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Best Episodes Of The App Guy Podcast As Blog Posts
How To Inspire Non-Payers To Spend In Your App
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. I love this show, and if you love this show as well, then do go and leave a review (I love those five-star reviews). Head to your favorite podcasting app or iTunes and help this show by leaving a review.
This is the show where I interview lots of different people from all around the world, and what I do is I deconstruct their journey and see if it can help us out in our own app journeys. Today to help us with this I have - actually one of the most interesting e-mail I've had in a long time - a founder who came to me through my good friend Steve P. Young who also does a podcast, it's Rachel Cook. She is the founder of Seeds. She is going to talk about Seeds - it's something that will help inspire your nonpayers within the app to spend their money, which is pretty helpful.
Now get this - she's got a journey that we're going to talk through, which is going from a stock trader, to a film director, to where she's coming up with this idea with having spent a night in a Kenyan jail. I've been to Kenya, so I'm fascinated by this. Rachel, welcome to The App Guy Podcast.
Rachel Cook: Thank you, Paul.
Paul Kemp: Let's go straight into that really juicy story then. I'll skip over a few things and then take you back to that night when you were in this Kenyan jail. I'm so fascinated by this... How on earth did you come up with your idea from such a remote place?
Rachel Cook: Well, I was in Kenya because I was already working on the very earliest versions of Seeds. Seeds builds social good into apps, and then we funnel capital that we source in apps into microloans, so a sustainable form of social good, channeled to people in different parts of the world, and Kenya was the first place we were working.
I was there, I was out to dinner with a friend, another American, and we just decided that because there are -- you may have noticed this, Paul, there were signs (at least at that time) all over Nairobi on telephone poles that say like "Get your fortune told. Call this number!" and we thought that would be fun to do... And it kind of lead us on this wild goose chase that brought us to Kawangware, which I think was the second largest slum in Nairobi.
It turned out that we were in a spot where there apparently had been a terrorist attack a week before. The story is kind of long and winding, but we were in the car, we'd found the fortune teller, he was in the car as well, he had started to tell our fortunes, and these plain clothes guys with AK47's came around this corner, and didn't identify themselves or anything, and just yelled at us and made us get out of the car, and then they told the driver to leave, and they got back in the car and they just drove us away.
We figured we were being kidnapped, that was what it seemed like was going on, and in a way that was exactly what was going on. But it eventually turned out that these guys were cops. They drove us to a local police stations, and they kept yelling at us, like "What were you doing there? It's very dangerous there" and so forth. Once we got back to the police station they took our phones and wouldn't allow us to call anyone to let them know where we were. They wouldn't let us call the embassy or anything.
We hadn't done anything remotely illegal, and they just held us overnight. They told us that they wanted us to wait there so that the boss of the jail would come in the next day and talk to us and make some decision about what to do with us. What ultimately ended up being the truth was that they wanted to hold on to us so they could extort some cash.
Paul Kemp: That's crazy!
Rachel Cook: It was crazy.
Paul Kemp: This is the most fascinating introduction I think I've ever had, where this is you coming up with the idea. Now, I'm actually following the story with fascination because I picked Kenya to go on my honeymoon, and it was just after a terrorist attack shooting down a plane; it was probably the week after. It was probably the safest time to go, because there was huge security everywhere. But I remember turning down the wrong alleyway in Nairobi and just feeling like you're in a different world, and it felt immediately scary, and that you were in the wrong neighborhood and you had to get out. I remember saying to my wife, "We've gotta get out of here."
Then we actually did drive out the city and I remember distinctly the rental car agency saying "Don't stop for anything!" And of course, there was a guy laying in the middle of the road, which you don't normally see... We didn't know what to do, carried on, and then I think someone must have thrown some spikes into the road, and this jeep then got a flat, and within an instant there was like about 20 people around the jeep, all holding what looked like knives (I think it was a screwdriver). They helped us out, but it was so terrifying. But you've just topped my story big time. [laughter]
Rachel Cook: Yeah, I found Nairobi to be sort of a really magical city in many ways, and it's very cosmopolitan in many ways as well, but then there's just this sort of other entire dimension that was scary. And what was worse was that they held us in this jail and the cell itself was -- I mean, it was a dirt floor, there was a hole in the ground to piss in, and then there was a hole in the concrete wall, and that was the only window.
I remember sitting on the ground and just meditating, because no one knew where we were and we didn't know what they were going to decide to do, and they were already holding us for no legal reason.
Paul Kemp: This is where you came up with your idea then, so talk us through how you got inspiration for Seeds in such an awful setting.
Rachel Cook: Well, it pre-dated this trip, but this was sort of the very early days of Seeds. Essentially, I had been a stock trader, a futures and equities trader in Chicago and then in New York, and I was doing that after college. I moved to Chicago because I wanted to study improv and comedy writing at Second City; if Second City is unfamiliar, it's a comedy school that many known American comedians have gone through - Bill Murray, Chris Farley, Tina Fey, Amy Poehler... So I wanted to go there and just kind of come up through the comedy world.
I was doing that, and trading was my night job. I would trade the European shift, which was midnight to 9 AM Chicago time. One night I was sitting on the trading desk and I came across an op-ed in the New York Times about micro-lending, and specifically about how microloans, tiny loans made to primarily women in the developing world could be as small as four dollars... About how they were this fantastic investment and how they really helped these women out who were just completely ignored by the banks due to discrimination baked into the financial system.
I had seen that myself in my own first-world way working as a stock trader, because I was always the only woman or one of the only women at every firm I traded at. At one point I discovered that I was paid a 15% lower base salary than the eight guys who started at the same time I did, despite having a better educational background and experience as a successful trader that none but one of those guys had had. And I negotiated the starting salary as well, so that could have contributed, but it was really surprising... I kind of started waking up - I was 24 or 25 at this time and I hadn't really thought about systemic discrimination before that. And being aware of that and then knowing later when we got our trading bonuses I outperformed the eight guys who had started when I started, it just made me start to get really angry and I started to think about what I could do to try and shift that system so that it wasn't discriminating against people arbitrarily just because they're women, or for whatever other reason.
When I came across that op-ed in the New York Times, it was just like "Wow, microloans are this great investment that repaid 98% of the time in most regions", and it's women that are statistically much more likely to pay them back, it's women who are the better investment. Something about that really piqued my interest.
Then simultaneously, while at Second City, taking classes, the best sketch that I wrote was kind of this abstract feminist sketch called Mime Brothel, about a brothel full of mimes; the mimes were prostitutes, but when you thought it was going to be a sex act, instead they'd be trapped in a wind tunnel, or picking a daisy, or something. It was this really weird idea... It sounded strange on paper, but it actually staged really well and it was well reviewed, but you know, 20 people would come to see it maybe. So I started thinking about additionally how I could make things that would reach a larger audience than 20 people on a night, and that's really how Seeds came together.
It was like, okay, micro-loans exist. This kind of touches on my interest as an investor and my interest in shifting the system so that it doesn't discriminate against women. And then the other lightning bolt I had on the trading desk that night when I read that op-ed was "What if I made a film about this topic?" That would be a film that I personally at least would be interested in seeing, so maybe there are some other people like me who would like to see a film about micro-lending as well, and hopefully a film would reach more than 20 people.
So I decided to do that. I'd never made so much as a film short successfully before, but I just made the decision. I was able to find a director of photography on Craigslist who had worked of Fargo and Terms of Endearment and Groundhog Day, and it had this nice studio, Hollywood film career. I think he could just see that I was excited, I was 25 years old and I was passionate.
He was very generous, he agreed to work for no pay. I just raised the money to cover his travel, and he even let us use his equipment. Once he was involved, it became a legitimate project. We ended up filming in Paraguay, and then in nine cities in India, and then in Nairobi, and then in Detroit in the States, and the film was ultimately the feature presentation at the Chicago Social Good Film Festival. It was a new festival, third-tier festival at the time, but that had been the goal, to get it seen.
It was when we were filming in Nairobi - this was the year before I got arrested there - I saw what was going on with mobile money transfer, text-message-based money transfer, and I'm sure you and many of the listeners are already well aware of this. At the time - this was six years ago - it was just so exciting and so staggering to see that going to a sub-Saharan African country, they were still far ahead technologically.
At that time, 40% of Kenya's GDP was being sent through text message; people were doing it all the time. These were people that didn't have bank accounts and didn't have land lines, and it was just super cool... And I figured going back to the States that there must be a way to plug some other industry in the developed world into that infrastructure to send more money to those people who were doing so much with it and who were such a great investment, and that's what lead to Seeds.
Paul Kemp: This is fascinating, Rachel, absolutely. At the end of the day, this podcast is all about life, and it's inspiring the appster tribe to have a life... And I think about your life, how far apart can you get from going to become a trader and working on the trading desk - that was a dream of mine initially, 20 years ago - and then having this interest in comedy, which is, again, at the other end of the spectrum, totally... And then going and pursuing this film directing. It's fascinating getting into your life.
One of the things that I want to pick up on is the empowerment of women, because I actually personally believe that the way to get a lot of these third-world countries out of poverty is to empower women. What views do you have on that and how can micro-lending actually empower women to get themselves out of poverty?
Rachel Cook: I think that's absolutely true. I think that's the key to societally evolving in so many ways. I think it's have more metaseries about what that might mean, that I'll try and share here; they're still somewhat half-baked, but... Absolutely, to answer your question, micro-lending can be a vehicle to help communities just become more self-sufficient and robust, because these women take out these loans, they're successful with this capital 98% of the time or more in most regions, and what they tend to do after they've made money with their micro-businesses is they reinvest that capital in better education and nutrition for their families, so that's a boon for their local communities, and then it can be a boon for their larger communities as well.
That said, I've become -- this might seem a little esoteric - really interested in this idea of yin and yang, masculine and feminine energy... So not just limiting this way of thinking to the developing world, but also in the States and in Britain, and anywhere. I think the reason the discrimination in the system exists in institutionalized finance is because patriarchy is the OS of the bad parts of the capitalism. I mean, I'd say it's the OS of everything of what the Western world has become, what we think of as civilized society - patriarchy is the foundation of that. And I've been thinking about how all humans have both yin and yang, have both masculine and feminine energy, but because we grow up in patriarchal societies, we're taught to overvalue the masculine, which I would define as active, as being productive, more zero-sum thinking, more hierarchical. And the feminine I guess I'd define as being more receptive, for the sake of this example, and more about being. And yes, because we're sort of out of whack in that way because we're not balanced in ourselves and therefore in the things that we're creating, I think it's caused all kinds of problems. This is kind of complex, trying to explain...
Paul Kemp: No, I'm following you. Actually, I've been listening to Beyond Mars And Venus, which is the guy that wrote that Mars and Venus. He's released another book recently and it's fascinating to dig into the differences, and actually I've learned a lot from that, but also I've been in the institutional world of finance as well and I'm a big fan of a lot of the alternatives that are coming out. The fintech space is just great to be involved in at the moment, because of an anti-establishment movement, and this kind of move away from large institutions as a source of trust. You're on to a trend here... Do you feel like you're changing the world with this?
Rachel Cook: I hope so. That's the big dream. We were fortunate enough to compete in the TechCrunch Disrupt Battlefield competition in 2016 in London, and on stage I tried to make this point that, you know, when I was a stock trader, it was all zero-sum thinking. If I made a dollar, it meant that someone else had lost that dollar, and that's the way that system works... Whereas with Seeds, we give an app, our free tool, and they drop it into their codebase and it lets their users know that when they make a specific in-app purchase it's simultaneously going to help someone in need through a microloan. We found that that makes someone who's never spent any money in an app 60% more likely to start spending, and then they keep spending.
The app developer makes more money, Seeds benefits as well, the micro-borrower gets funds to run their business, and then that's repaid and we can keep lending it in perpetuity. I wanted to make this point of disrupt that what we're doing isn't zero-sum; instead, we're creating this greater pie for everyone involved in the ecosystem, and I think that's the direction we're heading societally. We're getting away from this sort of zero-sum thinking, this scarcity mindset, and the institutions that we've built that aren't supporting that way of being I think are going to have to fall away. They're going to have to either adapt, or it's just not going to work.
I just got a chill saying that... That idea is so exciting to me, and I'm really trying to kind of imbue that energy in Seeds philosophically and in terms of the culture we're building, in terms of our intention, and then also in terms of the practical functionality of the product.
Paul Kemp: Yes, let's talk about that practical thing, because that's fascinating. One of the big challenges of the appster tribe listening to this is getting those in-app purchases. What you're saying then is if there is an incentive to either make a micro-loan or see some impact from that purchase, and if it's an add-on to whatever they're getting, then there's more likelihood that they'll actually press that button and make that in-app purchase. Is that right?
Rachel Cook: That's right, and to our knowledge, it's the most effective way to get someone to start making purchases in an app, if it's at a micro-purchase price point. I should finish the story regarding -- after we finished the film and I came back to the States and I was thinking about... Like, it just seemed like there was a way to plug something into that micro-lending infrastructure to get these people who were doing so much for this capital more capital access.
Around that time, I'm sure you and many of the listeners remember - this was right after the earthquake in Haiti, which I believe was in January 2011, and Zynga used Farmville at that time to do this charity thing in which they sold virtual currency and let their users know that when they bought this specific virtual currency, it would go to rebuilding schools in Haiti after the earthquake. And I think they did it like a PR & marketing thing, but I think they did have good intentions. They did it just for a short amount of time, but to their surprise, they found that nonpayers - people who were playing but had never spent any money - were suddenly also about 60% more likely to start buying, and then they just kept spending after that.
So they sort of accidentally stumbled upon what turned out to be the most effective user conversion/payer conversion mechanism.
I wondered if there was a way that we could build a product that achieved that same uplift, that would work in all type of games, and then ultimately the current product can work in any app or on any website that enables purchases. I wonder if we could build that and if it would still deliver that same value if we were focusing on micro-loans rather than on charities. It turns out it does work, it works incredibly well.
It's encouraging to realize that what happens to be the most effective way to make money in this instance is also a tool that helps other people.
Paul Kemp: Rachel, I still want to understand then, because I'm absolutely fascinated by this... When there's an in-app purchase through Seeds or the platform of Seeds, then you call it a micro-loan. Does that mean that the user has the potential to get that money back then after a time?
Rachel Cook: That's a great question. We don't have it set up that way, that would be more complex. It could be interesting to do later on.
Paul Kemp: Another idea.
Rachel Cook: Yes, it would add many layers of complexity, but the way the product works right now is our recommendation algorithm - we're just in the beginnings of building this, but we show the user an item that they're going to be more likely to want, as the type of social good, the type of micro-loan they're going to be more likely to want to contribute to. Maybe it's a region of the world they're interested in, or a type of business, or something. It's two dollars, or it's some micro-purchase amount.
They make that purchase, they make that decision, and then we move the money to micro-finance institutions that we're working with who deploy the capital. That's what's true right now. Ultimately, we're going to look at blockchain solutions to move the money. We're actually going to be filing an ICO very shortly as well; I don't know if any listeners are going to do an ICO, but that's also fascinating.
Paul Kemp: Is that an Initial Coin Offering?
Rachel Cook: That's right. It's really exciting to me, because I think it's going to render a lot of the way venture capital works obsolete.
Paul Kemp: Let's talk through that, because I haven't actually had anyone talk through an Initial Coin Offering as a way of raising finance. What does that entail?
Rachel Cook: My understanding is cursory right now, but we're going to be doing this in the next couple of weeks so we're going to be learning a lot... [laughter] Essentially, you create a token that you then make available. You can do a pre-sale and then a crowdsale. The token, as I understand it from a legal standpoint, in the States at least, the token can be a security or it can have a utility. If it's a security, then you run into all kinds of other regulatory hurdles, so it's best to make a case for the utility of the token.
In our case, there are a variety of different things that the token could be able to do. We can put portions of the recommendation algorithm that shows a user specific types of social good on a blockchain... That's something we have to figure out from a technical standpoint in the next several days. But we issue these tokens, and people can just buy them. If you make a case for the utility of the token, that it's legally sound, you don't need to raise exclusively from accredited investors, you can raise from anyone, and it can have a global reach.
It's a little like crowdfunding, in the sense that anyone can contribute, but they're essentially buying -- you're not giving up equity, but you're creating this other option for people to take part in the upside of what you're doing.
Paul Kemp: It reminds me a little bit about Kickstarter, that you can actually get rewards for the more that you contribute towards a project. But the utility you talk about - that could be a discounted initial use of the software, or some reward for being an early contributor.
Rachel Cook: I think that could be an example of a utility, yes. There are a lot of interesting technical implications, but in addition to that -- TechCrunch Disrupt was in San Francisco last week, and three female founders got on stage and talked about their previous or upcoming ICO's, and the idea was... So I'm a female founder; I'm a solo, non-technical female founder. I've raised about a million dollars in a seed funding, but it's been a slog, and I've had many male founder friends who I knew had less traction or not as strong of a team or less revenue than we have raise money much more easily, sometimes from the same investors who had turned me down... And there are a variety of variables that contribute to that, but anyway - these women got on stage and the question was "Could ICOs level the playing field so that discrimination in VC no longer holds female founders back?" So it's just kind of this other element of what I was seeing as a stock trader kind of showing up in this other area of institutionalized finance, and I think ICOs can transcend that, and that's really cool.
Paul Kemp: Rachel, you are changing the world.
Rachel Cook: [laughs] I'm trying... I'm following what's interesting to me, at least, and what I think is exciting and what's important.
Paul Kemp: As we wrap up then, because we have only a few minutes left - this is a show to inspire all those who are listening right now to your story, because I'm blown away by it. But I wanted to take you back to that time when you were a trader. Imagine you are doing that now, or alternatively -- you've obviously gone and done all these other things... Has this journey of yours been worth it and would you recommend this life to others?
Rachel Cook: Absolutely. What I'd recommend though specifically, and if I had a time machine - I don't know if I'd go back and tell myself this, but I would say that when I was sitting on the trading desk and had that idea to make the film, which was sort of the first step on this alternate path, I really just listened to myself. I've gotten better and better at just kind of honing in on what my intuition is telling me and really trusting that more so than relying on external things and external indicators. The more and more I've done that and the more consistently I've done that, the better life has gotten, and the more true life has gotten.
I practice Vipassana meditation; if that's unfamiliar, there are these wonderful courses you can do that are completely free, and they feed you and they house you, and you go and you meditate. The site is dhamma.org, if that's interesting to anyone. Just doing that, I think of that as sort of a practical application of this feminine energy idea that I talked about; you're sitting there and you're receiving, and some of the best problem-solving I've done for the business has happened while doing Vipassana. It's made everything so much better...
Paul Kemp: I've been doing meditation for about a year and it's just with the Headspace app, but is that where you're doing mindfulness? Is it a mindfulness sort of meditation where you focus on the breath?
Rachel Cook: Initially you're focusing on your breath; ultimately, you learn to observe the sensation of your breath, and then they invite you to use that awareness that you've kind of honed when focusing on your breath to scan your entire body, observing any sensation that you feel. The idea is that you don't react, you don't avoid or suppress, you just observe. As you do that, you recognize that the nature of all things is that they're impermanent, that they'll change, and kind of deeply understanding that... Not just intellectually, but sort of really experientially getting that. It just makes it easier to confront anything that seems difficult.
It's wonderful, I can't recommend it--
Paul Kemp: Well, I'm not recommending this to any of the listeners, but I did hear somewhere that some founders were really struggling with a lot of different problems, so they had an experiment where they issued LSD or some hallucinogenic drug that tapped into your subconscious, and they solved pretty much 80% of the problems they had.
Rachel Cook: So interesting...
Paul Kemp: Yes, it is fascinating when you talk about tapping into that huge resource. And the other thing I wanted to mention as well is that you're one of the first to talk about intuition on this podcast. I find that so important, because during all the years that we've evolved as human beings, apparently intuition and gut feeling and gut reaction is vitally important. It's evolved, and we should trust it a lot more, because it pretty much got us out of life and death for our ancestors. So trust your intuition if you're listening to this.
Rachel Cook: Absolutely. The unconscious mind can process large amounts of information that the rational/conscious mind can't necessarily process.
Paul Kemp: Yes, and I do have people falling asleep listening to me, so we're feeding into their subconscious right now. Rachel, let's just remind people -- if you want to get in contact with Rachel, I will put show notes up; it's episode 537, so go to theappguy.co and you'll be able to get some links there to Rachel... But how is the best way of getting in touch, what's the best way of connecting with you?
Rachel Cook: Sure. You could tweet at us. We're @Seedstweets. Also, the website is playseeds.com if you want to visit us there. Either is fine.
This Advice Helped Me Raise $39m
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show that truly goes around the world and gets lots of different nationalities, so that we can listen to these really inspiring guests, deconstruct their entrepreneurial journeys, their app journeys in their world of digital. The reason we do this is because it helps you in whatever projects you have going on, whatever startups that you have going on, or any kind of career that you're taking. We really do try to bring you the genuine, non-sales entrepreneurial journeys from our guests.
This is episode 536. If you have missed passed episodes, you can go to the archives; I've got another 500-odd episodes for you to go into the archives with and listen to there. Just search "Paul Kemp" in your favorite podcasting app.
Let's get onto today's episode. Today's episode is with a CEO -- it always tends to be CEOs and founders that I love to chat to. The CEO in this case is the CEO of Zumper. His name is Anthemos Georgiades. Anthemos, welcome to The App Guy Podcast.
Anthemos Georgiades: Thank you for having me, nice to meet you.
Paul Kemp: Nice to meet you as well. First of all, let's talk about Zumper, because I'm unaware of the journey you've had with this. Tell us about Zumper.
Anthemos Georgiades: It kind of all began actually when I was -- I'm currently based in California, in San Francisco, but I began as an undergrad in England, where for the first time ever you move out of undergraduate accommodation, you're 20-21, and it's the first time you really have to fend for yourself in the real world. For me it was kind of finding my first ever apartment rental. I had such a miserable experience, as I'm sure many of your listeners have had while moving home... Not just in trying to find an apartment to rent, but also in when you find the one you really want, how to lock it down. It just seemed incredible ten years ago that there wasn't a way to just book an apartment, and it just turns out that ten years on there was still no way to do this.
So it began with a personal frustration of mine ten years ago, that I felt multiple times, every time I moved. Then five years ago, when I was living in the U.S., I decided to actually be the person to try and fix that problem myself.
Paul Kemp: Already I'm inspired, and I'll tell you the reason why. There's so many people that get into this for the money, and they look at some successful idea and they think they can emulate it, but so many of the successful guests that I have on this show have had a personal issue, a personal problem, and they've kind of identified this as a decent problem to go after and really addressed it.
So you've got this personal problem, Anthemos, and I just wondered - did you do any other research to justify giving up your life to pursue fixing it?
Anthemos Georgiades: I did. I think it was a lifelong pursuit if we pull this off, or when we pull this off, so you had to be very sure upfront that there really was a problem here to fix, it wasn't just something that I'd noticed and I was just unlucky. A year before we raised the first one million dollars for the idea, I was at Business School in the U.S., which is typically a two-year course, and then the summer between those two years, instead of taking kind of an investment banking internship, I just went off and took an unpaid internship for myself and I tested the idea. I moved to San Francisco, I tested the concept of "Would a renter put out their iPhone or Android phone in an open house and press Book?" Literally, just something that simple, and we did it with 35 leases in San Francisco just to see if that problem I'd noticed - it was kind of crazy we were still transacting on paper - was actually real.
We could have abundantly and overwhelmingly show that renters would do that, and they wouldn't just do it, but they loved it, because it felt like e-commerce in moving apartments. So yes, I spent really a year researching, trying ideas out, and finally the validation was we put that year together into a 10-slide PowerPoint deck and went to Silicon Valley and raised the first million dollar for Zumper back in 2012.
Paul Kemp: I love this already. One part of that journey which I'm fascinated with is that you mentioned you could have gone to investment banking for your internship or your first experience after Business School... Of course, I went into investment banking. I do remember the fact that you're so drawn by peers, by media, by what society expects for you to go and get the best paying possible job. How hard was it then to resist the temptation to go for the 50k-60k/year and actually go to something that you're not really getting paid very well for?
Anthemos Georgiades: That's a great question, and to be clear, I succeeded in doing it the second time, but out of undergraduate, where I first had the idea... I went the same route, I ended up working for the Boston Consulting Group in London, working 20 hour days for three years. I didn't go the entrepreneurial journey route to begin with, so I think even for me, who's ended up running a 100-person company now, it wasn't inevitable and it was a really hard decision to actually turn down, the kind of "safe" career.
I think the second time after business school when I succeeded in turning my back on the more traditional career is -- I think to your point earlier, if you have the idea and it just burns a hole in your soul that if you're not the person to pull it off, it will kind of grate you for the rest of your life because it's so obvious what you're going to go and do... Whether you're delusional or not, if you feel that call, it's really hard to see any other job as delivering any kind of personal satisfaction to you if you feel that kind of urgency.
So back to your earlier point about "How could you have not taken the money in an investment bank and go all-in on this?", I think the entrepreneurs who start companies to make money, they're typically not the most successful entrepreneurs. I think the most successful entrepreneurs are the ones who want to solve a problem; they're the ones who will burn the midnight oil to solve that problem until it's finally done.
I think I just felt that sense of inevitability the second time around, whereas the first time I think I felt like it should be done, but I think in 2005 when I left undergrad the technology wasn't really there to do it. I think native mobile, iPhone and Android apps were much more developed and the ecosystem was there in 2012; it wasn't there in 2005, and I think that was the final tipping point which made me think "This is the time to go and do it" back in 2012.
Paul Kemp: Let's talk back on that period then, 2012. You mentioned that you raised a million dollars - how hard was that? Because we've heard some stories from ex-founders that "Oh, it just took a day of the first person I phone, I got the money from", others it took years. What was your journey like to raising that substantial amount of investment?
Anthemos Georgiades: We've raised a total of 39 million dollars now in the five years since then. I would say the first million was definitely the hardest. For the 38 million we've raised afterwards I wouldn't say it was easy, but I think there was more traction to point at. The first million was the hardest; we started with European VCs - I knew some of them - and East Coast VCs where I was based. I think typically look for revenue traction; some even look for profit traction, which you know, many entrepreneurs will sympathize with this... When you're just focused on creating a flame, it's really hard to also drive revenue. You're just trying to get users organically.
The first million ended up coming from West Coast VCs, who in my experience, in the early stage, they're more prepared to take an early bout in the product before any monetization. Once we realized that and changed the strategy to focus really exclusively on raising from West Coast funds, it went much quicker. The first million dollars actually came from a one-week trip I took out to San Francisco. I was staying in a motel, I was desperately sick because I had just been to a wedding of a friend of mine in India, and I got a horrible food poisoning and flu, so I was kind of sweating out every night in a crappy motel in San Francisco... But day to day we were having six or seven back-to-back meetings for a week. Once you got the first investor, once the first check is through the door - from a pretty well-known venture capital fund in Silicon Valley called Kleiner Perkins - the rest came very quickly after that.
I think we had a really credible story, we had really good traction to suggest that renters didn't just want to search using Zumper, that they would actually use Zumper to book apartments... And once we got the first person to say yes, the rest came easier. It would have taken, I guess, ultimately months, but when I found the right audience, it took a week.
Paul Kemp: Yes, and also we know from these venture capitalists that some of them have the school of thought that they go all in for the idea, others it's about the person and the entrepreneurs that they're looking at, the founder, and another is it's a mix of the two. But I'd love to go back to your confidence in that initial raise... Were there any particular metrics and things that you did that really gave you the advantage of raising that amount of money?
Anthemos Georgiades: Yes, I think it was probably at the early stages -- the best piece of advice I'd have is just focus on one story, one thing. If we had gone in and said "This is how many landlords we have, this is how many renters we have, this is how much revenue we had", I think a VC would be like "Sure, it's kind of early, there's various things, but I don't see what's going to be different to a big company in the US, the big guys like Zillow or Apartments.com, or like RightMove in the UK."
So just creating a mini version of a bigger company doesn't really appeal to them that much. What we did was focus on one metric which was very different. We said we'll spend our first few years building a very large search engine for millions of monthly renters, but actually at the very beginning we wanted to just prove that those renters, if you took them through to an open house, would actually book what would ultimately be sometimes a $50,000 transaction - say they were taking a 12-month lease with $4,000/month on that phone. Would they actually do that? because that was a really new behavior, and it still is today. That's what the VC's really bit into. They said "Sure, we believe these guys can build a website like all these other guys have before them, but there's one metric that they've built off 35 leases (which is still a really low number) that is really different, and I believe in this. This is their endgame, this is their true North. I believe if they can scale this to 50 states it will be massive."
That even excluded some stuff that looks really good and was a pretty sexy metric because we just wanted them to focus on this one thing. In retrospect, I think that's the advice I would give myself if I was doing it again - get rid of the noise. Investors will assume a certain level of progress across the other stuff. Focus on the one metric that when they write a one-line e-mail to their partners after the meeting, they're only going to talk about that one metric. That's how the deals get done typically in early-stage venture, and that's where we ended up finding it works for us.
Paul Kemp: You almost reminded me a little bit of the presentation that Steve Jobs gave at Harvard that time where he addressed the graduates. He was talking about joining the dots, and you can only see it in retrospect. Listening to your story, I'm almost thinking your time at BCG, the 20 hours a day, burning the midnight oil... That no doubt helped you when you came to that daunting task of going into a room full of powerful people and being able to deliver a really succinct story that came across perfectly and managed to get you off the ground. Would you say that's the case?
Anthemos Georgiades: Yes, I think that's right, and I think in retrospect a lot of entrepreneurs you probably have on your podcast can tie a narrative together, that it was all inevitable. I started at BCG, then I went to Business School to finish the polishing of the skills, and then I was prepared for a startup... In retrospect I think it tells a great story, but the reality was it had never really felt like that. The idea of the BCG that was safe, and the MBA was also a safe idea... Starting Zumper was just from this constant restlessness that no one else was doing this booking engine for apartment rentals.
I think you're right, I think when we were doing the seed round, all of the skills that you could have amassed in completely different industries somewhat was super helpful, but you never know it at the time. It really makes you think "Yes, no way I could have probably done that without the training." But as you know, in the moment, so much that matters isn't your training or your education, it's the constant resilience of being buffeted by various different headwinds that try and knock you off your perch as an early stage startup. In the early days you just focus on staying afloat and pushing on.
Paul Kemp: Actually, just thinking about it, this does try to be a genuine show... We've had a lot of other guests, and what I always explain to the appster tribe listening to this is that we can't sometimes mimic or copy the guests that we have on the show; we wouldn't be able to go to BCG and then do a masters, whatever -- it just doesn't happen that way, but what we can do is learn from the bits that we can from you.
Let's move on then and get closer to now in terms of what are the big challenges that you face now in your business? You've grown so much over the years; you said 100 people, 39 million dollars raised... What are the big challenges for you now?
Anthemos Georgiades: I think the single biggest challenge any company that grows from zero employees to 100 which we now have in four and a half years is focus. As an early stage company you don't have any competition. The big public companies in your space - sure, they're competition, but they're not really... They're so big, and they have tens of thousands of people typically, so in the short term you don't have a hope in competing with their marketing budget or anything. So I think the most important thing we realized is that the biggest competition we have is our own ability to focus. In a 20-person company that's difficult, but in a 100-person company, it's everything.
What we tell the board, what we tell our exec team, what we tell the most recent hire who might be hire 98 is completely aligned, so that every single person in Zumper's business can see how their daily efforts and all the hard work they put in rolls up to one core purpose is critical. I think that a lot of companies at our level struggle with that; I know that we've struggled with that through the years. We've been better than most, but it's difficult, because you see competitors do interesting things, you could have hired people with really great ideas that are slightly different to the way you plan to implement... So I think as a CEO of a business as well it's super boring as a concept, but it's actually critical - driving absolute narrow, introspective focus, so when you ask the question of "What's the single biggest problem facing us?", I think how we can next grow from 100 to 250 people without losing our sole focus of building the first ever real booking engine for apartment rentals is everything. That's what keeps me up at night and I think that's the single biggest challenge we have.
Paul Kemp: In terms of your business as well, do you focus on all the markets, or are you just predominantly the US?
Anthemos Georgiades: That's absolutely related to the previous question. I'm British, as you can probably tell from my accent; I've lived in the US for a while, but there was no inevitability that I would start the company here. The opportunity presented itself at the right time here. Saying that, actually we're pretty narrowly focused on just the US, with currently really zero plans to move outside the US, in Canada, which we're kind of already in as part of an acquisition we did a year ago. So we're in all the 50 states with the search platform. With Zumper Select, which is the booking product, which really takes a renter beyond search, through to end-to-end, we're currently only is six markets in the US, six big cities. Now, the model will work in 100 cities in the US.
In the next four years we're only really focused on getting our model from six to 100 markets in the United States. If someone -- and you know, occasionally we get a bunch of e-mails telling us that they're competitors and they want to partner with us in different markets, like Brazil, or Europe... I think England was an example recently. Sometimes the best answer is good luck to them. If they want to look into the model and they're going to help some consumers in that market - great, I'm all for it; it will make lives better for the people moving in those markets... It's just for us the problem is large enough in the US right now, so we're laser-focused just here, at the expense of international growth.
Paul Kemp: Anthemos, one of the other things we like to explore is to kind of get a sense of what it's like to do what you do, because it's hard -- when you have a corporate career it's quite easy to break down your responsibilities, your job, but when you have the founders and CEOs, it's sometimes kind of hard to get an idea of what they actually do day-to-day. Would you be able to give us an essence over the last week or so what's been your main tasks as the CEO of this company?
Anthemos Georgiades: Yes, it's really evolved... You start selling, fundraising, building product, hiring - you do everything; you are this all-seeing, all-dancing band when you start a company. Now with 100, the last week - three top priorities that I've been working on, and it's a good litmus test for really where you spend your time as a bigger company CEO... So one is on fundraising. Even though we're not currently raising money, we will be in 2018. In the last week I've had over a dozen meetings and coffee chats with potential investors that will invest next year. Not pitching them, not sending them a pitch deck yet, but just getting them to know me and know the vision and get excited about what we're building.
The second thing is around hiring and retention. Ultimately, it all rolls up to you, whether it's culture, hiring and retaining your best people. In the last week I've also been the final interview for probably over a dozen candidates that my team have been interviewing across engineering and various other roles, and then also working with other managers in creating great packages for our best-performing employees to make sure they're super happy and they continue to stay with us until the end. That's a really important second piece in my role.
The third one is just product alignment... The things we mentioned - making sure that on a weekly basis what our engineering team or our design team are focused on is exactly what we told the sales team, and exactly what we told the board and our investors. It's kind of setting guidelines so that people can execute with zero ambiguity.
Those are the three things that on a weekly basis I'll always be working on, and then every now and again something will come out of left field. For example, I struck a big deal with a huge partner that will go live in November last week that came out of left field three weeks ago and it made sense for the CEO as a business to do the deal, because it's with a very large player... We'll be able to announce that in November. Every week 15 different things will come out of left field, whether good or bad, that you need to deal with. But across the typical week, it was mainly those first three things that take up at least half of my time.
Paul Kemp: One of the big challenges that a lot of us find in doing all this stuff is information overload; you can get just so much information, you can get bombarded... You start to get a report that you think is going to be valuable, and then one report leads to ten, leads to 50 or whatever you're looking at, all these different metrics. How do you discipline yourself to take in what you need and almost dismiss the rest or delegate whatever else you don't need to digest in terms of information?
Anthemos Georgiades: That is super hard, and I think that's super hard in an early stage business or a late stage business. My head of business operations, a guy called Brian - he's very good at using tree logic for how things roll up. So if you think about OKRs or DRIs - every single business should be broken into its constituent parts, and that really helps incentivize especially junior folk who join, to see where their role is... That even if they don't control the main number, they have to understand how what they do in terms of like how many onboards they do, how many sales calls they do - how it leads up to a top-line revenue or lease number.
Brian, my head of business operations has a great exercise for actually rolling that down the organization, so that at the junior levels everyone knows their numbers, then it rolls up to their managers, and then it rolls up to the CEO. Ultimately, what I see is a dashboard of all the most important numbers, which in the day-to-day is enough for me to be able to understand if we're going in the right direction. But if I ever want to drill down into them, it's kind of logically put together so that I can get as granular as I want to... Not by pulling a completely separate report, but by just drilling into one of the top-line numbers I'm given, where all the details are underneath there and it's quite easy to explore.
I think my team are usually pretty devastated if it ever comes to that, because then I'll ask them several dozen questions from the stuff that I haven't understood. The models evolve so much since I've last looked at it, but I think most CEOs should really have two or three numbers maximum that they're focused on, and as long as they're either leading indicators showing that there'll be future success later, or they're lagging indicators because you really believe in your leading indicators so you just want to see the outcome... If you're tracking more than 2-3 obsessively, it's probably too many.
The final anecdote from that is I think Mark Zuckerberg at Facebook was very well known for only having one number in a lot of his daily or monthly meetings, which was DA (daily active) users over MA (monthly active) users, which was a proxy for saying "How many people came back to Facebook every single day who used it at least once a month?" Facebook could have tracked a hundred thousand numbers, but they were very good at actually just tracking one, and it's a really hard discipline, but I think it's really important.
Paul Kemp: Yes, and also, the people we'd love to help here as well are those that are thinking about going into either a business school or maybe taking that job with one of the big consultants, so what I'd love to know as well is that the stuff that you'd learned from business school and BCG - how applicable is it to what you're doing with your role now?
Anthemos Georgiades: I think BCG, which is consulting CEOs of large Fortune100 companies equips you great for board meetings and for managing a business revenue. You're never involved in product decisions at BCG in terms of you're consulting a supermarket, typically you won't get down to helping build their product. You're going to structure how to do it at a high level, in terms of online product. But BCG was great for managing a business that now we're growing into, which actually has revenue, and the margin considerations.
I think where business school was really helpful was on the way you angle business school. I went to Harvard Business School on the East Coast, and the second year at Harvard you can choose your electives and slant them to things that you really want to learn. For me, I didn't want to do any more strategy classes or economics classes, because BCG just drilled me in that. So I angled very heavily in my MBA to stuff like negotiation. When negotiation comes in at every single point in the startup journey, whether you're negotiating your first hire, you're negotiating your series A, your series B... A class like that has just permeated every single interaction I've had through the business, and it's not something you really pick up at BCG, because you don't have the time to abstract out, to do that.
We had a world-famous professor teaching us the art of negotiation in my second year in business school, and stuff like that you can really use immediately after business school. I'd say for those of your listeners who are considering BCG or a consulting firm or bank - it's a fantastic training on how to run a business. In terms of business school, I think it has two advantages. One is you can really focus on the things that you weren't experienced in, and two - business school, let's just call it what it is... It's a 12-20 month time off to really soul search about if you're ready for a startup and if you have the right idea. For me it was as much about learning negotiation tricks and finance tricks, as it was about actually just having the headspace to take time off and research an idea.
They're amazing things to do, even if you wanted to do a startup down the road and you weren't ready tomorrow; they're fantastic journeys. Saying that, some people are just ready now and they won't need to take either of those options. If you have a burning idea, the best thing is to just go and execute against it and figure out as you go.
Paul Kemp: I love that advice, fantastic. As we draw to the end of our chat - it's been wonderful - how best can people find out about Zumper? Where is the best place to go?
Anthemos Georgiades: Zumper.com is our web platform where you can search for apartments if you're in the US. If you're in one of our first six markets: Denver, Atlanta, New York, Chicago, Dallas, Houston, in those markets you can actually go end-to-end, where we'll actually help you sign your lease and go the whole way through Zumper. Then we also have iOS and Android apps. If you just hit "Zumper" in the App Store or Play Store and download our app, you'll be able to search through those.
Otherwise, just googling around, because we have really interesting announcements coming out, and we also put a lot of stuff out on rent prices. It's being a common topic in the US about how markets have been quite hard so maybe things will be cooling off... So you may also come across us just through reading your local newspaper. Real Estate Trends, they talk about that.
Paul Kemp: And for all of those who want to go to a resource, you just go to theappguy.co and search for episode 536, and you'll see links to all the stuff that we talked about.
Thanks for coming on the show, that's so inspiring... I love doing this podcast and meeting people like yourself, because it's enormously motivating to hear the enthusiasm, the passion. And the fact that passion's still there after all these years of you doing such a hard job, and the fact that it just sounds so much fun... So thanks for coming on The App Guy Podcast, and I wish you all the best for the future.
Anthemos Georgiades: Thanks very much, Paul. I enjoyed it!
Solving A Problem You Didn't Know Existed
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a show that helps you as an entrepreneur and as an app founder, or maybe you're thinking about becoming an app founder. I help you by getting guests from around the world and helping you by tapping into their expertise and sharing that with you. This is a great episode coming up, because I have a wonderful founder who is going to share with us his journey with his various apps; he's got an iPhone, Android and Mac app that's called Silo. He is the CEO and founder. HIs name is Moshik Raccah, and he's here to talk about his journey and how to learn from his experiences.
Moshik, welcome to The App Guy Podcast!
Moshik Raccah: Thank you very much, Paul.
Paul Kemp: Thanks for coming on. First of all, let's talk about Silo, let's understand what it is. What is Silo?
Moshik Raccah: Silo is what we call a helpful community of startup people. The idea is that communities can be online as well as offline; you all know MeetUp and similar organizations. Silo is pretty much the online equivalent, where one can meet other founders, other product managers, other designers. The key difference with Silo is that it's all built on principles of being helpful to one another. If there's something you need, you can share it and other people will be happy to help you with it.
Paul Kemp: I love going back to the inception of the idea... Is this your first startup?
Moshik Raccah: No, it's not my first... It's my third.
Paul Kemp: Okay, you're back in the game then.
Moshik Raccah: Yes, absolutely... But it's my best.
Paul Kemp: Well, let's tap into your journey because it's really interesting to work out what makes you tick. Talk us through - you have a couple of startups, and I believe that you've had some good exits from them. Let's talk through your history in the startup world.
Moshik Raccah: Sure. My first company was dealing with application development, building intranets, and mostly systems for internal business use. It went very well, we exited, we had a very nice company, we had a very nice exit, so I thought I could do everything.
The next startup that I started was in 1998 or 1999; for those who have been around that long, it's basically when the bubble was starting to grow, and crazy ideas were floating in the air. I got the idea that building a startup which is more consumer-oriented is a great idea. We easily got funding, built the company, and when everything was ready for the launch, everything crumbled around us... So no exit there. It actually went down in flames, together with 90% of the other companies in the bubble back then. But it was a learning experience which was just as good as the first company that succeeded, because it taught us what the importance of raising funding really is, how to use your money intelligently, how to build slowly, how to test and not to spend three years in development, and then wait to come out with something.
Paul Kemp: It took you a long time to get back in the game then, if this is your third one.
Moshik Raccah: Yes, absolutely.
Paul Kemp: Did that experience kind of put you off?
Moshik Raccah: It didn't necessarily put me off, but I didn't know that the next company that I'm going to start would be in Silicon Valley. This was important for me, and I was looking for a way to get into Silicon Valley to start the next one after that.
That journey - moving to the U.S., getting a visa to work here is not an easy thing to do; it's pretty difficult. The U.S. government doesn't necessarily make it easy for founders to just move here. I took a job with a large telecom software company called Amdocs. I moved to them and I stayed a little bit longer than I originally intended to... I spent a little bit more time with them.
Life is good when you're working for a big company and you're getting a nice paycheck. It's much easier than being a startup founder... But eventually, if you're a startup founder, you'll get back to it.
Paul Kemp: Well, that's the thing I wanted to talk about. I love to deconstruct that part, of founders' journeys, because I've been through the same, where you have a nice, steady corporate career, and we have many people listening to this who have left as a result of listening to inspiring stories of founders. Now, you must have been very fearful -- you've overcome a big challenge to leave and start... I'd love to know what sort of advice you would have to anyone wanting to leave a nice, safety corporate environment to go and work for themselves or start their own company.
Moshik Raccah: I think the best advice I can give them is "Don't do it." [laughter] It's pure insanity to do something like that, so if you've got a good, steady job that you actually like, think again. No, but seriously, doing a startup is not something you do because you think you're going to be eventually successful and be a billionaire like Jeff Bezos or Bill Gates or Mark Zuckerberg. That probably wouldn't happen.
If you're leaving a large company to do something of your own, it's such a burning passion within you that you absolutely have to do it. It's not because you want to do it, but because you know that you would not survive if you continue working for a large corporation... That you need to set your own destiny, that you need to try to pave your own path. You don't do it just because you feel like "One day I'll be rich." That's not the right motivation.
Paul Kemp: I love that. That's why this is a genuine podcast. We definitely share the wrong reasons to do it. So you must have had your idea whilst working for your company; how did you come across this idea of connecting with helpful professionals?
Moshik Raccah: It's actually two things that happened in parallel. We didn't start with this exactly. When we set up on doing Silo, I was actually working with investors; I was helping startup companies get funded, and I was helping investors find their next great opportunity. I was doing quite well at that, but then I noticed something pretty interesting. I noticed that the investors have very little information about the companies that they invest in, almost next to nothing... Especially the early stage investors; I'm not talking about the big VC's, but the early stage investors who put in 15k, 20k, 25k in a company, and then not hear anything from the company for the next 2-4 years... And not being able to help, not being able to do anything for them.
We said, "Okay, maybe that's something we can help solve", and the journey we started with for Silo was trying to connect the founders with their investors and allow the investors to see how their companies are doing, so they can help them.
Something really interesting happened on this journey. We built this, we got really good feedback from investors, we started building the system, the investors absolutely loved it, they came in droves, some of them even asked their founders to come in... But then we found something really interesting happening; the founders wouldn't touch it with a ten-foot pole. They just wanted to avoid our system like the plague. They wouldn't want to update their investors, and the main reason they didn't want to update their investors despite knowing how important it is was because it puts them in a sensitive position. Almost every single startup has ups and downs, and if you ask a founder to update every month on the first of the month, it might be actually during the down cycle instead of the up cycle. And many founders are concerned that if they update with bad news, then the investors are going to desert them when that matters the most.
They've actually got a good point in that; they actually have seen that happen more than once. So we understood that we've built a system that only the investor side wants to use, but the founders wouldn't even touch it, don't want to be there. It's not like we'd never expected that to happen, but we expected behavior that's a little bit more like what happens in CRM sales systems, where the sales VP requires the sales managers to use a specific system... But this wasn't the case here. The investors said "We don't actually care if they don't update us. It's up to them. If they want, they can; if they don't, that's fine, too." That's something we didn't take into account.
So we understood that we have a big problem, because without the founders' collaboration, without their cooperation, we're not going to have anything - we're not going to have the investors, we're not going to be able to charge anyone, and we're dead in the water. So we had a problem. What we decided to do at that point on the advice of an investor that told us "Go check what the founders want." So we went ahead, and even though we've invested quite a bit of time and effort and sweat equity in building something, we said "Okay, we'll put all this aside. Let's go interview a few founders; let's go talk to founders - we know a lot of them - and let's see what they really want."
We started speaking to them and discovered something really interesting. Maybe it's not so surprising, but founders need a lot of help. They are always trying to learn from other people; this is why your podcast, I guess, exists. They're trying to learn from other people's experience, they need other people's help, but the one demographic that they don't want to ask for help is their investors. They would much better prefer to be in touch with other founders. They would much rather prefer to ask other founders for help, for advice, than their investors.
We said, "Okay, we can help with that", so we built a system that connects founders with each other and makes it really easy to help one another. The founders liked it so much that they said "Why just us? Why not a VP of marketing? Why not the CTO? Why not the person in charge of customer support? Anybody can use this kind of thing, and everybody should, because if it's helpful and other people can help each other, then let's have everybody in there." That's when we started to grow. That's when they started telling each other about the system and that's when people started registering in droves and using it on a daily basis.
Paul Kemp: Moshik, what I love about the advice you've just given there and the story is that it covers like three major themes that I keep picking up on this podcast. One is the fact that you are really focusing on solving a problem. The second one is that you had the courage to pivot, and the third is that you actually seek feedback from ultimately your user base, your customers. Those three things are picked up on and are major themes running throughout the episodes.
I'm interested in what are the biggest challenges of the founders you see? What sort of help are they seeking? Can you categorize it and put it into like the top-trending problems that they face?
Moshik Raccah: I think the number one for every founder -- probably the simplest one is information. "I'm looking for a lawyer. I'm looking for somebody who could connect me to someone else. I'm looking for information about how to do this or how to do that" or "Maybe you can connect me to a service provider of this sort." These are probably the most common ones. Another one is recruiting, "We're looking to hire a developer", but it's constant...
If you look at a small company, when the founder has a team of maybe five, six or ten people, you always need something; you're not like Larry Page at Google, that has teams of people to do everything they need. In this case, the founder might need just a quick question, like "How do you do ISO-compliance? What's the best way to handle penetration testing when a customer asks us?" These types of questions are best answered when you turn them to a community of founders; you'll get answers within minutes.
Paul Kemp: Let's talk about some of the challenges you may have in building this out. When I'm in communities, one of the biggest challenges I think of, and especially some of the Slack communities I'm in - there's a lot of self-promotion...
Moshik Raccah: Of course.
Paul Kemp: How do you actually go through the process of curating some of the things?
Moshik Raccah: Constantly, constantly. Actually, this is a big problem with communities everywhere. When you feel that people don't know you very well, a lot of people tend to turn to self-promotion. There's a few things that we did. First, the application itself guides you not to tell about yourself, but to ask for what you need.
The basic action or the basic activity that you do on Silo is ask for something you need. And it's harder to self-promote when you're asking for help or you're asking a question... So that's the first thing that happens. But then we also curate. If someone let's say advertises their services instead of asking for help, we first tell them that this is not the way that you're supposed to use the system, this is not how our community behaves, and you need to ask for what you need, but you cannot advertise your solutions and you cannot push solutions to other people.
Then if they ignore the friendly advice that we give them, we go all the way to removing their post. If that doesn't help, we even block users. That's happened before, as well. But most of the users, when you explain the rules of the community, are very kind and behave by the community guidelines, which is to ask and help when you can.
Paul Kemp: Within the communities -- I know some of the communities I belong to have different categories... You mentioned recruiting, or specific technical questions. Do you have a system of breaking down the different categories?
Moshik Raccah: Inside the main Silo community there are communities based on topics and based on roles; people can belong to different communities based on their interests. There are communities for CEOs, there are communities for CTOs, there are communities for product managers... And also by topics. People who are looking for jobs - there are specific subcommunities where people can post jobs and can reply to jobs. But it's mostly by role. Most of the people join communities by role, and are able to collaborate there with people with the same role... So marketing people together, sales people together, and so on.
Paul Kemp: I'm actually guessing that one of the big competitors, I guess, are all the big social networks. LinkedIn have all the groups, but you often go into these groups and they are very challenging to get any information, and they kind of deteriorate.
Moshik Raccah: True.
Paul Kemp: So you're finding that a lot of people are just not very happy with the existing communities out there and are looking for some solid communities - is that right?
Moshik Raccah: Yes, absolutely. We're seeing this, and we're also seeing it in the responses we get. There's a few things that Silo members say to us constantly about why they stick with Silo versus LinkedIn and so on. The first one is because it's all about asking and helping, they get a lot less noise. People really dislike self-promotion, just like you mentioned. That's one of the things that are inconvenient in other communities. In Silo there's very little of that; there's a lot of good questions, there's a lot of request for help, and the entire application is geared towards helping those who help. The more you help, the more reputation you get in the system, the more advantages you get in the system... So it's really geared towards helping other people, and it also helps you very easily create relationships and actually get to know the people behind the questions. So it's not just about questions and an answer, but you can actually ask for a favor, an introduction, something's that's a little bit more challenging than just a question and answer. People do that and people help each other, which I think is absolutely beautiful.
Paul Kemp: Moshik, one of the things we're in danger of is you're actually picking up on probably every single big theme of this podcast, because you're also talking about the importance of networking and helping; the more you add value to the network, the more you get back. How important is networking for you in what you're doing?
Moshik Raccah: I believe in our business as founders it's probably one of the most important things that you can do... Again, because we rely so much on other people's help that are not getting paid by us, they need a motivation to do that. Let's say if tomorrow I need a meeting at Google or I need a meeting at Facebook or something else for my company, I'm going to have to rely on the kindness of strangers, in a way, in order to get that. The only way to do this and to get that help when I actually need it is to be helpful to people before. I truly believe in networking, and I even run a networking organization here in Silicon Valley, and the reason I do that is because I know that if I contribute and help people, then I'll get it back in the future. And I don't do it because I'll get it back in the future, but I know that when the time comes and I need something, I will get it. There will be a lot of people that will be willing to help.
So that's what I do - I simply go out of my way to try to help everybody I can. I still have my company to build and do other things, but when I can help someone, there's nothing better to build a relationship than helping them. It's so much better than just exchanging business cards or doing things like that. Truly be helpful to other people. If I can do that, I know that one day -- it's almost like cash that you have in the bank; one day you're going to rely on that when you need something else.
Paul Kemp: I love that metaphor, yes - the more you deposit, the more you get back... Depositing good will and being helpful. As we draw this to a conclusion - we're running out of time here - in the last few minutes I'd love to pick up on the fact that you have tens of thousands of startups and tech professionals in your system... Do you ever look at the statistics of who's joining? Are there any trends that you're seeing and new startups coming on board? Are there any big trends you can draw from your user base?
Moshik Raccah: We can see the same things that I suppose everybody else is doing, because a lot of communities on Silo are based on professional topics, so you can easily see what's hot... Now it is cryptocurrencies and AI. I can see that in the number of new communities being open all the time on these topics, which is really interesting.
Another thing that we see is that because a lot of folks are using Silo to hire, to find the next person, we can see what they're looking for in terms of trends, in terms of development trends, what are the skillsets that are most in need, and because there's so many jobs, we can also see who's joining in order to find a job, and where... That's interesting, as well. Simply to find a job.
Paul Kemp: How's it going for anyone looking for podcasters?
Moshik Raccah: Oh, for podcasters? [laughter] I think they'll be in high demand now.
Paul Kemp: You know, I often pick myself when I hear about cryptocurrencies and look at the price of Bitcoins, because I was in two mines two years ago; I have big jump into blockchain and Bitcoin and I did do a little bit of playing around, and then there's this calculator that comes out that says "If you'd have invested this much in Bitcoin two years ago..."
Moshik Raccah: Yes, that's so true. [laughter] But it's never too late. I think with Bitcoin we're being still ahead of the curve. When your aunts and uncles that have nothing to do with software or the startup industry start buying Bitcoin, that's the time to get in.
Paul Kemp: Yes. But finally then, you've jumped ship, and here you are now... Obviously, I can tell from the way you talk about Silo you're amazingly passionate about this whole field. Has it been worth it then, this long-awaited comeback? Is it worth it? Have you enjoyed your time with the new startup?
Moshik Raccah: If you're doing something that you're truly passionate about, you enjoy every day. It's not about the outcome. Again, I think that anybody who's just looking for the outcome, being a billionaire, or being immensely successful - it's not about that. If you're enjoying the day-to-day, you feel creative, you feel like you're helping people, you're building a product that actually matters in people's life - that's the reward. It's the everyday that matters. Are you doing something that makes you feel great in the morning and you're excited to start your day? That's the most important, because if it's not, then you won't survive in this business.
Paul Kemp: Yes, Moshik, that's what I try to do on this podcast - get inspiration from the fact of reframing what it means to have a purpose-filled, driven life. We all get obsessed with the outcome, which is a big exit, money, or maybe even metrics - we're obsessed with app downloads and all these vanity metrics... And yet, just talking to you, there's a bigger purpose, which is having a purpose to get up in the morning. Thanks for inspiring us.
What's the best way of getting access to Silo and also connecting with you? What's the best way of getting in touch?
Moshik Raccah: Go to your nearest App Store and type "Silo." It's as simple as that. Helpful startup communities. I think your audience specifically would be happy to have every one of them. If the audience is founders that are looking to learn more, to do more, need access to Silicon Valley, or just want to help each other, I think it's a great place to be.
Paul Kemp: Wonderful. Moshik, thank you so much. There will be show notes on episode 535; just go to theappguy.co and you'll be able to also get links to various ways to connect with Moshik.
Thanks very much for coming on and inspiring us all. All the best for the next future with Silo.
Moshik Raccah: Thank you very much for having me, and I look forward to hearing the next episode myself.
How A Podcast Episode Of a16z Changed My Life
Paul Kemp: I want to say I'm really thankful for you coming on, as well. I know that we've got some really interesting topics to go through, and I think that will be fascinating for listeners of the appster tribe.
Let's start with your story, Leela Apps, first of all. Tell us what Leela is and what it does.
Sandeep Jain: Sure. We actually have two apps on the App Store. The first is the Leela Podcast App, and the second one is the Leela Kids Podcast App.
Regarding my story - I was not planning to start that company on podcasting. What I was investigating was to start a company on online marketplaces. Then a friend suggested to me to listen to a podcast episode from Andreessen Horowitz, the podcast called a16z on online marketplaces. I was like, "I'll listen to that."
First of all, it took me quite some time to find that particular episode on the podcast app, and on the iTunes standard podcast app. But when I started listening to it, it was exactly what I needed to listen... Because here was a VC who invested in and out in this space, and they were giving a framework for an early stage founder like me.
When I finished listening to that, what really stood out to me was -- I live in Silicon Valley, and I was really not aware that this content existed. My knowledge sources are going to the search engines, looking at business magazines and analyst reports, but that podcasting has this interesting draw of information, both for personal and professional use. To me, that sounded like a really big opportunity to tackle, and that was my entry into the podcasting universe.
Paul Kemp: That's why I love having you on this show. My show has been running for a long time now - you are episode 534 - but what I love is that you were inspired by one episode, and there's so many different wonderful resources out there, and I cannot remember in my entire life being that inspired when listening to the radio, or just watching a TV program... But you're right, podcasting has this impact on you. What happened after listening to that episode?
Sandeep Jain: First of all, an idea struck in my head that "Hey, this is information that most people are not aware of." There had been studies on it, and the research says 40% of Americans are not listening to podcasts. I talked to my friends and folks that I know in Silicon Valley, and about 5% of those listen to podcasts. Then I looked into the industry, the products... Most of the podcast apps I found for listings of channels and shows - to me it was like what internet used to be before Google came along. Like, you have to go to the Yahoo! search engine, in the directory, in the right place, and then you have to look for things. Then Google came along and was like "Look, just tell us what you're looking for and we will just tell you what is the right resource there." I found a similar problem in podcasting. But the thing is, for me to leave the job and start working on this full-time, there needs to be money that could be made.
My two early observations were that music companies like Spotify, Pandora, Soundcloud - they have a challenging business model in my mind, because they have to pay license and cost at the backend everytime you and I are using their app. They have to pay the creators.
In the podcasting universe, 95% of the content is free, which means that apps or the platforms are not incurring any licensing costs when they are playing the content. That was a big plus for me as a business to run.
Secondly, I looked at the online radio ads industry. I think that's about 18 billion dollars in the U.S. Podcasting, I believe, is around 200-300 million dollars annually. For me, that's a big, big opportunity for growth, and I needed to find out "Can this growth be driven by Leela Labs? Is this a technology problem or is this something else?" In my mind it's a technology problem, and that's when I decided to really leave my job.
Paul Kemp: Let's talk about that part of your journey. I always love tapping into how entrepreneurs like yourself actually have the courage to leave a very stable salary. Tell us how you actually did that.
Sandeep Jain: I have started a little late, I'm not a 20-year-old getting out of grad school and having tons of ideas, can sleep on the sofa and work on the startup. I have a family, I have a wife and I have a child, and I'm middle age, and I'm living in Silicon Valley, which means the salaries are really high... So it was a really tough decision to do that, though if I look back, I would have done it slightly differently.
Here's my theory on this now - when you're working, you have a lot of money that you're getting through the salary, but you don't have a lot of time, because you're doing a full-time job. When you leave your job, that equation changes. You suddenly have a lot of time, but you don't have this incoming money.
The right way in my mind to leave your job is if you're convinced about a particular idea, then spend at least 20% to about 75% of your salary in your idea that you are working on. Let's say an engineer in the Silicon Valley would be paid 120k annual salary. Your monthly salary is $10,000, so 20% of that is $2,000, and 75% is $7,500. Take aside that money from your incoming paycheck and invest in your idea.
Maybe it's for paying the contractors to get your app done or your mobile website done, maybe it's to get the designers to get your logos etc. You will tend to overspend, because you are not trying to maximize or optimize every dollar, so to speak, but what this gives you is when you have incoming money into an idea, there is a momentum in your idea, in the sense that you are seeing a product being built. Now, maybe it takes more money, a little bit more time, but you are putting the resource that you have, which is money, to the best use. When in three, four months you see some sort of traction, then you can leave your job and work on this full-time.
Leaving the job just based on an idea in your head - I don't think it's a wise financial decision, which is what I did, by the way.
Paul Kemp: It's what I did as well, Sandeep. You know, in all these episodes, that is one of the best pieces of advice about leaving a job, and you've almost boiled it down into a very scientific formula. It makes a lot of sense, but I guarantee not a lot of people are actually following that advice. They just go on a feeling... Or like me - I was unhappy, I needed to do something else, and I just quit. I now regret that. I wish I had followed this advice.
In terms of your story, you did actually quit... Why did you go in with someone else? What's the importance of having a co-founder?
Sandeep Jain: My story was I left my job and I worked on this full-time myself. I knew that I wanted a co-founder, but I did not spend time to do that until I was about 10-11 months into that. That's another thing that I think you should not be doing, or I would advise anybody not to do that. My background is in tech and product, so even if I hadn't coded for the last five years, I thought I could do it, and I did end up doing it.
My theory was that it would take me quite some time to find a co-founder, and once I left my job, I would rather invest every minute of my time in building the product that I thought about. That's a fallacy, that's the wrong thing to do. I think your every minute needs to be spent in growing your company. The product is there, but you need to think about the company. That's the role of the CEO of the company.
A company is built on multiple people, not just a single person, and the only way to attract multiple people is through capital. You would have to have a co-founder no matter what. It's not a if-question, it's a when-question. The problem in hiring much later is that this person has not gone through the decisions that you have to make on a daily basis on what to do and what not to do. This person will be joining you late in the game, and they will probably take a similar amount of equity that they would have taken earlier, and what you just lost on was the value that they could have delivered to your company from day one.
The challenge is it takes time to find a co-founder; I would say at least 1-2 months. It is not a phone conversation thing, it is not like "Hey, let's meet on a coffee thing and I'll like you. You seem to be the tech guy that I needed, let's work together." There needs to be a dating period, which means I would highly advise your audience that if you're thinking of somebody as a co-founder, just figure out a few tasks that you can work together on without this equity and this money business. Just get a feel of each other. "Do you like the things I like?" Do you like each other when you're disagreeing on things?
Once you pass all these milestones or barriers, then only start into that conversation about equity and "Let's work together." I've had too many of these bad steps... You meet somebody and say "Let's just do it together." That's not how you build a company, that's not how you build a professional relationship, that's not how you marry somebody - which is the analogy that I use for myself when I'm building a company. It's like a marriage, so you've got to get to know each other carefully. Sorry, that was a long answer.
Paul Kemp: We've had many past episodes where one of the biggest challenges of a startup is founder disagreement as well, so you're right to call it a marriage, and having a good dating period is probably important, because then it tries to avoid a messy divorce.
You mentioned coffee, and having these coffee meetings. Many of us do have these little chats... I wondered how you make these productive, because often they're just chats and they seem to get nowhere.
Sandeep Jain: Right, I used to be on that side of things as well, where I am living a corporate life, and I get out of the office and I do need a coffee; how about just meeting somebody over coffee for that? The problem with that is - at least from my perspective as a startup founder, I don't have a lot of time, I don't have a lot of money... All of my time and these coffee meetings need to be productive.
Once you leave your job, there are people e-mailing you, "Hey, let's meet up for coffee. It's been a while." I think as a founder - and I quickly realized that - you want to be polite to your friends as well, but you need to quickly think that all these meetings are at least one hour of your time, and time is money for you as a founder.
If you are meeting somebody, make it goal-oriented. Have a -- not like an agenda, keyword or something like that... But just say "Look, here is what I would like to discuss or get out of the meeting." I think that the social meetings of "Let's just get together and have coffee" is just a sheer waste of time.
If a founder is trying to get out of their daily work routine and have some relaxation at a coffee shop, that's okay. But if you really want to extract something out of this, do set that expectation with the person that you're meeting, that this is what you want to get out of it.
I was getting some repetitive things from somebody, and if you don't reply or you reply late, people get an idea that you're probably too busy, and I think you are.
Paul Kemp: You know, you mentioned something there about the transition of working in a corporate environment and you don't worry too much about having coffee meetings, because it's not really your expenses... And yet, there is a culture shock when you transition to this other side of life, where you're then responsible for your income, you're supporting your family. Any advice on how to get over the culture shock of jumping straight into a startup from a corporate environment?
Sandeep Jain: I think for me it was -- I call it a "culture shock" in the sense that you expect, when you leave something behind and you're working on an idea, you want validation; that's the number one thing that you are looking for as a founder, either from customers, your family, and even from your friends, that "Hey, what you're doing is the right thing. Just keep on moving!"
It's not like they should not be telling you what your blind spots are, but what you look for is somebody that has got your back. "Hey, look, whenever you need help, we will be there."
The challenge is that I think some people do not help you the way you think they should have helped you, and when that happens, it kind of hurts emotionally. When you are doing your own company at my age, you need all that support. It's emotional, and all that kind of support from your friends and the people that you trust. This is the sort of thing that will happen to people where some people will not help you the way you think they could have helped you, so it's just being emotionally prepared that this is going to happen, it's not whether it's going to happen.
If you have that thing in your mind -- I did not when I started... I thought "Everybody's going to help me in this", but then people did not. It was tough, it was hard. What I decided after some point was that "Look, I will put people in two categories." Maybe it's not the right way to put it or say it, but at least this is how I put that in my mind. One is the people who really care about me as a person, and who are invested - not financially, but invested in me being successful.
The second is the people who are just drive-by friends, so to speak, who are there just because of your social strata, but they do not care about my success or my company. I quickly decided where to spend most of my time and to ignore the rest. I don't know if that makes sense.
Paul Kemp: I'm really connecting with you here, because I had the same kind of feeling. A lot of people are in your professional life because of your work; all the friends you think you have in the company, that as soon as you're on the other side, you're out of the family. You have to get used to that, and it was really hard for me initially to have that adjustment, and then realize that "Oh, you're on your own, and you have to meet these new like-minded people who share your values", and that's why I jumped into podcasting eventually. That's where I've met like-minded people, not in the circles I was going around in my previous career... So I'm really feeling for you here.
One of the big challenges is getting PR and getting out there... I know that you mentioned in your e-mail to me that you had a PR hack. I wondered if you could share how do you PR hack yourself.
Sandeep Jain: Sure. When I was releasing the apps I used to look at a lot of blogs as to how to get the attention of the media - unpaid media, in particular. There's a lot of articles on that, and I did read most of them, I would think. I'll tell you my strategy was. It may not be different from some others, but I'll just share it with you.
My business was in podcasting, so I did a Google search and Google Alerts for all the reporters who were talking about podcasting in the last year. I made a list of them. You can get their e-mails, it's not that difficult; there are multiple tools out there. One thing that I did not know and I realized months later was most of them are on Twitter. Actually, I knew they were on Twitter, but this is one thing that I didn't know - most of them have their DM's (direct messages) open.
I'm not a social media wizard or whatever - I sometimes stick to Facebook - so I'm still discovering all these new things... And what I found was that if you DM a reporter with a small text which really applies to what they have done, they will correspond back with you in some ways, and you have to ping them once or twice so that they do it. That really helped me, so that's one.
The second is I did not spam any reports, which means that if you are a reporter covering food in a publication, you would not see my e-mail. It has to be highly relevant. That's a discipline I would say people need to maintain.
The third is the subject line. That's all you have got. I think most blogs talk about this. I'll give you a concrete example. Leela Kids App - this is an app where kids can enter their age and the category of what they want to listen, and it starts playing stuff. We were the world's first podcast app for kids (we are, actually). So I said "Look, what does the subject need to be for this Leela Kids App?" We started with "World's first kids' podcast app", and we got a few clicks on that. I later realized that it is maybe too boastful. Reporters look at it and say "Maybe this is too good to be true", so they're not clicking it.
Then I thought what would a reporter write in their article? They're not going to write that it's the world's first kids' podcast app; they don't have time to do the research. They would probably write something like "How to take kids off your phone and make best use of it", "How to make your car trips with kids enjoyable." Once I started using these lines in the subject lines of the e-mail, I started getting more responses from the reporters.
Paul Kemp: Alright, so what I'm learning from you here which is fascinating is almost write the headline for the reporter, which would grab their attention, and they may actually use that in their own writing.
Sandeep Jain: Correct. The problem - and I think everybody knows that - is as a founder, when you're writing about your product, you are just much into your head and you write it as if you're writing a product feature rapport, which is not emotional. There needs to be some emotion in the headline. "World's first kids' podcast app", even though it may be factually true - and it is in our case - it is not emotional. My advice is to come up with a line that is emotional. All of us like those headlines, and I think it's best to turn on the time on each side with those things.
Paul Kemp: In the few minutes we have left... Basically, this is a very genuine podcast, we like to get to the raw truth of how hard the app business is. I remember when I first got into apps I used to just go around telling everybody, and they would say "Oh, you must be a millionaire then. You're in the app business." It has this perception that it's so easy. You just go build it out, put it on the App Store, and then you just watch your money coming in. It is really hard, as I've found... Did you find the App Store really hard? How hard is it?
Sandeep Jain: It is very hard. The problem is there are just too many apps out there, and unfortunately today the primary way to discover apps is on the App Store or on the Play Store itself, so you have to invest in something called app store optimization. In a world where we have limited time and we have given this time to apps like Snapchat, Instagram, Facebook, Twitter, in the just the sheer number of minutes that you have in a day, you are trying to carve out a space in that time saying "Look, it makes sense for my app to be useful for you." That's really hard, because people are spending a whole lot of time on these other apps, and what you're telling them is that you need to take out time from there and they need to start using your app. That's a very hard proposition, especially when you're competing with ten other apps that may be doing something similar to what you're doing.
Even though it sounds sexy to be in the apps business, people need to be aware that for consumer apps to become the likes of WhatsApp, Instagram, Snapchat, it is a lot of luck, and of course, product execution. Just don't go into this for the lime lights or the successes that you see; for consumer apps building traction is hard, so just be prepared for that is my advice.
Paul Kemp: I'm doing a podcasting app, I'm a podcaster, and I just wondered what trends do you see in podcasts? I was very interested when you said initially that there's only 300 million dollars going into podcast advertising, whereas there's an 18 billion dollar industry for radio. Do you see that there is movement in the amount of money flowing into podcasting?
Sandeep Jain: There is some movement, though not to the pace that I would expect, and I think that's a problem of technology. The reason it's 300 million and not a billion plus is because brand advertisers are still not embracing this medium. When brand advertisers spend money, that's when you get the likes of Facebook, that's when you get the billion dollar plus market size.
For brand advertisers, they are looking for two things, in my mind - either it's scale, that you get on television or radio, or you need precision, which is what the likes of Facebook and Google give them. Like, "I need moms who are between 20 and 30, living in this particular city, who are doing this particular thing", which is what Facebook gives. The challenge with podcasts is the audience is not that big like that of radio or TV, and nobody as of today has given the audience-based ad targeting to the extent of what brand advertisers are looking for. Once that happens, I think things are going to change very quickly, but it has to happen from the technology side - how people are consuming that content.
Podcasters are struggling for monetization as well, so I believe this is the tech platform that needs to solve that, for both users and podcasters.
Paul Kemp: How can the appster tribe listening to this best make use of your app? What sort of group are you looking for to download your app?
Sandeep Jain: We have two apps. The latest app, Leela Kids Podcast App is made for parents and kids. I have a four-year-old, and he likes to listen to stories before he sleeps, and we can do only so much justice with that. In our app, you can just select the age category of the child, and there are different topics, like science, dinosaurs, animals... We are adding something new, like meditation for kids, tech and gadgets, world war histories, and lots of different topics. Parents and kids can make use of the app, so these are the kinds of users that we're looking for.
We are actually looking for podcasters as well, because there are a few things that we are working on in our app. Some podcasters, as you know, raise money through Patreon, and we are building features in our app so that with a single click, users who really like a particular podcaster, they can donate it from within the app. They can message the particular podcaster on their Twitter, Facebook or whatever social media from within the app.
We are trying to bring all the workflows that users and podcasters want to have in the listening app itself, instead of going out and probably not doing that.
Paul Kemp: Well, that's a wonderful mission. I'm so glad you got into this space, because we need more innovation like that. Sandeep, it's been just a wonderful chat with you, I'm so inspired.
I wondered, how best can people reach out to you? What is the best way of getting in touch?
Sandeep Jain: They can e-mail me, I think that's probably the best way. My e-mail is Sandeep@leelalabs.com. Maybe that's the best way to reach me.
Paul Kemp: Wonderful. Of course, there will be full show notes. This is episode 523 of The App Guy. Just go to theappguy.co. Sandeep, that's great! Thanks for coming on the App Guy Podcast, and all the best with this project. You sound like you've put a lot of effort and work in, and you're very knowledgeable in this space, so I'm sure it will be a great success. Thanks for coming on!
Sandeep Jain: Thank you, Paul. Glad to be here!
What I Learned Getting Millions Of People Using My Apps
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, this is Paul Kemp. What I do with this show is I go around the world and I interview lots of successful app entrepreneurs. Today I'm actually recording this from Indonesia and I'm chatting with our guest, who is in Singapore, he has just driven there.
He is a successful app entrepreneur. You're going to learn a lot from our guest today. Do remember that if you enjoyed my content, a five-star review from you on iTunes would really help out. Also, you can leave any positive comments you like on other podcasting apps that you may use.
Let me get today's episode underway and introduce Kay Minglani. Kay Minglani is the co-founder of Mindvalley, and he has built several apps, many of which have become successful apps, with millions of users. He's done some really innovative stuff and has been featured many times. We're going to learn a lot from Kay. Kay, welcome to The App Guy Podcast!
Kay Minglani: Thank you, Paul. I really appreciate it.
Paul Kemp: Thanks for coming on the show. Let's talk about the successes, because we love to hear about success stories. How have you got on with attracting so many millions of downloads? What's the secret ingredients that you're doing to get this number of users?
Kay Minglani: I don't know, I don't think there is an easy way, for sure. With every year that passes by in an entrepreneur's life, you tend to lose more hair; I don't think there is any shortcut or any easy way. We've started in 2013 - that's when we actually started working on our first app, and we were one of the few lucky ones who actually hit it off in the first app. Usually it never, ever happens.
After that we went on, did several other apps which did not get any installs and were not even half as popular as the first one. The first app that we did was actually in the space of meditation and personal growth. It goes by the name Omvana, and at a given time we were number one top-grossing in about 37 countries in the Health and Fitness category.
How did we go about it? We actually gathered inspiration from a couple of people. 2013 was the year when Apple was just settling in the app market; they had about a couple hundred thousand apps, nowhere close to what they have right now. The book App Empire had just hit the bookstores, and we were the first ones to grab a copy. It's written by a guy called Chad Mureta, and the guy was creating emoji apps back then. We were like "I think we can create something better and more meaningful."
2013 was around the time when the Google guys were talking about Moonshot and toothpaste companies, which means something that a user would use day in, day out. That's where we wanted to merge what we learned from some of the other apps and try to create something that people would use every single day. That was the number one lesson that we learned, and we continue to work on that one - how can we create an app that people would use every single day?
We thought that meditation and personal growth was one idea, which was super niche; nobody was focusing on it back then... Only Headspace had started to emerge, and we were like "I think we can nail it." We went and spent a couple of months and built that app... So that's how we got started.
Paul Kemp: I love this already. In all the 500-odd episodes I've had, I've never heard the term "toothpaste apps." I guess that means that it's an app that we use every single day. We often overlook that.
Meditation apps - I've built a meditation app and it pretty much tanked, but you managed to get this phenomenal growth. Was there any particular point in time that you can look back on and say "Well, that was what achieved our success"? Was it being featured or getting a mention in a top journal?
Kay Minglani: So I actually think that a couple of things, and let me just give some of the people who are listening just a quick glimpse of how those things rank, in some way. If you are looking for spending an insane amount of money to build an app and launch the product, my suggestion is save your money and don't burn that for sure. If you want to spend $50,000-$60,000, build the best product and hope a lot of users would come in - that never holds true. Given that we have about 3.5 million apps on the app store, to grab that eyeball you will either have to have deep pockets, otherwise you're not going to get the users.
Coming back to your question, what did we do, some of those things that actually worked in our favor - number one is don't rely on PR. PR will only go so far in getting you that bump that you need in the app store. The only magic word here is the user. You have to, have to, HAVE TO address the user's pain point, and get that user at least logged back into the app at least three times, if not more.
I'll give you another couple of really strong examples, and we'll only focus on users as a concept and nothing else the next few minutes. We realized that a fear in the meditation space, or let's take an example, you're in the tourism space, or somebody is in the social media app space - you have to realize that when the U.S. is sleeping, Asia is awake, and somebody should be using the app here, and when Asia sleeps, somebody needs to be using your app in the U.S. That's the first concept, which is the toothpaste concept that we spoke about.
Second is you have to focus on not bothering the user and going straight to delivering the value. That means don't bother the user with 15,000 pop-ups and then deliver what your app has to say. Give the value first, and the user will 100% come back again. That's point number two.
Point number three is make sure that you have a lot of freebies in the stuff. And don't have too much freebies, because the user will only consume the free stuff and never get to paying you for it.
So point number one, we said look at a concept which users are going to use on both sides of the world, in the West and in the East. Second is give genuine value and give it as quickly as you can, without too many pop-ups.
Number three is make sure you have enough free content to keep the user engaged, and make sure the user logs in at least 2-3 times, because Apple uses 100% that as an algorithm, and so does Google and Android. The user needs to log back into the app and there has to be constant interaction with those limited set of users that you initially get in the first 40-50 days. Should I go on? There are a couple more things that I could add here.
Paul Kemp: Well, first of all let me tell you - I love this content and the experience you're sharing with us now. What I've just summarized from you is one, make sure the app has a worldwide appeal, so that it can be used around the world; when a part of the world is sleeping, the other part is waking up and using your app, whilst brushing their teeth.
The second is don't bother the user too much - and I think we overlook that so often, because we want to monetize our apps so quickly, and yet we kind of forget to give the value first.
The third point you mentioned is make sure we have enough freebies, but not too many to make it a free app and not attract any in-app purchases. What I've learned also is that Apple and Google do look at the number of times you actually have users log back into your app, not just your downloads. Wonderful stuff.
Kay Minglani: Yes, because in today's world it's super easy... I could give you $5,000 and you could show a Facebook ad to somebody, let's say, in remote parts of India or Thailand or Indonesia, and get like a cent or five cents or ten cents an install. Is that user going to use the app? No. And is Apple and Google sophisticated enough to actually filter that in the algorithm? 100% yes.
So if you are buying users that are not going to open the app and come back two times, don't bother. Don't spend your money on Facebook to get users that are not going to open the app and use it. You are actually doing a disservice to your own self by actually killing the app algorithm, and it'll be two times or ten times as hard to rank back up once you acquire traffic that's never going to use the app. That's one important point that most developers miss out. They think "Hey, I've spent $30,000 or $40,000 building this really cool app. Let me spend $5,000 more and get really cheap traffic on Facebook or on Google, or through AdWords and let me see what happens if I get 30,000 installs."
Chances are, if you're buying cheap traffic, they're not going to open the app. They're probably coming through playing a game and then installing the app just to get a free credit, or somehow they're coming through whatever sources. But if they are non-engaged users or they're not your target audience, do not waste your money on those installs.
Paul Kemp: Kay, one of the biggest challenges I think the listeners or the appster tribe have when they talk to me is the fact of spending a lot of money on an app initially, and then watching the app attract a few downloads a day and being kind of upset that they've invested so much, and then they chase the downloads. But what I'm learning from you I guess is a way of trying to reduce the upfront cost by doing an MVP (minimum viable product)?
Kay Minglani: I would do the other way around. I would actually pick up the phone and call two SEO companies and ask them to give me a quote of their services. In return, I would just say "If you want to give me a quote -- I might not work with you, but I want you to give me all the keyword research in this particular industry and tell me what's popular out there." Those are five calls that you would possibly make, and five companies who are really big giants in the SEO space or advertising space will come to you and say "This is where the magic lies, these are the keywords, this is what people are searching." That not only validates your idea free of cost, but also gives you reassurance that tomorrow you have third-parties vetting out that "Hey, there's enough traffic, enough volume, enough searches in that space", so you will not be the only ones trying to float out that.
Second, if you've spent some money or you have an idea on the app store, I think there are several entrepreneurs who will tell you the same thing - don't spend all the money that you have trying to build that fancy leather bag that you can market to somebody else. Always try and sell something that's really, really cheap.
I'll give you an example - we did an app just purely based on marketing. We probably spent $6,000 building that entire piece, and we called it "The World's Most Boring App." It was an app around sleep. Just by marketing it in that funny way, we got to test the audience. Because the initial response on YouTube video was phenomenal... We hadn't even made the app, we just made a video and asked people to say "Hey, this app launches in 30 days. Be the first one to actually figure it out!" and sub list size grew from 10,000 to 40,000 to 80,000, and that's when we were like -- before we spend more back-end money, put more servers on it - "I think there's something that's magical going on here", and that's when we actually pushed the app out.
So MVP - yes, do it. Get other companies in the keyword space, in the SEO space, in the marketing space to actually quote you. If you can find an app marketing company, pick up their brains for free, and then go ahead and build the app.
My suggestion is if you are looking at a paid app, spend good money on design; do not compromise on design... Whereas most people who are trying to build an MVP just go straight for hiring the top developer and building the app. I can go a little deeper in this concept, because I think this is super important.
Paul Kemp: Yes, please.
Kay Minglani: So just to go a little deeper on this one, I think design is the most prime thing, and design doesn't mean just how it looks and feels, it's the aesthetics, it's the look and feel, it's the navigation, it's the user experience, what colors you are using.
If you look at fitness brands like Zumba, or other companies out there who are let's say in the energetic workout or dance space, they are all about bright colors. Let's take an example like Color Run - you are playing with colors when doing your 5k: bright logos, bright images... Some of those things also add to aesthetics.
The most important thing, of course, is your UX and UI. If you can, read a book on the Google ventures framework of Tom Chi, who is the Google ex-founder's framework on rapid prototyping. The second thing you should do is do a discovery phase. There are free resources available out there on discovery phases, as well as on rapid prototyping, for you to be able to quickly sketch your app and test it, and spend more time in designing navigation, and the look and feel, and on what the user is going to be experiencing, than jumping straight to developing.
I think if you can delay the developing by three months and just focus the first three months on user research, you will see every single dollar that you spend on building it will actually give you back money, or will be a good ROI.
Paul Kemp: Yes, I think that's one of the biggest mistakes that I've encountered and trying to help people overcome - they want to invest the majority of their money in just getting an app ready. It may take a year developing it, and end up pushing it out. What I love to hear from you, Kay, is that it's better to actually just take your time, prototype and wait, then eventually have an app that is likely to be used.
Kay Minglani: Yes, I'll try to go deeper on this concept, Paul, since you asked. We just recently launched a really flagship app called Quests. It's an app around, of course, daily personal growth, but it's designed around micro-learning, and it challenges the user to actually complete a learning module of, let's say, some of the world's best teachers around the world. Robin Sharma is on the app or how to be that linchpin in an organization, or if you are an entrepreneur or a C-level executive, how to be that linchpin in the company. We have several other teachers from Howard, to Wim Hofman, to a couple others. We spend roughly four months just going back and forth with some of the actual users and designing this app, without even writing a single line of code.
We actually said "If this is the target audience, let's pick up the phone and call them with every single iteration we make of the app." We have literally dummy plastic boxes which we had taken colored printouts on - this was the actual app - and we actually placed them on our table and we actually did about 25 interviews, every single week, until we got that perfect navigation of why our user would consume, the way it would consume and what will the learning look like.
We literally spend three months - that's 90 days - before we even wrote a single line of code. That actually saved us not only really precious money, but actually we were able to get that initial 50,000-60,000 users and actually get the maximum value from them.
Paul Kemp: Kay, this is extremely valuable because again, in all these episodes we've recorded, it's very rare that we hear the concept of interviewing the first four months of your project, just interviewing the users and getting to know what they're really looking for. This is massively valuable, and I'm sure that pretty much 90% of the people listening do not do that step when pushing an app out into the app store.
Kay Minglani: Yes. If I had $100 and if I were to spend that building an app, I would save the $100 for the first 90 days, nail the design, spend the first $25-$30 just paying a really good designer in nailing the app for sure. I would have that designer question me as much as he can from a user journey perspective and onboarding perspective. The remaining $70 that I'm left with, I would spend about $25 more on a robust backend, and the remaining on developers.
I would be 100% certain that I've interviewed everybody. I cannot go wrong with at least the user base. I have spent enough money on the design, which means the user will have a phenomenal experience, and the remaining - my developers are doing a good job of actually building it out.
And I would choose one last thing, which is "What is my actual strategy? Can I test this concept on web, or can I test this on iOS?" I would make that decision before writing a single line of code.
Paul Kemp: Kay, I wish I'd met you earlier. When I pushed out my meditation app, I did everything completely opposite to what you're suggesting, and that's probably why it failed. It's lovely to go through all these steps and help everyone, trying to give them the best opportunity.
Are there any other steps that you have, in the last few minutes that we have for talking to each other, is there any other valuable insight that you can think of that could help others who are struggling to just get that hit that they're looking for?
Kay Minglani: I would say research. That's the number one thing I tell my marketing guy. If that marketing person, or if my partner - or if even me, for that matter - have not studied the app store enough, I would say just stop; there is no point in launching the app. Everybody on my team has desk devices in every single form or shape, either if it's a tablet or an Android or an Apple TV or an Apple watch, and they have to wake up and actually install 1-3 apps every single day, and actually experience them.
I'm giving them a budget of, let's say, $100 every single week that you can go ahead and even install the paid apps, just to see what's out there. Because 99% of the time if you think you have a great idea, the neighbor next door has an even greater idea.
So make sure you're studying the app store. Again, do not jump into it until you think you have total understanding of the U.S. app store, or the local app store that you are targeting. And even if you let's say you're in South-East Asia or Indonesia, you should look at the U.S. app store, as well as the app store that you're launching the app in.
Paul Kemp: Kay, we have a couple of minutes left... I just would love to know, from a successful app entrepreneur, what was it like, what was that feeling - can you give us that day when you logged into your developer account and you saw a huge spike in downloads, or you knew that you had a hit? What did that feel like, to know that you are on the road to success?
Kay Minglani: Yes, I think I just felt happy for the team more than the feeling, because I know they put in ten times the effort that I put in, and they were super passionate. We still have a picture where all of us were in the office at 2 A.M. That was the time we actually got featured by Apple on their top 10 apps in the Health category, and we were the first ones to actually feature on the iOS 10. That was a good feeling, and that actually speaks to the fact that you have to utilize the market space you're in. Listen to what these guys are launching and work with that.
The minute Apple came out with HealthKit, we were like "Don't worry, stop everything and just focus on what the HealthKit is all about" and be the first one to actually ship that product, because Apple is going to pick it up and feature you guys if you've done a good job.
Our only objective was "How do we repeat that feeling?" and when we had the first $100,000 in our account, we asked "How do we replicate that feeling by just being the best of every single feature that the marketplace (either Android or on the iOS side) actually gives that to us?" If iOS gives you a new app store, which is iOS 11, and you can have collaterals, you can have videos, make sure you're the first one on it; make sure you have spent enough time and you're shipping the right part.
So for us it's just about replicating that feeling all over again, and yes, it involves a lot of hard work, there's no doubt about it. I hope that answers the question.
Paul Kemp: Yes, absolutely. Another genius, golden nugget you've just given us - concentrate on those things that Apple are bringing out new on the iPhone, because that's the apps that are likely to feature. Incredible.
Kay, how best can people reach out and connect with you and Mindvalley? What's the best way of getting in touch?
Kay Minglani: They can just e-mail me, I'm super active on e-mail, even though I travel a lot. My e-mail is k@mindvalley.com, and I'm more than happy to help out.
Paul Kemp: Wonderful. Kay, it's been an incredibly enjoyable episode to record. This is why I do this podcast - to meet people like yourself. Thanks so much for coming on.
Kay Minglani: Thank you for doing it, I know there are a lot of people who benefit a lot from this, so thanks for doing this job, by the way.
An Entrepreneur Empowering Children With Essential Lifelong Skills
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a show that helps you out as an entrepreneur, startup founder, or even if you're just in a corporate job and you're interested in this world of entrepreneurs that are the most incredibly helpful founders, helping us in our journeys. We deconstruct success, we look at failures and we learn in our own journeys, so if you are any of those above, then this is going to be the episode for you, because I do like to go around the world... And today I have landed in Europe, because there's a lot of stuff going on in the tech world in Europe.
I've got a wonderful co-founder, his name is Søren Nielsen, and he is the co-founder of ERNIT. We're going to learn about ERNIT and how it's helping change the world. Søren, welcome to The App Guy Podcast.
Søren Nielsen: Thank you very much.
Paul Kemp: Let's talk about ERNIT first, because I was really blown away by the mission that you have... Tell us about ERNIT.
Søren Nielsen: Well, ERNIT is empowering children with essential lifelong skills; we do that with a physical piggy bank that's connected to an app, which is connected to a real-time bank account. Our big mission is to empower children with essential lifelong skills by making digital money tangible.
Paul Kemp: I'll tell you what, that's a fantastic elevator pitch. First of all, how did you come up with this idea of empowering children? Was it a light bulb moment, or has it been a long, slow burn?
Søren Nielsen: The story behind ERNIT is, of course, like so many other startup stories, that the three founders behind ERNIT - Thomas, Mads and myself, we were sitting around a New Year's Eve table a few years ago, talking about how to give a kid some good money habits. Thomas has two kids, Mads has three and I have one, and we all had piggy banks when we were kids, so putting coins into those piggy banks, and pouring it out and counting it - that was like our first interaction with money... And we couldn't really see our own kids doing the same thing, mainly because we were using our credit cards to pay with, our phones to pay with.
I think what really hit it home for me was when my own daughter called my credit card [unintelligible 00:02:29.18] magic card, because she thought this card had an endless amount of money. We decided then and there that we were going to do something about it; we were going to go out and research the area and create a product. Along came ERNIT, a physical piggy bank connected to an app.
Paul Kemp: What is actually really interesting - first of all, you were sitting around a table, and it's New Year's Eve, and all we can think about is starting a business. [laughs] I'm surprised you remember the conversation.
Søren Nielsen: Yes, of course it's a long time ago now, but it's also one of those defining moments where you're sitting together with some friends and you're talking about life, and you're talking about what's the next year going to be like... I'd just heard the term "wine entrepreneur" a few weeks before that New Year's Eve. A wine entrepreneur is one of those guys that can just talk about all the good ideas when he gets a glass of wine, and then never does anything about it. I just decided then and there that I didn't want to be that guy, so we became champagne entrepreneurs instead, I guess.
Paul Kemp: [laughs] Now, the idea of this show is to inspire the listeners, the appster tribe, and what's really interesting is you're starting a business with friends... Tell us about the circumstances you were all in, because it's a big jump to go from having that light bulb moment to then actually running your own startup with the three of you. What was your personal circumstance at the time?
Søren Nielsen: Well, at the time I was an editor-in-chief at one of Denmark's biggest financial media. I'm a journalist by background, and I also have some business degrees, as well. I was sitting in a really well-paid job, and the same goes for Thomas and Mads. They were within the digital industry, making apps and working with ad agencies and stuff like that. We were all having some good jobs, having wives, having children, mortgages, everything... But this was just too big of an opportunity to say no to.
We decided first of all that we were going to play it safe in the beginning, because we were going to have our normal jobs, and then at night and during the weekends we would work on ERNIT in the beginning. We did that for one and a half years, and I remember the big changing moment. That was when we got the first investors (business angels) on board. We got some business angels saying "Yes, we want to put money into ERNIT", and I remember going back to my wife the same evening, telling her "Well, we've got these two business angels that want to put money into ERNIT." She just looked at me and said, "Well, then you have to quit your job." There was no question of us taking that jump and doing this, because again, this was a once in a lifetime opportunity and I wanted to be more than just that wine entrepreneur, I guess.
Paul Kemp: What I love about doing this podcast is we learn so much about the right way to pursue a dream. Just two episodes ago we learned that you know when the right time is to quit your corporate job, your well-paid salary, and again it's come up in this episode, where you just knew after a year and a half of hard work on weekends, you knew when to quit. Was it the same for your co-founders? Did they follow the same path as you?
Søren Nielsen: Yes, definitely. There was no question of us wanting to try this out, and we also had the huge support from our families. It's impossible to do something like this if you don't have the support from your family, and also during the hard grind which we're in right now... Because you can always talk about what it is like to start something up, but then going through the first couple of months, going through the first year and then the second year, you get into this grind where, of course, there's a lot of hard work. I think that's one of the things that people don't hear as much about - the grind, the middle part. You hear about the beginning, you heard about the end, but less about the middle of it all.
Paul Kemp: Yes, and that's what we like to explore, because what we try and do is unravel the real story behind people like yourself. What I'm really impressed with is the fact that, you know, a year and a half is not an impulse decision; you obviously know that's what you want to do, and the idea is solid by then, because you've invested so much time.
So you made the transition... Any tips or any strategy for going from the three of you earning a good salary and being able to pay your mortgage, to then basically relying on your startup to fund your own life?
Søren Nielsen: One of the things that I think is important is of course the family; you need to have the support of your family to be able to do this, or else it's not going to work.
The second part is that you have to have a time path going forward, saying "We'll give it whatever time it needs", but you have to be able to say -- for us, for instance, we said "Okay, we'll give it 12 months; we'll work without a salary for 12 months, and after 12 months there needs to be a salary." It doesn't have to be big, and believe me, it's not big right now, but there's a salary, and that was the plan that we set: "We'll work a year for free, and then something needs to happen."
I think it's really important to have a time schedule going forward, because if you're not doing that, then you're just working into oblivion, and you can do that as a startup.
Paul Kemp: That's a massive lesson, and I don't think we've learned that in all these 530 episodes, which is to set a target and have the target be earning a salary, because I guarantee there's people listening to this that are probably realizing they made a mistake, because they've worked so many years for next to nothing, just trying to survive, and you get used to it... So I love that.
Let's move the journey on then - what were the big challenges as you progressed in building what I assume is a prototype and showing it around? Talk us through the early start of the journey.
Søren Nielsen: Of course, being a hardware startup - also with an app, of course - the prototype is much more expensive to make than making the software part; of course, it depends on what kind of app you're doing... But in general, let's just say that hardware - yeah, it is hard. It takes time and money to get to a point where you think that the product is also worth showing to somebody else.
In our case, the prototype that we were working on after we quit our jobs was the prototype for the Kickstarter campaign. We did a crowdfunding campaign in the fall of 2015. The money that we got from the business angels - that was spent on building that campaign, making a prototype, making marketing materials, making the website, doing PR, all of those things. That was the first big step.
Dwelling a little bit about the MVP or the prototype, I think that this is one of the big lessons as well for me -okay, what is a prototype that is good enough? What is an MVP that is good enough? Because going into it, I think all of us founders had different definitions of what that MVP, what that prototype should look like. I think that's something that you have to discuss really early on in regards to what is the company's MVP.
Paul Kemp: That's also reminding me - we've had quite a few past episodes talking about successful Kickstarter campaigns, and what I've learned from you is the fact that many people assume that it's free money; you just put up a page and then it's going to take off, but you invested your funding in all the things that are required on the Kickstarter campaign. I guess that not only gave you additional funding, but already made a customer base.
Søren Nielsen: Yes, it did, but I have to say that at least in our case, the Kickstarter campaign was way more validating the product than it was getting funding, getting financials. We raised $80,000, and that was not nearly enough to start the production, making the development for the real product, but it was enough to make that product validation and also show investors "See? There's a market for this" and also getting insights into what kind of product the end users would want. That's, in my opinion, the biggest lesson you can get from a Kickstarter campaign - it's learning about your customers, putting a product out there and putting people's money where their mouths are, so to speak... You force people to buy your product, not just say "Oh, that's nice." No, you have to buy it.
Paul Kemp: Actually, I was thinking about the target customers... How many parents are on the planet that have kids that use technology? It must be huge.
Talk us through the product then, because I'm still unclear exactly how the product works. Of course, many people are listening to this whilst driving or doing something, so let's try and describe visually the product and how it benefits the children.
Søren Nielsen: Yes. I want to start with just a normal use case... A normal use case would be that a family signs up for the product and they have both the app and the physical piggy bank as well. Then it's really important that it's the child that sets the goal; there's goals within the app.
The goal can be anything from an iPad, a bike or a gift for mom, and then the parents and grandparents and other grownups with those magic cards that I was talking about before - they can then transfer money directly into the piggy bank. Each time they do, this physical piggy bank lights up and plays a sound. Then the child has to go and physically interact with the piggy bank, pressing its mouth. When it does that, the money is claimed, and then in the app the child can then distribute the money between the different goals that it has set. That's the way that we're making digital money tangible.
Paul Kemp: That's incredible. Any family member then can use their physical account. Is it at the moment global?
Søren Nielsen: Yes, it is global, but the real money part is only doable in Denmark as it is; it's not doable yet in the rest of the world. That's because we have to start building relationships with the bank infrastructure in each country.
Again, starting this journey out with the Kickstarter campaign, we were really naive about the whole infrastructure of money. Even though I've worked within financial services, we were still really naive. We're at a point now where we have real money in the product, but only for the Danish customers, whereas the global product does not have real money in it yet.
Paul Kemp: Søren, it's quite interesting how this show works out... Just the previous guest - her name is Alicia Roisman Ismach - was talking about fintech, the challenges and regulation and all this sort of stuff... But are you able to take cryptocurrency and change that into local currency yet? Or is that another step on your feature list?
Søren Nielsen: That's another step... It's funny that you mentioned it, because it's actually a step that we've already made, but we've gone away from again. The reason for that is that the users were not ready for it yet.
The first currency that we combined with our solution was a blockchain; on the blockchain there's this blockchain bank that we were working with. They actually have 50 different currencies that you could put into the product. We had the whole backend linked up to it and it was ready to go, but again, going back to the insights that you get from your customers doing a Kickstarter campaign, the customers were just not ready for it. They were still unwary of putting children's money on blockchain; that was related to Bitcoin, that was related to some kind of bad behavior, at least at the point when we were doing this.
I guess the market is more mature today, but I would still say that when we have to do with real money, and especially children's money, the market is still not mature enough for blockchain, in my opinion.
Paul Kemp: What was really interesting is listening to you in terms of the idea, it's just wonderful; then listening to all the challenges that you have to go through... You have to have grit and stamina in this whole startup world to fulfill your dream; it must just drive you insane competing with all these challenges as you try to deliver what seems like just the most amazing idea.
Søren Nielsen: I think one of the main characteristics for a founder of a startup is to be a bit naive in the beginning, and then have a lot of perseverance. If you don't have those characteristics, it's going to be tough. Because you have to be a bit naive in the beginning, saying "Okay, I can do this. It's not a big problem", and then also just sticking to it afterwards and not taking a no for a no.
I've had so many sales meetings, so many investor meetings where I've heard a no, and I'm actually thinking inside my head that you're actually saying "maybe", or even "yes." You have to have that kind of worldview, that a no is not always a no.
Paul Kemp: Yes, and that's what we're learning from all the co-founders that come on here - if there were too many yeses, then maybe the idea is not so good. You need a lot of pessimism, because that means there's opportunities to really crack a new market.
One of the chats I'm reminded of is when one of the co-founders of a drinking app actually sat next to someone using his app, and was just delighted to see the benefit it was bringing this user. Was has it been like to sit with the family and watch them play with your product? Was it a really enlightening moment?
Søren Nielsen: I think it was one of the most giving moments that I've ever had, just getting the response from the families and the children... When they see ERNIT - the physical part - for the first time and when they start using it, and getting these e-mails and getting people's responses on "Oh, this is just so much fun!" And even just a small thing like having a physical object that has to do with digital money is enough to start the conversation, and for me that's been like the most eye-opening thing of them all.
You actually don't need that much to start a conversation about this, but you need something more than just an app. That's been really, in our perspective, a great thing, because that was why we started out... We were saying "Okay, how can we make this money tangible for kids the age of four and up?", because they're not used to having a phone with an app on it, and as long as we are bound to these bodies, we have some senses that need to be nurtured; this is what all experts are agreeing on, so if we can view money and you can touch it, there's more learning in it than if you can just, for instance, touch it.
From that perspective, having those children and those families responding to the physical piggy bank, and the interaction with the app, that's just tremendously giving.
Paul Kemp: Yes, and actually there's two things that come to mind... One is that it must eventually bring a lot of families around the world together, because I could imagine sitting with your child and saying "Hey look, auntie Gertrude from Australia has given you some pocket money towards that bike!" It must bring a lot of families together. Did you see that goal?
Søren Nielsen: That is definitely something -- I think we started out looking at it as purely like money, like "Okay, how can we make this money tangible?", but then it also grew bigger and bigger, to "Okay, you can actually use money to teach children about perseverance, you can teach children about patience, you can teach them how to make delayed gratification, and you can also connect people." My mom and dad - they're living on the West coast of Denmark, I'm living on the East coast in Copenhagen, so we don't see them that much, but they can then send money through ERNIT to my daughter's piggy bank, and that's a connection right there.
I think that's a really great thing within this as well, that we're connecting families, connecting people in general.
Paul Kemp: The second thing that I was reminded of is the fact that by teaching children how to save -- there's a book I've just read by Tony Robbins called "Unshakeable", and in there he talks about if you start at a very young age (18), investing in the stock market or just saving a very small percentage of your salary, you are going to ultimately end up having assets well over a million, just because of compound interest and the fact that it compounds over the years.
We're a nation of debtors, aren't we? We've got this credit card debt problem all around the West, and you're obviously challenged with that...
Søren Nielsen: That's of course something that we meet almost everywhere that we go, especially in a country like the U.S., where we've spent a lot of time as well. There people are really afraid that their children will go into huge debt, not only because of college, but also just because you don't have the same sense of value as you had before for the money... We can get everything instantly, and I think that's one of the dangers of where we are with this convenience - from the convenience of your home you can buy everything in the world practically, and you can get it shipped right to your door.
You don't feel the same kind of pain of letting go of something like you did before when you had physical cash. That is something that we're looking into and we're trying to solve. We get all these experts from around the world contacting us because it's not something that's been done before; we're actually touching into something scientific here as well, and that's what makes it exciting, as well... It's not defined yet how this is supposed to work and how we're going teach children about money when there's no physical cash anymore, but with ERNIT we're trying to solve that.
Paul Kemp: Sadly, Søren, we have to wrap this up soon, but what I was wondering is like, for all those parents who are listening who are eager to get involved, how best can they -- I'm guessing the Danish listeners are pretty alright... But anyone globally can at least sign up to follow your journey and then eventually sign up?
Søren Nielsen: Yes, definitely. You can go to ernit.com and you can sign up to our newsletter. You can also at the same point be a part of the pre-orders. You can go in and sign up for that, and we'll let you know once we're ready to ship out to the people after the Kickstarter campaign, because we're still shipping to the Kickstarter campaign people as is right now... But we're taking pre-orders in and we're ready to make the next batch, as well. So the journey goes on.
Paul Kemp: It does. And how best can people reach out to yourself, Søren? What's the best way of getting in touch?
Søren Nielsen: I'm pretty active on LinkedIn. Unfortunately, I have a pretty common name in Denmark, so I guess I'm not that easy to find... But if you write Søren Nielsen and you write ERNIT as well, then you should find me. I guess that's one of the easiest ways of getting in touch with me.
Paul Kemp: Yes, I wish I had a unique name... I'm also sharing my name with a guy who writes Star Wars books. I'll put a link in the show notes, so you can just go to theappguy.co and search for episode 530. For all of you who are too busy to write this down, just remember - go to theappguy.com, episode 530, and you'll be able to connect with Søren on LinkedIn.
It's been a wonderful, pleasant journey. I love talking about how to change the world, and certainly starting with children is probably the best way. All the best, Søren, and thanks for coming on the show.
Søren Nielsen: Thank you!
What Is Fintech And How To Build A Successful Fintech Startup
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. As you know by now, I go around the world and visit lots of different locations, looking for great entrepreneurs.
In the last episode we touched on the trends going on in some of the wonderful tech communities around the world. One of those is a tech entrepreneurial community that is really growing in Israel, and I've had many episodes in the past talking about Israel - you can go and listen to those in my past episodes.
Today I wanted to visit an entrepreneur in the fintech space who is based in Israel and who is doing a lot of very groundbreaking work. She is a serial fintech entrepreneur - her name is Alicia Roisman. She is based in Israel, and in fact she has developed some technology that only the banks now are catching up with; she's been early in the game, six years at least doing this payment syste. We're going to find out more about her, her journey and what we can learn in the fintech space, so let me welcome Alicia... Welcome to The App Guy Podcast.
Alicia Roisman Ismach: Hi, thank you for having me here.
Paul Kemp: Thank you for coming on. Let's go straight into fintech then, let's learn about you. What is the fintech space in your mind? When people say fintech, what does that mean?
Alicia Roisman Ismach: Well, actually fintech is a very broad space today. It started as the technology to support banks and payment systems, but today fintech also applies to most of our life experiences, like when we need to manage our finances and when we need to pay each other, or when we just need to have a better access to our insurance and pension funds.
As you know, money is all around us, and fintech is trying to make it more secure, easy to access, and cost-efficient for all.
Paul Kemp: What's really exciting to me is that there was a long period where the only technology was from the big financial institutions; they had the money to invest in their systems. But is it right to say now that there's lots of smaller startups who are making ground-breaking technology revolutions and coming into the space and offering great services without those huge financial investments required from the large institutions?
Alicia Roisman Ismach: Yes, that's amazing how technology has changed for all. You know that today our phones have more technology than the first flight to the moon... Today we have more access to speed for a low cost, tech computing that can bring us amazing solutions, and the internet, of course; the internet has changed also, with fast communications and access to data that didn't exist before. You needed to put very expensive systems in order to communicate between just the branch and a bank. Today you can have fast access all around the world over the blockchain for any instant transactions.
Technology has made it possible for startups to not only improve the financial institutions' capabilities and systems, but also to disrupt part of them, of course.
Paul Kemp: Yes, let's talk about that disruption, because you're doing some disrupting yourself. Let's understand what you're actually doing. I know from reading your biography you were doing some really interesting things with payments from account to account instantly, so maybe you could describe a little bit more about the current project you're working on in the fintech space.
Alicia Roisman Ismach: Yes. In 2007 I created a startup with my co-founder Eldad Aharoni. We really believed that the payment system was probed for financial institutions and we saw that when you wanted to use a bank account for payments, you needed to go through third-party access like credit cards or (at the moment) PayPal, and you couldn't use your actual account for anything in real time.
We embarked on a journey to make sure that there is instant access to bank accounts and transactions between bank accounts in real time, so it will lower the cost and make all these payments much more efficient. By 2011 we were already up and running in the U.S. with a few banks with real-time, account-to-account payment.
We had a really long journey together. It was hard to get banks on-board with us in that journey. They are very risk-averse; they don't like it very much to try technologies early, but we managed to do it and already then you had the real-time account-to-account payments.
That journey actually brought us at the end of the day to Africa, where the largest bank in Nigeria and another 19 countries are using that same technology we developed for omni-channel payments. So people can pay not only between bank accounts over the mobile phones, they can do it in any social environments, and even the cardless ATMs. So they are recreating the omni-channel experience over our platform that we dreamed back then for the U.S. and couldn't make it there because of the way banks perceive this kind of disruptive innovations and were afraid that it will take from them some power.
Paul Kemp: We love learning about journeys, and your journey. You are a female founder in the fintech space, which is wonderful to learn about your journey. What were you doing before 2007 when you started the company? Were you working in a corporate environment, or still working in the tech entrepreneurial space?
Alicia Roisman Ismach: I go a little farther in my story just to say that I am originally from Argentina, and at 16 years old I moved to Israel alone.
Paul Kemp: Wow.
Alicia Roisman Ismach: Yes, I wanted to try a new adventure and finish my high school in another country, and I had a lot of romantic ideas of changing the world and doing new things even then. So my journey started then by facing that, you know, you have some rollercoasters in life, and things don't go as romantic as a teenager may dream.
I tried many times to do things for my own, to establish new companies, have new projects, I developed games (board games, not applications) and tried to sell them... I did a lot of things over time, until 2001. That's when I entered the electronic payments world. I discovered a world full of opportunities - a lot to do, a lot of things that have not been done yet, emerging technologies and emerging markets and industries, and I found my true love. I stayed there since then.
In 2007, as I mentioned, I also founded my first fintech company... Although I've had a few companies before, I really only founded a fintech company in 2007. Now I am in another startup called Amaryllis, that is changing also the world of payments for what today is called a "multisided payment" that is normally known as marketplaces, and platforms on demand or sharing economy.
Paul Kemp: I'm so inspired by your journey... Let me just summarize what I've gained from you. At the very young age of 16 - and we have many of the appster tribe listening who are also at that age where you really do believe you can change the world, and it's wonderful because you have that naivety of youth, and dreams, and we always love dreams... And at 16 you went to a foreign country to then start learning the world of startups and tech. Did you decide then to opt to go to university, or did you prefer to learn the trade through just starting your own thing and learning independently?
Alicia Roisman Ismach: I actually did both. I learned a lot independently and also tried to go to a regular university. At the beginning I was a dropout.
Paul Kemp: Oh, we love dropouts.
Alicia Roisman Ismach: [laughs] Yes, we all do. I learned a partial first degree in computer science, and then later on in time, after I did already a few things and learned on my own, I completed that certificate and did a second degree on entrepreneurial innovation. That's much more relevant for entrepreneurship and what I am doing today.
So I did a mix of both - learning along the way and not waiting for formal studies to start anything. I always was impatient. I needed things to be done on the way, I could not wait a few years until I started something. So I did both, as I mentioned.
Paul Kemp: You're so inspirational, because here you are, from Argentina, going to a foreign country... I'm honestly blown away by the fact that -- if you could do it in those circumstances, then a lot of people sitting on the fence listening to this can make their own transition. Would you recommend to anyone who is thinking about going into higher education, getting themselves into lots of debt - we know that U.S. universities are extremely expensive; in fact, most of university education now is expensive... Would you recommend getting into debt and finding a formal education, or would you recommend going into the world of startups and learning whilst actually doing something?
Alicia Roisman Ismach: I think that the world of startups needs both. The world of startups needs the ones that are meant to research and study things very deeply - if it's a data scientist, if it's in physics, in nanotechnologies etc. We need the scientists, we need the ones that can afford and are built to learn for many years very complex issues and topics, and we need the ones that just jump and want to explore and innovate and change things and don't have the time, in their minds, in the way they are, to study for a few years before they do something.
I think that the world of startups actually grows because we have a mix of these two types of personalities and interests.
Paul Kemp: What's interesting then is if we move forward in your journey along this timeline - so you reached 2007, you have already done several years in startups and doing your own thing... How difficult was it then when you had this idea about changing the world of payments, how challenging was it to get funding, get the thing off the ground, meet your team and co-founders... Talk us through the challenges you had in 2007, actually getting it started.
Alicia Roisman Ismach: The first thing for me was to find my co-founder, the person that can go with me through this journey and have the abilities that complement me, and that's what I did. I met with Eldad Aharoni and we understood immediately we not only have a mutual interest, but we also have the capabilities to make it through together.
We worked together for many years to bring this system to life, and today also to multiple countries around Africa.
Once you have the team, once you have the people that can go with your on this journey, only then you can face the complexities of bringing this startup to life, that include the funding, but not only... Funding is only a part of it.
If you have all the other pieces in place, you will be able to convince and bring the funding as well, but it doesn't begin with funding. Funding is always hard, it's a full-time job sometimes, but it's really available and possible if you have put in place the rest of the pieces you need to successfully bring a startup to life.
Paul Kemp: Yes, and I love the fact that you mentioned the importance of a co-founder and sharing the journey with a co-founder. One of the big themes over many of the 500+ episodes of this podcast is the importance of networking and meeting people through your network.
So you started the company then... Talk us through maybe the things that you believed in 2007 where others did not agree with you, because you must have then really been fighting against the status quo.
Alicia Roisman Ismach: Yes, I actually have a few of [unintelligible 00:15:18.17] One of the things we believed is that putting your credit card numbers on a website to pay was completely illogical; that was in 2007. The internet had brought already all the necessary tools in order to communicate between you and your funds, wherever they are, without putting an external plastic card number in order to point to your bank account or other types of funding.
It was for us really something we couldn't understand - why are you still using it and why are you still putting that number of something that was created for physical payments on the point of sale?
People didn't believe in it. Most people would look at that and say "But it's a credit card... Everyone has it, and there is no reason not to pay through a credit card. Why are you trying to make payments from the bank account directly, in real time? What's the point of it? Just put in your credit card data and it works."
It took many years until financial institutions and the industry itself understood that that was a third-party network, that it's one of many, and there are other options that people may prefer better, where they can access their actual funds, the real funds they have available - in real time, they can really use this, and the merchants, the ones that are selling, can pay lower fees and have the ability to get the funding from the customer also in real time in their bank account.
It took time for the industry to accept that approach as valid and to allow those kinds of solutions and systems to be a part of the methods that the customers can use. That's one of the things we were facing.
Paul Kemp: Yes, I was going to say that I'm sure that a lot of the appster tribe listening to this are thinking about fintech opportunities themselves, and I wondered if you could share with us the challenges that you may have had to grow in the fintech space. Just immediately I'm thinking of the challenge of trust, getting consumers, users and other institutions to trust the transaction, but also there must have been other challenges as well. Talk us through some of those challenges and how you overcame them.
Alicia Roisman Ismach: Yes, there are many challenges, and as you said, trust is one of the main ones. Trust is not only from the consumer side; when you are bringing a new banking system forward, the financial institutions needed to trust it, and how can they trust something that no other financial institutions have even tried?
Bringing to life a system that affects banking accounts without trying it with an actual financial institution is a chicken and egg situation. You need to find one institution that has more interest in innovation and understands that maybe they are the underdog, or maybe they are the ones that want to change things in their industry, that are able to think differently and bring you the opportunity to try your system and show that it's really trustworthy and you can then put the stamp on it for other financial institutions.
But not all startups go through the path of financial institutions. When you are bringing a system directly to consumers, you need to build trust for the consumer to use it, as well as for the merchants.
Building trust is really one of the main issues for any startup that is touching funds, touching a financial instrument and the consumers, or financial institutions need to use it. The key to it really is to find what makes a system like the one that that startup is developing trustworthy? What will make it really look as something people can trust, if they do it before they launch it or if they do it before they approach the financial institution with their offering?
It can be a partnership with, for example, one of the top five accounting firms, it can be some kind of auditing, it can be another type of branding that they can acquire through channels... It's very important to build trust around your solution before you approach your market.
Paul Kemp: Yes, and I can imagine regulation is quite challenging as well, to overcome a lot of the regulation in finance, which is more burdensome than other niches and markets.
Alicia Roisman Ismach: Yes, regulation has two sides - one is a part of what we talked before, the trust. If you can work with regulations, you will also partly gain from it. They trust you can bill for your product.
On the other hand, sometimes regulation is a barrier and you need to work around in order to bring your product through some institution that has already been regulated or has already all the audits in place, so you don't need to do it for your won product, and you can offer it as an OEM or white label.
The issue with regulation is that in our space regulation is very important because otherwise no system and no solution will have trust from anybody. But on the side, if it's not made right, the regulation goes through, for example, a path of trying to support the legacy institutions, to not let new systems come into the industry... Then the regulation becomes a barrier instead of an instrument that can help the startups.
Paul Kemp: Alicia, I wanted to just talk about two more things in the few minutes that we have left together. One is the trends in fintech... It's a very exciting space - what excites you most in fintech right now?
Alicia Roisman Ismach: Right now what excites me most is really the sharing economy. We are seeing how platforms are disrupting large industries by connecting directly different constituents. For example in the insurance industry you can see how Lemonade is doing it and bringing directly the ones that want insurance with the funds, and they don't need so many intermediaries.
You see the same in the transportation industry with companies like taxi and Uber, you see the same happening with the lodging industry, with Airbnb and others, but it's in every industry. There is no industry today that you can mention that there are not companies trying to bring these platforms that will connect directly every side of it.
It's much more direct, streamlined, cost-efficient, and of course, it works better for all the parties. But those platforms are complex, require a lot of attention in all the details in order to bring a good solution for everybody, for all the sides on it; it's a multi-sided platform, of course.
That's the industry that I am today focused on, in bringing the efficiencies to it with Amaryllis. It's a very exciting industry with a lot of potential for a lot of startups around the world.
Paul Kemp: Yes, and we've had a few chats in the past about blockchain technology... I remember the managing director of TechStars (the accelerator) talking about blockchain many years ago, and I wish I'd looked into that a bit more then... But blockchain is so disruptive in that, as far as I understand, it's taking the ledger system and the trust that you get from an institution and enabling that level of trust, but on a distributed, worldwide platform. What does blockchain mean to you? Do you see it as revolutionary as I do?
Alicia Roisman Ismach: Yes, blockchain is revolutionary as a platform, not necessarily the coins that are running over it. It's much more important what the platform itself can bring in terms of efficiencies in connecting everything. For example, when you're talking about health care records - you can connect the health care records with the patients and doctors in a secure way, and only the persons that are relevant will see it, without any central system or servers having all that information for one institution only.
There is a lot to do with blockchain technology as a platform. Banks are already deploying it for overcoming the intermediary banks they currently need to make a transfer between one bank in Asia to one bank in the U.S. Currently, they go through other banks in the middle until the money gets to the final destination. With blockchain, they are already trying to disrupt that and make that transaction between banks direct and secure.
So the blockchain platform may have a lot of potential for a lot of industries. It needs to be applied, of course, for the specific model they are trying to bring efficiencies. We are already enjoying from it.
It still is evolving in terms of trust. I think that the institutions actually are becoming part of it, instead of being completely disrupted. At the end, everybody will really enjoy from it, including the institutions themselves.
Paul Kemp: Yes, and I wanted to appeal for the listeners - if you're interested in blockchain, definitely go and have a search for some of those past episodes... Just type in "techstars" into the App Guy, and you'll hear that chat we had, which is still relevant today. Very exciting stuff.
The final thing - I noticed that you are a mentor, and I wanted to ask you the importance of getting a mentor as you're starting, or even if you're experienced in this whole space. How important is having a mentor to guide you through the decisions that you have to take?
Alicia Roisman Ismach: A mentor is very important, and I have my own mentors. Everybody is actually being mentored at some point or another by someone else. I think that the more we are open to be mentored and mentor, we are also evolving as a person and as a professional, and we learn much more about how we can do things better in our industry, in our startup and also for our future plans.
I also encourage others that have experience, that have done things, to mentor others. It brings value to yourself, it's not only that you are bringing value to others and helping them through their journey... It really gives you back, you gain a lot from it, so mentor as much as you can.
Paul Kemp: This has been such an inspiring chat... Sadly, it's come to an end and we have to finish. In the mean time, Alicia, how is the best way of contact you? What's the best way of reaching out and getting in touch?
Alicia Roisman Ismach: Of course I have a LinkedIn profile and I accept gladly invitations when a person has a true profile, of course. If you have a LinkedIn profile, just connect to me. I am a very open person, I connect to anyone that wants to invite me, and of course, you can write me there a message and I will respond.
I like to be in contact with people and help and be helped, of course, when it's possible.
Paul Kemp: And hopefully, we've inspired some 16-year-olds who are thinking about what to do with their life... Go ahead and change the world, that's what I would say!
Alicia Roisman Ismach: Absolutely.
Paul Kemp: Alicia, there will be a link to your LinkedIn profile at theappguy.co. Just search for episode 529 and you'll see a link to Alicia, and also the other kind of ways of reaching out.
Alicia, thank you very much for coming on The App Guy Podcast and sharing your journey and inspiring us so much with what you've been able to achieve from that young age. Thank you very much!
Alicia Roisman Ismach: Thank you very much, it was a real pleasure.
How To Start A Startup Without Ruining Your Life
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. What I do is I help budding app entrepreneurs, anyone in the digital nomad space, everyone who's excited about the whole revolution that is mobile, and if you are running your own business or if you're interested in startups, this is the podcast for you. Remember to share the episodes and talk about The App Guy Podcast; it's a wonderful resource, but even better when you're sharing.
Every once in a while I get an interesting guest on. I've got a fascinating guest and it's highly relevant to what we do, because it's a guest who is in the whole space of startups and mobile marketing. Let me introduce to you, direct from Hong Kong, given the international flavor of this show... This guest is Vadim Rogovsky and he is the CEO of Clickky, but he's got a number of other things he's also a co-founder of, a few mobile startups. And you know what? He's even been on the cover of a Forbes Magazine.
Let me introduce this young CEO, Vadim. Vadim, welcome to The App Guy Podcast.
Vadim Rogovsky: Thanks for the introduction, Paul.
Paul Kemp: Thanks for coming on. It's highly relevant what you do, Clickky... Let's explore firstly what Clickky is and how it really tackles the whole world of mobile marketing.
Vadim Rogovsky: Yes, sure. In a nutshell, Clickky is a full stack mobile advertising platform. What we do is we connect app developers and brands that have a mobile app - Android or iOS. We connect them with the traffic sources that can deliver high-quality users for them. By traffic sources I mean any mobile apps or mobile websites where there is a relevant audience for them. Using the tools that Clickky provides, we can show relevant ads of the advertisers to the traffic sources, and thus advertisers get users and traffic owners get money. That's the simple version of it.
Paul Kemp: Right, because is the big challenge that I think many of those listening to this show, especially if you've created an app -- it's app discovery. Trying to get people to download an app is really hard nowadays. There's the big apps... The problem with the charts is it never seems to change, and the only alternative for indie app developers and small scale app startups is to actually advertise.
Talk more about these traffic sources then. Obviously, it's great to know where to get downloads from.
Vadim Rogovsky: If we talk about the strategies for indie developers, for small developers to acquire users, I think that a company like Clickky is not the best fit. We tend to work with app developers who already have some experience, who understand their revenue funnel. That's why if I were an indie developer, I would go to test different traffic sources, starting from Facebook, maybe Google AdWords... But of course, it depends on your app category.
I would also test some CPI channel like Clickky, but I would compare it to other sources that are available, to understand where the best performance is. I would also test some PR, some publications, I would test app store optimization, SEO, and see which channels deliver the biggest ROI and performance for my app.
Paul Kemp: Vadim, what would be great is trying to figure out who listening is the most relevant to using Clickky. It sounds like someone who is a mid-sized startup who knows a lot about their app conversions, the metrics... Is it a fair thing to say that you work with slightly larger companies and mid-sized startups?
Vadim Rogovsky: We work with mid-sized companies like game developers, utility app developers... We work with almost any categories of apps - with antiviruses, with weather forecasters, with music players etc., and we also work with big companies like Alibaba, Yandex and so on.
Our perfect client is a client that can spend at least $1,000/app/month. We require such minimum amount of money because we need it to be able to optimize the campaign, to optimize the list of traffic sources that we use, because we need some amount of traffic to get a minimum amount of traffic, of data points, to be able to analyze the traffic quality. That's why we typically we are not running any campaigns with a lower budget.
Paul Kemp: This is fascinating, because we always like to know how the big companies are doing it, and what is most interesting is the fact that I guess it's understanding the problem that you're trying to solve... The problem that you're solving is that companies spend usually a lot of money - the big companies like Alibaba and all the big companies you've mentioned... They are spending already a lot of money on trying to attract installs, so you actually then efficiently optimize what they're already spending and make sure that you can get more traffic and more downloads for the money they are already spending. Is that right?
Vadim Rogovsky: Actually, we often also try to use the data that they already have about their users - some post-install data - so they usually share it with us, and thus we can run their campaigns even more effectively. We usually stick to a list of KPIs that they have in place, and we are constantly trying to optimize the cost-per-install, and we're also trying to optimize the retention rate, to increase retention rate on day one, day three, day seven, depending on advertisers' requirements.
Here, our main goal is not to spend more, but to deliver high-quality users cheaper and on a higher scale.
Paul Kemp: Vadim, let's change gears slightly, because this show is also about inspiration. You're working with some fascinating, big clients, and I know that you're involved in lots of different startups. Tell us about the inception and start of Clickky. How did it get off the ground? It sounds like you've built it up to be a very fast-growing company, but what was the start of it like?
Vadim Rogovsky: At the beginning it was like a hobby for me. I was working in a big software development company, I also was...
Paul Kemp: Are you able to tell us which one?
Vadim Rogovsky: It was a local company called Softechnics, but it was relatively big. They were developing some social media networks, photo sharing services, and I was managing one of these big projects there.
Then I read some news that social media applications were growing really fast; it was the time when Zynga was very popular with its poker app, or FarmVille... It was the time when games on Facebook were very popular, and also the games on Russian-speaking social media, like Vkontakte or Mail.ru were also extremely popular... But all the app developers lacked at least one advertising solution to monetize their traffic.
As I was also a bit involved into app development for social media, I decided to test this assumption - to build a very primitive prototype of ad serving solution for social media applications and just to offer it to a few fellow developers, and maybe they'd be interested.
They actually were interested and they implemented these pieces of code into their apps. We didn't have a website, so I was spending a few hours per day on that. I was acting as a project manager, so I asked my former developer colleagues to code this ad-serving solution for me. It started to grow very fast, and on the third month we had gathered around $10,000/week, right after the new year, in the beginning of January.
Then I decided that it would be the start of a successful scalable business. I quit my job and I fully focused on this company, I started to hire people, and at the beginning of 2013 we completely switched to mobile apps, from social media applications. The mobile app market had a much higher potential at that time.
Maybe the main piece of advice that I would like to give to the audience that is listening now is that you should not think about a new startup idea, about something very difficult or impossible or very hard. They should try to think about it as a hobby. Do it because you like it and not because you're just thinking about the millions of dollars that you will earn in a few years, and do it as a hard job. Do it because you love it; if you're not loving it, just stop doing it and choose another idea. That's the main lesson that I've learned when I started.
Paul Kemp: Vadim, I really appreciate that. It's such a wonderful message, and I just want to summarize what I've learned from you, because it's actually touching on many of the big themes over the entire years of this show. Let me just summarize what I've learned.
First of all, you were working in a big company, like many of the appster tribe, the audience listening to this, but you have this idea... And instead of risking a lot of money and all your savings and putting lots of money on credit cards, you did a very low-cost prototype and you chose a very fast-growing space. You did it as a hobby, as a passion, as a side-project. Then you used your network - that's another big theme of this show - and then you knew at which point to quit your big safe company, because you were actually making real money ($10,000/week), enough to know that it's time to focus on it full-time. Then you started hiring people. Then you pivoted, as well - and knowing when to pivot is also a big theme of this show.
So you touched on so many different things... It's almost like a blueprint of exactly how to start a startup. How does that sound in terms of the summary of your journey?
Vadim Rogovsky: Thanks, Paul. It's exactly what I wanted to say, in a nutshell.
Paul Kemp: Great! I want to appeal to everyone listening... If you are in that big company and you're looking to the future, don't get distracted with a lot of the new where you can make a million dollars overnight with an app, but take advice from a genuine entrepreneur. Has it been worth it, all these years of hard work and without the safety net of a salary? Has it been worth it for you?
Vadim Rogovsky: Of course. I had some hard times as well, because I wasn't an experienced entrepreneur at the beginning, so of course I had some problems with cash flow, with cash gap... Mostly with finance management, and then also when I started to hire people quickly, I made many mistakes. At that point in time I didn't know who was my ideal teammate. Some of the wrong people that I hired - they actually caused some problems inside the company, with motivation or even just with bad quality of code.
The most valuable source of my experience was my own practice, my own mistakes, and of course I learned a lot... I've read a lot of books, I've attended a lot of seminars and educational programs, I've networked with fellow entrepreneurs - that was a very important part of my learning. And yes, it's worth it, because at the end of the day I'm the leader of my life and of my business. Of course, I depend on the market, I depend on our business partners, clients, publishers, but at the end of the day that's fascinating, it's exciting, and that's why I'm doing it.
Paul Kemp: And also, it's nice to hear that you had problems early on with hiring people, because I had the same problem with my first venture after leaving my company, with hiring the wrong people. It's amazing... It's so important getting the right people and the right fit.
Also, I love that you mentioned you're the leader of your life... What a wonderful quote. Doing what you do means that you can be in charge of your own destiny and you have it in your own hands.
I was wondering - you managed to get big clients, very impressive clients (you mentioned Alibaba and others), how difficult is that when you're an unknown small startup?
Vadim Rogovsky: Of course, if we started this business this year it would be much more difficult, because the hype in mobile marketing is maybe not so noisy as it was four years ago... But when you have the right timing and the right product, a right value proposition, it's easier. At that time the competition was not so active, the market was not so saturated, and that's why it was easier. The biggest companies were more open to test new partners, much more open than now.
For example, if anyone would develop an ad network for a VR right now, then it would be much easier for him to attract the biggest companies to try it, because it's much easier to get anyone to try VR advertising than mobile advertising right now. But in terms of money, I wouldn't recommend anyone to go into VR advertising for now.
So it was easier, but yes, we've also made some mistakes before we actually learned how to work properly and effectively with big clients, how to respond, how to prepare some reports for them... With each client we've become more and more experienced and increased our conversion rate when getting new clients on board.
Paul Kemp: So you're constantly learning from what you're doing, which is also another great life lesson. Again, finally, in the last few minutes we have with you, Vadim, you do sound a very global international entrepreneur; you're there in Hong Kong... I'm sure you do a lot of traveling. Are there any parts of the world you would recommend in terms of the entrepreneurial community and network?
Vadim Rogovsky: A very typical answer would be the Bay Area. Still, Bay Area is one of the most active parts of the world if anyone wants to get some inspiration, some networking. Besides that, I think the Israeli startup system is growing very fast. There are more and more events that are worth attending, but the ecosystem is quite closed; it's not so open-minded as in the Bay Area.
Also, the Berlin startup ecosystem is one of the most active in Europe. In Europe I see that London, Berlin and Tel Aviv - if we consider Tel Aviv as a part of Europe - seem to be the capitals of startup ecosystems. The Ukraine is also growing in this matter, and we also have more and more tech events. I am the organizer of a few, and of one of the biggest events. The biggest event in mobile marketing in the East of Europe actually is happening in Odessa every year, and Clickky is the organizer of this event. It's named the Mobile Beach Conference.
I would definitely recommend you to come to Ukraine. One of the main advantages is that it's much cheaper than to come to the Bay Area, and the quality of networking is actually almost the same. That's it, in a nutshell.
Paul Kemp: That's lovely, that's a good summary. We've had a lot of previous guests from Israel; everyone interested in Israeli entrepreneurs, you could easily search my website and find them. We've had many of them on this show. Actually, we've had Berlin, Ukraine, London... Obviously, the big bulk of it is still the Bay Area, San Francisco and around the Silicon Valley.
This has been a fascinating chat. Do you feel like we've managed to cover everything you were hoping for in a chat about Clickky and your entrepreneurial journey, or did I miss anything?
Vadim Rogovsky: I think yes, because we've touched some really fundamental points that should be interesting for the audience. Feel free to ask any questions.
Paul Kemp: Yeah, we've got a good idea. If you're involved in the metrics of app downloads and you're in a mid-sized startup or a large company working as part of a digital marketing team, then they sound like perfect clients to go and check out Clickky.
Vadim, how can people best get in touch with you? What is the best way of reaching out?
Vadim Rogovsky: I'm actually quite open on LinkedIn or on Facebook, or just by e-mail - vr@clickky.me. Or just LinkedIn, Facebook... I'm quite responsive.
Paul Kemp: Wonderful. It really has been a wonderful journey. I'm so pleased that we had that rundown and summary... Almost like a perfect blueprint of launching your own project and doing it without putting your whole life and financial savings at risk. Wonderful! Thank you so much for coming on and spending your time whilst in Hong Kong speaking to us on The App Guy Podcast. All the best!
Vadim Rogovsky: Thank you very much, Paul.
Nathan Raffel - Start Your Startup Focussing On A Personal Problem
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, this is Paul Kemp. This is the show where we go around the world and get the most fascinating serial entrepreneurs, inspiring startup founders, and anyone who can help us in our lives as we pursue our dreams of startup lifestyle or maybe living independent from a corporation.
If you are in a job and you're wondering what is going on in the startup world, then this is the show for you, and in fact, this is the episode for you, because I have got a wonderful guest for you. This guest is a serial entrepreneur, he's an actor... It's a shame this is audio only, because I'm sure if you could see him you'll know who he is.
He's a startup founder, he invested in lots of different companies and has a new startup. His name is Nathan Raffel and he is with us today on The App Guy Podcast. Nathan, welcome to The App Guy Podcast.
Nathan Raffel: Thank you so much for having me, Paul.
Paul Kemp: Let's talk about the big one then, the Chevy commercial; that's what you're famous for. How did you get that gig?
Nathan Raffel: I got really lucky... Chevy came to New Orleans and I didn't know it was the Chevy until I pulled up in the parking lot and there was a bunch of cameras and a Chevy. We were told that it was a focus group, and they were just walking around the quarter with iPads. They interviewed me on an iPad, then I got a thing saying do I want to make $200 to go to a focus group? I was like, "Oh yeah, I'll make $200 to go to a focus group."
I went in the focus group, and it was like a filming thing. They were putting mics on us and filmed us... It was funny.
Paul Kemp: It's funny how sometimes for all of us life plays a funny hand, and you just have to go with it. Nathan, we are a bunch of app entrepreneurs, but you are extremely successful with eCommerce businesses. One of the things we find it hardest to do is to think about apps in an eCommerce way. Maybe you could tell us a little bit about the eCommerce businesses you're involved with.
Nathan Raffel: My first eCommerce venture was just selling online for my ex-wife and I's bakery. It was then called BB's Patisserie and we did health food, gluten-free, allergy-friendly things, stuff that was safe for diabetics... That was my first eCommerce experience.
Honestly, it's so funny... Back then, I really wanted an app. I guess it was 6-7 years ago (2011) that we first made our website, and I didn't have that... So I used a baby version of the Magento. They had a Magento Go thing, kind of a cool little backend to build your store on. It was pretty easy to keep up and it was clean.
I used that, and we started testing back then Facebook ads, and it wasn't really as big of a thing, it wasn't really converting as well, and Instagram or anything wasn't there, so we tried doing SEO stuff, and Google, and that was really the only way that we really got any traffic - doing it a little bit old-school. Six, seven years ago was forever in tech terms.
Paul Kemp: You know, Nathan, what would be really interesting is working out why you wanted to start an eCommerce business. I think the back-story is relevant in that many of us coming to this show think that we can just build an app; we don't have to worry about monetization, we don't have to worry about making money.
Then we build the app, we spend a load of money, maybe put our credit cards into debt, and figure out "Oh, we're not making any money." So what's the benefit of getting into eCommerce?
Nathan Raffel: It was the exact opposite. We had a physical location, and I just started noticing that we actually had people who would drive from Houston or Alabama or Mississippi to come just to our store, because we were making food that really wasn't sold not only in our city, but in our region, and it made sense that those people would probably just not want to drive and have stuff shipped to them.
For me it was purely a functional decision. I had customers who were in an increasingly broad radius and I wanted the simplest way to take those orders and get it to them. I didn't want them to have to drive. It was honestly a customer service move for me as a businessman.
Paul Kemp: Nathan, that's a genius thing, because often we kind of look at tech as like this hidden amount of users and customers, but here you are solving a real problem, which is a big theme of this show, by the way... Which is you have a physical location for your products and you feel like you want to help the users by giving online presence.
Nathan Raffel: Yes, I very much intersected with tech through business; I don't really have any type of background, but just because I've somehow not failed as an entrepreneur in a pretty crazy economic decade... I've been through a lot of changes during my 12+ years of self-employment. I feel kind of blessed, because I kind of sit at the intersection of tech and a couple of spaces, like tech and music and tech and food.
One of my first real travel experiences was when I got invited to San Francisco to speak at this food hackathon about startup entrepreneurship. It's really interesting that since then tech has just kind of become an integral part of my life, and how much I've been drawn back to Silicon Valley.
I think the way that business owners like me solve problems is incredible and it's old school and it works, but there's also innovation in the water out there... The creativity with which Silicon Valley approaches problems is staggering to me. I love it.
Paul Kemp: You're going to have to explain a bit more about this food hackathon; I've never heard of a food hackathon.
Nathan Raffel: The food hackathon is the brainchild of Tim West, who I'm grateful for; he gave me an amazing opportunity when he allowed me to speak in San Francisco. It was around Battery Street... I don't remember the name of the place, but I remember it was around Battery Street, kind of downtown San Francisco.
Basically, the same way people would take a hackathon to solve a problem for an app or a coding challenge, he basically wanted to hack the food system. "How do we get food into food desserts? Can we use some Microsoft APIs? Who can we have there?" They had corporate sponsors and they had lawyers, accountants... He called it a hackathon, but it was more like a food business incubator bootcamp. It was incredible, the people that Tim West had brought together...
I think it was either October or November 2013, and it was really cool for me, as someone operating in Louisiana, how much Silicon Valley and data and technology had an impact on our food and on a larger scale. That was really my introduction to technology.
Paul Kemp: That's wonderful. One of the things I want to touch on is that a lot of us get distracted with our businesses, because it's all focused on tech and not perhaps too much on the end user. I wondered, as you go into companies, what's the biggest distraction you see for new startups when they've got something going? Tell us what the distraction is for them.
Nathan Raffel: It's two things. It can be the romantic relationships of the founders and money, at a startup level... Because at a startup level often you're not looking at more than a 2-4 person team, so the whole startup lives and dies by the people running it. I think often times in tech we overlook the human elements. Even though these are codes that run, it's humans with lives that program them. I really try to focus on the human elements.
People who don't have enough money are operating from a fight-or-flight position; they're in a scramble and they're not thinking clearly. It's the same thing as someone who's in a day in, day out unhappy situation romantically. Those are really the two biggest pitfalls, I see. I see people tripping on their own shoelaces because of personal problems.
Paul Kemp: Yes, because we often neglect the human side in a lot of this... This is why we do this podcast - to bring the human side back to technology and to the startups that we explore. How can a startup interfere with the personal side, the relationship side?
Nathan Raffel: I think especially for guys, there's very much a societal breadwinner role where men who aren't making a bunch of money during their startup phase often feel a little bit more insignificant. A lot of times a startup guy can have a girlfriend who's waiting tables and making more money than him...
I feel like that's a horrible thing, that men are that insecure, but often times it plays up into people's own insecurities and they fall victim to them. I think that's why there's kind of been this entrepreneur-chic the last five or six years, but it's not something that really everyone is cut out for. It's very scary whenever the buck stops with you, and actually if you don't get enough money in your bank account by day X, then you're screwed, and it all falls on you.
I think that everybody wants that sexy entrepreneur lifestyle, but there's not enough conversation about all the stress and the collateral damage that that can cause to the people around you, during your rise to success. There's a general misconception in my opinion that success happens overnight. It's often a decade or more in the making, in my opinion.
Paul Kemp: Yes, and this is what we love, opinions like that, Nathan... Because we're trying to unravel the onion and reveal the true nature of what it takes. In my experience as well, it's quite hard to transition from a corporate job where you don't have to worry about any money; you have it every month, and you just pretty much have loans to pay off that are covered by your salary... And then to go to the point where it doesn't matter how hard you work, the money doesn't equate to the level of effort that you put in.
Nathan Raffel: Yes... I remember I was in my early twenties when we first opened our retail place with that food company (BB's)... We had like 14k/month of overhead and we were covering the overhead but we just weren't making any money; it just felt so crazy to me to look back at the end of the year and just see "I made a quarter million dollars and I have nothing to show for it." I was like, "Oh, my god... How did I see this much money? All I did was pay the bills every month, and now there's nothing left." I was like, "Man, where did that quarter million dollars go? I want it back! Give it to me!"
Paul Kemp: Nathan, we have a lot of new entrepreneurs listening to this show. They're often building something from the start, and it can be really challenging at the start to find demand and nurture demand. You've built things up from the start... Do you have any recommendations or suggestions on how to find demand?
Nathan Raffel: To start with a personal problem, one of my favorite stories of one of my friends who solved a personal problem is my friend Partha. Partha Unnava has a company called Better Walk crutches. He reinvented the crutch so it doesn't dig into your armpit. A few years back he was on crutches, and crutches are really uncomfortable; he just realized "This is stupid. The crutch hasn't changed since the 19th century. Why is it that we had an industrial revolution, we've got cell phones, Facetime... Why are crutches still uncomfortable?" He solved that problem, and he's been very successful simply because he started with a problem that he personally cared about.
Whenever you start with a personal problem, you're inevitably starting with the user experience. I think that's what missing... Too much people start an idea based on a dollar sign, and you simply can't do that. In real business (not in theory) profit is a byproduct of a well-run operation. The end.
You have to think about the user experience and doing right by your users in whatever it is - an app, a retail store... If you do right by your customer, then you will do well.
Paul Kemp: I feel like this is what we often neglect, especially on the app store. We often see the most successful apps and we come in very naively and think "We'll easily clone that and do it better", but we're neglecting any kind of personal problem that's trying to be solved. Going back to what we were talking about at the start, we're not seeing the humans behind the technology.
Nathan Raffel: Yes, that's a very important thing to remember. It's easy to look at someone as just the amount of hours they're spending on a certain app, or how many in-app purchases they're making and what that can do for you, but even data... All this stuff in tech comes from humanity; it's just being quantified.
Paul Kemp: Here's one for you, Nathan... Here's a dilemma. Say you are about to start again - do you focus more on the product or do you focus more on what the user is trying to get out of the problem-solving?
Nathan Raffel: I think that depends on a thing... If I'm doing an event where I want to educate people or something, then I'm going to center that on option B, around the user, because events are just very experiential. In Partha's case, Partha had to first design the product before he could go and give it to users. So it kind of depends on the particular problem. I think it's an either/or.
Paul Kemp: Right. The other thing is because there's just millions and millions of apps on the app store, there's tens of millions of developers, there's often a race to the bottom. You have a good idea, you solve the problem, you put it out there, and then you have ten clones around you. How do you deal with competition in technology? Copycats, and that sort of stuff.
Nathan Raffel: I think that's when you go back to good old-fashion marketing. Everybody has done everything, everybody has had every idea by the time you put out an app. If that app isn't out there, there's six other teams working on that same app right now, bar none. There's nothing new under the sun; someone else is thinking of it right now... So it's old-fashioned branding and marketing. If your real estate is that little icon on that screen, if that's your whole retail store, if someone has to see your icon versus the next icon on that app that does the same thing, then you need to figure out how you put your whole experience and your whole brand under that icon.
Look at Facebook, Twitter, Snapchat... The icons for those apps are iconic.
Paul Kemp: Yes, and I'm reminded in the app world of when Uber changed their icon, and there was uproar; it was horrendous. They had a wonderful U on the icon, and then they changed it to some weird thing. Anyway, it didn't affect them too much.
Nathan Raffel: It wasn't a large gap of time between that and a lot of changes in their culture, too. I don't think you can overlook the importance of a logo and a brand. The logo is a very, very important part of every company, that needs to really effectively represent what the company stands for and communicate that in a clear, concise way to the consumer.
Paul Kemp: Yes, and I'm reminded of... We've just recently launched an app of my own, a video app that I'm involved with, and we did a lot of split testing on the logo. We ended up going with an icon that generated three times more the number of click-throughs... So yes, it's important stuff.
Nathan Raffel: That's the best way to find that stuff out. That's the way I've really been working data into my own decisions - split testing. It allows you to remove the conjecture and the fear. Whenever I started doing business without data... In a retail store, you're just guessing what's going to make somebody walk into your store. If you put something in a magazine or on a billboard you have no way to measure the ROI.
Once I went to San Francisco and found out I could do digital advertising and track everything and track my customers, I was like "Oh my god, this is it! This is so much better!" I saw the light. Tech is great for business.
Paul Kemp: Nathan, as we wrap it up in the last few minutes here, I'm really intrigued... You've mentioned marketing and you've done a lot of digital marketing. Is there any particular standout campaigns that you would have done that you remember that went really well for a particular business you're involved with?
Nathan Raffel: No, to be honest I've never had a home run. I've sold stuff online, but I haven't had that campaign that went viral and I sold 100,000 units in a month. My successes in business lie in my opinion more on just somehow succeeding and mildly profiting in a variety of industries. I haven't had my million-dollar idea or marketing campaign yet.
I actually kind of have a feeling about this thing that I'm working on right now. It's really striking a chord with people. Dads are undercredited, and it's fun shining a light on them and seeing the response. I feel that there's really some potential for virality with that one.
Paul Kemp: Well, let's talk about that. I'm very intrigued, because I used to run a podcast for many years called The Entrepreneurial Dad; I started that whilst living in Dubai with my kids. I was seeing the trend for being a work from home dad and having a different kind of relationship with my kids than I was used to when I was growing up.
What are you trying to tap into with this "Bout Dad" thing?
Nathan Raffel: We're really just trying to tap into making some positive news, honestly. The content we're currently building is just interviewing everyday dads and just shining some praise on just good men doing good things every day. There's just so much divisive stuff being presented in digital media, in traditional media... We really want to create some content that's a little bit more human.
I'm a dad, my business partner is a godfather, but he's from a big family, he loves family... We want to do something to highlight dads and families. It's really a simply well-intentioned project.
Paul Kemp: That's wonderful. Where can people go to find out about that?
Nathan Raffel: It's http://boutdad.life. That's it.
Paul Kemp: Wonderful.
Nathan Raffel: Shouts to Teespring for the very, very easy eCommerce setup. God bless Teespring!
Paul Kemp: Nathan, it's been a wonderful chat. How best can people reach out and connect with you? What's the best way of getting in touch?
Nathan Raffel: Facebook - my name, Nathan Raffel. Instagram, Twitter and other things - N.RaffelOfficial or just NRaffelOfficial, some variation of that. My e-mail is just nathanpraffel@gmail.com
Paul Kemp: Nathan, it's been a real pleasure, a real joy. It reminded me why I do this podcast. Thanks so much for taking the time to come on the show, and all the best!
Nathan Raffel: Thanks for having me.
Earning Six Figures Coaching Adventurous Entrepreneurs
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, this is Paul Kemp. What I do is I really do try and inspire you, the listeners, the appster tribe. The whole show has been set up because we live interesting lives as app developers, as app entrepreneurs.
I've done many recordings from Bali, and let me just give you a quick back-story of how this next guest came to be. I was on the show The Eventual Millionaire with Jaime Tardy - now Jaime Masters - and she introduced me to this guest who was going to be in Bali around the same time as I'm going to be there.
Now, we're actually doing it from two different parts of the world, but I'm glad we got together because this is all about being an adventurous entrepreneur. I've got a coach who is actually coaching entrepreneurs to be adventurous. It's going to be a fascinating episode, so please do stay tuned.
Let me introduce Emily Utter. You can find out more from EmilyUtter.com. She is coaching for adventurous entrepreneurs. Emily, welcome to The App Guy Podcast!
Emily Utter: Thank you so much for having me, Paul. This is awesome!
Paul Kemp: It's fantastic. Now, we were to meet up in Bali; it never happened because you have just come back from a trip over there. Where else were you, just out of interest?
Emily Utter: Yeah, I spent most of my time in Ubud and Canggu, and I couldn't seem to tear myself away from either place.
Paul Kemp: You know, they're two of my favorite places. In fact, I'm just about to leave to go to Canggu and then Ubud. What is fascinating is there's hundreds of entrepreneurs out there. Did you meet a lot of interesting people?
Emily Utter: Oh my gosh, every day my schedule was booked with coffee, yoga, all different kinds of social dates with cool entrepreneurs that were either people I knew before or people I met through connections, the way you and I met. It was so cool, and I think the community is really growing over there, and the infrastructure to support entrepreneurs is growing, so yeah... I definitely spent pretty much every day hanging out with awesome entrepreneurs.
Paul Kemp: Yes, let me just get some of the appster tribe excited here, because Canggu, for a start - when I lived there, I'd get up in the morning at 5 AM, jump on scooter, go for a surf for a couple of hours; it's got some amazing surf sunrises... Have a cup of coffee at Monsieur Spoon, and then go and connect on the internet to some superfast broadband at the local hub, meet some great entrepreneurs, and then maybe have some beers on the beach in the evening. It is absolutely paradise, and it's just so undiscovered.
Comparing that to Ubud, which is very spiritual - lots of yoga, lots of meditation... I usually live near a monkey forest. What people are missing if they haven't gone to check out Bali?
Emily Utter: Well, this may sound funny, but I have to say it's the food. For me, the food in Canggu was just totally off the charts. And it really is those lifestyle things you're talking about, because there is something that feels so free about waking up in the morning - for you it's surfing, for me it's yoga; doing our physical movement, sitting down to some ridiculously delicious food... Everything from total vegan, raw, all the way to the carnivore which is the end that I'm on.
I grew up in Vermont, which is a state that has snow sometimes up to nine months of the year, so for me to be somewhere hot, where I can get good internet, good food, hang out with cool people... I honestly can hardly think of anything better, and for anyone who's kind of curious about what that lifestyle looks like, oh my gosh... Bali is really the place to go, for sure.
It's also really affordable. People who are in the hustle, earlier stage startups or newer coaches, for example, it's a great place to go because you can have an insane lifestyle there without having to spend a ton of money.
Paul Kemp: That's right. So let's talk about what you do then, because this is fascinating, and I don't think I've come across too many coaches who coach entrepreneurs for adventurous lifestyles. Let's start with what is it you do to help entrepreneurs have these adventures?
Emily Utter: Yeah, I love this question. So here's the thing - most of the clients I work with right now fit in the category of coach, healer or consultant, and the consultants generally tend to be doing something great for the environment or something great for people, because everybody I work with has a really purpose and mission-driven company.
People come to me wanting to learn business strategy. Most of my clients - although this is shifting - are a little bit more early stage, so they're just excited to get their income stable and actually be able to have a great lifestyle.
One of the things that I include in every conversation around strategy for my clients is "Okay, so how does this fit into the lifestyle that you want to have?" Not everyone that I work with wants to travel, although most of my clients do. Whenever we sit down and actually start to plan out their launches or whatever they want to create in their business, the first question that I always ask them is "Okay, so what's non-negotiable for you in your personal life, in your lifestyle?" Because I came to this business because I just knew that I could not do the 9-to-5 thing ever again. And I've actually had a business before this one, but I went back and got a job, I ended up getting fired, and it was the best moment ever, getting fired and walking out that door and knowing there's no way in hell I'm ever going to have a boss again.
So I took that pain point in my life, even though I was seriously really happy when that happened - I took that pain point moment and I realized that there were so many other people like me who were just fighting to get out of the 9-to-5 and being told what to do and having to sit at a desk all day, inside and all of that, and that's what really inspired me to create this company.
So when you ask me how to coach my clients to be adventurous, there's nothing in particular that I ask them to do, but what I do really invite them to do is look at how they can structure their business from the very beginning in such a way that they put their lifestyle first. I see a lot of entrepreneurs who start out and they burn themselves out because they're working so hard and they feel like they have to get to a certain point before they give themselves permission to have the lifestyle.
I really want to turn that whole conversation on a tad and say "Hello?! Remember why we're doing this, because for lifestyle entrepreneurs - we didn't start our own business so that we could have a shitty boss that's actually us." So that's why I want to kind of flip the conversation for newer entrepreneurs who haven't been at this, and really say "You can build your business around the lifestyle." So even details such as what time of day I run my mastermind calls is based on the fact that I tend to go to South-East Asia twice a year. So I'll actually not have to do a call at two in the morning because I've planned my entire business around that, I've planned my sales periods around when I want to be traveling... My whole business goes on pause when I go to burning man.
Those are the thing that I decided were really important to me, and because I just freakin' own it, I draw clients to me who want the same thing. That's kind of a long-winded answer to what I do, but I just think it's so important for us to remember why we started this thing in the first place. Obviously, it's to make a difference, but I really believe we cannot make a real, genuine difference if we're not taking care of ourselves first.
Paul Kemp: Well, Emily, one of the reasons why I was so excited about getting you on is I absolutely believe that it can be genuinely valuable to have guidance when you're in an early stage startup.
I'm personally celebrating ten years of being boss-free, and I'll tell you, it's been an up and down road, and I really wish I could go back and have more direction at the start, because there is a transition from being that corporate employee to then doing your own thing. And to have help, a mentor, advice, coaching to help you understand that it's not all about -- for me it was about getting back to the level of income that I was on, and actually it took me a while to figure out, "Hey, I can just go and live anywhere in the world and do this thing."
So what's the biggest mistakes you feel people are making that transition from a corporate lifestyle to then being their own boss?
Emily Utter: Well, you just answered it, and that's trying to do it alone. I think that is the number one mistake that people make. The coaching industry is becoming a really big industry, and there's such a range of how quickly people get to a certain number. Some people could argue that I've built very slowly. Other people would say like "Holy crap, how did you build your business so fast?"
Let's pretend that the people listening are in the latter camp and would look at me as having created a certain level of success only four years in, and it's because I chose to hire a coach on day zero.
I didn't even know what this coaching company was going to be and I hired a coach. I feel like my choice to do that, as well as my choice to actually be coachable and follow what my mentor asked of me is what allowed me to create the level of success that I see today and that I experience today.
So I would say that's the number one mistake that people make in the beginning - thinking that they can figure it out on their own. That actually connects in with another challenge that I see, which is I see not just a lack of focus, but I also see people focusing on the wrong things. As social media marketing has grown and we all see tons and tons of ads on our Facebook feeds, it can be really easy to get caught up in thinking that we found the next silver bullet, the thing that's going to help us explode overnight. Any of us who've built a business know that none of that is real, and it does take work and it does take failure.
I think not choosing to just focus on a few strategies and seeing them all the way through, that's another mistake that I see people making. In terms of me and big mistakes that I would say I've made, one of them really is not giving myself permission in the beginning to really be in my personality, and that's something I've started to really speak and teach on a lot more, actually.
In the beginning, I didn't feel confident running my business from anywhere, and I actually felt like I had to keep it a secret because I created this judgment that it was irresponsible, that I couldn't responsibly run my company from another country, and I had to really get honest with myself about that.
There's so many different things that fit into this conversation, but to boil it down, I would say the biggest mistakes people make are not investing in support, being unfocused and then not being freakin' authentic to who they are. In my experience - and maybe you have something to say about this - I just think it's so important that we authentically care about what we're creating, that we give ourselves permission to be self-expressed.
Paul Kemp: Absolutely. We're coming out of a world that has been manufactured as very structured, the branding is very organized, and to actually have authentic human beings that we connect with - that's what a lot of people are seeking nowadays.
Let's talk about your journey, because one of the big challenges of the appster tribe listening to this podcast is that it's sometimes quite challenging to make an income selling apps, in-app purchases and monetizing your app and all this sort of stuff... Many of us do have expertise in the areas that we have, and we want to move into coaching. I wondered, in terms of your journey, coaching, what's been your greatest marketing technique for winning clients? Have you got any great tips on something that you've found in terms of what the best way of winning clients is?
Emily Utter: Yes, and this might surprise some people, because the truth is I really hit my first six figures through mostly speaking and networking. If I look at the very first clients that I ever had, it was almost all people that had some personal connection to me. I actually recently did this when I was in Ubud, I spoke at the co-working space there, and I built some awesome relationships and it was just honestly the most fun speaking gig I've ever had... But I would do the same thing out of the co-working space in San Francisco where I lived for many years, and it was through getting to know people, and then those people would tell other people about me... That's how I sold out my first programs in my private coaching - it was really through building relationships.
Some people may see that as like, "Wait, that's not even really internet marketing" or "That's so old-school, it's so grassroots", but the reality is there's no warmer lead for the coaching industry, because people really have to trust you to choose to work with you... There's no warmer lead than somebody who either came through a referral, somebody who knows you, or somebody who's had the opportunity to be in your energy.
So even the really big names, the huge multi-million-dollar coaches, you'll see that they're actually still out speaking on stages. So that was really the thing that allowed me to really build out the stability of my income.
I would say for newbies, if you've developed an expertise in a particular area, that would show me that you already have great connections and that there's people in your network right now who could be clients. My very first client came from LinkedIn. They came from people that I met at conferences, they came from people I met at networking events, and I was just bold enough - and this is the hard part - to actually put myself out there and make an offer.
So for anyone who's thinking about going into that world, think about who do you know right now already who could either refer somebody to you, or who do you know in your network who would actually be a great client for you based on your expertise. So that's definitely what my business looked like in the beginning, and that's how I really built up my income in the first year and a half or so.
From there, I actually did move into doing online list building. I've built my e-mail list - it's not huge, but I do have several thousand people now that follow me and read what I put out there, and I did that actually through doing interview series where there was an opt-in to get to watch the interview. That's added many thousand followers... Now I'm branching into Facebook ads and things like that, but in the beginning I think the best strategy - because it costs very little or no money at all - is actually going out and speaking and networking and talking to people.
Paul Kemp: You know, it's fascinating... You've picked up on one of the big themes of this podcast, Emily, which is networking - the importance of networking. We often forget that there is real people out there, outside of the social media that we tend to focus on.
In the last few minutes we have together, I wouldn't mind steering us back to adventurous lifestyles. You work with many people, and I wondered if there's any sort of really interesting client or anyone you could talk about who has a pretty compelling lifestyle, running a business but doing some pretty awesome stuff in between.
Emily Utter: Yes, absolutely. The first client that comes to mind is also a friend of mine. His name is Derek, and funny enough, he and I met a year ago in Ubud, because another mutual friend of ours said "Hey, you two have to meet." We met at the Yoga Barn, which I'm sure you know the Yoga Barn. We went to an awesome class with one of my favorite teachers, who used to teach in San Francisco, and then we had lunch together and we just had this really cool conversation.
Several months later, he decided to join my adventurous entrepreneur mastermind. Derek is a new dad - I think his baby is probably about five months now, I'm not sure... He's a new dad, so he and his partner and their son are traveling the world together. Since he started working with me I can't even tell you how many places he's been. The ones I can remember are that he's been in Mexico, he's been all over the US, he's now in Croatia. In fact, the local news just did a story on them and their family and their alternative lifestyle, which is so cool.
We do a fun thing in our Facebook group - we have a private Facebook group for the mastermind where people post a photo and then they say "Today's office." So they'll post pictures of where they are, where they're working from, whether it's by a pool, it's in a foreign country, it's an airport, whatever. It's just a fun thing that we do to keep track of each other.
But Derek's been all over the place. He's traveling the world this year with his partner, their kid, and this is actually partly what he helps people with, too. He's also supporting people to grow businesses that they can run from anywhere. He travels with his bicycle and he goes on these crazy -- he used to be a pro cyclist, so he'll go on these crazy 50-60 mile bike rides and post photos of the wild horses, and animals, and all kinds of cool stuff he's seeing. So he's really living a lifestyle...
I have another client who has just been in London and she just got back (today or yesterday) from Japan, where she took her son for a momma/baby trip; not baby, I think he's about 12 years old.
They're really doing it, and for me it's one of the most fun things and it actually keeps me on my toes, because when I see my clients traveling a lot, I'm like "Dang, I gotta catch up. It's time for my next trip!" when I see them just posting from all over the place. It's cool.
And then I have clients where their adventure is actually that they get to be home with their kids. Everyone has their different version of it, but it's so fun to watch what they're up to.
Paul Kemp: Yes, because I compare this to when I was working in corporate finance, and you would go to lots of different cities around the world, but you'd end up in an airport, and then the local hotel, maybe a bar. You would see nothing of the local culture, you would not have any adventures. It would be very, very staged, kind of cosmetic.
Now the podcast is going to continue whilst we go and see the Komodo dragons in Indonesia, and go and live aboard a boat - all this sort of stuff. It's fascinating, and I do hope that anyone listening can be inspired...
Finally, what would be your advice then to get over one of the biggest hurdles, which is actually quitting, and sort of saying goodbye to that safety net? What advice would you have for anyone contemplating quitting their corporate career?
Emily Utter: That's such a good question. The first thing I would ask anyone who's having that thought to consider is "What are you afraid will happen if you leave and something doesn't work out with the business?", because I think that's what really keeps people stuck. They create this huge story around this worst-case scenario. So think of the worst-case scenario and then ask yourself what would you do if that happened.
The reality is, as much as I don't want to ever have to go get a job, I know how to get a job. And if I had to go get a job and something happened with my business, it exploded or some horrible thing happens that I'm not anticipating, I know that I'd be able to figure it out. So it's almost like you have to remind yourself how powerful you are, who you are, that you've already created success in your life, and the business is just the next adventure.
So that's what I would have people consider - what will you regret more? Will you regret trying it and having it just completely fail, or will you regret never knowing what you could have created? Because I'm sure every single person that you speak to, Paul, could tell you a story of failure. Anyone who's created any level of success can share with you a happy story, as well as one that really hurt and was painful and that they weren't sure they were going to recover from. We all have those stories.
It's funny when I got fired, because I had actually decided that I was going to quit, but I didn't know how to quit, so I just was kind of sitting on it... And I ended up getting fired, which was so perfect, so I didn't have to take that step of quitting. But I just knew that I wasn't going to be satisfied if I didn't try.
I think it's a question to ask yourself, "How bad do you want it?" and "Are you willing to take the risk for the possible reward?", which I say often, Paul, I feel like I'm in this secret society. I feel like having a location-independent business that actually brings in great money, I feel like I'm in this secret society. Life can be so amazing over here if only you try to make it happen.
Paul Kemp: I think sometimes you often forget what it is like to go back to a corporate job. I'm tempted to go back to an office for a few weeks just to remind myself how bad it can be in terms of having a very narrow outlook on life. You're right, absolutely.
This has been fascinating, absolutely lovely. How can people best reach out to you, Emily? What is the best way of getting in touch?
Emily Utter: I think the easiest way is to just check out my website and you can hit the Contact Me button. That's EmilyUtter.com. I'd also love for you to find me on Facebook, Emily Utter - that's a fun way to connect. Those are the two easiest ways to find me.
Paul Kemp: That's EmilyUtter.com. Wonderful. Emily, thanks so much for coming on and sharing these wonderful journeys of your clients, and your success as well. I wish you all the best, and thanks for coming on The App Guy Podcast.
How To Start A Startup Without Falling Into Financial Ruin
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where we I go around the world and get lots of wonderful guests so that we can learn from their journeys to inspire you to do something awesome with your life, with your app journey, whatever the projects you're working on that lead you to have a wonderful life.
This episode is very relevant to app developers. I know there's a lot of you listening who develop your own apps and the technical side of your business. To help us with the understanding our users, which I think is very important, I've reached out and got a wonderful guest. His name is Zahi Boussiba, and he is the CEO and co-founder of AppSee - very related name, given that this is The App Guy Podcast.
AppSee helps developers understand their users through powerful visual in-app analytics such as heat maps. We're going to find out all about AppSee, all about Zahi, so do stay tuned.
Thank you, Zahi, for coming on The App Guy Podcast.
Zahi Boussiba: Hi, Paul. Thanks a lot for having me. I'm super excited to share my story and the AppSee story on The App Guy Podcast.
Paul Kemp: Wonderful! Zahi, let's talk straight away with understanding the problem that you're trying to solve. You've been in business now for a few years... I wondered what was the initial problem that you were trying to solve with AppSee.
Zahi Boussiba: Actually, it's a funny story, Paul. Exactly five years ago myself and my co-founder decided to develop our own mobile application. It was around the peak times of Groupon and check-ins and coupons, and we wanted to create an app around that. The name of the app was ShopTalk - it was a mobile social commerce application. We built it very quickly - it took us around 2-3 months. We released it to the public and we measured it with the available analytics solutions that were free at the time... Mainly Flurry and Google Analytics. We saw that we were getting a decent number of downloads, but actually we got very low engagement with the app. We saw that most users only use the app once and never returned. We couldn't understand why.
When we measured it, we saw that most of the users are not completing the super simple three-step onboarding process. That's where we kind of hit a brick wall. We couldn't really understand what's preventing our users from completing it. Again, it was like a three-tap, super easy process, in our opinion.
We couldn't understand why users weren't completing that process, so we started developing capabilities that could help us better understand what our users are actually doing inside the app. We would actually take screenshots of every screen, we would send them to the server, and then we would actually look at screenshot after screenshot and see what users actually encounter and do inside the application.
Now, the amazing thing we found out - and this is something we had no idea when we planned the process - is the first thing we asked for in the app was location permissions, and it was our assumption at the time (again, this was five years ago) that everyone would approve sharing their location. Actually, 70% of users did not confirm sharing their location. Obviously, as very sophisticated programmers, we showed them a message: "Please go to the settings screen and update your location settings", and we actually saw that they went to the setting screen, but they went to the app's settings screen, and not the phone's settings screen.
So we saw a lot of screenshots of users actually getting confused, going to the apps settings screen, trying to search for location settings... They weren't able to find what they were looking for and they left the app and never returned.
Paul Kemp: Fascinating!
Zahi Boussiba: That was really the first a-ha moment of how a simple user notification can actually be very confusing, and you mean one thing and the user thinks another thing, and that's why you're losing 50% of your users.
Happily - or sadly - the app was not successful, but we felt that we stumbled upon something that is really interesting - the ability to actually see what the user is doing inside the application. That's how AppSee actually came to be.
Paul Kemp: You reminded me, Zahi, of my conversation with the founder of Brunch, which has almost an identical story to you... The initial app failed, but what came out of it was an understanding of a real problem that needed to be solved. So what happened then? You discovered that this was a real problem... How did you start AppSee? Talk us through the early stages. You had this a-ha moment, but how did you get that from a-ha to then a real business?
Zahi Boussiba: The early days were very challenging. First of all, we're talking about two guys with some development experience, basically new to the app world, bootstrapping from the garage with two laptops. The ShopTalk app kind of failed, and we set out to initially build what was called UserVOD; we couldn't even afford a proper domain, so we bought the first domain that was available, and kind of in the area of what we were looking to do.
UserVOD was not a good name. It gave people connotations of an entertainment video streaming service, while we were aiming for helping you see what your users are actually doing inside the app. But we went ahead and built a very basic prototype, again, with zero funding... Just us and our coding skills.
We built a landing page, we had a very simple SDK that you would integrate into your iOS app - initially we only supported iOS - and a very simple dashboard where you can actually see recordings of user sessions. At that point we'd advanced from the screenshots to an actual video replay. You would put the SDK, stick it inside your app, and then you could watch recordings in the dashboard. That was pretty much the only feature we had. With that feature we went to some friends and people we knew in Israel, in Tel Aviv where we live, and offer them to try out the solution.
We got some very nice feedback that yes, it actually works, but obviously it was very hard to scale... So I think the most important thing we were able to achieve was actually a TechCrunch coverage at that point. Five years ago everything new in the app industry got a lot of coverage. We were in an area that reporters found interesting, and we were able to get a TechCrunch story. This was in July 2012. That was really our starting point.
We started getting hundreds of registrations to the website. The SDK did what it was supposed to do, it recorded user sessions, but the functionality was very limited. On the other hand, there was no real business model behind it, so it was just like a service that you could use; we didn't have any terms or pricing or anything around that.
Then potential customers started asking us about "How much does this cost?" and we actually had no idea how much to price it or how to price it, so we built out a very simple pricing model. I think it started with 1,000 recordings for $19/month, and a month later we got our first paying customer, which I think was one of the most exciting events in the company's history... $19 that went into our bank account from a Paypal transaction.
We understood that the product had very limited functionality. If you're testing an app with 10/20 users and you have 50-60 user recordings where you can actually see what the user is doing remotely, that's fine. But what happens when you have 10,000 or 20,000 or 10 million users? How do you make sense of all of those thousands or tens of thousands or millions of recordings? And that's where the real concept of AppSee started maturing.
At that point we were also able to secure the very basic funding to the company, and also finalize the concept of AppSee that I'd be happy to cover.
Paul Kemp: I've learned so much from you on that piece alone. There's many people listening to this that come to the whole app world with an idea, and then they think it's about pitching that idea initially, but what I love is the steps that you just took us through. You started with the problem, identifying the problem, then you actually built a prototype. Then you shared that with friends and family and people in your network, and then you got some exposure which then led to hundreds of registrations and then your first paying customer. You know, a lot of companies don't even get a paying customer, don't even think about that.
Then I guess that was a lot easier to raise funding after showing those solid steps of progress.
Zahi Boussiba: Yes, definitely. When we finalized our funding round we had around 10 paying customers, and the company was generating an astonishing amount of around $250/month. I know today it sounds funny, but for us at the time it looked like "Hey, we're generating $250/month." I think it's all in perspective now, but to take the story a few steps forward...
I would say in early 2013, that's when we got our seed funding - a fairly small amount of $800,000. Based on the dozens of users that had tried the platform, we indeed identify the major gap of just having a list of video recordings is nice, but it's not enough. And indeed, that's when we've made the most significant leap of understanding the real need here, of the ability to create an analytics suite that combines both analytics capabilities and also the session replay capabilities... Meaning that our customers will be able to create reports on questions they want answers for, for example users that don't complete a certain process in the app (like an onboarding process), or users that only used the app once and never returned, or users that experienced a crash. All of these questions will be able to be answered visually by a sample set of recordings that demonstrate that specific behavior, and that for us was the major leap.
In that stage, we actually went to kind of a sleep mode for a few months. We realized that we didn't want to promote UserVOD anymore. We wanted to basically kill the brand and kill the product we had. But on the other hand, we wanted to continue an experiment with features, we wanted to make sure we were building the right thing, so we were adding a very small number of features to UserVOD while we were in parallel building the comprehensive AppSee platform. This went for around nine months, and in October 2013, with another TechCrunch coverage, we happily launched AppSee, with a comprehensive platform. We announced the funding...
I'm guessing that's where the real story begins, because up until that point it was all experimental... But after we launched, the focus was more on proving that there's a business here, that this is something that we can scale for, generating millions or tens of millions of dollars. At that point, the challenge kind of changed for us, and for me personally as the CEO and co-founder.
Paul Kemp: Well, this show is to inspire everyone that anything is possible, especially in the world of apps. What I kind of take as most inspirational is here's two guys working in a garage, identifying a problem, going through those steps we talked about, and with only -- I mean, the $250/month shows you that even the smallest amounts of indicators to show that there's a potential market is enough to get that first step on the funding. And then once you had the funding - I love the fact that you're one of the only guests that talk about running something in parallel, testing with the existing service whilst preparing the big launch of the full-service of AppSee. I think we can all learn from the way you've done that with our own projects.
Let's jump forward, then - you've got the launch... What can we learn from you about the big launch then of AppSee? For instance, did you appoint a press company, a PR company? Talk us through how we can then learn from you about the launch.
Zahi Boussiba: Yes. Actually, I think we've done a lot of mistakes when we initially announced or launched UserVOD; we've corrected a lot of the mistakes made. First of all, indeed we've hired an external PR firm that helped us with the pitch and with the story and how we wanted to approach media, and we were also ready from the commercial perspective. The website had a proper pricing page, you could pay online, we had our live chat support, we had our sales guy, so the entire operation - although we were only five employees at that time - was ready to handle hopefully hundreds of registrations and potential customers that would come through for the live press release. Happily, that was an important lesson that we've learned from the UserVOD launch.
Indeed, in the first few days we closed an extra $1000-$1,5000 in new subscriptions. So we've done 5x in one day on what we'd done with UserVOD in five months. That was a definite positive indicator for us that we'd done something right.
Paul Kemp: What I'm learning from this is that many of the guests that we've had on the show and listeners to the show, they have had experiences of losing a lot of money, and I feel like if more people took your steps where you have more evidence that there is a market there - you've tested, you've experimented and you know the price points, you know the features that are the most compelling, and there's less chance of losing investors' money when you actually take it.
Zahi Boussiba: I agree, but on the other hand, we had the privilege of working in the garage a year without any salary. Personally, I must say it's a very challenging and emotional time. I used to work as a developer, making a decent salary, and then for a whole year I don't have any income. You're eating up on your savings, you're running from one investor meeting to the other... At some point you definitely think, "Hey, is this the right thing? I could go back and work as a developer and make a decent salary, instead of running between meetings and hearing a lot of no's and maybe's and "Let's talk again in a week."
It was very difficult, but on the other hand it kind of built the company structure we have now; it was experimental, we were proving out something before we go ahead and throw a lot of money on it.
On the other hand, obviously, this approach has its disadvantages because it's a safer and slower approach, so you move slower than a startup that has raised 10 million dollars and is now spending a lot of money. But I think in the long run, and specifically in our industry, it has proved so far to be the right strategy for us.
Paul Kemp: Zahi, let's talk about just one thing there that's on the minds of many of the appster tribe listening to this - the safety net of doing something like you've done, having a runway in your own savings... Mike Zuckerberg was giving a commencement speech recently from Facebook and he said that entrepreneurs need a safety net, they need something to fall back on if it goes wrong, but then I kind of feel like on the other hand that the thing that drives you is not having a safety net and not having a comfortable salary, but driving to something bigger. What do you feel is the better way for entrepreneurs to find success?
Zahi Boussiba: I think my personal problem was that there was a big gap between my expectations from the startup world to reality. When we initially opened the company and developed ShopTalk, we thought "Hey, we're going to develop something quickly for a few months, we're going to have amazing success, and in a year max we're going to sit on a beach, drinking tequilas after someone has acquired us for millions of dollars." And I think one of the most important things I learned during this journey is that when you start a company or a startup, you have to understand this is a very long way. In the best case scenario, if everything is going well, you're in a journey of I would say a minimum of five years and an average of ten years.
I think if you realize that once you go into that journey, then one year is actually not a lot of time. But if you are in the mindset that "Hey, I need to have very quick wins", then it's very difficult.
Paul Kemp: Zahi, we're talking about the most important lessons... You know, this app podcast is to try and get the genuine hard story of entrepreneurs - it's not easy, there's too much press that talks about how easy it is to put an app on there and become a multi-millionaire and settle on a remote island somewhere that you buy... It's just so wrong, and so many people get in, so over the years I've tried to emphasize how hard it is, and you were saying just how hard the whole process is. If you have that mindset before you go in, then it's much easier. Let's talk about this - how hard it is.
Zahi Boussiba: As I mentioned, I've learned that this is not a sprint, this is actually a marathon, so you need to understand it takes time. I think if we would have known in advance what we know now, we would have thought about doing the entire thing a hundred times more. We would probably go ahead and do it again, but we simply didn't realize how long of a journey it is.
I think one thing that helped us is that we had a deadline in mind. We said, "If between 12-15 months we're not able to have this thing lift off the ground in a positive way, then we'll go back to our day jobs." And because we set that deadline ahead of time, then after six months we were still pretty relaxed, because we knew we had enough time to complete the process that we started. I think everyone or anyone who's actually starting something new - you should have something set out for yourself; you decide for the next year you can work on the project without the need to deviate from the course.
Paul Kemp: And how important was it to have a co-founder that had your same values and worked alongside you?
Zahi Boussiba: I think that's probably the single most important thing. First of all, my co-founder and myself, we're known each other for ten years, we've been very good friends. That can also be a potential risk to the friendship in case there are conflicts and disagreement. But in our case, because we knew each other so well, we knew we can work together and we can make big decisions together. I think one very big test we had together - we actually spent a month in South America traveling together. That gave us an opportunity to get to know each other. And obviously, the most important thing is support.
I know it's a cliché, everyone says that startups are an emotional rollercoaster; that's especially true for the first year, where there's so many uncertainties, so you have to have someone to support you, and it's obviously mutual. He has his high times and low times, you have your high times and low times, and you have to be there for one another. But I think finding and choosing the right co-founder is probably the single most important decision you're going to make in the company's history.
Paul Kemp: Yes. And just in the last few minutes, I'm really interested to know if you had spent these last five years on the same course, working as an employee and not getting involved in the startups, the projects, working for zero money, bootstrapping, all that stuff - do you think that you would have learned more as an employee, or do you feel this journey has been worth it?
Zahi Boussiba: That's a hard no. The things I've personally learned about business, about people, about building things are invaluable. It really was a journey that changed my life. I wouldn't trade it for anything. And again, another cliché, but at the end it's all about the journey, not about the final outcome.
The amazing thing is that in every part of the road you have different challenges. In the beginning it's finding the idea. Then getting funding, then the launch, then get your first customer, then hire employees. You have so many different things that are happening constantly, and every time there's a new challenge which is usually bigger than the previous one. Once you reach $10,000 of revenue, you want to hit $100,000, and then you want to hit one million, and then you want to hit 10 million, and every milestone has its own completely different set of challenges. It's constantly evolving, constantly challenging, and if you compare it to, again, the standard day-to-day job, which again, has its advantages... Like, when you take a shower and you go to sleep you have less thoughts and worries. But personally, I think I've developed tremendously as an entrepreneur and as a person, as a result of the amazing journey we've started five years ago.
Paul Kemp: Yes, which is about the same time as when I've started this podcast, and I feel like this has changed my life more than any employment in my history, so it's wonderful to meet like-minded people.
Zahi, as we wrap this up then, I would love to know how can we get people to sign up. Who are the perfect audience for you then to be looking at AppSee and testing it out?
Zahi Boussiba: Great question, Paul. I think that today people - and when I say people, I say end users - have a very low tolerance threshold. I think today when you use a new app, probably the developers have 10-15 seconds of grace. If the user doesn't get it or he's not getting a smooth experience, then you're not going to see that user again.
I think today developers and app owners should be super-focused on understanding how their users experience the app. That's exactly where AppSee comes into play with the session replay, heat mapping and visual analytics capabilities. We have a fully-functional 30-day free trial on our website, so anyone can go into AppSee.com, create a free account, integrate the SDK - it just takes a minute - and then they can instantly gain insights on how their users are using the app.
A typical course of action is that the developer would integrate apps into the testing or QA environment, and then would include apps in the next release. He can gain insights on how the users really use the app, not only from the quantitative perspective, but more importantly from the qualitative side of things.
After that, we do offer some affordable plans for small startups, small companies, and even indie developers. At the end of the day, our goal is to help companies and individuals build better apps. That's what we're here for.
AppSee is really the expert, I would say, in user experience analytics today. We have hundreds of customers globally, ranging from Fortune 500 companies to bootstrapping individuals, so we really serve a wide range of the app development spectrum.
Paul Kemp: Wonderful. How best can people reach out to you and connect? What's the best way of getting in touch?
Zahi Boussiba: I'm available 24/7 through my e-mail. That's Zahi@AppSee.com. If you have any question or issue, please feel free to contact me directly. There's obviously also our website at AppSee.com. It contains all the relevant information and it allows you to start a free trial. But again, for all the App Guy Podcast listeners, please feel free to contact me directly and I'll be happy to assist with any query or issue.
Paul Kemp: That's totally inspirational, thanks for that. That's Zahi@AppSee.com. Zahi, what a wonderful journey! It reminds me of how I love doing this show, meeting people like yourself and getting totally inspired. Thanks for sharing your awesome journey and coming on the show. I look forward to seeing how AppSee grows and takes over the world. Thanks a lot!
Zahi Boussiba: Thank you very much, Paul. Thank you for having me, it was a true pleasure.
Habits Of Eventual Millionaires
Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp.
This is a big deal for me, because the show was started out of Dubai and it was partly inspired by another entrepreneur I used to listen to John Lee Dumas, and he was inspired by Jaime Tardy, who creates The Eventual Millionaire. So it has been a dream of mine for a number of years to get on the show The Eventual Millionaire. My dream has come true. I recorded an episode with Jaime Tardy of The Eventual Millionaire.
Because it's important to me and I wanted to deliver some really good messages, I decided to actually prepare some notes. I am a listener to the show, and I do have a good sense of the types on things she was going to ask me. However, it's a bit like my show, it's free-flowing, there's no particular structure; it can go anywhere. And ironically, all these notes that I made for appearing on The Eventual Millionaire - I didn't use any of them. I thought,
"Well, I've got to use some of these notes..."
There were some really interesting themes I was trying to get out. Most of the chat was about particular launch strategies, how to find enterprise clients...
A lot of these notes that I made for appearing on the show kind of didn't go anywhere, so this is my opportunity to share with you some of the things I've written down for appearing on The Eventual Millionaire. As you can tell in the title, the whole pursuit of the show is to help budding millionaires, or at least try to encourage a millionaire dream in running a business that then makes you a millionaire. What I think I've learned over the 500-odd episodes that I've done on The App Guy Podcast is that there's maybe a slightly alternative viewpoint than just the straightforward counting money to see how much you've made at the end of the day...
I've written these notes to try to pull out some themes, and these themes are taking mini-retirements, working remotely, building up your network of very like-minded people that are fun to work with... I've made a list of some really awesome apps that I've enjoyed, and also corporate life versus the entrepreneurial app life that some of us live. Some of these are the themes that I wanted to get out, and I actually made a note of some little stories as well. I'm going to try and keep this to the next 15-16 minutes or so, so let me see how far we can go through this list of subjects.
The first thing I was trying to get through is the idea of new rich vs. the old rich. I have been a little bit on both sides of the fence. What do I mean here? Well, unbelievably, I've only just read The 4-Hour Workweek. It was a book that I'd kind of come across years ago when it was first out, but never really got around to reading it until recently; I listened to the audio version of it. I can't believe that I kind of missed it when it was first out, because I have been living a life similar to the suggestions in the book - or at least some of the points in the book - without actually realizing it.
One of the big themes of The 4-Hour Workweek is this idea of the new rich vs. old rich, and I was trying to think of some of the examples of what it was like when I was working in corporate London in finance on this six-figure salary that I had, and how I'm richer -- I've actually joined some of the new rich vs. the old rich. Let me explain, and I'll do this in an example.
The old rich mentality was that -- because I was in London, it was enjoyable living there, but I wanted to escape, and of course you're committed to the hours you have to work in the office. I had an office overlooking the Buckingham Palace, I could see the Buckingham Palace from my window, which felt like a great achievement... But I wanted to get away from the whole stress of being in central London, so I would use a lot of my salary on a Friday to take off on a plane, depart from a London airport, fly out to either Italy or France, and then drive for like three hours to get to a place I had in the French Alps. And what I would do is I would spend just a weekend - this is two days - snowboarding. I'd then return and get back around about Sunday - or actually Monday at 2 AM in the morning.
So I had two wonderful, exhilarating days snowboarding. I'd often take my wife, and it was a lot of fun. But I was extremely strapped for time. I was completely time-constrained, so during a season I reckon that I would have had several weekends of doing this, and the cost to me as part of the old rich would have been in excess of $10,000 in travel and the cost of living, and that's without the cost of actually buying the place, buying the chalet in France in the first place.
Ideally, it seemed to be like the sort of thing I wanted to do, however when I left my corporate job I had this abundance of time and decided to do an entire ski season. An entire ski season, which was a dream of mine. I did this for around about $1,000, and that's at least three months or more living in the wonderful resort of La Plagne, which is in the Three Valleys; it's the second-biggest ski area in the French Alps.
The point I wanted to make on The Eventual Millionaire is that even though you may be on a path to being rich, being a millionaire, being part of this old rich, that actually if you calculate the time that you have, then maybe it's easier to be part of the new rich, because you get a much better lifestyle for a fraction of the cost. We're talking about $1,000 for three months, versus $10,000 for a handful of days over the year. And the other part of that theme is that now that I've got a lot more time than I've ever had, then I can actually look after my health. Living and working in a corporate life in a city can be incredibly unhealthy. Actually, a lot of the successful people around me - some of them drove lots of Ferraris and all that sort of stuff, but they were very overweight. At the end of the day, the cost of your health was a lot for the money that you were getting in.
Because I'm now part of the new rich, there's a lot more time for health, and I've got this coach - if you've listened to the past episode recently, I've got the coach of Hugh Jackman getting me really fit, and that's something I would have only achieved on this new path of app entrepreneurship.
Moving on then -- I guess I kind of reflected there, in the ski season I have taken 15 mini-retirements over the last seven years... That's 15 mini-retirements. Now, I never actually called them mini-retirements because I didn't know what I was doing; I just wanted to take a break now and again, and given that I'm doing podcasting and app development and working remotely, it felt like it was quite an easy thing to do.
So yes, I've taken mini-retirements to the French Alps, and Dubai, and Indonesia, I spent a lot of time in Bali... And these are usually 1-3 months at a time. I've had the wonderful experience of undergoing Chinese gong bell meditation, learning how to surf, given the snowboarding days, and living and learning different cultures. One of the things I wanted to bring out with The Eventual Millionaire is the fact that when you are free from the constraints of a corporate life, then you can actually have these mini-retirements, which in themselves are things that you would never achieve whilst on the corporate ladder.
Moving on, I guess still on the theme, but more about the corporate life versus the digital life, part of the attraction for me at the time living in the corporate world was to be surrounded by millionaires. I actually personally used to work with the grandson of Winston Churchill - pretty cool name; quite a rich guy. I would spend a lot of time with the City folk. I actually joined the local golf club that was quite exclusive to get into, and my whole purpose was to be surrounded by millionaires.
What I've grown to learn is that actually they're the wrong people to be surrounded by. It felt like these were the wrong people, these were not my kind of people, which is an ironic thing to say... But since doing the podcast, since networking, since being in the app space especially, what I've learned now is that there are so many more like-minded people out there that are much more fun to be around, that are much more inspiring, that are much more helpful, helping YOU achieve your goals.
Very, very few of these people that I used to know would help me personally achieve the goals. They were more interested in the types of suits that I was wearing, the name that I had, rather than what sort of projects am I getting involved with and how they could help me. So that moves me on to my other subject I wanted to bring up, which sadly I never got a chance to when speaking on The Eventual Millionaire, which is the network that you build up in this space.
We know that it's one of my big themes that comes out time and time again from this show - the importance of a network. I've been able to massively increase my network and meet some of the most inspiring and interesting like-minded people. Many of those I've met virtually, but some of them I've met in person, as well. I was going to give some stories of past episodes where, for instance, I had a really wonderful episode with the founder of Hang With. He's a guy that got some money for his app from 50 Cent. He is on the board of The Developer Alliance, which has 60,000 members. I had a wonderful episode with him, and we do have quite a few back-and-forths on the e-mail, as well. He's part of a network that I've been able to get involved with... Much more interesting. Stories of building an app using 50 cent's money - that's pretty awesome.
Also, I did have an opportunity to meet, for instance, my friend Andreas, who has inspired me to go to Bali, and I've done that for the last couple of years. Also, he introduced me to the coach of Hugh Jackman, which is someone who's changed my life for the better in terms of my personal fitness now. So the network is incredibly important in terms of your goals and your enjoyment out of life, and certainly your business life, and I was going to speak a little bit about that.
And of course, some of the interesting projects that I got involved with over the years have led me into lots of different places. There was a guest I remember building a meditation app; we worked together, and he ended up going for several weeks off to meditate in the jungle, out in the Amazon. These are the types of people you get involved with. Compare that to Winston Churchill's grandson, who was good to have a beer with, but I can't imagine him meditating in the jungle of the Amazon.
And other like-minded people that have also been on the show, that I've really enjoyed getting to listen to and getting to know. In one of the past episodes there was a guy who crashed a wedding. He was trying to fund his app project, and he managed to get his ideas after crashing numerous different weddings and started up an app. He had to subsidize -- he had people living in his house, getting money through Airbnb... So really wonderful stuff.
In terms of wrapping this up then, given that I did want to try and keep this to under 30 minutes, there were some apps that I was going to talk about as well. Some of the apps that have been truly remarkable... I mean, who can believe that now we have access in our pocket to these supercomputers that are really groundbreaking.
I'm thinking of all the wonderful people I've met using the app Slack. It's an app that has been around for a number of years, and a lot of people have mentioned it on my show in the past. I am in some really interesting groups... One of the groups I'm in is a group called Digital Nomads, and I can remember a time when I was looking for accommodation in Bali, and a very friendly entrepreneur went to go and check out the place I was planning to book... I was a little bit worried, because I hadn't been to Bali, certainly not for many years. And he went out and checked the accommodation for me and said, "Look, it's pretty cool. It's very close to the city, and there's a lovely digital hub just down the road." He was so great. So apps like Slack can help you bridge the gap to meet like-minded people in the space that you want to be in. There's so many of these wonderful Slacks. Of course, I have a related Slack that I'm an owner of as well, called iOSStack. There should be a way to join that on the website TheAppGuy.co.
Other apps - I'm thinking how I use Google Translate, and Google Translate has really come a long way. When I was driving around Bali - it was four of us on a moped... Yes, you can actually get four people on a moped - myself, my wife and my two kids. We were in the middle of nowhere and had a flat tire. Now, nobody around me could speak English at all, but I did manage to pull out Google Translate, and we had a verbal conversation, back and forth, where they were speaking the local dialect (Indonesian) and it would translate it to me and I would translate it back, and it would speak back to them. I just found that fascinating that we have that ability in our pocket to have a global translator. It certainly helped me get through the ordeal of breaking down and not having anyone to turn to who spoke English. We managed to get the bike fixed, and sort everything out, so that was a wonderful experience with Google Translate.
And then just the creativity of the people in the app space and the apps that I've come across. I was recently enjoying an app called PartyQ. It's to overcome the whole problem we've got now, which fubbing - there's this new word called "fubbing" I hadn't heard of, which is in a sense is phone snubbing, that's what it's short for. It's those situations when you go out with your friends and everyone's just looking at their phone and not interacting. What this app enables you to do is you have a facilitator ask very interesting questions among the group. Every time I've used this app, it's really got the whole table together; people are putting down their phones, they're engaging, we have a good laugh, we find out some really interesting things about our friends...
So I just love the fact that -- that app would never exist on a desktop; it has to be in the format of an app, and it could only work as an app, and it's overcoming some of the problems we do see with iPhones and Android devices, this whole phenomenon of fubbing and becoming a little bit detached from reality... It's helping come back in that. Those are some of the things I wanted to talk about.
In the final three minutes I have for you today, I did make a note of some of the past episodes I wanted to refer to in case they come up, with The Eventual Millionaire in mind. Clearly, I've just done an episode, 522, that talked about the 15 biggest app entrepreneurial and life lessons that I've learned over the 500 episodes, so I was going to refer to that. But more importantly, there were some other episodes that I had here that are relating to really interesting millionaire-type stories. The recent episodes include 518 with Josiah Humphrey, who took $3,000 (just him and his mate) and built a company that has millions in revenue and over 400 people around the world are employed by his company Appster. So that's clearly a success story.
Also, David James, it was an interesting episode - episode 516, where he (like my story) quit investment banking, but then he went on to create an app and has millions and millions of users using it every year. Also, the success of Alex Austin, episode 509, where he talked about pivoting his company and creating Branch, which is a hugely successful company in the app space. Or Mait Muntel, episode 492, where he created Lingvist, and went from zero to half a million beta testers, and it was his first startup. He was part of the team that founded the GOD particle.
I love the story of James Abbott - I guess he's part of the new rich - where he sold everything in a day on eBay and left and went traveling around the world and then set up a hub in Thailand that I'm hoping to go and see this summer. Brian David Crane - another wonderful interview where we actually interviewed in the middle of the rice fields; that's episode 485. A very popular episode, Dmitry Dragilev (502) on how to get free press. Anthony Martin, episode 490; he went from his dorm room to millions with his business. Angela Yu, episode 474; she went from being a doctor to an app developer, entrepreneur and teacher of app coding. Really inspiring.
Adam Farah, episode 453, who went from leaving his banking career - again, you can see a theme. I love people that have left corporate jobs and taken a big risk. He's built a career now in the AI personal assistance space. And of course, the hugely successful Breanden Beneschott, episode 450, who went from a dorm room to 100 million dollars a year at least in revenue. A huge company. And of course, Roberta Lucca, who achieved global fame with the game that they were behind called Surgeon Simulator. That's episode 427.
Those are some interesting episodes I wanted to refer to, that I made a list for The Eventual Millionaire. So those are the three things then I've gone through in my preparation. Now, the thing I forgot to mention is that the recording of The Eventual Millionaire was recently, this week, as the time I'm recording this, but it will not go live for another six months, so it's not until December. Can you believe that? December. So you'll have to wait until December until you hear the actual recording of The Eventual Millionaire. But it's been a dream come true coming on that show, and I wish you all the success with what you're doing.
Do remember to leave a review for the podcast. Again, I do read all the reviews. Do remember to get in touch with me about potential future guests, because I am going to be doing some hard work with future guests coming on this show, and now is the time to influence that for the remainder of the year. So if you have a burning desire to learn something or to meet someone in particular, listen to them on the show, then do let me know. If you've been to an event recently where you've seen an inspiring speaker, let me know, because I want to interview these people. And tell me what you think of the mission statement for The App Guy Podcast. Does this meet your needs and what you get out of this show?
Thank you for listening, and I look forward to getting a guest interview next time... But for now, sayonara!
How I Sold My Startup For $200 Million Just 18 Months After It Was Founded
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where I help you, as a potential entrepreneur, a solopreneur, a startup founder, maybe you've got a business of apps, or maybe you're just intrigued about what happens in the world of business and entrepreneurship.
My job is to go around and meet some of the most amazing entrepreneurs and try to deconstruct their journeys so that we can learn for ourselves. To do this today, episode 521, I've got a wonderful guest. His name is Alex Quilici, and he is the CEO of YouMail.
Let me just give some background to why I'm talking with Alex. We're going to go through YouMail, but he's also in his past co-founded a company called Quack.com, and get this - he sold this company within 18 months for 200 million dollars to AOL. He then actually helped AOL with multiple product launches, and they managed to get over one million paying subscribers... Loads of wonderful history that we can tap into here to help us out. Alex, welcome to The App Guy Podcast!
Alex Quilici: Thank you for having me on.
Paul Kemp: Thanks for coming on, as well. You're incredibly successful... I want to start off by just talking about what you're doing now, YouMail, and maybe after that, we can go through your history. What is YouMail?
Alex Quilici: YouMail is a replacement for mobile voice mail that's targeted at the sole proprietor, the person running their own business themselves. The idea of YouMail is that if you're a sole proprietor, you get tons of phone calls, but you might be a plumber under the sync - it's hard to answer the phone; you may be a lawyer in court - again, hard to answer the phone, hard to even deal with text messages in those circumstances.
What we realized is these folks need to have a virtual receptionist. They need a receptionist to handle the calls when they can't, so that's what YouMail is - we replaced your mobile voicemail with a virtual receptionist, to provide your callers with a great experience even when you can't get to the phone.
Paul Kemp: What I love, Alex, is when we speak to entrepreneurs like yourself, it's fascinating... You've obviously come out of a very successful sale, an experience with your last company... Why pick this particular idea over all the rest? Did you have some kind of an assessment that it passed? Can you help us through your thinking and why you chose this particular problem to focus on?
Alex Quilici: It's actually kind of interesting because it's not so much I chose the problem, but the problem chose me. After I left AOL, I was doing a number of angel investments, finding interesting companies that I thought were tackling a problem that if they succeeded with a solution, it could be very large scale. And YouMail was one of those companies that came along extremely early stage - essentially, a prototype and a few users. But they had a vision of tackling voicemail, which everybody hated, with a better service.
At the time, the key things were you get voicemail in the cloud, so you can pick it up both on your phone, but also on your computer, sort of a very early idea of visual voicemail... They had the notion of different greetings - a public greeting that most people hear, but private greetings that your friends and spouse and others could hear, and it just seemed like it was kind of an innovative take on something that had been basically frozen for 20 years.
You look at that and think... Voicemail may be going away, but the phone calls are probably not going away, so having a platform that you could use to try to give a better experience when you're just too busy to answer call, but there needs to be a call, and being able to do that at enormous scale, because everybody has a phone number, and everybody in business at least cares about phone calls - that was just too good an opportunity to pass up.
I invested in it, and long story short, I wound up running it, long story short I wound up putting tons of money into it and trying to scale the business. So it was something I was interested in, it was an opportunity that came by, and I thought "You know, I want to tackle this. I want to see what I can do to make the phone call experience better for people because I'm not one of those who believe that it's going away entirely someday."
Paul Kemp: What I love about this story - I think you're probably the first entrepreneur that we've spoken to that has invested as an angel investor and then gone on to become CEO and owner of the company. That's slightly different from what our usual stories are.
What attracted you to wanting to run the company, rather than just continue to invest and get someone else to run it for you?
Alex Quilici: Well, it's one of those things where initially I wanted to just invest, temporarily run it to help them out, and bring somebody else in. But it got momentum... We started getting some traction at the time, with potentially getting carriers to release the product. We raised almost five million in venture capital on top of a couple million of angel money, we borrowed a couple million on top of that, so we had tons of money to work with... And it felt like "Hey, this is an opportunity where I want to see if I can help change the world."
What's really interesting about YouMail is the first incarnation of it spent a couple of years and a lot of money trying to convince carriers that their existing voicemail product had a bunch of flaws and this was a better solution, and sad to say, the sale cycle outlasted the funding of the company, to some degree.
With the sale cycle, you try to convince you the carriers, you do tests, you work your way up from small carriers to big carriers - long story short, that just didn't work for us. But as we did that, we discovered we had over a million Blackberry users at the time using an app that we built primarily as an example of what could be done with our platform.
It was really interesting, because I'd gone in to go after carriers, came back and pivoted to go after consumers, and in fact, we pivoted multiple times since then, but that's a story on its own.
What really attracted me is I like to build things that a large number of consumers can use, and where I believe that me, my team, our ideas, our development talent - we can actually build something that really makes a difference to folks.
Paul Kemp: Alex, I'm so inspired by this story so far. We have a lot of the appster tribe listening to this who are maybe venturing into their first company, sort of sticking their toe in the water... You've come off the back of a successful sale, you've been extremely successful at AOL... I would love to know what your thought process is and why you continue doing what you do. You could have gone to retire on a lovely beach somewhere. What made you carry on?
Alex Quilici: You know, it's about making a difference. One of the things I personally am interested in is how to help people get their businesses going and growing. In the U.S. there are 28 million people who've officially started some sort of business, whether it's they're a realty agent, whether they're a plumber, whether they're a contractor, whether they hand drywall, whatever it is. They're independently trying to build something up. Initially, it's always business for themselves, trying to take care of themselves and their family, but over time they start getting employees, and they grow... I wanted to be part of that and help those folks, and that's a big driver for me.
I feel like I've been pretty lucky in the success that I've had over time, and I want to help others. In this case, telephony is an area I've got some expertise in, and I just decided "Hey, these guys live and die by the phone call, so let's do that better for them." At least that was the start of this.
Paul Kemp: What I'd love to do as well, Alex, is we have also founders who have companies who listen to this. In fact, I was speaking with one today who sold his company... We very rarely go through how we can sell the company, and I'd love to know tips from you -- you took a company, within 18 months sold it to AOL, which is a big feat... I'd love to know how you would advise anyone else set themselves up to have a successful sale and exit.
Alex Quilici: It's really interesting, because I'd love to come on and say I had this plan, this 1-2-3 cookbook or recipe and it just worked out perfectly. What we did is we said "Where is there a big hole? Something we wish there was that's not there yet." Back then - it was pre-smartphone days - what we wanted was the ability to get digital information on the go. You're in a store and you're shopping, you want to be able to get a better price. Obviously, now you just plug it into your smartphone and off you go through various websites, but back then there weren't smartphones, there wasn't the mobile web... There was just an opportunity to solve that problem of getting information when you're on the go.
We just wanted to build the best possible solution for that. We built a platform, we built essentially a telephony app that people access with a 1-800 number. Just think Siri over a 1-800 number. That then became very interesting to the existing web portals at the time, because they were very big on giving you access on the desktop and wanted to expand on that. The natural place for them to expand was "Let's provide access over the telephone", initially by voice, and obviously they expanded it over time. We were a solution for providing that information by voice, which is what enabled us to sell the company, because we met a core need that those guys had at the time.
If I could give advice, it's making sure you're doing something where you can see and imagine who would buy you. Where are you additive to something a company's currently doing where you have an advantage, you've built technology, you've built something that's hard for them to simply build themselves, and then the natural thing is to buy your company.
It's much easier said than done, but you should always have in mind who might buy you and why. The answer "Well, Facebook will buy me because we're great" is not a very good answer. It's really much more detailed about where are these guys trying to go, what's a likely area or need they might have? How do I fit into that?"
Paul Kemp: I can imagine there's lots of opportunities there, because these big companies - especially Facebook - dominate the app store; Apple, Google - they can sometimes be a little bit slow to identify these needs in the market. You mentioned a couple of things, actually, that are long-running themes of this show: problem-solving, which you made us realize, and also pivoting. Let's talk about pivoting, because that's really hard for some of us.
You get this really awesome idea, and you just can't see changing it. How did you know when to pivot?
Alex Quilici: You know, that is one of the toughest questions to answer, because it's partially intuitive and partially data-driven. For me, one of the reasons to pivot is that you planned your business growing at a certain rate, and it's not. And you look at that and you start going, "Well, why is that? Is it because demand isn't what we thought? What's causing the issue that we're having with growth not looking like it should?"
That's usually the thing that says, "Hm, maybe I should consider pivoting." But then the question is "What do I pivot to?" That's where you look at the market, you look at your assets and you start thinking "There seem to be areas that are moving faster where I could contribute more to... Let's see if we should be thinking about doing a pivot to go in that area."
I'll give you an example... When we did Quack, originally we wanted to be a consumer portal. We imagined Quack as the destination. People are going to call our number to get all the information they want. But building a destination site is extremely difficult; getting people habituated in the behavior to call a phone number or even call a particular website... You see the enormous sums of money that people have to raise to do that sort of thing.
So we started thinking, "We built a great platform... Maybe what we should be doing is talking to the providers who already have content and becoming the way they get that content out on another channel." So instead of being B2C, directly to consumers, "Let's see if we can convince these large scale businesses that we're a solution." The minute we made that pivot, very quickly we had opportunities and we're starting to get a lot of interest in what we were doing.
That told us that that's the right way to go. We've done the same thing with YouMail. We tried to go after carriers very hard; we probably pivoted too late in that regard, but carriers take a long time, so it's hard to know you failed until you failed... And we looked at that and said, "Well, we've got data showing us that we've got a lot of consumers using our app with no marketing. Hm, maybe there's ways that we can organically grow off the consumer base and focus on that." That had a lot of advantages - not having to build at the scale of a carrier right away, you're not dependent on outsiders buying your product, or deciding to implement your product, like at a carrier; you're going after consumers directly.
We saw a lot of traction as we started focusing on that area, even thought at that point we had very little funding and we were sort of back to gorilla to grow. It's one of those things - set up your expectations on what you think you're going to do. If you're not hitting them, really carefully analyze why, and then look around you to see if there's an adjacent area that can leverage what you've got where you think you might have a better bet. It's much easier said than done. A lot of times you tell the story, it makes it seem like "Oh yeah, of course we knew", and it's a lot of like "Well, let's try this little thing, let's try that thing" and eventually Boom! You've decided you have to pivot.
Paul Kemp: Alex, I'm thinking... We had a wonderful chat quite a while ago now with an angel investor called Chris Jones. You're an angel investor, you've been one... I wondered if you could give us some idea of the criteria that you use when investing in a tech company in particular. Do you have a school of thought about what you will or will not invest in? Maybe you can give us some ideas on your thinking.
Alex Quilici: Well, let me first do a little bit of a disclaimer... I've done some angel investing on my own, and I've had a couple of winners and a fair number of losers. What I ended up doing was actually starting to invest in angel funds, where you've got the wisdom of crowds helping pick out what the right investments are, just because I think it's very hard to pick 5-10 companies on your own as an angel investor; it's much easier to invest in a fund that's investing in 50-100 companies, where you've got 100 people contributing ideas and helping decide what's good or bad.
I think being an angel investor is actually really hard, but what I've noticed is the companies that seem to be successful generally have a problem that everybody agrees it's a problem... It's either every consumer would agree it's a problem, or every consumer of a particular segment, or every business in a segment... It's obviously a problem. They've got some unique solution to that problem; it's not there's a hundred solutions, but it seems like there are the one or two that are really working on that.
Then it comes down to the team. Do you believe that the team that's building this technology can turn it into a company that can really hit scale while solving a problem? That seems to be the core. A big problem, some sort of unique approach to that problem, and then a team that you believe can carry on and get traction and move forward in this space.
Paul Kemp: How about this then? We do have people who have made money through selling companies, who have been on this show and listen to this show... How can we help those people avoid losing money? Because I can imagine... There is this trend that you end up having a successful exit; you're not quite sure what to do... You end up investing as an angel and then backing a load of companies that are similar to what you've done, but then lose money. So how is it we can actually help people from losing their money after having a successful exit?
Alex Quilici: I think that the thing to remind people is being an entrepreneur is different than being an investor. When you're an entrepreneur, all your eggs are in one basket and you're watching that basket and you're moving forward; you've got a domain you understand well, you've got a company you understand well, you're putting everything into a single space, a single area.
When you're an investor, it's almost the exact opposite. You want to know a little bit about a lot of companies and be able to look at big trends in things to find the winners. I find that to be the biggest challenge - explaining to people that they're not in fact investors just because they sold a company and did well doing that. Some people are, but just because you can drive a race car doesn't mean that you can drive a motorcycle; they're two different things.
Paul Kemp: Yes, I love that. In fact, before the podcast, I used to work in investment banking, and we did have quite a few investments. I'm reading a book at the moment called Unshakeable, by Tony Robbins - wonderful book. He's interviewed Warren Buffet and all these others... He comes from investment as "Try not to lose money first." That's the first goal - don't lose money.
I wondered, with app entrepreneurship, with entrepreneurship in general, we never really think too much about protecting the downside, we're always going for the big wins. Is it important to protect the downside?
Alex Quilici: You know, as an entrepreneur you really want to focus on the big win or making a difference. As an investor, you absolutely want to protect on the downside. One of the things I realized is you don't want to put more than a certain percentage of your assets into extreme early stage investment. It's very risky.
The single biggest thing to protecting the downside is avoid putting the money in at all. Put 90% of your assets into safe things, whatever they may be, whether it's a normal stock market or bonds, houses, real estate, whatever... 5%-10% is what you're willing to actually go bet on companies. That helps you a lot, because I feel like when I invest in angel investment I have to be prepared to lose it entirely. You don't want to go into an angel investment hoping to get 7% a year as a return, it's just not interesting. You want big winners, and you can't have big winners without big losers.
It's really about deciding "How much am I willing to really roll the dice on?" and viewing it that way.
Paul Kemp: Alex, in the last few minutes we have... You've been in this industry for quite some time now, and you've seen a lot of things. I just wanted to know if you had any views on trends that you're seeing, especially in telecoms, with apps in particular and mobile. Are there any particularly interesting trends that we can flesh out to talk about?
Alex Quilici: A lot of the trends that people talk about are kind of big movements. There's a movement in communication to do everything by video, right? I think that's a big one. People are trying to figure out how to interact more with video. My 9-year-old and my 11-year-old - they love Facetime. They just communicate by video very naturally, but a person who's a plumber doesn't communicate by video very naturally. But video is expanding everywhere, so one of the big trends I see is how does video take over more of our business type interactions? It doesn't do much now.
For me, what I look at is I see these big trends that everybody else sees - video everywhere, augmented reality, virtual reality etc., and what I find interesting is how is this actually going to become a part of how consumers and businesses communicate? And I think you're going to see some really interesting, surprising stuff over the next few years, as people sort all of that out.
For example, ten years ago you wouldn't have imagined texting your dentist for an appointment, where now that's becoming the kind of behavior that people expect. Some people expect to call, some people expect to text. I'm just imagining more and more of these channels of communication opening up, and it'll be really interesting to see how each of those channels work, and then how all those channels get integrated to have a really compelling overall experience for that poor guy trying to run his business.
Paul Kemp: Yes, and I can imagine it won't be very long until Google or whoever looks at our calendar and says "Hey, it's been six months since you had your last checkup. Let's book automatically an appointment for your dentist." Life is curated more and more.
Alex, we're getting towards the end, and I'm fascinated with just how incredibly successful you've been and what you're jumping on now. Is there anything you feel that we've missed to talk about that could help the entrepreneurs, solopreneurs that listen to this show?
Alex Quilici: I think the biggest thing I learned... There's a couple things: one is don't give up. There's always dark points; for us there's times we're almost out of money, there are times where a deal drops through... You can't let all of those things get you down, but the related part is that if you're having enough problems, you should be thinking about how you can pivot to a greener area where there might be fewer problems. So the key thing for the entrepreneur is don't get too depressed, but get depressed enough to switch if something isn't working well for you in the path that you're taking.
If you keep doing that, you'll eventually find some level of success, and then you need a little bit of luck to turn it into a really big level of success.
Paul Kemp: I love that advice, and especially pivoting, because a lot of the appster tribe are struggling on the app store. Their only idea is to monetize an app, and we know that it's becoming harder and harder to make it on the app store, given the level of competition and the dominance of the big companies.
Alex Quilici: The thing to think about there is that the odds of winning the lottery are one in a million, and now there's over a million apps in the app store... So the chances of just putting something out and having a big winner are -- you should almost buy a lottery ticket. So you really have to have a core problem and a strategy to try to grow your app, and that requires patience and that's very difficult for people. It's no more just build an app and Boom! It's going to be a big deal. It's a lot more than that to build a business out of an app.
Paul Kemp: Alex, this is episode 521... For the appster tribe, you can go to theappguy.co and search for Alex Quilici and you'll see links to Alex and YouMail. I just wondered, though, Alex... How best can people connect and start to play around with YouMail? What is the best way of getting in touch?
Alex Quilici: Right now YouMail is interesting because it's a U.S.-only app. We sort of support Canada, but more at a beta level. So the best thing is visit either app store, if you're in the U.S., download the YouMail app, and you can run it and get it going really fast, a couple of minutes... Just watch it change your life if you're an entrepreneur that gets a lot of phone calls.
Paul Kemp: Great. Okay, that's YouMail - go and download it from the app store. And actually, why not rate it as well? Getting reviews is always important.
Alex Quilici: Positive reviews are good.
Paul Kemp: Yes, we love five-star reviews, we don't take to anything less. Alex, thanks very much for coming on The App Guy Podcast, episode 521. All the best with YouMail and I can't wait until you start rolling this out globally.
Alex Quilici: Thank you very much, I enjoyed the show a lot.
15 Of The Biggest App Entrepreneurial + Life Lessons From The Last 500 Episodes
Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a different episode, because the show itself has now probably over half a million downloads plus, and I've reached a pretty high figure in terms of the number of episodes, so it's about time that I appeal to some of the new listeners who are coming on and finding this show. I want to go through the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes.
If you're listening to this show and it's your first time, this is a look at the past episodes; normally, I do a guest interview, but this around I want to go through 15 of the biggest app entrepreneurial and life lessons that I have learned from the last 500 episodes. I'm going to go through, and the order is in the order of when they first were aired. This show does go back several years.
To find these past episodes, what you best do is go into your favorite podcasting app, search for the term "Paul Kemp", that is my name, and it will bring up a lot of different podcasts, and you can then tap into the podcasts that say "The App Guy Archive", and it's either Archive Part 1, Part 2, Part 3 or Part 4, and they cover all the different past episodes. Sadly, if you go to The App Guy Podcast, you will find that it drops out after about a hundred back episodes. iTunes doesn't have a particularly good way of going back into the big archives, so I've had to do them as separate podcasts.
So that's going into your favorite podcasting app and searching "Paul Kemp", and going to The App Guy Podcast Archive Part 1, Part 2, Part 3 or Part 4. Do subscribe... You can obviously listen to other episodes, and it would be great if you could leave a review as well, if you like some of these past episodes, and also leave a review for this current episode that I'm recording. It's quite a bit of work and effort to go back into such a huge database of content, and try to record some of these wonderful tips.
I've managed to now get a list together of 15 of the biggest app entrepreneurial and life lessons that I've learned from these last 500 episodes, so I hope you enjoy it.
The first episode I want to look back on is, if you go to The App Guy Podcast Archive Part 1, you'll find episode 62. It took me a while to warm up, but I did get to episode 62, and this was a fascinating episode with Steve Olsher. It made me realize I can actually introduce and find very high profile people and just talk to them naturally and get some really great information from them.
Now, Steve Olsher is a huge figure, because he was at the time the author of "What is Your What?" and he appeared on CNN, Fox Business, ABC, NBC, Forbes, The Huffington Post, and many more shows. I think he has over 300 other media outlet appearances. He's a success coach and a keynote speaker and a strategist, and he talks about a lot of different things in regards to life lessons.
Now, the discussion that we had was really fascinating because it hit a cord with me... Prior to the podcast and prior to making a life chance, I was in finance, doing a kind of cubicle, office corporate job overlooking Buckingham Palace, actually... I was totally obsessed with the illusion of money. And Steve Olsher does talk about the illusion of money. He talks about finding what is your What, finding your What, what it is that makes you tick.
He does remind that actually it wasn't my fault that I went down the wrong path; it's not many of our faults that we do this. "No one teaches you how to live" is what I recall him saying. They'll teach you how to get a job, they'll teach you about the things that you need for that job, but no one teaches you how to live. He did see at that time - this is now going back a few years, but he did see a move from the cubicle to the working in the outdoors, because all you need is an internet connection and access to these tools that we use, especially with what we do.
He also reminded us that you don't have to be young... You can be young or old to make these life changes, as long as you find something you enjoy, plus something that you're good at, plus that it pays well... Because he said that if you don't meet all three of those criteria, then it doesn't quite work.
For example, if you do something you love but no one pays you for it, you're going to go broke, so you do have to have a minimum monthly income to keep yourself going. He talks about what is your What - something that you can identify that's in your DNA, something that has been chosen for you, rather than you choosing it.
So you 1) find what it is that makes you tick, what is your What, 2) the vehicle that you want to share your gift with to the world; for us it's obviously apps, but it could be any kind of technology or anything. And 3) a clear sense of what type of people you want to serve, and he talks about serving those people.
So that is episode 62 with Steve Olsher - a wonderful episode. It certainly makes it into the top 15 of the biggest app entrepreneurial and life lessons that I've learned from the last 500 episodes. That was Steve Olsher.
Next in this series of 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of the App Guy Podcast is - again, you'll have to go back to The App Guy Podcast Archive Part 1, and go to episode 64. This is with Jerrod Sessler. What a great episode this was! He is an ex-NASCAR driver, the founder of HomeTask. He talked about at the age of four telling his mom that he wanted to be a NASCAR driver. This is really fascinating, because I'm sure a lot of the appster tribe listening right now - you did have these dreams as a kid, like Gerard; he actually then realized his dream, even though he dreamt of it at a very young age.
He reminds us of the importance that dreaming can have for us. If you think about it, how many of us dream of a big hit? How many of us have come into the whole world of app entrepreneurialism and app startups and technology startups because we've dreamt the things that we may achieve. So a very inspiring episode... He talks a lot about spending your younger years dreaming, and it's only until you get older that reality starts to kick in... And you follow reality, rather than the dreams you had as a kid.
He does go through kids' dreaming and the fact that we do live in a culture that tells us it's impossible -- and I love the story that Gerard comes out with... He talks about the fact that often when we are young we have a dream, and we put a lot of the memorabilia of those dreams into a shoebox. That shoebox then goes with us around in life, but it remains unfulfilled. We take the shoebox to our new homes, it goes up there on the mantelpiece, he says, we sometimes open it and say "Oh, maybe it's time to start to realize some of those dreams" and then we close the shoebox and it goes back, and then we just get back to reality.
What he says is it's important to dream, important to invent something or important to change the world. It is amazing... Human beings - and what he says is very inspirational - are amazing in terms of what they can achieve if they put their mind to it. And you can do the same - if you put your mind to it, it is amazing what you can achieve. So that's Jerrod Sessler, and that's certainly made it into 15 of these biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. Do go back, listen to that episode.
The next one, number three - again, these are in no particular order other than the date that they first aired, so it's not in an order of importance or order of my favorites... It's just 15 episodes that I picked that are the biggest app entrepreneurial and life lessons that I've learned from the last 500 episodes of The App Guy Podcast.
This is episode 70 - incredibly inspirational. Remember, these episodes have really kept me going. Meeting these people, talking to these app entrepreneurs, these tech startup founders, these inspirational individuals - these people have really kept me going and kept me inspired to keep delivering this content to you. So number three in 15 of these biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast is episode 70, with Syed Balkhi. Syed is truly an amazing individual, because he is the creator of WPBeginner, having worked with the founder of WordPress. He is the creator of List25, co-founder of that, and OptinMonster - those were the three big things that he had achieved.
Now, List25 was an idea that he had, and at the time that I interviewed him, he had been responsible for videos that had 120 million views. He's been featured in The New York Times, Wired, Yahoo! and Mashable, Business Insider and a lot more. He's got a fascinating story.
Now, why I picked out Syed Balkhi for these 15 biggest app entrepreneurial and life lessons is that it's really his story. If you often doubt what you can do in the tech space or what you can do with your own life, then you want to try putting yourself in the shoes of Syed. Now, he moved from Pakistan to the U.S.A. at a very young age - I think he was about 11 or 12 - and it was just after 9/11. So moving from Pakistan to the U.S.A. right after 9/11... It was a time of high tension, and he couldn't speak much English, and he had to school and face a lot of racism and face a lot of struggle. So what he did is he fell into the internet, and he would find that he would be playing online games, he would wake up in the middle of the night and take care of his virtual pets. At this age, his good friend said to him, "Look, why are you waking up and doing this stuff, taking care of these virtual pets? Why don't you trade domain names? You can make some money."
So instead of waking up and wasting his time, what Syed was doing was he was waking up and starting to trade domain names. Now, this was at a very young age that he starts to make money.
This is a cool story - he became one of the coolest kids. He went from this kid that suffered a lot of racism and a lot of disadvantage, and in school, he became one of the coolest kids because he learned how to build a proxy which would help kids in his school get around the school firewall. So he would meet up in the library and they would all then play these different games, and he would be considered the cool kid.
He went on to continue to poke, prod... Curious to all these different things online, just from a curious mind. The big breakout was working with the founder of WordPress. Then he realized that a lot of people needed help getting their WordPress sites up, so he created WPBeginner. That went on to huge success.
The second thing is that then he was on a trip to London (or somewhere in the U.K.). He loved castles and decided to put together a list of the 25 things to do when visiting castles, and he then elaborated that to just List 25. List 25 went on at the time to get 120 million views on YouTube. This was several years ago.
Then the final thing that he was doing at the time of recording this is he was doing OptinMonster, and working with some of the biggest names online. So if you want to be inspired, go back and listen to Syed Balkhi, episode 70. He certainly is an inspiration and definitely one of the biggest app entrepreneurial and life lessons that I've learned from, in terms of the last 500 episodes of The App Guy Podcast.
Let's move on then to number 4. Number 4 of the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast - this is the guy who inspired me to start the podcast. I managed to interview John Lee Dumas, a very busy man. He has a podcast called Entrepreneur On Fire, and it was a podcast that I was listening to whilst I was living in Dubai, on one of these mini-retirements that I take.
He was great to interview because it's just so cool when you interview the guy that has inspired you to start something. He certainly inspired me to start the podcast. Now, the great things that come out from John in the episode - which is why it's worth listening to - is that he talks about impostor syndrome. I wonder how many of us do sit back and think "I'm not worthy. I can't possibly do this. I'm not an expert, I don't have the credibility, I don't have the..." -- there's always an obstacle on why you can't do something, why you can't realize your dreams, why you can't realize your passions and follow something you want to do.
So we talk about overcoming the impostor syndrome, but more importantly, we talk about the art of building an audience. Of course, in the app world, we often put apps in the app store, we often build tech startups or whatever the technology is, and put the stuff out there and hope the quality of the product is enough... But there's an importance about building an audience, and he talks about how to build credibility and authority in the space. He does share a lot of success and a lot of failure stories in his podcast.
The importance of building an audience - let's go back to that because that was the big theme going through the entire episode. He said that if you think about it, when you have an audience, rather than build an app, put it out there and realize it's going to be a flop, what you can do is you can take the audience along with you. First of all, you can ask them what it is that they need, what their big challenges are, what problems they are facing with whatever the niche is... Then you can build a minimum viable product and then distribute to them a solution for the challenges that they face. That solution typically is in the form of some piece of software or an app. If you do it that way, you are building something that has already made an audience.
That's a very valuable lesson to a lot of us who are trying to carve out a living by doing tech startups and apps. So that's one episode that goes into my top 15. Now, I should have mentioned that this episode - episode 110, with John Lee Dumas of Entrepreneur On Fire - you do need to go to The App Guy Podcast Archive 2.
Number 5 in the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast is my chat with Hal Elrod. This will be in The App Guy Podcast Archive 2. Hal Elrod is the author of The Morning Miracle. He is also a keynote speaker, he's a number one bestselling author, he is one of America's top success coaches; he was a national champion sales manager, he's a record-breaking sales rep, he ran an ultra-marathon, and the biggest thing that I learned from Hal - a lot of us have great ordeals to overcome with our journeys. Now, Hal had the biggest ordeal. He had two massive failures, hitting rock bottom. His first was just truly inspirational, he overcame this... He was hit by a drunk driver and he was thrown to the side of the road, blood everywhere, and he was clinically dead for six minutes. And yet, he was brought back to life, and the doctors said he would never walk again.
Imagine that - you not only have been clinically diagnosed as dying for six minutes but also you have been told by doctors that it's impossible for you to walk again. Now, not only did he walk in the next several weeks, he started training for a marathon, and has since run a marathon. So whatever obstacles you have in front of you, there's no bigger obstacle than not being able to walk and then having to face that future.
He went on to become a very big success coach, and then he hit his second rock bottom. He says that his second rock bottom was actually tougher than his first, which seems quite astounding who us who haven't died for six minutes... He reached the second rock bottom being the failure of his business. At the time, he wasn't really particularly in a good place - I think it was 2008-2008, obviously the U.S. had gone through a big crash in the economy, and his business failed; he couldn't pay the bills anymore.
He went through this rock bottom and it was a friend or a mentor of his that helped him get out, simply through exercise. Of course, if you've been following my newsletter, you would have seen my results from my recent exercising; I'm working out with the personal coach to Hugh Jackman. That's made a big impact in my life, so I know the importance of exercise, so I can really resonate with what he's talking about here in episode 142. By the way, if you're not on my newsletter, you should go and sign up. You can easily sign up by going to TheAppGuy.co, and just look at where it says "Free Updates" or "Sign Up", and there's a little picture of an e-mail, and you can get access to my newsletter... And see the results of what I've been doing in terms of working out with Hugh Jackman's personal coach.
Hal did talk about in this episode that it's important to dedicate time to the things that successful people do, which is 1) wake up early, and have a very important morning ritual. 2) He talks about these "life-S.A.V.E.R.S." (Silence, Affirmation, Visualization, Exercise, Reading and Scribbling). You can always go and buy the book, The Morning Miracle, or certainly, he does give a lot away in episode 142 of The App Guy Podcast.
Let's move on then to number 6 in 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. Who can believe 500 episodes...? Alright, I want to refer back to episode 164. You can find this by going to The App Guy Podcast Archive 2. This is with Christophe de Courson. Now, I will warn you, his English is not particularly great, but what we learn from Christophe in this episode -- again, if you want inspiration, here's a guy working with one other individual in a very small startup, with no money. They were able to achieve over one million downloads in less than 50 days.
Christophe is the CEO of PeeeM, which is a mobile app that lets you share any type of file and any size over the internet. It's a great episode to learn about successful app launches, and you can certainly apply his success to any app launches that you may have going forward. In terms of the launch, he actually puts it down to a little bit of luck, but also the features within the app were very viral. But I think the most important thing that we learn from his app launch -- and his app launch went on to become at least the number one in a lot of Middle Eastern countries... I guess that's because of the need to share data over a new app.
He puts a lot of his success down to launching at the right time. Now, his app is in a way useful for previous Blackberry users. If you remember, the BB10 came out to very bad reviews, and they had promised to launch an app on the App Store, and they delayed by three months. He launched at the time when Blackberry was supposed to launch their app. Many of the people then came looking for that launch, and stumbled across his app. The importance of timing in terms of finding the right time, and also capitalizing on the failures of some of the bigger companies to commit to their launch cycle. So a lot of great information going through with Christophe de Courson. That's episode 164.
Seven in this list of 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast is with episode 188 - Paul Myers. Again, go to The App Guy Podcast Archive 2, and it's episode 188. Just to remind you, if you can't find that, do search "Paul Kemp". For some reason, if you search "app" it's a little bit hard to find, but if you search "Paul Kemp" you'll see all the stuff I do and you'll see The App Guy Podcast archives, and that's Archive 2, episode 188.
It was actually one of the most interesting and funny episodes I've had. I really enjoyed my chat with Paul. A straight-talking Brit, and full of just genuine, good information. At the time, Paul was a British author, a businessman... It was actually for a record producer, and the CEO and founding pioneer of a music store called Wippit. He's a very busy entrepreneur. He also managed to build a company called BAAPZ, and built at the time the biggest independent podcast production company called Playback Media. So a lot of different things...
Now, what we talk about initially is his app building business, BAAPZ, and the fact that he managed to build apps - one for his company and one for the clients. What he did is he actually goes through the story of acquiring a team from Melbourne who were, at the time, building Facebook apps; he managed to transition over to iOS apps.
He had this team, and they developed one app for themselves and one app for the clients. It was a good way to keep the developers interested in these side projects. They managed to build an app for themselves that became incredibly popular. It was a London Tube map app, and they got three million downloads. He talks actually quite in depth -- one of the few episodes we talk in depth about advertising on the App Store in your apps. He gives some very good examples of when to include ads in your apps, what number of downloads you should have to include ads, and the importance of then sometimes switching to interstitial ads, rather than straight banner ads.
We also the talk about his project at the time, which was a dating app called BootyShake. The initial test phase of the launch was getting 50k users in the first few days. Great episode, you'll learn a lot from Paul, and that is episode 188 of the archives part 2.
We continue the journey with 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast - we're moving on to The App Guy Podcast Archive 3, where this is at episode 200 through to 300. What I want to pick out here is number 8 on the list. Number 8 of 15 of the biggest app entrepreneurial and life lessons is an interview with Anton Lopyrev.
Anton Lopyrev is actually the founder and CEO of an app that no longer exists, but it was massive. It was called Umano. I had several thousand audio listens every episode that I put on Umano; they gave me a feature. It was a huge app, and it was actually bought out by Dropbox.
It's interesting to go through the story that Anton gives us just before the timing of being bought out. He was on the verge of a deal with Dropbox. If you want to listen to an episode where a founder has actually done something very successful -- he's got a huge, ambitious goal that he talks about, which was to become the largest audio content provider in the world, that was his aim. It's wonderful, because he does talk about starting small, and understanding users is the most important thing.
Did you realize before he got funding he was extremely small, in that Umano only had 200 users? Now, for anyone out there who is struggling to get funding, this would really inspire you because, with only 200 users, Anton was able to get funding, and he was featured by Apple. It goes to show that it's not just the initial download numbers, it's the story that you can tell to investors. Also, Apple does look at some of the better apps, irrespective of just pure downloads.
A very inspirational story there from Anton Lopyrev. He's number 8 on our list of the top 15 episodes of The App Guy Podcast.
Let's move on to number 9. Number 9, 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast, it's episode 245 with Bram Kanstein. Go back to archives part 3, listen to this episode and get inspired, because I actually chatted to Bram ahead of the curve. He was in the process of building something called Startup Stash, which is highly relevant to us. It was nice to get him before it took off.
He talked to me about the launch, and I knew about this Startup Stash before it went live. Now, when he launched on Product Hunt -- he actually does go through the process of how it became the number one, and still is to this day at the time of recording, still the number one hit on the massive site that's known as Product Hunt... Still the number one product/website on there. It's got several thousand upvotes from the community.
Startup Stash has gone on to get loads of copycats. In fact, yours truly here did copycat the idea, and I remember working with a good friend of mine, Chris Beshore, to start up something called iOSStack. We created that together and launched that, and it got something like 20,000 views over a few days, and was a really big hit on Product Hunt.
So it was nice to get inspired by Bram, but it's interesting to go through because Bram does actually do a lot of good deeds. He was one of the guests that did hunt me in the past, and hunt this podcast show, and I'm sure like many of you listening may have even come from seeing the podcast on Product Hunt, where it got several hundred upvotes. So a great episode - episode 245, with Bram Kanstein, who actually later went on to go and work for Product Hunt, and then since quit and started his own stuff... So a wonderful, insightful chat with Bram.
Let's move on to number 10 of the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. We're getting close to number 15, but this is number 10. Number 10 is Adam Wulf. I wanted to pick out this because I was going through a phase back at the time - it was a couple years ago now - where I started another podcast that was well received, called App Store Launch Stories. As a result, I was really into trying to find creators and app entrepreneurs that could talk about launches.
Adam was the creator of apps such as Loose Leaf and Remotely. He at the time had written an incredibly insightful launch strategy and a guide to launching apps. He talks a lot about it... It was actually a 7-step process on how to launch apps, and we went through every single step in this episode, so well worth listening to if you are in the process of launching an app.
He talks about some books that inspired him, such as Trust Me, I'm Lying, and a book called Traction, which is also another past episode of The App Guy podcast. He talks about making sure that you define the problem and define the audience prior to actually building the app, which is important. And also prototyping - we talk a lot about prototyping. With prototyping, it's important not to miss the big picture, and are you tackling the wrong problem?
A lot of the entrepreneurs I speak to -- and that's why we talk about pivoting so much on this show... You actually are tackling the wrong problem and you're not validating your idea ahead of time. Great tips, worthwhile listening to and going through these tips if you are in the process of having to launch an app, or even build an app and you're starting from scratch.
That's episode 333 in Archives Part 4, which is episode 301 through to 399. You'll find there episode 333 with Adam Wulf, a wonderful episode. Thank you, Adam. I do still stay in touch with many of these guests, and I'm pretty sure Adam will be listening.
The next one is actually the following episodes - I had a spate of wonderful episodes. This is number 11 in the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast, the countdown that we're doing. Number 11 is episode 334 with my great friend, Andreas Kambanis.
We had a great chat where we talked about one of his biggest successes, one of the biggest successes I've been involved with, which is how a $2.99 app became a number two hit on the App Store. Andreas talks in detail about the exact strategy; a big part of it was Product Hunt, where I got involved, and Reddit as well, Instagram... He talks about the success of the promotion...
We really do dissect a successful launch, so if you want to see, pick up your iPhone now and have a look - Fit Men Cook is still in the charts. If you look into the Health & Fitness or the Food category you'll see Fit Men Cook is still there, roaming high. It was a wonderful launch, and that's why we talk about a successful launch as very important in the whole process.
Moving on, number 12 in the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast is episode 372, a chat with John Bradford, who is the co-founder of Tech.eu and F6S, and also he recently departed as the MD of Techstars, which is an accelerator/incubator that helps entrepreneurs and startups. We've had many Techstars companies come on this show in the past - I think actually if you search "Techstars" on my website, you'll see a whole series of different Techstar interviews we've done.
It was nice to have the ex-MD, so we can talk about his insights and his knowledge. A very, very busy guy, but also completely smart and happy to give advice. He talks about giving tips to startup founders. What types of tips? I mean, the whole episode is full of these wonderful quotes, very memorable quotes. I'm thinking about the quote that he said, which is "If you want money, ask for advice, and if you want advice, ask for money."
It's interesting that this man has so many different quotes... Maybe that's part of his Irish heritage. He talks about big trends in this episode as well, and it really got me involved in Blockchain, which is obviously the technology that runs Bitcoin. It was nice to hear from him that actually that's one of the areas he sees growing. This was just under two years ago now, so it's still highly relevant and definitely worth listening to. That is episode 372. If you go back to Archives Part 4, you'll be able to hear this.
We're going to move forward now, we're on the final three of the countdown to the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. There's so many really fascinating and interesting episodes... It was hard to choose, but what I wanted to do is choose episode 476, which is with Chino Lex. I loved my chat with Chino.
Let me give you some background to Chino. Chino is an app developer that went from a carpet cleaner to the top 1% of app developers, and he's got millions of downloads. If you want to know how hard it is and how many challenges you have to go through to be successful, then you've got to listen to this episode with a very young Chino Lex. He is the founder of tapTrax, but also he's created tons and tons of apps. At the time we recorded it was about 166 apps, of which 50 were top-ranking in their category.
He's got over 5 million users, and guess how much he spends in marketing? Zero dollars. It's all very helpful advice, and just basically an inspiring story. If you're listening to this and you're thinking about your future, if you're wondering what to do after quitting college, you want to listen to this.
Chino talks about his story, he talks about he actually connected with a very smart, high-profile entrepreneur in the app world and gives you some advice on how to do the same. Also, he talks about the very difficult decision that he had to start an app company, and he actually chose to go down this route rather than attend the very high profile Princeton, a top 13 university in America. He ended up making this decision, his first app failed, and the talks about the story of being in the shower, just crying, because he thinks he's made the wrong decision.
He managed to overcome that and build another 40 apps, and he just kept going and going and doing. All those apps were failures, until then after his life crisis he carried on and made a guide. It was the first guide to CandyCrush, and it was a huge hit - it hit number 200 in the charts, a paid app. That then gave him the income that he required to carry on going.
It was a nice story to go through, how he went from a carpet cleaner to an app entrepreneur with very successful hits and millions of users. That's episode 476 with Chino Lex.
I'm going to give you now the penultimate -- and again, these are only in order of when I recorded them, they're not in order of my favorites. I just had to pull out 15 of the 500 episodes, which has been quite challenging, but here we go... 14 of the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast is an episode that I took six hours to edit; it took a lot of time. It's an episode with Rich Pleeth, and it's the story of the Million Dollar App Startup - that's episode 495. You'll have to just go to The App Guy Podcast and it should still be in the list of episodes.
I was really fascinated about putting this episode together. I wanted to go into the story and do some editing with music, and I'm really proud of how it turned out. The actual story is of Rich, who is an ex-Google employee. He talks about dreaming of his own startup... For anyone, if you listen to Rich talk, he should have been automatically successful because of all the different experience he had - ex-Google, he was involved in lots of different successful apps...
I think he was very instrumental in bringing Chrome to the millions of web users that we have - he was very instrumental in that. So a very successful background... He ended up raising about a million dollars in funding at the time for his app idea. I'm not going to give you the spoiler if you haven't listened to this episode, but definitely worth going through the story that I tell in this episode. That is episode 495 of The App Guy Podcast, which then brings me on to the 15th.
Number 15 out of 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. It's been enjoyable going through and trying to pick out these. I wanted to make sure that for all the new users that come along and find The App Guy Podcast, I wanted to make sure that you had a resource where you can actually pluck out some really good episodes. Because it must be daunting to be seeing 500 episodes and wondering which ones to start with first. Well, I recommend these. If any of these episodes have interested you, then go back and listen, and you'll get a good taste of the entrepreneurs and app people that we've had on this show.
Episode 514 is my final pick, it's with Jo Overline. He is incredibly successful. He built an app that had over 30 million downloads and was number one in 94 countries. Talk about success... Incredibly successful. Actually, he had so much press attention that he realized that the press were creating fake stories just to get headlines, so quite an interesting insight into how the press works.
His app was called Ugly Meter, and it has been extremely successful. It has really propelled him into app stardom. It seemed at the time that he was getting all this attention that everyone on the planet was trying to download this app. It was a number one hit, and he talks through that story, but the fact that it wasn't all plain sailing and it wasn't particularly strategized. It wasn't like this big blueprint of "Alright, we're going to have this successful app..."
What I learned from the story is that sometimes it does just take a bit of luck for you to actually get app success. We can do everything we possibly can, we can follow all this advice that you hear on my show and from other resources, but at the end of the day sometimes is just takes a little bit of luck, and it's wonderful to hear how this was perceived and a big hit with the press. And he does actually talk quite extensively about how to make your app a story, how to make it worthwhile for the press to write about it.
That's one of the big challenges I think we all have - you end up writing to the press, trying to get influencers to take notice of your apps, and they're inundated; they're getting several hundred e-mails a day, these top journalists, so what makes it special? Well, making it a story, making it controversial perhaps, making it interesting. Ultimately, at the end of the day, journalists do want to have lots of clicks, and they want something that's interesting to read - basically a story. This is the episode where you learn how important it is to create a story.
That is it, that is my final pick... 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes of The App Guy Podcast. Thank you very much for listening to this. You can really greatly help me out if you do like the shows. If you have left me a review - great, thank you very much, but please do go and leave a review. I like five-star reviews... I do read all the reviews and I do take great inspiration from especially the 5-star reviews.
Also, if you haven't gone and subscribed to some of these archives, go and leave a review for some of the archive shows as well. That will help me out.
Finally then, I just wanted to take this moment to say thank you very much for listening to The App Guy Podcast, I'm totally grateful for your time. It's been interesting putting this list together.
If you are a new listener, welcome; there's a lot of great content, and this will help you become a realist, but also inspire you to carry on in the whole world of app entrepreneurialism. Do go back and listen to some of these past episodes. They are fascinating. There are all these entrepreneurs that we learn from; these startup founders are all fascinating individuals, and I absolutely guarantee that you will learn something new from every single episode that you listen to.
I've learned an enormous amount from these people that I've spoken to, and I hope you do, too. Thank you very much for listening, and all the best.
Story Of A Founder Fundraising For His New Startup
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where we go around the world and introduce you to some fascinating founders and entrepreneurs, so that we can learn from them and take their lessons into our own businesses and our own journeys. If you're a solopreneur and entrepreneur, an indie developer, an app developer working on side projects - all of these things, it's highly relevant to you.
Listen and stay tuned, because this is going to be a great lesson, particularly focusing on fundraising. It's a really big topic. In fact, I'm going through some struggles with fundraising with Velapp, which is an app I'm partly involved with, so I'm really always fascinated to learn how others are doing it.
Let me introduce to you then our guest today. His name is Adam Barker, and he is the CEO of MagnaPass. He has already gone through a pre-seed angel round of 150k, and he's also raising 200k pounds. We're going to talk about that and the process.
Adam, welcome to The App Guy Podcast.
Adam Barker: Hi, Paul. Thanks for having. Just a quick one - we're raising 300k.
Paul Kemp: Yes, even better.
Adam Barker: Even better, going even bigger.
Paul Kemp: Well, let's go straight into the fundraising round, because honestly, I get these questions so often, like "How do you raise money?" I'd love to take you back to the start... Take us back to the beginning where you had no money, you had an idea. How did you get your first money in to start the company?
Adam Barker: Like you said, we had no money, we had pretty much nothing. We had a really basic prototype and a few users. We tried to heavily beta-test as much as we can, but as you know, money talks. We couldn't go much further without having to actually raise any funds and get a fully fleshed product out and start making some real money from there.
It was about 18 months ago that we started having some sort of basic prototype and getting some users to actually engage with us. And having no money at the time, I had to be back and forth, staying with my parents, back in London and driving up to Manchester where we're based, pretty much every week. I slept in the car a few times... It was quite a journey.
Paul Kemp: Adam, you're going to get the best interview here, because we have had an entrepreneur who slept in his office, but I don't think I've ever had anyone sleeping in the car before.
Adam Barker: Yes, I did a pitch once (January last year), and it was in the middle of nowhere, it was some hotel in the middle of Lancashire, and I drove up from London the night before, thinking "Okay, I'll try and get a bed in this hotel, if they've got any room." I wonder why I didn't check to see if they had any availability. I drive all the way out there - it was in the middle of nowhere, miles away from anything, and I got to the hotel and realized that they didn't have any spaces.
I was like, "Okay, the car it is." It was just starting to snow, and it was heartily freezing. I was in my big coat and joggers in my car, just shivering all night. The pitch was in the morning, and I had to get changed in the car, I probably smelled awful... And I remember going out of the car and I slipped on some ice, and I felt like I nearly dislocated my shoulder, it was really bad. And you know how you get that really bad, sick feeling after you've hurt yourself...
I had to go in and do this pitch, basically looking really ghostly faint, which was an experience. But from that we raised the money, so it must have done something.
Paul Kemp: That's a fascinating story. So that was the first bit where you raised some funding?
Adam Barker: We raised from an angel syndicate a little bit before that. We obviously went around the friends, family route to begin with and see who had the connections, see where we can connect some dots. This was the time when I was traveling up and down, trying to network as much as possible. The advice was "Get some friends and family members involved." Not necessarily to invest, but they would have the network, they'd have the connections, so use your connections really wisely, and use their networks to the best of your ability, because there are people you might not even think...
It was one of our friend's uncle... He did really well for himself, he started and sold quite a few businesses. So we just used our network. He pulled together a few other angels as well to get the ball rolling, and that was the first 50k. It was essentially just friends and family, just utilizing our network. We used that to the best of our advantage.
Paul Kemp: Okay, let's have a pause there, because this is really fascinating, and I often think we forget that if you have a great idea and you start talking about that idea, then people sometimes don't call themselves angel investors, but of course we do have a lot of people in our network that have money and are always looking for potential investments. So what you're saying is the friend or the family wasn't necessarily a dedicated angel investor, but liked the idea and got some money together for the initial seed.
Adam Barker: Absolutely, yes. Obviously, at the very early stage it's difficult to gain enough traction, so the more traction you can get, the better. Whether this is pre-sign-ups - or people who sign up to your landing page or your newsletter... Even the most basic of things. We got a few pre-sign-ups.
We had a horrible prototype, I'm pretty ashamed to show that in the live day ever again actually, to be honest. It was really basic. I think he just really liked the vision and the plan that we had going forward to really execute what we anticipated to do.
Obviously, as you may know, things don't go the way it's planned a lot of the time, but I think he saw that me and the co-founder (Shawn) were really driven to actually make it succeed, make it a success.
I think showing a lot of passion in what you do, and showing that you have some expertise in your field, and using the networks to the best of your ability. They pulled together 10k each. Possibly to them it's not a lot of money. And you've obviously got the insurance of the SEIS & EIS in the U.K. as well, which really helps people that may not be investors, like you say; they might not be angel investors as their job, it's just a one-off thing. We used that to our advantage as well, and really started to get the ball rolling from there.
Paul Kemp: Yes. Do you mind if we go into this, because I do feel like this is a valuable lesson. We often neglect -- we've had past episode where we've been talking about those large sums of money, but I'm guessing this is incredibly important, because first of all it gives you the credibility of the fact that it's a legitimate idea, with the backing of a group of people.
Adam Barker: Yes.
Paul Kemp: What did you mention there about the security and insurance policies for the investments?
Adam Barker: In the U.K. you have the SEIS & EIS - it's like a tax rebate you get for investing in really early stage companies. SEIS (we've got both SEIS and EIS insurance) is the Seed Enterprise Investment Scheme. When I tell American people about a scheme, they automatically think it's dodgy... It's not. It's essentially a 50% tax rebate on an early stage investment, so in a company that's not been around for more than two years.
Paul Kemp: Okay. That's quite straightforward to set up?
Adam Barker: Really easy, yes. You have to send over an executive summary, and essentially they can see that the company has only been set up for so long. You have just an executive summary to send across, and they normally get it assured within a month; I know the government takes so long to things sometimes, but about a month is pretty good for them, I suppose.
Paul Kemp: Right. And then what a lot of people don't realize is that then the funds hit the bank account, and it's pretty straightforward then after that. I guess you have the free will to do what you like with the funds.
Adam Barker: I think you have a responsibility to your investors. They could be your uncle, they could be your friend, your father or whatever, but you still have that responsibility. You can't just go out and buy a brand new car or something with it, because you're just wasting everyone's time. The investor could probably sue you if you do that, as well, if you spend the money in an unwise manner... If it's stated in the terms sheet, for example.
We have to spend it really frugally. We obviously didn't pay ourselves until we were making significant traction, or if really badly needed it, for example. I must explain as well that me and Shaw pretty much just came out of uni, pretty much. We had previous experience in work - mine was more sales-focused, Shawn was more design. We didn't have any money ourselves... Before friends and family, it's "Have you got any cash yourself to at least allow you to survive, to gain some demonstrable traction?" Like I say, you have a responsibility to your investor to make sure that they get a return. The SEIS & EIS goes so far, but you need to put the money to work, that's what it's there for, whether it's you need to start developing your app, or start developing a website, or get some basic licenses or services that would enable you to grow your sales. It could be using SalesForce or MailChimp - basic things like that, that allows you to put your money to work. But never waste money.
Paul Kemp: Let's try to answer the first question, which is often "Is it right to raise or not?" We've had a lot of episodes on this series of podcasts, and there's two schools of thought. One is that it's better to bootstrap in the early stages, and raising money is deferring your ability to ask customers for money. But then it obviously helps if you do have funds, because then you could do a lot more with them.
Do you have any views on the two schools of thought? Bootstrapping or raising?
Adam Barker: It does depend on the type of business, I think. If your product is inherently a revenue-making product that instantly makes revenue, then the best money is customer's money, and you can bootstrap as much as possible. As an entrepreneur, the day-to-day is you have to just survive, whether that means, like you said, the previous guy - slept in his office, slept in the car, whatever... You have to just survive, and use the customer's money to grow. If it's a revenue-generating product straight from the off, that's the best way to go.
That could be more applicable to bigger SaaS products, and maybe companies like ours, that would take transaction fees and has that inherent revenue-making ability in the product.
Then you see other products that are depending on mass. For example Snapchat - it's not an ideal business I would invest in personally, but it's reliant on mass, so you need to raise money in order to grow it and scale it. All you have to show is that the user is adopting the product, and that you're gaining users. That's kind of your money, that's what you live and die by - the user numbers.
Like I said, it depends on the product. I'd obviously prefer to go in some more inherently revenue-making products, but it doesn't work like that... Sales do tend to be quite slow, so there will be a time where you need to have some financing in order to make a big enough company for you to take it to the next level, unless you've got stacks of cash anyway.
Paul Kemp: Adam, I'm really interested in what strings come with the funds. For example, are there specific guidelines of what you can and cannot spend the money on, and how is the reporting? I'm guessing there's regular reporting back on the success, and managing expectations as well, I should think.
Adam Barker: Yes, absolutely. As an entrepreneur, you have to be the optimistic one. You can put whatever financial projections out there to an investor - they have to be relatively sensible, of course - but you still have to be a bit optimistic as to what you want to achieve... Because you're the entrepreneur, you've got to be optimistic about your business.
I think there aren't necessarily specific guidelines, it's more of like an unwritten rule - you have to spend that investment money as wisely and as frugally as possible. Like you said, there's frequent reporting. I meet one of your key investors pretty much once a week. It depends on how active or passive the investor is, as well. It's on their back, as well; they're taking the risk to invest in your company.
I'm not saying that our investors that meets us every week is on our backs, nailing down on what we do and do not spend money on, but... Yes, he meets us every week, we do frequent financial reports and use a number of reports etc. It comes back to that responsibility you have to your investors to say, "Look, we're actually putting this money to work", which I think is very key for investor relations.
In that respect, going forward, even if you don't meet your targets, which for an early stage startup sometimes you will miss targets... You won't have 100% success rate on a quarterly target, for example, so just showing that you have respect for that investor... They could come back, and if you want to raise a follow-on round, they could be happy to chipping some money in, price around for you. So it's a long-term gain with them, it's not just "Get the money now. Spend it." It's a long-term relationship we have with them, and you have to keep the trust going with them to make the best use of that relationship.
Paul Kemp: Adam, let's move forward then to the next phase of your journey, which is the angel syndicate I think you mentioned. To all of us who don't know what that is - what is an angel syndicate?
Adam Barker: A syndicate is essentially just a group of investors. You have a lead, which was our friend's uncle, and they essentially brought together their friends or the people that they invest into businesses with, in a group, to essentially diversify the risk.
An angel, for example our friend's uncle, wasn't going to put in the full amount, but he would rope in whoever he knew that either had money or was a bit keen on investing in new things, and spread the risk for an investor that way.
Paul Kemp: Great. And after the syndicate, what was the next phase in your journey?
Adam Barker: Our pre-seed round was 150k, so we got about a third of the way. Mainly up in Manchester, we tried to network as much as possible. Obviously, the more of a better proposition you have for an investor, the easier it is. It's quite difficult whilst you're raising, because raising financing is essentially a full-time job, I suppose. It's difficult and time-consuming.
You have to make the case for an investor that it's not just an idea, we're trying to put the money that we've got to work; we're getting this much traction, this many users, this much money coming through the door. That essentially makes it easier for you to get an investor on board.
It was trying to network and trying to go to as many investor-related events and networking opportunities as possible. There are quite a lot, it's definitely a growing thing. Unfortunately for angel investors, they like to hide away in the Cheshire suburbs, or wherever they are.
Again, we try to use as many programs as possible. There was a really good -- they're called Northwest Business Angels and they essentially run pitches. There's quite a lot of these "paid to pitch" schemes out there at the moment, but Northwest Business Angels was a free version of it, and they allowed us to practice pitch, hone our pitch and our deck, and get in front of a really good pool of investors.
We managed to raise money from that, so that was really successful. But there are still things out there where you have to pay to go into this program. I wouldn't advise doing that, because first of all you're paying a lot of money to just go on a program to pitch in front of people. There are other ways of doing it.
We just try to go out to as many networking events as possible, and stumbled across the Northwest Business Angels and managed to get into one of their pitching days, and strike lucky from there.
Paul Kemp: It's reminding me of a past episode with Josiah Humphrey of Appster. His company now is 300-400 people, strong. But he was saying that many of the app entrepreneurs - some of them get very lucky. One even had funding on his first phone call. But the typical story is it takes months if not years of continuous pitching and rejection, and you just have to have that passion, as you say, to keep going.
Adam Barker: You have to have the passion. I think you have to treat as kind of like a long-term sale cycle. Luckily, I've had some business developments, I was experienced; you treat it as you're selling an investment to someone, so you have to get your credentials out there, you have to show your passion and show that you really believe that you can do it, because as an entrepreneur you know you can do it. You understand the risk, but you believe in your product, you believe in what your vision is.
And yes, treat it as a long-term sales cycle. You made the initial contact, you have a deck or a one-pager - it has to act as a taster. You can't just show your cards, show the deck straight away. You have to rope them into a conversation and initiate some sort of call or meeting with them, because you can sell your business better than what a pitch deck can sell your business.
Previously we had a deck which was about 15 slides long. It had literally all the details in the business, and it just didn't work because an investor looks at it and they make assumptions based on the information they give you, and don't come back with any follow-up questions. We then developed a taster, which was really basic. It's essentially, "Okay, what's the problem? What's the product? What have we done so far? Look at the projects, look at our vision", and nothing else. Nothing about what's our go to market strategy, how do we actually accomplish these things... It's just the kind of bare basics, and just a taster of what we've done and what's to come.
An investor then comes back with questions, and then you can initiate a conversation and really sell the investment.
Paul Kemp: Yes. What I've learned before is if you give a third of the information as a teaser, two-thirds of it tend to come out in the Q&A, and I think a lot of people do learn in the Q&A in a meeting or in a pitch or a formal presentation. So that's really valuable advice.
What else did you learn in the pitching process, in terms of tips that we can give for others that are in the same boat as you are?
Adam Barker: As in tips for people that are pitching, I suppose know your business inside out, as you probably will do, and just be super confident. I can't really say anything -- I think at a very early stage in the company, the investor buys into the team, or buys into the entrepreneur. If you show as much passion as possible, there might be some gaps... Don't be afraid that there are gaps, because it is early stage; you won't have all the answers to all the questions, but if you show your passion, the investor buys into you, not necessarily what the product is at the moment, for example.
Just show crazy passion, network as much as possible, utilize your networks... You might have a LinkedIn contact that knows somebody that knows somebody. Utilize as many networks as possible, go to as many networking opportunities that there are - there's tons of them going on - and don't be afraid to pick up the phone and make a call. You have to treat it like a sales process. Be the entrepreneur, and...
Paul Kemp: ...keep going.
Adam Barker: Kick some ass, yes.
Paul Kemp: Adam, in the last few minutes we have with you on this podcast, I would love to know... You've just recently come out of university, and there's a career out there for you, there's a regular salary... It could have been quite easy to take the corporate route, 9-to-5 and have a lot easier life. You could have even stayed in the hotel, I'm sure, rather than sleeping in the car. What made you want to go down this really hard route of being an entrepreneur and getting involved in this whole world?
Adam Barker: It's a pretty funny story.
Paul Kemp: Go on, we love funny stories.
Adam Barker: Cool. So I did some work before uni, during uni and a little bit after uni, as well. I understand what the corporate environment is like and I understand what the 9-to-5 feels like... Especially in uni - you don't really do anything in uni, so I had to go out and work and do something, so I started a couple projects and worked in retail, things like that whilst I was in uni. I did a placement year and I understand what the corporate life's like in it. I suppose something triggered during my year out where -- this was in between university years, so essentially my third year of uni, where I realized that I wasn't really passionate about it. I kind of waited for the day to finish every day whilst I was there.
I learned a lot from it, I'm not saying you don't learn a lot from it, but something told me that I needed to do something a bit different and try something on my own and see where it takes me. Obviously, being young at the time - well, I'm young now, I suppose - I didn't have that many responsibilities, it's not like I've got a wife, kids and a mortgage or anything, so I can really go out and, like you say, sleep in the car.
Of course, at the end of uni, it was about June/July 2015, it kind of hit me that my tenancy ran out at my flat in Manchester, and I was like "Crap, I have to move back home, basically, within the space of a week." It just kind of hit me...
Paul Kemp: Well, that was one easy phone call, because you just phoned your mom.
Adam Barker: Yes, I had to go back to my parents and stay in the spare room, which... Obviously, when you go to university, you kind of get that independence and you want to keep that independence. So it's not that I don't know my parent's house, I was slightly dreading it, but... I came to the realization, "Okay, I have to go back home." I went back to my parents, and my parents are saying, "Look, if you're going to stay here, you're going to have to kind of give us some rent money, and get a job etc." I was like, "Okay, fair enough. That's absolutely fine, but I'm kind of working on this little project here... I think it can go really far." They basically said, "Is it making any money yet?" I was like, "No, but it will... I promise." [laughter]
They weren't having any of it, and just kept saying "Go and get a job." I mean, I've got a decent degree from Manchester uni, so I went on and applied to those places. It was mainly more sales/finance focused, that's what my background is... So I applied to a lot of investment banking, investment management type things, financial advisory, stuff like that. I ended up getting in the space of about a month or so about seven job offers, and ended up taking one of them, whilst I was still working on the MagnaPass project.
I remember going in at first saying, "Okay, I'll give it a few weeks and see how it goes." I ended up going in on the second and the MD called me into his office, saying, "Adam, you're doing really great. You seem to be fitting in really well, picking up things really fast." I was like, "Yeah, this really isn't for me..." and I just kind of left on the second day. That was when it really hit me... I was like, "Crap, I'm actually really in this now... I'm going to have to really dedicate all my life to it, and all my guns onto it", I suppose...
Paul Kemp: You know what's really funny about your story, Adam? I'm actually now remembering various points in my life where I think I quite somewhere after a day, and somewhere after three days; somewhere I think I was fired after two weeks on another job, living in Sydney... So all these different, various things... It's actually quite hard to go and resign after even just a day.
Adam Barker: Yes, I think it's easier after a day, to be honest, because you don't really develop too much of a relationship with the things that you're working in.
Paul Kemp: For all these people that are listening - if you've been in a job for several years, for instance, like I have when I left my big job, it's really hard.
Adam Barker: Yes, it's not an easy decision to make. I'm not saying you can't start a business whilst working, either. I think you can still pick up some valuable skills whilst working, but I got a sense literally on the first day where it's just like, "This isn't for me. I can't imagine myself being here for 2, 3, 4 years, or spending the majority of my life in this space." My gut told me that I just had to go at it alone... Just go at it, I suppose.
During the process, those next six months - I took on some really funny jobs, but just to kind of pay my way, I suppose, while I was working on the project. But yes, it's not easy, especially for people being in a business for a long time, obviously developing relationships with the business with the people within it.
Paul Kemp: Adam, I realize we're getting to the end and we haven't even spoken about MagnaPass. Perhaps in the last few minutes - this is the challenge to you... Are you able to share with us your pitch that you would typically give in an elevator? Give us a sense of what you're doing, and then how best we can help you in your journey.
Adam Barker: Okay, so MagnaPass is a platform that allows you to discover and get access to independent fitness-based experiences and events and activities that are going on near you. We also double up as a customer acquisition and retention tool for independent studios and freelancers. We don't team up with any chain gyms or anything like that, we're more about the smaller studios, the wider range of activities, and the more experience-led fitness journey.
We've got just under 1,000 loyal users now, with 100 partners just in greater Manchester, obviously doing pretty well revenue generating, and picking up... Our month-by-month growth is about 12% now, and we're picking up a lot of commercial agreements with a lot of the companies to provide them with their wellness packages.
It's quite diverse, and we essentially allow these independent studios that could be doing things like rock climbing, yoga, water sports, circuits, whatever you can imagine in the fitness realm, allow them to diversify their business model, manage their business a lot better, market to new users, and not just be reliant on drop-ins, which they currently are. It allows them to build a more stable business straight from the off.
Paul Kemp: So really then, for any managers who are in corporations who are looking for wellness packages for their employees - these are the types of people that could perhaps be interested in MagnaPass.
Adam Barker: Absolutely, yes. We deliver packages for whole sites. We essentially build a bespoke pool, arrange all the courses and sessions and experiences etc. for the employees, and we save companies 71% on average, as opposed to going through a traditional route of harrowing wellness managers, paying market rates for things and taking a lot of time to actually build these wellness packages... We essentially do it all for them through technology, through a bespoke portal with us, specifically for their business.
Paul Kemp: Yes, it sounds like it's beneficial as well for companies to do this, because it's looking after their employees a lot better.
Adam Barker: Absolutely. You see workplace stress... That's becoming more prominent, especially in things like law firms, even in investment banking firms, things like that. Stress is really high, and when stress is high, the productivity dips, so the more you look after your people, the more people will look after you.
Paul Kemp: Adam, it's been a beautiful story, I've really enjoyed it. You are the first guest to have such an interesting story about how you left uni and stumbled into entrepreneurship, and especially the infamous sleeping in the car story.
How best can people reach out and connect with you at MagnaPass? What's the best way of getting in touch?
Adam Barker: We're on Instagram and Twitter. It's @Magna_Pass. Me personally, I'm @Adam_DBarker.
Paul Kemp: Adam, it's a beautiful story. Thanks very much for coming on The App Guy Podcast and all the best with the continued journey with your company.
Adam Barker: Thanks, Paul. Thanks for having me, it's been good fun!
15 Of The Biggest App Entrepreneurial & Life Lessons From 500 Founder Interviews
Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a different episode, because the show itself has now probably over half a million downloads plus, and I've reached a pretty high figure in terms of the number of episodes, so it's about time that I appeal to some of the new readers who are only now finding this show. I want to go through the 15 of the biggest app entrepreneurial and life lessons from the last 500 episodes.
If you're listening to this show and it's your first time, this is a look at the past episodes; normally, I do a guest interview, but this time around I want to go through 15 of the biggest app entrepreneurial and life lessons that I have learned from the last 500 episodes. I'm going to go through, and the order is in the order of when they first were aired. This show does go back several years.
How I Sold My Startup For $200m Within 18 Months Of Starting It
Paul Kemp: An interview between Alex Quilici, CEO of Youmail and Paul Kemp, host of The App Guy Podcast.
Let me just give some background to why I'm talking with Alex. We're going to go through YouMail, but he's also in his past co-founded a company called Quack.com, and, get this! Alex sold his company within 18 months for 200 million dollars to AOL. He then actually helped AOL with multiple product launches, and they managed to get over one million paying subscribers. Alex, thanks for helping us understand startups and success.
Alex Quilici: Thank you.
Paul Kemp: You're incredibly successful... I want to start off by just talking about what you're doing now, YouMail, and maybe after that, we can go through your history selling your company for $200m. So, what is YouMail?
Alex Quilici: I think the biggest thing I learned...
There's a couple things: one is don't give up. There's always dark points; for us there's times we're almost out of money, there are times where a deal drops through... You can't let all of those things get you down, but the related part is that if you're having enough problems, you should be thinking about how you can pivot to a greener area where there might be fewer problems. So the key thing for the entrepreneur is don't get too depressed, but get depressed enough to switch if something isn't working well for you in the path that you're taking.
Why I Quit Investment Banking And Built A #2 Grossing App
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show for budding entrepreneurs, startup founders, anyone working on a side project... What we like to do is actually go around the world and just try to find out who's doing some really awesome stuff that we can learn from in the startup world.
Today I'm in my home country, the U.K., where all the best startups are from, obviously. I've got the great privilege of chatting with a founder who's got a top three grossing app in the Utility section, he's consistently in there. We're going to learn a lot from this chat with David. I'm going to suggest that we talk about the technology choices that he's made, how to engage users, how to optimize for conversions, and perhaps the psychology of getting in-app purchases, which is really actually quite challenging for many of us.
If any of those topics are of interest to you, do stay tuned, but I'm sure we'll cover a lot more, as well. Let me introduce David James. He is the managing director of Total Car Check - it's an app and a website. David, welcome to The App Guy Podcast!
David James: Hi, Paul. Thank you very much for having me.
Paul Kemp: Thanks for coming on, David. It's great! So you reached out to me, and I was really thrilled that I got your message, because you have a top three grossing app. Maybe we can start off by talking about the app.
David James: Certainly, yes. To give a you a bit of background into Total Car Check and what it does, it's an application that allows you to check the history of a vehicle that you might be looking to buy. If you're going out and perhaps looking at a new car and you want to find out if it's been stolen, or maybe written off, if it's got any outstanding finance on it... There's about 50 data checks that we do.
I actually started the company - it's quite an interesting story - when my parents became the victim of a crime. They bought a bar and took it home, and when they took it to a garage to get a problem with it fixed, when they turned up to pick it back up, the police was there. What somebody had done is they cloned the vehicle, used stolen details to [unintelligible 00:02:34.00] the vehicle.
My parents lost quite a bit of money, probably about 4,000 Pounds. My background's in technology, so I thought "How can I make it easier for people to check the history, the provenance of motor vehicles?", and that's how Total Car Check was born. My background's in development and IT, so I had some of the skills already to start an organization, start a business, or really just start an idea, as they always start, and start building Total Car Check.
We have a website, TotalCarCheck.co.uk, an iOS and Android application, and like you say, we're really lucky to have a really successful application consistently in the top three, top grossing apps in our section in the U.K. I checked today, we're number two, so we're doing really well in there.
It's taken some time, but hopefully I'll be able to share with you and your listeners some of the tools and techniques that we've used to really grow and climb up those charts.
Paul Kemp: David, I love this chat, because the reason I started this podcast was that I wanted to learn from people like yourself, and like everyone, I made this fundamental mistake - I left corporate U.K. (the banking sector) thinking that I knew how to launch apps, I knew how to do it. It's simple - you simply look online for what is really successful and then you clone it... [laughter] And what I've come to realize is I want to avoid everyone listening making that mistake. That's not the way it works. It's actually more common to go your route, which is you are in the world, you find a problem that's really relevant (your parents') and then you go out and you find technology to solve the problem - getting ripped off by rogue car salespeople.
Would you agree that if you were to do another company, maybe that's the way you would start, with the problem first?
David James: Not one hundred percent... I don't think it's being understated. I think one of the things that drives any organization forward when it's very small is the passion of its founders and the people that are beginning the organization. I think when you truly understand the problem that you're trying to solve and you also have a passion in trying to see it through, it's very different to perhaps trying to crowbar yourself into an industry because you might have identified an opportunity.
It doesn't always work like that... It's slightly serendipitous the way it happened [unintelligible 00:05:21.21] I had a technology background... But generally, that's the way things happen. Actually, much like you, I was working for an investment bank in London, and I had a 9-to-5 job. I had previously worked in insurance and for a telecoms company... Straight-laced, as you could have imagined, really. I always say to people when they ask me for advice, "Find the problem that makes you have a chip on your shoulder about it, and try and fix it. Be realistic about what you can achieve, do your research on your competitors in the marketplace", but having that fire in your belly I think is really important.
Like you say, if you can start with the problem first, then I think you'll have a better shot at success than perhaps some of the other models that we've seen. I always [00:06:21.18] people sometimes find the domain first, and then think about the business idea later. [laughter]
Paul Kemp: I have been prone to that before. Let's talk about engaging users. That's one of the big challenges, the fact that many people are downloading apps from the App Store and then forgetting about them within a few seconds of downloading. We have the attention span of goldfish, and you have actually managed to retain this very useful app.
Now, I'm imagining that the problem is that when you're out to buy a car, you don't have your laptop with you, so one of the best things is you have your phone in your pocket, and you can pull it out and do a check. Is it the fact that it's so useful that is your big feature?
David James: I think that's a composite part of it. I think certainly user behavior is changing all of the time. I think the official term is "showrooming". People will look online for products before they actually go into the showroom to purchase, or into the shops - they'll try to find it cheaper or better, or bigger, or smaller, whatever they're looking for. All applications work perfectly for that, because in the privacy of your own home, in your living room, you can check things out. If you need to buy a new swing for the children, "Okay, I have to look on Amazon. But is it the cheapest there? Is the best one there? Let's look in some other places. I don't go to a shop that sells the swings."
So although, like you say, you can turn up to buy a vehicle and check it there, what a lot of people now are doing is looking at five or ten vehicles beforehand. Some of the tricks that we use -- I call them tricks, but it's really just simplified thinking.
Some of the things we do is we don't force people to create an account if you want to use the application, and I think that can't be understated. We want people, the first time they open it, to be able to enter a registration of a vehicle and find some information about that vehicle. That gives us great traction, because when they're on that second page, we can start to offer them new products and services, and we can start to up-sell, cross-sell, invite them to sign up after that point. I think that's point number one - try, where you can, to make the application as usable as possible without an account. Obviously, prompt people to do that later.
I think unlocking features in exchange for data, even if it's not making a payment -- if you're saying to someone "What will you do on Total Car Check?" You say, "You can use the application and it will return you lots of information, but if you sign up, we will actually give you for free even more information." With that data that we've collected with the user's permission, we can do other things with that. There's alternative options for monetizing your business model, rather than directly purchasing features and products. Because let's be honest, the vast majority of your users aren't going to be making a purchase every single time they use it, but what you do want to be doing is making it easy for them to come back to the application.
One thing that I always promote here is try and make the application as simple as possible and as usable as possible. I recommend people get ten users and you just watch them in silence as they use it, and just see how they're using the application. Are there any pain points, any sticking points? Because people are fickle. If they find things difficult to use, they might not come back. Sometimes you only get that one chance to make that good first impression.
Particularly in our field, we do a few things to keep people engaged. Once we've collected their e-mail address with their permission, we actually send them reminders for important dates for their vehicle. In the U.K. we have the concept of vehicle excise; it's sort of a road tax, something you have to pay over a year to keep your car on the road, and then MOT, which is an annual test if your car's over three years old, to make sure it's road worthy. So we say, "If you want, we'll send you reminders when those are close to due", and that pulls people back into the application to check data.
For every application that's not going to work; you might not have the right data model for that, but you can always think about ways in which you can perhaps pull people back in and trying to engage them in a way that isn't creepy. You don't want the old Facebook model of e-mailing you every single time something happens on the website, but it's useful for the user as well.
Paul Kemp: That's genius. In fact, in all these 500 episodes that we've recorded on The App Guy, I don't think once has anyone mentioned the benefit of not asking to set up an account immediately. That to me is genius, because a lot of us are trying to solve the wrong problems. It's made me realize that you're maybe trying to make the account setup a lot easier, without realizing that actually that's a major drag initially. Going and making the app really useful is the best thing for your user journey.
Let's talk about conversions then. We've kind of touched a little bit on that, the fact that you are sending reminders and offering great valuable data in return for some actions from the user. I'm guessing a lot of people are returning to your app, because I can imagine a car purchase is only once in a blue moon...
David James: Yes, about once every four years.
Paul Kemp: Yes, so do you get people returning to the app? Is that your goal?
David James: Yes, so the marketplace is interesting, because you have consumers which are perhaps making a purchase about every three-and-a-half, four years, but naturally what will happen and what we've seen is they will tell people about the application, because someone they know might be buying a vehicle - their extended family, close friends - but also there are what we refer to as home dealers. These are people that actually run businesses in the U.K., and that are buying one or two cars a month from their bedroom, essentially, or from their homes, and they're trading those on eBay and other classified websites. Those are high volume users.
There's quite a long tail to the market in the U.K., and it's relatively fragmented, as well. But to talk specifically about conversions, echoing one of the things I said initially, we're trying to make the fewest clicks possible to buy. On a Total Car Check in the app and on the website, if you enter registration plates, then you really only have to press one more button to make a purchase. You have to enter an e-mail address and payment details (if you're paying by PayPal or credit card), but we found that removing all of the friction from that process and not asking for people's -- I always say, "Don't ask for the things you don't need." Don't ask for that home address, you don't need that. Also, people are nervous about giving that to you. Ask the minimum.
We just ask for your e-mail address, because that's all we need at that point. Someone might say to you, "Well, you could do some interesting management information on all the other information that they give you." Well, we probably could, but it wouldn't make us any money directly. What we want is to convert them at the time of conversion.
A few other things we do - these are sort of slightly fabled, slightly backed up with some evidence, but you should try your own ways of doing this... But some of the things we've found is the order of products - the way in which we display the products can have a difference on our level of conversion. Is it the cheapest product first, or the most expensive product first? There's a great book, The Psychology of Persuasion, and in one of the first chapters they talk about the contrast principle... They give an example of a pool/billiards table salesmen in the U.S. - he would always take people to the cheapest pool table first, and then he would work up to the most expensive pool table, and then they would make a sale at some point, or maybe not.
When you change his behavior to work from the most expensive products back down to the cheapest product, I can't remember the exact figures, but he significantly increased his monthly revenue. When people see a product, they're only seeing it in comparison to what else you could give to them. [unintelligible 00:15:15.14] but I think it's good advice; it's worth experimenting the way in which you display your products, the order in which they're displayed to users, because that gives them some sort of cognitive triggers to think about which one they want to buy... And some other things, as well - the color of the buttons, and things you might not think would be incredibly significant, but there is some research out there that suggests -- and I know after I say this, everyone's gonna try and do it and expect a 25% increase in conversions, but we changed our buttons to red... It sounds so trivial and so silly, but we saw a not insignificant increase in conversions, and there's some evidence to back it up from a psychology perspective.
I always say to people, "Do some A/B testing for conversions", that's the best thing you can do. We're quite fortunate in our area, because the industry is already quite used to paying for this sort of check, and in lots of other organizations maybe they're not... But I always say, don't try cheap tricks; be clear, open and honest, and if people think that they are getting a good deal, then you're more likely to convert.
One thing that really resonated with me that I was told once was this concept of the fear of regret. When people purchase something, before they purchase it, one of the first things they're thinking is "What if after I buy this I don't want it or I don't need it, or it's the wrong product, or it doesn't do what I want it to do?" One way you can negate that and increase conversions is by offering people 100% money-back guarantee, within reason. You say to people "If there is a reason that after you got this check that we're giving you, that you feel entitled to a refund, we'll just give it to you no quibble. Say that there were some data fields missing that you felt was important for whatever reason, we just give you a refund."
Not everyone can do that... Obviously, physical products are slightly different, but removing that friction from the buying process I think is one of the key parts of converting people.
Paul Kemp: Yes, and we often forget that, because actually, trying to get a refund from an in-app purchase is always quite a minefield anyway.
David James: Yes...
Paul Kemp: So we're really talking then about the psychology of getting in-app purchases, and it's wonderful to hear you go through all those trivial things... Do you use any particular tools to do the split testing?
David James: Well, it's very basic, actually. We have an even number of web servers that serve our content up, so we build our own internal A/B testing. There are ones available, especially if you're running it on a website, but the difficult one is A/B testing within applications, because that is slightly more difficult to do because you'll be constrained; you can't update the application every time someone uses it.
I always say to people when doing A/B testing, as long as you are controlling all the variables, it's just as valid to do one thing one day and another thing the next day over a continued period of time, rather than trying to run both in parallel and collect that data, because it is more difficult to do that. Obviously, you can assign session IDs and things like that, but I always say to people, "Just simplify what you're doing. Change one thing, test it for a week (or however long you want to measure it for) and then go back and compare it." Don't try and overthink the way you're measuring what you're doing, because if there are significant results, you're going to see them relatively quickly. And don't get too bogged down in the tools that you're using.
Paul Kemp: David, let's change gears slightly now, because one of the passions I have is helping anyone who feels like they're destined for bigger things or a different kind of life than working in a corporate environment. You mentioned that we have a shared experience - I actually worked in investment banking as well, and wore the pinstripe suits to work and all that sort of stuff, and I realized that there was a better life to follow what you're passionate about and have a life of freedom from the constraints of the corporate environment. Have you got any guidance for anyone who is feeling stuck in a corporate job and would love to switch to doing something as a tech entrepreneur?
David James: Yes, I think one of the first things I'd recommend is sort of a book/PDF you can download... I think I read it in 2009-2009 (maybe earlier than that). It's actually by an artist called Hugh MacLeod; he creates cartoons on the back of business cards, check him out. The PDF is called How To Be Creative - if you google it, you'll find it almost instantly. One of the pieces of advice he says in there is "Don't quit your job and then start thinking about how you're going to start a business." If you really feel that passion, you've got that got that creative juice in you, temper it and work with it within the constructs of your current job, evenings and weekends.
When I started Total Car Check - I always tell people - I was developing the application on an application that my then-girlfriend, now wife, got free with a mobile phone. I was just working evenings and weekends, and now I've got two children and my time is more precious... But you've still got the same amount of time as everyone else, so the first piece of advice, I'd say don't (what people refer to as) rage quit. Don't just quit your corporate job and say, "I'm gonna do this!" Do it sensibly. Think about the product or service you want to offer, do your research, use your spare time to get something up and running and show it to people, and iterate that way.
I'm a big proponent of work/life balance, as well. I think success is great, but what's really important is that you're happy in what you're doing, and it's often the case that you might look over the hill and see the grass is being greener, but for those of us that have trodden that path, it isn't always rosy. I'd always encourage people to follow their passion, but do it in a controlled way, until you can find out that the idea that you've got is perhaps gonna work. Then you can just iterate from there.
Like I say, the How To Be Creative PDF from Hugh is great, and the other one I think is really excellent advice is called Getting Real - it's by 37signals. You can download that from their website, it's a PDF. It's just sort of a proforma on how to begin a startup, and the things you should do at the very beginning. Don't jump into the deep end is what I'm trying to say, and try to swim. Get in the shallow end first, and walk upstream.
Paul Kemp: Well, I wish I'd listened to you when I jumped in the deep end, and that's why I love sharing this content. You touched on something called work/life balance, and that's always quite challenging, because as soon as you open up your laptop or get set, ready for the day, no matter how early you get up, you could fill up your day and doing a million and one things... And especially if you work from home or work close to home and have children, it is quite hard to juggle.
How do you juggle your day, and any guidelines for us to try and be strict about our work/life balance?
David James: I think the first thing that I always have to remind myself about is the most important thing to me is my family and not my work. It's easy sometimes to think that it's the other way around; you never intentionally think it, but if you're spending more time than you have to... I always have to remind myself that the reason I'm working so hard is so that I can have a better time with my family.
Actually, I've got two young children at the moment, and actually I've got that already now... I've got a two and a three-year-old, and a wonderful wife. Sometimes that can pass you by a bit, because you become so tunnel-visioned on trying to achieve your success... But to give specific advice, one thing I do is I say, "Okay, I have a list..." -- it's just a .txt file that I keep on my desktop; that's my to-do list, and it's called "to do.txt" and I have a year goal, a month goal, a week goal and a day list that iterates up and down. That is at simple as it gets, and it helps me focus on what I need to do next.
The problem that I think a lot of small [unintelligible 00:24:38.10] suffer from is context switching and trying to swim upstream sometimes, trying to fix problems... Obviously, things will come up, code reds, errors in production - that's always going to happen, but if I know the things I want to achieve, then I can check against that list and I can feel how close I am to achieving them. That gives you a great deal of satisfaction when you do achieve them, and it also creates an endpoint for the day. If I know that I want this to happen today, great. Once I've done that, within myself I feel slightly more happy to go and spend time -- but like you say, Paul, it is difficult, work/life balance. It's something that you have to work hard to remember that it isn't always about spending 70 hours a week in the office.
Paul Kemp: I'm really thrilled that you mentioned that, because when you mentioned success - and actually you could have success in front of you but not realize it, and I'm sort of thinking back to when my kids were two (I've got twin boys) and we took off and spent several months living in Dubai, we did a ski season, and I guess I got mislead to think that success was all about chasing the profit, the bottom life figure, your bank balance, not realizing that here we are, living with my family, my wife and kids, we're in France, or we're skiing, or we're jollying around Dubai or around Asia... Actually, that was at the time the most successful thing. Can you define success?
David James: That's right, exactly. You want to have professional success, but like you say, the success you're really garnering for is perhaps sometimes really there. If you haven't read the Alchemist, it's a spoiler alert coming up, but this guy spends his life traveling the globe to try and find this treasure, and then he returns home to only find it buried underneath the tree he sleeps underneath. Sometimes, like you say, it's there in front of you.
That sounds maybe a little bit hippie you might say, but it's important to have that balance and to have that focus. By all means, strive for success professionally, but not at any cost is what I would say.
Paul Kemp: The whole reason for this show is to expose the appster tribe to alternative lifestyles, and the fact that we have all these tools, the fact that you can be out looking at a car and do a check-up, or you can work from home, you have all the communication you need... The whole world is set up for us to have a great work/life balance, but I do feel like a big portion of the people are missing this, because they are kind of stuck in what they're expected to do, which is drive to work or commute, and go to do something they don't particularly enjoy, and then leave and get their enjoyment from spending the money on things they don't really need.
David James: Exactly! But it's difficult... It is really difficult to notice that. I always think that self-awareness is one of the most telling/compelling, but most difficult features to have. Being aware of what you're doing with your time, being aware of the influence and impact you have on your family and your colleagues and other people... It's important every so often just to take a step back and realize, "I really want this organization to be successful, but you know what I want more than that? I want my family to be happy and I want to be happy myself."
We've all had experiences which [unintelligible 00:28:20.22] You've worked long hours for an organization you don't particularly like, but you want to pay the mortgage, and there's all sorts of factors involved... But it's always nice to get reminded that there is a bigger picture outside of the iOS App Store, and it's important to find it.
Paul Kemp: David, it's been so pleasurable talking to you, and meeting people like you is the reason I do this, and I'm so glad that we connected. How best can people connect with you and get involved with Total Car Check?
David James: The best way to get in touch with me is probably over Twitter, I'm @DavidJames. I actually used to have the handle @DJ, but I didn't use it; I should have kept onto that. But yes, @DavidJames on Twitter, and anyone that wants to have a chat, feel free to drop me a chat and we can take it forward.
Paul Kemp: Yes, you missed up on that. [laughter] @DJ would have been worth quite a lot then...
David James: Oh, can you imagine...? Just for Dow Jones, perhaps...
Paul Kemp: I think I do recall an episode of The App Guy where I actually talked to a guy with the shortest Twitter name I've ever seen, and he was one of the first hundred batch of employees at Twitter, I think. I think he's probably ended up making more from his Twitter handle, selling that, than what he actually made from the company.
David, thanks for joining us, and for everyone listening, the show notes will be at theappguy.co. You can search for David James, it's episode 516. There is a rich archive of episodes if you happen to...
This Man Shapes The Best Hollywood Bodies And Can Help Overcome Harmful Startup Lifestyles
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a show and an episode that I've been so excited to share with you... It's been a long journey for me - in fact, a three-month, twelve-week journey to improve my health and fitness, and I've been so keen to share this with you. Let me just give you a backdrop before I introduce today's guest.
Before I was introduced to today's guest through a good friend of mine, actually - Andreas Kambanis, who's been on this show twice before (you can find him in the archives); he launched Fit Men Cook. Anyway, I reached out to him at the start of the year and said, "Andreas, I want to get fit, I want to get healthy; I'm feeling that health is one big goal of mine this year", and it's really important to me because I've lost my father last year, I lost my sister-in-law to cancer, and I just wanted to focus on health, because I've been abusing my body, like many of us do.
So Andreas connected me with today's guest, and I started his program, and I'm telling you - it has changed my life forever. I am the healthiest and the fittest I can remember being, and I want to bring this to you and try to encourage you as the listeners to actually rethink about your health and your fitness because it is so important to the overall success of what we do. Let me introduce David Kingsbury.
There's something that I've neglected to mention - he is responsible for some of the best bodies in Hollywood, and I'm talking about the top, A-list celebrities like Hugh Jackman, Jennifer Lawrence, Michael Fassbender and all those amazing, sexy Hollywood actors; he is the personal coach and helps their fitness. He's got some training programs and he's been working with me for the last 12 weeks. Also, I do want you to go to theappguy.co, where I am going to post my before and after image, so you can see the impact that he's had on my life.
David Kingsbury - he can be found at DavidKingsbury.co.uk, and he's here on the App Guy Podcast. David, welcome to the show!
David Kingsbury: Hi, Paul. Thank you very much for having me on the show!
Paul Kemp: Thanks for changing my life! As I said, we were initially introduced through Andreas and then I started your program, with a huge commitment, but not knowing what to expect. It must be so rewarding, doing what you do... Let's go back to why you got into fitness in the first place; let's start from the start of your story.
David Kingsbury: Yes, of course. I've always been very passionate about my own personal fitness, and that was sort of my route into becoming a personal trainer and setting up my own gym and all these kinds of things which I did. I've actually been a qualified personal trainer for 12 years. I qualified when I was 17 years old, and I've been working in gyms ever since then. I progressed through working in normal health club gyms where I'd be just writing programs for members, cleaning the gym equipment, all that kind of stuff, through to eventually setting up my own very small personal training studio in Buckinghamshire.
Once I was set up within the film studio there, then the works kind of naturally progressed onto me training actors for roles. I never necessarily had the intention of training actors, it was just part of the process of the growth of the business. I just wanted to run a successful health and fitness business that was delivering really good results, and it just naturally progressed into that because of my location, and I guess because of my experience and the results I was achieving with people.
In terms of doing this for a job, I'm very fortunate to have a job in fitness and to be successful in the fitness space, because like you say, it's one of the most rewarding jobs that you can do, seeing people's lives and bodies transform and their health transform. It's incredibly rewarding.
Paul Kemp: I'm really keen to talk about that initial first step into training actors. We're talking about some of the world's most recognizable names. With Logan, the movie that's just been out, everyone knows Hugh Jackman... In fact, when Andreas introduced me to you, he said: "He's the personal coach to Hugh Jackman." I never really put two and two together, and then suddenly Andreas was like, "No, you do know who that is."
How intimidated were you when the actors started coming through your door, and how did you overcome that intimidation?
David Kingsbury: It was quite a surreal experience initially... Although luckily I wasn't just thrown into it; it was kind of a gradual process, in some respects. I'd been at the film studio already a couple of years before I got my first film contract; around two years I'd been training people at this studio, so during that two-year period, because I had my own space, I would have other actors coming and using the gym with their trainers. So I'd say hello to those guys, but I wasn't actually training them directly myself, so there was kind of that nice, gradual introduction to it for me.
The first actual film contract I took - my first full-time contract anyway... I'd done bits and pieces with lesser-known actors up until then, but the first big contract I took was Snow White and the Huntsman. It was a nerve-wracking experience for me because I was desperate to do well. I really wanted to show off my skills and to really demonstrate my abilities, because I wanted to last in the industry and to be established in that industry. You're only as good as your last job as a trainer, so if you don't provide good results, then that does get noticed.
Also, when you're working with actors, the risk in terms of risk of injuries and those kinds of problems is huge, because the whole film relies on them being able to shoot. If, for example, an actor does become injured during training, and it affects the shooting of the film, it presents huge problems. So it was a very nerve-wracking experience initially, but once I got into that first film role, I used all the years of experience I had and all the hundreds (if not thousands) of people I'd worked with prior to that - I used all that experience to really provide a very solid service. I think that's why I've kind of been established in the industry since then.
My progression onto training Hugh Jackman - that was quite a surreal one. It was around the time I finished this Snow White and the Huntsman -- it was a little bit later, actually, and I had done a few other little bits and pieces in other films... But I had a call from the studio and they were like "Oh, we have an actor that would like to come and see you today." I didn't think too much of it, and thought "Okay, chances are it'll be an actor I haven't potentially even heard of, or whatever."
About ten minutes before they were set to arrive, they called and they said: "Oh, Hugh Jackman's on his way to the gym", and instantly I felt the blood rush away from my skin, because I became so nervous, basically... From my point of view, that is an opportunity of a lifetime, to have someone like that walk through the gym doors and be inquiring about personal training. That's a make-or-break moment really because those opportunities don't come around very often.
It was sort of a fascinating experience with him coming in and then talking through how I would help him train for the role, and so on and so forth. He booked into training with me the following morning, so I must have done it right, I must not have been too starstruck or nervous.
Paul Kemp: That's so interesting. So in terms of actually getting someone like that - Hugh Jackman and others - to listen to you, because they have, pretty much as we would expect, everything they need in life... How can you give them the discipline...? Were they responsive to what they had to do? How can you encourage them to stay the course?
David Kingsbury: Working with actors, especially when you're working with the real top guys (and girls, obviously), they are some of the hardest-working people you'll ever meet, and they are incredibly motivated. They understand themselves; they are a brand, and they are a product in some respects, and they know that they have to work hard for that brand. If therefore a role requires training, then they embrace it and they go for it because it's part of their process of becoming that character.
When they're acting, when they are being another character, they do embody them in a lot of ways, and they do embody them in a physical respect, too. If that character is a very strong physical character, then they will want to take the onus as part of that. It links in with their business sense, but also in their creative sense in becoming that character, too.
They are, in some ways, some of the easiest people to work with, because they are so motivated. I always say to people, "If at the end of your program you're going to be shirtless on a billboard, then that's motivation enough."
Paul Kemp: Yes... Many of the appster tribe listening to this and reading the blog are not top celebrities and not actors, but we are passionate entrepreneurs, startup founders, hardworking developers, and I guess it's interesting you say that someone at the top of their game are the best people to work with because they're so motivated. I can imagine listeners like this are not so motivated because we've got distractions... But if Hugh Jackman can do it, and he's got everything he ever wants, I guess, in terms of what money could buy, then there's no excuse for us. What life changes does it make getting fit and healthy? How rewarding can it be, at the end of the day?
David Kingsbury: In terms of increasing your health and fitness, it does have huge benefits on other aspects of your life, as well. They will vary from person to person, but that could be big improvements in self-esteem, confidence, but also the more physical benefits in terms of energy levels and focus, as well. I find it's a huge motivating factor for a lot of people, the physical side of things and doing the exercise, and I find that the people I work with often comment on how it improves their focus, their productivity and their concentration during their working days, as well. So it does have both physical and mental benefits for anyone who is hardworking and is looking to really build something, as a business or as a startup.
Paul Kemp: Yes, because I often find that a lot of people get into apps because they want to become the next Mark Zuckerberg, they look at it as money... But what I've realized over the years is it's not just money that is success, it's the fact that we only have one body to walk around this world in, and in success one of the top ten things is having a healthy body and a healthy mind, and having all those things you talk about - high self-esteem, energy - which health and fitness can give you.
Let's actually help some people then... It's been really interesting to go through the program that you put me through, and just to give people a taste of what to expect, if they were to go through your program - would you be able to walk through an average program of what anyone signing up would expect to go through with you?
David Kingsbury: Of course, yes. Obviously, the initial setup is creating an account page on my website, and then from there you basically fill out a questionnaire; during the questionnaire, I get a really good idea of what your current level of fitness and also what your goals are, and what you need to do in order to achieve those goals. I'll look at things like your current exercise levels, also I will look at your weight, your body fat levels and all your personal information in that respect. With that information I can then create the custom element of the plan.
Once I receive that information, I will then get to work on building the best plan possible for you to achieve your goals. It's a combination of exercise, and the exercise will be broken up into resistance training, which will be classic weight training movements, also some cardio training, which will be either intervals or low-intensity cardio or a little bit of both. Then there'll also be some circuit-style workouts around there, as well.
The proportions of each of those will vary, depending on your goals. For example, if someone wanted to primarily build muscle, then the focus would be primarily on resistance, and you wouldn't include too much of the others because they're essential for that... Whereas if someone's goal was to drop body fat, then you'd have a little bit more of a balance of all of those, so there'd be more of the resistance, the intervals, the circuits and the cardio.
In terms of the amount of training that people do, it can really vary, and you can get great results on a variety of a different number of sessions per week. Some people will be limited to perhaps three gym sessions a week, and before they start a training plan, they might think that three sessions a week is not enough to see results, but it absolutely is. If you can get those three sessions in; never feel that because you can only do three you can't achieve results, because you can.
Other people want to spend a lot more time in the gym. We do have people that train six days a week potentially, or slightly less, but maybe doing double sessions a day. They might be doing a cardio in the morning and then the weights in the afternoon. The amount of training does vary, and it will vary based on the person's lifestyle and what time they have available, and it will vary slightly based on their goals as well.
Paul Kemp: The effects are dramatic, aren't day?
David Kingsbury: Yes, absolutely.
Paul Kemp: You got me on a five day/week program, and really after just seeing three, four weeks of progress, it's enough to keep you going and keep you motivated.
David Kingsbury: Yes, that's the thing - a lot of people talk about motivation; they say that they struggle with motivation, and it's very hard to be motivated for their training. A big part of that is a lack of results. If you see results quickly and they are sustained results and you see them week after week, then it's hard not to be motivated; it'd be hard to give up at that point. Whereas if you are struggling and you're not really seeing changes, then obviously the drop-off rate is much higher.
One of the reasons why people are so successful on my training plans is because they do see results early, and that really helps to keep them motivated. And obviously, they've got myself for accountability, as well. They'll do weekly check-ins on their page, I'll receive those and then I can review those and give them the support that's necessary. From those check-ins I can see how their training is going, how their food is going, how their sleep is going, and I can make assessments and help them improve things.
What separates a successful training plan from an unsuccessful one nine times out of ten is the nutrition, and this is where the results are seen, through the nutrition. If your calories are calculated correctly for your goals, then you will work towards and achieve your goals... Whereas if your calories are left to chance, then your results are left to chance, and you, therefore, are not going to necessarily see the results. Essentially, by calculating the calories, you take all the guesswork out of achieving results.
Paul Kemp: And I'll tell you what was great, talking about motivation... I have reached a small goal in a way - I became member of the month at my local gym.
David Kingsbury: Oh, that's fantastic.
Paul Kemp: There's a big poster at the gym saying:
"Paul Kemp, member of the month".
David Kingsbury: There you go... That's brilliant.
Paul Kemp: It's just wonderful, because I know that there are other members who started around the same time, because of course it's the new year and the gym is packed with new year's resolutions; they've all dropped off and they pretty much stayed the same, and they've seen a huge change in me. That definitely is enough to not just make this a diet, but more a life changing experience.
David Kingsbury: Absolutely. You'll know from that - to achieve those results it's not an easy process. You do have to work for it, but the results are well worth the effort that you put in. And the longer you're on a plan, the more it becomes a part of your routine. Then once it's fully integrated into your routine, then it's something that you don't really want to live without after that point.
Paul Kemp: Yes, and to be fair, I have actually mixed it with meditation as well, and I've gone through how to stay motivated when going to the gym, and I use meditation techniques to create every session as if it's the first time you're going...
David Kingsbury: Fantastic.
Paul Kemp: ...because after several weeks of continuous training the novelty starts to wear off, and that's where you start to use those meditation techniques. I've suddenly realized what happened to me was when -- I think I was running for something, maybe in a car park, and I suddenly ran and thought, "My goodness, this feels like a different body..."
David Kingsbury: You can just keep going, yes. That's a fantastic feeling, isn't it? When your body exceeds your mind, in that sense, it's such a great feeling.
Paul Kemp: Yes, so that's enough to inspire anyone who is thinking that they need to act upon what they're hearing here, definitely give it a try because the success you may be getting in your startup or your business is actually nothing if it's not followed by the health and fitness that you can succeed with.
Let's talk about nutrition - you mentioned nutrition. I've really enjoyed the change of diet that I've found on yours, and I believe that you're thinking about a new product that by the time this goes live will have launched.
David Kingsbury: Yes, absolutely. By the time this is launched, I will have released a subscription nutrition product. Essentially, it's a really smart way of delivering custom food plans that adapt as your body adapts and they grow with your goals and they adapt to your goals as well.
The way it'll work is, again, you fill out a questionnaire on the website and it will calculate your calories, and it'll also calculate your macros. Your macros are the breakdown of your fats, proteins, and carbohydrates, and different macros that will help to achieve different goals - it will select those based on your body type and your goals as well. Then you will have a page on the website which will have all of the recipes; there will be hundreds and hundreds of these recipes, and they will all be perfectly balanced for you to achieve your goals.
You can essentially select any of the recipes that you would like and include them in your food plan. If you follow that, then it's going to be the exact calories to achieving your goals. Each month you'll be e-mailed out a reminder, which is basically to do a check-in. You fill out a check-in on that, and it will then adjust your calories accordingly to either the changes in your goals, or the changes in your body type. As your weight increases or decreases, your demand for calories also change. Likewise, if your goals change - for example, if you shift from wanting to drop body fat to wanting to gain muscle, then there's quite a large shift in how many calories you need to consume.
The system is incredibly smart and it adapts all the way through, creating a custom menu for you every single month. Also, there'll be new recipes added weekly, so you'll always have new ones you can try if you want to... Or, of course, you can stick with your favorites if you love them. It's going to be a really nice product, and that's going to be available now from my website.
Paul Kemp: Right, DavidKingsbury.co.uk.
David Kingsbury: Correct, yes.
Paul Kemp: And the thing that in a way has changed my view of food and the way I consume food is that for most of my life - adult life, anyway - I've kind of gone to the fridge and decided there and then what eat, when looking in the fridge. But what's happened to me is I've gone on this journey of preparing all the food for the week - that's breakfast, lunch and dinner in one go. It's kind of hard work at the start, but the benefits are great. I know that society is not set up at all to help us keep healthy. There is temptation everywhere, and actually getting food on the go is really hard.
David Kingsbury: It is, definitely. The preparation of food - that's all about focusing on your goals and working towards them, because if you're not preparing, then you'll essentially -- like you say, it's very difficult to get the calories right, and also it becomes much easier to go and eat things that are not healthy and that are not good for you. The easiest way of keeping your willpower in check in that sense is by having food prepared with you.
The biggest part with nutrition is about understanding your goals, because once you know where you want to be, then you can work back from that to where you are now. The information in the middle there is what you need to be doing each week, and the essence of that is following the correct food plan and eating the right calories for your goal.
Paul Kemp: Absolutely. David, we're kind of in the last few minutes... I wouldn't mind exploring the app world with you, in a way. I've had past episodes of this show actually where we're spoken to these very successful app founders, entrepreneurs, and one of the areas they said is in most need of development, especially given that we have these personal devices, smartphones on us all the time, one of the biggest areas is nutrition and getting smart education about nutrition.
We don't learn this at school, our kids are not being taught the proper way to eat... And society - especially the West - are we on an epidemic of obesity and unhealthiness? What views do you have on how we can change our society because it just seems like we're on the -- I mean, I heard today about the food wastage in the U.K., it's some billions and billions there every year. What can we do to get a healthier lifestyle?
David Kingsbury: Yes, in the world today there are more overweight people than there are people starving, which does show that there is a very unequal balance of food available. The majority of people that are overweight are in the Western world, and a lot of that has to do with the availability of food. Food is so readily available in the Western world, and junk food is, as well. With that, there comes a lack of understanding as to what the body needs, and really what the body can get away with, in a lot of respects, in order to maintain a healthy weight.
Obesity is increasing. The amount of people that are sitting at a healthy weight is decreasing, and therefore the strain on society (especially in the U.K. the NHS, and obviously in the States) is massively increasing. I think there has to be a huge focus on leveling that out and getting people back into a healthy way. The only way I can see that being done is really through education early on in life - teaching this stuff to people at schools, and so on...
Then also, you've got to go back and teach the parents, as well. I think probably one of the easiest ways of doing it - well, THE easiest way - is with technology. People are using smartphones more than they are watching TV. It's gonna be the way to get the message across, and it's about developing products that are very user-friendly and that don't make it a chore to understand what you need to eat. I've got ideas of apps I'm working on, but they're big ideas, so they're going to be a long time in development... But I really do think that there need to be products available that can simplify the whole process and make it easy for people to maintain a weight that they're healthy at, but still being able to enjoy certain foods, without the typical bodybuilding or healthy eating chicken and rice and broccoli.
It needs to be enjoyable foods, and it does need to have your treats in there occasionally for people, because if they don't have those, the likelihood of people sticking to a healthy food plan becomes much less. It's about balancing your week, essentially... If you can balance a week out so that your calories come in correct for a week, then you're going to be in a good position. If you calories are coming out way too high for the week, for example, then you're going to gain weight.
In terms of the products that are available, there is so much unhealthy food available... I think that something has to be done in that sense, to try and improve the quality of the food that is cheap and readily available in this country.
Paul Kemp: Absolutely. I actually used an app from our mutual friend, Andreas, to track my progress. It's called Snapsie. It's a lovely app, and I encourage everyone to download it.
I was thinking as well, technology cannot improve us physically. There's no surgery, there's no way of -- you have to put the work in at the gym. But what I'm realizing is that smartphones, iPhones - everyone at the gym is carrying one of those, and everyone is using it to either listen to something (a podcast etc.). I've learned so much as well, because when you're exercising and listening to something educational, your retention is so much higher.
And obviously, using the phone for the timer, the workout plan and everything. It's so easy now.
David Kingsbury: Absolutely. I think technology is going to play a huge part in giving people confidence in what they're doing, and supporting people with what they're doing. A lot of people don't start their fitness journey because they're worried they're not going to see results, and they're worried that what they're doing is incorrect.
With the improvements in technology there, you can create products that are going to be more customized to them, and therefore they can reassure them that what they are doing is correct. But it has to do it in a very simple and user-friendly way, so that it doesn't scare people off, and anyone of any ability can use it.
Paul Kemp: Yes, and I just want to really encourage everyone to try this: there's a section in gyms - the bodybuilding section... I have one in mine, and I'm sure most gyms have them. I thought it was a no-go area, too intimidating. And I'll tell you, since I've been in that section of it, I've met some of the nicest people alive; they're lovely. All the bodybuilders coming there are just really genuine.
David Kingsbury: They're incredibly supportive, because for them it's more than just staying fit, it's their passion, it's their hobby, it's their life. They live and breathe it, and therefore their knowledge is great and they are very supportive of one another. It can be a daunting place... I remember when I went into my first bodybuilding gym when I was about 17; you feel about one foot tall, but you soon realize that these people are very friendly, and if you need help, they will give you help. They're not the type of people, in general (this is a generalization) -- but they will give you support; they're not going to knock you down.
Paul Kemp: Yes, and that's even the Hugh Jackmans of this world... So there's no excuse for all of the appster tribe now - if you are feeling that you need more health and more fitness, don't just sit on this information, act. You can go to theappguy.co, it's episode 520, with David Kingsbury. Or, David, how best can people reach out to you personally and connect? What is the best way of getting in touch?
David Kingsbury: The best way of finding out a little bit about my products and about my history of training actors for roles, and also visiting my blog for some really nice free content is my website, which is www.davidkingsbury.co.uk. Also, if people are using social media, I can be found on Instagram @TeamKingsbury, and also Twitter @DavidKingsbury. The focus of those is more motivation and giving people support and things to try, whereas the website is the hub of knowledge and information, but also the platform on which I supply my online training from as well.
Paul Kemp: Well David, thanks for coming on The App Guy Podcast and changing my life for the better. All the best with your future projects, and maybe we can do another show in a year's time to make sure that I'm still on track.
David Kingsbury: Yes, absolutely. That'd be brilliant!
How I Built A Multi-Million Startup With $3,000 At The Age of 19
A chat between Josiah Humphrey Co-Founder and co-CEO at Appster and Paul Kemp host of The App Guy Podcast
Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. Today, this show is all about inspiration. We love success stories, we love to know that it is possible to create awesome businesses around apps and around the mobile space. Today I've got one of the best success stories I can remember talking about in a long time. I've got the co-founder and CEO of Appster.
Let me just explain a little bit of his success story before introducing him...
In 2011, and at a really young age of 19 years, he started a startup with less than $3,000. Now, he has since grown the company Appster to nearly 400 employees and works with technology startups from all over the world. Astounding!
Let me introduce Josiah Humphrey to The App Guy Podcast.
Josiah Humphrey: Pleasure to be here, man. I'm excited to talk about the world of apps.
Paul Kemp: And we're excited to talk about you. Let's start from where you started from... Can you take us back to when you were a young 19-year-old guy and you had this $3,000 in your pocket? How on earth have you gone from that to nearly 400 employees? Tell us the story.
Josiah Humphrey: It's been quite a journey... We started in 2011, so it's been about nearly six years now. It was just myself and my co-founder, Mark McDonald. This is not the way I would recommend everyone start a business, but we had this idea that if we can go and get an office in the city, a really big, fancy, expensive office in the city, that will force us to do well and create a business. You know, not the typical advice that you would want to give someone, which is to bring on a lot of expenses before you have a good revenue, but at the time we were very naive and we thought it would be a cool thing to do.
We actually managed to put on some suits, look a little professional, and we ended up signing a lease for an office. It's actually the tallest office building in the Southern hemisphere in Melbourne, Australia. We signed a lease there, and then all of a sudden it was like:
"Okay, now we have to make rent."
Then we were kind of going through the process -- we hadn't actually started Appster at that point yet. We were running a marketing agency first and helping clients with their marketing. We then also started an education company. This was ironic because I'd dropped out of school at 17 and I just thought it was funny that we'd started an education company to educate students on how to do well in exams, after being a dropout myself.
Then eventually, later the same year we also came up with the idea of starting Appster. We eventually ended up closing the education company down... We thought:
"We want to work in an industry that's growing, and then even if we're stupid and we make a lot of mistakes, we'll probably just grow anyway. So we opted for the mobile industry"
That was actually the whole idea behind getting into the mobile industry, and I think it was a great choice. I don't just speak for myself, you only have to look at the explosion of growth in the mobile industry and the smartphone industry, it's just been tremendous. So that's how we got started. It was very much a "burn the ships" moment, getting an office. It did really put us outside of our comfort zone. It was a shock to say to ourselves:
"Okay, now this thing's real. Now we've got outgoing expenses..."
I do always try to challenge people. You have to, in some form, get outside of your comfort zone. If you have a family and you're putting food on the table, I'm not saying "Sell the house and put every single cent into your startup", but you do have to challenge yourself; you do have to get outside of your comfort zone. So that's how we got started.
Paul Kemp: I agree. So, you mentioned the explosion in mobile... When I started The App Guy Podcast I didn't think I would have enough guests to fill up a ten episode series, and here we are on episode 518. It's just been a constant flow of founders and CEOs over the years.
Josiah Humphrey: It's amazing.
Paul Kemp: Josiah, you talk about real startups... Do you feel like any of the entrepreneurs or wantrepreneurs reading this think they're running a startup, but really they're just kidding themselves?
Josiah Humphrey: Yes, well I think it depends on what you're building. There's a lot of (let's call them) appreneurs that are kind of just building a single type of app - maybe it's a game, or maybe it's got some utility value that maybe they're going to sell on the App Store for 0.99... At least at Appster, the kind of people we work with, the technology entrepreneurs, they see a certain type of opportunity in the market, maybe something that's not being done as well as it could, maybe they could bring a new solution to an industry, or in some sense maybe disrupt the status quo of that industry with technology.
For me, there's a very big difference between just making a cool app and actually deciding to build something that might one day become a great company. It depends on what the concept is, but we've seen over the last few years the rise of on-demand (e.g. apps such as Uber), or certain types of marketplaces (e.g. apps like Airbnb). That's the space that I'm more familiar with - how do you build a sustainable, fast growth company as a technology entrepreneur?
Paul Kemp: Yes! Let's explore this, because I think when people see the success of certain companies on the App Store, they feel they can imitate the success, but what you're talking about is building a real technology startup - not just an app... Let's flesh out this idea. For example, how can we really monetize an app?
Josiah Humphrey: Well, I think there are various stages, right? We see a lot of people get into things too quickly, or they think that their idea is absolutely incredible and it's guaranteed to work. Actually, in a lot of those cases they really need to slow down and really challenge themselves, being brutally honest and asking the question:
"Am I actually really solving a core problem? Is this a problem in the industry?"
I used to be a fan of Gary Halbert who was a copywriter back in the day - nothing to do with the apps or the technology business, but he always used to use the notion of a starving crowd... Are there people that are absolutely screaming for a solution? Do they need something to be better? Can you look at an industry that you have experience in (or it's a personal problem you are having) and you think to yourself:
"You know what? There are other people out there that have this problem as well"
then you might be closer to finding your starving crowd, or (in other words) solving a core problem.
Then there is another issue on top of finding your starving crowd. So, it's great if you're solving a problem, but then is the problem something that you can make money from? And there are two ways that you can look at that. Obviously, you look at Snapchat - not yet profitable, but IPO'd recently; I think they had a top of 26 billion in terms of market cap. Not profitable, but still extremely valuable. Their evaluation comes from their user base, and Snapchat has obviously had some tremendous growth over the years.
Then there are other apps that actually have a business model. You look at SaaS (Software as a Service), say a company like Atlassian, that provides different software tools to software developers, and people pay $5/month for those services, and that might be like a SaaS model. So either you're building a user base that could have a lot of valuation and maybe you exit that company later or you take on investment and eventually get acquired, or something like that, some sort of liquidity event... Or you're building a company that can eventually sustain itself through cash flow. Sometimes that's a SaaS model, sometimes that might be a freemium model, you might be building a game where the app is free to download and then people pay for the service over time, they buy in-game currency or whatever it is.
But you need to figure out if you then have a core monetization model because there's certainly a lot of problems... For example, going to a new city and not knowing where the nearest public bathroom is, right? There's apps for that, but can they build a sustainable business that might be worth tens of millions of dollars, or a hundred million dollars one day? Probably not.
At Appster, we generally focus on people that are trying to disrupt an industry or build a solution that has some type of monetization model, and they have their sights set on building a great company. Maybe a company that could be worth millions or tens of millions of dollars one day. That's generally the ambition that a technology entrepreneur has when we work with them.
Paul Kemp: I love the fact that you mentioned looking at core problems. We've had lots of episodes with founders over the years and many keep coming back to the theme:
"solving a core problem".
Now, the other big theme from all my episodes on The App Guy Podcast is around getting feedback and validating your idea. How do you validate a business proposition or idea?
Josiah Humphrey: Validation is key. Definitely, before you bet the farm and you decide to spend whatever it is (say tens of thousands, hundreds of thousands of dollars in development). Especially if you're trying to build something world class - such as a world class platform. It is going to cost a lot of money. Hence, it makes sense as an entrepreneur to validate the idea before committing the extensive resources.
A perfect example is actually Appster. Before we got started (and before we had nearly 400 employees and a few different offices around the world) it was just Mark and I. We had this idea:
"Okay, we want to help startups and companies build apps, but we don't know if it's going to be a good idea, so how are we going to test it?"
We've always taken this approach to business in general. Everything is an experiment. There's no guarantees in business, or in building a company or in having an idea. You have to experiment.
In fact, at Appster at the start we had no developers. We simply thought it was a cool idea. So, we hired an actor and we filmed a video explaining our intensive development process. It sounds funny going back to it now. As it happens, we filmed him talking about how we develop apps etc. We also built a very professional website outlining our process. Then we spent maybe a hundred dollars on AdWords to drive some real traffic to the website and test it.
We ended up:
getting leads
calling people
bringing on clients
Then it was a mad dash to hire some developers and start doing the work. But I would challenge people to do the same thing. For me at least, the number one reason that I see startups fail is that they believe their own grandeur so much... For example, an entrepreneur may say to him/herself
"This is guaranteed, it's going to be a million-dollar or billion-dollar..."
If I had a dollar for every time someone told me they were going to build the next Facebook. You know, we probably hear around 2,000 ideas a month from all over the world. It's just crazy how many people have so much belief in what they're trying to do. On the otherhand, these same people fail to ask the basic questions
"Have you validated the idea? What core problem are you trying to solve? Have you got real feedback from customers? Have you asked the questions on whether or not they're willing to actually spend money on this solution?"
the amount of deer staring in the headlights from entrepreneurs is concerning.
To this point, I think you have to be very smart about how you can do validation, and I don't think that it means having to actually go and build the product right away. There does come a time and place when you just have to build the product. You have to get it out there, you have to test what the market reaction is, but things you can do initially are
building a prototype
getting a designer
talking to people that might become users.
You can ask the question:
"Hey, this is the idea that I have. What do you think about it?"
Walking them through the process, seeing if they have the a-ha moment and think
"Wow, this thing's fantastic!"
Then asking the question:
"Would you pay money for this? What would you pay? What if this was a paid service."
You have to be also very wary of asking friends and family, particularly if they're not in the industry that you're trying to serve because these people will be too polite.
You want, as much as possible, people to be brutally honest about whether your idea is good or not. The last thing you want to do is waste time and money, spending the next three years of your life on an idea that's not even any good.
Success is also looking for the right people. Let's give an example. Say you are building an Uber for haircuts, Actually speaking to people in your target demographic is essential. Such as, people who use a barber on a regular basis. Finding out who those people are and speaking with them directly.
Then I would still even be cautious of the feedback you get there, especially when you're face to face with someone. Not everyone's going to say:
"Well, that's a crappy idea."
Not everyone is that blunt or, let's just say honest. So you could take it even a step further, and I think Facebook certainly has just some wonderful targeting capabilities these days.
For example, let's talk again about the Uber for haircuts business model. If I wanted to validate this idea, I would:
set up a landing page
have some images of the app
say "Sign up for free to get early access to our Uber For Haircuts app!"
collect their e-mail address and phone number
then call up those people to validate
This way, the people giving feedback are not someone you've found on the street who are going to be friendly to you face to face. They are someone actually showing an interest from an ad that you've published. It doesn't cost too much on Facebook to run these sorts of ads and target the right kind of people.
You could target people who are interested in hair products or people who have liked a very famous local barber shop in the area. You can be specific with your targeting on Facebook. This is why I absolutely love Facebook for validating ideas.
Then ask your new audience questions such as
"What do you think about the idea? Is this something that you would use?"
Not only that but also say:
"Hey, we're actually in the process of building this thing. Would you like to be on the beta list for this?"
Through the journey of validating that idea and, in fact, every stage you can really lean on these people in a big way. That, I guess, is always my advice to people that are going through a journey of validating their idea whether it's at the idea stage, the prototype stage or the MVP stage. You need to stay close to your customers and people who are using the app because they are really going to be your source of truth at the end of the day.
Furthermore, you will be able to use analytics and measure retention, onboarding and all the different things that are so crucial to really seeing if your app can eventually get traction.
I probably sound like a broken record saying it, but you really have to take the approach of challenging your idea completely and being brutally honest about yourself as to whether this idea is going to be good or not. At the same time (it's a tricky thing), you have to balance this brutal honesty with having an absolute certainty and belief that you want to make an impact in a market and do something remarkable. Remember to ask:
"Is this something that actually has legs? How do we validate this at every stage?"
Those are some of the things, as an overview, that I would be thinking about if I had an idea I was trying to validate.
Paul Kemp: Josiah, what I love is the fact that we're on the same page. The reason I started this podcast was to get genuine stories of app success and cut through the hype. You mentioned 2,000 app ideas come to you every month...
Josiah Humphrey: Yes!
Paul Kemp: I'm pretty sure that the success stories submitted to publications, like techcrunch and mashable, are in the tens of thousands. They opt to ignore the vast majority of ideas and publish the very few one off overnight success stories Big tech publications make it seem easy to be an app millionaire.
Josiah Humphrey: Exactly.
Paul Kemp: Do you feel like there is almost too much misinformation surrounding how hard it is to build a successful app business?
Josiah Humphrey: Yes. I definitely think that it's glamorized. I feel like entrepreneurs, specifically technology entrepreneurs, are like what rock stars were in the '80s. I live in San Francisco, so this is very much glamorized around:
"Oh, this person started this thing and in six months they were a multi-millionaire."
You hear that story in the press all the time. It's funny, a lot of these people are my friends and peers. In fact, we worked with a bunch of different startups that have gone on to have multi-million-dollar valuations, be acquired and all this kind of stuff. You'll see, even in these cases, the amount of hustle, the amount of grind, the amount of work that goes into making an "overnight success".
I'm certainly testimony to this mis-perception of overnight successes.
It's not something like:
"Oh, I have a really cool idea. I'm going to stick it up on the App Store and then I'm going to be a multi-millionaire."
This never happens. I can't think of one case where I've seen this happen.
It always takes:
hard work to validate the idea at different stages
hard work to build what could be considered something that's just an amazing product
hard work to then figure out what those channels are going to be from a marketing perspective and what's really going to fuel the growth
All of these things take a lot of work.
If you're thinking about getting into the App startup space, then you'd better be prepared to really put in the effort and understand that it's not necessarily going to come easy.
Look at our success stories at Appster. Who really knows what is actually going to be successful. Often times, it's not even the original idea that was successful, but rather something else found through a lot of trial.
This is why I was talking so much about validation and testing so many different things and running a million different experiments.
Through trial and error and improving over time, you eventually come out with a product.
Often times, the first version of the product is not actually what ends up being successful. I can give a million examples of this.
YouTube was a video dating site
Twitter was a service called Odeo - it was a podcasting service
Paul Kemp: Oh, really?
Josiah Humphrey: Yes, exactly. What's another famous one...?
Paul Kemp: Instagram?
Josiah Humphrey: Yes
Instagram was a Foursquare knock-off
PayPal was a transactional software for BlackBerry
Flickr started off as an MMORPG (or maybe that was Slack)
I think Slack started off as a game.
Again, I can quote many more examples, but my point is if you're wanting to become another success story - it requires:
a lot of grit
a lot of persistence
These dedicated entrepreneurs know that it's not always the original idea that is going to make it. It's generally:
a lot of iterations
a lot of improvements
it's talking to customers
it's getting feedback over a period of years
all these things combined gets determined entrepreneurs to success. I think it's really important to question
"Do I want to put in the work?"
Because it's a lot of work, I can tell you that much.
Paul Kemp: Josiah, one of the other things that I get asked quite frequently is how to get funding. I know you've got some tips perhaps for those founders and CEOs that are at the start of their journey.
Josiah Humphrey: Yes, that's an awesome question. It's a question that we get asked all the time:
"I've got this really great idea, but I've got no money."
I think first of all you have to think about the resources that you have. There's a few ways to go about this. In other words, there's different options.
When you've got an idea, you might want to find an engineer, maybe give them some equity, maybe a couple of engineers, and maybe that's your way to pay for the development, for building the product.
In some cases like that, maybe you can't afford to pay a salary, so it's literally just all equity; you guys become partners and you're able to build a product. This is if you're a non-technical founder.
Another way is maybe you work with freelancers, or maybe you off-shore it (depending on your budget). Sometimes this can be a really good way to build something. But also throwing a little caution to the wind (remember, it's just my perspective). I have the full belief that if you're really serious about building something great, then it has to be world class. Working with freelancers is, typically, very hard to control regarding quality.
The other option is working with a company like us. We're more on the side of building something world class and running validation and designing product strategy and all the kind of stuff that we do. That comes with a large cost. It can cost $100,000 dollars (and sometimes a lot more than that). So, first of all, you have to think about:
what are the resources you have to invest?
What are you willing to dedicate?
what do you think is the best path in order to make the product?
This is the first step.
Then it's deciding on what your appetite is like for raising investment. You have to understand that if you're wanting to raise investment, then you're going to have to give up equity. In fact, equity (technically) is the only thing you have as a startup entrepreneur. When you have an idea, that's all that you have.
You have an idea and you have equity, that's it.
You have to be really careful giving away equity early on. You may find, very quickly, you could be diluting yourself out of the company. You could lose control of the company at later stages of funding (depending on what kind of terms you have with an investor).
Then you have to decide, are you able to maybe grind it out and get some version of an MVP out before you go and take on serious investment? If you have an MVP, then you're probably going to be able to save a bit more equity. Sometimes, you save significantly more equity, because you've got more of a product out.
However, if you've just got an idea, then be prepared to give away equity. In fact, be prepared to give away a lot more equity than you would if you had an MVP released and you had traction with it.
Now, some investors are going to be taking a lot more equity. For example, working with angel investors, particularly if you only have an idea, is going to cost you more equity.
In fact, investors are going to want to have already seen traction because of the way funding markets are right now. Investors will want to see that you've grown users, maybe that you have some traction in some form in terms of revenue as well. It's different in every case. For first-time founders that are raising their seed round (the first round of funding that you would get; after that comes series A, B, C and onward), we typically recommend founders try and raise from friends and family first (if they can), before professional investors and particularly VCs.
Most VCs don't do an incredible amount of seed funding. Also, you're going to get much friendlier terms raising from friends and family, because generally they're not investing in the idea, their risk profile is much lower, and more than likely they're actually investing in you and in the relationship, the rapport that you have with them.
Working with angels investors (again, take this with a pinch of salt because it depends on who you find) can be very generous investors. They may simply believe in you and they believe in the idea rather than having to see traction. But generally, it's going to be trickier in the way of negotiating good terms with just an idea.
So, I would say these are some things to think about when trying to raise funding.
Now let's talk about the fundraising process.
This is different for everyone. We have a workshop that we run where we coach founders on how to raise funding.
It's obviously different in every case. For example, a guy from last year who was 18 (at the time), raised about half a million dollars with the first call he made to an investor.
This rarely happens.
Most of the time it's meeting after meeting after meeting, and being rejected constantly.
You have to build a very strong mindset and the fitness to be able to go out there and be rejected time and time again, particularly if you're working with professional angel investors versus friends and family.
I often hear from founders the same themes. For example, I'll get a call like:
"Josiah, I'm trying to raise funding and I'm really struggling... I'm having a hard time raising the funding"
This is where I sort of know what's up. I'll say something like:
"This sucks, man... How many investors have you reached out to?"
The founder says:
"Well, I've spoken with two, three investors and all of them have said no."
"Well, reality check, dude... Speak to a hundred, speak to two hundred, speak to three hundred before you complain about you can't raise funding."
A perfect example of this is Airbnb. They have a 20 billion and they've just raised another 500 million or another billion in cash to expand (I think). As it happens, they were rejected by every investor in Silicon Valley. In fact, the investor that said:
"Okay, we'll put up some cash"
...didn't even like the initial idea; they were just like:
"You know what? We love the team. We think you guys will somehow figure it out."
You have to really question yourself.
Are you willing to take on rejection hundreds of times?
Sometimes. getting rejected hundreds of times is what it takes to get the funding. Not everyone's willing to put in the hard work.
Paul Kemp: Josiah, in the final few minutes we have you on this episode, the biggest thing I'm asked is how to launch your app and market your startup. In fact, this is relevant to me now because I'm currently helping launch an app where I have an ownership stake
Josiah Humphrey: Oh yes...
Paul Kemp: How can we cut through all the noise and market an app successfully?
Josiah Humphrey: Yes, that is sometimes honestly more critical, having the right distribution model for your product. Often times it's more critical than even the product itself. We work on a lot of products and do a lot of marketing. In some cases, we've done some really crazy stuff and got many, many downloads in just a weekend.
We see a lot of different things because we test a lot of channels. A lot of people come and work with Appster and they say:
"What should our marketing strategy be? What channel...?"
They all want tactics, they want a quick fix tactic:
"What channel should we use? What sort of ad should we run on Facebook for a cost/install campaign?"
But to me, it's like:
"Okay, before you even think about that..."
For me, the foundation of all marketing really is that your product is your marketing; that's really where it starts.
First of all, you have to look at your product and say:
"Is this something that I know would just create this incredible experience for whoever is using it?"
And the way that I would challenge people on this concept is to go and look at the apps that you use every day. In a given week, the average person only uses about eight apps. Take a look at those eight apps that you use, and ask yourself the question
is the app that I'm building as good as those top apps?
Is it world class?
Does it have an incredible user experience?
Do people walk away from it saying, "Wow, the app is amazing!" , "The app added a lot of utility/value in my life!"
and finally (and more important than everything else - the magic sauce) they users say something like "Okay, now I'm going to tell my friend about this app."
Can create an app that is going to give you organic word-of-mouth marketing.
For example, take the app Uber. They probably have a bigger app marketing budget than any company in the world, yet their number one channel is word-of-mouth, organic referrals. Because someone uses it and and says:
"Oh my gosh, this is much better than using a taxi."
So, to me, this is the foundation of app marketing. Before you think about:
"Oh, what cool marketing channel am I going to use?"
think about your product and making it world class.
Now, let's think about marketing channels.
For everyone, it's going to be different in various cases. There is a lot of emphasis placed on:
"Oh, let's just run a Facebook ad campaign and we'll be good."
To me, Facebook is probably the best channel in mobile, particularly for the targeting capability. Even then, there's a lot of acquisition costs in there, especially if you're building a freemium app or an app that doesn't have a monetization model (yet). You have to be careful with your acquisition strategy and your cost/acquisition.
Sometimes, it's actually about doing the things that don't scale. What I mean by this is:
getting your app out there
knocking on doors
really driving that organic growth
Now, the best way to do all this is to first focus on marketing. Especially if your app is location-based or if it's something where you're trying to build a brand. Typically, it's not smart to just launch an app globally right away, because you want to try to build brand equity very quickly in one place, where people can start talking about it and people can start using it.
Let's say it's a two-sided marketplace and you need to find buyers and sellers. Again, taking the Uber for haircuts model as an example - you have to find barbers and you have to find people that want to get a haircut. Well, you'll have to find both of those people, and if you spread out too quickly (let's say you go after the whole of America first), it's going to be harder for you to build both sides of that market.
So you want to try and focus on one location at a time.
Facebook is a perfect example of this strategy. They did this at Harvard, and then eventually moved out to other universities, but they focused on one place first. This is where I think people make big mistakes all the time, thinking:
"Well, I'm going to take this global right away. Look how big my market is, I have a billion people that I can potentially reach."
It's like:
"No, dude... You need to focus on a very small subset of the market first, and make those people raving fans."
Deliver a lot of value for those people, build a brand up there, get word of mouth happening.
Like I was saying, going back to doing the stuff that doesn't scale, knocking on doors.
I think Tinder is a really great case study of this. It's not like they had crazy amounts of downloads overnight and everything just went bonkers for them. They had to work to get the initial traction. The one thing they did is they helped people reach what's called the a-ha moment. What Tinder did was go to universities. They would get people that throw a party to download Tinder.
The smart thing was they were doing it at the same time, they were setting up both sides of the market. The a-ha moment in Tinder is when you get a match.
"Okay, someone likes the way that I look!"
But my point is that even an app that had the explosive growth Tinder had, guess what - once upon a time they had zero users and they had to build a street team and go out there and actually hustle to get their first downloads and focus on one location.
So often times it's about doing the things that don't scale.
The other side of the coin (and some of the stuff that we help our clients do as well) is then you're looking at scaling out marketing campaigns and testing different channels and optimizing different channels. This can be a lot more complicated. You need to test a lot of channels, you need to test a lot of:
ad copy
Test all these different things.
There's a lot of different channels:
paid ads
producing content that's really useful for an audience
There's all sorts of different things. Test those different channels and break down the investments that you're having to make, break down what the cost/acquisition is, and then if you can, you break down what your ROI is for each of those channels as well, and then you end up having a very clear picture of "What channels are working best for me?"
At the end of the day, marketing is not something that happens by luck these days. It's not like you just buy a billboard ad and then you have a hundred million downloads. It's very much about running scientific experiments and using the scientific method. In terms of scaling campaigns, that's probably the best advice that I can give - don't just throw money into a hole and not know where you're getting results from. I'm sure a lot of other people on this podcast have explained the process of how that's done, but it's critical that you don't just leave marketing to chance. You have to run experiments, you have to measure, you have to understand your metrics. That's probably the brief overview advice I would give around marketing.
Paul Kemp: Josiah, that is absolutely incredibly valuable. One of the big objectives of this podcast is to try and save people money, and one of the easiest ways to burn money is to hire a PR agency and expect things to be taken care of.
Josiah Humphrey: Oh, yes.
Paul Kemp: Josiah, it's been wonderful talking to you. This has been one of the most valuable chats I've had in a long time, and I really appreciate your time.
Josiah Humphrey: Awesome.
Paul Kemp: How best can people reach out and connect with you? What's the best way of getting in touch?
Josiah Humphrey: If it's for Appster, just appsterhq.com. For people that are going through the process, we have a lot of completely free resources. Under our resources tab, you can learn more about funding, about user acquisition, about how to build apps that are sticky. We have tons and tons of different whitepapers that I think will be super helpful for people that are going through the process. So that's the easiest way to get in touch with us and check out what we're all about.
To the listeners/readers that are out there, make sure you're willing to put in the work, and more than anything have the self-belief, because it can be a lonely road. Probably people that are listening/reading this - you're doing the right thing because you're getting out there and you're learning and you're thinking about:
"How do I build something great?"
Keep on this path of learning, and also try and develop the self-belief that you need to figure it out. Remember, it's a journey your going on.
I think sometimes people are too impatient for success. They think, "It's supposed to happen in three months. Every other person is an overnight success", but this is actually not true. I think the thing to really think about - something that I certainly try to ask myself every day - is:
"What seeds am I planting on a daily basis that are going to grow into trees?"
Kind of a funny analogy, but:
"What seeds am I planting that are going to grow into trees one, three, five, ten, twenty years from now?"
If you think like that and understand that most success stories and most successful people are actually playing the long game and they've been doing it for years and years - I think Jeff Bezos is probably my favorite example of this. Understand that it's about the long-term. If you're willing to be consistent over three, five, ten years - that's when you'll truly see success.
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