Kevin: Everyone who’s joining me today, this is Kevin need with Scripts for Marketers. Today, we’re going to be interviewing Michael Hunter on what it takes to bootstrap a product while you would be doing that rather than taking on venture capital, and a little bit on his story of going from a marketing agency into running his own company, Spiffy.
Kevin: Michael, I’m gonna start off with you and ask you if you could just give me a quick background on how you got started and how you went from starting a market agency into bootstrapping your own product.
Michael: Yeah, for sure. Thanks so much for having me. Happy to be here. So back in college, I was actually in college during the great recession, so I graduated in 2011. During that time, I had friends who were graduating college ahead of me, and they couldn’t get jobs. Nobody was hiring, so I knew I had to create my own job. Around that time was when Facebook started to roll out their ads platform, their business pages, stuff like that. I realized that I had a skill as marketable in the marketplace, and so rather than going out there and trying to find a job, I have created my own.
Michael: I created a marketing agency, we started with just doing social media for small businesses, and then grew out of that to servicing marketing automation campaigns, building websites, just all the digital marketing stuff for small businesses.
Michael: A decade later, we scaled that to be one of the top agencies in our industry. We specifically niched down to working with personal brands, author speakers, thought leaders, and that whole knowledge information, marketing.
Michael: Then, we kind of reach the pinnacle of that industry. We then realized we don’t wanna be doing all these high-stress marketing campaigns for the next 20 years of our life.
Michael: Both me and my business partner, Jeremy, decided that software was what we wanted to get into, and so we started to slowly make that pivot from agency to software product, and so that decision was made about five years ago, and fast forward to today, we are 100% software company.
Kevin: Yeah, I hear the story a lot of agencies that start building up product lines, and that’s actually how meditated and it’s really interesting where you see these big companies like mass and I think Basecamp as well. They’re all these agencies that started to see the problem over and over again, and then started moving into starting their very own company to solve those problems.
Kevin: Well, what I’d be curious about is, if you could talk a little bit about what your product does and then what those lessons were during your agency time that made you realize “This is a market that has a huge problem that is untapped, and we think that we have the right skills to solve it.”?
Michael: Ultimately Spiffy is our software product, that’s the name of our company, our website is Spiffy.co. We are a check-out page solution that makes it really easy for small businesses, freelance agencies to take payments to their website.
Michael: Time and time again, it was a challenge helping our customers take payments through the websites, whether they were just getting started or they were multi-million dollar brands, taking payment, there’s always some sort of hiccup or a software tool would do all these things and they kinda take payments too.
Michael: When we were in our agency, one of our most popular services that people came to us for was that We were custom coding Infusion Soft order forms, so Infusionsoft has CRM marketing automation and e-commerce platform, but their e-commerce platform has been out of date for a while, but you can custom code it and make it look great, make it mobile optimize and stuff like this. Back in 2013-2014, we were custom coding Infusionsoft order forms to be mobile responsive, to just be conversion-optimized, adding conversion-boosting content to that page, to that funnel, specifically the checkout page as we were building the entire funnel. Then we decided like, “Hey, there’s gotta be a way to productize what we’re doing with this template that we’ve created to mobile-optimize a checkout page.
Michael: We were charging anywhere between $1,500 to $2,500 to custom code just the checkout page and not every small business that’s not accessible to every small business. We decided to productize it, make it really accessible, and turn it into a software product. Ultimately that was just the first step, that was our own first step of solving a need for a very specific marketplace of people that we’re so hungry for, that they were demanding it.
Michael: We have the ability, we have the connections to get revenue quickly and ultimately build out a version of our product that worked without Infusionsoft too. It wasn’t just the need for a few stuff, but as a consultant running an agency, we were able to use all of the different software tools out there, and they’re all great tools. All the tools that are really good at one thing and they also kind of take payments.
Michael: Nobody was focusing on the payment space, and so that’s where we really wanted to focus our attention, our effort, making it really easy for people to take payments, and we decided to embark on that journey and build a tool that specialized in taking payments.
Kevin: Oh yeah, and I come from the venture-backed startups space and the software space. You see a lot of venture-backed companies in there, and I’d be curious what are the benefits and drawbacks of bootstrapping a company from scratch or from an agency versus taking venture capital right from the start.
Michael: It’s something that’s constantly a challenging thing to navigate, but yeah, we bootstrapped it completely taking revenue from our agency, being really strategic about the idea that we execute against because we knew that we could generate revenue quickly and just take the profits that were coming from our software and just reinvesting them. We still had our agency going, and that was our bread and butter. That’s what was paying our incomes, and so for the first two years, we didn’t take a single dollar out of our revenue from Spiffy.
Michael: So again, the difference between boot-strapping and taking on VC money is that obviously things go a little bit slower, but a lot of times that’s better, and so that was one of the big things that Jeremy, I decided early on, is that we wanted to bootstrap it. We didn’t want to have a job. We didn’t want to have an investor putting pressure on us to hit revenue next month to one quarter when we really knew the need in the marketplace.
Michael: That was kind of this selfish reasoning in a way where it’s like We don’t want other people telling us what to do. We didn’t want the other people’s agenda is to influence the product that we knew needed to be created in our industry. That’s really the benefit of boot trapping is that you get to the buck stop of you. You don’t have anybody telling you what to do, but you also move a little bit slower because you don’t have that huge injection of cash.
Michael: One of my fundamental beliefs is that, entrepreneurship, the startup space, we place too much emphasis on raising money and raising capital, and we think that that needs to happen before we can execute or idea.
Michael: At the end of the day, I think that people think they need to raise money in order to start a business. It’s more about being resourceful than it is about having a lot of money. We’ve seen a lot of companies raise millions and millions of millions of dollars and three, five years later have little to nothing to show for it. They’re out of business.
Michael: I think that when you bootstrap and you solve a real problem in the marketplace and you create a great product, and the emphasis is more on the product, even raising money, then you have a better likelihood of having a successful business long-term.
Michael: Another really successful software company, ActiveCampaign, is a CRM and market automation tool in the small business base. They bootstrapped and they just raised their Series A round of funding like 15 to 20 years into their business. There’s a time and a place to raise money. I think that at some point, we will raise money, but it’s going to be a very strategic round of funding at a really good valuation and really good terms for us, so we don’t have to give up a lot of equity in order to get that capital.
Michael: Our goal is to hit about $1.3 to $1.5 million in revenue, bootstrapping. Then at that point, assess, “Hey, do we need to take on VC money? Is that gonna help us accelerate faster?” and make those decisions as we hit some of those milestones.
Kevin: I think something that’s really interesting to me with the bootstrapping stuff and coming out of an agency is the question of “When we start to product as a specific service that we’ve been doing. You probably have the lead generation part of it, the sales machine. I guess what’s interesting to me is like that gap between “We’re making really good money as an agency, but we’re trading time for money. We don’t wanna be in that thought anymore.” and the early revenue from an MRR product.
Kevin: The hard part is that while software products have an incredible monthly recurring business model, they require a lot of saturation to really be bringing in the same amount of the services industry. I’d be curious, how do you turn a really great client into a customer of your software. Do you take those specific clients that are using your service and transfer them over to your software, or do you have them stay on both while you’re still trying to build up enough revenue on the software to no longer be doing these service?
Michael: We had our clients be customers of our software too. They pay us for executing services. As long as it was an ideal fit and it was the best tool for that client, then we’d also have them pay for our software to tool as well. Depending on what their needs are, we would still service it. If another platform was really in the best interests of our client, then we would use that tool as well, and then you learn why is that the best solution for this client, and what do we need to do to add more features and stuff like that to our software, so ultimately that transition for us took about three and a half years, so the first year of stiff we generated and somewhere the ballpark of $100,000 of revenue that came from our software and the rest of our income came through our agency.
Michael: The next year, it was about 50-50, and then the next year we only made about $100,000 to our agency and most of our revenue was coming through the software. We just kind of had this transition phase where if you’re looking at our books, we weren’t making any more money, but our money was just coming from a more leverage place, so to speak.
Michael: That’s my best advice is to have that longer-term approach: to look at it as a three to five year transition period, solve a real problem in the marketplace that’s going to be sustainable and going to last. Have a little bit more long-term outlook on scaling the revenue of your software company, and so for us, it was just a matter of scaling up the revenue of the software, because we could control how many clients we took on and how much work we wanted to do with clients because as I kinda mentioned, we’ve built that agency up to be one of the top of the industry, so people were coming to us. We had a wait list of clients. We were constantly turning down business. We had the ability to meter the types of people that we’re working with, being really strategic about the client work that we did take on.
Michael: I would say it’s very, very, very difficult to try to build an agency and build a software product at the same time, and so at the end of the day, having that revenue coming from the service side of your business and kind of getting that dialed in and product tie and systems from the service aspect is really kind of that first step.
Michael: I think that’s the best way to bootstrap a start-up is because you get to intimately know the market, you can to intimately know the problems, and you can create a world-class solution that fits a very specific need in the marketplace, so without having six to eight years of being a practitioner in the space, there’s no way that we would have built the product that we built today, we could have even come up with the same idea, we could have even tried to execute an earlier time. It just wouldn’t have been as good of a product.
Michael: A lot of times, especially or you’re looking for something that scales are you’re looking to get into software, you might get frustrated thinking, I’m trying time for dollars over here in my agency, and that’s not really what I want.
Michael: That’s not what I wanted either when I started my agency, but I knew that was a place where I could get paid to learn, and so when you just flip your perspective on it, maybe building an agency is at your end goal… It wasn’t my end goal either, but it was a way for me to get paid to learn marketing business, teen a industry, find other problems and challenges that industry and build solutions for that.
Michael: That was kind of my approach from even day one, starting my marketing agency back in college, was I just looked at it as a way of instead of me continuing to pay to learn more in school or going to get my Master’s degree, I’m actually gonna have my clients paying me to learn all of these software tools and actually be a practitioner and implement these marketing campaigns and things of that nature, so that’s the genesis of it.
Kevin: Gotcha, yeah, and I know that your background is in marketing: what you did as the agency. What I’d be curious about is what are the key differences in promoting a Software as a Service product, if you are venture back paid advertising is a big part of that because we want a scalable way to turn dollars that are a little bit the in abundance into direct revenue. Without that, you’re using your own dollars. How does that make a big difference in whether you go the organic route?
Michael: I think ultimately, it depends on what type of product that you’re creating, if you are creating a product that solves a problem in the market place that requires some education, then paid to advertise and get in front of those people is essentially you have to do that.
Michael: That’s one of the things that we’ve coached our clients on over the past several years, is that at least for us, one of the great things about building Spiffy.
Michael: When we decided to move from an agency to a software company, we had about 20 different software ideas that we thought could be a million-dollar ideas, we had about three that we thought could be $50 to $100 million ideas. We chose Spiffy for some very specific reasons. We have this eight filter process, but the first four steps are the most important.
Michael: The first four steps of validating a product idea, or one, does it solve a real problem in the market place too? Are people aware that they have the problem, three, are they actively seeking a solution to the problem, and four, are they willing to pay for that solution?
Michael: For us with Spiffy, especially the first version of our product that was just an app for Infusionsoft. It hit all four of those things. It was a visceral need in the marketplace, people knew that was an issue, that it was a weak point in their funnel, they were actively seeking a solution for it, they were begging infusions of the roll it out, and they were willing to pay to have better conversions and have a conversion-optimized, check-out experience.
Michael: Since we were able to solve a problem that met those four things, we really didn’t have to spend a lot of money and paid advertising. In fact, it was really difficult, this man, money paid to advertise because our product only worked for a specific type of user using Infusionsoft, there was no way to target just those people, so if you were running paid advertising, there would have been a lot of waste, so our product was so niche that we actually couldn’t run and paid ads in an ineffective way, but SEO and organic content and affiliates and partnerships and partnering with agencies and partner with other Infusion Soft apps, there was a little bit more of an organic Biz Dev affiliate commission play.
Michael: At the end of the day, we were solving a real problem in a community that was well-connected, and word of mouth really drove our sales, and so it took us about three years, three and a half years to hit our first thousand customers, and that was all.
Michael: We sponsored one of even so events, but the grand scheme things, our paid advertising budget was virtually zero compared to most start-ups, and so again, it really just depends on what your product is and what problem you’re solving and what that life cycle of that sale looks like for us, it was really short, people have the problem, they’re actually seeking for it and they’re wanting to pay for it today.
Michael: Others found our YouTube videos, they found our content, it’s not how easy it was to use, they signed up on the spot, so for us, we were… We were very strategic about the type of prostate created to ensure that that there wasn’t a long sales cycle that we could generate revenue quickly, build our team, take that revenue to reinvest into the next generation of our products.
Michael: Again, kind of going back to what I was saying before, we had this two-step approach to building our software company, we were really, really resourceful, we saw the need in the marketplace for the specialized, the easiest way to take payments tool in the marketplace, something that just specialize in payments, it wasn’t an online course tool and a payment tool, it wasn’t a page builder tool that also in took payments.
Michael: That was what our vision was, but instead of us going out and be like, Oh well, so that’s gonna take a couple of 10,000 dollars of developers to the build and we don’t have that money and we need to raise money.
Michael: I came from is just being a little bit more soul first and then building the tool we wanted to do, does that make sense? That evolution of just being a little bit more resourceful, not thinking that we had to raise money to build the thing that we ultimately wanted to build, but just kind of… Building a brand in this space. Building the street cred, so to speak. And leveraging a lot of those relationships to ultimately launch the tool we have the vision to create from day one.
Kevin: Yeah, yeah, and I think what’s interesting or strikes me out is focusing specifically on Infusionsoft and landing and expanding.
At the end of the day, you did want to build it out for almost everyone.
Michael: Right, specifically just for payments, but we’re thinking about being resourceful and not being full of resources, they’re two ways really. We’re focusing on the things we can do now while also keeping the vision of what it can be.
Kevin: Yeah, no, I got you, I think that works really well. The next question is raising money in a venture backed. Those are big milestones. It’s like your Series A, you’re sure it keeps going. How does that change, and how do those milestones change when you’re a bootstrap company, because I’m sure you don’t have those specific things, but you have things like, we just launched. Let’s say we were all on Infusionsoft and now we serve HubSpot too, right? That’s a big milestone. I’m just kinda curious, how does that change those and what milestones are really important when your bootstraps versus venture back?
Michael: Yeah, that’s a great question for us specifically, it’s customer acquisition, so what’s our total active paying customers, since we are in the payment space, it’s our TPD, total processing volume, how much volume are our customers doing through our system. Those are probably the two biggest ones.
Michael: Then obviously just different product milestones and things of that nature, those milestones change depending on what your product are, but it’s just the typical KPIS of any business, and there’s some nuance things to pay on your specific product, but a couple of the things that we look for in track, so obviously you crossing that thousand-paying customer threshold was super huge for us, and on an annual basis, we process about 300 million worth of transactions. Those are big milestones that we track and celebrate.
Kevin: Gotcha, yeah, for sure. Now, another thing that is a big difference between bootstrap and venture back is hiring a lot… Right, with venture race, even before a series A, you might have 40 employees, which you probably don’t even have the revenue to support, because you’re taking all of that in venture and money, how do you hire when you know that each higher is going to be in that 1-8% of your total company, because I know that in the venture back world you want generalists upfront and then you want specialists down the line, how does that change when that new higher that is probably gonna be your only hire for a certain amount of time.
Kevin: What are you looking for? Is it that specialized role, or is it someone who can do a little bit of everything in that role?
Michael: Yeah, it’s a challenge, to say the least. When you have limited resources, every single hire, especially your first five hires are really make or break, and you really, really feel it if you make a wrong higher.
Michael: Having a really dialed-in hiring process is critical, it’s something that we have a pre-dialed in hiring process and vetting process and interview process, and we’ve made hiring mistakes, not every single higher that we’ve made it has been the right fit, and so you’ve heard the term higher, slow, fire, fast. And so those are some of the things that we live by and now I think were a really good place where you have an awesome team, we have a couple of team members have been with us for three or four years, and for us personally, being in the payment space, a lot of our competitors, they hire the offshore development team oversees and we decided to be different, and so all of our developers are state-side, we have one developer in the UK but… Or or less state side, and we have just a small team of mines that just are really, really good at their roles.
Michael: One of the most important things for us bootstrapping was that starting out, we had a very simple product, and so I didn’t need a lot of the infrastructure and the team support a more complex product needs, and so I think it also just depends on what you’re trying to solve for if you’re trying to disrupt the healthcare space like, Yeah, you need to raise VC money, you’re not gonna do that boot-strapping, um, you’re already a billionaire or something, but if you are an agency or your freelance or just get out of school or something, like that, don’t over-complicate what you’re looking to build, our first version of say, we were selling annual subscriptions where our customers couldn’t even log in anywhere, we were manually adding them to the database and giving them their little Coast they could add to their forms. And so I think a lot of people over think what they need to do to even have an MVP that they can sell.
Michael: People want a result. So having a fancy login system and having a fancy dashboard and having all this stuff are probably what your customers want, but it might not be what they necessarily need right now, and if you can sign them up and deliver them a result and have more of those bells and whistles later, you don’t need those things to get started, and so those are some of the things that… That we did early on that allowed us to hire that first person sooner than most other startups, and we hit revenue probably within our first three months, and we were profitable in six months.
Michael: It was just one of those things where we were able to hire that first person which was a developer. We’re very product-focused. I think that helps too.
Michael: It’s like when you have a product and you’re solving a solution that meets those four pieces of criteria, it makes it really easy to be you product focus and have a developer-heavy team where you don’t need a full sales team, you don’t need a full content team, you don’t need all of these other other positions, you can really just focus on a product, the product sells itself word of mouth, and you create content, tutorials on YouTube, blog content, form strategic partnerships, do interviews like I’m doing with you, and there’s just a lot of high-leverage ways that you can get in front of a lot of people that way.
Kevin: Yeah, that makes sense. Now, something that I’m interested in, and it’s something we’ve talked about a couple of times, is why you decided to niche down into payment processing, and like you said, there are a lot of big companies, those subsides sales forces, Click Funnels to try to do everything, and I I would love to hear your tie on being world class, being specific on just one feature and doing it really well and mix with what’s gonna happen when these hub spots build so many features that they have blind spots, and how a company agency VC start-up can really look at, let’s say the unbundling of it and saying, Hey, they do this clearly, if we just do this and market it to that specific audience, we’ll be able to get market share.
Michael: Totally. Specifically around competing with the big companies in the industry, when companies get to that enterprise level company where they have thousands of employees, they’re just a Cruise ship. It takes forever to turn a cruise ship. There’s so much red tape. I look at PayPal for instance, Paypal is a great solution, but the still haven’t really nailed being a really flexible system for small businesses, and at the end of the day, it’s like if you’re a consultant or an agency, you don’t wanna have PayPal buttons all of your website, and so they really haven’t nailed small business, when you go to an eBay, obviously the one day, but when you go to a bar, you go to some type of e-commerce store, you have the check out with PayPal button, that’s nice. But is more of a traditional e-commerce setting, but when you’re a professional business or a consultant, it almost diminishes, almost reveals how small you actually are when you have a PayPal button on a website, and so that was just one of the things where we chose to build safe, because there’s those 800-pound gorillas that scare a lot of other people away from even attempting to build something in this space, and we just knew that there was a specialized and niche market for not just taking the pain… We integrate with PayPal, we integrate with to take payments, but we do a lot of other things that Stripe and Pat will never do.
Michael: We make it really easy to pass that sales data to your CRM, we make it really easy to trigger automations, apply tags, start your customer during sequence out for that in your mark animation or CRM tool. And so we’re basing this automation layer that rest on top of Stripe and pay out, and the reason why we focus on payment specifically, when there are other industry tools out there, leading industry tools out there, the job is like The Click Funnels, the Infusionsofts Of The World job is an amazing tool, is amazing for course platforms, it is a course platform, but if you all wanna start selling other things, it becomes less of an effective tool, a lot of event tickets, if you wanna sell consulting, if you wanna do… All these are things that I require you to sign in to your account, if you’ll have an account already, it’s just an interesting experience if you’re not selling an online course, if you’re just selling online courses, it’s amazing.
Michael: They’re also starting to branch out to be this all-in-one tool, all-in-one tool, and the reason why we built sites because back in 2015, we realized that the all-in-one tool software era is over, and we saw active campaign, active campaign in an… Their flag in the ground and say, Hey, we believe in the marketing stack, we believe in people building out tech stacks that are customized to their business, and we are a CRM and marketing nation to… And that’s it, and we’re gonna be a platform. And you can integrate with us and you can build out all the integrations and custom tools that you need, and so we saw that that’s the future of business and the future of online businesses is actually piecing together best-in-class pieces of software because you don’t need to be a developer, to do that these days, with tools like Zapier, you can connect a best in class piece of the software without ever having to write a line of code.
Michael: So that was what really prompted the all-in-one software era was that you had all of these other pieces of the software and you had to be a developer, you had to spend a ton of money getting these systems to talk to one another, and then one of them would update. It would break everything. And so that’s why the all-in-one solution was great, is because everything was in one place, what you can’t solve for every single business, every single use case when you’re an all-in-one platform, think Infusionsoft done the best job at it, but it’s still not the perfect tool for every single type of business, and so that’s where moving more towards a marking staff and getting best in class pieces of software to do specialized things and using tools like Sapper, apis are more well-documented though, easier to integrate than ever before, so even if you are a developer, it takes half the time, a fraction of the time to integrate tools than it did just five or 10 years ago, and so that’s kind of our vision of where we see things are heading, everything is gonna be more specialized tools, and so when you look at the hot spots, the world, like you said, you see their feature set, it’s like, Okay, what is host doing but doing poorly that you might be able to provide a solution for that does it better, the then… Just a basic feature of HubSpot or some of the gaps and HubSpot’s offering, or Salesforce or InfusionSoft, there’s so much opportunity building apps for those platforms, such a great place to start to get your feet wet and generate some revenue so you can spin up your next idea.
Kevin: Gotcha, yeah. And I know that when we had talked about marketing ideas and how to market, something that struck out to me was that you have a marketing road map, and I have never heard the quote, I have a marketing road map, and it’s on the road map, and I think it’s interesting because I think it’s a really good sign of like, Hey, we balance product and marketing, and we make sure that we’re putting the right effort into… Like you said, product. I guess my question would be, How do you bounce that and how do you make sure that, like you said, you’re a product-based business, but you’re also making sure that you’re doing the strategic business relationships, like, Hey, we get business from having integrations with sort, and how do you basically balance the Trotter, the AT with also the biz dev and marketing road map?
Michael: Yeah, so it’s challenging because there’s this match between having the features that you know the customers want in those integrations and then really pushing the envelope on marketing, and so it says delicate balance of growing the business, growing your monetary revenue, but also not shooting yourself in the foot. So that was one of the reasons why we personally decided not to raise money is because in order to build what we wanted to build, we knew that it was gonna take quite a bit of time, and we didn’t want the pressure of having to sell something just to have people turn off the back end because we didn’t have the feature yet, and that feature was on the roadmap for 12 months down the road, and so really focusing on bringing on very simple customers for I first, and focusing on building in integrations with very simple tools first, I… In general, this is not across the board, but in general, there’s a lot more smaller businesses, smaller, smaller businesses using Active Campaign, that infusion stuff here, a lot of power marketers, power small businesses doing crazy stuff for the fusion of… People are doing that with ActiveCampaign too, but there’s a bigger pool of just more basic businesses using Active Campaign and tools like MailChimp and things like that.
Michael: So for the first year of selling our new product, we didn’t even torsion soft customers about it, but we were actively pursuing active campaign and gonna bring on active campaign users and stuff just because we knew that our new platform wasn’t quite ready for an advanced user so there’s some different things that you can do just based off of where you’re at with your product, with the feature set, there is, if you… You might not have that luxury if you’re raising money, but at the end of the day, when you raise money, you also have the resources and a bigger team to execute against your product room that faster too. And so there’s no right way or wrong way to, of… But for us, it is a little bit of a delicate balance, just pushing the envelop and marketing to a point, but not just going full out trying to slang as much software as we possibly can, right now, we’re growing at a really awesome rate and building cool features and so on. Once we get to a point where we… Or at that 1.3-1.5 million revenue mark, we’re hoping to hit that within the next 12 months, we’re getting close, then it’s gonna be a little bit different ball game because we’ll be able to have more developers, we had a really good spot of the product, and I’ll play a lot more resources to marketing, if that makes sense.
Kevin: Yeah, yeah, I think something that was really interesting and jumped out to me is the fact that when you don’t do a pre-approach, when you’re… Integrations are a huge part of selling the product, marketing it, etcetera. I think it’s interesting because you see products like built list where you can figure out what tech staff people are using, I think also the… Cool to think about it is like, Hey, an ideal persona, we do once, like you’re saying, we don’t want people to be doing crazy stuff with our software because we don’t have those features yet, but they can still benefit from having a better payment process, so it’s kind of cool.
So you’re making personas off of the technology that they’re using, and that helps a ton if you… Even in the advertising world, if you’re like, Okay, we wanna show that everyone who likes active campaign, because then you’re able to really think through like, Hey, this is what’s important to these people, Hey, I really think about it as, what is it?
Kevin: The boundaries on somebody who’s is MailChimp, they’re not gonna pay a ton of money to use a HubSpot ’cause they… They just meet, and so I think that’s a really cool way to really dialing in on the…
Kevin: This is who our persona is, they don’t need these features because they’re using the specific product, and so they are already dialed in.
Michael: Yeah, and especially for our products specifically, our product, technically, anybody that wants to take payments through outside is our ideal customer, right, like you can literally just buy iffy and embed it on your WordPress site, embed it right into square space and you’re good to go.
Micheal: So you don’t need to have a marketing automation tool, but we realize that’s where a lot of the value is, and our software, and so as a bootstrap startup, not having unlimited resources, we had to NIT our marketing down and focus on our really robust integrations with specific tools. And so then trying to market to everybody, I really focused on active campaign in HubSpot, and we were able to focus our attention, focus the content that we create, focus the communications, the relationships that we’re trying to build to a very small subset of the market, so even though our product is designed for anybody to use, we need our marketing down and we’re really focused on that.
Kevin: Oh, yeah, and the last to question I’ll ask is, what that challenges that you would talk about to someone thinking about food trapping or moving from an agency into making their own product, and especially in that validation phase, what are the things that strikes most difficult?
Michael: Just having the patience. I’m a Type A type person, I like results tomorrow, and this has been four and a half, five-year journey already, and we feel like we’re just now getting started, and it started as a side hustle for our agency, we’ve only been full-time in this for over two years in December or so, so we’ve really only been at this full-time for about two years, even though it seems like it’s been so much longer, and so I think that ultimately making sure that you’re building the right product, but you’re executing against the right idea is essential.
Michael: And I think too much emphasis is placed on raising big money, having this huge company selling for 100 millions of dollars at the end of the day, like success is what you want success to look like for you? I know a couple of my buddy is like for… Of my body as runs a training company and they’re very focused training on a specific software tool, I make 150 000 a year, and it rolls out a course, a new course once or twice a year and has a pretty passive business.
Michael: He probably has a better lifestyle in some of my other buddies that run a multi-million dollar agency, and they’re stressed out and they’re… Got their hair on fire. So at the end of the day, what is it that you’re trying to accomplish? Building a software product that generates 100 000 of revenue passively. That’s awesome.
Michael: You don’t always have to have this huge grand idea that’s gonna make your 50 million, so first, figure out what success looks like to you, then make sure that the product that you’re building is exactly. The thing that’s going to get you there.
Michael: I think one thing that really derails a lot of startups early on is that they’re entrepreneurs. This is me throughout my career.
Michael: I’m a serial entrepreneur and I love new ideas, and I China objects, sender entrepreneur, SOS right, where it’s like you got this new idea, this new client, and you say yes to everything, and you got four different businesses, irons in the fire, and there’s a time and a place where that’s important, especially early on in your career, where you’re just learning a lot, and maybe you have several different ideas that are in or very viable and you’re running some tasks and Singh one has most legs, so I’m not saying don’t ever do that, but you need to get to a point pretty quickly where you have a single idea that you know, or at least have a pretty good idea, is going to have a long-term play and really focus in… Execute against one idea. I think that’s one thing that that plagues a lot of entrepreneurial people and start-ups is an inter of progress and 300 in 60 degrees of direction rather than making a mile of progress in one direction.
Michael: So there are just some things to think about. And I fundamentally believe that the more, the more research that you do and the time that you take to ensure that what you’re working on is in alignment with what you want to create in your life, from your life style perspective, the more confident that you are and in that alignment, and that what you’re doing now is gonna help get you there in the next five, 10, 15, 20 years, the easier it is to stay focused and to say no to other opportunities, there’s nothing that could come up, there’s no opportunity that someone can present to me, that I would consider, because I’m so confide and what we’re doing and so confident that what we are doing is going to create a level of success that I want to achieve my life in the shortest amount of time possible.
Michael: And so when you have that level of certainty, it just really makes it easy to say no to other things, to say no to clients, that we get people coming to us all the time still from our agency, so I have our business a, Hey, we guys do a product on or…
Michael: Oh, thanks so much for reach out. No, but we’ll refer you to some more people that do a great job, and so the other… You get to a point in life where making as much money as possible today isn’t as important as the time that you can invest into something that’s going to create an amazing amount of revenue in the future, and so… Yeah, I think that those are just some thoughts that are valuable and hopefully that serves your audience and you stir some thoughts and emotions around what people are executing against.
Kevin: Yeah, yeah, for sure. I think in terms of the audience for my blog is people who are hungry, right, and they’re trying to find new directions to take things, I think at the core of this, it’s really interesting on how to really validate something and build something out of something like a…
Michael: I do, a lot of us sat stuff and at the corner of it, I know what’s wrong with HubSpot from the inside out, and it’s really cool to hear how you can take something like that, whereas this one perspective on how this 800-GR are doing just such a bad job at one specific thing, and I think it helps thinking about it as not a scary thing, because you’re small, you’re able to make turns and you’re able to be agile in going against a massive company, so I think that’s something that could also a bunch of people out.
Kevin: Totally. Thank you taking the time to do this interview, man.
Michael: Definitely, hopefully, we can jam again soon once you start doing some repeats, would love to chat again soon.
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