I wanted to revisit and introduce Mixergy to everyone, Andrew Warner the host has been “Crushing It” (if you don’t mind the Gary Vaynerchuk term) since April 2008.  I’m not sure if you know this but Andrew has recently moved to Buenos Aires, Argentinia to focus on his work and see the world.  Andrew welcomes feedback for his show and site, believe it or not I suggested he needed a regular set time so we know when he is live, guess what? check him out live everyday (M-F) live on Ustream at 11am Pacific (2pm Eastern) and later on iTunes.  Some of his notable interviews have been Jason Calacanis, Leo LaPorte, Greg Spiridellis, Gary Vaynerchuk, Mark Suster, Timothy Ferris and Matt Mullenweg.  Needless to say his interviews are great and worth watching, his goal is for us to learn from the best and create a legacy business.    If you have a guest you would like Andrew to interview please read this post.  If you really want to learn about Andrew Warner check out this video:

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After seeing a lot of love for @garyvee in the #twist hashtag, I thought you may want more.  Andrew Warner of Mixergy has been “Crushing It” for some time here are two great interviews with Gary and his brother AJ, ENJOY!

Gary Interview:

Here is the trailer for AJ’s interview: Click here to download the audio MP3

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Mixergy, Sara Sutton Fellof FlexJobs

Our Mission: To be the most trusted, overall best job site for telecommuting, freelance, and online jobs!

FlexJobs not only walks the walk and talks the talk (our staff all work from home), but we also spread the love to help others do the same! Our site serves up only the “best of the best”, hand-screened, legitimate job opportunities for our users.

Anyone who’s ever looked for a work from home or telecommute job knows how much junk is out there, and it can take seemingly endless — and frustrating — hours to sort through which ones are just scams, ads, or or too-good-to-be-true business opportunities and which ones are really great jobs. So let our trained staff do the extensive, painstaking, and ever-important (due to aggressive online job scams and frauds) research for you!

• (07 min. ) When choosing a company to handle something critical for your business you have a couple choices choose well:

1. 1. A small up and coming company – be cautious that they aren’t trying to grow to quick and don’t have the people to handle all the business and end up with a crappy product
   2. A large reputable company – You may end of as a small fish in a big pond with little real interest in your product
   3. Contractors – Maybe the best of both worlds if you can find the right people.  A small group of contractors allows you to create a relationship and have input in what they are doing.

• (10 min.) Chicken or the egg problem that most companies face, when starting JobDirect they chose trying to get the job seeker first.  She felt she understood that user better, being a recent college graduate herself.  The method they chose was a bus tour they travelled the country to colleges getting students to sign up for email services and created relationships with career centers.  Sponsorship on the bus helped pay expenses during that time, yet purchasing multiple buses proved expensive.

• Understanding your audience is key to any business

• (29 min.) FlexJobs reached a point when their business model wasn’t working (charging employers) so they made a tough decision to flip the model and charge the job seeker but provide quality telecommuting companies.  They pride themselves on shielding the job seeker from the spammers and scammers, which is very prevalent in the telecommuting industry.  Adding the Better Business logo, having a money back guarantee and a 800 number along with getting reputable press helped prove integrity.

• (36 min) How did you get the press, let’s be honest your business isn’t too sexy?  They do all the leg work out in creating relationships, Haro (help a reporter out), being on the homepage of Yahoo!, reaching out to anyone associated to a news channels.  The entrepreneur story can also be very compelling.

• (46 min.) Everyone that works for FlexJobs is a telecommuter and when asked how do you balance life (mom vs. career)?  Sara comments that she has daycare but can see the kids whenever she wants, her office is separate from the house and stays disciplined to the work at hand.

If you found this interesting please click the “retween” button up top.

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Home of the ambitious upstart

What you will see in this episode:

• How a photo blogger changed blogging as we know it
• A thoughtful Matt Mullenweg
• Matt’s vision for WordPress
• How open-souce can make money

WordPress started in 2003 with a single bit of code to enhance the typography of everyday writing and with fewer users than you can count on your fingers and toes. Since then it has grown to be the largest self-hosted blogging tool in the world, used on millions of sites and seen by tens of millions of people every day.

Everything you see here, from the documentation to the code itself, was created by and for the community . WordPress is an Open Source project, which means there are hundreds of people all over the world working on it. (More than most commercial platforms.) It also means you are free to use it for anything from your cat’s home page to a Fortune 500 web site without paying anyone a license fee and a number of other important freedoms.

Automattic Inc. is a startup from a handful of people passionate about making the web a better place. So far we’re best known for our work on WordPress and other projects but we have a lot of other interesting things in the pipeline as well. We are strong believers in Open Source and the vast majority of our work is available under licenses like the GPL.  We work from places all around the world.

Matt started blogging in 2002, he was inspired by Washington DC while attending a Federal Reserve Challenge in High School.  While in DC he took a lot of pictures and wanted to share them with his friends, hence his start in blogging.

What do you want WordPress to look like in 10, 20 years down the road? I often think about its logical conclusion, I want it to stay true to what make it wonderful: an open-source community, peer driven development and be agile.

Do you focus on specific goals, like a specific number of users or things used in a specific way? I try not to focus on metrics, if you focus on the wrong ones they can be harmful.  A specific number of users isn’t his goal he could easily emulate a friend building site.  He prefers focusing on impact, the idea that more people publishing and engaging in the internet.  As terms of measurable goals he tries doing them like his new year’s resolutions, he open-sourced his resolutions “picked 25” it’s going ok. Taking photos is going well learning Spanish not so well.

Matt’s original blogging platform is b2 because he preferred PHP and MySQL  but b2 went through some hardship and was abandoned, so he started to blog about his concerns and Mike Little contacted him.  They wanted to continue b2’s work (Blogger was too simple, Textpattern wasn’t open-source, Moveable type was commercial and Perl took too long to rebuild between modifying) but they had some big improvements in mind primarily making set-up easier, a method to modify code and created the Blogroll.  In the beginning they had no plans of creating a business just making their blogs better and easier for others to start.

At some point CNET invites you to work for them, how did they find you? He had actually blogged about heading to SFO and Mike Tatum reached out to him, they met up and when he got home he asked him if he wanted to work at CNET as a Senior Product Manager in the Network Group (for Help.com).  They have a lot of great domain names and Matt wanted to start WordPress.com there, he really wanted online.com but CNET never got the vision of blogs for users.  He had ideas of bring all your profiles together but figured it was too early at that time.

However, after 10 months he left to create Automaticc.  He wanted to create an umbrella group to support open-source but for profit.  He believes that you can have more impact as a for profit company with virtuess in the fact that it is supported by the community.

2 Ways to make money with open-source: Dual Licensing (GPL and Proprietary) and Services.   GPL license (it has freedoms and restrictions; if something is derived from open-source you can’t make it close-source)

Akismet was the first service created (a freemium model) and then WordPress.com with a business model revolving around adding features (ie. own domain name, more bandwidth)

When did you become profitable? Almost day one, Yahoo! was licensing Akismet.  Akismet was key, advertising wasn’t enough, spam was affecting search engine results and was the fundamental basis for akismet, that and the fact that his mom was starting to use the internet and he didn’t want her to see some of the industry.

Andrew comments that he (Matt) is pretty calm and laid back, what is your personality like? (Matt comments, it is early) he is like what you see but impatient and motivated.  He opposes hype and prefers to let the work speak for himself.  However, if something is better he will promote it, in the early days he had to evangelize his work, one by one convincing them to switch.

How did you reach those people? Blogs, I would target people he admired and had a relationship with, spam was a huge problem for blog platforms and akismet helped solve these issues winning people over.

Do you have an example of who you contacted? Robert Scoble, he had read his blog for a year or two, Robert mentioned he was going to switch and whoever was the first couple commenters,  he would try out their platform.  Robert settled with WordPress.

How did you bring in other developers? He was lucky, most of the b2 guys came over, even the original developer, they had a simple website and adhered to web standards and a tagline that said “code is poetry” that appealed to the folks that had the same passion as him.  It also helps that every developer at wordpress is a blogger and were using the product.

What do you say to people that ask you about an exit strategy? Answering that implies I want to exit, which I’m not in a hurry to.

How much of that comes from the passion and how much come from the fact that you took some cash out of the business? He has had safety net his whole life, which gives him flexibility.  Taking VC funding allowed him to keep talent and give them a safety net the responsibilities of his employees and their families weighed heavily.

Rumor was you wanted to sell but investors saw more upside, were those rumors true? Not entirely, I can’t comment, I have considered the possibility, but with Automaticc ultimately there is a longer road ahead.  I think as an investor you ultimately defer to the founder, the opposite may be true with other investors but he is fortunate to be involved with good investors (True and Polaris).  Passion drives a startup and it’s early.  Luckily he had good people around him that helped steer Automaticc in the right direction and not at an artificial pace.

What was the break out success? Growth has been organic, one of the significant versions was 1.0 it introduced importers (from other platforms) 1.2 introduced plugins, 1.5 introduced themes.

BB press, why didn’t you stay focused on WordPress? I don’t focus well, a lot of things frustrate me and I want to make things better.

Where did the idea of Themes and plugins come from? I didn’t like copy and pasting code, I wanted to make things easy.  All the ideas came from frustrations, he also participated in the support forums and it was obvious what changes were needed.

How do you stay motivated? It is everything, the beauty of everyday things, all things worth doing are hard, feedback from users and how it affects their lives for the better

What advice do you give to entrepreneurs starting today? I prefer not to give advice, but I do it.  I prefer to speak to what I have done and if my experience applies.  My universal advice is to follow the morale underpinnings, work on something that makes the world better and you are passionate about and open-source.

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Andrew is proud to announce the first sponsor of Mixergy: Freshbooks

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Mixergy, Matt Mullenweg

I really don’t think the question was fabulous but the answer was beautiful.  In today’s business world with large impersonal corporations it is refreshing to hear successful business people thinking this way.

How do you stay motivated? It is everything, the beauty of everyday things, all things worth doing are hard, feedback from users and how it affects their lives for the better.

Matt talks about a little bit about ethics in business  and how it guides his business decisions in this interview.  It is nice to think it’s not a PR move.

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Mixergy, Where Ambitious Upstarts Mix

Date: Aug. 2009

Guest: Leo Laporte of This Week in Tech, TWiT

The TWiT.tv Story It all started in 1998 with a small cable network called ZDTV, a channel dedicated to covering computers, the Internet, and personal technology. The people behind this site all worked on that network as hosts, reporters, or producers. In 2004, ZDTV, then called TechTV, was sold and dismantled. Former TechTV hosts, Leo Laporte, Patrick Norton, Kevin Rose, and John C. Dvorak, and producers Robert Heron, David Prager, and Roger Chang went on to other jobs, but we stayed in touch, with each other, and with fans of the late TechTV. Those fans told us again and again how important TechTV had been in their lives, and how much they missed the channel. We missed working with each other, too. On a rainy evening in January, 2005 a few of of us got together for dinner after spending the day covering MacWorld Expo in San Francisco. Leo, who was working as a radio host, happened to have a microphone and recorder. He turned it on and recorded 20 minutes of idle chatter about the Expo and the tech world in general. He posted that recording on his web site. Within a few days tens of thousands of people had downloaded the recording. TechTV fans began clamoring for more. A few months later, TWiT was born.

What are the major differences between major media and netcasting? In short, control of your product but in the past the barrier was the money required to startup.

What happened to you when Tech TV was sold? They got rid of him for The Screen Savers but kept him on Call For Help, Canada.  Having been in the biz for sometime he had prepared for the possibility and had his radio show waiting in the background.  He had 15 days off a month and with that has created TWiT primarily with sweat equity.

What was the first podcast you released? It was actually one of Leo’s radio shows (Oct. 2004), Jan. 2005 was the first TWiT podcast after a MacWorld Expo. recorded at a bar.  He got about 10,000 downloads which caught his eye, but the logistics (locations of everyone) seemed daunting.

What was the reaction to your first podcast? Not too many followers (I question what this really means to Leo, I think to him a few means a couple thousand) this was before iTunes and only the true techie knew how to download the show.

Were you able to see if this was working right away? He was very lucky to be able to convert his mainstream media to new media.  TWiT grew very fast to the biggest podcast out their (150,000 – 190,000 downloads, each show), actually more viewers than Tech TV.

After having a lot of downloads of the first pseudo TWiT episode (in the restaurant) what did you do next? Nothing, distance still seemed a barrier but a caller on his radio show called in on Skype and it sounded great.  Leo had that epiphany moment of, hey this can work.  April 2005 he launched the first TWiT and it was an instant hit.  Believe it or not, the show was a mess John Dvorak was sending his messages in via chat because his connection was lost.

Andrew comments about an entrepreneur that started his own company and all the little things (office chores) that come with a business was too much to handle in addition to his big ideas.  Leo agrees he hates the little stuff but by having employees they leverage his time and strengths and it allows him to concentrate on his work and expand his business.

How many employees do you have? 5 fulltime employees and many hosts which are kind of like contract employees.

How were you measuring success in the beginning? I used server data but have learned it is misleading.  He hoped to be a donation only show and have a pure show.  He soon learned that people are conditioned to advertising based free radio and a donation based business model wasn’t enough to grow the show.

How were you dealing with bandwidth issues when you first started, I heard your listeners were helping pay? They were originally using bit torrent (listeners were helping) but luckily AOL stepped up and sponsored the bandwidth.  He currently has relationships with AOL, Cashfly, Stickam, Ustream and Bitgravity for bandwidth.  He guestimates his usage would cost $40,000 to 50,000 a month.  Donations helped him realize that people wanted his content, which helped with incidentals.

Mark McCrery of Podtrac approached Leo about podcast advertising and Leo was originally against the idea but they spoke,  built a relationship and eventually Leo signed on.  Mark was very instrumental about teaching marketers how important podcasting was to them, but it took about 3 years to get interest.

Leo really believes that you can have an idea but can’t build a business by yourself.  However, if your idea is good and gets others excited they will help.

Do you ask for specific help from the audience? Yes, it is crowdsourcing for pretty much anything, except advertising which he lets Podtrac handle.

When did you know you could give up “Call For Help”, Canada? Spring of 2008 he knew he could do streaming video, but he knew he couldn’t do it traveling in to Canada 5 days a month.  However, Call For Help was also starting to struggle and Leo and the executive agreed it was time to call it quits, allowing him to take TWiT network  to the next level.  Leo does comment, all the advertising money is still currently in audio podcasts.

Are you able to support yourself financially with the video and audio shows? He still has what he calls his day job, the radio show and still doesn’t take a salary.  It took about 3 years to get a solid revenue stream to afford 5 employees.  He believes he will make money in the long run and is still reinvesting in the show.

What is the big vision for the business? It changes, he has never been a businessman so he isn’t sure if he is doing it right but he uses feedback from the audience.  At this moment, he believes people will want real time content on the internet.  He wants to be the CNN of technology.

How many hours of show are you producing? Personally, 5 days a week 5 -6 hours, 30-35 hours.  Approximately 40 hours including the shows that run without him.

What is it costing you to put out all the shows? $800 an hour compared to Call for Help $2,600 an hour and he estimates CNN to be $5,000 – $10,000 an hour.  People are the expensive part, he points out that he provides health benefits.

What are you doing that is right, what advice can you give to other? Always be thinking of the audience and deliver great content, listen to the community in a broad sense.  What do you think your audience wants?   They are very active passionate people that love technology and are tired of being things being dumbed down by mainstream media.

Gary Vaynerchuk said that it isn’t about equipment, how important do you think these things are? There is a minimum standard, it cannot be difficult to hear and see.  Gary is right to a point it is about passion and content.

Do you do anything active to get an audience? He tries not to over promote himself too much.  In the early days he would mention that the show might be up for an award once but never pushed it too much.  He thinks that if you provide ways for the fans to promote for them it will be taken care of by itself.  He does make sure it is easy for people to get the shows in the easiest formats for people to use.  Create good quality content and let the audience speak for you.

Any advice for bootstrapping digital content? It can be an advantage bootstrapping vs. venture capital because you don’t have this timeline to make money and hurry your product.  He likes letting the audience steer the show where it needs to go.  It slows down development a bit but he isn’t making mistakes.  There is no substitute for sweat equity.

The TWiT network is owned outright by Leo.

Please give feedback, how can Andrew make his shows better?

Check out TWiT.tv

Explore Mixergy and learn about all the great stories.

Mixergy, Albert Lai, (Serial Entrepreneur) Founder of BubbleShare, IdleAgent, BuyBuddy

What to expect this episode:

• Albert coming to you from his closet, does this sound crazy, sure does, watch and find out why.
• Product Promotion Techniques
• Relationship Building
• Credibility Building
• Acquisition Advice

What Andrew calls one of his most different and interesting interviews.

Kontagent is the leading viral analytics platform for social network application developers. The Kontagent platform has been built from the ground up to provide deep social data visualization and analysis that delivers actionable insights delivered via a hosted, on-demand service.

The Kontagent platform works directly with the Facebook API, and will soon support OpenSocial and the MySpace platform. Kontagent was founded in 2007 by serial entrepreneurs Albert Lai/CEO (5th startup, most recently founder/CEO of BubbleShare) and Jeffrey Tseng/CTO (2nd startup, most recently founder of Aevena) . The company is headquartered in the SOMA district of San Francisco, California with a presence in downtown Toronto, Ontario.

Startup chronology: CD Rom Yearbook, FrogDog, Hardware Central, MyDeskTop, BuyBuddy, Idleagent, BubbleShare

Albert admits this is the first time he has spoken about some of these early lessons in a long time.

First Business

How old were you when you started your first company? 15 years old a multimedia production company called FrogDog, which created a promotional game that was distributed virally via floppy disk.

Did you come up with the idea and then go to MuchMusic of Canada? No, it was inspired by a High School yearbook project (1994) they created on CD Rom, they believe it is the first yearbook in the world created on CD. This project led to a lot of press and corporate customers approached them looking for something similar (Black Swan?).

How do you make something viral on a floppy disk? This was 95-96′ the idea was they would send them out free and friends could copy it and give to friends.

Promotion and Relationship Building

How did you get the press? Being young (15-16 years old) landed them on the front page of the largest newspaper in Canada, he learned at a young age to make the media your friend. Especially, if you’re the underdog. (I wonder if it was MuchMusic leaking the deal to the press to get more press)

How do you build relationships with the media? Find out who might be interested in your product and try add value to their life. Have a continual dialogue with journalists your space, so that you aren’t just there asking them for favors.

What gave you credibility as a teenager? It wasn’t just building companies, it was creating the entire professional product of a businessman. (Business cards, marketing package, incorporating for billing purposes) Now a days, it’s like having a professional website. He has many students that he mentors that by looking at their website you would never know they were young students.

Who did you target as your first customers? We looked for the biggest businesses, fortune 500 companies, looked for referral through mentors. To build up credibility they lowered the price to build relationships, they do this still today. They become reference able partners. They took the approach of focusing on big companies and then filtering down to smaller ones. Andrew gives an example of Tom Szachy, (TerraCycle)that tried the opposite and it was grueling work but when he tried the opposite approach it led to success.

Which relationship led to your reference able businesses? MUCH Music of Canada. He recommends going to events (conferences) that your customers are like to be at and to build relationships with the conference organizers so that you are present and providing value for the event.

Andrew adds that if you can become a participant and be on a panel, one you get in for free and two it adds to your credibility and promotes you in a way that an attendee never will.

Doesn’t it undo all that when you meet them in person, when you were young? Back then there weren’t as many young .com millionaires but even then people realized youth and technology fit well. Today it is not a question.

Is the first product you created for MuchMusic? Yes, it was similar to the early Myst. Creative constraints were a big balancing act. So they chose to go retro and make it look like you were watching a black and white TV, thus helping out there disc space issues. He comments that today those restraints may not be there but he is doing the interview from a closet he has different constraints.

He comments that you never want to get too much space they have made that mistake before. Constraints lead to more interesting ways startups operate. Albert comments that when funding was a constraint those companies (BubbleShare, MyDeskTop) did better than the better funded businesses.

Albert adds many great businesses they come from hobbies.

Second Business

How did you promote MyDeskTop? It was a different world back then their wasn’t as much interesting content but they worked in niches that people were passionate about but highly monetize able, meaning that they helped bring enthusiasts and manufactures together. Were you buying ads, using IRC? The used many avenues, getting linked on Slashdot was very important.

At the time what were some of the ways to get on Slashdot? They had a TopGear approach, they would do stunt like stuff with their hardware, such as over clocking hardware they first site to publish a benchmark to breaking the GHz barrier. They would do crazy stuff and cross promote to other sites.

How did you get people to work for you for free and do these crazy stunts? The love of writing combined with a love of hardware, most people wanted an avenue to publish their work. People forget back in the day blogs weren’t as accessible so getting published was tough.

The first people who jump into a technology have it easier than followers.

They sold MyDeskTop, in the single digit millions they are under an NDA. Payment was in cash he advocates balancing your portfolio of stock payments vs. cash. Also when starting a business he feels the business is high speculative and invests in conservative stocks.

Third Business

Buy Buddy, they were overly optimistic about wireless technology adoption curve.

Learned that you cannot fight two things:

1. don’t try change people, most are lazy but they want their data to be secure (even if encrypted).
2. don’t fight technology curves if it is against the grain of rapidly reducing hardware costs.

Fourth and Fifth Business

The failure of IdleAgent led to BubbleShare.

In 2000 Albert started doing more business out of Silicon Valley, it was a major down period for tech. He felt that every advance in technology they were making they were being held back by the market. When you are in a down economy you don’t want to build a capital intensive product.

What was the vision for BubbleShare? It started off as a network of instant messaging clients but went through many iterations and ended up in a photo sharing site. They realized what they wanted to do was very complicated and simplified their goals. They focused on solving one problem. They used inspiration from their two favorite websites Google and Craigslist (a simple interface and because you didn’t have to register). Simplicity was BubbleShares beauty, they were more concerned about appearance and elegance and what they failed to do was produce a social aspect.

They have learned their lessons about being viral and being data driven they are now focusing on viral analytics, the equivalent of taking Google Analytics and applying it to social networks.

Albert adds sometimes it pays not to listen to their customers and should give thought to business goals and strategy of distribution goals.

You want to be very careful in acquisition discussions, sometimes they are really researchers that may really want to build their own product. Fortunately, they had learned that lesson early on. Try feel out the market and try get multiple parties interested in case one falls through another can step in.

Steve Wozniak, Co-Founder of Apple is constantly experimenting with equipment do you think you are a tinker of businesses? I think am interested in trying to solve problems, which leads to many ideas. He has improved in being strategic thinker and applying it to his hobbies/passions.

• Feedback, how can Andrew improve his product? He wants active participants
• Here is Albert’s Website – Kontagent
• Please click around and explore Mixergy (you will be amazed at what it hidden on older pages)

Questions I would have liked to have heard:

1. Did you go to college? And if so, did it interfere with you starting companies?
2. Did he take time off after selling MyDeskTop or did you have a project waiting in the wings?
3. How did you find your co-founders?

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Mixergy, Where Ambitious Upstarts Mix

Guest: Darrin Clement , Founder of Maponics

Maponics is a true service firm, ready to work with you to meet your company’s needs. We have high ethical standards, so you know you will be treated honestly and fairly.

By outsourcing mapping-related projects to us, you can save your organization the typical investment in software, data, staff, and training required to create beautiful and accurate maps. We bring years of experience to your projects, freeing you up to do what you do well. There’s no need for you to know anything about mapping to work with us.

Thousands of businesses rely on us for mapping services. Many of them are small companies around the country.  Others are well-known Fortune 500 firms.  A few of our clients are listed to the right.

Maponics provides unique mapping solutions to many clients and we will work with you to determine what will succeed best.

The Learning Curve:

• What was Optiwave? My first adventure in a startup, a consulting business, he had no sales or marketing skills and learned that he lacked a plan for revenue, the life blood of any business.
• What kind of consulting were you doing? Helping companies design fiber optic assemblies.  He had about 2 contracts and thought his problems were that there wasn’t enough money in consulting but later realized he lacked the sales skill.  He formed a partnership with a buddy that was a software engineer and didn’t gain a single customer, still no sales or marketing skills.
• What was it like to decide to close up shop? He met his future wife and knew kids were coming and the reality of life made him realize a job would provide for them.
• Andrew comments that closing his companies was difficult; he remembers worrying about what his friends would think.  Did that go through your mind? Absolutely, it’s hard to admit failure and especially the ego that goes along with a personality that wants to start their own company.  He felt he had higher responsibilities (his new family) and so it was easy to explain.  However, he know will admit his companies sucked.  He also understands that some people hold on too long and it makes letting a business go even tougher.
• Darrin says, part of the ability to be successful as an entrepreneur is that optimism, a certain amount of self-deception can be very effective.  He is proud of the fact that he realized why he failed, lack of sales and marketing skills but didn’t dwell on the fact that he failed.
• Did you start any more companies before Maponics? Yes, one he calls a strategic placeholder, he knew he did not want to work for some big company.  So he mapped out his plan, he worked at one company doing fiber optic diode assembly design and worked his way into a product marketing engineer job and then worked his way into product marketing for a software company.  His family moved and he knew he needed a few more skills before he felt he was ready to do a startup.  He worked as head of product development at Geographic Data Technologies.  Andrew refers to this process as creating his own MBA, Darrin would have gone back to get an MBA but finances were an issue, so he read a lot to fill the gaps in his experience.

Startup:

• What was the original inspiration behind Maponics? One day, jogging he had the epiphany, what it would be, how it would work, exit strategy.  The basic premise was direct marketers didn’t have a great way to target customers.  He gives an example of if you wanted to target customers within 10 miles of your store they would get you all the zip codes in that area.  The problem was is some zip codes are really big and you end up marketing to more than your target customers.  Maponics started out with carrier routes a form of sub-zip codes that mail carriers follow.
• How were you going to get your customers this time? Marketing not sales.  He figured out how to optimize his web site and use paid ads and things started to happen.  People were calling him, he didn’t have to ask friends for referrals.
• What size orders were you getting from click ads? Roughly $30
• How did things go? He wanted to start out small and have no overhead so he worked out of his house.  Within three months he was having a hard time keeping up with all the work.  After 10 months he moved things out of his house and started to hire people.
• How do businesses use a map to find where they are going to send their mailers, don’t they need the actual addresses? Yes, they do but Maponics was the middle man.  Darrin feels that there is still a lot of money to be made in the middle even when companies are cutting back, companies still need to get stuff done.  The way it works is a business would call a list broker and want mailings sent to everyone within 10 miles.  However, if that business had seen their marketing they may ask the list broker to only target certain carrier routes.  List brokers wouldn’t know these routes and the business would have to go to Maponics to get them to give to the list broker.
• Where were you getting your data? His former employer Geographic Data Technologies he licensed from them
• You had approximately 10 people hired before things started to level off? Yes, from that revenue stream.

Success:

• What size of revenues were you doing? Under a million but they were profitable.  They then created an online store so customers could self serve what  products they needed this provided needed growth without adding a lot of staff.  Before that, in order to get a map, a customer would have to call Maponics to get a map.  The idea of automating seemed a daunting task (these are not the same type of maps you get from Mapquest) and the returns weren’t large and in order to create a useful map communication was usually necessary, but automating paid off.
• Andrew comments that more often than not the successful companies start out slow like Maponics and then automate, How did you automate? Darrin jokingly says he wasn’t involved, he learned the lesson that he didn’t have to have his hands in everything, so they hired someone to take on the task.
• How did you know he would be the right person? When it comes down to it you don’t, you can get better at hiring and be systematic but in the end you just don’t know.  In this case, the person (Cory) had the passion and technical background to succeed.  The only concern then is personality issues at Maponics, Darrin has all potential new hires meet all the staff.
• Can you explain more of the task of automating such a large project? They scoped out the project (outcome, functionality) but their past data was extremely useful.  They could ask themselves in the last year what type of maps have we made?  A commonalty was identified and how can we make rules to fit those areas.  Critical to its success was that customers wouldn’t see degradation in quality of pre-automation vs. automation.  The past sales data led to success, you can have all the technical knowhow to automate but how do you know what the customer wants?  Andrew comments that he has talked to other technical companies that ask all their employees to take customer service calls, to learn what they want.
• How much did the business grow when you automated it? Approximately double the company in about a year and a half, which was tough in their niche.
• Besides buying ads what other marketing were you doing? He when to a lot of trade shows trying to establish relationships with the list brokers and was even laughed at by brokers, not understanding how maps played into their service.  Tried direct mail to businesses but the return on investment was too great.  He went and got professional sales training which was difficult to swallow as the owner of a company but learned the technique.  He learned that you have to learn what the customer’s pain is before they will give you money, you must connect with that pain.  How did you find that out? By asking good questions.  Is their one question that works well?  How are you currently getting your customers?  So if you had a better idea of where they were located how would that help your business?  Try to get them to talk and visualize what life would be like with their problems solved.  He used Sandler Sales Institute he felt the methodology was a good balance of soft and hard sale, he learned that you need to be assertive and ask for the sale.

Failure:

• What was the next milestone? Failure, after automating and making money while they slept they got a custom project from a customer that was flash based and they did it, ok so where is the failure?  They fancied themselves application developers ( big money compared to what they were doing) but didn’t realize they weren’t developers.  They tried to get investors but never got a terms sheet, luckily, it never happened because at that point Google opened up their API and no one cared about flash map.  This was the first time they went into the negative as a company intentionally and Darrin felt he spent too much time with investors learning nothing.
• After Google and Yahoo! opened up their maps, what did you do? They shut the product (flash maps) down it was probably the hardest period for Maponics.  They had to lay off 3 people and letting someone go for something that wasn’t their fault was very tough.   However what Darrin learned was that if he had maybe pulled the plug earlier he may have had to lay-off only one or two people.

Redefining the Business and Success:

• Ok so you refocused on your core business but you added it what did you do next? We didn’t refocus, we cut-off a product line.  The saying as a door closes a windows opens, Darrin feels it is true, if you keep an open mind opportunity exists.  In reviewing what customers wanted they realized neighborhoods were the key for businesses, in most places it was it was tough to figure out boundaries.  The customer who wanted the first flash map had created a few neighborhood boundaries and wanted to shed the asset, Maponics believing this had potential and was able to purchase the product.  They knew map data and knew they could license this work that led to the success of Maponics.
• Their customer base changed in the transition to neighborhood maps and licensing, no longer was it mom and pop dry cleaners it was Google, Citysearch, etc.  which led to a better end user search experience.
• How do you get in the door of Google and some of these big companies? Darrin compliments his VP of Sales, Mark but will take credit in helping turn things around.
• How did you know who to call at Google and these big companies? Pure cold calling, asking some questions and trying to figure out who it is you need, at Google he talked to approx. 15 people before he got the right person.
• How big is the company now? Still less than 30, revenues are under 10 million.  Darrin is co-owners with Steve and Mark.  When looking for good talent equity may be the way to attract them.
• How does someone with a family (not a 20 something) start a business? Your spouse must be on board.  There must be some boundaries (when you have kids) where you engage the family in your downtime.  Kids just want their dad but try have them recognize the benefits of him being away sometime but present in others, when other dad’s aren’t around.

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Mixergy, Where Ambitious Upstarts Mix

Guest: JibJab, Co-Founder Gregg Spiridellis

About JibJab: Back in ancient times, 1998 to be exact, two brothers bore witness to an animated dancing doodie streaming over a 56K modem and it changed their lives forever. What Evan and Gregg Spiridellis saw in their browser was more than a dancing piece of dung; it was a once-in-a-lifetime opportunity to be pioneers in a brave new world of entertainment.

At the time, Gregg was an MBA student at the Wharton School of Business, recovering from four years of investment banking, and Evan was an accomplished independent animator creating festival-winning short films. The idea that production costs were dropping and distribution was opening up led the brothers to believe (some said naively) that they could create a giant, new entertainment brand. In 1999, the brothers started JibJab in a Brooklyn garage (despite the fact that starting an Internet company in a garage is really a cliché thing to do).

Interview: “Home of the ambitious upstart”

• What was your vision? To take advantage falling production costs and distribution was opening up to build a brand.  Evan was creative and visual inspiration. Gregg was going through MBA school at Wharton and saw an opportunity.
• Where did you see it going as a media company? They really didn’t know but saw the opportunity and were lured by the new medium.
• How did you see yourself getting an audience? Referral based marketing; they wanted to create something of value to the user.  They provided very visible subscribe links and tried to get subscribers to recommend them to friends.
• Where did you envision the money coming from? Didn’t know but they new their was enormous value creation opportunity to create a brand.  If they were first and worked hard they would figure it out.  They were able to make money from the get go and reinvest so the need for venture capital wasn’t necessary until 6 ½ years after startup.  Business was originally a content studio: licensing and creating original content and doing exclusive deals.
• Your brother brought in very talented people, how did you pay your first employees? They reinvested their own money.  They raised 50k from friends and family and then worked on deals and made sure they could pay the rent for 3 months and then reinvest in more original content.  Very speculative and risky, something Wharton would’ve frowned upon.
• Did you first get the licensing deal or first develop a show? Developed shows, purely speculative, they invested their own money but it was ok to them because they were building content, developing their audience and brand and big vision.
• Was the break down Evan would design the shows and you would do the business side of things? A little bit of both, Gregg helped write some content.
• What was the end goal? Were you planning on creating artistic works of online art or something fun and viral?  They were trying to create something fun viral that they could develop a brand that had value.  They wanted to create something similar to Saturday Night Live but web based, have one uber brand and multiple sub brands that support the main brand.
• Besides having a subscribe button what did you do to feed growth? Persistent “email a friend” form field.   They are very careful when creating an email; they only want something of value included.  Email helps get people to the site and social sites like Facebook, MySpace help virility.  They don’t see much traffic generation by Twitter.
• They created videos just for other companies, 99 to 03, problem with sponsor type work it isn’t scalable however, it paid the bills.
• Mike Jones in a previous interview came in and said it was important to take time and energy to build their own products and build their own brand did you find the same thing true? Absolutely, it is a wonderful thing to be generating capital based on your service business but at some point you want to get out of the service business into something scalable.  You need to turn down jobs and be disciplined in your goals.
• How did the dot com bubble burst affect your business? Crushed us, they had bootstrapped but saw the crash coming (too much money throw around by lavishly funded VC companies) and repositioned into a toy line (Nasty Santa) and Christmas cards.  Went from 13 people to the two of them, times were tough.
• How did you deal with having to let people go after they helped you succeed? It was really tough but to be honest they were all artists that he felt wanted to explore other avenues after having done nothing but JibJab for two years.  Still great friends with all ex-employees.
• What kept you pursuing JibJab? They were passionate and loved the work.  The fixed costs were small and they felt people cared, they had a 100,000+ followers which kept them going.  They felt their was exponential growth opportunities, the bigger your base gets the easier it is to achieve your goals.  Their Black Swan was “This Land”.
• How often did you doubt yourself during the tough times? Hourly, I don’t think that goes away.  Fear is the best damn motivator out there.  Luck favors the well prepared.  All entrepreneurs have the feeling that others are confidant and killing it but everyone is just as worried as you are.  Setting goals help them feel that they were making progress.
• Did you know that when you created “This Land” that it was going to put you on the map? They knew they had something special but didn’t realize how special.  The scope of success was way beyond what they imagined.
• What was the first indication that this was a smash hit? Day one they would get typically 40,000 streams and this time they got 100,000 and Gregg started to worry about server issues.
• What was your first TV appearance? Brian Wilson, Fox News (normal viewing hours) they did an ABC News Bush vs. Gore rap battle at 3am before the Fox appearance but partially feel it didn’t count because of when it aired.
• How did you capitalize on “This Land”? They went back to what worked, exclusive licensing deals.  They also made sure the Brand got out there unrelated to the political content and also went back to merchandise.  When they did their second video, the night before the release the “Today Show” was literally coming in to set up for the interview they came up with the idea of selling two JibJab videos on DVD.  They create a fake mock up of the DVD and created a Yahoo! Store and when the Today Show came in they promoted the product during the interview.  They had no idea how they were going to fulfill the orders but figured they would figure it out.  They ended up with 8,000 orders the first day.
• How did you know how to contact Sundance? The summer before he was at producer’s conference and he met people from Sundance and was offered the opportunity.
• Where did the idea come from to allow people to insert their faces into your work? They knew the licensing business was going away because of YouTube.  So they focused on quality for big brands that want premium content and a network called Joke Box.  They turned down an opportunity to do a feature film to focus on the web and maintain customer base.  This was when they realized they would need capital and did their Series A with Polaris Venture Partners.  They realized the quality standards were not scalable because the time between productions and they had to rethink their business model, which is how they got into eCards and social expression products.
• What are the benefits you see in the greeting card business? When coming up with the idea Gregg was looking for something that would smooth out the spikes between productions.  He researched American Greetings financials (10K) and they broke out online interactive numbers.  He was convinced this would work, Evan had no interest but Gregg convinced him that they could do quality work and redefine the industry.  I’m not going to pay for a video that makes me laugh that’s consumption, I demand free consumption on the web, that’s the way everyone is.  However, if you are giving people content that they can use, that’s got utility that they can use to express themselves in their lives they’ll pay for that.
• How big of a concern is the business part of business for you? They are equally concerned about the creative aspect of the business which allows them to be able to gather great business data points to build a better product.
• What is the end game for JibJab? We will be a major studio.  They are building creative swat teams, they see talent as extremely important, it is more scarce than capital.

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