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- Bootstrapping and venture funding
- Phenomenal customer service
- How to price products
- Dealing with YouTube
- Innovation and building Software
- Marketing strategy for affiliates and software companies
- Launch versus evergreen
- Building a team in-house
Transcription:
James: James Schramko here, and today’s guest is Clay Collins from LeadPlayer. Welcome to the call, Clay.
Clay: James, it’s great to be here.
James: Well, this will be a bit different for you. We’re just doing audio today and you’re quite into the video marketing, aren’t you?
Clay: I am. I’ve been video marketing for quite some time. I think I found that I actually love writing. So I’ll spend six hours writing a headline and that kind of thing. I found that in terms of actually video blogging, so putting out content on a regular basis, I literally could not let myself just write the damn article. With video and audio and things that are recorded live, I can actually get the damn thing done. I still heavily edit it and all that stuff, but something about video opens me up to produce more content. I used to blog like, maybe, once every six weeks, and now I video post, I think, once a week. So it’s been very liberating for me.
James: So how important do you think it is to work with your preferred modality?
Clay: I think it’s incredibly important. I think, at some point, I just kind of woke up one morning and I was kind of wrestling in my sleep, and I was hungering for something, this is before I got into video. And I woke up and I was like, I want to live at full expression. What I meant by that was that I felt like there were so many hoops I had to jump through in order to really express myself. I would find myself getting on the phone and doing these rants to my business partner, and she was like, “Wow, that’s really amazing. Why isn’t that recorded?” And then I try and turn them into blog posts later, and I just didn’t feel it.
I’d give toxic conferences and people are like, “That’s awesome.” And I’m like, why am I so expressively limited when it comes to emails in my business and when it comes to regular communication in my business, but it seems to just flow out of me at other times? And I think that as communicators and experts, I think part of the huge frustration that a lot of people feel is that they have this burning desire to express something, or maybe it’s not burning, but they know it’s there, and they just can’t express it.
People who do video, it took me a while to even figure out how to do video correctly. But when I used to do video, it’s like I had to record the video separate from the audio, and then it took like an hour to transmit these huge files over to my computer, and then I had to send it to someone, like the post-production guy, and then it was like a week later that I could actually publish the episode. That wasn’t living at full expression for me, either.
I think I’ve lived a good deal of my life probably creatively frustrated or expressively frustrated, and I think video, for me, was what changed that.
James: Have you got your work flow to a more streamlined or faster process now than what you just described?
Clay: I do, absolutely. I can get out an episode, I have a video blog called Marketing Show, which is at marketingshow.com, and now I can get out a new episode of the Marketing Show in like an hour and a half, with no one else involved. So there’s no having to do quality control on someone else’s post production who maybe doesn’t care about the content as much as I do. I can really just get that show out now. Sometimes it takes me longer if what I’m talking about is more conceptual and I really want to hone and refine the point or whatever. But yeah, my workflow is so much faster than it used to be.
I actually edit my episodes as I’m making them. I don’t record the whole thing and then edit it. I’ll edit it as I’m making it, and I find that that actually helps me a lot, too.
James: Can you explain what you mean there because I’m trying to understand how that would work.
Clay: Totally. So I used to have this camera called the Canon 7D and it’s a digital SLR camera. A lot of people use them. So it’s basically like a photography camera. People started using those because they’re inexpensive. What I mean inexpensive, like $10,000. But for about $2,000, you can get a video camera that allows you to have quality that is sort of on par with $3,000, $5,000 and $7,000; actually, more like $7,000, $10,000 Pro Zoom cameras.
The problem with those cameras, and I don’t claim to be a video expert, but in terms of the recording and the production, but the problem with those is you record the audio separately, and the audio is so huge because it has such a large quality, then you have to import it into your computer. And because the audio sucks from those things even if you’re doing external audio, you have to record audio with a separate device.
So I actually have like a separate audio system and microphone system, and then I had to pair those up after it took me like an hour to transfer it to some ridiculously huge file over to my computer. And then I’d put that into ScreenFlow or some video editing program and it would take forever.
Now what I have actually is 1080P. It’s a Web camera, a webcam that actually mounts on a tripod and allows me to record directly into my computer. So when I’m recording episodes of the Marketing Show, I’ll actually tell my computer to start recording. When I’m done, I’ll just hit a button and I can review what I just said for that 45 segment piece. If I like it, I’ll keep it. If I don’t, I can re-record it or I can edit it. So I can actually sort of create my thing as I’m going along and add sound and audio as I go along, and I find that that’s actually a lot faster.
James: This is kind of along the small batch size thing. I’ve observed with some of your approach to business that you must have studied some kind of Lean Startup process.
Clay: Yeah. I mean I think that’s sort of what always made sense to me, at least in the last few years. What a lot of people don’t know about me is that when I left home when I was 15 and started a software company, and that software company failed. It took us a couple of years and we blew through about six figures, about $150,000 or $170,000.
Again, I was 15, right? But still, there was something in the back of my mind that was like, this is hard. This is not something that I want to ever go through ever again. So not so incidentally when I moved 10 years later, and I’m in my 30’s now, but 10 years after that when I was around 25, I started affiliate marketing, that’s not something where you can lose a lot of money but you’re not going to blow six figures.
But when I moved from affiliate marketing to selling my own information products, I started pre-selling them. So I would actually make 10, 20, 30 grand on a product and then I’d make it. It wasn’t completely Lean Startup-ish, but it had that same kind of thinking embedded into it.
The thing that I think is not realistic for most people who read the book The Lean Startup is that’s really geared towards people who have a whole lot of venture capital. What most people don’t even realize is that in order to get the data necessary to even have a statistically significant AB split test, like that’s not where most new people are, in order to run the kind of metrics that they’re talking about in that book, and if you look at their company, they were six, seven, eight months out before they kind of pivoted for the first time and they went through a whole lot of money. I think there’s an even leaner version of the Lean Startup. But yeah, I’m a huge fan of Eric Ries’s thinking. I’m also a huge fan of doing not a crappy version, but doing the minimum viable version of something first.
James: Yeah. I think that’s what we’re hearing. You’ve got your minimum viable product and you’re getting paid first before you even create the thing. Is that how you approach software?
Clay: Yeah. Our first software product was actually a free plugin for WordPress. It was really actually designed to test the capability use of the full-time software developer that we created. So we hired him, and I was like, “Rather than spending forever creating something, I want you to ship a product in two weeks.” I told him what the product was and we shipped it in two weeks, and it actually works. Like there weren’t any problems with it, any huge problems with it. There were some issues like if someone were using some crappy, non-maintained plugin that conflicted with it or if someone used a weird WordPress theme that wasn’t ready for the current version of WordPress or someone who was using an old WordPress, it didn’t work.
But the first thing we shipped worked. I just wanted to see what that whole experience was like, and thank goodness we did because we learned a lot about supporting software in the process and it was also just a demonstration to my community that we could release good software. But yeah, that’s absolutely the approach we’ve taken with software. I actually think it serves the customer better.
James: OK. I just want to jump in there with a couple of things. Firstly, how did a 15-year-old get access to $150,000?
Clay: Yeah. That’s kind of an interesting question. I’ve actually never talked about this before. But that’s really interesting. So I was in high school and I was one of those people that didn’t fit in. Like a lot of nerds kind of in that era, I turned to computers and I really got into it, And kind of for fun, since I was a hacker, I wrote this software that ran, it was just in Visual Basic, it wasn’t like I was doing any crazy stuff, but it was just in Visual Basic, actually in this program called Delphi. But it was kind of like Visual Basic. It was a program that ran the computer lab at the school. So it allowed instructors to do things, like if there was a disruption in the class, they could lock down everyone’s computers, limit the number of programs people could open, they gave instructors special access. It just did a bunch of stuff.
It caught the attention of a business person who was selling computers to the entire school district and we started talking and throwing around ideas. Based on that idea, he was able to raise, I was a co-founder, but the truth is that he was the one who raised 120 grand initially from an angel investor. He was 27 at the time. So that’s how it was raised.
James: Right. I mean that was your first capital raising thing. I know this is all a big sexy topic in Silicon Valley, pitching ideas and getting money, and I must say I’ve sort of been opposed to that whole business model. I like to retain absolute ownership and not be compromised by investors and to have more of that minimum viable product thing where you’re getting paid to profit upfront and you can self-fund. Is that more of the model you’re moving to now with your LeadPlayer software division?
Clay: Yeah. We’ve always been that way. I mean, post-15 years old, we’ve always been bootstrapped. I’m a huge fan of being bootstrapped. That doesn’t mean that if the right investor came by who had the expertise to really advise us, like they’ve taken multiple companies to IPO, multiple billion dollar companies, someone who had deep connections in the space, someone who had a portfolio where, you know, just by virtue of their investment in companies, could create partnerships very quickly and efficiently, and someone who was willing to invest in our company at a fair evaluation.
So someone gives you money, and then in exchange for that they get equity, but the question is always, how much equity is the amount of money worth? So if something really looked right, I think I’d do what I think of, everything in business is really a product and so equity in a company is a product in itself, especially if you IPO, that equity is a product. So the question is, are they getting a good deal and am I getting a good deal for that product that we’ve potentially decided to sell, which is our equity. I think I’d only be willing to sell the product of our equity to the right person in the right circumstances.
James: Yeah. Well, you know there’s some parallels I think between Zappos and you. I can see that you have a customer service obsession. Would that be true?
Clay: That’s absolutely true. I wish I could say that the vision for our customer service came directly from me. I think a vision for amazing customer service, like I knew I wanted to be awesome, but I think the execution of it and how that actually takes place, I think that that has come through my business partner Tracy, who has a background in corporate customer service. She’s not capable of falling asleep at night without making sure that everyone’s support tickets are completed and making sure that she hires someone who absolutely has the same work ethic.
I remember once, we were on a meeting, and a developer we were working with made a comment about a customer who didn’t know how to install WordPress. It was really benign. It wasn’t like saying they were stupid or anything like that. It was not a big deal. But she was like, “Hey, these are our customers. These are the ones who pay our salaries. These are the ones who make sure everything we do is possible. I want it no matter who it is, no matter what the circumstance, I don’t care if they sue us, we will never speak ill of our customer around here.” I was like, that is so awesome.
So yes, we are absolutely obsessed with customer service. I wish I could claim credit for that, but it’s always been something that’s important, but the actual incarnation, awesome customer service in Technicolor. Like the Technicolor version of that. I can’t take credit for it, but I’ve always wanted to be awesome.
James: OK. If we’re just sort of having a snapshot of what the LeadPlayer team looks like, you’ve got an in-house development team and you have in-house customer service. Are these some of the factors that affected your decisions around pricing? I want to know, how do you go out pricing your software to the market? Because it’s obviously in a slightly different pricing bracket to some of the lower end solutions who would purport to deliver some of the things that your plugin delivers. But in reality, I suspect they do not.
Clay: Yeah. What I would encourage someone to do is just… So I get asked this question, asked a lot about what we can do versus other players and things like that. I just ask someone to actually just compare the screens, even just compare the opt in screen, compare the stats, compare what the user experience is like and stuff like that. I can get into a lot of technical details here, but I want to speak to your question specifically.
Yeah, I buy a lot of software. I buy a lot of WordPress plugins. To me, it’s almost like I can predict it. Whenever I see a WordPress plugin that is low-priced and offers lifetime support and lifetime updates, it’s almost like a clock. I’m like, yeah, this is going to go off the market and be unsupported in, let’s give them six months. And they always do.
The reason why is because we take pride, and whenever there’s a plugin conflict, we fix it almost within 24 hours every single time. Whenever there is a theme, we’ve got our main developer in there. There are entire weeks that go by where all we do is, like someone wants a special integration, they’re using some unheard of autoresponder. And we’re like, alright, well they bought the software so we will make it, integrate at the API level with that software because we want them to have a good experience.
So yeah. Part of that is that native English speakers, in house, full time, yeah, I mean that’s part of it. I think part of it is just about the products, too. The rate at which we iterated our products, this isn’t something, LeadPlayer is into product that was farmed out. And I have nothing against people on other parts of the world, but we hired the best people we could possibly afford and we released new updates based on user requests every two weeks. We haven’t missed that, actually. Sometimes it’s very week, there’s a new release.
It’s not because it’s buggy. It’s because someone said, here’s one example. Someone said, let’s say there’s a video blogger there, “Hey, I have 100 videos across my website and I would love a situation where someone watches a video, a LeadPlayer video on my site that I created a couple of years ago, but at the end of that video, I would like a call to action button coming up that invites them to a webinar that’s today or in a couple of days.” And we were like, that’s awesome. So we added it.
