Today’s podcast episode welcomes Drew Williams, an expert in running startups and author of Feed The Startup Beast. Tune in as he shares tips for starting, maintaining and selling businesses.
00:57 – The experiences behind “Feed The Startup Beast”
04:23 – Creating a repeatable marketing system
07:17 – Ask and listen
08:27 – Focus
09:10 – Attracting – all about social media
09:32 – Who should you go after?
09:58 – Nurture and grow
12:16 – The breakthrough
16:28 – An under-utilized marketing weapon
19:42 – Engagement ladder vs. chocolate wheel
27:09 – Building to sell
31:40 – The value of PR support
36:36 – Should you invest in an idea?
41:24 – Start out with something achievable
42:48 – How I differ from most business owners
45:14 – Creating credibility with a book
47:36 – Getting a good price on an existing business
52:07 – Resources and tips from Drew
The fastest path to growth is finding customers like your best customers. [Click To Tweet].
Build to fill a hole. [Click To Tweet].
Engage till they buy. [Click To Tweet].
Intrigue is an under-utilized marketing weapon. [Click To Tweet].
Be responsible first to yourself. [Click To Tweet].
Ask first: Is there enough of a market? [Click To Tweet].
James Schramko here, welcome to SuperFastBusiness. This podcast episode is with an author of a book actually called Feed The Startup Beast. His name is Drew Williams and looks like it was co-authored as well with Jonathan Verney but I’ve just got the Drew part of the show and we’re going to be talking about building your business, growing your business but also I’m interested on the story of selling a business. Welcome to the call, Drew.
Drew: Thank you James, happy to be here.
James: So you’ve got this book out. It’s got some pretty good tips about business growth. It’s a topic that we cover a lot on this particular podcast. A lot of the steps may be familiar to our listeners. I’d love to just get your take on firstly, why did you put out the book?
The story behind the book
Drew: I’ve been running startups over the last 20 years. I’ve run six different companies at this point and sold the company number four and I’m still running five and six, and through all of that kind of bashed my way through marketing and did everything wrong you could do wrong pretty much.
So early 2000’s I started scratching my head. Mid-2000’s I started writing an approach to marketing down, sort of just a workflow thing. And that evolved over time. I started using it with clients and I realized that I had something that I thought other startups could use, and really give them a shortcut to the fact of marketing, because in my experience most people don’t get into business to be marketers, right?
They get into business to do what it is they love to do. And so they got to get to marketing, doing it to get back to what they want to do.
James: Well interestingly enough, a lot of our audience got into business because they’re marketers and then they try and back fill it with a business.
That’s why the topic is quite interesting to me and potentially to a lot of our listeners is if we’re a marketer and we already know a lot about the marketing so we’re not going to labor over all of the points because we know a lot of this stuff, it’s common sense to us but obviously not to your average candlestick maker or bread maker.
Businesses Drew kept and sold
What I think is the really interesting story is we know that it’s important to have solid marketing foundations but I’m interested in the stuff like of the businesses you’ve sold and kept, why did you sell some and why have you kept some?
Drew: Well, I’ll start with the kept first. So the ones that I’ve kept – I decided I only wanted to grow to certain points and keep them growing as lifestyle businesses, and so I’ve kept them running.
One, I’ve got running without me, one I’m running quite actively involved. They’re a couple of million-dollar businesses, and they’re just chugging along. What happened is, after I sold my business, it was nearly 2000’s, I was really tired of managing people.
So we got up to around 250 people, and I just found that I was doing stuff I didn’t want to do, I didn’t feel like managing people and running the ship and all that kind of stuff I really don’t like doing so I sold that business and got start up with smaller businesses and have kept them that way. So really for me, it’s about doing what I love and not worrying about having tons of mouths to feed.
James: Right, so I had another guest on the show, Sam Carpenter and he talked a lot about setting up processes and automating the business even if there are a lot of humans involved.
James: To some extent, I guess I have both types of businesses – people intensive business and non-people intensive business which is more of a “me” intensive business. But also some leverage of information and community so I can relate to what you’re saying.
Making a repeatable system
I’ll dig further into that in a second but just to finish up the first point, I’m guessing that you wrote down and developed and systematized and refined and came up with a marketing system that would work well for most businesses who don’t have marketing knowledge whatsoever.
Drew: Yeah that’s right and it was really focussed more on B2B as opposed to B2C but what I realized is that to succeed in marketing, you’ve got to create a repeatable system and if you do, if you’ve got this repeatable system, you can actually have people running it who don’t have to be marketing experts as long as a system underlies it.
So I work with startups and take equity positions and startups to help them get to market and in exchange for marketing services. I just find this idea of a repeatable system is something that really works for them because they can’t afford expensive marketing talent so they put the system in place, they get a $30,000-a-year person and they can make it go and be quite effective with it.
James: You and I are doing pretty much the same thing. Although credit to you for taking an equity state. I’m wondering with some of those startups do they all go to a point where you get a return on your investment or do you sort of some balance out the others?
Drew: No. That’s a portfolio. Absolutely so. I’ve got one which was a Greek company and interesting story too. It’s a big pivot. So they’re pointing into one direction and we moved them to another. So they’re on their fourth round of financing right now and they’re up over $2 million. So they kind of lessened $50,000 a year about a year and a half ago and they’re up to two million right now.
So I’ve got equity in that company, now as we keep raising money of course I get deleted. It’s not great but… somewhat like that and then others can unfortunately as much as I think I’m the perfect marketer, not everything works, so some don’t as well.
James: Well that’s the thing, I’ve decided to work with only businesses that work but I do it on a fee basis and I don’t take equities. So it’s attractive for them to have I guess a solid business partner or a board member on their team who’s taking a fixed amount but because of filtering I only work with something that’s beyond the startup that’s now proven and established.
I did have a recent guest from the Foundation who was a focused entirely on that startup market. Well you know Dane Maxwell. Right from that you know, don’t even have an idea, have no money, have no talent, then we’re the right business for you. A lot of our audience are trying startups, they’re interested in it, they’re doing it, they’re pretty good with the marketing.
Let’s briefly talk about some things that you developed for your system because they do make sense and hopefully it’s refresher training for a lot of us. Do you want to step up through the things for the advance student?
1st 2 steps: Ask and Listen
Drew: Yeah. I’ll go quickly through it. So it is seven steps and we start with ASK and LISTEN as the first two steps and that’s really sitting down with issues. Sitting down with your customers and talking to them and we have a bunch of tools to do that and really these are the people that know what you need to know.
We provide the tools so that a reader can download these tools off the website and use them to capture insights that really most our competitors will ignore.
So we beacon something we call the laws of engagement in there so how do you mind your best customers and we talk about how to find your best customers for that information so you can go out and find others like them because the fastest path to growth is finding customers like your best customers. So ASK and LISTEN is really a strategy in value proposition and that kind of thing.
Step 3: Focus
The next third step is FOCUS and we’re getting the resources organized and in particular your website. So a lot of websites are all-you-can-eat buffets; prospects hit them, there are tons of information whatever, but what we like to do is create an engagement path through the website so that as somebody hits it the website becomes something more like a den of seduction.
So there’s path through to offers that are developed that also come out of the Ask and Listen steps to convert unknown visitors to known prospects. So FOCUS is very much around that. We get into sales teams too if you have sales teams of if you have third party people that you work with.
Attract, then Pursue
Once you’ve got all of that nailed down, we move to ATTRACT and then PURSUE, so the fifth and sixth steps. And attracting is entirely about social media so we do the 80-20 in social media, what to do, how to do it because we all know, social media can suck up a lot of time. We give essentials on what you need to do, what stuff you can ignore.
PURSUE is outbound, so one thing to do, inbound social media-type of things but if you know who you should be going after, if you’ve identified a profile that matches your best customer, makes a ton of sense to go and get them so we talk about developing lists and how to develop break-through campaigns. We’re big fans of intrigue. How do you use intrigue to break-through and get the attention of your prospect.
Nurture and Grow
And then the last two steps are NURTURE and GROW. NURTURE is once you’ve got an engagement through either attracting or pursuing, now you need to nurture that prospect. How do you do that, how do you keep them engaged until they’re ready to buy because everything’s on their timetable.
And then GROW. Important thing is about measurement. So if you can figure out what works and what doesn’t work and you can dump what doesn’t work and double down on what does work and of course that’s a faster path to growth as well.
So through this whole process, we realized that software is an important part of the repeatable marketing system. We didn’t want to force our readers to have to go buy software so we actually built a free software tool that we put up on the website that can be downloaded.
It’s a really simple marketing automation tool but it kind of does 80 percent of what you need to do in marketing automation and it’s spreadsheet-based; very, very simple. Pretty cool thing, works with macros but you can use that and it produces reports for growth.
So again you can see what’s going on, you can build list quite effectively, you can take action before it’s too late. So that kind of wraps up the whole cycle and then you repeat it. So what you’ve got is something that’s repeatable and can be run by again it doesn’t have to be a VP of marketing type of person.
James: Yeah, it all makes sense. It’s exactly the sort of things we talk about although in our industry we use a slightly different terminology. In some of the sections we talked a lot about funnels which might be your seduction den.
Drew: Yeah, we talk about funnels too.
James: And we have cohort analysis, segmentation, feedback loops and I guess lead scoring helps us identify our best customers in the beginning and certainly nurturing and growing, we hear a lot about that with automation software solutions that are out there like Infusionsoft and Office AutoPilot are really active in our market and those tools would be a foreign concept for your average florist or hair dressing salon etc. but the ones who use it well are killing it.
One word you used that I liked is the breakthrough, I’d love to ask you to tell us more about that. Tell me more about the breakthrough.
Drew: So this just came out of me trying to come up with ways to break through to my audiences, you know, my prospects years ago. And so I sort of stumbled on something that seemed to work well and we’ve continued to use it ongoing and sort of bake it into the book. Big fan of direct mail.
You know, most people who direct mail, oh, that’s really old, who does that? And the point is that yeah, most people don’t. You’ll still get a lot of junk in your inbox, but it’s mostly… junk, I guess. And so we do these 3D mailings, a lot of people call them, but we do it a bit differently.
So as an example, one that we did for ourselves, kind of kicked it all off, we printed a 6 by 9 postcard, we glued a big dog biscuit to it, so it was a big milkbone dog biscuit. Had a picture of our beast, which is the beast from Feed The Startup Beast, with his mouth wide open, looking like he’s going to chomp on the cookie.
And printed on the card was Drew, so if it was to me, “Here’s your beast biscuit, for further instructions go to, whatever it was, TheBeastAwaits.com, question mark, Drew Williams. And that was it. And that goes in a padded envelope, and it’s sent by mail. And it’s actually really inexpensive. Everything I just described is under a buck total cost, plus postage.
So anyway, we do these things. We’ve done it with house keys, we’ve done it with masks, we’ve done it with all kinds of things. And I’m not kidding you, we have typically between 40 and 75 percent open rates, so we know that people are opening them because they’re going to the URL on the card.
They go to the website and then we’ve got a… you know, we talk about what you have there to engage people and convert them. But so we’re getting huge, huge engagement rates and conversion rates, not only to prospects but to actual sales.
We ran it for IBM. We ran a program like this for IBM. You know, I do work for some large companies. And they were trying to reach 600 other business partners who were very busy small- to medium-size companies, and we had a… 75 percent of the people who received this mailing had a key in it in this case, went to this website and we had a 15 percent conversion rate to a sale out of the one mailing.
So it’s just, the point is when you get something that’s different, like a dog biscuit, most people look at it and they smile. And if they smile, you’ve intrigued them, and if you’ve intrigued them, you’ve got that first step towards a relationship. That’s worth a whole lot and… so we’ve found it works well.
And then we’ve taken that and we’ve brought it into email. How do you get the same idea across in email? And we’ve run the same thing in email, where you’ve got one big picture, like a billboard, like an ad to our billboard, one big picture and just a few words with a cryptic link on it, no branding whatsoever, and again we get between 30 and 50 percent open rates on those things. And then between 15 and 25 percent click-through rates, which are way way ahead of what we get for anything else we do.
So the whole idea is… and we’ve got a whole chapter dedicated to it, in fact we’ve got a free, I call it an e-pocket guide, that I’d be more than happy to give you the URL for, that people can download. It talks all about this idea of intrigue, and how powerful it can be, and it doesn’t have to cost a lot. It’s especially useful when you don’t have a big budget and you want to get through to people.
James: Yeah, I’ve got a few questions around that. I’m friends with quite a few people who still use direct response marketing, especially people like Bond Halbert, I think they still do those dollar bill mailers as well.
Drew: Right, right.
James: Certainly the letterbox is going to have a higher open rate than a lot of emails, in some markets. Do you use things like SMS as well?
Drew: We use it to communicate. We’ve not used it in campaigns at all, so far. This could be because I’ve really not seen a good example of it yet that’s inspired me.
James: Does this work outside of North America?
The power of intrigue
Drew: I think it does. You know, the whole idea of intrigue, regardless of whether you do it the way I suggested, the idea of intrigue – I think it’s a really strong one. I think it’s one of the most under-utilized marketing weapons, tools, whatever out there. And I think all human beings are prone to being intrigued.
James: Oh, I like that word. The much more familiar word in our circles is curiosity.
Drew: Yeah, yeah.
James: Yeah, curiosity’s worked. But there’s a lot of evidence that shows it might be gimmicky or hypey and I think it’s certainly one to watch outside. Different markets are going to respond perhaps differently.
I know, whoever is down at my local bank is probably drinking from the same fountain because when I go down there, it’s like a Matchbox car on the counter or there’s like $500 bills stuck to it or a house key and I’m supposed to ask them what it’s for and I’m like my immediate reaction is like: “F**k off! I’m not going to ask you about this because it’s a ploy it’s a cheap trick.”
Drew: Oh, for sure and you’re right. You’re going to get a certain percentage who’d say “Yeah, whatever that’s a marketing gimmick.”
James: Well, I think you know I’m not normal by any stretch.
Drew: Well, you’re in the business, yeah.
James: I’m a savvy marketer. I understand what’s happening but I’m sure it probably works because they’ve been doing it for more than a year now.
Drew: Yeah, and I can say that just by the numbers we get, more than half the people go for it. So, maybe 40 percent or 30 percent think it’s junk in the…
James: I have no doubt it works in your market because your market is insane. They’ll buy cars out of a catalog. They’ve been trained to buy like that for years. There’s less education, more selling in that North American space than other markets. So, I’m just wondering if for a company like IBM, if you tried it in different markets because I found different sensitivities.
In fact, there was one campaign where in Australia I heard of a car dealer had purchased their database and started sending gifts to neighbors of someone who bought a new luxury car that would send back a cap to the person across the road.
Drew: Oh, yeah.
James: And he’ll be like: “Hey, here’s a Mercedes cap because your guy across the road just bought a new Mercedes and we thought you should at least enjoy something.”
James: And it backfired terribly like they were pissed off.
Drew: Oh, really?
James: Breach of privacy. They felt violated and it upset neighborhoods and it was really interesting to listen to these stories. But, really interesting idea about breakthrough and I think the action step for our listener would, at the very least, is OK, if you already know what funnels are and you already know what all the other things we’ve talked about, which you probably do because we talked about it to death, think about what could intrigue or capture the imagination or the curiosity of your prospects and how you could access them.
And, I think the direct response marketing technique is super strong. I still send lumpy packages like T-shirts and hoodies and workbooks and stuff to really break out of this fact that we’re just a predominantly online business in the world we talk about.
Drew: Yeah, for sure. Yup, yup.
Engagement ladder or chocolate wheel?
James: So, I got to ask you another thing. You mentioned that your attraction is mostly all social media. What about videos and podcast and things like, how do you use those?
Drew: Yeah, so we use that as content. So, back when we’re talking to our customers to figure out what is the profile of our best customer, we do get into segmentation at that point as well. So we create what we call in the book an engagement ladder. And the engagement ladder is, imagine, an eight-rung ladder.
The lowest rungs are kind of general information, the higher rungs are much more specific information to the sale. So we populate the rungs of the ladder with podcast, with all kinds of the things you’re talking about, because what we want to do is we want to get an early prospect on the bottom rungs of the ladder.
So industry education, tell me what this is all about and how does it work? And as they reach for the rung, and download a piece of content, we then try and lure them up to the next rung.
And we’ll do that with another piece, which might be a podcast, which maybe a little bit more in-depth on the industry, so we’re sort of luring them up the ladder until they reach the top rung of the ladder and become a qualified prospect. So that’s how we… you talk about creating leads, we do the same based on an engagement ladder which is populated with all kinds of stuff like that.
James: I’d kick the ladder away, that’s bull****. You need a chocolate wheel instead. Spin that wheel. It doesn’t matter where they come in. You can go into your analytics, and you’ll see multi-touch points and it’s so un-linear…
Drew: Oh, it’s not linear at all, you’re right.
James: I just want to wholeheartedly dismiss that metaphor.
Drew: I’d like to argue with you on that for a while. It’s a great way to organize your content, and I appreciate that they don’t come in on a linear fashion, but wherever they come in on the ladder, So let’s say they’re a C-grade lead, and they come in at the C level, you inevitably want to move them up to B. So now you’re moving them up the ladder.
So they can come onto the ladder at any point depending on how qualified or how ready they are to buy, but there’s no question there’s progression. You’d like to move them up the ladder. It’s not perfect at all….
James: Well that’s why I think the wheel is a good thing, because let’s see… As an example I will go to a conference, I’ll meet someone who’s at a very high level, and they’ll go straight into the top program that I have, and then they’ll actually work their way and buy every other product that I have as a consequence of that, probably, because they will start engaging our website services, they will have our content team preparing things, setting up a podcast…
You know, they’ll work their way through. But my idea really is they just come in at any single point on that circle, and they’re going to work their way around with your internal marketing.
Drew: Yeah. So, if you like, we could bend my ladder into a circle and we’ve got essentially the same thing.
James: I’m absolutely happy with the circular ladder.
Drew: Chocolate circular ladder, I think it would be.
James: The chocolate wheel really came about from the car dealership environment that I was in, because we had service and parts and finance and cars and new and used. And it would fascinate me – someone would literally come in to buy a petrol cap, and then they would buy a new car while they’re there. So the total randomness of it astounded me.
But now a decade later from when I was thinking about that, I look in my analytics and I can see these funnel paths that people take for buying my products. So random. And really if you wanted to simplify it, it’s just to be multi-channel marketing is a good thing for businesses.
And I imagine with startups, where there’s a limited resource, you’re going to have a systematic rollout because of funding and testing different things and some probably work better than others.
But I would have had, I would have actually thought that social media, for that to be so strong in your book, I’m almost surprised because I would have thought that paid traffic or maybe Facebook campaigns, or very specific campaigns, might have been more targeted and show a very precise, controllable scalable return on investment.
Drew: Yeah, we do, in the Attract chapter, so it’s more than social media, so it’s SEO, so search engine optimization of course…
James: Now you’re warming the cockles of my heart.
Drew: Yes. There you go. And in fact, on social media, we say, “Here’s the 99,000 things you can do, here’s the three you should bother with right now because you just don’t have time.”
So we kind of strip it down. And then we get into pay-per-click and Facebook ads and all that kinds of stuff as well. All of it we sort of group under attracting prospects by putting value out there in some form, and they come to you as opposed to I got your name on a list, I’m going to go find you and reach you with an email or a direct mail kind of thing.
James: Well I really like the Pursue side of it. I think a lot of people in my space are not pursuing that much.
Drew: Oh, you’re right.
James: They’re doing a lot of attraction. They’re posting stuff, they’re spending a lot of time on Facebook, no doubt. But you know, this systematic pursuit, the breakthrough campaigns are great. It’s kind of like a reactivation campaign, when you go into an established business. You say alright, what have you got?
And I’ve seen it done old school, like literally a salesperson will say, “Alright, where can I get the database? I’m going to ring up everyone who bought a car five years ago and find out what they’re doing.” It really does actually work. The clear message is, apply these fundamentals that work in real businesses to an online business and you are going to get results.
Drew: And the thing we’re trying to do, most importantly, is just to simplify everything down, because it can be really overwhelming. So we’ve stripped it down on the 80-20 thing. It’s really the 20. This book gets after the stuff you’ve got to do and simplifies it.
Again, that spreadsheet tool’s an example. Anybody could use it, and I can tell you, I don’t know how much experience you have with Infusionsoft and all those guys, but man, that stuff is not easy to use. It’s a pain in the butt.
Factor before building
James: Well, I really like factoring. When I’m building out a new business model, we open up a document, and we start running our scenarios. If we have this many customers, if we have this many team members, if we have this much marketing expense, what will our profit be, what are our competitors, what’s our cost plus profit pricing.
You know, we work out all this stuff on a big matrix before we actually do anything, before we build the website. And if the business sucks on the spreadsheet, then we aren’t going to build it. But a lot of people start building things and then they hate themselves for it. Even Henry Ford did that. Henry Ford wanted a thousand cars a day out of his factory, and then he hated his factory.
Drew: I can relate to that. You’re right, a lot of people fall in love with what they’re doing and they just push it out whether it’s right or wrong, and often it’s wrong.
James: Aw, that’s… You’re being a good sport, and I’d like to debate some of this stuff because… to see what you’re all about. Alright, so I’m really interested in the sell part. I’m sorry to hear that you didn’t like managing 250 people. It’s kind of like adult day care center, right?
Drew: Oh, yeah. You know, some people love it. Some people love managing, and it’s just not my thing.
James: Yeah, and that’s okay. It’s great to work out what you love and what you don’t love and to separate. So now this is the important thing. Would you be able to tell us a little bit about that process?
Now I’m just going to assume that you put in a good marketing system, your business was built quite well. But what are the things that when you went to sell your business you were glad that you had done and perhaps some of the things that you probably realized you should have done differently that we could learn from?
Drew: Yeah, OK, so I’m going to give you a bit of a hybrid story, sort of mine and a few other companies that I’ve worked with where they sold the companies. I mean, it really depends on what you want to get out of life and what you want to do and if you just… if you want to do what I’m doing, create a little service and keep it going and make yourself happy, that’s one thing.
Building a business to sell
But if you want to build yourself to sell, the approach that we have used is to identify large companies, so identify a space, let’s say data mirroring as an example, or data storage. And so who are the big players in that space?
And when I say big, I’m talking about the multinationals, the big guys. Figure out where the holes are in the market, build a product, and this is tried and tested and has worked four times in a row now for one gentleman I know in particular.
Build a product out to satisfy that very specific need, so that hole that they have, and it doesn’t have to be a big hole, it’s just a hole, you know, leaving aside the marketing of your own business, hire – this actually works and it blew my mind, I was against PR for the longest time – but hire a PR firm, hire the most expensive PR firm you can afford, who owns a Rolodex that includes those potential suitors that you identified.
That PR firm makes it their job to have you become known in all the publications around and that surround these people and these people themselves, these potential suitors. And build a good product. Build a good solution that fills that hole. And so what has happened four times in a row.
The last experience, on this one case I’m talking about, the gentleman built a company, he got it to $20,000 in revenue, that was it. It was in the dataspace. Intel was one of his marks, one of the companies that he identified. And this just happened last year.
He hired a PR firm who was really deep in that space and who had again all the various Intel and other folks on the Rolodex. He sold it to Intel for $25 million, one year after he started with $20,000 in revenue.
James: That’s an impressive story.
Drew: It’s unbelievable. And it would be impressive if he’d only done it once, but he’s done it four times. The same thing. So he finds a big space, he finds large companies, he finds a hole in what it is they’re offering, he builds it. He just gets the resources necessary to build what’s required, generally software, he’s usually working in software.
Makes sure that they become aware of it, runs a PR circus so there seems to be a lot of press around it, and he gets taken out, four times in a row. So it’s not quite my story….
James: But do they ever think, well that’s a pretty good idea, we might do that? And they used to call this Microsofting a company. They could go and catch up with them, find out a bit about them and go and do their own…
Drew: You know, $25 million to Intel is nothing, right? So in many cases it’s easier for them just to buy this thing out and get the IP, get the….
James: Well obviously, you’re a good student of that process. The reason we’re speaking is because a PR agent reached out to me.
Drew: That’s right.
James: You’ve published a book, you’ve decided to promote it, the PR agent contact… Admittedly, I didn’t want to play the normal game and talk about what you want to talk about because that’s a little bit pedestrian for us.
How PR support worked for Drew
I wanted to talk about the real story. I think the real story was the selling of the business and now the real real story is how effective has the process been for you in terms of getting yourself an audience with the PR agent and supporting a book launch?
Drew: Sorry, the question is, how effective has what process been?
James: Having a PR agent supporting your book launch. How many platforms does it open up, and you know, has it been a positive experience?
Drew: Yeah. So it’s an interesting question. So the book industry rate now…
James: That’s my goal, by the way. I want to ask interesting questions. And I do have the book on my hard drive, so I’m…
Drew: I’ll give you all the background you need on that. So the publishing industry, as we all know, is running a little thin these days, having a hard time making money. They do have in-house publicity but they don’t, in my view, push really hard. So everyone will tell you it’s smart to hire your own PR firm, anyway. And so I did, I hired a firm out of New York.
And so I’ve had them engaged for the last four months, and the experience has been very good. We’ve managed to get into several top publications, we got into – I don’t know if you’re familiar with the publication – Atlantic Monthly, which is a large magazine in the States, it’s been around for a long time. They’ve got a fantastic website called Quartz.com.
A lot of byline stuff, a lot of op-ed stuff, so I got an article piece I wrote on Quartz. That exploded. I got all kinds of exposure, and then got HubSpot involved with us, so now I’m involved with HubSpot, I don’t know if you’re familiar with them but they’re in the Infusionsoft space.
James: Yeah, we see a bit of HubSpot in the market.
Drew: Yeah, they’re really good. There’s been television, there’s been a lot of stuff that’s come out of it. So we’ve seen the traffic to our website go up at least five times in the last four months. Twitter is what Twitter is, but the following has increased quite significantly there too.
James: But aside from its vanity metric, does it actually translate into anything?
Drew: Yeah, I think it does. That’s another good one. So Twitter, I was a skeptic for a long time, and yes, if you’re just putting out, you know, I’m following you and you follow me, and who the heck are you? It’s not going to do much for you. But there’s ways you can actually make sure. So I’m interested in startups.
There’s ways I can find startups and follow them and they follow me back and they know that I’ve got a group, a large group of people who are very focused on startups. And we’ve done tons through there. Unbelievable opportunities.
So I was just in Boston last week, presenting to a startup event, conference. And that all came out through Twitter. And so we’ve had a lot of traction there, it’s really surprised me. As long as you do the groundwork and make sure the people you’re engaged with are the people who could potentially be your audience.
But yes, I’d say the PR approach has worked really well, it’s opened up tons of doors that I wouldn’t have been able to open on my own, I just don’t have the access. I don’t have the contacts.
And then combined with the story I just relayed, which is, you know, this gentleman I know who – in fact, he doesn’t even believe in marketing, he says, “I don’t market a lot, I just hire the best PR firm and they sell my business.” I don’t fully agree with him on that, but as I say, you can’t argue with success.
James: Well there’s huge numbers and I’m just, you know, it’s astounding to have such a small revenue… but then you’ve got companies like Twitter themselves. Or Amazon, it didn’t make much profit for seven years. It’s interesting for us, like we’re very Internet marketing-savvy over here at this podcast, so we look at your site and I see stuff like the fact that you’re using cartoons and a picture for each post and stuff.
That’s core stuff that we teach on my course, Own The Racecourse, which is free. But I am interested in how you go from the book to… I guess the book is your calling card for consulting and getting deal flow.
Drew: Yeah. So I see the book and I’ve got another book in mind as well, Building The Perfect Beast, which is to be more around creating a product. So I see books in my future, I see learning, so online learning, and I know you’ve got quite a bit of that, so I’m actually interested in what you do.
James: Well, let me tell you, based on what I’ve seen and heard, I’m sure that our material will be able to significantly leverage what you’re doing, especially in the online space. And because you’re interested in tech startups, they’re all digital, really, they’re all doing this stuff.
Drew: Yeah, for sure.
James: OK, so back to the selling stories. Now that was an outlier, I suppose. What’s someone going to do if they can’t develop software for Intel?
Drew: So in my view, I’m not going to say anything really novel or new here.
James: But that’s OK. I celebrate good old-fashioned sense. One of my best buddies is John Carlton, and he doesn’t say anything new or remarkable that’s bright and shiny, but he’s good old-fashioned hardcore sales techniques are still in play, you know?
What to do before investing in an idea
Drew: Absolutely right. So to me, it all comes back to what is it that you’re creating? And is there a market for it? And so as we were talking about a moment ago, too many people fall in love with their idea and they push it out and they staff up and they build a company around this idea and they get to market and the market doesn’t respond.
And they go, crap, and they’re out of runway and that’s the end of that. So the whole lean startup movement was, which I’m sure you’re very familiar with… or maybe you’re not….
James: Yeah, minimum viable products, pivots…
Drew: Yes, exactly.
James: We had Dane on recently, so I think we’re all up to speed on….
Drew: There you go.
James: Don’t even start a project until you get someone to tell you your pain, and then you get them to pay for the solution, and then you develop it and then you scale it and….
Drew: That’s right.
James: We love that stuff, that’s all taken as given.
Drew: Yeah. So to me, that’s step one. You got to talk to your market, you got to get out of your office, you got to go sit with people. I’m a big believer in… in all of our marketing we do batches, we do batch marketing. So it could be A:B testing by any other name but we’ll send out 200 at a time, get the results, tweak it, go out another 200 and it also sort of amortizes your marketing costs over time.
Same thing when you’re developing a product or starting a business. You know, find 50 people who should, by all rights buy what it is you’ve got and sit with them. Or if you can’t sit with 50 people, which is unlikely anyway, talk to them or communicate with them or survey them in some fashion.
But anyway, go through that whole thing to know that you’ve got a product or a service that the market wants, is number one. And there’s no escaping that.
James: So step two I guess you go to do the… you’re going to to teach a company how to suck eggs. Find out where the gap is and they’re missing out.
Drew: Yeah. Absolutely right.
James: You’re mean, Drew, you’re mean. But you know, we can’t hear this advice too often. All of my startups that have been successful were usually started from my own needs and certainly my customer base has a lot of overlapping needs with me. It turns out whatever my problems are they’re soon to follow with the exact same problem. So if I can solve it, it’s got an instant audience.
Drew: And so you’re lucky. It could be a gift that you’ve got. A lot of people don’t have that. They have a need. They’ve got a pain, they developed to it, and there’s just not a big enough market to support it. Yeah, there’s 10 other people like them, that’s not going to cut it.
James: I think I’ve gone for general markets and one of the early mistakes I made was… it was good but it was bad. I really was micro niche-focused on one particular software solution that could build websites that was appealing to just do-it-yourself Internet marketers which is a real subset of marketing which is a real subset of business, so it was quite specific but I really ran out of market.
I owned the market and it still wasn’t enough. And then the brand sort of now sort of tanking. I had to drop off it because it was no longer the best solution. And from there, I went much broader and I thought back to, you know, I’ve worked for Mercedes-Benz and Vodafone and General Motors and BMW and I’m not afraid of a big market.
So, by going a little bit broader, which is almost counterintuitive and some people would advise against it, I got this huge market and now I’m dealing with big general problems that… and you know, it sounds like you’re dealing with huge companies too that are serving massive audiences like online file storage.
Drew: Yup, yup.
James: That’s kind of a big market.
Drew’s rule about spending
Drew: Yup, no, for sure. Yeah, and that’s cool. I mean, the other thing I’d say as you’re setting out is: “Spend less than you earn.” The common wisdom seems to be still these days is: “Spend all the money you can.” You know, “borrow money, get to the market, be the biggest, be the first” whatever it is. And I’ve done that and it’s just a high-pressure, high-stakes game. And so, spend less than you earn.
The other thing I really like is, and maybe this runs contrary to what you were just saying a little bit but, don’t serve or paint the picture that I’m going to be a $1 billion-a-year business. Start out with: step one is I’m going to be a $1,000-a-month business and get there because it’s a completely different mindset and it feels very achievable. I think it works well for most people in terms of just human nature.
James: Oh yeah. It took me 9 months to make $49.25. I was very keen to scale it up to 500 bucks a month. Then I hit $1000, $1500, $2500, $3500, $5000 and then $10,000.
Drew: Yeah, right, exactly. So, if you see your way to 1000, you get there. Okay, now I’m going to double it – now, I’m going to do two and…
James: Well, the thing is because I hadn’t put it up on a spreadsheet first, I didn’t realize that I’ll run out of market at some point. I pretty much run out of market around the $10,000 a month mark.
Drew: Right, right.
James: I couldn’t see an easy way and the product was wrong because it was a one-time product so I was continually having to go and get new customers. And the second I switched to a recurring business model and serving the same customer over and over again, in come the millions. It’s a totally different game and it changes the rules on everything, even right down to affiliate marketing.
But, I’ll tell you where I’m quite different to the average bear is that I’m self-funded, I don’t take other people’s money, I don’t have partners, I don’t want venture capital, I don’t want to list on the stock exchange; I couldn’t care less about that, I see that as a massive compromise.
Drew: Love that.
James: I want to own it and because it’s self-funded, highly profitable, never in debt and you don’t have to do those stupid compromised marketing things, you know, like an MLMer.
James: Who’s put 20 grand on their credit and now they have to go and get other people to sign up so they can pay it back.
James: And it forces the market with corruption.
Drew: Yup, you know I couldn’t agree more. And the whole idea of spend less than you earn which is really kind of basic.
James: That’s good. It’s grandpa advice and it still holds true because you’ve got to be able to feed yourself and your kids and be responsible. I actually was listening to some lady speaking and she had run herself into like a half a million dollars of debt and then she proudly declared that she decided to go bankrupt and it was the best thing she ever did.
James: Hang on, what about the five hundred grand? Like, somebody out there is short, lady. And it’s like there was no responsibility to the person or the funder or whoever, that had loaned that or invested in the money. So, I think we have to be responsible firstly to ourselves.
James: You know, like in the airplane. Put your mask on first. If you don’t put your mask on, you can’t help anyone. I love what you’re saying here, it’s a sensible advice. Keep stepping us through this if you’ve got time.
Drew: Yeah, I mean, the key thing was my lesson here. When you think you’ve got…where there’s line of credit, whether you’ve raised money, again I think it’s human nature. You just do not spend as responsibly.
You will spend more than you should and when it’s your own money, when you’re trying to keep that balance in the black, you’re trying to stay ahead of the, you know, running out of cash. I think you make smarter decisions. You make harder decisions, you make smarter decisions, you got to pick your spots. So like, that’s really key.
James: Oh yeah, and you have to look at a multinational to see how people can be responsible with someone else’s money.
Drew: Yeah, no kidding. So my business, we raised $10 million initially and then I was purchased and then as the joint company, we raised another $60 million. And there’s all kinds of good reason at the time I suppose for having done that. But having done it, I wouldn’t do it again. So what you said, I agree with a thousand percent which is keep control of the thing.
When there’s that many people and that much money in the pot, you lose control and the focus is gone and everybody’s got a different idea. And really, any startup is going to, I mean, a startup is with somebody’s vision and passion and that’s what’s going to make it go. It’s not going to be this community or a communal decision process with all these different people at that table. I don’t think that works as well.
The benefits of having a book
James: Well, one of the places I do partner, which is pretty rare but I’ve got two podcasts with co-hosts and I would say they’re probably much like a book. They’re a publishing machine that is a lead generator and I noticed you have a co-hosted book.
Drew: Yes. that’s a co-writer.
James: Now, is it true you’re not going to make a fortune from the book but it’s really just a way to get to look at deals, to get some consulting customers and to push your profile forward?
Drew: I’d say yes except I believe we can make money in the book. I think I’m into this book and I’m biased obviously. You know, I wrote it, it took years and years and years before it finally came together but I really wrote it in about three months at the end. And when I finished it, and I hated it. I couldn’t even look at the thing. I couldn’t look at her for two months.
And then I started getting feedback and then I finally picked it up and looked at it again. Then I realized, it’s not so bad then I started liking it. Anyway, right now, I love it. I’m on the “I love it cycle.” I’ve come right around. So, I think it does a good job of what it’s supposed to do. I think there’s a real need in the market for this kind of thing.
So, yes, you’re right that the book is kind of a platform and it’s really credibility. It’s kind of funny how many people think you’re smarter than you are when your write a book. But that all said, I still believe that there’s money to be made in the book.
It’s my goal to make this one of the best selling marketing books ever. So that’s still on my mind. That’s not the main event but it’s, you know, as we continue, I think that that will happen in the background.
James: Well, I hope you do sell lots of it because I think marketing is a good problem to solve out there.
Drew: Yeah, yeah.
Getting a good sell price for a business
James: So, someone’s got a business now, what can they do to get a high sell price?
Drew: To sell well, it’s going to get back to what we’ve talked about. It’s got to…
James: So it depends if it’s actually good or not and if they’ve tagged with the right marketplace? If there’s a perfect buyer for it?
Drew: Yes, right. It’s got to make somebody really really happy so there’s got to be a customer at the end of this where there’s demonstrable demand for what it is you’ve created even if it’s not fully formed. So you’re not, you know, millions of dollars a year. But, you can see the beginnings of it.
I mean, one of the companies I worked with got in early on. You know I don’t know if price transparency is an expression that’s gotten over there, so people stand at Best Buy over here with their cellphones and they scan a price and they see it’s cheaper elsewhere, they either buy it online or they walk out of the store and they go somewhere else. You know the showroom, they use the Best Buy as a showroom.
These guys… so what happened is, I’ll make this quick, they developed a price comparison engine (online price comparison engine). So, if you want a camera, you go on this site, you can see the camera across different retailers. Couldn’t make any money with it. Took that business, turned it to a B2B play and sold the same data to retailers.
So, and this kind of gets to what we’re talking about, finding a hole in the market or finding a need and then satisfying it really well. So what was happening is retailers are blind. They’re getting killed by Amazon. They’re getting killed by, you know, they put out a price, they put out a promotion. The guy down the street, prices are lower, Amazon prices are even lower and they don’t know. They can’t see the pricing.
They can do it manually like somebody scraping all the various screens that are to be scraped but it’s huge, huge, huge because there are so many retailers.
So, they tipped their software and applied it to this problem and gave retailers, and now some of the biggest retailers in the world, a portal where they log on and they see their price for all their products or it’s one of their cues to see their pricing and they see all the competitive pricing in real time.
So hour by hour, they can see the price changes. So in this space – I’ll just give you a sense of what could happen – their biggest competitors, so a bunch of people popped up right around the same time as them, and their biggest competitor was bought by Home Depot.
Home Depot bought them lock, stock, and barrel because they wanted to take their technology, the competitor’s technology off the market and keep it to themselves so they could have this proprietary pricing and analysis tool. Anyway, point being, here was a huge problem: retailers are being killed by everyone using their smartphones and not buying there, buying elsewhere.
They needed to see what was going on so they could price competitively and effectively. And a very simple software tool that was developed by this company first and that several others after, nailed it. Absolutely nailed it. And now, this whole thing started in less than two years ago. And now, it’s an entire category of software.
James: I think the important story is that it was aimed at the wrong customer in the beginning.
Drew: Yeah, yeah.
James: Like this retailer and it didn’t work and they’ve repositioned it. So, the takeaway I’m getting from this is: If you have a business now and you’d like to sell it, you should just have a look at what are the core assets of your business, what are the actual building blocks of it and who’s got the biggest problem out there that this core asset could solve if it was renamed or repositioned at the very outer layer.
Where is it going to have the biggest impact? And then you basically, I guess, use it as somehow pursue these by using the PR Rolodex strategy.
Drew: Yeah, the PR Rolodex strategy and…
James: It’s a great strategy and I haven’t heard that before and that’s why we have people like you on the show.
Drew: Oh yeah, it’s a cool one. I mean, it’s essentially what happened when I sold my business. It was the same thing. So, we got bought by a company who was missing something.
They had this software suite and they were missing a piece and we provided the missing piece and we didn’t build it for that any expressed purpose, we didn’t know at the time but that’s how it worked out. So, the idea of filling a hole in a line at some fashion is powerful. And then you roll PR into that and you got an interesting soup.
Resources and final tips from Drew
James: Nice. Now you’ve been really generous with your ideas and tips. Tell the listeners where they can go and get the pocket guide and the software and all the goodies.
Drew: Yeah. We set up a website www.feedthebeast.biz. That is where you can find everything about the book. Hanging off that is a blog so Feedthebeast.biz/blog and there’s tons of great ideas there that you can use ongoing.
The free download is, and that’s an e-pocket guide on using intrigue, so using intrigue to create breakthrough and that’s Feedthebeast.biz/intrigue, and you can get your hands on that there. It’s 30 pages drawn from the book. It’s a quicker read, it’s a quick read but some good ideas in there.
James: Yeah, we’re definitely going to link straight to the book as well where we put this podcast. So, you’ve got any final tips for our listeners? Just sort of summarize what we’ve talked about. We have been all over the place. We’ve talked about marketing…
James: We’ve talked about old school marketing. We’ve talked about publicists and launching a book and selling a business and we’ve argued about ladders and chocolate wheels. So, I’d go and I guess it’s probably, maybe one of the more unusual discussions you might have had but hopefully you’ll get a whole lot of traffic to your site from our audience because it’s pretty solid listenership here.
Drew: Yeah, I know I appreciate it. I mean, the only thing I’d say is if you’re an entrepreneur, never give up. Keep at it. It takes patience and persistence but it’s worth it. What a journey, it’s great.
James: Yeah, well, as long as you’re doing the right things, right?
Drew: Ah yeah. Well, you’re going to do the wrong things a bunch of times before you do the right thing but when you get there, it’s worth it. Maybe it’s not for everybody, I don’t know. I just think it’s the best that you can do.
James: Oh, I’m biased too. I think it’s fantastic as well.
James: Thanks so much for coming along and we’ll probably get a couple of comments. Maybe you can answer a few questions if there’s some interest there, Drew?
Drew: Yeah, happy to. Thank you James.
James: Thank you so much.
Drew: Alright, take care.
For more podcast episodes, subscribe on iTunes
Please feel free to comment below.