This is the story of how Nate Grahek from Sticky Albums went from 0 to 1,500 Customers in 3 Months (and how Nate did this with no programming experience, no list, and no up front investment or venture capital).
The interview contains a play-by-play breakdown of how Nate did this. With all the nitty gritty details.
This is the story of (almost) everything done perfectly.
Clay: Hello everyone, my name is Clay Collins, and on the other end is Nate – Is it Grahek?
Nate: You got it.
Clay: Okay. Nate Grahek from StickyAlbums, and he – This is such an amazing case study of everything done perfectly, basically perfect execution. We’re going to find out in a second if part of that was luck or if it was that he was just wise enough that he didn’t completely bias himself into doing all the wrong things like most head stuck up there wherein entrepreneurs do.
So anyway, that’s what you have to look forward to in this interview.
Nate, welcome to the show.
Nate: Thank you so much Clay. It’s an honor to be on. First time I saw you, you did a Mixergy with Andrew, and I was super stoked, and then, later, I realized we’re in the same city, and I got even more excited to meet you. So I’m glad to share with the community as much as I can.
Clay: You know, it seems like in a number of ways, you know, a lot of your, you know, bigger and smaller dreams are coming true. You had an interesting story that maybe we’ll get into a little bit later about being at a demo day, and then a short period of time like 6 months later, actually being able to present at that demo day. But before we do that, I want to really kind of give everyone a snapshot about why they need to be paying attention to this interview. So if you could maybe in about 2 minutes give us a before and after, maybe what your life was like about a year ago, and what your life is like now.
Nate: Okay. Well just 7 months ago, I was working – I really enjoyed my job a lot. My background is in education in training and development, so I really like helping people and that’s another reason why I’m stoked to do this. I miss being in front of – Excuse me. Sorry. I miss being in front of a room, in a classroom or even a virtual classroom in just helping people accomplish their goals and learn something.
So I was really enjoying that. I worked at our awesome manager that let me do the things that I like to do. If anybody’s read the book Marcus Buckingham: Go Put Your Strengths, it’s all about just because you’re good at something, it doesn’t mean it’s your strength.
Nate: At the end of the day, you’re done with your job or you’re done with task you’re doing, and you feel rejuvenated and energized then it’s a strength. If instead you feel like depleted and worn out, just because you’re good at this doesn’t mean it’s a strength, and at the end of the day – I personally need at the end of the day a high note, otherwise, it starts to impact my whole life. And so, while I consider myself super lucky to have a job like that in the cubicle form…
Clay: Can I cut you off of here? So we totally want to hear all this. The truth of the matter is though like 3-1/2 minutes in, folks kind of decide whether or not they’re going to watch an interview, so let me just give the play by play.
Nate had an idea – And we’ll totally get into the back story – but Nate had an idea for an app, for a software. He had a background in photography. In a very short period of time, he sold that app to customers that did not have, you know, the ability to give their customers – Well, anyway, he sold that app to photographers and created a new line for photographers, cut to the day, you know, about 3 months later, and he’s making more in a month than he used to make in a year.
And so, you know, what we have in Nate’s story is really a story of rapid transformation, and a story of someone who truly did every single thing imaginable right. I mean I imagine there’s a few things maybe you’re thinking back like nah, that’s not exactly true, but it’s so textbook it hurts. And I believe that it’s really important to learn from other people’s mistakes, but I also think that it’s really nice to have a case study of something done incredibly right. And so at the heart of the matter like I’d really like to use this as a case study to show everyone just how well this can be done when executed properly.
Okay, so you were living – you were working. You were doing something you were good at, but you weren’t fulfilled?
Nate: For sure, yeah. So I can get a little in the weeds. Thanks for pulling me up, yeah.
Clay: No worry.
Nate: At a high level, I was working in training development and education. I like my job, but we got acquired by a big conglomerate and everything started to go downward like morale, teamwork. Everything just started to suck, and meanwhile, I was also doing a photography on the side, which I love to do, and it was always a passion thing for me, and so I was creating custom apps for my clients with the skills I learned in doing instructional design online. I was building this really simple, which I thought pretty basic HTML 5 apps. I said how can I combine this and give them to my clients. I built it like right away and my brain is going okay, this is bigger than me. Other photographers need this. I started sharing with other photographers. They got excited. And so I built a website first.
Clay: Okay. So let’s stop right here. So what Nate did was he had photography clients, people who hired him to be a photographer who wanted an app on their phone with all the photos that he took. So for example, with Nate at a wedding, the bride would want an app on their phone with all the photos from the wedding on it so they can show their friends. Maybe they can pick among those photos which ones they want to turn into prints.
So Nate’s customers loved this, and he started thinking how do I get this new revenue stream that I built for myself, right, because when he created apps for let’s say the bride during the wedding, he charged for that. So he created a new revenue stream for his photography business, and so he started thinking how can I add this new line of revenue? How can I add this revenue stream to other photographer’s businesses because other photographers are hurting and would like a new revenue stream? So is that – Okay, cool.
Nate: Yup, yup. And I think the real value piece I found is this photography market is so saturated right now. With everybody and their mom who has a DSLR for Christmas decide they want to be a photographer is great. That’s how I did it tool. The ease of getting into photography with the technology and all of that has gotten so much easier, and so it’s made it hard to compete, and so that’s what StickyAlbums helps people do is that it helps them spread word of mouth. It’s like a digital business card at the very essence and that’s what I really latched on to is that the key problem I’m solving for photographers is helping them market themselves more effectively and differentiate themselves from the competition.
Clay: So basically, StickyAlbums is a number of things. It’s a differentiator in a marketplace where a whole lot of people are just running around with digital albums. So it differentiates you. It legitimizes you, right, if you have an app that’s an app store or is otherwise available that kind of makes you stand out, it’s a new line of revenue, so in other words, it’s an upsell. It’s a glorified would-you-like-fries-with-that. They’re already paying to get the customer, and once the customer is in the door, if they can get that customer to spend more that’s just pure gravy.
Clay: Any other things you’d use to describe it?
Nate: I think that the key thing is I really kept it as simple as I could. I think that there’s so many things that I want it to be still, and I thought it had to be before I went live that I think we learned. It’s just it doesn’t – The simpler – The simplicity of StickyAlbums is why I’d been so successful. It’s very straight to the point. There’s a – I think it’s not any apps store. It’s just an HTML file web app, and so both my clients and their photography clients don’t have to deal with going to the app store to get a special viewer, installing things special. They can just share it with a URL.
Clay: I see.
Nate: So in that simplicity, there’s a lot of trade offs that I’m very aware of and wish it weren’t there, but I think you always have to pick – Instead of just straddling the trade off and trying to do everything to everyone, I very clearly decided okay, I’m going to go this direction because this, and I’m going to maximize all of the benefits that come with this route.
Clay: Sure. Now let’s put a timeline to what happened. So you were providing this service for your clients, for the people who hired you to be their photographer, right?
Clay: They would get this app. And next you realize that your friends who were photographers wanted to create a little bit more money and provide this service to their clients as well. So what was the next step? Did you start providing it to them then at that point?
Nate: Nope. So I’ll walk you through it. Another way to this sort of workflow, how I realized this was going to be something important is if you go a little deeper into photography industry, there’s – In high school senior photography, there’s this thing called Senior Models where you pretty much do a shoot for free for the cool kids, then they’re going to go tell all their friends, right?
Nate: Back in the day, you’d give those models the business cards and a custom like printed album that they could go share with their friends, and that was really effective for a long time, and remember like when we were maybe in high school, everybody got wallet prints. All that stuff is gone with Facebook and mobile phone. No, seniors don’t want to carry that stuff, and it actually took my own cousin to tell me that. She’s like, “Nate, seniors don’t want these.” I was like, “Oh, I’m going to print this up for you and you can share them with your friends.” She’s like, “It’s not cool, Nate.” I’m so grateful for her just being able to be that blunt with me, and so that’s what got the wheels turning. I’m like okay, of course, seniors don’t want anything on paper, but guess what, they have everywhere they go their cell phone, and that’s what got the wheels turning into building something for their phone.
Okay, so then, I quickly – I’ve built like literally like 3 or 4 of these for my own customers, and I knew right away that this was a business model. And I also knew that there was a tremendous market for experts on the photography side teaching and offering products and services to other photographers new to the market. And so I sat down and asked myself, “Look, I’m a trainer. What can I teach people in photography that I’ve learned the last few years?” And I was like okay, I’ll just create this online videos and I’ll teach people how to build these apps. And thank God, I got a developer friend. My next-door neighbor is my best friend, and he’s like, “Yeah, that’s a really niche market dude,” like who’s really going to have the time to watch the video and they’ll wear it all to edit HTML themselves. All these people are going to want to just have a done form, and what you’re talking about isn’t super complex.
Nate: All right, yeah, yeah, yeah, and that was just for your side like conversation in the backyard.
Clay: So I just want to pull out something. Whenever I hear a nugget, I kind of want to just focus on that for a second. So you know, a lot of people watching the Marketing Show are in the information product business. A lot of us are in the software business as well, but I think that so often, in the information product business, we end up creating information products that really should be some other kind of product, you know. Maybe it should be software. Maybe it should be a physical product. You know, what we do with our own software is instead of teaching folks how to do marketing correctly, we’ll build apps that built in best practices into the software that we distribute.
And so, I really like that pivot that you made Nate from like I’m going to teach other people how to build these for their own client, and then folks are going to pay for the information on how to do it. By the way, you probably would have done okay with that, but instead of doing that, you said, I’m just going to do this for you. And so what you combined is done for you with revenue stream. So you know, maybe it sounds a little weird to say this, but you provided a done-for-you revenue stream to photographers on the cheap, and that’s brilliant.
You know, if anyone out here is familiar with the market, and they can think of a way, dream of a way to create a done-for-you new revenue stream for professionals who are already in a market, already have access to customers and are looking to make more money, you know, there are few things in life that are more sure thing in terms of, you know, getting your business off the ground. So okay, so that’s what you did.
Nate: Absolutely, yeah. And I’m learning all of these terms kind of up to the back. So right about that time, when I decided to make it a company, I knew website. I could do web design, right. So I build a website, and I assumed that I would – all this stuff would have – I would pay the developer hours and hours and hours and hours to manage like member’s stuff and Paypal integration. I just assumed it was to be so terribly hard, and with a few, by the week’s worth of research, guess what? There’s S2 member plug-in, and it’s like $100, and bam, I’m connected to the Paypal, and I’m managing like membership levels. And I could just figure it out with like not even knowing HTML, just doing WordPress.
Clay: What plug-in was it?
Nate: S2 member plug in.
Clay: Okay, cool.
Nate: There’s so many out there that I just…
Clay: Wish List, Digital Access Pass, like those – There’s a whole bunch of them, yup.
Nate: Exaclty. And that was really eye opening to me that the only thing really in my way was time. And so I just decided to start making time, and everybody complains like you’re going to rot that work or something like that. I was really surprised how much time I was able to create. Yeah, I wasn’t getting a ton of sleep, but anybody who’s saying they can’t do it, I started to – I have a 6-month-old baby boy…
Nate: …and a 2-1/2-year-old daughter, and so we had our second kid while I launched this company.
Nate: That was insane.
Clay: Wow. My hat is off to you.
Nate: It’s cutting out like I didn’t watch a ton of TV. I love TV. I love watching – I’m current on any good show on HBO and Showtime.
Clay: No episodes breaking bad.
Nate: Exactly. I’m current on those, but like for the first…
Clay: You’re like that one I do bought.
Nate: Well I’m currently getting out. That’s the good news. But during that time when I launched, I didn’t play video games. I didn’t do – Certain amount of things I carved out, and when you sit down, instead of – I think when you’re honest with yourself, people can realize how much time you waste online. There’s just hours that can go by.
Clay: Totally. All right, so you did it for your clients. Other people wanted it, and what was – So you decided – You thought about doing information product around it, decided not to do that, and so it seems like a series of barriers that existed in your head, but didn’t actually exist in real life started being – knocks you down, so you figured out how to do the shopping cart, different membership levels, and then, when was the next time that you actually charged for it?
Nate: Yes, perfect. So then I had the website up, and then – and like I was ready to start – I was capable of charging not thinking that I would yet, and then I watched this great video – Is it Spare Foot on Mixergy. He did a really good example of how – He’s like yeah, we just put our friend up, and people did a search, and then we completed the search for them offline. And the light bulb went up. I was like that’s where I’m at right now. I could just build this for people. I could start selling today…
Clay: Okay, okay. All right, all right. So this is awesome. So now we’re at another sort of point of insight here.
Clay: So what you did is most people, when they realize that they were dealing with something bigger than themselves, most people would have gone out and started building the product, but you put up your shopping cart first, and I think that’s super important. I think you don’t really have a business until your first customer purchases something from you, and can you imagine having like a grand opening of a store and there’s no shopping cart in there like the shopping cart is the first thing you build, and so you have the capacity to take people’s money first and foremost, and then you thought about how you’re going to actually deliver the product, and instead of doing this in automated fashion, you were like hey, I’ll just do the first few myself. Is that right?
Nate: Exactly. So I really modeled myself after the service. Annie Motto has a huge foothold in the photography business.
Nate: I love Annie Motto. A huge fan of them ever since they’ve started, and I really wanted to model myself after them. And so essentially, the work flow for the customer is the same. If you go to Annie Motto, you grab some videos. You pick a song. You upload them and you arrange them and you’re done. You get a link back. The deliverable is a link. That’s the same thing I’d deliver my customers as a link. It just goes to a mobile app instead of a video.
Nate: And so I was like okay, I can just build this. I don’t need a server on AWS to do this for me. I can just build this until I know that I’m actually on to something. And I won’t know that until people start paying me for it. I didn’t even know what lean start up meant. I just was like I saw this dude on Spare foot say it and I was like yeah. I didn’t even think of another way like why would I risk. So the back story is I did some shopping around. How could I turn this into an Annie Motto like service? I could build up myself which I could because I was really inspired to like I can just figure this out. It might take me a year to figure out, but I bet I could. It wouldn’t be that great. I could have some help from developer or I could pay somebody to develop it.
So I shopped around and people were saying it would be about 10 to 20 grand to build an MVP of what I needed. I was like okay, awesome. There’s no way I’m going to risk 10 grand until I know that this is a proven model. And so then – Okay. So then I ran a promo. My first promo was a little bit smaller than the one you know of, and this is a cool insight is again, I didn’t risk any of my own money. I went to a really popular blog where I knew exactly where my target market would be, and I said, “Hey, I’m new to this space. Can I give away a few memberships to my program in exchange for a blog post?
They did a feature called StickyAlbums and they did a contest where people liked my page, and etcetera, etcetera, and…
Clay: Wait, they didn’t charge you for that?
Clay: They did it just for the privilege of hooking their members up with this info. Can you share what blog that was?
Nate: Wait, wait, wait, wait. No, I’m sorry. It was $500. So they charged me $500 to run this promo.
Nate: And I was really excited about that because it’s like well, this is a lot of – Like $500 is a lot of money for me, and this is kind of like a make it or break it moment. I’ve got $300 in other things in web hosting and other plug ins that I purchased, and I was like okay, here we go. Let’s give this a shot.
Nate: And this is fun.
Clay: Can you tell us what blog that was?
Nate: It was called Rock the Shot.
Clay: Rock the Shot, okay. Cool.
Nate: Yeah. And there’s literally – I’m lucky I think that in my market, there’s dozens of sites like this, and I’m hammering all of them now.
Nate: But they were really helpful like really supportive and I ran this contest, and I had like 10 customers over the weekend. So I was like two $2500.
Nate: Okay, that’s awesome.
Clay: How much was the product?
Nate: I think at the time I was selling it for $99 or $89 or something like that.
Clay: Flat rate or per month?
Nate: That was an annual membership. And I’ll speak more to I think by accident, I started following sales to annual memberships. I offered monthly, but I really discounted and stressed the yearly, and more about why that’s great.
Clay: So you ran this, and you had 10 sign ups at $100, so that’s a grand, so you’re up $500.
Nate: Yeah. Yup.
Clay: That’s a great return on investment for paid advertising.
Nate: Yeah, I was pretty stoked, and so I said, “Okay, this is awesome.” I’m doing my math wrong. The number that sticks, I think I have $2500 in sales.
Clay: Okay. So it must have been 25?
Nate: Yeah, it must have been. So I was pretty stoked. And so the scary part then was remember, this was not automated. So now I had 25 customers that could upload unlimited album to me to start building them.
Nate: So I started panicking. I’m like crap, this is good, but now they start uploading them, and people were like okay, how does this work, and they liked them, and I kept those 25 customers really, really happy. And I’ll say this point now, and I’ll probably say it again is another law I followed – I didn’t make this up. I learned this somewhere else – is early on, you got to do things that don’t scale at all. And the one way I know I can always compete when I’m small is customer service. And people shit their pants when I – They’ll send me an e-mail with a question, and they’ll have their phone number in their e-mail signature, and I’ll call them back like 3 minutes later. They’re like, “Hey, this is Nate from StickyAlbums. I’m just returning your e-mail.” And they’re like, “What?”
Clay: That’s awesome.
Nate: They get oh my God, I’m going to sign up right now just because you just called me. I have no – So early on, you can do those types of things, and I still am doing them today.
Clay: That’s so cool.
Nate: I do that because I love blowing people their expectations out of the water when it comes to this customer service. The bar is so low. It’s a really easy, a good place to compete because customer service – Okay, so then, I’m going okay, I still don’t want to risk another 8 grand of my own money on getting this automated. What do I do? Do I do another couple promos like this on other blogs and just gradually build my way up? But at the same time, I’m thinking what’s my capacity? How many customers can I really keep happy? Now not only am I trying to build business. I’ve got to build these albums, and luckily, they weren’t coming in too fast, but I was still up to like 2 in the morning building them up.
And again, my savior, the developer next door, really rational thinker. He’s like well – He’s like, “Shit, how long does it take you to make them?” “It’s about 20 minutes per album, and that’s if they follow instructions perfectly.” There’s some goal between it was taking me too long. He was like, “Well, I could build you a tool out of dotnet that lives on your local machine. They could just make it, automate some of the things that you do on your machine before you upload it up the server.” “Okay.”
Clay: Wait. The developer next door, why don’t I have one of those?
Nate: I know, right.
Clay: That’s just awesome. That’s great. It’s like the mythical girl next door, and they never live next door, but that’s great. So how is – I want to hear what the developer did next, but just – It occurs to me right now that there’s a lot of like, you know, a lot of late nights. How is this affecting – I mean if you don’t mind sharing. No worries if you don’t want to, but how is this affecting your family? Is everyone still kind of supportive and things are going okay?
Nate: Yes. My wife was awesome throughout, but I tell people there’s so much value and always – You’ve got to have people that are your cheerleaders, and you have to have some people that are always going to give you like are you the devil’s advocate? And my wife, bless her heart, she’s amazing like not negative, but just dead honest. She’s like great, okay, 2 grand, what’s that going to buy us? What’s 2 grand? What’s next? And I was like, “You’re right. I know that’s just 2 grand. Well, I’ll keep chugging along,” and I’ve kind of set expectations where – As long as all I was sacrificing was my time at night and my lack of sleep wasn’t impacting our relationship in the family, it was okay. And then I walked that line perfectly now, but learned along the way.
Clay: Well it sounds like the good side of this is is that, you know, with the devil’s advocate that it sounds like if you made a reasonable argument, everything was fine. Obviously, you’re where you are today, so it turned out okay.
Nate: It did. And I wouldn’t – I probably would not have been. I think it’s too easy to get too optimistic too early, and you’ve got to trust your gut, but just so you can take action quickly, but you also do really do fail quickly because a lot of the things that I tried didn’t work, and a lot of the assumptions I made weren’t accurate, but I wouldn’t have known that unless I just tried it.
Clay: Okay, so dotnet, developer next door.
Nate: So now I could build them in 5 minutes, and I have gone to Photo Dough before and said, “Hey, I got this new thing. It’s like Groupon, but for just for photographers.” They take 25%, which is pretty good considering, I think compared to some of the bigger sites. They hang on to your money for a little while. That’s just because Paypal can exchange it. Okay, so then, I call the guy. He said, “Dude, this is awesome. You’re on to something here. How does this work?” And he could kind of tell early on it wasn’t automated. He’s like well I can’t run this because you’re going to get like 500 customers and you can’t support 500 customers. I said, “Yeah, yeah, I know, I know. I’ll call you back when I’m automated.” And this is a huge white lie that I told, and a huge risk that I took, and I would have refunded people’s money in a heartbeat if I couldn’t have kept up. That’s how I rationalized it. I had my buddy write the dotnet tool. I said I’ll call if I do better. I’m automated. I’ve got some automation in the back end. There’s a little bit here and there that I’ve got to approve. It requires like a human to make sure it looks right, and he’s able to run it, and that was probably the most exciting 3 days of my life.
Clay: That’s awesome.
Nate: It’s got – My whole family was online hitting refresh, and I had 189 customers, 3 days, and 10 grand.
Nate: And that was my seed money right there, so I was like boom, done. 10 grand. Shit.
Clay: 10 grand. Is it 10 grand that you kept?
Clay: Okay. And how did your promotion compare to other promotions that they run? Did they usually make as much money off of promotion like in the scheme of things like how did your offer compared to other offers in the photography space, you know, into that market?
Nate: Yeah. I was kind of in the higher percentile. There was some that had done better, but I was in the upper like 80% I think.
Clay: That’s awesome.
Nate: So just a side note on the product about the value that it delivers. There’s a lot of services that do something very similar to me. There’s like Mobley and all kinds of sites that even target photographer websites, but help them turn their website into a mobile version of their website. That’s an interesting business to be in. It’s really fine where a.) it’s hard to sell because you’re trying to sell somebody a new roof to their house. They already have a roof so you’re trying to sell somebody a better version of what they already have. That’s hard to do. Like you said I delivered them a new product. I gave them something, a new tool to use, and something that they could sell.
Nate: Above and beyond their website. So okay.
Clay: And let’s do some Math on that though. How much – So it cost 99 – What’s your pricing now? Is it still $99 for a year?
Nate: No, no, it’s $189 now that I’ve got more features. It continued to go up a little bit.
Nate: $189 for a year.
Clay: $189 for a year, and they get unlimited albums for $189 a year, and how much does a photographer typically charge for like a StickyAlbum for a client?
Nate: It varies. A lot of them, which I recommend where we go back to the real value that this delivers is the word of mouth. It generates.
Nate: Here’s the value profit. It comes across choppy, but…
Clay: You’ll tie it up over time.
Nate: Yup. What this allows is that the photographer’s customers can now say this. “Hey, check it out. My photographer made me my own app.” That ability is such a conversation stuff.
Clay: That’s cool.
Nate: It’s all of their customers sharing everybody they know, and it’s in person. That’s the other big thing about Mobile is it’s making the web social again where Facebook is us just staring at our faces out of Facebook on those pictures.
Nate: Mobile, we’re looking at our pictures together again in person, and really meaningful word-of-mouth referral start to happen, and so that’s the real pitch. And so some customers, some photographers are just giving it away as a bonus…
Nate: …and are charging $200. To get you back to your number is if it helps them win one new client , they pay for it, and then some.
Clay: Okay. So they can recoup their investment in…
Nate: New customers.
Clay: …one of two ways, or you know, both way. So either they can charge for this, which it sounds like some people are or creates a really kind of cool business card that’s on everyone’s phone. Is there any like white labeling or branding like if I’m a customer of yours and you know, you made me an album, and it’s on my phone, and I show it to my friends, is your logo going to be on there?
Nate: No. So at the pro level, I left them, completely removed my branding.
Clay: Oh, I don’t mean like – Okay, so let’s pretend that I’m talking about one of your client. So if one of your clients makes me an album for my wedding, and I show that to a friend, is my friend going to see the logo of the photographer?
Nate: Yes, yes.
Clay: That’s awesome.
Nate: Yes. That’s the pitch right there. That’s it. So what’s so cool is then they have that in-person conversation, and then they share it with the share button, and now their friends have the app on their phone. So a couple months down on their own, they’d go oh, I think I’m going to hire a photographer for my wedding, whatever it is. Who did Jenny hire? Oh, that’s right. I have that app right on my phone, and I have their phone number and their website and their e-mail right on my phone, not buried in e-mail, but as an app on my phone.
Clay: Yeah, that’s invaluable real estate. They don’t have to search in Google. It’s right here. So that’s awesome. So if someone has the app installed, they can actually give that app to their friends and…
Nate: No. It’s just sharing a URL is all it is.
Clay: Okay, so it’s like an HTML 5 like responsive website basically that has an icon attached to it and just adds to their list.
Clay: Okay, cool. That’s awesome. Okay, cool. So you did this promotion, and you make 10 grand, and that’s your seed money.
Nate: Yes. And so the analogy I make is so like I double down on my money and then got tingling in sitting out playing blackjack, and I just said, “Here you go,” and slid it over to the developer and said okay.
Clay: Wow. Are we still dealing with the developer next door?
Nate: He really wanted to help, but he has 2 kids of his own and I needed now. I was like panicky too because now I have 200 customers that could build unlimited albums. And so that’s – I really started to get…
Clay: That sounds like a nightmare.
Nate: Yeah. I was really nervous so I was like I celebrated with my 10 grand for a minute, then my wife’s like, “Wait a second. Where’s my cut?” Like going to the developer, and I went in, and bless her heart. They were like yeah, this is going to take like a few months to build, and I was like, “Oh shit.” I started to panic even more. I said, “Look, I really need this done as soon as possible,” and they pulled a lot of strings for me and got down in 30 days.
Nate: It just – They were really good at coaching me too on keeping things as simple as possible because I had always cool things I want to improve upon, but the reality I had to keep reminding myself is people have signed up and paid for as it was. So even though I wanted to make it better, I didn’t have to make it better yet.
My customers were already happy. Let’s just get it built, get the baseline thing built, and then I can always approve upon it later.
Clay: That’s awesome. So can you – You know, can you share like did you go to a freelance developer? Did you go to one of these development shops? Did you outsource to India? How did you make the decision of, you know, who’s going to get this work?
Nate: I got really lucky. I mean that’s – Out of all the things that I think I did right and the mistakes I made, I looked back and holy shit, I interviewed 3 different developing companies, and when I look back now and see which direction those other two would have taken like one wanted to build an Adobe Air app for local and not on the cloud. I think that one wouldn’t have been as good as it is now. One was just a one-person shop, and what I went with, they had a combination of in-between cities and the Eastern block developer. So they had a really – I knew I had somebody with really deep technical knowledge to project manage for me because I wasn’t a developer.
Nate: Combine that with the cheaper labor from the Eastern block. And they manage all of it seamlessly for me.
Clay: Cool. That’s incredible.
Nate: So yeah. And then – But I – Here’s a good anecdote is I broke my keyboard, the copy control, being control C. I had to build 400 of these apps in those 30 days. 400 fucking of them.
Nate: And that was – Again, I just knew I had to keep the customers I had. I treat my early customers like gold because they have to stay happy, and here’s a good lesson. What I assumed would be the end of me. I thought that because I had positioned this as an automated thing, I thought those 200 customers would realize that it wasn’t automated and freak out and go Twitter and hate mail and all this stuff. They loved it because all they had to do was gather their images and do a zip file and upload it to me, and I handle the rest. I got it back to them within like 24-48 hours, but it was still super easy.
Nate: And the reverse was actually true because I rolled up the automation and I got all excited. I was like, “Hey guys, it’s live. Check it out. It’s great.”
Clay: Yeah, they didn’t care. They were like oh, you were doing it custom for us before.
Nate: Exactly. It was like now, this is more work. What do you mean? What are you so excited about?
Clay: That’s awesome. So when you do 200 in a month, how long did it take you to do an album at that point?
Nate: I got it down like 5 to 10 minutes.
Nate: 400 in a month. It was insane. So yeah, I got pretty good at it, but it was blur after a while.
Clay: And that was a month of doing that until the automated thing came out.
Clay: When the automated thing came out because, you know, people always make this timeline sound so simple, and so I’m really trying to tease out the complexities. You know, people say oh yeah, I do an MVP, and then there’s the service MVP that you do before that, or the Concierge MVP or whatever the hell it’s called where you kind of do it yourself. Well, that’s a pain in the ass if it actually works. And then when you do get it automated, it never comes back perfectly from the development shop unless you spec the hell out of it, so it when it came back like was there bugs? Did you customers find the bugs before you did or did you find them first? You know, what happened when you like the development shop calls you, and they’re like, “All right, it’s done.” How did it look at that point?
Nate: There were bugs, but we had this really annoying issue with Safari, and they were like, “Well, do you need Safari to work?” And I was like, “Anybody else wouldn’t, but I’m doing with photographers,” and I bring up my Google Analytics, and like 80% of my visitors are using Safari, so we had to painstakingly get through this really annoying bug that was happening with Safari, and it was just through trial and error, and really number one, I think following up with customers immediately. Just returning an e-mail or calling somebody just totally diffuses the situation. And then it being really continuing to follow up with the developers, and again, I got really lucky. I’ve heard horror stories where if my development firm would have said they barely used it and you said no, we’re done. Wait, we built it. It’s yours now. But they really took it upon themselves to make sure it worked how it needed to work.
Clay: Okay, so you got it built. So what did it take like a week or so after it was delivered to you until like you actually integrate it into your site and released it and then it go live?
Nate: I had a live right within 30 days. It was totally live and working and running.
Clay: Oh, I see what you’re saying. Okay. And did they actually like upload it to your site and install it, and like make it awesome for you, or did you have to do all that?
Nate: It was a combination. We worked together on that.
Clay: Okay. Cool. Okay, so you’re live with the automation. You’re like hey, yey, it’s automated and customers were like ah. And then what happens now? What is your next sort of major struggle or goal at this point? Is it really now focused around marketing, and you know, I made 10 grand, and then I completely lost it, and now I’m sort of like up like maybe $500 and a whole heck of a lot of time, what comes next?
Nate: And then – By now, I’m like devouring every Mixergy video I can possibly find. I’m learning as much as I can about what to do next, and…
Clay: Mixergy is awesome by the way. I just want to put a plug in for them. That’s great that you were doing that.
Nate: Yeah, them too, and also, Micropreneur Academy. I wish I would have gotten into there sooner. I didn’t get until a little bit later, but if anybody, I’ll say that it’s targeted towards developers, but I still – Even as not a developer, I still got a lot of value out of that.
Nate: Some good discounts, which I like. Like I got to interview Jason Cohen for an hour.
Nate: That was fucking awesome. He gave me a lot of really good ideas.
Clay: What did you interview him about?
Nate: He just does coaching. I don’t think he does it anymore. He’s so busy with WP engine, but he just did 1 hour of coaching for me.
Clay: That guy’s a rock star. It’s awesome.
Nate: It was such a valuable hour. It was pretty cool.
Clay: Yeah, cool.
Nate: Like I’ve been following all his blogs. It’s a good place to start. People are interested. Okay, so know, I’m trying to – I remember when you said this a couple months back. I kept feeling like this guilt like I should be doing SEO. Everybody says I should be doing SEO. There’s just so much noise out there about it, and even though I kept pushing it away, pushing it away, it was still nagging me until finally, 2 months ago, I was at one of your sessions. You were like who cares. The analogy I made for myself is if I’m Tiger Woods, the kind of golf ball I use matters. I don’t play golf except once or twice a year. You can use a brick and range ball and it’s not going to have that big of an impact on my game. The same is true with SEO. I mean I didn’t know – I have no idea what people are going to search to find me, and who knows if the terms they use are really going to convert anyway.
Luckily, I didn’t bog myself down with that, and I focused on building relationships with other leaders in the industry, people who already had traffic, and said, “Okay. Hey guys, I’ve got this new product. How can I help you?” The really big ones, I did a couple 100 page spots were like $500. I got to do blog post. You know, I gave away an ipad on top of that. So I was sweating still. I’m like okay…
Clay: What was that arrangement you gave away an ipad to like…?
Nate: Another similar blog targeted its first photographers, early photographers. So they do a feature and here’s a plug for a tool. Rafflecopter. I found Rafflecopter through them. They do a giveaway.
Clay: So Raffle what?
Nate: Copter like helicopter.
Clay: Oh, like Rafflecopter. Okay.
Nate: Got it.
Nate: Okay, so what that does is it managed all of these sites. I came on it like the perfect time. I first giveaway I did, they pay somebody to like administrate or count people’s likes on Facebook. I saw this. I’m glad you’re doing that because there’s no way I would.
Clay: Maybe this is their concierge MVP and they’re going to automate it at some point with some dude like – Yeah, all right. The stretchy. Count them up.
Nate: So the stars aligned and Rafflecopter hit the scene and everybody started using that, and it totally simplifies doing any type of giveway. It a.) It makes it dead simple for all of your fans, all of the people entering to enter the contest and in several ways that they are happy to do it. They’d like your page. They follow it. They tweet about you during the giveaway. They share about it. And it’s all automated right in the widget. It captures the data and then it picks the winner for you automatically.
And so that was huge. And the next giveaway I did – This is a really big blog. It’s called I Hurt Faces. Again, just for pro-photographers. That cost like I think $500 or $700 or something, but let alone the sales I did during it, they netted me over a thousand Facebook likes in 3 days.
Nate: That was credit to their traffic and to Rafflecopter making it so simple for people to start following me.
Clay: So you’re running a raffle and it’s driven by Facebook likes. Is that correct?
Nate: That’s the simplest way to say it, yeah.
Clay: You’re paying – I know there’s – I don’t mean like you’re paying for Facebook likes, but you’re running this thing to get likes and you’re paying to run the thing, so it’s – You’re trying to get more visibility within Facebook, but is there any direct sales component? Are you trying to…? Is there a component within this where you’re trying to drive sales?
Nate: I think you’ve always got to marry the tube. I see people not do this. So one of the people I also recommend reading – I’ve always been a huge fan of Robert Cialdini. You got to tie into scarcity, and it’s so annoying to do it, but there has to be a reason for them to act today. And I think there’s so much out there about call-to-action stuff, but I learned that the hard way.
And so during the giveaway, I would say during this promotion or this contest, there’s a use this coupon code and save $30 to $40, and the cool thing I’ve learned is I’ve experimented with all types of values of coupons. It doesn’t matter. Just having an expiring coupon is what matters because people come across cool stuff all day everyday, and they go I’ll come back to that. That’s pretty cool. Maybe I’ll do that tomorrow or later I want to get home. No, you’re like they need for their own benefit like make them act now so they get the service you think they need.
Nate: So that was . . . so that’s how I would make, and luckily, I got to the – I was bracing myself to like everybody says with marketing, you kind of break even, but with each endeavor, I was getting like a 10 x return.
Clay: That’s huge man.
Nate: I got make up . . . I’m like oh God, this is – That’s when I started to get excited because I was like, “Okay, this is automated.” Yeah, I get a lot of customer service. They would perk up when I got a bunch of new users, but once they’ve got comfortable with how it worked that dropped down again.
Clay: It’s awesome.
Nate: That’s pretty cool. What else you want to know?
Clay: Yeah. So where are you today? Can you share revenue numbers or just sort of, you know, the amount of growth you have or maybe we could do something where you could tell us like month one have this many users and just maybe show the trajectory of your growth? Is it like doubling every month? Like what – That would be insane if it were, but like where you at?
Nate: It is cool and I’ll combine with the next segue, which is kind of making the decision now when do I quit the day job. Keep in mind guys, I’m still working 40 hours a week and raising a family during the day.
Nate: So this was nerve wracking. In the first 4 months, I got my first 400 customers – I’m sorry, first 500 customers. It took 4 months to get there, and that’s when I finally decided okay, now’s a good time to jump ship. Let’s do this. Brace yourself. I’m going to go for it.
Nate: And in the 2 months since, I’ve got another thousand customers.
Clay: So you’ve – You have 1,500 customers.
Nate: Yeah, yup.
Clay: That’s awesome.
Nate: It’s going pretty quickly, yeah.
Clay: And are they – In the subscription, are they autobuild like when, you know, some people are paying on an annual basis. Is they’re credit card automatically going to be hit for year 2, or do you have to go and make that sale all over again?
Nate: No, so I’ve – Here’s my thinking, and this is again is I’m flying by the seat of my pants. So you say I did some things right. You just don’t know. I’m just taking risks here and there and going with my gut. So early on, I started heavy incenting towards the 1 year, and the benefit that gave me early is it helps me…
Nate: Yeah, it gets casual point right away. It helps me just capture the market in case. I’ve always been nervous about competition. I finally sort of just relaxed about that, learned to just not pay attention to competition. Just focus my time on me as time better spent. So it helps me capture the market. And then, there’s every – Here’s the reality of having a software product is your customers will always – So I have this automated thing, but my customers will always want more features. That will never change ever. And so I think there’s a benefit in having something monthly. I’m going to start moving towards that because I think I could bump up my rates a little bit higher.
Nate: But that requires me to really adjust to what my customers are saying at a little bit faster rate than I initially could afford to do.
Nate: And so what I would say, “Yeah, that feature’s coming.”
It didn’t have to come by the end of the month. I’d say, “The app is coming this year,” and people are like, “That’s fine. This is awesome. Keep kicking ass.” And so that really helped. And now I’m looking at switching gears and starting to move more towards the monthly. But I’ve had like less than 5 people cancel them. That’s the part that really blows me away.
Clay: Wow. So but with that annually, is it an annual subscription?
Nate: Oh yeah. That was the part I was – So I used that as a helpful incentive to go towards the year is the monthly recurs automatically…
Nate: …and the yearly does not.
Nate: And the reason why I say that is – This is what I’ve told myself is that $21 a month, even if I’m meaning the cancel that’s not quite annoying enough. They’re going to let that slide a little bit longer whereas a year goes by, they’re not using this at all, and all of a sudden, their card gets drained $200, they’re going to send me an e-mail, “Hey dude, I haven’t used this. Can I cancel this?”
Nate: So I figured I don’t want to force people into having something they don’t want.
Clay: Sure, absolutely.
Nate: Right before their year will be up, I’ll send a mass e-mail out to them and say, “Hey guys, your membership’s due this month. Save $20 and sign up today.” I would much rather earn them back that way.
Clay: Sure. That makes a lot of sense. You know, it’s not typically good practice on a year-long subscription to auto build people for the next year. You just get a lot of charge backs that way. People don’t remember even signing up in the first place sometimes. A whole lot of bad things happen when it’s a high dollar amount and it’s a year later, and they’re like, “What is StickyAlbums?” So hopefully, they’ll remember you, but a percentage won’t.
So cool. Yeah. I mean I think what you’ve done is actually perfect in terms of pricing and pushing people to the yearly subscription. If you have them on a monthly basis, what they would be doing is on a monthly basis, evaluating whether or not they were actually getting $20 worth out of the thing that month, and if you weren’t adding features, then that would not be good for you, and then they’d think, oh, I’d cancelled, you know, and then joined a few months later.
Clay: So it really requires you to perform on a monthly basis, and it sounds like you weren’t when you first started in a place to reiterate that rapidly. So now the value comparison is, is this worth, you know, $100 or $200 to me per year. And then they can easily say, oh yeah, if I can get one customer, it justifies it, but when the analysis happens on the monthly basis, you know, it just doesn’t work out as favorably for you.
So I think all your natural inclinations have been spot-on so far, and I’m sure I’ve ever met anyone so inherently out-of-the-box gifted at marketing. This is amazing what you’ve done.
Nate: And my background is in education, and that’s a pride in keeping things super simple, and I’ve always been a huge study on like human behavior and what has people act a certain way. That’s why I think that’s really helped, but like I said before, there’s a lot of things I thought wrong, but was – The only way I knew that was wrong is I was confident to just take action.
Nate: I say that I was confident enough to trust my gut knowing that most of the time I’m going to make mistakes, and that way, when I thought – So here’s like a really narrow example. Right now, the loading screen on StickyAlbums is – This is a secret. Now everybody’s going to say it’s annoying why I mentioned it. It’s just a gift. It’s like an animated gift.
Nate: Just knows like – It’s not dynamic. It’s not actually showing the progress of a downloading. It’s not an expensive thing for me to add and it’s going to get added, but I thought that would be like the first thing I needed to build. There’s like guys, “How much is this going to cost because I need this?” And I haven’t had a single customer mention it at all.
Clay: Right. So I want to – Because we’re running low on time here and I want to keep this under an hour. Just when it comes to psychology, when interviews are under an hour, people are much more likely to watch them whereas like if they’re an hour or three, people are like ah, screw that. I don’t have an hour. So I want to keep this within our timeframe here. Do you have any employees right now?
Nate: I don’t. Not yet.
Clay: It kills me. That’s awesome. So you’re doing all the customer support, all the marketing, all the technology development.
Nate: No. This is another thing I recommended. As soon as I started making money, I started contracting some of the – a lot of the graphic design, a lot of the marketing development, and stuff like that. I’ll still be doing a lot of customer support. I wish there’s a better way around that.
Nate: I think that’s probably going to be where I hire my first employee but there’s something so clean. Again, instead of just sitting back and going oh, do I or don’t I, I know there’s weaknesses to not having any employees, but the benefit is that it’s super clean. I don’t have to worry about hurting anybody’s feelings when they don’t do good work.
Clay: Sure. Are you thinking about – God, I got to cut out all this clearing of my throat. Are you thinking about raising ventured capital or are you fond with hey, it’s just me. It’s super lucrative. I’m making more in a month now than I used to make in a year. You know, I’ve got customers and sales continue to happen on a daily basis. I see no indent site for this, and this is just awesome. I’m going to do this or are you looking to bring in ventured capital and skill this maybe to something more?
Nate: I don’t know. I think that – One of my – Jason Cohen writes a really, really good article on that in saying one, there’s no way to know which way is right, an advice I’d really taken to heart. He said instead of asking yourself what’s the better business, answer to that question, what sounds like more fun? Do I enjoy like having control over every little detail? Like does building a company sound like fun to me and having employees? And I think some day, I would like to have employees to help develop other people and give them awesome jobs they love, but I don’t – I’m not going to rush there because I think that’s a whole another issue of like sleepless nights again. Right now, I’m going to be before 2 a.m., which is pretty awesome.
Clay: That’s incredible. That’s incredible. Nate, I am super grateful. Thank you so much for doing this interview. I’m blown away by your story. I don’t know if I’ve ever seen a more perfect first-time case study of someone starting up a business and just doing everything ridiculously right. Is this the first company you’ve started or are you like a serial entrepreneur?
Nate: First one.
Clay: Damn. Kills me. It kills me. All right.
Nate: Yeah, in my mine, I’ve always – like I love this show Shark Tank, and I love this stuff, but everything I was about to start I would stop short because I’d go oh no, that’s not going to work. That’s why I’m just – Everything started to fit. I was like this is it. This is going to work and I got lucky.
Clay: That’s awesome. Nate, thank you so much. I’m super grateful.
Nate: Yeah, thank you.
Clay: How can folks find you?
Clay: All right. Thanks a ton, man.
Nate: You bet. Have it going. Cheers.
Clay: You too.