1.8 Million Selling To Golfers Without Being An Expert - with Dave Nevogt

Dave is a serial entrepreneur and now owns a successful SaaS business. But he got started selling info products to golfers. Tune in now.

 

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Starting from Nothing – The Foundation Podcast
Guest Name Interview – Dave Nevogt
Introduction: Welcome to Starting from Nothing – The Foundation Podcast, the place
where incredible entrepreneur show you how they built their businesses
entirely from scratch before they knew what the heck they were doing.
Dane: I really enjoyed this episode with Dave because he’s been an entrepreneur
for 13, 14, 15 years now. He got started and he made about 1.7 million selling
information products to golfers and then like most of the very smart
entrepreneurs that I know, he’s now switching into software and he has a
SaaS business that’s doing over 30K a month and growing.
He started from scratch, he had to leave his job, he had mentors at the time
that told him not to leave his job, that his job was safe – funny – and that he
would give up his health insurance and all that kind of stuff. If you’re looking
for the extra nudge to jump off the fence or if you’re just an experienced
entrepreneur wanting to see another entrepreneur’s journey I think you’ll
really like today’s episode.
Welcome to another edition to Starting from Nothing—the official
Foundation Podcast. I’m your host Dane Maxwell – one of the partners here
at The Foundation.
Today is our Monday series where we interview established entrepreneurs
and slow down time in the conversation for how they got started in hopes
that when you see just how they got started that you’ll be able to see that
possibility for yourself. Whereas other podcasts may focus on how people are
growing from six figures to seven or even up to six figures, while we may
touch on that briefly, our interest is really on how to start from nothing.
Today’s guest is no exception.
Dave, as I understand that you have quite a passion for starting things from
nothing, is that right?
Dave: That’s exactly right, man.
Dane: What is it that you like about starting things from nothing?
Dave: More than anything it gives me such satisfaction to be able to create value
from thin air. That’s what drives me really.
Dane: What does that feel like for you to have the satisfaction creating value from
thin air?
Dave: It feels like just kind of like a rock star. It feels like you’re able to feel free. You
feel able to do things that others kind of dream about doing.
Dane: It feels like a rock star, it feels free.
Dave: Yeah.
Dane: Also, you said it feels like you’re able to do things that other people dream of
doing.
Dave: Yeah. I took a job at out of college and pushed some reports. I hated it.
Dane: TPS Reports?
Dave: Similar. Mostly Excel, whatever. But yeah, man, and I just didn’t feel like I was
creating any value. I didn’t feel like I understood the business. I didn’t feel like
I was really fulfilling my call. So I got out of it despite the advice of my
mentors and my dad and others. I went for this online business back in 2003,
2004. It just kind of exploded. I guess I just feel like there’s so many people
out there that I talk to that wish they could have the courage to go do
something on their own that they never really attack.
Dane: Yeah, I really resonate with that. The courage – they don’t have the courage
to do it. Is that what you noticed in the world?
Dave: Yeah, its courage. Maybe it’s a little bit scared, maybe it’s a little bit …
Dane: That’s what courage is. Courage is [unclear 00:04:09].
Dave: For me it’s not so much a matter of fear of failure, it’s more like fear of the
future. Am I making the right move by doing this now? That’s the thing that I
think a lot of people are afraid to take that leap. They rather keep the
security of what they have now despite their not being happy.
Dane: So, you are going through that phase yourself?
Dave: I was, big time. I was commuting an hour and a half a day just – I was having
fun with the people I worked with but just was not feeling challenged for
those eight hours that I was working per day. Now I love everything I do. I can
make every second as an entrepreneur is a decision that you’re making and
that’s that freedom factor that I love.
Dane: Thefreedomfactor.com, let’s see if it’s available. It’s for sale
Dave: $2800.
Dane: Own it for $2595.
Dave: That was close.
Dane: Never buy that domain unless you have a paying customer first. Would you
agree with that or how would you approach that?
Dave: Yeah. That’s interesting. I started building way before we had a paying
customer. I actually white labeled our product that we have now – a version
of it – and got about 10, 15 paying customers and decided that this wasn’t
right. We started totally rebuilding the whole thing. Maybe it didn’t answer
your question but I tried to get – I knew the product would take years to
build out but I knew it was something I want to do. I guess I’ve definitely built
things before I had a paying customer. So I guess I would not agree with that.
Dane: Wonderful. Cool. What had you not agreeing with that?
Dave: Well, I think that if I look at all of the businesses that I’ve done, I’ve always – I
had a book, I had DVDs. I had to put significant effort into those products
before I could have somebody saying “I’ll pay you for the product.” I could’ve
probably reversed that. I probably could’ve found somebody that was willing
to say that but it just hasn’t been the way that I’ve done.
Dane: Do you find the way that you’re doing it to be fun?
Dave: Oh, yeah, man. I love what I do. Yeah.
Dane: And it’s working for you?
Dave: It is. Yeah.
Dane: Then I would say keep on doing that.
Dave: Yeah. Right now we’re building a few different products and we don’t have
customers but we think it will.
Dane: Yeah. I know it’s like a little apprehension like, “Oh, I really don’t like that
idea,” but the higher perspective that I think is more important is if you’re
having fun and what you’re doing work. You have freedom.
Dave: Yeah.
Dane: Yeah. You can’t dispute those higher principles and values that we have.
Dave: We typically – like some of the products that we’re building it’s like we –
These are products that we would build ourselves in our own business and
use ourselves. And so we build them for ourselves and then we’ll – For
example we use an intercom or think about an intercom product that is kind
of built on top of intercom. A lot of things that we – challenge that we face –
we see a solution and a way to solve the problem and then kind of build it
based on that. That is not one that we’re building right now.
Dane: What you’re talking about – the way I see this – the word that comes to me is
momentum. So you get this product and – we’ll put a link below the podcast
here but I can actually see all of the details for your revenue for your
company because you’re public with them.
Last month you did $31,993. One hour ago, a person’s $49 payment failed.
Another hour ago a company upgraded three users – one user for $5 per
month so you got $15 per month more an hour ago. $49 also, two hours ago,
from another company was charged. Just in the last two hours you’ve made
about 65 bucks and you weren’t there to do that. The company earned that
revenue while you were doing anything else.
Dave: Yeah. That’s what I love about the business that I’m in right now is just the
foundation that we’ve laid. I’ve got a great partner, we’ve had a great team,
and the business itself is just so foundationally sound. We’ve been working so
hard to get that built and now we kind of ruined the fun part of looking more
[unclear 00:10:00] insurance, figuring out how to increase revenue, cost
reposition, all that stuff. We’re in a good spot right now.
Dane: I’ve noticed you’ve been sniffling a little on the interview. Do you have a cold
currently?
Dave: I do, a little bit.
Dane: Bummer. I hope you start feeling better.
Dave: More allergies.
Dane: What kind of allergies?
Dave: I don’t know, man, to be honest. It’s like grass, pollen.
Dane: Pesky grass and pollen.
This thing about momentum; one of the most valuable things that I like about
growing business is the momentum and how many things spawn out of that
momentum.
If you have a fast-growing company or a company that’s growing such as
yours, you have opportunities that you notice that you would never notice if
you hadn’t gotten started.
Dave: Right.
Dane: It’s like the world – there’s like these two worlds that I see. There’s like, okay,
I’m looking to start something. I never got started about something. I need
the courage. I have lots of fear. I don’t know if this is right. There’s this world
you live in of not starting. If you want to start and you’re not starting, that
world really sucks for me. It’s like a world of constant disappointment. Get in
your car to drive an hour and a half to work, you’re reminded about that. You
enjoy your people that work for eight hours or maybe something. Maybe
you’re doing another boring report then you’re reminded about that. So, it’s
just like a roll of constant disappointment. But then when you start and when
you get to some level of success the world that you see, the world that you
get to live in completely changes.
Here you’re talking about this idea of a product that would be on top of
intercom that you would use an intercom’s API to build a software product
on top of. Is that right?
Dave: Yup.
Dane: And you saw that opportunity because your business is growing.
Dave: Yup, and that’s something we struggle.
Dane: That’s something you struggle with. This is one of the great benefits of
owning a business is you can just solve your own problems. You don’t really
care about – this is what happened. You get a paying customer for the
problem because you’re going to build it for yourself. You think people
probably have it but even if they don’t buy it you still now solve this problem
for yourself.
Dave: Right.
Dane: It’s kind of a nice little benefit to owning your own business and solving your
own problems.
Dave: Yeah. You get to learn so much. Through that learning comes all these ideas.
All of the exposure of things that you never knew about before and you never
would have thought about kind of just come to light.
Dane: What do you mean?
Dave: Very similar to what you’re saying. It’s just like problem present themselves
in the day-to-day of forming your business. How am I going to solve this? And
then you’ve got to go figure out a solution. And then you get all these ideas
that come to you based on, you know, for parental startups, that come to
you based on the problems that currently exist in your own business.
Dane: You mentioned something about despite the advice from my mentors I
decided to start my business. What problem does your business solve? What
is your business?
Dave: Right now my business is Hubstaff. We are time-tracking for remote teams.
We basically help remote teams communicate faster via time tracking, screen
shots, application monitoring, all of that. But really it’s about priorities and
what – I had the problem of – When I was doing my golf business I had I think
seven employees. I didn’t really understand what any of them were doing on
a daily basis. I did it based on. I knew their priorities; I knew what I wanted
them to do. We had to launch a lot of products, a lot of videos, that kind of
thing. But I didn’t really know what they were doing that day to the point
where I was really losing sleep over this.
I would do things like try to get updates from them. Send me an email at the
end of the night about what you did today to move us towards the goal of
releasing this video say [unclear 00:14:28]. They would email me for a period
of five days or so and then it would slip to once every third day and then it
got back to the stress point of not understanding what anyone was doing.
Part of that was a management issue on my end probably and part of it was
on their end. We went to try to build the solution that kind of made all of
that automatic.
Dane: I feel like I’d like to implement this in my team and I feel like [unclear
00:15:01] I’d have a fit.
Dave: Yeah. We get that a lot. I don’t know, man. I’ve never had a problem with it.
Now, of course, the people that I interview for my team, they know the
business that we run so they probably know that going into it. Now for me
it’s never been a problem. Yeah. The employees that you’re going to hire
have to be on board with you as a business and making things faster. For me
it’s about communication. I can log in at any given time and understand
exactly what’s going on with my team.
Especially like we work with a lot of agencies, a lot of companies that –
they’re remote. A lot of people, like, they don’t understand what software
developers are actually doing – the nitty-gritty work that’s going on. This
really helps them understand what’s happening. Designers for example. I
could see a design take place as it’s happening in real time versus having to
wait to see it until …
So I can see the work happening in real time. I can understand what a team
member did all last week to say why wasn’t this deadline hit? I could
understand it wasn’t hit because maybe I gave him too much work that
wasn’t related to that deadline. I can see that reflected in those previous
reports. Like I said, it’s like half management issue that we’re fixing and half
work issue we’re fixing.
Dane: How did you get this idea?
Dave: Like I said, it was a pain point of mine to the point where I was just like
almost losing sleep over it, that I just couldn’t understand what people were
doing in my own organization. I couldn’t consistently understand it. I’m a
person that hates meetings. I hate meetings, I hate phone calls. I don’t like to
do one-on-one meetings to understand the progress of things. I’d rather just
have the information at my fingertips.
Dane: As a pain point you were losing sleep over.
Dave: Yeah, that and then I’ll add to that too. The other thing is that I was at the
point where I was spending so much time trying to figure out and push
forward everyone else that I couldn’t get my own work done. And I was the
main marketing machine at that point in time. The marketing was slipping
because the technology – I would manage the technology and that’s not a
good thing.
Dane: You were working eight hours a job, how did you have this pain point?
Dave: Oh no, this was way after I started my – I’ve gone through a progression of
like … I started a golf business – I ran that for ten years. Then I had a different
software company and now I have this. So this is my third company. What I’m
talking about is referencing my golf company that I started back in 2004 and
went until about 2010.
Dane: That’s good. At what age did you leave your job?
Dave: Twenty-three, probably.
Dane: Okay, 23. That was when you got the advice from mentors that told you not
to do it?
Dave: Right.
Dane: Who were your mentors?
Dave: I had a mentor set up automatically. I was in a large company in Chicago –
Abbot Labs. Basically, they had a mentor system set up where I would get
access to somebody higher level – VP in the company, whatever. He was one
of them, Dad was one of them. Everyone’s like – Their thoughts are, “Dude,
you have health insurance. Have you thought about this stuff? You have
health insurance, you have a good paying job, you’ve got security. You just
went through four years of school, why are you going to do this? Are you sure
because we don’t take people back, you can’t have your job back.” They got
that. And so they just couldn’t understand why in the world I would ever
want to give up what I had.
Dane: So, they’re saying, they’re telling you, “You have your health insurance. You
basically have all the safety. You just invested four years into this. Why
wouldn’t you keep doing it?”
Dave: Right.
Dane: What were the voices going on in your head at that time?
Dave: That I was not producing value and I wasn’t – because that drove me crazy. I
didn’t have any creativity, I was not producing any real value for the company
and I think, as I think about it now, the biggest thing was that I wasn’t
creating an asset for myself. I really love the idea that all the time that I
spend is creating an asset for my future. At that point in time, the only thing
that I was getting was I was trading my time for dollars.
Dane: The thing going through your head was – These folks were like, “Look at all
the safety and security you have. Look at all this time you invested.” And
inside you’re thinking, “But I’m not really adding any value and I’m still
exchanging time for dollars.”
Dave: That and just I’m not happy with where I’m at. I’m not challenged. I can’t be
creative. I felt like there was definitely something else out there for me.
Dane: You weren’t being challenged, you couldn’t be creative, and you felt like
there was something else out there for you.
Dave: Yeah. I felt like I could for sure find something else better to do than what I
was doing.
Dane: Felt for sure.
Dave: Yeah. The other thing too was as I looked around – I knew already that I
didn’t want to – I’m a very futuristic kind of a person. I looked around. If I
would have spent ten more years in that job, I knew already that I wouldn’t
want to be in a position that I would’ve been in. Mid-level manager that was
still making that commute, still doing the same kind of work, still, probably
not [unclear 00:21:52] much value to the world as a whole. I think I was just
meant to operate on a smaller level in some senses. Now I’m way more
control and I do feel challenged. I feel a lot more pressure now, of course, but
I feel that feeling of control is awesome.
Dane: You feel more pressure but the feeling of control feels more awesome?
Dave: Yeah. Do you feel those same kind of feelings as you build your business?
Dane: I don’t typically feel any pressure.
Dave: I feel pressure because I’ve got two little kids, I’ve got a wife. It’s been, now,
for a while, man, that we have – I haven’t made personally much income as
I’ve been building this company. That’s where some pressure comes from for
me. I’ve got to make this thing happen. That’s why [unclear 00:23:08] great
spot now because right now we’re just getting to the point now where, man,
this is going to be – This thing has wheels now. We can see the future in the
multi-million dollar level for sure.
Dane: Yeah. I would probably feel pressure as well if I was in that position. I’ve
purposely built businesses so I would never have to feel pressure.
Dave: Yeah.
Dane: I build businesses kind of on common ways. I make them very highly lucrative
and high profitable right from the get-go. Building this business the same way
that you’re building it with the kids and the wife and everything, I relate. I
feel like I could relate. I imagine I would. I’m not there but I imagine.
I really want to focus on this advice from the mentors that you got, this
situation. This is a very common occurrence for a lot of people and I think
that bad advice kills souls – can kill souls. These mentors of yours, why do you
even call them … For me a mentor is not a mentor unless they have what I
want. Did any of these mentors have what you wanted?
Dave: Not really, no. It wasn’t like that. I just used the word mentor just because
that’s kind of what at the company I was working for called that program,
mentor program. So that’s just the word I use. I would not say that – looking
at it today, I would not say that this person … If I’m going to go out and find a
mentor, we have the same kind of definition for that. I would not say that
this person is somebody that I went out and sought.
Dane: These are more like peers at the time.
Dave: Yeah. They were there to help guide me to success with that current job.
Dane: Great. Phenomenal.
Dave: Set up by the company, you know.
Dane: Yeah. Good Lord! Talk about death trap. Man, the vice grips were on you
tight, my friend.
Dave: Yeah.
Dane: They were on you very tight.
Dave: Yeah, but I mean at the same time my dad, he was worried, but at the same
time he supported me as well. He bought me this book, it was from – I don’t
know if you ever heard Early to Rise down in Florida. It’s like … I don’t know.
Not productivity but … I don’t even know if it’s still around, I haven’t looked
at it.
But anyway this [unclear 00:25:48]. He bought me this book, this course, it’s
like $500 back in 2003. I read it, implemented it. He said, “Dave, if I buy this
for you, will you implement it? Will you actually do it?” I said, “Yeah, man. I’ll
do it.” I did it word-for-word and a few years later, probably like 18 months
later, a business doing 1.5 million. I was probably 24 at the time, 25. At that
point in time it was obviously the right decision.
Dane: A $500 course that you followed by word-for-word in 18 months you had
$1.5 million business. Did you have to think on your own at all or you’re just a
monkey following words?
Dave: Oh, no, no, no. Yeah, you always have to think on your own. Yeah. The book
was only probably 50 pages maybe but it introduced me to things like back in
the day like ClickBank. I had no idea about how does it emerge in account. I
had no idea of any of that stuff. It helped guide me through that. It would
help me, taught me all about copyrighting and how to write copy, persuasive
copy in, all these different things. I was dealing with a – It was some
WYSIWYG editor that was just like – I forget even what the site was or
whatever. It wasn’t even like a legit webpage that I was selling this on.
Dane: That’s cool. What a father to even find that product.
Dave: Yeah. I think I get up on the newsletter and then he started reading it
because he knew I was unhappy.
Dane: That’s the kind of a core thing. So, you have this thing, you wanted to add
more value, you knew you weren’t adding value. You also mentioned you
were exchanging time for money. How did you know that concept even
existed? Like “Oh, I’m exchanging time for money.”
Dave: Looking back on it, I say that at the time I felt like at the time that I was
receiving payment for the time that was spent. I just knew that I had to go to
work in order to make dollars.
Dane: That’s such a pivotal moment, man. I wish I could’ve been a fly on the wall.
Was it in a room, you’re sitting there with people and they’re physically with
you telling you this or are they on the phone?
Dave: Yeah, it was in a room, man, it was in a little cubicle. I hate cubes now more
than anything. Yeah, it was in a cubicle and I had this guy living over my
shoulder, man, who say, “Are you sure you want to do this? Have you
thought about insurance? Have you thought about what you’re going to do?
Have you thought about if this doesn’t work out?”
Dane: What about the answers to those questions. Have you thought about that?
What are your answers to those?
Dave: I said yeah, man. I’m sure I want to do this. He said, “Alright, when do you
want your last day to be? You have a choice. Basically you can end your job
tomorrow or you can end it in two weeks.” I said I’ll end it tomorrow, man.
Dane: FU, man! What did you say about insurance though? How did you answer
that? What about your insurance? Did you just disregard it and say I don’t
care. I want to do this?
Dave: No, I said I’ve got money in the bank. You’ve paid me well and I’ll go buy my
own insurance. I’d already done that research of course and so I knew I
needed insurance. Yeah. At that point in time it was just – I don’t know. I was
single, I was paying, whatever, 500 bucks a month single health insurance.
For me that wasn’t too much.
Dane: Five hundred a month when you were single?
Dave: It’s about that much.
Dane: No, absolutely not. It’s so much more affordable for entrepreneurs these
days. How old are you?
Dave: Man, I’m an entrepreneur right now. I’m paying I think $1700 or something
like that?
Dane: Well, you got a family, you’ve got kids; makes a little more sense. Dude, I’ve
been paying since I was 22 $90 a month for insurance. $80, $20 after, 10
grand. Yeah. That will cover me if there’s a catastrophe. $20 coupe
everywhere I go. I’m sad to hear that. I’m just wondering, I don’t know if you
were dodging the question, do you mind sharing your age?
Dave: Yeah, I’m 35.
Dane: Thirty-five. So 12 years ago, that’s 2003. I don’t know. You have bad
insurance advice, bro.
Dave: I bought it on the internet man.
Dane: You’re in this thing and they’re like, man, you got two weeks, you could have
a month, you can even stay here for three more months or you can leave
tomorrow. I’m out tomorrow. How did you feel when you said that?
Dave: Man, just total relief. Yeah, just total relief.
I was so excited to get working on my business full-time. Because I had
already been working on it at night, I had already had – I was working on this
thing. I guess that’s probably important to know. It wasn’t like I just quit and
then I started the next day. Man, I built things at night. I would wake up in
the morning about 5:30, drive for about probably 60 minutes or so up north,
work all day long, drive back home 60 minutes. Get home, have some dinner,
and then work until about 11 at night, get up the next day and do it over. I
did that for about 6 months. So at that point I already had a product and I
knew – I already had customers at that point. I had customers at that point.
Dane: Yeah, good. This is exactly what we recommend. Build your business parttime
while you’re doing a full time.
Dave: 100%
Dane: Tell me about this business that you started part-time?
Dave: It was golf, e-commerce
Dane: Golf or e-commerce?
Dave: Yeah.
Dane: What’s the URL?
Dave: [Peerpointgolf.com 00:33:11]
Dane: I see you have some DVDs.
Dave: Yeah. DVD’s, produce all the DVD’s.
Dane: I’m going to go ahead and I click the like button for you.
Dave: Yeah, thanks. By the way, I’m pretty much totally out of this business now.
Dane: Did you sell it?
Dave: I sold half of it and now I don’t really work on it.
Dane: How did you come up with the idea for this? Tell me about your first sale with
this?
Dave: I remember sitting in my studio apartment in Chicago and I saw the
notification come into my email. I had an old e-machines computer, 17 inch
monitor hooked up. I saw it come in and I was like, man, $46 minus
commissions. I was like, man, that is all – It just started to flow through pretty
quick from there. A few days later, I got [unclear 00:34:25] and then I got a
few affiliate hits and then I would make 100 or 200 sales from that. Like I
said, man, you had to grow pretty fast from zero to $1.7 million in that
amount of time. It just really kind of took off.
I started doing DVD’s and started from there. Then I started outsourcing
training aids and trying to figure out how to procure those. I had a warehouse
in Chicago. Yeah. That business was all based on pay per click. Those were the
days, man. I was paying 5 cents a click. My conversions were huge. Graphic
was mostly mails over the age of 55. Those were back in the days of like you
got mail, AOL kind of thing. What happened was that people … the [unclear
00:35:38] psychology has changed so much since then.
Back then, people really thought that I was emailing them personally. They
didn’t know that this was coming from an autoresponder. They really thought
that these mails were coming from my personal account to them. The open
rates were huge, the conversion rates were huge, the advertising costs were
low and that all kind of started to change. I saw all that change. Now I think
it’s a lot harder to actually – I think it’s a lot easier in a lot of senses and I
think it’s a lot harder in a lot of senses.
Dane: Wow, man. So many questions I want to ask. Let me make a little note quick.
Tell me how it’s easier and tell me how it’s harder.
Dave: It’s easier now because so many frameworks exist, much more knowledge is
out there, so much more training. Back then it was like you had to do – I
mean there wasn’t that many places where you could go really learn how to
do sales and marketing on the internet or build a product. Nothing like what
you have with The Foundation. Nothing like that. It was harder from the
standpoint of like you were really kind of blazing your own trail and not
nearly as many tools existed to do your job.
It was harder to find developers, it was harder to find people who understand
technology, but it was easier because there wasn’t nearly as much
competition. There wasn’t nearly as many – like I said, the psychology on the
internet was different. People really would buy a lot of my products I think
just because they were kind of like – this was their hobby. Golf was their
hobby. I feel like a lot of them were kind of lonely. I was able to give them
attention. Now, they’ve got so many things coming at them, you know what
I’m saying, that that whole thing has just totally changed.
Dane: Yeah.
Dave: We’ve seen ad prices go from – like I said, I was paying 5 cents a click in the
beginning with real high conversion rates. In that particular business that just
totally, over the years, changed to like where I had to pay $1.25. The math
didn’t work anymore. I was in a position where I built a list of about 500,000
golfers all through paid advertising. I couldn’t do that anymore. That kind of
all stopped back in 2008, 2009, kind of that time frame. Then I was reliant
upon the list I had built up already and so I could still release a product and
do well with it but it was all based on the customers I already obtained. It just
kind of died down overtime to where now I don’t really focus on.
Dane: How strong would you say your direct response marketing muscles are on a
scale of 1 to 10?
Dave: At one point, man, they were really strong. At one point I would give them an
eight. I’ve done everything from like physical mailings with pennies attached;
lots of stuff there. Very much built on giving away free information, gaining
the trust and loyalty of a group of people, and then basically just providing
value over and above, almost to the point where … Like I said, they feel good
about buying your products. Now it’s become a little bit different, I think, in
my current business, B to B. It’s a different – B to C versus B to B is just a
different ball game, man. B to B, it’s harder to obtain that attention.
Dane: I want to pause this B to B question. I want to come back … You started to
build … What you’re doing now in the golf just got harder, you just kind of got
edged out. What I’m seeing from very smart entrepreneurs like yourself is
that … Well, okay, so what’s the way of the future? In my opinion, one of
those ways is to build a SaaS business.
Dave: Totally.
Dane: Why did you switch to SaaS?
Dave: It’s very interesting because … In the golf business, I had released a
membership program. I saw the power of recurring revenue. It really saved
my ass, man, it really did because it added so much consistency to the
business. I was introduced to that. I also saw some softwares popping up that
I used and I was like, man, this is really where I want to be because so much
about it I loved. You had a product that I felt was very valuable. What I was
selling at the time was DVD that popped in and you watched for an hour. Lots
of times people wouldn’t even watch it all. They would buy, never watch it.
Software was different because I felt like in the softwares that I was using in
my business – I use these things every day. For me, it’s all about how to
produce more value than you charge and then you know that your customers
are going to stick longer and all these different things. Basically, the way that
I saw that I could create a lot of value was through software. That make
sense?
Dane: Yeah. The info business – I’m going to pause that for just a second and we’re
going to come back to it, what you just said. I want to ask what was the – So
you bought Early to Rise, it taught you how to make a ClickBank product. So
you made a ClickBank product targeting golfers. Is that right?
Dave: Yeah.
Dane: For those of you guys who don’t know, ClickBank products are just …
ClickBank is a digital marketplace. You go to clickbank.com, it’s just a place
where a lot of really, really savvy direct response marketers making absolute
fortune printing highly priced information products to folks. I applied
ClickBank for a little bit as well and ultimately went to software for the same
reasons that you mentioned.
How did you get the first idea for this first product? What was it? How much
did it cost? How did you put it together? How did you find the niche of golf?
All that.
Dave: In that book that I purchased, I learned that you needed to find a hungry
crowd, you needed to know where they were, and you need to – More so
maybe than even a hungry crowd, you need to find somebody that had a very
specific pain that needed to be solved. Man, I played golf and I was in pain
every time I played golf, so were all of my buddies. This was just like
something that was just obvious to me. At the time, actually, it was between
two things. It was down to golf and poker. Those two things. It’s what it was
down to. I chose golf because I just was – I don’t know how to play poker. So,
it was more a passion play. Yeah, man, I just made a good decision I think
with the market that I went in to.
Dane: I don’t think either one would have been a bad decision.
Dave: No, but golf allowed me to do what I love. What I did learn though is that at
the end of the day was that basically the business took over. It was always
the business stuff that I had to focus on, not so much the golf stuff. It’s not
like I was out playing golf every day. Some products because I was doing
everything to I needed to do to sell the golf products online.
Dane: Let me pause you. I want to know about the first product you made. What
was the first product?
Dave: It was a book called The Simple Golf Swing.
Dane: The Simple Golf Swing. How did you decide – how did you build that? Why?
Dave: Because basically everything out there was like 120-page book on golf that
really when you go out to the golf course no one can understand. So you
can’t remember all that 120 pages. So I built a 20-page book, illustrate it,
built it in five steps and said, “All you got to do is remember these five steps.”
Take it to the range, print it out, whatever. That was it. I think that I’ve sold
probably 25,000 copies of that book, 30,000 copies of that book now.
Dane: That’s so cool, dude. How did you put the content together?
Dave: I had Microsoft Word and went out to a golf course that we didn’t have
permission to film on or basically beyond and took some pictures and made
PDF and uploaded it to the server and then that’s it.
Dane: You had videos as well?
Dave: At that point in time I basically went out and found golf pros to work with.
Either gave them a percentage of the business or a percentage of the profit in
the business, or paid them upfront.
Dane: So you were not the expert.
Dave: No.
Dane: Fantastic. Let that sink in, guys. Just let it sink in.
Dave: That’s very important.
I have two things to say on that. I was not the expert. Number one, that’s
good in many ways because you can do so many – it opens you up to be able
to do so many more things. But the bad side of it is, if you’re not going to be
the expert, I would make it something that you can at least produce content
about yourself. Because relying on somebody else to produce content for you
sucks. You see what I’m saying?
Dane: Yeah.
Dave: In my mind this does. Whenever you want to write an email, whenever you
want to write a blog post, whenever you want to – Like right now I love what
I’m doing because it’s my expertise and I can write about it and I can really
put passion into what I do whereas before it was like pulling teeth to get
these guys to create content for me.
Dane: Aw, bummer. I appreciate on both perspectives on that. I see both of them.
Basically, similar process to The Foundation; slight twist as you’re building the
product before you’re selling it. However, you’re following a pretty safe
approach I’d say. Finding a market, finding a painful problem, seeing what
else is out there, repositioning yours. Like 120, how do you actually use this
on the golf course? I know the positioning so I’ve got the positioning of the
product then your next step was to find experts. Tell me about how you
negotiated like specifically. How many experts did you have and how did you
negotiate with each one of them.
Dave: We had three and basically I just give them a cut of the products that were
sold. If I sold 100 videos, we would take out kind of like the hard costs and
then split the rest.
Dane: 50/50 after hard cost?
Dave: They got 30%.
Dane: How did you know to negotiate 30%?
Dave: It’s just what I felt was right. Just felt what I felt would – I didn’t know if it
was right or not, I just felt it. I felt like that was what we had to do in order to
get their interest but I also felt that there was a lot of things needed to take
place behind the scenes that they weren’t involved with.
Dane: Absolutely.
Dave: We changed them out a little bit down the road and we actually started
paying pros up front their daily rate plus $2000, something like that. We
would give them 10% of the sales.
Dane: Very good evolution. I’m really astounded that you knew to give 30% because
of all the stuff going on behind the scenes. I remember when I partnered on
my first information business, I was in real estate so I found the next [unclear
00:51:26] and I published them and we split it 50/50 because I had no
freaking clue what I was doing. I didn’t have Early to Rise. I was making stuff
up along the way.
Dave: Yeah, man. I was just going to say that in comparison to what’s going on now
in software, me and my partner are 50/50 and I love that. I never would go a
different direction than that.
Dane: Is your partner more technical?
Dave: Yep. He’s tech, I’m marketing operations.
Dane: Tech and marketing. I love this combination. I love partnerships when two
people are successful independently. I do not like partnerships when you
have two unsuccessful people coming together out of fear like, “We’re both
unsuccessful. Let’s help each other out,” versus like, “Hey, I’m crushing,
you’re crushing, let’s join forces.” That’s a great thing.
You’ve got the expert. So here’s the thing. This is what I’ve always wanted.
I’ve always wanted to have a lot of friends who understood the world the
way that you do, Dave. I wanted people …
Dave: [unclear 00:52:41]
Dane: Yeah. Thank you. It’s truly an abundant world to me. There’s so much
opportunity and there’s so many things that I could do because I’m not
limited to having to be an expert.
Dave: Right.
Dane: When you were doing this golf thing, you found a hungry crowd, you found a
problem, you built a product, and you put experts in place. Same process
with software now. You found this problem which was your own, you found a
hungry crowd which is other people that have remote teams, and you found
an expert to build the product for you. Same process to golf, it’s the same
process of SaaS. SaaS just happens to be something that’s going to make you
ridiculously rich.
Dave: Yeah, man. I hope so. I hope so. I feel great about where we’re at right now
with the business.
Dane: Yeah. This is real product man like in full vulnerability and transparency. I’m
looking at that product I’m like, “Oh my God! I wonder what my team’s
working on. This person might hate it, this person might really love it. Oh
man! Would this person want to leave if I tried to monitor him this much?”
I’m in that conversation and I’m like really excited to know this product
exists.
Just so you know, when your product clicked for me was when I read this
line. This line that I read, like my body viscerally reacted to, it was the second
– Time tracking sheets with this and this and it’s feature, feature, feature like
meh to me. Just so people understand the headline so you’re listening. The
headline is time tracking software with screenshots, activity levels,
timesheets, simple employee payments and reports. It lands flat. But the
reason it lands flat is because it’s completely feature-oriented. Depending on
the sophistication of your market – where there’s five levels of market
sophistication – that will inform how you position your headline.
In this case, my sophistication level is one so this would be for someone who
has a market sophistication level of three or four. Because my market
sophistication level is one, I scrolled down and I see this headline, “Know
when and what your team is working on,” and then I thought, “Holy crap!” I
saw to the right and I saw all these arrows and screenshots in the video – it’s
a minute and twenty. I was like “Oh my goodness. This is nuts.” That’s when I
felt it right there. You grabbed me there.
I’m scrolling down and I see David [Judge 00:55:01] online special so I’m like
“Blah, blah, whatever, blah, blah, blah.” And then I say, “Whoa! David save 22
grand a year? Holy crap! I have to watch that.” I’m seeing your marketing
prowess on this page. It’s clear that you know how to sell. You could have
software but you could be really crappy at copywriting and sales but because
you have all this experience and all ten years or eight years building different
businesses and building your marketing skills, when you turn that on the SaaS
it’s like rocket fuel.
Dave: Yeah, man. That headline has been tested. I test that headline. It’s being
tested right now. It’s not like – I know it’s totally feature space and I hate it
but it wins and they just got to speak.
Dane: Absolutely
Dave: We’ve tested several other ones.
Dane: It’s so fun to test headlines. That’s why I said the people that are reading this
are probably more sophisticated than I am. [Unclear 00:56:12] level 3 or 4 so
that’s probably why this headline pulls. You still got me above the fold with
knowing on what your team is working on which is why I think this is an A+,
grade A page.
Dave: Yeah. Which version are you seeing? Are you seeing the version that actually
shows the JavaScript timer or are you seeing a version without that?
Dane: I do not see a JavaScript timer. Hold on, I’m going to go on to Safari for a
second and we’ll see. Just so you guys know, split testing is how you either
get your lunch handed to you or get your lunch eaten.
Dave: Right now, that JavaScript timer is working like … it’s up about 27% above the
one you saw in Chrome or whatever you’re using now.
Dane: Yeah, Chrome. Here we go. We’re going to pull this other one up and
hopefully I’m going to get the JavaScript timer. I’m in a different browser.
Fingers crossed. While that’s pulling up – Nope, I got the same one. That’s
alright.
Dane: The thing you mentioned about B to B being harder to get attention. I also
want to mention, what I see the smartest people in the world getting into is
software. It’s no surprise to watch some guy; you do 1.7 million in golf over
the years. We’ll list 500,000 people just naturally see like I want recurring
revenue. Hardly anyone actually watches the DVD, I would actually like
people to use the product that I’m selling.
Dave: Yeah, totally. That’s the main thing, man. That is the thing. The value – every
day we do 275,000 screenshots every day right now. Those usability numbers
like that are like – that’s what drives us almost more than revenue because
it’s like a leaking indicator. How many people are using the product and how
many hours of tracking and just – People are actually running their day to day
business on this thing every day, all day. It’s what they use. It’s the platform
they run the business on.
When we also realize – We didn’t want to build it all so we integrate in with
like Trello and BaseCamp and we let them handle their job and we kind of do
ours. That’s cool because we get access to all those crops.
Dane: You’re right. I’m on the paperlesspipeline.com site and I see 43,518 real
estate agents using this product, it’s the heartbeat of their office. They don’t
have to drive across town anymore. They don’t have to print paper anymore.
There’s all these trees being saved. It’s a lot more gratifying than an
information – If I was selling transaction management, information product
instead I’m selling a transaction manager software product.
Here, right, it’s deeply meaningful. It’s almost like cheating how much better
it is. It does have its down sides though. I don’t actually really know what
those might be. I actually see no down sides to SaaS if you’re managing it
correctly.
What I would like to talk to you about in the last 10-ish minutes or so is tell
me how you built your software product. How much it costs and like how you
structured all that. Make it possible for us to do what you did if you can.
Dave: It will be hard. The reason why it’d be hard, number one, is that it has a
desktop component and a mobile component and that’s what – Man, going
back on it, if I’m looking back on it, I would probably not do that again, and
my partner, Jared, for sure would not do that again. He’s told me many times.
It’s so much harder to build that. It’s so much harder to build.
We’ve been building for two years, man, and there’s other products that
we’re looking at that we can pump out in two months because they’re web
based only. Just dealing with all of the testing required with the desktopbased
product and all the extra complications that takes. The level of the
developer you have to have in order to produce that stuff is just a different
world. That’s the first thing.
We’ve been building for about two years, a little more than that. We’re
getting to a point now where it’s like – like I said, there’s been discussions
internally about actually signing up for The Foundation and to go through
that to build another product because you get to a point where it’s like where
is the ROI? Is the ROI in producing more features for this or is the ROI in
producing new product that maybe related that we can sell to the current
user base or whatever. There’s all these different decisions and ways that we
could [unclear 01:01:11]. And so we talk about that a lot.
We probably have invested $200,000 in the product, maybe more than that.
Bootstrap, [unclear 01:01:29] funding …
Dane: Let me pause you there. How long were you building a product before you
had your first users paying for it?
Dave: We were building – and again, that’s another thing, man. The desktop sucked
in those regards. I’m going to say three months, four months.
Dane: That’s pretty good.
Dave: Maybe a little bit longer. It was pretty rough when we first released it. The
thing is that – I guess it was longer than that, maybe it was more like seven
months before getting paying customer. We saw people coming in and using
it a lot after about probably three months.
Dane: Okay. You had the security of or the safety or like the assurance knowing that
people did want this while you were building it after about three months.
Dave: Totally, yeah. We’re talking to people. The other thing is the price of the
product. It’s not like it’s like we’re going to come out the gates and be like
you come from paying zero to paying $200 a month. It was like zero to $15 a
month. The average revenue per customer was $29.
Dane: Oh, that kind of sucks.
Dave: It does, man. That’s the main thing. That’s the main thing that we’re going to
try to change. The main thing about that business that I would kind of like
start – if I was starting over, I would look way more at a product that had a
different kind of price point.
Dane: What would be the minimum price per month you would want per account
or whatever? Average revenue per user?
Dave: $55 or $60 minimum.
Dane: I don’t really consider a product unless it’s $99 a month.
Dave: I think that’s so smart.
Dane: I only want to do web-based products too. No desktop.
Dave: Totally. [unclear 01:03:30]
Dane: Yeah. So, the $200,000, that’s actually been invested from revenue in the
business. So, it’s not like you’re actually risking that $200,000.
Dave: We put about $26,000 or $27,000 a piece in to start.
Dane: And then everything else has been from [unclear 01:03:50].
Dave: Yeah.
Dane” That’s where I would just say, “Hey man, if you consider pre-selling and you
did that, you probably wouldn’t have had to put any of your own money in.
Dave: Yeah, totally. I hear you. I hear you.
Dane: Cool. I’m telling you that because people listening – I’m just worried. I don’t
want to scare anyone away from SaaS when they don’t need to be scared
away from SaaS. It’s not SaaS that’s risky, it’s the way you think about SaaS
that would be risky. That’s what we would like to train on.
Dave: Yeah, man. I would say totally if I were – I totally understand and I get what
you’re saying.
Dane: I don’t actually want to hear about how you built this product. I want to hear
about how you would build another SaaS right now. All your experience. Tell
me exactly what you would do. Tell me about a product that you’d want to
make in two months for example. What would be your step by step for that?
Dave: Step by step would be basically to understand that problem, have that
problem in mind. We would, for sure, probably take that to a group of
people. I would most importantly – I think the other problem with the
business that we have grown is that the users are not so easily found. For
instance, I go back to the golf example or your real estate example. If you’re
selling software to a group of people that you could easily find, even on
Google Maps or whatever. If you’re selling to insurance agents, if you’re
selling to dentists, if you’re selling to – whatever, man. Even if there’s a place
they hang out online that you know where they are and can find them and
can sell to them, that’s key because right now we don’t really have that. Right
now, we’re growing based on just total kind of like a viral expansion type of a
model.
What I would do is for sure try to figure out a way where that product price is
up there. You said minimum so I say $55, $60 but I would want the maximum
to be 750,000. Every customer is like so much more money. Because right
now we’re in a volume based business. We know that and it’s something we
have to deal with now.
I would look at those things, I would try to, again, identify that market,
understand who I’m selling to very closely, talk to probably 20 of them. I’ll
record it on Skype, I would share it out, I would probably look at three or four
different ideas and test them against a check list that I’ve got that I’ve
developed regarding price. What’s the price? What’s the pain? All these
different things?
We probably would start building at that point in time after choosing one of
those. It would be web only and it would - It’s possible. That business that we
described right there, that’s out there. There’s a thousand of those out there.
Yeah, you got to put some front to get them but they’re out there.
Dane: I’m sorry, they’re out there. Who’s out there? What are you talking about?
Dave: Those business models. It’s not like they’re – Those models are out there.
There is several of them.
Dane: How do you feel when you look at a business like baremetrics.com versus
yours? Is there a little indie there?
Dave: No. We’re doing about the same amount in revenue and…
Dane: It’s all web-based. Their minimum price is $75 a month. It’s everything you
want.
Dave: Right. Right. But, at the same time, we have right now a castle. We look at it
as a castle. It’s very hard to penetrate. Right now it’s growing on its own, the
market is massive. The idea of a work is growing and it’s going to grow for the
next 20 years. I feel like the software’s going to be around for a long time.
Yeah, it’s cool what he’s done for sure. Any web-based business that could
check off those different boxes that I just said, kudos. It’s awesome.
Dane: You’re very savvy at this point. I really like that you said you were considering
joining The Foundation because I think it speaks to how you approach your
education. You’re always learning and you’re not too proud or self-confident
to like whenever you learn things. What has a serious SaaS entrepreneur and
also a serial entrepreneur like you considering joining The Foundation? What
has you wanting to consider that?
Dave: It was really simple. It’s basically that we know we can build a product. We
need to feed our team work. We know at the end of, however long the
program is, that we’ll come out with a product that’s probably profitable. We
like the feeling of the challenge to do that. It’s kind of like a motivation for us
to – We know that we motivated to go through and actually go through this
and at the end of the class, we’ll have two products, not one.
Dane: Would you essentially be paying for the motivation to do it?
Dave: No. Well, we would, of course, learn a lot as well. We would love to get an
extra take in terms of how someone else in a group of people would build a
SaaS based business as well. So we have that. But it’s also just like – Yeah,
man, it’s pretty cool. At the end we’re going to have two products and that
second product may be – based on everything we know now – that second
product – and what we would learn that second product could be the one
that we roll almost all of our time into because it has way more
ROI and has more potential.
Dane: Yeah. The way I see it – would you like my perspective on …
Dave: Yeah. I’d love it.
Dane: The way I see it is you’re sitting on a gold mine of how many paying users you
have with his HubStaff. How many paying users do you have?
Dave: 1,100.
Dane: 1,100 paying users and you have already this existing market that there’s
probably potential to sell a higher prices SaaS to. You already have this
existing customer base built in. I see the potential to be absolutely insane just
from that stand point. Does that sound accurate to you?
Dave: Yeah, that’s why it’s so hard to consider. The only thing holding us back
would be do we want to really – do we want to go through this again or do
we want to really hone – I’m sure you’ve heard the focus thing where it’s like
– there’s no argument where it like, “Dude, you have to go after this one hard
in order to win.” It’s a battle.
Dane: So, it’s a battle. And the thing that’s holding you back is like, gosh, do we
build this new thing or do we just hone in on this other?
Dave: Right. Because Hubstaff’s proven, man. Hubstaff’s proven and there’s so
much more to do that we – And now the cool thing is that we’re almost
through the desktop phase. Now it is mostly web-based and so everything we
do is like so … Now we have timesheets, we’ve got invoice, all kinds of cool
things that we can become now. It’s just a matter of where we focus our
attention. It’s a very – Do you diversify or do you go all in? It’s an interesting
question. Can you somehow do both? I don’t know.
Dane: Here’s what I would do. Hearing everything that you’re at, I would join The
Foundation, apply The Foundation process to my current customer base, test
it with the other three or four ideas I had. That annoying thing about me,
“Should we consider something else?” will be going away. The confidence
and clarity you’ll gain from talking to your existing customer base using our
framework will either inform you to build a new product. You may instead
build a completely another product separately. By the end of six months
you’ll actually have clarity and this will no longer be annoying at you whether
you build this other product or explored your current one. For a price tag of,
what, 5K look what The Foundation is. I think it’s a no-brainer for you.
Dave: Yeah, man. Yeah. I just got to go after it, man, just got to figure it out. Just got
to decide one way or the other, you know.
Dane: Well, I like seeing you smile when you consider it. We do have our class
coming up August 3rd; our next class August 3rd. I would be honored to have
you be one of the first few people on there. I would also just make a mental
note that you’re in there and give you some personal attention every now to
kind of nudge you along. And also work with you on getting this checklist that
you’re building built out even further. So it might even help more students as
well.
Dave: Yeah.
Dane: So something for you to consider. Would you have an interest in being one of
the first students in the August 3rd class? How does that idea sound to you?
Dave: Yeah, it does. It sounds good. I’m not sure who would join: myself or my
partner. One of the two. Right?
Dane: Yeah.
Dave: We have to figure that out internally. But yeah, man, like I said, we’ve been
heavily considering.
Dane: I don’t have an instant hit on which one would be better; you or your partner.
Dave: Yeah, we’re very different.
Dane: I would say probably it’s more on the marketing side than the technical side.
You would probably be able to do it faster than him.
Dave: I don’t know. He’s pretty smart. Part of me says – It’s almost like he’s making
a transition more into marketing as well and that’s kind of what we were
thinking about. It would kind of force that transition to happen. You said are
you paying for the motivation. It’s kind of like no but it’s paying for the
structure to get it done.
Dane: Oh, wow! Yeah, that feels even way more exciting to have him build that
muscle.
Dave: Yeah.
Dane: We’re a little over time actually and I love getting to have this conversation
publicly. And I just want you guys to know that – everybody listening – that
the journey of entrepreneurship is so much fun when you get into it. You’re
always evolving, always learning, always cutting things sharper. Generally
that’s what you’re doing. It’s just kind of this fun game to how can you play
for the biggest win.
Dave: It is.
Dane: Yeah, right? How can you play for the biggest ROI?
Dave: It’s similar to a video game. [unclear 01:17:01] like “It’s like a video game,
man. It’s like how are we going to win today? How are we going to win?
There’s a way to do it. How are you going to do it?”
Dane: It’s like a video game in that like level 1, the first time you play level 1, is kind
of difficult. But since you’ve played the 100 levels, you’re going to go back to
level 1 and just slaughter it. Like your character get stronger and where that
first level was really difficult, now you just breathe on things and they die.
You’ve leveled up so many levels that when you come back to level 1 it’s
going to blow towards something.
Dave: Cheat codes.
Dane: Man, I’d love to stay longer but [unclear 01:17:39] I actually have someone I
would keep in five minutes over. I want to wrap this. There’s so many
amazing things we talked about on this podcast. I think it’d be worth for you
guys listening to a couple of times, especially the part where he’s getting bad
advice from mentors. Think about that. The thing about getting momentum
and what happens with momentum and all these new ideas you get.
The fact that he started in the information business, built that up and he
went into SaaS is really something important. How he would do his next SaaS
as he would stay with web apps only. He would stick with the problem, he’d
find a group of peers, he’d make sure they could be easily found and he
would get three or four ideas and systematically move them through a
checklist so he’s clear that he’s not making a completely emotional decision;
so many great things here, Dave.
For any of you guys interested in joining The Foundation, possibly being a
part of the next Foundation class with Dave, if him and his partner do decide
or just with our future students in the next class, they just keep getting better
and better. Our software app that powers, everything gets better and better.
So, we’re super excited to have anyone considering the next class in The
Foundation. You can apply for that, build your own software company, build
some freedom in the process at thefoundation.com/apply. For Dave’s
business, go to hubstaff.com. Is there anything else you’d like to say Dave?
Dave: Nope, that’s it man. Thank you.
Closing: Thank you for joining us. We’ve taken this interview and created a custom
action guide so you know exactly what action steps to take to grow your
business. Just head over to thefoundationpodcast.com to download it for
free. Thanks for listening and we’ll see you next week.

j