SFN145: From E-Commerce to Process Management in 4 moves and 5 years, with Vinay Patankar

Vinay Patankar is a digital nomad who has carved out his career as an entrepreneur over the last five years. Having decided that he wanted to work while travelling, Vinay set up his first e-commerce business, which allowed him to see the world whilst maintaining a good income. After selling that business, he used what he learned and moved onto affiliate marketing, then an unsuccessful business (in terms of money, but rich in business lessons) and is now working on his current business – Process St.

In today’s show, Vinay chats to Frank about e-commerce, having an exit strategy and what he learned from having a failed a company.

 

In This Interview You’ll Learn:

  • 01:28 – How Vinay got to where he is today
  • 11:50 - Vinay's thoughts on the 4-Hour Work Week
  • 15:15 – What Vinay learned from having an e-commerce business
  • 21:25 - Vinay's thoughts about having an exit strategy
  • 24:25 – About Vinay's newest business – Process Street
  • 32:40 – What Vinay learned from having a failed company
  • 35:19 – What Vinay did to start his new business
  • 49:57 – About funding for businesses

 

Downloads:

 

Show Notes:

Podcast transcript:

Starting from Nothing – The Foundation Podcast
Guest Name Interview – Vinay Patankar
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.
Frank: Welcome to another edition of the Starting from Nothing podcast. I’m
your host today, Frank Mocerino. We’ve got a really great guest with us
today, his name is Vinay Patankar.
Vinay has been a digital nomad for five years and has run three different
companies and is now on his forth. So, for his first company, he learned
about entrepreneurship through e-commerce, then he took what he
learned from there and transitioned into running multiple affiliate
marketing companies. He also experienced some failure with a company
that didn’t go so well for him and now he’s onto his company called
Process Street that simplifies process management and workflow.
Vinay, welcome.
Vinay: Hey Frank, how’s it going? Really excited to be here. Thanks to that
awesome intro.
Frank: Yeah, you’re welcome. It’s great to have you on. I think that we’re really
going to be able to extract massive value for the audience particularly
because you’ve learned by doing. Particularly because you’ve gone
through these different companies, each stage you’ve learned some
valuable lessons that have allowed you to get to where you’re at today.
So, let’s begin in the beginning, Vinay. Tell us a little bit about -- How did
you actually go from college and finishing college through the path of
become an entrepreneur through these various companies up to where
you’re at today? Help us fill in the gaps as to how you got to Process
Street, where you’re at right now.
Vinay: Yeah, for sure.
So, I think that I kind of, as a kid, I probably already had that
entrepreneurship kind of spirit at heart. Something I didn’t really, you
know, I think those any kind of, like, critical moment. But I was always just
hustling candy, CDs, old computers, whatever I could kind of the whole
way growing up. But I didn’t really come from an entrepreneurial family
that had any experience in starting businesses or had any idea of, you
know, where you’d go about kind of starting that, or people to talk to, or
whatever.
And actually my dad is kind of big into education so I just ended up going
into the kind of the normal, you know, went to college. Had quite a few
good jobs early on. My dad was actually a Cisco trainer which allowed me
to get certified and become the youngest Cisco engineer in Australia when
I was 16. So I had some pretty good kind of jobs that gave me good
experience before college. And then kind of going into college that
allowed me to have some pretty good side jobs.
But actually what happened, I ended up dropping out of college so I never
end up finishing college and that was because my parents moved to China,
I’m from Australia. My dad took a job in China. And in Australia, like the
way the university college works, is you don’t get sent to college and then
live on the campus. Everybody stays at home and then you just commute
to college just like you would work, right?
And Sydney’s really, really expensive as a city to live in and so when my
parents’ left, and I was living in the house with them, I had to basically pay
for all my own stuff moving forward. And so that was really difficult to do.
I was working, like, three part-time jobs. So, I ended up taking a job, a fulltime
job, and basically switching university a part-time which didn’t end
up working and I ended up dropping out.
I didn’t end up finishing college per se but I went straight into the
workforce and I went into a job that that was going to earn me -- Basically
my objection was to earn as much money as quickly as possible. So I
ended up working as a recruiter, recruiting software developers for the
investment banks. I did that for a few years.
I chose that job for a couple of reasons. There’s a book Rich Dad Poor Dad.
Actually, funnily enough, I just read that guy, like, fought one of his
companies to bankruptcy. But from what I understand, it was more about
a legal issue versus bad business arrangement. It was just one of his
entities, not like his whole kind of fortune.
But in that book, he talks about how it was really important for him to get
some sales experience early on. I was a bit of an introvert before. I was
super into computers and games and that kind of stuff. And I knew that --
Well, I’d read, kind of from a few different sources, that it was a very
important kind of skill to have moving forward in whatever kind of
business you want. Also, it doesn’t hurt with things like the ladies, you
know?
Plus, also, it’s probably the fastest way to make a lot of money when
you’re young -- in kind of a normal job structure, right? You get a job that
has high commission payments and if you’re willing to put in the work and
you’re willing to innovate in your role, you can really make a lot of money
quickly -- much faster than most other types of roles that are not, like,
commission-based [strategy 00:04:56].
Frank: Yup.
Vinay: It kind of hit all those things and I did that.
Through that, I learned a lot but I also was able to build up a little bit of a
piggy bank, a little bit of a kind of starting fund, right? While I’d always
been interested in entrepreneurship and startup, super into tech, always
watching what was happening in Silicon Valley and stuff, in Australia it’s
like, you know, very much to how this kind of podcast is structured, right?
Like a lot of people don’t talk about -- especially [unclear 00:05:25].
People don’t talk about the smaller entrepreneurs and how they’re doing
things that are still amazing compared to, you know, you working your
job. But maybe not, like, globally news worthy, you know what I mean?
Frank: Yeah.
Vinay: So we just hear about the Googles, and the Facebooks, and the
WhatsApps, and blah, blah, blah. We don’t hear about any of the small
stuff that’s going on which is the stuff that you learn about at conferences
or whatever, or through podcast like this, right?
So, for me, starting a business was always this giant endeavor, you know?
It wasn’t like a little thing that I could start on the side. It wasn’t
something that I could kind of do. It was something that I was going to
need heaps of money for. It was complex and expensive and took a long
time and it was a huge risk and blah, blah, blah. So it wasn’t something
that I ever felt that I was really ready for.
But basically, I got to the point with my job that I just save up a little bit of
money so I actually decided to go traveling. I decided to take a six-month
kind of walkabout, the Australian walkabout, and go backpacking in
Southeast Asia, or in Europe, for six months and I had some money saved
for that.
As I was gearing up to go and do that, I put myself in a reasonably safe
position. I got a house at that time so I had a mortgage and had a little bit
of money saved. I actually read the 4-Hour Workweek which is an
awesome book. It’s probably a little bit dated now in its tactics but I think
that from --
I did utilize a lot of the tactics at the time but I think it was more
important for me to actually kind of understand that it was possible, right?
That was kind of one of the first pieces of material that actually did
publicize these smaller entrepreneurs, you know what I mean?
Frank: Yeah.
Vinay: That was a really widespread piece of content that actually kind of
publicize these muses that he calls them, or whatever. That was kind of a
concept that I hadn’t really heard of before and so that kind of led me
down a path of doing a lot more research, and discovery, and getting me
interested and etc, etc.
Yeah, that’s when I started. I decided I was going to take six months off
and travel and at the same time, when reading the 4-Hour Workweek, I
was like, “Whoa! I can make money while I travel.” That’s the greatest
thing I’ve ever heard. And, like, real money, right?
Equivalent I was making $130,000, $140,000. I think in my last year I made
bit over $140,000 and I was, like, I can make the equivalent amount of
money that I’m making waking up at 7 o’clock every morning, putting on a
suit, working 12 hours a day, just doing this grind. I can do that and work
from anywhere and control my own hours.
I’m not even too fussed about working long hours but it’s more just, like,
the freedom as to when I want to work and when I can rearrange my
schedule and that kind of stuff.
So, yeah, that was an amazing idea and concept for me so that led me to
kind of take my first jump into entrepreneurship.
Frank: Okay.
Vinay: So basically -- I literally followed the book. I started an e-commerce store
in Australia. I was reselling a women’s nail product just throughout a
Shopify store. And initially, just throughout the Shopify store, and just
started just, like, cold emailing nail salons and posting at a bunch of
forums in Australia basically just advertising this product that I was selling.
Yeah, that kind of started to generate business.
I basically set up a bit of a system so that fulfillment was taken care of and
then I went traveling and I just focused on marketing. So I did a lot of
email outreach, did a lot of -- Initially just, like, super gorilla stuff, just
forums and just emailing people and tweeting at people and stuff.
And then basically, eventually, started learning more about online
marking, learning more about AdWords, and SEM, and then SEO, and
email marketing, and all that kind of stuff. That was really a kind of great
experience for me. I ended up running that business for about a year-anda-half.

It extended my trip from six months to a year-and-a-half at which point I
went back to Australia and sold it for -- like mid five figures. Not an
amazing amount but enough to basically give me essentially another year
of being able to test more ideas and be able to kind of take a shot at
continuing this business.
So, yeah, that was basically how I got into entrepreneurship and got that
first bit of experience.
Frank: Cool. What was that e-commerce store making at a monthly basis roughly
when you sold it?
Vinay: I was making about $1500 per month in gross profit. In revenue, it was
probably about $5,000, $6,000 or something.
Frank: Okay. What did you actually end up selling that for?
Vinay: I don’t want to disclose the amount but it was kind of mid five figures.
Frank: Okay. Cool.
Vinay: Most of the traffic, at that point, like when I first started it, when I first
started the store, most of the traffic that was coming and most of the
sales were coming through aggressive outbound marketing or AdWords.
By the time I got it to the point where I sold it, most of the customers
were coming through SEO and just kind of repurchases through existing
customers. So it kind of got to a point where it was a pretty nice kind of
self-sufficient little business that it would had a lot of customers that were
just coming through organically.
Frank: Beautiful. Were you actually spending just four hours a week managing
that thing while you were traveling?
Vinay: I mean never because it wasn’t built when I left, right? It already got -- At
the point that I sold it, it was at its highest point. So it still took a long
time; a lot of grind to get it there. And it wasn’t something that just blew
up, it wasn’t something that had any kind of hockey stick curve. It wasn’t
something that did any kind of, like, organic distribution, or did some
launch and had thousands of affiliates, whatever. Just like every sale was
just, like, grinding.
Until the point where the organic -- I started just crunching out content,
right, and then until the point where that kind of side kicking in which is
really more than a year after I’d started it, that was the only point that I
could -- Well, I felt like the business would sustain itself if I kind of took my
foot off and didn’t spend that kind of 30 or 40 hours on marketing. But I
continue to do it anyway because I wanted to keep it growing. You know
what I mean?
Frank: Got it.
Vinay: I never actually took that foot off.
I think that’s, like, a pretty interesting point about before I work [unclear
00:11:44] muses and stuff like that is that -- If you get your business to a
point that say you can spend four hours a week on it, and depending on
who you are and what your goals are, that could be it’s making $3,000 a
month, $30,000 a month, $100,000 a month, right? But let’s just say it’s
$30,000. It’s probably a pretty comfortable spot for most people where
realistically if they’re earning that much money, they could probably have
flexibility to do a lot of things.
But the thing, I think, that people don’t really think about or at least, like,
not in a lot of the blog post and whatever is, like, if you’re earning $30,000
a month for, like, six months, especially if you’re doing an online business
for a year, especially if it’s an online business. You have no idea what the
longevity of that revenue was going to be.
In the internet, everything changes a bunch of times and I’ve gone
$30,000 a month to zero, to negative 20 up to 70. It’s not a very consistent
thing. Depending on your business model, maybe it’d be more consistent,
like, if you have a recurring SaaS product then your revenue is a lot more
consistent, right? Even then, even with a SaaS product, there’s still a lot of
things that can kind of disrupt your business very quickly.
I think that if you’re making $30,000 a month and you make that for six
months and you’re like, “Ah yeah, I’ve made it.” Whatever money you
have, you don’t have enough to live forever, right? How much have you
put away? $100,000, $200,000, $500,000 still probably not enough. Unless
you’ve really made millions of dollars, you probably should still be working
and not just spending four hours -- Especially if you have a business that’s
already making $30,000 a month, spend an extra 10 hours a week and
make it into $60,000.
Unless you’ve already been running that for 30 years and have your time
and all paid for in your kids’ college funds, or already kind of there in the
bank, right? You probably shouldn’t be taking that pedal off to do what,
like -- I don’t know. I just feel like it’s a huge lost opportunity.
You get to $30,000 a month you’re like, “Okay, I’m going to spend four
hours a week.” And then suddenly, six months later, the thing dies. Now
you have $100,000 or whatever, $200,000 in the bank but you don’t
actually have a business. That’s not going to last you your whole life. Now
you’re going to have to reinvest that money into another business. That’s
a big risk. I feel, like, that concept of “now I’ve got this kind of certain level
of income” is not a good trigger to say “I’m going to go and start working
less,” right?
Frank: Mm-hmm.
Vinay: You should have some type of longer term objective and say, “Okay, I
want to buy this house,” or “I want to set up this much for the future,”
right? Getting to that goal should be the point that you feel comfortable
taking your foot off. Not, like, hitting a certain monthly target.
And especially if you’ve done that in very short period as, like, a lot of
affiliate marketers especially [unclear 00:14:23] stuff can I get to really
quickly, right? And then suddenly they just like, “Oh yeah!” Making
$50,000 they just saw us spending on stupid shit and then whatever.
[unclear 00:14:30] tax bill and then their campaign dies and it’s all gone,
right?
Frank: Yeah. No, that makes a lot of sense.
So the whole idea of the 4-Hour Workweek is essentially totally elusive
and a little bit misleading. Because if you get to a place where you stop
managing your business, the business stops innovating. So eventually, if
you take your foot off of the gas pedal, that thing’s going to die.
One of the things that I’ve heard very recently is that if you’re running a
business that does not have an exit strategy, then you don’t have a
business, you have a job.
Vinay: Right.
Frank: So, I really like what you’re saying there.
So tell us, what were the things that you learned from this process of
developing and selling the e-commerce business that you kind of used to
parley it into your next business of affiliate marketing.
Vinay: Marketing? (Laughs)
Frank: What specifically were, like, your biggest takeaways around the marketing
of that stuff that you used the principles to grow the next businesses over
a million?
Vinay: Yeah. I mean it was like -- The three main channels were pay traffics,
AdWords and social, SEO, and email. In my affiliate marketing companies,
I didn’t really do a lot of SEO but we did a ton of media buying.
All that initial experience that I got just understanding how it all worked,
understanding that I can do arbitrage and purchase ads here and sell it to
a product that I don’t own or push it to a lead, to a company that’s not
mine and still make money off it. Just like that kind of whole
understanding of how the whole market work and obviously how paid
traffic work.
And then email marketing, around, like, once we drive those leads from
the pay traffic, how we’re nurturing them, how we’re getting the most
value out of them, how we’re selling to them, how we’re pushing multiple
products to them, how we essentially extracting the most value out of
those, clicks that we’re buying on the ads, right?
Frank: Okay.
Vinay: So those are the main things. And then SEO, I didn’t actually use so much
in my affiliate marketing but I use it a lot in Process Street.
Frank: Cool. I really like this, right?
So essentially what you’ve gotten is you’ve gotten an MBA in business
from the school going out there and doing it. So you’ve learned these
really valuable lessons, not necessarily by reading a million books and
then going and being an expert and executing perfectly, but you ran this
imperfect company, figured out what worked, and then took that
knowledge into the next business.
Vinay: Pretty sure all my companies are imperfect. (Laughs)
Frank: Alright, so what were these next businesses? You say affiliate marketing.
What is exactly were you guys doing?
Vinay: Yeah. So we were doing pretty much like I explained. We were doing
purchasing ads on various ad networks: social, Facebook, AdWords,
mobile apps. And then pushing them and doing -- I’m running arbitrage on
them essentially. So essentially, selling some type of other product that
we didn’t own. Whether that was through an affiliate offer or it was
through a lead gen offer.
So the majority of traffic that we ran were lead gens where basically with
things like auto insurance, credit cards, mortgage refinancing. Where
basically you run an ad, you push someone to a landing page which is, like,
a form that says, “Do you have a car? What model is it? What year is it?
What’s your income? What post code do you live in?” or whatever. And
then if someone fills up that form, that gets sent through a few different
channels eventually ends up at somewhere like GEICO, right, that says --
Then basically a rep from GEICO calls or a broker who resells GEICO
insurance calls them and tries to close them on insurance.
From that form submit, we would get paid anywhere from $3 to $10,
depending on the offer and everything like that. So we’re buying traffic on
a -- say running an ad on Facebook, you get 10 clicks, you pay $2.20 a
click. One person fills out the form, you make $3. So you just spent $2 and
made $3. And so you’re up $1 on that exchange and we’re just running
that at scale.
Frank: Cool.
So this actually reminds me, right, because a lot of the times when you see
people asking how do you start and grow a business, most people give
advice around find something that you’re passionate about and go do it.
My guess is that you’re not super passionate about affiliate marketing but
I want to know.
As you guys were running these businesses on a day-to-day level, what
about that business itself were you passionate about? What activities
were you doing on a regular basis that you were having fun with, that
were growing you, that were challenging you? What in the nature of
running the business were you passionate about versus the overall
business?
Vinay: Yeah. I mean, I think, that kind of where I am now in my role -- except for
a lot of the administrative bullshit -- that basically get to do the things that
I like most. And that’s around building systems and marketing.
Frank: Okay.
Vinay: And marketing systems. But then also, yeah. But I kind of sit more on the -
-
Also now though, I’ve got a lot more of the product base it on the
marketing -- the sales side, the business side. So talking about -- Through
all my businesses, that’s been what’s been interesting to me. In my first
company of an e-commerce, I love that business even though I wasn’t a
user of the product in any way.
The challenge around building a business -- also technology I like. Working
with technology, figuring that stuff out, getting customers, building
systems, automating systems, scaling systems. All that stuff was really
exciting to me. Honestly, to me, it helps me a lot if I’m a user and love the
product but it’s not really necessary because I still enjoy business itself.
Frank: Yeah. I want to point something out to the audience. What you guys are
hearing now is the difference between being a business operator and a
business owner.
A business operator is just caught up in the day-to-day tactics and
techniques. What I’m hearing from Vinay is that he is a business owner
and that he is interested in the creation of processes and the creation of
vision around what the company is and what the company does and the
rest of the stuff just kind of falls into place. So that’s really something
important here that I want to pull out.
We can also tell that Vinay is a business owner versus an operator
because he had his exit strategy for his first e-commerce company and
sold that thing.
One of the things that I’m pulling out from our conversation is that it
seems like you go into these things with some sort of an endgame in
mind. We learn that from the fact that you’re not just going to sit there,
take your foot off the pedal, and let this thing die out or give you passive
income but that you have some sort of a next step in mind all the time.
Vinay: I don’t know if I have, like, of being that strategic about it. I think that it’s a
great piece of advice to have. But I think that if you go into the business,
and even without necessarily having a particular exit strategy per se like
I’m going to sell this, I think that if you go into the business with the idea
that I want to scale this.
If you want to grow your business, you’re not going to be able to do that
effectively without systems. This is very important, I think, when you’re
small, right? As you get bigger, of course, [unclear 00:21:55] is going to
die. But if you’re starting out and you’re less than five people or you’re
just on your own, right, I don’t think you should --
Worrying about your exit strategy before you’ve even started or when
you’re just starting, it can be a little bit daunting for some people
especially if you’ve never done this before, you don’t have a good concept
of the market, of your competition, of how big this can get etc, etc.
But I think if you go with the idea thinking, “Okay, look, I’m going to need
to grow this and I know that, like, as we continue to do more things, it’s
going to be impossible for me to do everything and all this stuff is going to
get. So it’s going to slip through the cracks.
If you’re thinking about how am I going to scale this, about how am I going
to get this for me to this much revenue this year or next year, or for me
this many employees next year, I think that thinking about scaling it that
way automatically starts you think about how to build systems. I think that
if you’re thinking about how to scale, something that is being built to scale
automatically makes it sellable most of the time.
And so I think it’s kind of like -- if you’re, like, “Okay, how are we going to
take on another 50 customers? How are we going to launch this other
product?” If you start thinking about that stuff and you start thinking
about how am I going to do that, it generally comes back to, “Oh, we need
to hire these people. We need to figure out this stuff. We need to create
this strategy.”
Even if you’re not very experienced in, like, “Oh, we need to create
processes and systems for everything.” If you just think about it more
logically, “Oh, okay, we have a hundred customers, that takes me 20 hours
a week to support. What happens if we have thousand?” right? Just think
about it, right?
Something’s going to have to change, like what’s going to change? We
need more people. Okay. Where are we going to find these people? How
are we going to train them? How are we going to make sure they’re giving
them the correct support? How are we going to make sure that they
continue doing that after they’re there for one month, three months, six
months?
When you start thinking about how you’re actually going to implement
that scaling, it should come back to the idea of, like, “Okay, we need to
stop building systems,” right?
I think just kind of thinking about it that way is always going to put your
business in a place where at least with a few tweaks, as long as it’s got
healthy growth and revenue and customers, whatever, it can be sold,
right? Because those systems should already be in place and should
already be running themselves by the time you get to a point where you’d
even be considering that. Or where it would be a valuable and [unclear
00:24:15] investment for somebody else to consider it, right?
Frank: Yeah. Yeah. Okay, cool. I like that idea.
What I’m thinking about right now is there’s a show on TV in the US, I’m
not sure if you ever heard of it, it’s called The Profit. A guy named Marcus
Lemonis goes in and invests in businesses and there’s three things that he
always looks for when investing in the business is people, process, and
product. Right? So with your company, Process Street, where you guys
focus on simplifying process and workflow management, you guys are
obviously built to handle one of those three main things around business.
So, let’s hear a little bit about, number one, how did you find out that
process were so important? I can imagine it’s from growing your other
businesses. But, right, why are processes so important -- aside from what
we’ve already said -- and then number two, how did you actually decide
to take this from building your own processes into creating this business
that helped other businesses do that?
Vinay: Yeah, for sure.
I mean, everything came out, like you said, just doing shit and figuring out
the hard way. Exactly like you said, the first kind of real -- I studied
business and I studied causes on business processes and business systems.
That’s why I understood from, like, a theoretical level that they were
important there.
As a recruiter, I used to recruit process consultants into banks and into
IBM and stuff like that. I understand there’s divisions for that stuff. So I
understood like it all existed, right? But it wasn’t something that ever
actually had experience implementing or ever really felt the pain of until
my affiliate marketing company kind of got to a certain point.
Actually, even without really understanding this, I’d already built in
systems for fulfillment from my e-commerce store but really it was, yeah,
it was when -- We got to a point where we’re about 20 people in the
distribution team for the affiliate marketing company. Had an office in
India, people in the US, and South America. Kind of managing process and
scaling was getting really difficult, even more so with the distribution
team that way.
And so that’s when I really kind of felt the pain. We were just spending all
this time fixing regressions, right? We’re doing these media buying
campaigns; the same mistakes are happening over and over again. I don’t
know what the status is. Split test is being messed up, communications
getting all lost. There’s just this kind of unstructured nature of everything
was, you know, just Google spreadsheets everywhere. It was just like this
kind of giant mess. There was no dashboard, there was no point in
control, there was no accountability and what people were doing. People
were getting confused; people weren’t talking to each other properly.
That’s was when I really just like -- I basically was at the point where I was
actually in Argentina. I had to work with my team in India. They come on
like 8PM or 9Pm or 10PM or something in the night. It was, like, I end up
spending, like, this three-month window where I was almost awake until 6
o’clock in the morning every night, just like on the phone, basically just
going through every piece. Like essentially kind of acting like a
micromanager standing in the office behind the team, like, making sure
that everything got done. You know what I mean? I was just, like, “This is
just shit.”
And so I started, you know, trying to build systems in search for solutions,
in search for products that will basically help me manage a simple
workflow like this.
I couldn’t find [unclear 00:27:44] I need. All the products that I found were
either really enterprise-y. Like really expensive and enterprise-y and then
there were a few SaaS products like some open source ones and a couple
of other ones. And they were still very complex in just their experience
and how they went about helping you solve a workflow.
So you can basically tell that the way that most workflow products are
built. If you look at, you know, IBM process builder, or SAP workflows, or
even small ones like Nintex.
If you’ve ever studied process design or flow diagrams or anything like
that in the university, you kind of have this diagram that has a bunch of
squares and triangles and diamonds and stuff on it. They’re all connected
by these lines. That’s, like, what a process diagram looks like and how
you’re taught in business school.
And so, basically, most of the SaaS products, they kind of just start with
this blank page with all these options to build this process diagrams that
follow the structure of how they were taught in university and how it’s
taught and how [unclear 00:28:43] deploy processes.
But the problem with that is, like, it’s an overly complex, unnecessary
interface for most small teams and small businesses that aren’t building
these kind of really giant, complex processes.
Frank: Okay.
Vinay: And so, just [unclear 00:29:04]. My team in India, a lot of them were doing
pretty low knowledge work. A lot of, like, report generation or just
processing things in Excel or just formatting and running split test on ads
and just changing images and stuff. Just like a lot of kind of repetitive
work. A lot of them aren’t college educated and stuff like that.
And so the workflow systems that I was looking at were just really
complex for them to understand. And actually created more problems for
me because not only do they not understand the process but now they
also didn’t understand the software as well. Right? That was kind of the
thing.
I started brainstorming and I’m just like, “Why isn’t there a way that I can
just send this to them in format that very understand?” I can take out
them not understanding the software as one of my problems, you know
what I mean?
Frank: Yup.
Vinay: That was the initial idea is how can we re-envision workflow software in a
way that is innately intuitive to everybody without having to have gone
and studied process design in business school.
Frank: How did you go from experiencing this pain yourself on a personal level to
-- right now you’ve got this idea of “I wish X, Y, Z existed.” How did you go
from that, experiencing of the personal pain, to having an idea of what
something could be to solve your problem and actually getting out there
and validating that, yes, this is a problem that we can actually build a
business around profitably?
Vinay: Yeah. I was in a little bit of a unique situation because I was actually
already going through -- At that time, I was already in the process of
building out the product from my first startup when I first actually -- So, I
launched another startup. Now I was running two companies in parallel:
the startup and my affiliate marketing company which, at that time --
When I think about it, that was probably running on 10 or 20 hours a week
for probably a year or something.
Frank: Okay.
Vinay: It got to the point where -- That wasn’t out of choice. I actually had it. So
that wasn’t out of design. At that point -- and I flipped a couple of
different affiliate marketing companies not because we really did different
things, but mostly because I kind of had one business partner and then he
left to do his own thing and then had another one. We’re pretty much
doing the same thing.
At the time, when I was doing the first startup, my other business partner
was managing a lot of the company. And then he left and then that
startup failed. When he left, I kind of had to take the reins back of the
company and that’s kind of when I really started feeling the problem
because he kind of knew everything that was going on and he was a major
point of knowledge in the company, right, and a key player. And then
when he left, there was this big gap.
Then none of the processes were built. Everything started collapsing and
shit. That’s when I had to jump in and try and start to fix it all and build
systems for it all. Because I wanted to kind of get it to the point where
technology was kind of replacing my other business partner, right? Where
the systems were replacing my other business partner, but it just wasn’t
there and that’s kind of when Process Street came.
I was in this weird situation where I was actually already going through
the process of had a consumer, like iPhone app which is something I won’t
ever do again. It was a very moon shot Facebook idea type product.
Actually, it was something similar to Vine from Twitter if you know that.
Frank: Yeah.
Vinay: It was, like, collaborative video editing. No clear monetization path which
would require millions of dollars to even get anywhere. That was
something that I learned through that experience.
I quickly learned how to -- through that experience, like, the product
wasn’t the best fit for me, at least. But what I did learn through that
process and got a lot of experience was, you know, pitching to investors,
getting feedback on a product, building a deck, validating ideas. What kind
of things mattered to investors, right? Going through that process of just,
like, fundraising.
I got all the points of data -- or not all but I got a lot of experience around,
like, why my current startup was not something that was interesting to
other company, to the investors. You know what I mean?
Frank: Yeah.
Vinay: What would be interesting? So that was one thing.
And then the same time I was going through this process of -- I was living
in Mountain View and in San Francisco and I was going [unclear 00:33:17]
of fundraising and I was meeting all these people.
When I started halfway through the fundraising process I just, you know,
had that feeling about the last company. It was just, like, it wasn’t going
anywhere, we’re not getting attraction on investors, we weren’t getting
good retention on our customers, we’re running out of money. It’s just,
like, all these flags going off that, like, this thing’s about to fail. And so I
actually had the idea for Process Street.
What I did was basically write up a pitch deck that was -- just in, like, the
standard PowerPoint template design, right? Just, like, the white thing
with no colors or no fonts. Just like a ten-page deck. I did one screenshot.
Not screenshot but kind of, like, UI mockup of the screen, of the main
screen that I wanted for Process Street.
Frank: Yeah.
Vinay: That was pretty much the deck.
And then I basically went around and as I was pitching Vitoto, which is my
other startup, and if I was getting no’s from people. I was then, like, repitching
Process Street as a second idea just [unclear 00:34:17], “Alright,
they already said no. I’m going to get some feedback on this as well.” And
then also I pitched it to a number of people that I kind of, like, built
relationships with.
It ended up being one of the partners from 500 Startups that I was living
with in the house. And basically people were like, “Vitoto is shit. Kill it.
Move to Process Street.” So I kind of got that feedback from a number of
people and that was a good, I guess, validation for me initially. And also, I
knew that I wanted it personally and that was going to be my first
customer. That was also another big validation point as well.
And so that was kind of where it transition from an idea into something
that I was more serious about pursuing after I got some of that validation
and I’ve done some pitches. Just on a super basic deck that took an hour
to build.
Frank: Yup.
Vinay: And then from there, the next step was finding a co-founder because
another problem that I had with my first company was basically the team,
the team structure. I basically had two other co-founders, another
business co-founder, and then an engineering co-founder.
So the other business co-founder, you know, basically we were using a lot
of unnecessary resources, people had high cost of living. My other two cofounders
were really experienced and really strong in their skill sets like
ex-Microsoft, ex-Deutsche Bank. Really, you know, qualified people.
But also they had families and they had a lot of overhead and
responsibilities which meant that they weren’t able to commit the hours
like they had to spend time with their kids in the weekend, whatever, that
maybe a younger 20 something person who is completely dedicated to
the startup would be able to commit.
And also they required more money. They had mortgages, they had
families, they had school bills which meant that the salary that we had to
pay ourselves initially was higher. We weren’t able to really bump rate on
that if we needed to extend our runway, whatever. That was some of the
big reasons. And so the first company failed. We didn’t have enough
money to iterate or fix all the problems on the product, you know?
Frank: Yup.
Vinay: So with Process Street, I went out looking for a co-founder. The big criteria
for me this time was, like, okay, I’m not going to take an idea to investor
and we’re not going to take an MVP to an investor. I’m going to take a
product with traction to an investor, right?
Frank: Yeah.
Vinay: That was the first step.
Frank: Okay.
Vinay: Okay? So I’m not going to even think about raising any money, period,
until I have traction. So that was one of the big lessons that I learned in
the first one.
That was because, like, what I do was I kind of budgeted our runway so I
raise a little bit of money like $50,000 from -- actually a business partner
who gave me very easily because we were making heaps of money doing
affiliate marketing. That was also another problem, right?
If the money comes super easily then be careful because maybe you
haven’t validated your idea enough. And maybe the person is giving you
the money is giving you too because they like you and not because they
understand the idea well enough, right? So just double check that.
If somebody quickly gives you money, “Yeah, I can do it,” but that should
almost be a point of concern. You almost want to have a lot of people drill
you really, really carefully about the idea because actually that will save
you -- If somebody figures out that it’s a bad idea or there’s a better
opportunity somewhere else, you can still take that money but you can
push it in a better direction.
Frank: Yeah. So tell us why -- How did you go? So we’ve got the whole idea table
of immediately going to get funding before we’ve got customers. So how
did you guys go about getting this thing built and getting those initial
customers?
Vinay: Yeah. So first it was finding the co-founder. Finding somebody who is
down for the cause; someone who is really more interested in the equity
and was pretty flexible around salary and location, didn’t have a lot of
commitments, blah, blah, but obviously had the technical skills.
If you’re going to do a venture backed startup that is going to require you
to build a product for some unknown period of time that could take three
months or 30 months to get to a point the customers like, you need a
really flexible team. And so, yeah, that was the first point and then we just
started building.
We sketched out the initial core features that we made a bunch of
mistakes and rebuilds but the idea was basically we just wanted to get it in
the hands of users as quickly as possible. Because something else that I
realize was just we didn’t know what we --
My first startup, when we were just talking about shit in a room of three
people and playing with things and testing things, we knew nothing, you
know what I mean? All the information that we needed that was valuable
came from external people. And so the idea was to just build anything as
quickly as possible and just get it out.
First we built like an MVP. We must have got the first very, very basic
version out in, like, a month or something. Couldn’t reset your password,
couldn’t, like, do anything. We got my internal team because I was still
running the affiliate marketing company on.
This was a really, really, really valuable thing was basically getting my
internal team, or if you can go and find a friend with a business or
something, who would be willing to really, like, test your product properly,
use it every day, like, straight away, you know what I mean?
Frank: Okay.
Vinay: And so getting that feedback because, also, when your product is early on,
especially if it’s a B to B product, a lot of businesses is just like, “Oh, this is
too early,” and they’re going to move on. They’re not going to invest their
time in a product that is really early if they’re not sure that it’s going to be
a correct fit which means you don’t really get that real, real, real user
feedback. You get people coming in and playing with it for 10 minutes
and, like, “Ah, yeah. Maybe I’d like it if they had this.” But that’s not the
same feedback of someone who’s actually using it day-to-day to actually
manage their business processes.
Frank: Okay.
Vinay: Trying to get, like, either yourself or some type of few beta customers on
really early that, like, are actually really, really using it. Not just, like,
signing up and playing for it. That’s really important.
Yeah, it was basically getting it out, just building code, it was just Cameron
building. I basically just started content marketing from there. And so big
focus on pushing early, getting users on. Our initial users -- I think we got
our first spike of users from beta list.
Frank: Okay.
Vinay: That was really good because it was actually pre-launch. It was still an
invite. We got a few hundred people on from there like it was, like, an
initial kind of testing base. And then from there, acquisition came through
just, like, a bunch of testing shit.
What’s ended up working in being the most successful has been content
marketing. So some early hacks I did was I did a bunch of video marketing.
This is actually probably a super good hack for a bunch of your listeners.
Process Street is a pretty horizontal product. It has a lot of different used
cases.
Frank: Okay.
Vinay: And so it can be client onboarding or employee onboarding or report
generation or million things.
And so I basically went about and I made a bunch of videos where it’s just
me recording, like, two minutes of the screen saying, “This is how you
would use Process Street for client onboarding. First, you’d go here and
you’d make a process for client onboarding, and then you would hit run.
And then for every new client that comes in, you would put in the client
name and now you have a checklist to help you track onboarding for each
month,” in the video.
I made, like, a hundred of those, or 70 of those; all targeting different
keywords. In the space that I’m in workflow space, standard operating
procedures, there’s not a lot of, like, hacky incident marketers in that
space, right? Like it’s a pretty kind of old school enterprise-y type space. I
think there’s a lot of software verticals that are the same as that, right? If
you’re going to try to do, like, weight loss or some shit, this is not going to
work.
Frank: Yup.
Vinay: Because there’s really no competition, a lot of those keywords, a lot of
those videos, throw a few backlinks to those videos and those all started
to rank. That got me a lot of -- and in fact, it’s still bringing traffic now. It’s
kind of annoying because most of the videos are recorded in, like, an old
UI but it still brings in a bunch of traffic. And so that was a really good
early hack. And then now we just content. Content just crushes it. Just our
blog and then just guest posting.
Frank: So massive value creation for free has been one of the key driver to
Process Street.
Vinay: I mean, like, now it is but actually those videos were not really that
massive value. That was more of a tactical hack because there was really
low competition in the video space from my particular vertical. And those
videos were done really fast, like 70 videos recorded in a week; very
minimal editing, just like one after another just banging it out, right? I’m
just trying to hit as many keywords as possible.
Now, we’ll go back and we’ll make better videos in that because we have
a team and resources and stuff. But at that point, it was just gorilla styles.
Frank: Cool. Catch yourself on the timeframe of this. When did you guys
originally start building the MVP of Process Street?
Vinay: That would have been the end of 2013.
Frank: Okay. So you’re about two years deep?
Vinay: Yeah. A bit less.
Frank: Okay.
Vinay: [unclear 00:42:56] about that. Yeah.
Frank: Cool.
Vinay: So, yeah. So kind of the timeline was we build the MVP and then we got --
we switched on early revenue as well. That was another thing that we
wanted to do was switch on revenue as quickly as possible. Even if the
conversion rates were really bad because a lot of the functionality wasn’t
built out, we still wanted to validate the idea that businesses were willing
to come in, test the product, realize that it was valuable enough for them
to implement into their business, pay for it, and roll it out into our team.
Even if it was a very sub-optimal conversion rate, we still just wanted to
validate, like, that one point.
We did that really early on. We got up to, like, 30 or 40 customers, maybe
even 50, I think, and then we switched off revenue. We switched that off.
It was almost a fundraising technique but we switch that off really
because, like, we just wanted to get as many users on the platform at that
point because we still could get more data to do more intelligent
iterations on the platform.
So that was about six months in when we kind of switched on revenue.
Then we ran revenue for another six months. And then about a year in, we
applied for AngelPad which is one of the accelerators. We got in to
AngelPad, that was in December -- Oh no, it started like October 2014.
Yeah, it started October 2014 and then we went through that until
January.
And then last year, we closed our seed around about halfway through the
year. Still hasn’t fully been announced. And then since then we’ve been
scaling up the team.
Frank: Cool. So you got an investment in the middle of last year, was that right?
Vinay: Yup.
Frank: What I’m curious about, and what I think other people are going to be
curious about as well, is we’re talking about a very Silicon Valley style
model of building a business here where you kind of have your eye on
funding. I would love to know your thought process overall on why go the
route of closing funding versus really just trying to bootstrap it up.
For people out there who might be running a company, they’ve
successfully got 50 to 100 customers paying on a regular basis. How did
you think about “I’m going to go for funding” versus try and grow this
thing organically?
Vinay: Yeah.
I mean, I think, what I came to the realization was -- and I don’t know if it
was based on the product that we picked or not. Every month that went
on, there was, like, another five months of work created and five months
of things that we wanted to build and opportunities that we soar. The
product got to a point where we had a bunch of functionality but now
[unclear 00:45:44].
I don’t know how experienced a lot of your audience are in actual
development but it got to a point where the product had a bunch of
functionality but now we’re hitting a bunch of aggressions on releases. We
have no security. We have no continuous integration. We have all the
security issues coming up from enterprise customers. We have
deployment issues. We can only work on one feature at a time. It basically
got to a point that, like, we couldn’t really scale engineering.
The customer base that was coming in, we were getting a lot of really
positive results on the product itself but the way that we had envisioned
the product scale -- I guess it’s also the business model as well is because
we wanted to build out our premium product, which also meant that we
had to invest a lot of money building a free product first which didn’t
generate revenue.
Frank: Okay.
Vinay: Which we then had to build a business plan on top of. So it’s almost two
products, right? We build a free product first, like a whole product, and
we build a second business product. To fund the first three products as
well is also difficult. Yeah.
And then it just got to a point where it’s like, “Okay, if I just want to build
the roadmap right now just for what our larger customers are asking, it’s
probably going to take Cameron three years.
Frank: Okay.
Vinay: And then on top of that, that would be three years of him just building.
Not fixing all the shit that’s broken, not rolling out continuous integration,
not ripping things out into micro services and making it completely
scalable and [unclear 00:47:09] balanced and blah, blah, blah. There’s,
like, all this other bullshit work that’s happened, right? Besides just
actually building the product to make it viable and scalable, sales teams,
marketing teams, support, operations, right? Everything just starts to
stock up and we’re like --
And then really, like, okay, to really make this thing work, well, now, we
need at least another expert, at least one. When you’re looking at a
software development/dev ops expert in bill shit and scale shit and know
everything, they’re not going to come for less than $100,000. And so your
business needs to already be doing pretty well, I think, to be able to kind
of really hire top players.
Frank: Yup. Okay.
Vinay: I just didn’t have the money to do that myself. The timeline looked long.
There was probably things that we could have done to, say, get revenue
faster but it would be at the sacrifice of the core product.
Frank: Okay. Okay.
Vinay: We wanted to build the best product possible, right? Without sacrificing
the product for early monetization optimizations that basically when you
think about it in the scale of things, if you try and optimize your product
from monetization in six months before you hit product market fit, you’re
wasting a bunch of time because a lot of those optimizations won’t hold
true anymore. Once you hit product market fit or they’ll need to be reoptimized.

From a speed perspective, you’re slowing yourself down a lot by trying to -
- I think that doing revenue test is good but trying to optimize your
revenue funnel is, like, “Oh, tweak this onboarding. Tweak this
optimization. Tweak this messaging.” Versus, like, build this core product,
this core feature that a bunch of people need. I think that it’s less useful.
If you work out, if you think about -- If you’re pre-product market fit and
you understand the gym and you workout. Building a new feature is, like,
doing a compound exercise. Whereas doing an optimization on revenue,
like, adding a referral program, or optimizing the flow to increase your
conversion rate, is like doing an isolated exercise.
Frank: Okay.
Vinay: Just on one of your muscles, whatever. Like it doesn’t get that underlying
ripple through benefits that building the actual features will give you.
Because they will also improve your conversion rates plus they will open
up your market size because people would use cases that you currently
couldn’t service you can now service. They will help you close. They’ll help
your sales team. They’ll help your marketing channels. They’ll help your
referral, right? But you optimizing, like, some -- like autoresponder email
is not going to do any of that. It would do only hit one of those points
which is maybe improve your conversation rate.
Frank: Interesting. The last thing that I’m curious about here that I want to wrap
with is actually something about the funding process itself, right? For
those people who are listening who have never gone through the process
of raising venture capital for their business, what were some of the
takeaways? What were some of your lessons learned in going through
that process and securing funding for this business?
Vinay: Go to an accelerator.
Frank: Okay. Okay.
Vinay: So I think that if you’re not from Silicon Valley, if you’ve never work from a
startup, if you’ve never raise money before, if you don’t have -- If your
extent of understanding how venture capitalists -- like the venture funding
environment works is from reading a couple of textiles books and a few
blogs then, like, you need to go to an accelerator because you don’t
understand. Because how everything works is, like, underneath, right? It’s
not a clear thing.
It takes 13 weeks of Thomas, who runs AngelPad, sitting there with, like, a
group of another 13 extremely, extremely intelligent entrepreneurs doing
closed door white boarding sessions of information that you’re not going
to find on the internet. To, like, really just even kind of understand that
model or going through at once, right?
So I’d say go to an accelerator unless you just have insane traction. If you
have some type of ridiculous traction that’s like -- this thing is just, like,
uncontrollable, then you’re going to get money, whatever. If you don’t
have insane traction, if you’re building, if you’re testing ideas, if you have
a few good kind of leads but you need a lot of work to kind of get that
growth, then, I think, go.
And you don’t have a network already, you don’t have friends that can
hook you up, friends who are VC’s, friends who have sold companies. You
haven’t worked for those people before then -- which was, like, me which
is coming from Australia. I had no network, no experience, like, nothing.
And so the first time I tried it, it was incredibly hard.
After coming through an accelerator, you have, like, a network of support.
You understand how everything works. You have a brand associated with
you if you go to a good accelerator. And you also have a network of
people that you can tap into to get introductions. Just change the game
completely.
So, I think that if you’re coming blind or if you’re trying to learn on the
internet, don’t even bother. Just focus on getting your company to a point
that will get accepted into an accelerator. If you are more advance in that
then you probably don’t need to be listening to what I say.
Frank: Cool. Cool. Alright. So Process Street, simple process and workflow
management.
For people listening, Vinay, what kinds of businesses or what kind of solo
entrepreneurs can be thinking about Process Street as an opportunity to
really improve their business. So people now understand a little bit more
about what Process Street is. Who is it for? If I’m listening to this, who
should I be in order to go check out your stuff?
Vinay: From my perspective, like, I deal with customer, right? Owner level people
of businesses between 10 and 200.
Frank: Okay.
Vinay: And then team leaders or managers of departments or teams between 10
and 200.
Frank: Cool. And where can we go …
Vinay: In professional services technology companies. Yeah, that’s kind of the
ideal customer but that’s for the paid product.
On the free product, there’s a bunch of stuff that can be used for Process
Street that’s, like, not necessarily pulling in ideal customers. So we have a
lot of solo entrepreneurs who use it for just managing their daily task lists.
We have people that use it for running a checklist before you publish a
blog post, or we have it set up in Process Street.
So every time we publish a blog post on the blog via an RSS Feed via
Zapier, it automatically launches a checklist that gets assigned to a VA that
says, “Okay, now the post is live” or “the podcast episode is live,”
whatever, “We need to go out and start submitting it to Reddit, sending it
to the email list, posting on social media, emailing everybody that we
mentioned and telling them the post if live.” Kind of give them a
promotion list that way, so that’s the way a lot of small businesses use it.
Employee onboarding, client onboarding.
But then, also, what we have is we actually have this other side to the
product which is around the public templates. You can actually make a
process checklist and make it public. And so we have a lot of, say, coaches
or people that have information products that package process templates
or checklists in their products or use them for lead magnets for giveaways.
We actually have a thing built into the product where you can make a
checklist public and then you can embed that checklist into your blog or
whatever, anywhere that you can embed. Just like a YouTube video. And
then you can actually integrate your MailChimp, or your AWeber, or your
Salesforce, or whatever, into Process Street. And so anybody who comes
and grabs that checklist, that lead will automatically go into your
autoresponder as well. So you can use it for kind of creating a publishing
content that way.
We even have the ability to basically lock the checklist. So you can blur out
the content of the checklist when you embed it in your blog and you say
“You need to give me your email to actually view this content.” So it can
be a cool way to do a lead generation and things like that as well.
Frank: Cool. So, if I’m interested in using the product at any level -- and we’ll
drop this into the show notes as well, guys -- where should I go? What URL
can I get on to see what’s right for me to get started with Process Street?
Vinay: Yeah. Just www.process.st.
Frank: Process.st.
Vinay: There you go.
Frank: Awesome. Vinay, you’ve been an amazing guest. Thank you so much for
taking us through your journey of e-commerce muse. Learning a little bit
about what it means to actually run a business, and that you’re not going
to probably run a business in four hours a week or less, all the way
through where you are now which is having raise venture capital and gone
through an accelerator. So, thank you so much for coming, Vinay. It’s been
a pleasure.
Vinay: It’s an honor to be here and I hope your listeners can get some value at it.
Frank: Absolutely. Take care, man.
Vinay: Cheers. Bye.
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