Ontraport: The Difference Between Generating $1 million/year and $10 million - with Landon Ray

Starting from Nothing – The Foundation Podcast Guest Name Interview – Landon Ray 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. Now here’s your host, Andy Drish. Andy: Welcome everyone to another episode of Starting from Nothing, The Foundation Podcast. Today I’ve got with me Landon Ray. Landon is the CEO of Ontraport, an all-in-one business and marketing platform that we actually use at The Foundation here for all of our content management, payment processing, email marketing, and all of our partnership programs. It’s incredibly solid. But more than any of this, Landon has a deep desire to help others start and grow their businesses and I’m just stoked to have him on the show. Landon, thanks for coming, man. Landon: Thanks for having me, Andy. Andy: We’ve been doing a handful of interviews that have been smaller people doing – in the just getting started phase. Three to ten grand a month or so. Those interviews are incredible but I think it’s really great to bring people on who have really – just have bigger visions to expand our mind for thinking. We had a chat at Eben’s event recently of the different mindset in building a $10 million per year company and a $100 million per year company. You guys are doing – getting close to that $10 million mark right now with the vision of hitting the $100 million mark in the near future. But before we get into any of that, tell me how you got started being an entrepreneur. Take me way back when to when you’re 22, 23. Landon: I wasn’t an entrepreneur at 22 and 23 but I was – Let’s see. If you want to go all the way back, I think I’ve got it in my blood a little bit. I was selling my dad’s NY products door-to-door when I was eight. Andy: No way. Landon: Yeah. And everything else I could find. I sold seeds, I sold cards. I don’t know what the deal was. What I thought what I needed the money for. I remember buying video game machines. I think that was the first ever video game machine called the Vectrex that I somehow earned $300 to buy, which was an ungodly amount of money back then, especially for a kid. I think I’ve just been kind of a hustler, making stuff happen. It was not until I was 25 I went back to New York, or 26 maybe, I went back to New York and became a day trader and became pretty successful at that. And then I actually started my first real business which was to train day traders. I trained a bunch of guys to trade stock and that was an interesting business. But not at all like this one because we didn’t have customers and the kind of organization that we’ve now built. Andy: Yeah. This one started years after that. The markets kind of wrapped up in 2001. I took a few years off and then started a business with a buddy of mine. Eventually – that was not Ontraport – but eventually discovered the need for this kind of thing. We built it and then eventually turned it into a product. Andy: In the pre-interview, you talked about a point where when you’re a day trader where you came to understand the power of vision. Can you tell us a little bit about what that means? Landon: Yeah. One of the things that I discovered was that it’s – First of all, just making money in the stock market is hard, right? Probably most people that try that lost money. Not probably, for sure. It takes quite something to get just over the hurdle of profitability at all. But then once you’re there, it’s an interesting thing because especially in trading, it’s so pure, there’s nothing to it but numbers. The reality of the situation is that the difference between making $500 a day or $5,000 a day, or $50,000 a day, or $500,000 a day is not much more than additional zeros. It’s the same kind of stuff that you were doing. I was actually around people that made all those amounts of money, right? Andy: Yeah. Landon: What separated us, I came to discover, was nothing more really than the belief that that extra zero was possible. I went through a process for myself of getting from $500 a day, to $1,000 a day, to $2,000 a day, to $5,000, to $10,000, to eventually a lot. Really, all the change was my confidence in that it was possible to do that. With that came willingness to risk more, willingness to take positions that – to get yourself into positions where you could make those kinds of money. You just wouldn’t do that if you didn’t believe you’re responsible, right? Andy: Yeah. Do you feel it’s the same in business? Landon: Exactly, yeah. The only thing to say about that though is that there’s no faking it. Nobody ever went from $500 to $500,000 without passing through the steps. The reality is just that you kind of grow into this ability to perceive possibility. Yeah, in business, my experiences has been the same. When I started with Zach for example, he was – he did not have the kind of financial success that I’ve had. He was running a little web design firm. It was literally like him and a buddy and they were making five grand a month or something like that or eight grand a month. I don’t know what. Something small that they’re just surviving. For him, a stretch was the idea of getting to $10,000 or $20,000 or $30,000 a month. For me, where I just come from a totally different world, I was making – there were days when I’d make $30,000 a day. It wasn’t as stressed at all to wrap my mind around $30,000 a month. For me, the next step in my career was how do I put together something that’s going to do $5 million or $10 million a year. I could wrap my mind around that. I could actually envision myself in that situation and creating that kind of value. I could see the size, problems that needed to be solved in order to earn that kind of money and it all felt very comfortable. Then what happened for me was that – I kind of designed a business where I could see a pathway to $10 million. And then I ended up getting introduced to Eben Pagan. He was kind of at the next level of vision because he’s already been through $10 million. At the time, he was running a couple of businesses that I think together were probably doing $20 million or $30 million. For him, the natural next step was $100 million. You could stretch and see that. Just the way I can stretch and see $10 million. I went through this process with him and it took a while of him stretching my brain around this larger vision which was a lot like what my job was with those traders, just stretching their brains to the next level of vision for a possibility. It took a while for me because at first I heard him talking, I was just like “This guy’s full of shit.” [unclear 00:08:34], right? Andy: Yeah. Landon: But then over time I started to see like “Wait a minute, I can kind of see. What are the kind of companies that do $100 million? Okay, whoa, those are big companies,” right? These are hospital names very often. You’re taking on different kind of problems than the kind of problem that I’m taking on. There was no way the fundamental model that I was working under was going to get me to $100 million. It wasn’t that big of a problem. The kind of problems that he was talking about were very big problems. When you start to wrap your mind around bigger problems and see bigger possibility, what you notice is that the steps to getting there are just different. It’s different projects, different kind of businesses you build, and – but it’s not impossible. Jeff Bezos also has 24 hours in a day. What he’s done with his 24 hours is dramatically different than what most people do with their 24 hours. It’s really a function of feasibility to perceive. Andy: What’s your vision now with Ontraport? Landon: Our vision is to be well-placed where entrepreneurs go to start systemizing the scale of business. What we see is that the State of the Union in terms of entrepreneurship and technology is that there are – that every entrepreneur has to go out and solve the technology problem themselves because how it is is that there’s a million little point solutions, right? Email system, their website system, the payment processing system, and the web hosting, video hosting, web hosting, and all these different tools, CRM. Everybody goes out and has to – Every single entrepreneur goes out and has to solve this problem, and connect things together. Giant problem because most entrepreneurs don’t get into business because they want to mock around with technology that they’re forced to. We see that as a gigantic inefficiency in the world that simply won’t stand. It’s like a vacuum and it will get filled in. It will get filled in with all place that every entrepreneur knows that you go to go and start – to get the tools to start and systemize and scale your business. Much like salesforce.com has kind of become THE place for mid-market and enterprises to go to build the backbone of their technology. That just doesn’t exist. There’s no leadership at all in the entrepreneurial space. It’s a huge problem for entrepreneurs. And fundamentally, that’s business that we aim to build. Andy: What I love about this is that we spend a lot of time talking about pain, talking about problems. Still even when you have $100 million per year vision, you’re still focused on pain. What is the problem that you’re solving. You’re just thinking it’s such a bigger level than somebody who’s thinking what’s one tiny little problem that I can solve for realtors for example [unclear 00:11:57] small. The process is similar, it’s just you’re thinking such a wider scale. Landon: Yeah, exactly. We look at the same kind of problems that your clients are probably looking at. What is the problem the realtor has when they want to blah, blah, blah? What you said is like, “Well, I’m not going to go into the real estate business because we want to develop a place that entrepreneurs go.” We’re actually going to have to create tools that are good for the realtor but also good for the pool repair guy, and chiropractor, and the veterinarian, and the marketer. What do those tools look like? They don’t look the same. It’s a bunch of different things. Andy: What’s your role? Building a company like this, what do you see your role as? Where is your time and energy spent? Landon: That’s an interesting question. It’s changed a lot as you can imagine. Just a few years ago I was doing all those sales and customer service, and product design, and graphic design, and everything, right? Now, my [unclear 00:13:05] and my role had gone through a couple of evolutions. Right now where it’s at is I am still the product manager. So I continue to run the engineering team from the perspective of what they’re working on, not how they work on it. We have project managers, and CTO, and staff that organizes how that’s done but I obviously design the software now with the help of graphic designers, and organize the features, and basically assign projects and stuff like that. That’s maybe a third of my time. My primary operational role, that’s the big part of the business that I’m responsible for. Another third of my time is about giving feedback to the different departments. We have eight departments now, and they’re all doing a whole bunch of different things, all these different projects. I basically meet with each one of those departments once a week for an hour and get updates on what they’re up to, and give feedback on those projects. The way I see my role there is about being a direction pointer in terms of the overall vision for the business. Making sure that all the projects and the people continue to be aligned around the larger vision for what we’re up to. It’s hard for somebody, for example, in support to see everything they need to see to make great decisions when they don’t know, for example, what’s coming down the pipe in engineering or where the ultimate vision of the business is. I spend a lot of time painting the picture for people about where we’re headed and making sure that all the projects people are aligned in the same directions. Communicating the vision, communicating the direction, communicating the priorities is a huge part of my job. Andy: Yeah. It’s almost like you’re leveling up. You start here and then your role changes into this, then it shifts into this. What’s been the hardest part so far for you to develop and expand? Landon: That’s an interesting question. I don’t think I’m much of a manager of people. It’s not my forte. Fortunately, I hired one, you’ve met Lena. She’s an incredible manager of people. I’ve learned a ton. Now I would say I’m a very passing manager of people. That’s been a challenge to – That’s one challenge. I think letting go is a big challenge in general for entrepreneurs as you level up as you call it. Every time you get to a ceiling of complexity where you’re maxed out and whatever it is that you’re doing, you can’t take on anymore. It starts to get painful and you realize that I can’t go on. I’m not going to get to the next level of my business without fixing this problem, solving this problem. There’s a letting go that has to happen. Ultimately solve the problem by letting other people handle it, and putting your trust into people on your team, and there’s been over and over and over again a letting go and extension of trust from me. Like all your clients, this is my baby. I want this to be amazing, and I want to consistently deliver extraordinary experiences to our clients, and it breaks my heart whenever that doesn’t happen. That’s been a unique challenge. Andy: Yeah, it’s – You guys are almost at that $10 million per year mark and you own majority of the company; almost entirely self-funded, something that you built from the ground up to where you’re at here. I can imagine that letting go is just – How many employees are you at now? Landon: Seventy-one. Andy: When did you guys launch Ontraport? Landon: Late 2006, something like that, early 2007. Maybe it was late 2007, sorry. We started building it in 2006, launched it in 2007, flopped pretty much, got some traction in 2009, and we’ve been charging since then. Andy: Wow! So two years of figuring things out. Landon: Oh God, more like five. The original business I started with my body Zach was in 2004. Yeah, it was five years of abject failure. Andy: Oh wow! Well, it’s cool to see where you’re at now, that’s for sure. You’re at a really, really exciting time right now. We saw last year the stuff that’s coming out in terms of the new user interface that’s coming. Yeah, it seems like a lot of changes for you guys. Landon: Yeah. Andy: You guys haven’t done any marketing for the most part. How is that possible? Landon: Yeah. What happened for us is that we struggled, like I said, for a long time to find what they call product and market match, to figure out what it is that was going to fly in the marketplace. When we figured it out, we figured it out a pretty big way. It went ballistic all of a sudden. We launched kind of our third revision of product and up until that point we probably had a dozen or a couple dozen clients. And then we went from a dozen or two to a thousand in like a month or two. It was just crazy. Andy: Really? Landon: Yeah. We’ve had just incredible word of mouth. That’s how it’s possible, basically, is that friends have told friends because we’ve got a cool product and we’ve driven for good experiences. It’s tempting to look at that as luck and I’ve certainly feel like that’s part of it but also, I think, that fundamentally, we have seen a shift in how winners are going to win going forward. I think that in the past – by in the past I mean pre-Facebook, pre-online permanent record be it Google, pre-instant communication between everybody on the planet. So like maybe ten years ago. The only way to get the word out if you’re going to be a business bigger than a tiny little business was to do advertising. Get it advertised in one of a sales team because there was no way to find out about products. It’s become kind of a business maxim that if you built it, they won’t necessarily come. Who wins is the guy with the biggest and baddest sales and marketing team. What we had is generations of businesses that grew up that way and the sort of heart and soul of those businesses would lie in sales and marketing. The very best paid people were in sales and marketing. The products very often were afterthoughts. They were good enough to fulfill the basic promise that the sales people were making, but not really any better, right? Andy: Yeah. Landon: And then along comes the internet, and Facebook, and everybody talking instantly and our reputation’s being created and destroyed overnight. Suddenly, a new kind of business is not only possible but I think going to ultimately be required. It is that the heart and soul of the winners are the future. The businesses of the future that are going to win is going to move from sales and marketing to product and experience. The reason is that if you deliver extraordinary products and experiences, people will talk about you. If you don’t, they’ll talk about you. Now we have businesses out there – many of them – that have stories that simply could not have happened without the internet and communication the way it is today. Companies like Groupon, for example, or many others, that have just simply exploded because on the back of creating extraordinary products and experiences. Not on the back of sales and marketing teams. Having realized that, we basically from the very beginning have – from the minute we got any kind of traction at all, we focused all of our efforts on improving the product and improving the experiences we’re delivering through our support and experience teams [unclear 00:23:31] and services. Even to this day, we have two vehicle on sales, they never make an outbound call, all they do is do demos if you call us up and ask. But we’re not a sales organization. That’s not to say that we won’t ever get there, but certainly the heart and soul of this business lies in product and experience, and that’s very much on purpose. Andy: Beautiful. Beautiful. Wrapping up here, I want to talk about one thing. What happened for me last year, what really turned me into an Ontraport fanboy was the event that you guys put on last year. Landon: Oh, cool. Andy: We signed up for – Last year it was called Office AutoPilot: Transitioning to Ontraport. We signed up last June, I think, right before we did our product launch for The Foundation and stuff. Went out to ONTRApalooza, the event that you guys had for the first time last October, and was able to see the customer base that you have and how incredibly good they are. Like what an incredible group of people. Also seeing the vision that you guys have for the future and I was just absolutely blown away. I know you guys have the event coming up again soon. Can you tell us a little bit about what the event is and, yeah, what’s going to be going on there this year? Landon: Yeah. The event for us – It’s called ONTRApalooza and you can check it out at ontrapalooza.com. It’s in October. Is that next – No, not next month already. It’s coming up though. October 2nd, 3rd. So that’s just, yeah, a little over a month away, a month and a half away. We believe – One of the reasons we built our business really is to envision, in this kind of age, to do projects in general. Envision what it should look like down the road and then walk backwards from there. We spent a lot of time thinking about this company that I was talking about, this company of the future that will take over and become the place where entrepreneurs go. We thought a lot about what that business might look like and are basically reverse engineering that business or designing every project that we do to fulfill that vision. One of the things that we believe about that company of the future is that they will be leaders not only in software but in education around entrepreneurship. They’ll teach people not just how to point and click the buttons but they’ll literally support entrepreneurs in their education around how to think about growing their businesses. We are investing pretty heavily in beginning to build that for ourselves. ONTRApalooza is one of our projects around entrepreneurial education. About half the attendees are clients and so they’re coming to learn more about how to use our software. The other half are non-clients, entrepreneurs that are coming to learn about the kind of the things that we know about running and growing a business. We have all kinds of different speakers coming. People like Brendon Burchard who’s a friend of ours, and an amazing speaker, and an amazing business man. My mentor, Eben Pagan, is going to be there speaking. A couple of other businessmen that we really respect. This guy named Joey Coleman who is an experienced – Andy: He is so awesome. Landon: Yeah, he is awesome. He does the experience [unclear 00:27:11] for a bunch of different companies including Zappos. He helped them with their initial user or initial client design, experience design. Talked to [unclear 00:27:20]. He’s just an amazing guy from Australia. The rest of the people largely are either us or our clients talking about what we know about how to run a business, everything from how to start a content marketing function in your business. We’ve probably gone through the pain of how to do that. Because content’s hard. It’s super time consuming. That’s a problem that we’ve largely solved now so we’re sharing about how we do that. We’ve done a lot around operations and becoming – developing operational excellence in this business, creating culture, and so we’re sharing a lot about how we’ve done that. We got our engineers who are going to get up there and talk about our API and about how clients are using APIs to provide new experiences to their users, kind of on a knot. We got out chief growth officer. Going to talk about how to create lead management and nurture processes that really work based on our experience and the experience of working with thousands of clients. We have a really unique positioning that we get to see how literally thousands and thousands of businesses are running and being successful. We just talk to some of the best minds in the business like you guys. We get to pick their brains, and share what they know with our client base because that’s what ONTRApalooza is all about. Plus, crazy parties. Andy: Yeah. That’s what I was just going to say is that the content and stuff was awesome last year, but what I appreciated about the event so much is that it was a small – Last year was a little bit smaller and intimate but the caliber and the quality of people were so high. It didn’t really matter who you were talking with or you’re going to talk with somebody who you’re going to have just a great experience with. Landon: Really the same thing. We kept it at 400 this year. It was 330 last year. Andy: Beautiful. I know you guys are running the contest. We’re going to link to the contest in the show notes. If you guys want to try and win a ticket to the event, you’ll be able to do that. I’ll have a link to ontrapalooza.com in the show notes as well. If any of you happen to be attending, let me know. Shoot me an email at podcast@thefoundation.com. Dane and I are going to host a little – either do a little lunch thing or just a little happy hour thing for anyone who follows The Foundation and just a little meet up so everybody can get together and get to know each other. Landon: Awesome. That will be fun. Andy: Yeah. Anything else, Landon? If people want to get in touch, what’s the best way to learn about Ontraport or to reach out? Landon: Yeah. Ontraport.com. Talks all about our product, of course. ONTRApalooza if you’re on the West Side or want to do a little traveling. That’s going to be an amazing event and an amazing way to get to know us as an organization and learn a lot for your own business. Yeah. That’s about it, I think. Andy: Awesome, dude Thanks for coming on today. Landon: Yeah, thank you, Andy. 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.