Randy Rayess on Building a Startup by Scratching Your Own Itch

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Today, on the Early-Stage Founder Show, I’m talking with Randy Rayess, the Co-Founder of Outgrow, a growth marketing platform that enables marketers to build interactive content/tools to increase customer engagement and boost demand generation. 

Outgrow is Randy’s second startup, and in our chat today we cover how the idea for Outgrow came from running his first startup, VenturePact, how they dogfooded their software to help grow the startup, practical tips other startups can use to accelerate their own growth, and how Randy and his partner prioritized their hiring decisions as they grew.

Randy has a ton of experience growing startups as he works with them every day to help get results from his software, and in this interview he doesn’t hold anything back.

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Topics covered:

  • (00:01:09):  How did Outgrow come about? What does it do?
  • (00:09:00):  Growing from Venturepact to Outgrow. 
  • (00:12:47):  How were people finding these early calculators?
  • (00:15:35):  Were you doing any paid advertising to promote these?
  • (00:18:05):  After you have someone, how do you decide what the best next-step is?
  • (00:20:32):  Handling sales yourself, as an entrepreneur.
  • (00:22:33):  First hires on the sales team.
  • (00:25:45):  Experience of growing the company – past experience in sales useful?
  • (00:30:19):  Don't bloat a calculator/quiz with survey questions, videos, and don’t use a pop-up.
  • (00:34:25):  Prospects for the company – scalability (depends on timing and quality of execution)
  • (00:36:53):  Prospects for the company – products and expansion

Where to learn more:

To learn more about how Outgrow can help your startup grow with interactive content, check out their website or tune into the episode to get Randy's personal email address.

Transcript:

ANDY: Andrew, thanks so much for coming on my show today.

RANDY: Thanks for having me.

ANDY: So let's just dive right into it. What does Outgrow do, and how did the startup come about?

RANDY: Sure. I’ll go with how the startup came about, and then it kind of leads into what we do. One of the core things that we noticed when we were marketing – so we have 2 key products – in marketing our first product was that, you know, obviously acquiring new customers is a challenge, and most traditional mechanisms like building out a blog, or eBooks, or white papers, are good, but they no longer provide outsized returns. You have to put a lot of work in and you can get some leads from it, but in terms of conversion it’s not great. So what we decided to do was we built a calculator for the company – it was called… it was a development marketplace for people to hire and manage developers, and it’s called Venturepact. And so we built the calculator for people to estimate the cost of building a mobile application, and that turned out to be really valuable for people. People started sharing it on forums, and it’s a question, you know, we got so many times that now we could just give them a quick answer to, where they could say, you know, ‘This is going to give you a range of prices, and we’re going to ask around 12 questions and then you're going to give us, you know, at the end before we show you the results we get your email, and then we show you how the price ranges depending on where the team is located. And that turned out to do really well for us.

 And so we launched that as an additional SaaS tool, so people could now come on as a marketer and build a calculator, or a quiz, or a recommendation without any developers or designers, and it can help them acquire customers or help them better engage with their existing customers around, are they fully adopting the tool? What can they do better to leverage the tool? So you can ask them a set of questions or you can review their behaviour and provide them with some result in terms of, you know, how well they’re leveraging their tool. It’s like that, so that’s how we came about with the idea, and that’s kind of, you know… our focus is mainly on customer acquisition.

ANDY: When you created that first quiz, did you build out an entire tool around it just like you do that [00:02:14 PH]? Or did you… How did that first quiz come about technically?

RANDY: Yeah, no, the first calculator, we built it custom, and we kind of charted out… We didn't know it was going to do as well as it did, and so, you know, at the beginning… After we launched it, within the first couple of days we were already getting insane amounts of traffic just to that page, and then we were able to generate thousands of leads over the first few weeks alone…

ANDY: Wow.

RANDY: …and leads in a B2B setting, to get that many leads is actually very difficult.

ANDY:  Yeah!

RANDY: And so we realized that, you know, obviously we… People started sharing it, and once you get the right people sharing it, and if it's well done – which we focused on the design of the calculator. On the results page we kind of had a map, and you can kind of click and see how the price varies by region, and so it was kind of interactive and people liked it, I think, just that experience. That instant gratification. It ties in with the culture. That’s how we… The first one, we built it custom. Then, when marketers… When our marketing customers on the development marketing place started to build out… You know, they wanted to build out these calculators or quizzes once they saw that they did well for us, and that’s when we saw that there was a market for people to be able to launch these, you know, for marketers to be able to launch these on their own and try to improve their customer acquisition.  

ANDY: So you built this first calculator fully-custom. You then had some marketers on that platform that were wanting to build similar things. Did you… Did you do any other, sort of, customer development, or was it just enough to hear from them that this is what they want, for you to go forward?

RANDY: Yeah, no, so… So on our development marketplace we had a lot of tech people on their hiring developers, but we also marketers hiring developers as well, and when the marketers wanted to go to the calculators or quizzes, they were coming to the development marketplace to hire developers, and what we saw was that as they work with developers, marketers obviously needed a lot more hand-holding…

ANDY:  Right.

RANDY: …working with developers, and there as as lot of back-and-forth, and there was a lot of communication there, and it’s not kind of, something marketers have a lot of experience with. And so, when we saw that they wanted it, because they were coming on and they were going to pay, you know, full custom… They were willing to pay for a full custom project, to build it out, the main thing they would come back with was they were, like, you know, kind of going back and forth, the developer and the designer and getting everything coordinated. You know, it takes a lot more time than you originally anticipate. That was where we saw, okay, not only do they have a need for it, and not only are they willing to pay for this to be done custom, but they also have a need for… We can save them a lot of time by doing it as a SaaS tool, and we can save them a lot of money because we don't have to charge them the same price as custom.

So everything kind of, you know, pushed us in the direction of saying, ‘Look, we need to do this as SaaS,’ and once we spoke with more of our customers about it, there was quite a few who were, like, ‘Oh, if you can get it down to, you know, that price point where we can build as many calculators or quizzes as we want because it’s a SaaS tool that does it all for us, and then you guys have the templates for the design…’ – that was one thing we saw with our customer development, was that people didn't want to hire designers, not just developers.

ANDY:  Right.

RANDY: And so we said, ‘Okay,  we’re going to create templates, and you choose the template. You can obviously change the logo, and the branding, and the colors, but we’re going to handle the design part,’ so really it’s just kind of like a PowerPoint-like experience; do-it-yourself, self-service experience. That’s how… That’s what we kind of learned during our customer development process.  

ANDY: And so after that point, when you’re committed to really building this out as a stand-alone SaaS product, how long did it take to go from that idea, to having something out there that people are paying for?

RANDY: So, the first version we… Well, so what we did as we were building up the product, we were actually building the custom… We started building out a few custom ones.

ANDY: Okay.

RANDY: You know? So people were paying for the, kind of, custom calculators or quizzes, which was actually a really good thing, looking back, because it gave us a much better insight into what people wanted…

ANDY: Right.

RANDY: …building out a calculator / quiz, because when you’re building custom, you can do anything, right? And so you start to say, ‘Okay, what are the things people really need, versus the things that are nice to have?’ and that helped us prioritize our roadmap. But I would say our first version of the product probably took us, you know, 3 months? 2 and a half to 3 months to get it going. And then, in terms of sale cycle, it was good because we just rolled over people we sold custom to. We said, ‘We’re going to build your first couple custom, and then you’ll roll into the subscription.’ And so it was nice in that sense, that we were able to sell before we had product, and we were able… So we sold it saying it was goin got be custom in the beginning and then product afterwards. And so I would say 2 and a half months to 3 months when we were able to… from… you know… decision to, kind of, build our product. Until our first, I would say, alpha, or beta, or whatever you want to call it. It was, kind of, like, a functioning product, but obviously not fully polished, and then we just kept on polishing it and improving it, and I would say maybe after 9 months to a year did we have something where it was, like, you know, didn’t require as much support. It was a self-service tool. A good experience for customers and things like that.

ANDY: How long ago was that, when you were at that point where you were pretty confident with the product?

RANDY: I would say… So… That happened… [00:08:00] I would say… Around 11 months after we decided to make the move, which was probably around, you know, summer of ‘16. Yeah. Something like that.  

ANDY: Okay, and so you have this product out there, you’ve been polishing it for a bit, you have a few early customers in – how do you now take that to the next level and grow the business?

RANDY: Sure. Yeah. Well, so… We kind of knew that calculators or quizzes was a great way for us to, you know… It was successful for us with the Venturepact development marketplace, and so as we, kind of, came after Outgrow, what we did was we separated out the 2 teams… We kind of built out a separate team for Outgrow, and we had our marketing team focus on interactive calculators and quizzes as well. And so the first thing we did was we created an ROI calculator quiz, right? So, ‘What is the ROI of using Outgrow?’ and then we basically showcased, kind of… There was a few things we wanted to showcase in calculators or quizzes around how calculators or quizzes help, so it’s a little… you have to, kind of, listen to both parts… But the main thing was that the… [00:09:07] The first part is the sales conversion rate, so we wanted to highlight how your sales conversion rate is higher when you know the answer… You know, if someone answered 9 questions and then they give you their email, you know a lot more about them. And so you can segment them a lot better, and so that improves your conversion rate and your targeting.

Sales love that, because sales… ‘Now, this guy’s trying to buy in the next 3 weeks. This guy has a $50,000 budget. This is the right person for me to go to. he’s in this location, so that’s the right… Based on geographic territory split of how we split our sales people, we know how to send that to, and that’s a much…

ANDY: Right, because they're not just giving you your name and email address to download an ebook; they’re answering questions that are going to help you…

RANDY:  Exactly.

ANDY:  …qualify and sell to them down the road.

RANDY: Exactly. Exactly. So a lead is a… We call it like a ‘highly qualified lead.’

ANDY:  Right.

RANDY:  It’s… It’s very different from the name and email address that you mentioned. And so that's one thing we wanted to highlight in our calculators or quizzes, was, ‘Let's get some information about your current conversion rates, and things like that, and then we’ll tell you about how that’s going to be changed based on average data that we have from our past customers,’ and then we talk about how it’s going to impact your traffic. So it also helps with your top-of-the-funnel traffic, because if you put a quiz on Facebook, more people are going to engage with that than people are going to engage with a traditional ad, because people on social platforms are there to… because they’re bored.

Like, that’s the reality of the situation. They’re there because they want to enjoy themselves, they want to kill time, they want to see something fun, and if you give them a fun quiz, like, ‘How much do you know about this?’ or ‘Which celebrity style best matches yours?’ or, like some knowledge test – whatever it might be, depending on your business… It’s not direct to purchase. Those types of engagements are not going to be, like, ‘How much are you going to save by using our product?’ Usually what you’ll [00:10:50] do when you do a Facebook, more kind of open-targeted campaign, you’ll do a more, kind of, generic, fun quiz, and that brings in a lot of traffic, gets some exposure, and those types of people, usually, you’ll put them on a marketing email campaign based on the answers they've given. That helps also with your traffic, So we wanted to highlight how your traffic increases with calculators or quizzes, we wanted to highlight how the sales conversion rate changes… is impacted, and then we wanted to talk about how your conversion rate within your blog changes, right? So if you have a blog and you have no email… you have limited email capture on a blog post, and suddenly you put a quiz there that complements the blog post, how does that impact it?

So we highlight those 3 things, and then we wanted to highlight overall ROI, and those are the calculators and quizzes we started off with for Outgrow, and that’s what helped us acquire our own leads, and kind of, through the value of the product.

ANDY: How were people finding these early calculators? Because it’s one thing to create a lead-magnet of any kind, but it’s another to actually get people in front of it.

RANDY: Sure.

ANDY: So how were you driving traffic to those calculators?

RANDY: Sure, yeah. So the main channels are, of course, you know, you have your existing blog, you have your homepage, you have Facebook and Twitter and LinkedIn, and then you have your email list. So those are the main channels that you want to focus on, and then, if you have a phone number, SMS, and if you have a mobile app, push notifications as well. Those are the core ones that everyone would think of. That’s how you push traffic to… But there are other things that are also relevant.

Forums. So, if you have a really good calculator, like the ‘How much does it cost to build a mobile app?’ or if you have something that’s kind of highly relevant to sales, and you go to forums where a lot of questions are being asked about sales, you know, you can share that calculator or quiz in that forum, and that helps bring a lot of traffic to the forum. You will get criticism for most of these things. You know, it’s hard, especially if it’s hard… [00:12:51] you know, if the data, like, ‘How much does it cost to build a mobile app?’, right? In 12 questions we have to give you a range, and we kind of say, ‘This is an estimate,’ because…

ANDY: Right

RANDY:  You know, if we wanted to go really detailed, we’d probably ask another 10 or 15 other questions to, kind of, really fine-tune and get a perfect estimate. But there's a delicate balance between the two, and so going out to forums, we usually say people should wait until they have feedback from about 10 people who are experts in the field, who’d say, you know, ‘This makes sense and we think…’

ANDY: Okay.

RANDY:  ‘…you know, that’s good,’ and then go all-out on the forums, because you will always get some people who say, ‘I think this number should be higher,’ or, ‘This number should be lower,’ but at least you have enough… It’s not black and white at that point. It’s more like an art… It’s more like it’s a gray area.

ANDY: Right, you’re in the right ballpark, at least.

RANDY: Exactly. You’re in the right ballpark. You’re giving them a range and you have a disclaimer at the bottom saying that… you know, this is, [00:13:48] obviously, like, sometimes a lot of our customers, especially where they have FX issues where they have foreign markets, they’ll say, like…

ANDY: Okay.

RANDY:  ‘This is the price, but, you know, the current FX rate is this, and as FX rates change this can cause changes in the future, so don’t, you know, think this is going to be the same rate going forward.’ And so there are things like that that’ll help, but I definitely think we found forums to be really useful. Obviously targeted forums, the right ones for your audience. And because you're not selling your product – you’re giving them something of value, you know? Like, this is, ‘How much does it cost to build a mobile app?’ – it’s not directly selling the developer marketplace. It’s just helping people find a price and, of course, we get the lead as well. But that’s when people who are more willing to give up their email: when you’re giving them something that’s useful to them.

ANDY:  Were you doing any paid advertising to promote these, or was it all more organic, sort of, style outreach?

RANDY:  So, at the beginning, we were on a constrained budget, and so we wanted to validate, you know… kind of see how much we could get organically, and so we started off mainly organic, a limited amount of spend on LinkedIn ads and Facebook sponsored posts, and then, over time, as we were able to better fine-tune and improve, and say, ‘Okay, what are we doing to make sure conversion rates are high?’ and once we were able to get a better sense of the value of leads, and how much we were going to get on our marketing spend, we started to invest more. We invested more in Facebook, we invested more in LinkedIn, and then we started also doing Google AdWords as well. I think that makes a lot of sense for people to do, and then display ads and AdSense, we did a bit of that as well, and then re-targeting as well, so people who have landed on our Outgrow page and then [00:15:41] we re-target… we split it… pixel… we do a re-targeting pixel, and that does really well. So the re-targeting is a great way to re-engage people, and you can, kind of, do intelligent things as well, like, I can target people… If someone’s given me their email for a top-of-a-funnel fun quiz, I can then target that email on Facebook with a middle-of-the-funnel type calculator or quiz, or a bottom-of-the-funnel, to kind of see… kind of move them along that process. So you have different strategies for people along different parts of the funnel, so there's things you can do there. As you spend time, obviously, you can kind of optimize these things.

So we started to invest more aggressively once we were able to put more capital behind the business, and we were able to better understand the ROI.

ANDY:  Right, it seems like, yeah, there were a couple angles with that, whereas 1) you just needed to have more cash to be able to dedicate towards it, but the other thing is understanding the internal ROI, and making sure that you've built out the funnel to a point where it actually makes sense to put money in, because you’re confident enough that you’ll have a positive return.

RANDY:  Exactly. Exactly.

ANDY:  And so once you’re getting these leads into the system, using the calculators, using the surveys, what’s next? Because I can see with some business where it would make sense to just have a sales person reach out right away and check in with them.

RANDY: Yeah.

ANDY: But how do you decide what the best next-step is? Whether it’s a nurturing campaign, a sales call – how do you make that decision?

RANDY:  Yeah. That's a really good question. And so, what we do is we basically… In every calculator or quiz, we try to have something that helps us get a better sense of what type of plan is relevant to that customer. Based on the type of plan that’s relevant to that customer, we’ll handle them differently.

So if we think… This is kind of like, if we get a company, and, you know, our $45 per month plan is the most relevant option for them – our Freelancer plan – then we will put them on an email nurturing campaign and direct them to sign up for a free trial, right? So they can go on, they can use our free trial, they can experience it, they can ask us questions. But that’s the most common way that people who are looking to buy our Freelancer plan are coming in. They’re like, ‘Okay, I can come, this is a monthly thing…

ANDY: Oh, okay.

RANDY: …it’s low-risk.’ We target them that way. For the Essentials plan, we’ll usually… People who are in the Essentials plan, I also mainly send them to a free trial. So the Essentials plan is $125 a month, and we’ll mainly send them to a free trial, but we’ll give them the option… We’ll also mention, like, ‘If you have questions and you’d like to schedule a call,’ we’ll provide them with a link as well. And then, the people who have larger budgets, a question would be, like, ‘Mark, what’s your approximate marketing spend per month?’ and then people… So we’d say, ‘Oh, this person’s spending, you know, over $10,000 a month on marketing. They should probably look at our Business plan, or our Enterprise plan.’ And so those types of people usually don’t buy… they might do a free trial, but they’re not going to… They really want to talk to someone, get a sense of how the integration work, right? so they’ll ask a ton of questions on their integrations, on their specific customizations for their business, and those people will direct to calls, and we’ll send them to sales people. We’ll basically send them to sales people based on their location, so territory-based. And then, size – if it’s a really big deal, we’ll send it to our more experienced sales reps who have experience selling our Enterprise plans, and then if it’s a medium-sized deal, we’ll send it to our Business… Our sales reps who usually sell our Business plan and who are in that territory. So that’s how we would do the segmentation in terms of how how to decide what to do with that lead.

ANDY: Interesting. So it's pretty standard stuff, where you’re looking at the potential lifetime value of the deal, and making a decision on how high of a touch sales approach you want to take.

RANDY: Sure, yeah.

ANDY: So, do you have much of a sales background yourself?

RANDY: Yes, I have done. I have done a decent amount of sales and marketing. I’ve… So, I worked… I’ve worked at a tech startup in San Francisco, I’ve worked at startups in Philadelphia, and I've worked in New York as well, and in throughout my time, you know, working in those companies, I’ve done marketing and I’ve done sales. So that’s how I’ve kind of gotten the opportunity to see how things work, and then at Venturepact I was also involved in sales as well – the developer marketplace.

ANDY: When you first launched Outgrow, were you handling all the sales yourself?

RANDY: When we first launched it, yes, and then over time we basically started to build out a team for it. Yeah, I think it actually a good experience to do the sales myself, even though it's actually very hard to launch a company, run it, and do sales, but I think that’s… you know, entrepreneurs have to do that. Just because… There’s specific nuance to interacting with a customer and selling to them, or trying to see where they push back, that it’s kind of hard to get just from a salesperson who you’ve hired to do it. So I actually highly recommend, even if you don’t feel like you’re a great salesperson, but you will learn from that experience, and it will help you work with the product team on product strategy, and it will help you train the next salesperson much better, because you’ve been in their shoes. You’ve seen customers being difficult to follow up with. You’ve seen customers pushing back on these specific points, and you understand, kind of, how they could potentially misunderstand you. You could say something and you interpret it some way because you’ve been doing this for so long, but a customer might misunderstand a specific point, and you have to be able to recognize it, understand that, see if they have an objection that they’re not communicating. All of those things, I think, are important. So yeah, I think that was a useful thing for me.

ANDY: So when you started building out that sales team, what were your first hires in that department? Were you hiring someone with someone experience and seniority, or were you hiring someone you could train from the ground up?

RANDY: Yeah, well I should say that hiring sales people is actually something that we had done at Venture… During the developer marketplace as well, so that experience helped us a lot.

ANDY: Okay.

RANDY:  So when we did it then, we definitely made a lot of mistakes, and I think the main thing that we learned was that when you hire a salesperson, the first and most important thing is the person had to have the right attitude. He has to be a positive person and he has to be good with people. The second is they need to have a good work ethic, to be able to follow up and be able to keep track of leads. At the beginning, those are the main things you need. You need a generalist who’s willing to hustle, who’s willing to work hard, and who’s not going to come in from a big brand and is used to selling a company where everyone already knows that brand name and it’s much easier to get a food in the door. But when you don’t have a foot in the door, and you don’t have a big brand name, it’s more about the hustle. So at the beginning we were all, like, SalesForce, you know? Someone coming from SalesForce, or someone coming from, like, you know, Workday. Those types of companies are great. But it’s just a different vibe, coming into a sales organization with, you know… As a first, second or third hire versus going into a big brand. So that’s, kind of…

We have learned that, and so when we came into Outgrow [00:22:59], into the Outgrow team, building out the Outgrow team, building out the Outgrow product and the Outgrow sales team, it was a different strategy. So we said, ‘Okay, we need a BDR, we need account execs, and Salesforce.’ And so there we were focusing mainly on attitude. And, of course, we wanted someone who had done a bit of sales, so at least 2 years, so they at least tried it and they see the challenges, and we wanted them to have seen B2B SaaS, but we said, ‘If they’ve done it at a company with less than a 10-person sales team, right, they have seen a smaller sales team and building out of that.’ That was something that we also looked for. So they’re in that kind of range where they've had some experience in a smaller sales team where not everything is just perfected to the dot…

ANDY: Right.

RANDY: …and they’re just coming in and just, kind of, you know… repeating that whole process that’s already been executed. They kind of have to invent, and be creative, and try things out.

ANDY: How big is your sales team today?

RANDY: Yeah, so right now, the way it's structured is we have BDR and account execs, and so in our BDR team we have 3 people, and account execs, we have 3 as well, and then 1 of our account execs does some BDR as well.

ANDY: Okay. And then where else… [00:24:19] How big is the team overall?

RANDY: Sure, so the total team size is 34 people spread across, you know, marketing, product, sales, and then customer success support.

ANDY: And for hiring for those other departments, did having your prior experience also help there, or… what was the learning curve like for you, when you started growing across the company?

RANDY: So, I think that’s a great question. Definitely, the experience we had building up the Venturepact team was very helpful, I think, because we did make… [00:24:58] I think hiring was much harder than we thought, because we usually would go with our gut a lot, and your gut is usually good at some things, but it’s hard with other things like… No-one’s going to show you that they don’t have a good work ethic in a 15-minute interview, right?

ANDY: Yeah!

RANDY: And people who generally might have very high expectations and get frustrated quickly are not going to show that in a 15-minute interview. So there are things that are subtle, and we started to… [00:25:26] One of the things we did as well ,we started to use references a lot more, and that was very helpful for us, because when you speak with a reference who has worked with that person for a longer period of time, you’re able to get a much better sense of whether or not they’re going to be a good fit. And it might just be a bad cultural fit. It’s not that the person is not a great, you know, individual or great employee; it’s just that it’s not going to work based on their attitude, or based on some cultural disconnect. And so we started to use references a lot more. I highly recommend it. It’s a lot more work. YOu know, it’s a lot more work to go and talk to references, schedule calls with them or ask them for information. Not every reference wants to talk about the person.

ANDY: Right.

RANDY: It’s more work to do and I can see why people don’t do it, but recruiting is such a… if you look at the long-term mindset, the cost of a bad hire is so high, and the time you’re investing into the interview process, that is so worth it. You just need to get long-term perspective, and it’s hard as an entrepreneur who wants to move really quickly, who wants to make quick decisions, and is thinking, you know… At the beginning you’re really thinking about kind of, I just need to hit this goal, and you’re usually thinking short-term just to get yourself off the ground early on, but you can lose sight of the long-term and just say, ‘You know, I’m just going to hire. I know most people say ‘do references’, but in this situation I’m pretty confident,’ and then you end up being wrong…

ANDY:  Right.

RANDY: …and you end up spending a lot more money, and it’s a lot more time, and it pushes the business back.

So that's the other thing. And the third thing I would say about hiring is don’t hire one person at a time. you’ll usually hire people together, and that helps you because you can train them together, and you don’t have to train each person separately, and you can have a benchmark and compare. Especially when you don't have… Your metrics at the beginning are really… You’re guessing, right? You have… [00:27:15] you know… for every role, like customer success, or for sales, you’re guessing on metrics. It’s not like a… You don’t have a lot of evidence. As an entrepreneur, I had my sales records, but is it fair to take a first sales rep who doesn’t know as much about the business and give them the same metrics you have, as the founder of the business? Who has spent so much time in sales before? That’s probably not a fair thing to do. So it’s just… There is… I usually recommend you hire a couple of people and do references, and it’s hard! Like, you’ll still make mistakes, but, you know, if you hire a couple people then at least, hopefully, 2, 3, 4 people, you’re able to recognize… [00:27:58] you’ll have a few good people, so you don’t feel that time was wasted.

ANDY: Right, and I think – building on what you’re saying – is that taking that long-term approach of understanding that 1) a highly valued, qualified, productive employee is worth a lot to your startup, especially in the early stages where you need to move quickly, but on the other side of it, someone who is not the right fit, who isn’t qualified, can really hold you back. When months can count for a lot as a startup, it is so important to put in a few extra hours in the beginning and build up the processes, build up your systems, so you can at least lower the chance of making a bad hire. But, going with that long-term view as well, with your customers themselves, I’m guessing that for them they’re going to be pretty ROI-focused as well, in that if they’re not getting results, they won't stick around. So that churn can be an issue with that. So what mistakes are you seeing your actual customers making with the software that prevent them getting the results they otherwise could?

RANDY: Sure, there’s a few things. One is you have to understand… Actually, there’s quite a few things that customers need, that they've done wrong. So let me try to see which ones are the most important.

So one is, I would say, having… [00:29:19] So, if you have market research team, or you have a sales team, or whatever it is that’s pushing the marketing team to add more questions that are data-oriented that aren’t actually adding value to the result, alright? That’s something that we usually push back on, alright? If you have a calculator or a quiz – let’s say you were trying to estimate how much does it cost for a video campaign, or how much more sales can I get if I use this software, and if you have questions that are clearly not relevant to that answer, right, that your sales team wants, just for information, then you have to manage such that you're not asking too many of those questions, because then people are going to think this is a survey. You're just asking for more data, you’re not giving them anything of value.

ANDY: I see.

RANDY: So that’s something we always push back on. Less than a third of the calculator or quiz should be questions that don’t contribute to the result, and they should at least come across as relevant to the topic. So those are very important. Like, top-of-the-funnel quizzes, if you’re asking, like, ‘How much do you know about… How much do you know about sales commission structures?’ or, ‘How much do you know about, you know, email marketing software?’ or whatever. If you have that type of quiz… You shouldn’t ask for questions about, like, ‘How many employees do you currently have in your marketing team?’ because it’s a test around their knowledge of email marketing.

ANDY: Right. It doesn’t matter.

RANDY: Right! And so it’s going to come across negatively for that user, because they’re going to be, like, ‘Oh, you’re doing a survey!’

ANDY: Yeah.

RANDY: The point of it is that you want the data, but, at the end, you want to make sure they have a good experience and that they're going to share it. So that’s why we always try to say don’t let your market research team, or your sales team, dictate what the questions are asking. They can influence it, they can give you feedback, you can add a couple – I’m okay with that – I’m just saying don’t go too far. So that’s one thing where you want to make sure the calculator or quiz is actually useful and you’re not going overboard.

 The second thing I would say is that the promotion… how to promote it, and then making sure that you have the right information on it. So one thing is videos are great, but you need to be careful and really pay attention to your load speed. So if you have really heavy videos going on in the background…  

ANDY: Oh, okay.

RANDY: … if you have heavy videos on the page, you’re going to slow down the load speed, and when people click on Facebook, and they click on the ad or they click on a sponsored post, the page is going to take a long time and you’re going to have a high bounce rate. Right? So, condense the image. You don’t need these perfect videos, you know, to be going out throughout the whole calculator, but you want to make sure you’re optimizing for speed, and the heavier all the images are, the longer it’s going to take to load – especially if they’re on a phone. So you want to be careful with that.

The third thing is paying attention to location of the calculator that is within the page. So if you put it at the bottom of a page, right, someone’s going to have to scroll all to to get there on a mobile phone,a nd if you have a large percentage of traffic on mobile then you don’t want to put it at the bottom.

ANDY: Oh, okay.

RANDY:  You want to put it closer to the top. You don’t need so many banners at the top of your page, so don’t try to have 10 calls to action. Have one, clear call to action. People who are coming to this page are coming to take the calculator or quiz.

So there are a few things there that are important as well, and the pop-ups? Always be careful with news pop-ups and make sure that, you know, if you have a sophisticated audience that’s developer-focused, a lot of them have pop-up-blockers, you’re going to have issues if you launch the quiz or calculator as a pop-up, os be careful for that.

I can go on for a while, but these are the main ones we see people making mistakes with when they’re leveraging calculators or quizzes. Does that answer the question?

ANDY: Yeah, I think that was super helpful. I know there’s going to be the long tail of, ‘There’s a thousand different things people are doing wrong,’ but those seem like the bulk that…

RANDY: Sure.

ANDY: …if you can fix those, you’ll be, sort of, 80% of the way there.

RANDY: Definitely. That's exactly right.

ANDY: So for you guys, personally at Outgrow, how big do you think you can scale a company on the back of calculators and surveys?

RANDY: Yeah, so, I think… [00:33:29] So if you look at calculators, quizzes, and product recommendations, right? Product recommendation engines. I think those mainly signal… the way we think of what we do is that the future of marketing is personalization and inter… Like, it’s going to be more personalized, and more interactive. It’s going to be more about the user. So instead of us talking at the users, or providing them with generic information, we’re giving them something personalized, and we kind of interact with them. And so, you know, a lot of, you know… that's what bots are. Bots are just interactive experiences for users that help them get something more personalized. More personalized information. And so bots is just one example of personalized interactive marketing, and obviously that took off with Slack bots, and Facebook Messenger bots, but…

ANDY: Right.

RANDY:  So, the concept of personalized interactive marketing is actually a huge category. But it has the potential to be a huge category over time. Whenever a category is young and new of course it’s going to… it takes… you have to be patient and it does take time to build it out, and it’s difficult to educate customers on the concept, and to roll that out. So your question on how big can this be – we think it can be… This can be built into a large business. The question around whether or not we will be the company, you know… I can see a handful of companies becoming big in this company. The question of which company will be big? THe answer is based on execution and timing. You’re either too early – sometimes you’re too early to the market and then you've burnt out a lot of capital and you're not able to scale your team as fast as you’d like – or you’re too late to the market and a lot of people have come in, or you're at the right time and you have a really good team that executes well. You’ve hired the right people, and it’s able to market and educate people on this new category to build it out into a large organization. So I think we have the potential to be a big company. The answer of whether or not we will be a big company, I think, depends on how well we’re able to execute and whether or not this timing is right. I do think the timing is pretty right, but we'll have to see how well we can execute!

ANDY: That goes perfectly into the last question before we wrap up, and that is: what are your long-term plans for Outgrow? Do you see yourself expanding into other similar products? Or what do you see as the real vision for the company?

RANDY:  Sure. I [UI 35:53] it down to short-term and long-term. In the short-term, it’s continuing to hold a product. So in each industry… [00:36:00] You have to think about the wide range of use-cases, right? Just within product recommendations, there’s such a wide range of use-cases. Within e-commerce, right? And there’s so many things around optimizing for user experience, experimenting with different styles and different strategies, and even within financial charts, financial graphs, there's just so much that can be done within the 3 existing verticals of e-commerce, product recommendations, or general plan or recommendations. You know, graded quizzes, knowledge tests, and then fun quizzes. Even numerical calculators. There’s so much that can be done within those areas, you know? In the short term it’s just continuing to leverage… build that out and make it better.

In the long-term, we want to kind of think… [00:36:55] The way we think about it is if we believe the future of marketing is personalized and interactive, what does that mean in terms of products and services that can be created or made to help marketers leverage this kind of trend, and to allow them to better connect to their customer? Allow them to add value to their customer? And os that, I think, will depend on what technologies are available, how behavior changes and how things develop for me to give you a specific kind of, ‘These are our next set of products.’

ANDY: Yeah, no, I mean, Randy – you shared a ton with us today. You gave us a lot of insights into your business, you gave us a lot of insights into how other startups can grow themselves with these types of tools, so I want to say thanks so much for all that. But before we say goodbye, if listeners want to learn more about Outgrow, if they want to learn more about how to use these tools to grow their startups, what is the best thing for them to do?

RANDY: Sure. So the easiest thing is to go on Outgrow.co (it’s Ougrow – O-U-T-G-R-O-W.co) and just sign up for a free trial and just, kind of, experience it. There’s no strings attached. Try it out! Then, usually what we tell customers or people is that within 3 months of experimenting – you have to obviously do A/B tests and try it out, and try it out properly – within 3 months you can see, if you’re properly trying things and properly promoting them, you can see which types of calculators or quizzes are best for your audience. What’s going to resonate best with them, and what’s going to work. So that’s the reality. It’s not a… You know, as with a blog, it’s not always your first blog post that’s your home run, but you kind of have to A/B test that and try things out, and see what resonates. But that would be number 1.

Of course, if you have questions, you can email questions@outgrow.co. You can email me as well: randy@outgrow.co.

ANDY:  Awesome. Well, thanks for sharing all that, Randy, and thanks again for the time and coming on the show today. I really appreciate it.

RANDY: Thanks for having me!