Brennan Dunn

Josh Pigford on February 26, 2018

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This week I talk with Brennan Dunn of RightMessage! Brennan and I talk about product personalization, pricing, getting your first customers, agency work, info products and so much more! Fun fact: Brennan once tried to start an airline…and yes, we talk about that. Enjoy!

Josh Pigford: Hey, Brennan, how’s it going?

Brennan Dunn: I’m good. How are you, Josh?

Josh Pigford: Doing well, doing well. So, thanks for hopping on a call. The way that I like to kick these things off is starting off with you as a kid, little Brennan. What was he like? What was he up to? You grew up in Virginia, right?

Brennan Dunn: No, I grew up in Florida, actually.

Josh Pigford: Florida? No, that’s right. And, then you moved to Virginia later on. Yeah, yeah, yeah. So, as a kid in Florida, what were you like, what were you into?

Brennan Dunn: I liked computers, go figure. I think my parents had an Apple IIe and this was, I guess, pre-internet stuff. So, I would go over to the local college bookstore and I would check-out books on Pascal and type them directly into the Apple IIe’s prompt, and I’d type, verbatim, the code samples, and hit enter, and be like, “Why doesn’t this work?” And, I didn’t really understand, back then, about compilers, or any of this stuff, but it got me interested in this stuff. And, then I eventually figured out how to do a very simple, basic script to impress the friends. And, yeah, I liked computers, I liked …

Josh Pigford: So, how did you even get into computers? Was anybody in your family into it? Or, is it just, what?

Brennan Dunn: Yeah, there was one at the house and why not mess with it? No, so if my parents would’ve got their way I would’ve been some Olympian volleyball player.

Josh Pigford: Wait, volleyball?

Brennan Dunn: Yeah, my dad’s a big beach volleyball player. Actually, he’s competed internationally in it and, still to this day, he’s 70, and all of his friends are younger than me. And, he goes to the beach every day and just plays volleyball. Nothings changed in 50 years for him.

Josh Pigford: There’s something chill about that.

Brennan Dunn: Yeah. So, they tried to get me into, I did the baseball thing, the flag football thing, the soccer thing, a kid stepped on my hands with cleats and I never played it again. Yeah, so I was bred to be athletic, but it didn’t really work. Actually, I had a friend who lived in the neighborhood who was really into computers too and I probably got some of the early interest from him. Yeah, so two younger sisters, I didn’t really hang out with them. Just did my thing and, as I got older, realized there was a shopping mall a 20 minute walk away, and would start just branching out, and getting out of the house, and then I got a car when I was 16.

Josh Pigford: Obviously, now, you and I both have kids and technology is much more pervasive than it was when we were growing up, but do you feel like your parents ever thought, “Brennan, man, you’re spending too much time staring at that computer.” Was that ever a thing?

Brennan Dunn: Yeah, I don’t think they ever saw it as being an economic thing, like it would ever positively impact my, maybe if they were more in-tune with computers and stuff it might’ve been different. So, in high school I taught myself EHP, and I decided to install Linux, and change my keyboard to Dvorak, so no one else, but me, could use the keyboard, ’cause I wouldn’t remap the keys, I would just remap the keyboard. And, I got really into that kind of stuff, but I don’t think it was until college when I started doing a little freelancing on the side, to do websites and stuff, that they saw that I was able to make decent-ish money doing the computer thing, I guess, right? But, no. Yeah, it was just different, ’cause you probably remember, like me, that time where there was, you had your ISP that could be 20 hours a month for the internet. I think when, what were they, ISPN, or whatever they were called, right, whatever those were, pre-cable modems, better than dial-up, when those came out and you started getting more decent internet, I think that’s, for me, when I started to hang out more online. But, before that, it was just more of a curiosity that I got into it.

Josh Pigford: You mentioned the X number of hours thing, my dad is a classic sort of, cheapskate’s not really the word, but he will go out of his way to get the cheaper item, or to get something for free. And, the AOL, you’d get those CDs and get X hours, or whatever, and he quickly figured out that he could just, every month, call them and say, “You know what? We’re done with AOL,” and then they would just keep giving. Very quickly, we had, essentially, an infinite number of hours, because AOL just was going to all lengths to [inaudible 00:05:56].

Brennan Dunn: So, this is how I figured out how to get unlimited internet, it wasn’t that smart. Do you remember the AOL chat rooms that they had?

Josh Pigford: Yep.

Brennan Dunn: Yeah, so I hung out, randomly, in the Hercules and Xena one, and they were looking for a moderator of their chat room, and they’d give you, basically, free AOL in exchange. So, yeah, 14 year-old Brennan was the moderator of the Xena: Warrior Princess chat room on AOL.

Josh Pigford: Well, your story’s much better than mine, man. I guess, you had to work for it, but still.

Brennan Dunn: Well, yeah. Or, “work” (air quotes).

Josh Pigford: Oh, man. That’s good stuff. Okay, so you mentioned going to school. So, thinking middle school, high school, were you even entrepreneurial at that point, or did that not really come until you had to support yourself in some form or fashion?

Brennan Dunn: Kind of. I like to think that, growing up my dad had a business to, basically, facilitate his volleyball thing, right? So, he, basically, defined lifestyle business, but it was much more brick-and-mortar, and he would go in for 20 minutes a day to check with things and then go to the beach. But, no. I learned, I guess, from him, I remember once, we were sitting at the, I think I asked him, “Hey, Dad. I want to make some money. Can I do a lemonade stand or something?” I must’ve been eight, or nine, or something like that, right? And, he sat me down, I remember this, at the kitchen table and he was like, “You know, when I was a kid I had a boat washing business,” for people’s canoes and little boats that they had, I guess, in his neighborhood. And, he’s like, “I figured out I could just tell other kids to wash the boats for me. I’d pay them something and I’d sell the people on giving my company,” again, air quotes, “The project. And, I did the sales, but I didn’t, actually, need to wash any boats.” He’s like, “Work smarter not harder.”

So, that was drilled into me. I was like, “Okay, I’ll go start my limited franchise.” It didn’t really work out. There was a time in middle school I got really into buying, what was that, PC Magazine, or something like that, and that was back when Intel was releasing their 200 MHz processor, or something like that, and my friends and I would geek out on that stuff. But, anyway, I got into building my own computers. Granted, this wasn’t a thing I did often, but I would do it for myself when I’d, say, I got a new machine, but I’d do it for my friends too if their parents were open to giving them a new computer. And, it was really just so I could play more Command and Conquer. But, ultimately, I went door-to-door and, basically, pitched people on like, “I’ll build you a computer.” Again, that didn’t really work.

Josh Pigford: The fact that you were even, had the guts to go door-to-door is, to me, there’s a certain personality type that can even overcome the social awkwardness of having to do that. To me, it sounds like you, at least, had the mental make-up to …

Brennan Dunn: It’s funny, I think I would have done that if, you remember those magazine sale things you would do for school?

Josh Pigford: Yep, where you’d go to ask people, yep.

Brennan Dunn: Enter the contest [crosstalk 00:09:46] National Geographic and stuff? It’s funny, now, ’cause I’m sure they’d require your parents to go along with you.

Josh Pigford: Totally.

Brennan Dunn: Yeah, but I just had to do it on my own. And that, I guess, broke the ice with that. And, then there was a pizzeria who paid me nine dollars to, basically, go for four or five hours to pass out fliers to different houses. Again, probably violating child labor laws and all this stuff, but I got free pizza, and I got nine bucks, and I was happy. So, yeah. I’m definitely introverted and I’m not always good at, even now I’m doing cold outreach nowadays and I’m still awkward about it. But, I think that stuff probably, definitely did help a lot.

Josh Pigford: So, you’re doing that stuff in high school and then when it’s time for college, how did you decide what path to go down for that?

Brennan Dunn: So, I got a free scholarship to Florida State. Mostly, because it’s really in Florida, at least I think it’s still like this, but they have so many old people who play the lottery that they have a lot of money for education. Or, at least educational scholarships. So, if you get above a 1,200 on your SAT, and that was on a scale of 1,600, I think it’s gone up since then, but if you do decent on your SAT you can go to any Florida school, effectively, for free. So, I went to Florida State for a year, majored in electrical engineering, ’cause I thought it was cool, and I ended up, actually, not liking the path I was going down. And, I was in computers and, actually, I started my first proper “company” then. It was, basically, Uber before Uber where my friend Jason and I, we were trying to figure out, we didn’t want to get a job. So, we tried the whole we could take what little money we have and drive three hours to Jacksonville and do the casino cruise thing, and try to make money that way, it didn’t really work.

And, then we tried starting an airline, ’cause we were taking, Jason and I were taking ground school, because it was free at Florida State, ’cause a bunch of Navy and Marine people were there, I guess. So, we did ground school and we thought, we looked into kit airplanes and we thought maybe we could just build an airplane and fly kids to Panama City. Apparently, there are rules and regulations around … I didn’t live in this Libertarian paradise that I thought I lived in. So, that didn’t work, and then what did work, but it didn’t really work, was I was in the, back then, just the Procedural PHP, no frameworks, just writing, somehow that worked. I did this thing where I found out I could calculate the distance between two points using this website that had a bunch of code fragments, and I started this thing with, again, my friend Jason, called Homebound Network, where if you still Google Homebound Network, Brennan Dunn, you’ll find it.

Basically, the idea was, I went to school in Tallahassee, that was an eight hour drive from Ft. Lauderdale where I lived, I’d go home a few times a year, Thanksgiving and stuff, but also randomly, and what if I could, say, sell seats in my car back to Ft. Lauderdale, right? So, that was the “company” and we’d charge, say, $25 for Tallahassee to Ft. Lauderdale. We would give the driver $20 and then we’d keep $5, but we didn’t really know how to do that. So, we had PayPal giving us money, but then we wrote checks for the remainder, then mailed them to the driver, and we would make three dollars at a time for something that took going to the post office just to fulfill. It didn’t really work. We had that typical marketplace-y issue of supply and demand, so we did the standing in the quad and passed out fliers we printed out at Kinko’s and stuff. So, it got us off the ground and, again, we got press, randomly, in the college newspapers, but it didn’t really work. It was before it’s time, I like to say. This is pre-Facebook and stuff. So, it didn’t really work, but then I decided to transfer up to a school in Maryland and study the classics, and learn Greek and Latin, and everything opposite of what I was doing before.

Josh Pigford: So, all of this stuff with you, good grief, Brennan. The Uber before Uber and your little airline, this is all, you’re a freshman in college, right?

Brennan Dunn: Yes, yeah.

Josh Pigford: Okay, so let’s unpack this a little bit.

Brennan Dunn: Sure.

Josh Pigford: I feel like, now, if either one of us had the idea, had either one of those ideas, we would both quickly not do them for all of the logical reasons. So, what is it about you being a freshman in college where you felt, or maybe just did not even think about it, you just thought, “Hey, an airline. Sure, why not?” Do you feel like that was an ignorance on your part in a negative way, or an ignorance on your part that was, ultimately, a positive thing?

Brennan Dunn: So, my friend and I, if I mentioned the entrepreneur friend of mine from school who, we would construct, say, half a craps table that he found instructions for online in his dorm room so we could practice throwing dice. You’ve seen me in Vegas, so it hasn’t worked. But, we were always trying to find little, we got into trading foreign exchange stuff just ’cause we thought it would be cool. We got into options trading. He and I wanted to not do the get a job at a restaurant normal path that a lot of college students had, so we were just trying to come up with ways to circumvent that. Well, the airline really, no pun intended, literally, never took off. The other one did, but we never thought about the numbers, we just thought, “Somehow this will work.” And, you still see this, now, with people our age and beyond who are like, “I’ve got this great idea for this marketplace-type thing,” and they don’t, actually, think through the implications of all that, right?

In my case, making sure that if I was going down to a city, and I looked on this Homebound Network site, and there was no ride to that city I’m probably never gonna come back again. Whereas, if I list the fact that I’m driving down and want to sell seats, but no one buys those seats, I’m less likely to come back and do that again. So, I guess, in a way, I learned marketplaces are hard, back then, without even knowing the language, or the lingo, right? But, I think stupid ideas, nonviable, you’re absolutely right. Today, I’d be like, “Nope.” But, I do think they helped a lot, ’cause I know there’s that whole thing about you gotta fail quite a few times and fail, sometimes, hard maybe, to get things to stick, and I do think that. And, I really haven’t given that much thought to it, to be honest, what, if any, fallout from all that affected where I am now, but I’m guessing it probably did.

Josh Pigford: To me, there’s so much of those early things where back, say, 15 plus years ago, the kinds of things that you could try and fail at were more tangible, where, in this case, whether that’s an airline, or travel stuff, ride sharing kind of stuff, there’s a lot more that has to go into it to even try and then fail at it. Whereas, now, you throw up a landing page and then you didn’t get any signups, and you said you tried it, and then you moved on.

Brennan Dunn: Yeah, granted the coding part was probably the easier part just ’cause I was a college student, I had nothing better to do than to screw around with this stuff. But, there was things like going and spending all the money we had to print out a flier at Kinko’s to pass out to students from the quad. So, yeah, the viability of testing it, especially if you knew how to would have been much, much easier nowadays and I probably would’ve just thought, “BDC marketplace, hell no,” and circumvented the whole thing early on. Especially, BDC marketplace where the customers are college students and circumvented that early on versus, again, I was thinking, “I do this, it would be cool if other,” or, “I drive, I have a car that seats four people. I’m one person, I’m driving eight hours, I would love to make some money doing that.” And again, that thought has been validated, obviously, through Uber, and Lyft, and others. But, back then there wasn’t, again, not to be like a get off my lawn old man, but we didn’t have social media then, right? Social media was, literally, going and hoping people would take your flyer and type in the website when they got back to their dorm.

Josh Pigford: So, you spent a lot of time on computers before this, and the web, at this point, albeit not as pervasive as it is now, it was still a thing, right? There were plenty of businesses on the web.

Brennan Dunn: Yeah, this was 2003. Every college student, for the most part, had internet access, I’m guessing, right? It was different. This was when Facebook was just for colleges, but it was still, yeah, you’re right, it was still the web as we know it today.

Josh Pigford: Why do you think you went down the route of doing something offline when, at that point the web was something that was, I think, a little buzzy at that time too. Everybody was like, you start using the web, at least daily, and you’re e-mailing and all that stuff, so why not go down the route of trying to do something web-based even at that point?

Brennan Dunn: So, you’re saying to make it so the fulfillment is putting the media timeline in instead of it being-

Josh Pigford: Yeah, instead of having to go through the work of printing out fliers and having cars, and building airplanes, and things like that.

Brennan Dunn: It’s not like we owned the cars, or anything, it was, basically, the Uber model, but I think, for us, it was a distribution problem. I didn’t know how to get in front of people like I do now, right. So, the only way I knew how to promote this was, literally, to, well, I did two things. I passed out fliers and I also bought this CD from a shady company online that gave me a spreadsheet on that CD of every college, along with the point-of-contact who runs the student newspaper. So, I just, basically, not even, I mailed, physically, them all a, “Hey,” and that’s why if you randomly Google, to my knowledge it’s still there, but if you Googled Homebound Network, Brennan Dunn, you’ll find University of Missouri from 2004, probably, with some article that they did. The mistake I made was thinking, “Okay, I’m in Tallahassee. This is doing okay, maybe it’ll do a lot better if we go nationwide,” instead of the, “Let’s get Tallahassee to write well and then we’ll start to branch out.”

Josh Pigford: You went from Tallahassee to all of Earth.

Brennan Dunn: Pretty much, yeah. Why not, right? So, yeah, it was definitely an interesting learning experience, I should say. Again, the airline was very just conceptual. This is, actually, something. I, actually, did incorporate the company too. So, yeah, I want to say it, in a weird way, gave me a taste of getting unexpectedly paid, if that makes sense, right? So, I think the first time anyone ever successfully used the site, and there weren’t many of them, but the first time it happened I was in class. And, even though, yes, I just made, probably, profit-wise, this is after direct expenses, probably, no profit, ’cause we spent a lot on printing stuff, but knowing we just got $25 into our PayPal, that’s cool, especially when it wasn’t invoiced, or it wasn’t asked for directly, if that makes sense? So, if anything came from that experience that was, probably, the most impactful.

Josh Pigford: Which, tell me, you get a bit of an adrenaline rush from it, right? So, especially, early on, when it’s these one-off things you get addicted to it pretty quick.

Brennan Dunn: Yeah, yeah.

Josh Pigford: Okay, so you leave Florida State and you head up north to Maryland …

Josh Pigford: And you head up north to Maryland and completely change course from electrical engineering to very much not electrical engineering.

Brennan Dunn: So this is the kind of campus that had no computers at all, no internet in the dorms. I had a wireless … like you know those … it was like basically, what do they call it? PCMCIA cards or whatever that went to into laptops back in the day. Yeah, so one of those, but for … It’s basically a wireless 3G or whatever it would’ve been called back then. And I found out how to get a thing to put in the back of my computer that I can insert those laptop things into, and basically get internet in my dorm room that way.

So did that, and it was … I was thinking I would go down and keep computers as a hobby, but not a profession. So I thought I’d do this. I’d maybe become a college professor or something like that, and that would be basically it. And one thing led to another, kinda that entrepreneurial bug bit me again, and I started doing a little freelancing. I was getting into flash actions and stuff at the time. And then I partnered up with a real estate agent, or mortgages broker I should say, who posted … I was looking for gigs on Craigslist, and he was saying, “I’m looking for somebody to help me get leads, and if you help me, and lead I close, I’ll give you half the revenue of his commission.”

So it sounded good at the time. Really dumb in retrospect because I was basically paying for his Google AdWords account and my time going into building this thing up, but it was basically just a landing page that I drove local traffic that I was googling for refinancing and stuff to … But it was cool because he would make like $5000 if he closed, so I would get $2500 if he generated a lead that closed. And I was like, “Oh, this could be something!”

So I dropped out of college and started that! And partnered up with a different friend of mine, who was also entrepreneurial and started doing that. And that actually worked well. That was my first kind of foray into proper lead generation and, in a weird way, personalization because what we were doing is we partnered up with somewhat dubious marketing companies who would do mass emailing to people, and on a cost per action basis would basically give us people going to our landing pages. But we did instead was we had a single landing page, and then I coded it so we would [inaudible 00:27:02] inbound traffic to that landing page, and say, if they’re in Florida, find a customer [inaudible 00:27:07] in Florida, pick them at random, and show their photo and their branding and their names and all that stuff, right? And we just have this kind of system that that’s how that worked, and then we ran ads on Google targeting people looking for mortgage leads or refile leads.

And then we hired this sales guy named Pete, and we had this really kind of dinky like from the 70s office, where it was me, Anthony, and Pete. And lead would come in. It would go to Pete’s inbox. He’d call them right then on the spot. These would be mortgage brokers, typically independent mortgage brokers. We told them we’d give them exclusive leads because they were used to shared leads with [inaudible 00:27:53] and others, and we told them kinda how it worked. And then they ended up paying us between $80 and $100 a lead, which we would then be paying about, on a good day, probably $70 to acquire that lead through ad spend.

So it did okay. Again, we didn’t really look at the numbers like we should’ve because we were doing well with revenue, but profit wasn’t really there, especially factoring in Pete’s commission. But then it just went belly up with the subprime mortgage thing of like 2006 or whenever that was, or ’07. I don’t remember. The company basically imploded overnight because of that. So that kind of gave me a little more crossover business-

Josh Pigford: I mean, you drop out of college for this company that implodes … Were your parents ever … Were they hardcore college? Like you go and you get your education, or did they care one way or the other?

Brennan Dunn: No, no, no. My dad was like, “Unless you’re gonna be a lawyer or a doctor-”

Josh Pigford: The guy, he hangs out on a beach all day, so I get it. He doesn’t care.

Brennan Dunn: Yeah, exactly. I mean, he made his money in timeshare, so he’s all about like the most valuable skill in life is knowing how to sell.

Josh Pigford: Well, what did he think of you going to Maryland and studying, you know, the arts?

Brennan Dunn: He thought it was a total waste of money. I was getting free education in Florida, and here I was…

Josh Pigford: Just studying Latin!

Brennan Dunn: Taking out student loans to get a liberal arts degree! So he thought it was a total waste. He still does. But I thought it was helpful. I think learning a bit about kind of philosophy, and it kinda makes me laugh when I see all these people nowadays in our space who are obsessive over like … not Socrates. Who am I thinking of? … What’s…What’s his book called?

Josh Pigford: Right, yes.

Brennan Dunn: Basically stoicism. People who are into stoicism, right? They’ll quote like Seneca and Marcus Aurelius, and I’m like, “I read them in the original Latin!” But yeah, I mean, I think that helped. It was definitely … It was one thing after another, and then I kind of, after that thing imploded, I got a job at a web agency, just as a coder. But apparently the owner who hired me was like, “It’s obvious you are kind entrepreneurial. I don’t expect you to stay long,” kind of thing, which you know to his credit in retrospect … that’s a probably a good thing that he was-

Josh Pigford: Do you feel like you recognized that you were entrepreneurial at that point? I mean …

Brennan Dunn: I mean, I was 22 or whatever, and I had, in a way, run two different companies. One of which was more successful than the others, so I guess so. I mean, most of my friends as the time were, if they were working had mall jobs, so-

Josh Pigford: Well, I feel like most people, once you realize that you’re capable of basically making something out of nothing, it’s kind of hard to go back to not doing that, right? You know. So I was curious if you feel like you had recognized like, “Hey, I have a unique skillset to make something out of the ashes,” kind of thing. I think that’s interesting though that also he recognized that as well.

Brennan Dunn: Yeah. I mean, I do think thought that I probably realized it. I think I did. It’s hard to tell if it was a friend of mine at the time, but you know, I realized within six months or so I basically, in a way, risen through the ladder. It wasn’t a big company. About 25 people, but I was running the technology department at that point, which meant I got to go on a lot of fun trips to meet with their clients and got to sit in conference rooms and see them pitch. And that was really, really helpful for me because I … I mean, most of their clients were airlines and big resort chains. So I got to go cool places, but on top of that, I got to see how … I mean, they were selling ad spend. They weren’t selling consulting, but I got to see kind of how that worked, how important kind of that wining and dining element of it is.

And that really helped me because the next stage of my career was to move towards running my own agency. So I guess I didn’t last long. So eventually I made my way to doing a stint as a solo freelancer, but then that scaled up into my own-

Josh Pigford: When did you start your agency?

Brennan Dunn: Essentially, I incorporated in 2008, but I started … Yeah, I started freelancing a few months before that-

Josh Pigford: Could you basically parlay your freelancing into agency work?

Brennan Dunn: That’s all it was. I mean honestly, my original freelancing after the agency I worked at was … I was got into Ruby on Rails while at that agency in Florida, and got real into it there, and I learned it there. And then when I did my own thing afterwards, I was doing Rails contracting effectively for bay area companies who needed coders.

But then one thing lead to another, and I got a few companies who were looking for … because I guess there weren’t a lot of people in that time who were doing Rails consulting, so I got a few requests, and I realized I could either turn them away or I could be more ambitious and say I’ll find a way to take this branch on.

But that led to me, because I was getting involved in the local regional Ruby community, and I met a few people through that. And that led me to basically reach out to some of them who I knew were effectively freelancing, and I basically said, “Hey, I’ve got projects. I’ll do all the administrative stuff. I’ll do the invoicing and the client management. You do just the development stuff, and I’ll pay you this an hour.” So that’s how kind of the agency came to be. It wasn’t like a proper anything. At first, it was all just Independent contractors, but then it morphed into being a proper brick and mortar company with employees and salaries-

Josh Pigford: At the time, in 2008, or even through say 2009 2010, but as you probably got deeper into the agency stuff, remote work setups were not super common, but I guess becoming a little more of an option. Do you think … Was it intentional to go the brick and mortar route, or it didn’t even enter your mind to try to go the remote route?

Brennan Dunn: I think, yeah, I mean, in retrospect, I would’ve gone remote, but at the time, I thought it would get us proper clients.

Josh Pigford: If you had your own like office to basically bring people into-

Brennan Dunn: I thought it would be more-

Josh Pigford: Hold up.

Brennan Dunn: Right, and I mean, that worked. I mean, it was nice when you’d bring in … because we would have clients who’d come to us sometimes who were remote, but we’d also have some regional or local clients. And honestly, it was kinda cool bringing them into our office, third floor, you know the get out of the elevator, see a bunch of iMacs and people behind them.

My thinking was, because consulting is such a flakey industry often, especially web development stuff, that we were not a flight risk if they saw that, right? So that was my thinking then, but I think when you really factor in things like, everything,… Yeah, just the office and stuff, right? Yeah, in retrospect, I would’ve gone fully remote day one, and we started out remote. I mean, at first, it was a remote company.

Josh Pigford: I think the first that I heard of you, and I don’t know if we’ve even met that particular year, but was at [inaudible 00:36:17]. I think it was maybe 2012, and you were on stage announcing or launching Plan Scope. So was that 2012?

Brennan Dunn: Yes. Oh 2011

Josh Pigford: That was still part of … I mean, you still have the agency going then?

Brennan Dunn: I did, yeah. So I was building that, bootstrapping it while running the agency, and I kind of … I mean, we were basically building web apps for other people. I mean, a lot of our clients were people who were effectively having us develop an MVP of their product, and then we’d hand it off.

And I saw, looking up to people like Amy Hoy and others, I saw them doing well with their sass. The problem I had was we did okay, but my overhead was about 100,000 a month when you factor in all of our payroll and office and stuff. And we had maybe three, sometimes four, clients at any given time, so that meant … Divide that up equally, about 33,000 a month per client. So if a client walked or somebody we were expecting to start didn’t, or really whatever else, I mean that to me was … It always kinda kept me up at night. That whole like, I’ve got a ship that cost 1.2 million baseline to run, and all of our revenue is transactional.

So I was looking at people who had sass companies, and I saw they’re getting like … They’ve got a lot of people paying them like $30 a month, and it’s recurring. Like they don’t need to be outselling. Like, it’s just a math equation. So I got bit by that bug and wanted to do that on my own. And then I realized it’s gonna be really hard to get anything getting to the level where we could replace … I mean, we need to have at minimum 100K MRR just to break even.

So I realized I didn’t want to do both. I really was bullish on sass, so I ended up handing off the agency to the guy was doing business development for me, treating it like an asset that I still retained control of, but I only kept half of the overall profit. And I let him keep the other half of whatever profit came out of it, and I didn’t want to have that fixed overhead, so I effectively converted everyone to be independent contractors that go on … A lot of them wanted to freelance. One of them was Andrew Culver. He ended starting Term Buster, which worked out well.

So a lot of them were entrepreneurial themselves, so it worked out okay. But the ones … We still had lead flow coming in, and then Zach, the business development guy would handle them, and if he sold them, he’d form them out to our network of former employees. And then I get half the money left over, and it worked out well for about year-ish before that kind of dwindled off. Without any active marketing effort, it just went away. But by that time, I was getting real into the swing of things with Plan Scope, which never did remarkably well, but it kinda got me down the path of what did do well and is doing well, which is Double Your Freelancing, which came about as a content marketing initiative for Plan Scope.

Josh Pigford: Plan Scope was the Double Your Freelancing stuff. Were you making any money off of it, or was it purely just a marketing effort for Plan Scope for a while?

Brennan Dunn: I mean at first, there was no Double Your Freelancing. It was Plan Scope log that had random articles about freelancing, and my thinking was, which I think a lot of us have, which is not many people are looking for project management software who are freelancers, but a lot of freelancers might be googling around for how do I raise my rates or how do I get more clients or something like that. So my idea was bring them in that way, and then eventually convert them to use Plan Scope.

But a lot of people who came in liked the content, but didn’t really need the software, and again, pressure from people like Amy Hoy was telling me like, go and create info products, and go deep on a certain subject that people are obviously interested in and do that. So I quickly found myself kind of juggling both running a solo single person sass and kind of this little info product train company [crosstalk 00:41:00]

Josh Pigford: Double Your Freelancing basically surpassed Plan Scope, I assume pretty quickly.

Brennan Dunn: Quickly! Yes. Yeah, it took off, and I realized I was really doing a disservice to my customers of Plan Scope trying to … It just wasn’t worth the energy to even support it, so I ended up going to Thomas of [inaudible 00:41:27] international, and he ended up selling it somebody who was a full time employed person who had a bunch in the stock market that he’d done well one. And he liquidated some of that to basically take a shortcut to product market fit, if you will and having a customer base. So he ended up buying it, and that was a huge … It was bittersweet, but it was a huge kind of weight lifted off my chest because I could then focus full time on Double Your Freelancing-

Josh Pigford: So how long were you doing just the Double Your Freelancing stuff and like really growing that? Has that been like two years of that? Or three? Okay.

Brennan Dunn: It’s been about three. Since it moved off of Plan Scope … because it used to be, like the Plan Scope blog had content, and then I had these single page landing pages that were for the products. And then I had on BrennanDunn.com my podcast, and then three years ago I consolidated all under this new Double Your Freelancing brand, and-

Josh Pigford: But if I recall, you were also doing some consulting stuff?

Brennan Dunn: Yes. Yeah, so I was getting into … So my thinking was, first off, it paid really good money, and I was following the footsteps of people like Patrick McKenzie and kind of his model of consulting. And on top of that, it felt right that somebody who’s doing a lot of teaching on consulting still consults. It seemed like that’s probably a good thing, even though you could make an argument that consulting is really kind of an evergreen thing. It doesn’t really change year to year. It’s not the same as saying I’m gonna learn Ruby from somebody who last touched Ruby ten years ago. But it felt like it was a good thing to do, and honestly, I enjoyed it. It let me kinda get out of the monotony of just doing kind of like blogging and creating courses and stuff.

But that actually, what’s interesting is that led to … When I started getting into doing some experimentation with personalization on Double Your Freelancing, that lead the consulting projects to shift toward that end, and that’s actually kinda led me to my current place, I guess.

Josh Pigford: Double Your Freelancing, I guess sort of turned into a way to just experiment with lots of different ideas, right? I mean, especially around personalization and just like all these different funnels and setting up these sort of complex ways to hyper target sub-niches and stuff, right?

So that … I guess, has it been a year? You started like building this like tool on top of drip, right? You were …

Brennan Dunn: So the first one was, I was on a fusion soft, and I built WordPress conversion funnel, which was … This was in 2012 or 2013, so it’s been a while. It’s been like five years! But the idea there was its early, early predecessor to what I’m doing now, but it was basically just if-thens for tagged or not tagged. And then you could spit out like a WordPress partial or whatever they call it there.

So that’s where that came from, but you’re right. When I moved to drip, I had a much better API than in fusion soft, and I was able to do a lot of interesting things around … because again, being a site for freelancers about how to get better at the business side of things, I knew that there’s a lot of different types of freelancers who have different ways of describing the kind of work they do, and also who I have different reasons for needing my stuff. And I just, you know … I mean, having built Plan Scope, I did a lot in that, especially in on-boarding, be super personalized where like when you signed up, you would tell me what kind of business you ran, and how big your team was. And then like the sample projects would be based off of that. So I realized that was helping there, and to a web browser, [inaudible 00:45:33] html, so, you know, same thing. So that got me down the path of experimenting with DYF to see what would happen if I could just do some pretty interesting if-then sequences based off [crosstalk 00:45:45]

Josh Pigford: So you’re doing all this stuff on drip, you start realizing, hey we could do even more, so you start building kind of like this … I assume it was just sort of a way … You had not even intended to productize this, or like just wasn’t going to be some sort of a like drip plug in kind of thing?

Brennan Dunn: Yeah, so what happened was I got a lot of people asking who didn’t want to hire me, or they couldn’t afford it, who wanted to learn how I was using drip and doing some personalization stuff. So I created a course called mastering drip, which basically just was screen sharing of me doing my thing. But I including in that the underlying code base that I was using to personalize my site, and the biggest complaint with the course was, what do I do with all this JavaScript?

So that was kind of that, in a weird way, like we sold about 400 copies of that course. A lot of people came in because they wanted to learn about how to do this kind of advanced automation personalization stuff. And that kind of, in a way, validated the need for making that a little more sass-ified, if you will, right?

So we got a lot of feedback, and people actually taking my code, the ones capable of it, and doing interesting stuff with it, and getting results. And then I was thinking, well, what if we can make it a little more less here’s a zip file with some JavaScript, have fun, and more something a little more useful for marketers and such-

Josh Pigford: So at what point did you, I guess, realize that you could turn this thing into like a proper product? Or even I guess company?

Brennan Dunn: Well, so I mean … I think there were kinda two discrete stages that came first. One of which was when I had consulting clients who’d pay tens of thousands for the result, but manual one-off implementation. So that showed that people are willing to pay for kinda the underlying result, if you will.

… The underlying result if you will. And then the shift towards the info product is the course, showed that there were a lot of people how wanted to learn how to do it themselves and implement it on their own, but they still, again, wanted a similar result.

So, if you think of it like this spectrum, on the one extreme people who are DIYers, who just want to learn how to do it and do it. On the other extreme, you have companies who want their result but don’t have the bandwidth or the resources, so they want somebody else to do it. And then in the middle, that’s what I thought that sweet spot of people who aren’t really DIYers, but they want the result, but they don’t need a consultant to do that or a custom coder or whatever. They just want a tool they can use and in a way, because I validated those both extremes financially, it felt like there would be a good likelihood that something where a turnkey like software would be …

Josh Pigford: Did you set out to get back into SaaS?

Brennan Dunn: Making software? No, the original thinking when I started was this would be kind of a like a weird upsell to people who bought my course, but it wouldn’t be my focus. My focus was on freelancing, which was doing a little north of a million a year in revenue and margins were very nice. So I thought I’d just keep doing that. But I think in a way I missed, I was seeing like what people like Nathan Berry were doing, where he had gotten out of info products and has a extremely successful SaaS that he started. So I kind of was looking at that and thinking, I like the recurring angle. I like a lot of the things that that got me out of that original transactional revenue business which was my agency and we have some recurring with DYF but it’s a completely different beast because recurring for an info business means you typically need to produce more information constantly to make that recurring element useful or viable.

So we wanted something that, or I wanted something and I was seeing, like I was looking actually at Baremetrics is a good example of, it’s one of those things you don’t need to log into all the time to make it valuable. It doesn’t require, like Planescape was a project management tool. If you didn’t use it every day, it wasn’t valuable, which meant you had to kind of shift habits and things like that. And I really saw this as being something where if we could go in and somebody could set up some basic campaigns and get them running and they’re successful, they don’t need to be going in every day to make this useful. They just keep paying the bills. If the ROI outweighs the cost and that’s it. So it seemed like a very solid business model that had been validated again by these two extremes, consulting and course customers.

Josh Pigford: Like you mentioned it’s sort of systematizing the things that you’ve seen be successful across all these other ways. And I mean to me is a really great example of how using software to solve an actual problem instead of using software to invent a solution to a problem that nobody really has. So when did you sort of kick off like, Hey RightMessage is this thing in an official capacity and we’re going to launch it soon and you start building the actual thing. Has that been a year?

Brennan Dunn: About that, yeah, actually a little more, so around Thanksgiving of not last year but the year before I started talking with Shai, who is the co-founder of RightMessage, about him leading the tech stuff, I do the marketing stuff and figuring that out. And I had worked with Shai for a while, and we got along really well. So we did that and then we started getting some early customers, our first customer actually was Teachable, which we were happy it’s the first customer because that’s not like some random little thing. And they really happy about it and we were starting to think about, OK well, I’m still running [inaudible 00:52:29] freelancing, that pays my bills. He’s still consulting, that pays his bills. Will kind of treat this as a side thing until revenue gets to the point where we can make it more serious.

And then the CEO of Teachable reaches out saying, we love this, we want a better, will you take more money. And they were basically offering to invest. And my attitude towards investment has always been kind of not something like I wanted to do but I was seeing people I really respected who were like, let’s hold back, there’s a difference between that VC kind of crazy whatever and just some seed money to start with. Right. So we entertain that and it’s started to really make sense because then we could say, well we could get to market faster, we have an early advantage because no one else is really doing this the way we are.

And then I started reaching out to people who were in my network who were companies we actually integrate with or were planning on integrating with and we were able to raise, we raised about a half million dollars. And it only took about a week to do, so I was happy about that because it wasn’t like this crazy like going and flying all over the country with my like presentation deck. It was pretty straightforward and allowed us to get to the point where we could come to market faster, build the product the way it should be built rather than this kind of scrappy ugly thing, V1 MVP thing that hopefully one day would have enough money to hire people to help us do it right. We were able to preempt that and kind of do things a bit faster than we would of. But with ultimately good terms because we had customers by the time we brought on money. It wasn’t just like at an idea phase, we had people paying us-

Josh Pigford: Did you have a hard time mentally, like you and I are both in prior years, say in the past five years, in communities that were very hard right. Was that a mental hurdle-

Hardcore conservatives.

Or were you sort of like, meh whatever, it is what it is?

Brennan Dunn: Yeah I mean it was, I think it was more because I was worried about the whole, because if you really dig into what are the complaints people have about funded companies, it really has to do with their loyalties are more towards investors rather than customers, which means the product changes in a way that isn’t always best for the customer. But the way we were able to structure the round was that the investors are silent entirely really and when it comes to other things obviously I wanted their advice because these are smart people who are much more successful than me and in a lot of different ways. And I want their help but they can’t say, Brennan don’t do this or don’t do that. So I mean that to Shai and I was like, OK well this is, it’s just like a head start, it’s not really, it’s not going to change our direction. We told them up front, we told the investors our goal is not to be chasing round after round. We want to hit profitability as quickly as possible.

So it wasn’t like we were going in with the attitude that, our goal is not to secure the next round of investments. Our goal is to secure a very successful solid base of customers and we baked that into the early DNA. And I think, that’s to me that was the difference. I still am generally opposed to the kind of the Bay Area kind of thing we all like to make fun of but there’s shades of gray in between. It’s not either completely bootstrapped or-[crosstalk 00:56:28].

Josh Pigford: I feel like the issue from the hardcore bootstrapping community is that ignoring, like treating all VC money as, this thing that you read about on like Tech Crunch and stuff are like these series ABCDEFG things where, they’ve raised $500,000,000 and given away 95 percent of the company and the board is made up of all sorts of VCs that could quickly and many times do sort of take over the company. But the reality is, like the round that you took, the 500000 and then like same with Baremetrics, the 800000 that we raised in these sort of seed or like angel rounds, the people who invested have no say. Right. And in reality they’re the kind of people that you’re wanting around anyways because like they they believe in the idea because they’ve invested so early and you sort of value their opinion.

Brennan Dunn: Absolutely. I mean that’s exactly it. And I think it was good too because we’ve had, I mean we’ve had random like, I’ve talked to a few VCs and some of our investors wanted to put more money in but I think a lot of them respected the fact that our response was, we don’t know what we do with that. Like, this I think what we need, we’re raising what we need, like there’s no having like a million in the bank and not knowing what to do with it because we still do run this boot strappers. I mean I’m still fairly cheapish with a lot of different things right. And we’re not buying fancy chairs or anything like that. It’s just, I mean we’re a remote company and so yeah I mean it’s, again I think it’s being dogmatic rarely is a good thing. [crosstalk 00:58:26]

Josh Pigford: I think it’s only been what a month, six weeks or something since you guys officially launched RightMessage. What was it like, I mean you guys he launched it I guess in a public manner after you already had a few paying customers. How did you get those first customers?

Brennan Dunn: So we built up a very early interest list, which was just an opt in type thing and then I just sent out random thoughts on personalization and we were going for 10 people and that was kind of our urgency and a lot of these were people who, I don’t want to, it’s been helpful having previous business success because it’s made it quite a bit easier than if I was, if I didn’t have my own network I guess, does that makes sense? So we were able to get that fairly quickly and we were just looking for people who could help us because we knew the kind of V1 version was rubbish but it functioned.

But we wanted people who could work with us actively to help us create what was going to be the final product or the beginning of the new product I guess. And so that helps and we just did with that. We basically, I think we charged $600 for a year of access and we basically made 6000 doing that. And so we did that and that helped us and then we just worked on building, while the product was being built I did a lot of conference speaking about the subjects, I spoke at Sumo Con, I spoke at [inaudible 01:00:03], other conferences, about this that generated some interest and then we [inaudible 01:00:08] on a few customers depending on if we thought they could give us a lot of good feedback while we scale this up and then January 23, actually exactly a month ago, we launched publicly but only annual plans and we still haven’t actually launched our monthly plans yet.

But we did annual plans and the reason we did that is we wanted it to be that if you bought annual during launch you would get free concierge setup, which is something we’re going to be charging for quite a bit long term, which is basically we’ll go in and consult with you and help you get set up and help you figure out your segmentation and do all this stuff. But we will do that upfront. And the reason for doing that is that allowed every member of our team to get direct exposure to the problem that brought people to the product and why they paid and what they need in return rather than just understanding the fundamentals of what the product does and what it doesn’t do and so on. It actually got everyone really connected with why people are paying us money. So that was why we did annual upfront. And now we’re hoping, it was going to be this week, we got a bit delayed, but next week we’re going to be opening up annual or I’m sorry, monthly plans for people to sign up to.

Josh Pigford: How did you land on a price?

Brennan Dunn: Well, I don’t think we’ve landed on, we’re still experimenting. The V1. So initially we were thinking metered and then we were thinking like a $100 per 10000 I think, 10000 visitors a month to your site. And the thinking was people with more traffic had more successful companies but that’s not necessarily true. So we were going to do it straight up metered. We ran into a lot of issues where people were like, I’m selling $20 dollar e-courses and I get a million people a month to my site. That would be a very expensive SaaS that I’m paying for. Whereas somebody who might only get a few hundred a month at their site are selling 100k consulting gigs and they’re actually much more profitable than the, so it’s not a good scaling metric necessarily.

So we were then going to move to more metered but with kind of things like people who pay for infusion soft are probably more likely to pay more money than somebody paying for MailChimp and so kind of breaking it out by that. That was okay but it was still kind of loosely based on traffic. So what we’re at now, which is. I was talking to Patrick Campbell of Price Intelligently and some other people that can help me with this and what we kind of settled upon was, we have a lot of people who just start with top of funnel optimizations, they don’t integrate with email marketing app or anything like that, they just do browser data and they’re really successful and then what they end up doing after they get successful there is they then start integrating it for more down funnel stuff.

So the idea was, well what if we could go and make it so the cheapest plan, which is 99 a month currently, is just top of funnel, no integrations. And then open up room for expansion revenue for people who then want to integrate with their email marketing app and do interesting stuff like pushing up behavioral data back up to their email platforms that they can use that in their email campaigns and so on. So what we’re finding now with the new model is a lot of interest on the 99 plan but a lot of expansion revenue interest for upgrading to and we’re going to be doing a clear bit integration and more account based marketing stuff for people targeting enterprises and that will be on the highest tier. So we’re looking at that currently what I’ve just outlined is our current price but I don’t know if those plans and prices will, how long they’ll stay. But that’s as of February 23, that’s where we are.

Josh Pigford: We struggle with that, we still struggle with that because we started off based on your customer count which is a weird thing because it’s, especially when you’re talking B to B versus B to C, where a B to C might have 100,000 customers but like 100 of them are paying, and they’re paying five bucks a month. Then you’ve got some B to B who’s got 10 customers charging them $5,000 a month and they’re making a ton of money. So that’s why we switched to basically revenue based pricing, which for us that works out well in this, in theory your metrics and the data that we’re able to service from that, becomes more valuable, the larger you are because tweaks here and there are more impactful. And it sort of doesn’t cap us on the ceiling of how much you could be paid. It’s like sort of infinite in theory on expansion. What’s a way that you guys sort of, right now you’re sort of capping the top plan right because-

Brennan Dunn: At 500

Josh Pigford: How do you keep going?

Brennan Dunn: I mean for instance, we just met on Monday with a company that sells a million dollars a day through the web site. It’s a 300 million a year company, they would not be on any pricing plan that’s on the website. So I mean we still want to, I’ve been talking to people like Jordan Goll about this about like things like if you want to have more bigger fish clients who probably are going to have custom pricing, custom needs, versus still making it self-serve. It seems to be either one or the other, you just have a request demo and that’s it. And then there’s custom pricing or there is a traditional pricing page with self-serve. And we’re trying to still balance that, like figure out is there a middle ground that we can do but because again it’s straight out of, again to go back to Patrick Mackenzie, why would a company that does 300 million a year pay us 599 a month.

Josh Pigford: Exactly. I remember him talking about once, about charging some massive company like 500 bucks a month and like how it’s our tendency to be like no that’s way too much money. And he says that’s their sandwich budget for the day.

Brennan Dunn: When Amy says the toilet paper budget. Yeah, exactly.

Josh Pigford: It’s so hard getting past that sort of wall of, well man that seems so expensive, even though you built it and you know how valuable it can be.

Brennan Dunn: Exactly. Yeah.

Josh Pigford: So you’re very fresh on RightMessage as a company, as a product. I mean even looking six months out is kind of a long shot but what’s sort of on the immediate horizon for you guys?

Brennan Dunn: So for us, our big thing is really nailing down the one or two inbound channels that we can really focus our efforts on. One of them is going to be integration marketing for us and the other is probably going to be more partner based stuff. So that’s one thing that’s kind of on the inbound region side.

Product wise, more integrations. We’re working on some stuff where we’re able to make it more of an if this then that platform. But through your site where you can do things like, if they came from a referrer in this category of types of referrers and then they do X, synchronize that data up to your sales CRM or your email marketing app so you can then kind of profile people based on behavior, not just for the purposes of website personalization but also doing stuff like when a certain condition’s met, push them into [inaudible 01:07:56] or add this tag in your thing or something like that. Right. So that’s a big thing that we’re working on now and that’s partly already there. We now have upwards email marketing app synchronization where you can say something like, define a segment as people coming from any of these different domains or landing on a certain landing page or click on a certain ad, you can make it so that if and when they opt in, all that data, that segmentation data, gets synced up. So you have that kind of permanently for your own back end segmentation.

So that’s that’s one thing on the product side and also on the sale side we’re looking at what do we do to get into more direct sales. So there’s a lot of companies like the one I talked about, 300 million a year, we’re not Googling around for ten ways to increase conversions on your site. So what’s the strategy there to get in front of them.

Josh Pigford: Well that’s good stuff man. So I don’t want to take up any more of your time. How can people get in touch if you want people to get in touch with you?

Brennan Dunn: I mean the RightMessage.com is the site. And then you can just e-mail me at Brennan@rightmessage.come if you want to say hi.

Josh Pigford: Right on, good deal. Well hey man, thanks for hopping on a call and talk about all this stuff.

Brennan Dunn: Absolutely.

Josh Pigford