Spencer Fry - Baremetrics

This week, I chat with Spencer Fry, founder and CEO of Podia. In this episode we talk about starting businesses while in college, being a non-technical co-founder, the pros and cons of having co-founders and the appeal of entrepreneurship!

Josh: All right, so you’ve had a string of startups going back like 10 plus years?

Spencer: Fifteen.

Josh: Fifteen, okay, there we go. I always find the sort of entrepreneurial progression kind of fascinating, so you’re currently building Coach, which we’ll get to in a bit, but tell me where that entrepreneurial journey began for you.

Spencer: Yeah. I’m 32 years old now, and I actually started working on Internet, tech startups, I guess you could say, as early as 11, 12. I was doing weird, part web-hosting, part IRC bot hosting back when IRC was popular before Slack. Then come college, so about 15 years ago, I started working on a company called TypeFrag which was a Voice Over IP company for video game players. That was when I started really realizing that you could make a lot of money on it.

Josh: Sure. TypeFrag, you did that from 2003 to 2007. I think that was what I read, 2003 to 2007.

Spencer: Yeah, around that. It started a little bit earlier, but it was under a different name. I started out of my freshman dorm room, with one of my friends who was at Case Western. I went there at the university. I went there freshman year before I transferred into Yale. Yeah, we just started. We were both huge Counter-Strike players, and we saw this need for people to be able to communicate in the game with their teammates without having to type everything out, and hence TypeFrag. It started to balloon into a pretty big company, and during college, I had three employees, which was pretty crazy.

Josh: Sure. You’re going to class and also supporting multiple people with a salary?

Spencer: Yeah. It’s funny because I started out as a computer science major, and the curriculum was so difficult that I couldn’t manage that and running a company, so I ended up getting a psych degree.

Josh: The psych degree, was that just sort of, “I just need to pick something,” or did you have some interest in it?

Spencer: I love people, and I love human relationships and emotions and stuff like that, so I ended up being a social psych major. That was super helpful for how I’ve always … Everything from managing employees to interacting with customers, I think my psych degree actually helped a lot, but it wasn’t my first choice.

Josh: Sure. I went to school for graphic design and got a degree in that, but I briefly pursued a master’s in psychology. People are fascinating, right?

Spencer: Yeah.

Josh: The very first one of these Founder Chats that I did was with David Cancel, and half of that was just us talking psychology. That’s building a company, is people. Yeah, to me that seems like way more interesting and way more useful for building a business than say, a business degree or something like that, right?

Spencer: Yeah, I know. Totally. Abusiness degree will get you some of the analytics and some of the planning stuff, but nothing compares to just working on a company and working with friends and working with employees and trying to put something out there.

Josh: Sure. Experience, right?

Spencer: Yeah.

Josh: TypeFrag for a few years there. What was the end of that for you, like how did that come to a close as far as a business for you?

Spencer: I worked on that right through the end of college. I was working with a friend of mine, but after four years, we were no longer friends, which sadly happens in pretty much every startup or company like Facebook or really anything. It’s really hard to work with a partner for four years and still be friends, so after four years, we basically each wanted to buy the other one out and take control. We went through a five month legal process where each of us would propose a bid, and then the other one would raise it. Then the other one would raise that, and it lasted for five months. Eventually, the price got to a point where I was like, “Okay, you can have it,” and I cashed out.

Josh: At that point, after four years, five years of doing something, were you really all that interested in continuing that as a business or even still interested in that sort of industry? Is it something that you would still be doing today if you had that much interest in it?

Spencer: Yeah, I mean, I’ve always been a video game player and still am. Yeah, gaming has always been really interesting to me, and I think that industry, for example, is blowing up right now. I don’t know how much you follow the eSports. People watch more of the League of Legends finals than they do watch the major league baseball World Series. I think that I could have carried that through the last 10 to 15 years, obviously, just continuing to innovate on that, but voice is still such a key component to how gamers play video games. Obviously, things would have changed, but I could still see myself doing that company now.

Josh: Yeah. That’s interesting, so TypeFrag ends 2007. Then you somehow make the transition to Carbonmade, right?

Spencer: Yeah. That’s an interesting transition because I basically … I sold TypeFrag in January, and I didn’t really take a break. I was like, “All right. I’m going to jump right back into the startups theme.”

Josh: Where are you as far as college goes? At this point, you have finished?

Spencer: Yeah. I had graduated in 2006, and I had just moved to New York City and living in a nice two-bedroom apartment. I didn’t have a traditional job, so I didn’t have an office to go to. I was working out of my bedroom. It was harder to meet people for me because I didn’t get out much. I was just working all the time, so I was like, I might as well jump back in.

Josh: Got you. Where has Carbonmade come out? Carbonmade is a design portfolio thing.

Spencer: Yeah, it was really the first online portfolio, which is crazy to think of because now there’s hundreds, and it’s a key component of Squarespace’s business in a lot of these big companies, but Carbonmade was really the first online portfolio. Right after TypeFrag basically happened, I wanted to do something new. I came up with an interesting idea. Then I was looking for design and development partners for it. I found two guys out in Chicago that had a small design and development shop, and we just started talking. I hired them to work on this other startup, not Carbonmade. A few months into that, they said, “Hey, why don’t you join our agency and as a one-third partner run the business side of things?” I was like, “You know what? Your stuff is going super well. This new idea of mine is not even really off the ground yet. Let’s do that.” Then out of that, a three person agency became Carbonmade.

Josh: You had just finished TypeFrag with a less than pleasant ending with having to-

Spencer: It was pleasant because I was like 22 years old, and I had-

Josh: Some money.

Spencer: Too much money.

Josh: Right, but from the relationship standpoint, that was a bummer. Did that affect any of the Carbonmade stuff and jumping in with these other two guys after you had … What’s the appeal of jumping in with some new partners? Why not go solo and do something?

Spencer: I’m still on Coach now so I’ve learned my lesson, but going to Carbonmade, I think these were two really amazing designers and developers, and they had a lot of really good ideas. I loved working with them, and I was also young, and I didn’t really want to do something on my own, and I wanted to work with people. It just seemed like a natural thing to do.

Josh: Sure. The Carbonmade thing, the idea for this design portfolio, that comes out of the agency, or was that the idea that you initially had?

Spencer: No, I was working on something else. It was like pre-Foursquare, but it never saw the light of day. Carbonmade came out of one of my co-founder’s ideas, so it was his idea. He was the designer, and he was building out his own portfolio. He build this little basic CMS for it, and then a bunch of his friends were like, “Hey, I really want to have that as well.” Then we took all the feedback and built it into a SaaS business. This was like 2006, 2007-ish. Then it’s still running today, 10 years later, which is pretty crazy.

Josh: Are those guys still doing it, or has it moved on to somebody else?

Spencer: Yeah, they are still doing it. I worked on it for a little over four years, and I was the CEO and then after four years decided to do my own thing. I wanted to branch out and found my own company without co-founders.

Josh: Got you. The thing I remember most from Carbonmade was specifically almost over-the-top illustrations.

Spencer: Yeah.

Josh: At the time, you think like, early 2007, 2008, that wasn’t all that common, so to me it stood out a lot.

Spencer: I like to say it was one of the most innovative marketing websites there was period back in 2009, probably when we released the really heavy illustration feel to it, and also just really innovative copy, too, not your usual business speak. Lots of jokes, lots of, “We’re not going to really tell you what this thing is. We just want to get you excited and make you laugh, and then you sign up for it, and then you can see what exactly it is you’re getting.”

Josh: The thing that is see that feels really similar to me is almost the way that Slack does things.

Spencer: Yeah.

Josh: This even predated Slack, but it almost felt like … Did you ever pay attention to … Before Slack, there was Glitch, the game that they tried to release?

Spencer: Oh, yeah, yeah, yeah.

Josh: It was almost in that sort of vein, this weird cartoony world that didn’t take itself too seriously. The graphic design, or just designer industry doesn’t strike me as terribly having a lot of money to spend on a product.

Spencer: Right.

Josh: Was that a hard sell for you guys, or did you have to just find the right niche?

Spencer: Yeah, back then, and the pricing has changed since. I think it was we were charging $12 a month for your online portfolio. We actually were going along pretty strong but not with any kind of tremendous growth. Then the 2008, not depression but financial crisis hit, and there were just like a ton and ton of out of work artists and designers and creatives. That’s when we started to really take off. It was just the three of us for about two years, and then all of sudden, we had this huge influx of customers. We started to hire. I think we grew the team up to 11 or 12 people. That was really what jump-started all of Carbonmade’s growth.

Josh: It was where people who were having to go independent to try to make some money.

Spencer: Yeah, or just like they had never had a portfolio before because they always had a job, and then they were out of work. They needed a quick portfolio, and because we were the first online portfolio, it’s pretty awesome. We ranked #1 for both the Google search terms online portfolio and free online portfolio, so were just getting hundreds and hundreds of signups a day, back when SEO really, really mattered. It still matters but not in those woods.

Josh: Okay, so Carbonmade, you wrapped that up around 2011. Then that was more of a, “I’m just kind of maybe burnout,” or just done with that company?

Spencer: Yeah, there was some internal issues in a way but I think for me it was really … It’s difficult working with partners for more than four years, and I’ve always found that to be the case. It’s not because you don’t get along because one of the guys was my roommate and everything, and we were friends. I think it’s more just after four years, you each have your own idea of where you want to take the product and where you take the company. They don’t always match up. I think especially with bootstrapped companies, there isn’t always a sense of, “Let’s grow to like a hundreds of millions of dollars company.” Some people are just super happy with just raking in a pretty big paycheck, so you just get this imbalance between ambitions and where you want to take things. After four years of Carbonmade I was like, “I really want to break out and do something on my own.”

Josh: Got you, so that led to Uncover, correct?

Spencer: Yeah. It’s funny.

Josh: Was there this grey period where you were just looking for things to work on, or was that something that you already had an idea for?

Spencer: Yeah, I basically wanted to get back into programming, because I hadn’t really done any development work on Carbonmade or really on on TypeFrag except for the first few years. It basically had been eight years without me touching any kind of code, so I knew the next thing I did, I wanted to at least build the prototype myself. I took a little time off, probably a month or so, and then I jumped into learning “Ruby on Rails.” Then a friend of mine who’s the lead designer at Twitter in New York City, he and I teamed up. We started playing around with a bunch of different prototypes, and that’s where Uncover came from.

Josh: Uncover is basically like employee rewards?

Spencer: Yeah. Originally the idea was, if you’re familiar with Zenefits and Gusto and those payroll benefit services, one of the huge challenges I had at Carbonmade was as the CEO, I was also running payroll. Back then, we were using Bank of America’s product, and it was just a real pain in the ass. I knew I was like, “I want to build a new payroll service, like way friendlier, way easier to use,” so Uncover started as that, and we went out trying to raise money. This is pre-Gusto, pre-Zenefits, pre-everything. We went out trying to go raise money for that, and just no one bought that idea. They were like, “Payroll, it’s too difficult. You’ll never be going to be able to do this.”

I stupidly only talked to like two investors, which was a huge mistake. They strung me along for a really long time, and they were like, “We’re going to do this. We’re going to do this,” and then the last second, they pulled out the rug. When that happened, we didn’t have any funding. My two partners were like, “We need to make money,” so they left to do other things. I was left on my own. The perks or rewards part of Uncover was actually the only thing that was being used, so I ditched the other stuff and just ended up going deep with the perks.

Josh: Got you. That was four years ago?

Spencer: Yeah.

Josh: Are you still working on Uncover?

Spencer: No. I sold Uncover back in May. Two years ago, I actually hired a guy to run it all for me, so then I would just report in with him once a month and see how things were going. Finally, last May I was able to find a buyer, just to get it off my plate because trying to even manage two things, even if one of the things you’re not really spending any time with, it’s just too difficult.

Josh: Brain space.

Spencer: Yeah, brain space. Just having it around was painful.

Josh: Totally, so that brings us to where you’re at today, which is Coach. You started that in 2014. Is that right?

Spencer: Yes.

Josh: Most recently, in the past couple of weeks, I guess, you relaunched what I think you called a Coach 2.0.

Spencer: Yeah.

Josh: Coach is built around the solopreneur, the one man show and the idea that any single person should be able to take their skills and knowledge and then build an online business around that, right?

Spencer: Yeah, that’s right. At its heart, it’s a platform for people to be able to sell digital products, whether those are like eBooks or templates or full online courses. The way that we look at it is that that’s not enough. Just selling digital products is not going to get you anywhere. You need the other things that support that. You need the email marketing. You need the email capture, that you need the landing pages. At Coach, you get everything that you need.

Josh: How do you convince people that they actually could build a business around their skills, or is that even part of who you’re after?

Spencer: Yeah. We have a lot of super-experienced creators and entrepreneurs that are doing $100,000 a year, and then we have people that haven’t made a single dollar but are looking to get started. We’re not really out there trying to convince anyone to do it. I think most people kind of convince themselves, but once you convince yourself, you still have a lot of hurdles that you need to jump over. Some things like, “Where do I start?” That’s a big thing, so that’s where the email capture and the landing pages go. Then it’s like, “How do I turn those subscribers into customers?” Then that’s where the digital products and the email engagement stuff comes.

Josh: Got you, so much of the teaching … A big component of Coach is like a course builder, essentially, right?

Spencer: Yeah.

Josh: Part of that is also downloadable products or things like that, eBooks. All of that, I guess in my head, I group under teaching, and so much of that that I see around the Web comes from people who are trying to make money by teaching people how to make money, in this get rich kind of setup. “Live the dream, and work from home in your new mansion,” kind of stuff. How do you maintain quality, or is that a thing that you guys even want to be a middle man for, or is it just whatever?

Spencer: Something I learned at Carbonmade, and there’s a lot of parallels actually to Carbonmade and Coach, but something I learned at Carbonmade is that if you’re going to allow people to build out their own portfolio, you can’t judge their work, and you can’t impose quality or any types of controls over it. The same thing with Coach. We’re not trying to tell people how they should use it, in the sense of what they should put up on it, and what they should sell. We just help them with the process, so we don’t look at their content in that sense.

Josh: Got you. From a business standpoint, do you guys have an office anywhere, or are you guys all remote?

Spencer: All remote. We do have two people in New York, but we’re both … and we do have an office. We actually, from the kind hearts to the people at Harvest, we have some nice free desks, but I tend to only go into the office maybe three days a week because it’s cold.

Josh: Carbonmade, you guys had an official office.

Spencer: Yeah, also in New York.

Josh: I assume, was the remote thing intentional this time around or just worked out that way?

Spencer: From the start, I was like, I’d like to have some sort of central hub in New York where people could go to and visit, and we could all get together and whiteboard, but it just worked out that that wasn’t possible. I wanted the best people I could get to work with, and I’m working with one of my former people at Carbonmade, and he’s up in Canada. Then I’m working with a guy in Ireland who’s amazing and then an awesome designer in Colorado Springs. I think, just get the best talent, and then we’ll work it all out later. Slack has been awesome. Trello has been awesome, so it’s just been relying on those tools.

Josh: Sure, and I would agree. Now from say even just five years ago, it’s a lot easier to build a remote team than it was even just a few years ago. What’s the biggest difference in building Coach now, compared to say TypeFrag or even Carbonmade a decade ago?

Spencer: Both TypeFrag and Carbonmade were both bootstrapped companies, and Coach we actually raised money. I’ve been having this discussion a lot over the last few years because I’m known as a bootstrapper, that I just don’t think it’s really possible to bootstrap SaaS businesses anymore. I think that’s the biggest difference, mainly because there’s so much competition out there, not just for people in your same space but also just for getting people’s attention. I get 10 cold emails a day from different startups, and everyone is just vying for a different user’s attention. As a bootstrap company, it’s really difficult to break through the noise.

Josh: Let’s talk about the money part first. At Baremetrics, we’ve raised $800,000 over the past couple of years. I’m now on the back end. We’ve essentially spent all of that. I’m curious how … What do you view using fundraising for? What sort of a purpose that you use for that?

Spencer: Everything I’ve built, I want people to use it, and I want people to get benefit from it. If raising money helps me do that, I think that’s great. If I could have bootstrapped Coach in a way that I could have built the same company, then I probably would have. That being said, raising money gives us a lot more time. It allows me to hire the best people. It allows me to give them stock options. It feels like we’re building more of a … I hate to use the word real business, but it feels like we’re moving toward a bigger ambitious plan. Whereas, when you bootstrap, you’re not fully attacking the problem sometimes just because you don’t have the resources to, and I’m not saying like as a funded startup you should misuse your resources, but at least that if you think that you need to do something, you have the money and the resources to do it.

Josh: Got you. Playing off of that, what does running a business or even being an entrepreneur mean for you? I know that for some it’s the allure of some big payoff. For others, it’s having just a big impact on lots of people or for others, it’s just this appeal of seeing a problem and then being able to solve it. After multiple companies and then multiple industries funded and not bootstrapped, how do you view entrepreneurship?

Spencer: For me, I think it’s really just building a product that impacts people’s life in a positive way. If you look at the … This is the fourth startup that I’ve been working on. My best experience before this was Carbonmade, and I think because we were really helping people get a job or make money. Similarly with Coach, that’s our goal here. I love the idea that we can create software that positively impacts someone’s life. For me, that’s basically my biggest motivation. Going back to my psych degree and working with social psych and personality psych, I love the idea of helping other people, like volunteering. I think the best way to do that on the Web with products and still earn money is to build software that helps other people.

Josh: That makes sense. That’s good stuff. All right, so that’s all for this episode. How do people get in touch with you?

Spencer: Sure. I’m Spencer Fry on Twitter, and my website is spencerfry.com, and my email address is spencer@withcoach.com. I love to chat with people, so if you want to reach out and talk to me about business or work or just have questions, definitely shoot me an email.

Josh: Good deal. Hey, thanks for chatting, Spencer.

Spencer: Thanks.