Bootstrapped to $83M. Samcart, Brian Moran & Mathematical Marketing – YouTube

Transcript:
(00:00) one of the best pieces of advice that comes from that was it was either it was probably both of them uh Tom colzer who founded aweber and clate mask Infusionsoft I think both of them told me this that don’t ever raise money unless you know exactly how you’re going to use it and if you’re going to raise money raised more than you need [Music] today I’m beyond a million I am talking with Brian Moran the founder of Sam cart if you don’t know Sam cart is a shopping cart that helps you optimize your

(00:41) checkout process Easy Pay Direct is integrated directly and I’ve known Brian for years he is an absolute Beast with sales and marketing in fact I think Sam cart stands for sales and marketing cart we talk about tons of stuff from bootstrapping the company all the way up to the point of accepting money and why he did it to raising an 82 million dollar series B and what the path and what business looks like after you do something like that tons of good takeaways in this episode you will love it let’s dig in

(01:15) Brian Moran I am uh I’m super pumped to have you dude we uh we’ve been trying to connect and talk for quite a while and I finally got you not in-house but I can at least see you right now I’ll be in there soon I know our schedules just are like opposite ends of the spectrum I know it I know it um well you know we’ve known each other for many years uh and I I think really we met at the beginning of Sam cart um but uh why don’t for those that don’t know why don’t you give a little backdrop on what Sam card is today and

(01:51) then back out and we’ll talk kind of how you got there because like today it’s very different than it was initially but I think it’s worth uh starting with kind of the concept of it and then we can talk about your story yeah so I mean Sam cards basically a a billing platform for the the market that we serve and go after um primarily is Creator so anyone who you know they have digital products Services coaches we still have a bunch of physical products I mean the nice thing about the word Creator might not

(02:20) be the best from the marketing standpoint when you want to call someone out specifically but it encompasses a lot of people so we actually kind of struggled with our identity as a business for a while thinking we’d be kind of an all-in-one e-commerce platform that has you know everything from billing to landing pages to email to SMS all Under One Roof that is it is not what we are right now and it’s not where we’re heading our bread and butter from the very beginning was always giving people the ability to create a

(02:50) super optimized checkout flow to sell really any type of product that they want so things like you know being able to split test what price your product is being able to boost average order value with order bumps add-ons upsells down sells being able to sell any type of billing structure sell one-time payment um pay what you want limited subscriptions uh recurring subscriptions obviously and kind of anything in between and so we basically tie into whatever most people you know at least we could take like the digital product space they

(03:26) have a course or a coaching program and they’re using the job a teachable thinkific you know any of the WordPress plugins that are out there we don’t try to get people to leave those we just try to get them to use our platform to accept orders and we integrate with all those other platforms so you buy through us the customer automatically gets all their content in whatever LMS or course platform that they’re using and they use us because they’ll just straight up make more money they’ll increase their cart

(03:54) conversion rate really their sales conversion rate so it drives your cost to acquire a customer down allows you to spend more to go get them because we drive up average order value a whole kind of billing tracking analytics platform behind the scenes that tells you where your customers came from who your most valuable customers are I mean it’s it’s meant for someone who’s you know doing probably at least 5K a month we have a lot of folks doing less than that that they’re kind of aspiring and they’re on their way

(04:19) building up but our sweet spot is really somebody doing at least full-time Revenue so like 5 10 grand a month all the way up to we have a couple folks doing 100 million a year on the platform now but our bread and butter is just kind of the the billing side uh being able to you know efficiently accept payments accept an order anywhere your customers are you can take Sam card now and embed it wherever people are embedded onto a sales page a Blog sidebar link really quick off social or email um just trying to give people you know

(04:51) more efficient ways to make a sale so this is great because I’m I’m gonna force a huge open loop because this is new this is not how Sam cart started right to talk about being uh to reference yourself as a billing platform I don’t think I ever would have heard that out of your mouth five years ago but Sam card still existed uh and you know we’re Easy Pay Direct is integrated to Sam cart so we know the platform but the transition the transformation of the platform has been pretty significant in

(05:21) the last several years before we get to why that happened how did Sam cart start and actually was Sam cart your first journey or were you doing something before that yeah I know it started so we launched Sam card in 2014 I got started right out of college graduated in 2009 had a terrible job working for the government like everybody here I’m in the DC Maryland area so everyone here either works for or with the government in some capacity you take a motivated 22 year old kid and you slap them in a government building with no phone no

(05:52) Internet no laptop no touch you know communication with the outside world and even making great money at a school you know I felt rich but was just absolutely miserable at that job so I did what you know most entrepreneurs do at some point you know you go you start down that journey and try to figure out hey how can I make money outside of this full-time job what business could I start and I kind of stumbled into this digital product space I found a couple experts from back in the day who had a course about you know how they

(06:24) had built their digital product business and bought that course and like that was really the end I fell in love with this idea of look I can take knowledge that’s in my head turn it into an ebook or a video or some kind of program that I can sell this product I spent you know a couple days creating one time and I can sell it forever so I fell in love with that idea um unfortunately didn’t happen it didn’t succeed right away um the first business that I started it was a website called trainbaseball.com

(06:57) so I for those that don’t know me I’m a huge baseball guy I’m wearing an O’s hat right now played all through High School played in college was a first-team All-American thought I was going to go pro that didn’t work out the way that I had drawn it up but still loved the game and knew a lot about it so created a couple ebooks and video courses about how to you know that a mom or dad or a coach could buy and give to their you know son or daughter to make them a better ball player and so I started this

(07:25) little blog figured out you know everything we need to know is kind of digital marketers and didn’t make any money I think for like 14 months was living in a basement apartment with my my new wife at the time trying to figure out like look I need to quit this damn job and I want to make a lot of money and you know give her a life that you know she couldn’t dream of be able to you know control my own destiny all the things that we all want as entrepreneurs and luckily like a year and a half in I started making a little

(07:57) bit of money um I ended up kind of pissing off this big player in the market this guy Paul Reddick who’s now one of my closest friends been a mentor for a long long time uh this is maybe a story for today maybe another day but I pissed this guy off so bad we had this like all out fight ended up making up he kind of took me under his wing and mentored me through kind of that next phase of my journey which ended up becoming a second site the second entirely new business same business model of selling courses but it

(08:30) was to entrepreneurs and I was going to teach them how I was using Facebook marketing to grow the baseball site so interesting okay yeah yeah let’s pause there for a second so the uh the first what was the first course the first product was technically not a course it was an ebook it was called the 10-step hitting system uh tried to sell it for 27 bucks that was like the the main the main product from the you know back in the day and how’d you piss off Paul I like copied one of his squeeze pages so he uh I found one of the pages

(09:05) he was driving a lot of Google ads to um didn’t copy a word for word although me and him still have flights about this today uh but I I’m I modeled it and he didn’t didn’t appreciate that very got it got it um so the concept for that business model was were you running ads at that time or were you just trying was it an SEO play to try to get traffic and then sell an e-book on the back end of it very early days was SEO try to get traffic um eventually figured out what Facebook ads were they were like brand new at the

(09:34) time so I dabbled in it without a whole a lot of success um Facebook is then what later on that was the traffic source that I dialed in and figured out but early on was trying a little bit of everything without a whole lot of success and you weren’t making money selling that product um so you then shifted to create a course on how to run Facebook ads on a different site and sold there did you when you did that I’m asking because there are lots of people that do this both ways did you did you feel like you had dialed

(10:08) the Facebook ads when you created that course yeah so little tweak to that story the baseball site start I got it to finally start selling so I got up to three or four grand a month using organic and Facebook ads built up the fan page to about 10 000 people so I was kind of up and coming in the Baseball World which when I met Paul I drove up to Jersey hung out with them showed them what I was doing with Facebook he’s more of an old school guy who was all SEO AdWords so he knew nothing about how to use Facebook for

(10:40) his business yet and when I showed him what I was doing he his immediate advice was you need to teach other people this because it’s such a Hot Topic right now now I don’t know if he did that to help me I mean it did help or to get me out of his Niche but he did he did both at the same time so I kept the baseball business going and created a new course about not how to how I was using Facebook ads because I wasn’t really an expert yet it was how I got 10 000 fans on that fan page and started using those

(11:08) fans to sell products um that’s kind of the the other version of that story got it okay so uh never did that evolve into Facebook ads or did I hear that wrong was the course the course was always building a fan page too the initial course was yeah how to get fans how to build up a fan page during this whole process that like six or nine months of building kind of both businesses I got really good at Facebook ads both on the baseball side and the it was get 10 000 fans.

(11:41) com was the name of that brand um how I met like everybody in this space um yeah was kind of this like up and coming Facebook guy that I think because I like niched way down and there wasn’t somebody you know this was back in 2010 so you had the Ryan dice Evan Pagan Jeff Walker even like the Amy Porter Fields James wedmore Lewis Howes were all up and coming and they all had their little niche and I didn’t even do this on purpose but I sort of became like the Facebook guy who you know knew how to use this platform to build an audience

(12:12) sell products run ads all that stuff yeah I remember that uh now that you’re saying it I didn’t I like I have now I only associate you with Sam cart now but I remember that in that moment uh that’s hilarious uh so what was the transition so you did that and you were in the course community and um teaching people stuff there’s a big jump from that to software which is the devil but also kind of Awesome yeah yep yeah so we we ran get 10 000 fans that one scaled up really quick we were right place right time everybody

(12:49) wanted to know about that topic so we we did a million that first year um still living in a apartment with my wife at the time just and I still hadn’t even quit my job at the time because I was so scared that none of this was real that it wasn’t going to last so I stayed there for a while um we ran get 10 000 fans I think we got it up to like two and a half three million bucks a year by the time 2013 rolled around in 2013 a couple things happened we sort of hit a wall revenue-wise I didn’t I didn’t want to do the traditional kind

(13:21) of Coach model where I was going to start a mastermind or a coaching program I liked kind of the no stress environment that just having a bunch of courses gave you so we were just kind of sitting steady at two and a half million bucks a year really good profit margins probably should have just yeah I I shouldn’t have stayed there but uh somebody probably should have offered me that option of look you could just sit on this thing and have no employees and do your thing for a while but I got bored I mean I like that’s

(13:50) kind of my curse as I I was bored I wanted the next mountain to climb I I really wanted to get recurring Revenue as part of my business so software was where I was seeing a bunch of buddies uh clay Collins at leadpages at the time kind of came out of nowhere and built you know Lee pages into Behemoth it was in the first two years um and so I thought okay like I I want to go down the software route you know I’m not a coder but I I think I know what good software is and I really appreciate good software so I’m going to figure out how to do this

(14:23) our first step was we actually went and white labeled a Facebook marketing related software at the time you could like build a website inside of a fan page they had this thing called a custom tab where you could like put a landing page in your actual fan page and there was there were tools that let you do that so we found somebody that actually ended up being kind of right down the street who had a really big one and we white labeled it did a promo generated like 50k a month in recurring Revenue that just lasted for quite a while and

(14:54) it was that taste of what recurring Revenue when you offer a good piece of software how that can change a business that I thought this has got to be the full-time thing we got to figure out what tool could we create that are already established audience of 500 000 followers who are mostly digital content sellers everyone who had bought from that get 10 000 fans audience I just kind of looked at hey what are they using what tool am I using that that sucks that I can make better and the worst tools of the time were the

(15:25) shopping cart like they were all terrible you were either stitching together an Infusionsoft account or using something dumb like PayPal that’s costing you money and so that was when the original idea in 2013 was look we’re going to build a shopping cart and it’s going to be kind of for for ourselves first for our audience second and we’ll see what happens after that yeah uh I uh I think that there’s a recurring theme amongst um seasoned entrepreneurs uh which is I probably should have assessed the

(16:02) business models early on and made a choice based on the things that I want to get out of the business uh and and people very often don’t see it and they just kind of build the thing that was introduced to them right and it’s like they have an itch and they just start going and iterating um but it is some of the smarter people I know now have made deliberate choices around I want a cash flow business or I want a low stress business or I’m swinging right I want to grow and a lot of people go the growth route just because of

(16:40) ego yeah or you know fomo or social you know it’s like but I think it’s it’s worth evaluating those things and one of the things that you said that I think is awesome is you wanted to do the courses but you didn’t want to do the high ticket back end because it came with stress yeah um and you know we we serve that community so heavily um we get to see that but the model is basically always the same which is nobody does just courses everybody does the course to event to Mastermind model right and and they lean on the high

(17:19) ticket to monetize uh to convert the whole thing yeah right if you can spend a bunch to acquire a customer the whole model works right but if you don’t have a high ticket offer they can’t get it to work yep um so I guess one of the questions that I want to ask before we get into the Sam card stuff is when you were doing that uh if you were to do that today do info products today do you think you could still get that model to work with Facebook ads as they are now versus what they were then yes the and without a

(17:50) high ticket without a high ticket yeah yeah and one I say that out of straight ego I mean I’m in my own head I’m the best marketer that’s ever lived so there’s not there’s no challenge that scares me I know for a fact I could make it work I mean we we have a a branch off brand for Sam car called Creator you that is that model now we have the benefit of our whole back end is trying to get people to use Creator you plus which is a SAS platform Sam cart SAS platform drop deck that we just acquired SAS platform so we have

(18:19) three recurring Revenue tools that we can get everybody on that is effectively more profitable than and way less work than a mastermind would be but um we got it to work back in the day partly because Facebook ads were a dollar a click it was you know I’d spend a thousand a day and make four so I didn’t have to do the coaching program and two and a half million a year at a million profit was like I don’t need an extra half a million dollars a year to work another 2 000 hours a year um so we deliberately said no I don’t

(18:53) need to like we’re good enough we’ve made it work the way it is I think today yes you could do it um it would be you would basically replace the high ticket back end with just a really solid email SMS follow-up campaign to customers offering them other things I would just have more expensive courses I’d find a way to have recurring that’s low lift whether it’s like a SAS platform or white labeling somebody else’s there’s plenty of ways to make more from your customers than just having a big slack adjuster 5 10 20 50k
(19:27) offer yeah that’s great I think that’s a good paradigm shift for people and I think the other is you mentioned a few different options to increase you know the LTV the lifetime value of the customer on the back end one of the things that is worth considering if you’re thinking about that is it should it be your own product or is it okay for it to be an affiliate offer right or you also mentioned white labeling which is sort of in the middle there somewhere yeah um but those are all great options uh if

(20:00) if you could get your core offer together enough where you have the bandwidth to focus on something like that yeah I mean any of those options are good yeah I would yeah we white labeled that original SAS just out of you know the Need for Speed so we we weren’t going to build a if we were going to rebuild a tool like that in less than probably six to nine months at least and I wanted to make money that day so it was a lot easier to go find a good deal and the nice thing about you know people in our space like we know

(20:27) how to make customers appear out of nowhere in in big numbers so when you go to a product owner you know most SAS companies don’t believe you when you walk in there and you say hey I can send four emails to this thing and get you 5 000 customers tomorrow what does that work to you like I’m not going to take your normal deal where it’s 50 50.
(20:48) like I want a bigger cut like you have big negotiating power because all of us have these massive audiences that you know we can make customers appear out of thin air pretty quick and so we were able to leverage that in those early days and you know looking back some of those deals I think that original white label like we kept 80 of that revenue and this was an established SAS brand who had raised money and they were like look if you can move the amount of people you move you can keep damn near all of it doesn’t

(21:14) cost us anything to it’s basically customer support it’s like their only actual cost um so yeah I’m not opposed to anything in the end I want to own my whole product Suite like ideally um but you know you’re not going to do that overnight yeah did you have that insight and desire when you white labeled did you think from the beginning hey ultimately I want to rebuild this myself you know what that one I don’t remember ever thinking that I think the deal was so good and I was in pure lifestyle

(21:50) business mode so look they’re gonna do everything all I gotta do is push people to an order page they’re going to take care of them they’re going to deal with bugs I don’t know the first thing about hiring a developer I know it ain’t gonna happen overnight so I think the deal was so good in that scenario that I just said look I’ll milk this thing as long as we can I think that’s another one of those important distinctions with when if you you’re because you’re you have to

(22:11) think about you know what your driver really was and in your head what what you said actually a couple minutes ago was I wanted recurring revenue and then you also said I wanted a software platform but it was really the recurring Revenue that drove you towards software right so what point did you switch I guess it was maybe a year after that was end of 2013 when we said you know look we we have a little bit of a war chest so now we can actually take look we can take a risk and I really like I want to build something big and SAS to me was the way

(22:44) we’re gonna do it um whether it was because it was going to let us raise money someday or you know just the recurring Revenue side that’s something that we can sell I didn’t see a path to selling the previous business because I was the face and so we sat down and said what could we build kind of evaluated all the tools that we use and our customers use decided on the shopping cart space was where we were going to go attack and you know we we didn’t if we were gonna like make this kind of our sole

(23:13) focus it wasn’t going to be white labeling something we’re going to figure out how do we build something who do we need to go find and hire and try to make this the next business so as a non-developer building software is difficult uh I I asked me how I know how did that happen what was your what was your swing how did you approach trying to build a software company with no experience in and I’m going to ask you the other side of this in a moment but that part in and of itself is super relevant because you

(23:42) you look at uh the opportunities and software for any vertical right now and whatever your business is the opportunity to increase LTV of your client base with some sort of software is probably there yeah the barrier is figuring out how the to build software yep so how did you approach that in the beginning yeah um the one thing I knew there were a couple options you know we could go to upwork or wherever and try to Outsource and find someone overseas I didn’t want if I could in a perfect world if I could have it

(24:19) anywhere I wanted I wanted a human being or two in the office with me ideally someone’s super smart that isn’t super cheap that’s going to do this the right way and it’s going to be someone I can be kind of right next to him as we build it so I just started asking around and doing you know research online trying to figure out you know hey like where where can I find someone that does this I got very lucky um and two of my best friends from college my roommates from college one of the guys who lived down the hall

(24:51) from them who was in their frat who I hung out with a lot because he was on in the same Hall with us I was telling them about this new idea and they basically they both said like hey have you talked to Justin and Justin is Justin Smith who’s now our CEO at Sam cart he they were like have you talked to Justin about this and I my initial response was why the hell should I talk to Justin he was a political science major like is is he a coder now like how did that happen and he was a coder now not only a coder

(25:19) but he had his own startup I think he had just sold off not not like a huge exit that’s kind of a small app that he had built kind of for a government client um in our area so I checked out the tool he had built it looked beautiful it looked like you know super clean simple like easily something that I could sell and I hit up Justin and basically gave him my pitch that you know look let’s do this I have this big idea for Sam cart but that’s probably a big project and I don’t think you’d probably trust me yet

(25:50) I have a couple other little mini app ideas that are Facebook marketing related for our get 10 000 fans brand if you like here’s how many of these things I could probably sell if you give me something to sell here’s how like our normal promos do he didn’t believe me so I said look how long would it take you to build I think our first little app idea was there were two one was called the Facebook keyword tool so if anyone remembers Facebook ads pre-2012 there was no keyword targeting like at all you

(26:22) had to go search Facebook for keywords like dog groomer and so he built on top of their API it might still be live somewhere it was FB keyword tool.com you could go in to type in baseball and it gave you all the keywords baseball mom baseball dad MLB whatever and we I think we sold it for like 19 bucks I gave him half the profit we did a pro he built it in like three weeks we did a promo did like 200 Grand and yearly recurring revenue and I’d like stroke them a check for it was like 50 or 100 Grand that for

(26:56) him was like okay this guy’s for real like he can sell basically anything I give him so let’s now talk about this big project Sam cart and building a whole Ecom platform that’s see a lot bigger lift than a Facebook scraper essentially crazy uh so this was 2014 uh that was 2013 2013.

(27:19) and I know so what was the was that so that was pre-sam cart yup got it so how did so then you did a couple of these iterations and convinced him to jump in on the Sam cart bandwagon yes yup yeah he got to make great money from these little three-week projects building these stupid little apps um highly valuable but essentially dumb little apps and so that’s all I needed to convince him to then commit to six to 12 months working with me building out this big e-commerce platform shopping cart you know thing that was in my head

(27:51) got it um okay so bootstrapped no money has been raised right yep I know now I just saw before we got on here that you just closed your series B for 82 million so you raised your Series be at 82 million would you if you were to start a software company again today would you go the fun the the VC route or the bootstrap route if I had to so me personally at my Current financial status and track record with our current investors I would probably immediately go to raise money because we have so many connections now and we’ve proven

(28:33) ourselves to be a good investment that I could go have somebody else fund the whole thing now I would be able to do it myself I’d probably have to think about it but I would off the cuff I’d probably say I’m gonna go raise money this time so I can go super fast with someone else’s money because I know there’s going to be checks everywhere because we like once you go down that route if you prove yourself and you’ve made money for other investors it’s usually very very easy to go get
(29:02) you know somebody else to trust you or you go right back to the same guys if you if you were going back to 2014 at the beginning of Sam cart when you didn’t have those connections and resources I would not raise money no no I would have blown it like we didn’t raise money for five years we bootstrapped for five years those years were one the most fun in my life to the most stressful in my life I sat in this exact office it might have been 2017 with a thousand dollars left in the bank account and a forty thousand

(29:34) dollar payroll happening the next morning at nine a.m and we found a way to make it work like those were any of the gray hairs coming in it’s it’s from then it’s probably not from these days um but you know you learn I learned more than I could have ever imagined learning like I don’t regret any of those years what I do know is if you gave me five million dollars 10 million dollars more back then I don’t even know if I would have spent it I hopefully would have been too scared to spend it because we didn’t

(30:06) have a model yet like there was no we couldn’t pay to acquire customers yet we hadn’t figured out paid advertising I knew nothing about running a team Justin who’s now CEO he was not here that’s another crazy story him and Zack Moore who’s one of our he’s our original developer with Justin they’re best buds they’re like two of our sharpest guys here they built the first version of Sam cart as private contractors in 2014 and they both then left they went on to other projects we just had this finite

(30:39) like build us this thing hopefully we can keep you guys around but Justin got a crazy offer from uh a big publicly traded company in New York so he went off for five six years Zach went off for five or six years so it’s just me and Scott with this great product to sell but no team and the team was chaos for five years because I know nothing about not not that I know nothing about it I have no interest in managing delegating any of that stuff I I’m I can get the crowd excited and motivate employees but then

(31:11) after that speech is done I’m like leave me alone I need to go work and that’s not a good way to to lead a team so if you gave me all that money back then I either went a bit I would have been an idiot and dumped it into an ad campaign that didn’t work or hired people that didn’t have a leader or a manager or I just would have held on to it hopefully I would have held on to it and done nothing and I just would have gotten yelled at by the investors who want you to put their money to work um one of the best pieces of advice that

(31:40) comes from that was um it was either it was probably both of them uh Tom colzer who founded aweber and what’s the uh is it clate mask Infusionsoft yes I think both of them told me this that like don’t ever raise money unless you know exactly how you’re going to use it uh and if you’re gonna raise money raised more than you need um so and back then I I wouldn’t have known how to use it like today we know all our numbers I know how much um we’re touring I’m gonna get if I put it into an ad campaign I have

(32:14) leaders and leaders of leaders so there’s like a whole orc structure where you can hire people that are going to be held accountable and do their job and know what to do back then none of that existed did you figure that out through the bootstrapped era or once you had raised the first round probably both um I Pro I think more through the bootstrapped era like they were telling me those things and they’re like look what would you do with this and I’m like uh not sure they’re like then don’t do it

(32:42) like bootstrap your way I got Justin back in we got Zach back in So we had the ability to like we finally were able to get past 10 employees without this place caving in on itself and then I just made it my mission to create to turn the business into a math equation because before that it was just hopefully we get customers we can send a couple emails every once in a while and get some customers that’s not sustainable we need a way to get customers that’s dependable and repeatable and so I made that my mission in 2018 and we figured
(33:15) it out and that was like when the light bulb went off that was holy like I now I have an exact campaign that I’m running every ad through it prints customers and if I had a bunch more money I could go negative on the front end and blow this damn thing up and that was when I became crystal clear that this is why I would raise money like now I get it and I have Justin to lead the company so we can scale up people up until that point late 2018 I was adamant I that I would never raise money never in a million years I didn’t want
(33:49) anyone to have control I was terrified because I didn’t know what it meant to have a board or any of these things and I just had no interest luckily by the time 2019 rolled around I personally financially was in a very stress-free place so the thought of raising money and this thing not working out an investor being an and like taking over the business and causing it to stall and the whole thing just being a waste I wasn’t that scared of it like I’m an entrepreneur I’ll just start something else and on the flip
(34:19) side I saw the path that if you fuel this thing if we just had an extra couple million bucks like we will double like I I can draw the math equation out like that’s what’s going to happen and those two things combined were what finally got me to overcome that whole fear skepticism side of my brain that kept me from raising money from the beginning it’s insightful man um I think that there are I know that there are a lot of people that live on both sides of that that line what was the business model in those
(34:57) bootstrap years in the five years what was the product what was the business model um and we’ll fast forward to today in a minute here because as I look at the product today it is different than what I saw initially um what was in your head at the time and what were you trying to build and where’d you where’d you land with it before you raised yeah so 2016 was really like our big coming out party I guess 2015 we we released it just to our list um we had the the first version of Sam cart which essentially
(35:30) still similar to what it is today it was a shopping cart you could go in pick from a library of checkout page templates we were just a checkout page a checkout page that you could add multiple products to increase average order value add up sells two to increase average order value and a reporting system that gave you insight and everything is happening and connections to all the other tools so that you could accept an order and then deliver a course in kajabi or fire off a zap to alert you know somebody through
(35:58) slack or whatever you needed to do that’s what it was at its core and so 2015 we had that the business model was do a launch to our list like just tell our whole audience about it we had 200 000 people on an email list forty thousand customers from the get 10 000 fans brand hundreds of thousands of social media fans and relationships that I had built with Amy Porterfield Jeff Walker Ryan dice I mean all the big kind of influencer experts in this space and all their customers needed this so the business model from 2014 to 2018 was
(36:36) essentially hit my list up with this every so often try to figure out ads we never did um we would still I’m as ad still brought in some customers but not I mean we probably spending like 500 bucks a day just because it didn’t make sense to go any higher um and then it wasn’t a huge chunk of sales but of affiliate Partnerships and relationships was a big one I mean with Word of Mouth also that’s that was probably bigger than affiliate marketing um which was nice getting into software like people share good tools so when we
(37:17) we did a big launch in 2016 we you know fortunately had you know for any of you have done like big Walker style launches with like affiliate leaderboards our leaderboard was Amy Porterfield James wedmore Todd Brown Todd Herman Jeff Walker a bunch of other folks so those relationships were huge I mean that launch like put us on the map in an even bigger way than we already were and we got a bunch of huge customers uh Mike Dillard switched over Darren Hardy switched over I mean we had Heavy Hitters using the platform
(37:52) processing hundreds of millions of dollars a year uh this is before we realized you can make money from Payment Processing by the way um so that it was from that point 2016 to 2019 it was no ads it was kind of flat-ish growth like we didn’t really have a way to go get a bunch we’d try to do a launch every so often and get Affiliates to promote but they don’t want to promote the same thing all the time our list was kind of sick of hearing about it um it was just kind of steady Word of Mouth um so we were kind of flat at four or five
(38:25) million in revenue for probably two and a half years just because we didn’t have a model we didn’t have you know Dependable way to go get customers at scale yeah so you didn’t have kind of a predictable selling system yeah predictable acquisition model yep would you have done that bootstrap version different to do it over oh that’s a good question I definitely would I mean I would have figured out ads faster I think I just got lazy and that’s my bread and butter I mean that’s what I that’s still my
(38:53) full-time job today um is working on kind of the performance marketing side of things because that’s what I love to do build ad campaigns offers funnels that that work it’s just such a fun puzzle to figure out for me I don’t know why I didn’t do it earlier than I did because it didn’t take me that long to figure out once I decided to try to figure it out um yeah I just would have done that would have done that earlier just would have yeah done whatever it took to figure out how to turn ads on and scale them up in
(39:26) a way that doesn’t bankrupt the business uh so for those four years uh was your title CEO were you yeah functionally the one running it yep um what were your responsibilities as the CEO then and then fast forward to today what are the responsibilities of your CEO at Sam cart today and how are they different yeah I mean I probably shirked all my responsibilities back then you know we had we were in this office which isn’t huge but everybody was is pre-covered so everybody’s in basically every day it was me and 15 other folks
(40:02) uh primarily like 25 to 27 year old guys so you can imagine what that office was like we probably played more ping pong and basketball than we did work or at least they did I mean I I busted my ass because I had to basically keep the whole thing afloat me and Scott which wasn’t their fault it was my fault I mean I just didn’t do a good job leading them and let them know you know what they need to do um so I mean my responsibility was basically you know I I was the face I mean the guy that you know when walks into the office
(40:33) everybody knows kind of what I say it goes which is good and bad um but there was like no structure no I mean we didn’t have weekly meetings with the team there were no one-on-ones with man there were no managers uh it was just kind of like a group of six guys over in that corner that were the coders and we just kind of pinged back and forth and figure out what the next thing we’re going to build without a whole you know not no real Vision at all um yeah I mean you can imagine anyone who’s been a part of a business at that stage
(41:07) they’re probably all very similar um but my role then was I was the guy that had to move the needle revenue-wise that if there was a launch or a promo coming up I was going to do basically all of it write the scripts film the videos edit the videos create the ads network with Affiliates decide on the big features that are I know are one important to gonna actually be something people will pay for um and it’s pretty much like every every big decision or critical job outside of coding was was me it was my fault I mean
(41:44) I I I put it on me it sort of needed to be because I don’t know if we had the people we needed then to do those jobs but is what it is yeah sure I mean I think one of the uh one of the significant unlocks from a leadership perspective is learning how to hire and then on board and Lead but the hiring component alone is a significant Challenge and for an Executor uh that gets validation through doing hiring is one of the most boring things ever yeah somebody handed me that top grading book I think I made two
(42:21) pages in I’m like no I’m not I don’t care enough I know it’s bad but I don’t have time for this I need to go generate Revenue which is what I’m good at so Sam cart today August of 2023 what are the current stats what’s the size of the company employees whatever stats you want to share 150 people uh office here and then uh our headquarters the big office down in Austin Texas just north of you uh uh what other stats 85 000 customers between Sam cart Creator U and drop deck uh three brands three different software
(43:01) tools um yeah in total rates close to 100 million bucks over three rounds uh what other stats you want uh were you in Revenue right now Revenue getting close to 40 mil awesome and what is the responsibility of the CEO today who by the way was the original developer that built the platform right yep so Johnson was that original developer he left got he really is a a business operational guy if anyone’s ever read oh what is the name of that book The every business needs an integrator and a Visionary uh EOS traction yeah
(43:39) yeah that that’s me and him to a t he’s the integrator um yeah honestly like I I could rattle off a couple things he does but you should ask him because I don’t really care to know like and I don’t think he cares to know what I do we just trust each other to do each other’s job I mean he’s he’s the leader of the business I’m still you know I think when I talk at all hands people know me and Scott are the founders and they they perk up and listen when we talk and when we say something it means a lot
(44:11) um as far as to the company I think I’m the you know kind of works with the the Visionary that I’m the the inspirational one that I’m the good cop He’s the bad cop uh which isn’t fair to him all the time so I have to step in every once in a while and help there because that I’m sure it can be stressful but no I mean he knows the ins and outs of every team in this business he’s hired you know most of them um he hired the whole leadership team which you know now I guess like 10 people
(44:41) um he’s responsible for how much money’s in the bank making sure we don’t run out of it um he’s taking a big lead on relationships with our current investors and potential future ones runs board meetings um all the stuff that I want to care about but just can’t figure out how to care about it more than I care about running marketing campaigns and putting up numbers I love it so what he does not do is run the marketing campaigns and focus on driving Revenue correct uh he focuses on driving Revenue he knows where all the
(45:13) revenue comes from he’s been around me long enough to know on the products I’m working on what the big needles are um he likes to pretend to be a marketer every once in a while and critique my copy or ideas I’m sure I do the same to him uh but it’s a it’s an awesome combo between the two of us so I I you know I make jokes about how brutal it is to build software because we’ve got a development team in-house and we stumble through so many things uh what are the biggest mistakes that you’ve made in
(45:46) building a software company um and what is a tip that you would give somebody that wants to go down that path yeah I think there is one main mistake that still haunts me today that I still pay for today now I don’t know if there’s a way to avoid this honestly because I didn’t have a ton of money back then but when we first bootstrap Justin and Zach they built a great V1 of this thing when they left we brought in a new crew of young guys like young inexperienced not inexperienced like they knew how to code
(46:19) but you know they were Junior guys at any SAS company and they were put in charge of this one and I let them rebuild this whole thing and that that spaghetti code from back in the day that I mean that’s the base imagine any software platform but an e-commerce platform that every little piece touches every little piece and when it’s all kind of messy under the hood you hand it over to a good mechanic a year later and they’re like dude throw it out like I can’t work with this it just it haunts you forever and you know
(46:56) I think that’s what caused us to move a lot slower than I wanted to in 2019 2021 we’re now finally getting through most of that energy are able to to move really quick but you look at the opportunity cost of that I mean my God if I hadn’t if I could go back I would have done whatever it took I would have mortgaged my house I would have moved into an apartment if it meant keeping Justin and Zach around because they they built a very Sleek minimalistic platform that could have grown way faster that we could have built extra
(47:32) features on and probably moved we could probably have the tool we have today in 2019 if we had done it the right way and not let folks that build things a little bit Messier do it that way um and we see that with now we have two other products one is Creator U one is drop deck both were built in the last year with new tech by very very smart people and those tools just move like we ship cool stuff every two weeks um and Sam cart still pays for you know those mistakes back in the day probably better that Sam car doesn’t
(48:13) move super fast because we are dealing with people’s money and so we got to be extra careful like we you can’t go down if someone’s running a million dollar a day business on there but you know still a pain in the ass well I’m aware uh um from a the my question with that is when you’re looking for I mean basically what I heard is don’t have shitty people built your software but more specifically does that take a single senior software developer or is it an architect that you’re looking for
(48:50) or is it a product manager that you’re looking for what are the components that you think are mission critical now that’s a good question I still don’t know if I know the answer to that um when we bought drop deck Justin flew over to France this was like nine months ago and we were talking to these guys they had a awesome unbelievable looking tool we both had used it it was it was incredible and we were talking about buying them and when he flew over he he basically asked me like look is there anything you
(49:22) want me to ask these guys because I couldn’t go and I just said look you evaluate them Justin is very he’s he’s technical he’s been a coder he doesn’t code anymore but he knows what he’s doing he can see good code and you know sharp people um from a mile away and I told him look I don’t even really care about their product I care about the two guys running it if and there they were kind of best friends they’ve done they’ve built and sold off multiple other apps so they had a very good track record
(49:51) one guy is more of a product guy one guy’s more of a an actual developer so it sounded like a very good match and I just said look you evaluate them I don’t even care about their software because like we’re gonna repurpose it and sell it to a different audience we’re gonna change things anyway but if they’re the guys if you think they’re two of the smartest product engineer combos that you’ve seen I’ll pay anything to get them because it’s so rare to find Engineers that can think like a business owner that can
(50:24) get into the mind of the customer and and can do it all the right way like build it clean scalable um fast and he came back and said they’re the guys and that’s what they’ve done over on drop deck the way that they’ve innovated and changed things and improve the platform in a very short period of time I mean they like if I had to describe these two guys both incredibly bright super fun cool dudes um proven track record the the software speaks for itself you can feel the difference I mean you log into a shitty
(51:02) app and you log into a good one like even someone like us that can’t code we can tell like it’s just sappy it’s clean it’s done the right way um yeah I think it just comes down to the right people I don’t like one great you could give us the world’s best engineer and like they can’t build something like Sam Carter easy pay to act all by themselves like you need a team of great people which you know are great coders that know how to do things the right way great product people great leaders like
(51:33) it really is kind of a tribe um from the get-go one or two great people can probably take you a long way um but once you reach you know scale like those two guys aren’t going to be able to build drop deck to a billion dollars all by themselves sure um okay I know that we’re approaching time uh the my perception and you articulated this to some extent but we started with what Sam card is today and we went through the bootstrap iteration uh and you mentioned that you were targeting the shopping cart space shopping cart and
(52:15) then it kind of transformed into checkout and you’ve used both terms but my perception certainly through the that initial era was Sam Carter was a shopping cart and today when I look at it it’s distinctly a checkout product and one of the Transformations that I saw was the ability to embed the checkout widget in any location you want so in all these other sites and one of the things that I saw was like embedding checkout inside of a notion page which was interesting I think that’s on your home page today
(52:49) um where was the transition and what led you to the conclusion that this was the direction you were supposed to go was this a gut feeling a data-driven thing yeah what was it that made you say hey you know what not shopping cart but embedded checkout process yeah I think one the the terminology is almost more of a marketing decision that shopping cart isn’t really what people say or search for anymore we don’t want we used to say for last couple years we’d say e-commerce platform but then people expect a website builder email
(53:26) marketing SMS they expect a lot more inside of an e-commerce platform what our bread and butter has always been is what we are today we’ve gotten we got distracted over the last five years numerous times partly because one of the campaigns that I figure out how to really scale it brought in a lot of beginner kind of advanced beginner very small businesses doing a couple Grand a month it brought in a lot of those folks and a lot of them like they don’t even know what a split test is so for us to go super deep
(54:01) and check out with upsells and split testing and multiple forms of payment like those things one they don’t even understand what they are why they’re important and two they can’t really use them yet they’re not big enough what those people needed they needed an all-in-one so we went and bought a course platform and baked it into Sam cart that took 12 months we build we had very simple checkout templates back in the day we turned that into a drag and drop page builder that distracted us for 18 months we did those two things for
(54:32) this influx of very different types of customers than the Amy porterfields of the world who they don’t need any of that she’s going to use kajabi she’s going to custom build her own course platform she doesn’t use our Builder because it’s not very good she’s going to custom code something on webflow or WordPress or straight HTML so we we got distracted building things that weren’t our ideal for the ideal customer do I regret those things sort of like they still did help like we were
(54:59) bringing in thousands of these people and it did help us get them and keep them but it just kind of distracted us we were this shopping cart trying to pretend to be an Ecom platform trying to pretend to be focused on you know billing and payments which is what our VIPs wanted but we weren’t giving them the time of day it’s so it actually the series B was really our time to think look this is a lot of money like we need to be crystal clear on where we’re going this like we’re not gonna go spend 85 million bucks without a clear
(55:35) Direction so we decided look we don’t want to turn away beginners but a lot of them aren’t ready for Sam car yet so let’s create a separate product just for them and that’s what became Creator U that we scaled from zero to eighty thousand customers in six months that is kind of a coaching platform there’s some software in there there’s little AI Tools in there to help them create content there’s a lot of analytics and tracking so they can see their audience grow you get a Creator score there’s a
(56:04) shitload of videos in there every course I’ve ever created is in there for free it’s everything that beginner needs to grow into a Sam Car customer and that allows Sam cart to do what we do best which is build things that make real businesses real money um increase their checkout conversion rate allow them to customize it deploy it wherever they want drive up average order value track lifetime value track ad campaigns like the nerdy that I love that the Amy porterfields of the world the Jeff Walkers of the world the you
(56:39) know the big supplement brands of the world people doing 10 20 50 100 million dollars that’s what they want us to do and it’s what I wish we would have done more of along the way we just you know you get distracted like every business owner does but luckily we’ve come back to I think where we need to be where our sweet spot is and really where the money is for the business you said that you kind of regret it how could you have learned those lessons in another way yeah I mean someone could have told me
(57:12) but living it’s a lot different than someone telling you um no I mean like my personality style whether it’s good or bad like I don’t ever really regret much of anything um outside of like if I’m a dick to my wife or something like they’re obviously scenarios where I really do mess up that I regret but business decisions where at the moment you have all the information you can get and you make the wrong call like so be it move on I don’t have time to sit here and dwell I’m gonna learn from every single one of
(57:42) those mistakes and it’s going to pay off later um that was my thought process I remember talking my dad before I raise money and I’m like this is a big ass decision like there’s no turning back after you give someone a percentage of your company on paper like it’s over like that’s it um and the deciding factor was one like I’m not good I’m not gonna worry right now about regretting it because even if it goes sour I’m not the person that regrets things I will probably learn more meet more people
(58:14) um doing this than I ever would have gotten at any business school you know in any other path and that’s I always want to have kind of that next challenge that you know put myself in a new environment to learn new things you know and right now the owner of the Dodgers and Lakers sits on our board like would I ever have met that guy run and get 10 000 fans like no no um it’s like the the types of people we get to to meet and the things I get to learn um it’s all worth it so no I don’t I don’t regret any of those things it’s a
(58:52) good you know they’ll help me make better decisions later on but we need we also needed those things to happen back then like our business model the ad campaign that we could dump Millions into those are the people it got and so we had to deal with what we had and if it meant pivoting a little bit yeah it probably made some folks that I wish we wouldn’t have pissed off pissed off because we weren’t really building things for them and it probably cost us some of those folks but it also got us a hell of a lot
(59:20) of other folks um it is what it is learn move on you know adjust well we are uh I think Cut From the Same Cloth on that front I I like to say that I’m good at learning from the stakes once I have personally made them a few times sometimes it is a few times unfortunately but yeah um well it’s awesome man I’ve got a bunch of other questions uh about your current build but we’ll take those offline I’m excited to keep watching Sam cart grow and excited to get you into Austin um where do you want to point people if
(59:53) they want to check things out I know we’ve dropped the names of the products but if you want to find out more about you personally or any of the softwares where do they go yes you can go to samcard.com if you’re someone doing 5K a month to 5 million a month um you know it if you’re selling definitely digital products Services coaching we are right up your alley even if you’re selling I mean I think our number one seller right now sells primarily physical products so we work really for anything but if you’re that
(1:00:21) kind of of business I mean you’re just straight up going to make more money using us than any other tool there’s nobody that focuses on how to drive your sales conversion or customer value more than we do um so samcard.com is there anybody interested in the kind of AI content creation space check out drop deck the new tool we just launched that is kind of an AI document designer uh it’s super cool and then if you’re in the beginning stages trying to figure all this stuff out like we did in the early days uh
(1:00:51) check out creatoru.com uh it’s a new platform we just released I take it Brian Moran thanks so much thanks for having me love it man love it I hope you enjoyed the episode as much as I enjoyed doing it I need your help there are three places you can find Beyond a million the podcast itself beyondthemillion.
(1:01:09) com which has some cool free resources including a free course and we finally launched the Beyond a million YouTube channel I would love it if you would go there and subscribe and if you don’t want to you still would probably enjoy seeing the visual content check it out youtube.com forward slash at Beyond a million [Music]