How To Start A Software Company

Jason Drohn:
All right. Hey, what’s up? This is Jason Drohn. Welcome to GSD Daily. This is episode number 43. I’m here with my new best friend, Mars. How are you doing, Mars?

Mars:
Hanging in, man. Hanging in.

Jason Drohn:
Nice. So first of all, nice setup.

Mars:
I got this stuff from my fiance actually, but thanks. This is in her apartment right now where I’m in.

Jason Drohn:
Nice. So what we’re going to talk about today is… Just to kind of throw it out here. So we’re going to talk about how to start a software company. So the first 10 minutes or so, I’m going to kick through this idea of software-as-a-service, how to start a software company, MVPs, and then I’m going to show as a little simple wireframe of how I got started.

Mars is going to break into all of the crazy shit he’s doing. We just started talking about how to start a software company just before this and we’re like, “Shit. We should just go.”

Mars:
He used to back this up. He’s like we were in the middle of talking about what we’re going to talk about. Then he goes, “I’m just going to go.” So here they are, dropped in.

Jason Drohn:
I think we should probably just pre-frame this a little bit. So the software is something that I started five years ago. When did you start a software company for the first time?

Mars:
Depending upon how you look at it, probably about eight or nine years. But before that, I was sort of dabbling with it. But heavy like eight or nine years.

Jason Drohn:
Okay. In our estimations for how to start a software company, and this is kind of what we’re talking about like on Mars and my estimations, the software is the easiest thing to sell because you’re selling access. You’re not necessarily selling like an info product to dream or a pie in the sky kind of thing.

You’re building something cool to then sell and you’re making it available to everybody for a small monthly retainer, typically. But when you talk about software to other people, as Mars said, their eyes kind of glaze over. They’re like well it’s kind of this weird like voodoo dark or mystic bullshit like how to start a software company than being able to sell it.

Jason Drohn:
I can kind of relate because when I first had the idea to start a software company, I came from the info product space, and software was… I mean, it’s like, “Well, no credit card free trials? How the hell are you going to make money?” So it’s just different. Then you kind of research how these big companies start a software company and get into selling software and it’s like you can’t follow their business model because they have venture capital and everything else to burn.

Mars:
Funding.

Jason Drohn:
Right. It’s an evolved business model. It just is in general. So I want to just kind of kick through some slides here real quick. And then I just want to kind of bring everybody to the same place and then we’re just going to we’re going to get rocking. All right. First of all, when you start a software company… If you don’t know what SaaS software is, it is software-as-a-service.

There are all kinds of offshoots now, banking as a service and all sorts of stuff. But SaaS is like kind of the genre that we’re talking about. It’s a cloud-based hosted software. We have created six SaaS tools over the years and it’s designed to solve one problem quickly or at least that’s kind of the first thing it does. Mars, when you start a software company, you’re building something that solves one thing, right?.

Mars:
Always. It took me a while to figure that out that just make it solve one thing and do not overcomplicate it.

Jason Drohn:
Right. Let’s see. MVP products. So MVP stands for minimum viable product and it does one thing simply efficiently. It solves one problem and that one problem is it should be something that thousands to millions of people will pay for the problem to be solved.

We’re streaming out of a piece of software called StreamYard right now. It does one thing well which is its streaming software. It gives you access to different social networks. Those are one thing well. It’s 49 bucks a month and there are thousands of people who pay for it.

The MVP product is something that can and should be sold but will probably go through a beta test with a few users when you start a software company. Now some of the positives of software that you get monthly revenue, users pay for access.

The software works reliably every time as long as it’s coded well. So if it’s coded well, then it consistently works, or it’s consistently broken. You are not the deliverable like other info products. The software is deliverable. From a negative standpoint, it’s expensive if you’re not a programmer. Mars and I both paid shit loads of money to have programmers do shit that didn’t work.

Mars:
That’s been the official measurement, by the way, a shitload. Like multiple shitloads of money.

Jason Drohn:
This is why I like him. So, to start a software company and elegantly designing an MVP product can be challenging and the cost of acquiring new customers is oftentimes higher, especially if you’re doing a 14-day free trial.

Of course, it can be hard, because you’re going to be paying 20, 30, 50, 60 bucks per new user and you’re getting paid nothing for that. So that’s one of the reasons funding comes in.

Now, the build process, and this is kind of where Mars and I are going to jump in his pool is the wireframing piece. So what you want to start a software company, you want to kind of set up the screens and figure out the logic and figure out how the screens are going to map into each other.

You as the product owner, the business owner, the SaaS platform owner should take the time to develop these screens including all the buttons, the text, the design elements, and all that stuff.

Then when you’re happy with that you send it to the developer and say, “This is what I want to be done to make it all work.” It’s very like 37signals Basecamp methodology but it works well, and it makes it crystal clear how it all needs to work.

What you’re seeing is the first four wireframes for our software, which was Scriptly. So this is the home page and it’s like campaign one, campaign two, campaign three, edit preview dashboard, or edit preview download.

Then you can pick some different email autoresponder sequences and you can still see this. For any of our Scriptly access members, you still see this dashboard in there. Then different form types and then the download box. So this is as simple as really like start a software company it needs to be. Now, I’m going to over to our little combo. So what do you think, Mars about the software?

Mars:
One thing that you just demonstrated there that I hope anybody who’s checking this out will pick up on is how uncomplimentary developers need to be, meaning you don’t need to be any kind of developer or anything like that.

What you have to do is think like how the heck the user is going to think and then gear everything towards what’s the result for the user. I do try to keep it to one result and maybe two or three secondary related results. I’m always thinking what’s the result that they’re getting at?

I hadn’t seen your software before. I heard of it though and I never actually saw it. I’m like that is perfect because I get just from even looking at your mockup before the designers did it like what this thing does. It’s awesome.

Jason Drohn:
Thanks. So the first piece of software we built was time slots. That was my first move to start a software company. I literally logged into Photoshop and I just put a box up on the screen and said… I put my logo there and then like the header bar and then what I needed in.

When I was looking for developers for that thing, I called… So I had three… Was it two stateside? One UK-based SaaS company and then I ended up hiring a developer off of Upwork.

In researching how to start a software company, everybody said, they were like, “Well, it’s going to be 45, 50, $60,000 to build this thing. I sent them my little Photoshop drawings and they’re like, “Well, you’re going to go through the build team then you’re going to go through the UI team, then you’re going to go to the implementation team.”

I was like, “I don’t want teams. What I want is one freaking developer who knows what they’re doing. That’s all I want, one person. I don’t want to move the teams. I don’t need any project, whatever. Just one person.”

Mars:
It’s funny. I went through this entire process that you’re describing and I haven’t talked to anybody else about this. The only people I know that start a software company, the first guy that I work with, actually Mike Koenigs is the one that actually turned me on to this and then I start with his teams and I realized, “Wait a minute. I could do this.” But he had a big team and I was like, “Man,” and it was like a lot of money per month to keep them on and all that stuff.

But then I realized like what you’re saying, I just need one guy. One guy who can take what’s in my brain or it could be a gal if you want. It’s a gal. Then take what’s in my brain.

Either I draft it up in Photoshop, the same way as you, and then holy crap, the next day sometimes it’s like done, or maybe two days later you’re like, “Crap, that wasn’t that expensive or time-consuming. Holy smokes.” Then you got to market it which is what I’m good at.

Jason Drohn:
Right. Scripting, I think in the process of how to start a software company, I’ve spent about seven grand before we started selling it. The first time we sold I made 12.

Mars:
That’s pretty typical if you do a decent job. That’s like…

Jason Drohn:
And I think it relies on having that very simple singular focus. That MVP product solves one thing does that one thing well. I think we had like seven email sequences in there when we first started selling it.

Mars:
That’s awesome.

Jason Drohn:
Yeah. Now, we have, I think it was 48 or 49. Something like that. So do you want to start kicking through your screen? Do you want to start sharing stuff?

Mars:
Yeah. Sure. I don’t want to overcomplicate things because like… I started talking about this and then you went, “Go, go time.” So here I go.

Jason Drohn:
Good.

Mars:
Anybody who’s listening who wants to start a software company, I want them to realize some people are there already. But I wanted to show pretty simple something that’s in the good process. Something that I already built that drives a lot of my leads and then kind of how I map it out first before I go into Photoshop and do what you did, which is how everything connects.

This is a semi-complex but not super complex map. But basically, it’s just like where do things on the page link to and where those things then link to. I got a screen to share, right?

Jason Drohn:
Yup.

Mars:
So let me do that because if I don’t people won’t be able to see my screen. So let’s see, screen sharing now. Let me know when I’m living in Houston. All right. There we go.

Jason Drohn:
There it is. All right. There we go.

Mars:
When I learned how to start a software company, this first one is this particular branding version is my fiance’s. You can see her little icon there at the top. But I have a couple of other versions that are the same thing. I put them in a different market with different partners and stuff.

One of the times when I go in and I work with people, I’ll do like a white label version for them. I’ve made quite a good chunk to go off in that too where I white label my stuff. Most of them are conversation, but there are all kinds of ways to monitor it right. This one here for her business, she’s a blogger and likes social media and online business coach.

People are struggling with a certain thing and a lot of times people aren’t responding to their posts and stuff like that. That’s a thing. For instance, I’m not going to go too deep with it, but let’s say, this is a great headline. Then I’ll scan it.

This one scans based on a Word database tested by humans. So rather than just sort of randomly. So this is sucky. Right now it’ll give me synonyms and then tell me which ones are better to use in there.

Jason Drohn:
No way.

Mars:
Yeah. Let’s try extraordinary. Let’s try extraordinary. And then you can compare… I don’t want to go too much into it, but this is an extraordinary headline. If I test that, it should go up because that was a slightly higher thing. So that went up to 5.2.

Now, you can change all kinds of things in it, and then it does all kinds of other junk which I don’t want to go into, but you can store up all your headlines and then compare and save them. You can scan for emails versus email subject lines versus blog headlines versus Facebook ad post headlines because there are different rules for all those things you can’t use certain characters in them.

If you use certain words it makes them bad because Facebook doesn’t like certain things. So the database is checking against the specifics for that particular medium. If I change it right now to let’s say… Right now it’s probably a blog post title.

Well, let’s say I change it to a Facebook ad line. It’ll scan differently for Facebook than it does for… Facebook doesn’t like parts of that. It’ll tell you why it doesn’t like it so you can improve. I don’t want to go in too deep. I just want to-

Jason Drohn:
This is so badass. This is fucking awesome.

Mars:
Before I made up my mind to start a software company, I used to do this by hand, dude where I would go through and look at my copywriter’s stuff. I didn’t know why I wasn’t liking things or why I was liking things, because if you’re talking to a female audience for some male audience and this thing does scan female versus male and how people like certain words.

Like for instance just one word, the word gun, okay? Women hate that word and dudes don’t hate that word. Now, as copywriters, we kind of intuitively know that. But if you say I’m scanning this for women versus I’m scanning this for men or older people versus younger people or high education versus low education, it comes back with different numbers.

But the point of it was, actually the hook line, I call that the hook line, that headline versus subject line, versus add a line or whatever, but that opening line if that doesn’t catch them, we all know they’re not going to read the rest of it. So that’s really important like working with a bunch of copywriters and trying different people out and also working with designers and staff who tend to throw things up without you realizing that they even did it.

I needed something for them to go, okay, this sucks versus this is awesome or at least this sucks versus this is maybe possibly okay. If I have a process, I’m like, “How do I automate this, and then how do I sell it, and then get people the result?” Because I am a service provider at heart, right?

Jason Drohn:
Yeah.

Mars:
And this is the thing when you start a software company. Now, that’s an important distinction because a lot of us are service providers and how the heck do you scale yourself. How do I take my knowledge and how do I do it in a way that’s going to sell a lot which software sells better, in my experience than info products.

Anyway, my point is that’s an example of a finished product versus this which is one that I’m working on right now, which is my video testimonial capture tool. The idea of it is it helps people create so that you don’t have to ask people for testimonials.

A lot of people like it and the problem is in all my years of like… We’ve broken a lot of records and I was an ad agency guy before I was in online and info-marketing and stuff. The only thing that I’ve ever really done super well, in my opinion, is like… When I don’t understand how a product works… Like if somebody brings me a lady’s shaver.

I remember very specifically working with Gillette, they brought this new shaver that they were trying to do and it’s supposed to be for dudes, first of all, the thing that they wanted to do, and at the end of it, I was like, “All right, you need to make that think pink. Go back to the molds and make it pink because there’s too much competition in your marketplace. Let’s just turn it into a lady razor.”

We did that. And then what we did was we actually had people use it and then I got feedback from the people who used it about what they liked about it, which was different than what the client thought that they liked. I talked to the people who used it which is your social proof, your testimonials, right?

Jason Drohn:
Yeah.

Mars:
Case studies and so forth. So the only thing I’ve think I’ve done well other than putting together pretty stuff like I like visually beautiful things and things that sound well is understanding what the heck the end-user is feeling, like about it and then leveraging that proof, their feeling basically to get other people to go, “Hey, that person is just like me and they’re getting the result that I want.” So I want it, right?

Jason Drohn:
Right.

Mars:
The current version of it, and I have a running version of this it’s called Proof Factory. And the only reason why I made it was because I have the best test video testimonials on Earth. It’s Bob Proctor, Tony Robbins. It is all kinds of people that I’ve worked with that are like this dude is amazing.

Also, it is easy for me to sell myself and they’re all on video saying it and like I didn’t coach them, but my girlfriend, she’s sucks, the dude at getting testimonials.

She’s gotten so many people results from ground zero up to six and seven figures way more than me. I don’t even understand how to take it because I’m impatient. I don’t have time for them to figure out how to write a headline or how these kinds of things she does.

She worked with somebody for a year or two years who are to be hopeless and we’ll never find the path towards a successful one. She’ll work with them and she’ll work with them indefinitely and be like get them to the point of making money and no longer happen to be in a cubicle, et cetera.

But the thing is she doesn’t collect testimonials and I’m like you got to get testimonials. She’s like, “I feel awkward. I don’t want to ask people.” So basically I built her the sloppy original version. I said just send this link out and I had the developers like crank a video capture thing. It asked them a series of questions versus what some of the other video testimonial gatherers do where it’s the story of transformation.

Before I was working with Michelle, blah, blah, blah. Since working with Michelle, I got results XYZ and then my favorite thing about Michelle is blah, blah, blah. So basically ask some a few questions instead of just, “Hey, record how you feel about this thing.” The way that this is set up, I don’t want to go into it too much, but essentially when this person is done, there are different ones for different…

Jason Drohn:
Like little recipes.

Mars:
Yeah, yeah. So the template is there so that the actual… To start a software company, I went from scratch though because I haven’t even have built those parts off. It basically sends people a form like this and they capture their video here and then they just tell you what their profession is.

I have it set up so that I get the important stuff on the front side because sometimes they’ll go all the way through the process. That’s another problem, that boasts, and so tell us, and those kinds of things. It just captures one video, which is great, but it doesn’t tell the transformation story which is what marketers we know is the key to that.

Jason Drohn:
Yeah, totally.

Mars:
So anyway, this here is in the process right now versus being done. All I want to do is explain kind of in addition to how it works is because of whatever because I’m not here to sell it, but the idea is she had a problem that she was coming. I didn’t go, “Ooh, I’m going to make this, and then it’s going to sell a whole ton of stuff.”

I have so much of that original Proof Factory now, dude. It’s like I didn’t even put a sales page up and people were coming to look for it, asking me how they could get it. Then I put a crappy sales page up and then I just have so many… I think I have 3,000 users right now of just the old version.

I’m like I should probably do something serious about this. And because I have funding, my funding from the original MVP which is the minimum viable product, since I have people from that, the users that are paying me monthly I can afford to pay my designers, my developers, and myself to work on this, make it look really good, make the user experience good with the original version but that MVP work just fine, dude.

I mean, people use it. They send it out to their email list. Agora publishing has used it, Rich Schefren has used it, Bob Proctor has used it, all these people have used it, and I just want to clean it up. But I’m now self-funded because the thing sold itself.

After all, it solves that one problem which is either I have to ask so many people for proof or I don’t want to ask anybody for proof because I’m scared and I’m nervous depending upon your situation, and your thing solves that problem. And it also makes like a little section for your sales pages and stuff where the videos are all there and you can arrange.

Jason Drohn:
So cool.

Mars:
I wanted to talk through how I do it, which part of me was like, “Okay. I’ll just show the simple kind of like one or two wireframes.” You did that part because you don’t want to smack people in the face with overwhelm. But I mean, this is about as complicated as it gets. What you showed in this are about as complicated as it gets, which is the logs. Let zoom it a little bit.

Jason Drohn:
Well, I tell people whenever I have a conversation about software like you have to think hard about this for like an hour like literally. This, what you’re seeing on the screen is you thinking hard. It’s no different than creating products. It’s no different than writing your table.

Mars:
It took me four hours. It didn’t take that long.

Jason Drohn:
Right. Yeah. You just have to concentrate and focus on it for a brief amount of time and then the rest of the work on the screens flows out of this document. You can just fucking show up and do something and as long as you have this map in front of you then it will guide you the rest of the way. This is the hard part.

Mars:
Yup, that’s a good point. You’re right. This is the toughest part of the whole thing because selling it is pretty easy for me. If you got a decent thing that solves a single problem and that it really can be basic and simple, but if you got something that solves a problem and you put it in front of people and they can see that it’s…

The info product… I always say that the so software and widgets like the templates and the checklist and then the software, they’re the things that make the info product easy to digest because an info product can be a little scary. It’s like, man, I’m going to have to watch how many videos. I’m going to have to read how many articles or how many pieces of written material.

There’s this written material that goes with this, dude. There is like how to do a good job of collecting your proof and what social proof is and what the best kind is. But this thing automates 90% of that stuff for you so you don’t have to…

It relieves that much of the workload. So in a nutshell though because I don’t want to spend too much time on this because I like to just riff on why do it and what the psychology behind it is. But basically, I sit down and I go, “Okay. What stuff does it need to do? What are my main pages over here towards the left, screen left? And then what do the things that they link to?

Like for instance, this one has a main dashboard when they show up and then it has the thing that you just saw which is the template. Then it has the different kinds of things that you can kind of do in there and then it links to these other pages. Once my developers understand that they can look at it and go, “Okay. I see how this works.” Because there, that’s another thing we should hit which is how do you find developers that can [crosstalk 00:22:34].

Jason Drohn:
Yeah. I figured we can do that next.

Mars:
Yeah, yeah exactly. But once I give this to my lead dev, he just basically at this point was… Because we have rapport especially, but even when I first started working with him, he could take it and build something up and go, “How’s this?” I’m going to stop the screen share. On a serious level, dude, I would go like, holy crap, how did you build all that. I didn’t even explain any that to you, right?

Jason Drohn:
Right.

Mars:
You can go on and the math makes sense, right? And I’m like, “Wow.” So he would get it like I don’t want to say 90%, but it would be a solid 60 to 70% of the way there just because I gave him a sketch of how things flow and I was like this is way easier than I thought.

It was way simpler than I thought. It’s hard work, but it’s simple. It is not complex. It’s like this is way simpler than I thought it was going to be to just do this and then all of a sudden. My guys are fast, dude. I don’t know how fast your guys are, but I always think of something.

To start a software company, the final product takes a while to refine, but the [inaudible 00:23:32] that thing is knocked out in a day or two days or three days sometimes and I got something I can sell. And as long as I’m clear with people, “Hey, this is the beta version,” and I never mislead people, that’s a key thing. I say, “I just want to get this out.”

So really you are going to get first access to this, but here’s what it does and then I do a little screen demo and they’re like, “Holy crap. I needed that problem solved. Here’s my credit card.” They’re levitating credit cards out of their pockets through telepathy or telekinesis and it’s floating into the computer, and it’s like they’re sending me money.

Jason Drohn:
Nice. So how do you establish pricing for your software? What is your methodology there?

Mars:
Ironically, I have a software tool that helps me price things based on the degree of paying from the problem-solving, the competition in the marketplace. That’s the next thing it was called. It’s called Offer Simple where it helps you understand how to price things because that’s the thing that as marketers, we all know how to price things sort of intuitively.

Jason Drohn:
But there isn’t a calculator that says X, they’re Y.

Mars:
There will be because I can’t stand the fact that there isn’t. Because I’ve worked in so many different industries and so many different types of products, fitness and fitness coaching, and all these different things. Relationship stuff, pickup artist. There are all kinds of things.

There are commonalities between all those spaces in terms of what your front end is and what the ranges are for that and what the threshold is. And then it’s industry-specific. My point with it is to answer your question more directly, I usually will lead with…

On an MVP, I’ll make it like dirt cheap like under 50 bucks always and usually under 20 bucks as long as I’m not going to eat my lunch on the server costs and stuff like that.

To start a software company, I want to get people using it for five or six months so that I can figure out how to have to make it better. I know how to make go from Proof Factory to Proof Simple, the new version because I’ve had users go, “This part is confusing,” or I’ve had them go, XYZ, ABC.” And I’m like, “Oh, I didn’t even think of that. That’s a really good idea. Thank you for helping me develop my software.” Usually, the person that does that, dude, on a serious level, I just give them a free account.

Jason Drohn:
Yeah, totally.

Mars:
Because I’m going to make an extra 50 or 100K from that little piece of advice that they gave me. That’s how you start a software company. It’s like I kind of owe them karmically. So I price usually, initial MVP is… I’m just going to throw out actual numbers, it’s not always this, but like sub 50 for sure. And usually sub 50 per month.

Then a lot of times I’ll do the free trial thing. It depends on the thing. I tend to not like to do the free trial as much. I’ll give like a teaser version to get them using it. My whole goal is, however, I got to do it and this is key. This is a writer downer. I would try and deliver three nuggets per thing that I do. This is nugget number one. There should be a little nugget, nugget alert.

Jason Drohn:
You have that board over there.

Mars:
Yeah. And I do actually, thanks.

Jason Drohn:
There it is.

Mars:
This is a nugget alert, all right? My whole thing is whatever I do, I used to is to get people into the chute while delivering them the result and I don’t hold back on the result and go, “You can’t have this.” But I want whatever they do, and Google is the best at this. You can’t get rid of your Gmail account.

You can’t get rid of your Google Docs, your Google Docs account because you got stuff stored in there. So I could care less about if I don’t make money right off the rail so much. Sometimes I’ll justify that as free. I just never want to undervalue my stuff.

But like low, the low price gets them in the chute. Have something valuable to them at that point. I either video testimonials all living inside of my servers and stuff. I do make it so that they can download it if they want, but it’s never going to be as easy to use and as automatically digestible and easy to the result as it is from inside my system.

After that, it isn’t hard to get somebody, “Hey, you want to do the monthly? It’s 29,” or whatever it is, 27 bucks a month or 47 bucks a month, whatever it is. Because they’re like, “Well, shit. I already got the result. I didn’t have any video testimonials before now I have five,” whatever their thing is.

All my stuff is in this account. So that sort of under 50 down to free, but make it sticky. That’s nugget number one. If you make it sticky, whatever your thing is and you own the thing that they… Well, I don’t want to say you own it because they own it, but you hold access to it. It isn’t hard to get somebody to go like, “Yeah. What the heck. I’ll do this.”

Jason Drohn:
Right, right. Totally.

Mars:
Way easy doing info products.

Jason Drohn:
Well, in talking about how to start a software company, one of the things that you said was interesting which was you get some folks in and then you maybe six months down the road after they’ve been in for six months, five or six months then you have enough value.

They’ve given you enough information that you can then flip into like a bigger product or whatever. After working with a lot of clients on a lot of different things, like you being in this game for a long time understand that the payoff sometimes is in six months, a year, two years, three years. Not necessarily in six weeks, eight weeks, 12 weeks.

Mars:
Yeah. However, though honestly is I always ask myself, and this defines whether or not I focus on something or not because I used to just build whatever I wanted to and then I ended up in that spot where I wasn’t getting paid until later, but I usually did get paid later for it.

But that’s not necessary because the only question you have to ask yourself, and this is nugget number two is how valuable is this right now? Is this solving an immediate pain for them so they can make a little bit of money right now to develop this better?

I used to be very money guilt one of those people who’s very money guilt sort of like, “Oh, man. I feel bad, I just want to help people.” Because I do genuinely like helping people, but then I realize it’s like a lifeguard. You can’t help people.

When you think about how to start a software company, you can’t save people from drowning if you are drowning because you aren’t worried about whether or not you stay alive or not. So I did go into the thing of realizing, “Okay. I honestly can’t develop this past the MVP into the beta version and the gamma version and stuff unless if I can figure out how to charge something for it so I’m not going upside down on it.”

I generally say do it and sometimes I’d BS myself. I’m not going to lie. But most of the time I go would somebody pay for this right now? A lot of it is just talking to people. When I tell people about Proof Factory, the current version, and especially now that I’m telling them about Proof Simple, they’re like, “You got what?” Agora, the financier.

They have all kinds of text testimonials, but it’s like when I told them that I have a thing and you think, “Well, it’s Agora. They’re a freaking billion-dollar company.” No. When I sat down and I talked with them I said, “I got a thing. I just set, blast it out to all your different lists and stuff and collect proof on all those.” They’re like, “What?”

They were like, “How much do we have to pay?” That’s how you start a software company!

They started to want to write me a check. I’m like, “Dude, this is 50 bucks a month, man. I’ll give you the enterprise version.” But if somebody gets the lights up like that when you’re talking to them about it or whatever, it’s like okay, that’s going to sell, therefore let me charge something for this.

Jason Drohn:
Right. In the meantime, let me go tell my developers they need to build an enterprise level.

Mars:
Right, exactly. I did that. I was like I didn’t think of that. There are companies out there that need it.

Jason Drohn:
That’s funny. Finding developers, so what has been some of your… How do you find talent?

Mars:
Okay. So I’m going to give the kind of simple version because if I do a thing that’s based on my talent that I was born with, sometimes you can’t explain how you’re doing your thing. Most of the things that I have are skills. There’s the stuff that I learned along the way because well, dammit, I better learn it, or else I’m doomed, or somebody that I care about is going to get hurt or whatever.

Noticing talent is a… It’s the only talent I have. I can size somebody up and look at them and go, “Okay, this person can sing.” They’ll ask me, “How did you know that? We didn’t even talk about that?” That’s because when we were talking about songs and stuff, your pupils dilated, your vocal tonality changed, et cetera, but from a systematic way of doing it, it’s not related to my talent.

The way that I start a software company from scratch. First of all, there are countries… And please chime in on any of this, because you know the same stuff that I know. There are countries out there, nation, states out there where the cost of living is so much less and all things development did not mean to be learned in college.

If you talk to any developers, they will tell you it’s counterintuitive to learn in college because you’re usually three or five years behind what’s going on right now. After all, it’s fast. It’s like marketing. The stuff that you learn from a marketing textbook is usually a decade old. It doesn’t work anymore. So the same thing with development.

Everything that a developer needs to learn nowadays is learnable on the Big G, Google, right? So this is the person geeking it out on it and they’re not practicing all the time. It doesn’t hurt them to have some foundational like college, higher education. But usually, it’s just, will they geek out?

The thing that I do though past that and especially if I want to do it in a scalable way, no matter where I’m looking at, I don’t care if it’s US, Canada, Germany, Lithuania, Philippines, wherever is I test people. I have a developer test and here’s how I stack my test.

This is nugget number three and now we’re clear on mandate nugget, nugget number. So seriously write this one down because this is like a secret to everything. I test people when I run an ad to find people if they didn’t come through a referral and even if they came through a referral I still run through a similar process.

I have a process where people come in, they take a test and it’s kind of like the, what’s that test in Star Trek that Kirk cheated on? The something that’s a Japanese name. I can’t think of it, but he gamed the test so he could win. But the whole purpose of the test was to see how people handle failure. I can’t remember it but that test.

Kobayashi Maru, I think is what it’s called. I have that. So in other words, if I have 50 people all come in and apply for the gig, and I don’t mind paying somebody if they’re good at what they do. In my case, I know how to monetize it. So that’s not a problem.

I want somebody who’s going to do a good job. What I do is I give them a test that will take them depending upon whether it’s for video. Here we’re talking about developers. Developers, copywriters, whatever the thing is that I’m testing for.

They cannot pass it in the amount of time that I give them. It’s a three-part test that they cannot pass and what I want to see is how the heck do they handle not being able to finish it? So this is a three-part test.

You have exactly an hour to take this test. For developers, it’ll be like how good are they with PHP? How good are they with JavaScript and stuff like that? It just depends on what it is. Then there’s no way for them to pass it. It takes an hour and a half to finish that test by the best guy that I know and they only have an hour to get it done.

To start a software company, you get three types of people and I only hire one of them. There’s the type of person who goes… Well, there are four really because there are people who just don’t respond at all.

There are the people who, in terms of people who respond. This is a solid-gold team hiring nugget. Some people respond and they go, “Your test was no way to finish it, man. It’s BS and I’m glad I’m not working for you.” And I’m like, “Hasta la vista, baby. You’re out.” They gotta go.

Then there are the people who don’t finish the test, but they submit what they have and they go, “Couldn’t get it done. Sorry. The test was a little too hard for me. I guess I don’t make the grade.” Now and again depending on how they write that message to me, I’ll hire somebody.

The ones I’m looking for are the ones who go, and this will be one out of 30 people who will do this. But then I’m hiring that person and then my whole team pretty much all of them have been with me for a decade. Seven to 10 years.

They’ll come back and they’ll go, “Hey, sir. Sorry. I couldn’t finish the test. That third one was a little bit harder than I thought it was going to be and unfortunately I needed about another 10 or 15 minutes to get this done.

I’m submitting what I have now as per the instructions, but I’m going to finish the test anyway because I want to get it done.” Because they’re bought in it anyway because they’ve made it. So they then submit the thing to me and honestly even if the work is not perfect, I don’t care because the ethic is there, right?

Jason Drohn:
Right.

Mars:
That’s my system for how to find developers and start a software company. I don’t have to deal with them past them submitting the final version of that, whatever the test was. I do this with video guys like I said copywriters, developers, and so forth.

To me, other than where you source people at because I find people in Germany are the most expensive, but probably the best. I find that people in the Philippines sort of hit-or-miss. It depends. People over in the Indo area like in Pakistan and India and so forth, that’s sort of hit-or-miss.

For whatever reason, the way that they develop sometimes isn’t as organized and for whatever reason, I don’t know how they were educated or whatever. I tend to like the Baltics though because they operate slightly like Austrians and Germans however they’re thinking, but they’re cheaper.

They’re less expensive because their cost of living is less. So my team is all Latvia, Lithuania, mostly Lithuania, or for some Russians and stuff like that. But then where you source them is something. So I’m curious what your answer is to this. But then past that is like how you vet them, right?

Jason Drohn:
Right.

Mars:
So what’s your secret? Where do you find people are at and what’s your process for finding people, I mean, outside direct referrals and stuff.

Jason Drohn:
So I have a kind of a similar testing process early on, similar testing process, but I don’t make it so that they can’t complete. So I will have to incorporate that into everything.

Mars:
How gold, dude. How do we handle that not being able to do it?

Jason Drohn:
I have had developers for a while. So the first US-side developers were referrals for the most part. It was one referral that brings in a different referral, additional referrals. But as far as like kind of the core team who built all of like…

The original software was just like Upwork. Posting a job on Upwork, interviewing them, testing them then ultimately I hired two guys that I thought were good and then one of them ended up staying with me and then he started putting it together where he was. Now he’s the leader of a team in… It works out pretty well that way, and everything just kind of flows through him so he’s a project manager.

Mars:
Where do you get really good developers? It’s different for different types of work because I found like web development, you can find people. In the Philippines, it’s not that hard anymore. It used to be a little bit tougher. But where do you find that for deep coding? I’m picking your brain right now. So this is not all just for you because I’m looking for something particular, but where do you find that you get the best sort of higher more complex development tool competent type people? Is there a place where you found it works?

Jason Drohn:
Utah.

Mars:
US-based. Right exactly. That’s great. Utah specifically, if you look down to the state.

Jason Drohn:
Yeah, US-based. It depends. So we have a coding team in Pakistan and they’ve been with us forever. They’ve built a lot of stuff. They’ve done a lot of PHP stuff.

Mars:
Really good guys over there.

Jason Drohn:
Totally. So we started building access and access was built in React JavaScript and they didn’t know much. My original team doesn’t know much of React so they’re hiring a React guy now as of this morning to handle some of the recoding stuff because React was upgraded from a programming language. It’s where we coded in an older version. But in terms of kind of some of the more complex stuff like we found we’ve had really good luck in Utah.

In Utah, they have particular like districts, but I’ve never been to Utah so I have no idea. But from what I’m told, they have this space that’s kind of set aside called Silicon Slopes which there is a lot of badass programmers there.

Mars:
It’s the Mormon Silicon Valley. That’s basically what I’m picking up from that.

Jason Drohn:
Basically, yes.

Mars:
I’ve been to Salt Lake City quite a few times because I had a bunch of clients in different areas and stuff there a lot, but I didn’t know that about developers. That’s an interesting thing.

Jason Drohn:
Yeah. They have a lot of coder-developer boot camps. DevMountain is one of them. So it’s like a coding school. There are the coders who end up being instructors. There’s a lot of companies, a lot of startup companies in Utah now, a lot of tech startups. Although, it’ll be interesting to see how it plays out with the pandemic and how all of that. So I was just reading in Andreessen Horowitz’s blog post, the venture capitalist.

Mars:
Yeah.

Jason Drohn:
He was saying right now like it’s never a better time to start a software company. If you don’t need a lot of funding because there are only so many venture capitalists who are like actually funding right now, but talent hasn’t been cheaper in a long time because there are so many people out of work.

Mars:
That’s actually what I’m finding too in a bunch of different areas. It isn’t just in development.

Jason Drohn:
No, no, no. Yeah.

Mars:
It’s amazing. Everyone who’s gone like, “Oh god. The struggle we’re in.” I was thinking, dude, and this is a little sidebar, but I wrote this piece on my great-grandfather. He’s my great-great-grandfather, but my grandfather taught me how to paint like portraits. Oil portraits were my originals spur-like crafted business.

He would sneak little things in about stuff that had happened to him when he was younger. He went through World War I like 70 million people died. World War II, the Korean War, Vietnam, Spanish flu, all these things. It’s like a billion people total through all those things and right now so many of my friends are like, “Man, this is so…” It’s like, “Dude, get…”

I mean, look, anybody dies and it’s a bad thing. Anybody gets sick and it’s not a good thing, but right now for my business, I mean like it’s awesome, dude to be honest with you. And that isn’t pandering to people who are worried about…

I see a lot of people doing like, how to make money in the pandemics. It has nothing to do with it. I just find that talent and drive right now are like through the roof, dude. Through the roof, dude.

Jason Drohn:
Yeah. I think the drive is the big one. I mean, there’s a Tony Robbins’ quote that fear and excitement are the same emotion under a different context.

Mars:
Oh, yeah, yeah. That’s great.

Jason Drohn:
When this all started, for me, there was just kind of an overwhelming feeling of excitement because the world is changing literally. But under a different context, a different pretense than that same feeling is fear. Which way are you going to use it? Are you going to use it to fuel your drive or are you going to use it to sit in front of the couch and watch Netflix?

Mars:
Right, because some people try and numb it, right? But here’s the thing that I’ve learned in terms of… And you already know this, but like this is a study that I read. So one of the things, that first tool that I showed, that headline tool, checks for three variables.

It checks for negativity or positivity for each word. It checks for a feeling of empowerment or disempowerment for each word and it also checks for excitement level for each word.

A word can be very negative like the word gun is a negative word overall to most of society. Rifle, gun, handgun, all those words are like that. It’s very interesting to see how those sorts. But the thing is for excitement level, how excited it makes somebody feel.

The word gun is one of the hot words, one of the top 20 hot words as you can imagine. But the point of it is, the study that I read which is actually what got me into that list that I built that to a law firm is that the single greatest number of people buy when their excitement level is elevated.

It doesn’t matter if it’s negative or positive. You could call that fear or positive excitement, enthusiasm. Both of them are forms of excitement. So fear versus enthusiasm. If you want to motivate somebody or get them to take any kind of action, the main thing you got to get them to do is get excited which is why sometimes you look at people and you go, “What the heck is this guy selling? He doesn’t know what he’s talking about. The thing isn’t even all that great, but he’s super excited on camera.”

I’ll tell you right now those guys, they sell stuff because they understand one exciting core thing is the key to motivation and right now people are… I take excitement as a sort of the neutral version of enthusiasm versus fear.

People are excited. They’re either enthused because they’re like, “Holy crap, I finally have an excuse to sort of build my business or [inaudible 00:45:02] thing over here.” Or they’re afraid. But either way, the one thing it does is the hive is swarming and right now finding developers, finding video guys, finding customers, finding clients.

I mean I don’t want to jinx myself. I don’t have any wood to knock on. [inaudible 00:45:16] Anyway, the level of excitement right now is through the roof and anybody who understands that especially when it comes to software sort of answering that excitement whether it’s fear or enthusiasm is like you’re set, dude. You are set.

Jason Drohn:
I think we got one more thing to cover. So we talked about building software, we talked about developers, we talked about pricing. The one thing left is how do you find the traffic? Are there some ways kind of some tried-and-true Mars approved to traffic generation strategies?

Mars:
I got three.

Jason Drohn:
Okay.

Mars:
And they’re the basics. They’re the basics, but those are my three versions. So number one is like for instance a headline tool, the way Michelle uses it because she’s the content marketer. She does not like selling. She’s in the blogosphere. So she goes out and she just shares it in different groups and does a post about how to write…

She’s got a thing called Lingo Dynamics which is basically about the different ways people perceive words and how they use them, and the word charge of things. So she’ll anchor to that sometimes. Sometimes people are like, “I’m not getting any results and social.” People come to that from the places where she’s posted her content and that being the link that she associates with the post.

So from a free traffic standpoint, posting on Facebook to your groups and even on your profile and stuff like that, super easy if you got a piece of software where there’s a free level that they can play around with, okay?

Jason Drohn:
Good.

Mars:
That’s number one. Number two, obviously like Facebook ads and so forth. No brainer. If I say, “Hey, are your ads not converting?” I’m very specific. I don’t just say to you, “Your headlines suck.” That’s a problem. Hey, your ad is not converting. Here’s probably why your ad line probably is doing these things. Here’s a free tool. Come check it out. The tool itself, the free version is optimized. You get them to opt-in.

Then the last one for me is partner stuff. Because I’m pretty well-connected and this is something everybody can do, but everybody has some level of connection to partners. It’s just a matter of how high the influence is, i.e. when I was doing a project with Agora with Rich Schefren and Agora Financial recently, and then I showed them Proof Factory.

Joe Schriefer, the guy who runs Agora Financial was like, “Dude, I need that now. I need it in all my divisions, et cetera.” While we were doing the campaign itself, I mean I as a service provider, my team came in there, did the live stream, and then it was like Russell Brunson, Ryan Deiss, Katrina Ruth, all the heavy hitters because Rich knows them. And Rich knows me. I am an opportunist.

Rich Schefren is a really good friend of mine so I was like, “Dude, how about this. You don’t have any tools with your newsletter. So what about if we give a hook line dynamic away as a thing, as like a kicker to push people off the fence. Hey, you’re talking about getting this. I also want to give you this cool thing so you can synthesize all this information.”

So basically every hour, because it was a 24-hour broadcast, every hour a little commercial with me ran that was like, “Hey, get this thing.” And I always just put like for my nose down or my goatee. This is rare for me to be in a video like this.

I just started doing it. I started the same as you because it’s like I’m compelled to do this at this point. I’m a behind-the-scenes guy, but my point is free traffic through content, link to something for free that gets up people the result, and then have it optimized so that you can get them in the chute.

Paid traffic, very specific target. Not just headlines but specific ad lines, email subject lines. I’m targeting different audiences with a very particular result from that tool, and then partner stuff which is just like you and I are talking about. Not that I don’t know what your audience is like, but at some point like, “Hey, dude. Let’s do a promotional thing.” That kind of thing comes up all the time because the tools are good.

Jason Drohn:
Yeah, totally.

Mars:
So those are my three general sorts of traffic approaches.

Jason Drohn:
Dude, I love it. Facebook ads are paid. You have great free group stuff. For the people who want a little bit kind of a grassroots strategy, a little bit of organic. Then you have the partner thing which is always good, leveraging partners and leveraging relationships. It takes a little bit of time to build up those partners and relationships. But I’ll tell you right now because everybody is locked inside, everybody is craving connection.

Mars:
I’m six foot five, dude. This is the thing I noticed. Michelle and I talk about this all the time. If a woman is well-endowed… This is going to be horrible and I hope I don’t offend anybody in your audience, but let’s be honest. A lot of times the reason why they’re not necessarily… A dude is a buff, it could be, either way, they don’t have to learn how to talk.

People just let them in the club. They give them a job. They do whatever. We all know that that’s a reality. It’s the same thing when you’re six foot five. When I’m in person with somebody, my presence, just because of my size, honestly it’s compelling and profound.

But virtually, it’s tough for me dude, because it doesn’t translate… When they meet me in person, they go, “Dude, you’re a freaking giant.” Tony Robbins is the only person… There’s one other dude that’s bigger than me in the space in which I travel.

In-person, it’s not that hard for me so I’d be making connections, but online, it’s been tough because I’m like a dumb buff guy in away. I don’t know how to do the virtual thing. Michelle is great at it. She’s like five… I think not even five feet. If I say that, she’s going to get mad at me, but she’s five foot according to her.

She’s from Alaska where there were no connections, no networking parties, or anything. She is like a master of doing stuff online. But even I, even sucky at doing virtually not in-person stuff, right now I am having the best time and I’m going, “Man, I should have been doing it this way the whole time.” Fun places and stuff like that. So that opportunity is through the roof right now.

Jason Drohn:
Yeah, definitely. Well, man. I am so excited. I think we need to figure out what we’re going to talk about next and just talk about that.

Mars:
I’ll tell you what, man. So when Dr. Daigle… Chris Daigle is a mutual friend of ours. He was like, “You need to follow this, dude.” I was like, “Okay, Daigle.” He’s telling me this so therefore I must. But what I’ve discovered just in interacting with you like in the few times, because we’re new friends, is like that I need to be doing something with this guy. So at any point that you want to do anything or you need anything from me, man, I’ll just come out and say it, just let me know because I always get a feeling when I should do something. I don’t care if it’s a year from now or tomorrow. It doesn’t matter.

Jason Drohn:
Certainly.

Mars:
At some point, dude, let’s do another thing because I [inaudible 00:51:54] that I could talk about. At some point, I want to interview you on our show. There are three very specific things I want to ask you about. I’m going to keep them kind of a mystery right now.

Even just in our few discussions so far, I’m like, “Man, he knows something about this thing that everybody else that I talked to think they understand.” And your way of synthesizing it is very similar to mine, only you have different information than me. What I mean by that is I’m fairly balanced between a sort of creative brain and a logical brain. I’m leaning towards the creative brain, but pretty close as compared to most people who are heavy one way or the other. And you’re the same way.

I find that for me anyways and my audience of people that type of brain resonates because I don’t want somebody who’s just delivering me the technical tactics and so forth. I just have a hard time with that, man.

But I also don’t want somebody who likes feathers and crystals like fluff. I’m not getting any meat potatoes out of it. My meal has to be balanced. So I’m hoping you and I do some cool stuff. I’ve enjoyed this interview.

Jason Drohn:
Yeah, I love it. I’m excited. Cool. So thank you, everybody, who watched us riff for 53 minutes. We’re going to do something else fun. I don’t know quite what it’s going to be, but we’re going to talk about making some money or something. I don’t know.

Mars:
Okay.

Jason Drohn:
All right. I’ll talk to you soon.