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EFP 162: SaaS Company Splitly Brings On An Investor

EFP 162: SaaS Company Splitly Brings On An Investor

Justin Cooke August 25, 2016

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We’ve been talking a lot lately (behind-the-scenes) about deal structures.

No, not the types of deals we usually negotiate between our clients. (Earnouts, seller retained equity, etc.) Instead, we’ve been talking about creative ways to package together strategic companies to provide more value to the market overall.

Today, we’re taking an inside look at an example of the types of deals that are going down recently.

Andrew Browne is a partner at Splitly, a SaaS business designed to help FBA business owners split-test their listing pages on Amazon.

We’re talking to him because him and his partner recently took on another partner/investor, and that new venture has doubled their business in less than 2 months.

I think you’ll get quite a bit out of this one if you’ve been considering these types of deal structures as well.

Check Out This Week’s Episode:

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Topics Discussed This Week:

Background on how Splitly was formed
Bringing On An Investor
Thoughts on partnerships and equity splits
How Does Splitly Work?
3-5 year plan with Splitly?

Mentions:

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“The less variance you have, the less data you need to find a winner.” – Andrew – Tweet This!

Your thoughts on deals structured like this? Anything interesting you’ve seen go down recently. Let us know in the comments!

-Transcript-
Justin:
Welcome to the empire podcast episode 162. There are plenty of advantages of selling your business outright. But sometimes the strategic advantages of bringing on a partner may be the better move. In this episode we sit down with [inaudible 00:00:12] from [inaudible 00:00:12] to discuss his FBA split testing software, how he found an investor and how he negotiated the deal. It’s a really in depth case study I think you’re going to dig it. You can find the show notes and all links discussed in this episode at empireflippers.com/splitly. Alright, let’s do this.

Speaker 2:
Sick of listening to entrepreneurial advice from guys with day jobs? Want to hear about the real successes and failures that come with building an online empire? You are not alone. From San Diego to Tokyo, New York to Bangkok, join thousands of entrepreneurs and investors who are prioritizing wealth and personal freedom over the oppression of an office cubical. Check out the empire podcast. And now your host Justin and Joe.

Justin:
So Joe, we’ve been thinking and talking a lot recently about how to structure deals. Most of our work with our buyers and sellers and our customers involve structuring buyout scenarios and trying to get the deal done, working out like creative financing solutions and getting these deals done between the buyers and sellers. But, there are other interesting business structures that we’ve been looking at and talking about as well. We’re going to get into a few of these briefly, but there have been a lot of things kind of brewing in the community for months, a lot of things going on with acquisitions, with people trying to kind of advance their company, make it bigger that I think are really interesting. We should probably start talking about them.

Joe:
Yeah, I mean, it’s interesting. Look, I love all cash deals and that’s great, but it’s blatantly obvious to me that as the price goes up, you have to get a little more creative with these types of deals and whether it’s something as simple as an earnout or some of these more advanced structures that you’re talking about, I think it just kind of has to be done.

Justin:
Yeah. So, let’s get a little more specific and we’re going to just cover this briefly. I think a lot of these could be discussed in more depth, but there are three kind of strategies that we’re looking at that are interesting. The first is kind of the own the race course acquisition strategy. Here’s what I mean by this. Let’s say that you’re taking the customer life cycle from the very beginning to the end. So, let’s say that there’s a larger company that says, look, I want to buy up a bunch of companies and I want to do it in a sort of channel, right? So, on the front end, you have new kind of site creators that are using tools like Long Tail Pro. So, let’s say that that’s your first acquisition. You by up Long Tail Pro, and then you’re kind of like looking at the middle entrepreneurs, what kind of like analytics tools they’re using, what kind of dashboards are they using and you buy up companies that are in that space. So, you now have both kind of like the very front end, the kind of the middle stage for those companies, [inaudible 00:02:50] kind of like the tail end of their life cycle which would be a company like Empire Flippers or a broker, right? Some place for them to actually sell off their business.

Justin:
So, you can actually own that entire channel of the entrepreneur’s kind of life cycle, from getting started and doing your keyword research to build out your site, all the way through the exit of the business and these kind of like larger companies are seeing this and saying look, why don’t we buy all of these individual companies, package them together and sell them off as a larger company?

Joe:
Yeah, I love this one. I like the idea of it, but I think executing on it is going to be the most difficult of the options that we’ve proposed here. It would be interesting to see if we have any examples during the interview if this is something that can actually happen.

Justin:
Yeah. So, the interview is more of the second strategy [inaudible 00:03:36] is the spoke wheel acquisition strategy. So, this would be an example where a larger company buys up a bunch of smaller companies that offer either supportive services or SaaS products, whatever, that are just supportive of the customers that are on the main business. So, example of this would be like lead pages, right? They recently acquired Drip and they’ve acquired some other smaller businesses. As they started to pick up the kind of the smaller companies that are supportive of kind of their overall goal, they’re kind of filling out the spokes to make the wheel. They remain the largest company of the group and they’re buying supportive companies kind of around themselves.

Joe:
Yeah, this one seems the easiest to me for sure because you don’t have to have the entire race course, you can just have products that are similar to yours or an addon to yours and something that you can wait for a business to become available on the market before you acquire it.

Justin:
Yeah, it requires some strategic advantage between the two companies, where you’re sharing customers and trade between one or the other. So, there’s definitely that, but you’re not so stuck where you have to look at each individual phase and have to own a business in that phase, right? You can kind of pick and choose the ones you want and if you don’t get good terms on one you’re not stuck missing a piece of the channel, right? You’re not stuck missing a piece of the race course.

Joe:
Yeah, exactly. That’s what I’d be worried about with the race course idea.

Justin:
So, in this interview, we’re actually talking to one of the smaller companies that was not fully purchased but at least invested in by the larger company. We’re going to get into that a bit. The third strategy I want to talk about that I’ve seen is interesting is the glomeration strategy. So, what this is is basically you have multiple companies, private companies that have aligned interests, right? Either … let’s say it’s a marketing agency and a design agency and they have similar, just maybe similar customers and they decide to kind of band together to go public. So, you have three, five, eight, twelve companies that are part of this, a glomeration. Maybe there’s one of them that kind of set it up, maybe they’re just kind of doing it together and they take the larger company public and the idea here is that it improves the valuation, right? Because they have better purchasing power, they have more interest in the market, it improves their valuation because they’re now public, right? So, their valuation’s going to improve. They’re no longer stuck to what like a small business buyer might pay for them, they’re stuck with the market.

Justin:
The other thing [inaudible 00:06:05]. So, they now have an ability to sell stocks on a public market, it allows them to buy out or buy in as they see fit. So, it improves the [inaudible 00:06:16] in their business they don’t have as a private company. I think this is pretty interesting. I’m actually going to put a link to an article talking about that in the show notes, I think people will appreciate that.

Joe:
Yeah, this one’s really interesting to me as well. Obviously it’s a lot bigger than we would have available to small businesses but maybe the same type of strategy could be used for private businesses, especially with equity funds and VCs out there that provide a little bit of liquidity at least to ten million dollar businesses.

Justin:
So, kind of the bigger picture stuff we’re talking about here is that we’re on the cusp of like some really big moves I think in our industry and there’s murmurs, there’s whispers of things happening that are super exciting, super interested in. So, we’ve had our ear to the ground, so to speak, to get some of these details and try to figure it out and we’re trying to figure out a way to make it legible so we can talk about it in a podcast without giving away information we shouldn’t or breaking anyone’s confidence and also explaining it in a way that kind of makes sense and is realistic to what’s happening. So, yeah, a lot of this stuff is kind of inside baseball and our goal is to kind of share some of that inside baseball to make it just more transparent and to kind of share some of the opportunities that are going on in the industry that we find fascinating. Alright buddy, enough about that. Let’s into the featured listing of the week. We’ve got listing 40612. Joe, tell me about it.

Joe:
Yeah. So, this is an FBA business in the sports and outdoors niche. It was created back in 2014, so it does have more than two years of history here. So, that’s pretty nice. It’s making almost $51,000 in net a month and we have it listed at 1.5 million dollars, so this is our biggest listing right now on the marketplace. I’m excited for people that are interested in a very big FBA business. It definitely has brand recognition in the marketplace and has been doing quite well in terms of net profit and stability.

Justin:
Yeah buddy, show me the money. $51,000 in profit a month. We’re talking average [inaudible 00:08:15] revenue of $164,000, so expense is about $113,000 a month. Again, that’s a 12 month average on a two plus year old business. I think it’s interesting it’s a nice size FBA business, I think it’s just in the US and so, one of the sellers [inaudible 00:08:33] kind of expanding into the European Amazon market, I think there’s some opportunities there. So, if you’re interested in this type of business, I think if you’re looking for an FBA business that you can add to your portfolio, that you can take over and run that’s larger I think, this is a pretty good option. Alright buddy, enough about that. Let’s dig into the heart of this week’s episode.

Speaker 2:
Now for the heart of this week’s episode.

Justin:
Today, we’re talking to Andrew Brown, who’s the co-founder of a company called splitly.com which does split testing and optimization for Amazon listings. Andrew, great to have you on the show man.

Andrew Brown:
That’s awesome, thanks for having me.

Justin:
Alright man. Before we even kind of get into the whole show, I do want to say, I’m friends with your co-founder, James, right? So, I’ve known him for quite a while and I met him in Rome and we were talking a little bit about the business and then like two weeks later we were in Saigon, Vietnam talking about his business and he’s like, you know, I think maybe there’s a podcast here and I said, split testing, I mean, yes, of course, it’s important, I’m sure there’s some [inaudible 00:09:29] there, but [inaudible 00:09:30] details of kind of what’s going on behind the scenes with the business, I was like, wow, that is kind of interesting. I got to have you guys on the show.

Andrew Brown:
Yeah, I was actually there in Saigon when you met him. We were all there to meet [inaudible 00:09:33] team. They were there for their, what they called Jungle Camp which is they do every … twice a year I think.

Justin:
Nice. I met Greg in Barcelona this year. Fun guy, super cool guy. It’s great meeting him, but we’re going to get into kind of like how you’re related to them in a bit, but before we do that man, tell me like a bit about the background on how splitly was formed. What was the idea like? How did you come to partner with James, that kind of thing.

Andrew Brown:
Well, I started selling on Amazon over a year ago and actually, the very first thing I did before even started selling was you were supposed to play around with spreadsheets and stuff like that, so I started making a product research [inaudible 00:10:14]. At this point I didn’t even know there was [inaudible 00:10:16] at the time. I didn’t know there was any actual business opportunity in selling software. I was just doing it to help myself. So, that was also in the back of my head and then in around December, I came up with the idea that you could actually do split testing, although not exactly like traditional split testing, but there was a way to do it. I started working on that for just a few days before I told James about it and he got very interested. So, he said do you want to partner? I didn’t really hesitate, he’s got a lot of skills, he’s got a degree in theoretical physics and a master’s in financial maths. So, he was going to be a useful asset to the team for sure.

Justin:
Yeah, super sharp guy. So, you brought to him, he said, hey, let’s partner and you guys went in on this. So, originally it was going to be kind of a niche finder tool and then how did you kind of switch to being a split testing tool for Amazon?

Andrew Brown:
Well, the niche finder was just me on my own and that was just at the beginning, like over a year ago. That was a separate thing, but then once I saw [inaudible 00:11:09] had done a pretty good job of that, I dropped that idea.

Justin:
Got you, okay. So, you started creating this tool that was going to split test on Amazon, like what … how did you know there was a problem? Is that from your previous Amazon experience?

Andrew Brown:
I didn’t know if it was a problem that everyone else was having, but I knew it was a problem that I was having. Before that, I’d used split testing software on my own family’s e-commerce store, so I knew about split testing and what it could do and I was just kind of wishing that you could do with Amazon and then it just clicked. There was actually a way you could do it. And then I just immediately started working on it, I got very excited about the idea.

Justin:
Awesome. Okay. So, we’re going to skip ahead a bit. That’s kind of the background on how you started splitly. Suffice to say that you got a product market, you verified with Amazon, using their API that they weren’t going to shut you down right away which I think was an important move early on. You got some customers, you got some paying customers and you guys were improving the tool and then eventually, the idea came around about having an investor come on or a partner basically to buy in equity in the business. How did that come about and who was it that approached you?

Andrew Brown:
So, actually, we weren’t really thinking about having an investor at all. We were just [inaudible 00:12:18] just get it out the door and once it’s matured, that’s when you think about someone buying into it. But we were actually approached very early by seller labs through … I have a friend Matt, from FBA [inaudible 00:12:30] and they just immediately came out with a basic offer of … well, their idea was interesting. What they wanted to do was take 50% of our sales and not actually own any of the business and so, they wouldn’t give us any investment at all. So, they would just do all our marketing and integrate us into their family of products and stuff like that.

Andrew Brown:
We came back to them. Well, I was thinking basically that we want them to have some skin in the game or some downside so that they just team up with us and then not do anything. So, we came up with more of … well, it’s better if you invest in us type deal.

Justin:
Okay. So, originally, they just want 50% of sales and probably your users? What was their play there? Was it just a cash flow for them they were looking to buy into or were they looking to pick up the users you were getting?

Andrew Brown:
I think they wanted to have a no risk type investment. So, what they were thinking was, well, they’re going to first of all take 50% of our sales and they’d direct their users to us and our users back to them. We wouldn’t [inaudible 00:13:29] do our own [inaudible 00:13:30] or anything separately, it would just be all through them and then further down the line, if they wanted to, then they would have the option to buy.

Justin:
Okay, so they have the option to buy eventually and it’s a way for them to freely send customers to splitly, they’re getting 50% of the cash coming out anyway, so they’re happy to do that. It’s a very strong affiliate agreement, but your problem was is that they could affectively do nothing and still be getting 50% of your cash flow even though you’re putting all this growth efforts into other channels or whatever. They’re just getting 50% across the board.

Andrew Brown:
Yeah, it locks us out from anything else. I thought it was kind of a strange deal because if you wanted in, I think you should put something into the pot. Something more of a commitment.

Justin:
They were offering you cash for it though right?

Andrew Brown:
No, on that first offer, no. But then we came back and said we’d actually rather sell part of the company, have cash in return and then they were totally willing to do that. So, that wasn’t a problem.

Justin:
Okay. So, you were negotiating the offer, said, look, I want some cash in the deal, they were willing to do that. At what point did you look at alternative potential investors or someone else to potentially buy you out?

Andrew Brown:
Well, so, luckily … [inaudible 00:14:36] except, James happened to have met Greg at one of those DCBJK meetups at a mastermind. So, he already knew Greg and he just sent him an email and said, look, this is what’s going on. So, Greg kind of hijacked the whole thing and just jumped in, said, yeah, I’ll do that, I’m interested in that. So, then we had the same offer basically from the two companies.

Justin:
Yeah. So, you kind of negotiated a deal with the original party, reached out to the second party because James had the connections, said, look, will you match the software? And Greg was all over that. Greg from Jungle Scout. So, you ultimately ended up doing the deal with Jungle Scout, we’re going to get into that, but why were you willing to do like 50% … at any point were you like, well, once you entertain the idea of bringing on an investor, were you ever like let’s just sell the whole thing?

Andrew Brown:
We could’ve just sold the whole thing, but it would’ve been … if we sold the whole thing it would’ve just been a little bit more than … it would’ve been just basically selling the whole thing at maybe just twice the price that we got for half of it. So, we wouldn’t have got a serious upside, the potential upside would’ve been gone. The thing is, if we just wanted the money, I don’t think we would’ve done the deal, but what we were really looking for was a partner in the industry that could drive the sales. So, really just came down to not who was going to give the more money to us, but who was going to be the better fit with us working with us.

Justin:
Is that kind of like what made the decision when you had some more offers from the first party and the second party? You ended up going with Jungle Scout because you figured they were a better fit long term for your business?

Andrew Brown:
I think a lot of it just became a personal thing because James knew Greg already and we didn’t really know the seller labs guy. I really enjoyed … it was a very tough decision. I was actually leaning a little bit more towards Seller Labs but I never met Greg at that point. Now after actually having met him, in this month in Vietnam, [inaudible 00:16:19] happy there, a really cool team. Greg’s a really nice guy and they just seem like a great fit for us.

Justin:
Yeah, I think they’re really doing some interesting stuff. He was previously on our podcast, we talked a bit about his business and Amazon in general. You ended up doing a 52 48 split. Could you have accomplished the same thing by selling 20% of your business or 30%? Why so much? Why give them 48%?

Andrew Brown:
Well, originally seller labs weren’t interested in it because they’re going to have to do a lot of work, it’s not just that they’re giving us some money. From their point of view, it’s like, well, if this is going to be worth it for us, we want a serious chunk of the pie, otherwise there’s just no point. If they were just giving us money, that was it, it was just a straight up investment, then yeah, you could probably do a small amount of equity.

Justin:
Was it a bigger deal for you to retain a majority share, so the 51% or 52%? Or were they easy or happy to give you 51%, 52%?

Andrew Brown:
So, in the case of Jungle Scout, yeah, Greg was quite flexible with that. Seller Labs had a lot of more like legal restrictions, they were talking about how you would do different types of buyouts later down the line. They wanted to protect themselves I guess in case me and James did something strange or whatever. So, they wanted to have these options to buy. So, the actual … no, who had control, as in 48 versus 52, I’m not sure that that actually mattered so much in that deal because there was a lot of clauses about how things would happen in the future.

Justin:
It’s interesting that you do this because you guys were growing. You started the business, what? Like end of 2015, and this started going down, we’re talking like I think the kind of offers were being made like May 2016, is that right?

Andrew Brown:
Yeah, exactly, yeah.

Justin:
So, why not just drop both of the offers and just continue growing it out? It seems like the business was on a fairly good trajectory, was it just that it wasn’t going to get big enough quick enough to be terribly interesting to you guys?

Andrew Brown:
There’s a couple of advantages to having teamed up with [inaudible 00:18:10] for example. They have a great team of developers that we can work with. They have a really good customer service, so they can help us make the product much better. Along with branding, and if we have a competitor in the future, we’re going to be much more secure I think being with Jungle Scout than being on our own. So, a lot of it came down to myself and James, we’re just nerds really, we’re programmers, and marketing and all that kind of stuff is not really our strongest point.

Justin:
Got you and Jungle Scout’s got all that plus they’ve got some developer support you can use, you can plug into their customer service [inaudible 00:18:44] the integration team like smart fit. One other question I have … I’ve seen Jungle Scout’s growth and they’ve done really, really well and they continue to grow. Why didn’t you take equity in Jungle Scout as a [inaudible 00:18:55]? Why did you choose the cash over equity?

Andrew Brown:
Well, that wasn’t one of the offers. We did think about that [inaudible 00:19:01] with that as an idea, but … I think a lot of it is just myself and James, this is the first time doing a deal like this, so we didn’t really know, we just kind of took what seller labs came up with, because they were quite thorough in how the offer would be and then just took that to Greg. So, we didn’t have a lot of experience with that sort of … the actual all the different ways you could’ve structured the thing.

Justin:
Well, one of the challenges with an equity swap too and I’ll add this, is that when you’re just doing a cash deal, you only have to value splitly, right? So, you determine a valuation, all parties agreed, okay, [inaudible 00:19:38] pay this much cash for this much equity. That’s pretty straight up. When you’re doing an equity swap, you have to valuate both businesses and agree on both valuations and then do the equity split. So, it’s a little more challenging, there’s more ways for the deals to fall out too.

Andrew Brown:
Yeah, but then what we did was quite clean in a way.

Justin:
Were there any deal breakers for you? Like if you couldn’t retain a majority stake in the company, if they put some kind of requirements on you, was there anything you guys were like if this is the requirement, I’m out?

Andrew Brown:
Yeah, so, with dealing with seller labs, they wanted … they had a lot of buy out clauses and one of them would mean that they after a certain amount of time, they had the right to buy us regardless. So, if at that point the company was on an upward trajectory, and things were going really, really well, we’d still have to sell to them. So, we didn’t really like that so much.

Justin:
How were they going to base the valuation at that future point? Was it at any point in the future or was it a set point? 12 months, 18 months, 24 months?

Andrew Brown:
Yeah. So, it’d be after a certain time period expired. We were negotiating that and then it would be a multiple of sales earnings at that point.

Justin:
Would it be the same multiple you were using for valuation at that point or are you assuming growth and a higher multiple?

Andrew Brown:
[inaudible 00:20:47] multiple. I can’t remember exactly what it was, but it was not based on what we were making currently at the time, no. Considering what we were making when we first got these offers, it wasn’t … these offers weren’t based on any sort of multiple of our sales, it was purely a tech buy if anything or potential in the software itself.

Justin:
Yeah and [inaudible 00:21:05] because bringing you guys on to help both with that business but also potentially with Jungle Scout as well. [crosstalk 00:21:11] for some things there. Tell me about … now, we’re going to talk exact numbers, I can’t say that we’re talking six figure deal and I know after the fact that your users grew significantly in only like a six week period from the time you were working on the deal to six weeks after. So, your users more than doubled I think, is that right?

Andrew Brown:
Yeah, exactly. There’s not too much surprise there either. Jungle Scout I think is the largest player now in terms of users in the Amazon software game. So, I don’t think that’s too surprising that that one happened, but what we’re doing is we’re going fairly steadily and slowly and just working on improving the product, that’s the main thing at the moment.

Justin:
[crosstalk 00:21:51]. You gave up 48% equity and within six weeks you doubled your users which is effectively doubling your company. So, to me, that sounds like just an absolute no brainer, like looking back, even just six weeks later, you’re like, yep, that was a win.

Andrew Brown:
Yeah, exactly. The idea is that going forward, they’ll be able to grow more than twice as fast as we would on our own. That is the idea.

Justin:
Is this your only baby or do you have other projects or businesses you’re working on as well?

Andrew Brown:
Well, I still have my original Amazon stuff, but I was doing okay with that, but it wasn’t really … it doesn’t have the potential I think that splitly does. James has his fingers on two other SaaS products. So, he’s got quite a bit going.

Justin:
Yeah, every time I talk to James I get the update. I’m like, how’s this business? Okay, how’s that business?

Andrew Brown:
Yeah, he’s a busy boy for sure.

Justin:
As a partner, do you have any … before I ask the question, let me just say that Joe and I have a deal in our business where basically if we’re doing anything, even [inaudible 00:22:47] we’re involved in everything or it’s like a marriage for us, or a business marriage. So, any of the deals we’re involved in [inaudible 00:22:53]. One of the things that helps with this, like, if Joe’s off working on a side project, I know that it’s part of our overall business strategy, but if James does that, it’s not, right? So, if he goes and spends more time on one of his other businesses or projects, that doesn’t involve you, how do you not get frustrated that it may be taking away from splitly or the thing you guys are working on together?

Andrew Brown:
Well, so far [inaudible 00:23:17] much of an issue. I think now, especially that we’re part of Jungle Scout as well, a lot has to go through them, so that takes away a bit of the pressure, where it’s just me and him working on it and now we’re part of a bigger team, so I don’t think that’s going to be too much of an issue. He’s pretty reasonable, I’m reasonable. It hasn’t been a problem so far.

Justin:
Would you do another business with James? Are you looking elsewhere? How does that … do you guys see yourself … you’re going to continue working on splitly obviously and obviously working with Jungle Scout, would you start other projects with James or would you want to try other co-founders?

Andrew Brown:
Well, this is my first time actually having a co-founder because I always thought the headaches, the fallouts of personal relationships, all that stuff, is too much and you’re better doing it on your own. But, James really had the skills so it worked out okay. Honestly, I wouldn’t partner unless there was a really good reason to do it. I wouldn’t just do it just because, oh, he’s your friend or it’s a fun thing. I’d just do it if it was a very good fit and you have the separate skills that they’re melded together well. So, in this case, James had the software skills and I knew Amazon. So, it worked out.

Justin:
Alright Andrew. Let’s get into a little bit more about like how splitly works and kind of who it’s built for now. Splitly does split testing on Amazon and mostly for Amazon FBA sellers. Tell me a little bit about how exactly it works.

Andrew Brown:
Okay. So, traditional split testing software, I’m sure people, especially your listeners who have their own e-commerce stores and stuff like that, they’re aware that it’s like you have a user that comes to the page and then you have another user and for every single user that comes to a certain page, you show something slightly different, like you might have your checkout button and you’ll show it red for one user and green for the next and then you keep doing this for let’s say a month and you will have a thousand users clicked on the red button and 900 users clicked on the green button and you go, okay, the red button was the winner. The question is, how can you do that with Amazon? Because you can’t stick any software on Amazon directly. All you can do is control your listings page and just like the sellers, you can go in and you can edit things.

Justin:
[crosstalk 00:25:16] optimizly and visual [inaudible 00:25:20], those are all out on Amazon, not usable.

Andrew Brown:
Just not possible, yeah. Exactly. You can’t stick any sort of Javascript or any code on Amazon’s website. So, what you can do is, you can … and you can do this manually. So, if you wanted to, you could do all this yourself. You can go into your listing and let’s say you were testing your main image, you could go in every midnight in Amazon time and I’ll explain why it has to be that time in a second, but you could go into your listing and you could change it every day, so you could show one image one day, the next image the next day and then back to the next image and back and you keep on doing this and then after a month, you can go into your business reports and you can gather up all your data you’ll have, it’s called detail sales and traffic by ASIN and it will tell you all your sessions and sales and you can do some of the maths and you could figure out which one was the winner.

Justin:
[inaudible 00:26:10] all of your tracking every day, I was using this image, the next day I was doing this image and you do it on a spreadsheet or something like that.

Andrew Brown:
Yeah, exactly, yeah. The reason why you have to do it at midnight Amazon time which is, what’s it called? West coast or pacific time, is because Amazon gives you the sessions data. So, sessions are counted for every person that visits your listing. They give you that data on that 24 hour period. So, you have to change it at that time every day. Why every day? So, currently what people are doing is, if they want to test something, what most people are doing is they’ll just try something for like two weeks and then they’ll try something else for two weeks and they’ll say, oh, this one was better. But that’s just luck. It’s pure luck if you do it that way because there’s so many other variables, seasonality and just like some people just happen to come to your listing at that time. You can’t predict what will happen there. But if you change it rapidly back and forth, the more frequently the better, you minimize all that chaos and you can actually figure out which one is the winner.

Justin:
Alright. So, what this does is it … and give me the different things you can test on splitly.

Andrew Brown:
So, at the moment, we allow testing of titles and images and your bullets or features, description and the key one is your price. [crosstalk 00:27:23].

Justin:
It’s not just split testing, I can also do multi-variant testing. I can put in three or I can put in four, right?

Andrew Brown:
Yeah, you can do as many as you want. We do recommend the best thing is the simple AB test, just two variants. The reason why is multi-variant testing is quite complex. You want to be able to isolate exactly what the change was. So, if you have multiple things and you group them together, you might not be able to figure out what component of your changes caused the actual affect. Also, the less variants you have, the less data you’ll need to find a winner. So, you’ll get to finish your test quicker.

Justin:
So, let’s say I’m going along and it’s been, I don’t know, two weeks, three weeks and splitly is showing me these reports, right? I’m able to pull this information, look in splitly and get this information. So, is it going to continue that split test forever? What happens when it determines a winner?

Andrew Brown:
Exactly. So, when it determines a winner, it will set your listing to that winner and send you an email and tell you that your test is finished and how we determine the winner is we use same as optimizly and Google and everything, they use a thing called statistical significance. This is a calculation of how confident we can be that the winner is indeed the winner. It’s all probability. It’s all maths. What will determine the winner is how big of a difference you have between the variants, so that will cause more data to go for one than the other and also how much data we can get, so how long we can run it for. So, those two factors will get you the winner.

Justin:
It’s interesting. It’s similar to what they do when they’re following or polling data in presidential elections like 538 or whatever, where they’re looking at if one side is 80, other side’s 20, they’re pretty damn sure the 80 side is going to win, if we’re talking 51, 49, the margin of error [inaudible 00:29:04] margin of error, it can’t be terribly sure and so this does that on things like price, on things like using different images, that kind of thing. Now, when it comes to statistical significance, obviously you have to be outside of that margin error and the more data you get, the better. We had a tool back in the day we created called [inaudible 00:29:21] and it would do kind of testing of ad placements and themes and layouts for adsense and Amazon affiliate sites. That was [inaudible 00:29:29] is like a lot of sites or particular pages or whatever just didn’t get enough views to reach statistical significance and that was a problem. Is this less of a problem on Amazon and if so, why?

Andrew Brown:
So, on Amazon, it can still be a problem if you only make a small change. So, if you’re testing for example your price, we always recommend people test their price first, because it gives you the biggest bang for your buck effectively. If you’re changing your price from $17 to $15, that is going to produce a very significant change in your profit one way or the other. It’s going to have a big effect. So, when you do something like that, no, it’s not an issue, you’re going to get an answer to your test. If for example you just do something like some people I’ve seen, they’ll just change the order of their books, they haven’t actually changed anything, they’ve just changed the ordering and they’re running a test and they’re hoping that they’re going to see, one’s going to do better than the other. Well, that might be true, but it’s going to take a very long time to detect which one was actually better with any sort of confidence.

Justin:
So, I could do something [inaudible 00:30:29] where I have a product, let’s say it’s $69.99 and I put … on one of them I put $99.99, which is a significant difference in price and then I actually write up the description to be a more premium description, it’s like more descriptive, it’s like … it has a more premium feel in the content that’s written and in the headline and do both of those tests, just some AB tests on that back to back and I can see whether … [inaudible 00:30:56] more sales, but how does my profit look across the board, right? So, yes, maybe I got a little less sales at the [inaudible 00:31:02] price point but my profit across the board is better, my margins are way better, so my profit’s better.

Andrew Brown:
Exactly, yeah. We have four different goals that you can measure, but if you’re doing the price test, you’re really looking at the profit and that’s what matters in that situation.

Justin:
Cool. Okay, another problem we found with split testing is that it just seems like a large majority of tests fail and I’m doing air quotes for fail, but by fail, I mean they just … there’s not that much of a difference, right? It’s like, 3% difference or 5% difference. It just didn’t seem to matter. When you talk about price, obviously, the bigger the price difference, probably the more interesting your data’s going to be and the more clear it’s going to be. What else really affects it? Images are pretty important, right?

Andrew Brown:
Yeah. Well, your main image is really, really crucial. That can have a … I’ve seen other people and I’ve seen some people’s tests that allowed us to view them and yeah, you can see some great success stories with the main image, because if you … it’s a compounded affect as well. So, if you’re testing main image, what you’re looking for there is conversion rate. Also you’re testing for click through rate which is how enticing your image is in the search results, but mainly conversion rate. If you can get a 5% to 10% increase on your conversion rate, not only do you get that increase in profits just directly from the conversion rate increase, but also Amazon likes it. Amazon will give you an increase in your rankings, in your search rankings, depending on how well you’re converting, because you’re making more money for them. So, that would be the logic there.

Justin:
So, you’re going to get improved rankings, it’s like a compounded effect, right? So, [crosstalk 00:32:34] getting more click throughs, you’re getting higher rankings and you’re selling more obviously.

Andrew Brown:
Exactly. We can’t show that in splitly that extra bonus of the sales ranking, we just show which one converts higher, but you should also take into account you’re also getting that bonus at the end of the day.

Justin:
So, ranking importance, because you guys have done … you have a bunch of customers in splitly, you’ve seen the data, so you kind of know like what the important factors are. When it comes to price, image, headline and description, rank them in order of importance. Is price like way ahead of the others, then image, is that how it works?

Andrew Brown:
Yeah. Price is way ahead of the others simply because you can very quickly optimize it and get to where you want to be and your test will … don’t have to take that long to run to determine which one is better. So, there’s a lot of reasons why we all say start with price and also, if you don’t know and you don’t know what you’re doing and you’re just there, I want to get some improvements, it’s very easy to create a price test. You just pick your two price points and away you go.

Justin:
So, do you recommend like dramatic changes on these tests or like a much bigger price difference, a dramatic change in the headline or like can one or two descriptive words entirely change the headline? Would I do a $60 versus $90 price change or would it be more like $70 versus $73?

Andrew Brown:
So, this is like … I think I read an optimizly article talking about this. It’s like the peaks and troughs. You want to start by doing a big change because you don’t know if you’re in the right area at all and then once you find your winner, the big change, then you can start making smaller refined changes and these smaller refined changes will take longer to run but at this point, you’re just getting those last few bits of optimization, just squeezing a bit more out of it. So, certainly at the beginning, I would definitely recommend getting a large change, because although you may think you know what you’re listing is optimized or not, you probably don’t. So, it’s best to make a big change to find them.

Justin:
Yeah, it’s like the 80 20 for split testing, right? So, you may get to a point where you’ve been doing split testing, you’re doing these big changes, you go, oh my god, I’m priced half of what I should be, this is great and then you get to the point where you’re like changing descriptions a little bit and sure, maybe it’s a little bit of a difference, but like tracking it, trying to figure out … you get to a point where you’re like, okay, I’m good, I’ve done enough here.

Andrew Brown:
Yeah, a lot of that depends on the type of product that you’re selling. If you have a lot of products and they’re not that competitive, if that’s the kind of game plan you’ve taken, then you might just want to test your pricing in all of them. That might be the way you want to do that.

Justin:
Is that a problem for your customer base? If I’m doing these kind of big changes and I find, oh, a big difference in price, oh, this image is way better and then I’m like, okay, thanks splitly, I’m canceling the service. Why is this an ongoing long term thing?

Andrew Brown:
Pricing you probably want to keep testing all the time because that’s going to change depending on competitors coming in. I know any Amazon sellers are [inaudible 00:35:20] probably have the experience where they have had to keep on decreasing their price over time, as the space becomes more competitive and then the game becomes how can you get cost down in terms of shipping and all that sort of stuff? But while you’re doing that, you don’t want to just guess what the price should be, you should be split testing your way down and that type of split test, it might only be a dollar in the difference between the price to see what’s optimal.

Justin:
With FBA, sometimes you have people coming in undercutting you, they’re just trying to get a bunch of reviews, they offer [inaudible 00:35:47] and you can, if you’re constantly split testing, and you’re consistently testing this to make sure that you’re in a price range that works and gives you the best bang for your buck. Can you give me an example or kind of like a mini case study where this particularly helped out a customer? Can you kind of explain what the customer was doing, why they got splitly and kind of like what the difference was?

Andrew Brown:
Yeah. So, I’ve seen it work … I mean I’ve seen it work many times with pricing but that’s not so interesting I think to a lot of people because that’s kind of obvious. I’ve seen it with one customer where they tested their main image and I think they might not have known it, but I’ve been looking at so many tests now, I kind of knew what was going to happen here. They tested a kind of a neat image versus an untidy one. So, without giving too much information away, they were selling something where there was more than one item and was arranged very neatly and then they tested it against an item where it was all kind of messy and thrown around the place and the messy one converted at about 20% higher. It was considerably better, yeah, considerably better. I think you could actually … in that instance, that you could almost take that as a rule because I’ve seen that type of change being done and it can be quite effective.

Justin:
I hear [inaudible 00:36:59] kind of scattered all over the place. [inaudible 00:37:02].

Andrew Brown:
Well, okay, so, is that true? Because from my own experience, just dealing with some customers, [inaudible 00:37:09] the opposite to be true. So, that just gives you an example of where you really do need to test it.

Justin:
Yeah. Totally true, yeah.

Andrew Brown:
The fact that they’re different means that there’s money to be made, that one way or the other and if you just test and arrive at the right answer, then yeah, if you can increase by 20% and just think about this because it’s such a competitive space, that if you’re 20% higher relative to your competitors, you fly off the search rankings. So, it’s really, really important to optimize your listing.

Justin:
Yeah, it’s interesting. I’m in masterminds or like forums sometimes and I see entrepreneurs asking other entrepreneurs, they’re like, do you think I should put this here or there or what looks better or what do you think my customers would prefer or what do you prefer? I was thinking to myself, none of that matters. Like, okay, this guy thinks it should be blue or that your font’s a little off, who cares what he thinks, it doesn’t matter, right? I’m wrong so much on those things when I think, oh, it should be this way or that way in terms of like design and layout that I don’t even bother anymore because that’s … it’s pointless, right? Unless you actually … you’re getting feedback from real customers using it, who cares what you think?

Andrew Brown:
Yeah. [inaudible 00:38:12] Amazon versus normal websites, is you’ve got so many things you can do with the website. It’s overwhelming all the things you can do that I think that a lot of people are just like, just get it to what I think is best and just leave it alone. But with Amazon listings, you’re very limited in what you can change and these changes can have a large affect, so that really lends itself towards testing and optimizing to get it as good as you possibly can.

Justin:
That’s really interesting. It might just be better. It might be better to have a limited set of things that you can test because [crosstalk 00:38:39] sigh of relief and not have to know whether you’re using the red button or the blue button or saying, you know what I mean? You don’t have to deal with any of that. One of the things we talked about in a pre-interview was one of your challenges in the business and is the education piece, right? So, you both have to like sell people on the value of split test. Maybe not so much [inaudible 00:38:57] a lot of talk about it, but [inaudible 00:38:59] some pre-interview … sorry, some pre-sales questions you have to answer and kind of get them onboard and then there’s like a post purchase educational piece too, right? So, that they’re using the tool correctly because obviously that’s important for your turn. If you want the to stay, you want them to be using it and getting value out of it, so you have to kind of educate them on how it works, how they can particularly use it. What do you do on both sides of that pre-sales and post-sales in terms of kind of getting them up to speed and making sure they’re getting value?

Andrew Brown:
So, we recently, for example, we added videos to every page to explain what’s going on there. We’re constantly putting out material about how to do your split tests and what you should be testing, kind of like [inaudible 00:39:40] optimizly does, they’re always giving case studies and things like that, so we’re working on that all the time. A lot of it is just tweaking the user interface and making it more and more intuitive. We still have a lot of options when they come, for example, to create a test, there’s a lot of things they can do and I think if we can make that even more simple, we might even just say, look, just start with the pricing and don’t worry about anything else for your first test. After that, because we’re partners with Jungle Scout, they’ve got a great customer service team and it’s 24 hours, they’re in different time zones, so they’re great to have.

Justin:
How did you get their customer service team up to speed on kind of the questions from splitly customers on solving problems and kind of making sure they’re able to help your customers out? What did you do to get them trained and up to speed?

Andrew Brown:
We just met with them all in Vietnam just now and the good thing is, before, we were using outsourced customer service stuff like local Filipinos because that’s where I met James, but since then, just watching these guys in action, they’re already familiar with Jungle Scout and review kick and [inaudible 00:40:38] which are Jungle Scout’s other applications. So, they know how Amazon works. One of them was actually an Amazon seller himself and so, they’re very quick to get up to speed about how things work. I’ve just seen them in action answering some of the tickets and talking to people on the phone and they’re very, very good.

Justin:
So that conversion was pretty quick. It’s basically you and or James sitting down with them and going through the questions, kind of the frequently asked questions and the struggles that customers have in terms of testing through it or having problems with the software, that kind of thing and just getting them up to speed. Was there any like actual … did you give them any documentation or SOPs or was it just walking them through it?

Andrew Brown:
Yeah, we recorded a lot of videos. We have an admin panel for them to use, so they can help customers with that. And really, any sort of issue they have or anything they don’t understand, they can just raise the ticket to either me or James and then we’ll jump in there and figure out what’s going on.

Justin:
Got you. Okay. So, I’ve got a pretty good understanding of how splitly works. I love the story of kind of how you brought on an investor. I want to talk a little more about kind of like the long term vision for you and James for splitly. You took on a partner, that seems to be a win because you doubled your customers relatively quickly and you kind of see like a vision. What is the vision? Are you planning on expanding the tool? Are you going to make the tool much better like a deeper tool? Or are you looking like addon products and services to splitly itself?

Andrew Brown:
So, there’s a lot of things that can still be done with the split testing tool itself. For instance, we could do a more rapid … rather than doing it daily [inaudible 00:42:05] profit, we might increase the frequency of the updates, then there’s other things we can do like we can test the backend search terms and other … so, there’s other options we can add into our testing and even further still, we might add in something like for example, rank tracking, if that works well with splitly. So, there’s a lot of options we can explore further down the line for the tool itself.

Justin:
That’s interesting. So, like on the split tests where … do you improve your rank because you [inaudible 00:42:33] improve conversions, you can look for kind of correlations there, that might be kind of interesting.

Andrew Brown:
Exactly. So, look, at the moment, rank tracking, a lot of other people are doing rank tracking and it’s like a separate thing on it’s own, but I think that could actually tie in quite well with split testing. So, we’ll investigate that.

Justin:
One of the things I think there’s a takeaway here for are developers. A developer or let’s say co-founders that are both developers is … you ultimately ended up taking on an investor, a partner that is a marketing person, right? So, one way to solve kind of like channel sales or adding sales is to partner with someone or have someone invest in the business that can take care of some of the marketing for you which allows [inaudible 00:43:12] developer to kind of focus on what you do best which is improving the product and coming up with new addons and services you can offer with it and letting someone else kind of take over the marketing or be able to just dump potential customers in your lap and I think that helps, but that’s not fully the case. You’re on this podcast. You’re out there still promoting it.

Andrew Brown:
Yeah. I still have to do … James is just doing … really focusing on the tech and he has so much experience with SaaS stuff that he’s able to handle a lot of problems that I’d be unfamiliar with from ym end because I know the Amazon stuff and it was my idea I guess and I’m more familiar with it, I did a lot of the customer service as well, I’m kind of the … one of the faces of the product now. But between me and Greg, we both do some of the webinars and the podcasts and stuff like that. But also other guys, content writers and stuff that [inaudible 00:44:00] that handle a lot of our blogs and stuff like that.

Justin:
And they’re doing that for splitly too.

Andrew Brown:
Exactly.

Justin:
Cool. Okay. So, I was going to ask you kind of what you’re doing to address [inaudible 00:44:08], but I think I’ve got some of that already. You’re adding additional education post sale to customers, right? You’ve trained up a new customer service team that’s already been doing customer service with Jungle Scout, you got them trained on splitly, so you’re hoping for some improvements there. What else are you doing [inaudible 00:44:26]?

Andrew Brown:
So, a lot of it is reaching out to the customers themselves when you can see that they’re already having some sort of difficulty. Also, we address if people decide that they want to quite or whatever, we can get in and find out very quickly what is the reason, what’s the problem. At the moment it is a very, how do you describe it? It is a customer service heavy kind of product because of it’s complexity. I’m not sure that we can actually reduce that so much going forward. I think it is always going to be like that. [crosstalk 00:44:52].

Justin:
Add vale I think and potentially even reduce turn is to offer paid services, right? Where you have a customer service agent that’s willing to step through it with them and offer like hands on training and like have them work on the product with them and charge them for it. Is that something you guys are considering?

Andrew Brown:
Yeah. A lot of customers have asked us for service like that. They’ve asked us, do you know experts that can help us out? That kind of thing. So, we may even have it, either we do it ourselves, or we offer it as a third party type thing where we plug in these experts and they can deal with the splitly customers themselves.

Justin:
I think that’s super interesting. So, Joe and I, just maybe six months ago or a year ago, we were looking for like a CRO [inaudible 00:45:35] agency and most of them, like even the cheapest ones were like 10 grand a month, a lot of them are like 30, 40 grand a month with like a six month commitment. We were like, this is outrageously expensive, right? So, I think having someone that you could pay, even a couple hundred bucks an hour to kind of walk through the splitly tool and make sure you’re using it correctly or help you kind of get everything set up. My guess is you’d probably have some customers that would pay that.

Andrew Brown:
Yeah. You could do. Especially some of the bigger customers. They’d be more than happy to have that. But some people want you to go further and actually optimize the listings for them. So, that would be a more obviously expensive service. But it’s interesting because where you have those services at the moment, it’s just like, okay, you pay them the money, they optimize the listing and you have no way of really showing do they do a good job or not. Of course with split testing, you can actually split test the changes that they make.

Justin:
Yeah.

Andrew Brown:
If there’s a return.

Justin:
So, let’s talk a little bit more, a little further about like kind of where splitly is going. So, you’re pretty integrated or you’re going to become even more integrated with Greg and Jungle Scout, they own 40% of your company, is your future and splitly’s future tied to Jungle Scout? Can you guys sell independently of Jungle Scout? How does that work?

Andrew Brown:
Technically we could sell, it’s part of our agreement, but we would, had a reduced … you know how these contracts are set up. So, if one of us wanted to walk away, it would be [inaudible 00:46:59], that kind of thing. But that can work either way. But I mean, I really think we’re … unless something goes horribly wrong or … and these things can happen of course, I think we’re pretty much going to stick with Jungle Scout and just go do whatever they do. So, if they were to ever sell themselves, then we would just go with them. That’s the most likely thing.

Justin:
So, what’s kind of the bigger vision? You’re going to go along with Jungle Scout, right? The two, three, five year, like your dream scenario is Jungle Scout continues to acquire other smaller companies, they add addon products and they have this suite of products that they’re offering to just a ton of customers. They end up getting acquired and splitly goes with the business, so you get bought out that way, is that kind of the dream scenario for you?

Andrew Brown:
Well, I’m not sure if it’s the dream scenario, because I’m not actually thinking about [inaudible 00:47:48] thing at the moment, but when that day comes, [inaudible 00:47:51], yeah, I think so. We’ll just go with them, but … to be honest with you at the moment we’re just focusing on growing the business and earning money just from the business itself rather than [inaudible 00:48:01]. So, I’m not too focused, at least in my mind, I’m not sure how James is about the future of selling it at the moment.

Justin:
Man, you’re so … you’re too now focused [inaudible 00:48:13], we’re painting the picture here. The big long term vision, you sitting on the beach, you’re retired, you’re now a passive investor in multiple businesses. Just teasing you man. So, yeah, I mean you still have a lot of growth to do. I know you guys want to add a lot of customers. You’re going to want to continue to improve the product and you’re hoping that splitly becomes … the bigger chunk of the Jungle Scout’s suite of products splitly is, the better it is for you and the better it is overall for Jungle Scout and Crew, right? So, yeah, I can see how you guys are working together to make that better. Just kind of like in an overall or broader scope of things, I think it’s really interesting with AMZ tracker, right? Which is a Jungle Scout competitor [inaudible 00:48:54]. They’ve been buying up companies. Jungle Scout has been buying up companies to bolt on and then the other one, what was it?

Andrew Brown:
Seller Labs.

Justin:
Seller Labs’ in a very similar situation. So, there’s kind of a heated and somewhat friendly, because I know some of the guys know each other, but some are friendly, competition for users, for buying up companies that have some strategic advantages and I think it’s a really hot space right now, be interesting to see how this plays out.

Andrew Brown:
Yeah, I think it will be. There’s a lot of smaller companies out there as well doing just individual things and so, I’m not sure what they’re thinking but a lot of them are probably hoping to be bought up by the big boys because on their own, if they don’t do that, I think what’s going to happen is one of the larger players will just [inaudible 00:49:37] their product and compete directly against them and then they’re going to be in trouble.

Justin:
Yeah, I know some guys right now that are like in the works building products and potential companies that are parallel to the big ones, right? With the intention and the hope to get bought up by them. They’re building as a standalone but if it does get bought up by them, and they know their business a bit, then they’re in really good shape to get acquired by the larger businesses. I think that’s a pretty slick move. Alright man. Well, thanks so much for being on the show Andrew. Is there anything I missed or where can people get a hold of you?

Andrew Brown:
So, the best thing … if you’re interested in the software itself or if you’re an Amazon seller, you can just go to splitly.com and there’s a lot of free resources there. You can download an ebook about split testing. We have a blog that gives a lot of information and of course you can always … you don’t have to use our software, you can do it yourself, so the material is there that will tell you how to do that. So, it’s worth checking out anyway.

Justin:
Awesome Andrew. Thanks man.

Andrew Brown:
Okay, thanks a lot Justin.

Speaker 2:
You’ve been listening to the empire podcast. Now, some news and updates.

Justin:
Alright Joe, let’s talk some news and updates. First off we are just coming down or just coming off of our first ever Empire retreat man and I got to say for the listeners, let’s be honest here buddy, before we did this what was your impression of kind of like what we were doing with this?

Joe:
I was definitely very worried that it was going to not come out as well as it did. It went off without a hitch, Mike’s wig did an awesome job. I didn’t have to do very much except show up and look pretty which is really nice and the guests were unbelievable and we had really a wide range of people, so thank you everyone that came.

Justin:
Yeah dude, it was awesome, Mike’s wig crushed it in terms of setting up and running the event. I didn’t know … I mean that kid’s got a skill man, he should be an event planner or something, he just crushed it and the people that came just had a blast, I got amazing feedback from them. I think it was a really good balance between masterminds and like thinking about deals, singing about their business and like getting really good feedback and having fun, partying right? So yeah dude, I loved it. We’re definitely planning on doing it again, we’re thinking probably end of October or November just kind of we’re looking at the dates right now. We’re probably gonna do it in Phuket again, we looked in Chiang Mai which we were gonna be but I think man, we had such a good time and like things were just so perfect, that Villa was ridiculous.

Justin:
So, I think if we could do it here again I would definitely do that. So, we’ll have more information about that in the next couple of weeks as soon as we’ve kind of firmed up some dates. If you’re interested in attending make sure to check it out and look for the email. The second thing buddy, we’ve got some really good news. I’m really excited to share on the podcast the ink 5000 list came out and we were listed number 161 in the US. So out of 5000 companies, ours is number 161 of the fastest growing companies in America man.

Joe:
I am so excited about this. Congratulations to you Justin.

Justin:
To me buddy. Well I mean, our team really [crosstalk 00:52:31].

Joe:
You’re supposed to congratulate me back. [crosstalk 00:52:34].

Justin:
Oh hell no. Talking about our growth, it has been phenomenal, we’ve been aware of it and we’ve been looking at it going wow, this is quite the wild ride and when we look back to kind of like some of our growth and the things that I think helped us, adding team and culture which is so weird. I remember thinking years ago, team culture, I don’t know so much about that, I’m not sure that’s important, but I see the importance now, do you?

Joe:
Yeah, I absolutely see the importance and I understand why it needs to be there and I think we’ve chosen a great team culture, so I’m very happy with where we’re at.

Justin:
So, that’s a pretty good transition. Next thing for news and updates we’re gonna be hiring a couple of new sales apprentices, so we’re looking for people to help us onboard new customers both on the seller side and the buyer side and learn the business and come out here to Southeast Asia and work with us. The pay won’t be great for the first few months, it’s not going to be wonderful and you’re gonna be working your butt off, but I think it’s an amazing opportunity. You can look at any other people that work with us now and you can talk to them if you’re interested but probably within the next couple of weeks we’re gonna have that position open. The goal is to get a couple of people out here by November by our Chiang Mai meetup, so we’re gonna be pushing this and talking about it quite a bit for these new apprentices and if you know anyone or you yourself would like to apply, make sure to hop over to the blog and take a look at the opportunity.

Joe:
Yeah, I’m excited to interview some people.

Justin:
Last bit buddy, we’ve got a pretty interesting travel schedule. You and I are gonna be in Hong Kong from the 28th through September 1st. We’re then going to be in Bangkok September 1st through the 5th. From the 6th to the 7th we’re gonna be in Denver Colorado and then we’ll be in Colorado Springs from the to the 9th I think of September then we’re going to Traverse City until the 12th of September. So, if you’re listening to this and you’re close to any of those areas and those dates and you want to meet up, make sure to reach out, reach us on Twitter or just email or whatever and we’d love to have a coffee with you, maybe grab a lunch and kind of say hi.

Joe:
Yeah absolutely, it’s going to be a busy travel schedule but if you are anywhere near to those cities, let us know.

Justin:
All right buddy, let’s do some listener shouts [inaudible 00:54:44] indulgent ego boosting social proof segment. First up on Twitter, we got Cody McKibben said pick one and start something hashtag entrepreneur, he was talking about our post regarding the 11 most popular online business models. That’s kind of a roundup post of 11 different posts we did, a series of posts we did talking about the different business models from an entrepreneur’s perspective and from a buyer and seller’s perspective. We cover things like Amazon affiliates, regular affiliates, FBA businesses, drop shipping, e-commerce, so if you’re interested in that, I’ll put a link to that in the show notes, so appreciate that Cody, lots of love for you.

Justin:
We also had a guy Joe, on Twitter ask if we have an affiliate program, [inaudible 00:55:22] interesting, I told him no we don’t, but if they have … if that person [inaudible 00:55:27] people looking to sell their businesses, we’re a good option and no compensation though. He got back to me and said I guess you don’t need the extra customers but if you ever do set up a program or want to expand business selection I can help. That was interesting. I guess you don’t need the extra customers. I was thinking to myself, our problem with affiliates that are kind of sending us deals is that affiliate sales tend to over promise right? And they bring not the best clients and this is just our experience isn’t necessarily the case but that’s kind of our problem with paying for affiliates to send us leads and we also kind of feel that we want them to send whatever customers they have or people they talk to you to whoever is best not who’s necessarily paying them the most money right? I mean does that make sense? I think there’s some kind of like affiliate deal that I don’t love/

Joe:
I think affiliate deals work for certain industries very, very well and I think possibly there is a structure that works in the brokerage industry as well. I would prefer a co-brokering relationship where you need to bring either the buyer or the seller to the table and I need to bring either the buyer or the seller to the table and we have some sort of relationship but there are some sales on your end. An affiliate relationship implies you just dump the lead on my lap and then it’s all up to me and you go home with a big paycheck and that’s just not very effective in the brokerage industry.

Justin:
Yeah and I don’t know what they’re saying on the other end of that, oh yeah, no they’ll definitely do this or here’s what we do or [inaudible 00:56:55]. I think it starts the relationship off and this is a very relationship business, I think it starts it off on the wrong foot. So, in terms of paying affiliates to bring us leads or deals, we won’t do that, we would be happy to do business with them if you think we’re the best fit for them. Okay buddy, another couple of things but we’ve got a great guest post going on on Matthew Woodward’s site. it’s a case study on how one of our customers built and then sold a hundred and ninety thousand dollar Amazon affiliate site. It’s really detailed, really interesting, I’ll link to that in the show notes. I was also a guest on the entrepreneur on fire podcast with [inaudible 00:57:27]. I’m a huge fan of him and the business he’s built. I don’t love the podcast. Have you listened to it?

Joe:
I have and I think the formula is nice from someone that has to do a podcast all the time. I understand the way the reason why you would do it from a business needs but yeah, it makes for … the listening is difficult if you listen to it all the time.

Justin:
Yeah, that was my … so that was my problem. I think I’m just not … I’m not the target market for that right? That’s for the guy or girl that kind of has a commute and they’re like, god, I need something to listen to every day, I want to stay motivated, I’m working on my side business to like get away from the job and they’re commuting their job and like helps to motivate them, get them fired up and give them ideas on things they can do in their business to improve and I just [inaudible 00:58:10] commuting or whatever, so it’s not … yeah, I’m just not the target market. It’s cool, but it’s not … I think it’s not meant for me.

Justin:
Another thing, I had a really fun interview with the guys over at a site called the land geek and we were talking about how buying and selling websites and online properties compares to offline real estate and so, I think it was a really fun interview, the guys were great and there were some really I think great comparisons and some analysis on the differences and kind of the similarities between the two, so if you’re interested in that, take a look. Last thing is we got featured on a site called The Next Web about kind of our business ideas surrounding fitness and gaming, it’s a roundup post and we got mentioned there. I love kind of like forward-thinking ideas about entrepreneurship Joe, I just … I got an email from someone who’s talking like where do you see the market going like in five years, ten years? What like trends in technology will change the world that entrepreneurs can take advantage of and I love sitting around having a beer and talking about that stuff, that’s like a hobby of mine, so it’s fun.

Joe:
Cool.

Justin:
All right buddy, that’s it for episode 162 of the Empire podcast. Thanks for sticking with us. We’ll be back next week with another show. You can find the show notes for this episode and more at empireflippers.com/splitly and make sure to follow us on Twitter @Empireflippers. See you next week.

Joe:
Bye bye everybody.

Speaker 2:
Hope you enjoyed this episode of the Empire podcast with Justin and Joe. Hit up empireflippers.com for more. That’s empireflippers.com. Thanks for listening.