Subscribe
Share
Share
Embed
Dan Martell discovered computers in rehab. After he overcame his problems with drugs, he taught himself to program. From there, he started building businesses. Eventually, he travelled to San Francisco to learn everything he could from the startup scene.
You might recognize his former product: Flowtown, and his current one: Clarity. In this episode Dan shares his story from the beginning, and how he overcame a difficult beginning to build his own products.
Show Notes
Dan Martell discovered computers in rehab. After he overcame his problems with drugs, he taught himself to program. From there, he started building businesses. Eventually, he travelled to San Francisco to learn everything he could from the startup scene.
You might recognize his former product: Flowtown, and his current one: Clarity. In this episode Dan shares his story from the beginning, and how he overcame a difficult beginning to build his own products.
Notable quotes
- “I had a hard upbringing, my mother was an alcoholic. I was removed from my home.”
- “Built tree forts, when I was 8 or 9, and I would charge the other kids to come play in them”
- “I’ve always been into building and selling stuff… so I took to selling drugs.”
- “It was in rehab that I discovered computers. I learned to build stuff that wasn’t illegal.”
- “A lot of the stuff you learn selling drugs, translates to business acumen.”
- “Clarity’s foundation is getting advice from people that have been there before. ”
- “You should only get advice from people that have been there before.”
- “My uncle was selling roller blades in his basement.”
- “As soon as possible, your company needs to make money. If you can get anyone to show up and pay you $1, you’ve made it on the internet.”
- “People don’t [charge money for their products], because they’re scared that their product sucks.”
- “It took me a few failed attempts before I made my first million.”
- “When I was 21, I was hired to work for an oil company in the tar sands. My job title was Solutions Architect.”
- “I almost went bankrupt in 6 weeks.”
- “I became a millionaire when I was 27.”
- “I get 3-4 venture cap firms cold emailing me every week.”
Show notes
- http://www.danmartell.com/
- https://twitter.com/danmartell
- https://clarity.fm/#/danmartell
- http://maplebutter.com/
Premium Sponsors
- Sprint.ly – Our premium sponsor is Sprint.ly. Sprint.ly is agile project management software with one goal: to help you ship more stuff. You can try them out for free at www.sprint.ly. You can also thank them on Twitter: @sprintly
- WPengine – Are you frustrated with your current web host provider? A few years ago I was looking to switch from my current cheap host to something more robust: but trying to search online for hosting providers is a nightmare (there’s so much spam in the search results). Then Rob Walling recommended WPengine. I’ve been with them ever since. If you’re looking for dedicated WordPress hosting, that can handle huge traffic spikes (like 40,000 visits in a day), is lightning fast, and has great support I highlight recommend them. Click here to get up to 2 months free.
Shout outs
- Shout-out #1: Product People newsletter
- Shout-out #2: Save 10% on domains at Hover.com
Creators and Guests
What is Product People?
A podcast focused on great products and the people who make them
Dan Martell is a Canadian product guy and entrepreneur from Moncton, New Brunswick. You might recognize his former product, Flowtown, and his current one, Clarity. What you might not know is that Dan has a crazy past. In this episode, Dan shares his story from the beginning and how he overcame that difficult start to build his own products. Stay tuned.
Speaker 1:First, want to tell you about some great sponsors. Sprint.ly has been with us since the beginning. Their web app is the best way to manage the software development process. This is what I use myself. I use it every day and it's agile project management that works.
Speaker 1:No other way to say it. You and your team can try sprint.ly for free by going to www.sprint.ly. And I'm writing a book called Build and Launch. It's a book about building and launching your own stuff. You can go to buildandlaunch.net, sign up for the mailing list, and follow along with my progress.
Speaker 1:I'll be sending a sample chapter soon.
Speaker 2:Hey, I'm Justin and this is Product People, the podcast focused on great products and the people who make them. And today on the show, I have a Canadian who's been to Silicon Valley and back again, Dan Martell from clarity.fm. Dan, welcome to the show.
Speaker 3:Hey, thanks for having me, Justin.
Speaker 2:Well, thanks for being here.
Speaker 1:Dan, I want to
Speaker 2:get into your backstory, but let's start by quickly describing your product, your current product. What is clarity.fm?
Speaker 3:Yeah. So it's just clarity. We can I mean, sucks that it's a .fm, but, you know, domain I've been fighting with the domain people for a while? Clarity is the easiest way to get expert advice. So you find, schedule, and pay for expert advice over the phone to grow your business.
Speaker 3:So we launched a little over a year ago. We've got 13,000 experts in 2,000 different categories, guys, that'll help you figure out how to start your business, how to grow your business, how to raise capital, how to get acquired, to how to manage your team. I mean, those are some of the big clusters of things that people use Clarity for, but, I mean, we have guys on there that obscure as data scientists to email analytics. I mean, it's pretty broad, the experts we have, but everybody's been recruited, vetted, and we've done tens of thousands of calls across 56 different countries now. Cool.
Speaker 3:It's pretty cool.
Speaker 2:Yeah, great. And we're going get into how you built Clarity and some other things that our listeners can take away a bit later. But I'd like to start with your story. So I mentioned that you're Canadian. Where did you grow up?
Speaker 2:And have you always been into computers? Have you always been building things? What's kind of the story behind Dan Martell?
Speaker 3:So obviously, I don't want to bore your readers. I mean, the first thing I guess is, you know, today, you know, I've been this is my fifth company. My first two were complete failures. Kind of figured out when I was 24, built a company with 30 employees and got acquired four years later. That's financially when I kind of, you know, made some money and realized that if I did something after that, it would be a pure kind of passion thing for me.
Speaker 3:I then went on to build Flowtown, which was a social marketing company, raised venture funding. Well, I moved to San Francisco after my company, Spheric, and then Flowtown got you know, built the product, bootstrapped it, got it to profitability, ended up raising 750,000 from guys like Dave McClure, Mitch Cape Horn that did Lotus Notes, and, you know, Travis Kalanick, founder of Uber. Just a bunch of great angels, and Mhmm. Two years later, we grew that to 50,000 small businesses as customers and then got acquired by Demandforce, which then got acquired by Intuit for 500,000,000, so that was kinda awesome. And and then a few months after they acquired us, I essentially walked away from my earn out to go work on this crazy idea that's called Clarity.
Speaker 3:Early days, Clarity was not what I just described it, and we can get into that. But Mhmm. My background is you know, I grew up in Moncton, New Brunswick. It's a town about 80,000 people in the middle of nowhere. So middle of nowhere is just to the right.
Speaker 3:You know where Bangor, Maine is or Maine is a state? You go up into the right in Canada, in the province called New Brunswick. So that's where I grew up. I've got a crazy back background, you know, as a as a kid. I actually got a lot of trouble.
Speaker 3:I mean, I come from a home. My mom's an alcoholic. My dad was in sales, always on the road, had a lot of time in my hands. I actually it's funny. I I grew up in kind of the in kind of, like, farming area.
Speaker 3:I don't know. Rural I don't even know what you'd call it, but in the woods. Yeah. Jokes. I grew up in the woods.
Speaker 3:Anyway, I built tree forts, you know. So when I was, like, eight and nine, I I go in the woods, find a spot, and then try to convince the neighborhood kids to help me. And and the ones that didn't, I would charge them, you know, to come play in it. And so I always joke that I I got into real estate at a young age.
Speaker 2:You're building teams and building I products way back
Speaker 3:didn't even realize it till later on when I was like, what did I do as a kid? But, you know, unfortunately, like my upbringing, you know, ended up that when I was 11, got removed from my house. I spent, you know, four or five years in foster care and crisis centers and group homes. I mean, you name the government program, I went through it. And it was challenging when I was when I was 13.
Speaker 3:You know, that was the year I finally got, you know, allowed to be returned home, and it was also the year that my parents got divorced, which, you know, any kid that's been through that, you know, I thought it was my fault. Obviously, I learned later in life that it wasn't. Mhmm. And it was the it was the year that I actually, you know, got turned on to drugs. And over the next three years, I was pretty much spending way less time at school and a lot more time with guys twice my age.
Speaker 3:You know? I guess the the I don't know what it is. Like, I've always been into building and creating and selling stuff. So, you know, I took to selling drugs, and, you know, next thing I knew was I got arrested. I ended up spending two months in jail at 16.
Speaker 3:And then after that sentencing, I promised I would, you know, change my friends, do all that stuff. And, you know, eleven months after getting out, I ended up, you know it's kinda crazy now that think about it. It's like I'm telling a movie, but, you know, I I got I got in a high speed chase with cops, and it was just all messed up. And I thought, for sure, I'm not going back to jail, and I had a gun with me. And, you know, there was a point where I tried to pull it out of the bag because, you know, I ran into a house, and all of a sudden, I got stuck.
Speaker 3:And it was at seventeen at that point where, you know, I'm getting dragged out of this car realizing that I wasn't supposed to live, I don't know, I just decided that I'm gonna do something with my life. So six months after that, I got sentenced a year and a half in jail. I spent six months my son finally got released to rehab, did eleven months in rehab, this is where I learned not only, you know, who I was as a person and kind of what I wanted to get out of life, but also I discovered computers. And, you know, I credit this place Portage, New Brunswick, the rehab center, you know, to obviously saving my life, but to computers as well because I learned how to build stuff that wasn't illegal. It turns out a lot of the a lot of the stuff you learn selling drugs translates to business acumen, so so far so good.
Speaker 3:Oh, man. That's that's my that's I mean, that's my craziest you know, it is People are like, wow. That's nuts. You know? But to me, the way I look at it is, you know, it's not what I did.
Speaker 3:It's how I felt. And I think that a lot of, you know, teenagers or young kids, they go through stuff. Right? And Mhmm. It's how you deal with that that matters, and I've been fortunate.
Speaker 3:I just had some really great people that showed up at the right time in my life to kinda teach me, you know, to go right instead of left, and it turned out to be a good decision. So that's that's why I do what I do. That's why I built Clarity. I mean, Clarity's foundation was getting advice from people who've been there before is the lesson I learned when I was 17 because what was unique about the rehab center I went to was that every staff member was an ex drug addict that had been clean, and We're now working at this facility.
Speaker 2:Yeah, that was significant to be talking to someone that could actually understand your situation.
Speaker 3:You've got to imagine, like have you ever met those 16, 17 year olds, not nose baggy jeans? You know those kids, right? Oh yeah. That was me, right? So it wasn't the first time I went to a twenty one day program to see somebody talk about my problems, Yeah.
Speaker 3:It was the first time that that person I was talking to actually truly understood what I went through. I mean, when a guy comes up to you that spent, you know, seventeen years in jail for for for getting caught selling heroin in Mexico tells you, hey, Dan, you you should really take a second and think about what you're doing right now, you kind of listen.
Speaker 2:Yeah. And so that's
Speaker 3:what I needed.
Speaker 2:And so that was the significant part about Portage is the fact that they had people that had been there, had done that and could say, Listen, if you don't clean yourself up, this is where you're headed.
Speaker 3:Exactly. And they could talk with a thorn. I mean, to me is the lesson I didn't realize until honestly two weeks before I started Clarity and I kind of started messing around with the idea. It's something I learned that has resulted in all any success I've had in business was because of the lesson I learned at 17 that you should only get advice from people who've been there before.
Speaker 2:Mhmm. Mhmm.
Speaker 3:And and and it it was it was funny that it took me fifteen years to finally figure it out that that was, like, this guiding principle, but I'm glad, you know, that's why I feel like clarity is is essentially what I what I was meant to do with my life. It's my life's purpose. It's an extension of who I am and the way I think and the problems that I want to solve.
Speaker 2:Yeah. And so you were 17 or 18 when you got out of rehab?
Speaker 3:Exactly, yeah.
Speaker 2:And so what did you do at that point? You said you got into computers. Happened? The
Speaker 3:beauty is after eleven months of rehab, because took me that long, most people did it in six months, but I was bit hard headed. Mhmm. I mean, I rebuilt my relationship with my family, my brothers, my friends, the good ones anyways. I went back to high school. I learned to write code in this facility.
Speaker 3:They they they had a programming on Java a book on Java. I didn't even have a computer. I would just read it, and I was just fascinated by the programming language and the math, and I studied a book without ever writing code. It was just the weirdest thing, but it's the way my brain I like math. I like problem solving, and it just it was kind of, like, interesting to me even if I couldn't actually execute the code.
Speaker 3:I could understand, and I was like, wow. If I could actually do this, this would be interesting because there's all these things that I would wanna do, and and it just turned out there's this thing called the Internet that was, you know, that was picking up steam and Yeah. That was kind of a big deal, so I got lucky. I mean, really, when I came out, went to high school, graduated with honors, rebuilt the relationship with my family, and studied computers, went to chapters, you know, in Canada, but, you know, whatever, Indigo in The States or whatever Yeah. Bookstore, and spent $3 on books and just studied.
Speaker 3:I mean, I spent a year, nights and weekends, building and trying and fooling around programming languages, and that's know, that's when I started my first company, Maritime Vacation. There was a complete failure but a lot of fun, and I did a hosting company, which I always tell people the lesson I learned there was don't start a hosting company. It's like the dumbest business to get into unless you're Amazon Web Services. Like, you're working twenty four seven for you know, it's like selling gold. Like, how much profit are you gonna make off selling gold?
Speaker 3:Yeah. You gotta do it at yourself.
Speaker 2:Although, those guys at WP Engine are it seems like you've got the right niche sometimes in the right level of service. Maybe you can still make some money there.
Speaker 3:Exactly. I think that's that's the lesson I learned is you've got to be differentiated and you've to go after growth market and WP Engine and a lot of the Ruby guys in the early days, they all figured it out. I'm And not
Speaker 2:so how old were you because that must have taken a while to go back to school, to rebuild your personal life. How old were you when you said, Okay, I'm going to go to Chapters, the bookstore, and pick up a bunch of books on programming?
Speaker 3:I was 19. I mean, what happened was I read the books on programming when I was away, and then I got out. I went to high school. I was fortunate enough that high school had a computer programming class. I did one year, so I did two classes, right, each semester.
Speaker 2:Mhmm.
Speaker 3:And during while I was doing that, my dad, you know, saw how excited I was about it, and he was just pumped that it was something that wasn't illegal. So he's like, whatever you need. Like, what else what do you what do you need a computer? Do you need books? And I was like, yeah.
Speaker 3:You know, I heard about this thing called ColdFusion. I'd like to read books or HTML or JavaScript. And, you know, we'd go every week and I'd I'd buy books and I would just stay home and, you know, read them, implement them. And then, you know, the vacation site was him going, hey, Dan. There's this thing you know, I wanna build a webpage for my cottage.
Speaker 3:Do you think you could build it? And my first question back to him was, how many people do you think own cottages that would want a webpage? And he's like, well, there's probably a couple 100 around us. And I was like, yeah. I can build you the website, but it's gonna cost you a $100 a month for hosting because I was trying to figure out how much I would need to spend to get everybody else but make my dad pay for it.
Speaker 3:Yeah. So that was my first entrepreneurial venture.
Speaker 2:Yeah. How important do you think that is? Because I've had similar experiences when I was a kid. Like, sometimes joke that, you know, my my first customer was my dad. How important do you think that is for young entrepreneurs to have someone like in their family or someone they know kind of take a chance and become their first customer?
Speaker 3:Well, I think it's important to have I think what my dad did indirectly by there is he my dad had always he had a cottage he rented, right? So he was indirectly kind of an entrepreneur. He worked at a full time job and whatever you wanna define lifestyle entrepreneur, whatever, but he was that person that, you know, he had a cottage, he had a fish and chip wagon like this place that served fries and fish and, you know, he built that on the side. I mean, he he was at at the very beginning, he was somebody that I could look up to, right, that's, you know, get advice from people who've been there before. So when he said, hey, this is really interesting and I would want it and I'll pay you, you know, I listen.
Speaker 3:So I mean, I think it's important to have somebody in your family or around you that is an entrepreneur that can give you that support because what happens is you don't have it yourself because you have no reference point to believe it. Right?
Speaker 2:Like Yeah.
Speaker 3:I don't care who you are when you're a kid. You need to see at least one example of it to be able to believe that you could even do it. Right? My uncle was in was a businessman, my mom's brother. Turns out years later that he was actually in the mafia, but, you know, at the time, thought, oh, he sells he sells rollerblades.
Speaker 3:Like, he has a thousand pairs of rollerblades in his basement.
Speaker 2:Were the shitty
Speaker 3:of his rollerblades. Put it that way.
Speaker 2:That should have been your first indication. A guy that sells rollerblades in his basement.
Speaker 3:You don't know. I was like, why does my uncle have all this stuff? He didn't have stuff. It wasn't his.
Speaker 2:Oh, that's so funny. Yeah. Okay. So your first business was kind of doing these cottage websites and where did you go from there?
Speaker 3:Well, the funny story with the cottage website is when my dad told me that, I was like thinking to myself, like, how do I get in front of all these cottage owners? And I was just talking out loud to one of my friends and he goes, oh, there's actually this book that they sell at the tourism or they don't even sell it. They give it away. It's called the, you know, the Tourism Guide Canada Select whatever. It has a list of every cottage and bed and breakfast with their address in the area.
Speaker 3:Yeah. So what I did as a developer is I built this mail merge program that essentially, you know, access database, paid my little brother to load in all the addresses into the database, like, fucking hour, and and then created the the letters, these mail out forms that said, hey. If you you might have heard this Internet. If you want one for your your your property, you know, send us a check for $35 and three pictures. And if you want the pictures back, you know, add $5 to the check, and we'll mail them back to you.
Speaker 3:And I just sent out, like, 200 and some. Right? Yeah. And it was, like, five or six days later, my dad came home and got the mail. It was, like, Dan, you have you know, who gets the mail at, like, know, seven, 18 years old?
Speaker 3:He's like, get some mail. And I was, holy shit. It worked. Yeah. Opened up these envelopes in front of my dad.
Speaker 3:He's like, what did you do? And I was like, no. No. No. This is legit.
Speaker 3:So he was pissed because he knew that he was paying for the hosting, but I was charging everybody else to to use the service. But, I mean, that was when I made my first dollar, and I think that was the biggest lesson, you know, I tell people. It's like as soon as you possibly can, make make money. Right? I think it's really I think if you can get anybody to show up to your product or website or service that's not your cousin, not your friend, doesn't know you whatsoever, and give you a dollar, you have gone pro on the internet.
Speaker 3:Yeah. A lot of people don't ever make $1. It's tough. A lot to ask somebody about a credit card. It's not as easy as people think it is.
Speaker 2:Why do you think that is? Because there's a lot of people that want to like this is our audience. Audience is made up
Speaker 3:Can of they not ask for the money? I'll tell you exactly why. They're scared to find out that their product sucks. They're scared that nobody's going to want it. It's easy to make it free because there's no cost to the person to enter an email and a password.
Speaker 3:That's why.
Speaker 2:You had this first experience getting people to send you money in the mail. You must have known there was something there that you could make money doing this.
Speaker 3:The epiphany, here is the epiphany even more than that, is I created something that had a URL. Like, people don't realize how special this is. I created something that I could share with anybody in the world and they knew what I was working on. Think about that. Most people that go to work every day never ever ever show actually what they do at work to their family.
Speaker 2:That's right.
Speaker 3:You know, that's interesting and we take it for granted in people in the tech or product or web space, but I remember it hit me on the side of the was like, Wow, there's this URL that if I send to somebody an email or I tell somebody and they go on the internet, they can actually see what I've been spending the last hundred hours a week on. Cool. All over the world. Isn't that neat?
Speaker 2:You're right, too. If you're a pipe fitter, you can't really show that to anybody. You
Speaker 3:could be an engineer. You work on these really great plans. You never really show your family what you do or the work product or anything. Know, my dad worked at a company managing guys that fix big electric motors and like, he never you know, unless I went to a shop and like looked and talked to people, like, I never really knew what my dad did. I just thought it was really neat that there was this thing called the Internet, and I guess I just got hooked to that.
Speaker 3:I got hooked on the idea that I could create things and share it with anybody I want, and there was nothing stopping me from doing that, except me. That was powerful.
Speaker 2:Yeah. And so what did you do after that? You've had this initial success. Did you kind of realize that
Speaker 3:did the best.
Speaker 2:Well, in terms of making you're successful because you've already made a dollar from people you don't know.
Speaker 3:Fair enough. What I do, I just I kept building stuff. I mean, the next I built this this this desktop app in Visual Basic that because I was pissed off that my friends would always come to my computer because I was the only friend with a CD burner and, like, sit there and build their mix tapes, and I couldn't use the computer when they were sitting there trying to figure out what songs they wanna put on. So I built this app that would synchronize all the m p three that downloaded off the Internet to an FTP server, and then they could download the updated list, and they could build essentially their mix tape on their computer. And when they were ready, they'd hit, you know, burn, and it would I would charge them $20 for it, and then it would come to my computer, set up the CD at night, burn the CDs while I was sleeping, and that's how I made money.
Speaker 3:Again, like, just solving my own problem.
Speaker 2:Oh, man. I wish I wish you'd sold that to me when I was a kid. I could've used that. Exactly.
Speaker 3:You were probably one of those guys. Right? You had a speed burner, and everybody come to your house and sit there for three or four hours trying to figure out build a mix page for their girlfriend. And just
Speaker 2:for like some people know, what year is this when this is all happening?
Speaker 3:1998, '99. '97, '98, yeah.
Speaker 2:Alright. Are you and I about the same age? I'm 33.
Speaker 3:Exactly the same age.
Speaker 2:Okay. Interesting. You started doing that. Was kind of the first big company you started?
Speaker 3:Well, at first, I mean, of revenue, it would probably be Sphere. And it took me a few failed attempts. You know, I was 18 when I started the vacation rental site and, you know, I I I just didn't I wasn't passionate about it. It was my you know, I like that I made money, but I didn't give a shit about people's cottages. Right?
Speaker 3:So Yeah. You know, so I learned a little bit about that there. And then I did the hosting company because I was building websites for people, so I figured, why not do a hosting company? And I lost, like, $20 there because I actually was trying to be legit and buy all the hardware and servers and software. And I mean Oh, wow.
Speaker 3:And then yeah. And I got a bank as a customer, and they almost killed me. I mean, 247 support. Their ecommerce it was just the dumbest. Never again.
Speaker 2:Wow.
Speaker 3:But and I just kept, like, trying stuff. And then finally, I got a job. It's the only job I ever got for ten months, and I quit and moved out west. I actually live in Calgary, you know, for the Canadians out there listening. And yeah.
Speaker 3:So the I mean, I don't wanna I don't know how much backstory, but the funny story about that was I decided to go 09/09/2001. I wanted to move out West, so I called up my dad. Called my dad after I quit my job. It was like he didn't know. I, like, sold everything I owed.
Speaker 3:I was like, dad, I know you're probably not gonna be happy with this, but I actually quit my job. It was the, like, the best company you worked for in the city so far. I was making I was making $60 a year at, 19, '20. Oh, wow. He was pumped.
Speaker 3:Yeah. It was awesome. He was excited. Yeah. And I called up and said, I quit my job, and I'm moving out west.
Speaker 3:And he goes, that's the worst decision you've ever made. And it's almost silent. And I'm like, really? You know what I mean? Seriously, that's the worst decision?
Speaker 3:You you know what I mean?
Speaker 2:Like, are we not the
Speaker 3:same people? Do you not remember what I've done? Like Yeah. I thought that was funny, but I I ended up going anyway. But September 9, I left in my Volkswagen Jetta and mountain bikes in a suitcase.
Speaker 3:And halfway across Canada, you know, September 11 happened, and anybody in the tech industry knows, like, every opportunity dried up, like, overnight. It was done. Yeah. So I couch surfed for three months, you know, beg, bar, and, you know, almost deal and just try to survive because I didn't wanna prove my dad right. And after three months of hustling every day trying to figure out how I could get any kind of work, I got a call from Syncrude in Fort McMurray of all places, the oil company in Tar Sands, and they said, you know, we're looking for somebody that has experience.
Speaker 3:It just I was lucky the company that I worked at taught me some they sent me on some training, and I was, like, one of three people in all of Canada that had. And they yeah. So that I mean, I'm 21 or 20, and they offered me a job as a contractor making $75 an hour, all expenses paid.
Speaker 2:Wow.
Speaker 3:And I was like and they but they didn't know how old I was. So I show up the first day, and the man I remember the manager everybody was like, twice my you know, the average age is, like, 30. I'm 21. And I I show up in, like, a plaid red shirt and khakis and a shaved head. And and the manager is, can we talk for a second?
Speaker 3:And he he pretty much said, you got you got two weeks to prove to me you're not a complete, you know, re reject. Like, you can actually do this. I I got my job title was solution architect. Like, I was I was the architect for the whole portal infrastructure that they had a $10,000,000 budget for. Wow.
Speaker 3:And, yeah, I I I hit the ground. I I went old school. I got a library card, and I read about project management and Gantt charts and pro you know, like, budgeting and all this crazy project stuff that is pretty much like just in time. Like at night I would study for the next day's meetings. And after he's Hey man, I'm really impressed and let's keep going for another month.
Speaker 3:I ended up staying for two years.
Speaker 2:Now tell me about this, because there's a lot of, you know, young people that sometimes they just want to start a company right away. Do you think there's a value in going out and working for a while? And it sounds like you learned a lot of skills while you were at that job.
Speaker 3:Yes, but I could have learned them on the job. I would have never done it. I wish I could go back and talk to myself. I mean, that's why I built Clarity. I built Clarity for the 18 year old version of me that was trying to build a tech company that didn't have one friend in the industry.
Speaker 3:I mean, the best I had was my friend that had a signed company. It wasn't like you know, and the rest of them were like weekend, you know, partiers and barbecuing. Like, they didn't care about business. So had I had somebody that you know, like myself that I could've talked to, I would've told that, and I have. Since that day, I've had people call me and like, hey, heard you lived in Fort McMurray, what do you think I should do?
Speaker 3:And I'm like, don't go. It's the most ridiculous place in the world. I have no social life. There's no women there if you're a single guy, and the people there are just ridiculous because they all make a lot of money and they're not very bright. I don't mean to overgeneralize, but everybody anybody who's been to Fort McMurray will tell you the same thing.
Speaker 3:So was there value in me working there? Yes. But could I have done it another way? A 100000%. I wish I would have.
Speaker 3:I would have got a couple years head start.
Speaker 2:So you wish you'd started sooner?
Speaker 3:Freaking right. I already started. My problem was I started and then shit happened and I didn't keep going. Like, I'd already been in the business and I thought I was gonna go out there and maybe start another business or start something and there was nothing. There was, like, no opportunity.
Speaker 3:Nobody was buying. There's no customers. The market went to zero. It's like trying to sell a seven finger glove. Nobody's going to buy that.
Speaker 2:Was it after this job in Fort McMurray that you started Flowtown?
Speaker 3:Nope, Spheric. Spheric technology, So, I yeah. So I did what I think every, you know, young person with a lot of I saved all my money. I mean, I paid myself 40,000 a year because all my expenses were paid. That was like my play money.
Speaker 3:Then I put everything else in a bank account. So I actually had like a lot of money. And, you know, so I did what I think everybody should do. I went traveling for almost a year. Went to Australia.
Speaker 3:That was awesome. Yeah. And then it was when I came back. It was while I was there where I was getting calls from people, you know, recruiters saying, hey. We really need somebody with your experience, and I'm like I was like, 150 an hour.
Speaker 3:They're like, done. And I'm like, holy shit. If I had 10 people just like me, I could retire. Yeah. Turns out it's not as easy as that, but that was the idea.
Speaker 3:So after Australia, that's when I started Spheric at 24, and day one, took you know, at the time, what I had left over was just $70, and I I started Spheric with three guys that I I hired day one.
Speaker 2:And and how did that go?
Speaker 3:I almost went bankrupt in six weeks because I didn't understand cash flow. Even though my dad was like, you really shouldn't grow too fast and you should sit down and do a plan. I was like, come on, dad. I was like, what do you know, man? I'm do I've got more money in my bank account than you probably do.
Speaker 2:Like Yeah.
Speaker 3:I was a little cocky. So that was that was probably wrong. But, you know, it came down to the fact that, you know, we had a bunch of customers that I had lined up. I hired these guys, and I didn't realize by the time we do the work, I pay for everybody's payroll, bought all their hardware and travel and flew them around and did work for customers, invoiced them, and then it got finally paid, which is, like, net 45 for big enterprise corporate, sometimes net 60. Mhmm.
Speaker 3:And then they would send a check to the office, and I would go to the bank, and the bank would freeze the check for twenty business days because it was a US check. I was like six months before I ever actually had the and I had rev I mean, we're doing like 30,000 a month in revenue.
Speaker 2:Yeah.
Speaker 3:I had no I ran out of money.
Speaker 2:$70,000 cash isn't a lot of money when you've got a whole company going. Especially
Speaker 3:if you have to float four people's salaries and hardware and travel. So like, I learned a thing called factoring, which is you can actually sell your receivables for, like, 8%. You still are accountable a 100% for them ever coming in, but you can get them it's kinda like a payday loan for a business. Right? You get money now.
Speaker 3:Yeah. So, I mean, I was desperate.
Speaker 2:Yeah.
Speaker 3:And but that's but you know what? That it was that moment, and and there's a longer story, but the short version was that moment where I solved that problem that I realized that I don't need to know everything. I just need to find people that know about it, and I could probably doing what I was doing, which my plan was to grow a 100 and some percent every year because I wanted to build a big company. Mhmm. And everybody told me I was stupid, and you're growing too fast, and why do you care?
Speaker 3:And I was just like, you know why I care? Because anything less wouldn't be interesting. And that's just me. Yeah. So it was it was one of those moments where none of my employees knew.
Speaker 3:I've never I've told the story, but, you know, unless they've listened to the interviews, they probably don't know. But, like, I couldn't make payroll. I was screwed. I was like, holy shit. I just got these guys to quit their jobs if they were employable.
Speaker 3:One guy had two kids. Oh, man. Yeah. You know what I you know how I was like, my stomach was just twist I I felt ill. Yeah.
Speaker 3:And but I got through it. They never knew. The money came, and I got paid, and and we built the company, the multimillion dollar company. I bootstrapped it and got acquired. I mean, it was it was an awesome ride.
Speaker 2:And was the like when you say you got acquired, did did you make some money off that deal? Because you can never tell. Was that a good payout?
Speaker 3:So I became a millionaire when was 27 just from the revenue of the company. Mean, we had certain employees. Can run the math. I mean, we were doing 40% net margins. I find it personally, financially, like, I've never been a money spender.
Speaker 3:I just reinvest. So I remember my accountant called me up. You know, I was driving, he goes, you know, we finished the year end for the third year, and he goes, you know, hey, Dan. Like, did you know that you actually have, like, 1 point some million in retained earnings in your bank account? I'm like I was like, should we do something with that?
Speaker 3:I'm like, yeah. We should talk. And I was like, I didn't realize. I just didn't know. I didn't know that our first year, we did 1,200,000.0.
Speaker 3:I didn't know that was good. I actually thought we were not doing as much as we could have been doing.
Speaker 2:Yeah. Your first year you had 1,200,000.0 in revenue? Exactly. Wow. Wow.
Speaker 2:Okay. So so you you sold the company. Why did you sell the company?
Speaker 3:It was a lot of stuff. I mean, I've been doing it for four years. I was working one hundred hours a week. I didn't plan on it. I a member of one of our partners we were working with that that was, like, 30% of our business kind of asked me if I wanted to do some kind of merger and you know, when you're when you're a company, we won a bunch of awards.
Speaker 3:And it's funny because, like, when you're when you get awards or you get in the press, there's actually these these guys that, like, email you, and they're like, hey. We were we're, like, growth growth equity and or I have a client that'd be interested in talking about your business strategically. You fit and I was just like, what is this crap? Like, I'm not I don't know anything about that stuff, and I would just ignore it. But when that guy approached me and said, hey.
Speaker 3:We're really interested in your business. You know, we think that together we can create something big and meaningful. That's when I started replying to those cold emails from those guys that were saying, like, you know, we can help you with, like, growth equity. Because I was like, hey. If there's something there, if he sees it, maybe I should explore it.
Speaker 3:And that just quickly turned into conversation after conversation and and, you know, finding three or four buyers that, you know, essentially created a competitive process that that worked out pretty good.
Speaker 2:Are those guys that cold email you, are are they all good guys?
Speaker 3:No. They're not. But they are. Like, here's what's funny is now it's the VCs. Right?
Speaker 3:Like, I'm in I'm I've been building, you know, venture backed companies for five years. I'm at Flowtown and now Clarity. And, like, the associates at every like, you name it. Sequoia, Kleiner, etcetera, etcetera. Like, that's what their job is.
Speaker 3:The associates at those companies' job is to cold email people that got on TechCrunch, that got on AngelList. Like Mhmm. That's what they do. Right? I get them today.
Speaker 3:Right? I probably get three or four a week. So the those those guys that emailed me back in the day, they were in a different industry and and you know, because we'd win, like, the the profit top 50 under 50. They've cold emailed every company on that list. Yeah.
Speaker 3:But, yeah, they're they're you know, it's like anything else. Probably half are great and half are just, you know, not great, but not like they're, snake oil salesmen. Are doing their job, they're just not very good at it. But there are other ones that are great at it.
Speaker 2:So tell me about Flowtown. You were doing consulting before. What was the genesis behind Flowtown? Why did you decide to build a product?
Speaker 3:Well, Spheric ended up being a product company indirectly. So we started off as a service company. Like every service company, we saw a need, we productized it, that was, you know, half I would not half. 20% of our revenue was from the product, 80% was from services. It was like a Trojan horse.
Speaker 3:So so we I ended up trying many products. They all failed because they were, like, not even related to my customers. I was just taking the money and trying stuff, Mhmm. Which I'm sure anybody building a service company can relate to. You always have this, like, product ambition.
Speaker 3:Yeah. But that was after that company is when I realized, like, you know what? Screw this, you know, tink dinking like, tinkering dinking what is how do I say
Speaker 2:it? Tinkering.
Speaker 3:Tinkering around on the side. Yeah. Tinkering on the side. Let's just do it a 100%. Mhmm.
Speaker 3:But before I do it, I wanna learn. So that's why I moved to San Francisco, you know, where I think arguably if you wanna be like an actor, you go to New or Hollywood. If you wanna be in finance, you go to New York. If you want to be a tech entrepreneur, you go to San Francisco. And I spent a year just studying, you know, marketing and product and all this stuff because enterprise software today is less gap, but back in the day, enterprise software and consumer software are two different things.
Speaker 2:Yeah. And so you spent a year learning in San Francisco.
Speaker 3:And
Speaker 2:then how did how did the idea for Flowtown come about?
Speaker 3:Well, I mean, like, every question, there's a long answer and a short answer. I'll give you the short one
Speaker 2:Sure.
Speaker 3:For the sake of your audience. But I I met a guy named Ethan, Ethan Block. He he Ethan was doing a video podcast, and I liked him because I was thinking of doing something in video. Why? Because going to growth market and video is it was a big growth market.
Speaker 3:Yeah. So I met this guy, Ethan, and I was like, hey, man. Let's hang out. I wanna, like, learn how you do your shooting, how do you do you do all your editing, all this. I I wanna learn about Internet video.
Speaker 3:And it was through that that we ended up becoming friends, and he gets fired from his company because the two thousand eight crash happened. Yeah. And he comes to me, like, what should I work on? I'm like, I don't know. But what I did when I moved to San Francisco, it's probably a really good tip to anybody because I didn't figure this out for three weeks, and then it changed my life when I did it.
Speaker 3:I I when I first moved there after three weeks because I was like, this really sucks. I don't know anybody and nobody's responding to my emails. I was good at some things, and I just threw it out there and said, hey. If anybody wants help with marketing, I'm not not only can I help with marketing because I'm good at it, but I actually can write code and I can just query the database? So, like, there's no resources needed.
Speaker 3:I can come in for two weeks, and the the greatest thing that happened to me was the economy crashing because it was at that point where every startup that had raised capital had to get really serious about understanding how they acquired their customers and how their landing page converted and their product market fit. It was through those two week engagements that I ended up meeting a lot of people, not only the entrepreneurs, but also the investors because the entrepreneurs would, you know, go to their investors and go, hey. We've really got this thing figured out. And they go, how did you do that? And they go, we've been this guy, Dan, has been hanging around for a couple weeks, and here's what he did.
Speaker 3:And they're like, holy shit. Can you do it for one of my other companies? So that's that's the lesson I learned there was, you know, don't ask for anything, offer it. And be helpful and, you know, try to figure out what the pain is and, you know, I did that for a few months. But Ethan came to me and said, I got let go.
Speaker 3:What should I do? And I asked him, why'd you move to San Francisco? He said, to start a company. And I said, to start a company.
Speaker 2:Yeah.
Speaker 3:He's like, well, I don't know what to work on. I said, well, until you figure that out, why don't you do execution part of all this research and strategy stuff that I've been doing? Because every company I do it for are kinda sad when I leave because they need somebody to actually execute on it. Mhmm. He's like, cool.
Speaker 3:And it was, like, probably two months into doing that that he goes, I think there's a product here because I have figured out how do you leverage your existing customers to grow the business. Right? Mhmm. And what Flowtown was was a social media product. So if you can think, like again, this is before Hootsuite and all these products.
Speaker 3:It was kind of like my vision for it was Mailchimp for social media. Like, Mailchimp was email marketing. Social media marketing would need its own product like a Mailchimp. And I still don't think anybody really owns that. I think there's people that do good messaging, like publishing.
Speaker 3:People do good monitoring, but nobody's really said, here's a great small business tool marketing tool that encompasses all things social.
Speaker 2:Mhmm.
Speaker 3:Mhmm. You know? And and the reason why I was so passionate about when it what was because my brother had, two years prior, started a home building company. Long story short, you can Google, I've told this story before, but he almost went bankrupt because he tried to not use real estate agents and go direct. And when he finally called me to tell me that things weren't working out, I sat down with him.
Speaker 3:I showed him how to use social media to essentially build an audience and a customer base, and he ended up selling 16 houses his first year, 32 the second year, and he's now one of the top fastest growing home builders in all of Canada. He builds over 100 homes a year and he's 32. Yeah. I'm sorry, he was 26. So I realized that there was a need because of my brother and I thought if I could build a solution that could help other people like him, that would be really important.
Speaker 2:Yeah. That's why
Speaker 3:I built Interesting.
Speaker 2:And so I was one
Speaker 3:of the
Speaker 2:first I was an early user of Flowtown. I remember signing I seeing it on TechCrunch and I signed up. I thought it was such a great idea. And then I think one day I got an email saying like or I heard. Yeah, it got shut down.
Speaker 2:What happened?
Speaker 3:What happened was essentially, I had built this technology that allowed us to take an email address and find all the social and demographic data about that person, right? Name, age, email, occupation, on top of you know, what sites were they on, 50 different social networks, you know, what are some of the topics categories that were associated with them. I mean, that was our our our unique product hook was give us an email and we'll show you all this information. Mhmm. And one of the ways we did that was was using Facebook data.
Speaker 3:Now we didn't do anything, you know, black hat with it. Like, we so what happened was Facebook it was raised a year into it. Facebook got it was the New York Times' financial post did a whole expose about how ad networks and games were using your Facebook data and reselling it to other ad networks. Mhmm. Right?
Speaker 3:They were essentially like these these viral games on Facebook would cookie you, tag all of your personal data and your friends and everything about you because you Facebook connected to it Mhmm. These games, and then they would sell that data to what's called retargeting companies or or or DSPs, this demand side platforms for ads. Right? Like, you'd you'd be surprised what happens when you visit a website. Like, they know a lot about you.
Speaker 3:And and Facebook, in response to that, you know, article, changed their terms of service that pretty much said, you if you use Facebook Connect or any Facebook, you can use it to enhance your product, but you can't allow the the data to leave your system.
Speaker 2:Mhmm.
Speaker 3:Right? And what we were doing was allowing people to upload email addresses from Mailchimp, iContact, Constant Contact. You name it, we supported it, and add the data to those email systems. So you came through Flowtown, but then you could apply it to your email list in Mailchimp. And that's what essentially shut us down.
Speaker 3:We couldn't do that anymore. We could use it inside of Flowtown, but what's the what's the use? Like, what's good is it if you can't do anything? Like, I can totally tell you who these people are, but you need to do stuff with it. Essentially, we realized the business was not gonna be we couldn't do what we were doing, so we had to essentially go back to the whiteboard and start scratch all over again.
Speaker 1:And that's part one with Dan Martell. He's back next week to talk about the practical steps involved in launching Clarity. He's actually going to use that as a model for how we can build and launch our own products. You can follow Dan on Twitter at Dan Martell. You can follow me, Justin, on Twitter at MI Justin.
Speaker 1:And you can follow the show on Twitter as well at ProductPeopleTV. If you like the show, please give us a review in iTunes. It's as easy as clicking five stars. Join us next week for part two with Dan Martell. See you then.