Entrepreneurship is a hot topic these days, and one that you may know I am quite passionate about if you are a return reader here.
After I interviewed Leo Widrich of BufferApp a couple of weeks ago, I was put in touch with Dan Martell who is a B2B SaaS founder coach as well as former founder of Clarity.fm, Flowtown, and Spheric Technologies. Clarity exists to connect experts with other entrepreneurs in order to create a knowledge-sharing ecosystem where the experts can also earn some money in return for having conversations with those seeking to learn from them.
Fun fact: you can book a call with me through Clarity: https://clarity.fm/dohertyjf
We talked about products, the importance of focus, the importance of revenue generation as early as possible, freemium, entrepreneurial goal setting, and more. Have a read or listen and let me know your thought in the comments!
Interviewer: All right, so let’s go ahead and get started. Hello, everyone out there. My name is John Doherty, as you know. Welcome to another interview on my blog. I wasn’t planning on continuing these, but today I am very privileged to have Dan Martell of Clarity.fm here with me. Dan, why don’t you introduce yourself real quick? Tell us who you are. Tell us a little bit about Clarity, and what you have going on these days.
Dan: Cool. Thanks for having me, John. My name’s Dan. I am first and foremost Canadian. I spent the last five years in San Francisco. I’ve been an entrepreneur my whole life. I’ve done five companies. First two were complete failures, but I started early, so I got those out of the way. Then when I was 24, I started a company called Spheric Technologies, and grew that to 30 employees. It got acquired in 2008, and moved to San Francisco. I started another company called Flowtown which is a social marketing application. I grew that over two years. That got acquired in 2011 by Demandforce.
Then last year, I started working on a new idea called Clarity, and that’s what I do today, and Clarity’s kind of like eBay for business advice. What we do is, we help business owners and entrepreneurs and professionals get on a phone call with other experts and entrepreneurs, seasoned entrepreneurs, thought leaders to talk about their challenges, and their issues, and try to get some clarity around the problem. We launched it in May of last year. We’ve done 13,000 calls across more than 50 countries, and things are going really well. We announced our funding last year. We raised 1.6 million.
Dan: Thanks. And we’re just really hard-core focused on product, and making sure that we create a great community.
Interviewer: Awesome. So how many people do you have on Clarity right now? What are the sorts of things you can do there?
Dan: We’ve got over 9,000 experts. Everybody from guys like Eric Ries from the Lean Startup to Mark Cuban to the World Series of Poker champion. We’ve got 100+ venture capitalists and angel investors. We’ve got New York Times bestselling authors. We started off with 1,00 really curated experts, predominantly around the tech entrepreneur space, New York and San Francisco and Toronto. You can search the site without creating an account, and you can request to call as many people as you want. The average call is about 30 minutes and costs about $50.
We use Clarity everyday at Clarity to reach out to reach out to people in different specialized areas. The way we see it, is we help entrepreneurs and business owners make faster, better decisions. Everybody knows that getting advice from someone who’s been there before is the best way to make a decision. We let you do that in your real time, even if you don’t have the network to find those people.
Interviewer: Totally, awesome. So when did you launch Clarity initially.
Dan: We launched publicly in May of 2012.
Interviewer: May of 2012? Wow, so you’ve only been going for what? Eight months now.
Interviewer: Okay. So one question I get asked a lot, I work with a lot of startups here in New York City, advisor to some, mentor to others. I’ve been around the tech startups crowd, and one thing I always get asked is, “How do you launch a product?” Obviously you’ve done a number of different ventures, a number of different businesses, and this one has obviously done pretty well so far. How do you think about launching a product? Is it like, do you get a couple of influencers in there and they get everyone else? How do you go about it?
Dan: I think there’s different types of launch. Really, I look at it as different types of marketing.
There’s marketing at before- product market fit, and marketing post-product market fit.
Most of your audience, unless they’re doing $100,000 a month in revenue, they’re probably pre-product market fit, and it’s not really a launch, it’s more like a search and discovery, and the marketing you’re doing is really to attract early-adapters, and to learn from them, and to talk to them. For instance, our funding, we announced it in December. We actually raised it before then, and we just never had a need to announce it, because we felt like the product needed certain things before we wanted to capitalize on that traffic.
I just think that a lot of startups are too quick to launch publicly to the world when the product’s not ready. Really, the way I look at it is, all you need is about, I say “just,” but about 50 sign-ups a day. Honestly, if you have 50 sign-ups a day, that’s 350 sign-ups a week. It’s enough people to run experiments, to talk with, to get feedback from. And I don’t believe in launching publicly to the world until you do that.
We started working on Clarity, the first time there was ever a transaction on Clarity was in January, and we could’ve launched in January, but we waited January, February, March, April, May, because there was no purpose. We were still learning. We were still trying to figure out what the heck this thing was, and how was it going to work. So yeah, I believe that you shouldn’t launch . . . the version launched by most people watching this versus mine is two different things. Once you’re ready to launch, the best way is, come up with, obviously you want to have a product that solves a problem. You want to be able to communicate clearly what it is, and why it’s different.
And then, if you can, try to find a story that’s unique and different, like a human-interest angle. For us it’s really about helping the 400 million entrepreneurs around the world get connected to each other and move their goals and dreams forward. That’s our passion, that’s why we started the company. It’s trying to figure out the story that the writer is going to write about. You’ve got to do that. Right? And people don’t spend enough time trying to figure out “What is that story?” Whys should they write about you?” Just the fact that you’ve built an app does not mean anybody cares. You’ve got to figure out why somebody should care.
Interviewer: Right, that totally makes sense. So if you started building the product in, you obviously started building it before January, because you had your first transactions in January of last year, I’m assuming.
Dan: Two weeks to build the prototype.
Interviewer: Two weeks to build the prototype?
Dan: Yeah, it’s easy.
Interviewer: You just reached out to some friends and got it started?
Dan: The first thing I did, and I tell this to everybody, is I went on Skype, and I found some people, and I said, “Would you pay X for advice about this?” and they said, “Yes.” Then I went to my buddies, and I said, “Hey, would you $250 an hour for your advice on SEO, or for your advice on social marketing, or whatever?” and they said, “Yes.”
And then I just said to my other friends, “Send me the money on PayPal, and I’ll make the introduction.” I wanted to know, Did anybody care about getting great advice?
And if I was the filter, that was step one. What I always tell entrepreneurs is do as little as possible to validate your idea. Then the next version of Clarity was this simple HTML5 form that used Stripe, Twilio, and Phonegap, and that was it.
Dan: It was just, you Facebook connect, you put your cell number, created a profile, and you could share that on Twitter, people could put their name and number in the request, then enter a credit card, and then after you talked, it charged you. It was not complicated.
Interviewer: I get it. That sounds super smart. You’re just figuring out, basically you’re asking your friends, “Hey, would you pay for this?” “Yes.” “Would you pay for this?” “Yes.” Would you pay for this?” “Yes.”
Dan: Send me the money. You got to get paid.
Dan: People forget the next step, which is, “Great, give it to me.”
Interviewer: Right. So what do you think about the Freemium model. There’s been a lot of talk about it in the last year or so, and some people say it’s dead, some people say it doesn’t work. I’ve seen it work, and not work.
Dan: It’s dangerous.
Freemium is a marketing decision.
You’re offsetting the cost of paid marketing channels, by offering a free product. The free product is the product. The free version of Evernote is amazing. The free version of Dropbox is amazing. The free product is the product. There’s a difference. Freemium is not trial. It’s not limited versions. It’s not tiered pricing. It is, free product is the product, and a very small percent will upgrade, and it’s a marketing decision.
And you can go there eventually like MailChimp did. Right? For ten years, they were a paid product, and then they said, “Look. We could really scale this up if we offered a free version because we know our numbers. We know our metrics. We know how much we spend to acquire a customer, and we can offset that cost of acquiring by giving away something free knowing that a percent’s going to turn into a paid customer, and here’s the lifetime value of a customer.”
So it’s not dead, it just doesn’t work for many products, and when people implement it in early days, it’s usually because they’re too scared to charge and have anybody not pay. So they’re like, “Oh, I’m just going to make it free for now, and eventually I’ll charge them.” Do paid day one.
Interviewer: Makes sense. So you said at the beginning that you had a couple of, this is what, your fifth company, you said?
Dan: Yeah. It’s like the fifth “company” I’ve incorporated. If I asked you how many domains for ideas you’ve had, you’ve probably had 20- 30, right?
Dan: We all have that, but five real companies that I had an earnest effort towards, yeah.
Interviewer: So you said you had two at the beginning that didn’t really work out. Can you tell us a little bit about those and what are some of the biggest lessons you’ve learned? I worked with a company in Europe for about a year, and you know I didn’t have the experience, and it just didn’t take off. It didn’t succeed. I had to go do something else, and I learned a lot through that. What are some lessons that you’ve learned?
Dan: The first one was a vacation rental site called Maritime Vacation. I grew up in this Atlantic maritime region of Canada.
The lesson learned there was pick a bigger market.
Anybody in Canada doing a startup, doing a .ca, don’t. Do a .com, do a .co, do a .anything, but don’t localize it. Don’t be like, “Twitter apps for Eskimos.” That was the biggest thing. I actually did well, I got 100 cottages listed on there, and then I realized that the name didn’t lend itself to grow further, and I didn’t know what the heck I was doing anyway. At the end of the day, today, I would’ve just pivoted quicker, but it was the first time. You make a lot of decisions. You weren’t 100% focused on it. The second one was a hosting company. Lesson learned there was don’t start a hosting company. It’s the most ridiculous . . . we all do it. If you know how to code-
Interviewer: Or you think about it, yep.
Dan: You build a CMS product, right? Because you’re building websites for people, so you need your own content management system, and you usually start a hosting company. This is before the days of resellit programs and stuff. But the lesson learned there was don’t go into a market that’s a commodity. Right? I don’t want to be in the selling silver, or gold, market. Well, selling hosting is no different. Right? You’ve got to come up with something super-innovative to differentiate. That’s what I’ve learned now is, make sure your product is actually unique and different, and addresses a real problem, that doesn’t exist in the market, because that’s how you really build great big businesses.
Interviewer: Sure. So would you say the companies you’ve done, are things that you were definitely passionate about? I’ve seen people say, “Oh, I can make so much money with this certain idea that I have.” I’m like, “But you’re not passionate about it. You don’t care.” What’s your take on that?
Dan: Well, let’s put it this way. The other companies that I never incorporated, were all those kind of ideas initially. Now for the last seven or eight years, I’ve not done that, but I had this crazy idea called “XLights.” XLights.com was a way for you to order your Christmas lights to go up every Christmas. Like you just pick, click, click, click, and all the sudden, a group of guys in trucks would show up and put your Christmas lights up. And I didn’t even own a house. I never put up Christmas lights. I didn’t care. I just thought, oh, people are busy and have money, and they don’t want to do this.
So it’s a no-brainer today that I don’t do anything for the money. I do it because I have the problem, and I feel that the problem is worth me spending my life on. Here’s the filter, and people always say you have to have goals. It’s not, ask yourself, are you worthy of your goals. It’s ask yourself, is your goal worthy of your life? I don’t get today back. I’m going to work on Clarity. If I’m not super-passionate about Clarity, I’m wasting my time, and I don’t get it back. I take that seriously. I want to work on problems that I feel it would be an honor to invest my life into that problem, and no matter what happens, if it’s good or bad, I know that I tried, and I had a lot of fun doing it, and that’s my filter for starting companies today. And it has to have a big impact.
What I learned, and I got inspired by, a guy named Peter Diamandis, he wrote a book called “Abundance”, founder of Singularity University. He challenges every company he talks to, to build a ten to the ninth power impact company. So within a decade, could you potentially have a positive impact on a billion people? That was my filter for Clarity. And it wasn’t apparent at first when I built the first prototype, but once I realized that I’m helping entrepreneurs around the world get advice and grow their companies and achieve their dreams. If I can help a hundred million of them a year talk to each other, that’s going to leave a positive impact on the world, and that’s what I’m working towards.
Interviewer: Sure. I love that take. I’ve recently been, I look up to Brad Feld a lot. He invested in my friend Rand Fishkin’s company, and Brad writes a lot of awesome stuff. Just came out with his book “Startup Life”, I believe it’s called.
Dan: He’s on Clarity. Both of them.
Interviewer: I saw that, right before we hopped on this. I may actually use Clarity to talk to him.
Dan: You should.
Interviewer: Yeah, he seems like a cool guy, but he’s been talking a lot recently about entrepreneurs and depression. Which I personally think, and I have a lot of weird views on stuff, and I’m probably wrong on 75% of them, if not more, but he talks a lot about pouring yourself into your job too much. An entrepreneurial type person is a certain type of person. Right? We’re all very driven. We all work very hard, probably work too hard, take too much on, that sort of thing, but it sounds like what you’re talking about, launching something that you really care about, could be one way to mitigate that.
Dan: Yeah, I mean, to me the way I look at it, the company I did called Spheric, I did that one wrong in the sense that I sacrificed everything for it to be a success. What you end up learning is, you can’t associate yourself to the company. What I do now is I associate myself to the problem and the purpose. So I don’t care if Clarity succeeds or fails. Obviously, I want it to be a success. It’s going to be a success, but if it doesn’t it’s not an attack on my personality, or my abilities. It’s just the idea. The purpose and the problem is still worth solving, helping entrepreneurs get advice from other amazing people. There could be a different way to attack the problem. I could revisit it later if it didn’t work out. It doesn’t matter.
I feel like that’s my purpose, and the vehicle for that is not what defines me anymore. That’s the difference. Where a lot of people, they’re company is what defines them. If something bad happens to that company, they personally take it as an attack on their character, and that’s where it gets dangerous.
Interviewer: I totally agree. So you’re talking about building something that really could, whether you were around or not, it could keep on going, and your ultimate goal was to impact the world.
Dan: It has to. I’m looking at Clarity, and every company. It’s got to have an impact way beyond me. I think that’s what Steve Jobs did really well, and Jeff Bezos. These are these organizations that should be around for a hundred, two hundred years. Why don’t we think like that anymore? Why are people building companies to flip 16 months later? I’m not doing that anymore. I want to build a team and work on a problem that I feel is worthy of my life, and should exist way beyond my time here.
Interviewer: Right. And you can’t do everything as well. If it’s just built around you, you’re the developer, and you’re the marketer, and you’re all of that, you’re going to burn yourself out, and you’re not going to succeed, and you’re also not going to being on the right people that have other ideas that are going to help make you a success as well.
Dan: And you probably won’t have the impact that you could have.
Interviewer: Right. Totally, makes sense. So talking about the impact that you could have, obviously you have to grow. You have to have a large reach to have a big impact. You said that Clarity’s at 9,000 mentors right now?
Dan: Experts. Yeah.
Interviewer: Experts, right.
Dan: We don’t really call them mentors because we’re not mentoring. We’re really about, “I need to talk to somebody who has this type of background experience. 30 minutes, transactional, you can talk to three people on the same topic.
Interviewer: Right. So you have 9,000 experts now. How big do you want it to go? How big do you think it could go? How are you going to get there?
Dan: Hundred million entrepreneurs every year, talking to each other.
Dan: It has to. I wouldn’t be happy with myself if it didn’t do that. Anything short of that is not interesting enough to me. I wouldn’t get out of bed. I would go spend time with my newborn son. I would just not do a startup. I don’t have to work. I’ve had two successes now. I do it because I fundamentally love the problem, and the customers, and the users.
We have a 97% satisfaction rate, so that means out of all the calls they’re rated four stars or five, most five, and some four. That means that they’re getting the answers. They’re having great conversations, and I know from the reviews, and the feedback that we get that we’re changing lives. I can’t think of anything cooler than what we’re doing. It’s just really interesting and powerful, and doing anything less than a hundred million entrepreneurs, helping them doesn’t have that impact. I want a billion people positively impacted in the world. If I can help those entrepreneurs build better companies, they’re going to hire more employees, they’re going to help the economy, they’re going to create great solutions to problems, and that’s why I get up every day.
Interviewer: Sure, that’s awesome. So what are you doing to get there? Can you give us some insights on the things you guys are working on?
Dan: Everything possible. Everything.
Honestly, the number one thing we do is focus on the product.
The best thing we can do is get people to that core product value, that promise that, for us, is getting them on a call. Here’s the funnel. I look at it every day. We have real-time metrics. In my office, I have three TVs. I would pan around if it didn’t show you other sensitive information, but we have TVs with all our metrics.
We just care about getting new users, as fast as we can, on a call with somebody awesome. And everything else marketing wise, we don’t do any paid marketing. People write about us, free media, earned media, that kind of stuff, but we’re really product focused. I think that’s the best thing any company can do, is just figure out what’s the difference between your curious, your casual, and your core users? And try to get people to core. Engage, checking it out every week, using it every week, using it every day. So that’s all we do, is really just product focus.
Interviewer: Is that different from past companies? You had one that was around social media as well, right. So what was different about the past ones?
Dan: I used to think; I didn’t really understand how growth engines worked. I understood the concept. Eric Ries is a friend, all the Growth Hacker guys. I talk about product development. What I’ve really understood this time with Clarity is two things. One: You need to measure the core metrics as frequent as you can. For us it’s weekly. We set weekly goals, and every day we have daily forecasts on where we should be to hit that goal, and the percentage of where we’re at. So we have history, and we know the data. So the more often you check the goals, the higher the probability that you’ll be able to hit.
Most entrepreneurs don’t have goals. They may have yearly goals, at better; they’d have quarterly, and maybe monthly. But I get 52 chances a year to adjust what we’re doing to make sure we hit our numbers.
You would only get twelve if you did it monthly, or four if you did quarterly, or once if you did yearly. So that’s one, the frequency of the metrics, and how often you set those goals and measure them. And then the other one is really, crazily, almost obsessively, try to understand what it is that your product does that adds value, that people will pay for. It depends on the business you’re in. If you’re in a social product like Instagram, what is it that makes people come back? Engagement would be the core metric. For us it’s transactional, so who are the highest lifetime value users?
And the way I look at it is what’s the journey they went on to get to that point where they’re engaged? Really understand, what they did, and how they did it, and when they did it, what the frequency was, and they’re experience, and then try to model that journey, that path for every new user to get them to that point. Those are two things that I’m doing totally different with Clarity that I didn’t do before. And Flowtown was awesome. I mean, we grew 30% month over month. My goal with Clarity has been 10% week over week. That’s a totally different trajectory.
Interviewer: Totally different animal right there, yeah. So how do you even, when you’re launching a new product like that, with Clarity, you had it ready to go after two weeks. You had it validated that first check.
Dan: Yeah, but there’s so many things I didn’t understand. I have a list of 75 different beliefs that I had about the product and the market that were totally wrong.
Dan: I didn’t have a search. There was no search for three months. It was a utility. The way I looked at it was, you use Clarity as a utility to share with your network, but there was no search. That was probably one of the bigger ones. The other one was there was no scheduling, so the way the call worked is, I request a call with you, and it was on your call list, and whenever you felt like it, you would call me back. That’s just crazy.
Interviewer: No triggers to get people coming back in or anything like that?
Dan: That was like that for eight months. We only changed that in November. To say that we were validated, or knew what we were doing, that’s crazy. No, but we’re fast learners. I think that’s slow learning, but we did a lot of stuff, we tested a lot of stuff. Sometimes what happens is your personal opinion gets reflected in the product. I’m the type of guy that I hate scheduling, and that’s why scheduling didn’t get in the product, because I didn’t want it, but I didn’t realize that 99% of our users needed it because they felt weird to not schedule. I was trying to solve from the experts point of view, but the real user, the customer, is the person looking for advice.
Interviewer: So obviously you’ve been very product focused, but when did you . . . I’ve heard of Clarity before because it’s a great product, because I’m in the tech field, but there are probably a lot of people out there that haven’t heard about it. So I just signed up right before we got on this call because I was like, oh I should probably poke around in here and see what’s going on. What do you think is going to be the biggest driver of growth for you guys? Word of mouth can get you to a point, but then there are so many others. There’s email, there’s social, there’s so many of them.
Dan: Have you ever seen Dropbox do an ad?
Interviewer: Nope. I have not.
Dan: It’s powerful. 250 million accounts. People underestimate–Facebook’s never run ads, right? They just built a really great product. They were very thoughtful about how they deployed it, and what markets and verticals they went after. Because of that, they grew because they had a great product. And people don’t understand that. You can optimize for that, right?
We optimize for that by making sure that when somebody signs up as an expert, they get activated. They get a call request. And if you sign up as somebody looking for advice, we do everything in our power to make sure you get on a call. We recommend people. We suggest people. We insure you understand how the product works. We take care of all the risks, etc. So I really think that if we just do that, people are going to write about us. They’re going to talk about us, and that on it’s own- You see, you can’t force yourself into a market. We were really focused on tech entrepreneurs, and now we’re really focused on real estate, retail, restaurants, etc. And people are like, “Are you ever going to do telehealth or other consumer stuff?” And we’re not. We’re really focused on business advice.
And so far, the numbers are proof that you can actually just make sure that the product gets better and better, and you will actually grow. And I think that is the fallacy that people spend money on paid marketing, ten grand a month on Google, Facebook, social, whatever. At the end of the day, if your product isn’t great, it’s not going to get distribution. Nobody’s going to talk about it.
Interviewer: Right. That’s totally fair. Do you think that marketing can help? I’ve seen that marketing can help validate, or invalidate, an idea as well, as you’re going through those different product iterations. I’ve worked with some startups here in New York, we were doing SEO, and we were optimizing their site, and some link building, but mostly on-site stuff, content stuff, all of that, and we realized it just wasn’t getting the return that we wanted, and they actually ended up pivoting their product. Not all because of what I did by any means, but they ended up changing their product focus. And that was validated through those early pushes.
Dan: Yeah. I think, like I said, try to get to 50 sign-ups a day. If you do that by content marketing, or PR, or some kind of viral product, or social sharing, or influencer outreach, whatever you want to do. But honestly, once you have fifty sign-ups a day, all your energy should be focused on the final, to the core- product value experience like the ah ha moment. If you signed up, and we didn’t walk you through to the point where you felt comfortable enough to do a call request, and get it scheduled, and have that call, then bad on us. And I know a hundred things I can do to make it better. And you could probably tell me. Right? That’s the only place I should be spending time, other than talking to people like yourself, or when the press wants to write about us, that’s cool.
But all that comes because you build a great product. If it wasn’t great, Brad Feld wouldn’t be on there. He wouldn’t be doing calls. And if he wasn’t on there, people wouldn’t sign up because there would be no social proof that there’s people that trust us. So I think at the end of the day . . . so I know what you’re getting at. Once you get to a point where the product is great, and there’s different ways you can measure that. Obviously, there’s the “How disappointed would you be?” survey question, custom development question. There’s engagement metrics you can look at. There’s lifetime value of a customer, etc.
Once you understand your lifetime value of a customer, and you need three or four months of data to kind of get an idea, then you look at paid channels that can allow you to acquire a paid customer for less than, hopefully, 50% of the lifetime value. That’s when things get really interesting. That’s when you get crazy growth, if you can pull it off. Most startups can’t. It’s really difficult to do. But that’s the game. In content marketing, the SEO has a cost, hiring somebody to help them out, writing content, restructuring their website has a cost.
And I think you just need to figure out all the different channels you want to test. Spend $500-1000 on each channel. See how they perform in your funnel, and then decide which ones you want to invest in. And then also, which ones are your competitors not investing in? Because if you’re trying to go head-to-head with a national chain on Google AdWords, good luck. They’re pockets are deeper. You’re not going to be able to outspend them. You might be able to ad a product feature like a referral program, or invite program, or some social engagement stuff.
Interviewer: So it’s good market research. It’s good competitor research. And you wouldn’t have founded Clarity probably if there had been a product that already existed that did that. You might have, you might have tried to solve it on your own, but it would have been different.
Dan: I think a lot of us do. I think what happens is, we start out of ignorance. How many times have we started companies, and we didn’t know? And thank God we didn’t know. I’m glad. Ignorance is awesome. I’m glad I didn’t know how hard it was to build my first company. Or that I would fail, because I probably wouldn’t have done it. So I think what you do want to do quickly is get validations on those assumptions.
What are the key assumptions that are wrong are meaningful to my business. Like the first assumption is, if I can’t get people to get on a call then there’s no business. People are like, “Why don’t you do video?” Doing a call’s hard enough. “Why don’t you do it in person?” Again, call is hard enough. Let me just focus. I think there’s these riskiest assumptions that you have that you need to validate. And doing marketing will help you do that. Because you can run paid ads right now to a landing page to kind of get an idea for traffic costs, and then figure out that my product’s only going to sell for $30 a month. I’m not going to be able to use that source of traffic to make money. There’s a lot of different ways to use paid marketing as a way to validate the idea.
Interviewer: I want to be conscious of your time, so I just have a couple more questions for you, one just about Clarity. If I wanted to become an expert on Clarity, how would I go about doing that?
Dan: So today you can’t. We closed it down two weeks ago. The reason why is, we’re retooling our expert acquisition funnel. We’re making it very much like you’ve got to earn your way onto Clarity. Initially it was open to everybody. We’ve retooled our whole community. It’s very much curated. But you can sign up, and fill out your profile, and then probably in a week, we’ll be emailing everybody that’s a member, and saying, “Here’s how you do it.” But you just sign up, and essentially you fill out your profile, and you seem like somebody who might be the right fit for our members.
We’re looking for CEOs, founders at all-level marketers, interesting thought leaders, authors, etc. I don’t want an expert to be on Clarity if they’re not going to get calls. That’s not a good experience for them. If you fit the professional advice . . . If you’re the kind of guy that gets people asking you to pick your brain over coffee? You’re probably a good fit for Clarity. So jump on, and then our job is to get you calls.
Interviewer: So last question, and it’s actually two questions in one. Since you’ve been starting companies for a long time, you’ve probably had a decent number of mentors, talked with a lot of people. What’s the worst piece of advice that you’ve ever been given? And what’s one piece of advice you would give to someone that’s starting a company?
Dan: So the interesting part is the worst piece is not because the advice is bad. It’s because the timing, or the context, was wrong. For example, my dad, everybody wants to pick on their parents. I love my dad. It took me many years to figure out that he was doing it out of love. That he didn’t want to step on my dreams, but he just didn’t want to see me fall down and scratch my knee. That’s parenting. I have a kid now, and you learn, he didn’t want to be not supportive, he just wanted to be realistic to make sure that I didn’t go out into the world and fall on my face. But anyway, my dad always used to say, “Don’t grow too fast.”
And out of spite, I didn’t listen to him. And we grew 150% year over year, and I learned that what he was really saying, and maybe he didn’t even know this himself, was, “Only grow as fast as these things are true.” Cash flow, etc. Revenue, forecast, pipeline, cash flow. That was the right advice, but he didn’t give me context. “Don’t grow too fast.” That’s like telling Mark Zuckerberg, “Slow it down.” Why? You know what I mean? If all these other things are good, go. So I see a lot of bad advice because they lack context, but the advice in concept is good if it was in the right context.
So the best advice? Is that the second part? What’s the best advice I ever got?
Interviewer: What advice would you give to people that are starting companies now, if you were starting now. And you gave one at the beginning; it’s pick a big market. That’s why your real estate one didn’t succeed, but knowing what you know now, what’s the biggest lesson you’ve learned that maybe you didn’t expect to learn?
Dan: I’m going to give two. One, I’ve got to say a lot of advice is generic, but this is probably the most helpful generic advice. Get paid as soon as freaking possible. And I’m talking about no product, no website, get paid. If you are not capable to go out there and convince somebody else to believe in your vision, to believe in you as a person, to believe in your skills, to give you $20, take the money from their pockets, put it in your hands, you’ve got to do that. If you’re a first-time entrepreneur, and you don’t know any better, regardless of everything else, do that. That is the most honest exchange of advice you can get from somebody. They will vote with their wallets, so try to do that as often as you can, right off the bat, and then rush like heck to build whatever you promised them to make sure that they’re happy.
The second one is, and I got it from my buddy Randy, who was the cofounder of Square with Jack Dorsey. And it was after I sold Flowtown, and we were sitting there having lunch and he was like, “Why’d you move to San Francisco?” I told him I wanted to build a big company, etc. And he asked me, “What would you build if you had already made a billion dollars?” And he goes, “And the reason I ask you that is because I have.” Square’s valuation is X, I own blah, blah, blah, I’m a billionaire, and all I can think of is what would I work on after that?” And it was that question that made me realize, that’s the idea that you need to work on. If it wasn’t about the money at all? If you’re already financially independent? Those are the ones that are really interesting. That’s the best advice, I’d say. If you already were a billionaire, what idea or problem would you work on? Do that one.
Interviewer: Interesting. And the funny thing is that that idea is probably also one that could make you a billionaire as well if you’re not already.
Dan: It is. Because it’s going to take all the restrictions [away.
Interviewer: And be happier.
Dan: Like payments, who would do payment. Yeah, if you’re already a billionaire, who cares if you fail? Try to fix email. Those are huge problems. You wouldn’t think like that if you didn’t have that perspective. So I think that was some of the most meaningful advice I’ve ever gotten in my life.
Interviewer: Awesome. Well, like I said, I want to be cognizant of your time, so I really appreciate it. It’s been phenomenal talking to you. I think you’ve said a lot of awesome things. I know I’m spinning around in my head now. I’m sure I will be for a while. I really appreciate your time, Dan. It’s been a pleasure.
Dan: John, thanks for having me. If anybody wants to get a hold of me, it’s Dan@Clarity.fm, or @DanMartell on Twitter.
Interviewer: Brilliant. Awesome. Thank you so much.
Dan: Cool. Thanks, again.
Thanks Dan for your time, and leave your comments below!