HustleFactor - EventDog - Building a Multi-Million Dollar Business without Focusing on Growth
Welcome to ProofFactor's Entrepreneur Interviews - We've taken ProofFactor clients who are building business from the ground up and ask them the hard questions. Watch the video or read the transcript below to learn how to successfully navigate the challenges of starting a business.
Take Aways:
- Focus on your product - work as closely as possible with your customers
- If you have partners, make sure you trust them to work as hard as you and you trust their work
- Make a plan and stay hyper focused on it - don’t let shiny objects distract you.
Joey, thanks for joining us on ProofFactor’s video cast. We’ve asked entrepreneurs that we work with to talk a bit about what they've been up to.
Maybe you could tell us a little bit about your background and what you're working on.
Sure. Uh, my name is Joey, and I have a degree in Organizational Communication, which I only sort of use... much to my parents dismay. I've spent the last, 20 or so years working, bouncing between event production and technology. Like I used to work for the Austin Marathon, in small event production, I've worked for the Olympics on that (event production) side of things. Then I led a global support group Microsoft; I've done a lot of that kind of stuff. I did my obligatory stint at Dell that everybody in the Austin area has to do at some point.
So right now, over the last few years, we've been working on a company called Event Dog. And what we are is a platform for registration. So if you wanted to run an event, so if you want to do the“Capital 10k Run” or if you wanted to put on a Wing Festival, we handle registrations for those kinds of things.
How did you get involved in space? It sounds like you had some understanding from your work with the marathons. Was the transition or what motivated you to get started.
So it's pretty simple. My business partners own one of the biggest privately owned event production companies in the country, and they were getting really frustrated with all the solutions that were in the market because they've got 20+ years of experience of putting on events, and they knew exactly what they wanted. Over the years they have built various little tools that made their jobs easier. And they're like, “we need one umbrella to put all this under”, we can see what the better mousetrap looks like - let's build it.
And so I came aboard. I've known them for years, and we just like, “Okay, we're gonna build this thing that's gonna be hopefully better than what's currently in the market.”
So then tell us a little bit about the start of it. What went into starting EventDog? What process did you take? What you do from an engineering standpoint?
When we decided to do it we just started going really fast. We had a lot of just crunch sessions where we outlined what we liked and what we didn't like in the market - what we thought we could do to differentiate.
So the first step was just that proof on paper, that we knew better than everybody else, asking ourselves “How is our experience going to make a better product”? And that's before a single line of code gets written.
Once we did that, we just started building on it on. What we would do is we had road map like, “What's the core set of features” - and once we have that we kept iterating until we had a product that we could go to market with.
So you guys know the space, you had a really good sense of what is necessary and what you could do better than anyone else because you've been in space for so long and still be partners.
Yeah, through my experience and their experience, we had a really good idea of what the minimum feature set was gonna be.
We had a really good idea of what that thing was that we were gonna build and how to build this, so we can differentiate ourselves in the marketplace versus some of our competitors.
I’m not going to say it was easy, but it was probably easier than if we had just said “Okay, I have never put on an event before; I just want to come in and build something in this space because I see an opportunity.”
How were thinking about customers. And how'd you start getting customers and going about?
So when you have 20 years of experience in the business, it was really easy to get customers. Customer acquisition wasn't our number one concern.
Because my partners own a production company we had the luxury of getting cash flow with an internal customer - so we spent a couple of years of just eating our own dog food and building and building and building just for their company.
So that was really helpful. We were able to make a couple of mistakes and just say and learn, say “you know what? That's not working the way we thought it was gonna work” so we could veer off and do things a little bit differently?
Things like “You know, uh, wow. We thought merchandise would work this way, but it really should work that way.” So we have that luxury built in with having a customer who is also a partner.
Now we're just exiting that phase and we're getting into the “Let's grow, let's get bigger, let's get more customers in”
We're able to leverage, years and years of working with other events, working with other people, knowing different people in the industry, being able to say “Hey, we've known you for years. You use this system, we built something different. Let us show it to you”.
And we've already had a few wins in that regard with people are asking, “Hey, we see you're doing something over there, can we get in on it” We're like “Let's let's hold off until we get out of the gates”.
And now we've brought some more people in, and they're like, “Wow, we're really happy with this”.
We've already built up these customer testimonials based on that where they're like “OK, we like what you're doing well, like this approach to events that's a little bit fresher than what other people are doing”. So customer acquisition hasn't been our trouble yet. We're about to enter the phase where that's our main focus.
Right. And that's sort of an interesting thing because, you know, on the one hand, because you've been in the business a long time, I'm sure you all have deep networks of people to talk to and pull from. But it's interesting that you guys have been really disciplined and know that while the product might be OK for internal use, you want to validate it before actually going to market with it. You want to be a bit more careful that you don't just bring people on before it's really ready. Especially the people you work with already - they have expectations.
When we're looking at starting a company, generally things are like “Go, go, go, go, go! Get as many customers possible, get scaled” - but there really is a different way of doing it, where you're really trying to build out the product first.
Part of it is, having the luxury of that inbuilt customer. We don't have to go out and chase revenue because we had a customer, once we launched we were basically profitable from day one.
From the first transaction we took, we were basically able to be profitable from everyday forward, just because of being in-house. I know a lot of people don't have that luxury but we didn't take any outside money - we could have built this a lot faster.
We could've taken some money from investors and then hire a big team of developers, and just get it done. But I think we would have come up with a different product, we wouldn't have had the time, to incubate and build what we have. We would assume like even based on our experience, years of experience, we think “Okay, merchandise should look like this” but we found out that “Oh, no, it should look like that”. When you’ve got a team of 10 people and you're just going out selling it's much harder to scrap and say “Stop, stop, stop, let's pull this back, Let's build it differently” and then relaunch that section of the site.
So we didn't take money, we didn't take investment, we took our time. And that's been a luxury for us and It's paid dividends.
Yeah, yeah, it sure sounds like it. My last company way took pretty significant outside investment, over $10M.
When you do that, you have different incentives that come in because those investors were really looking tosee growth.
And they're expecting some sort of return on their investment. And oftentimes don't really understand the business - so they don't get the nuance of it. Wven if I look at your business tonight and I saw how you built a certain portion of it I might not know that doesn't actually work for the customer because I don't know the details of why. You're able to really build things out without having to focus on just selling. Focus on the customer and the product and that allows you to do different things. I think people think of taking outside investment and that it will solve all my problems. But it actually gives a different set of incentives and problems.
It solves problems A and B, but then presents problem C & D. So you just have to decide which problems you're willing to live with. We wanted problems A & B and not C & D. For some companies for some entrepreneurs, it makes a lot of sense to bring in that money.
We knew that we were coming into a mature market with six or seven really established competitors, and so we knew that we weren't gonna get a first mover advantage. We weren't gonna get that “Bang!” that you get from just popping into it like a disruptor - like a surprise attack, like “this category didn't exist and now it does”.
Whereas we were like, we're gonna be the dark horse. No matter what we do. Let's just do it organically.
So then tell me how you know during this process of starting to build this out. There's challenges you faced - how did you overcome those?
Any time you build a company, you're gonna have the challenge of “this is your little baby” and you're working 24/7 because there's things that people don't know and you need to figure it out.
But the surprising things for us were things like email and credit card processing. If you'd asked me in the beginning, “what are your biggest nightmare things gonna be”? I would have not guessed those two things.
Credit card processing. Because of the nature of our business, we're almost like an escrow company. People pay us a $100 transaction for some triathlon, $98 of that goes to the event, and so our margin is very small. So credit card fees are a big deal - the difference between 2% and 3% in credit card fees is a lot of money to us.
Because we're just working that gray zone; so when we’re small and we haven't done a lot of transactions yet it's very hard to negotiate a lower rate and the people who give you a low rate aren't reliable.
We went through a lot of times where, we would do a lot of transactions very fast and the reliability would be low. Now that we're doing millions of dollars of transactions, we're able to go in and negotiate and find really reliable credit card processors who’ll still give us a low rate.
Stuff like that - the nuts and bolts stuff, that's the stuff that catches you. It's not the way you designed it or anything like that; It's just literally these little utility things that you're like, “ughhhh”.
It's part of the fun. That's part of the fun of building a company, there's some unknown in terms of what challenges you’ll face and just sort of having the confidence that you can work through those challenges.
Looking back when you first started, knowing what you know now, would you would do anything differently.
I don't necessarily think that we'd do anything differently, because we have a philosophy about when you make a mistake - it's just an opportunity to learn something new. We don't dwell on our mistakes. We just are like, “What can we learn? Let's move on”.
And we've definitely had things that if I redesigned this differently, we’d be happier. If I had to go in and redesign I’d do it.
But that was a learning opportunity, and so I wouldn't change it. I think that the majority of what we've done, I'm pretty satisfied with the way that we've responded to it. And so there's not really a lot that I would change in terms of the big picture.
On the flip side is anything that over the years, you've found particularly helpful or advantageous.
The main thing that’s been really, really helpful is having partners who have their areas of specialization and being able to trust them like “Okay, I know they're doing what they do, and I'm not gonna worry about that.”
And we come together and say ”Okay, this what I've done, that's what I've done. It’s all good”. We don't have to worry about micromanaging each other as partners. That's been really good on. I’d say that anybody starting a business should have that kind of relationship with any partners that they bring on board.
I've seen situations where it's like, “OK, I've got the talent, they've got the money”, - but you have to have more than that.
These are these are partners you've known for 20+years that you worked with before. You knew the kind of work that they would put, and that kind of work that you would put forward.
They're definitely people that I completely trust. I mean absolutely. And I think the other thing that's been really helpful with us is that we make a plan and we stick to the plan. We try really hard to not get distracted by shiny objects. There's a lot of drudgery, in the day to day building of a website, and it's really easy to get distracted and say, “Oh, this feature would be really cool”. It's like, yeah, that'd be really cool, but it also is not gonna help us gain and maintain customers.
So being able to be super hyper focused on what are we working on right now - what's the next thing on our list and then I'm gonna get to the shiny stuff later. But right now, what is the thing that we've got a note, right?
What would that be your advice for the entrepreneurs?
If I were gonna have three pieces of advice - Finding partners, stay hyper focused and unless you have a really good a good reason, stay the course with what you're doing.
But then kind of on the flip side of that don't be afraid; if something is not working, and this is gonna cause problems, stop, burn it down. Start over.
If you've got if you have something that you know is not working, just burn it; Start over. Done.
A lot of people get very entrenched in what they’re doing “Oh, this is what I got to do because that's what I've done” If it's not working, then get rid of it.
How do you think about that?
That's a tough question, sometimes your customers tell you, for example “I thought this interface was rock solid, foolproof” And you've got customers saying, “Man, we're just confused”. We're doing thousands of transactions and so my customers are the event owners who have the people doing the transactions, and so they'll contact me and say, “You know what people are really? They contacted me because they can't complete transaction”. Okay, so there's something wrong. I built that wrong.
A lot of times you just it's a gut feeling. You just have to be like, “you know what? I really could have gone down, path A or path B, I really should have gone down path B. Just gonna get that feeling. And if you've been around long enough, you should learn to trust yourself.
So from that perspective, anything else in general on your mind?
To get into your [ProofFactor] product, we've got a core product, and we don't have to build everything. One of our one of our partners was wanted, social proof on the ste. And so we started looking around looking around, “do we build? Do we build our own, or do we find a company that does it and just integrate it?”
It would not have been very not to do our own, but that would have been an easy solution, right?
Especially because in our use case, our use case doesn't fit what most other companies use cases.
You know, we're collecting the sale information on one website, but we need to publish the social proof on third party sites from all over.
And as I was looking around out there we contact like five different companies in your space.
And I think I contacted all of them and said, “Here's my use case” and I think two of them wrote back “No, we don't do that” two didn't write back at all, and you guys were like, “huh, That's interesting. Challenge accepted.”
And and we did it and so now we've got this social proof as a feature option,for partners and it's a cool thing.
But, running into those couple that were like “No we don't we don't support your use case”. It would have been very easy for just say like, “you know what? Fine, We're gonna build our own”, but that would have distracted us from our road map but by being by persevering and saying let's find that company that will work with us We spent an afternoon looking and then on hour integrating versus a week of development on something that's not the core product.
if there's a widget, or a third party, something that will make your life easier? Grab it. You don't have to build everything from stretch.
Yeah, got it. This is a little off off the cuff question. But is there a story behind the name then?
When we look at events, you look at events. There's 2 major types of event, there's like moving events like a marathon or triathlon and then they're static events like a wing festival or, music festival.
But they're all events.
And when we started the company, we really wanted to be able to be good for all kinds of events, not just running or whenever sewing whatever the main competitors are, space is RunSignUp. Another one is IAmAthlete, RedPodium. These these companies, when they named themselves, they named themselves into a specific niche, right? Right. And so we didn't want to do that. Y
So we wanted to be clear, we were about events, and then Stacey, did research, and she's the marketing arm, And she was like, You know, people trust dogs more than they trust people. EvenDog. I went out and bought the domain.
There you go. That’s the story.
Yeah, I love it. I love that story because it partially it's like you guys are actually really think about where you want it to be, you know, not in a year, but in 5 10 years, looking at how we make this a little bit more fun and also play on the fact that you know, you're trying to be a trusted source for these companies. And, you know, dogs don't fit in perfectly, so I like that Nice.
Yeah. if you go to the website and you see the little event dog, the little mascot, his name is Ed. (Event Dog = ED). And people are like, Oh, is that really a pet dog? No, he's not a real dog.
People are really attached to that. Um they're like, “Oh, I love this name”.
So if you want to learn more, where could they go?
Check out our Site: EventDog
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