# From Idea to 8-Figure Exit in 10 Years Flat — Aaron Foss, Nomorobo

Channel: Sub Club by RevenueCat
Video: https://www.youtube.com/watch?v=x5fcgrSp9s0
Duration: 57 min
Language: English
Words: 12647
Transcript page: https://viewrankai.com/tools/youtube-transcript/x5fcgrSp9s0

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[0:00] hello I'm your host David Barnard and my guest today is Aaron Foss founder of Nomo Robo an app that stops annoying Robo calls and spam texts Forever on the podcast I talk with Aaron about the ultimate premium strategy making lowrisk Bets with potentially asymmetrical outcomes and how Aaron bounced back after almost running out of money hey Aaron thanks so much for joining us on the podcast today oh my pleasure thanks for having me I'm super excited to share my story with all the sub Club listeners awesome and it is quite a story so I launched my first app back in 2008 and it feels like every two or three years

[0:39] there was a think piece about the end of apps and it was 2010 was the end of apps and 2012 was the end of apps and 2016 was the end of abs and in this time span after multiple pundits have declared the end of ABS you went from idea to launching an app to exiting at over eight figures and it's such a cool story so I want to start digging in by painting the picture of the assets you had in place that allowed you to take advantage and to have an advantage in building Nomo Robo so what were you doing before you started Nomo Robo that

[1:22] kind of gave you those building blocks to then build this company when I got the idea for nomobo I was actually between companies there's a lot of people that are between jobs when they're unemployed when you've just sold one of your companies and then you're trying to figure out your next adventure that was the spot that I was in and I love leaving it up to the universe to push me in the right direction and I was reading TechCrunch one day and there was this robocall Challenge from the FTC and I just got interested in that and that is how it all started that's awesome and

[1:57] before that though so you're actually a programmer but then also have an NBA have started multiple companies so you kind of had this entrepreneurial base where while you were waiting for the universe to push you a direction you actually had some experience some Foundation behind that right yeah and I knew what made me cranky and what I didn't like uh so exactly I got my undergrad was in information technology and then I bolted on my MBA went to school in Rochester New York at RIT and I thought I wanted to work at a big company to this day I don't know why but like just seemed like the right idea and

[2:31] even back then my mom was like you know you're going to make a terrible employee I was like okay well let's see what happens right I was a bad employee for all the right reasons right I worked for basically Motorola it was a company called symbol it was acquired by Motorola and I was building really cool stuff really quickly and that was just like incompatible with big companies my 401k vested on what week 52 like day 365 I was there for two more weeks and then I started my own thing I started a consulting company and then one thing led to another other where I had a few

[3:00] successes and failures in the startup World until I finally kind of hit my stride in roughly around 2011 yeah that's awesome and everybody has different advantages I think there's folks listening to this podcast who are a marketer at a bigger app or they're in product or they're you know have different experience life experience business experience entrepreneurial drive whatever it is and putting those building blocks together and going for it is what it takes to build a company like no Robo so it's really cool to see that story of how you had this entrepreneurial journey and pushed you into creating the app so then let's talk through the

[3:38] FTC contest so you saw on Tech crunch the FCC wanted to solve rooc calls where'd you get from there I had been building telepan apps for years I was one of the first adopters of twilio when I saw twio I still remember this first time I saw it it was like holy crap I've been looking to be able to hook my code into the phone system system and it's always been impossible and twilio makes this simple I got like a modem for my bar mitzvah like I was on bbs's in the 90s like I go way way way back I saw twilio I jumped on it just built a whole

[4:15] bunch of stuff with our user group here in New York City I entered Tech crunch disrupt hackathons and everything that I built had some sort of communication telefony SMS something like that so I had a lot of experience in that area but I had never built anything commercial right so FTC this is what's weird about it is that like the FTC is the government agency that is tasked with stopping robocalls and they put out this competition it was a crowdsourced competition which were 13 years ago it was really popular have a crowdsourced contest and a competition and get the best ideas from people who ordinarily wouldn't be in this industry and that's

[4:52] exactly what happened they put up $5,000 800 people entered and they picked me and another guy we split the prize what's interesting too is that that was super controversial back then there was so much negativity with like wait you're the FTC and you're given 50 Grand to someone to solve the problem that you're tested with solving but we in the industry and and they understood that if it wasn't for that not that I needed the money but that was the cool there was a big prize and like then I became aware of how big this problem was and then I was you know incentivized to try and solve it well things you and I

[5:29] have talked about before is how Nomar Robo is ultimately the compounding of thousands of small decisions and a few large decisions and this is one of those large decisions but it was also like a super low-risk decision right you didn't have to put hundreds of thousands of dollars on the line you didn't have to quit a job because you put yourself in a position where it was a low-risk opportunity so yeah tell me more about jumping head first into that contest and how long it did take you to pull something together I love things where the risk and reward is out of balance where obviously the risk is low and the

[6:05] reward is high you don't want it the other way that's not it but that kind of framing as like why wouldn't you at least take the shot so as I mentioned before that I was with a company called Sor and we went through Tech Stars in 2011 so it's just a little bit earlier and what I learned in Tech Stars was your technology is great and wonderful and the product is great and wonderful and all your team and all those other pieces what's really important is how you pitch that idea to people it's going to be if you're pitching to investors if you're pitching to potential hires if

[6:36] you're pitching to Partners investors whoever it may be getting that idea across and so I knew I had a technological solution and thinking back the rules were basically impossible it had to work on mobile it had to work on landlines had to be easy to use it had to work no false positives you know so it knocked out apps this is the thing that a lot of people forget about is right we're known for our one of the top apps in the App Store now but when I started the company building apps like this was impossible and want say like illegal but Apple prevented it you know

[7:09] this is Apple's world we just live in it so how insane is that to start an app company building an app that is against App Store rule we couldn't do it but what I could do is on the landline side I had this idea on how to use sim ring which is one of those little dark corners of Telecom and it's a feature that everybody knows voicemail and way calling and all those other pieces but siming basically let us put a phone number was powered by twio people would be able to put it into their siming list and then we would basically get a copy of the call as the call came into their

[7:41] house it would also ring on our server and that way we could do all the analytics so I was able to pitch that and that really was the key if you read the competition guidelines and you read between the lines you could see that the FTC wanted something that went around the carriers it couldn't have carrier cooperation because the carriers weren't incentivized to fix this so my idea of being able to go to the consumer directly have them do something relatively simple and then get robocall protection that's ultimately why they picked and that's actually it's interesting but the second person that we split with had a better algorithm I

[8:17] basically had no algorithm at that point I was like we'll figure out how to do that but the key was almost like this distribution this go to market this how are we going to get to Consumers and that other person or I guess 799 other people people just didn't have anything that was good enough to win yeah and so sharing that quote idea you came up with an Innovative solution using existing technology getting around the carriers and then you talked about it on stage how did you build a company on an idea that was already out in the public before you even launched what's really interesting about this competition right

[8:52] I won and they also picked another winner he had a better algorithm I had a better way of getting to the consumer thing is he didn't want anybody to quote steal his idea so when the press conference came right they invited us both down to DC to be in the press conference he didn't want anybody to steal his idea he didn't want to talk publicly I jumped on a train and was there as quickly as I could get there and so it's a giant press conference about a giant problem from a giant organization from a giant government and there's one guy there so there's all these cameras so I'm doing interviews

[9:26] with CNN and Fox Business News and everybody I would just talk to everybody do you have time to talk to the New York Times I'll stay here all day and I'll talk to everyone did I go into the technical details no did I talk about simmering and this no but using a part of the phone system it's going to be launched and again like nobody ever heard from the other guy again I don't know what he did yeah so it's interesting how you did share and the other guy didn't but part of the value in Sharing was that you got a ton of attention that you wouldn't have

[9:58] otherwise gotten I know you eventually created a sign up page did you have that before you went to this press conference were you shouting from the rooftops go to nomorobo.com and join the wait list yep that's the simple answer right I knew that that was an opportunity like the amount of we call it like earned media now but I was just like yeah I got to get as many people and capture their information as much as I can because I knew that that was my cheat code that was the thing that I had that no one else did so even when I entered the competition I put together a video

[10:30] nobody else put together a video I built a prototype maybe some people made prototypes most people made like a business plan like a 30 page description of what they were doing mine was a one-pager maybe it was two talked about the general technical pieces it was all the source code the database schema a video demon literally at this desk right this desk what I'm sitting at right here is where I built it and then I just sent it on over there and still remember the day I was sitting right here and I'm coding and my part of my brain just came up with the name it was just thinking

[11:01] about like no more Robo call like oh call it no more Robo and I checked the domain was there I registered it cool went moved on and maybe that's the other part too is for this competition right I named it something catchy no mo Robo no more robocalls this other guy had it was a white list gy list Blacklist wayy the name was like 17 letters and everything and it just wasn't catchy whereas for me they' be like and his idea noobo cool that's what got it go to nomorobo.com it was the video and a little box that said put in your email and we'll let you know

[11:32] when we launch and by the time I launched I had over 30,000 people that had given me their email address right for free just that was what I used as an analog for do people want this right it wasn't earning Revenue I wasn't but like every day that I was seeing more and more email addresses coming in I knew that this was a big problem that needed to be solved I couldn't not do that yeah and that's the thing is like there are ideas that you want to have a big launch and so you you want to keep some things close to the chest but when you get

[12:01] something out there you validate whether you should spend the next 6 months of your life building this or not and it's just such a great story that you shared all of that and instead of just getting ripped off it actually was this lever for you to then launch from a much stronger position and again another thing that you told me in the past was like if the idea was that easy to just rip off you probably don't have a business anyway so that's exactly and you know what's funny about that like so the way use simring in my opinion even to this day there was only one way to

[12:33] win that competition was by using simring so when I'm writing the code I figured that there was going to be like five other people that were going to come up with this because when I looked at the problem there was only one solution and it was using simmering that was what I was most worried about that I was just entering with something that everybody else did no as a matter of fact I talked to the CTO of the FTC afterwards he was the guy that was in charge of this whole competition and they looked looked at all 800 entries and when mine came up he basically say

[13:02] he's like this can't be true he's like cuz if this was so true it looks easy everybody would be doing it and this is the story he told me right he called his friend at AT&T and he like I don't know there's this guy in the competition and using Sim ring and he's like that wouldn't work right and the guy went actually that would he went no he hung up the phone called up another guy and like come on this he's like when the second guy told me like actually that's just like stupid enough to work he like we knew that you had won at that point

[13:26] but if I hadn't done that I don't know where we would be okay so you win the contest you get a bunch of press now you actually got to build the thing did you raise $10 million hire a huge team and hit the ground running or what' you do well so first part I was also doing some Consulting and so I had to wind those down okay I got to get some Breathing Room cool great tell everybody like last train and everything I won the competition in April of 2013 and then I got invited to speak in front of Congress in July which was okay this is

[13:57] an opportunity I've now testified in fromont of Congress three times so like if anybody has any questions on what to do give me a call I've done it a lot as a fact that the last time I did it I was sitting in the chair that Mark Zuckerberg sat in just a few weeks before you know his did not go nearly as well as mine did but that became more media that became a bigger part of the story and I was already building it if you look at my testimony go on C-Span you can see I say I'm like and I already have 3,000 people who have signed up

[14:24] which I thought was great right in a couple months getting 3,000 as I mentioned before right when it launched on October 1st that had over 30,000 but no what I figured was okay I got 25 Grand from this competition I don't know maybe that'll last me a day maybe it'll last me a year I don't know and I always figured that that was an economic thing my only expense at that point was twilio and it was the biggest one because the way my idea worked is we have to answer every robocall and then hang up on it so I know everybody oh it's free calls and

[14:53] everything like that yes but at volume and things so when I flip the switch on it's the stand Story the email servers got shut down cuz they thought we were spamming so many invites and the Ser like I'm I'm running I'm jumping from one foot to the other and everything but that after that first week did the numbers I'm like I'm gonna run out of money in six weeks so turning to twilio again I know Jeff I know all those guys I was like what can we do we started negotiating that I figured out what can happen and then we opened up a convertible note but it was friends and

[15:19] family it was like my mom my stepfather a couple of guys that I knew that had successful exits but it was very very small let's see what happens cuz there was no business model at that moment maybe is the really important part is in order to stop robocalls you need a lot of data but in order to get the data you already need to be stopping rooc calls so none of that data existed so this is the other part like I needed to prime the pump somehow giving away the robocall data would get me the real time data that I needed I needed something else I was talking to the FTC about this

[15:51] and telling them about this problem and they said well would it help if you got five years worth of all of our do not call complaint data I go that would be really helpful and because again I don't know anything they're like well if you foyer it we are going to be obligated to send it to you I said I will go and do that so day one I got the CD ROM in the mail and I crunched through it kind of ridiculous looking back at it right the false positives like it was blocking stuff it wasn't supposed to and whatever but it was enough to start and then give away

[16:24] the roboco blocking on the landline side which arguably has much less value than the mobile side but again I didn't even know how we were going to do mobile but I just needed time to basically figure it out I figured okay we'll monetize this somehow we just got to go and get this data get people putting their number in their simmering list and I'll figure the rest out that's why yeah if I went and try to raise you know $10 million what are you going to do with it I have no idea so it was just enough to keep the business running and our first kpi right was only one and I recommend

[16:54] this for all entrepreneurs a startup can do like one thing barely ours was was robocalls block cuz that meant that it was working people were signing up people trusted it it was growing and that kind of thing so that was the only metric that we did and then everything that needed to block more rooc calls when I needed more money that was where it came in right so you built it all yourself so you used that engineering background and built it all still to this day like the devs Now call it like iron code there's like initial Cod and I built all the website literally every

[17:22] single thing was written by me that's incredible so then that fall you launch on the web to block landlines and you're not making any money you raise a little to like keep the lights on keep yourself fed keep the office AC going when did you first start thinking okay we're GNA monetize this and this is how we're going to monetize it the Turning Point really came with iOS 10 so Apple said devs can now build apps that block calls one of my investors actually had a house on fire Island and we were walking to it and I just happened to mention I was like yeah Apple iOS 10 is allowing it okay so then

[18:01] you're going to have to build it I went damn yeah you're right it was like one of those I like okay okay okay now to that point well you're giving away the landline give away the mobile but I was like no we got to monetize this at some point and that's really the turning point so that's the part that's interesting and I think maybe to your listeners you're on sub club right we were one of the first robocall blocking apps in the App Store but more importantly we were one of the first apps that use subscriptions everything was I AP in app purchases and everything I don't know if we were the first but

[18:29] easily one of the first five because I knew that that's how we needed to monetize it two bucks a month or $20 for the year but at least that way and it was just using the same Tech all the data right it's all the same data that we're just getting it in different ways and that was the inflection point where once the mobile app came in now all of a sudden we had some API like Enterprise deals we were selling queries and things it brought in an amount of money but not enough to be a viable business but when Apple changed everything we were able to

[18:55] sell direct to the consumer that's really when it changed and I could talk talk about the rest of it cuz it changed a couple more times after that I wish I would have in 2014 2015 said the only real viable way to monetize a weather app is via subscription and been a little bit earlier to that bandw wagon there was consumer push back during those early days people were used to free and cheap and paid up front apps it's interesting how the cost probably helped force that decision when you have ongoing costs like the better it works the more calls it blocks the more calls you get the more expensive it is for you

[19:31] to run this service like it's just not practical to do this in upfront payments or any of the other really models available I mean you could have like sold bundles of calls and it would have been a mess and there's just so many ways that Apple opening up subscriptions as they did in 2016 when you started doing it allowed an app like no more Robo to exist like the platforms because of the limitation on business models and I think things have improved with subscription and as much as a bull as I am on subscription specifically I still wish Apple would allow other options like upgrade pricing like there's so

[20:08] many other business models that's a whole another conversation but it's cool that the timing of you kind of landing on an app coincided both with you understanding that I need to monetize via subscription Apple allowing it and then even iOS 10 it was like kind of a perfect storm of technology and monetization to launch at the right time one other piece too is our price point and everybody complains about the Apple tax but on a $1.99 a month we were actually getting a better deal if we had to go and get off thees shelf kind of pricing and we had to run it ourselves I actually did the math I'm like actually

[20:40] apple is cheaper yeah for that and so everybody was fighting me on all two bucks a month how you going to do this what about that I saw it very simply or maybe I just didn't know any better I was like here's a service that you need constant updating every 15 minutes two bucks you're going to pay for we have the ability to do sub descriptions easily we don't need to go and craft all this from our we just latch on to Apple and then we just collect checks and that was the beginning part if we want to call it in phase one that was the

[21:09] beginning of the company and when the light at the end of the tunnel like well there was a light right if you're walking down that tunnel with a flashlight and looking and looking and looking that was the first point I was like there was a glimmer like I always knew I was on the path or a path and I knew kind of the general direction but that finally was like wait wait here it is here's the answer so again talking about like all these small and big decisions that are compounding over time you've won the contest you've built up this email list you've launched on the

[21:34] web you've got users you've got people's attention how did you launch the app was it just a massive Splash by that time did you have 100,000 emails or in 2016 when you launched the app what did that look like I'm not a big fan of big bang launches maybe because I just got burned that one time there's so many things that can go wrong so every launch we've had I don't want to say it's been like a soft launch but it's ready when it's ready and then we push it out and then on our end like we've never done any paid acquisition is just organic and

[22:07] it's also leveraging what we already had so we had all of these landline people that we were covering we had their email address they loved it on their landline so when you send somebody an email and you're like hey you love it on your landline why don't you try it on mobile this is also probably pretty important too is from the very beginning we built in the free trial I didn't want this to be a premium we gave a twoe free trial because we wanted people to try you may not get a robo call today or tomorrow what but by two weeks in you're going to

[22:35] know so in so many words like giving people more than they expected it made it very easy like just push the button try it on out and even said like if it doesn't work for you totally cool just cancel your subscription so those things just made everything easier if we had charged whatever $7,000 or we gave a three minute trial or we need you to literally take out your credit card write it on down send us a check all these things that are just putting freak in I think that's why it was really successful we just didn't I want to say we didn't have to work hard obviously

[23:02] really really hard but we didn't have to work hard convincing people that the demand was there the problem is there people were screaming for a solution and we had already proved ourselves so that part yeah we put it into the App Store and we might have sent a press release I don't even remember went to the reporters that had been covering it for a while hey we got this new thing they were able to oh cool that's new let's go and get that out there using it and then that train that just started chugging along that flywheel started moving and then we just kept on adding more fuel to

[23:30] that fire so the launch you said you kind of soft launched it did you get like tens of thousands of downloads hundreds of downloads and at what point did you really ratchet up to SP it did a lot of press come in right away or you're saying you launched it and kind of waited two or three weeks make sure everything was going good send out a few emails check in and then you told the press and sent the big email blast yeah basically we launched it made sure that you know we had to obviously get some bug fixes and all those other things then once it was ready yeah I would just

[23:56] write to a reporter and hey herb I know you wrote about this all the last time go in we grew but and maybe this is a flaw of mine but I build something and then I'm on to the next thing and like I don't even look back so many people are like looking at the analytics and this and that all I figure is okay that's quote unquote done for now it's launched cool on to the next one I'm not a big goals Setter like that I don't think goals work and deadlines and things I like systems and things and things just take as long as they do and then when

[24:23] they're ready they get pushed out and literally that worked we talked about the press and then we were on to our Android version cool okay guys let's do it again build out that whole thing and you have to find the team and everything and then what's that done but just keep on moving so I couldn't even really tell you I just I want say I stopped looking I had it in my board deck and everything like that but it was just like okay this is making money this is working let's fix it keep on moving forward what's the next thing what's the next thing and not

[24:46] in a o squirrel or shiny new thing but just like what's the next thing that we need to do and again I want to give away the ending but that's how also I knew that the company was kind of ready for acquisition when my work was done everything obviously can be better and better and better but I kind of got to the end of what I'm really good at what makes me special what makes like it needed to grow up it needed to graduate and that was a thing that I had a lot of time wrestling with but ultimately that was the right decision at what point in

[25:11] this story did you start hiring you're a lone wolf did you hire to build the app and how did you think about that hiring process I know we've had other solo developers on the podcast like card pointers Emanuel ciser and the slopes app Curtis Herbert I don't think Emanuel has actually hired somebody yet I know Curtis now I think has two employees but when you're a solo it is kind of a big leap like it's important to really think through when and who to hire so how did you think through that process of growing the team around you couple of pieces first one was it was a lot of

[25:46] work obviously and doing everything so the first piece that I'm like okay and I love customer support I love talking to all the customers and being right there but like I can't talk to every customer and do this and do that so the first piece that I thought is okay I can break off off customer support as it turns out it was a guy that I was in tech stars with he was a hack star and the company that he worked for had folded so he was kind of like looking for opportunities and in that case it was just as a contractor he's like do you have

[26:10] anything to do I'm like we need to set up customer support he's like oh I set up Zen desk and like oh awesome can you do that for me so we that might have set the tone for working with a lot of independent contractors it wasn't just because you know I want to say like race to the bottom cheapest I actually found that some of the best people you can't hire them you can contract with them they may be here and like looking at that opportunity so he set me up he did all the customer support then he went and got another job and he's like good

[26:35] news bad news bad news is I'm not Consulting anymore the good news is my brother is graduating from college and he's really good at the stuff also cool he took over and was able to build the entire thing and now he's actually the product manager worked his way up I did the same thing on the technical side okay I can write all the code but I could use some help and this is funny is that I've never like put out a job application or done interviews or anything like that everything was written in LL and PHP and there was Scott Jason Gilmore very good friend of

[27:05] mine even to this day he wrote basically some of the original books on Lille and he was offering you give buy the books and whatever I was like I want to be a better developer I just saw him from his offering so I go and buy it and it's like well you can get the book for x and the book and the videos for $100 or the book The videos and a 1-hour consultation for like 200 bucks I get it now it was like lead gen right we jumped on and we talked and we really hit it off and I just want to learn some more

[27:30] I'm like do you do Consulting and he was like yeah I can and like we worked together for years from that we just kind of like found each other it wasn't now hiring or doing that seems to be the way that we've grown the team and I can give you seven other examples of how that happened no that's really cool for a lot of entrepreneurs that's how you have to think it's like when you're at 110% what's the 20% you can carve out to give yourself just a little bit more breathing rim to work on those higher leverage things and then you start working on those higher leverage things

[28:00] and you get back to 110% capacity and you're like okay now I got to carve out another 20 or 30% to free myself up the ad hoc bootstrap very Scrappy starting with contractors I think it's just a such a smart way to operate in the mobile space I think it's been interesting and will continue to be interesting seeing companies like Nomo Robo get built and have fantastic exits when the narrative around VC like do you go raise a million that just sets a whole different set of priorities a different set of expectations and yeah you can then go hire somebody full-time hire a whole team and build out the team

[28:38] but sometimes doing that doesn't help you go faster and being Scrappy and hiring as needed working with good contractors is a great way to build a business and own more of that business in the end yeah what I found very early on you just don't know what to focus on as a startup oh we can do this we can do that we can do this if you then have unlimited resources right you're like oh we'll just hire this person we'll hire this person well now all of a sudden the focus gets even less focused I don't really have a methodology I've never again worked with big teams or anything

[29:08] but I just called like a hopper like my job was to keep the developers Hopper full and to manage what's important on that and then their job was just to pop out the thing on the top and sometimes that thing on the top gets pushed down because there's other things and whatever and so like I have two time frames it's now or later are we working on it now cool let's do it or we're working on it later sometimes later never comes and then that feature just wasn't important but knowing that here's your resources and that's a constraint that you're confined in that okay cool what we got then that means we can't do

[29:37] these three things we can do one of them cool okay well let's run then do the next one I say there's an infinite amount of work because once you do something we got to do and there's of course bug fixes and those kinds of things those obviously pop up to the top I love that constraints just breed creativity that's the way I like to build a business yeah looking back over the last decade VC has even said like it's just a different game and I I don't know what we're calling this here it's Indie development or whatever but like this is going to become the norm even

[30:03] when I started like even remote businesses weren't really popular my board was like when are you going to buy your own servers yeah ex I laughed I was like never yeah you just looked at me I was like we don't do that anymore you just get rack and Stat no that's not what I'm going to use the money for that doesn't make any of course I couldn't say that but that's what I was thinking I was like you just don't get it now aays I think people are getting this I don't know what this is but hopefully it'll have something to be fair I think there's times when the money can be an

[30:29] accelerant but that's what you really need to understand is like when will the money actually be an accelerant and when will it unfocus you as you put it like when will it remove too many constraints that where the constraints were actually helping pull you in the right direction you did end up raising money right what was the total you ended up raising over the course a little over it was two and a quarter you did raise money but you raised money along the way not like I need a million dollars to even build this thing out what was the thinking behind when and how much you did end up

[30:59] Rising so we basically did it in two tranches right so the preed basically a million and then a million in a quarter and that was before safes existed and everything it was a regular convertible note but the first one I opened for half a million but I raised I think 50 Grand of that okay cool because it was rolling okay let's see what that happens and then I did the 250 and then we kind of extended that when it got up to the million that's when we did a raise and then that got to profitability it was just kind of on an as needed basis it

[31:27] was like okay there's traction we're moving the right direction we're not going to go raise a ton of money we're going to raise just as much as we need to get to this next step and then you just kind of slow rolled those raises yeah and I never thought about it in that way but yeah and like it's not one of those things we didn't have to meet any milestones and it wasn't adversarial or anything like you'll get this when you get that like this isn't like training a dog or giving a treats to a an animal but it was just like hey I need this much cuz we have a lot of

[31:54] assumptions that we have to go and test and we don't know and the and so we didn't even do any advertising cuz there been no way to do it but I was able to literally call or email all the main reporters we did a lot with SEO and organic so didn't have to budget for that what do we need to budget for our Telecom development folks and that was how we just kept on growing that way and then I'm glossing over it but we have the White Knuckle right $944 in the bank account story if you want to hear that one too yeah know tell me that story

[32:21] well I kind of gave it away but basically we launched the mobile app but as you know like there was a 14-day trial and then there was 30 days from Apple and then another 30 days and in that time the investors were even say oh you're going to run out of money and that's when it got a little bit tense and they would invest again but it was under very very poor terms it was really really bad and I literally just had to I saw the way that this was going just the timing had to be absolutely perfect and I reached out to twilio and I was like

[32:51] instead of net 30 can I get net 90 for 3 months I need a bit of a loan here because of the whole thing and they were like yeah absolutely right I went to the bank I was able to get a line of credit didn't need to touch into that but at least I got that in case I needed so I had backup plans in case things went poorly and then there might have been like oh we paid this bill a little bit later and everything but literally $944 in the bank account was probably an OV exaggeration because if you go and look at all the bills that we owed but it

[33:18] literally potentially to the day to the minute to the whatever just coincided that then those apple checks started coming in then we were able to do it then we went back down to normal terms and then it just flew it really was but it was a dangerous dangerous game that even looking back I don't know how it worked but I knew at that point the deal that the investors were giving me was untenable because they had backed me into a corner basically if I took that I basically would have had nothing even if this thing got to be huge I would have had nothing there was a zero chance of

[33:48] me having anything at the end of that and if I rolled the dice there was a nonzero chance of having it so I was like well rationally I got to roll the dice and and it in that case pulled out all the stops and it worked yeah the scrappiness that's how you have to operate right like back in 2008 I was in the same position Apple's paying 33 days after the close of the fiscal month is tough in many circumstances I actually after launching my apps I hit probably very similar I don't have the exact number in my head that I've remembered all these years later but I ended up

[34:22] selling my wife's car to keep going until I got that first Apple payment so it's like I knew the money was coming so I just needed whatever it was like 30 days of runway for my wife and I to get the bills paid and we sold her car and we're like a onecar family for another like five years just to keep the lights on and stretch until that first payment came in just before that story you kind of glossed over a few things so you didn't do paid marketing ever but talk me through some of the things that you did do from SEO to press let's go

[34:53] through each of those individually what you would consider the top three or four group growth levers that you did put effort into and probably even spent money on contractors and other things even if you didn't actually pay for ads directly you spent on marketing you just didn't pay for advertising so let's talk through those key leverage points that you unlocked in this journey the way I look at it is your product is part of your marketing so offering the free landline blocking my twillo bill peaked at like 120k a month it was pricey it was always during political season cuz that's when all the rooc I you may have

[35:32] remembered there were one or two really big elections in that time when just the calls skyrocketed but because of that it's like okay well then the next piece is now we have everybody's email address that we can then go and say Hey try out these other pieces so that was really huge second from the data that we were able to build up we're able to do a lot of organic and SEO so what happened so in addition to the consumer calls that are coming in we built a Honeypot so we bought all of these old dirty numbers from twilio and other carriers it grew to over 300,000 lines of a honeypop but

[36:06] we're never answering and recording the consumer calls we're super privacy conscious focused we got our start with the FTC we can't touch that but on company-owned phone lines we can do whatever the hell we want so that balance of using the consumer side to figure out some of the data points then sending it over to the Honeypot where we're able to get recordings and more data and then generating programmatic SEO pages from that so one of the thoughts that I kind of had was like okay what happens now if you get a call from an unknown number while it's ringing you run over to Google and you

[36:39] type it in and you hope that you can get there right well let's just make landing pages for every one of those phone numbers so when you type it in it'll say no Mor Robo and this is a scam call be and when you clicked on it it would give you the recording it would give you the transcription and then it would say hey block this and you know 7 million other robocallers so all of that could have been our organic side our marketing budget but that's where I said this is a really good use I would rather spend $100,000 a month and block Robo calls

[37:08] and then funnel that into something usable on the SEO side rather than $100,000 in an ad budget which maybe that would work too I don't know but I just felt that it was better to build the product and then bring people together when you're looking for you see a phone number and that was the thing maybe an ret it was like if you have a different kind of app or whatever maybe don't know the longtail keywords ours were so longtail it was just a number right a 10-digit number but it worked really really well and that was like one of those Moes that we built is that you

[37:36] couldn't really compete against that once we were there and we were offering value on both sides and then saying hey you want to go and do a trial again night yes sure we took away all of the friction and then it just made everything so even the new acquirers they're big into PID well that's just going to make the paid better cool click on it get your trial move on through and if we had anything that increased friction I don't think it would work very well okay so number one you have the freemium landline product that you're upselling the mobile product to I would consider landline free even to

[38:10] this day you can't pay for it and there's nothing you got you can't get anything better it's just literally we just protect your landline for free that's awesome okay so you have this totally free and I was saying premium because for a lot of your customers I would imagine they're using the landline for free and they're using the mobile app paid so it's a weird kind of Premium and maybe this is another piece I left this out but because we were offering it for free the carriers came to us and said can we tell people about it like yeah so like literally I get a call at

[38:37] the time it was Time Warner right now spectrum they were coming to us because they were like oh if we build this in and then we can basically check off the box that we're providing roboco blocking yeah and we don't have to pay for it no so literally in the control panels there's one click access where they would hit RPI send us the phone number get it activated put the simmering number into their whole thing and yeah that was another huge channel that we didn't have to pay for or we would have needed to spin up the whole fdev Division and work on these whole things

[39:05] and again like we talking about 10,000 little things would they have done it if we had not won the FTC competition probably not would they have done it if they couldn't try it out on their own and seen it probably not each one of those then they came to us and like how do we do this cool let's just go and do that and that started building that was the free side but you're right all these I guess you could technically say it's part of a marketing budget yeah and this is where I think a lot of people get fremium wrong where when you're going to

[39:33] offer a free product and not directly monetize ideally now there are some cases where you are just going to give away value for totally free and maybe not even have ads or whatever but ideally when it's most synergistic when it works the absolute best those premium users are delivering value in some other way it's like all Trails they're suggesting new trails and tracking new trails and correcting trails and part of the community and like they're helping build out the value that then all Trails sells in the premium subscription and so in your case it's fascinating that it really is a form of freemium and what you were doing was subsidizing the free

[40:17] landline blocking because that gave you so much data that then made the mobile product that was paid so much better such a fascinating end round of Premium like it's not your standard fremium but that's exactly what you're doing and it's that perfect kind of synergistic fremium free and premium are dangerous games like if you do it free and premium are user acquisition paths it's not a revenue model necessarily it's a way of acquiring customers so yeah looking at it through that lens I always joke it's like riding a unicycle juggling chainsaws that are on fire if you do something wrong you're dead but if it works it's really impressive and if you

[40:59] can reduce the risk of it not working and again this defined in all these different ways that seems to be the theme but yes the 2023 we're looking at it very differently people understand it back then Instagram was six months maybe a year old or something maybe it just been acquired like Airbnb was still new Uber was still like all shiny and new and like everybody just looked at the world differently it's like just give it away give it away give it away that's well other than being like a redot Chili Pepper song Als so but it's just that was the thing back then nowaday you just

[41:29] can't do that you have to use those as user acquisition channels and you have to think about it as your in your business as that it's not going to earn you Revenue so how is it bringing you value is it bringing you value through data is it bringing you value through Community is it bringing you value through being an amplifier of Word of Mouth how are those premium users actually delivering business value and if they're not this is a pretty big question whether you should be operating premium you nailed it that V word right value I mean so many people think of again Revenue expenses but you're

[42:01] exactly right value comes in a lot of different ways and so as long as you know in your company where they're creating so again in our case the landline was value oh dollars yeah but there's other ones what about data o yeah that we can then monetize you're exactly right you have to look at everything as far as what kind of value are you gaining or giving or all those put together okay so landline freemium strategy is number one number two was programmatic SEO which was a brilliant move number three I'm going to give you number three press how did you manage press and other earned media getting

[42:36] featured by Apple and that sort of thing I'm a one trick pony man it's a good trick right what do I do right I look at it and I go okay news wants new stuff and look some of the competitors in the robocall space always just put out data and analytics right 8 billion robocall I always just thought that was like cheesy I still do it's like yes robocalls are bad that story's been told a thousand times but you know what story hasn't been told hey what's this robocall that's coming in right now what's going into Seattle what are the robocalls that are hitting Austin and because we had

[43:08] all this analytics from the consumer side right we had on every carrier every major VI carrier across the United States and we had our Honeypot that can go and catch record and transcribe them and everything so we could go to a reporter who was in Austin and say hey here are the top scams that are hitting Austin right now along with audio now we'll talk about it well that got people because again it wants to be local and things we got national news stories right we're on NBC Nightly News all that and it was all because of if you're just giving data okay that's great you know

[43:35] according to blah blah blah you're getting all this with us they were like well now we want to see how do you get this let's hear it let's play so all of that and this was all on our landing pages right but all of that just leveraging that if you give a reporter something to work with boom they're just going to write the story and it's going to be written in a way where you're obviously going to get it mentioned so yeah just dear report Roc calls are really bad do you want to do a story on it no that's just been done 17 times hey

[44:01] here you know and then finding the new ones right like recently we found President Biden is telling you that you won the Publishers Clearing House sweep Stakes yeah no you haven't won that but now we went that's a deep fake that's a persuasion technique it's all these other things that we've just gotten better at that but what is that story that is new and interesting and you can give them some you have go to make their job easy for them and then again when you cut through the Clutter when they know tell me what's new that was honestly what was happening with a lot of the reporters that we kept in touch

[44:28] with hey next month tell me what's going on so whenever there was also a gap when like they didn't have a story going on okay let's go back to Robo calls but let's look at it what it's different here and then it obviously the robo text and the spam text and then any kind of consumer protection those evolved from that on the Apple and Google front did Apple feature you out of the gate as one of the early iOS 10 robocalling apps yeah that was helpful from day one I was never trying to be Shady right we're in consumer protection so no tracking no Shenanigans none of this like would we

[44:59] just offer what we do so that also worked with the Apple ethos so without get into like the technical details apple and privacy so an app developer can't see calls that come into your phone on our basic version we have to load a block list and then Apple proxies that so some people were like oh and apple and we just have like no that's the Privacy conscious way so when we built ours you don't even have to give us your phone number with our basic product we do a better job if you do we just basically rather than fighting we slipstreamed hey this is how Apple wants

[45:29] to do it we agree we love that that's how we would want to be treated and then when we were able to say you should feature us as app of the day why because we protect somebody and we're privacy conscious that just became a competitive advantage to us any other leverage points that you feel over the years on growth and user acquisition the best thing that I'm thinking about on on growth is we grew so slowly like it might have gotten people really frustrated to grow slow but the thing about growth is it means that you're getting better each day it's always the dollars but in my mind it was how are we

[46:04] growing value so the best I can say is like yeah we grew slowly I guess if we had maybe I don't know if there's a parallel universe or I could invent a time machine and go back in time and try it again what would we have done if we raised 10 or 20 or $50 million would that have changed anything I don't really know right you will never know but I know that the path that I took was growing at a sustainable pace and that meant not overextending financially not overextending hiring not biting off more than we can chew until the right time so I don't know if that's the right answer

[46:38] but that's the way I looked at it that leads us to the last topic I did want to talk about today is that by approaching it that way by being Scrappy by only raising the money you actually needed by not taking bad terms when you did need the money but weren't going to get I mean it's always that way with VC and investors right it's like when you don't need the money they'll give it to you in great terms and when you do need the money bad terms if you are on that track and if you do think you might need money do it before you need it because you're

[47:05] just going to end up in a better situation so you're growing you raise money as needed you're Scrappy and then you exit for over eight figures and to spoil the story a little bit you own a very big chunk so this is life-changing money for you by making those Scrappy decisions all along the way vers is getting on that treadmill where you're raising more and more and more money owning less and less and less of the outcome so tell me about the acquisition like did you go out looking to get acquired or at what point did you start thinking like it's time to maybe exit this business so on the acquisition side

[47:43] we always had people knocking on our door and like when you have a good app when you have a good business people are going to why are you knocking on and so we got weekly a couple times a week right and most of them were boilerplate and most of them you just ignored and it was noise and whatever we did a process a few years back again like the investors wanted a return and so okay we'll go through that and we worked with an investment banker and effectively all the deals that we got we're just kind of like lowball at that point we looked at the numbers like this doesn't make any

[48:08] sense like what they're offering is where we're going to be so why would we do that so we just kind of like okay whatever I'm just making a ton of cash right and so it's a great place to be and we can then grow and hire and all those and then yeah we got an inbound offer from a pretty big company brought to the board and we looked at it and we you know where we going here and this and that the other thing like maybe now is the right time one of the lessons is actually really important is to make sure that two is one one is none so I

[48:33] went back to all the other people that and said hey look we're not running a process but we got this offer because of that we had our choice and we could have gone with the big company and instead we went with a smaller company that I felt it was a better fit for the product the timing was right the value was right and again on the ownership side it worked out I got a great return the employees got a real good deal the investors got a real good return the acquir if anything I hope that this is the worst the company ever is cuz just by putting on

[49:04] there like just stuff that we just never got around to it was an extra like a terabyte directory that was just hanging out in AWS we just didn't look at it like I can't even imagine how much that cost but it was like so those kinds of things right and like I just keep on joking I'm like now that you guys know like what a terrible businessman I am I'm I'm okay with that right it's like it's fine just nobody understood why I made certain decisions it was like I only have a certain amount of resources and I had to concentrate on what so if right if that bucket cost I don't know

[49:31] how much per month whatever I'll figure it on out what's more important is when the robocall blocking robocall industry changed maybe two years ago right so new technologies came out stir shaken the carriers were stopping more and more of these it could have blown up our entire business I bet the business on our product now it's called Max and it is 100% protection it has our block list it has our allow list it has call screening because now now it's is an unknown number should I answer it and you don't really know so looking at it from that way like I got to build out Max great

[50:04] Max is not two bucks a month it's five bucks it's $50 a year there's a family plan for 80 bucks a year there was just way more value there and those are the things people were screaming for on our basic version hey can I protect my whole family right listening to those people building out Max and then saying look this needs paid this needs people that are experienced with this we could build out this whole thing or is now the right time and it yeah I would stayed here for another decade or two doing exactly what we were doing and it just made sense for everybody and that's when you're kind of

[50:33] in the driver seat too when you can say no to something you're like uh no thank you that's really what is I unfortunately I see this so many times I mentor and Coach a lot of startups and I can't say this to them sometimes even if they have like a just a disgusting cap table like even if this works man this isn't going to work you're putting in all this effort and whatever and unless it is like a trillion dollar company you know maybe you'll walk away with a million bucks I never wanted to get myself into that jam I'm a very amateur DJ and I love defining things with music

[50:57] and things and so when the deal was closing it was going about between 10 and 12 and I'm just sitting there waiting but it was like I didn't know what was happening or anything so I put together a playlist and one of the songs was closing time right we all know that that's when it came up to that and then right after that Frank snch was my way and I was like you know what because I took a very different path than everybody else that I know and it took a lot to listen to people and incorporate that into my thinking I'm not saying I'm perfect or right or anything like that

[51:29] but to hear somebody who says again even like on a board member right well you should be doing this and then make it your own and have a 10 year you're not going to find the answer out for 10 years I just had to know that look this is the way I'm wired and this is the way it works and I think it's great and that's why that song right just like I did it my way and that song if you listen to the lyrics it's when he's towards the end of his life and he did it his way and you know regrets had a few but overall I think that's what been

[51:58] great about this journey this story and that's what I loved about it and so I think hopefully your listeners will be able to take from this yeah absolutely it is such a great story and such a great outcome and as someone super bullish on this industry somebody had apps I've had exits I've actually sold three apps it's just such a cool opportunity and it's a cool opportunity that you didn't just go like exploit people you're not like a scammy subscription you brought value to people over the course of a decade and made life-changing money by doing that and that speaks to the power of software and

[52:35] Entrepreneurship and you know a lot of people get in this like uh rich people like they've worked on the backs of others and stuff like that and there's cases of that for sure where people get rich not taking care of people not truly bringing value into the world but there's so many great entrepreneurs like yourself and hopefully a lot of our listeners as well that yeah make a ton of money but make a ton of money bringing a ton of value into the world and that's the best way to do it like the people are trying to scam their way to the top the people are growth hacking

[53:03] and other stuff it's like often those are the ones that just flame out but when your goal from the beginning when you slow grow by bringing value to people you just create better stuff and better outcomes for yourself like the line in the hip-hop s is a Tupac like I made a g today yeah but you made it in a sleazy way right just just drive Val you I love the fact that we're talking now cuz I've been reminiscing and looking back and obviously had to put together a bunch of stuff but for literally 10 years straight we had two to three press mentions every single week for 10 years

[53:39] straight wasn't paid or anything like that either noar Robo or me or some like 10 years every single week on average we were getting something and like yeah that just doing it they say about consistency for your listeners right number one create value don't just make tricks and dialing it in and optimizations and everything number one is value and number two is just consistency I know it sounds so cheesy but like those are really hard to do so many people just create things that just don't have they're cool okay cool and that's great right and use those on side projects and I'm not saying no to that

[54:11] but if you're looking to have a business the business has to create value the value is reflected in money it has to be because that's how we keep score in this game and the more value you create like again if it was robocalls block I'd have like billion dollars I'm not exaggerating we block billions of rooc calls but obviously doesn't equal that way but yeah the stuff is a very very long road and it takes a lot but build value and do things consistently and you're already halfway there well I think that's a fantastic place to wrap up you've exited and you're going to be moving on soon so you're not hiring or

[54:49] anything else but anything else you want to say as we wrap up yeah you know what the biggest request that I would have is I would love to talk to Founders that are like me the Indie developers small teams just reach out to me right like what are the problems there that I can help solve or what are the problems that you're seeing or how can we solve these things together because people keep on asking me like what are you going to do next and my answer is like whatever I want and like what do I want to do is I want to help people like me get to this

[55:21] place so I was at Tech Stars foundercon one year and I don't remember it was a Founder that was telling the story and I don't remember the details but his company got Acquired and he had reached the Mountaintop you know we're all sitting around like what's it like he's like you know what's up here nothing I went I thought like okay so I've gotten to the mountain I right got the I had an idea built it up and it was acquired that's the life cycle and this is great and I got to the mountain toop and it's great it's amazing the grass is soft the air is so clean and there's

[55:54] like lots of bunnies that run over and they jump up and they're nice and fuzzy I'm like it is so cool up here what I want is to bring more people to that mountain top I'm not investing there's way more people that can do that way better than me and you can get money from anywhere right I do a lot of mentoring and things but like what are these pieces that people like us need to get over to that next level to move on to have their companies grow onto the next one and graduate and things like that so I would love to talk to anybody

[56:20] yeah my email is just mearon f.com drop it it's my personal love to talk to people and see if there's anything that we can do together that's my goal here now now that I had a lot of people help me up that mountain and now I'm going to be helping a lot of people up that mountain that is amazing I think you're the first guest who's ever offered to just help thank you so much for joining it was just such a fantastic story and thanks again for offering to help our listeners and I hope people take advantage of that pleasure and thank you for having this podcast and you're

[56:47] helping out everybody on this end right anybody who's listening to this all the value that you've been creating and giving away how many lives view change there so if we can go help out together that's really the goal here and thank you so much for this time thanks so much for listening if you have a minute please leave a review in your favorite podcast player you can also stop by chat. sub club.com to join our private [Music] community

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