Keith and I are joined by special guest Jay Winder, CEO of MakeLeaps, in this 11th episode of the podcast. We talk a bit about doing business in Japan, raising money vs. bootstrapping as a SaaS company, how AngelList is going to eat the world, and the usual eclectic mix of topics.
[Patrick notes: The transcript below has my commentary inserted like this, as usual.]
What you’ll learn in this podcast:
- Why you should negotiate from a position of strength and abundance.
- How to raise a round of funding through AngelList while not being in Silicon Valley.
- Why AngelList Syndicates are the future of seed stage fundraising.
- How to manage relations with investors when you have lots of them.
- How running a bootstrapped SaaS company is different than one which has raised early investment rounds.
- How the SaaS market is different in Japan.
- A bit about Jason’s new project, Sales for Geeks.
A brief announcement: Keith and his co-founded Rachel launched a new product recently called Segmetrics. It’s Baremetrics, for InfusionSoft — gives you actionable, one-look insight into which of your InfusionSoft segments (e.g. traffic sources) are producing results for your business. If that sounds relevant, make with the clicky-clicky.
Podcast: Customer Onboarding
MP3 Download (~60 minutes, ~59.3 MB) : Right-click here and click Save As.
Podcast format: either subscribe to http://www.kalzumeus.com/category/podcasts/feed in your podcast reader of choice or you can search for Kalzumeus Podcast in the iTunes Store.
Transcript: Bootstrapping vs. Raising Money
Patrick McKenzie: Hello, everybody. Welcome to the 11th episode of the Kalzumeus podcast. I’m Patrick McKenzie, here with my noted co‑host, Keith Perhac and our good friend, Jay Winder as CEO of MakeLeaps here in Tokyo.
Keith Perhac: I’m Keith. Welcome to the 11th episode. I can’t believe that we got this out, literally one week after our last episode.
Patrick: This is downright scary.
Keith: This is scary.
Patrick: It’s almost like we have an actual podcast.
Keith: I don’t think so. All right. Cool. Welcome, Jay.
Jay Winder: Thank you. Hello. I appreciate the welcome. I was looking at you guys doing a podcast behind a thick Plexiglas window and I think, “Geez, that looks really warm and cozy inside that little podcast igloo”, so thank you very much for inviting me in. It’s a pleasure to be here.
Patrick: We’re happy to have you from outside in the cold.
Jay: Well, we have an air‑conditioner right here.
Keith: Hopefully you guys cannot hear, otherwise our editor is going to be very, very mad at us.
Patrick: Very, very angry at us.
Keith: In fact…
Jay: Should we turn it off?
Patrick: We were testing a little bit ago and it sounded OK.
Keith: You couldn’t hear it.
Patrick: Alright, so we’ll be talking about a few different things this time. Jay has a SaaS business called MakeLeaps. Why don’t you just give us a little bit of background on what that is for people to have some context, and then we’ll talk about recent MakeLeaps adventures.
Jay: The best and shortest way to describe MakeLeaps would be a FreshBooks for Japan. It’s essentially an online platform that helps Japanese freelancers and businesses more easily create and send their invoices, whereas right now pretty much everybody in Japan uses Excel and they do it all manually, which is crazy, and we’re on a mission to fix that.
Patrick: As of a couple months ago, you guys are funded out of a few Silicon Valley movers and shakers. You want to tell us a little bit about how that came to pass?
Jay: Sure. Around one year ago, I had the good fortune to meet Naval from AngelList, who’s a good friend of my friend. The first time I met Naval, he asked me a series of questions about MakeLeaps because he’s interested in the Japanese startup ecosystem. I answered all of those questions and at the end of that conversation, he very generously offered to be an advisor, which was very nice.
We thanked him for that and then the next time he came to Tokyo, I got a chance to see him again. He said, “What’s happening with MakeLeaps? Where’s everything going?” I said, “Oh, it’s great. We’ve got this traction and we just hired this guy and we’ve got this partnership and this deal and blah‑blah‑blah.”
He looked at me and said, “Can I ask you a few more questions about MakeLeaps?”
I said, “Sure, of course.” For about 30 minutes, he asked me a series of about 20 rapid‑fire questions, which I found very fun. They were all on point and interesting, so I responded.
Then at the end of that conversation, he said, “Wow. That all sounds pretty interesting. If you would be open to it, I would really be interested to invest in MakeLeaps.”
Up until that point, taking funding and investment had been an amorphous idea, we’d read about it in TechCrunch, but actually having an offer from one of the top most well‑known people in Silicon valley, offered to invest in MakeLeaps, kind of like Michael Jordan saying, “Hey, would you like a game of basketball?” It’d be crazy to say no, even if you like basketball a tiny little bit.
That began a process where we started thinking deeply, myself and my co‑founder, Paul. What do we want to do with MakeLeaps? How do we want to manage it? Do we want to take on investors?
That was quite a complex discussion we had over quite a long time. The more that we thought about it, we realized, “Well, if we really want to build a big important meaningful business, it’s going to affect a lot of people in a meaningful way, funding is going to be critical” is what we ended up realising.
I realized that, the Bootstrapper method is absolutely legitimate, and we did that for four years, so, I am not detracting from that at all. That’s a great way to go, but we had a situation where we could get some well‑known people onboard our team at MakeLeaps.
We decided that, it would be a great idea. We went ahead and did the funding round of $750,000 that closed a few short months ago.
Patrick: Some of the participants for that, were Naval, Dave McClure from 500 Startups, Hiten Shah, a few others. It’s funny, these days, there’s a mechanism called a “Syndicate” on AngelList, which might be new to some of you who are listening to this.
Typically, in the days of yore, three years ago, a funding round for seed stage investment like this would be done by some of the collection between a 5 and 10, or 5 and 20 angels. Typically the minimum for an angel investment is about $25,000, below which, it wasn’t really worth everyone’s time in putting the deal together. Between $25,000 and then, say $100,000 on the high‑end, you would put together $250,000 to $500,000 like that.
One of the emerging models on AngelList is that, various smaller angels who don’t want to do deal flow management for themselves, which means they don’t want to go out in the world finding people who are like Jay, convince them that they should be allowed to invest in the company.
They want to outsource the deal flow management to somebody else, outsource a lot of the vetting of the deal to somebody else that they trust, and be able to invest some money in the startups that person invests in.
They can follow them on AngelList, in a way that is not like following somebody on Twitter. They make an informal commitment to invest in startups that the syndicate lead invests in. Collectively, this is called a syndicate, and then, some magic happens. I am not sure what the magic is, but my understanding is that AngelList makes some sort of vehicle where the syndicate can each put money into the vehicle, or is it AngelList just brokers the arrangement and the angel invests directly in your company?
Jay: The way that it works in practice is there’s a person that has a syndicate, like you say. There’s maybe anywhere between 2 to 100 people that are following a syndicate. Then the syndicate lead will say something like, “OK, guys. I’m going to make an investment into this company. Here’s what it looks like.” At which point, depending on Angel List settings, and I’m not sure about this, it’s either opt‑in or opt‑out.
If people want to opt into the deal, they can say, “Yep. We agree with this deal. It looks great. I’m in,” or if they want to opt out, they can say, “You know what? I’m not interested in this space” or something like that, they can opt out. With that in mind, it’s actually kind of interesting. You don’t actually know, if you’re leading a syndicate, the amount of investment money that you can get until you actually decide to lead a syndicate investment and see how many people join.
Any person that’s running a syndicate who’s fairly well known that says, “OK, we trust these guys and we want to invest into them,” that’s a very strong signal. As Patrick said, if you’ve got some spare cash sitting around from Google stock share sales or something like that, you can say, “I’ll throw in behind all these people.”
Then what actually happens is if you’re an entrepreneur on the other side, you perhaps might start to trend on Angel List. Then you start get a lot of attention and people start to follow you and people might start to say, “Hey. Can we hop on the phone for a call?” at which point you lose a tremendous amount of sleep if you’re living in the Tokyo time zone…
Jay: …because they all want to call either very late at night or super‑early in the morning. You’re a bit of a zombie for a little while. Hopefully, you can close enough deals on the phone or you can get enough people interested in investing that you’re ready to go. You can pull together your funding round.
We got very lucky. We set out to raise $400,000 and in the end we ended up almost double oversubscribed at $750,000, which would not have been possible without AngelList, especially because we’re trying to do this remotely. There are already some difficulties, where somebody can’t drive from Sand Hill or wherever they happen to be living in San Francisco to come visit you guys in Japan.
That’s a little bit difficult, so there’s a little bit of extra, I would say, latitude that we have to spend a bit of extra time and effort in trying to assure people that we’re good people. Sure, we’re doing this in a foreign market, but it’s B2B SaaS. It all looks similar. The numbers are similar. The market is huge and exciting and all the rest of it. You close a syndicate deal and then what happens is there is a single line on the cap sheet in respect of that deal.
All the angels invest into a holding company and that holding company actually makes the investment into your company. You get a single wire and a single name on the cap table and that’s it. You’re done. You don’t have to chase people to sign agreements or do any of that kind of stuff. All of that is done and fully managed by AngelList, which makes having 60 investors a cakewalk.
It’s simple. All of a sudden, you get a big wire of cash and a single entry in your cap table and that’s it. You’re completely done. That was transformative for us. Moving forward it’s not going to make sense to raise money using something other than AngelList. It just makes it so easy and straightforward.
Keith: That’s a glowing recommendation if I ever heard one.
Jay: Yeah, it was great.
Patrick: This is particularly true for folks who might be raising from smaller angels or angels who don’t have a strategic profile to them. For example, if you’re someone who previously has some successes as an angel or as an entrepreneur and is known to have the capability to open doors, then a startup like MakeLeaps or another startup would be crazy to not jump through any hoop you put in your way to getting a check.
Well, given that it’s a relatively reasonable process. If you require a custom document ‑‑ a custom negotiation of the terms of the agreement, as long as it’s something reasonable, there could be founder time invested into getting a $25,000 check from you.
If, on the other hand, you’re J. Random product manager from Google, you don’t particularly have any successes behind you. Your main capability of contributing to a business is the ability to contribute a check full of a meaningful amount of money, but not a gigantic amount of money, then startups, particularly startups in demand, don’t really have a lot of reasons to spend huge amounts of their time on the phone with you, when they could be spending huge amounts of the time on the phone with either a better‑known angel or with their customers or employees trying to move the business forward.
Moving the amount of pain, the transaction costs of doing business with you down opens up more deals to you, which is probably one of the reasons that AngelList is going to eat large segments of the angel fundraising market, particularly on the low or less‑established end.
Jay: Absolutely. It’s either “click, click” and you’re done, or “click, click, phone call, send a document, get somebody to sign it. Did they sign it? Oh well, they went on a holiday for three days. Try to call them again, but they’re not around. You need that document to close your deal,” or “Click, click, you’re done.”
It’s very clear that “click, click and you’re done,” the way that AngelList has made this very possible, and simple, and easy, it’s great. I can’t recommend it enough.
Keith: It’s also easier for the investor, as well, because you don’t have to jump through all the hoops, as well. You don’t have to vet it as well as you would if it was a one‑on‑one.
You have other people. You have that social proof working for that, as well. It’s a lot easier for people now to invest, as well as be invested in.
Patrick: Right, and we’re not trying to convince anyone out there in podcasting land to become an angel investor because the mathematics of it are exceptionally unfavorable unless you already know what you’re doing and you have lots of money to burn. Be that as it may, even knowing that the underlying math was difficult, the actual mechanics of doing angel investing two to three years ago were a little painful.
I have two very small angel investments, and because there’s actual contractual language involved we have to run it by a lawyer. Let’s say that I spent a high portion of my very small check size on having a lawyer look over four pieces of paper and make sure that I wasn’t giving up the general store in those four pieces of paper.
That wasn’t really something that I wanted to do. It wasn’t something that the startup wanted to do.
It’s like, “OK, we’re both professionals. We both have different bases of IP, which we want to mutually know is not going to cause problems for anybody, so the lawyers will be involved.”
With AngelList, if everyone is using substantially the same paper, which has been vetted by AngelList’s presumably top‑tier, VC, yadda, yadda legal firms in San Francisco, then there’s less legal risk involved with that paperwork.
Jay: Very true. What’s interesting about the whole process is you can choose the set of documents that you want to use.
If you’re raising, say, $400,000 on AngelList, people will see that as, “OK, they’re raising 400k, they’ve got over 50 percent committed, and they’re using, let’s say, Y Combinator SAFE documents. Oh, OK, that’s a very clear, very easy to understand structure. It all makes sense.”
There are all kinds of different SAFE documents, so you can pick the kind that you want, and say, “OK, here are the base default documents that we’re asking everybody to sign. That makes things easier, as well. When we did our round we had an investor or two say, “Listen, the terms are good, but we’d like this favorable term,” or something like that.
When you’re doing an AngelList syndicate and you’re already almost double overcommitted, it becomes very easy to say, “OK, we appreciate that you’d like to be involved. You want this favorable term, however, we’re already double overcommitted and everyone has signed documents that do not include this favorable term. If you’d really like to be involved we’d love to have you involved, but the documents are the documents.”
It becomes very easy and straightforward to say that. Negotiation becomes very simple because everyone signs the same documents, and away you go.
Patrick: What Jay’s saying about favorable terms is important. Traditionally in angel investing there is a few axes that the deal can move along.
One is fairly simple, “What’s the price this deal is being done at?” is something, which is fairly uncomplicated, which has not always been true.
You can imagine, using very simplified math, if I’m willing to buy 10 percent of the company for $10,000 that puts the value of the company at $100,000, which is much lower than any company would actually be valued at, but simplified math.
Those two numbers, which sum up the price of deal, are one way to evaluate the deal. There’s other terms that might be involved with exactly how the math works out in the event of an acquisition, or a down round, or various other things in the company, like, say, whether you get liquidation preference.
A liquidation preference is typically in the interest of the investors, not really in the interests of the firm. Certain liquidation preferences are borderline abusive.
Which doesn’t mean that they were never signed. A few years ago there was not the understanding in the entrepreneur community that a 3X liquidation preference is not a market term.
Also, supply and demand. People were saying, “I will only give you my money if you include a 3X liquidation preference.”
Like Jay said, if you’re oversubscribed and the funding round is happening with or without someone’s particular $25,000 check, you can say, “Look, the term that we’ve negotiated with everyone is,” for the sake of discussion purposes, “a 1X liquidation preference, ” or “no liquidation preference, and that’s kind of the deal. You can choose to do this deal or not do this deal, but we’re not going to negotiate consequential terms like that with you.”
Jay: The way that we ended up saying it was, “Listen, for us it’s very important to keep good relationships with all of our investors. If they found out later that one investor got preferential terms over everybody else, then that’s kind of a big, serious issue.”
There was a point that I needed to make that was fairly important, and that was the way that we ended up responding to people who asked for preferential terms. “Listen, we’d love to have you involved in this, but we don’t want to make a situation where the other investors feel like they got a bad deal or any one particular person out of 20, 30, 40, 50 people didn’t get that same deal.
“In the interests of keeping good relations between MakeLeaps and all of our investors, we’d really love you to sign the standard documents. That’s very simple, and easy, and then you can be involved, and that’d be great. If that’s difficult for you, completely understand. No problem at all. Please let me know what you’d like to do,” is the way that we handled that.
That was very smooth, and successful, and an easy way to explain what we were doing and why without treading on anyone toes.
Patrick: This is, incidentally, something which is useful, not just in negotiating investment, but in negotiating all sorts of contracts. It’s something that your vendors will occasionally do to you.
A, if you’re selling, say, SaaS where there is an actual, physical contract in play, and it isn’t the standard contract of adhesion ‑‑ presuming you’re selling on the several thousand dollars of services every year [inaudible 17:35] companies ‑‑ you should probably have a template agreement, which you give to all of your customers.
Your first negotiating position can always be, “Well, our standard offer is…” blah. If they say, “Well, we would really prefer….” some term in there, “…which is more favorable to us than what you have right now,” you can say, “Well, this is the standard thing we offer to all of the customers at the level of service which you’re currently willing to sign for.”
“If you want to upgrade to our super‑duper platinum enterprise thing, we could discuss individualized contractual language with you. But, at the $1,000‑a‑month level of service you’re at, the $2,000‑a‑month level of service, we really encourage the use of our standard terms.”
Maybe you win that deal, maybe you don’t. That’s a negotiating tactic that you can do, which is fairly low‑risk.
Jay: Exactly. If you’re speaking from a position of strength where you have other customers signed up to that same deal, you don’t need that deal to make your rent payment, or something like that, then it’s very easy to do.
Say, “Listen, here’s the deal that’s available right now. If you can sign it, great, if not, no problem. Best of luck, and hope to run into you again in the future,” is a very strong negotiating position to be taking.
Patrick: I had this once for Appointment Reminder, where I’m trying to get business associates agreements, a particular type of paperwork, signed between Appointment Reminder and all of our medical customers. Many of them had already signed it, but some of them were waiting on it.
I have gone out to the folks who were still on the not signed state and said, “Look, we have a standard BAA ready. I’ve prepared it for your company. Please sign it immediately.”
Some of them are saying, “Well, we have to run this by process A, process B, and process C.” Most of these are not large accounts.
My position has been, “You have neglected signing this contract for a while, which puts us both in technical violation of some regulations, so this really needs to get done this week, rather than being done after the lawyers get through with it. Our current documents work. We know they work. We’d highly encourage you to sign the correct document.”
Keith: What I find a lot, especially in consulting, is what you said Jay. It’s talking from a position of confidence, and power, and “OK, I’m going to be able to make my rent this week, do I really need this contract if they’re asking for all this stuff?”
What I’ve really found is that the more concessions you make, the lower your status becomes, the more power the client has, and the more things that they’re going to demand of you. In many cases, not all of them.
I think always working from a position of power, and from a position of, “OK, this is standard. This is the way we do things,” and, like Patrick said, “If you want extra things, it’s going to cost this much for adding that on.”
What a lot of people don’t realize, negotiation is a two‑way street. It’s not someone telling you what you’re going to do. You need to work out what’s beneficial for both of you, so that you’re both on the equal footing.
Patrick: The magic words for negotiation are “mutually beneficial agreement.”
Patrick: Like Keith was saying, sometimes people who are maybe a little closer to us in mindset hear the word “power” and they get a little bit scared about it. Maybe we could think of it less of it being a power relationship and more about you having a mentality where, “This is one deal out of a universe of many abundant deals that are going to happen over the course of your business career.”
Given that, you do not need this deal to close. You’re in a position to hold out for terms on the deal that make sense to your business and to say, “OK, if the terms of the deal that are being offered right now don’t make sense for the business.” Then we will shake hands, we’ll part as friends, and maybe we’ll do business in the future, but not under terms which don’t make sense for me in the present moment.
Jay: Of course, the classic negotiating idiom is two people want an orange. One person wants the skin of the orange, and one person wants the inside of the orange.
[Patrick notes: There are many SaaS negotiations like this, where e.g. the buyer sincerely wants the software to be maintained and the SaaS company sincerely wants thousands of dollars, and neither realizes that the other would grant that request in a heartbeat rather than it being a key point of contention.]
Then somebody cuts it in half and says, “OK, you both get half,” where both people could get 100 percent of exactly what they want if they talk about it a bit more, and understand each other’s goals, and what they’re trying to do in trying to divide an orange.
“Just buy two oranges,” is what I think actually listening to that idiom again.
Jay: From that position, I think it’s always good to understand your negotiating position against somebody else’s, but let’s not get too far into negotiating theory and all that kind of stuff, though it’s interesting.
Patrick: One thing I want to ask is you’re a Japanese company. You’re completely founded in Japan.
You’ve been running in Japan. You’re towards the Japanese market. Why Silicon Valley for funding?
Jay: Good question. I suppose the best answer is because Silicon Valley came calling. Naval from Silicon Valley came over, got to know us, met us, found out a lot of information about us, and offered to invest.
From that perspective, we could have gone out and aggressively looked for Japanese angels and done an angel round that way. However, the Japanese angel ecosystem is not one percent of what it is in Silicon Valley.
I recently had a trip to San Francisco and I checked into my Airbnb. I walked outside and literally ran into a MakeLeap investor, completely randomly on the street.
Jay: I’d only actually met him via video chat. We had two video chats.
He walked past me, and I was like, “Oh, man, I’m pretty sure that’s Tom.” But I was like, “Do I go over and accost him, and say, ‘Hey, do you know who I am?!’”
Jay: Of course, that’s what I did. I’m Australian. I can’t help it.
I went over, and I said, “Hey, do you know who I am?” and of course he responded as if he was about to be mugged. He took a step back, and I was like, “No, no, no. I’m Jay from MakeLeaps.”
He’s like, “Jay.” I’m like, “Yeah, Tom.” He was like, “Ahh.”
That is the sort of thing that you can experience in Silicon Valley. [Patrick notes: People have come up to me on the street in Silicon Valley and asked “Excuse me — are you patio11?!” Craziness.] If you walk outside in Tokyo, you will have to throw a lot of rocks before you hit an investor, [laughs] or an angel investor. It’s not so common here.
As Dave McClure says, “Angel investors are the limiting factor to any startup ecosystem,” and I agree with that. The value that you get from an experienced angel investor to give you advice, and capital, and point you in the right direction is really super‑invaluable.
We found that, once we did the syndicate round through AngelList, a lot of people became interested in Japan and the Japanese market, as well they should. Japan is still 15 percent of the entire world’s GDP.
It’s still the third largest economy in the world, full of affluent businesses and consumers. It’s a really exciting space, so people see this opportunity, and it’s rare that a company, especially run by foreigners, is aggressively focusing on focusing on and targeting the Japanese market.
[Patrick notes: I am perennially annoyed when people — inside and outside of our industry — treat Japan like its an also-ran whose time has faded, or are unaccountably surprised when Japan proves to have a lot of money. One common article in the business press about e.g. iPhone penetration rates could be titled World’s Third Largest Economy Discovered To Contain Money.]
I guess, because of that, we also got a little bit of interest from people who’ve always been interested in Japan and wanted to find a way to get into Japan a bit more. We became that opportunity for them.
Patrick: The understanding of investing investors, VCs, angels, service providing firms, companies, entrepreneurs, et cetera, our ecosystem is really important because all these things are interconnected.
For example, not only does Japan have fairly few angels who have operating experience in technology companies, it has few enough…Technology companies in the sense that we mean the word technology companies.
There are many tech firms in Japan. Most of them are not SaaS firms. In fact, I would have difficulty naming five Japanese SaaS firms.
Jay: It’s not a common model in Japan.
Patrick: Not a common model yet, so there aren’t people who have successful exits at these firms, who then turn into angels and start giving money to the next generation of entrepreneurs. Even though that’s the probably the same generation of the actual people. There’s not the sort of established best practices here for people who can….
There’s understanding in the market in Silicon Valley that a SaaS firm that has a particular metrics ‑‑ “A churn rate of two percent is really, really good amongst most SaaS,” for example. That there are probably on the order of 20,000 people in San Francisco who could tell you that off the top of their head, where in Japan you could probably go to a lot of professional angel investors here and ask them to define churn rate and have them be unable to answer that question.
Jay: I agree with that. Yes, that’s true.
Patrick: The three of us all have high hopes for Japan over the next short period and in the long‑run on both having successful exits, having this information percolate through the various channels, both Japanese and Japan‑resident foreigners, and hopefully having the market mature a little bit more here.
Keith: I’m the only one in the room who doesn’t live in Tokyo.
Jay: We’re working on that.
Patrick: We’re working on that.
Jay: I got one of you guys to come to Tokyo.
Jay: It’s just a matter of time, Keith.
Keith: Yeah, I’m number two, right?
Patrick: It’s true. I’m in Tokyo largely because Jason is here. He and I have been good friends for the last four years.
Keith: Also, it’s Tokyo, so it does have a lot of benefits over Ogaki
Patrick: Tokyo is not Tokyo for everybody, although Tokyo is Tokyo for me now, darn it.
Patrick: Darn it, Jason, you were right.
Jay: That’s deep. That’s deep, Patrick.
That’s true. I’m so glad you think that.
Keith: I think you need another drink.
Keith: I did want to ask, me being not in Tokyo, not as much in the scene, when I think of a Japanese startup, what I’m really thinking of, and what I see a lot of, are Japanese megacorps who have that SaaS division. [Patrick notes: Many Japanese companies have an empire-building complex. In the US, Salesforce has essentially one product. Dropbox has essentially one product. Basecamp has essentially one product. Their Japanese analogues own domain registrars, web development agencies, and — in many cases — restaurants or hotels. I kid you not.]
I’m thinking of a lot of companies that…like Recruit. Recruit has a ton of SaaS companies, divisions.
Keith: Exactly, and they’re very different than a bootstrap or a SaaS that’s going to be invested in because they’re owned by a giant, multibillion dollar company, right?
Keith: It really changes the landscape, so there are fewer investors. Companies do not buy SaaS here like they do in the States.
Jay: Yes, there’s definitely a lot less exits and acquisitions in Tokyo, much to the chagrin of all of the angel investors, especially foreign angel investors.
You will see a company like Recruit say, “OK, we’ve identified a need in this market. Let us build a solution for that market, rather than acquire the established current leader of that market that’s going really, really well.
“Then we’ll put $20 million behind their marketing campaign and, boom, now we’re number two,” or three, or one, depending on the market and the company, which is not great. Then again, you don’t necessarily want to look towards giant companies in Japan to really support the startup ecosystem.
Keith: Not at all.
Jay: It’s not a good strategy.
Keith: I work with a lot of marketing companies, especially in [inaudible 28:35] area. For the last four years, I’ve been really pushing for A/B testing, and analytic testing, and stuff for marketing tools in Japan.
I was talking to, literally, the largest digital marketing firm in Japan. I was like, “Yeah, you know they have all these great tools, Visual Website Optimizer, Optimizely, all these things, Crazy Egg, that you can use to test.”
They’re like, “Yeah, we know. We’re really pushing hard to create our own platform to help our customers.’
I’m like, “Why don’t you just help your customers by…”
Jay: “Introducing a tremendously successful thing that already works right now?”
Keith: Yeah, it’s like, “Why do you want to build…?” I understand why they want to build the competition, but it’s like, “You could be helping them now and build that on the side.”
It’s like, “We’re not going to touch A/B testing, we’re not going to touch marketing, until we build this tool.”
It’s still not built. That’s four years ago.
Jay: Sure, of course. Of course, yeah.
Keith: That’s what happens, so now they’re late to market, and…
Jay: Of course. People underestimate complexity in software endemically, especially in Japan. It’s like, “Oh, it’s software. Just somebody build it. Easy, done.”
Especially for invoicing. A lot of people will have their own solutions, or a lot of people will be considering, “OK, do we go with MakeLeaps or do we build our own solution?”
[Patrick notes: The build-versus-buy decision for anything at a SaaS company which isn’t something you actually sell should come down to “Can I do this before lunch?” If yes, build. If not, buy or adopt OSS.]
The way that I look at this is very similar to, let’s say, an infrastructure question where somebody says, “OK, well, Gmail looks pretty good with your 500 of the most qualified engineers on planet Earth 100 percent focused on this 24 hours a day, but I really want to be able to control my own infrastructure.”
It’s like, “OK, so what would you like to do?” It’s like, “Well, instead of using an established platform run by literally the smartest people on Earth, that are qualified to do this exact kind of thing, I want my own server.”
It’s like, “Great, so when there’s a problem at 2:00 AM, 500 of the smartest people on Earth are not focused on your problem.”
Jay: “They’re eating free lunch because today’s Mexican day at the Googleplex. That’s great for them, but you’re screwed because your email server’s offline for four days and your business stops. It makes obvious sense to start…”
Keith: Japan has a huge thing about “not built here.” The thing is, we have a ton of smart people, and we have a ton of smart people who love solving hard problems.
They love solving hard problems, and that’s not a bad thing at all. It’s a great thing, especially for new IT companies in Japan.
The problem is that a lot of people would rather be solving those problems than using a solution off the shelf that solves the issue, that solves the business need, right?
Patrick: I find, in dealing with larger Japanese companies, that when they’ve identified an intrapreneur and said that, “OK, this person has put in 20 years at the company, they’re a known quantity. We’re going to stake a few million dollars of the budget to build a competitor to Optimizely or Visual Website Optimizer.”
They don’t think of what Optimizely and Visual Website Optimizer were when they started, something put together by one person or a very small team, thrown together in six weeks, and then exposed to the market for feedback.
They think, “No, no. We’re going to try to escape to where they are today,” and with several tens of person‑years of engineering effort involved.
“OK, well, if it takes 50 person‑years of engineering effort to get to where this is today, that’s all right. We will hire 25 engineers, and we’re going to put them on a project for two years.
“In two years from now, we will be where Optimizely is in 2015.
Jay: “We will release our unmarketable product.”
Patrick: Aspirationally in 2017, they’ll be almost where Optimizely is in 2015 as experienced by someone who doesn’t really understand the product because they never actually used it in anger.
Keith: I think a lot of people are listening right now are like, “Oh, no. It’s not as bad as you say.” I have had literary three Japanese clients last year that this was exactly their problem. They would not MVP it. The contract was for an MVP. We worked out a thing.
It’s like, “Take this to your client. Start selling it and then we’ll start building the next one.”
They’re like, “No. No. We have to have all the features. It has to be complete. It has to have the bells and whistles, invoicing and all this stuff before we even show it to our potential customers.”
Jay: Here’s an interesting theory on this that I heard recently which I kind of agreed with and I think it’s fascinating. Typically, Japanese companies and people approach software the same way as they have successfully in the past approached hardware.
Keith: We’re a hardware country.
Jay: Exactly. You can’t show someone hardware that’s 20 percent complete because that’s zero percent complete. Hardware is binary. It works or it does not work for its intended purpose. People have tried to apply that same idea to software and it doesn’t work in 2015 now. I almost said ’14 but it’s ’15 now. It makes sense to roll out something that works to fulfill the purpose that it’s built for and then you iterate from there just like software.
Keith: There are two comments I want to make. The first one is that there’s this great Dilbert cartoon where the boss is saying, “Measure twice, cut once.” Dilbert’s response, “Well, when thinking measured is infinite and the cost of cutting is zero, it makes more sense to measure once, cut once and then iterate quickly.” It doesn’t work with hardware.
I keep telling this to all my American friends or my western friends in general. They’re like, “Oh, Japanese IT, software must be so amazing.” I’m like, “No, it’s not.”
You think Japan, you think electronics. That’s true. Electronics are not software. Electronics are hardware. You look at all the hardware, all the electronics that come out of Japan that have been amazing and they’re all hardware based, the Walkman, the CD, the CD‑ROM…
Keith: PlayStation. Oh, my god. PlayStation.
Keith: Word processors, the toilets. It’s all hardware.
Jay: Magic toilet. Oh, god. I love my toilet.
Keith: It’s all hardware.
Jay: That’s very true.
Keith: The software in Japan…You look even at a simple website, it’s horrible.
Patrick: With exceptions for maybe embedded programming and video games.
Keith: That’s about it. This is interesting. We built an OS back in, I think, ’85, I want to say, that is the kernel level OS for pretty much 90 percent of ATMs in the world, but it’s so low level. There’s no user interface. There’s no nothing. It’s built on top of…We built tools. We’ve built hardware. We built things.
Jay: When you say “we’” you’re referring to Japan, which is interesting.
Keith: I’ve been here for 12 years. Almost my entire business career has been in Japan. I worked at an internship, then I worked at a startup job during my college years in America, and then I moved out here.
[Patrick notes: Keith cofounded an RPG company. His comment on that: “Want to know how to make a small fortune in RPGs? Start with a large one!” It’s a horrible, horrible business to be in.]
Jay: Your formative years in Japan.
Keith: I know. I wonder if it’s hurt me. People tell me I have a very different thinking about business than western…I like it. I think it’s a good way of thinking.
Jay: We all bring our own unique experiences to our work in all of this in much the same way. I came to Japan when I was 19 to originally study martial arts. Now, I’m running a SaaS business. Japan has been an interesting country for us both to grow in because you’ve been here for 12…?
Keith: 12 years.
Jay: How old were you when you first came to Japan originally?
Keith: I was at 22.
Jay: Interesting. How about you, Patrick? You’ve been in Japan also for a long time.
Patrick: Yup. About 10 years and change now. I think I came out three months after university ended. I’ve been here, essentially, for the duration ever since. All of us have careers has been shaped by our time in Japanese organizations or in foreign organizations that were operating in Japan.
It’s a pretty fair statement to say that if you took a look at the a day in the life of one of our businesses, it would not exactly look like it would if we had grown up in Tulsa, Brisbane or yada, yada and have the business grow up with us there.
Jay: That’s true.
Patrick: Or San Francisco.
Jay: One thing that kind of blew my mind was I had to return to Australia for a five‑month period. This was maybe coming back like seven or eight years. I had to run a business from Australia and I had to do some business in Australia. What struck me was how simple everything was. It was so straightforward.
Jay: I needed to do something. I make a phone call and I have the thing that I need. I needed a contract. It’s like boom. “Here’s what we want to do.” It’s like, “All right. We’ll sign here and…”
Keith: No huge back and forth and all that.
Jay: It’s like, “What the hell is this? I have like two things to get done today. It’s 10 AM and I’ve done three things now.” It kind of blew my mind.
Keith: I had a client who would not discuss anything over the phone or email. It had to be in person.
Jay: That sucks.
Keith: We cannot come to an agreement on things except by meeting and talking. There’s no way to come to an agreement over email or a phone call.
Jay: That the magic of SaaS business.
Jay: When every single of your customers is paying you $20 a month and somebody says something like that to you, you can…
Keith: Delete the account.
Jay: Exactly. You know what? That sounds great. I’d love to spend the next six months talking about your $20 a month account, but no. [chuckles] No. No. No. No.
Running a Low-touch SaaS Company In Japan
Patrick: That’s an interesting segue. Like we said earlier, there’s very few SaaS companies in Japan operating at any sort of scale. Most of them that are US transplant like Salesforce does very, very good numbers here. Many US enterprise companies do good numbers by merging the traditional enterprise sales culture of the US with the stuff that works in Japanese market.
On the low touch end of things, there’s not that much. What have you done with MakeLeaps that’s been successful with getting thousands of paying customers on the lower touch end of things?
Jay: Well, one thing that’s kind of interesting in Japan, I would say, is an incredibly high level of customer support. In Japan, it’s table stakes. That does not set you apart from any of the other companies in Japan that also have an incredibly high level of support.
Patrick: Can I jump in with an anecdote there that happened to me today? I go to a hair salon. I’ve been there maybe twice since moving to Tokyo. The young lady who cut my hair both times is moving to a different branch of the same hair salon in Tokyo.
She sent me a two‑page, honest to God, handwritten letter thanking me for coming in, visiting her twice and getting my hair cut. Giving instructions that I can give the next person that cuts my hair and directions to the new hair salon where I can find her if I want to travel 15 minutes out of the way to get my haircut.
I will be getting on that train to get my haircut, obviously.
You can imagine this is somebody whose per-visit value is what, 50/ 60 dollars for a salon haircut here. That’s a level of care that most SaaS companies that have account values the $5,000 a year range do not send handwritten letters to their customers saying, “Hey, we’re just dropping you a line because we like you.”
Keith: If you do want to send them, I recommend MailLift.
Keith: MailLift is a handwritten letter by API.
Jay: Does it work in Japanese?
Keith: It does not work in Japanese, but a great SaaS idea for anyone who wants to start a handwritten API.
Jay: That’s a good point. There’s actually a bit of a problem in Japan right now, I think, where older workers are not able to assimilate into a lot of the newer roles that are being created as certain sections of industry are phased out.
Something like that would actually be interesting idea to look after the rapidly growing section of Japan, which are the older seniors. As we all very likely know, recently, adult diapers finally began to outsell baby diapers in Japan, which is terrifying.
Keith: It’s only going to get worse.
Jay: That’s very true. That’s only the start of the trend. There are a lot of potential business opportunities for older people in Japan for sure.
Keith: I think it’s interesting though. I’ve wondered about doing a MailLift version in Japan. The thing that convinced me against it was that why would a company not get their OLs or their, I guess, window watcher is the best English term for madogiwa. Why would they not get them to do it?
Patrick: Well, there’s actually companies…They don’t have the API piece. API piece is what scares them because you would have to convince companies on integrating an API to get business, which is not something many Japanese companies are very keen on.
Jay: Considering that they don’t understand the word API. [chuckles]
Keith: You could say integrates with Salesforce.
Patrick: There are even at least five of these in Ogaki where the company is typically a printing shop or something where they have the traditional mass-scalable printing equipment there.
They also have, essentially, little ladies who will handwrite documents that you take to them with the idea being that certain classes of documents in Japan can’t really be printed and still have the kind of heft to them, personal letters, certain forms of certificates and whatnot. These require a bit of skill with Japanese calligraphy, which the little old ladies have. If you don’t, if you are the poor, semi‑illiterate graduate of the modern Japanese educational system [Patrick notes: sarcasm tags] who can only type, then you’d go and pay a little lady $20 a page to handwrite your customer facing documents.
Jay: Very true. That’s a good point, but the other thing that I find a little bit concerning and perhaps another reason to not start this one particular business is sometimes, in Japan, the act of doing something because it is time consuming, ridiculous…
Keith: Don’t even get me started on that.
Jay: …and all the rest of it. The act of doing that is what’s valuable. If you were to outsource that to somebody else for $20 a page, that act, essentially, becomes meaningless. It’s a concern that I will have.
Keith: We talked a little about this in the last podcast where we were talking about getting the busy work done feels good. It’s an extension of that where taking the time, putting the effort even though it’s not what is the best for you or the company, it feels good and it feels right.
Patrick: Also, seen from the perspective of the customer, I think Jay is right. That sometimes the conspicuous expenditure of resources as a way to signal commitment, that’s something you see in all societies. There are rituals for it everywhere. It something that Japan embraces a lot.
Jay: Very much so.
Patrick: For example, in Japanese politics, if the ruling parties is having difficulties, they send out the equivalent of US congressmen to stand at stations in Tokyo outside of the gate. They get on a soapbox and say, “This is the Liberal Democratic Party. Please support us. We want to work together for a bright vision of Japan’s future. This is the Liberal Democratic Party. Please support us.” The person is basically on loop for three hours.
Keith: I do work with political candidates as well for marketing and stuff. They actually have people whose job is to repeat a speech on a megaphone as they drive around the city for eight hours a day.
Jay: This is one of the areas where I take issue with Japan. I love everything about Japan. I love the people, the food. Everything about it is great. Noise pollution laws, where are you on this one Japan?
Jay: What the hell is going on? I say this without doing any research, the only civilized country that has zero noise pollution laws.
Keith: We do have noise pollution laws.
Keith: Oh, yeah.
Jay: When you say “we do,” you mean Japan.
Keith: Japan has noise pollution laws. I looked this up because I have a noisy neighbor. I think it’s 80 decibels or something like that. It’s ignored for many, many things.
Jay: I see. Keith, as difficult as I’m sure your situation is with your noisy neighbor, I’m a little more concerned about the people who are driving around with megaphones on Sunday morning!
Keith: No. It’s horrible.
Jay: For me as well. I’m a foreigner so therefore I cannot vote in Japan. However, if there was a candidate that said, “You know what? I’m against noise pollution. I’m going to make noise pollution laws in Japan.”
I would totally support them even though that support would be meaningless. The problem is that person could never be elected because he could never announce his platform to all the people to put him to be potentially elected.
Keith: It’s going to change because this was the first year. This last election was the first year. I don’t want to get too much in the politics so let’s kind of cut it.
Jay: We’re leaving out sex and religion. Let’s go into politics. Go for it.
Keith: This is the first year they could do commercials. If you went on YouTube during elections, there were tons of political commercials. For the first year they’re actually allowed to do social media. They were allowed to do blogs before but they had to actually write them themselves. You could not hire a marketing firm to do it.
Jay: For $20 a page. [chuckles]
Keith: You could have a marketing firm tell you what to do and then you do it but you had to actually physically do it. Those laws are changing. I helped a political candidate. I’ll be helping another one with their social media platform this coming election in…When is it April or whenever.
Patrick: That’s probably something to nail down prior to taking politicians on as clients.
Keith: There are a lot of business opportunities in Japan. In Ogaki, there’s very little. It’s pro bono. This is totally a, “Hey, you’re a friend of my wife. We hang out. I’d love to help you out. Let’s do some social marketing for you kind of thing.”
Patrick: That makes sense.
Keith: I haven’t done Abe’s — the Prime Minister’s — marketing campaign.
Patrick: You would probably have to know when the election is if you’d be doing that.
Keith: There’s snap elections. You don’t know.
Patrick: That’s right! We could schedule elections like a week from now.
Keith: They did do that.
The Difference In Bootstrapping And The Venture Track
Keith: We are kind of getting long on time. I do want to be conscious of everyone’s listening time because we have had complaints that three hours is a long time for a podcast. had always been bootstraped and it was a big decision for you to take funding. How has taking funding change the way you’re doing business from being bootstrapped?
Keep in mind people who are listening. This is not like, “Oh, I got $5 million of funding.” It was a sizeable funding amount but it’s not like you’re going off and buying Lamborghinis tomorrow.
Jay: If I could find a Lamborghini that I could buy a number of without causing problems for my bootstrap, then I’d consider that. It’s $750,000 of funding that we have to use in a really good way to either, I suppose, build in the features set that is very compelling and that enables us to get to the next level of the business.
We have to use that funding to, essentially, get us to a point where we’re totally happy and ready to go out and do a Series A funding round, which we’re on track to do within three to six months from now depending on how it all goes.
Your question to how did the tenor of the business or how did the atmosphere change before funding and after funding is a really important one and a good one. It’s tremendously important to have good mentors because I have a lot of very dumb questions that I needed answered. “Well, if I sign this, does that mean that I don’t run the company anymore?” Kind of level of questions like that.
Of course, I’ve done a lot of reading. [Patrick notes: Jay recommends Venture Hacks and pg’s blog on this topic.] I’ve done a lot of learning and I’ve gotten a lot of advice from people. When you do funding, it comes down to two things, economics and control. The extent to which you understand both of those is very critical when it comes to negotiating those kinds of deals.
For me, I was more concerned actually about the staff and how MakeLeaps staff would feel about…Suddenly, we have a lot of investors because that’s kind of confusing. They would ask all the questions that I needed to ask to understand really what was going on and how it was going to affect things.
I made sure to talk to everybody and say, “Listen, we’ve done very well up until this point. We’ve managed to get many, many users, many, many customers. It’s all very exciting. We’ve come to the point where people are interested to invest money into us.
At this point, you have to know that I’m not getting to let some person who could be destructive or cause problems for MakeLeaps into an area where they could potentially cause problems for us. We’ve been successful up until this point by doing what we’ve done. It’s not in anybody’s interest for us to radically change things like completely different in a crazy way when we’ve achieved really great growth up until this point.
For me, it was critical to, number one, understand the impact of investors coming into MakeLeaps. What would they expect? How they could offer value and how they could help us get into the next level? It’s important for the MakeLeaps staff to understand that it’s not going to change the tenor of the business.
In fact, if it has changed things in a very serious way, that’s my fault as CEO. I haven’t done my job well enough.
Number one, I want to find the right people. Number two, I want to explain the process and how we’re going to do it. Of course, we have the MakeLeaps vision — where we want to go and how we want to get there. That needs to be clearly communicated to both staff and investors.
One of the things that I’ve learned is…Well, there’s actually a great film. I think it’s called “The Watchmen.” There’s a particular character in that film. His name is Rorschach. He’s like this crazy guy. He gets caught and sent to jail.
This sounds like a sidetrack, but it gets really relevant in a moment.
Jay: Essentially, he ends up having to go to jail. In the jail, there are many of the criminals that he himself put into the jail. He’s standing there and they can’t wait to get their hands on him, beat him to death and all that kind of stuff. He looked at all the people that are standing in the jail and he says “You know what? I’m not stuck in here with you. You’re stuck in here with me.”
That’s what I realized about investors. It’s like I will talk about MakeLeaps for literally 24 hours with anybody who wants to talk about it. I’m very, very happy to discuss and talk. When people say, “You know what, I’ve been thinking for MakeLeaps. How about we do something like this? What do you think of this kind of idea?” I’m very happy to discuss anything with anybody about that kind of stuff. It’s my passion.
I sort of realize, “Well, hang on a minute. We’re getting with AngelList syndicate 60 people that are now financially interested in MakeLeaps and they’re intelligent because they’re investing in MakeLeaps.
Jay: They’re clearly cut above the standard person.
Keith: They know what they’re doing.
Jay: They know what they’re doing. They’ve had plenty of experience. For me, it was actually all positives. We never had any issues or problems because we had really great mentors. We had great lawyers that put together the deal well. We communicated what we’re going to do and how we’re going to do it.
Typically, when it comes to relationship breakdowns, it’s just a lack of communication about what everybody is thinking [Patrick notes: In business and in life!], so we made it a priority to communicate as much as we possibly could. We send out very regular investor updates on what we’re doing and how and current progress and all that kind of stuff.
I would say that we’ve been able to expand a lot and be able to do many different things with more resources. The core that’s got us to this point that’s been successful remains unchanged and that’s a good thing.
[Patrick notes: Seen from the outside, I’d identify the core of what makes MakeLeaps tick as a willingness to walk the line between being a natively Japanese company and a tech startup, Jay being the most force-of-nature CEO I’ve had the opportunity to meet, and a great willingness to just grind things the heck out. Anybody can say “Try going to where your users are.” Most people don’t sell $20 a month SaaS software by knocking on the doors of substantially every accounting firm in downtown Tokyo.]
The Benefits Of Raising Money
Keith: I want to ask something a little more specific and you’re free to not answer this if you don’t want to. Where did you find that you had the most success with that funding? Is it building out your staff? Is it being able to do more marketing? Is it doing more events?
Jay: I’m going to tell you guys something that you might not be happy to hear. It’s the same way for all bootstrappers. We bootstrapped for four years proudly. We’re happy we’ve gotten into this point. We’ve done very well.
We’ve received, I would say, slightly less recognition because we weren’t funded, and we weren’t in the media as much with things like funding announcements. As soon as we got funded, about a week afterwards, this one person I’ve known for a long time was like, “Oh, you got funded. Great. We’d love to do an interview with you.”
It’s like literally nothing has changed between now and when the money in our bank one week ago. Why are you interested to interview me now?
Keith: It’s the social proof.
Jay: Exactly. There’s social proof in that. There are certain things that have gotten easier and better as a result of getting funding, especially from well‑known people, but, as a bootstrapper, it’s always frustrated me. It’s like, come on, we are doing as well as these guys. In fact, better in many ways, but they are getting more press because they are funded.
Keith: I do see that a lot with the bootstrapper community, especially some of the communities I am in. I don’t want to say, incestuous, but it is a closed circle. The people we know who are famous, they are famous within our circle, but if I was to talk to someone like at a newspaper, or someone in the larger startup community, they’d be like, “I have no idea who that is.”
It’s really interesting, because as soon as you get that funding, apparently, it’s this open door to, “Hey, we are a real company. We are a real boy now.” It’s frustrating, like you said. Nothing has changed.
Keith: There’s an extra digit in our bank account now, but other than that, at that point, you haven’t even used that money yet.
Jay: It’s a little bit frustrating, if you are operating a business, and people are suddenly interested in you, now that you’ve gotten funding, but that’s part of the game. At the end of the day, you have to figure out, how to make it work with your particular environment, the way that you have set things up.
If you can be successful and grow your business, and get plenty of media attention without getting funding, more power to you, that’s great. In Japan, people tend to respect social proof very much so…
Keith: Did I ever tell you about the optical fiber guy, who came to my door, and try to sell me optical fiber?
Jay: I heard this story, but it’s a good one.
Keith: It’s a good story. I like this one. I had actually had optical fiber at this time, not through that company. He comes to my door, and he says, “You know, you are the last person in your neighborhood who has not had optical fiber installed.”
I thought about that, I am surrounded by grandmothers. I am the youngest person in my neighborhood. The three people on the side of me, I know for a fact, do not even own a computer. They have no idea what a computer is, most likely.
He is trying to tell me that I am the last person with optical fiber, which I already have. This is interesting, because I know this works in the US as well. It is a very time tested proven strategy. It’s so effective in Japan. It’s not even crazy. I told this to my wife, and she’s like, “Oh, we should get optical fiber.” We have optical fiber!
Keith: No one in the neighborhood has optical fiber but us.
Jay: Keeping up with the Joneses.
Keith: Exactly. It’s huge.
Patrick: I am just realizing now, I bought optical fiber after hearing that pitch.
[Patrick notes: Seriously, I did. I thought they were going to drop connections to the ASDL lines in the neighborhood or something. What can I say, I’m a software guy, not a network guy.]
Keith: It works.
Patrick: Crying about it…
Keith: Get optical fiber. There’s no…
Jay: Not have it.
Jay: Absolutely, get it right…
Patrick: Great reason for all you geeks to come out to Japan, you can come to Ogaki, where we have slow, slow one gigabit Internet…
Patrick: Two gigabit Internet, yeah, I am sorry. We upgraded in Ogaki. We’re where in Tokyo was in like 1997. [chuckles]
Keith: What’s your speed right now?
Jay: I’m not going to share how fast my Internet connection with you guys. [chuckles]
Keith: No. I want to hear. How fast is your Internet connection?
Jay: Oh, geez. I’ve been meaning to upgrade it one gig, which would be simple, painless and straightforward, but I think I’m still like 300 megabits.
Patrick: Oh, man.
Keith: Oh, god. That’s horrible. You’re almost American.
Jay: I know and I’m Australian. What the hell.
Keith: I was talking to a friend who was interning at Gawker. He’s like, “Oh, man. I’m so happy to be at Gawker because we have a 25 megabit connection.” I was like, “Since I moved to Japan, I’ve never had a connection that low.”
Keith: 12 years ago, when I was on a ADSL, it was faster than 25 megabits.
Jay: Exactly. 10 years ago when I had like a wireless PCMCIA card, originally it was slotted into the laptop.
Keith: It was still going at 350…
Jay: …Of course. [laughs]
Patrick: Anyhow, do you think we should be wrapping this up?
Keith: I think we’re wrapping this one up.
Patrick: Jay, do you have anything else you want to tell us?
Jay: I suppose. Aside from the confusion where my name is Jason, but now pretty much everybody calls me Jay. I’m right in the awkward spot of transition my name from Jason to Jay. There’s still a bit of Jay, a bit of Jay all over the place but I answer to either.
Keith: Should I go for Jay?
Sales For Geeks
Jay: You can go for whatever you want. Honestly, if you make a noise in my direction, I will answer. However, even if you say Jay or Jay that’s fine. Speaking of which one thing that I’m pretty excited about that I should mention that Patrick has been helping me with a bit is I’m working on a new course called “Sales for Geeks.”
As a geek myself…I mean, people describe me as technical, but I can’t code very well. However, I’ve built and grown two IT businesses, one on the infrastructure side and one on the software SaaS side, so I do know a little bit about sales, communication and social skills to a degree.
Keith: I want to mention that Jay is a force of nature when it comes to sales, networking or any sort of talking to people.
Patrick: I’ve said for the last couple of years that Jay could probably get a meeting with the Japanese Prime Minister simply by showing up at his residence and refusing to be told no by any of the people in there. Four years ago, I said that like it was a joke. As I’ve become more friends with Jason, I think, it’s probably literally accurate.
Jay: At this point, I should probably just do it to prove Patrick true.
Jay: The Japanese, sometimes, if you’re being polite and friendly and you’re saying, “I need five minutes of the Prime Minister’s time.” It might be potentially possible.
At the same time, I also have a sales course to get out. Priorities I suppose. It’s very nice of you guys to compliment me in that way. As an Australian, I do struggle with compliments and accepting them in general.
Patrick: What’s the name of that course?
Jay: The name of the course, Patrick, is Sales for Geeks. You can access more information about this course at salesforgeeks.com.
Keith: It’s such a deal!
Jay: Order now and get a free set of steak knives. There’s no steak knife. Sorry. Order now, though.
Keith: You’re doing it as a text course, an audio course, a video course, or…?
Jay: I’m thinking video might be a good way forward, because in a lot of sales stuff a lot of it is quite visual. There’s a lot of body language. That factors into sales meetings in general. A video course would be a good way to do this.
Patrick: We’re looking forward to seeing what you come up with. You can go to the website right now and start to get Jay’s advice delivered over email about this as he gets the course put together, and then you hear about it when it comes out.
Keith: No commitment required.
Jay: No credit card required. Sign up right now.
Jay: Salesforgeeks.com if you’re interested at all in learning how to sell better. It would be great to have you onboard. I’ve got a bunch of stories, sales anecdotes, and interesting things that I’ve learned in a career of 12 years. I started my first company when I was 20. I’ve got a lot of stuff to share. If that’s useful or interesting to anybody, that would be great.
Keith: I hate to talk Jay up this much. Actually, what am I saying? I love to talk Jay up this much.
Keith: But, really, you’re up there with the three best salesmen that I know personally. I consider you, Ryan Delk, and Steli Efti definitely hands down. [Patrick notes: Agreed.] If the three of you got into a room, either it would cause a singularity, and it would explode, or you would take over the world. It’s one or the other.
Jay: Interesting. That’s very, very nice of you to say. All I can do is do my best to toil in the efforts of becoming the person that you both seem to think that I am.
Jay: I appreciate both of your faith in me. I thank you.
Keith: Jay, thanks very much.
Patrick: We appreciate you guys being here with us for the long, long, long haul.
Jay: It wasn’t that bad. It was about an hour and 10 minutes?
Patrick: I was thinking more like the three years, which it took us to…
Patrick: Four years?
Keith: Four years to get up to episode 11.
Patrick: We ship babies and products faster than we ship podcast episodes, but it’s changing. We actually got up two in a month. Oh God, this is a regular thing to happen.
Keith: This will be great.
Patrick: Drop either Keith or I an email about this stuff anytime, if you have ideas for what we could cover on the podcast.
Keith: Ping us on Twitter.
Patrick: Or you can ping us on Twitter. Keith is harisenbon79, I’m patio11, and Jay is @JasonWinder.
Keith: Suddenly, I feel like we’re on NPR. I don’t know why.
Keith: “Thank you for listening to this edition of ‘This American Life.’ [laughs] This your host, Ira Glass.”
Keith: Great show, by the way.
Patrick: Great show, by the way.
Keith: Thanks very much, guys.
Patrick: Thanks very much.
Jay: Thank you. Cheers. Bye‑bye.