The secret to creating something viable is you better be highly engaged in it. Tope Awatona learned this lesson the hard way.
Dave Young:
Welcome to the Empire Builders podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is, well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.
[No Bull RV Ad]
Dave Young:
Welcome back to the Empire Builders podcast. Dave Young here with Stephen Semple. Today, Stephen mentioned, it’s the app, Calendly, C-A-L-E-N-D-L-Y, Calendly. I’ve used it. We still use it for a couple of things. It’s a way that you can give people a link to sign up for a time on your calendar to talk to you or make an appointment with you or make an appointment to get their haircut, or I think all kinds of things now.
Stephen Semple:
The first time I was exposed to it was through you-
Dave Young:
Oh, all right.
Stephen Semple:
… where you had sent me this link, and I was like, “What the heck? What the heck is this?” which then caused me, after experiencing it as a customer, because the cool thing as a customer, it’s just a link you click on, there’s no software or anything, and then it sends you something that immediately populate your Google or iCal or whatever, that I ended up exploring it. Now I use it for absolutely everything because it even has automated follow-ups and all this other stuff I’ll do. I found, especially if you’re trying to get a group of people together, it’s a complete game-changer because you can also put all your calendars on it. It’ll look at everybody’s calendar and find the free spot. This experience I’ve just talked about, hold that in your head because it becomes important to the story. Calendly was founded by Awotona, I’m sure I’m pronouncing it wrong, in Atlanta in 2013. Today, it has over 400 employees and is valued at $3 billion.
Dave Young:
A real unicorn of a startup.
Stephen Semple:
Really, really is. Interestingly, in 2021, Calendly moved to a completely remote workforce. They have no office space anywhere any longer. Tope was born in Nigeria and immigrated to the United States when he was 15. He went to the University of Georgia where he did computer science, and he graduated with business. During school, he was working for a while at CVS as a cashier. Then he got a job doing door-to-door selling alarm systems in Athens, Georgia, on full commission. One of the things he learned was the best time to knock on doors is right before dinner. He’s one of those guys, right before dinner.
Dave Young:
Yeah, right before dinner because everybody’s home.
Stephen Semple:
Yeah. Now, he made good money, way more than CVS. On the first day, he made like 500 bucks because he sold two units. But the rest of the week there were no sales. But he still liked doing it because he understood there was a hit rate. He also liked that he could influence how much he could make, become better, work harder, make more. And it was a different outlet for him than coding.
He graduates from university. He had a few offers. He landed a sales job at a luxury travel company and then IBM. But he started looking for a small, fast-growing company to work for because there’d be more advancement opportunities than a big company like IBM. So gets a job where he moves to Kansas City, and he’s working for a company that digitized files and managed content. Now, this was an interesting experience for him. Because while there, one of the onboarding things that they did for all the new employees was they would meet the founders of this company where the founders shared their story of starting this company and growing this company. For him, he had never heard anything like this growing up in Nigeria. This was the first time he had heard a founding story from the founder-
Dave Young:
Wow.
Stephen Semple:
… and all the good, all the bad, the unvarnished story. He learned it took them eight years to get a product market fix, and they had to pivot and learn, and it was a lot of hard work. But to him, it made entrepreneurship more obtainable because they were no different than him. They had just put in the hard work. So he started to dabble in a number of small businesses. In 2012, he started his own company, but his mom was sick and he had to put it on hold. His mom was in Atlanta, so he wanted to move back to Atlanta. So he was recruited by the software company, Variphone, and he took the job and moved back to Atlanta. But while he was there, he met a business contact who helped people start online retailing. So here’s what he discovered. Most online retailers start because they want to sell something in particular: “I’ve got this thing, and I want to sell it online.”
Dave Young:
Product first.
Stephen Semple:
Product first. Basically, you then try to find the keywords around that and whatnot. But what he decided he wanted to do was start the other way around. Let’s go find some keywords with a lot of traffic, and then I’ll sell that product.
Dave Young:
Oh, wow. Okay.
Stephen Semple:
So Tope paid this guy to do an analysis of keywords, and he came back with projectors, movie projectors, high-def projectors, that sort of things. So Tope starts this company called ProjectSpot.com, builds a site, it takes three months, builds a site, invests about 20K in it, and he started getting all these orders. But here’s the problem. Margins were razor thin. The reason why it was razor thin, money wasn’t being made on projectors. Projectors was a loss leader. Money was made on all the other stuff that you sell around projectors.
So six months later, he shuts that business down, but he knew exactly wanted to do next. He wanted to do an e-commerce business but with a higher margin product. So what he then started was YardSteals.com, which was going to be home and garden equipment. It would supply things that were hard to get in small communities, because this is what he noticed. In small communities, it was hard to get this stuff. So the idea was to build a better e-commerce site. Orders started to come in, margins were better, and it kind of did well at first. But what he found was people in that space wanted to be educated, which meant investing in content and learning about gardening, which he really didn’t want to do. So six months later, he shuts that down.
Dave Young:
Wow, okay.
Stephen Semple:
Now, he had kept his day job during this time and decided to take a break because what he realized is… here’s the problem that he was finding. He needed to pick a problem that exists that he was willing to be a student of the problem. Instead of, “Oh, I’m going to find a keyword to fill. I’m going to do this,” he goes, “No, no, no. I need to find a problem that I’m willing to be a student on the problem.” Now at this point, he’s an account manager at a Fortune 500 company, and there’s, like dude, lots of people involved in meetings. So he’s organizing these meetings with 20 people across several companies. We know what it’s like, like you and I just trying to organize a meeting with three people.
Dave Young:
You throw the third one in, and now you’ve just created calendar chaos.
Stephen Semple:
Especially when they’re different companies, different time zones.
Dave Young:
Different platforms. Some of them use Microsoft Calendar, some of them use Google Calendars, some use Mac calendars.
Stephen Semple:
Exactly. It’s 2012, and he thought this problem should have been solved, so he went out to find a solution. Now, there was software he found that solved bits and pieces, but none did it well or checked all the boxes. Lots of software for brick and mortar. If you wanted to book a meeting room, that was easy. Meetings with people, that was hard. And it was often designed for the user, not the recipient of the software. So in other words, if the person was outside of the software platform, it didn’t work. So what he decided to do was research this and really figure it out. What he also decided was he had to be mentally happy not to do it. So in other words, “I’m going to do all this research, but I’m going to be prepared to walk away from it.”
Dave Young:
Wow, okay.
Stephen Semple:
So he signed up for every single product he could find, use them to understand them, spent time in the community forums. What were people saying? What did they like? What did they not like? Submitted tickets for change. Just immersed himself in that space. What he discovered was even with the obvious deficiencies, customers loved it. So he felt if he could take it to a higher level and made it available for smaller users, that there’d be this really, really big opportunity.
Dave Young:
Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.
[Empire Builders Ad]
Dave Young:
Let’s pick up our story where we left off. Trust me, you haven’t missed a thing.
Stephen Semple:
So after six months of learning, he decided, “No, I really like this. I’m going to do this as a business.” So in 2013, he decides he’s going to make a scheduling software. But he needs a coder and he needed a technical co-founder, and he couldn’t find either one of those things because everybody says you should have a technical. So he decides, “You know what? I’m going to outsource it,” and he finds this company in the Ukraine. Now, he didn’t worry much about NDAs. He wasn’t afraid to share the idea because he believed it was the execution was what’s going to make it different not the idea. So he went over to the Ukraine, met with these folks about building a minimally viable product. Like, “What’s the minimum we could do?” They figured to do that would cost like $200,000. So he empties out his 401(k), maxed out his credit card, cleans out his savings, borrows as much money as he can.
Dave Young:
Oh my gosh, okay.
Stephen Semple:
In interviews, he says he wasn’t nervous because he felt that this was his calling, and he knew how to sell it because he also had this sales experience. He wasn’t afraid pick up the phone or knock on doors. So fall of 2013, version one is available, and he found a company to test the product. They got using it in schools. Here’s the thing that they found is that parents and teachers would use this for conferences, so that was a little niche that they found. Then a school came to him. This was amazing. A school came to him in Kentucky and wanted to roll it out to all the teachers in Kentucky. In this process, here’s the other thing he discovered, like what I discovered with you. When a teacher sends it out, all of a sudden it had this very viral nature in it because the person receiving it would go, “Well, what is this?” So he found it had this viral nature to it.
So what he decided to do with the business model was to have a 14-day trial. At the end of the 14 days, you would upgrade with a credit card. So boom, great. We’re good, right? Great business model, except he had one challenge. This was back in the day when taking a credit card payment meant you had to code your own site. You didn’t have these plugins that you could purchase, and he didn’t have any money. So basically when the 14-day thing happened, people just continued to get it for free because he had no way to charge them. So this now forced him to find investors. It’s still growing. It had this viral nature. “All I need to do is be able to take payments.” But despite that, investors thought it was a bad idea. They all went, “No, this problem’s already been solved.”
Dave Young:
How? By what?
Stephen Semple:
So finally, what he said is, “Okay, I’m going to leave my job, put together a pitch deck, and work really hard to find this money.” He got a developer who would work on credit. So now, still raising money was a problem. Here’s what he found was, he was on the East Coast, and he said investors on the West Coast liked growth, but the East Coast investors kept looking for profit, and he didn’t have profitability. Now, he’s in this startup thing in Atlanta called Atlanta Tech Village, which is a co-working space for tech startups. The owner gets wind of the product and starts using the product and basically approaches him and says, “Hey, I’d like to invest.” He invested 350K in the spring of 2014, and this gives Tope nine months of runway. At this point, he’s got like 16,000 people signed up. His first priority was, “You know what? I’m not going to focus on growth. I’m going to focus on profitability.” This is one of the things that also really made him different because he said, “I never want to run around trying to find money again.”
Dave Young:
Yeah. If you’ve got 16,000 people that are already using it and you figure out what the price is that gives you the profitability you want, a good share of those people are just going to start paying you.
Stephen Semple:
Yeah. So in August, he turns on billing, introduces a premium plan. He’s charging $10 a month. Now, he did do one part where he did have to go out and raise a little bit more money. But basically from that point forward, and in, again, small dollar amounts, so it’s not a big part of the company, they’ve not had to raise money again. They’ve just been profitable and growing from their own internal cash flow. It’s a really different… in terms of what we’ve seen in the software space where instead of growth, growth, growth, growth, growth with outside investors, it was like, “No, let’s figure out how to build this thing that makes money.”
But there’s a couple of things that really stood out to me. One is this natural viral part that the product had. He didn’t design it going, “Oh, it has this natural viral piece,” but it had it. And I remember experiencing it. I remember getting a Calendly from you, clicking on it, going, “Well, this is cool,” and then going and buying the product because my experience on it was so powerful.
Dave Young:
I dump all my emails into Gmail. So I just did a quick search for the word Calendly, and I found an email from the Calendly team in May of 2015 telling me my premium trial is ending soon.
Stephen Semple:
So you’ve been a user for a long time.
Dave Young:
Since May of 2015, yeah.
Stephen Semple:
Nine years, wow.
Dave Young:
Yeah.
Stephen Semple:
Wow, that’s amazing. You are an early adopter of a lot of these things.
Dave Young:
Sometimes, yeah. I get fascinated with the new shiny thing. It’s like a restaurant. Once it became so popular that everybody started going there, and I had lost interest.
Stephen Semple:
But Calendly’s one you’ve not. You’ve continued to use it.
Dave Young:
I have on and off. I don’t use it personally anymore. I actually found one that I prefer a little bit.
Stephen Semple:
Well, we’re not going to talk about that in this.
Dave Young:
We’re not going to talk about them. We use it for a couple of things at Wizard Academy and Chapel Dulcinea.
Stephen Semple:
Yeah.
Dave Young:
It’s how people schedule weddings and whiskey sommeliers schedule tastings and those kinds of things. It’s amazing software.
Stephen Semple:
It is an amazing tool.
Dave Young:
It made itself absolutely indispensable.
Stephen Semple:
I live by it. But here’s the other part that I found is really interesting. There was the natural viral part. What I like in terms of his past mistakes that he learned was not technical mistakes. It was mistakes that because this is what he needed to keep himself engaged in it. I thought that that was really interesting. “If I’m going to do something, it has to have this.” That really struck me.
Because when we launched this podcast, that was a big part of what I looked at. I went, “You know what? It’s got to be this way and it’s got to have these things so it can hold my interest and keep me dedicated to it over the long term.” So I thought too often entrepreneurs don’t think about that side of it because that’s what’s going to keep you going through the long, hard grind in the beginning. I thought that that was really super, super interesting, and I don’t think enough people consider that when taking a look at a business to do.
Then the last part was just how much he immersed himself in the space, but not just looking at the code, looking at the customer experience. If you think about it today, that customer experience is much more visible than ever in the past because you can go in and join the user groups. You can go into the Facebook communities. You can go in and put a ticket in. You can see the things that people like and don’t like and really do a lot of really immersive research on things, and not just software, everything, what people think about the fricking mattresses.
Dave Young:
That’s true, yeah.
Stephen Semple:
You can do a lot of real in-depth research. I don’t think people are doing that even though it’s right there and there’s that low-hanging fruit.
Dave Young:
Especially if you identify just some kind of friction in an everyday thing that we all have to do and go, “You know what? There’s probably an easier way to do this.”
Stephen Semple:
Absolutely. As soon as you discover that, that’s an opportunity. That’s absolutely an opportunity.
Dave Young:
Just to cap things off, I also added the word Semple to my email search. That first Calendly link that I sent to you was April 22nd, 2016.
Stephen Semple:
Okay. So that’s when I would’ve started. It would’ve been just shortly after that.
Dave Young:
That’s fun.
Stephen Semple:
Then it’s led us to here.
Dave Young:
Led it to him growing into a real, truly unicorn-level software company, so amazing story. Thank you for sharing that, Stephen.
Stephen Semple:
And I love the product. It is like my right arm at times. Cool. Thanks, man.
Dave Young:
All right, thank you. Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five-star rating and review. If you have any questions about this or any other podcast episode, email to [email protected].
