On this special episode of Shopify Masters, you'll hear from Michael Perry, the Founder of Kit: a virtual employee recently acquired by Shopify that you can hire for $10/month.
Learn the story behind Kit and what it means to be an entrepreneur in today's world.
In this episode, we discuss:
How to decide if you should jump into your business full time.
How to use your competition to motivate you rather than overwhelm you.
How to find advisors for your business and how to work with them.
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Show notes:
Free trial: Kit
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Press Coverage: Venture Beat, Forbes
Transcription
Felix: Today I’m joined by Michael Perry from Kit. That’s right Kitcrm.com or Shopify.com/Kit. Kit is your virtual marketing employee and a copy of that was acquired recently by Shopify and it was started in 2013 and based outside San Francisco California. Welcome, Michael.
Michael: Thank you for having me, Felix. Extremely excited to be here.
Felix: This episode is going to be a bit different because you obviously are an entrepreneur. You started a business and had a great exit but in a different industry than what most of the listeners might be in by thinking there is a lot of lessons here that can be applicable and there is a lot of overlaps here. You are obviously the founder of Kit which was recently by Shopify so let’s start with that. What is Kit and how does it help store owners?
Michael: Absolutely so as you mentioned and when we kicked this off Kit is a virtual employee for those of you that don’t know exactly what that is. It’s basically like a little AI robot that works for your store. You communicate with Kit over text message or Facebook Messenger and we also work on Telegram and our goal for Kit is that you own trust Kit basically handle all the heavily lifting of your marketing so Kit is incredibly smart. Capable to do Facebook ads, Instagram ads, email marketing. Fun thank you emails to your customers, update your Facebook page. Then we actually recently launched a program where developers can build apps that Kit can use so if you have a Yappo account or you use Bold’s product discount apps or new released CSO manager you can connect those things to Kit and Kit is able to use those marketing apps for you as well. We’d like to believe that Kit is for a lot of Shopify merchants there are very first hire, their very first employee on their team that helps them manage and sell their business, the products on Facebook.
Felix: Now, very cool so where did this idea come from? How did you come up with the value that Kit provides?
Michael: We started like a lot of startups it’s like a software company that built a platform that people could log into. We’re really seeing a large opportunity with small business owners that were not using Facebook or leveraging Facebook to drive more sales or effectively use Facebook’s ad platforms. It really was because it’s such a complicated product that we really started just thinking how can see build Facebook ad out there that took really complex 20 steps own to 3 basic steps. We had hundreds and hundreds and hundreds of phone calls with Shopify merchants and small business owners and really realized what the problem was and we were trying to solve a problem to build software for people to better market their products. It was this constant reality that for people who are selling on Shopify majority of them are trying to run their business by themselves.
It wasn’t that they weren’t comfortable with using software. Actually, a lot of the were very text savvy it’s that they just didn’t have the time to do it. They’re trying to do customer support or inventory management or make the products, do customer loyalty, handle the logistics. Their day is so filled that for some reason marketing continue to fall down to the bottom of the task list and we thought “How could we scale our operations?” Really what they wanted was somebody to do the marketing for them and we took this like very courageous ambitious step to try to build a person that could work for them and help them handle a lot of these items on their to-do list and that’s really where we got started in the summer of actually 2014 a year after we launched. That fall launched Kit the person and we’d like to think we stopped being software company and became more of a human company more at that point.
Felix: Very cool so Kit isn’t your first stab at entrepreneurship. Tell us a little more about your background like how you started on this path of starting business?
Michael: Actually, right before Kit, I ran another startup in the software space. I did a mobile loyalty app for small business owners to basically turn your traditional punch card into a loyalty card digitized on your phone. I’ve always had this deep rich passion for small businesses because I grew up working in small businesses. When I was 7, 8 years old my uncle ran a video store. I used to work for him on the weekends being a video stock boy. He eventually opened up a jewelry store. I worked for him as again on the weekends sweeping the store, selling products, wiping down counter tops, restocking inventory. It was a jewelry and coins store so I worked with him for a long time and actually my father ran a car dealership and I went and worked for him selling cars for a long time.
While I was in college I built my first website, it was a photo sharing site that was pretty cool site but just didn’t really go far. That really opened my eyes to what does it take to be an entrepreneur and the first thing is that you have to be really excited about what you’re making. The second thing is you have to really be deeply passionate about the problem that you’re trying to solve and I wasn’t really passionate about the art world and I realized that I was incredibly passionate about the small business family business world. I wanted to enter that arena and that’s how I started my first loyalty company that didn’t do well and that’s how I started Kit and that seemed to work to for me. I’ve been a full-time entrepreneur for almost about 8 years and it’s like I have been a lifetime entrepreneur since I was 7, 8 years old.
Felix: There is something you shared with me over email. Hopefully, you’re okay with me telling this thing on the air too if doesn’t we’ll cut this part out anyway. You’ve mentioned that you quit your job, you sold your car, you’ve maxed out your credit card to try to get this company, loyalty company off the ground. What made you feel comfortable with all those styles? Because I think this is a stage that I’ve been thinking about or I’ve we been talking to a lot of entrepreneurs about them and thinking about a lot which is about where you kind of reached a crossroads where you got to decide should you go all in, should you be safer, should you just put 1 foot in the door or should you go back, retreat and take the safe rally? What’s going through your mind at the time when you made this decision?
Michael: It’s not something that happened overnight. Like I’ve [inaudible 00:07:13] a long time and I just want to pressure into that it’s not for everybody. I think a lot of people will hear this next segment and think like I’m going to do that and it’s just it really is not for everyone. There is a lot of sacrifice and high gamble high reward kind of plays at when you sell your car and liquidate every single thing you have and max out your credit cards to start your business. You have to be prepared about the consequences and for me, it was just a stage where I was working every night and working every single weekend and there is a saying that there is no such thing as a halfway crook. Either you steal or you don’t tell and for me, I just badly wanted to be an entrepreneur. I just felt like it was in my DNA. My grandfather ran a carpet business.
I just came from this family of men who kind of forged their own path and I just badly wanted to see if I can make it. I badly wanted to chase my dream and really take this approach that you only have 1 life and if that means I walk away with nothing then I walk away with nothing. I certainly did not do it for an economic win, I really did it because that’s where my heart wanted me to go and it was not easy. I feel very fortunate to be in the position that I’m at today, raised venture capital and sold my business and all that kind of stuff. That’s certainly makes the gamble feel great but it also doesn’t necessarily mean that it was the sole reason why it felt great.
I would have done it and continued to do it with or without the win. I’m just feeling very fortunate that there was a financial win there. It was really just like my heart was calling towards it and I just didn’t want to live a life not listening to what I thought was going to drive my happiness and I was 100% correct. I’d never been happier and also in my darkest most difficult times of having nothing I never lost focus. I never wavered. I never thought about quitting. I anticipated that it would be hard and I just really wanted to see if what I felt about myself was true. I felt that I was an entrepreneur and I wanted to prove that I was an entrepreneur.
Felix: It makes sense so like you’re saying it’s not for everyone. I think is important to emphasize because for everyone that is like you that has seen the success that you see there is maybe 50, maybe 100 people that didn’t make it and we have thousands that we never hear their stories. Because it’s not interesting or no one knows about it because it’s swept underneath the rug so how do you now it’s for you? How do you know if this path is right of you? I think this is another entrepreneurship recently maybe the last 10 or so years has become very attractive, it’s been glamorized. There is movies about it. The social network and everyone thinks that you’re meant to be an entrepreneur so how do you know if you’re just kind of following that path or you really are or should be an entrepreneur?
Michael: First and foremost, like you’re going to find out very quickly. It’s so hard to make it that you’re going to turn back really quickly and the way that I look at entrepreneurship is like Christopher Columbus. He left Spain and he didn’t know when he was going hit land so to speak, but regardless of how harsh the win was and how turbulent the waters were like he didn’t turn his ships around and went home. He just kept soldiering forward and he kept moving towards and I think that along the way most entrepreneur or most people who believe that they want to be entrepreneur.
Because they get into it for this very romanticized reason when the things get really really rough and you have a hole in your boat and the boat is sinking and people are jumping overboard that’s often times people say you know what this not just for me. They want to enjoy their nights. They want to enjoy their weekend. They want some comfort. They want some consistency and then there is this courageous few like I have to hit land like if I have to get there by myself. If I have to swim, if I have to get on driftwood and float. If have to capture a lawless and ride it to shore whatever it is like they’re destined to find land and that was just my mentality. I was going to stay laser focused and I was going to get land. I met a lot of entrepreneurs along the way.
I think that that’s just the reality is that it gets really really really hard depending on what kind of business you’re trying to build and but those are moments when you have honest conversations with yourself do you want to move forward or not? I think putting your feet in the water and trying to find out is a beautiful thing because no matter what you learn a lot about yourself. I think that there is no better life than life of an entrepreneur but I also think that there is no harder life than the life of an entrepreneur.
Felix: It makes sense yeah I agree with you that you really can’t know for sure unless you just try it out so for folks that are thinking about trying it out either they haven’t started anything at all or they have started a business on the side as a side project but haven’t really dived into it. How do you prepare for this kind of leap and maybe not to the same degree that you done it where you sold your car and maxed out your credit card and everything but at least put themselves into a place where they are repercussions. Like how do you prepare for this?
Michael: Unfortunately, it’s one of those things where it’s like you can read every single book about becoming a parent but until you’re a parent there is no preparation. I think it’s just getting in the mind frame about what could come and I also think that like there is nothing wrong with being a part-time hustler. I think that there is a big difference between someone who hustles on the side and someone who’s an entrepreneur. If you work at a pet store and you decide as a side hustle you want to open up a Shopify store that sells dog collars online. There is nothing wrong with that.
There is nothing wrong with slowly growing your business and then at some point realizing that you can make more money just working on your own business full-time and you can slowly get to that comfort level. For me, I was impatient. I’m working in software it’s a different world. I wasn’t willing to sit back and wait and see if my work on the nights and weekends would get me to a point. I had to go all in. I think the best way of looking at it is like if you get a tattoo you’re going all in. It’s not coming off and I had to tattoo entrepreneurship on myself.
Felix: It makes sense so I think the next question is going to applicable for other store owners that might be selling to other business in the B to B space. You mentioned before that that small business has been part of your life from the beginning. You worked at in small businesses. Your family was involved in small businesses. What opportunity did you see though that made small business owners a good opportunity to focus as a customer or to go out after as a customer?
Michael: The reason I went after them a customer because I felt hat it was very relatable to me. That’s just the honest answer. It wasn’t about some mask there is obviously tens and million small business out here so there is a huge market for you to sell to but for me, it was just like that’s what I cared about. I cared about the people that were working in these stores. I cared about the people who are trying to do it by themselves. I cared about the guy who’s standing behind this counter on Saturdays missing his kids soccer game or the guy who’s running a detail business and missing his son’s basketball game. I just cared about these people and my opportunity was that I wanted to try to contribute to improving their quality of their life.
I think what’s really amazing when you look at Kit we’re still just scratching the surface but if you go and you read the reviews on our app page it’s people saying Kit’s the best in place I’ve ever had. Kit works nights and weekends. Kit responds to my needs. Kit is the first person that worked in it. We’re trying to give them seem balance because for a lot of people and I’ve seen it firsthand like it’s scary to stand inside of a store and let days go by and not make a sale. I got into the business because there is an empathetic piece of me that just really really cared and that was why I was able to sell my car and max out my credit cards and quit my job with no funding and live on food stamps and let my electricity be turned off. Because at the end of the day I wanted my body of work to represent what cared about above anything else.
Now, if you’re in the B to B space whether you’re selling software like it’s a massive opportunity because companies like Shopify are making more and more entrepreneurs every single month. The barrier of entry is lower than it’s ever been. There is all kinds of opportunity for people to be an entrepreneur and so it’s a everlasting incredibly elastic space where you have a million people you can sell to at any given moment and so it’s just a very ripe time to be selling to small business owners. Again, I have to reemphasize that it was not the field of my fire you know what I mean?
Felix: It makes sense and obviously your super passionate about this so it might be hard for you to answer this next question but I want to know that how do you know if you are deeply passionate about what you are working on? If the listeners out there are thinking that they are super passionate about it. How do you know if you’re really a passionate about it or maybe you’re just have a passing interest in it and it might pass in 6 months from now? Is there a way for you to identify that?
Michael: You’re right it is a hard question to answer because I think everyone defines passion so differently. Someone can be super passionate about something but they’re not losing sleep over something. Like for me, I so badly wanted to be the guy that solved what I felt was such a large problem. It made me physically sick to think that some other person was going to beat me to it. I was not willing to turn back for anything. I really wanted Kit and I really want Kit and I really want my time at Shopify to really be a representation of my life’s work. I come across a lot of entrepreneurs who are crazy passionate about what they’re working on but if they don’t succeed it’s not the end of the world for them. They just love what they do. They can’t imagine themselves in any other capacity so they’re really passionate about it.
Like if they were second or third or fourth place or whatever like they’re okay with that and our degrees of passion, our degrees of drive are just so radically different as human and entrepreneurs. For me, it was just like I absolutely want to be the person that gets to solve this incredibly difficult problem and I really want to be there for them and make it all better. If somebody else solved it I’d be happy that the problem is solved but I lost sleep over the idea of someone else beating me to it when I invested my life into it.
Felix: Was this like a very stressful for you then? Just always this constant thought that there is a sense of race going on because I think there is going be other listeners out there that are in this situation that maybe they’re not in a cutthroat industry necessarily but they are always thinking about the competitors. Always thinking about where the competitors are at. Is there any ways that you found ways not necessarily that to cope with it but at least to manage it to a point where you can do the work and not be so consumed by the thoughts of your competition?
Michael: Yeah, at some point you kind of realized you have to stay focused in your own lane and keep moving fast and you rather be the guy that’s blazing trails then the guy that’s following them just to make sense. I know it’s kind of a harsh way of putting it but like it’s also like welcome to the real world. Entrepreneurship is a very competitive sport. Maybe the most competitive sport in the world. Everyone is looking to try to climb the mountain of success. Everyone is trying to stand on Mount Everest. There is only so much space at the top of the mountain. I think it’s just a matter of are you okay with being number 2 through number 10? Are you really fighting hard to be number 1? You could build a really really nice business being in fourth place, a really nice business being in fifth place and it just it’s a matter of like that’s a big difference between drive and passion.
For me like one of my early advisors said something to me and I never thought it were to be more true and that was only the paranoid succeed. I lost tons of sleep wondering if someone was outworking me. I lost tons of sleep wondering if someone was out hustling me but that’s ask why I haven’t taken a vacation in 5 years. That’s why I work every weekend abut that’s also why I was able to create some early success in my life that I have and it just really boils down to life where you want to be positioned within in your industry. Like the same way, Shopify is the number 1 leading e-commerce platform in the world. They’re not here for second place. Everyone that works there. Everyone I meet is like very ambitiously focused on bringing commerce to everyone and so that just drives a different type of mentality and work quality that you put into your work.
Felix: You want to be number 1. It makes sense so was there ever point during this whole journey, maybe now maybe never I don’t know where you realized where you could at least take a breather and there is a base camp that could set up along the way up or you can rest and think okay now where do we go from here or was it just kind of full blast from day 1 until now it’s kind of just full throttle?
Michael: There certainly were times where I carved out like a weekend to take a step back and reflect on what we’ve accomplished and mostly what we were doing wrong and where did I see areas in improvement. I think it’s a terrible idea just to be constantly full steam ahead and never taking a step back just to look at the lay of the land. Because that’s how you start making mistakes but certainly at any given moment that we could hit the accelerator it was all about full throttle. It was all about pushing our chips in, being courageous, being bold, be willing to fail. Like I’m totally okay with failure. What I’m totally not okay with is that responding to that failure.
I let every mistake be a very valuable lesson. Something comes out of everything so like I just so ruthlessly wanted and I continued to want to make Kit special. That just what it comes down to. I really believe that Kit can be a special person for store owners and I try to look deep into the horizons of life and think what is it going to take for me to get Kit to that point? Now, it’s a lot so a point where I’ve invested so much into my life into Kit. Like do I now want to let up on gas? Is now the time that I want to back off and the answer is just everytime I ask myself the answer is no. I just don’t.
Felix: It makes sense so when you take this time ad take a step back and I think that this is a valuable lesson for any entrepreneur which is not to just be heads down the entire time but actually take the time. Take that day that weekend to look back on your business and decide where to go. How do you structure that day, how do you structure that weekend? How do you set it up in a way where it’s actually productive and you are looking objectively at your business?
Michael: There is a place in Northern California called C Ranch. I try to go there once a year for the weekend and basically power down my laptop. Just go notepad and pen and just really ask myself some really painful difficult questions and forcing yourself to have very honest conversations, answering the why’s and why are we making these decisions and is it really the right move? Is it really the right step? where do we need to get to? Kind of reverse engineering your success a little bit and asking yourself if you’re on pace to achieve those milestones and goals that you’ve set for yourself and set for your team. That is the way that you climb the mountain. The way that we climb the mountain and the way that we try to help businesses climb the mountain is like help from my envision, what’s the goal?
I always love to ask myself like why am I here? Why am I building Kit and I think like why do we make those decisions why do we? Because you have to continually bring back laser focus of like why you are making all the sacrifices, why am I working every weekend? Why am I working on the holidays? Why am I doing these things? It’s because I’m trying to build a virtual employee for millions of entrepreneurs around the world and like that opportunity when you make that statement it’s so overwhelming and it’s so powerful that it helps you regain conscious focus. I think for anyone whether you’re selling again dog leashes online or jeans or shoes.
Maybe your goal isn’t to bring that millions of people but maybe your goal is I’m trying to get to $10,000 in sales, I’m trying to build strategic partnerships, I want to hire my second employee. I already have Kit so I want to hire my second employee. You can have short terms and long terms goals. It’s just that you have to have moments to step back and have conversations with yourself if you’re on track to hit these goals. That’s why I take the opportunity at various point of the year or at least on walk through and from work to ask myself if I’m I making the right decisions every day that’s keeping us on pace?
Felix: I like how all the questions you ask yourself during this kind of retreat are why questions. I think we spend so much time asking how-how-how, how do I do this, how do I do this? How do I accomplish these things but I think those questions are very primed for next step types of things. How do I accomplish this in the next day the next week the next month but when you start asking why it really zooms you out and it gives you much higher view. When it comes to the more the tactical questions are there any general business kind of questions you ask yourself or think about when you do take this time off to look back on your business?
Michael: From a tactical perspective, I’m constantly wondering how we can scale better. That’s when I ask myself the how question and then usually a follow-up answer will be like well at various points like well maybe we can partner with PayPal? Ends like well why would we want to partner with PayPal? It always kind of boil down to this how and why. For us, it’s like what pieces of the puzzle are we missing. Why is Kit not? We surveyed, for instance, we surveyed, all of our Shopify merchants back in November right before Christmas and 68% of them say they depend on Kit to do all of their marketing for them. They completely are hands off. I was astonished with hits. I was so proud of the 68% but then I took a step back and said why wasn’t it 100% and that’s the goal.
The goal is 100% so then when you start digging your own and finding those answers that really helps you to kind of strategize where your focus should be. It helps you have that ruthless prioritization. I think often times we do as a society want instant gratification. We want to move so fast, we want climb the mountain but we don’t really want to put in the work to figuring out like what we need to do to climb the mountain and why we are climbing the mountain. I just think that it’s important piece of the puzzle for all of the entrepreneurs have a little bit of patience with the process and constantly question themselves and question their effort and question their decision making and just remain a student. The only closing note on that question that I would say it’s also really great to bounce these conversations with mentors and people and peers and have real open conversations about how you’re executing and get some value out of that.
Felix: I think one thing that you’ve been able to do really well is just be able to grow this business so quickly and your focus is so much on scale right now. What do you focus on to make sure that you are moving as quickly as possible as fast as possible? What do you think other entrepreneurs might be doing that’s kind of slowing them down from executing faster?
Michael: I don’t what other entrepreneurs are doing that’s slowing them down. It’s a very person question for them and I don’t want to make any assumptions but one think I continually push is having just laser focus. Just say no to everything. If it’s not a part of the goal. If it’s not a part of the equation. If it’s not a fundamental piece to what we’re working of towards say no. Don’t fall into distractions, stay laser focused. Stay committed to the quest and just have ruthless prioritization of your time and your day. You can have a billions dollars but that doesn’t buy you more time. You just have to be like ruthless with your time and this goes back to having conversations as to why you’re doing it? Why are you doing these things?
I think the one thing that is really misleading is when people talk about having focus. They think it’s about having focus on saying yes and focus on the business and focus for time on this but really it’s saying no and prioritizing your time on what you’re working on for the business. I’m sure my team they’re so sick of hearing me say have laser focus but I say every single day have laser focus. Say no to everything. Make sure it makes sense and just work very diligently on the tasks at hand.
Felix: It’s amazing how many successful entrepreneurs say the same thing which is about focus being the key to success and I think it’s a struggle that a lot of people get into because we never want to understand that focus is important but then when it comes down to making the decisions that allow you to be focused that’s when things start falling apart. That’s when the creeps start happening. That’s when all of a sudden your scope starts to widening and you start saying yes to things that you actually don’t mean to say yes. What kinds of questions do you ask yourself when you sit down to maybe the night after work or the morning before starting your work to put together your to-do list of things you want to get done? How do you evaluate each thing whether it should be cut from your list or it should be allowed on to your list?
Michael: I simply outline where are at with product, where are we at with customer success, where are we at with our marketing goals? It’s about working towards goals and if the item that I’m adding to my list doesn’t lead me to accomplishing the goal. I have to remove it or I at least have to back burner it for a second because the only things that we should be focus on are those things that help us achieve the dream to achieve the goal and it’s really hard to do. It’s easy to fall into distractions. It’s easy to want to go to meetings. It’s easy to want to go to conferences. It’s easy to want to do all these different things. It’s easy to want to build these new features, it’s easy to feature creep. It’s easy to get excited about things because then we have to ask ourselves is that helping us achieve the goal and if the answer is no then we have to move on without it no matter how attractive it may look.
I remember turning down multiple partnerships before we were acquired by Shopify and it always boiled down to even I personally wanted to go for it being challenged by advisors to say is this really helping you achieve the goal or is it just a flashy distraction? It’s a really hard things to do but it’s a harder thing to identify when you’re a young entrepreneur. You don’t know if those things that you’re saying yes, you’re saying no toward the right things to say yes or no to and that’s why I highly encourage entrepreneurs to have a more seasoned mentor and to remain a student. I think the biggest mistake that entrepreneurs make is that they think that they are an expert about their business.
Let me take that back. They think that they are an expert about their domain. You may know the business and the ins and outs in your business but someone may have more knowledge about you about how stage of your business and how to get to the next stage for your business. I just think it’s so valuable to build those relationships and let people kind of coach you and have someone you can be conversate with because they will help align you. They will help you stay focused. It’s a big undertaking to expect yourself to have those natural abilities with no life experience to guide you through it.
Felix: I think that’s one of the common themes I hear as well from other successful entrepreneurs is that one of the keys to success is to be humble and not think that you know everything. Because once you start thinking you know everything that’s when you start falling behind. Because someone other is working like then they’re not number 1 and working like their number 2 trying to get to number 1 and that’s the person that’s going to beat you or that’s the person that’s going to be a really strong competitor at the end of the day. Mentorship I think is really important and this is the topic that I don’t think comes up enough on this podcast so I want to talk about a little but more is how did you find your mentor? How do even being the process of this idea of finding your mentor is definite a great goal to have but how do you being to find somebody that can help you out?
Michael: I think it’s like anything. It’s like how do you find a best friend. How do you find a wife, how do you find life, partner? It’s about building relationships and letting them kind of naturally come together. One of the mentors I have he is 15 years older than I am so he has 15 years with a life experience on me. Our businesses are obviously in very different stages and I just constantly we started as friends and the he became an advisor to my business and then he became a personal mentor who’s now my kind of business shepherd. Even when things are going great we talk about them and he reminds me it’s never a moment of celebration. It’s always figuring out how to get to the next step.
For a very very very long time and I’d still say it’s standing truth a day my father has been a huge mentor for me and reminding me about just intense work ethic. My father’s the hardest working guy I know. Intense work ethic, staying focused, staying humble, staying grateful. Seizing the moment, seizing the opportunity so different people will come in and out of your life and those relationships will naturally kind of take place. I don’t think that they necessarily have to have the title hey your my mentor. It’s more so that you just have that kind of loving relationship with somebody where they want to see you succeed and they know a lot more than you know and they’re kind of willing to share their wisdom with you and there is a lot of gratitude that goes into that. You don’t give a mentor a percentage of your company. You give an advisor a percentage of your company and those are 2 very very different things.
Felix: Let’s talk about that then lets about advisors I think that’s also something that maybe bot a lot of entrepreneurs considered doing and I think it applies in different stages of your business. Talk to us a little bit about an advisor, what does an advisor do for you and how does it all set up for people that don’t have ones and don’t know where to begin to find an advisor?
Michael: Sure again, it’s a relationship building exercise. I think the best way of finding advisors is just pure networking, going to conferences, going to work events. I think with an advisor it needs to be a very outlined thing like where you struggling with this in your business. For me, not the beginning my advisors helped me fundraise so they were making introductions to investors for me. If it’s recruiting they can help me with recruiting. If it’s having a quick phone call conversation to discuss partnership opportunities. They’ll give me their insight if they think it’s good for the business or not. They’re coaching you but they’re not telling you what to do. They’re giving you feedback, it’s your job as an entrepreneur to filter that feedback.
Some of my advisors had given me feedback. It was very good feedback, they just didn’t apply to my business and sometimes they gave me feedback where I followed their feedback even though I thought it would be but for my business and it turned up to be right. It’s your job to filter that because it’s also your job to define what you expect out of an advisor in terms of how it’s going to impact your business. Where a mentor it’s a very personal level. It’s coaching you through how do you handle hiring and managing people and firing people and letting people go or what are you struggling with personally?
One thing I loved about having a mentor who is entrepreneur is like we can relate on a human level. Being an entrepreneur when you are like all in, when you are working day and night like that impacts your personal relationships. It’s hard to maintain friendships, it’s unfair on your spouse. It’s hard on your parents. People are watching you struggle. People are watching you fight very very hard and even if you’re making momentum slowly for a lot of people it’s hard to witness and kind of having that comradery is also a really nice piece of the pie. In either form a mentor or an advisor I strongly strongly encourage it and I strongly encourage it to be from the genesis of a very very very good relationship that you have with somebody.
Felix: It sounds let a mentor is somebody that is more intimate with you on a personal level while a advisor might be more intimate with you on a business or industry level so what are some typical ways that an advisor relationship is set up like? Are you usually paying them? Let’s talk about your particular situation.
Michael: It’s usually equity in the business so you’re giving them anywhere from .25 to 1% of the company in stock. Everyone’s advisory structure is different. I have some friends that have given advisors 1.5%. Again, it’s kind of an exchange. Right hey I’m going to give you .5% of the business you’re going to stay on as an advisor for 2 years and that 2-year window here is what I expect out of you, are you able to deliver on that yes or on? Whether that is help me fundraise, whether that is help structure strategic partnerships, whether that’s make introductions to people within your network. Like whatever it is. Like those, I think like going back the one thing that I would strongly suggest is really clarify what that relationship looks like from day 1 and really setting some framework around that.
Felix: An advisor is this something that makes sense from the very beginning or at what stage of your business should somebody consider getting an advisor?
Michael: Again, it’s a personal preference. Some people in the very beginning they want to kind of stumble a little bit on their now and kind feel things out and you also have to assume that a lot of people may not devote their time to someone just at the beginning. Because anyone that’s gone through it knows how hard it is and mentally they might be thinking when this person gets to point A then I’ll offer to jump in and kind of help. I also had a lot of people who offered to be my advisor. As you make more traction you’re going to become more attractive to people that want to help you specifically if there is equity stake in the game.
Just it’s really really preference point. I had an advisor earlier on and that’s only because I had flunked 2 businesses in a row and so I kind of knew what my needs were at that point and where I was going to need some help. Some people were with me from day 1 and then I had an advisor that joined more like 6 months down the road. It’s just really your preference, to be honest with you. It’s really hard to question the answer because it’s just a matter of how you want to conduct your business.
Felix: It makes sense so let’s talk about your experience now working with stores because I think I out of all the obviously guests on the podcast you have the most experience since you work with so many different stores with Kit. If there are listeners out there that is an entrepreneur that’s working on a side or maybe that’s starting out for a first time. What do you usually recommend that they focus their attention on doing at the very beginning?
Michael: I always recommend that someone finds products that like understand who your market is, understand how your customer is. I’m going to go with the assumption that you have a store set up and you have some product and things like that. Do a little bit of homework whether that is you’re setting up a Facebook page and you’re investing a little bit of money in your Facebook page to try to understand who is interested in your brand, who’s interested in your business. Use that data to start targeting customers, to drive you first sale but if you don’t know who you’re supposed to selling to or who you’re supposed to be messaging your brand to it’s very hard to find success. I think it’s very understated for people that don’t do enough homework on who their customers potential could be.
It’s something that it’s actually a problem that we’re trying to address with Kit and not to give myself a selfish plug here but we’ve realized that a lot of people they don’t have a full grasp of understanding who their target audience is. They think they know who their target audience is and this gets back too many people jump into entrepreneurship being an expert and having too many assumptions versus the willingness to be a student and find out the answers. That would be my number 1 feedback. My number 2 feedback, of course, would be it try to find some brand advocates. Let the people talk about the brand. Maybe it’s worth you giving away 100 or $200 worth of merchandise of product to get some people excited and to give you feedback about what they like or what they don’t like.
I think that that ultimately again it goes back to a key issue in today’s age and people want instant gratification. They don’t want to do the homework or the laid work to position their business for a success and so I would just take 2 steps back, have some patience. Understand that it’s a process to find success. Now, once you have your market carved out. Once you understand your target audience then go all in. Then be impatient. Then be peddle to the meddle but in the interim of that if you just start diving in without really trying to make that first sale before you are thinking about your hundredth sale. Get your 100 Facebook fans before whatever it is. Try to understand who you should be communicating with before you go crazy otherwise, it’s going to be a very frustrating experience for you when you don’t see results.
Felix: What is the onboarding process like for Kit? Someone signs up for the first time. What is that experience like?
Michael: Someone goes to Shopify.com/Kit. There is a hire me button. They go through an onboarding process where they connect their Shopify store, they connect their Facebook page and they connect their phone or by way of adding their telephone number or the select Facebook Messenger or Telegram and then they are able to basically communicate with Kit very one of these messaging platforms and Kit tries to understand where their business is at, the stage of their business. Then they start kind of working together to have some marketing success.
Felix: I’m not sure how much you can share about this but I think there is this new Shopify has talked about it on the blog, we’ve talked about it I think on the podcast as well about this more focus on messaging. Being able to contact your customers through messaging so how were you able to scale something like this up so that it’s at the point where it still feels like obviously you’re talking to human. I’m not sure how it’s all set up on your end but how do you keep that human touched to something and scale it up at the same time when you are trying to communicate with so many customers?
Michael: For right now obviously Kit’s not engaging any customers directly. Mine is the ability for Kit to send thank you emails to customers and that’s coming on behalf of the store owners so it look style it’s signed by Felix. Not signed by Kit so working with a that employee relationship as store owner to Kit that’s much easier process to scale to build that empathy and trust that it is to have Kit responding and talking to customers on behalf of the store owners. There is 1 big section of conversational commerce that there is some really great teams out of [inaudible 00:41:16], and Ottawa are working on that are just really focused on helping merchants have more meaningful conversations and relationships with potential customers by way of face with messenger.
Then there is Kit team who try to build these conversations between a merchant and Kit to work together to drive more success for the store and those are 2 really different problems. Eventually at some point, we hope that Kit can become sophisticated enough to speak to customers on behalf of the merchants or just to speak to customers as a sales associate on a more regular basis and have a more relationship building opportunity with customers forward facing relationships with customers. We’re just not there yet. It’s just not our internal emphasis. Right now, our goal and our emphasis is for people in their mind to trust believe and build the relationship with Kit the same way that I work with my colleagues at Shopify in Kit. That’s a very very real relationship and they treat Kit in a very real way and that’s just where our focus is at today. Helping Kit better understand their business and making Kit smarter and making Kit more empathetic but we’re really focused on the merchants to Kit experience right now.
Felix: When someone does sign up for Kit and they I think you mentioned it earlier that most people don’t have the time for marketing which is obviously very scary to think about if you’re having a store and you’re not focusing on feeding that pipeline. What is the marketing channel that you try to get them to focus on first? Because I know you do email marketing, and Instagram, Facebook ads just reading from your page here and all these integrations with these apps. Where do you recommend that most entrepreneurs either they are using Kit or not, where should be focusing their attention on marketing wise?
Michael: By far Facebook. That’s where even internally at Shopify that we focus a lot of our time. It’s just the world is on Facebook. There is a tremendous amount of data there. There is well over a billion people who are using Facebook every day. I’d like to believe that there is a potential customer for every single business on Facebook. That is best bang for the buck. It is the best opportunity to leverage this massive well-categorized catalog of data to try to find somebody to drive interest in your products and a better understanding of your brand. It’s just the most obvious one.
Felix: How does Kit work with stores to help with their Facebook ads? How does the process work?
Michael: The beautiful thing about Kit is that we worked really closely with Facebook over the years. Kit’s really designed to use Facebook in best practice so whether there are seasoned business and we’re really pulling like there customer email addresses and hashing those to create customer audiences which in term we create lookalike audiences to find people on Facebook that best represents their customers. We target directly them. We do pixel placing to retargeting. We do pixel placing on thank you pages to do measurement. We follow these same practices with Instagram. We then if you don’t have enough of that we kind of look at your Facebook page. We try and figure out if we can find customers that look like your customers off of your Facebook page if you don’t have enough of that we use insights so.
We’ve really mapped every single scenario out based on the stage of your business and Facebook API’s and Shopify API’s are able to tell us based on the stage of your business to make really sound marketing decisions for you. This is why we won in 2015 Innovative Company of the Year with Facebook. We were mentioned at their marketing partner seminar. We’ve had just a lot of success because what we try to is simply by test messaging Kit we remove all the guess work from actually building a Facebook ad.
Felix: Because you work with so many stores and I’m going to ask you this question because I want to help the listeners see into the future a little bit which is are their stores that you work with where you see that they’re going to have hard time making it and being successful and the stores that you see are almost guaranteed to make it? What are the themes between the going to be successful versus the ones that are going to have a hard time?
Michael: There is no guarantee in my period. The beautiful thing about that is that there is also no guarantee for failure. I think the things that we see a harder time making it are people who are selling very very very niche things or there is a very very very small customer base and if you don’t know how to navigate the Facebook ad ecosystem or you really don’t know how to market your products best of those customers it gets a little bit harder. We had a guy who I’ll never forget he lived in in Hawaii and he was selling fish tanks and I’m like well that’s interesting but that’s on the assumption that people want to have fish or that’s on the assumption that people who already own fish want to investment many into a new fish tank. It’s just a very very very small market. They’re obviously going to have a much harder time than someone who’s selling jeans or someone who’s selling golf polo’s or products that there is mass market appeal.
Those are easy indicators to look who may have a little more uphill battle than the other but with that being said the guy who was selling fish tanks out of Hawaii was killing it and doing great and we’ve seen people who are selling women’s bags who are struggling and they’re not doing so well. We see the garment of everything and that’s what kind of beautiful about Shopify is that it’s really built a platform that gives every single person a chance to find successful. It’s just a matter of how hard they’re willing to work at it and how much time they’re willing to invest and the guy that sells fish tanks I’ve talked to him and he goes to meets up. Not all of his sales can happen by running ads. He does a lot of face to face business and sometimes the person that’s selling bags needs to do the same thing but they probably have a better chance at making sales if they really leveraged on social networks and marketing to its full potential.
Felix: What are the future plans on Kit? Where do you want to see Kit on the next year?
Michael: I think when we think about Kit it’s we’re trying to figure out how can Kit start building a relationship with our merchant where it’s not just helping them make that one sale or it’s not just helping them with marketing. How does is Kit helping them best position their business for success and building a marketing agenda or building a game plan to help their business get on the right path? How can we help them reach the vision? I think everyone becomes an entrepreneur because they see something for themselves. It’s like whether you don’t want to work for the man anymore and you’re okay what just being by yourself if you have income of X amount of dollars per month or you’re a guy who is crazy like me and you’re like I want to have 50 people working for me, and I want to build this big empire.
There is something for everyone when it comes to entrepreneurship. Our goal is how can Kit become our companion to help that dream become a reality and that’s what I want to keep working towards with Kit. As we get millions of people using Kits it’s are we helping their dream come true? Are we helping that vision come to life? That’s what we continually strive to work towards every single day at Kit.
Felix: Thank so much Michael, so again Shopify.com/Kit. I’ve read like this tagline here in this page it’s hire your first employee for just $10 I think it’s a great offer you guys are putting out there and a lot of value to you just hearing you talk about it. What’s the first thing you recommend a store owner try out? Once they are ready to sign up for Kit they need to have anything to prepare like how do they approach this setup?
Michael: The beautiful thing is that when you sign for Kit is going to try to assess what the best next step for you in terms of marketing. Kit will actually proactively message you and ask you if it’s okay to move forward with this marketing activity and you simply have to say yes or no.
Felix: Awesome thank so much Michael.
Michael: Thank you, Felix, it was really a pleasure. Thank you for having me.
Felix: Thanks for listening to Shopify maters. The e-commerce marketing podcast for ambitious entrepreneurs. To start your store today visit shopify.com/masters to claim your extended 30-day free trial.
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