Our guest today is Andrew Warner. He runs a very popular podcast for entrepreneurs called Mixergy. If you want to learn everything that you need to know when it comes to business, you listen to Mixergy. It’s not Andrew teaching the wisdom of his ways, it’s Andrew interviewing all the top names out there. Some of his interviewees are:

  • Tim Ferriss of the Four Hour Work Week
  • Barbara Corcoran from Shark Tank
  • Jessica Livingston of Y Combinator
  • Brian Chesky and Joe Gebbia of Airbnb
  • Gary Vaynerchuk
  • Neil Patel and many others.

There’s some significant wisdom locked in Andrew’s head that we’re going to try to unpack a little bit, specifically for our property management tribe. Below is a transcript of our conversation:

Q: The concept out there is that 20 percent of the work brings 80 percent of the results. You said, and this is a quote: “when you build a start-up, the secret of success is to understand what that 20 percent is, and pay attention to it.” So, what is that 20 percent for you, Andrew?

A: For me, the 20 percent is a handful of things. One of them is to talk to my customers and my audience a lot more. Anyone who is involved with or excited about what I’m doing is someone I need to talk to as much as possible. At first, I thought online research was enough, but I discovered it’s about finding ways to get people on the phone so I can talk to them and understand what they’re going through.

I had been hearing that the founders of Airbnb went and lived in their customers’ homes and saw what it was like to list on the site. They wanted to understand the problems people might have. So they realized Airbnb shouldn’t be about just renting a room, but the whole house. They only discovered that when they got into a house. The thing is that it always seems so easy when you’re told to go talk to your customers. I tried doing this, but no one picks up the phone and no one wants to schedule a phone call. That creates more work for them.

It took a lot of creativity to learn what my customers are going through.

Q: What were some of the creative ways you learned your customers go through?

A: Here’s one: I didn’t say I want to learn from you so I can improve my product. Instead, I emailed them and said thanks for being a part of my community, I want to give you a free coaching session. With free coaching, you’re going to find a struggle that they could use some help with. If they’re not going through something, they won’t take me up on it. But if they are going through something, they’re going to take me up on that offer.

Once I get on a call with them, I can talk about what they want and why they signed up. They will always tell me about that one issue that they need help with and want to focus on with their free 15-minute coaching call. Then, I could understand the real problem and solve that problem or help them come up with their own solutions. More importantly, I could understand the problem better and build the solution into my interviews and everything we stand for at Mixergy.

Q: That’s pretty brilliant.

A: I know it won’t work for everyone, but it worked for us. The key that I’d like anyone to take away is that we want to learn from our customers what to create for them and how we can improve, but it’s a challenge to figure out how to get them on the phone. If we call them and they don’t pick up or we email them and they don’t respond, it’s not because this doesn’t work. We shouldn’t stop. Just spend some time figuring out the one thing that will work. When you figure it out, they will tell you what they need. When they tell you about the one desperate problem that they have, if you can address it even a little bit, they will be happy customers.

Q: I spoke to Lisa Wise, who is running an incredible property management start-up in Washington D.C. called Nest and it’s transformational. She built her office inside a typical house that these guys manage. So the employees can touch everything that would be in a house. They know how the heater works and what happens when the air conditioner goes out. This build empathy for their customers. It accomplishes two things: It shows you how to build your product and where to go with it, and it also builds the empathy you need to transform your services. 

A: That’s incredibly helpful. Can she get people into the actual homes? If they can get invited to dinner or in to repair something, it would be incredible.  

Advice on Pricing

Q: Sure. You could shadow your maintenance guy and see how tenants feel. There’s something to learn there. Within the last year, I’ve been fascinated with two things: pricing and unit economics, and how they impact the business. You recently spoke to Patrick Campbell with Price Intelligently. You mentioned something that might be useful for everyone here. You have used a tool to figure out your pricing and your revenue. Can you talk about that a little?

A: Profit Well is one of his products, and I use it to get a sense of who is buying from me and what they are about. And then, I learn how long they stick around. We use a software called Stripe to collect payment. Stripe is really good for processing payments, giving refunds, and integrating everything. But, it’s not great for giving you a clean dashboard or for even telling you how much money you made last month. So I signed up for Profit Well because I want to understand how many people churn or leave. I’m obsessed with why people leave. People who try us out and paid us but then leave have been let down somehow. I want to know why we didn’t meet their expectations.

Q: Do you have any advice for experimenting with pricing? I know some companies will help you do that. We are below that level but there must be some wisdom you’ve heard from other entrepreneurs.

A: Yes, I learned it from a guy named Will Schroeder who runs a bunch of companies that he has bought like Zirtual for virtual assistants, Launch Rocket for landing pages, and other businesses. He said to de-couple the price from the offer. That means, don’t say “here’s my offer, click this button and pay this much to buy.” When you do that, you can’t tell if people are turned off by the price or the product.

So, here’s what I do when I’m selling something brand new and I’m trying to figure out the price.

  1. I collect my audience’s emails.
  2. I email them about the new product, and ask them to click somewhere if they’re interested in it.
  3. I tag those clicks, and there’s a page that shows the offer.
  4. There’s a button that says “buy it.” I tag whoever buys the product.
  5. Then, on the next page, people can decide which level they want or if they want to pay at all.
  6. If they leave the page, and don’t pay, I know it. I also know if they decide to pay and how much it is worth to them.

That gives me a way to go to someone who clicked the email and wanted to buy, but then didn’t. I can go back to them and say that I noticed they were interested, and I ask them to help me understand why they didn’t go through with it. This is critical. I want to know if it’s the price. They will tell me. Or, they might say that they weren’t looking for a course because they’re in a different time zone. So, then I go back to my sales page and clarify that the course does not have to be watched live. So don’t just measure the progress, track the people who drop off so you can follow up and find out why.

Q: You need systems to be able to do something like that.

A: Yes, you need to be a tinker. It’s not expensive or hard, however. Any email system you have will let you keep track of who is clicking on links. You want to set it up and they’ll do it for free. The forms you use will allow you to capture the email address so you can keep track of who is pressing the button. Call the customer service people at MailChimp, Infusion, or whatever system you’re using. Home grown systems will have it. They will show you how to do it. It’s built in and easy, but very few people take advantage of it.

Q: So, pricing wise there’s some experimentation there and the tools we already have can help us with it. I have a story and a question. I just came back from a real estate conference and they had Darren Hardy speak, who is a super-coach motivational speaker and very knowledgeable. He told the audience that he coaches three CEOs from large companies and he was invited to play golf with them. He doesn’t play golf, so he didn’t want to go, but they insisted. So he goes to play golf and they get up and they’re about to tee off and he says here’s your first lesson: he tees off and it lands in the brush. Super-achievers suck at golf. He spends his time perfecting his skills to coach CEOs. He talked about his big Give-Up list. He gave up television, golfing, sports, and Facebook. So in your experience, I want to know: do people give up a lot of things to be that good at one thing, or do they balance?

A: They do give up a lot. One example that comes to mind is the guy who runs Y Combinator, the best seed funding company out there. He gave up so many different foods when he was building his company and ate only ramen. He gave himself scurvy. He made himself sick because he was so committed and focused. I see that kind of thing a lot. They are super-focused. They aren’t playing golf. They are focused on their business. When a friend of yours is going through it, it might feel like they’re being jerks, but you have to understand it and be supportive.

Q: I have two priorities: business and family. I cannot fit anything else into my schedule, or one of them will suffer. Do you give up for Mixergy?

A: I give up a lot. It’s work and family and it’s also a little bit of me. By that, I mean that I need to go running four times a week. It’s really important that I get that done. I need downtime at the end of every day, which is sitting and reading. I fight for that, and it’s worth it to fight because I need those things to be a better person. And there’s not much time for anything else.

Q: Do you listen to anything when you run, or is it music?

A: I listen to a little bit of everything. My runs are long so even though I’m not lonely, it’s the one place I feel alone; when I run. So I listen to audiobooks and podcasts because they’re productive and interesting. Sometimes, I’ll make phone calls while I’m running. These aren’t business-related calls, but I’ll call a family member and catch up while I’m running.  

Q: So this is a founder question. I feel like I don’t have alone time at all. Do we need that time? I like to go fishing, but even then I’m surrounded by friends.

A: You may not. If you do need it, you might have to fight for it. But if you don’t need it, that’s fine. But I do think we need something outside of work and family. I was running a company that was doing a couple million dollars a month in sales. Then, we suddenly went down to half a million dollars a month and I felt like such a failure. Everything was going down. So my business was everything I had. If I had the sense going into the office that I was a failure, everyone around me would pick up on that and they would begin to wonder why they were working with me.

I started to take up running and in the morning, I would run for a mile or two and I’d go into the office feeling like a victor, like I had done something meaningful. So I was doing something I didn’t think I could do. It helped me to think more clearly and I would walk in feeling like a winner. It would come across in the way I did business. We need something outside of work that we can be just incredible at. Moving our bodies is important, but it doesn’t have to be sports. Maybe it’s music and you’re playing a great set over the weekend. That next Monday, you’ll feel like a rock star and that will give you more authority and creativity in the office.

Advice on Coaching

Q: So to feel the satisfaction at work and with the business, you need to hit some milestones outside of work as well, whatever those might be. Let’s shift gears. Do you have a coach?

A: No I don’t now, but I have at different times in my life.

Q: Do you have any advice on finding a coach that matches you?

A: The best coach I ever had was a guy who was an interview coach. He was really good at one thing. He had done it, and he was really good at it. Every week, I would get the transcripts of my previous week’s interviews and we would do a post-mortem. We talked about what we should do differently, I’d talk about problems and what was coming up, and we’d strategize about what to do and how to overcome the problems. This was really helpful. I don’t know about other people. For me, the best people are really good at one thing specifically. When I first got into cycling and I couldn’t even clip myself into a bike, I found someone who did long distance cycling with me. He biked next to me and told me how to deal with the gears, when to stand up, and what to do with hills. All these things don’t matter if you’re going to bike 5 or 10 miles, but if you’re going to do a 100-mile or a 200-mile bike ride like I did, you need to know these things. So to me the only coaches that really helped were really good at one thing, and they taught me that one thing.

Q: So, I have never had a coach. I’m always worried about the cost. It costs so much money and I’m worried about getting the wrong one and hurting their feelings by firing them.

A: I get that, or getting the wrong one and then you are locked in. One of the problems that coaches and therapists have is that you don’t really know what you’re getting until you’ve worked with them for at least three weeks. Even if you have someone that is a great coach, it might not be a great coach for you because everyone is different. I wish it was easier to understand their methodology before you sign up. For example, if I was going to choose a running coach, I don’t want just any running coach or the one who got other people to do their first marathon. I’d like to get a running coach who subscribes to the methodology I use and can help me with my process. It’s the same with business. I volunteered for Dale Carnegie & Associates for a while. He’s the one who wrote “How to Win Friends and Influence People.” I noticed that these executives would hire Dale Carnegie & Associates, and they knew what they were getting. They knew that there was a methodology that included listening to people and caring about them and making them feel important. So they knew what they were getting. That’s hard to do with a business coach. It’s difficult to know their methodology.

Q: How do you find a coach that you synergize with?

A: I think that if someone reads a book by a person they really respect or whose methodology works for them, hire a coach that the author trained. So if you are into Dale Carnegie’s book, go to Dale Carnegie & Associates to bring on one of their coaches. If you’re into getting things done, go to a coach that specializes in helping people get things done. That way you aren’t getting a brand new system, but they’re taking system that works for you and helping you implement it better. If you like the E-Myth system, you can hire a person to help you implement it.

Q: There has to be a business out there for this. For the last two or three years, I haven’t spent money on coaching or improving myself because I worry about spending money on something that doesn’t work for me.

A: It helps to say that “I only need two sessions” and see what they can get you in two. You can tell after a couple of meetings if someone is going to work for you. Challenging them to produce results within two meetings can be really helpful.

The Next Steps for Mixergy

Q: I’m curious about Mixergy and where you’re scaling. So where are you taking it?

A: The vision behind Mixergy has always been to create a place where entrepreneurs can learn directly from other entrepreneurs. My preference is for long form audio, and I know there are other ways to reach people. There’s a group of people for whom audio just works. To be able to listen to the founders of Airbnb, for example, and about how the business was built, is helpful to other entrepreneurs. So I’m trying to run an online school and provide resources where people can learn from others. That’s been the model. The interviews I’ve done bring people into the fold.

For example, Justin Kan has had a number of businesses and is the founder of Twitch, a place where you can go to play video games and have people watch you live. Amazon bought it for almost a billion dollars. He’s got a course on Mixergy where he teaches you how to build a product that people really want. He’s not giving you theories or stretching out a multi-month course. He’s saying that in one hour, he can share the best ideas and process. He’ll talk about what went wrong and what went right and he’s sharing specific examples and demonstrating his credibility. That’s what I’m trying to do.

Q: Who sets up the course and how does the progression work?

A: It works in different ways. We hired a producer who went through all of his written material and the stuff he’s done online and on Snapchat. We accumulated the most applicable ideas for us and we said – here’s what we think your methodology is, are we right? He talked about where we should change and adjust it and we brought him our process. Then, we worked with his specific ideas and broke it up so that instead of giving it to people in one long chunk, we had examples and then moved onto something else. That makes it easier for people to remember. He used our process and he taught it. It’s unusual to have access to someone like that in the first place, and then to have that person trust our process really helped us deliver for each other.  

Q: So that’s really unique. Are you going to do a book?

A: I’d like to at some point. I’m not working on it yet, but distilling all the interviews into a book is the goal.

Advice on Leadership

Q: There’s a lot there. The biggest problem in my industry and small business in general is that we aren’t that good at building a culture in our organizations. We lose employees, there’s a lot of turnover, and this is difficult for small business. What are some of the less radical practices that founders you speak with use to foster competence and care in their teams?

A: Radical is a lot of work. With a big radical idea, you walk in and want to create a company culture and everyone knows you just read a book and want to start something new that will ultimately go away. Instead of that, pick one thing you stand for and do it in a small way so everyone knows this is the future. So if you want to establish that your company is going to be one that sends out gifts, create a culture where everyone in the company gives little gifts. So you start giving gifts to people and they will pass it on to others. If you want to create a culture where thank you notes are sent out, start sending them out to people who you work with as a way to start showing what it’s like. Then buy them note cards so it’s easy for them to incorporate it into their way of doing business. Find what you want to do, do it for your people, and then let them pass it on to others. That’s the best way to get started on culture.

Q: So I’m hearing you should lead by example. Do this yourself, don’t necessarily just talk about it, but do it and encourage your people.

A: Yes, otherwise people will give up on it. It’s not as easy as it seems. Then, it gets scrapped. If you do it yourself, you’ll feel the pain and pleasure and decide whether you want to continue it.

Q: If you were to coach, what would you coach in?

A: Meditation is effective and I use a process called true mind meditation. You don’t have to sit in a room; you can walk around as you’re meditating. You’re encouraged to listen to music, and the goal is to train your mind to focus despite all the things going on around you. It helps you deal with distractions. When we want to make a sale, it’s natural to think about all the reasons the sale won’t work out, and it’s natural to worry that the guy has heard it all before. Those thoughts are counter-mind thoughts and they distract us. By meditating and focusing on what we truly want and where we’re truly going, we learn that in the moment we can tune the distractions out and focus on what we want. That’s the most powerful thing, and I would love to teach everyone how to properly meditate. We are more active, so sitting in a calm room and meditating won’t work for us. Focus on the person you are – energized, determined, and looking to do something with your life.

Thank you for your time, Andrew. I think everyone should go to Mixergy.com and begin their journey into the minds of entrepreneurs. Thank you for sharing some of what you know. If you need help with sales or marketing for property management companies, please contact us at Fourandhalf. Thank you for listening, and we’ll see you next time.

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