Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch, and grow your SaaS business.
This episode is part two of the interview with Shane Melloch of Thrive Themes.
All right, Shane, welcome back.
Guest (00:41.170)
Hey, Omar.
Omer (00:42.210)
Okay, so last time we talked about just kind of what Thrive Themes was and how you were trying to serve an unmet need in the market and how you had come up with the idea for this and, and a lot of the sort of validation that had happened through building your impact.com blog where you were talking about online marketing, building an audience and a mailing list.
And effectively that's how you figured out and sort of validated what the need was.
So I kind of wanted to pick it up from there and say, okay, so you, you, you decided to build three Thrive and you, you kind of talked about having hired developers in the past and with, with sort of mixed levels of success on, on actually having a workable product at the end.
Guest (01:37.630)
Yeah.
Omer (01:38.030)
I'm curious about how you tackled things differently this time given those experiences that you had to to build and launch the right product.
Guest (01:48.350)
Yeah.
Yes.
So one thing we did differently was that we for the first time hired people not on a project basis.
So it wasn't just, okay, I'm hiring you to build this theme and then that's the end of it, which is the typical freelancing, upwork kind of thing, which we did before.
And one of the problems we found with this is there's just not enough buy in from the developer.
Right.
For them, it's just like, okay, let's get this done, let's get this over with and move on to the next project.
And for the kind of quality that we wanted to bring, we really needed more than that.
We needed someone who would really be part of the team, basically.
Right.
And who'd be, who'd have a vested interest in making sure that what they deliver is really good and that we can continue growing as a business.
And of course, this is always a pricing problem.
So at that point, we'd already launched our first.
We'd already launched Thrive Content Builder to our own list.
We'd made some money off of that.
With that money, we could be like, okay, we can hire a few people and worst case scenario, we can pay them for half a year or something before we run out of cash.
And so with that, that was one of the important decisions to really get people on Board with this instead of just doing a project.
Omer (03:11.070)
So the initial launch of Thrive Content Builder, you had hired freelancers to help you build that.
Guest (03:17.060)
That was entirely built by Paul McCarthy, who's my business partner.
Got it.
And who's a developer that was basically built in house.
Got it.
Omer (03:27.900)
Okay.
How did the two of you meet?
Guest (03:31.940)
We met online.
So at the time he was building a membership site and I was doing my information product stuff and he found one of my free courses and really liked it and got in touch and we just kind of started talking and did some small projects together.
And at some point it was pretty clear, you know, that we worked well together and, and yeah, grew from that.
Omer (03:58.900)
And then so he took on the development and you sort of focus more on the marketing side.
Was that the way you guys sort of split things up?
Guest (04:05.860)
Yes, yes, that's how it has to be.
Because I cannot, I cannot develop.
Omer (04:13.650)
You know, a lot of people talk about the difficulties in finding a co founder or particularly a technical co founder and I thought it was interesting the way you said that you guys first decided to work on a few small projects together and it sounds like it was almost a way to sort of figure out, you know, like a relationship.
Like, you know, before we kind of move in and live together, let's double.
Guest (04:44.490)
And that's.
It's funny you say that because we did actually move in and live together when we started, but this is actually, and this is deliberate, this is exactly what we did and exactly for that reason.
Just like we don't hire anyone other than by trial.
Nobody gets to work for us because they have a nice looking cv.
You have to do, you know, you have to go through our trial tasks.
You have to show us how you work and the quality of the work you deliver.
That's the only way you can work for us.
And the same goes for a business partner, you know, times 100.
It is very, very important.
So I know this is a huge challenge and there simply isn't an easy recipe to find a business partner.
And I see this, I'm sure I've been pitched this idea several times by different people of, you know, oh, let's build some kind of like social network for entrepreneurs to find each other and co found stuff together.
This is the worst idea possible because if you remove the friction essentially to getting together and starting a business together, you just make it worse.
There has to be essentially a trial by fire.
Right.
You have to know what this other person is like.
And you know, if you have a social network of entrepreneurs, everybody Just says they're great.
And you kind of look at someone's profile and you go, oh, yeah, this is.
I'm the marketing guy, you're the tech guy.
Let's do this.
That is a recipe for disaster.
So what I would say is, you know, if you're trying to find a co founder, don't expect it to happen overnight.
It's not going to happen quickly.
And I think you have to evaluate two things.
The first thing is you have to evaluate is this person that I'm potentially choosing as my co founder is this someone who has extreme work ethic, who has the capability to work on something sustainably, even when it gets really hard, even after months, even through the difficult times.
Because everybody can work hard in the first few weeks, basically, like in a relationship, the honeymoon period.
Every relationship is great for the first few weeks, right?
So it's the same with a business partnership.
I think in the beginning, everything's exciting, everything's potentially amazing.
But then at some point, you hit the hard times and you have to have someone by your side who can grind through those hard times, ideally without complaining too much.
And that's something you have to evaluate is this person.
You have to find a way to test that.
Right.
The other thing is that you have to ask yourself, are you good enough?
Are you that kind of badass?
Are you good enough that you would want to work with you?
And are you willing to do.
Are you willing to pull your own weight here?
And in fact, if you want to be a founder, you have to pull your own weight and then some.
And I think this is another thing.
I again, I get pitched a lot, as you can imagine.
You know, people go, hey, I have this great business idea.
I want you to get on board with it.
I want us to be partners in this, and so on.
And I'm often like, this is pretty harsh to say, but listen, it's like most people who pitch me something, they don't, if I partnered up with them, that would not be a good deal for me because I know what I can deliver and I've proven it.
And just because you have some brilliant idea and right now you're excited about it, doesn't make it a good deal for me to get on board with this.
So I think for a lot of entrepreneurs, it's also.
I'm also big into personal development, and I certainly wasn't.
I have done a lot of work and I've had to do a lot of work on myself to get to the point now where.
Where I can Take responsibility in a company like Thrive Themes and not be a total nuisance to everyone.
Because that's what I would have been like a few years ago.
And so I think this is the overlooked thing is like, take a close look at yourself.
Take a look at your own work ethic.
Take a look at your ability to basically be a badass, because you need to be a badass if you want to start a company.
This is going to be really hard, okay?
This is going to be really bloody hard.
And you have to be that person who can pull through.
And if you're not that person right now, you got to do some work on yourself.
Omer (09:19.380)
Let's talk about some of those really hard times because so far it sounds like you had the list, the email list, you got the validation in terms of what they wanted.
You and Paul got together and had the first product built and launched and immediately you were able to email your list and start to get sales.
So so far it sounds like a great story and a very effortless kind of way to launch a product.
And obviously it took time because you're talking about launching your blog in 2008 and launching this business in 2013.
So there was like five years at least of work going on and building the audience and stuff.
Guest (10:06.080)
But the reason it sounds so good is because we jumped in, in the, you know, third act.
Omer (10:11.200)
Yeah, but what was.
Was your list the primary driver of you getting your growth?
And I think before we kind of get into that, I just want to give the listeners a sense of the size of Thrive Themes as a business.
And I know you don't disclose specific revenue numbers, but it's fair to say that it's a seven figure business.
And how many customers do you currently have?
Guest (10:42.330)
Something around 30,000.
Omer (10:44.132)
30,000.
And I think you told me earlier that you had about 35 employees.
What I'd like to try and get to is just explore a little bit
Guest (10:55.330)
about
Omer (10:57.460)
from where you are now in that size of that business to back where you were with you and Paul.
Just kind of having launched the first version of Content Builder and then deciding you had enough money to be able to hire some developers and pay them for six to nine months or whatever it was, what did you need to do to get customers and what were some of the hard things along the way?
Guest (11:19.700)
Yeah, so basically at the point where we launched Thrive Themes, we are already well on the gravy train in terms of my entrepreneurial journey.
That's already reaping the rewards from five years of work.
But yeah, you said like you mentioned the list, right?
So the mailing list is definitely important.
Although I think mailing list is really the wrong word to use because it's about the audience, right?
It's about having an audience of people to communicate with that's definitely been, I mean, invaluable.
I have no idea what I'd be doing without the audience and the audience building.
And so, because, yeah, again, this was a huge advantage that we were able to launch the first plugin that we did for Thrive themes to a list of thousands of people who had positive, who basically had a positive association with our names because we had provided them with valuable content over and over again, we had provided them with great products over and over again.
We had provided them with great customer support.
We had proven to them beyond a shadow of a doubt that we cared, that we were committed to creating great stuff.
And that takes years.
That simply takes years to do.
There's no shortcut for that either.
So this is, I mean, you know, in terms of like, oh, what's your growth hack?
Or whatever, I have nothing to share.
This is not a growth hack.
This is, this is the slow and deliberate slog of.
And see, it's also basically the least innovative strategy that you've ever heard of.
It is start, you know, start by giving away something for free, which in my case was like a really simple free report in exchange for people's emails, and then keep giving those people a reason to come back.
Keep writing emails that are worth reading, keep sending out more free stuff that is worth getting, keep communicating with these people and you build the trust, right?
You build a relationship.
And over the years, in my case, I started with information products like I mentioned, and again there, you know, and in fact this is something that I think is also quite relevant.
You know, I definitely had the opportunity at several points in this journey to kind of cash in to basically say, okay, I'm going to jump on some bandwagon here.
I'm going to promote these latest guru launches that were all the rage.
At one point I could have made a lot of money off of that.
I could have made one of these crappy half coaching, half information product and sold it for like $2,000 and did the whole pre launch thing.
And I could have done that and I could have made a lot of money off of that, but I didn't.
I kept paying close attention to what my audience cared about and I kept creating products that I sold at a reasonable price where the thing I always want to create when you buy something from me is that there's basically, I call it positive gap.
So a negative gap is when you buy something for, let's say, $1,000 and you start using it and you go, yeah, I guess this is all right.
So there's a gap, a negative gap between the money that you spent and how good you feel about the value that you're receiving, which is quite common, especially for expensive products.
And for me, and especially in the Internet marketing space, right.
I was making information products about Internet marketing, about online business and so on.
And there it is very common for people to peddle absolute garbage for money just because they can.
And so you have this negative gap.
For me, it's very important that you have a positive gap experience that you buy something for $100 and you go, oh my God, this is worth way more.
That's the experience I want to give.
And that's an experience that I provided for a lot of people over time, you know, with my information products and so on.
And that's, that's where it comes from.
That's where the momentum comes from that we had pretty much from day one with Thrive themes.
Omer (15:46.910)
And so is that the same model that you've continued with Thrive?
Because I see you guys blogging very regularly.
I see you creating these videos where you're the sort of the face of the business and kind of kind of bringing some kind of like a personal touch to it rather than, you know, some newsletter coming out from somebody in the marketing department.
Is that sort of the general kind of marketing strategy that you're continuing to use to grow Thrive?
Guest (16:21.810)
Yeah, absolutely.
I mean, that's still the, you know, the number one thing is that we just, we just want to provide value.
And we want to provide value.
Like that is greater than your cost, right?
That is greater.
If you are a customer or a member, it is greater value you get from our products is greater than the money you spend on them.
And even if you're just a reader, we want to make sure that the time you invest, the value of the time you invest reading our stuff and watching our videos, that the value you get out of them is greater than the value you invest in terms of your time.
Right?
That's extremely important.
And yeah, I think that's fundamentally that's like the long term thing because of course there's lots of marketing stuff you can do for short term increases and we do those as well.
You know, whatever, like your Facebook targeting strategy or whatever is, that's important.
And it gets like, it gets people to the site right now, you have all your conversion stuff on the side, it turns them into customers.
But the long term thing is, is everything I just talked about is like just.
And there's no faking that.
There's absolutely no faking that.
You just.
We actually care, right?
We actually care about making great products.
We have a team of people who are actually committed to creating great software.
We are actually willing to make, you know, to make that compromise where we say, okay, we could pump out more products and sell them and make more money, but we choose to spend more time on polishing them, making them as good as they can be, providing as much value as possible and so on.
We actually make that choice and we make that again and again.
For me, this is just like the long term strategy, right?
In the short term we could do a lot of stuff to make more money next quarter, no doubt.
If a new CEO came in and the goal was, okay, increase profits next quarter, you could throw out a lot of the stuff we do and just make more money, no problem.
But if you take that fictional next quarter CEO and put them in a race against me, I, I lose against them in the short term, next quarter, next year, but in five years I'm still here and that guy isn't.
So that's the basis of how we do things.
Omer (18:47.260)
That wraps up part two of this interview.
In part three or episode 121, Shane and I talk about how he went from a university dropout to the founder of a seven figure software business.
He talks very candidly about his failed business attempts, his mistakes and tough emotional times.
He also offers some great advice and inspiration for aspiring entrepreneurs.
There are some great lessons on building a business and generally on entrepreneurship.
