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.
In this episode, I talked to a founder who self funded his startup with $100,000.
He set out with a small team to build the ideal product.
Almost a year later, they blew most of that money and they still didn't have a product in market.
So they knew that they either had to quit or they could pivot.
And what they decided to do was to take one feature from the product that they were building and turn it into a standalone product.
Within a week they had a crappy website up and running and they started charging right away.
Today that startup has an annual run rate of over half a million dollars and is profitable.
In this episode we talk about how my guest pivoted the mistakes he made along the way and, and how doing some counterintuitive things actually helped him to grow the business.
I hope you enjoy it.
All right, today's guest is the co founder and CEO of Cloud Sponge, a product that helps businesses to acquire more users via their email referral forms.
Now, most referral forms ask you to type in your friends email addresses.
With Cloud Sponge, it's possible to give users access to their contacts directly without even leaving your website.
The company was founded in 2010, is self funded and its customers include companies such as Lyft, Yelp and Airbnb.
So today I'd like to welcome Jay Gibb to the show.
Jay, welcome.
Jay Gibb (02:07.480)
Thanks for having me.
Omer (02:09.000)
Now one thing I always like to ask people when they come and join me is what drives them, what motivates them.
So you know, what gets you out of bed every day to do what you do.
Jay Gibb (02:21.020)
Well, today it was this interview.
Omer (02:26.540)
Good answer.
Jay Gibb (02:27.340)
You know what I've actually found I was thinking about that question I knew you were going to ask me.
And for me every day it's a little different.
I don't think there's one thing that is the theme from day to day.
You know, sometimes it might be, you know, yesterday I was really excited about watching some inspect lit replays of our, some changes that we made to our onboarding funnel.
And like I said today I was, I woke up thinking about this interview.
And so for me it's, it's kind of, it changes on a day to day basis.
I don't know if that's the answer you're hoping for, but that's the Truth,
Omer (02:57.940)
That's a great answer.
Is any.
So I kind of explained to the audience a little bit about Cloud Sponge, but it would be great if you could tell the audience a little in your own words what Cloud Sponge is and who your target customers are.
What problem are you trying to solve for them?
Jay Gibb (03:16.180)
Yeah, so you said it.
Well, the easy way to think about it is that we provide tools that let our customers put address books on their websites so that people don't have to flip between tabs and windows to go back and forth finding people's email addresses.
And usually that makes itself useful in referral forms and places where companies, they really want to remove the friction point of people having to either have their friends and family's email addresses memorized or like I said, flipping between tabs and windows.
Our most popular use cases for those kinds of two field populator to populate a two field with email addresses.
But we also have companies like Yelp, for example, that uses us for their friend like Find a Friend feature.
So if you go to Yelp and you go to their Find Friends feature, there's a tool where you can upload your address book, which is the same feature that exists in pretty much every social network.
And they'll show you, they'll match everybody in your address book with everybody who's in their database and kind of make it really easy for you to connect with everybody that you already know who's there.
So that's a use case that we've found for some of our crowdfunding companies and social network companies.
So we're a single point of integration for the world address books.
And you know, it's kind of there's.
Those are the two most popular use cases for that, for that address book connection.
Omer (04:52.670)
Tell me a little bit about kind of like the technology and what you guys are doing.
So I understand from the front end there's either a widget that your customers can use or an API to build their own experience.
And sort of what's happening in the back end, like you guys have basically built this platform which, which handles all the integration with how many contact systems out there?
Jay Gibb (05:19.330)
Yeah, we call them address book providers or contact providers.
And right now I think we've got about 50 and we've got, you know, it's our focus to get them all around the world.
So the big ones that people are all familiar with is Gmail, Yahoo, Outlook.com, or the big ones icloud.
Those are the ones that most of our customers want by default.
But then we've got AOL and a lot of ISP address books and popular address books in Brazil and Germany and Russia and China and different markets that our customers are trying to penetrate.
And so for us, the back end part is really connecting to all those places, normalizing all that data, making it look the same regardless of where it came from, so that our customers don't have to worry about those differences.
Then the core product is the API.
And then on top of that API, we've got the JavaScript widget, which is really for people who want to get started quickly and they want to have a way to display an address book in a web page.
They can install our widget just in a couple minutes to just paste the JavaScript and do a couple small configuration steps to get it going.
The API is really for more special use cases or bigger companies that have large development teams already, very sophisticated groups, or they've got a branding and marketing department that just can't live with the way that our widget looks.
Then they'll invest in building their own UI that just sits on top of our API the same way that our own widget does.
So that's kind of how the stack looks.
Omer (07:10.800)
Where did you get the idea for this product and business?
Jay Gibb (07:17.520)
It was a pivot, actually.
We started off in 2009 building something totally different.
It was a tool that we were calling internally, we were calling cloud copy.
And it was for.
The value proposition was really for people to make a copy of their data that was out there in the cloud, which at the time, many people didn't trust as much as they do today.
And it was a tool that was going to let them make a copy of that data and store it locally somewhere that they could touch.
And so we set aside a budget of $100,000 with our agency and we started building this thing.
And we got probably about $80,000 of the way through it.
And we hadn't gotten anywhere near getting something built that we felt was ready for market.
But one of the things that we had spent a lot of time building and a lot of problems that we weren't anticipating was the contact importing part.
So we had spent, we had spent time looking at these tools like Open Inviter at the time and, and there was a company called Octazen that was later acquired by Facebook and there was Plaxo, had like an address book importing widget.
And so we kind of went through all the things that were out there that were available for this contact importing problem, and nothing was good.
Nothing worked.
We had to.
We basically felt like we had to build something ourselves.
And as we were going down that path and we were solving those problems and we were building it ourselves for this other business that we were trying to build, we noticed that there were lots and lots of other developers asking the same questions we were asking.
We were in Stack Overflow, we were in Quora, we were in Google and Yahoo and Microsoft developer forums trying to solve problems and figure things out.
And we weren't alone.
There were tons of people out there asking the same questions.
When, you know, as the founder, like when I started to see the, that we were sprinting into a brick wall and we were going to run out of money and we hadn't gotten to where we wanted to get, you know, we sort of circled the wagons and looked and said, look guys, like it's clear that we're solving something, this problem that other people have.
So let's put a price tag on this thing and just sell that and forget, sort of just abandon the original idea because we know that we're not going to get there.
But we have, you know, in the journey of developing that, we have identified that there is a strong signal that something that makes this contact importing, contact embedded address problem easier for developers to solve.
We knew that we were going to be able to sell it and we knew how to find the people who would buy it.
So we did exactly that.
We registered a domain name and made a quick website that was pretty ugly and put a price tag on it and started to talk about it with developers in those communities where we already were.
And sure enough, they loved it and they were super happy that somebody was dedicating their professional lives to solving this problem for them.
And so they paid us on day one.
Like we immediately had people that wanted to help us and wanted to pay us and wanted to buy what we had.
So it was a good feeling to have that, that strong signal, you know, right at our, at our moment of weakness.
Omer (10:57.920)
Okay, so, so I just want to be kind of clear, just so I understand this, you, you, you, you'd self funded, you had about $100,000 put into this business.
You were working on this first idea, which was this, this cloud copy product and you got to spending about 80,000 of that and you still didn't have the product in market at this point, is that right?
Jay Gibb (11:26.810)
Right.
Yep.
Omer (11:27.730)
Right.
And the contact importing wasn't a separate product at the time.
It was just a feature for the overall product that you were trying to build.
And that's when you Decided that maybe the demand that we're seeing here and people talking about this, maybe this is the thing that we should focus on.
Jay Gibb (11:49.800)
You got it.
Omer (11:50.760)
You said you put.
You built the website and put a price tag on it.
So what were you doing?
You were just going to places like Quora and, and Stack Overflow and whatever and just telling people like, hey, you just.
You're kind of struggling with this.
We.
We have this product.
You might want to check it out.
Jay Gibb (12:06.520)
Yeah, maybe not.
We weren't quite so shameless about it, but, yeah, effectively, that's what it was, right?
It was, it was a little bit more strategic.
You know, we would have our.
Our company name, our URL in our signatures, and we were helpful.
We would just answer people's questions because we're smart and we were able to answer them.
And then when Cloud Sponge, when our contact importing solution was the answer, like it was the actual legitimate answer to the question, then we would mention it and we would link to it, and then we would do the usual disclaimer that says, hey, by the way, I work for Cloud Sponge, so that we didn't get banned and didn't have people getting upset that we were, like, shamelessly plugging our own product.
But, yeah, that was really it.
It was just being, you know, participating in these forums and answering questions and being helpful.
And, you know, we.
We ended up.
Those are.
Those are still things.
This was.
This was 2010, so this is six years ago.
And those are still links that drive traffic today.
Like those.
Those threads of paid dividends permanently.
Wow.
Yeah.
Omer (13:13.950)
From the point where you started the first product and you started spending the 100k and to the point where you had 80k spent and felt that you were kind of, you know, banging against a brick wall.
How long was that period?
Like, how long were you trying to build that product?
Jay Gibb (13:36.440)
It was about a year, I guess.
Omer (13:37.880)
Okay.
Jay Gibb (13:38.360)
I'm not sure.
Nobody's asked me that question before, so I'm not totally sure, but I want to.
I want to say it was probably about a year.
Omer (13:43.240)
Okay, so about a year.
And then you hit the kind of the aha moment, look, this isn't working.
We need to do something else.
And you decide to pivot, build the new website and start, you know, putting prices up there.
I'm curious how long that time took compared to the year you spent on the first product.
Jay Gibb (14:03.970)
You mean putting up a webpage with
Omer (14:05.210)
a price on it, doing that, as well as making the decision to pivot, like, you decide, I'm going to pivot okay, what are we going to pivot to?
What was that whole kind of period look like?
Were we talking about six months, a few weeks?
Jay Gibb (14:18.690)
Oh, that was a few days.
I think.
I think we kind of got to a point where it was clear to all of us that we didn't have enough money left to finish what it was that we were building.
And so it was really, should we just give up?
Like, should we stop?
Or is there a plan B?
Like, what else can we do here?
Should we go raise more money?
How much do we believe in this idea?
And we just, it was clear because we had spent so much time cracking this contact importing nut that it was something that had value.
So we just decided that, that decision, decision to do that and the, you know, putting up a page and kind of getting, getting that started, that was very fast.
It was maybe a week.
Omer (15:04.960)
How many customers did you initially get and how long did it take you to get those first few customers?
Jay Gibb (15:12.080)
So the first few customers, some of this, you're.
You're asking me to go into a pretty old vault, so I'm, I don't have a perfect memory that far back.
But the, the initial couple customers came immediately where, you know, we were able to like, talk to people that we were already in the same forums as and just ask them, hey, would you buy this?
And they said yes.
So we just put up a website and let them buy it.
I think the first, like, well known brand at the time that got us really excited and made us feel like, like we were onto something was a company called Causes.
Have you heard of Causes before?
Omer (15:49.380)
I haven't.
Jay Gibb (15:50.710)
It's kind of like it was in the fundraising space for.
It was similar to GoFundMe.
This is way before GoFundMe existed, but it was where you could, you know, instead of, instead of getting your friends and family to buy you a birthday gift, you could sort of put on social media that you wanted them to make a donation to, you know, some nonprofit that you preferred or something like that.
And at the time, you know, this is six years ago, they were.
They're a relatively well known brand and I'm not sure what they're up to now.
They're not with us anymore.
But we were real excited to see Causes come online.
And that was fairly early on.
That was within the first month of pivoting.
Omer (16:35.010)
So that's really interesting that almost a year of building a product, not much progress, and then suddenly everything seems to turn around in about a month.
And I think it's kind of easy for people maybe to look at that and say, well, you know, maybe, maybe that that first year was a waste of time and you guys should have gone to that second idea or whatever.
But yeah, I think in many ways it was kind of getting started and spending that first year in terms of trying to solve maybe a different problem that took you onto the path of figuring out what the right problem to solve was.
Right.
Because.
Because I think a lot of the times many of us kind of get stuck in not doing, not taking any action because we're trying to look for the perfect idea instead of just getting started with something.
Jay Gibb (17:29.229)
Yeah, maybe.
I think in this case it was, it was clear that this was a painkiller.
Right?
Like we were, we were in these communities with, with hundreds of developers who were all asking the same questions about.
Questions about Google contacts, API integration or how to do very specific geeky parts of integrating with these different APIs or fixing PHP bugs with open Inviter or getting Octazen installed, or all these different tools that people were trying to use.
We saw this signal, right?
So it was at that point it was really more of just not letting ego get in the way and just basically saying, look, like we had this idea that we really liked, but we didn't do it.
We didn't get there, we didn't make it to the finish line.
During that journey, we learned something.
We identified this problem that exists that we previously didn't even know was a problem.
And so I wouldn't change it for the world.
I mean, we had to, we had to go through that pain to discover that a problem, this problem existed.
Otherwise we just didn't know that it existed beforehand.
It's not like this is something that we knew about and just disqualified, right?
It was like we discovered that it was an opportunity while we were trying to do something completely different.
Omer (18:52.180)
Yeah, yeah, absolutely.
Did you get any pushback from.
Because, because your customers and the people who are solving this are mostly going to be tech guys, they're going to be developers.
Because I think when you, when you initially look at this and say, oh, you know, like, I don't know, doing Gmail integration.
Well, well, Google has their API.
I could kind of go and build something myself.
Why do I have to pay somebody?
Did you get any of that kind of pushback from people?
Jay Gibb (19:17.870)
Yeah, we still do, I guess.
I guess a lot of the pushback is probably silent where, you know, people just, they see that we exist and they say to themselves, well, I could do this myself.
And a few of those people are vocal about it, where they'll come to Cloud Sponge, start a trial, kick the tires and then when we ask them, hey, why didn't you convert?
Like why?
You know, I see that you started a trial, like why did you not become a paying customer of ours?
There's some people will say, well, because I'm, I'm just going to integrate with Gmail by myself.
And that's a valid answer if that's what they want to do.
I think the people that really appreciate Cloud Sponge the most are the ones who don't want to build too much software and don't want to have to maintain those integrations for certainly the ones that want two or more of these integrations, they want Gmail and they want Yahoo and they want Outlook.com and they might want AOL and iCloud and a few more.
That technical effort starts to multiply and it's usually a smarter decision to focus your product effort and your technical time on whatever is your unique selling proposition.
Whatever is the thing that makes you different.
I think it's a pretty easy argument to say that building address book importing is, is a distraction for most companies.
In fact, it's a distraction for all companies except for mine.
Omer (20:49.790)
Yeah, right.
Jay Gibb (20:51.470)
So yeah, there are certainly people that prefer to build things themselves but you know, they're, yeah, they're just, they're not the people that convert.
Omer (21:02.030)
Yeah, any developer type person often looks at a problem and the immediate response is I can build that myself.
And that's something I do as well.
And I'm kind of guilty of that where, you know, if I kind of look at a, there's a product to go and solve a particular problem I have, or I could spend what I think might be a couple of days to kind of build something myself.
I'm like, well, maybe I'll just do that.
Right.
That sounds like it's going to be better.
And from what I understand, that's what you guys did as well with your product, right?
At some point.
Jay Gibb (21:44.390)
Yeah, I mean we're, we're a bunch of engineers.
Right.
Or at least, at least I used to be.
And most of the people at Cloud Sponge, certainly at the point in the timeline that we're talking about right now, are engineers.
And so our, our default, our like instinct in most cases is to add features and issues and build stuff.
And it wasn't until we made some mistakes in doing that and sort of bloating our own software with other things such as our own internal recurring billing logic or our own internal reporting tools or our own internal dashboards and things like that where we started to realize like, wow, like we should really not spend our energy building these things that we could go buy from other companies as SaaS products.
And granted nowadays there are thousands of those companies and products available that didn't exist six years ago.
But you know, nowadays we're as part of our internal priority is really trimming all that fat and deleting massive, massive chunks of code that we've written over the years and replacing them with third party services.
Replacing, like I said right now, like for example, we're going through a project to replace some fairly complex and nuanced recurring billing code with third party product called Chargify.
And so far that's been really cathartic and helpful and it's helped us to realize that, you know, we really shouldn't have built this in the first place.
We should really have done a more.
Been more disciplined about buying before building.
Omer (23:40.900)
What do you think was the cost of, I mean not in financial terms, but what do you think it cost you guys by.
By not using solutions that were already built instead of trying to do most of it yourself?
Jay Gibb (24:02.640)
Yeah, I haven't really tried to quantify that before, so I'll take a stab at it now.
But I would guess like, you know, if, if building something was going to take a developer two weeks to do, that probably came with at least, at least a couple days a month.
Forever.
Right.
Of like maintenance.
Right.
So there's this permanent tax that you're sort of adding to your own velocity once you do that.
And if you do it all the time and you do it for all these things that appear to be just little two week projects or little one week projects or two or three day projects, that each one of those comes with like a tax and there's probably some universal constant that somebody else has calculated that we could look up there.
But there's this maintenance tax that just happens and we've felt the pain of that over and over again.
And so I think when you ask the cost, it's really a.
It's really a.
There's a lot of different ways to calculate it.
One of them is the financial cost, but the other one is what is the opportunity cost, how we could have spent all that time building our unique product, the things that make us unique, the things that bring value to our customers, that instead of doing that we've spent paying this tax, this velocity tax, let's call it.
I'm just going to coin that term on your podcast right now.
Omer (25:33.900)
I like it, I like it.
I want to kind of go back again.
And I know we're kind of, kind of spending time in an area which happened over five, six years ago, but beyond the kind of the outreach you were doing and kind of posting on sites like Quora and sort of Stack Overflow and those kinds of sites, what else did you guys do to get the word out about Cloud Sponge?
Jay Gibb (26:04.540)
So that's a, that's a skill that I'm still learning now.
I'm not an expert at it at all in terms of, you know, the outbound scalable marketing channels, getting better at it.
But back then, you know, the getting into those communities and being helpful was huge for us.
I mean, it brought a lot of, lot of action.
The other thing that one of our sort of, I guess you could call it like a scalable engine was the Powered by Cloud Sponge logo that's displayed on our widget.
So people would go to causes or they would go to Kiva or they would go to one of these big sites and they would see, oh, there's this address book embedded into the website.
Like, that's cool.
How did they do that?
And they would see, Powered by Cloud Sponge.
And so that was a really important distribution channel for us.
And then there's this whole layer of software companies where their products are improved by ours.
So, you know, referral program software and tools like WordPress plugins and Shopify plugins and Magento plugins and different tools that are out there.
There are dozens of them.
They, they integrate with Cloud Sponge as well.
And, and so they end up being a distribution channel for us where, you know, we'll get, we'll get installed on 10,000 or 30, 000 websites all at the same time.
Once we, you know, get one of those distribution channels or one of those companies to integrate with us.
So that ends up being a pretty scalable channel for us as well.
Omer (27:52.830)
So, okay, so you look for somebody who needs that kind of functionality, like kind of Magento type environment.
And the bet is if we kind of build ourselves into that, then that's going to be something we'll be able to reach all their customers in one way or another.
Right.
So how do you, how do you do that kind of, is it kind of like a biz dev deal you have to go and do, or is it just like getting the integration done or like, how does something like that work?
Jay Gibb (28:28.040)
So it's usually, in our case, it's normally been an inbound lead.
So these, these organizations that are, you know, Building something that they're selling to a B2B audience.
They'll I'll, the same way that anybody else does where they're out there searching for address book importer or something like that and they find us organically or they find us on a slot stack overflow thread the same way that most people do.
They'll come to us and then I'll personally like, I look at everybody who all of our leads, I personally lay eyes on all of them and I'll identify them, I'll see.
Oh cool.
This is like another company that you know is selling, you know, a refer a friend tool or a coupon delivery tool or you know, a rewards program platform or something like that.
And I'll reach out and talk to them and let them know that we can, we can establish a partnership together and negotiate terms for sharing traffic and you know, sending customers to each other.
Omer (29:34.650)
Okay.
Okay.
Jay Gibb (29:35.770)
Yeah.
Omer (29:38.730)
Looking back over the last few years is, is there's maybe a mistake that you can think of that you wish if you could kind of go back in time, you would do differently?
Jay Gibb (29:55.450)
So many.
Yes, absolutely.
The one that I think is most counterintuitive that I think your listeners might be surprised by and maybe learn from my mistakes or our mistakes is we made the assumption that reducing friction in the onboarding process was obviously a good idea.
So for example, we would do things like giving people giving our leads license, like a license that they could use install Cloud Sponge into their development environment for free so they could sign up.
The first thing they would get would be a license.
This license is available to you in your local host environment or your like Heroku or your Cloud 9 environment or whatever.
And it would work in that environment.
But then as soon as they deployed to their production environment, they needed to come back and give us a credit card and buy the product.
Right.
And that was the idea behind that.
The reason why we did that was to reduce onboarding friction.
We figured, well, you know, we need these guys to get to their aha moment where they actually see our product inside their product so that they start to fall in love with it and they can share it with their co workers and their bosses and whatever else.
And it, it just, it turned out in hindsight that we do much better and so do our customers when we have gone to a considered sign up, which is where you sort of add friction to that.
You say you don't, you can't use this in your development environment.
You can't get anything from us until you give us a credit card.
Number and start a trial and start that clock ticking.
And really the reason for that, I think, and this is the jury's still out on this, but you know, it's, it's, it forces the person who's signing up to really make sure that they're ready to really make sure that they're going to start a 14 day trial.
They need to sort of be ready to prioritize this on their product roadmap.
They need to make sure that every day for the next 14 days they're like working through the integration and getting this thing done and functioning properly.
And it adds that sense of urgency and that sense of importance to us and it really helps with our conversion rates.
There's really a dramatic difference in terms of the number of people who what you would call an inbound lead.
The conversion rate to paying customer.
When we have switched to a considered sign up where it's a little bit more friction is, it's just night and day, it's dramatically better than when we had a sort of a low friction process.
Omer (32:46.480)
Now I can understand why the conversion rate might be better because as you said, you're getting people through your, your onboarding funnel who are going to be a lot more serious about making the investment.
They know what they're going to have to pay and just, just some of the friction or the hurdles they have to get, get past before they can become, you know, start using your product.
Probably means a lot more of them are going to convert into, you know, ongoing customers.
Whereas I think people who are fans of the, the freemium model, and let's say what you were doing before was kind of, you know, where you let people get up and running in their dev environment was kind of like a freemium model.
Those people I guess would say, well, that's okay, your conversion rates are going to be a lot lower, but you're going to get so many more people coming through that funnel that at the end of it you're going to get more customers.
But it doesn't sound like that was your experience either.
Jay Gibb (33:48.670)
No, it wasn't.
At the end of the day, it ends up being pretty much the top of the funnel stayed the same.
We just converted more people at the bottom of the funnel.
Omer (33:59.700)
I'm curious, how did you figure out to do that?
So you've got this funnel set up and it's converting and you're like, okay, how do we make this better?
But how do you get to the point where we say, let's do the opposite of what we're doing?
Jay Gibb (34:13.620)
Yeah, it's a combination of just sort of flattening where our revenue stopped growing as quickly as it previously was.
And so we're starting to look at everything.
We're starting to figure out, okay, you know, do we need to find new marketing channels?
Do we need to optimize our current onboarding funnel?
Do we need to, you know, optimize our landing pages and get more people to convert into inbound leads?
Like, where, where in this process do we have a lever that we can pull that we haven't pulled before?
And at some point I read a really insightful blog post.
I don't remember who wrote it, but it was a while ago that just kind of gave me the idea, said, well, you know, here's the difference between a quick sign up and a considered sign up.
And it was somebody else who'd had a similar experience where considered signup was just much better for their business.
And again, it was kind of counterintuitive.
And so we put it on the list of experiments to try.
And when we tried it, we had great results from it.
So I think, you know, it's got, for me, it's.
It's got a lot to do with just listening to podcasts like yours and reading blog posts that are sort of, you know, in the, in the category of problems that I'm currently thinking about or trying to solve.
In that case, that's where the inspiration came from.
Omer (35:41.549)
I think that's so interesting because as you said, it's so counter intuitive, but it just goes to show that there's no one way of doing anything and you shouldn't sort of take those for granted.
And you should continuously test and experiment.
And just because something is working for somebody else doesn't mean that it's going to work for your product, your market, or your customers.
Right.
So I love that one.
Tell me a little bit about the size of the team, like how many people do you have right now?
Jay Gibb (36:20.300)
So Cloud Sponge is a product that's managed and operated by my agency, which is called Arizona Bay.
And so I have the luxury of being able to swap in and out resources for the agency as I need to.
So as we have free resources, I can put them to work on Cloud Sponge as Cloud Sponge no longer needs them.
I can put them to work on the, at the age, on the agency, client work and so on.
And so at any given time it fluctuates because of that.
But we do, basically, we operate right now with three dedicated engineers full time.
This is the only thing that those three Guys, think about my CTO and two engineers that work under him and then, you know, me and a marketing person and some sales and, you know, security and operations and some of that.
So, and those are, those are all individuals that work with, with me for my agency.
So it's kind of, it's, it's a bit of a expanding and contracting team that sort of has a core group of four of us.
Omer (37:33.150)
And in terms of revenue, what are you guys doing?
Jay Gibb (37:35.550)
Right now we're at about a half a million dollar run rate.
Omer (37:40.080)
So that's not bad at all considering you've only got three people working on that business.
Jay Gibb (37:47.440)
Yeah, yeah, I mean, we've been, the business itself has been in the black since I think 2011 or so.
Just because we're able to, we have low costs.
I mean, we operate the business with relatively small team and the overhead is relatively low.
And so we're able to, you know, not, not have to worry about raising money and just operate off of our own revenues.
Omer (38:12.810)
So what's, what's, what's next for Cloud Sponge?
Where are you guys headed and what are you kind of most excited about?
When you think about the sort of the next year for the product.
Jay Gibb (38:25.050)
The next year for the product, we'll see our new widget come out.
So our current widget is a little bit dated.
You know, it's got, it's got rounded corners.
Can't have rounded corners anymore.
It's got, it's got little drop shadow and little highlights and stuff.
Everything's got to be flat and material design nowadays.
And so we have, you know, I'm cracking a joke, but you know, it is, it is a little dated.
And so we've built a whole new one that's mobile first and is beautiful on all devices and works in portrait and landscape and everything.
And it's skinnable and so on.
And so we've been working hard on that for a few months and we're looking forward to releasing that in the summer.
And we've got specifications written for a new API and starting to work on mobile SDK to make it so that mobile developers who are building apps rather than just mobile friendly websites can integrate with our API a little bit more easily.
So we've got those kinds of things on the horizon.
And then we're also taking a really close look at the patterns and the use cases and the ways that our customers are using the product and their specific use cases and starting to devise some additional products, additional things that we can build that will, you know, really Help those customers succeed at what it is that they're trying to accomplish and basically just take a little bit more off of their plates and bring a little bit more onto our side of the.
Of the software equation.
Omer (40:09.140)
Okay, cool.
So I think it's interesting that I think we started this conversation talking about the idea of the email referral form and, you know, that kind of being the way to describe your business.
But from the conversations we've had and the way you've been talking about this, I think you guys have a broader vision or a much broader vision for what Cloud Sponge is becoming.
Right?
Jay Gibb (40:33.950)
Yeah.
I mean, we see.
Because we have the luxury of having so many customers and having them be so friendly and helpful with us, we're able to see what it is that they're building on their side to integrate with us.
And through doing that, through having those conversations and being involved, we see patterns.
I mean, we see the customer after customer building the same thing on their side over and over and over again.
And so it gives.
It makes it really clear that there's an opportunity for us to take a little bit more of that software on our side and do more of that and provide more value to customers in different segments.
So what that'll probably do for us is it'll take us from being arguably kind of a generic tool that is like an address book that lives on your website that can be customized and takes us into some more specific products that address the specific use cases that we see people using it for.
Omer (41:31.410)
Great.
All right, it's time for our lightning round.
I'm going to ask you a series of questions and just answer them as quickly as you can.
You ready?
Jay Gibb (41:39.970)
Sure.
Omer (41:40.930)
What's the best piece of business advice that you've ever received?
Jay Gibb (41:47.870)
You know, this is all.
It's going to be kind of a boring answer for you, but it's.
It's a good one.
And that's just start charging for your SaaS product on day one or day zero.
Don't, don't even try to start with a, you know, without charging people.
I think, I think having people give you a credit card number and actually put their money on the line is critically important to you, actually knowing whether or not you have something that can turn into a real business.
Omer (42:20.280)
Yeah, totally.
Because I think that sometimes we're scared that asking for a credit card people might say no.
And if we don't, if we don't charge them initially, then there's kind of, I don't know, you kind of always have this hope that it's going to turn into a successful business.
But I guess the sooner, sooner you get to the rubber, hits the road and you kind of get them to commit, I think the sooner you're going to know how successful your business has the potential to be.
Jay Gibb (42:51.160)
I mean, if they say no, then you get to ask why, but if you never ask them for a credit card number, then they never say no and you never get to ask why.
Omer (42:58.920)
I love that.
All right, what book would you recommend to our audience and why?
Jay Gibb (43:07.010)
The answer to that one probably changes monthly or at least a couple times a year.
The one that I'm getting or I got the most value out of in the last several months, six months or so, is Traction by Gabriel Weinberg, which is for a product guy like me who's sort of just learning.
Learning how to.
How to do marketing.
It was such a critical playbook.
I mean, it's basically broken down into 19 chapters that articulate the 19 marketing channels that Gabriel Weinberg has identified and kind of gives you ideas for how to.
How to evaluate them and experiment with them.
And it was, it was, you know, for me, it just came at a really relevant time.
So maybe that's why I like it so much.
But it's, it's a, it's a really great book.
It should be on everybody's bookshelf, I think.
Omer (43:59.620)
Yeah, I agree.
And Gabriel was a guest on the show back on episode 33 and 34, where we talked about DuckDuckGo, and then we spent one episode just talking about the Traction book.
And I love the way that he's kind of really.
With.
Who's his co author, Justin Mares, I think.
Right.
In terms of just coming up with a really nice framework for people to think about how you just tackle the whole concept of growth.
So I like that a lot, too.
All right.
What's one attribute or characteristic in your mind of a successful entrepreneur?
Jay Gibb (44:37.160)
You know, when I think about the people in my network that are the most successful entrepreneurs, the thing that, the pattern that I see, the thing.
One of the things that I think they all have in common is they're all really good at developing, like, business relationships where everybody wins.
I don't know if there's a word for that.
I don't know if there's a way to describe that in a word.
Maybe.
I mean, a lot of.
I guess the current buzzword is customer success.
Right.
Where you've got.
You've got a situation where everybody who's involved in Cloud Sponge's case, that's Cloud Sponge itself, that's my customer and that's their user.
Where all three of us are winning.
We're all.
It's a win, win, win partnership.
And the presence of Cloud Sponge in that is what makes it, makes it good for everybody.
And that, I would say is the thing that when I, when I look at, you know, my, my co founder and you know, a lot of the people that we've worked with who've succeeded, that's one attribute that is universal in that group.
Every single one of them, they just look for those, they look for those ways to, to create relationships where, where everybody wins.
Omer (45:47.620)
What's your favorite personal productivity tool or habit?
Jay Gibb (45:53.300)
So I don't know.
I don't know if this is a popular one yet.
I guess maybe it's getting to be more and more popular, but.
Email snoozing do you snooze your emails?
Omer (46:02.410)
I do.
I started doing that a few months ago.
Jay Gibb (46:04.650)
Oh man.
I mean, I guess it was pioneered by Mailbox, which is now gone because Dropbox shut it off after they acquired it.
But man, I mean, now it's like anybody who's using Vanilla Gmail, if they switch to Inbox by Google, it's got a snooze feature and sort of, I'm sure lots of other clients.
I'm currently experimenting with Polymail and, and nilus n1 that both have it and really just basically just getting an email and saying, you know what, I'm not going to deal with this until such and such a date, so redeliver it.
And you know, on that date has just, it's basically removed the email processing part of my professional life or reduced it down to a few minutes a day.
It's like, it's just genius.
It's amazing.
I love it.
Yeah.
Omer (46:54.150)
Yeah.
I actually use the Microsoft Outlook app on my iPhone now and to me, it's one of the best email apps that I've tried on the iPhone.
And it's not because I used to work for Microsoft.
Well, I have an iPhone, but yeah.
And it has the same snooze functionality built into that.
And yeah, I love it.
What's a new or crazy business idea you'd love to pursue if you had the extra time?
Jay Gibb (47:21.980)
You know, I'll change that question on you.
I'm not really sure what the business idea is, but I think the problem that I would attach myself to is really climate change and specifically finding a way to get more kids to pursue stem career paths in hopes that they start to contribute to our climate change problem.
I Think it's a big deal that I could, I could bite down on and really, really enjoy.
Omer (47:51.450)
Yeah.
Yeah.
I mean, those are kind of one of the things.
I started reading a blog post series about Elon Musk on.
Wait.
Are you familiar with.
Wait, but why?
Jay Gibb (48:01.290)
Yes.
Omer (48:01.850)
Yeah.
Jay Gibb (48:02.250)
So.
Omer (48:02.730)
So, so Tim is.
I just love his writing style and, and kind of that, that was for me was like when you just start to really kind of go into a little bit depth and sort of figure out what Elon Musk is kind of trying to do for the future of humanity and stuff like that.
Um, these are like some really, really, you know, big problems, but somebody's got to do something about those.
Otherwise, you know, are we screwed?
I don't know.
Jay Gibb (48:29.150)
Let's hope not.
Omer (48:31.070)
All right, what's an interesting or fun fact about you that most people don't know?
Jay Gibb (48:37.550)
I still can't resist a good mosh pit.
Mosh pit.
I grew up in high school.
I grew up going to punk rock shows.
And so I still go, I still love to go.
You know, bands, you know, like no Effects and Bad Religion and Pennywise and bands that, you know, from the early 90s, kind of pop punk bands.
And I'm way too old for it now, but I still, like, I still can't resist getting in there with.
In a good mosh pit.
I love it.
Omer (49:03.450)
Yeah.
Yeah.
I still can't resist trying to break dance sometimes, even though I probably break my neck trying to do these things.
And finally, what is one of your most important passions outside of your work?
Jay Gibb (49:15.290)
Well, right now the only thing I have time for is my kids.
I love them.
And we got, I got two three year old and a one year old and another one on the way.
Omer (49:24.250)
Wow.
Congratulations.
Jay Gibb (49:27.290)
Next month I'm going to have three kids under four.
Omer (49:29.770)
Wow.
Jay Gibb (49:30.650)
So, so we're just, just doing that, you know, doing that if I'm, if I'm not working, it's just full time dad mode and I'm, I'm loving it.
Omer (49:39.460)
Awesome.
Now, if folks want to find out more about cloud sponge, they can go to cloudsponge.com and if they want to get in touch with you, what's the best way for them to do that?
Jay Gibb (49:55.059)
Email, I guess.
But if you go to cloudsponge.com, there's a Slack button.
We have a cloud sponge community.
Slack community.
So that's, that's.
I'm gonna go ahead and plug that right now because I'm trying to get more people using it and I love Slack.
So get in there.
Come into Slack.
It's free to join.
You can chat with me and the rest of the team or just email me@j ayloudsponge.com Cool.
Omer (50:22.560)
Jay thank you.
It's been a pleasure.
Enjoyed the conversation.
Love the story of cloud sponge and particularly how all of this came from a week of a pivot which has turned into a business which is steadily growing and becoming bigger and bigger.
So yeah, thank you for your time.
Thank you for sharing your experience, your insights and I wish you all the best.
Jay Gibb (50:49.600)
Thanks Omer.
Omer (50:50.640)
Cheers.
