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.
Today's interview is with Patrick McKenzie.
Patrick is the founder of Calzamia Software.
He's best known for two software products, Bingo Card Creator and Appointment Reminder, both which he's bootstrapped.
Patrick's also a well known blogger and he's joining me today from his home in Tokyo where it's currently 3am Patrick, welcome to the show.
Patrick McKenzie (00:50.610)
Thanks very much for having me.
Omer, how do you go everybody?
Omer (00:54.220)
Now, before we get started, I think you should probably explain why you're doing this interview with me at 3:00am in the morning.
Patrick McKenzie (01:02.300)
While I'm doing it at 3:00am in the morning, mostly the time is no difference why I'm willing to do it at 3am in the morning.
I really, really love talking to smart people about software.
It's my business, it's my job, but it's also my hobby.
So I generally solicit opportunities to do anything I can to talk about this stuff.
It's one of the reasons my website has a standing invitation if anybod is ever out in the Tokyo region.
I would literally like buy coffee just to have an excuse to talk about this.
Otherwise I get crippling social loneliness from being the only software person within a quite a wide radius where I used to live.
And in Tokyo there's more software people, but less who are quote unquote like us, you know, doing their own thing as opposed to working at a big mega corp.
Omer (01:45.960)
So has when you moved into Tokyo, did you get a lot more people taking you up on your offer?
Patrick McKenzie (01:53.200)
Yep.
I've been thinking, prior to moving to Tokyo, I was a little worried because the population is probably two orders of magnitude bigger than Ogaki, which is the small town in Japan I used to live in.
And I thought, wow, if I'm doing a meeting every day I might have to walk it back a little bit.
But it's been heavy but manageable so far.
So knock on wood, I'm going to try to keep doing it.
Omer (02:16.000)
So while we're on the subject of talking to smart people, one of the guests that I had on a while back, and I can't remember which episode it was, was Paras Chopra, the founder and CEO of Wingify, the makers of visual website optimizer.
And Paris told a great story of how he quit his job and he bootstrapped this business and he had a very, very modest goal.
I think at the time he just wanted to be able to generate $1,000 a month from this business to cover the salary he was getting from his previous job.
And to date he's turned that into a seven figure, multimillion dollar business.
And he credited you as being one of the people that were key to helping him in the early days figure out what product to build.
So I think that alone was a great story.
And so tell me a little bit about how you got involved with him and.
Patrick McKenzie (03:24.480)
Well, back in the day, I really love Parasit, one of my favorite entrepreneurs, certainly my favorite software person from India.
He's done an incredibly successful business over the years and it's a product that I really love and is genuinely useful.
Way back in the day when I was, my business was a little smaller than it is right now.
I had been blogging for a while about Bingo Card Creator and blogging about doing AB testing for it.
And Paras dropped me a line one day and he says, hey, I'm a engineer in India.
I'm thinking of doing an analytics software called Wingify.
And you seem to be like the analytics guy, so can I run it by you?
And I said, oh, yeah, sure, but right now is my busy season, October, so can't do it right now.
But yeah, he pings me again two weeks later and he says, okay, if your busy season is over, I still have this thing to run by you.
And he was pleasantly persistent like that for probably about a month until I installed the tracking code on my website and actually tried to put it through its paces.
I came back to him two weeks later and said, all right, I never wanted to discourage any entrepreneur from doing what they wanted to be doing, but I do know a little bit this analytics thing, and I've taken a look at your product and here's my, here's my honest feedback because I think you're, you need to hear it.
This doesn't do anything better than Google Analytics does, and they're already giving that away for free.
So it would be very hard for me to see a path forward for this, for this business right now.
And at the time it did like 15 things.
And he said, well, I'm going to do a 16th thing and then, you know, that feature will be, will be the thing that makes it.
I said, well, rather than being a collection of 16 things that are all, you know, executed at like a C minus, I would really prefer it to be like a business that did one thing at A plus that I could recommend it over Google Analytics for.
It turned out the 16th thing was, which he showed me a week later was Visual Website Optimizer.
And as soon as he said that, I said, as soon as he showed me that, like, within a minute of seeing the interface, I said, you should forget about the other 15 features and just sell this as a standalone product.
And then the same day, I emailed a bunch of my buddies and said, visual Website Optimizer is going to make this chap a millionaire.
And I was right.
Omer (05:44.370)
That is a great story.
Patrick McKenzie (05:46.290)
So I went around the next two months, I banged down every SEO store I knew and said, hey, you've been using Google Website Optimizer to do a B testing.
You and I both know that Google Website Optimizer is a terrible product, and you're only using it because you're free.
I have an invite code to this thing called Visual Website Optimizer.
It will blow your brains out.
No, wait, that's not actually English.
It will impress you very much.
You should.
You should use this now.
And I think I probably gave away 50 accounts of that.
Paid accounts, if I remember right.
I was like, basically.
Basically a sales rep. Because I love the product so much.
Omer (06:19.110)
Yeah, yeah.
And I know Paris really appreciated the help that you gave him.
All right, so we like to kick things off with a success quote to better understand what drives and motivates our guests.
Do you have a favorite success quote?
Patrick McKenzie (06:32.260)
So I went to Adlai E. Stevenson High School, and they have a quote that's on the wall attributed to Stevenson, who's an American politician.
I don't know if he actually said it, but it said, how does it go?
We are what we habitually do.
Excellence, therefore, is not an act, but a habit.
And that sticks with me, particularly as the arc of entrepreneurship lasts many, many, many years.
And.
And there's never a silver bullet like a, you know, I'm going to do one a B test, or I'm going to release one product, or I'm going to have this one sales conversation, and then that's suddenly gonna flip the switch on this business.
It's just, you know, a long, very, you know, enjoyable journey.
But at times it's just a slog, and you gotta, like, wake up on Thursday and do the work, and then wake up on Friday and do the work, then wake up the next week and do the work, and.
And then a year later, you suddenly look back at the last year and, oh, goodness, there's something on the graph, but it's very Rarely the case that there's just one magic bullet decision that fundamentally changes the business.
Omer (07:40.920)
Now, your first product was Bingo Card Creator, which I believe has generated over $300,000 in revenue since you launched.
And I think it was also what helped you to quit your job and start working full time on your software business.
Patrick McKenzie (07:58.510)
Yeah.
Omer (07:59.070)
Are you still working on that product today?
Patrick McKenzie (08:02.270)
So Bingo Card Creator is pretty firmly end of life at the moment.
The product still exists, people can buy, might sell $1,000 over the next two days thanks to Valentine's Day.
But the only work that gets done is by my virtual assistant in the Philippines who answers tier one technical support questions.
If there's something she can't handle, I, you know, it gets escalated to me and I handle it.
But very little gets through her these days.
So I am focusing for the moment on Appointment Reminder, which is my second software product.
Omer (08:35.580)
Okay, so let's, let's talk a little bit about that.
Can you give your, can you give the listeners a better understanding of exactly what Appointment Reminder is and who are the target customers that you're going after here?
Patrick McKenzie (08:50.770)
Sure.
So Appointment Reminder does automated phone calls, SMS messages and emails to remind clients of the appointments that they have with professional services businesses.
The question is, what's a professional service business?
Basically it's someone who they have client, they have a defined schedule, and when things don't happen according to that schedule, with regards to meeting with their appoint their clients, the business suffers substantial economic damage.
So when I was thinking of Appointment Reminder back in the day, I thought, oh, I can sell this to massage therapists and to hair salons.
And it turns out that massage therapists and hair salons, they have appointment books and many of them have an appointment system, meaning, you know, they ask their clients to make an appointment in advance of dropping in.
But if a client fails to show up for the appointment and they're a little annoyed, but they just, you know, take out their cell phone, play angry birds for 15 minutes, a walk in comes in, and really no harm done.
But many other businesses that have appointment books, like say, trades businesses, an H VAC contractor, somebody who, you know, repairs furnaces for a living, they have catastrophic, catastrophic events happen to them when somebody misses an appointment.
For example, if an H Vac contractor gets locked out of someone's apartment, sorry, locked out of someone's home for repairing their furnace, that typically means that three people just spent 30 minutes in a van to drive out to someone's house.
They got locked out.
They then drive back to the business.
So the business Owner loses three hours worth of wages at a professional rate.
Plus they often lose the sale of that furnace repair because when your furnace is broken, you need a fixed pdq.
And if the appointment doesn't happen, even if it's the homeowner's fault, the homeowner just, you know, dials somebody else in the phone book and gets them there right away.
So that can often be between a, you know, on the low end, four or five hundred dollars of damage to the business up into the, you know, two, $3,000 range.
And there's, believe it or not, clients that have, you know, even more riding on a single appointment.
Omer (10:58.670)
So that's a really good lesson on finding a really painful problem that people have.
And the difference between the hairdresser you described who, you know, if, if an appointment client doesn't turn up, it's not the end of the world.
Whereas for somebody else, it could be a bleeding neck kind of problem.
And so how did you go about figuring that out?
Patrick McKenzie (11:36.310)
Not one single bullet kind of thing actually launched Appointment Reminder, thinking that it would be mostly targeting the low end of the market.
I thought my, you know, the biggest thing that my software was doing was making it at this.
So there exists other solutions that do substantially similar things, and they typically start at $1,000 per month and are launched pretty much solely into the medical industry.
The medical industry is the lion's share of businesses which are prepared to pay $1,000 plus a month for this.
I thought, okay, I'm going to make it radically cheaper.
My core customer will be paying about $30 a month.
And then that opens it up to everybody who has an appointment book.
And so massage therapists and hair salons will be able to use this.
And some of them did.
But a couple months after launching, I was like looking at my, you know, looking at the recent account signups and, you know, just humming a few bars.
It's like, bugs be gone, Exterminator, blah, blah, blah, carpentry services, you know, New England heating and ventilation, some other extermination firm, yada yada, yada.
And I just picked up the phone to one of the, one of the customers and I said, hey, it's Patrick.
I founded the company that you use for appointment reminding stuff.
I was wondering if I could just talk to the business owner for a minute and, and I said, hey, Bob, can you clarify something for me?
Recently I've discovered a lot of exterminators using Appointment Reminder.
And I don't quite understand why.
Why do you use appointment Reminder?
And he Said, oh, well, he tells me the story about, well, if I get locked out of somebody's house, that means that I spent an hour in a van with two other guys who smell bad in a van of toxic chemicals.
And then I go to the house, get locked out and make no money and then come back and he's like, and that happens all the time in the trades businesses.
Like the trades businesses.
That is like, that's the like magic thread that connects all these customers that I'm seeing.
So trades makes up about 25% of our book of business right now.
Medical is about 25%.
Professional services like lawyers, accountants are about another 25%.
And the remaining 25% is a grab bag of, you know, hair salons, massage therapists, tutors, random folks.
Omer (13:50.810)
How long did it take you to build that first version of the product?
Patrick McKenzie (13:56.490)
So let's see.
I quit have very exact answers for this.
I quit my day job on April 1.
I spent two weeks building a prototype version and would show that around to people in Chicago and tell you that story in a second.
And then I basically spent six months, just burned out from my day job, so didn't do anything.
And then I spent six weeks of hard charging to get the version 1.0 out the door to the state where it could actually take money.
So total of 8 weeks to launch appointment reminder.
I guess the, the story about Chicago is interesting.
I marked up a two page demo and took it on an iPad around downtown Chicago.
So I didn't know whether there was like a market for appointment reminder.
So I had this idea, okay, it's going to be massage therapists and hair salons.
I can't really, you know, cold call them from Japan.
But as long as I'm going back to Chicago anyhow to see my family, I'll just put a bit of money in my pocket from the ATM and walk around the very nice section of the city.
And I just walked into every hair salon and every massage therapist that I saw and said, hey, can I book a, you know, can I just do a walk in for a 30 minute shoulder massage?
Okay, we can do that.
All right, so in lieu of the 30 minute shoulder massage, can I just talk about massage therapy for 30 minutes because I'm interested in the industry, still happy to pay you.
And I did that for 15 people and had, you know, like a dozen conversations about how does appointment, how does the appointment system work here?
Do you use a computer?
Do you have a computer on the premises?
Do you, you know, do you have.
No shows?
Are you vexed about your no shows.
Do you give people phone calls to remind them about their upcoming appointment?
Who does that at the office?
You know what doesn't work about that thing for you?
Blah, blah, blah, blah, blah, blah, blah, blah.
Okay, so let me level with you.
I'm a software guy and I have this thing on my iPad I'd like to show you.
Can I ask you to take out your cell phone for a second?
And then I would just type their cell phone number into this faked appointment screen on this two page demo.
Like page one was typing your cell phone number and page two was, it showed your name here.
Literally your name here was scheduled for an appointment five minutes after the, you know, whatever the current time was.
And then their cell phone would ring and a young lady college student who was willing to record something on Fiverr for $5 said, this is your automated appointment reminder.
Your appointment with Patrick is at five minutes from now.
My computer would read, to confirm your appointment, press one.
And then I'd say, okay, you can press one on your cell phone now.
And then as soon as they press one on their cell phone, my iPad would flash, confirm the appointment.
And I said, now, if you had canceled the appointment, we would have sent you an email on our SMS right away.
And then you could reschedule that slot and not lose the revenue for it.
And people were so mesmerized by the whole like, wow, a computer is talking to me, that's awesome kind of thing that I would just plow right into.
So this doesn't exist yet, but it will in six months.
Would you be interested in using it when it exists?
And then if they said yes, I just got their email address and then I promptly lost all the email addresses a few months later.
But I had, you know, enough proof points after a day of shoe leather over downtown Chicago that I thought, okay, there, there is certainly a market for this.
And unfortunately, because, you know, my.
What's the word?
Statistical distribution, my, like, selection strategy for who I was talking to was guaranteed to get me only hair stylists and massage therapists.
That I was thinking, like, okay, appointment reminder is going to be for hair salons and massage therapists for like the next six months as I was building it, which turned out to blow up in my face, but still glad I built it.
Omer (17:47.150)
Okay, so I want to talk about the part about blowing up in your face.
But before we do that, I think this is a great lesson for people listening out there.
I mean, you know, we can all get caught up in this situation.
Of I want to build this product.
I need to go and talk to people.
I don't know how to reach them.
And not everybody is as accessible as, you know, just walking down the street and walking into their business.
But in this case, that was possible.
And, you know, I assume you ended up spending, what, a couple of hundred bucks, Few hundred bucks on this?
Patrick McKenzie (18:30.480)
You'd be surprised.
So I had budgeted $400 for the day, and only one person out of the 15 I talked to would actually take money for it.
The others were just happy to have a tea with someone who would.
Who was listening to them and cared what they had to say.
Omer (18:46.560)
Wow.
So you spent almost nothing.
You got to talk to 15 potential customers and got a ton of data and feedback in one day.
Right.
So I think we all get caught up in those excuses, and I think this is a great story that people should kind of remember and whatever business you're in, figure out how you could do something similar.
Thank you for sharing that.
Patrick McKenzie (19:16.020)
Okay.
Oh, thanks much.
By the way, guys, I'm an introverts introvert.
I used to run a World of Warcraft raid guild is how geeky I am.
This is totally something you could do.
Even if you don't feel like, you know, a big go out and get them tiger sales guy.
It's.
You can.
You can do this for like a morning.
It's not that hard.
Omer (19:35.030)
Yeah.
I think that, you know, I. I'm a pretty introverted guy as well, and I hate the idea of just kind of going up to strangers and trying to talk to them.
But one thing I found is the.
The fear that you get thinking about talking to people is a lot worse than actually going and talking to them.
Right.
So it's almost like you have to just push yourself to do that first one, and then things tend to get a little bit easier after that.
Patrick McKenzie (20:03.520)
Yep.
And particularly for this kind of stuff, it's not a sales conversation.
It's just, you want to talk to someone about themselves.
People love talking about themselves and will do so at any excuse or provocation.
So.
So you're giving a lot of people exactly what they want.
So it's, you know, hey, you're a massage therapist.
That's very interesting.
I'm interested in massage, too.
Why don't you tell me a little bit about it?
And then you just gently nudge the conversation in the direction you needed to go in.
But, like, it was hard getting out of some of the offices.
Omer (20:38.300)
All right.
So you mentioned something about blowing up in your face, and I guess you know, even though this was a great example of how to get out there and talk to customers, I guess eventually you realize they didn't really care that much about this problem.
Patrick McKenzie (20:52.440)
Right.
So what I eventually learned over the, over the coming year or so is that the, how to put it, many massage therapists, hair salons, etc.
Are not exactly run in a, in a very business oriented manner like their businesses, but they're not run super professionally.
There's no one whose job it is to, you know, take a look at the metrics for the business and make them better.
And so if you're trying to sell something on this will take the metrics for your business and make it better.
That's sort of difficult.
Also, this is a thing that I did not think to ask about, you know, hair, hair salons, but useful information if you're trying to sell to them.
A lot of the people who are in a hair salon do not work for the hair salon.
They have a business that is just them as an independent contractor and they rent a chair from the hair salon for the day.
And the hair salon often has some like, protocol by which they, you know, parcel out, walk ins and like parcel out booked appointments to the various hair hairstylists on like a round robin basis.
So it's like literally no skin off their nose if somebody doesn't come in or they come in on time or not.
Just like, oh, well, you know, I'll get the next walk in that comes in anyhow, or I won't based on whatever my position in the round robin is.
So they just don't care.
And not caring about the core value proposition makes it rather difficult to sell things.
Omer (22:25.670)
Do you think you could have done anything differently when you were talking to these hairdressers to figure that out sooner?
Patrick McKenzie (22:33.510)
I like, so I had my rough list of things that I wanted to.
Things that I wanted to ask them about.
And it was largely things that I thought I needed to ask rather than the things that I actually needed to ask.
What probably would have served me pretty well is leaning on like one person.
Like, I don't happen to know a lot, hair stylist off the top of my head, other than, well, the lady who cuts my hair.
But, you know, find one person within like 6 degrees of social separation from me and just ask to shadow her for a day and then I would have figured that out like really freaking quick.
Omer (23:11.650)
That's great.
Patrick McKenzie (23:12.290)
You know, minor missed opportunity.
Omer (23:15.170)
All right.
Now, one thing I know about you with the appointment reminder is that for some Time.
You weren't really very excited about this business.
Patrick McKenzie (23:27.090)
Yep.
Omer (23:27.890)
Why is that?
Patrick McKenzie (23:29.010)
This is my single biggest challenge for Appointment Reminder.
So I think we're mutually friends with Peldy from Balsamiq.
Great guy, very talented software entrepreneur.
Omer (23:37.960)
He is.
Patrick McKenzie (23:39.240)
I was talking to him about Appointment Reminder a few weeks before it launched at a conference.
And I was saying, this is going to be great.
It's going to use Twilio integration.
I'm going to be able to charge customers X and Y and Z.
It's going to decrease their.
No, sure.
Rates, going to be fantastic.
He says, patrick, Patrick, Patrick, stop for a second.
Is what you want to spend the next five years of your life on optimizing the scheduling at dentist offices?
I said, no, of course not.
I don't care about scheduling at dentist offices, but this is a really great business.
He's like, stop now.
You're clearly not passionate for this.
Do something you love.
And I did not listen to his advice.
That was a mistake.
So a lot, like, for four years running now, I've declared that, okay, this is finally going to be the year that Appointment Reminder is going to be my number one thing.
I'm going to pursue it to the, you know, it's going to be like my number one business priority.
I'm going to, you know, do great things on the marketing side, make new features, get in front of more customers, finally get the growth that this business clearly has, you know, hiding within it somewhere.
And for four years running, it's been like anything else can distract me from Appointment Reminder.
Because honestly, at the end of the day, like, I love my customers.
Don't get me wrong, they're the reason my family can afford to live in this apartment.
But I don't, like, love, love, you know, keeping appointment books for dentist offices.
Like, that's not, you know, doesn't feel like the reason I'm on this earth.
Not something I'm passionate about.
Like, I'm passionate about, you know, talking to smart people about software, for example.
And so there's been a lot of things that needed to happen for Appointment Reminder, which happened literally years after they needed to happen.
Just because, like, it's like, oh, man, it's going to be a slog for two weeks.
I think I'll go play League of Legends.
And I had some.
I had some better excuses there, too.
Like, I, you know, in the interim, I met my wife, married her, had a daughter.
So, you know, all those are totally legitimate reasons to not be working, you know, slammed out style.
But I did a lot of work over the intervening four years too.
It was just for, you know, things that were not a point reminder like alphabetized, alphabetized my book collection.
I played League of Legends.
I think I wrote probably literally more than a million words on Hacker News.
And then you know, absolutely anything would like bump the work that had to happen off the stack just because it was like, oh God, I don't want to, I don't want to be hyper compliant.
That's going to suck.
Btw, guys, hypa.
Hipaa I can never pronounce it.
Would probably be able to pronounce it if I cared.
HIPAA compliance not nearly as hard as you think it's going to be.
You just like block off two weeks on the schedule and boom, you're done.
And it took me like three years to figure out, you know, blocking off two weeks on the schedule and then adding a notification about that to my website.
That's crazy.
So yeah, that's my, probably my number one historical thing that's kept appointment reminder from being what it could be.
Omer (26:43.110)
So why did you keep going with it?
I mean, I guess a lot of people would have not only got distracted, they would have probably forgotten about it.
Patrick McKenzie (26:50.470)
So can't forget about it because as long as you have at least one paying customer, you're like committed to them.
Also appointment reminder is very business critical.
We might talk about that in a little bit.
So like if it goes down in the middle of the night, that's catastrophic for somebody.
Theoretically speaking it's catastrophic for me.
But this would actually damage people's businesses.
They rely on it, on these reminders getting out at the right times.
So I had to put in a continuous effort on the engineering side of things.
And that made was in that weird twilight where I wasn't putting in the work that it needed to grow.
But I also couldn't ignore it.
And one of the reasons that it was easy to backburner for the longest time was like if you've ever heard the expression long slow SaaS ramp of death, which was by the.
Gail Goodman did this presentation about constant contact and basically we have this impression from reading the Media that successful SaaS businesses have a growth curve that looks like a hockey stick.
But most businesses don't get the hockey stick.
What they instead get is the eponymous long slow SaaS ramp of death where your MRR grows very, very slowly and linearly over time until you start to figure things out.
So you know, a year and a half into the business after I've poured in, I don't Know how many hours and significant amounts of brain split and whatnot.
It was making like fifteen hundred dollars a month of MRR or something.
And at the time I was doing consulting and a two week consulting engagement was worth $60,000.
And so, you know, I get the check from a consulting engagement.
I'm a little exhausted, but very happy with how it worked out.
It was, you know, a very intellectually stimulating exercise for me.
And I've got a check for 60 grand in my hand, which is more than I made in two years at my old day job and was feeling fantastic.
It's like, great.
What do I do for the next two weeks?
I can either work on appointment reminder a little bit and increase the monthly recurring revenue by $100, or I could play League of Leg and League of Legends happened.
I got pretty good at that game, but did not grind up on the business nearly as well.
Omer (29:01.960)
Now you mentioned that appointment reminder really is mission critical for many of your customers.
What kind of challenges did you face with that over the last few years?
Patrick McKenzie (29:17.800)
Sure.
Let me tell you the anecdote of the single worst day I've ever had in business.
And both from the perspective of this is funny that we can laugh about it three years later.
And also, you know, if this is as bad as life gets, life isn't all that bad.
Although it felt like it at the time, I was moving apartments.
And so because I was silly when moving apartments, my cell phone managed to get packed up in one of the boxes.
And my cell phone gets all the monitoring alerts for appointment reminder for things like, you know, the servers are down or the queue workers are down the queue workers are the part of the system that actually sends out the appointment reminders.
So they have to be up.
And stupidly, I decided right before, you know, packing my cell phone up for the apartment move, I think I'm gonna, you know, try to get a little work done today.
I'll just add one little like a check for an error case in my Q worker class.
That check for an error case made the cue workers unable to boot, but only after they went down once.
So they went down randomly.
Later in the evening, after I was ensconced in my new apartment and the computer immediately started complaining to my cell phone, which was off and in a box.
Omer (30:32.390)
Wow.
Patrick McKenzie (30:33.030)
And so several hours later, I just woke up with just an unaccountable feeling of unnie is like, I wonder if I'm forgetting something.
Maybe I'll pull out my Kindle here and check my email.
And my email has Exploded from people wondering what the heck happened to their appointment reminders today.
I'm like, oh no, oh no.
And I'm starting to put together what series of events could possibly have happened.
And like, oh God, it must be that the cue workers are down.
And, and so I maneuver from my Kindle to whatever the magic page I need to reset the cue workers and I reset them and I check to see that the queues are up.
And they're up now, like, okay, great, I'm done.
I go to sleep.
I spend the next day partly unpacking, but I don't have my laptop out.
Then I check my email and my email was bad the day before, but it was now incredibly bad.
Because what I had not realized when I hit like the Qworker restart after they'd been down for eight hours was every five minutes.
During that eight hour interval, my computer said, have I called Kathy Smith yet?
Oh, I haven't.
Okay, add a call to Kathy Smith on the queue.
Omer (31:58.450)
Oh my gosh.
Patrick McKenzie (32:00.210)
So everyone who was supposed to get a phone call from appointment reminder got 12 times 8 is like 96 phone calls all at once.
And typical residential phone doesn't really handle 96 simultaneous phone calls happening that well.
They just like stack up and wait.
So you can imagine my customers, customers phones are ringing off the hook and every time they hang up, I don't want any hang up, they get another phone call instantaneously to the point where, so this happened to a few dozen people.
They had to like, you know, take their phone out of the wall to get it to stop ringing.
So wow.
I find out about this because after the email has started in America, you know, workday starts in America and people start coming into their appointments and tearing a new one to their like doctors and whatnot.
And so their doctors start, you know, writing me emails and I get the emails again on my, on my phone that can't really do much at 3am Japan time.
And I don't have Internet in my new apartment yet.
So I pack up my laptop and a space heater and walk.
Oh, by the way, in the town I was living in at the time, there were no taxis that operated at 3am so the only place I knew that had Internet working at 3am was my old apartment.
So which didn't have heat and it was raining and in the middle of winter.
And so I was carrying my laptop in one hand and a space heater in the other, walking across town for 45 minutes while feeling like the most terrible failure of an entrepreneur in the world crying my eyes out.
I get to my old apartment, plug in the space heater, plug in the laptop, and I just lost it like I had.
Because I knew what I had to do.
I had to call up 60 people or, you know, whatever the number was and apologize for that to them for, you know, ringing their phone off the wall the other day and say, no, it wasn't Dr. Smith's fault.
I'm the CEO of the company that, that made the 60 phone calls the other day.
I'm the only person that was at fault here.
I'm really sorry.
If there's any way I can make it up to you, please tell me and do that call 60 times in succession.
And I got done with about two of them.
Got chewed out a little bit, lost again, had to call my father because I was, I just could not continue.
He gave me a nice little pep talk and then I made another, you know, 40 calls and then called it an evening.
And I am the only person who remembers that day, aside from maybe people who heard about it.
We only ended up losing two customer accounts.
One came back after they were satisfied for the way I dealt with it.
Their patients came in the next time and said, hey, you know, figured out what happened with that phone call, saying it was Patrick like miskeyed something.
But he seems to be a really stand up champ, you know, totally no harm done.
Omer (35:04.390)
Wow.
Patrick McKenzie (35:05.190)
So was like if I showed you my revenue graph right now, you couldn't tell what day it happened.
Even if I showed you my phone graph right now, you couldn't tell what day it happens because we process, you know, we process more phone calls every morning at like 7:32am than that entire day of blow up did.
I'm glad it blew up early in the life of the business and not late in the life of the business because if we, if we did 60 phone calls for every person we call on an average Monday these days, that would be.
Oh God, a lot of phone calls.
Twilio would have a blockbuster quarter.
Omer (35:39.420)
That, that is a great story and it says a lot about you actually going and calling all those people up.
Let's talk about the business today and what 2015 looks like now.
Even though you became a father recently, Right.
Your daughter was born when daughter was
Patrick McKenzie (36:03.400)
born back in October.
Omer (36:04.720)
Congratulations.
Patrick McKenzie (36:06.320)
Thanks very much.
Omer (36:09.100)
In one, in one of your blog posts, you said that the birth of your daughter was the turning point for you in how you thought about an appointment reminder.
So tell me about that.
Yeah.
Patrick McKenzie (36:22.980)
Yep.
So like in the run up to the Birth of my daughter.
I was thinking, okay, you know, I have appointment reminder is not where I want it to be.
I. I want to both have it, like, numerically in a place where I'm happy with it and where it can support my family without me having to, you know, go out and do the consulting rainmaking dance once every year or without having to do additional products.
And at the same time, I also need to get some of this off my plate because appointment reminder being rather mission critical and sales in it only happening when I, you know, pushed the sales through myself, was just.
It was not an unsustainable workload, but it was an unsustainable workload if you put it on top of being a new father.
So I thought, okay, I've got to, you know, make the.
Make the changes in the business that's necessary to make this sustainable both for myself and for the business.
And so I thought, okay, I've been, you know, doing the software business basically by myself for the last eight years.
The closest thing I have to an employee is a single virtual assistant who works with me from the Philippines for, you know, probably less than an hour or two a week.
All right, I need to have someone help on appointment reminder and particularly the sales side of things.
And I need to get appointment reminder in a position where someone can actually execute on the sales.
So how am I going to do that?
I put in my thinking cap and figured out, okay, what am I, uh.
Oh, who.
Omer (38:02.050)
Who is calling you at this time of the night?
Patrick McKenzie (38:04.890)
That is a good question.
It might be somebody.
Oh, it's the.
So I have given to the fire department in my hometown before, and they circulate my.
My number to all the other, what do you call them, semi charitable organizations in the hometown.
You get on one person's mailing list and they give it to everybody else anyhow, neither here nor there.
It is not the appointment reminder emergency line, otherwise you we'd be cutting this one a little short.
That, by the way, that is an actual thing.
It used to have the.
The ringtone.
It's called the Wagner thing.
Ride of Valkyries.
I swear, if I hear that, If I hear that tune now, I have like, post traumatic stress disorder.
Had to hear her there.
So sales.
So I'm really good at automating things.
I'm not, you know, a pick up the phone and have a really, like, chest bumping.
You should really buy this today.
And if you buy it by the end of the quarter, it'll be 25% less, blah, blah, blah, kind of Sales guy personality.
So what works for me is, you know, being very connected to customers, exercising my engineering smarts in terms of like having cron jobs do a little bit of sales, tying things directly into how the application works, but not so much on the like actual calling.
So it's like, okay, I'm going to have somebody do the actual calling and I'm going to have a CRM so that we can, you know, be on the same page for that.
And then I'll have deep integration between the CRM and appointment reminder proper so they get all the information they need to do their jobs.
And the from the customer's perspective, it seems like a seamless experience between using the app, having a, having a person on the phone with them who knows exactly what they're going through and what the next steps are and having features available for the sales rep person doing customer onboarding to be able to onboard customers in like a minimally painful fashion.
And so I built about half of that before my daughter was born and my daughter showed up a little bit early, so pushed the pause button on development for another two months and then got back to work, banged out a lot of it.
And so sales efforts started in earnest back maybe in like early January.
And right now I'm you know, looking back on the last month of it and starting to tweak knobs on.
Okay, this went well.
This perhaps a little less well.
Talking with my sales rep on what she needs to do her job better and then getting that added to the business.
Omer (40:48.800)
How much revenue are you doing at
Patrick McKenzie (40:50.000)
the moment with appointment reminder we just hit 7k mrr.
So annualized and you add in well.
So I've got a few enterprise accounts.
The enterprise accounts are a little annoying because they're NDA'd.
Let's say an enterprise account can be anywhere from like you know, single digit thousands a year to theoretically speaking we could probably like service an account that paid 100,000 a year but in practice I've never actually signed one for 100,000.
I think represent number of the largest enterprise count I've ever signed was 75000 for a multi year contract.
Omer (41:27.560)
So are you, are you doing over six figures with this business when you include all of that?
Patrick McKenzie (41:32.440)
Yes, six figures, let's say that.
Omer (41:34.760)
And, and what is your so from the 7K you're doing with the MRR right now, what's your goal for 2015?
Patrick McKenzie (41:40.520)
So I'm trying to shoot for the end of quarter two.
I want it to be up to 15k which is a Little.
It's on the aggressive side, but I think doable not.
We have somebody who's actually doing sales work every day rather than just me passively responding to emails.
So in the doing the short term SaaS cash flow deficit thing, where this happens in a lot of SaaS businesses, but since the commission operated, sorry, commission earning salesforce earns let's say three months or four months of the revenue from a customer upfront as of, you know, the day that they sign up or, or like 30 days later.
But then you, you actually like physically earn that four months of revenue over the next four months.
Right.
So if, if somebody increases MRR by $1,000 in January, then that means I owe them whatever their base pay is.
Plus and let's say three and a half months times a thousand is 3,500.
So you can, you know, do the math of that versus 7k.
That cuts it very close to the bone.
But you know, six months from now, then the magic of calculus takes over and the business is grossing a lot more than it would have been without the sales rep.
So in that kind of like, it's a weird place for a bootstrapper to be, like I'm doing this totally out of, you know, my own revenue slash, my own pocket rather than doing the traditional thing and you know, taking, okay, I have a working sales process, a product which hundreds of customers use.
I have non trivial revenues and demonstrated capability to earn a $75,000 check with it.
Okay, can you write me a check for $500,000 so I can hire five sales reps?
But it's a, you know, fun challenge.
Omer (43:32.900)
Yeah.
Okay, Patrick, it's now time for our lightning round.
I'm going to ask you a series of questions and I'd like you to answer them as quickly as you can.
Are you ready?
Patrick McKenzie (43:41.760)
Sure thing.
Omer (43:42.720)
All right, what's the best piece of business advice that you ever received?
Patrick McKenzie (43:48.720)
Oh man, it's too late in the evening for me to do lightning.
Best piece of business advice I ever received.
Focus, focus, focus.
So I've run a product portfolio for the last couple of years.
It turns out probably not optimal.
If I were doing it over again, I would try to have products which were more closely clumped together in terms of who they served.
Also be more clumped against my interest rather than like all over the map.
Omer (44:11.010)
What book would you recommend to our audience and why?
Patrick McKenzie (44:15.090)
So it takes a little bit of tweaking for bootstrapped entrepreneurs, but read Predictable Revenue.
It's about how to do an outbound Sales operation.
But there's a lot of stuff which is useful for inbound sales as well.
And it's sort of the bible at a lot of larger SaaS companies for a reason.
It's about four times longer than it needs to be after you feel like it's repeating itself.
It is.
You can stop reading it then.
But that like the one quarter of the book that is repeated four times is freaking fantastic.
Omer (44:44.360)
What's one attribute or characteristic in your mind of a successful entrepreneur
Patrick McKenzie (44:50.440)
starting the.
The biggest difference from like the people I look at is my professional peers and the folks who you know, come up to me and you know, talk to me on like a once a year basis but never have a business.
Is that the, you know, all the successful entrepreneurs were willing to like to use the dwarf fortress metaphor.
Yeah, I'm a geek.
Strike the earth.
Like actually, you know, get out there, get in the market, get something in the hands of customers and start iterating on it.
Omer (45:19.430)
What's your favorite personal productivity tool or habit?
Patrick McKenzie (45:24.390)
Personal productivity tool.
I really love Trello for the to do lists and for like giving me that little dopamine burst that okay, stuff is happening in the business clearly because like pixels are moving from the left side of the screen to the right side of my screen.
Boom.
Habit wise, I check email only twice a day.
I check it in the morning and then I check it once before I clock out for the day.
Whether that's clocking out to go to bed or clocking out to just, you know, have an evening with my family.
If you leave your email clients giving you desktop notifications all day long, it just, you know, drops you out of flow state too often.
Omer (45:57.220)
If you had to start over tomorrow, what type of business market or problem would you want to go and tackle?
Patrick McKenzie (46:05.620)
So I'm a software guy at heart but rather than doing a SaaS business where the with like the traditional SaaS price points, you know, $29 to like 250 or $500 a month, I would probably be looking at something like a SaaS business on the low end that's closer to SaaS plus productized consulting on the high end where it's basically a wrapper for at start you but eventually some other experts delivering the service.
Great example of this is bench, which is basically like a software wrapper around bookkeepers.
The thing that I've been thinking of doing as my next gig, which probably won't happen, so feel free to steal.
This is like SaaS pricing pages as a service because I love SaaS so much.
I know a lot about software, love talking to software people.
I would be like, okay, at the low end, it'll just be, you know, a hostable page that will allow you to create, you know, really nice pricing pages and a B, test them against each other towards the middle end.
Like I will be giving you advice about exactly what you should put on your pricing page.
And at the high end, you give me back access to your backend database so I can create the plans.
And I will be your company's chief revenue officer and that's going to run you $3,000 or $5,000 a month.
And the reason I would do it that way is it takes an awful lot of time to hit day job equivalent salaries if you're building that up 30 bucks per customer.
But it doesn't take an awful lot of time if you just got to go to three or four people you've worked with successfully in the past and say, hey, buy this 3K package for me.
It'll be worth your while.
So you would have like a built in base of revenue which is day job competitive as of a few weeks into running the business and then you can build from there with both that to fall back on and that to reinvest into the business rather than having to go on the long slow SaaS ramp of dev.
Omer (47:54.670)
What's an interesting or fun fact about you that most people don't know?
Patrick McKenzie (48:03.120)
Interesting fun fact about me that most people don't know?
Blinking.
So I play League of Legends.
My favorite character is Ad Jungle Evelyn.
If any of you guys get that reference.
High five.
My name is Palasan League.
Drop me an invite anytime.
Although I play a little less these days.
More family man than a gamer.
Omer (48:28.520)
All right.
And finally, what is one of your most important passions outside of your work?
Patrick McKenzie (48:34.840)
I really think this gets too little attention in our community by a lot of people.
So I always try to mention it.
I'm very, very, very serious about being like a husband and father first and entrepreneur like 32nd as compared to those two.
And I think that's true of a lot of the entrepreneurs that I most admire.
When I look around I see, you know, there's an impression if you read the magazines or read the Internet that the, the core of like the energy of entrepreneurship is 24 year olds who are killing themselves and have not enough time to even take somebody out on a date.
But when I look at the folks who are around me, spiritually speaking, it's folks with, you know, happy marriages, folks who are utterly devoted to their children.
And I want to just emphasize that A that's totally doable.
There's nothing about this line of work that says you have to sell your soul to get into it.
And B, it's, you know, it's important.
Like at the end of the day, 40 years from now, I'm not really going to care what the MRR for appointment reminder was.
As of, you know, Q2 2015, I'm going to care about, you know, my daughter's baby pictures and whether I've been a good father by her and a good husband by my wife.
So, you know, try to optimize for that in the long run.
Omer (49:48.600)
Awesome.
Great answers.
Patrick, I want to thank you for joining me today and sharing your experiences, insights, and thank you for letting us get to know you a little better personally as well.
Now, if folks want to find out more about Appointment Reminder or they want to read your blog, what's the best way for them to do that?
Patrick McKenzie (50:06.840)
Sure.
If you want to see Appointment Reminder, it's@appointment reminder.org or just Google Appointment Reminder.
By the way, buy an.
Org domain name for 895 instead of paying $30,000 for the dot com name like the broker wanted works equally as well.
If you want to email me, my Email address is PatrickAlzumius K A L Z U M E U S.com Also my blog at www.calzumius.com There's I don't blog quite so frequently anymore, but there's a it asks for email address at the top of the screen.
I send about one email a month out to my email list about making and selling soft and it's some of my best work.
I'm really, really happy with the way those essays turn out, so I'd recommend if this was interesting to you get on that email list.
Also, new announcements coming down the pike in like a month or so.
So get on out while the getting's good.
Omer (51:00.140)
All right.
Awesome.
Patrick, thanks again for joining me today.
I really appreciate you doing this, especially in the middle of your night and I wish you continued success.
Patrick McKenzie (51:08.460)
Yeah, thanks very much Omer.
I also wish you continued success.
If there's any ever anything I can do for any of you guys that would help you out with this.
I've only achieved my little modest slice of slice of the successful business because people have been very generous with their time with me.
So if there's ever anything I can do, I want to help you guys out as well.
Drop me a line.
Omer (51:26.540)
That's great.
Thank you.
Cheers.
