David Vogelpohl (00:04)
Hello everyone and welcome to Growth Stage by FastSpring where we talk about how digital product companies can increase the value of their business. I’m your host David Vogelpohl. I support the digital product community through my role at FastSpring and I love to bring the best of the community to you here on Growth Stage. In this episode, we’re going to be talking about how to scale playable and interactive ad strategies and joining us is someone who knows quite a bit about that topic.

welcoming the CEO of Quicksave Elina Arponen. Elina, welcome to Growth Stage.

Elina Arponen (00:39)
Thank you, David. Thank you. It’s great to be here.

David Vogelpohl (00:42)
I’m so excited to have you to talk about this topic. And I know you were just kind of nerding out about this a little bit there at PocketGamer Connect in Helsinki with someone else who’s joining us here, Chip Thurston. Chip, you want to say hi? Chip’s head of gaming here at FastSpring.

Chip Thurston (00:58)
Yeah, hey David. Thank you. Hi Elina Happy to be here chatting with you today. I’m the as David mentioned, I’m the head of gaming here at fast spring really focused on helping our customers market monetize directed consumer. But before past spring I was at scope Lee for a few years and there I worked pretty closely with playable and interactive ads myself. So I hope I have some interesting thoughts to share here too.

David Vogelpohl (01:21)
Well, it’s such a cool topic and I think such an opportunity. And I think there’s a lot of folks out there who are thinking, like, how can I leverage playable and interactive ads in a scalable and really an effective way? And that’s what I’m really looking forward to talking about with both of you today. So for those listening and watching, really what we’re going to cover here are Elina’s thoughts on why playable interactive ads are so compelling to begin with. What makes them hard to produce?

how creative teams can accelerate the production of those ads and other insights into why WebGL is ⁓ revolutionizing ad production, publisher websites, web stores, and beyond. So it’s a bunch of topics here, but really focused on the interactive playable ad strategy. So really excited to kind of dig in here. Now, Elina, I’ve asked this question of Chip, so I’m not going to ask it of him this time, but I’m going to ask it of you as I ask many of our guests.

What was the first game or in game item that you bought with your own money? Not like a, you know, holiday gift or birthday gift, but like you took money that you had and spent money on a game. What was that game?

Elina Arponen (02:31)
This is actually a great question, although I’m going to dodge it a little bit because I don’t remember my own first purchase, I remember very vividly when I was talking to a person who had made their first purchase, because that was the first purchase that I ever heard anyone do. I was at Digital Chocolate and one of our colleagues had made a purchase. I think it was Zynga’s Mafia Wars game in Facebook. She had bought this virtual sword there.

And it was a lunch break and she comes in like, hey, I bought this weapon in this game. And everyone’s like, what, like shocked or confused or excited? And it was because it was a new thing. It was like the very beginning, like the very first games that introduced the in-game purchases. And so it became like this big rumor, like, did you hear, she actually made a purchase already? And like, have you done it? And then I guess we all started from, you know, soon after did our own purchases. But somehow that, because we were already in the industry, we were game developers.

And then it was like a massive thing to happen that someone had made a purchase. So that I remember very vividly. I think my own game sometime after. Yeah. Yeah.

David Vogelpohl (03:35)
Oh, that’s an interesting moment. I hadn’t really thought about when the first time I was exposed to in-game purchases was, you know, you just kind of shifted from like this premium game model to now all of a sudden, you know, in-app purchases are available. But I hadn’t thought about like the moment I might’ve discovered that. That’s super interesting.

What about you Chip? I’m just curious, do you remember the first in app? Your answer was the you’d spent a bunch of quarters on like some sort of like X-Men game and the arcade or something. But what about in app purchases? Do you remember the first time that you were exposed to that?

Chip Thurston (04:10)
You know the first place my mind goes with that is when they debuted Horse Armor as an additional purchase option in one of the Elder Scrolls games and there was this uproar about like, what? doesn’t even do anything! Why would people buy this cosmetic item?

They’re just trying to get more money out of their players. this was before, know, purchases obviously became such a common feature of games as they are today. But it’s funny looking back on that now and how that’s just so in a dime compared to anything that we see in gaming today. But I think that was the first moment I was like, there can be purchases within the game in addition to purchasing the game itself.

David Vogelpohl (04:48)
Yeah, I do remember my kids back in the day coming like, I want to go buy this skin or whatever. And I’m like, why would you pay money for design? And this is in a point in my career where I was really involved with like e-commerce and web store themes. And I’m like, wait a minute, I’m charging for designs on this front and they want to go pay for designs on that front. I felt a little disingenuous, but it’s so interesting how the world has changed. Of course I’ve spent plenty of my money on in game items since then. All right. Well,

Elina, next question is for you. ⁓ I kind of teed up Quicksave a little bit before we got started, but could you tell me about Quicksave and what you do there and what your role is at Quicksave?

Elina Arponen (05:29)
Yeah, yeah. So I’m one of the founders. We have three founding members in the company who’ve all been ⁓ in the gaming industry for quite a long time, like 20 plus years now. But right now what we are focused on is the tool. So what we have is the QS app tool. It’s a tool to do interactive ads without coding. So it’s kind of like a Photoshop for interactive content, you could say. And now what we’ve done lately is also we brought AI into it. So you can also prompt

for the interactive content. If you are not fully satisfied with what the AI did, you can still open it up in the editor and you can still manually perfect what you building, whether it’s an interactive ad or whether it’s something else. But now we are fully focused on this technology on how to bring interactive ads to be more accessible.

David Vogelpohl (06:21)
Yeah, it’s such an interesting point. And prior to tools like QS app, how would people create interactive ads? Is this like a hand coded thing? Help me understand that.

Elina Arponen (06:32)
Yeah, I mean, it is often a hand-coded thing. mean, when we talk about interactive content, is HTML5 or WebGL. I mean, technically it’s WebGL, but some people talk about HTML5, so either way. ⁓ And that is a technology that is available everywhere, like in your mobile, in your TV, in your car, a desktop. I mean, it’s available for the end user, but the actual creation of the WebGL content is often coding.

For interactive ads specifically, there are some tools that also offer kind of template-based solutions. So if the template has the interactive part that you are looking for, then that might be enough. But usually it’s coding. And even the kind of AI tools like Claude or ChatGPT or maybe Lovable they don’t work as well because of the ⁓ kind of formats that are required for interactive ads. Like you need to be specific format, specific size. So if you don’t do some massive coding project,

Even if it’s automated, it may not work in the end result.

David Vogelpohl (07:34)
Yeah, it’s kind of interesting, right? Because with AI, with a few prompts, you can potentially make these interactive experiences. And I kind of like how you’re merging in the AI aspect of that with the ability to, it sounds like, edit it and manipulate it. Because like, just producing AI slop is, I’m guessing, not good enough. You still need that kind of informed human hand. Is that why you’re merging the two together?

Elina Arponen (08:01)
Yeah, well, that’s one reason, but also ⁓ how the tool for us works is that it’s actually producing data. ⁓ So it’s not even doing code, which is like a data format for the interactive ads. And so now what we’ve done is we’ve the AI to use the same, build the same data format so that it kind of keeps the structure, it uses the same validators for the content that we have. And it’s kind of more structured and it’s easy to…

to do iterations and variations of it as well. It doesn’t get out of hand with that because you can modify certain components of yeah, mean, actually working with the AI has been a really fun and actually really fast process because something that we discovered while working with the AI and the tool is like if the AI doesn’t do something correctly, like it’s using some features or filter or something, like a shader incorrectly,

what it boils down to is that probably the inline help in the tool was missing something, like it wasn’t clear. So actually training the AI is pretty much the same as improving your tools documentation now. So which is good for the human user as well, you have better help texts and then the AI, know, the humans don’t always read all that, but the AI does. And then the AI can use that information quite efficiently.

And I do think we’re going to get actually quite good results, especially if you have your game assets and you give that as a starting point. And so the AI can be a massive help, but it’s definitely coming strong. And I don’t think there will be any tools left soon that don’t have a solid AI kind of assistance as well.

David Vogelpohl (09:41)
That makes a lot of sense. Sure. There’s a lot of opportunity there for you and other other platforms like like Quicksave . So let me kind of zoom out for a minute here though, a little bit. And I’m just curious, like why bother with things like playable and interactive ads? Like why not just have a static ad that links to an interactive landing page for my sake of example?

Elina Arponen (10:05)
Yeah, well, I can start, but I think she probably has a lot of info on this as well. I mean, it is pretty well researched that playable ads or interactive ads, work like three times better than video. So it goes for ⁓ the conversion, the retention, how memorable the content is. And it’s quite intuitive because if you get the person kind of interacting with the ad, it helps. You’re actually clicking or tapping the content, not just watching it passively.

Chip Thurston (10:31)
Yeah,

I agree with that. That’s well said. And I would say also it’s a few things about basically meeting players where they are. You’re giving them a native experience to whatever platform it is that they’re on, where they’re doing something and then they encounter this playable ad. They don’t need to go to a third party, like a landing page, to go engage with whatever it is they’re doing.

⁓ You’re giving them obviously an engaging experience. That’s something that’s a bit more than a traditional ad, so the playable nature of it is appealing. And the third part that I always thought of from the game development side is like, so much in game development, we talk about removing friction, right? Whether it’s friction for a new player and getting them into the game easily and installing the game, whether it’s friction through the UA process and the clicks it takes to get from a UA ad to the install to playing the game.

whether it’s friction in the purchase funnel and how you serve and offer in the game and get players through checkout and then back into the game. there’s all these ways we look at friction. Of course, we look at it in the direct-to-consumer space and getting players from the game to a direct-to-consumer purchase platform and then back into the game. But I think it extends to these playable ads as well. It’s really saying, is, you’re doing whatever it is you’re doing and you will experience this playable ad and it is right there.

you’re removing any friction from that process to get players that experience. And then that extends into the install and then playing the game and everything else. So I think it has a really nice role in aligning so much with the strategy of game development too.

Elina Arponen (12:08)
It’s true that you kind of give a piece of the fun, the experience already there in the ad so that you can get the kind of taste of it. ⁓ And although you were kind of comparing it to like landing pages, so I would say like on the websites and web stores, there should be more engaging content as well. That’s kind of another talking point then as well.

David Vogelpohl (12:32)
Yeah, I like that idea of meet the player where they’re at, removing friction. ⁓ I also was interested to hear you, Elina, talk about giving the player kind of a taste. ⁓ Are you do you think most of the people, publishers leveraging Quicksave to make playable ads, are they making like the WebGL, the playable ad version of the game like easier or in some way more enticing than they might experience in the full game? Kind of like how

Some games will make kind of those introductory levels super easy to kind of get you like hooked on playing the game. Is that a common strategy? You see publishers when they make these playable ads with Quicksave Elina.

Elina Arponen (13:14)
Yeah, well, I’d say that you might want to make it easy in the sense that the player needs to, or the person needs to understand the kind of rules of the game on what’s happening here. So playable ad is only like 15, 30 seconds snippet. But in that time, you should still give them a sense of like, what this game is about, how does it function?

And ideally like a little bit of sense of progress, like some kind of a-ha moment that, I achieved something and that kind of is a hook. And it might be that in the game, that kind of a-ha comes a little bit later than in the first 30 seconds, but it might not. It depends on the game and how fast it comes. So sometimes in the ad you might speed it up a little bit, but it definitely needs to be truthful to the game. So you don’t kind of do things that are not in the game.

David Vogelpohl (14:08)
player spending like a good amount of time. Like I walked up to my daughter the other day and she’d been messing around on this iPad for a little bit. like, what are you doing? And she goes, I’m playing an ad. And I was like, okay. but if she had been playing it for a while, like her people are these playable ads. You want to like engage with them for like a long period of time.

Chip Thurston (14:24)
Yeah,

think ⁓ strategically it can be the case where it really depends on how you build your ad. You could build a really closed loop playable ad and say like you step one, step two, step three, and then that’s it. And there’s nothing further to do or you could make it. So it is just this kind of endlessly engaging experience. It depends on what the goal is and the strategy of the game using that playable ad. But I think you’re keying in on a really important point here, David, which is ⁓ what makes a good

playable ad is sometimes different from what makes a good game, right, in terms of the gameplay. And so you do need to think about how you represent that. Sometimes it does need to be made easier or something where you streamline the process a little bit such that you can engage players through that playable ad, which is a much more bite-sized form of content, and then get them into the game where it’s this much more long tail, much more…

engaging over a longer period of time and experience. But Elina, what are your thoughts on the endless experience versus having a more closed loop system there?

Elina Arponen (15:31)
Yeah, no, I think I agree. It depends on a little bit on the game. And ⁓ I would actually, ⁓ with your particular game, who doing the ads, like test it out, like do iterations. Like in a true kind of performance marketing manner, you should have multiple, ⁓ always like ⁓ creatives in the testing. So if you are producing like, I don’t know, hundreds of images, hundreds of videos, why not have…

similarly a lot of playable ads to test that. you could also, I would kind of try different lengths if the gameplay seems to be some such that it kind of lends itself to either option. It’s more often short than long that I’ve discovered, but yeah, there are the long options as well.

David Vogelpohl (16:17)
Yeah, and I like your point about testing and making sure you’re leveraging strategies that work best for you, your game and your players. So let’s get back to like producing these ads. I often describe WebGL as like it’s the new flash. Basically, maybe that’s a bad way to frame it. But I’m just curious, like if you could do a double click, Elina, unlike

Why are the ads so hard to produce? mean, maybe you could like vibe code something, but like in general producing a good ad, why is that so hard to do ⁓ currently?

Elina Arponen (16:52)
I guess it’s to do with the process. If you are coding it, if it’s quite manual to produce the ad, like make a game snippet in WebGL, ⁓ then your iteration speed is also ⁓ slower. We want to bring the most value, like increasing the iteration speed, which means that you can also create more of the variations. And then you can…

actually do this performance marketing where you have a lot of options to test out. If it takes many weeks to do the ad and if it’s very costly, then you’re less likely to have multiple copies and so forth.

David Vogelpohl (17:37)
If I’m a UA specialist and I’m trying to get new players into my game and I have an idea for a new ad unit and it’s playable and I have developers and designers that are helping me create these WebGL interactive playable ads and I kind of give the idea to them, they go off, take a week or so to make the ad and then I can deploy it. This sounds like

what you’re describing is like this process can even just a couple of weeks can be way too slow and you’re not able to iterate and test different variations quickly. You’re kind of sitting around and like waiting on the backlog to get resolved. So your idea can be made a reality. ⁓ it sounds like what you’re saying is like when you’re manually creating them, relying heavily on designers and developers, it can be slow to produce.

and reduce the number of variations that you can test. Does that sound about right?

Elina Arponen (18:39)
Yeah, yeah. So with ⁓ like a good tool and a faster process, even if the first ad, let’s say the first ad, takes hours or even like, let’s say days to make the first one. But then if you are able to kind of iterate and make variations quickly, that can be a huge, benefit as well. And the wipe coding has been mentioned a few times, but that is kind of difficult with the, you cannot have… ⁓

But obviously, needs to be very error-free. It needs to be quite small packets that you are delivering to the ad network. So there are all these kind of ⁓ restrictions on the output, technically how the output needs to be, especially if you are doing the interactive ad for these ad networks. All right.

David Vogelpohl (19:25)
It sounds like what you’re saying is that when I create these ads or when my team creates them, if it’s this manual process, of course it can slow me down. But you also kind of pointed out that maybe if I’m using templates or reusing and iterating on assets, this might be one way where I can speed up the process. I could also, of course, use a platform like QS app by Quicksave .

QS app usable by non-technical or least non-developers? Like as a marketer, can I go in and create these ads?

Elina Arponen (19:57)
Yeah, that’s the aim of it. So it’s being developed for artists and designers to be used by them. It’s actually ⁓ coming out from our ⁓ game development ⁓ editor originally and then we’ve repackaged it. So it’s an editor that’s been built over actually many years to be usable by non-technical people. And now with AI, ⁓ it is ⁓ obviously becoming even easier to use.

because you can get that AI help. ⁓ Right now though, we also can help a team to get started and maybe even make the first ad and so forth. So if you are not looking to use the tool, but you just for now want to get the ad and we can help with that too. ⁓ But yeah, mean, this is the goal on making it so fast that it’s anyone’s…

⁓ Anyone can do it and it’s really accessible. Right now it is the most effective ad format, but it’s still not used by everyone. It’s kind of out of reach for smaller companies, for the public. That’s how I’ve ⁓ kind of discovered.

David Vogelpohl (21:09)
that’s an interesting point. So it’s not just like I’m a UA or whatever marketer inside a publisher and I’m stuck waiting on developers. So I might use something like QS app to free myself from the developers backlog jail, but it’s also for smaller publishers who just don’t even have the resources to facilitate that. It sounds like by providing this type of service, it allows you to open up the possibility of interactive playable ads to more folks.

That sounds really helpful. then you said this is how kind of Quicksave helps achieve this with QS app. sounds like you’re also like working with them to create their first ads. Is that correct?

Elina Arponen (21:51)
Yeah, we can also work on the ads and help the team to kind of get started or even like, yeah, just be the users of the tool either way. Yeah.

David Vogelpohl (22:05)
Awesome. Now Chip, at your time at Scopely and before that, I guess at SciPlay or whatever, ⁓ when you created or had interactive playable ads that you were leveraging for the games you were working on, ⁓ were these hand coded? mean, were you waiting in line for the developers to make the ads for you?

Chip Thurston (22:26)
Yeah, it was cumbersome. I would say we used a third party agency. When we would do that, we would send them the brief and here’s what we’re looking for from the playable ad, get that back. Effective UA requires iteration, right? So then we would have back and forth. And I think if you ask why do playable ads take so long, I would have to say like, I’m part of the problem here because whenever I would get that ad, would…

really poke holes in it and say, okay, we need to change this part, let’s change that part. I was working on a game ⁓ with ⁓ IP-based, very famous characters. So that meant these characters had to be represented effectively in line with that IP. Not only that, after I would go through my rounds of feedback and iteration, which to your point would take weeks of back and forth, we then have to go to the licensor.

say, okay, licensor, do you approve this creative? And they might say, this character needs to be doing that instead of this, right? So then we take that back to the agency. And so you just have all these feedback loops. So yeah, it would take a long time. And it was really an uphill battle for us to leverage playable ads, as opposed to more traditional static or video ads, where just the cycle was so much quicker. And so that’s where I kind of wish I would have known about Quicksave back then, because that would have streamlined so much of our processes.

Elina Arponen (23:46)
This is pretty new. I don’t think this tool existed with us back then. ⁓ At least for us like this has ⁓ become available this year only. ⁓ Actually since August. So it’s a pretty new thing.

David Vogelpohl (24:05)
So the value then it sounds like for you Chip is like there’s always going to be this back and forth, right? You’re always going to poke holes and whatever the thing is, the licensors are always going to have their point of view. And so by reducing some of the technical complexity, it can help just draft, you just drastically across the board, shorten the cycles, but you’re still going to have the cycles, but by enabling your creative teams to produce more of this content.

versus having to have developers or outsource much of it seems like it could be incredibly valuable.

Chip Thurston (24:39)
Yeah, yeah, absolutely. I would say the extension of that is also giving me more shots on goal, right? Like I’m able to crank out a lot more volume of playable ads because we are lessening those feedback cycles, right? So we’ll still have the iterations, we’ll have the cycles, but as a result, therefore I can crank out more playable ads and then I can optimize better. And that was the part that always fell short for me trying to leverage playable ads was I had this very mature

a static and video ad section of my user acquisition strategy. Then I playable ads where I was confident in the theory behind it and everything we talked about about meeting players where they are and the engaging experience you give them. But it takes time. It takes time to find the right creative, what resonates with your potential players, what works in what forums.

That takes a lot of iteration and cycles of running different types of ads. And so I think just the volume is a critical piece, but at the end of the day, being able to get more volume is a function of being able to do that more quickly, like you can with a Quicksave platform.

David Vogelpohl (25:47)
Yeah, Elina pointed this out as well, like the idea of like number of iterations and variations and the ability to produce more of them. And I think it’s kind of interesting because I often think of like the world of advertising has shifted away from kind of like the madman era where ⁓ advertising people go in a room and drink a bunch of scotch and smoke cigarettes and come out with the perfect idea.

to where now we can iterate and test and understand, then I still feel like in gaming writ large, you kind of have this moment of like, I’m going to spend a lot of time somewhere and come back with like the perfect thing. And I have less ability to iterate, especially if I’m like doing a big release, like it’s out there and people are playing it and being exposed to it. And it’s affecting my reputation in the long run. But it sounds like with these ads, have more abilities to iterate and play around.

⁓ Is that a fair way to look at it?

Chip Thurston (26:44)
Yeah, I think so. Because you don’t… I shouldn’t say you. I was surprised a lot of the time with what UA would tend to break through. I would say, okay, I have this ad, I’m very confident in, I love this concept. And then we have this other one that maybe it’s a spin-off of that or it’s taking some weird feature in our game and really putting the spotlight on that. And we’ll try and add around it, why not? And then we try that and for whatever reason it outperforms the other creative.

So we’ll go lean into that, right? But that’s so much of what UA strategy is about is just throwing so many different things against the wall, seeing what sticks and then running with that and iterating on that. And that’s the way to finding a very impactful UA strategy.

David Vogelpohl (27:29)
Excellent. All right, Elina, the last question is for you. ⁓ So we’ve talked about WebGL a lot in the context of playable and interactive ads, but what else can WebGL be used for?

Elina Arponen (27:43)
Yeah, this is great question. mean, as I said, the, yeah, we’ve been doing like the playable ads, like since, since August, but we’ve actually done other WebGL content since, since earlier. So if you have like a, well, any website really, but you have a web shop, you have a web store, you probably want to have the visitors that come there to be engaged and stay on the site longer.

So now that lot of mobile game companies are also building their kind of site stores, ⁓ I would see that they should be a little bit more of a destination so that the players going to that store would find it engaging, exciting, to be more like a continuation of the game experience as well. So you can definitely have WebGL content. mean, normal website builders.

⁓ don’t use WebGL, they use HTML. You can do a lot of nice things. You can have videos and can have sparkly images, but to use WebGL content, ⁓ you can make it more engaging and you can have a continuation of the stories or the games even there. And ⁓ I think that would be quite beneficial in the end. So definitely I see that using WebGL content.

elsewhere as well. Of course, you can build whole web apps, just embedding ⁓ smaller things, of like in the sense that it’s a playable ad is embedded inside an app where it’s being advertised. You can embed WebGL content on a website.

David Vogelpohl (29:16)
I like this idea of like a playable web store. Maybe that’s a topic for another time. I had not thought about the implications of things like that, but it is really interesting. And you know, when we optimize web experiences in general, I like to think of it as like the balance between suffering and joy, the joy of new experiences and interactive content and the suffering of page load time.

And meaning that the more we add, the slower the page will load. But there’s such an opportunity here, I feel with such an engaged user base of players who are interested in playing and interacting and bringing that to life in unique and interesting ways on the web. Now my brain is like twisting with ideas around this. I’m going to have to go play this on WebVue.

Elina Arponen (30:05)
long times can really be kind of worked around with, it doesn’t have to become an issue. ⁓

David Vogelpohl (30:10)
Yeah, maybe we’ll do a different episode on page load time with WebGL and otherwise. But this was super interesting. Thank you so much for joining us today, Elina.

Elina Arponen (30:20)
Thank you. Thank you for having me. mean, it was a great topic, conversation. And yeah, good times. Yeah.

David Vogelpohl (30:28)
And Chip, thanks for joining again as well.

Chip Thurston (30:32)
Always a pleasure.

David Vogelpohl (30:33)
Awesome. And thanks everyone else for watching and listening today. If you’d like to learn more about what Elina is up to, you can visit quicksave.fi. Thanks for joining the Growth Stage podcast. Again, I’m your host, David Vogelpohl I support the digital product community as part of my role at FastSpring . And I love to bring the best of the community to you here on Growth Stage.

David Vogelpohl (00:04)
Hello, everyone. Welcome to Growth Stage by FastSpring, where we discuss how digital product companies can increase the value of their businesses. I’m your host, David Vogelpohl. I support the digital product community as part of my role here at FastSpring, and I love to bring the best of the community to you here on Growth Stage. In this episode, we’re going to be talking about the dramatic rise of the web in gaming and how top publishers and studios

are building innovative web teams. We’re gonna be having that conversation with someone who knows a decent amount about that. I’d like to welcome Caleb Brown from X-Team. Caleb, welcome to Growth Stage.

Caleb Brown (00:44)
Hey, thanks so much for having me, David. Happy to be here.

David Vogelpohl (00:47)
Awesome. Well, I know you all over at X-Team do quite a bit of work in this area, so I’m really curious to get your insights here. And for those listening and watching what we’re going to be talking about today, ⁓ X-Team and the company Caleb works with is a provider of technology talent as a service for top game publishers. But we’re going to be covering his thoughts around the drivers behind the rise of web experiences in gaming.

Caleb Brown (00:55)
Yeah.

David Vogelpohl (01:13)
the key challenges of building an innovative web team from scratch, which I know a lot of publishers are doing these days, and how top game publishers and studios are approaching building out their own teams. I think these are some topics that are really top of mind for a lot of folks, and I’m really interested to get Caleb’s perspective, and I hope you are too. Caleb, to kick us off, and I ask this question very often when we talk about gaming of guests.

But what was the first video game where you spent your own money on? Not like your parents’ know, holiday gift or anything like that, but like your money. What was the first game?

Caleb Brown (01:46)
Right.

It’s a really good question. ⁓ So my birthday is just a few weeks after Christmas. So was very common when I was young to kind of pull that money together, the Christmas money, the birthday money. ⁓ I do have a memory of buying, it was Donkey Kong Country one or two.

for the Super Nintendo, probably would have been eight or nine or somewhere around there. I recall holding it in the car, my mom driving us home, and just wanting to play it there, wishing it was a mobile game, because I was holding the package and so excited to get home and play it on Super Nintendo. So I’m pretty sure that was birthday and Christmas money. So I think that answers your question, unless you mean…

money from my first paycheck or something like that.

David Vogelpohl (02:46)
No, no, no.

Yeah, birthday and Christmas money makes a lot of sense. It’s funny, we were just talking about Donkey Kong Country over here. I can’t remember the context. But yeah, that’s such an iconic game. It was so cool, especially in the Super Nintendo era when you were getting more into these 3D games, which was really compelling at the time. But I can empathize with you there on that one.

Caleb Brown (02:53)
yeah?

So iconic, yeah.

Totally.

And lives on. It’s cool to see the franchise live on. It’s doing incredibly well on the Switch and things like that.

David Vogelpohl (03:13)
Yeah, exactly, exactly. Nice franchise and IP there. But let’s move on and talk about the topic at hand. But before we jump into that, I’m just curious. I said a little bit about X-Team when I did the intro. But can you help the people listening and watching understand what X-Team does and what you do there?

Caleb Brown (03:35)
100%, yeah. I mean, you did a great intro. do ⁓ staff augmentation essentially for software development. ⁓ So we connect top tier developers that are around the world, living everywhere, ⁓ with some pretty great companies that we’ve partnered with over the years. In fact, over the decades, ⁓ X seems about 20 years old somewhere around there. And some of those, partners we have,

Riot Games being a good example ⁓ are folks we’ve worked with for a decade plus. ⁓ And so we have a lot of X-teamers all over the world working with not just gaming companies, but we certainly have some in the portfolio. ⁓ the nice thing about how that works is ⁓ it’s staff augmentation. So developers come on for maybe a six-month-long project with one company.

And then there’s still X teamers the entire way through. So once that contract wraps up, they kind of come back to X team. ⁓ And then we begin that search for their next partner opportunity. So ⁓ like a lot of developers were already kind of independent contractors prior to being in X team and liked the, experience. ⁓ But getting clients can be hard. And like I said, we’ve, we’ve, we’ve partnered with, with ⁓ many great companies over the years. We have a good relationship with them and so we can kind of help them.

Keep that lifestyle they loved as an independent contractor and help bring them to great clients. In terms of my role, currently I am content and strategic initiatives manager, which is a bit of a mouthful, but I handle a lot of stuff. I am our podcast host on our end for the podcast, Keep Moving Forward, which you can find anywhere you get podcasts.

We also have an internal education program, something that looks like a Udemy or Coursera, know, with Swift and React and even AI courses, so I kind of ⁓ curate a lot of that content. We’re starting to do some of our own original content there. I do a little bit on our social media and the developer-focused stuff, and my background is actually technical, so ⁓ with the rise of Vibe coding, I’ve been…

helping us do lot of internal apps, stuff that we might have bought a small subscription for. We’re starting to roll that out on our own. So I’m a little bit all over the place, but just trying to ⁓ kind of really enrich the developer experience when you’re working at XT.

David Vogelpohl (06:08)
That’s excellent. And I personally know Nextteam for a good long time and happy to know Mitt, the CEO as well, and many developers that have worked there and all of them really super high caliber folks. I guess I’m talking nice also about some of my friends there. So like that with a grain of salt, I suppose. yeah, really, Yeah, yeah, yeah.

Caleb Brown (06:14)
Yes, yes.

True. Wait, you are right. I do agree. Good folks.

David Vogelpohl (06:33)
Some of the best folks I’ve worked with are known in that way. So I’ve been real pleased with my interactions with you all over the years. And you mentioned you have game publishers in your portfolio. And I know you can’t share like every name you do work for, but I know you’ve publicly talked about others. But give me some examples you can share.

Caleb Brown (06:42)
Happy to hear that.

Mm-hmm. Yeah.

Totally. So like I said, we have had a great relationship with Riot Games for quite some time. And that is the biggest, at least as far as my knowledge, the biggest game publisher that we work with. We also work with Epic Games. we’ve worked with small, I mean, massive, huge. Yeah, but we’ve worked with some smaller.

David Vogelpohl (07:11)
Those are two pretty big ones. ⁓

Caleb Brown (07:18)
⁓ kind of more indie studios and things like that in the past for for some small engagements but yeah the big ones ⁓ epic and riot

David Vogelpohl (07:26)
All right, good deal. So now let’s transition to the topic at hand, which is the rise of web experiences in gaming. From your perspective and your team’s perspective, what do you think is driving that?

Caleb Brown (07:32)
Sure.

Yeah, great question. ⁓ Because yeah, there certainly is a rise. ⁓ I I think a lot of it, and I don’t think all of it, I think we’ll certainly get into it, but I think a lot of it is the margin and the ownership of direct to consumer, The marketplace. Speaking of Epic Games, we all know about Epic Games versus Apple. There’s the whole ⁓ thing about… ⁓

using kind of other folks’ ⁓ platforms and taking a significant portion of that. ⁓ And so I do think a lot of it is on the financial side of wanting to rule your own ⁓ marketplace. ⁓ That being said, I don’t think it’s just about the financials. I think that there are major benefits to having that direct relationship ⁓ with the consumers.

for sure and like I said, we’re happy to get into that but you know, I do think probably a big thing that kicked it off was You know realizing that a lot of game publishers felt stuck within within some of these You know walled guards

David Vogelpohl (08:57)
Yeah, and it’s such an interesting observation because in almost every other industry, this idea that I’m going to have a direct relationship with my customer and own my commerce experience is a foregone conclusion. And the web is the engine and pathway for that for most brands, certainly digital brands. ⁓ And gaming was traditionally relying on marketplaces and ⁓

Caleb Brown (09:17)
Yeah.

David Vogelpohl (09:25)
app stores and things like that for distribution and monetization. And so it is interesting to think about the ⁓ ability to monetize direct as unlocking this idea that the web can be more than like a brochure site, if you will, to promote your game. Is that kind of where you’re going with this, it sounds like?

Caleb Brown (09:42)
Right. Yep.

That’s exactly it. like there is a like not even thinking at all about the financials. I think there’s a massive benefit to having ⁓ web platforms that kind of extend through. mean, you know, gaming is, know, folks are fanatical about it or they love it, right? And I think you can, you can have a better experience across the spectrum. You can have kind of frictionless, you know, platforms where

You’re doing your, you have a hub, you’re doing your loadouts. I think ⁓ EA Sports for their soccer game, I think you can manage your entire squad ⁓ from their web-based ⁓ app. So I think part of that is just the direct connection that you can have with consumers and you can experiment too. I think we’re seeing some potential. I don’t think we’re totally there yet, but there’s some ⁓ even tech.

⁓ expansion with like web GPU, where I’ve seen like 3D demos and mini games happening. And I think you could probably just have like a really good interactive experience on the web that then might even push you to ⁓ try the full game, know, things like that. So I think there’s just a world of experimentation where you can build these, ⁓ you know, extensions of the game.

David Vogelpohl (11:08)
It’s an interesting point. You I am kind of curious from your perspective as we talk about, you know, beyond just having a, you know, a store on your website, a web store, if you will, like, what does it mean to have web based gaming experiences? And I really liked the example you provide of like managing your soccer or football team on the web where you’re going to play it though on your phone or maybe a console or something like that. That’s a really

Caleb Brown (11:17)
Right.

David Vogelpohl (11:36)
interesting example because there are these really complex interactions where maybe a larger screen or a mouse and a keyboard might provide a better experience than maybe trying to mash it out on your phone. And obviously that’s not going to work for every kind of game, but a game like managing a soccer team maybe is more relevant. ⁓ You also talked about this idea that maybe I have extensions of the game or even ⁓

Caleb Brown (11:49)
Totally.

100%. Yeah.

David Vogelpohl (12:03)
playable elements of the game that are on the web that connect to the game, which I think is also really interesting. ⁓ What are some other examples? Like you talked about this idea of a hub, and I know a lot of folks talk about this in the gaming context, but what are some of the spokes on that hub ⁓ that stand out to you?

Caleb Brown (12:13)
Mm-hmm.

Yeah, yeah. Well, so it’s interesting because I think that Rockstar actually rolled it back. But I thought their Rockstar Social Club was really interesting. They had like an activity feed, ⁓ like a player profile that you could see. And I think some, you know, people obviously get really into Rockstar stuff. And I think they had some exclusive content videos and things like that. And they discontinued it, which is interesting.

But at the same time, I still think that’s a good example of what’s possible. I don’t know the reasons for pulling back on that. But I think the experimentation alone is really interesting. ⁓ And my guess would be, even if they rolled that back, I think it was a year or two ago. ⁓

that they’re probably not done in that space. They’ll probably expand into it. ⁓ But yeah, like I said, the inventory management, you made a really good point that some stuff works really good with a keyboard and mouse or even on the console, but then doing some of your kind of management of what’s in your inventory and things like that actually might work better as a mobile app or a web app.

David Vogelpohl (13:29)
Yeah, it’s interesting to think about the interaction between the game and the web and how you combine them together, or maybe not even just the web, but like PC versus phone versus console. And, you know, it’s, I don’t, I’m not familiar with Rockstar Social Club, but obviously we also have third party platforms like Discord, where some of those interactions happen, but it sounds like the wheels of the hub, if you will, or the hub in general.

Caleb Brown (13:35)
Totally.

David Vogelpohl (13:57)
It sounds like the the sentiment you’re getting across is this idea of your website is not just a brochure or not just a commerce engine, but a destination for your players where they can interact with their account, with the game and perhaps the community. But it’s this idea of it being a destination and not just a sales page. Is that fair? OK.

Caleb Brown (14:18)
That’s right. That’s

100%. Yeah, yeah. You need to look at these things like they’re real products.

David Vogelpohl (14:25)
Okay, products. And my website is more than just an advertisement. It’s part of my product. I think that’s a really distinct way of looking at this. And I think a lot of people haven’t thought that way before.

Caleb Brown (14:34)
Totally.

Yeah, I agree with you. And perhaps we will get more into it, but I think you’re right that it would be really easy to make what I would call a mistake of saying that you’re getting into this world of extending out into web, and it’s really just marketing, not a product.

David Vogelpohl (14:54)
Yeah, that makes

a lot of sense and definitely resonates with me. if I wind the clock back even like three to five years ago, and I kind of imagine gaming sites at the time, it would have some good imagery, some videos, a little link in the navigation to our games, maybe a hiring page and things like this. It was really basic. It was the kind of thing you could probably outsource to an agency down the street. ⁓

Caleb Brown (15:05)
Yeah.

Yeah.

David Vogelpohl (15:22)
They’d build it within a month and it’d be live and that’d be a thing. And now when you’re talking about like, wait a minute, now I’m going to have this commerce engine with D2C. I’m going to have a destination that’s going to be part of my product. And I do want to get into that more later. ⁓ But now we’re having to like think like, well, wait a minute, this is more than just like offloading, making a website. This is now a very important and much more important thing. ⁓ So help me understand what are some, help everyone really understand.

Caleb Brown (15:30)
Yep.

Totally.

Mm-hmm.

David Vogelpohl (15:51)
What are some of the key challenges in building a quality web team from scratch? Like lot of these publishers have just never done this before. Give me the lay of the land. Like what are they up against?

Caleb Brown (16:00)
Yeah.

Yeah, yeah. I mean, you know, playing off what we just said, like, you know, you do have to look at it or the right way to look at it, in my opinion, is a true product. And that’s what we’re saying, you know, authentication so that it is ⁓ working with your existing ecosystem with the existing game. So when you do stuff like, you know, you already have a soccer game going and then you log into this web portal, you you want to be able to have all of that sync up.

and work and just to see your team there within the web app. So there’s obviously like the, the technical side of things. ⁓ But you you’re also looking at, ⁓ like you said, you’re looking at it as a marketplace now. So you’re looking at, can even have microtransactions within that. So you’re looking at, you know, fraud and policy and chargebacks on virtual goods, you know, a whole thing. So having folks that understand that world, that ecosystem.

⁓ certainly valuable, certainly important to have the right tools there to build these things up properly and securely.

David Vogelpohl (17:12)
So when I’m building this team from scratch, though, ⁓ and I’ve got to go find people, and recruiting can be a challenge. And of course, the gaming industry has had rounds of layoffs recently. And so maybe hiring for game developers isn’t super duper challenging. Maybe web developers are also relatively easy to find. But the first thing I think about when I think about hiring is hiring for what? ⁓

Caleb Brown (17:30)
Right.

Mm-hmm. Mm-hmm.

David Vogelpohl (17:40)
And so

as I put myself in the shoes of a publisher that’s kind of ramping up a web team for the very first time, the first question is really, what is my web stack? You talked about interactions with the game and the back end system, and those are things, obviously, that are already there. But what are some of the key considerations for choosing which web stack to go with? ⁓ Help folks understand that.

Caleb Brown (17:51)
Right, right.

Totally, yeah. And I do think that’ll vary to some degree based on what they’re building. But trusted, modern, real-time frameworks are typically a good way to go. Next.js will give you a lot out of the box. You’re streaming out of the box, server components out of the box, which is pretty nice. Like I said, like an authentication standard that works with your existing ecosystem. And that’s where it’s important to, I think, have experts, folks that

know OAuth and know that world and ideally have built something similar to this before. ⁓ If we’re talking about the micro ⁓ transactions, we’re in the payments world, we’re looking at compliance and regional conditions, ⁓ you want folks or a platform that understands that really well. And specialization I think is huge here. I we see it at Xseme for sure. I was just talking about the web GPU.

stuff that I was seeing recently, which I haven’t seen built totally. Yeah. Yeah. Yeah. I haven’t seen it built totally into one of the examples we’re talking about, but I’ve seen demos that are wildly impressive through the browser. And that’s like relatively recently unlocked with some of the, some of the web GPU stuff. you know, you’re, you’re right. Maybe it’s a little easy at the moment to find game developers, but

David Vogelpohl (19:07)
If you are right.

Caleb Brown (19:33)
even within any niche is a sub niche. So looking for folks that have worked with something like a web GPU is really valuable. And ⁓ like I said, we do see that at X team where folks are putting this thing together and they have an amazing existing in-house team, but they need folks that have really worked with XYZ tech to build that out. ⁓ And so that helps on the hiring side if you want to kind of…

jump right into it.

David Vogelpohl (20:04)
OK, so that makes sense. So ⁓ if I kind of play back some of what you talked about there, I’m going to pick a kind of core technology for my site build. And one example you gave was Next.js. I’m going to leverage and integrate in things I already have, like say maybe my player authentication system, ⁓ and integrate that into my web experiences.

⁓ Next.js is often used with decoupled JavaScript web architecture, headless, if you will. And maybe folks in the game industry aren’t as familiar with this, but this is the new way of building a web experience is where most developers coming out of code school and learning are learning in this way. Is that a fair assessment, Caleb? Okay, okay. So…

Caleb Brown (20:37)
Yep.

Totally.

I believe so,

David Vogelpohl (20:59)
This might be a path that if I’m building out a web team from scratch and I’m picking this web stack, but I might very well ⁓ land in this approach. Now, I want to talk in the game world, there’s a lot of web store or web shop providers. And so what these will typically look like is there’s some kind of store in a box and the provider

does all the work for you or most of the work for you and launches it and hosts it and maintains it. And when you see Next.js and headless builds and things like that, yes, you’re right. It’s like a framework and you inherit things that you don’t have to build from scratch. But it’s building a site from scratch but with a framework versus a guardrail of a store and a box. So help me understand the balance between those two approaches. Obviously, we like

Each approach is probably valid for different reasons and different situations, but help us understand like the benefits of both sides.

Caleb Brown (22:01)
Yeah, absolutely, absolutely. ⁓ You know, and you’re right. I don’t think there is a universal right or wrong. That’s certainly for sure. ⁓ But when you have a little bit more freedom, especially if you are a larger team, a larger organization, I think that has resources, you want the freedom to A-B test and test with pricing and do stuff that might.

be something that you alone want to try and therefore it might not be baked into an off-the-shelf solution. ⁓ At the same time, guardrails is amazing to have in terms of, you don’t need to be A-B testing security. You don’t need to be experimenting with compliance. ⁓ And so it’s nice to have cookie cutter solutions for the stuff that

you know, needs to be sort of hammered down. ⁓ But every team is going to be entirely different. know, I wasn’t a game developer, but when I was an individual developer building e-commerce solutions, I was just one person, and I was happy to have options that covered more than I could handle in terms of that. ⁓ At the same time, you know, like I said, if you’re a bigger team doing a bigger project,

and have resources, having freedom to build exactly what you want and make that. Like I said, if you’re looking at this as a product, which you should, you should be developing it the way that the team feels it should be built. And so having that freedom is necessary. But ⁓ yeah, you’re certainly right in that I don’t think there’s any right or wrong ⁓ kind of across the board.

David Vogelpohl (23:54)
Yeah. So the balance it sounds like is when I go the kind of quote custom coded route and I am quoting that because like frameworks obviously come with a lot of stuff baked in. have the freedom to kind of drive the direction of innovation and experiences. And if I’m using something off the shelf with more rails on it, I can go faster and I have to mess with maintaining it to your example. I don’t have to experiment with security or compliance.

Caleb Brown (24:05)
Great.

Totally.

David Vogelpohl (24:24)
but I might be trading off that freedom. so these are some of the balances that play there. If I’m taking the custom route though, what are your thoughts on using off-the-shelf components to address that? ⁓ So like in the FastSpring universe, people like offload payments to us. So like that’s one example. But do think that’s a way to bridge some of those gaps on the custom side? Not necessarily the payment side.

but just like in general using off the shelf components for certain parts, but still preserving that freedom you have with a custom coded site.

Caleb Brown (25:02)
Yeah, absolutely. mean, and payments is a really good example. Like I said, that’s what I was referring to when I was working as kind of an independent developer. ⁓ Like I was so happy that in fact, I actually did use fast spring for this project. ⁓ is back in truly back in 2011, I started taking payments for a it was an educational bookmarking site. ⁓ And it was the first dollar I had ever made on the internet. And, you know, because of the security and compliance stuff we were talking about, I was so happy.

⁓ that someone else, Fast Spring in this case, was able to handle all that stuff and I didn’t have to think about, ⁓ my gosh, I have customer credit cards and stuff like that. And obviously there’s parallels there to other ⁓ off the shelf components. I’m sure there’s times when that makes just a ton of sense for folks and they don’t need to customize absolutely every single thing. ⁓ But yeah, totally depends on what you’re building, but absolutely.

pulling in ⁓ outside resources like that can be ⁓ really helpful.

David Vogelpohl (26:06)
What a happy surprise for me. actually didn’t know this. feel like it sounded like I teed you up for that, but that’s really ironic. ⁓

Caleb Brown (26:08)
I

assure you did not, but no, it’s true,

David Vogelpohl (26:17)
That’s funny. That’s cool.

So, you know, in my background, I’ve ran an agency before and we would go to customers and we talk about, you know, custom coded versus off the shelf systems. And these were some of the tugs and pools and we almost always landed on something custom coded. And it was because the client usually had some zany idea on how to make money or go to market in a very specific way.

Caleb Brown (26:47)
Yep.

David Vogelpohl (26:47)
but they

liked the advantages of offloading complexity, especially in areas that they weren’t going to experiment with or that presented a lot of risk. And so I think a lot of people think that custom coded means you’re responsible for everything, but you actually can componentize and offload key parts of it in that way. But then at the same time, if you’re up against the deadline or you don’t have the team to support something custom,

Caleb Brown (26:54)
Totally.

Absolutely.

David Vogelpohl (27:13)
Maybe you’re too small or you just haven’t got there yet in a larger organization. Off the shelf is a great path and option. ⁓ And it’s good people have those choices. But I appreciate you kind of walking through the puts and the takes on that one. So you’ve mentioned a few times that you feel like the web should really be treated like, the web experiences should be really treated like a product instead of just like an ad, if you will.

Caleb Brown (27:30)
Absolutely.

Yeah.

David Vogelpohl (27:43)
So this

really brings up the question, you know, again, a lot of publishers are for the very first time starting to scale a web team. Where should they report? I feel like in the old days they would go to marketing, but should they go to product or engineering? And I guess it obviously differs per organization, but what are your thoughts on that?

Caleb Brown (27:54)
Totally.

Yeah, yeah, it may differ per organization. the same time, I’m pretty opinionated that it probably makes the most sense to have the core web team under product, ⁓ but with a strong sort of dotted line connection to marketing. ⁓

You know, obviously, ⁓ marketing is a very important thing, of course. At the same time, I think it would probably be a mistake to have your web product entirely focused on marketing, because as we said, ⁓ what you don’t want it to be is a marketing landing page, and you don’t want it to feel like that. ⁓

So I think having a strong connection with product and looking at it like a product, like an extension of your existing ⁓ game in this case, is the best way to do it. But you partner with marketing for campaigns and maybe some kind of like life cycle strategy. ⁓ You can sort of partner a little bit on some of the content, but I don’t think marketing should define all of that content. But I think you should work together to figure that out.

I’m pretty strong in feeling that, you because you don’t want to make that mistake of letting this fall into just being a landing page, ⁓ you know, for marketing and feeling that way, that it probably does make the most sense to at least have that core team underpriced.

David Vogelpohl (29:34)
Yeah, that makes sense. As a marketer though, I’m going to push back a little bit here. And yeah, like to me as a marketer, when I hear things like this, I’m like, wait a minute, I’m to have to wait on product and engineering to like do stuff on the website. So like to me, like a more ideal approach would be to have, say the main website or the, the dub dub dub sub domain, if you would not that people do that anymore.

Caleb Brown (29:38)
Okay, please do, yes.

Yeah.

Yep.

David Vogelpohl (30:02)
be different than the product side of my web experiences? And in the web, of course, this might just mean different sites or domains with the marketing side and the product side of the hub or whatever. What are your thoughts on that? Like giving marketing the freedom to be able to market ⁓ without making them wait on engineering, but then giving engineering and product their own realm where they can treat the web like a product.

Caleb Brown (30:28)
Yeah, I mean, yeah, I absolutely think that marketing should be marketing for this, ⁓ for the existing game as well as ⁓ the new one. And right, I understand timelines can… ⁓ Yeah, you don’t want to be just waiting around for another department to kind of wrap things up, wrap their sprint up and things like that. yeah, I I do think that they should be in harmony. I think that there should be that dotted line connection. I think they should work closely. ⁓

I just feel that the core app itself should be product focused.

David Vogelpohl (31:04)
Yeah, it’s such an interesting dynamic. And I think it depends on the company in this situation. I worked for a CMO in the past where it was one of those tech companies from her past where the homepage was the product and it wasn’t marketing. was just, it’s kind of like Google is like homepage is the product. But as a marketer, if she needed to go out and like spread the word about this thing and be able to have

Caleb Brown (31:20)
Yeah. Yeah.

David Vogelpohl (31:31)
web pages that people came to and learned about it and then interacted with the brand in different ways. And so there was this tension in that org between the two. And when that tension is handled in a bad way, that can be really problematic. So if I’m out there marketing games and in-game purchases on the marketing side and the product side of my website is vastly different and disconnected,

Caleb Brown (31:41)
Right.

David Vogelpohl (31:56)
then that sounds like a really bad experience for players and you’re not getting the benefit of the product and the marketing side working together. Now, this is definitely not an easy thing to solve for, but I’m definitely in your camp where that player web experience is a product-led experience. And as a marketer though, I’m like, well, let’s keep the door open on the other side to give those marketers some of that freedom, but…

Caleb Brown (32:20)
Yeah.

David Vogelpohl (32:23)
I think, of course,

it just depends on the company and the publisher or studio or whatever focused on this. This is all super duper interesting. I would love to talk about this all day and often do. But for those watching and listening, if they remembered one thing we talked about today, what should it be?

Caleb Brown (32:29)
1000%, yeah.

Yeah, great question. ⁓

I really think what we, the marketing product discussion I think is really interesting. I would definitely want folks to be thinking about how that should work in their organization. Even if they’re not in gaming, but they’re in a similar situation here. Think about that because, mean, you’re right, it can be a little bit of a complicated dance, but when it works,

you know, that synergy, if you will, with product and marketing is beautiful. And you you build a great product and then you actually get it out there. ⁓ On a personal level, I build a lot of products and then just don’t market it. Like on a personal, you know, I don’t market it at all. I’m more product and engineering than I am marketing personally. ⁓ And so I, and I wish that I had more of that marketing DNA. ⁓

And so I absolutely see the benefits of it. So yeah, think just understanding what your product is, making sure that, it’s no disrespect to marketing, but making sure that your side app is not a landing page for marketing and is an app if that’s what it’s going to be. But then utilizing, working very closely with marketing to make sure that actually gets out there and people understand it. That’s what sometimes on the technical side we’re bad at.

explaining why users want to use this and that’s why marketers are amazing because they’re good at communication on that. I think thinking about your own organization and that balance between product and marketing is probably the most important thing to remember.

David Vogelpohl (34:26)
Such an interesting point to focus on because, historically in gaming, we would make a game and then mark it over here on the product side and then market it on the website side. And now what we’re seeing is like, well, these web experiences should be a part of the product, if you would, which now means that product and marketing need to have a much stronger bond than they have in the past. It’s such a kind of higher level

Caleb Brown (34:39)
Yeah.

Both,

100 %

David Vogelpohl (34:55)
challenge or way of thinking that I think is great to end on and kind of underpin some of the more tactical strategic things we were talking about. This was super interesting. Thank you so much for sharing all this today, Caleb.

Caleb Brown (35:09)
Thank you for having me. I really enjoyed this.

David Vogelpohl (35:12)
Awesome. If you’d like to learn more about what Caleb is up to, you can check out x-team.com. Thanks everyone for joining this episode of Growth Stage. Again, I’m your host, David Vogelpohl. I support the digital product community as part of my role at FastSpring, and I love to bring the best of the community to you here on Growth Stage. Thanks everybody.

Caleb Brown (35:35)
Thank you.

David Vogelpohl (00:04)
Hello everyone and welcome to Growth Stage by FastSpring where we explore how digital product companies can increase the value of their business. I’m your host David Vogelpohl supporting the digital product community as part of my role here at FastSpring and I love to bring the best of the community to you here on Growth Stage. In this episode, we’re going to be talking about pricing and packaging for gaming web shops and joining us for that conversation is someone that knows quite a bit about that.

like to welcome Chip Thurston. Chip, welcome to Growth Stage.

Chip Thurston (00:36)
Thanks for having me. Happy to be here.

David Vogelpohl (00:39)
Awesome. Well, glad to have you here. And I know this is a topic that a lot of folks are curious about, especially with the rise of direct-to-consumer and web stores following the recent Apple and Google rulings. So really interested in unpacking this one a little bit on the pricing and packaging front. And for those that are watching and listening, what we’re going to be talking about today are Chip’s thoughts around how pricing and packaging strategies differ between game and web store.

What are the top considerations when forming your pricing and packaging strategy, the role of creators in driving web store value, and how to strike the right balance in rewarding players while increasing your profitability? It’s pretty deep topics, but I think we can get through them here today. Really excited to learn more about this from your perspective, Chip. But before we get started, I wanted to ask you a question that’s similar to a question I ask other guests on the show.

But what was the first mobile game you remember spending money on?

Chip Thurston (01:44)
That’s actually a tough question for me to answer because I am notoriously frugal when it comes to purchasing on mobile games. And I realized the irony of that, given that I used to manage monetization strategy and offer strategy on mobile games. ⁓ I think it was Pokemon Go, but it was only after years of playing the game and only after my kid got into it. And that was really like pushing me to get this one like limited time ticket to this little…

event that we were doing. So yeah, I’m tough to monetize, I will say.

David Vogelpohl (02:18)
that’s interesting. I remember in the early days of mobile, I just went nuts on buying, but they were premium games, not really in game items, but I would easily spend seven, 10 bucks or whatever on a game.

Chip Thurston (02:29)
you know, that’s a great point. I do remember buying ⁓ Mega Man X on mobile as a premium time. You just drop a few dollars and get Mega Man X. It’s one of my favorite games. So when they put it on mobile, I had to get it.

David Vogelpohl (02:35)
Yeah.

Now I have all kinds of questions about Mega Man X, but that’s not why we’re here today. So we’ll pause that conversation for later. But I was wondering if you could tell me a little bit about FastBring, what you do there and what your background is in pricing and packaging games and in-game items for mobile games.

Chip Thurston (03:01)
Yeah, absolutely. And I would say let’s make sure we put in the calendar a separate podcast about Mega Man X. We can do a full deep dive on that one. Yeah, so FastBring is a direct-to-consumer payment platform. We facilitate the checkout on a global scale to enable publishers to sell globally. And so in the case of gaming, this often means web stores. And so it’s really enabling them to sell outside.

David Vogelpohl (03:07)
Yes, definitely.

Chip Thurston (03:27)
of the common platforms like Apple and Google and sell directly to their players. And for me personally, my experience is coming from the game development side. So I’ve joined FastSpring as the head of gaming to help our sellers market and monetize direct to consumer. And that means everything from understanding what’s going on with the latest regulations to understanding the FastSpring product, to making sure they have the scalability and the tools that they need to succeed.

⁓ And where I come from in game development is most recently leaving Scopely where I was for a few years. And before that, I worked at SciPlay for a few years. And over that time, ⁓ more than a decade in the industry, I wore a number of different hats. I oversaw LiveOps and monetization strategy. So basically responsible for day-to-day revenue of the game and event strategy. I was also a marketing lead.

for mobile games, and so overseeing our community engagement strategy, user acquisition strategy, managing the teams that would help facilitate all of that, and everything done with the configuration management of how are we actually setting these up in the game and getting them executed on a day-to-day standpoint. And what that culminated in at Scopely was the opportunity to take on the web store strategy.

for a mobile game and being responsible for its growth and its goals and what we expected from our web store and how we were going to make it succeed, ⁓ even knowing that there were these Intel-steering policies in place from platforms like Apple and Google. so taking a lot of time to iterate and understand that landscape and drive it to success was what then led me to join FastSpring and say, OK, I want to drive this conversation more broadly in the industry.

David Vogelpohl (05:12)
That’s a cool perspective. And it sounds like your scope at Scopely was quite broad. But do you feel like that gave you like a holistic picture of the player’s journey and experience and how that fed into pricing and packaging?

Chip Thurston (05:27)
Yeah, absolutely. Because ⁓ one question I got a lot throughout my career there was the common thread between the marketing lead role and the monetization lead role, because they’re under two different disciplines, right? There’s the marketing vertical and the product vertical, and those are typically pretty bifurcated. There’s not a lot of ⁓ overlap between those two. But for me, the common thread was player empathy. For me, it always started with

What is the player thinking? How will they perceive this? What are they doing when we reach them, whether it’s with a user acquisition ad or a starter pack offer in the game? At the end of the day, it’s rooted in the player. And so, yeah, guess, circling back to your question, it really did, I think, give me that holistic perspective where now I’m thinking of the player.

before they reach the game, when they install the game. When they first install the game, what do they see? Or if they’ve been playing the game for five years, what is their experience in the game? And how do we do that? And then what’s that player journey outside of the game as we drive them to something like a web store?

David Vogelpohl (06:29)
Yeah, that holistic view. I often, when I talk to folks, particularly in marketing context, I always say, what was the person doing right before they experienced what you’re building? And I feel like coming from that perspective allows you to build better messages, more compelling information and experiences. ⁓ so it’s interesting to hear your perspective there. Now, when I asked you about fast spring though, and what fast spring enables, said something interesting that I just wanted to kind of dig in a little bit.

You said that often means web stores with direct-to-consumer. What’s an alternative path to direct-to-consumer than a web store?

Chip Thurston (07:09)
interesting. Well, this is something that’s really emerged this year, which is the option to surpass the web store entirely and go directly to a checkout page. So this is something in line with recent regulations, which we can get more into later. But the short version is for Apple, or for iOS in the United States today, publishers have the option to steer players directly into a checkout page, meaning there’s no store needed. It’s the most frictionless path available.

We’ve actually recently launched a solution with Asprin called Steer Safe, which is a great visual example of how publishers can do this. But it’s an interesting option where, OK, maybe we don’t need to build out this entire web store and have our players go from game to store to checkout page. We can remove that intermediary and say, just go from the mobile game to a web-hosted checkout page and then go right back into the game. So pretty seamless experience.

David Vogelpohl (08:07)
Yeah, it seemed like that was a big eye-opening moment for folks as steering became available. It was like, well, wait a minute. Why do I even bother to go to the shopping experience in this other place when I can just present the option to buy the item or whatever in the game and then link directly to a place where someone can do a direct checkout? I think a lot of people hadn’t really thought about that paradigm prior to steering becoming available. And I think it was this like light bulb moment for a lot of folks. So thanks for picking that apart.

But let’s get back to the store for a minute here. ⁓ And we have this kind of divergence of experiences for the player a little bit. And of course, there’s a financial incentive for the publisher to drive the player to do the transaction on the store to make higher profits and have a more direct relationship with those players. So earlier when I was asking you about your experience with pricing and packaging, you rooted it in player empathy.

understanding what their experience is like, where they’re at in the journey of the game. But help me understand more about that process. What does it look like to set pricing and packaging strategy between a game and a web store based on your prior experience or even the experience you’re having these days?

Chip Thurston (09:24)
Yeah, I think the first thing I think of and really the umbrella for me that that would all sit under when it comes to pricing and packaging for a new web store initiative, say for a mobile game, is really game economy. It really boils down to that and managing the economy effectively because most commonly what we see is ⁓ the purchases made on the web store give more value to the player than the purchases made on the mobile store.

you need to be able as a game to accommodate that in the game’s economy. And what I found was the most ⁓ layman’s way of looking at this was basically looking at your source versus your sink and saying, source is what we’re giving out to our players, whether it’s they can play this game mode and win this currency in that mode and win these prizes. And this is what basically the output is from the game to the player, what we’re giving to the player. And that includes purchasing too.

What are we sourcing from the store? What are we giving to the players for the dollars that they’re spending versus the sink, which is where players are sinking that currency. What is the input that we’re getting from those players? And that’s constant balance that has to be regulated. And the best games out there have very flexible ⁓ sink options so that they can be more flexible on the sourcing side. And so when I think about a web store, it’s saying, OK.

we’re going to launch this web store and therefore we’re going to incentivize players to go there, which means we’re increasing our sourcing. And that could be through lower pricing, it could be through more value per store, it could be through other ways that we can talk more about. ⁓ But if we’re increasing our sourcing through having this direct-to-consumer program, we also need to increase our syncing. So how are we going to do that? What modes in our game are we going to tweak?

or what incentives are we going to put for our players inside the game to sink those currencies such that things continue to stay in regulation.

David Vogelpohl (11:28)
Are those, is that the totality of key differences when pricing and packaging between in-game and app stores? mean, what about profitability? You kind of alluded to more value. that like discounts for more in-game currency? Help me understand what the variables are that are going, do go through your mind when you think about pricing and packaging between stores and web stores and in-game.

Chip Thurston (11:55)
Yeah, more tactically, I would say I would look for what our players want. Again, going back to player empathy and say which method will be most compelling to them. So typically it would be maybe more per purchase is where I would start more gems per dollar. If gems are your currency, more hard currency per dollar when spent on the web store versus on the mobile store. So say I spend a $10 purchase on mobile and get a hundred gems.

Well, maybe if I go to the web store, that becomes a $10 purchase for 110 gems or 120 gems, whatever that right percentage could be, again, depending on your game’s economy and flexibility there. Or instead of more per dollar, it could be a discount. It could say, OK, that $10 purchase on mobile that gets me 100 gems is now $9 or $8 on the web store for the same 100 gems.

either discounting it or giving them more. And you could even A-B test or run some side by side to see which one is more compelling to your players. And it’s not just compelling to your players, but also which one is better for your game’s economy. Maybe you find that ⁓ the 120-gems or 110-gem option is a little difficult to accommodate from a game economy standpoint, so you opt for more of the discount route. There’s several different variables to evaluate as you try to run those. But beyond the core…

I think those are the base two options that most people jump to. But there’s more you could do, too. You could have exclusive items or exclusive bundles when you think about pricing for your web store as ways to incentivize players to go there. So you could put some cosmetics if your game has cosmetics, just visual items that have no impact or consequence or actual ⁓ utility in the game.

but you put those where players can only get them if they purchase on the web store. So you buy that $10 for 100 gems on mobile, or you can buy the $10 for 100 gems on the web store. But if you buy it on the web store, you get this little Hawaiian shirt that you can put on your avatar. And so players say, well, I might as well go purchase there because I get this cosmetic. Or it could be non-cosmetic. It could be a power item if you want to be even more aggressive and say, OK, this is a boost that you only get.

by purchasing on the web store. You could bundle it with other things. You could put it as a standalone item. And your players would understand if they really want to get that edge, that competitive benefit, they need to go purchase on the web store to get it through this exclusive item. And so there’s ⁓ all these different options. Basically, all the tools in the game economy and monetization toolbox are available. And it’s thinking about how you allocate those between the mobile game and the web store.

David Vogelpohl (14:44)
With player empathy though, like how do you balance that without like, you know, obviously players will often get agitated if there’s like play to win options in multiplayer and things like that. But how do you balance that with people that can’t or just don’t want to purchase outside the app store, just like live with it or like, how do you balance that with player empathy in mind?

Chip Thurston (15:09)
I think it’s just giving players choices, ⁓ empowering them to make the decision they want to make. so if a player, as long as you’re transparent with a player and they know that they have this option to get this other item elsewhere, and they’re choosing to purchase on the mobile store where you’re not forcing them to do that, you’re not putting them into the competitive disadvantage, they’re choosing to put themselves in that place in that case. ⁓ So I think it’s more just…

making sure that you’re communicating actively and not having someone say, I purchased this on mobile, not knowing that had I purchased it over there, I would have gotten more for it. It’s just ⁓ making sure that they’re aware and making the right choice that suits how they want.

David Vogelpohl (15:54)
Yeah, I see. So give them the choice and the opportunity to take advantage of it if it’s a good fit for them. ⁓ One of the interesting things that happens to me at every holiday and birthday for my kids is they come in with like a giant stack of like Visa gift cards and cash from relatives and things like that, but this really like sophisticated plan to use some of this money in their favorite games.

And then they asked me to help facilitate it. And many times the answer is I need to do the transaction through their web store because in app doesn’t support this, that, or the other and how they might’ve gotten that money from a relative. And so it makes me just think about like an additional benefit to a web store is taking advantage of payment methods, different card numbers and things like that that might not be able to be used.

through the app store for whatever reason for an individual player. I’m just curious, are there other advantages for players or publishers for transacting in web stores other than just like more money or better value for the player?

Chip Thurston (17:01)
Yeah, yeah, absolutely. Well, first I want to reflect on your kids getting a giant stack of gift cards. I want to make sure to send my kid to your Christmases.

David Vogelpohl (17:11)
Maybe not giant giant, but enough to be complicated, yeah.

Chip Thurston (17:12)
⁓

Yeah, think the benefits are numerous. Everyone tends to reflect on the profit, right, which is very significant. You pay 30 % of your purchases on Apple and Google ⁓ to Apple and Google for the usage of their platform. And there is a lot of value in that. And so ⁓ that continues to be a critical part. I would certainly not suggest forgoing that entirely.

But when you drive through a web store, it might be closer to 5%. So you just get a lot more profit per dollar spent from your player for all the revenue you’re getting. And that is important. But there are benefits otherwise too. There’s the ⁓ control that you have over the pricing and the flexibility you have. These ⁓ platforms like Apple and Google have a lot of guardrails on what you can do, how you can operate within them, how frequently you can update things, or even

to some extent the price points you can offer your players. When you’re on a web store, there’s no guardrails for better or worse, right? You have as much control and as much flexibility as you want in how you’re communicating to your players and what you’re pricing things at, what your strategy is. And so we’ve seen publishers find some value in that and taking advantage of the freedom that they have on a web store, even a website versus what they have on the mobile platforms. And another big one is the data.

that’s available to them. ⁓ When we’ve seen in recent years that Apple has really cracked down on privacy and the amount of data that they’re sharing with publishers. And that’s been detrimental to user acquisition efforts and how laser targeted game publishers can be in acquiring valuable new players. Well, on a website, you’re getting that data. It’s not as protected. And so you have a lot more

information at your disposal that then you can use to target more players and grow your games. And so there’s this really nice flywheel where you’re getting more profit from it, you’re getting more margin, which then you can use to put into your UA and your UA is now better informed because you have this great data. And so it can be this really healthy growth cycle for games.

David Vogelpohl (19:27)
Assuming people are being compliant with their data on their website, of course. Yeah. What about for the player? Like what’s in it for them? Like the example I gave was like, well, I can use more payment methods more easily. ⁓ what, what else is in it for the player to transact other than money or value?

Chip Thurston (19:32)
Of of course.

Yeah, I ⁓ think it does boil down to one, the transact how you want with the methods at your disposal, whether it’s a credit card or Apple Pay or ⁓ gift cards or whatever you have and being able to do that. I think there’s a nice global scale to it where being able to reach maybe different regions and different things with those local currencies.

in a way that certain merchants will be able to provide. And so if I’m someone that might be in one of those more remote ⁓ places, maybe that’s more appealing to me and a bit more accessible than it would be otherwise. ⁓ But the main benefit for the player really is the incentive that the publisher is putting on there. It’s saying, I get more out of my purchases by purchasing on a web store. And so…

⁓ That’s really nice for me as a player because I have maybe those extra power items. So we’re just getting a little bit more hard currency than I would be getting otherwise that then I can use in the game and engage with.

David Vogelpohl (20:52)
I’m a publisher and I hear someone say, know, ⁓ well, direct to consumer is a way to have a more direct relationship with your players instead of always going through the intermediary of ⁓ app stores or marketplaces. ⁓ That makes sense, right? Like every business wants to have a direct relationship with their customers. What’s the player’s benefit from a direct relationship with the publishers and studios that make the games they love?

Chip Thurston (21:21)
Yeah, I think it’s having a more personalized experience. You can ⁓ get served offers that are more relevant to you and something that may be more appealing to you or maybe even more valuable. ⁓ The publisher can better grow those games and develop the games that you love. And so ultimately it should be good for the industry when games inherently become more profitable through direct to consumer, just becoming more more commonplace. That can mean more ⁓ development.

for the games that you have. And ultimately, think more creative concepts getting greenlit because the threshold for success is lowered a little bit because games are more profitable. And so I’m getting a bit beyond the direct relationship piece, but I think there’s so much more benefit to gaming as a whole that players writ large will benefit from ⁓ just by virtue of direct-to-consumer on this upward trajectory and

increasing the profitability of the entire industry.

David Vogelpohl (22:23)
Yeah, it feels like on a personal level, the strongest relationships I have with brands in my life, or when I have that direct relationship and my experience transcends the devices that I’m having that relationship or an experience on. And so for games, for me, it personally means things like Fortnite and Rocket League in that, in the Epic universe in particular, and having that connected experience through my Epic account and all these different

places. And then non-gaming, it’s things like Netflix, where I’m really transcending between devices. But my relationship is with Netflix, and that’s a very fluid experience as I flow through there. So these kind of things are on my mind when I think of player value ⁓ outside of the monetary piece of it. ⁓ So let me switch gears a little bit here. ⁓

Before steering, you talked about how with steering now we can just link to a checkout instead of like a whole store. But before that, outside the US, the only way to bring players there without additional fees is to market outside of your game. And I know ⁓ creators play a really big role there, but I’m just curious what you view the role of creators and influencers are.

with web stores and are they important or secondary or like how do think of their connection?

Chip Thurston (23:53)
Yeah, I want to underscore one point you made there, which is that steering is still somewhat limited in just geographically where it can be implemented and even by platform. mean, it’s really iOS in the United States is where I’ve seen the most readily available opportunity unlocked for steering.

And that’s what’s driven so much of the recent conversation in the industry. And even the presentations I’ve been giving and the talks I’ve been having have been really focused on steering because that is the hot topic of the day. But when I look at a global scale, there are still these anti-steering policies in place to say, we can’t directly steer players outside of the US to these stores. so the question there is, OK, well, then how do we grow the web store? What are the methods available to us?

And I think that that strategy still needs to be considered and really optimized as well. And circling back to your question, yes, that’s where creators can come in. I would start by saying we need to identify what are the growth vectors available for our web store? We know we can’t take players directly from the game into the web store steering. We know we cannot do that under certain regions outside the US. And so if we can’t do that,

David Vogelpohl (25:07)
Outside the US.

Chip Thurston (25:11)
What can we do? What are the ways we can get players into our web store? And this is the exercise I did when I was at Scupl.ly of really trying to understand how we could grow. And so depending on the game, that could mean content creators, it could mean social media channels, which again, since you’re not inside the game, you can talk more openly about your web store there, regardless of what country you’re in. It could mean an email.

program where you’re reaching your players directly via email. It could mean community like a subreddit or a Discord channel. There are all these different places that you can talk about it. And why I think content creators are such a critical channel, critical growth vector to identify there ⁓ is one, they’re great about developing a meaningful relationship with your players. Your players will trust them and understand what they’re saying. Two, you’re giving your…

content creators a pretty compelling reason to talk about it because they have a clear case to make to their players of whatever that incentive is that you’ve built into your web store. So they’re advocating for, hey, players, make sure you purchase on that web store because you get 10 % more there. the players are happy because they’re learning about this and they’re getting to go this other platform where they’re going to earn more.

And the content creators are happy because they’re giving value to their audience in that case and developing a more meaningful relationship there. So I think it is mutually beneficial. And I think at the end of the day, it becomes a really effective way to grow your web story. And the best part is that it’s rolling agnostic because the anti-steering policies are really specific to what you can say inside of your game and how you can route players inside of your game. But for content creators, there’s not really ⁓ a firm regulation of what you

they can and cannot say about the existence of a web store and the value of a web store. And so it’s something that can drive growth regardless of where these regulations go.

David Vogelpohl (27:09)
You know, this reminds me of a conversation that you and I had with Justin Sacks of Nexus, nexus.gg for those watching and listening, which operates a creator program platform for game companies. And one of the things I remember Justin talking about, he’s actually a guest on this show before too, ⁓ was how publishers are thinking about creator attribution.

Are creators actually driving players to spend more? ⁓ Are the creators getting credit for purchases that were going to happen anyways? And I thought one of the really interesting things Justin had pointed out about all that was that with web stores, you often can have a great degree of confidence that that was a unique purchase. And of course you get the additional profit from that, from going around the marketplace, if you will.

But it was a very strong attribution signal when players were using creator codes in the web store. I don’t know if you remember that conversation very much or have any thoughts, but in general, what do you think about the role of attribution web stories and creators?

Chip Thurston (28:19)
Yeah, I think it’s a very compelling business case because I think the concern there is cannibalization. It’s saying, if I’m going to pay a percentage of the revenue to these content creators for the purchases that they drive, well, who’s to say they wouldn’t have already made that purchase without me paying that percentage of revenue? And so that’s the number one concern I’ve heard when it comes to considering content creator strategy. And for anyone with that concern.

I would encourage you to go to Nexus because they have some really compelling data that illustrates that those purchases are incremental, that they are either someone who was purchasing, but now they’re purchasing more, more frequently or at a higher price point, or it’s taking someone who’s never purchased before and is now purchasing because of that advocacy. There’s the word I was looking for, because of that advocacy that’s coming from that content creator that they trust.

So yeah, I’m a firm believer in the value that they add. And frankly, that’s true beyond the scope of direct to consumer and web stores. It’s just the value of content creators overall and their ability to drive growth for a game.

David Vogelpohl (29:27)
Yeah, anecdotally, getting back to my kids here, because that’s the most important topic we’re talking about today is I definitely my 13 year old will come in and say, I saw this creator and they were talking about this and Roblox and we need some Robux to go achieve this strategy. So you can like see it directly, but there is that question. And I think the web store plays an interesting role there. ⁓ So, well, I wish we had time to like.

talk this out to the nth degree, but I’m just curious out of everything we talked about today, Chip, what is the one thing people should remember about their pricing and packaging strategy for their web store?

Chip Thurston (30:04)
⁓ everything, every word I said. ⁓ I think I touched on a lot of different tactics about how to grow a web store, whether it’s on the monetization side and how you incentivize your players, whether it’s on how to grow what channels, what growth vectors you identify and leverage to drive more traffic into your store. I think it can be

a bit overwhelming for someone who’s new to direct to consumer to say, all right, I want to build this web store, but man, I don’t know where to start. There’s all these different ways I should consider to grow it. How do I even incentivize that? How can my economy handle it? Where am I going to sink this extra currency? You can start asking all these questions. so the one thing I would say to take away from this conversation is to not let the perfect be the enemy of the good.

Don’t feel the need to get it perfect right out of the gate. I didn’t really touch on this earlier, but web shops don’t just launch and have 50 % of revenue of your game coming through the store. They grow over time. And so I shared a lot of strategies, but I would say pick one, try it, move forward, iterate on it. The important part here is just to get started and move forward.

David Vogelpohl (31:24)
Affection is the enemy of progress. And I think the number one thing I’m going to take from you today is the focus on player empathy. I think that was such a great place to root on. But I really love your idea of launch quick, iterate, and learn. Such an important piece. Well, this was awesome. Thank you so much for joining us today, Chip.

Chip Thurston (31:45)
Yeah, thanks, David. It was a pleasure.

David Vogelpohl (31:47)
If you’d like to learn more about what Chip is up to, you can find him on LinkedIn, Chip Thurston of FastSpring. And you can also visit fastspring.gg. Thanks everyone for joining us for Grow Stage. Again, I’ve been your host, David Vogelpohl. I support the digital product community here at FastSpring. And I love to bring the best of the community to you here on Grow Stage. Thanks everybody.

Jesse Paliotto (00:04)

Hello, everyone. Welcome to Growth Stage podcast by FastSpring, where we discuss how digital product companies grow revenue, build meaningful products, increase the value of their business. I’m your host, Jesse Paliotto. I love being part of the community, and I love bringing the best of the community to you here on the podcast. Today we have with us Hank Hoffmeier from Kickbox. I’m so pumped to have him here. Email marketing is often hailed as the highest ROI channel for marketing, especially in SaaS and digital businesses.

But what happens when your emails don’t even make it to the inbox? So in this episode, we’re going to talk with Hank. He’s Director of Operations, but the email deliverability evangelist, more importantly, at Kickbox, about how authentication, verification, deliverability impacts your bottom line. So we’re going to learn why deliverability is no longer a set it and forget it process and how to fix common mistakes that could be silently killing your campaigns and communications. Hank, thanks so much for being here today, man. I really appreciate it.

Hank Hoffmeier (00:59)

Yeah, thanks for the invite. It’s exciting to be here and talk about email marketing and how it’s a crucial role for any type of company.

Jesse Paliotto (01:06)

Absolutely. I know we were joking for a second before we hit record that it can sometimes feel like the dark art off in the corner of like, how does that all happen? So today we’re gonna reveal the dark arts or whatever. I don’t know. Something like that. ⁓ Can you just to get us kind of into it, can you talk a little bit, why is email still such a high R— ROI channel? If I can spit that out, especially for SaaS companies or digital companies.

Hank Hoffmeier (01:31)

Interestingly enough, I like to do videos almost every day on various social media platforms, short form, and I did one this morning and it was a, did you know, and it was, did you know that email marketing, the first marketing email was sent in 1978 and made $13 million. And I was encouraging people, it’s Monday, but you might not make $13 million, but send an email. Yes, it is the marketing channel of choice by people that know what they’re looking at when it comes to numbers. Just the most affordable, provides the highest ROI,

and most importantly, and this is coming out more and more, I’ve heard it over the last few years, but more importantly, I’ve heard it in the last few months at conferences is it’s an owned audience. You own your audience. Of course you have to upload it to a platform to send emails, but you can take— it’s portable. If you’re on social media and you do something wrong or don’t do something wrong, but you get reported, you can have your account suspended, banned, or killed. You just lost that audience. It’s called rented land. A lot of people do marketing on rented land. On Facebook,

you know, if you’re running ads and then doing posts and boosting your posts and you get your account suspended, you just lost that audience. With email marketing, Like I said, you own that audience. You could stay in touch with them. You can make it feel like a personalized one-on-one conversation through the use of personalization and merge data. And it just, to me, it’s a no brainer to either just get started or go back and revisit what you’re doing. If you feel like that has fell off of a cliff or something.

more more I have these conversations and get people excited about bringing email back into their platforms and their marketing efforts again.

Jesse Paliotto (03:06)

Yeah, I’m curious like, has there been any changes over the last few years? Has anything kind of modified or is it still the same game as it was from 10 years ago? And is there anything that like founders or marketers should be thinking about like, hey, this is how.

Hank Hoffmeier (03:23)

there’s been changes and then there’s a lot of fundamentals that people don’t even know about. mentioned like dark arts and people don’t know. And oftentimes I go to conferences and I talk about the basics and getting things set up and doing it right so that you are successful right away. And it amazes me how many people in the audience are new to email marketing or have been doing it for a while, but just don’t know some of the things that I end up talking about. And when I started at,

Eye Contact, which is a sister company to Kickbox, both owned by Ziff Davis. You know, I went into account management. said, I know how email works, right? You get a list of subscribers, you create an email, you send it you make money. It’s not that easy. You mentioned it. First, your email needs to get to the inbox. It needs to be viewed. And first and foremost, you need to have a valid email address to send to. And that’s where Kickbox comes in is we validate email addresses.

Now lot of times people say, OK, I’ll upload a list where I’ll connect it to my HubSpot and validate my email addresses or HubSpot said, hey, my list is old, may have a lot of email addresses that are no longer valid, and they’re going to recommend that I go to kickbox to clean my list. And that happens. And sure, by all means, do that. But the missing link, as I call it, is verifying it when it first comes in. Let’s say you have a sign up form.

A lot of your audience probably have has a website. Maybe you have a sign up form or you’re looking to add one. You should be doing that on the fly. If I fill out my the form on your website and I put hank at g nail dot com and I spell it with an N by mistake. I finger it right. The form, if set up correctly with an API, can say, did you mean Gmail and automatically allow them to correct it? Or if I type in Hank FG.

At gmail.com and I didn’t mean to put the FG and it’s an invalid email address. It’ll say this is an invalid email. Just please try again. Custom like Citibank Major League Baseball and Reddit use us in that manner. Not saying only big companies can do that. We also have some partners that work with us to work with WordPress forms with gravity forms, small companies, and they’re able to do that. You can use the API. Anybody can use the API, but first and foremost.

Validate your email addresses, then decide if you want to use what’s called risky email addresses like disposable email addresses. Those are on the rise. That’s one thing that’s changing. Then there’s role email addresses like admin at and marketing at now. Why is that dangerous? If somebody signed up for marketing at whatever company.com, maybe I signed up for your email using that email address. And then three months later I leave the organization and then you, Jesse, you’re checking the emails because you got that new.

responsibility and you say I didn’t sign up for this email. I don’t remember it. You market a spam or you know unsubscribe from it. It’s up to you and the type of business you’re in whether or not that’s important and it also depends on other things as far as your engagement rates. But those are things to look for. Disposables, the role addresses and then there’s the free like do you want to accept Gmail, Yahoo, Microsoft or do you not? Do you only want B2B domains? You might see that you may fill out a form and will say please provide a business email because you tried using a Gmail.

That’s another thing that providers like kickbox and other ones that do validation offer is the ability to filter those out on the fly if you want to, or in a report. Next is email authentication. And a lot of people forget this and years ago, maybe it wasn’t as important and you didn’t really have to do that. What is email authentication? It is basically showing these email providers or the recipient servers that you are safe, secure and trustable.

Jesse Paliotto (07:05)

Mm-hmm.

Hank Hoffmeier (07:06)

And I’m to go into detail here because the first one is SPF and it’s not something you put on your skin to protect you from sun damage, right? It’s called sender policy framework. Yeah.

Jesse Paliotto (07:10)

Yeah, bring it.

I wanted to ask you about this because I feel like these terms

get thrown around and I’m not sure people always know truly what they are. So yeah, do this. This is great.

Hank Hoffmeier (07:21)

Let’s go through this and try to make it understandable. SPF is sender policy framework. This means let’s say I’m sending emails from hankhoffmeyer.com, but I’m using MailChimp. The recipient server is going to say, this email is being sent by Hank, but MailChimp’s actually sending it. Does MailChimp have permission to send us emails? What it’s asking for. Now MailChimp and other providers, they’re automatically going to do this SPF set up for you. And I contact our sister company who I worked for for 13 years.

Jesse Paliotto (07:43)

Mm-hmm.

Hank Hoffmeier (07:51)

They do this automatically. Now you may have another provider or you have your own server. Just make sure you have SPF set up and that would be in say your hosting provider like GoDaddy. I always mention X it’s well known. You go into GoDaddy and you go into your DNS. If you’re technical, you know what I’m talking about. If not use chat GPT, right? Or ask your email provider. How do I set this up?

And then you’re to go in and put a text record in and it’s going to be the SPF record. It’s going to identify, say MailChimp as a sender for me is what it’s doing to dumb it down. Then there’s DKIM, Domain Keys Identified Mail. Simply said, this means that the email has not been altered or changed during transmission. It hasn’t been hacked. It hasn’t been injected with malware. There’s end-to-end encryption. This is something that your provider, email provider, or you need to set up. Most times your provider will send you this information or it’ll be in your control panel.

Go to GoDaddy, whatever hosting provider you have, enter these DNS records and validate it and you can check it and make sure it’s valid. And then the last one is called DMARC, Domain Based Message Authentication Reporting and Conformance. That’s a mouthful. Really, even though it’s the longest acronym, it basically says, do you have SPF and DMARC set up? mean, DKIM set up. And if you don’t, what do we do with this email? What I always recommend is setting it up and then there is pass, fail, and ignore, right? Kind of.

And I would recommend just doing ⁓ doing no, none ⁓ fail and quarantine is what it would be right. None, rejecting quarantine is the correct terms set up as none. What this does is allow you to see if anybody is actually spoofing your emails. Maybe some company from a foreign country is sending emails on your behalf, trying to steal information from people. You can actually see this.

Jesse Paliotto (09:20)

Yes, ⁓

Hank Hoffmeier (09:35)

And a fun thing is you’ll actually see, Oh, it looks like the dev team is actually sending out a newsletter. We didn’t even know about it. And, know, cause you could see that they’re doing that and what email address they’re using and what domain they’re using, but then you can send it to quarantine or reject. And this is going to be something that’s required. The reason why I mentioned these three is these are required right now from Yahoo, Microsoft, and Gmail. If you don’t have this pretty much your emails are going to going to go to spam.

Now you might have a listener that’ll say, well, Hank, some of my recipients are still getting the email and they’re replying to it. I know they’re getting my email. What do you mean? Sure. If somebody is highly engaged and they’re opening, clicking your emails, they’ll continue to get the email. Now somebody going and going to your website and filling out a form and you’re using authentication for a kickbox. Then what happens is they don’t get that welcome email. They don’t get subsequent emails because it’s going to spam.

Another item you can add, and this is not required, optional, it’s called BIMI, brand indicators for message identification. Now, if you look and say Gmail is the perfect way to describe this, you may see either a logo or like a K for kickbox in a circle, like a red circle. The reason why it would be a logo is because BIMI is set up. Again, you have to have SPFD, Kim, and DMARC. You do have to have a verified domain.

There’s a couple options and it does cost some money anywhere from $800 to $1,500. You may need to have a what’s called a VMC certificate and then to go through this process of verifying you own the domain, right? Which is critical for this. And really what that does is it provides a way for users to trust you in the inbox that your domain showing up. OK, this is Best Buy. This is their subject line. I probably can trust them. I’ll open it. Whereas if it’s just Hank Hoffmeier and Assistant H, can you trust that? Maybe, maybe not.

But those are the authentication methods and things that you need to worry about when it comes to sending emails. Right. And I mentioned Microsoft, Yahoo and Gmail. like to call them “Yahooglesoft,” but we can also say MAGY, which would be Microsoft, Apple, Google, and Yahoo, because Apple and I can mean my phones right here. And let’s say I put it face down. I’m not even looking at it, Jesse, and you send me an email and I’m using the built in email

Jesse Paliotto (11:41)

Mm. Yeah.

Hank Hoffmeier (11:54)

app from Apple, right? And I can use that with Gmail, Yahoo, et cetera. It’s going to count as an open whether or not even looked at my email or not. I mean, never look at your email, but it’s going to count as an open. lot of people like to look at opens as a metric of success. In other words, at 20, 30, 40 % open rate where that’s kind of a almost a dead metric. It’s still OK to look at it. Realistically, you want to look at clicks and make sure that people are clicking your email

Jesse Paliotto (12:19)

Well, let me let me let me go back a paragraph. I just want to make sure that I grabbed that, because that was a lot of sort of dense definitions. But I this is my simplistic way that I heard you. So a ⁓ the SPF is a text file. In your. Domain settings the. Or. It’s the host and then.

Hank Hoffmeier (12:39)

or host that mostly most times is the host. But it could be

on the domain. It just depends on how your website set up nine times out of 10. It’s the host.

Jesse Paliotto (12:48)

And the DKIM is an encryption that’s running in order to make sure that contents are not altered during send, right? Okay, DMARC is essentially a policy that runs sort of if-thens, that if it sees these signals, do this with the email, either let it go through, possibly quarantine it, possibly put it into the spam folder. And then BIMI, in my weird brain, it’s the blue check mark on Twitter.

Hank Hoffmeier (12:54)

It’s making sure there’s encryption, yes.

Yes.

Jesse Paliotto (13:15)

You’re paying in order to get a brand trust signal that shows up right next to your message in the inbox. Is that Jesse’s dummy dumbing it down? is that where? The clip notes version. OK, so this is ⁓ before the Apple thing on the 30 % is a really interesting thing. Let me ask you really quick on a sidetrack before we come back to that. What do you see companies messing up? That’s that’s too negative. What’s the biggest opportunity you see that companies have when it comes to?

Hank Hoffmeier (13:16)

Yes.

Yes. Yeah, I like it. What do we call those Cliff Notes? Yeah.

Jesse Paliotto (13:45)

getting what you just said with all those settings.

Hank Hoffmeier (13:49)

When it comes to getting the settings right is they’re not actually implementing it. They don’t have it. They don’t know that they need to implement it and then making sure it’s correct.

Jesse Paliotto (14:01)

Yeah. So just straight up awareness, just knowing that there’s these pieces that need to be put into place. Is the obstacle. Yeah.

Hank Hoffmeier (14:08)

Yep. And there’s a tool. Let me, this is important about my dot email.

If you go there and you recently set up or you want to check your authentication, that’s a good tool about my.email. It will tell you if you have SPF, DMARC and DKIM and even BIMI set up and set up correctly.

Jesse Paliotto (14:27)

that’s a great tip. ⁓ if you’re, you know, shout out to anybody that’s new to the marketing team on the operations team, trying to get a quick read on things, you could go to there and get an immediate readout on your own or potentially even competitors or somebody.

Hank Hoffmeier (14:41)

Yeah, somebody could start in a marketing team and they’re head of marketing and they were told, yeah, we set up authentication years ago or last month. You may want to verify that.

Jesse Paliotto (14:50)

Yeah, does it change over time? Is there anything that would alter ⁓ those settings or once they’re set up they’re permanent?

Hank Hoffmeier (14:57)

Maybe you change the, ⁓ the domain you’re sending from or something like that, usually they’re kind of permanent or maybe you moved from MailChimp to Constant Contact and you never updated your records, right? ⁓ that could be a huge red flag and cause it to fail. And then a lot of people tend to use Microsoft email still.

A lot of times sometimes it’s hard to set up something with what’s called IP lookups because every domain has one or more IPs and I believe that the SPF record holds only about 10. So in other words, if you use it in Microsoft, I think it automatically uses like six to eight, I think. And then if you’re adding five more, it’s going to put you over that limit and it will fail. And there’s workarounds for that. We won’t get into that because it’s like highly technical.

Jesse Paliotto (15:42)

Yeah, interesting. And I know from my experience in SaaS companies, the entire company is often not using the same email platform. So you may have marketing team using MailChimp. You may be having the product team using Railgun or something to shoot out ⁓ system messages. You could be having sales team using other outreach techniques for outbound. So I would say that’s the thing that also strikes me with that is

It’s not just validating one system. It should be across the company, I would guess.

Hank Hoffmeier (16:14)

Yeah, and if you’re using many platforms, make sure you’re synchronizing your unsubscribes because you don’t want to get in trouble there.

Jesse Paliotto (16:20)

Yeah, that’s ⁓ interesting. Yeah. Okay, let’s go back then. Thanks for letting me kind of like circle around for a second there. ⁓ Can you get us back into, so Apple with ⁓ open rates, you’re, and this is going, I’ve seen this in a number of articles, people will talk about this, that your open rate as a metric is no longer as meaningful as it was because your phone is auto opening anything it gets. ⁓ So what do we do with open rate?

Do people still quote benchmarks and say, oh, know, if you’re in this type of business, you should be having a 40 % open rate? Or do you even think about that, or do just throw the whole thing out?

Hank Hoffmeier (16:56)

You can eyeball it and it’s a good way. You know, if your list isn’t holistically changing a lot as a, you know, an informal metric, you know, if you’re steadily in the twenties or going up, then you’re doing well. But if all of a sudden there’s a big drop or a big spike, you might want to look into why that happened. Um, you know, if you added a bunch of, uh, people that may be using Apple, then you obviously know there be some jumps, but most people don’t usually steady grow over time because you should be.

using permission based email marketing. In other words, never buying a list and adding your million email addresses that you purchased because there’s a lot of issues there because not only does Yahoo Google soft require that you have this authentication, they’re also looking at your spam complaint levels. If they’re over 0.3 % or 3 % per thousand of each of these domains, not overall, you will be dinged again. And also

cause what’s called IP or domain reputation damage. The same thing with your bounces, right? And that’s why kickbox is important and validating emails. If you send too many emails to too many emails that are invalid and they bounce again, that hurts your ⁓ reputation as well. And what I’m talking about here is every time you send an email, let’s say I’m using hankhofmeyer.com and I send to a hundred Gmail subscribers. I like to use Gmail cause they’re the most strict with their algorithms, et cetera.

And then over time, 50 % or 50 of them are either bouncing, mark me a spam or worse unsubscribing and even ignoring my emails. That is a bad signal and people don’t realize that. That’s why list hygiene is important. If that starts happening and my credit score is 50, again, I’m going to run into trouble and Gmail, Yahoo, whatever server is going to say, Hank’s not a really reputable sender. Let’s send more and more of your emails.

his emails to the spam folder and that’s what happens. And you mentioned like, what is the biggest thing that marketers either have an opportunity for with authentication, but the biggest overall opportunity is value, right? Making sure that you’re sending emails that your subscribers want that they opted into that’s. Educative, informative or helpful in some way, not what you as a marketer saying, I have the best email in the world and I love it. Everybody else should love it too.

Jesse Paliotto (18:56)

Yeah.

Hank Hoffmeier (19:16)

Make sure you’re sending relevant emails and testing, know, split testing. A lot of these platforms have ways of taking a portion of your list and testing it to see if it’s going to do well because yeah, authentication is important. Verification is important and your IP and your domain reputation is important. I don’t mention IP a lot because usually smaller senders are going to be on what’s called a shared IP like MailChimp constant contact. They have a bunch of IPs that all their customers share.

Jesse Paliotto (19:38)

Mm-hmm.

Hank Hoffmeier (19:43)

But if you’re a huge center and you’re sending millions of emails a day, it might be worth looking into what’s called a dedicated IP, having your own IP address, then you’re holistically responsible for the reputation of that IP address. And how I meant like to mention this is years and years and years ago when spammers would sign up for a service, they would send out spam and it would be the IP reputation that made it an issue, right? Okay. They’re on this IP address. They’re sending spam. Any emails coming from this IP leads block.

Jesse Paliotto (19:51)

Mm-hmm.

Hank Hoffmeier (20:12)

Then they would just say, okay, well I’m leaving this ESP and I’m gonna go over here to this one now and burn their IPs. Then they burn those IPs and they go somewhere else. What happened is there’s been a change. Number one, these providers start blocking people. And then two is the powers that be said, well, let’s start looking at the domain. Okay, if they use this provider and they’re sending crappy emails, that domain reputation is gonna follow you over to this other provider. And that’s what’s happened over time.

Jesse Paliotto (20:40)

Oh, interesting. Thank you. That was a helpful summary because I know I’ve looked at that in the past and tried to track like, why did this reputation, you know, why did it persist? Can you talk a little bit about list hygiene? Because I feel like this kind of gets us into like, if I’ve got 10,000 member list or 100,000 or million, it doesn’t really matter. And I want to make sure that what you’re describing isn’t happening, that people aren’t ignoring, spamming, just throwing in junk.

then know my I’ve heard that you know well you want to clean your list and take away people that are actively not engaged but I’m getting false signals now from my phone or from their phone rather that are auto opening that how do I approach ⁓ hygiene on my list in light of all of that.

Hank Hoffmeier (21:25)

And the advice can be generic and it could also depend on what industry you’re in and how many times you’re sending an email. If you send an email once a quarter versus once a month versus once a week, your timeframes can be different. let’s say average, you want to look at six months. If somebody hasn’t opened and clicked an email in six months, it might be good to put them into a sequence and asking people if they still want to receive your emails.

Now I’ve seen this done well on people that are in our space because we all know marketers know what’s happening. And there’s a newsletter I belong to that every now and then they’ll say, Hey, we all know that Microsoft Yahoo and all these other providers want to see engagement. Please click this link if you want to still receive our emails. I actually got one from a well-known brand doing something similar saying, we noticed that you may not have engaged with our emails in a while.

If you still want to receive our emails, please click this link to let us know to keep sending you emails. Now that was great. Wonderful. The thing I think the mistake they made is I clicked on the link and I went to their homepage. That’s it. Like just dropped on their homepage. You should have a, think in my opinion, have a specific landing page. That’s simple. That just says, thank you for clicking on the link in the email or thank you for letting us know you still want to receive emails from us. Now, if you want to put an offer on that page or put something else, picture of a clown, whatever you want.

Jesse Paliotto (22:31)

Yeah, missed opportunity.

Hank Hoffmeier (22:48)

Just make it so that, like I said, it’s valuable, right? Don’t just drop somebody to homepage and maybe they’re gonna buy something or you were just lazy to set something up. Maybe you do something where you sell something that people don’t buy too often. Like you sell, I used to work with a client that sold reading glasses and also regular glasses. I don’t know if you wear glasses at all or not, but I do. How often would I buy glasses? Maybe the most once a year. Why should I be sending somebody an email once a week, which is what this client was doing?

Jesse Paliotto (23:13)

Mm-hmm.

Hank Hoffmeier (23:17)

We moved to once a month, but then we also started limiting how much promotion was in there. Started providing information like blog posts about organic health for your eyes, how to clean your glasses, repair them, gave them more value to stay in touch with them. So basically my, guess I want to give some advice. Like if you don’t send the emails too often because you say we only send once a quarter because that’s the industry we’re in.

find ways to keep in touch with them and send them an email a little bit more often so that you do have that data and those metrics. And then you use that sequence of emails, send them one email asking if they still want to receive it, waiting a week, two weeks. If they didn’t open that first email, send them a second one. It’s kind of like, are we breaking up question mark, the first one, right? Then they don’t open that. The next one’s like, here’s the divorce papers, right? And then you have some information in there. And then the last one, if they didn’t open the previous two is,

Sign sealed and delivered. We will remove you from now. Hey, maybe email is not your thing. Follow us on Facebook. Follow us on LinkedIn. You know, whatever you want to do. Try to promote that as well, because maybe they’re getting them or they got that last one and they opened it, but they still don’t want to engage with your emails. Maybe social media is their thing. Then follow through and then you can use automation to automatically remove them or manually remove them. The beauty is folks, you can add them back at any time. That’s the thing is they can come back at any time. Some companies just

Jesse Paliotto (24:37)

Yeah.

Hank Hoffmeier (24:41)

Some marketers want to hold onto those email and say, they’re going to open up at some time and we need to be in their inbox even if they don’t open. Because now we also have the AI summaries where Apple is automatically summarizing these emails for you as well. You have to fight that battle too.

Jesse Paliotto (24:56)

Can you talk about that for a second? What does that look like for people that may not have experienced that?

Hank Hoffmeier (25:01)

Right. And there’s no telltale way as to exactly how it’s going to look for each individual person. I can look at my phone right now and any emails that I’ve gotten while we’ve been talking, it would summarize it for me. And it can even summarize that one specific email if I open it at the top. Play around with your copy. Your copy is more important than ever, making sure it’s concise and valuable. This way the summary is going to reflect what you have in your content.

If you’re using a lot of fluff words and you’re not really getting to the point, keep in mind that that could be pulled into the AI summary. And, you know, there’s a lot of jokes going around because some of it’s kind of funny or, know, there’s always there’s been like two I’ve heard where somebody had a death in a family and the summary was just hilarious. And it’s still a work in progress and they’re not going to be perfect, but that is something that we’re all going to have to learn together because it’s kind of newer.

Gmail starting to summarize emails now. If I gave you my work email address and you’re sending me emails, it’s going to summary at the top. Make sure that you’re optimizing for that. It’s almost like SEO and almost.

Jesse Paliotto (26:08)

Yeah, the AI summary with the death of the family, which is very, I mean, it was probably tragic for the person experiencing that. It reminds me of the story from years ago of, I think it was Target’s auto coupons, where I think it was the woman was pregnant and that coupon or something showed up, said, looks like you’re pregnant. Do you need these products? And the husband or somebody didn’t know and that’s how they found out. And it was just like the system is trying to be so smart.

you’ve got to, it can follow you up, you’ve to be smarter than the system.

Hank Hoffmeier (26:42)

Exactly.

Jesse Paliotto (26:44)

The ⁓ with sending. I’m curious because I’ve read recently around long form being making a bit of a comeback and a lot of different channels. Have you seen that with email? know kickbox probably has access to a lot of data. I’m not sure how much of that you can share, but do you have any insights on like in terms of getting engagement so that you do have a list that stays good and people are excited to or at least accepting of receiving your emails?

Is long form back for email marketing or is that largely other content forms?

Hank Hoffmeier (27:18)

It depends. It depends on what industry you’re in, your audience. I do a monthly newsletter and it’s tools I found that made me productive. If I’m going to be speaking somewhere or takeaways from conferences I’ve been to another blog posts I’ve read, that’s a little bit more long form. And I find that people tend to like that. But if it’s something where you’re selling a product and service and it’s you only sell one or two products and service and not like Macy’s where you can put a bunch of products.

Jesse Paliotto (27:48)

Yeah. Yeah.

Hank Hoffmeier (27:48)

It’s not worth having long form. It’s not worth

putting a full product review in an email, maybe put the first two sentences and getting the click to get them to read more. I still think that FOMO wins out, especially with email because we have to get that click through to show engagement, right? Whereas we’re not looking at opens much anymore. ⁓ You could say, Hey, we recently wrote a blog post with the top three ways to whatever.

Right. you can say number one, number two, and then say to read number three, head over to our blog and get them to go over to the blog. Right. You’re giving them the summary, not AI summary, your summary, and then click here to get the third one, which helps with that engagement. I think that people are willing to do that. But to specifically answer the question, it really depends. And also make sure you’re testing and finding out if that’s what and I’m always a fan of polling your audience. Do a survey once a year and ask people.

Jesse Paliotto (28:32)

Yeah.

Hank Hoffmeier (28:39)

Hey, do you generally like longer form content or shorter form content and let them decide. And people tend to say, Oh, well, we know what our subscribers want. No, you don’t. And a lot of times you might get mixed. Then what you can do is say, okay, 50 % of our audience or 49 % of our audience wants long form and 51 want short form. Then you split that audience into two and you put them on two different lists and you react accordingly.

Jesse Paliotto (29:03)

Yeah, testing is always the answer. Like asking and testing. Yes, 100 percent. ⁓ I wanted to ask for a second about regulation or changes or anything you may see coming up in the market around this. I GDPR has been with us for a long time. For those who may not be aware of it, that’s the Europe started ⁓ legal process or not legal process, legal requirement.

For people to opt in and not get spammed to their CCPA, which is the California one which has been more recent I’m curious if you see any other kind of changes standards or whatever else coming down the pike for the world of email

Hank Hoffmeier (29:40)

I think it’s all going to move towards like what GDPR is. And I would just ⁓ plan for that. And the best advice I’ve ever heard from somebody on a legal team was always follow the most strict there is, even if it’s not in your country. In other words, follow GDPR because then you’re covered for CCPA. You’re covered for, you know, Castle Now and, ⁓ and all the other ones that are out there and every state can come up with theirs because the thing is

I can market to someone in the European Union without knowing it. And then I’m on the hook for that same thing with California is if you’re emailing somebody that resides in California and you didn’t follow the CCPA, you can get in trouble. And the punishment’s pretty serious. I would say just make sure you’re doing the right things and make sure that you’re getting those options. I mentioned in beginning, don’t ever buy a list. And more importantly to not more importantly, but also important if you go to say a conference.

and you sponsored the conference and they say, we’ll give you a list for $2,000 of everybody who’s attended. Now, how many of those are going to actually come to your table if you have a table? Not all of them, right? But then you do have the ability to email all of them. But did they specifically opt in to get your emails? Probably not, unless the conference is doing it right. Then you run into the they don’t know who you are. They don’t remember your brand.

They may mark that message as spam, ignore it, or, you know, and all those things and it may bounce. It may have provided a bad email address. That’s why it’s always good to make sure that you have the best possible quality list you can. And with those folks that you meet at conferences too, most times what I recommend is emailing them one off or reaching out through LinkedIn and asking if you can add them to your email newsletter. Not every marketer wants to hear that if they’ve been going to shows and collecting lists of hundreds and hundreds of people.

Jesse Paliotto (31:22)

Mm.

Hank Hoffmeier (31:28)

⁓ I did a talk in Birmingham, UK, and I got the list of people who opted in. I sent them a personalized email video and I personalized each one, 120 people that I got the opt in from. And I just said who I was, gave them the key takeaways and a copy of the deck and a recording of the session afterwards. And I asked them, I have a newsletter. Would you want to sign up for that? I asked them to stay in touch. It was a one and done. And I asked them to stay in touch.

I’m not saying everybody wants to do that, but that is a good tech.

Jesse Paliotto (32:00)

So those were folks that they, because you were a speaker, the event had probably had something that said, you know, if you tick this box, maybe we pre tick this box, you’re giving permission for our sponsors to email market you. But you said, I want more permission than that. And so I’m to do this video tag.

Hank Hoffmeier (32:16)

Yes.

Cause I mean, if I just said, thank you for coming to the IREX conference, the name of the conference, wanted to follow up and tell you more about what kickbox does. They might not remember all that. They may have came to my session, sat in the back and been on their phone the whole time. And they probably might not have remembered me, but majority of them may have. they, and I got a lot of replies, you know, saying it was great and all this, and he appreciated the followup, but there will be those handful that.

Don’t remember who you are. Don’t care who you are. And they’re going to market a spam, unsubscribe, ⁓ ignore it, which hurts your domain reputation, which is what we mentioned. That’s what you’re looking out for most first and foremost, staying legal price. You don’t get fined and then making sure that you are keeping your domain health in check so that your emails get to the inbox.

Jesse Paliotto (33:03)

I love that in the sense that or in multiple sense one is just that it’s true permission marketing because once somebody says actively yes no I want to hear from you I’m going to be more likely now to open your emails because I kind of made this mental decision that I want to hear from you. Also I feel like SaaS companies digital product companies are so many venues where you get that you know when you somebody registers for ⁓ filling out a review they fill out a trial they fill out they attend a trade show they do something where they’re kind of.

kind of giving third party sponsors permission to market to them, but they don’t really want it. And so there’s so many scenarios that, you know, a company may find itself where they technically have GDPR opt in, but do they really have the actual buy in to not get burned in the relationship? And so I really respect, you know, kind of going out and doing the hard work to confirm the relationship.

Hank Hoffmeier (33:54)

Yeah, I like to always say, know, if you’re using a purchase list or using these conference lists, of course you’re to get the flash in a pan moment, right? You may get some sales, you may get some opens, but you’re hurting yourself for the future. Your domain and your IP reputation and your brand reputation is going to start to sink in. Your email marketing efforts will slope downwards and you might even start wondering why, unless you’re listening to this episode, you know why, but if you didn’t, you’ll

Jesse Paliotto (34:01)

Mm-hmm.

Hank Hoffmeier (34:20)

It will start saying, why are open rates so low? Why is nobody clicking our emails? It’s because they’re not getting them.

Jesse Paliotto (34:25)

Yeah. OK, this is a big question. So you can answer to the extent you want. If you could wave a magic wand ⁓ and fix kind of one thing with how most SaaS software, digital companies, do their email, what would that one thing be?

Hank Hoffmeier (34:41)

It’s going to be looking at the program and making sure you’re providing value while sending authenticated emails. That’s simply what it is. And it’s not one simple thing, but yes, just making sure you’re looking at your program and you’re set up correctly as far as setting yourself up for success. First thing is authentication. know, I’m not, mean, sure. Verification is important, but authentication is the king. And then your content and the value you offer is going to be the queen. And after that,

Hopefully everything just goes smoothly after.

Jesse Paliotto (35:14)

Yeah, I love that. ⁓ I think you can we talk for a second. I think you’ve got an offer for the growth stage audience today. We were just chatting for a second before we hopped onto the call. Do you want to talk about that for a second?

Hank Hoffmeier (35:27)

Right. People that come to kickbox and they sign up, they get a hundred free test credits. What I’d like to offer is using growthstage as a coupon code. When you go to purchase credits, maybe after you use the a hundred, if you want to up to you, I want to offer 1000 free credits. In other words, especially if you’re a small company, it would take you a while to get through a thousand free credits. You can test out our integrations, our API upload list. There’s a way to do one. We call it single verification. You can go in and just do one at a time.

Test it out, but yeah, use the code growthstage and get 1000 free credits. I have that set through the end of the year, which is the end of December of 2025.

Jesse Paliotto (36:05)

Awesome. Thank you, man. So much for doing that for the audience. And just to kind of poke at a little bit, because I haven’t used Kickbox yet, although now I’m going to have a thousand free credits to do. The credit is the API validation of the email. So somebody is filling out my free trial form and it double checks. This is a legit email and all of that. that’s actually especially for some for a company that may be either smaller or on the B2B side where there tends to be less volume of lead generation. Yeah, that’s a that could be a substantial runway to get somebody

testing this whole methodology, right?

Hank Hoffmeier (36:36)

Yeah. And we don’t charge for unknown results. There are some servers that may be temporary issues, servers down, or they just flat out refuse to talk to us. It’s called unknown. We don’t charge for those. We also do email deliverability consulting. And if you feel like you have a domain reputation issue or you you think your authentication is not set up correctly and you feel like majority of your, or you know, a majority of your emails are going to spam. We can provide a success plan and strategy to get you back on track.

Jesse Paliotto (37:06)

Man, that is so valuable and I’m not just buttering you up because you’re on the podcast. I’ve just been in numerous scenarios where ⁓ like email deliverability for the marketing operations or sales team can be, you never think about it till it’s wrong. And then all of a sudden it’s a fire and you’re trying to figure out how do I put this out? And so that’s a great shout out for folks that may run into that in the future.

Hank Hoffmeier (37:32)

Yeah, think of it like the credit score, right? You tank your credit score. It takes a long time to come back, right? It takes a while to get down to a low level and it takes a long time to climb back up that mountain. Same thing with email deliverability. Once you know there’s a problem, it’s hard to get back on track again.

Jesse Paliotto (37:37)

Mm-hmm.

That’s so good. Where can people catch up with you, Hank, if they want to ⁓ try and catch you somewhere online after this?

Hank Hoffmeier (37:56)

I always like to say if you search Hank Hoffmeier on Google, I have really good SEO. I show up probably for like the first two pages of results with everything that has to do with me, all my social media channels. The only thing I ask if you’re going to connect on LinkedIn, just make sure you personalize the invite. I have this rule where I don’t accept blind invites, but I’m a marketer, so I will reply and ask you if we’ve met before because I have a bad memory or I’ll offer to have a call with you.

And what’s funny is I keep track of that and I think the metrics still around. I only get a 40% response to that. In other words, it’s just a lot of salespeople trying to pitch me. I even get responses to my reply saying, thank you for accepting my invite. Here’s my sales pitch when I didn’t even accept it. But if you reach out and you say, I met you on the show, I still may actually want to have a call with you because I really covet having a valuable network where I can help you. You can help me and we can have a wonderful LinkedIn relationship together. Otherwise follow me on TikTok, Instagram, all the social channels. I’m always putting stuff out. It’s not all related to email. I do a lot of tips around digital marketing. I’m still trying to get my podcast going again. Hank’s Marketing and Business Tips. There’s probably about almost 300 episodes that are there historically. I hope to definitely get that back up and running and Jesse I’ll have you on too as well.

Jesse Paliotto (39:15)

Oh, I would love that, man. Well, thanks for being here today. I really appreciate it. Thanks everybody else for joining us, for being with us here on Growth Stage. Again, Hank Hoffmeier from Kickbox. Really glad to have him here. I’m Jesse Paliotto. I’m your host. I get to be a part of the digital product community by doing this today, and I’m so pumped about that. And I hope you all have a good week, and we will catch you next time on the Growth Stage.

Jesse Paliotto (00:04)

Hello everyone and welcome to Growth Stage podcast by FastSpring where we discuss how digital product companies grow revenue, build good products, increase the value of their companies. I’m your host Jesse Paliotto I get to be a part of this community as part of my role at FastSpring and I love bringing the best of the community to you guys today. So today with us I’m excited to have with us Amber Hinds. Amber is the CEO of Equalize Digital, a company specializing in WordPress accessibility, maker of the Accessibility Checker plugin, lead organizer for the WordPress Accessibility Meetup and…

Board? What was it Amber?

Amber Hinds (00:36)

President for WP Accessibility Day nonprofit.

Jesse Paliotto (00:40)

I knew I was gonna mess up the phrasing. Thank you for helping me. Through work at Equalize Digital, Amber is striving to create a world where all people have equal access to information and tools on the internet. So important, regardless of ability. Since 2010, she’s been leading teams, building websites, web applications for nonprofits, K through 12, higher education, government, businesses of all sizes. And she’s a passionate advocate for accessibility. Amber, I’m so glad you’re here today. Thanks for doing this. I really appreciate it.

Amber Hinds (01:06)

Yeah, thanks for having me. I’m excited to be here.

Jesse Paliotto (01:09)

Just to give folks some context, can you briefly describe what Equalize Digital does as an agency?

Amber Hinds (01:18)

Yeah, so we specialize in website accessibility. We do a lot with WordPress, but we also do work outside of the WordPress world. So we have a software product called Accessibility Checker, which audits WordPress websites for accessibility problems, puts reports in the editor, and helps with some of the larger governance, does full bulk scanning, and…

Then we also have a services side where we do audits and we do some audits and remediation. And our audits are full WCAG, Web Content Accessibility Guidelines, which I’m gonna call WCAG testing by certified professionals. And we also do user testing with people who are blind and native screen reader users.

Jesse Paliotto (02:09)

I wanted to ask about that in a few minutes about people versus machine testing. maybe first, like to ask the very obvious question or maybe the question I’m sure you have answered 1,000 times, can you talk about what accessibility is? I’m sure people that are listening have maybe a personal answer in their mind or some particular thing that, yeah, it’s color coding on websites or something. Can you talk a little bit more like what do you think of when you think of what accessibility is?

Amber Hinds (02:38)

So from a bottom line perspective, accessibility is about ensuring that all people of all abilities who use all different kinds of devices can access your website and do whatever it is you want people to do. So like buying your products, adding them to a cart, going to a checkout page, entering all their credit card information, and then completing the purchase.

That’s probably what most of your listeners want people to do on their website. So accessibility is about ensuring that people can do that on your website. There are a wide variety of different people who use websites. Based on stats from the World Health Organization and the CDC, it’s about 25 % of the population in the world has one or another type of disability.

And so some of the people that we commonly think of are blind people who use assistive technology called screen readers, which read out all of the code on the website to them. And it needs to be formatted properly in the backend, behind the scenes, so that it can be read out properly and they can then use the website with their screen reader. But also captions for people who are deaf, if you have videos on your website.

There’s things with color contrast or making sure that it’s appropriately mobile responsive so that if somebody who has low vision zooms in or somebody who’s just out using their mobile phone or sitting on their couch using their mobile phone can also use the website. And accessibility is something that a lot of us sometimes think, people are born with disabilities. And yes, that is a group. But it is one of these groups that almost all of us are going to join at some point in time.

some sooner than others unfortunately, but you know as we get older our vision maybe isn’t as good or we might experience an accident or an injury that results in a disability. A lot of veterans for example might have mobility challenges or limb losses where maybe they can’t use a mouse and they can only use a keyboard and they can see just fine, but if the website doesn’t work well with a keyboard then it doesn’t work well for them.

So there’s a lot of different people and it’s really just about making sure that they can buy your stuff on your website.

Jesse Paliotto (05:03)

It’s the vision thing is immediate when I thought of when you said, most of us will join kind of this group at some point because yeah, using reading glasses, you suddenly realize like, yeah, like I’m zooming on stuff and you get into sites where it doesn’t work properly and becomes very frustrating actually. and you get, you get, if you have not been a part of that group and had to deal with that before you quickly become aware of the gap that people experience.

Amber Hinds (05:21)

Mm-hmm.

Captions on videos too is very

big. You know, it’s interesting because even 10 or 15 years ago, you didn’t see captions reliably on YouTube videos or social media videos. And nowadays it’s very commonplace. And there’s actually a lot of stats that say most people consume more videos muted with captions than they do actually listening to the sound on the video on the Internet.

Jesse Paliotto (05:33)

you

Yeah.

Yeah, I would love a stat that showed, because I hear the other side too, like especially for music and stuff, people listen but don’t watch or as you’re suggesting, watch but don’t listen. I wonder how many people are truly watching videos in a full kind of experience mode. I’m sure you could piece together some stats out there. That, you know, with accessibility, I was going to ask a very obvious question, but you’ve kind of already kind of given some of the answer. was going to say, why is accessibility important? I think the obvious point that comes to me

Amber Hinds (06:14)

Yeah, I don’t know.

Jesse Paliotto (06:28)

is that it’s just the right thing to do. It’s about equality, it’s about treating people with dignity, making sure that it’s equal access. But you’ve of already, I think, answered a secondary or maybe a of a sub point, which is it’s also good for business. Is that a fair point?

Amber Hinds (06:46)

It definitely is. The interesting thing about accessibility improvements is that there’s a lot that you do to the underlying HTML code that is also very good for search engine optimization. If you think about it, Google Duck Duck Go, Yahoo, whichever your preferred search engine is, is probably one of the most common

blind or non-seeing users of a website. They come in, they crawl the code, they interpret that code to understand what the website is about, and then they try to match it with search results. So we’ve actually seen sometimes where we’ve done some website remediations where there’s no design changes and there’s no content changes. It’s just the underlying architecture. And we’ve seen six months later a 15 % increase in traffic to that website from Google search.

Jesse Paliotto (07:39)

wow.

Amber Hinds (07:41)

Yeah, so it can really help on bringing more people to the website. It also can reduce bounce rates because if a website doesn’t work well and someone finds it and they just can’t navigate around it, they can’t find the product or they try to add something to the cart and check out, but maybe, you know, something confuses them about the process, then they will abandon.

So it can help with reducing abandonment rates on websites or just getting more people to add products to the cart. You know, get them out of your blog posts and over to where they actually buy, that kind of thing. It’s also good from a legal perspective for businesses. There are laws around the world that require websites to be accessible, particularly for e-commerce websites.

Here in the United States where I live, that’s the Americans with Disabilities Act. In most places, websites alone have to be accessible. There’s a couple of jurisdictions where they say only if you also have a brick and mortar e-commerce store, but it’s not consistently that way across the entire United States. So even a business that only has an e-commerce and no brick and mortar is required to do that.

Jesse Paliotto (08:47)

Mm-hmm.

Amber Hinds (08:56)

The big one that a lot of people are talking about is the European Accessibility Act, which is beginning enforcement in June of this year, June 2025. And that’s requiring that all e-commerce businesses that have more than 2 million euro in revenue or 10 employees or more. So either one of those, you hit the box. It applies to you and that requires accessibility.

Different countries in Europe handle the enforcement of that different ways. It could mean that the business will get fined. In Ireland, there’s jail time involved if it goes far enough. Yeah, in addition to fines. There’s also instances where businesses, there have been airlines that were getting subsidies and they lost their government subsidy, which almost is worse than the fine because so much more extra money.

Jesse Paliotto (09:38)

Really?

Yeah, right.

Amber Hinds (09:56)

So there’s a lot on the business side for doing it beyond the obvious benefits of serving all of your customers. There’s also maybe a stick involved too.

Jesse Paliotto (10:10)

Yeah, and with the regulations, I my experience with regulations is that essentially you have to perform at the most stringent level and then it takes care of everything else. It’s very hard, especially in a digital world where potentially anybody’s interacting with your site or with potentially your SaaS product. Like you basically get held to the highest standard in order to be able to meet everybody else underneath it, which sounds like it may be the European one.

Amber Hinds (10:34)

and that’s the thing. Well, actually, you know, one of the ones that is most strict is in Manitoba, Canada. Their requirement is any business with one employee or more. There’s no revenue threshold. There’s not. And they all they all require that you meet what I mentioned previously.

is the web content accessibility guidelines level double A. So there’s three different levels for that. Single A, double A, triple A, and double A is kind of in the middle. And that’s all laws reference that. The current version is 2.2. So you hear people say web content accessibility guidelines 2.2. Double A. And all the laws reference that. But the thing that’s so interesting about digital businesses

is that if you advertise in a market or you ship products to a market, then you have, or you have employees there, then you have what’s considered nexus. And this is like people come to FastSpring to help you with the tax, because once you sell enough stuff there, guess what? Now you have to pay tax. Well, once you sell enough stuff or advertise enough times in a certain market, you now need to meet their accessibility laws.

Jesse Paliotto (11:26)

Mm-hmm.

Yeah.

Amber Hinds (11:45)

So where I mentioned there might be some states in the United States where if you don’t have a brick and mortar store, it doesn’t matter. But if you sell to a place like California where they don’t care if you have a brick and mortar store, you now need to comply with California accessibility requirements. And it’s the same thing if you go global, right? Then you’re looking, if you ship to Manitoba, Canada and you have one employee, you have to be accessible.

Jesse Paliotto (11:56)

Mm-hmm.

Yeah.

As soon as you said the word nexus, it triggered because that is such a key concept for what FastSpring does with tax handling for folks is that idea that you’ve kind of become liable is probably the wrong way to phrase that, but you’ve become legally responsible in that environment. I I’m curious. it’s I think anybody with a human heart would admit that it is the right thing to do to serve your people.

I think anybody with a business mind would say, okay, it actually makes sense. Why do people not do this though? Do you run into reasons why companies or even individuals who running their own businesses don’t kind of put the work in? Is it just ignorance or is there kind of myths or anything or what’s the obstacles there?

Amber Hinds (12:55)

some degree the interesting thing about the web and web developers maybe in general is that there’s there’s no certification there’s no one path many web developers and even marketing agencies are started by people who are self-taught and I don’t know that the the W3C which is the international group of volunteers that

created the web content accessibility guidelines, which have been around for more than 20 years. So this isn’t a new concept, but I don’t know that they’ve done a great job of marketing it maybe historically. And so I think there are a lot of self-taught developers that just don’t know. And even store owners, people who are starting an e-commerce business, there’s so much that you have to learn. And if you…

hire a web developer or web agency that’s never heard of accessibility or doesn’t say to you, hey, this is important, just like privacy policies. If no one tells you that, you might not realize, hey, I have to have a privacy policy on my website. So to some degree, I think there is or has been historically some just like ignorance or not knowing.

that accessibility is a thing or not having explained to them. Because I’ve heard people be like, well, I understand why you have to have a curb cut so a wheelchair can get up on a curb or why you need an elevator instead of stairs. But I don’t even know what this means on the internet. A lot of us haven’t seen a blind person use a screen reader. And so it’s hard to envision, well, what would the challenges be for them? Because we just don’t have that personal experience in the same way that we might have seen a person in a wheelchair and we can visualize that.

Jesse Paliotto (14:23)

Yeah, right.

Amber Hinds (14:41)

So I think there is some of that. In the more recent years, I want to say like four or five, right around COVID time is when I really started to see more of the news media picking up on this. We also saw a big acceleration on accessibility lawsuits against e-commerce businesses in the United States. And so the news picked up on it this year in

Jesse Paliotto (14:55)

Mm-hmm.

Amber Hinds (15:06)

February the FTC in the United States, the Federal Trade Commission fined one of the overlay providers a million dollars for lying about how they saw about solving accessibility because they don’t actually they’re like an AI solution and they got fined a million dollars for misrepresenting their ability to fix problems without a human, which we could probably go into in a minute. so I think

Jesse Paliotto (15:27)

Wow.

Amber Hinds (15:32)

There just hadn’t been a lot, but there’s a lot more news about it now and education. And so it does sometimes at this point, I think, come a little bit down to cost. There are ways to do accessibility cheaply or less expensive, but it is always going to be more expensive than if it was started from the beginning. If you have a website that’s already built out and no one thought about accessibility, well, now you have to put…

Jesse Paliotto (15:43)

Mm-hmm.

Amber Hinds (16:01)

some developer time into fixing that, which if you were just starting out and building it that way, might not be the case. So I do think sometimes there are some cost objections and some people have a harder time, like I was saying, of just visualizing it and understanding and being able to connect that with their customer base.

Jesse Paliotto (16:22)

Yeah, one other thought that just you provoked when you were describing that, have you ever seen this meme? It goes around on Twitter all the time of the World War II bomber with the bullet holes in the wings. But there’s certain areas that don’t have wings. And it’s supposed to be this kind of like logic insight of, do you put the, do you try and add extra armor where there’s the bullet holes in the wings of the bomber that came back to the base? You’re like, no, actually it’s counterintuitive. The ones that made it back flew fine. The ones that

didn’t make it back or the ones that got hit in those other places that you’re not seeing. And I’m giving that a bad description. Hopefully I can add a link in the show notes and give people the picture because the picture is worth a thousand words there. But the idea being that companies are very usually receptive to complaints and if they get customer feedback, they’ll respond to it. But I would imagine in the case of accessibility, you’re not getting the complaints from the people that are not being served. so sort of an out of sight, out of mind mentality, I would imagine could be happening there as well.

Amber Hinds (16:55)

Mm-hmm.

I think definitely, like I mentioned, they might just bounce right away, particularly if the navigation menu doesn’t work. How are they even going to find your contact page? Or I’ve seen them where the contact form doesn’t work. Or maybe they have a complaint about all of your products, explainer videos don’t have captions, and the only way that you have for them to contact you is to call you on the phone.

Jesse Paliotto (17:27)

Exactly. Yeah. Exactly. Yep.

Amber Hinds (17:48)

How is a deaf person going to call you on the phone to complain about your videos not having captions because you didn’t provide an email address or a form for them to submit, right? So there are definitely situations like that where someone with disabilities might want to complain, but they literally cannot. The other thing I’ll say is to some degree that puts a little bit of a burden on people with disabilities.

Jesse Paliotto (17:55)

It’s just illogical. Yeah.

Mm-hmm.

Amber Hinds (18:11)

And when they encounter so many websites, the unfortunate reality is that over 95 % of websites have at least some accessibility barriers and some have many accessibility barriers. And they’re dealing with that every day. At some point, it’s just easier for them to be like, I’m gonna leave this one and go to the other one that I know works, instead of trying to complain, because otherwise they’d be complaining all day long.

Jesse Paliotto (18:34)

So we’ve referenced a couple of times. I need to ask the question about human testing versus machine testing. And it may be a good way to frame this is if somebody is wondering themselves like, okay, Amber, I get it. Like this is important and I don’t know that I was aware and I would like to see how I’m doing and maybe make some improvements and see if it’s effective. Can you talk about like using machine methodology versus using actual people? I can you give us a picture of that?

Amber Hinds (19:04)

Yeah, there are some really reliable testing tools that are a phenomenal place to start. So like I mentioned, our accessibility checker WordPress plugin, includes, which has a free version that you can download if you have a WordPress website and install on it totally for free. That is a great tool. There’s also a browser extension that’s pretty popular called Wave. People can go to wave.webaim.org. It comes out of a university in Utah.

You can install that browser extension or just use it right on their website and scan like the home page of your website and then you’ll get some information.

the automated tools are a really phenomenal place to start. They’ll tell you some things that are very major blockers, like an empty button. Like your add to cart button doesn’t have add to cart text on it. It just had a little picture or something. That would literally stop someone from being able to do those are a good place to start, but they are not the end solution because there are some things that just require

context and AI is just not there yet and can’t identify the issues. You can also sometimes with automated testing tools get false positives. So I’ve seen instances where it flags color contrast only because it has a hard time telling where the background color is because the background color is maybe like four divs above where the font color is being set and it just can’t find it and tell. So it’ll think the background is white.

and the text is white and it will say you fail contrast but you’re like no there’s a black background on this right so you always need a human to sort of assess those and then there’s some manual tests that anyone can do you do not have to be a web developer or an expert and what this is is you take your mouse and you turn it off and you put it in a drawer and you go to the home page of your website and you tab use your tab key on your keyboard

Jesse Paliotto (20:38)

Mm-hmm.

Amber Hinds (21:03)

and you wanna make sure that you can reach every button and every link and every form field just using the tab key. And if there is a link, you’d press return to go follow it. If it’s a button, you should be able to press the space bar or the return key to trigger the button, do whatever it does. You should see a little outline around each item as you tab to it. If you ever hit tab and you’re like, I have no idea where I am, that’s a problem, right? So,

Jesse Paliotto (21:29)

Yeah, right.

Amber Hinds (21:32)

There’s just some manual stuff that requires a human to be able to do. And then I would say you definitely want to bring in someone who is an experienced accessibility professional because they’re really gonna understand web content accessibility guidelines, especially if you are in one of those businesses that is legally required to meet WCAG 2.2 AA. You want someone who can understand those because…

It is a long list of what’s called success criteria, where you pass or fail for different things. And some of them, if you’re new to it, can feel very overwhelming reading it. It’s not just like this little simple checklist. So I would highly recommend bringing in a trained professional. then the next thing would be potentially doing some user testing with actual users, which gives you a sort of different take. It gives you some accessibility.

Jesse Paliotto (22:14)

Right.

Amber Hinds (22:28)

but it also gives you general usability. Sometimes you learn that the name of your product doesn’t make sense to anyone except for you. And they’ll, oh yes. Or like the way you expect someone to come and search is, or the terms that they might search for to find something.

Jesse Paliotto (22:36)

It sounds like it happened with a client or something.

Amber Hinds (22:51)

is very different. And so that’s the thing that’s really neat about user testing is you get accessibility feedback, but you also get general usability feedback and you can watch people navigate and you’ll be sitting there being like, but it’s right there. It’s right there. And they’ll just let go circles around the thing you expect them to do. And then you might look at it and think, wait a minute, I’ve seen enough people do this now that I realize it should just be designed the way the people go. So, yeah.

Jesse Paliotto (23:02)

Yeah.

Yeah, there’s

a term for that. I’m blanking out on it, but it’s it’s like unguided paths or something. And it’s the idea. one of the famous examples is a photo down on a university campus in winter and there’s the sidewalks and then there’s the actual paths that are walked in the snow. And so you can see visually, this is obviously the, the, unguided path that people want to take to get from point A to point B across campus. And these sidewalks do not match what people want to do.

Amber Hinds (23:28)

Mm.

Mm-hmm.

Jesse Paliotto (23:44)

very, very you actually type of a thing. How would if somebody wanted to do user testing and is there services or groups or how do you go to a place where you’re to have somebody who have groups of people that have maybe different types of impairment that could test for visual versus audio or how do you go about doing that? Or do they work with equalized digital? Is that one of the ways to do that?

Amber Hinds (24:06)

Yeah, so we do do user testing and we have different people with different types of abilities. And I would say, typically most people start with somebody who is blind or visually impaired, but we also have people with cognitive disabilities or mobility challenges or limb differences, those sorts of things that can do testing for us. And.

So you could come to us, you could go to someone else, you could also email your email list and say, hey, we’re looking to do a couple of user test user testing sessions with our customers who use assistive technology. If you are them and you would be interested, offer to pay people for their time. You know, like it’ll be fifty dollars for an hour of your time on Zoom. Right. Because obviously we want.

to get good feedback and you want people to be compensated for the effort that they’re going to put in. But you could email out to your email list and you might find customers that are already in your network that use assistive technology and would be happy to give you feedback. But when we do it, we spend a lot of time talking about what are the goals, what are the paths that we wanna test or that we think people might do. And then basically we write prompts.

You don’t want to say go here, click this, then click that, then do that, right? Instead you want to give them ideas like go learn about how we make our custom t-shirts. Okay, now you’ve decided you want to buy one, what would you do? Right, like that. So then you can find out, okay, do they find the shop page? Do they go to search? Like what do they do to go figure out how to buy a t-shirt after they’ve learned about it? Okay, now you’re on the t-shirt page.

Jesse Paliotto (25:33)

Mm-hmm.

Right. Yeah. Can you do it?

Amber Hinds (25:51)

What sizes do we have available?

Right? Like thinking about those kinds of questions that you would guide them through and then you observe what they do, figure out where they get hung up.

And a lot of times when I run them, I actually have the code inspector up and I’m looking at the website also and I’ll be looking at the code and I might direct them back and ask them to replay something with the screen reader. And a lot of times our testers aren’t they’re not accessibility professionals. They’re not web.

developers, they’re just average people. So they won’t know what’s going on with the HTML, but because I’m an accessibility professional, right, then I can look at that and then I will come back later and we’ll give a report and then we’ll say, hey, this is why they missed this thing and here’s how the code needs to change, which is sort of the benefit of doing that. If you run your own and you’re not super technical, you might not understand why they got hung up.

You might have to then send a video to like a developer or somebody who understands about screen readers and say, why did the screen reader say this thing? So, but yeah.

Jesse Paliotto (26:53)

Yeah, yeah, just that level of fluency

with the technology to be able to be like, I see exactly what’s going on. Yeah.

Amber Hinds (26:59)

But that’s basically how you run one, and you might have people in your network, or you could hire a professional like us.

Jesse Paliotto (27:07)

I love the idea of hiring a professional like you. I also love the idea of the email. I think that’s such a brilliant idea in the sense that you get what you need, which is testers, but also you create awareness for people that this is something to be doing. All of a sudden your entire email list that you email is now like, oh, accessibility. Yeah, maybe I should think about that. And then I would imagine as a brand, I mean, it just furthers your brand’s presence as somebody who’s trying to serve the entire kind of spectrum of people. So it feels like a triple win to go down that route.

I love that.

Amber Hinds (27:38)

It really

can be beneficial to a lot of organizations have corporate values and putting out that you are working on accessibility is a way to show that you might be living your corporate values. If it’s like we serve everyone in our community, whatever that might be, a lot of times you can connect accessibility efforts with your corporate values, which also might be helpful if you’re trying to sell this to internal stakeholders. But it is a way to show that you’re practicing what you preach.

Jesse Paliotto (27:44)

Mm-hmm.

Yeah, I love that. One question I’d had is for a lot of what we’re talking about is websites. so definitely any company who’s, every company is going to have a website. So this at least applies to that marketing, potentially to more of their services that take place through a website. Does a lot of this apply or how much does this apply also to software, to people that are designing a SaaS application?

Is a lot of this kind of the same thing or how do you think about that? Have you worked with clients that are doing both?

Amber Hinds (28:38)

Yeah, we actually, a large part of our auditing business is with software products. So people who build components that get added into websites, not necessarily the website owners themselves. The laws are a little dicey on whether or not they apply to the maker of a software product that is used on a website versus the website owner, if that makes sense. However,

Jesse Paliotto (29:06)

interesting.

Amber Hinds (29:08)

However, what you really want to think about if you are the maker of a software product is that it could impact your procurement process if your software is not accessible because an e-commerce store that is in Europe or a government agency in the United States, they are only going to want to buy things that allow them to comply with the law and

So if your software product is not accessible, it’s going to reduce your market because you might not be able to sell to them. The other thing that we’re seeing a lot more requests, especially with regards to the European Accessibility Act, is we’re seeing a lot of software developers come to us for something that is called a voluntary product accessibility template or a VPAT, which is a standardized international format report.

that goes through the accessibility of a software product in relation to web content accessibility guidelines and some of the European accessibility requirements and the Section 508 accessibility requirements in the United States. And it maps it all out and says on line by line, either this product supports, partially supports, or does not support.

accessibility on this line with notes. And this is something where increasingly we’re seeing a lot of software developers realize they need these because their customers are asking for them. So we’ve had multiple people who have come to us and they said, our customers are saying, hey, we really want to buy your WordPress plugin, but we can’t unless you give us a VPAT. And they’re like, I don’t have a VPAT.

Jesse Paliotto (30:45)

Mm-hmm. Yeah.

Amber Hinds (31:00)

So they have to go get one. And really what that entails is you first have to have a complete audit. And you could write a VPAT from the audit, but most people say pause. I want to fix my problems first because it doesn’t look great to put out a VPAT that’s like bad, bad, bad, bad, bad. Right. So so you have an audit, you have some amount of time where you then remediate the software products and improve things. And then you have a retest.

Jesse Paliotto (31:12)

Yeah. Right.

Yeah, yeah.

Amber Hinds (31:29)

where an accessibility professional confirms that it is accessible or the problems that were identified are fixed, and then the VPAT is generated. And the document that’s actually created from that is called an accessibility conformance report. Most people call them a VPAT, but that’s what it is, an accessibility conformance report.

Jesse Paliotto (31:48)

For those of you who live in California like me, this is just like getting your car smogged. You take it in, they smog it, you quickly go fix whatever you can to bring it back to get it to pass a second time. Yes. That is, that rings a lot.

Amber Hinds (31:57)

You

Jesse Paliotto (32:02)

I’m curious, is there anyone who’s, and I hesitate to ask a little bit, but I’ll ask it anyway, is there anybody who’s doing it right? Like if somebody was right now listening and they’re like, this all sounds great, I get it, I wanna do it, if you could point out and be like, you know somebody or a place or a set of an industry or anybody who’s like really kind of nailing this or just a good example you could model on, is there anybody you could point to like that?

Amber Hinds (32:29)

boy, you put me right on the spot.

Jesse Paliotto (32:30)

Hahaha!

government agencies I would suspect just by dent of needing to be regulation compliant.

Amber Hinds (32:34)

Well, I’ll say…

Yeah, it’s interesting. think in historically in the US, we were seeing a lot more effort being put into getting more of the older federal websites updated. There’s a whole Web Modernization Act and accessibility has been part of it. We actually were the auditing team on the new NASA website, and I know they were putting a lot of effort into accessibility on.

that front. Some of the state and local government are not as good, but I expect to see that ramping up because there was a mandate from the Justice Department last year under Title II of the Americans with Disabilities Act that gave them all a deadline. Sort of like the European Accessibility Act deadline. I will say there’s a few…

Plugin companies in the WordPress space that have really started to prioritize accessibility stellar. WP is one of those. They own like an event calendar plugin and an LMS plugin. And they’ve been doing auditing of all of their stuff and remediating everything largely because they’re hoping to meet the deadlines before the European Accessibility Act. And because like I was saying, they have customers that are saying, hey, we really want to buy your stuff.

So I think there are some. You know, it’s funny. I can think of incidental like pages I’ve seen. that I like HubSpot is interesting because there’s some stuff that’s not as great about their website. But if you ever want to see a really great pricing table, the HubSpot pricing table is really accessible. So they’ve done a phenomenal job of

When there’s a check mark, there’s screen reader text that says, this is included. It’s not just like blank or an image that doesn’t explain what the check mark means to someone who can’t see the check mark. There’s a whole bunch of hidden code there. So if you’re developer savvy and you love that, I always would say, go check out their pricing table. It’s really interesting. So I can think of like little things like that. I don’t know if that’s helpful.

Jesse Paliotto (34:39)

Right.

Actually, I think that’s super helpful. It’s also interesting insight into, you know, to your point earlier when we were talking about, you know, there’s a value to your business for this. And of course, one of the most valuable pages for any business is the pricing page. so like if you’re, and you can think of it two ways. One is the commerce side. One is just the amount of visits, the amount of people trying to engage with that content. So like, you know, could imagine being in a seat where you’re saying, I want to roll this out. What am I going to prioritize first?

Amber Hinds (35:12)

Mm-hmm.

Jesse Paliotto (35:27)

Pricing page, I should probably go check out HubSpot as an example. Also, I love NASA because my inner nerd comes awake and I’m like, just go hang out on the NASA site. You can see it done well. Plus they do, they have so much multimedia that I feel like that would be a really interesting site to look at that through that lens of so much video, so much photo, so much different types of stuff.

Amber Hinds (35:47)

Yeah, and there’s a lot of interesting articles that were written a couple years ago about their approach to alt text, which is really interesting. So people who are not familiar, alt text or alternative text is an attribute that’s added to an image tag that describes the image visually for someone who is blind. And a lot of us kind of just err on the short side. But the thing is, is when you’re NASA, every picture is stars in a nighttime sky.

That’s not very helpful, right? Like, how do you distinguish all these different ones? So they put a lot of effort into thinking, how do we describe, like, what part of the galaxy is being shown or what’s being featured or how does it look with the different colors? Or I don’t know, it’s very interesting. you can find if you just Google like NASA alternative text, you can find some interesting articles that talk about how they did that. There’s some.

Jesse Paliotto (36:16)

Right.

Yeah.

Amber Hinds (36:42)

some art galleries as well that have put some really interesting effort into how they describe their art in alternative text. Because, you know, sometimes we think blind people don’t buy art or blind people don’t buy cars or whatever. But the thing is, is just because the purchaser can’t see it, it doesn’t mean that they might not want to give a gift to someone. Right. Or they might.

Jesse Paliotto (36:49)

Mm-hmm.

Amber Hinds (37:07)

be the person who cares the most about gas mileage. They’re not gonna drive the car, but they live in the household and they really wanna know the facts about the car before they go with their partner to buy it. So a lot of that does matter even though you think, this isn’t the user of this product. It very frequently can be.

Jesse Paliotto (37:24)

Yeah, and that’s an interesting, just to connect, adopt back to, know, for companies that are selling SaaS or software into, especially at an enterprise level, so a larger business level, you are always dealing with groups of people. is very rare that you’re selling a large software sale to a single person and no one else reviews it. There isn’t a CFO or a controller or somebody in the background that’s reviewing things on it. And so yeah, that’s a really interesting point like,

Amber Hinds (37:47)

Mm-hmm.

Jesse Paliotto (37:54)

that may not be the primary person that you’re even talking to, but there’s another person back there that could need this type of access.

Amber Hinds (38:01)

Mm-hmm.

Jesse Paliotto (38:02)

I am like, I’m going to go look up the NASA alt tags, because I can imagine that being so difficult. Like, what are going to put? It’s just 20 names of stars. That doesn’t help. I mean, maybe it does. don’t know.

Amber Hinds (38:11)

Another picture of the moon.

Yeah.

Jesse Paliotto (38:19)

I’m I’m have some really interesting Google search patterns after this. For folks that wanna get started, can you just recommend first steps? If somebody, we’re gonna walk away from this, I wanna do something today. You gave some great tips on tools that could be, but maybe if you had to tell somebody one thing, you wanted to get started today, do this. Any advice?

Amber Hinds (38:42)

Yeah, so I would say first have a discussion internally and determine what your internal capabilities are. So if you don’t have a solid dev team that can fix problems like I mentioned before going through tabbing through your website. Well, if you’re missing all those outlines, but you don’t have someone who knows how to add all those outlines, that’s probably your first step. So figure out how comfortable are you in-house doing some basic testing or

trying out one of those tools and do you think that you might be able to fix some of those problems? You can do a lot of that without bringing in an accessibility professional. And then you’ll get to a point where you want to start identifying an accessibility professional to help you really finesse things and figure out about the more difficult problems and how to fix it. But that’s where I’d recommend getting started, figuring out if you have a developer and if not, start there.

And then if you do try out some of those tools and keyboard testing that I mentioned and start trying to fix some of those problems. And also I think you should assess your processes a little bit around how you publish new blog content or add new products to your website because you will start to see even just using automated tools you can start to catch some patterns like, our marketing team always forgets to write alternative text or

the headings are always out of order. For some reason, someone on our team really likes to use that H5, right? Like it’s the smallest heading and they always use that when it really should be a different one. And so you might need to start thinking about what are our processes around the QA for the content that we’re creating or that we’re adding to the website? What can we do to try and catch problems sooner so that they get identified and fixed before we hit publish?

Jesse Paliotto (40:18)

Right. Yes.

Mm-hmm.

Do you find that if you’re following SEO guidelines rigorously that you’re also meeting accessibility guidelines or is there extra stuff? Cause good alt tags and all that stuff are part of good SEO. And I’m wondering if, you know, if people do that checklist thoroughly, are they really doing everything good enough on content in particular? I know that’s a very deep dive into SEO. maybe maybe a too, too nerdy of a deep dive there.

Amber Hinds (41:08)

No, so there is a lot that helps. A major problem for both SEO and accessibility is missing an H1 heading. Like a literal title of the page, very important for both of them. So there is a lot of sort of basics, like SEO really cares about heading order, the alt text, those sorts of things.

Jesse Paliotto (41:18)

Yeah, right.

Yes.

Yes, this is where you’re saying that

I’m like, a lot of what you’re saying is like, that’s good SEO if you’ll do it right.

Amber Hinds (41:32)

It’s good SEO. Yeah.

But but that said there there’s definitely a lot of accessibility that goes beyond what any SEO crawler like if you’re using PageSpeed. PageSpeed Insights has some accessibility and it has a little accessibility score. But what I’ll tell you is that you can get a 100 on PageSpeed Insights accessibility score and have a very inaccessible unusable website. So because.

Jesse Paliotto (41:42)

Mm-hmm.

Okay, so yeah, good SEO is not

good enough.

Amber Hinds (42:01)

Yeah, so it is a good place to start, but it is not going to guarantee that you’re legally compliant or that your website is usable for people with disabilities.

Jesse Paliotto (42:11)

Yeah, yeah, totally makes sense. Is there anything you didn’t get a chance to share today that you would want? I was going to wrap up, but I just want to give a quick spot if there’s anything that we didn’t get a chance to talk through where you’re like, don’t forget this or anything. And if not, no worries.

Amber Hinds (42:25)

Yeah, I mean the one thing I would say is we put out a lot of educational content both on our blog if you just go to equalizedigital.com, but also I run the WordPress Accessibility Meetup, which is a free Zoom webinar. We do have live captions so we have a human who comes in captions if that’s something someone needs. It is the first Thursday of the month at 10 a.m. Central Time in the U.S. and the

third Monday at 7 p.m. Central Time. And there’s a whole variety of topics. Some are developers, some are designers, some are content focused. And so there’s a lot of learning resources available. So even if you don’t have the budget yet, or are a professional, you could learn a lot just by coming to those free webinars.

Jesse Paliotto (43:14)

I love that. And so if people want to find you, equalizedigital.com. Is that right? And then if they want to find you in particular, any socials or anything you want to drop really quick.

Amber Hinds (43:18)

Mm-hmm.

Yeah, so on X I am at heyamberhinds and then I’m also on Bluesky, just amberhinds, which is H-I-N-D-S. Those are probably the two most common social media platforms that I’m on. I am on LinkedIn, but it might take me a while to respond to you. So, yeah.

Jesse Paliotto (43:29)

Ha

I love the honesty.

Thank you so much for sharing today. Amber, really great to have you here. Really appreciate you taking the time, explaining so much, and more important than I think just doing the long and ongoing work of really raising awareness and helping so many people kind of get better access to so much information. Thank you.

Amber Hinds (44:08)

Thank you for having me.

Jesse Paliotto (44:09)

Absolutely. Thanks everybody for joining us on the Growth Stage podcast. I’m your host, Jesse Paliotto. I get to support digital product community by doing this and that’s an awesome thing. I love being able to do what we did today, which is hang out with Amber and talk about this sort of thing. Thanks for being with us. Have a great week and we will catch you next time. Cheers everybody.

David Vogelpohl (00:04)

Hello everyone and welcome to the Growth Stage podcast by FastSpring where we discuss how digital product companies grow revenue, build meaningful products and increase the value of their business. I’m your host, David Vogelpohl. I support the digital product community through my role at FastSpring, and I love to bring the best of the community to you here on Growth Stage. In this episode, we’re going to be interviewing Justin Sacks of Nexus around the FastSpring and Nexus web shop integration.

Justin will share his thoughts on the core challenges the partnership was established to address, how the integration works, and exactly how publishers can use FastSpring and Nexus together to quickly launch a successful D2C strategy. And so joining us today, I’d like to welcome Mr. Justin Sacks. Justin, welcome.

Justin Sacks (00:56)

Thanks for having me, excited to be here.

David Vogelpohl (00:58)

Excellent. Well, you’ve been on the show before and I’m trying to recollect it was like, can you actually make 50% of your revenue through D2C? Wasn’t that our prior topic? I’m trying to remember now.

Justin Sacks (01:10)

It’s right. And it’s funny because it feels like every month it’s becoming more and more accepted just how much a percentage of your revenue can flow through your web shop. So yeah.

David Vogelpohl (01:20)

Excellent. Excellent. Well, thank you for establishing that it was possible. That was a burning question. I needed answered, especially when I heard you originally make the claim. But today we’re going to talk about the integration that Nexus and FastSpring built together. So FastSpring, the company that I work for, and Nexus, you’re COO there, is that right? Or CEO, sorry.

Justin Sacks (01:40)

That’s right, CEO here at Nexus.

David Vogelpohl (01:42)

Excellent. Excellent. Well, the first question I usually ask guests is, what is the game you bought with your own money, but you already answered that during your prior interview. So I’m just curious, what is the first game that you ever beat, completed and beat basically?

Justin Sacks (02:02)

I’m sure it was something on the SNES, but the first one that like comes to mind because of like the sense of accomplishment for beating it was Banjo-Kazooie on the N64. I’m sure that it was, you know, Mario or Zelda or something from even before that in the early nineties, but Banjo-Kazooie, I remember like a hundred percent completing it and it was an epic adventure to go through it all.

David Vogelpohl (02:28)

Excellent. Well, that’s a great one. All right. Well, let’s get into the topic at hand, the FastSpring and Nexus integration. So for people to understand, I think it’s helpful for them to get a sense of what challenges the partnership has kind of set out to address. What does that mean to you? In your view, what were the core challenges that you were trying to address here with the partnership and integration?

Justin Sacks (02:55)

Yeah. So I think it, goes back to people that are trying to start doing DTC for their game. What are the things that they need to solve? one of them is they need a way to take in payments and handle taxes, which is really what FastSpring is all about. Two, they need a place to, for the players to actually go and make that purchase. So website that they go to somehow they need to attach that purchase to the player’s account and then entitle that item or whatever

SKU they’ve bought back to that player inside of the game. And for that second piece around like the website and the item entitlement, the developer could do that themselves. They could build that website. They could build that, the interactive rails between web and game themselves. But most game developers, while they have a bunch of engineers at the company, they don’t have software engineers. They don’t have developers that are used to building for the web. And so the idea of what Nexus can bring is

a really, really simple solution that we can help build that for the publisher. So not only do they not have to do their own payment processing and merchant record, but they also don’t have to build and manage their own website or in-game item entitlement. And so that’s what the Nexus and FastSpring partnership is to me is all of the pieces that you need to launch D2C, you can have it in one place.

David Vogelpohl (04:16)

And that’s a really interesting perspective. like how you can, mean, obviously from FastSpring’s perspective, like payments and taxes and then outsourcing and compliance pieces, what we live, eat and breathe. But it’s interesting to also hear you connect the dots through to the value from the Nexus side of the equation around getting that web shop built and maintained, basically offloading all of that to the Nexus platform.

And it’s kind interesting how you talk about how game companies have a lot of developers, but they’re not software or web developers, if you will. And so a lot of those skill sets aren’t internal. Now, Nexus itself, though, it has a core value beyond just the web shop piece. What is Nexus’s core value?

Justin Sacks (05:00)

So the core, the reason for our existence is to build and manage creator programs, which is basically a way to align the incentives of a game publisher with the incentives of an influencer, usually around revenue sharing. So we build and manage creator programs. And a lot of the time that actually is done in game. So,

creators come to Nexus, they get a code, they tell their audience, hey, use my name when you’re buying something inside of the game. And then when a player does it, Nexus handles the attribution, and then we handle the payouts and stuff for the creators. But a lot of games increasingly are wanting those programs to exist either for a new web shop that they want to build or for existing D2C motions that they already have.

because one of the biggest challenges around D2C for games are the steering rules in place within the platforms. Basically that the games themselves can’t tell players in the game, go over to the web shop and buy instead because it’s a better deal.

But those rules don’t apply to content creators. So a YouTuber or a streamer, they can certainly say, hey guys, you get a better deal over on the web shop. And by the way, use my code when you’re doing so. And so our core thing that we’re trying to solve is creator programs, but they interact really directly and positively with D2C for publishers as well.

David Vogelpohl (06:20)

So Nexus is a platform and the creators and publishers that use it, the tracking from the creator to publisher referral or relationship, that is in a sense, a little platform agnostic, I guess, or works on many platforms, not just D2C. Is that true?

Justin Sacks (06:36)

That’s exactly right. Yeah, we build one partnership with the game and then whether they’re in multi-game platforms, meaning they’re on Steam and Apple and the Google Play Store and they’re on, you know, Xbox, we’re agnostic to all of those, as well as of course, if they’re on the web. Frankly, on the web, it’s an even easier integration.

David Vogelpohl (06:57)

And so for the creator marketing side of the equation, you kind of pointed out because of the anti-steering rules, creators have like, they’re in a sense, almost like this unique opportunity where it’s like their own platform to communicate. And so they don’t have those restrictions. So there’s like this natural connection to the D2C universe in that way. And then for the Nexus platform itself,

You have this ecommerce functionality built into the platform, correct? The ability to have shopping experiences and coupons and catalogs and effectively a web shop and ecommerce platform from the UI and UX perspective, effectively kind of in a box. Is that correct?

Justin Sacks (07:44)

Yeah, it’s, funny before, you know, web shops for mobile apps or games even like became a realistic possibility. were building web shops for creators, for, for a bunch of years. And so we built, you know, all of the tech that has to do with how does a player visit a website, see different SKUs, go through that shopping experience, then get the game or the item of the thing that they’re looking for. and just so happens that that’s the piece that

game developers need in order to now have that D2C motion. And so yeah, it’s been a big part of our DNA for the past half a decade or so.

David Vogelpohl (08:22)

Yeah. And so on the FastSpring front, then, so FastSpring for those unfamiliar payment and subscription and compliance, basically platform and the FastSpring platform can be integrated with kind of any open in that way e-commerce experience. And so we often think of the world as like, what do you want to build? And then how do you put FastSpring into that experience?

But the value of the in a box approach is it seems like a large piece of it is around speed to market really and ability to maintain. Is that how you see that value in leveraging and kind of in a box or out of a box type experience? Is it about speed and consistency? What do you think that core value is?

Justin Sacks (09:12)

I think that’s exactly right. And I think it’s, it’s also about the, like the team extension, you know, when you’re building out your team to handle whatever the pieces for your business, if that’s making a game, it doesn’t really make sense to also build out a core competency of web development. If that has nothing to do with the game itself. And so when you can have partners that can handle that for you, it can be valuable. And, know, as I think of like, what are the core pieces to have successful DTC? It’s the two that we talked about.

payments and merchant record, and then having the actual website that the players can interact with in order to get their product. But then to close the loop, you need to get your players to visit it. And that’s like, that’s where the core part of Nexus comes in with the content creators, but it’s also, there’s a bunch of different methods that the publisher can use to make sure the players can visit the website.

But of course, before you even start thinking about that, you need to make sure you have a website. And for a lot of developers, it’s, it’s not as simple as it is for us. We’ve built, you know, we built a platform and tools to make it, you know, within hours or days, we can stand up a new web shop. But for most game publishers, they’d have to hire the team. They’d have to choose the technology stack. They have to build it out and do QA and fix bugs and like, then maintain it forever. so often it makes sense when possible, partner with someone who can make it real easy for you.

David Vogelpohl (10:29)

So if I’m a large publisher and I’m going to go all out on my web portal and I’m going to have extensive player experiences, all integrated through everything custom end to end.

That’s not an out-of-box type experience, right? It’s completely custom. But maybe that’s a benefit for orgs that have the resources to invest in that. Do you look at it as like a size thing, or do you think, like, is there a sweet spot on the size front? Or is it also beneficial for people maybe further up the size scale, basically?

Justin Sacks (10:46)

Yeah.

I think it depends. It depends on the specific organization. I’d recommend for all of them, regardless of the size of the company, start out with an out of the box one, because you can always, like at the end of the day, it should be living within your game’s ecosystem. So on your own hosted website, you know, it’s easy to point domains there.

And you can always move into your own full developed stack if that’s a place that you want to go, but at least like start with someone else because you can see what is the potential for your business. And then also what is the experience of working with partners?

And to answer your question really directly, I think it depends on the customization level of those features because some of the platforms out there like us or like other folks, they might still be able to solve the unique needs of your game, even if it seems like it’s a lot of customized sort of like white glove experiences for your own web shop.

But if it’s things that are unique to your game that wouldn’t be true to any other game, then it’ll probably make sense once you also have the resources to build and manage it yourself. But for a long time, I think you can rely on partners to kind of figure out what works and what doesn’t work.

David Vogelpohl (12:20)

You know, it’s interesting to hear you talk about how speed is so important and kind of like, just get it out there. lot of the people, and publishers we talked to at FastSpring, you know, what a lot of, one of the popular stories we hear is, you know, we launched a web shop a year or two ago and we didn’t really do anything with it. And it’s already like 15 to 20 % of our revenue. So we’re like, I wonder what would happen if we tried.

do you find that that experience is common? Like, is that where you’re coming from with like, just get it out there.

Justin Sacks (12:50)

I mean, yes, I think it’s like, if you have a functional web shop and you make any attempts at all to let players know that it exists, you should see something around double digit percentage of all of your revenue come through your web shop. Which if you think about how the margin structure works, it immediately pays for itself with essentially no effort put into it. I’ve seen that to be true. Now it is.

What percentage of your revenue will flow through your DTC is a little bit dependent on things like the type of game that you have, the type of community you have, the type of monetization that your game has. But in general, I have seen that to be true, which is why I recommend people just try it and do it quick. Like throw something out there and see what happens. And you can always grow it over time and build that closer relationship with your players. But you got to get started somewhere.

David Vogelpohl (13:42)

Excellent. All right, well now I want to get a little nerdy and a little technical. We won’t go too deep though, because I think you and I mainly play technical people on TV, but we’re kind of on TV now, so maybe that works. But I want to talk about how the integration with FastSpring and Nexus works.

Let’s say that I’m a game and I sell in-game, I sell in-app purchases for like inventory items or maybe a battle pass. Where do I load that up if I’m using FastSpring and Nexus together?

Justin Sacks (14:17)

Yeah. So what the partnership looks like is Nexus will communicate with the publisher and then we’re going to do a seamless and easy API integration. And it basically is so that the publisher can tell us what the SKUs are and then what the information is about the SKUs. So there’s something like a store name, which is what it’ll appear to the player, a SKU ID, which is like the, you know, behind

the doors, like information about the SKU And then we’re going to need information about pricing and then some currency stuff and all sorts of pieces. But basically the publisher does one quick, easy API integration with Nexus. And through that, they provide the information that Nexus needs to know. What are the SKUs that should be sellable for what price to what players? and then we send back information post purchase. So the player comes to us and then there’s a couple of different ways that they can tell us who they are.

So either they can authenticate through their platform ID, so like their Apple ID or Steam ID or whatever it might be. Or most often, they’re going to use some unique player ID, which they can get in-game, which will be provided by the game’s back end. So it’ll be some string of letters and numbers. And then the player goes and makes a purchase.

And then we send information through that same really simple API back to the game. And it says, hi, game. This player ID should receive this SKU item. And then the game gives it into their account just like they would if that purchase was made in-game or in any other fashion. And that’s kind of the whole experience.

On the back end, the way that Nexus and FastSpring work is, as the player goes to make the purchase, they’re going to go through the FastSpring payment experience, and they’ll be able to use payment methods across the world, whatever makes sense for them. And all of that stuff is handled on our end, and the publisher doesn’t have to deal with any of those pieces.

David Vogelpohl (16:14)

So it’s the integration with the payment side and compliance features and capabilities that FastSpring offers. When you pull in the inventory or doing that via the FastSpring API, is that synchronized? Like if their inventory changes over time, can they push and pull from that into the Nexus system? is it kind of basically just like a one-time or manual sync?

Justin Sacks (16:38)

No, it’s dynamic. So it can be updated when there’s new items in the game or new prices or discounts or all sorts of stuff.

David Vogelpohl (16:48)

So the source of truth then it sounds like is the publishers data. It’s the publisher source of truth when it comes to the SKUs and items in their game. Does that sound correct? And then they’re basically synchronizing that with Nexus. And they are the source of truth is what it sounds like.

Justin Sacks (17:06)

That’s exactly right. Yeah, the publisher is always fully in control of what SKUs are available to which players at what price and all sorts of stuff.

David Vogelpohl (17:14)

Excellent, because it’s an open API, well, I guess it’s not too open, but what I mean is because it’s an API that they can leverage, then if their source of truth were to change to a new system or platform, in theory, they could still integrate it with Nexus. In other words, you’re not doing it only to work with one specific type of inventory system.

Justin Sacks (17:37)

That’s right. Yeah. Yeah.

David Vogelpohl (17:40)

In that inventory, I didn’t hear you say that it gets pushed to FastSpring effectively. As I understand it, we’re effectively invoking it on checkout. So you have the SKU, you’ve tracked what the user is purchasing. When it’s time to check out, you basically invoke FastSpring to charge that amount, localize the payments and do all the tax compliance pieces. And then FastSpring tells you if the transaction has gone through and then you can then tell the game via API that the player should have access to that entitle.

Did I catch that right?

Justin Sacks (18:10)

I think

that’s exactly right. Like if we imagine it as three points on a line, you know, the publisher says, here’s the SKUs that are available. Nexus features those SKUs. Player goes to make a purchase. We tell FastSpring, hey, someone wants to make this purchase. You let us know when it’s finished. You say, hey, this was completed. We then go back to the game and say, hey, this player with this ID is owed these items. So make that entitlement happen.

David Vogelpohl (18:37)

And that integration and all the systems and platforms behind that effectively is fully managed. So nobody’s having to like go update software or worry about like pen testing and all these other pieces basically, because it’s effectively all outsourced.

Justin Sacks (18:54)

Basically, yeah. We always do testing for any new launch that we do to make sure that the experiences matches as close to what the player would experience in game on their web shop and to the design and the specs of what the publisher is looking for. But effectively, yes, yeah, we’re not recreating new experiences for each new launch.

David Vogelpohl (19:13)

This is kind of interesting because the benefit of a platform is you inherit features, right? Everybody on that platform has access to it, and so it’s efficient. And of course, you don’t inherit the maintenance costs that goes along with that. But there is customization, right? As you launch these shops, help us understand the level of customization that you’re

doing for publishers as you get these out of the door? And then how long does that usually take? I guess not like exact working hours, but maybe like turnaround time in terms of days. And maybe I get that it’s a wide range, but help people understand like how quickly you can help get them going.

Justin Sacks (19:51)

Well, I can speak to Nexus. I think there’s other platforms out there that are less customizable.

but also more open, like, for example, like not anyone can come and build a web shop with Nexus. have to like say yes, and we will build this for and with you and make that partnership. And so we have some discernment of the size of the game or the type of the game or whatever it might be. but that’s because we’re highly customizable. A lot of that is for on the design front end, you user experience side of things. So

We at least tried very closely to match what the player experience would look like and feel like and seem like in game to seem like on the web.

But at the end of the day, it’s up to the publisher of what that literally will look like. And, you know, the, the, the aesthetics and the branding and the color scheme and all sorts of stuff. It’s, up to the publisher, but we can build that basically to their specifications beyond that on the feature set. There’s a lot that we can do. probably the most bells and whistles that Nexus has is on the creator program side of things. And so for example, we just launched with a partner last week, or it was two weeks ago.

that wanted to do, a multi-tiered system where different creators got different revenue shares for different SKUs, but also they got some custom SKUs that their audience could see after putting in a creator code. And there’s a lot of fun stuff that you can do there where you can like create personalized offers to groups of players.

You can do discounts, you could do promotions, additional content, exclusive content. There’s a of different pieces and ways to do it. Next, we have our recommendations and best practices, but the way that we always think about working with a publisher is we are their partner. And so it is up to them. they’re always fully in ownership of what will the web shop look like? What will it feel like to players? Who is it? Who is it available to? What are the SKUs that are available? What are the prices for those? What are the promotions and the activations and all sorts of stuff?

And so there’s a lot of options and recommendations that we make, but it’s really important to us that the publisher knows they always have a hundred percent control and ownership over what that looks and feels like.

David Vogelpohl (22:00)

What would the typical rollout time period look like? I mean, an ideal, perfect scenario. guess the worst case could be very high, but are you talking the matter of weeks, days, months?

Justin Sacks (22:11)

Yeah, so I use our last few as examples. And I think the longest from, Hey, we’re ready. And we like have some idea of what we want this to look like to launch was three weeks and the shortest was one and a half. and so it should be, should be weeks, not months. I would imagine.

The lengthiest would be like six weeks and that’s probably only if there’s really significant design cycle, you know, back and forth and some heavy QA and testing and stuff. But the actual like process of developing and building it with a publisher should be just a couple of weeks.

David Vogelpohl (22:48)

What other types of systems should folks be thinking about with this type of rollout? Like we’ve already talked about entitlements in game, we’ve talked about pushing and pulling my inventory back and forth. What other kind of systems should folks be thinking about with a rollout like this?

Justin Sacks (23:06)

Well, we recommend a creator program, but we’re very biased. You know, if your game is the sort of game that is live service and has some pool of organic creators, probably makes sense to incentivize those creators to drive sales specifically of, you know, new content in the game. There’s a lot of other cool pieces that are game dependent things like forums and blogs and leaderboards and competitions. Those are like systems that can be helpful when you think about DTC and

Now, D2C isn’t just about getting better margin than what you can get in the app store, but it’s also about building that direct relationship with the player and then offering them unique personalization. So if you have a really highly engaged player who’s spending a lot of money, maybe you can offer them something really special to keep them engaged and keep them excited and interested. And this is a good place and way to do that.

David Vogelpohl (23:56)

Yeah, it’s a great point. Such a good relationship builder, feel, not only with VIPs, but just with players writ large. This whole idea that, you know, are you a real business if you don’t have a direct relationship with your customers? In gaming, that’s quite common, right, to have this kind of third party interstitial type relationship. And so it’s really interesting to think about that opportunity to deliver a better player experience.

Thinking through the systems you mentioned, that made a lot of sense to me. Maybe we can switch gears on the rollout side. You’ve underlined a couple of times with the FastSpring Nexus partnership that you get payments and compliance, you get the web shop, but you also get the creator program in a box, which is interesting to think about in the rollout perspective, how you might roll something like this out. What should publishers be considering when

they roll out D2C to their players.

Justin Sacks (24:57)

I think they…

The first part to consider is the experience for the player. want like necessarily it requires more friction because you’re having the player change their normal experience of staying inside the app store and making a purchase. So how do you limit that friction as much as possible? That’s where I think of things like making the, the web shop, you know, mimic the experience and the aesthetics and the brand of your end game as much as you can. But then also I would think about just standard

better offers to the player. It’s really…

It’s sort of industry standard at this point that you’re offering at least about 10 % additional value on the web shop than you do in game. Usually that comes with additional content. So for example, if you sell a thousand gems, which is a soft currency for $10 of a hard currency, instead offer 1,100 gems for the same $10. I think those are like the core pieces to be thinking about as you establish your DTC. And then also think about that, those touch points.

that you were talking about, David, around how do you communicate with your player? How do you let them know about upcoming content or cool deals that they shouldn’t miss or exciting stuff going on in the meta experience around the game? I think those are really important pieces,

David Vogelpohl (26:20)

We’ve seen a big push from a lot of publishers who’ve rolled out with us around creating and activating their player accounts. Do you view that as a major pillar? guess it probably depends on the publisher, but how do you view the use of player accounts logging into a web portal with that player account, like that whole universe around the account side?

Justin Sacks (26:44)

I think it’s generally good. I do think there’s one unique piece of not doing the player accounts, which is it actually makes gifting easier. just by like, if, someone doesn’t have to authenticate their account in order to make a purchase or experience the website, but instead they’re using a unique ID, you could get your friend’s ID and then just gift them really easily. So it’s sort of like naturally enables gifting and gifting is a powerful part of

e-commerce, also this sort of like D to C motion. but generally attaching player accounts to the, to the website and to the web shop makes a ton of sense. It’s ways to like build more of those personalized offers and unique experiences. And it’s totally a thing that is worth doing. when you have the resources to be able to provide something special and unique to that player.

Whether that’s a daily login bonus or it’s a personalized offer or whatever it might be.

David Vogelpohl (27:42)

One of the interesting things that stands out to me about all this is that with live service games and mobile gaming in general, you tend to have things like VIPs emerge, obviously people that disproportionately buy from you. In the mobile app world, that actually rarely happens, right? It’s mainly driven by subscriptions and all players are effectively the same, or users are worth the same amount of money to you in a very real way.

In gaming though, we have the VIPs at Emerge. Do you feel like rolling out and focusing primarily on VIPs is a valid strategy in the beginning? Or do you like when publishers go broader with their player base? Like, can’t you get like 70 % of your revenue with like 5 % of your players?

Justin Sacks (28:33)

It’s a really good question. I don’t know if I would recommend starting only focused on VIPs, but I would, I would certainly not recommend ignoring your VIPs. I think they should be part of the strategy and should be part of the intention and the idea of building that direct relationship with your VIPs, with your most engaged players. That’s like.

Yes, it’s one of the biggest values that you get by, having a web shop, by having DTC. and it’s exactly right, especially if you’re a game that has, you know, a minority of your players driving a majority of your revenue. then your web shop is going to be even more valuable to you, not only because you get better margins on those few people and it’s easier to get a small group of people to make a shift to a web shop versus a large group of people, but also you’re starting to build that direct relationship.

And then as mentioned, you can communicate things that are really valuable to that person to keep them engaged and retaining one more month of a VIP might be worth retaining years of dozens of other smaller players.

David Vogelpohl (29:40)

That’s great insights. You’ve talked, of course, about the role of creators in promoting your D2C offering, and that makes a lot of sense. You’ve talked about the anti-steering provisions, and I know that you are able to promote your website within your game. Obviously, you can’t promote your web shop within your game, and so many publishers will kind of skate the line between what can we promote versus what might be going too far.

But I’m just curious, like either in that arena or just generally writ large, what are some unique strategies publishers should consider when promoting their web shops?

Justin Sacks (30:20)

Yeah, well, I do think I think influencers and creators are a good way to do that. So just partnering with the creators you have in your community and they don’t necessarily have to be YouTubers or streamers. can be ambassadors or community leaders. This might be people that run Facebook groups or discord servers or things like that.

I also think separately leaning into social is really powerful. Most publishers have built some social presence about around their games or the IP and, you know, letting the folks that follow you on, on, your social media and know that the web shop and the website exists is great, especially when ideally you can combine them and your website has some value to players beyond just the web shop. So it might be.

blog or news or more information or, you know, two of like the core pieces that I see all the time for competitive games are leaderboards. If your leaderboards exist somewhere near your web shop, then there’s like a pretty straightforward funnel of your competitive players go and checking out the leaderboards and then go into the shop in order to top up their currency. and then I forgot what the last one was.

David Vogelpohl (31:28)

Must have been a great idea though, but just in general, it sounds like, like I hear people talk about this and it’s so funny because so many gaming publisher sites, it’s like really cool looking imagery from the game, a list of the games and a few call-outs on where you can download or install or buy it. And that’s pretty much it.

And what we’ve seen, what I’ve seen anyways is more and more publishers really turning their website into a destination. so is that I talk to folks that’s often how what I’m seeing is like, if I have my leaderboards there, if I can log into my account and do stuff, if I can make it a destination where my players are engaged and interacting with it, then that’s just going to strengthen the connection with that player, with my brand and my business. And then of course your web shop is there and you get to take advantage of that.

Justin Sacks (31:53)

Mm-hmm.

David Vogelpohl (32:15)

But it’s this idea of owning your customers instead of renting them and using your website as a destination in order to do that. That’s my own point of view. I don’t know how you think of some of those variables, but what are your thoughts?

Justin Sacks (32:30)

I think that’s right. think it is really building it into a habit where it doesn’t feel like additional friction to go to the website, but it feels like just a part of the player experience. And so that reminds me of the last piece that I was going to mention. That’s one of the two core things that folks do. One is that that leaderboard piece, if the game has any competitive elements. And the second is some sort of like daily reward. So just saying, Hey, you visited this website, you get something. which requires that the player has logged in and they’re

experiencing this and that there is value on the website for them to go and see every day. Ideally more value than just like getting an additional, you know, hundred gems or whatever, but that’s great too. It is valuable to make it, like a normal experience for the player to visit your website and see content about the game in addition to actually playing the game itself.

and in addition to just using the webshop itself. I totally think there’s a lot of value in making it a destination more than just a place to transact.

David Vogelpohl (33:29)

Yeah, it makes a lot of sense. So how can publishers use FastSpring and Nexus if they want a custom webshop or create one in the future? Like, what if I didn’t want my webshop to be the out-of-the-box option? I was actually going to go build my own. Could I still use Nexus for my creator program and FastSpring for my payments on a custom webshop somewhere?

Justin Sacks (33:54)

Yeah, you certainly could. could, you know, if you’re…

totally building the website, which is what is the thing that the player is going to interact with? And then you’re building the rails to like tell your, your games back into entitle that item to the player after purchase. You can build that piece. can integrate with FastSpring to handle payment processing, your merchant record. then next, next is can certainly easily still provide that creative programming experience for the web shop. You could also just try it and start with nexus building it. and then, you know, before you invest all the time and resources

into making it yourself, but yeah, we’re Nexus is certainly platform agnostic. So you can have a creator program in your own first party web shop in one that obviously that we build in one someone else builds or in game, you know, we’re happy to work with you.

David Vogelpohl (34:41)

Yeah, I think like in my experience, that’s where I think people get a little like awkward around like out of the box experiences because they feel trapped, but it doesn’t feel like that’s actually the case here. You can take the value of Nexus forward with you regardless of your DTC future.

Certainly FastSpring is a similar type of fluid platform in terms of the web shop side. And then if you had a custom web shop either today or in the future, you could still use all three together if you found value basically in all three. And I think that openness is really powerful when you think about it through the lens of a partnership. least it is for me, someone who likes flexibility and options.

Justin Sacks (35:21)

That’s totally right. Yeah. If you want to build the pieces yourself, both of us, FastSpring and Nexus can be a module that lives in your ecosystem, or we can build that part for you. It’s up to you.

David Vogelpohl (35:33)

Okay, so just to recap one time since obviously the core topic we’re covering today is the integration, but effectively Nexus will help you set up your web shop customized for your game’s design and the type of inventory basically you’ll be selling associated with your game. You’ll help connect through to entitlement systems via API so publishers can allow their entitlements in the game.

The inventory itself, of course, is synced with the publisher being the source of truth. And then on the payments and compliance side, when it’s time to check out, FastSpring swoops in, does our checkout magic, offers local payment methods and compliance worldwide. And the publisher gets to stay focusing on their game and promoting their D2C channel and not implementing and managing all of this technology and integrations on their own. Is that about right?

Justin Sacks (36:26)

That is exactly right.

David Vogelpohl (36:28)

Excellent. Well, this is awesome. I really appreciate you taking the time to chat this out here on the podcast. Obviously, we’re, at FastSpring, really excited about this integration and really wanted to get the opportunity to kind of talk about it here and be able to share it with others. But is there anything else you want to make sure we mentioned about D2C or the integration before we kind of wrap up here?

Justin Sacks (36:52)

I think the only thing to mention is if you have a game that has any amount of players and revenue and you haven’t already explored D2C, you’ve got to get on it. And again, my recommendation is start with some partner that can make it super easy just to get something up there. But it is certainly positive value for basically every game publisher out there.

David Vogelpohl (37:15)

Excellent. Well, thank you so much for joining us today, Jessen.

Justin Sacks (37:20)

Thank you, I appreciate it. I’m glad to be here.

David Vogelpohl (37:22)

Excellent pleasure as always. And if you would like to learn more about what Justin is up to, you can check out nexus.gg. If you’d like to learn more about the FastSpring and Nexus integration, you can go to fastspring.gg and click “Demo” and we’ll get you connected with all the right folks who can help you take a double click down and learn a little more. Thank you all for joining the Growth Stage podcast. Again, I’m your host, David Vogelpohl. I support the digital marketing community through my role here at FastSpring. And I love to bring the best of the community to you here on Growth Stage. Thanks everybody.

Jesse Paliotto (00:04)

Hello everyone and welcome to Growth Stage, a podcast by FastSpring where we discuss how digital product companies grow revenue, build meaningful products and increase the value of their business. I’m your host Jesse Paliotto. I support the digital product community as part of my role with FastSpring and I love being able to hang out with just phenomenal people here on the Growth Stage podcast. And today the phenomenal person I get to hang out with is Hannes Andersson, CEO at oeksound. And we’re going to talk a little bit about how they build a globally recognized brand in this audio plug-in space that they operate in, take a little bit of a dive into their journey and their expansion and challenges, opportunities that they encountered along the way. So, Hannes, thank you so much for doing this, man. Really, really excited to hang out for a few minutes with you here today.

Hannes Andersson (00:49)

Thank you for having me.

Jesse Paliotto (00:52)

Hannes, maybe a good place to start. Could you give folks a little bit of context? Can you briefly describe what oeksound does, especially for people who may not have any exposure to the audio industry?

Hannes Andersson (01:04)

Yeah, sure. So oeksound is a software company and it’s a software company active within the music and audio space. When it comes to tools that we use when mixing, recording, producing music or then editing audio in post-production for a film or maybe even something like a podcast, a podcast like this. So we have a few

Jesse Paliotto (01:30)

Mm-hmm.

Hannes Andersson (01:33)

plugins is what we’re calling them. We call them plugins because they work within these larger software packages that exist, production programs like Pro Tools, Steinberg Cubase, Ableton Live, Logic, and even GarageBand that we can find on any Mac computer. So these plugins are these smaller tools that you use inside of software

Jesse Paliotto (01:57)

Mm-hmm.

Hannes Andersson (02:03)

packages that you can use them to manipulate or enhance or just better your audio.

Jesse Paliotto (02:12)

And you guys have three plugins or maybe you can just give a quick sketch of what oeksound offers. I think you’ve got a few and maybe a new one. Yeah.

Hannes Andersson (02:22)

Yeah, so right now we have three studio plugins. So what we mean by studio is that they’re used in more of a studio setting, maybe be this bedroom producer or a lone pod podcaster or maybe a big commercial studio where they make music. So we have three plugins called Soothe or Soothe 2 is the current version of that. And we have Spiff and then we have Bloom.

And then on the live side, we also have a live version of Soothe 2, which is kind of Soothe 2 quickly became our kind of most popular plugin and that was the product that really took off for us. so one and a half year ago, we released it for live use. That meaning that it’s also now being run on shows on, for example, huge…

for huge artists like Harry Styles or Red Hot Chili Peppers and those kind of artists. So it’s also being used in that kind of setting.

Jesse Paliotto (03:24)

wow.

that’s amazing.

Yeah. In terms of how you sell them, are they standalone or is there a subscription side to it? And I ask because for folks that listen to the Grow Stage podcast, a lot of what we end up talking about is sort SaaS businesses where they’re kind of building subscription model. But I think you might have a few options there. Yeah.

Hannes Andersson (03:50)

Exactly. Yeah. So oeksound is actually pretty much a very, very traditional e-commerce business. And so we sell perpetual licenses and that are perpetual. I mean, those are every individual product is bought individually. Currently we don’t have a bundle of any sort. And that’s how we’ve been doing it for…

a while now and that’s how the plugin industry has been working for most of the time. Subscriptions are mostly, you find subscriptions mostly when it comes to larger companies that might have 30 to 200 products out there and so there’s a large selection and for somebody that doesn’t know where to start they might just like jump on a subscription and then start using the tools that they need.

But otherwise, have our products, our studio products, our perpetual licenses range between $149 and $199. But a new thing that we did last year during summer was actually launch our rent to own pricing, rent to own way of purchasing our products. And that’s a very, very popular way.

Jesse Paliotto (05:00)

Mm-hmm.

Hannes Andersson (05:13)

or it’s been for us very, very popular. And I don’t see a lot of other companies doing it. There’s some availability on a website called Splice where you can rent your own products. And essentially what that means is that it’s kind of a payment plan, but you never commit to pay the full sum. And so you can just rent the plugin, but one month at a time making a payment. And after

Jesse Paliotto (05:35)

Mm-hmm.

Hannes Andersson (05:42)

I think in our case after 18 months, then you get your perpetual license and then you own it for the rest for perpetually after that. And I think that really helped us grow from from kind of more globally to countries where, for example, two hundred dollars is a lot and you might not actually need the plugin.

every month, you might not just need it for an album that you’re doing this month or next month and so then you rent it for two months and then the next time you rent it for two months and then after let’s say multiple years you get a perpetual license when you’ve gone through that 18 times.

Jesse Paliotto (06:28)

That’s amazing. Like what a very thoughtful sort of win-win scenario for people using it, like you said, where they get to use it when they need it. But as a company, you get the full kind of value that you need out of the purchase eventually. Like it’s timed out. I know, you know, there’s companies that

provide sort of this payment plan option. know, Klarna does this, Affirm does this, and buy now, pay later is the phrase that is often used in the industry for that. But that comes with, you know, finance charges and you’re committing to the full purchase up front. So it’s very interesting. So like when you guys are doing this, is it the same price? Like if it’s a $200 plug-in?

and I do the payment plan, does it become a $250 purchase at end of the day or you’re just, you’re kind of covering that financing cost yourselves.

Hannes Andersson (07:20)

We’re covering that finance cost ourselves to the most part. The end sum gets for the customer, the end sum might be somewhere like $5 more, $5, $7 more. So it’s pretty close to the original sum. so we just made sure that at least at the rental price, you don’t get it cheaper than for the full price.

Jesse Paliotto (07:32)

Yeah.

Right.

Yeah.

Hannes Andersson (07:46)

But then again,

we wanted it to be as close as possible to the full price. And that has a lot to do with how kind of our ethos work with our plugins. We are very confident in how good our plugins are and that they’re useful and that users find them useful. And also if they don’t find them useful, then I don’t see any need for…

our users to buy them and just like having that as the ground rule, make something useful and sell it. And if it’s not useful, then we’re going to know about it. so for example, yeah, go ahead.

Jesse Paliotto (08:18)

Mm-hmm.

It’s funny how like

that can sound almost like obvious when you say it out loud, but unfortunately there are things I’m sure all of us have bought that you’re like, why did I buy this? This sucks. Like this was not worthwhile. It didn’t actually do what I thought it was going to do. So it feels, I know what you’re saying sounds like this should be obvious, but it actually is like to hold yourself to the standard that we’re going to sell something that’s so good that somebody is glad that they paid us for it. Like that’s a pretty, pretty cool standard to be living up to.

Hannes Andersson (08:58)

Yeah, it’s pretty interesting because you see a lot of kind of race to the bottom pricing wise in the industry going on right now. And that kind of, I feel a bit unsure about what that communicates about the company behind the pricing. When for example, you see something like a bundle costing something like $899 and then it’s like

Jesse Paliotto (09:04)

Mm-hmm.

Mm-hmm.

Hannes Andersson (09:27)

crossed over and now you get it for $40 or something. When I see that and I’m am I supposed to am I like supposed to be happy when I see that I’m not like yes that is a good deal but why would anyone buy that for $899 to begin with then either either your your products were never that valuable or they were actually never that useful they were never actually that worth it.

Jesse Paliotto (09:31)

Yeah.

Hannes Andersson (09:57)

or then you’ve kind of like, I don’t know, there’s might be some other. Yeah, yeah. And so kind of having all of that. And I think also something we started off with our plugins and with our products is that they all have 20 day trials and these 20 day trials are just, they’re not restricted in any other way that they’re gonna stop working at after 20.

Jesse Paliotto (10:02)

Or they were, and why are you marking it down to $40?

Hannes Andersson (10:27)

days. So you get all the features that the plugin has and you can use that plugin. So for example, if you’re a professional mixing engineer, you can actually use the trial to make money during the trial so that you can then invest and get the plugin if you like it. And so having that honest, extremely transparent and honest discussion with the users of here is the plugin, you can use it for three weeks.

Jesse Paliotto (10:40)

Mm-hmm.

Hannes Andersson (10:55)

decide if you like it or not if you find it useful You can tell us you can let us know if you don’t understand it if you do understand it because we are all at different levels When it comes to users where you can be a super pro user and still don’t understand how it works So you can be a bedroom producer just starting off and getting exact getting immediately what it does. There’s so many different users available, but one thing that I like always to kind of

repeat is that our customers are not stupid. They’re never stupid in any way. We don’t have to ever tell anyone why they should kind of buy our plugin, but we could tell them why they should try it. I mean, and then every single user is going to make a purchase decision on their own. We’re never going to have to tell anyone. And we’re never actually in our marketing. We’ve never asked anyone to buy our product.

Jesse Paliotto (11:46)

Really? We should try it, right?

Hannes Andersson (11:48)

Yeah, I don’t think we,

I don’t actually think we’ve ever used the word by now or something like that as a call to something, something like that. I think we’ve, of course, when we have a sale, we direct people like we have two sales a year. And so usually Black Friday and then a spring sale around spring. That’s usually how we do it.

Jesse Paliotto (11:54)

Yeah, yeah.

Yeah.

Hannes Andersson (12:14)

We never know like how we’re gonna change it up or if we’re gonna do something different, but that’s been kind of the way we’ve done it so far. We let people know, people that are on our mailing list two weeks before that we’re gonna have a sale. So if anybody’s been waiting around, that’s usually the only reason why they’re on our mailing list is to know if we have any new product or run there’s a sale. So, and then we tell everybody beforehand and then they…

take care of telling everyone else like word of mouth is everything in this industry. It’s like 95 % of the marketing is done word of mouth. And after that, they just kind of that’s like the only time where we say, okay, here’s the link where you can buy the plugin for this price now. And so you can kind of like that’s because it’s a sale. Of course, it’s now it’s about now it’s about buying it, but that’s something we do.

Jesse Paliotto (13:05)

Yeah, yeah.

Hannes Andersson (13:08)

twice a year and then we’re back to our normal programming.

Jesse Paliotto (13:12)

That’s, love that in terms of like leading with value, like we’re gonna just give you value. And for folks listening who may not have kind of ever worked in sort of the creative side of software, my exposure is that limiting the ability to export final products was always like the trick to get you to, try the creatives, whether it’s photo or drawing or music. And then when you finally create something and you wanna export it, now we’re gonna use that as the hook to force you to pay us money. Like, you actually want that track exported.

And so to actually give them full use is a big deal, but it does lead with value. it, it strikes me that, it, it creates, it builds it into a workflow, which is very important. I would expect for this user base is that they’re creating things. And so the ability to create tool chains of software that work. And if it works, then you’re built in going forward. And now I want to buy it because I have a proven workflow that created a great thing. Is that, is that a fair analysis or.

Hannes Andersson (14:09)

Yeah,

exactly. So a really good example is we talk about something like vocal chains or master chains when we talk about these tracks, these audio tracks that we have in our software. So vocal track is obviously a track where you have your recorded vocal and then you put these plugins on in order to make that plugin, that vocal sound professional and make it sound ready, ready for the radio or ready for the streaming service where you’re going to put it.

And so there we have our plugins, but also plugins from probably 20 other different companies. so they’re constantly changing out these tools that they have there to get to a better result than earlier. Every single engineer is constantly tweaking and constantly changing out things there. And so when they trial our product, our plugin,

Jesse Paliotto (14:48)

Yeah.

Hannes Andersson (15:05)

put it there, maybe at the end of the chain or maybe at the start of the chain. And then they understand or they kind of like, yeah, get to the point where it’s like, this is actually better than before. And then after a while, let’s say after three weeks, they open up a project where they have used it. And then that’s when they’re going to notice that, okay, whoa, my trial has expired here. And then that purchase decision is going to feel so natural. It’s going to…

Jesse Paliotto (15:18)

Mm-hmm.

Hannes Andersson (15:35)

feel like a no-brainer for them at that point because, I’ve already used it on like two, three tracks and I know I’m going to use it again. This is an obvious purchase decision. And that purchase decision, especially if it’s done at full price, for example, which is not common in the plugin industry that you like ever buy something at full price, but our plugins do sell a lot at full price. What I find or what I believe

is that you get a user that is so proud of their purchase. They feel like they have made an investment because it’s already in their workflow, so to say. It’s already part of their toolbox and they’re really happy about the decision that, okay, I’m actually know that I’m going to need it. And then when you have that kind of a user, that kind of a customer,

Jesse Paliotto (16:11)

Mm-hmm. Yeah.

Hannes Andersson (16:34)

they’re going to tell everyone. So again, word of mouth, again, we have the perfect customer. And again, if you compare that to somebody that sees an email that says flash sale today only, and then there’s usually a timer that says like 72 hours. I don’t know how that’s today only. then maybe, maybe. then

Jesse Paliotto (16:36)

Yeah.

I don’t know, multiple time zones? No, I don’t know.

Hannes Andersson (17:04)

they buy it during that flash sale, they’ve never seen that plugin before, they use it once in their project, don’t understand it, don’t understand the value. It might be a super product, it might be great, but they just don’t put it on the right place or don’t use it right. And then they feel bad about the plugin. And so next time they’re in a room with other engineers or they’re hanging out with other music creators,

Jesse Paliotto (17:14)

Yeah.

Hannes Andersson (17:32)

somebody goes, hey, have you tried that plugin? And they’re gonna go, yeah, I tried it. I actually bought it. I know it, we use it. Yeah. And compare that to, oh, so do you use Soothe? It’s like, yeah, I use Soothe. I actually bought it like a few months ago. It’s on every track. Love it. Recommend it to everyone. Like that’s the difference. You have two completely different customers, but…

Jesse Paliotto (17:40)

Yeah, you’re get negative word of mouth because the experience was so bad with it.

Hannes Andersson (18:00)

I think the other plugin probably also deserves a chance. It’s just that that funnel has become so like, kind of like FOMO based that you just try and grab, yeah, it feels more like a money grab. And then if you like it or not, that’s up to you as the user. You’re not giving them a chance to even like question you.

Jesse Paliotto (18:04)

Right.

Mm-hmm. Yeah.

Yeah, I mean, it reminds me of sort of the age old wisdom that people value what they pay for and they don’t value stuff that’s free. Like, which is, you know, I remember hearing that as a kid, like I could give you this, but you’re you’re just going to throw it away. If you’ve got to save up your money and buy it, you know, what’s bike or something like, then you’re going to you’re going to be super proud of it and you’re going to you’re going to show it off. There’s almost like a a personal investment, which the other thing that was striking me while you were kind of describing that is the picture in my mind a little bit is of like

somebody who builds things with their hands, like they’re building furniture or something, and they have all these tools. And a big part of those tools and what they choose to buy is their ability to successfully use it. And so kind of, it’s not just, bought this thing as a status symbol. Like, no, I bought it because I actually have to learn how to use this thing to make cool stuff at the end of the day. And so you’re kind of building the learning pattern too at the same time, which kind of stands out to me.

Hannes Andersson (19:18)

Yeah, exactly. And we’re trying to make that as easy as possible. So both Soothe2 and Spiff, they have both integrated tutorials. So what that means is kind of like, this is something you might see in SaaS websites, right? So you have like the pop-up screens that you show, and then you might have a test project going on and stuff like that. That’s not something you

see within a plugin within a DAW. That’s something very unique, but we have that going on. And so you can open up a small tutorial that is going to go through the parameters for you. And then you also have some test audio material running through the plugin that you’ve installed together with the plugin. So kind of like you have some demo material in a way. I mean, yeah. So that way you kind of, you don’t need to,

Jesse Paliotto (20:09)

Yeah, to kind of get you started. Yeah.

Hannes Andersson (20:15)

read the manual, you don’t need to go to YouTube and watch some videos and get stuck in a rabbit hole on YouTube. You can just stay within your DAW, within your project, go through that tutorial and when you’re done, you’re back where you started and you’re still in your own project and you’re still using our plugins on your music. And so that’s something very unique in the plugin space, even though that’s something we pretty much took from, again, yeah, something more like the SaaS side.

Jesse Paliotto (20:40)

Yeah,

yeah. The just to quickly ask you said something a couple paragraphs ago that was interesting. How many you said there might be 20 pieces of plugins or software on a given track that you’re working on. Is that the right number? I’m curious. Like if I’m a music producer and I realize this is a hard question because there’s everyone from bedroom producers to professional, you know, working on, you know, Taylor Swift level kind of producers. But how many?

How many plugins or pieces of software are on a given song or album?

Hannes Andersson (21:15)

Yeah, I think if we start from the track level, I think Pro Tools, like the default number of inputs or kind of like plugin inputs you can have there is like five plus five, so 10. So usually if that audio track is well recorded material and you’re not in a genre where you have very

Jesse Paliotto (21:33)

Mm-hmm.

Mm-hmm.

Hannes Andersson (21:45)

over-processed material, then you’re going to be fine with an EQ, an equalizer. That might be the only thing you have there. Another thing is usually you go for something like EQ compression and maybe saturation or distortion, and then you have like three. But I’d say kind of like when you go for, when you have those more, let’s say,

Jesse Paliotto (21:51)

Mm-hmm.

Hannes Andersson (22:10)

music tracks, the instruments and those tracks you might have somewhere between like one and five plugins. And then when you have your most important tracks, like a lead vocal, for example, like the main vocal that everybody is listening to, then we’re probably up. If it’s a, and if we say the genre is pop or EDM, then you’re definitely going to have like seven, eight plugins on that.

Jesse Paliotto (22:15)

Mm-hmm.

Hannes Andersson (22:37)

And also that track being sent to some buses that also had the reverbs and the delays and everything like that. So there you have five, maybe some parallel tracks as well. So there you have five plugins.

Jesse Paliotto (22:49)

So I’m giving song,

this is all multiplied, right? So there was the five on the one and the five on the other and the seven on the vocal.

Hannes Andersson (22:52)

Yeah. Yeah. Yeah.

So, so in a, so in a, in a production project where the producer has produced a track, you’re definitely going to find, let’s say, I don’t know, 80 plugins and on a track, on a pop track. then that all already gets like committed. And so you kind of like print the tracks as they are. And that goes to mixing and the mixing engineer adds 40 plugins more. And so this is the way, this is just the way we manipulate, manipulate audio.

If we are not editing it, so like just cutting and pasting and copying and doing stuff like that, doing our fade ins and fade outs, the other way we process our audio is with plugins. And so that’s kind of the main way that we go about. And so yeah, we can have anywhere from like 20 plugins to 200, depending on the project. And don’t get me started on cinematic projects like for film, for cinema, because those projects might have…

Jesse Paliotto (23:48)

yeah.

Hannes Andersson (23:51)

If it’s for a whole feature film, you might have 2,000 tracks.

Jesse Paliotto (23:56)

mind-boggling. So let me use this as sort of a I’m gonna use that as a turn into a little bit different sort of question. So obviously a lot of competition in this industry right like there’s a lot of plugins out there it’s not like you know there’s you know five main ones that’s what everybody use I mean maybe there are five popular ones but there’s a lot out there. And I believe you guys are based in Helsinki and so how do you do how did the company and how did it think about going global?

Hannes Andersson (23:57)

Yeah.

Yes.

Jesse Paliotto (24:25)

Because if I’m creating software, I’m in Helsinki and I want to suddenly take this to the world, there’s a lot of other plugins that people can pick from. How did you get started and how did you do that? I know that’s a very broad question, so please feel free to take that wherever you want to take that.

Hannes Andersson (24:38)

Mm.

Yeah, yeah. I mean, I can start really shortly talk about the history. So the company was founded by Olli Keskinen. So he’s a dear friend of mine. were both studying at the Sibelius Academy. We were studying music technology. So we were both becoming recording engineers, mixing engineers in that sense, or was at least dabbling in that. And yeah, got to do that a lot.

Jesse Paliotto (24:46)

Yeah.

right on.

Hannes Andersson (25:10)

Oli made the first version of Soothe pretty much on his own. Like that’s a solo project. And not only did he made the plugin, but he also made the website. He made the web store. that was like a WordPress, WooCommerce based store back then. And he also made the copy protection for the plugin back then. And that’s both now both the store of course is FastSpring now and then the

Jesse Paliotto (25:27)

Mm-hmm. Yeah.

Hannes Andersson (25:40)

Copy protection is also done by another company that we then, or we implement their technology into our plugins. But yeah, that was all made by one person in November, 2016. And then we’re not in the plugin industry or in the, guess, in the software e-commerce side, you’re not thinking about going global. Anything is by different, by like start by default, it is global. And so he…

Jesse Paliotto (26:05)

Yeah. Yep.

Hannes Andersson (26:10)

started the web store and he loaded up the plugin and then he just wrote something on one of the more popular forums in the audio space and said that, hey, I made a plugin. I hope you like it. Here you can buy it and here you can download and try it. And then it took off from there pretty fast for a single plugin done by a single person. And so pretty quickly he understood that he should be focusing on

Jesse Paliotto (26:27)

Yeah.

Mm-hmm.

Hannes Andersson (26:39)

squashing the bugs and making sure that the code is good. And so I jumped on the business side, on the marketing side, or mainly focusing on marketing, getting more people to know about it. And Tommi Gröhn as well jumped on as another DSP engineer is what we call it. So digital signal processing. that’s, those are kind of like where all the code starts. It’s the algorithms that do the processing for the audio. And so we became kind of like the core

Jesse Paliotto (26:50)

Yeah.

Hannes Andersson (27:07)

team and now we are now the partners of oeksound but that’s where I mean my how it started for me was actually just cold emailing reaching out to Grammy winning engineers and a lot of them answer I mean they’re not I mean engineers are not that kind of they’re not that secluded and they’re not there a lot a of them like when people reach out to them and

Jesse Paliotto (27:23)

Yeah.

Mm-hmm.

Hannes Andersson (27:34)

especially like when somebody has a plugin that they haven’t tried before because we’re all geeking out about plugins. so, in a way, that just kind of shows that we were all musicians, recording engineers, mixing engineers, and just kind of had, we were all users of this plugin as well. So reaching out and just getting to geek out with other people about the plugins that we have was the best kind of marketing, again, word of mouth, getting the word out there.

Jesse Paliotto (27:37)

Yeah. Yeah. Mm-hmm. Yeah.

Hannes Andersson (28:02)

was the way I went about it. And then at some point we released Spiff our second plugin in 2018, grew the company to up to about six, seven people. And then Soothe 2 we released in 2020 before COVID really hit. So that kind of like, there was a lot of things happening there. Obviously COVID was good for software, COVID was good for music in general. When it comes to the business side,

Jesse Paliotto (28:22)

Mm-hmm.

Hannes Andersson (28:32)

horrible event, all in all, but just…

Jesse Paliotto (28:34)

Yeah, but yeah, so many people had to invest in tools and so many people were making music at home because they couldn’t go play the gigs.

Hannes Andersson (28:38)

Yeah. Yeah, exactly. They were making music at home. They couldn’t go to a commercial studio and so they were recording in their bedrooms and something that Soothe, for example, was pretty much made for was to make cheaper microphones sound more expensive, cheap rooms sound more professional and all of that. it kind of got released and came out into the world at the perfect time.

Jesse Paliotto (28:56)

Mm-hmm.

Hannes Andersson (29:07)

in that sense. so Soothe two was for us, the plugin or the product that really, really took off and put us on the map. And after that, it’s been crazy. Everything changed after January, 2020. And that’s when we also understood that we need a better partner on the, on the e-commerce side and not maybe like trying to do all the e-commerce our side ourselves with the, with taxes and, and everything. And so that’s when

we started to look for other partners there and found FastSpring.

Jesse Paliotto (29:44)

Was there any particular headaches that you ran into or was it just you could see that it would help in the future or was there specific pain points where selling like the popularity that surged? Did it create kind of growing pains or?

Hannes Andersson (29:58)

Yeah, definitely created growing pains. think bookkeeping was, for example, just keeping books clean on like the different countries and having that going on correctly. It’s just having pretty much… We couldn’t focus as much on the marketing side when there’s a lot of like technical things that you need to take into account and bureaucracy and…

Jesse Paliotto (30:24)

Mm-hmm.

Hannes Andersson (30:27)

legal matters and stuff like that. so it was just like we’re a small company of and especially back and back then we were a small company where most of the founders of the partner was pretty young and like I haven’t worked at another company in my life. This is my kind of first company. And so in a way it’s not like we could have we had like a

Jesse Paliotto (30:47)

Mm-hmm. All right, on.

Hannes Andersson (30:55)

consultants or a CEO that have started like four different companies before and say like, yeah, this is just how you do it. I mean, and we never were a startup either. And so we’ve never thought like a startup. We’ve never had the kind of like the way of thinking. And so we were always just like this artisan, plugging company making these tools. And so I think…

Jesse Paliotto (31:15)

Yeah.

Hannes Andersson (31:24)

What I remember now, it’s all a bit fuzzy just because of how fast everything happened. I think it’s just we needed to be able to handle scale and needed to be able for customer support as well to be able to handle orders correctly and fast and something that also would work with our licensing system because

Jesse Paliotto (31:30)

Yeah, I’m sure. Yeah.

Hannes Andersson (31:53)

because oeksound and our licenses are handled by a third party in a way, and then fast spring. So there’s always this kind of like Trinity of actors when somebody buys a plugin or license to use our plugins. They buy it from us, they get a license, an activation code that they activate with pace with ILOCK is called. And then…

Jesse Paliotto (31:54)

Yeah. Yeah. Yep.

Hannes Andersson (32:19)

that’s what they receive when they’ve made the transaction over fast spring to us. And so, yeah, there’s always that going on. it’s a bit of a complicated system, but again, it’s perpetual licenses. So it’s one transaction for most and then rent to own, of course, then makes it again, a bit more complicated.

Jesse Paliotto (32:24)

Yeah.

Yeah, but I can imagine there’s, start making decisions like am I putting my developer time into solving that triangle of software integration or my building the next, you know, soothe or improving the next feature or whatever. And so, it sounds like a bit of it is sort of just optimizing what do we spend our time on versus what do we outsource to, you know, a partner who can potentially or hopefully solve it for us.

Hannes Andersson (33:05)

Exactly. Yeah. And to not have to worry about some percentages being off when it comes to VAT or something like that and not having to keep track of it that often at least. I’d say as well, most of our, the sales we do is kind of B2C. mean, there’s a customer, but that customer is often as like,

Jesse Paliotto (33:20)

Yeah.

Mm-hmm.

Hannes Andersson (33:35)

solo owned business. And so it feels like B2C for most parts, but it might be that it’s B2B. And that’s why always like, it’s like a lot of customers that’s always going to write off the VAT. There might have a code for VAT in Europe or then some other company ID for tax purposes. And then

Jesse Paliotto (33:37)

Yeah.

Yeah.

Hannes Andersson (33:58)

there are also B2B customers. So large companies like game companies or movie companies that are actual businesses that want to buy in larger volumes, for example. And so that’s something we’ve noticed with FastSpring that it doesn’t matter. There’s going to be a possibility. have the tools through FastSpring to offer what the customer wants and also to keep that.

Jesse Paliotto (34:12)

All right.

Hannes Andersson (34:25)

funnel as clean as possible. That’s always been super, super important for us is that we’re not using an account. We don’t have accounts. We don’t have oeksound accounts for our users, which is pretty unique as well. Usually for a lot of software companies, you need to log into your account in order to make a purchase and something like that. We thought since you’ve already trialing our product and you don’t have an account for trialing our product as well. And so.

Jesse Paliotto (34:36)

Mm-hmm.

Yeah, right.

Hannes Andersson (34:54)

when you make the purchase decision, we’re trying to be by all means not be in the way for you to make a purchase. So kind of like when you’re going through the purchase funnel, get out of the way. You as a company need to get out of the way and you need to just make it as easy as possible for a customer, for a business, for to make a purchase, to make a volume purchase, to make a…

Jesse Paliotto (35:02)

Right.

Right.

Hannes Andersson (35:21)

purchase with VAT code to be able to add your address or whatever you need there. And it should just be so seamless and like simple so that that happens without doubt. It feels like because we’ve been super transparent up until that point. So we’re not going to ask you to to kind of like, you want to buy our plugin? Well, first log in and so you can see

Jesse Paliotto (35:24)

Yeah.

Right.

Hannes Andersson (35:50)

what kind of coupons you have in your account. No, no account, no coupons. The price you see is the same price for everyone. You don’t need to worry that somebody else gets a better deal. And you just go through it and then you have it and then you get on with your life and you get to mix more music.

Jesse Paliotto (36:00)

Yeah, right.

I love it. I can’t tell you how many times I have stopped because you go to buy or to do a trial and you’re in it and like, oh, quickly set up your account. I’m like, I don’t got time for this. And I’m, I’m in my head. wondering, like, if I set up the account, are you going to remember what I was purchasing? Is the cart going to stay permanent through my exchange or might have to start back over on the homepage? Like forget it. And I just move on. Like that’s so smart. Like reduce as much friction and just allow the purchase.

Hannes Andersson (36:23)

Yeah.

Yeah. And if you, and

also all of that, like if you sign off, sign up to our newsletter, you get a 10 % coupon and it’s like, so there’s coupons involved as well. Well, is there a 20 % coupon somewhere? And then I go to Google and then I try to Google out like, okay, where can I get a 20 % coupon? And, and stuff like that. It’s just like, it makes it such a gray area and it doesn’t feel, it doesn’t feel right. It doesn’t feel like you’re treating the customer correctly because it’s

Jesse Paliotto (36:39)

Yeah.

Yeah.

Hannes Andersson (37:00)

Yeah, just… Yeah, I think it’s good.

Jesse Paliotto (37:02)

It’s interesting.

I don’t hear people talk about that a lot, and it may just be me missing it, but like it’s very popular with retail sites, right? Like clothing stores or something where, you know, send it for email and you get the pop-up, you know, get 10 % today signing up. And what you’re introducing is cognitive load to somebody who’s in a purchase funnel.

And it’s not like typically in the digital world, we tend to think in terms of there’s more clicks and that’s friction or creating the log in is friction. Cause you have to think of a pattern, but just the question I asked myself of wait, am I getting the best deal? That’s friction. And so, yeah, you’re reducing sort of that whole kind of internal slowdown.

Hannes Andersson (37:31)

Mm.

Yeah,

yeah, and that’s actually funny that you mentioned that because you can actually trace that back to the way we develop our plugins. So plugins pop up when you make your music, they pop up in a separate window in front of your track, and then you adjust your parameters and then you close the window. Now, for many sites and for many, let’s say,

Jesse Paliotto (37:52)

Mm.

Mm-hmm.

Hannes Andersson (38:08)

let’s say content on social media, they kind of count how long the user has spent with that content and that’s positive. I mean, the more time they’re on a site, the better or something like that.

Jesse Paliotto (38:22)

Yeah, that’s quote

unquote engagement and that’s what everybody wants in order. Yeah.

Hannes Andersson (38:26)

Yeah, but that’s completely the opposite for a good plugin, right? When you know how a plugin works and you’re mixing music, you want to get to an end result fast. shorter while you have open our plugin and it stays on, it’s not in a bypass state after you close it. So it stays on. So if you open a plugin, you spend, let’s average seven seconds, like looking at it.

Jesse Paliotto (38:47)

Yeah.

Hannes Andersson (38:56)

And then you close it. That’s good. Like that’s amazing. If you spend a little time on it. And I think the same way you think about, okay, now I’ve used the plugin and now I want to purchase it again, the shorter time it takes for that person to make that person to make that purchase for better. Right. Because they’re wanting to get back to mixing music, right? They don’t want to spend time in their browser. They don’t want to start questioning. Like if they’re getting the best.

best deal possible they want to get back to making music

Jesse Paliotto (39:27)

Yeah, especially

if they’re going to have 200 plugins they’re using on this track. Like I don’t want to do this 200 times.

Hannes Andersson (39:31)

Yeah.

No, this is just a plugin exactly. This is not like, we’re not changing the world here with what we’re doing. We make kind of like really flashy toys in a sense, but they’re super good tools.

Jesse Paliotto (39:47)

The that that reverse metric on engagement is funny. It takes me back to the analogy of like somebody building something with like physical tools like the tool that I like the most is the one that if you tell me, Jesse, here’s this tool for building stuff with wood. And every time you use it, it takes an hour to set it up and it takes an hour to clean it. You guess what? I’m never going to use that tool. The one that like does it fast and I can just keep building. I’m going to use that every time. It’s interesting sort of reverse metric from a lot of marketing funnels where yeah, engagement is the.

the currency.

Hannes Andersson (40:17)

Yeah,

of course that’s different if the tool is the thing you’re doing. I mean, if I’m sitting down and I decide that today I’m gonna explore plugins, then of course I will spend time with plugins because I’m not working on a track, I don’t have a client waiting for me to send over a finished version. I’m not getting paid by the hour when I do that. And so in that sense, it makes sense. I mean, if you buy a golf club,

Jesse Paliotto (40:24)

Yes.

Mm-hmm.

Hannes Andersson (40:47)

the more time you spend using that golf club, the better, of course. But because that is the hobby, that is the thing you’re doing. And that’s the same thing with an instrument then as well. I mean, if I buy an instrument, the more time I spend using that instrument, the better probably it was for me. It was a good purchase. But for a tool that’s there to kind of like get to the end result, it should not be in the way. It should just do its job and get out of the way.

Jesse Paliotto (40:50)

Yeah, true. Yeah, really good point.

Yeah.

You

Yeah, it really you have to understand the user journey or the user story. And maybe can you talk for a second? Before we started, we kind of talked for a second around the idea that you guys are your own audience. Can you just go back to that like about how you guys use your own stuff?

Hannes Andersson (41:32)

Yeah.

Yeah, and so I think actually I think I actually bought Soothe before I started working for all with Olli, which is really funny because I needed it. I needed it like it was a good tool and I needed it for my own music or for the music I was making for artists. And so that really shows kind of where where the core is at the company. I think everyone

dabbles in music in some form at oeksound, be it in recording or mixing when it to engineering or then producing music, playing music or then DJing or yeah, being, having something to do with music. And so a lot of us use our tools at least at a weekly basis, use our own plugins and we also use all the competitor, let’s say competitors plugins, even though we don’t.

Jesse Paliotto (42:18)

Yeah.

Hannes Andersson (42:34)

like to think of them as competitors, or they’re just other plugin companies whose tools we like. And then, so that’s always present when developing a product. Everything we do starts in product development. All marketing starts in product development. All kind of ethos starts in, it’s not a separate thing in any way. When we start thinking about a plugin, a new plugin, or an upgrade to a plugin,

Jesse Paliotto (42:56)

Yeah.

Hannes Andersson (43:03)

everybody’s involved. Everybody’s involved in what is it, what it’s going to be, what is it going to do, who is it for, and because it should be for us, like mainly. The plugins we do, we do for ourselves. We do take a lot of feedback. We do test it with users, have user testing and have alpha tests and beta tests and everything like that. But if we don’t like the plugin when we’re done, we’re not releasing it.

Jesse Paliotto (43:30)

Yeah.

Hannes Andersson (43:30)

I

mean, even though everybody else would say that it’s amazing, we still need to understand it ourselves because it’s really difficult to market something that you don’t understand.

Jesse Paliotto (43:41)

Yeah, that’s such a superpower to be the audience. I can imagine there’s maybe complications there, but you know, especially like in the B2B SaaS world, I think that can often be a problem where people aren’t using the product in their day-to-day lives. Especially if that’s not there, you know, if you’re selling whatever, you know, in my world, it would be sort of marketing tech. But if you’re, if you’re somebody who’s not marketing and it’s a B2B software, it’s very hard to figure out like.

Hannes Andersson (43:52)

Hmm.

Jesse Paliotto (44:06)

what are people actually doing, but there’s such an intuitive knowledge, I would guess, and kind of the oeksound team, where you guys like, no, this is how a producer uses it, because I just did that yesterday, and this was the problem I had.

Hannes Andersson (44:15)

Yeah,

exactly. Yeah. It’s so, and that’s, I love having those conversations with users where I can, I can just go up and ask like, Hey, so what do you do? Are you an artist or a producer or you’re an engineer? And then we talk about it. They tell them where they come, where they’re coming from, what kind of music they make, how they like to work and what their workflow workflow is. And then I can just immediately be like, that’s great. I do that. I do that as well.

That’s something new for me. Do you mind telling me more about that? this is where I see our plugins come in. Like when you do that, you might want to try this there or this there. And then just kind of like putting our plugins into the context of what they’re already working with instead of being like, this is going to fix all your problems in your life. And without having even listened to them to begin with about what their problems are.

Jesse Paliotto (44:56)

Yeah.

Yeah, talk about over promising. That’s going to be very hard to follow up with actual delivery. Well, Hannes, this has been so good. Thank you so much for joining today. I’ve I’ve so enjoyed this conversation. It’s very interesting. And I feel like there’s just kind of so many insights along the way around how you guys have structured, how you price things, how you sell things, how you develop things, how you’ve expanded.

Hannes Andersson (45:16)

No, yeah.

Yeah.

Jesse Paliotto (45:38)

Before we wrap up, there any, if people wanted to connect with oeksound, what’s the best way to maybe connect with you or with the company? Just go to the website or what’s the best thing for people to do?

Hannes Andersson (45:49)

So our website is oeksound.com. That’s O-E-K-sound, all in one word, dot com. There you can find our, our plugins. If you’re making music, you can download the trials there and use them for those 20 days. And, I’m not going to tell you to buy it because I don’t do that. And and also on socials it’s oeksound — O-E-K-sound — on, on all socials. That’s, Facebook X, TikTok,

Instagram, Twitter, everything out there. And so that’s where you can follow us as well. We’re a very small company. So if you send an email to contact [at] oeksound wanting to speak with me, we’ll know about it. Or if you send a DM, if you send a DM to any one of our social channels, I will know about it. If you connect with me on LinkedIn, just Hannes Andersson there, I will know about it. And so that’s the best way to connect with me.

Jesse Paliotto (46:33)

Nice. I love that. And we’ll add those in the show notes, of course. Thank you so much, man. I’ve appreciated this today. Thanks, everyone, for joining us on the Growth Stage podcast. I’m your host, Jesse Paliotto. Love being able to hang out with you and with the best in the business here on the podcast. Really pumped to have been able to get Hannes on here and talk through kind of their journey. Have a great week, everybody, and catch you on the next one. Cheers.

Hannes Andersson (46:55)

Thank you.

David Vogelpohl (00:05)

Hello everyone and welcome to Growth Stage by FastSpring where we discuss how digital product companies grow revenue, build meaningful products and increase the value of their businesses. I’m your host, David Vogelpohl. I support the digital product community through my role at FastSpring and I love to bring the best of the community to you here on Growth Stage. In this episode, we’re going to be talking about how SMB digital brands can win the best talent

Joining us for that conversation is someone who knows quite a bit about that. I’d like to welcome Lizzie Mintus. Lizzie, welcome to Growth Stage.

Lizzie Mintus (00:41)

Thanks, David.

David Vogelpohl (00:43)

Awesome. So glad to have you here. And for those watching and listening, what Lizzie is going to talk about today, and Lizzie joins us from a company called Here’s Waldo Recruiting, but she’s going to share her thoughts on the most effective recruiting strategies for small and medium businesses. It’s so difficult for SMBs to compete for the best talent. And so Lizzie is going to give us some guerrilla advice there on how we can win that best talent. How to leverage community involvement to that end.

and content as well to punch above your weight when recruiting and insights on why the best candidates even say yes to working for smaller brands. I’m really curious to hear her thoughts there. So really excited to jump in here today. So Lizzie, I’m going to ask you a question. I know you focus in your business a lot on the gaming industry. Obviously it’s a big focus for FastSpring as well. But what was the first game you bought with your own money?

Lizzie Mintus (01:41)

Yes, I had a Game Boy and I bought a Mario game with my own money.

David Vogelpohl (01:49)

my goodness, what was the driver for that? Did you get like a birthday, Christmas money kind of thing and you were deciding what to buy? Had you been saving up for this particular game?

Lizzie Mintus (02:00)

Yeah, I always did odd jobs. had an allowance and yeah, I’d always figure out how to work from a young age. I was very entrepreneurial.

David Vogelpohl (02:09)

Excellent. So during the intro, I kind of talked about how you run here’s Waldo recruiting. Could you tell me a little bit about your business and what you do there?

Lizzie Mintus (02:21)

Yeah, Here’s Waldo is a boutique recruitment firm for the game and tech industry. worked, my first job ever was at Nordstrom and I worked at a recruiting agency for four years and I wanted to think about how I could make recruiting with a Nordstrom flair to it, which means you get taken care of and you feel like a person and you feel like your needs are met and you are really listened to and understood both from a candidate perspective and from a company perspective.

And as a kid, my parents always talked to me about efficiency. How can you vacuum more efficiently? How can you do this more efficiently? And I think there are many ways in which you can recruit more efficiently, which is just spending time to think about what you as a candidate want and what you as a company really want. I’m getting super clear on that. So we work with companies to first find clarity and then make a plan about how we’re going to find the person that they need. Where is this person? Is it a school?

Is it a company? Is it some kind of affiliation group where they are? And then we reach out to them and then we let companies know what candidates say so they’re informed about the market. And we work in tech, we work in games, we work in North America and Europe and we hire mid-level through executive.

David Vogelpohl (03:40)

Excellent. that efficiency angle and getting clarity, I’m guessing some of this probably plays a role in some of the questions I’ll ask you later. But it’s interesting to hear you think about that idea of setting a clear goal and its role and being efficient. And then I like the Nordstrom kind of analogy there in terms of service. It’s been a while probably since I used a Nordstrom shopper to help shop, but it’s really, it was really hands on and to your,

point like high attention and making sure you’re making the right choices. And it’s interesting to hear that you’ve used that motivation in your business.

Lizzie Mintus (04:15)

I always admired

the way that they do things. I just love high service at a restaurant, at a hotel, anywhere and being taken care of and knowing the person who is in the service role has my best interest in mind and goes above and beyond to think of me, right? When you leave the restaurant, they write a little note on your receipt and that’s easy and they bring you a mint. It’s minimal effort, but it’s just something to go above and beyond and make sure you’re taken care of.

David Vogelpohl (04:40)

That’s so cool. I have a similar story from my background. My first job inspired me on customer service as well. I worked at a grocery store as a bagger, but it was like the best grocery store chain in the city. And they prided themselves on customer service. And it was the first job I ever had. And they went me through, they sent me through this customer service training. And it was just all about kind of what you talked about, you know, respect and supporting the customer and helping the customer and always being there and just having that high standard.

Lizzie Mintus (04:46)

What was it?

David Vogelpohl (05:09)

And it just stuck with me like every job I ever had after that. It really resonated. it’s interesting to hear you talk about your backstory like that.

All right. Well, let’s kind of get to the topic at hand here. We’re talking about, course, how can SMBs hire the best talent when they’re competing with huge brands? Could you talk to me about some of the reasons why it’s so hard? Let’s get it on the table. Let’s get clarity like you were talking about earlier with recruiting. Why is it so hard for SMBs to hire the best talent when competing with big companies?

Lizzie Mintus (05:46)

Yeah, well, a big company can offer a shuttle that takes you to work and free lunch and all of the shiny things, you crazy benefits, maybe a trip to Hawaii with your whole family or a personal trainer or all these things that make people say, wow, I’ve never had this experience before. And I think people that work at two companies

big companies are truly spoiled. I mean, you listen to them, they’re like, yeah, we have that niche chocolate brand always in my office and I get to eat it every day and they do my laundry. So I think there’s that and then there’s the wow factor. And some people really value brand names. Like I work for Amazon, I work for this. And you even see people in their headline say X, yada, yada, right? X sales force, X meta. But I think it’s just…

for me from a recruiting standpoint, just about understanding what is it that you want? Do you really need to make, you know, this whatever, $100,000 a year plus plus, is that a need for you or are you living in Iowa with your cat and an apartment and like, you know, you’re not supporting your family and you don’t have seven kids and you’re in San Francisco. So I think people get wrapped up in the big company draw often.

David Vogelpohl (07:05)

So when you’re competing against this, there’s, like you said, the wow factor. And it’s, like when you tell like your parents or something where you work and they’re like, yeah, I got it. got it.

Lizzie Mintus (07:15)

Yeah, my kid

works for this. They can tell their neighbors, they can tell their friends. Yeah. Yes. Right.

David Vogelpohl (07:20)

Yeah, they understand it. And so that’s a challenge.

And then you mentioned benefits and pay as other challenges. And so as a small company, you then start to think about like, well, how can I differentiate and how can I overcome these things? Because it’s a big deal, especially if you start getting into pay. I think like, you know, maybe the free lunch at the office, maybe that is less compelling and easier to overcome.

Lizzie Mintus (07:47)

Yeah.

David Vogelpohl (07:49)

so help me understand then, and I love to kind of anchor to success when I think about strategies people can, you know, use, but when a candidate picks a small company over a large one, why do they do that?

Lizzie Mintus (07:58)

Yes.

Yeah, it happens all the time because the

small company cares about you, David, as a person. If you have the CEO, CTO, some executive chat through, here’s the big picture of the company. Here’s your impact. And you can see your impact. This is one of the major selling points to work at a small company. You have a big piece of the pie. You’re T-shaped. You get to work with a lot of different teams. Maybe you get to work with some high level executive, which at Amazon, you’re

I don’t know, 100 levels below, right? So you have exposure to people you wouldn’t otherwise. You have more ownership at a small company. And then I think it’s really just about understanding your why. Why are you looking for a new job? What are you unhappy with, candidate? Is your big company doing a return to office and you have to badge in for four hours every day to sit on Zoom with your team that lives in Virginia?

inferiority right I could personally I could never do that so oh can you know we offer more remote work I think you can offer flexibility with schedules with return to office you can offer equity and when you are a small company people don’t understand what equity is especially if you’re coming from a large company you’re like oh I had Amazon stock and it vest every so often so you could explain what the equity could be in different scenarios

And some people value that and some people don’t. And I hear a lot of startup founders, they’re like, oh, I want someone that’s so into working for equity. And I always tell them, it depends on the person and their circumstances, equity doesn’t pay for take care. And so you have to understand where the candidate is really coming from and what the most important thing, what is the most important thing to them? Is it potential for promotion? Is it a tech stack they get to work on? Is it working autonomously? Because money is one component. And for some people,

that’s the NLPL, they’re the breadwinner and they’re supporting their family and they need to make a lot. And that’s okay, right? And if you’re a small and medium business, you need to understand that as soon as possible so you don’t go so far down the path with someone whose motivations ultimately don’t align with yours, which is why you need a solid recruiter to ask the hard questions or you need to ask the hard questions right away.

David Vogelpohl (10:20)

I like how again, you’re kind of anchoring back to like, what is the person trying to achieve in their career? And you kind of rattled through a few areas where, you know, as they’re making this consideration and the hiring company is trying to think about how to position, you’ve kind of laid out some of these decision points or like reasons people would make the switch. You didn’t mention like a higher level title. I’m guessing that’s a pretty common reason. Maybe you just didn’t think of it in the moment.

Do you agree with that?

Lizzie Mintus (10:50)

Yeah,

maybe for some people. It’s all dependent on the person. As a smaller company, you can offer a larger title, but what is their five-year goal? I what is the title going to do for them? What is their next step? Yeah, or faster promotion. That could be another reason.

David Vogelpohl (11:08)

And so it seemed like though, like even if you considered say a higher title, but again, kind of to your point, you’re like trying to dial in on the person and what’s motivating for them. seemed like the theme though, if I was thinking about like, what’s like one core value of benefit of going with a smaller company or a larger company, it’s a broader impact within the organization. We talked about, yeah, being able to work with higher level executives on higher level problems.

Lizzie Mintus (11:29)

100%.

David Vogelpohl (11:36)

versus being a cog in a bigger wheel. Do you see this theme emerge consistently with your clients?

Lizzie Mintus (11:42)

Yeah, I think at a large company you’re touching one thing and it’s just a trade-off. Do you want to be really siloed? Generally, not always, but do you want to be really siloed and make a lot of money or do you want to work somewhere where your work has more meaningful impact that you can see and you have a faster, you’re moving faster at that smaller company and that’s a really personal decision for people. It’s about understanding their motivators. The other thing I think is important which goes back to the

just being intentional from a company standpoint, is getting clear about why someone would want to work for you and making sure everybody on your team is also clear. And they can have their own spin, but I think you need to be clear, what are our company core values? Where are we going? Because everyone in the interview process is going to add their own flair. And if it’s a good candidate, they should be asking the interviewer questions. And so you want to make sure that your team

is also aligned on what they’re looking for and also where your company is going. Because if they’re getting a lot of very mixed messages and you’re a super fast growing startup, you just don’t communicate, which I think is common, then that’s going to be a turnoff for the candidate. They’re like, I don’t believe in the company vision because the team is on different pages.

David Vogelpohl (12:59)

Yeah, they don’t know what they’re getting into and it’s, they’re getting mixed messages from the team. mean, obviously that’s not going to create the best candidate experience. Um, you know, and it’s really interesting. keep getting back to your, your notion of, you know, defining what people want and, following that path. I’m imagining times from my past, when I’ve worked for smaller companies, recruiting candidates, competing against bigger companies.

kind of selling the dream, you selling the impact they would have and the influence they would have at a small company over a large company. But to your point, that might not be what they’re looking for. They might be looking for actually just want to do a job and make a good amount of money and go on with my life. And maybe you might even need that for the role you’re hiring for. Maybe selling the dream isn’t even what you need. it is a trap. I can see small companies getting into is these

tropes of like I’m going to sell it this way when in reality the person you’re hiring for is looking for something different.

Lizzie Mintus (13:59)

Yes, that would be frustrating if you’re trying to the dream and someone doesn’t care about the dream and wish you’re selling. So it’s great to identify that from the start.

David Vogelpohl (14:08)

So let’s move on to the sourcing side. If I’m Google and I breathe into the wind, 500 engineers apply for my job. How do SMBs compete? How do they find the best candidates?

Lizzie Mintus (14:23)

I think having a solid website is important than a website that accurately represents your team. So if you are trying to diversify your startup and you only feature five white guys at your startup, that’s not going to be appealing for a woman or person of color to work there. I mean, this is common, you you just don’t think a lot about your website and you slammed it up at first. But I think having a compelling

about us section, you can win with your why. Here’s our why. Here’s where we’re going. Here’s our vision. Here are our values. And then another thing I love that I see small companies do is say, here’s our interview process. It’s this step, it’s this step, it’s this step, because nobody likes surprises. And with large companies, I think people have a higher tolerance for going through the ringer. We all know that large companies have some wildly long and

perhaps irrational interview processes that people do because there’s that brand recognition and they want to work there, but you don’t have that ability at a small company. So I think being really clear about the whole interview process and getting back quickly is important. And then just time kills all deals. You are not going to win on cash, but you can win on speed. You can have an efficient process that makes people feel good. And if people feel good in that process, they’re more likely to work for you. In terms of where…

You could post your job on LinkedIn. LinkedIn’s not my… I live on LinkedIn. But as from a company standpoint, I don’t necessarily love them and their pricing and lack of customer service. That’s another story. But you could post on LinkedIn. You could post on different job boards. You can post on your website. But you need to have someone who is qualified to review applicants, reviewing applicants quickly. And…

Probably, hopefully, I know there’s founder mode and that’s really trending in Silicon Valley for the founder to do everything. But I disagree, I think you should think as a small business, what is the best use of my time for my executive team? And I almost guarantee it’s not sifting through resumes. So have someone who’s qualified and competent and has attention to detail internally, externally, whatever, doing that function for you so then you can move people fast.

David Vogelpohl (16:43)

about uncommon ways of sourcing or like ways of sourcing that maybe just didn’t bring up like employee referrals and things like that. Like it sounds like obviously having a good about a section like marketable career site showing representation and other aspects that you’re maybe wanting to instill and have happen within your recruiting efforts. What are some like other ways people could think about sourcing candidates that might be helpful for them?

Lizzie Mintus (16:48)

Yeah. Yeah.

Referrals yes players refer a player so and then I think posting not on with a LinkedIn job posting to your network is great and if you’re Sourcing I mean a little bit you’re doing my job. You’re recruiting right? So who is Who do you really admire who’s in this role? Ask them who they might know and ask them to repost your post. I think that would be a great thread to go down

David Vogelpohl (17:10)

for us.

Lizzie Mintus (17:37)

And then I would think about what are similar companies and kind of get a feel for what other companies are offering. Cause you want to understand what you compete against. And a lot of times when you’re starting your search, you don’t really know, right? You’re just, putting your stuff together. You’re like, I think it might be this range. I think this might be appealing. So ask people for feedback along the way. I mean, you could go to career fairs. It depends on what level, right? You can go through schools, you can get referrals from schools if that’s what you really like.

and then you could pay attention to the news, what company announced return to office. If you’re not doing that, what company might be having financial difficulties? Maybe it’s good to rattle those cages.

David Vogelpohl (18:18)

Yeah.

of the techniques that I’ve used in the past, and I’ve had success with it, but I haven’t used it probably in a couple of years now, at least for the roles that I’ve hired for where I was the hiring manager, was a hiring manager, like pitch video for the role where they would record themselves talking about the role. And it’s funny because when I’ve done that in the past candidates would be like, I saw the video and I understand the role now. I’m like, well, talk about it. do you have success with that? And if you do, do you have success getting hiring managers to actually do this kind of.

Lizzie Mintus (18:31)

Mm-hmm.

Yeah, I think there’s great success. However, you can differentiate yourself and your job. But right now we’re in such a candidate driven market as we record early 2025. And so I think companies are putting in less effort right now because they already get applicants. But yes, I think that’s a wonderful way to do it. I even saw the best one I’ve ever seen.

I had a musically talented hiring manager who made a song that she sang about the role while she played piano and then she posted it. But that’s just incredible. You show your character, you show who you are, and the more you can show who you are, the more you’re going to attract the right person. So I think it’s great to make your job description a little less appealing to everyone, but appealing to the right person. Here’s what it’s really like. Here are our values.

I don’t want to put the good part or the ugly necessarily in your job description, but I think you should make it unappealing for people who wouldn’t match your values.

David Vogelpohl (19:52)

That’s such a good point, especially in an environment that’s candidate rich, right? is like just really setting those guidelines of what good looks like. That’s great advice. So let’s talk about now later in the process. We’ve gotten the applicants, we filtered through them, we’ve got it down to our last candidate, we’re ready to send an offer letter, and Google sent them an offer letter as well. So now we’re competing. What are your…

favorite approach is to try to close someone in this situation. Is it just the groundwork you laid before and hope for the best? How do you think about those last days and moments in trying to get that candidate to close and choose the smaller company over the bigger one?

Lizzie Mintus (20:36)

I think it depends on if the smaller company aligns with their goals or not. Like I think even when I worked at Nordstrom, I’d be like, hey, that shirt doesn’t look good on you. Let’s find a new shirt. And people are like, oh, because they’re not used to hearing that. So I think you really just have to be honest with yourself. Of course you want this person to work for you. But if you get the wrong person who actually wants to work at Google, they’re not going to last. So you should have figured this out long before and closing.

is not at the end. Closing is from the beginning. Closing is the whole process. Closing is before the final interview. Like, hey, what are your other interviews? How are you weighing those? What questions do you have? What concerns will you have? What will you do if XYZ happens? So yeah, it’s always scary. It’s like an shit moment, you know? Like, no, big company with this big scary offer. And that happens and that’s okay. So I think it’s just about understanding.

really the motivations and making sure that the candidate is clear and reminding them of what they said in the past. And also ideally understanding who else might be making a decision because it’s not always, it’s not just the candidate, right? It’s the candidate and their family. So I’ve talked to a wife before and one time a candidate is like, why don’t you just talk to my wife? Like, let’s say me in the middle of it and you can just talk to my wife. So I’m like, all right, I appreciate the efficiency.

Yeah, but I think just reminding them of who you are and the bigger vision. And what I love is when a CEO, whoever the executive person is, who’s appropriate, given the size of your company, if it’s 20 people, a CEO is great, but as you scale, it’s maybe not the CEO or maybe it still is. But there’s a lot of power in a really high level of executive saying, hey, David, I want you to work here.

I want you to work here because I see this in you and I see that you can grow in this way and you can become this at my company. And that is a competing factor Google doesn’t have. Google’s like, hey, where’s your offer from whatever recruiter, like maybe a contract recruiter. It’s not as compelling except for the Google factor. So I think you can win with like the heartfelt, we want you as a person here. But I would only do that tactic if you think, you know, the candidate is actually going to be happy working for you and they don’t want that big company.

David Vogelpohl (22:36)

Thank you.

Yeah, I love that idea of like kind of this judo move of using your weakness as your strength, like your smallness is your weakness, but using that for that personal touch and that, you know, showing care and connection with people there in those kind of last few days and moments. And then kind of re anchoring to like make the best decision for you. We want the best candidate in this role.

means that it’s the best decision for them. So if this isn’t for you, maybe Google is the right choice.

Lizzie Mintus (23:25)

Yeah, that’s okay.

Hopefully you find that out before and sometimes they get wowed in the end. And if they do, mean, maybe they’ll go to Google and decide, I am a cog in the wheel and I don’t like it and I’m going to time it with the stock vest, but I’m going to leave. And then if they had a good experience with you and you got back to them quickly and you were respectful and you sent them a night’s snow, even if they declined, then they will reach out to you when they get laid off or decide they don’t like it. Or maybe they stay at Google and then it’s not your person anyway.

David Vogelpohl (23:52)

Or maybe they have a friend.

Lizzie Mintus (23:54)

That’s a great strategy. Yeah. Hey sounds seems like it didn’t work out for you. We loved you. Who do you know?

David Vogelpohl (24:00)

Awesome. My next question then to shift gears a little bit. You do such a good job, I feel, with engaging with communities and producing content and things like that that help you with the efforts for your business. How should people thinking of recruiting candidates think about community engagement and content?

Lizzie Mintus (24:26)

Yes, I think different generations care about different things, but it’s important now more than ever, especially when the economy flips again, which it will, right? Just prepare for that. But to be strong and be vocal about what organizations you support. So I think showing that and those affiliations is a wonderful way.

to go. So what events do you go to? Maybe I mean, I think it’s a great thing to think about in general, what greater good can I do from a company standpoint? Like for me, be it Women and Games or Black Girls Code or all these organizations, right? Who can I get involved with that is meaningful? And then I, if I’m firm believer, just put good out into the universe and it will come back to you.

David Vogelpohl (24:55)

So, thank you.

Lizzie Mintus (25:18)

So I think that’s great. Or you could pay for someone to go to a conference. Like you could do all these little things. But yeah, again, all the little things come back to you.

David Vogelpohl (25:20)

That’s a good one.

I mean, like in this could see, I don’t know, kind of harder and easier and bigger companies, but like, obviously the professional communities they’re hanging out with as well. Right. Like, I don’t know if they’re a developer and they’re, you know, coding in a specific language, you know, developer groups and meetups and things like this. this part of your strategy? this strategy you think that smaller companies should employ?

Lizzie Mintus (25:47)

Yeah.

Yeah, I think especially now with AI, there so many garbage messages and people are so tired of being solicited to and sold to and advertised to all the time. So that’s a great way to go. Go somewhere, meet people, but you’re not going to go there. I mean, maybe you’re going to go there and meet someone. I think that’s a great way to go. But it might not be that transactional, you know, you might go there and then maybe you’ll volunteer there and put in some work.

But I have a friend who organizes community meetups in the Seattle area, and he has hired a good amount of his team from people that have showed up there that he has gotten to know, and he has recruited them himself that way. And that’s a great way to go. It’s authentic, and you really know the person a little bit better, too, that you’re hiring, because you’ve met them in real life, just not on Zoom. It’s more organic.

David Vogelpohl (26:41)

Yeah, that’s a, feel like a really bold small company and hiring manager to, become actively involved and play this long game, but to get the most value out of communities. found that to be true is that it’s a, it’s a long game effort, but it can have a huge payoff in terms of, you know, the quality of the people that you can get connected with over time. I’ve, I’ve been a big fan of it. I’ve had transactional things. I had an agency back in the day and I remember we.

needed to hire PHP developers and for the cost of like, I don’t know, beers at one meetup, we got a huge exposure and we’d get like candidates like during that meetup kind of thing. so I do think there is a transactional element to it, but I agree with you that it’s more of a long game play.

Lizzie Mintus (27:27)

Yeah, it’s a great way to go.

David Vogelpohl (27:30)

Awesome. Um, any other golden tips you want to mention before we kind of wind it down here? I’m sure you have a wealth of information you could share, but what’s the one thing you want to kind of finish up on to make sure you remind folks of is they’re competing for these, you know, best candidates when they’re a small business.

Lizzie Mintus (27:50)

Yes, have all the hard questions ready up front. Think about those. I have so many hiring managers who say, yeah, I have this amazing applicant from whatever, Nvidia, know, some really large company that pays a lot and they’re in the process and we’re doing it ourselves. I’m like, okay, have you talked to them about comp.com? Do you understand their motivation? No, we’re thinking we’re going to save that till the end. You know, so every, when you’re a small company, your team’s time is

everything. You need to have your team focused on creating your product, finding product market fit, doing well, getting that out the door, and interviewing is a huge distraction. So do all of the hard work upfront to give yourself clarity and to give your team clarity and to get clarity from the candidate that you are interviewing if they’re going to be the right fit potentially or not because you will save yourself and your team time and your time is money.

David Vogelpohl (28:48)

Excellent. Well, that’s a great thought to end on. Thank you so much for joining the interview today, Lizzie. Awesome. Thanks everyone else for watching and listening. If you’d like to learn more about what Lizzie is up to, of course you can find her on LinkedIn. You can also visit hereswaldorecruiting.com. Thanks everyone for joining us today. Again, I’m David Vogelpohl. I support the digital product community through my role at FastSpring and I love bringing the best of the community to you here on Growth Stage.

Lizzie Mintus (28:53)

Thank you.

Jesse Paliotto (00:04)

Hello, everyone, and welcome to Growth Stage podcast, where we discuss how digital product companies grow revenue, build meaningful products and increase the value of their business. I’m your host, Jesse Paliotto. I support the digital product community as part of my role with FastSpring, and I love bringing the best of the community to you here on the Growth Stage podcast. Today, I’m really pumped, we have with us Blake Hutchison from Flippa.com CEO.

And we’re going to talk to Blake and get insights and updates about flippa.com as well as get insights on things that you should know if you’re a digital business owner, SaaS owner, looking to potentially sell your business and maybe get some insights from Blake on how to go about that and how you might go about it on flippa.com. Blake, thanks for being here today. I really appreciate it, man.

Blake Hutchison (00:48)

Thank you, Jesse. Really appreciate it as well. Should be a great chat.

Jesse Paliotto (00:51)

Yeah, looking forward to it. For those who are not familiar, can you start just giving us a quick overview of what Flippa is and how it helps entrepreneurs and business owners?

Blake Hutchison (01:00)

Yeah, absolutely, thank you for that. Flippa’s the number one platform to buy and sell digital assets and online businesses. So, should be a really good fit for a lot of the FastSpring customer base and audience out there listening in today. But in short, if you own a SaaS business, if you own a Slack plugin, if you own a Chrome extension, if you own a…

an online publishing business, even like a blog or an iOS or Android app, we have the pathway to exit. So we can offer liquidity and match these entrepreneurs up to the universe of buyers out there who are looking to buy these assets. And they buy those assets much like buyers and investors buy any other asset. They’re interested in the return on investment, they’re interested in the growth opportunities, they’re interested in the strategies and the synergies that those businesses can bring them, either as individuals or as companies. So it’s a marketplace, it’s a platform.

Our sweet spot is really between sort of that $250,000 size business all the way up to maybe a $25 million business. Our job is to match them up and make sure that they can find a happy home.

Jesse Paliotto (01:57)

Mm-hmm.

I love it. I’m tempted to like dive into, I’ve already got some questions on the platform and some of the specifics, but let me ask before that, I’d to hear just a little bit about yourself. Like what led you to become the CEO, Flip? What got you into this particular business model? I believe you’ve got some different, you know, experience as well. So I’d just love to hear how you got connected.

Blake Hutchison (02:21)

Yeah, maybe a few things. I first comment would be I did sell my own. I was an entrepreneur. I did sell my own business on Flippa. So I’m a customer of the platform and have used it and therefore had some understanding of its power and that therefore created a bit of a love affair between, I guess, the board and myself. Secondly, I’ve worked across many, many business models. And of course, we need to know how those businesses work here at Flippa. And I’ve done that. So I’ve worked in SaaS businesses that were fast growth.

and

now very big in the case of, say, a zero, which is cloud accounting software.

I ran one of the fastest growing online travel agencies, of course is ecommerce here in Australia called Luxury Escapes. That’s now a billion dollar company. When I was running it, it was a lot smaller than that, but scaled that up very, very quickly. As I mentioned, I was an entrepreneur myself. I built a marketplace for specialty food and I’ve worked in the Valley based in San Francisco across a number of, well across one startup and then a very established online publishing business called Lonely Planet, which of course at one point in

It’s the biggest guidebook publisher in the world. I guess the of the dynamic number of different industries and the business models I’ve worked across has been of great assistance to me here. And of course we work with entrepreneurs across the globe, regardless of their monetization strategy and approach. So that sort of diversity is still being good stead, I guess.

Jesse Paliotto (03:48)

Yeah, that’s amazing. mean, even just having sort of the gut instinct for, you know, as looking at decisions for the business or how to grow it, like being able to very at a sort of instinctual level, take into account the diversity of business models and stuff that are out there. That’s like a huge, I would imagine that’s just a huge asset for yourself personally and for the business for having you at the home.

Blake Hutchison (04:06)

Yeah, and you know what, I say this a lot. mean, business is business. And of course, industries are different and some industries are very complex. But for the most part, the way you run run business is actually quite analogous to the way you might run another business. The tools and tactics tend to be similar, albeit you need to nuance those. But you just learn so much from seeing so much across so many different businesses. And I think that that’s been really helpful.

Jesse Paliotto (04:35)

Yeah, that’s that’s huge. How has Flip It evolved since you’ve become CEO? Has there been any big milestones or changes or has it been largely sort of this steady state growth process or what’s that look like?

Blake Hutchison (04:47)

Yes, we’ve certainly grown six years consecutively, but I think the biggest evolution for us was going from what might be a low value digital asset marketplace into an M&A platform. And the biggest difference between the two of those statements is one, low value to sort of medium and high value, and then two, the actual service layer built into the technology underneath the hood. And so in the past, it was really a chat environment. So, hey Jesse, I like the

look of your blog, can I buy it? Yes you can, Blake, let’s do a deal. And that’s the history of Flippa. Now it’s a dynamic M&A platform, so we’ve got obviously still that negotiation engine which is the chat room, we now call that the deal room, but then you’ve got M&A insurance which is basically a reps and warranties insurance, you’ve got due diligence built in, you’ve got 15 different data integrations, you’ve got an AI matching tool that does 20 million matches annually, just in excess of

400,000

weekly. You’ve got different asset types. You and I spoke about SaaS plugins, Chrome extensions, all these types of different digital business modes that are now sort of prevalent in 2024. So we’ve had category expansion be a critical part of the business. So I think it’s really the maturation of the platform in what is still a nascent industry and then the service layer that we’ve built within the experience itself.

Jesse Paliotto (06:15)

That’s that rings so true for me personally, because my I experienced flip of first, I think coming out of like a digital marketing background and probably 10 to maybe 15 years ago where I think at that time and please correct me if I get this wrong, it felt like very much like people were selling their blogs there. This was when blogging was very new or at least it was kind of in the upswing and everybody there monetization. I think people were like, my gosh, I could actually sell this. This is like a sellable business and flip it was one of the places you did that. Right.

Blake Hutchison (06:32)

Yes.

You’re absolutely right, Jesse. was the beginnings. There were more blogs than there were anything else. And of course, there’s art today, but the digital economy has evolved substantially. So I think, the number one, to be candid and transparent about it, we sell more ecommerce businesses than anything else. And then second to that would be online publishing. Third to that would be SaaS. And then you sort of have this long tail of new asset types. And so an example of that would be YouTube channels, which is very

fast growing category within the Flippa ecosystem. So people sell a YouTube channel as an asset, they sell the back catalog, we sell KDP, so Amazon Kindle Publishing. That’s a really fast growing category for us. And again, things like Slack plugins, Chrome extensions, this sort of evolution of the platform economy is starting to find its way to Flippa.

Jesse Paliotto (07:39)

That’s interesting to me, partly because I think a lot of the logic around owning a business is that you have to really own your own platforms so that you are in control of what you’re selling, right? But if you’re selling YouTube channels and stuff, is there any, I don’t want to say gotchas or tricks, but any complexities or nuance is probably a better way to say that, around those categories you mentioned at the end where you’re trying to sell a business that is largely built on a third-party platform that you yourself do not entirely control.

Blake Hutchison (08:07)

Yeah, it’s a really great point. I candidly, I still think ecommerce is the most complex to buy as an investor because there’s so many moving parts. So, you know, it depends on the ecommerce.

sort of type, you’ve got direct to consumer, you’ve got drop ship, you’ve obviously got Amazon, you’ve got the other marketplaces like Walmart, et cetera. And so there’s complexities there. And you’ve got the warehousing, you’ve got inventory, you’ve got cost of landing that inventory from maybe China or any other market in the world into the US. So ecommerce is maybe the most complex with respect to how many moving parts there are.

And funnily enough, I mean I obviously take the question, but funnily enough YouTube channels as an example are probably the least complex. the reason being is YouTube is the second largest search engine in the world. So it’s actually similar to buying a blog. What you’re actually looking for is something which dominates YouTube search, something which has clearly high views, which is the equivalent of page views on a blog.

Jesse Paliotto (08:51)

really?

Blake Hutchison (09:13)

And

it’s kind of the most passive. And I never want to say that there’s a passive business you can buy because I’d be setting people up for failure. But it’s kind of the most passive in the sense that if something, you know, if a video about trampolines is consistently generating 100,000 views each month, and it’s been doing so for last 12 months, well, it’s highly unlikely unless Google search changes its search algorithm, which is probable. But it’s highly unlikely that all of sudden this thing drops off a cliff.

100,000

views, it will probably generate 100,000 views the following month. And then of course you generate revenue in much the same way as a blog. You’ve got the equivalent of AdSense, which is a Google product for YouTube, and they’ll serve up ads and you’ll generate revenue, you’ll take that check home every month. So it’s actually relatively consistent. And when you’re doing the due diligence, there’s only so many assets within a YouTube channel you need to assess. So it can be complex in the sense that

If the channel you’re buying is so dependent on new fresh content all the time, you obviously imagine yourself being able to produce that and produce that in line with your audience expectations. But if you’re buying mostly a back catalogue, then it’s less tricky.

Jesse Paliotto (10:18)

right.

You know, a slightly different lens to look at kind of the audience and like this through would be geography. Like you mentioned the different industries that you see coming up, the ones that are sort of leading the pack, these interesting ones that are rising. Is there any kind of places where geographically you’re seeing like we’re starting to see a lot more business or a lot more acquisitions in these regions?

Blake Hutchison (10:50)

Yep, so the US is our biggest market by an absolute stretch. Still 70 % of all trade happens in the US on Flippa. What we have seen though, Jesse, and I think it’s super interesting, is the rise of sort Southeast Asia and Eastern Europe entrepreneurial environment, entrepreneurship hubs.

And what is interesting to watch when you look at the graphs at Flippa that we track each month, US buyers still rocketing up and to the right. So the number of buyers investing in this asset class continues to increase, but what they buy is more regionally diverse. so Americans buying American assets and now it’s Americans buying global assets. And so 67 % of trade on Flippa is cross-border.

Jesse Paliotto (11:28)

Mm-hmm.

Interesting.

Blake Hutchison (11:41)

and essentially what they’re doing is going after all of the entrepreneurs across places like Poland, Bulgaria, Romania, places like Hong Kong, Singapore, Malaysia, Seoul, Thailand, etc. So many entrepreneurs building great small businesses that are infinitely leverageable.

Jesse Paliotto (11:48)

Mm-hmm.

Mm-hmm.

Blake Hutchison (12:05)

and

they’re then applying their understanding of the US approach to running these businesses, they’re applying their skill set, and they’re buying these businesses regardless of where they’re based around the world. So that’s been a substantial shift in the supply side of the Flippa marketplace.

Jesse Paliotto (12:22)

It’s interesting you just said that phrase literally what I was about to say. It’s interesting to see diversification as a supply side driven phenomenon rather than a demand side. Usually it’s like I want to diversify so I’m not all in one market. But this is the other way where there’s just so many good things out there around the world that people like, well, I guess I could buy a company in Vietnam as well as I could in Illinois. That’s interesting.

Blake Hutchison (12:32)

Yeah, no.

Yeah.

And there’s so many stories of that. mean, you know, there’s a San Francisco based company there, they’re called Sporcle where they’re the largest online trivia business in the world. And they recently bought a business out of Helsinki, Finland. And the AI matching connected them up with that opportunity. There’s no way that they would find that opportunity without the platform and the matching algorithm existing. So all of a sudden they find themselves in a deal room negotiating with a broker and entrepreneur based on the other side of the world. And that therefore is their pathway to growth.

Jesse Paliotto (12:55)

Mm-hmm.

Blake Hutchison (13:13)

and in organic growth through acquisition and they find that asset happens to be that the perfect asset is operating out of Europe.

Jesse Paliotto (13:21)

Yeah. Yeah, it’s interesting that AI is a key driver, at least if I infer that from that example where, because of course, I mean, it’s the problem of all digital world that we live in. There’s just so much opportunity, so much content, so many connections. And so that’s how you guys are steering people through that, that breadth of.

Blake Hutchison (13:36)

It’s

become enormous and yeah, I’m sort of jumping on the bandwagon, I, with respect to commentating about it, but the reality is it’s become an enormous driver of our business and it’s because it’s adding so much greater efficiency and accuracy to the matching process. so, know, deal flow and deal origination is one of the challenging things about M&A. And so if you are the founder, the CEO or the analyst working at Sporcle,

You can’t just be logging into marketplaces and platforms every day and seeing what’s out there. Your reliance on us pushing to you the deals that we think are the best fit. And you’ve got to get that right because if you don’t get it right, just annoy the client. And the AI, the precision that we’ve been able to build with respect to those matches has been outstanding. So what it does is it looks at intent signals. So if they are browsing the marketplace,

Jesse Paliotto (14:23)

Mm-hmm.

Blake Hutchison (14:36)

basically makes an inference as to the the fit of one asset based on other assets that they’re looking at so it’s kind of piece one that’s relatively simple and rudimentary the second thing it does is obviously read the mandate and the bio and then it picks up keywords within the mandate and bio and goes and finds relevant assets and then the third thing it does is you kind of got these graph neural networks so it looks at all the assets on the platform and that sort of

Jesse Paliotto (14:46)

Mm-hmm.

Blake Hutchison (15:06)

It creates synergy, so it’s a scatter plot. What is the proximity of one asset to another based on this network? And then it does that on the buyer side too. So it actually looks like buyers like you and what those other buyers are finding interesting. And then it infers that you will also find that interesting. In short, we then ping a text message, ping an email, and we say, we’ve got a match for you, check it out here. And that’s substantial scale in.

Jesse Paliotto (15:08)

Mm-hmm.

Mm-hmm.

Blake Hutchison (15:36)

in our magic business.

Jesse Paliotto (15:38)

Are you familiar with Pandora.com, the music company?

Blake Hutchison (15:41)

When I was living

in Francisco in 2005, they had just started and they were in West Oakland alongside me.

Jesse Paliotto (15:48)

What you just described to me is like a two-sided Pandora. It’s not only correlating the, people that like this band also, or bands like this or like this other one, but they’re correlating you. People like Jesse tend to log into this and you’re kind of doing it on both sides to kind of optimize and match, which is pretty cool.

Blake Hutchison (15:58)

Yeah.

Yeah, it is cool.

Jesse Paliotto (16:07)

Is there any, you this, may have been what you’re just talking about would answer this, but I’m curious if there’s any particular unique challenges around a place like Flippa and running that. It feels very complex, you know, in so many ways and kind of the types of deals that we’ve done, vertical industries, geographies. Is there anything about that that’s like, hey, this is really different than anything I’ve done in the past and here’s how I tackle it.

Blake Hutchison (16:30)

Absolutely, Jesse. I mean, it’s a managed marketplace. so firstly, you’ve got the marketplace aspect of that. It’s two-sided. You must fill up supply to ensure that you provide the adequate service that your demand side is looking for you provide. That’s an always-on battle. And so we’re what you call a high-value, low-repeat marketplace. And so all the transactions are…

of a high value, there’s very few marketplaces that operate at this value. You might have something like, obviously, a Zillow, a Redfin, an Opendoor, all of these are sort of managed marketplace businesses that are selling high value, and then the low repeat nature of it. So you’ve got to get it right first time around. If you don’t, you lose the opportunity to sell and collect revenue. And the likelihood of that customer coming back is quite rare. There’s very few entrepreneurs who spin up more than one asset.

mind that more than one business. And ultimately, there are buyers who are very prolific buying 10, 20, 30 assets, but in reality, most people are buying one or two. you’ve got to get the customer experience right from day dot, and that takes some time to evolve, and we’re continually evolving that. In addition to that, the matching piece is hard, the cross-border nature of it is hard.

Pricing is really difficult, so these athletes are complex. so one YouTube channel with 100,000 views isn’t the same as another YouTube channel with 100,000 views. The category is different. Where it derives its views from is different. An American audience is worth more than an Eastern European audience, just by nature of what advertisers will spend. So the pricing…

Jesse Paliotto (17:59)

interesting.

Blake Hutchison (18:22)

algorithm that goes into valuing these businesses is tricky and we got it wrong for a long time actually and I’d say it’s a lot more accurate than it’s ever been. Of course staffing, you you’ve got to have sales staff on the ground across all of these major entrepreneurship markets so that someone understands the process of selling.

It’s all good and well to do that through an outstanding onboarding experience, which we’ve clearly built. But if someone’s going to sell something for $250,000, it’s a highly emotional sale. And so you’ve got to get that right. And that requires good quality staff operating across, in our case, 20 different countries. So it is complex.

Jesse Paliotto (18:55)

Mm-hmm.

What? Yeah. And even that last comment about the emotional nature of it and that it’s a large deal. It’s maybe analogous to, people talk about if you’re if you’re buying a residence that you’re going to live in, it’s often the biggest purchase of your life. And it’s it’s this massive, massive moment for you. Like when when you’re with pricing, do you find that part of that emotional kind of like walking people through the sales process is educating them on what the pricing should be to people come loaded with a lot of maybe misconceptions around how the process works?

or most people pretty kind of hip to the flow of this.

Blake Hutchison (19:40)

Yeah, so if we step back a little bit, the first problem is most business owners aren’t thinking about exit. Most business owners are thinking about the day-to-day operations of their business, how to put a roof over their head, how to grow it, how to generate revenue and pay their staff. So the complexity of the business starts with one awareness for the problem at hand. And the problem at hand is that ultimately businesses tend to not last forever.

Businesses are assets. They are valuable and there’s a liquidity opportunity that we can provide. So you’ve got to make people aware of that. Then yes, to answer your question on pricing, they mostly have an inflated view, as you would expect, of what their business is worth and they tend to tie that to what they read about the VC industry or what they’re seeing in the public markets.

Jesse Paliotto (20:37)

right.

Blake Hutchison (20:38)

And of course, these businesses don’t have the scale or opportunity that a VC asset would typically have for growth. Its growth profile is different. And then secondly, you don’t have the always on day to day, minute by minute liquidity that you get in the public markets. So it tends to be that they are not valued as high as businesses which have that liquidity or have achieved that scale. And people need to be educated as to that. And then of course,

Jesse Paliotto (21:03)

Mm-hmm.

Blake Hutchison (21:08)

People don’t really know how businesses are valued. They’ll say, hang on, my brand’s great, my product’s great. And we’ll say, well, that’s great. We understand that, we respect that. But the way these businesses are bought and sold is on historical performance, not future opportunity. The future opportunity is for the new owner to realize, which is actually more analogous to buying property than it is to investing in a startup or buying public stock.

Jesse Paliotto (21:35)

Yeah, right. The potential

is there, but you have to put the work in to realize it. Yeah.

Blake Hutchison (21:39)

Yeah, so there’s some education that happens. The good news is we have the equivalent of like a Zillow’s estimate where we’ve got so much sales data that we can predictively price these things and tend to get it right.

Jesse Paliotto (21:46)

Mm-hmm.

Is there any advice you’d give to a SaaS or digital product company that is looking to sell their business on Flippa? What should they be thinking about? I some of the stuff you just said, obviously, anything else that you’d say, you know, be considering this if you’re looking to do an exit here.

Blake Hutchison (22:08)

Yeah, so investors are pretty savvy. If they’re buying a SaaS asset, they tend to know the metrics that matter to them. And therefore, we try to educate founders as best we can as to the metrics that matter. So you can have a SaaS business that says, hey, we’re great. We’re doing $2.5 million ARR. But the reality is they’ve got a high churn rate, their LTV is low, and their cat costs are high. And so the metrics that matter to a SaaS business, we would highly encourage most SaaS business owners.

to study, to understand and to improve and show consistent improvement or at least consistent effort to improve.

The second thing is just find a good quality sort of financial hygiene. Are you using accounting software? Do you understand your inflow? Do you understand your cash flow? Do you have a good feel for how the business is performing on a day-to-day basis? And we find that sounds simple, Jesse, actually, but we find that entrepreneurs are obviously so busy in the trenches that…

that financial hygiene is less likely to be there. So we highly encourage people to a bookkeeper and manage a clean set of books day in, day out, because it does improve their ability to run the business well, but it also sets themselves up for a better possibility at an exit long term. Probably the other thing is to start to imagine.

when the time will come that you may want to move on. And so we often find that people come to us, they suddenly say, I had a, you know, I was at Christmas lunch and I was talking to my family and I’ve decided that in 2025 is my time to exit. And then things aren’t in place. They don’t have standard operating procedures. They don’t have the financial hygiene that we alluded to before. They don’t have a sense for what it’s worth. They don’t have a sense for how much.

Jesse Paliotto (23:49)

Mm-hmm.

Blake Hutchison (24:04)

they are willing to part ways with this business for. And so we encourage people to start to think about that time. They’ll say, well, I’ll never wave the white flag. That’s okay. Think about all the things that annoy you in the business and start to plot a pathway to understanding when that time might come for you. Is it a year out, two years out, three years out? And then imagine the check. What size check will make you happy? You sort of need to work toward that and build a financial position in the business that will give you that

Jesse Paliotto (24:28)

Mm-hmm.

Blake Hutchison (24:34)

best possible chance of success.

Jesse Paliotto (24:37)

Yeah, that’s an interesting way of reframing, you know, what you had said a few paragraphs ago about people often they look at the VC markets, they look at that and they value their business according to these things, but their business is very different. But another I really like that framing like, if you think your business is worth X, then let’s build the framework and the pieces in place that value it at that. So you can feel good about that sales price and getting realistically getting it.

Blake Hutchison (24:56)

you

Yeah, mean, you know, if you take good quality public market SaaS multiples right now, they’re quite compressed still, right? And so you’re looking at maybe five, if you’re lucky, seven times for the average publicly traded SaaS business. Well, in the small market dynamic, you might be looking like sort of two and a half to five times. Two and a half for a standard business, five times for a great quality business with a reasonably low churn rate, maybe sub 7 % churn.

So for those businesses, let’s say therefore that you’re a million dollars ARR but you’re saying, I want a 10 million dollar check. Well, a million dollar ARR business that is subscale, i.e.

generating substantial revenue at this juncture, that business isn’t going to give you a $10 million check, but you can plot your pathway to that and say, okay, well, now I need to get this business to maybe three million ARR, $3.5 million ARR to imagine myself getting that $10 million check.

Jesse Paliotto (26:04)

I wanted to ask you, kind of mentioned like we have like a Zestimate type tool that will kind of value and what are the key factors that it values on? Is it mainly sort of using those default metrics for SAS multiples and then maybe considering churn rate? Or is there some other key things that people should think about when they do sort of a back of the envelope calculation of their value?

Blake Hutchison (26:24)

Yeah, those things are included, but yeah, let’s just go through them. you know, revenue, your cost base, your

profit and we understand and respect that SaaS businesses are not always profitable. They’re reinvesting for growth. The cost of the technology is high, the cost of customer acquisition is high. So it doesn’t need to be profitable, but those things are still taken into consideration. So that rule of 40 top metric is considered in this landscape. Cost of acquisition, LTV, retention rate, churn obviously.

Then location, you the reality is if you’re trading to an American customer.

Let’s say for argument’s sake you’ve got a trade, you know, a trade tech business going after construction companies or builders or plumbers or something like that. The reality is there’s more plumbers in the US than there is in Australia. So if you’ve got a trade tech business and you’re going after plumbers and you’re selling a business to an investor on Flippa and you happen to be US versus Australia, well you’re going to get a compression to your multiple if you’re Australian, unfortunately compared to if you are.

US just by nature of the target addressable market and the opportunity for that new acquirer. So those things are all taken into consideration. Growth rate is taken into consideration. Clearly a declining business. There’s very few people in the world who want to buy a turnaround. You’re talking about a very specialist acquirer.

Jesse Paliotto (27:52)

Mm-hmm.

Blake Hutchison (27:56)

And so again, this comes down to timing. A lot of entrepreneurs will suddenly say, wow, I’m down, I’m down again, I’m down again, shit, I better exit. Well, the reality is that wasn’t the time to exit. The time to was when you were moving up and to the right. Now we’re not looking for moonshots, so we’re not looking for triple digit growth. Those businesses are actually considered a little bit speculative in a market like Flippa.

We’re looking for consistently growing businesses or even flat businesses where the predictable nature of the business is what an investor is most interested in.

Jesse Paliotto (28:33)

Yeah, very interesting. So assuming somebody’s sort of got their business in a place, they’ve got realistic expectations, they have some growth going on or at least flat line performance that they’re not in this kind of bad situation of being in decline and then deciding. So they got those ducks in a row, they get the flip up and they want to pursue doing an exit. Are there any strategies or patterns or things that would be like, if you’re going to come in and do it, here’s some advice on how to pursue that.

Blake Hutchison (28:59)

Yeah.

So one of the best tactics that most people won’t do is to point out the weaknesses in the business. And the best way to do that is, know, investors buyers are pretty savvy. They can see the strengths. The strengths are obvious. What is interesting to a good quality buyer are the things you don’t do well. And so you have to be vulnerable. You have to say that

I’ve never invested in an SEO and I have no idea what content marketing is. So therefore, if you have that capability, then my business will be beneficial with it. I’ve never advertised for customers on Facebook and Google, but if you have that capability, that will be an opportunity for this business.

Jesse Paliotto (29:39)

Mm-hmm.

Blake Hutchison (29:53)

Our churn rate is poor, but we actually know why. And we haven’t got the means to develop that feature set that will help us with our churn and retention. So therefore, if you are a developer with experience in SaaS businesses in this particular category and industry, this business can be optimized. Because buyers are trying to imagine themselves.

taking over these businesses, right? Again, for the most part, they’re not investing, they’re acquiring. And so when they acquire, they then have to take it over. So they need to understand how it works today, they’re the strengths, and they need to make sure that they can continue to run it to the same level that the business owner is running it today. And then secondly, they need to then understand what the weaknesses are, so that once they’ve …

taken the asset over, understood it for some number of consecutive months, they can start to work away at those operational weaknesses and start to fast-track their ROI.

Jesse Paliotto (30:58)

Yeah, that’s interesting. It’s almost a reverse SWOT analysis. So the way I’ve done SWOT in the past, I imagine a lot people have, is you do your strengths, weaknesses, opportunities, threats, and you go, here’s an opportunity, apply our strength to the opportunity. But you’re doing it different. saying, show your weakness. And the weakness is actually where a purchaser or an acquirer say, I can turn that into an opportunity because I have a strength that you don’t. So it’s almost this inversion going on.

Blake Hutchison (31:13)

Yeah.

Yep.

Yep. And it’s an interesting one. Sometimes what is perceived as a strength, a buyer,

considers a weakness. So let me give you an example of that. Now, middly, I understand your audience is, know, SaaS, gaming, et cetera, and this is not an example of that, but I think they’ll get it regardless. So there’s an ecommerce business for sale right now. It’s a $6 million listing. It’s had a lot of attention. And what ends up happening is that acquirers and buyers find out that a lot of the stock,

that is bought is then personalized. So Jesse’s buying a baby romper and then his son or daughter’s name is stitched on the front. And so this…

Jesse Paliotto (32:11)

Right.

Blake Hutchison (32:14)

The founders consider a strength, right? The personalization aspect of what this business offers is what is most attractive to it for parents all over the world. They love the personalization of it. Jesse loves that he can have his name stitched into this romper for his new baby that’s been born in the last six months.

That’s cool for you as a customer. It actually is what sets this business apart. But it’s spooky to acquirers because the acquirer is going to spend $6 million on this business. And if they haven’t worked in or operated a business which is built around personalization before, and is more mass market, churn and burn, high speed retail, that can be…

Jesse Paliotto (32:51)

All

Blake Hutchison (32:58)

challenging. so sometimes we do get entrepreneurs come to us and they’ll say, this is a highly niche operation. And we agree that that should be a strength. And ultimately, our matching algorithm will find the relevant buyer for that type of business. But it can sometimes be a bit debilitating. And it does limit the chance of finding a buyer fast.

Jesse Paliotto (33:23)

Yeah, is most of the buyers, do you find they are people that run the business? I think you said this a couple minutes ago, it’s they are acquiring, not investing. So most of the people that are purchasing the businesses intend to run them themselves.

Blake Hutchison (33:37)

Yeah, they run or they have a team to run. We have what we call the side hustler, we have acquisition entrepreneurs, and we have institutional investors. Regardless, so the side hustler is I’ve got a job, I’m Jesse, I’m Blake, I want to supplement my income and I want to run this digital asset on the side. They’re, know, Slack Plugin, Chrome extension, SaaS business, whatever.

Jesse Paliotto (33:41)

Mm-hmm.

Mm-hmm.

Blake Hutchison (34:05)

I’ve got the acquisition entrepreneur, so that’s Jesse or Blake, but we’re gonna quit our jobs and we’re gonna buy something. We’re gonna buy our next job. So we are an entrepreneur. It happens to be that we won’t do the zero to one, we will do the one to 10. So that’s a safe play because you don’t have to invest all of that time up front in requiring your first hundred or thousand customers, building a technology, understanding how it works and then finding product market fit. Somebody else has done all of that heavy lifting for you.

Regardless to your question, yes, I’m still operating. And then you have the institutional investor. So yes, they call themselves investors, but the reality is they do have a team waiting in the wings to operate. So they’re either rolling up multiple assets that look the same, or they’re buying an asset that looks different but is an awesome extension to some of the business that they already run today. Typical PE type strategy in organic growth for a good quality business.

Jesse Paliotto (34:49)

Mm-hmm.

Blake Hutchison (35:03)

answer your question. Again, they’ve still got a team to run it so yes they are owning and operating.

Jesse Paliotto (35:07)

Yeah.

Yeah, that’s interesting. Well, this is all been extremely interesting. Blake, thank you so much for your time today. This has been great. Is there any final thoughts or comments that maybe I didn’t get to open up that you wanted to make with the audience before we wrap up here? Just wanted to see if you had any final advice for people in the SaaS and digital product world looking to sell their own business.

Blake Hutchison (35:32)

I’ll maybe two quick comments. If you want a very quick valuation, it’s completely free. Just head to Flippa.com, you’d get a free valuation. Hope you don’t mind me plugging that, Jesse. And then the second one is, you asked the question about investing versus operating, so we are imminently, we are just about to launch Flippa Invest. So Flippa Invest will basically make available just an excess of 70,000 accredited investors on our platform who are looking to invest in good quality small businesses.

Jesse Paliotto (35:40)

Absolutely.

Blake Hutchison (36:02)

only, tech only businesses. They’re not looking for moonshots, they’re not looking for IPOs, they’re looking to invest in good quality businesses where they can apply some advisory. So Flippa Invest will launch soon and if anyone’s interested in that just reach out to me on LinkedIn.

Jesse Paliotto (36:16)

that’s wonderful. To reach out to best thing to look you up on LinkedIn?

Blake Hutchison (36:20)

Yeah, LinkedIn’s my platform of choice, so grab me there. I’m pretty active there and I’m happy to chat with anyone about it.

Jesse Paliotto (36:28)

I love it. Well, thank you so much for being here today. I really appreciate it. Blake, this has been super interesting for me personally and I’m sure for people that are listening.

Blake Hutchison (36:36)

Thank you, Jesse. I really appreciate the time.

Jesse Paliotto (36:38)

Thanks everyone for joining us on the Growth Stage podcast. I’m your host, Jesse Paliotto. I support digital product. Community is part of my role here at FastSpring and I love getting to do this. Hang out and bring the best of community here on the podcast with you all. Thanks everybody. Have a great week. Catch you next time. Thanks.