// conversationS 

DevHub.

A conversation with Mark Michaels of DevHub.

August 8 2017 | New York City, NY

AUDIO

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Raad Ahmed:
All right, cool. For people out there that might not know that much about you, can you just tell us a little bit about yourself and whether you were working on anything else before starting DevHub?

Mark Michael:
Yeah. Parents are first-generation in this country. They always wanted us to go to college. I personally always thought college was kind of a waste of time, but my dad was like, I'll disown you if you don’t go to college. I think four years of college slowed me down. So, I actually feel four years younger. I'm 35 today. I would have been 31 if I would have not done that nonsense. I love my life. My parents and I, my business partner, basically all my relationships are from about 17 years old, especially with my business partner. Just a really good person and here for the long haul. That story will all make sense once we get to the history of where we came from.

Raad Ahmed:
Yeah. That's awesome. I totally feel you on that sentiment. I'm a first-generation American as well.

Mark Michael:
You know how they are.

Raad Ahmed:
Oh, yeah. Exactly. I actually went through all of law school, and I wanted to drop out through my second year, but I ended up just staying just to make them happy.

Mark Michael:
My dad, it's so funny, because I hang out with my dad. He was the best man at my wedding. I hang out with him all the time. It's so insane. When I say that, because when people see us today, they just don’t believe. He was militant. He was so strict. There was no joking. There was no laughing. It was just like, you're going to school, you're going to school, you're going to school. We didn't talk about anything but grades, basically. He’d always said the same thing. I'd be like, you're an asshole, and he’d always be like, one day, we'll be best friends. I'd be like, F you. We'll never be best friends. Then, I swear to God, the day that he got the degree, he called. He's like, hey, let's hang out. Just totally changed. I don’t care. He's like, you did what I wanted you to do. You're good, man. Whatever happens, even if you're homeless, I'll always make sure you're not. I was like, Jesus.

Raad Ahmed:
I know, I know. Same exact thing. That's why I basically started LawTrades when I was in law school. Then, I graduated and then I just went at it full-time. I ended not taking the bar, which I also got a ton of pushback for, but that's a full separate story. You come from a first-generation background starting this company. What was the original vision for DevHub?

Mark Michael:
You want to me just tell the story how I tell it?

Raad Ahmed:
Yeah.

Mark Michael:
Okay, cool. We raised a couple million bucks to do what it is we don’t do today. In 2010, when the money was running out, we took a step back from what we were trying to build and realized that all we had was a cool way to build websites, which was not a cool thing to have in 2010, but because we raised money from what I consider seven of the greatest angel/VCs between here, being Seattle, L.A., New York, and San Francisco, we just didn't want to be the guys that had to duck when our investors walked into a restaurant and we're with our friends or wives or parents or whatever. We were like, shit. We're going to be around here for a while. At that time, we were getting a ton of press on Tech Crunch and a lot of the tech blogs that were really popular back in 2010. What we were trying to build was this blogging platform—it sounds insane now, but it was SimCity meets WordPress meets AdSense. Basically, you can blog about your passion, and we can monetize it for you. What happened was is, we gamified that whole platform. What we got was a big influx of small businesses using the platform. By that point, we had no more money, and we had to lay off 20 people, and we were like, shit. It was a really dark couple of months. Then, all of the sudden, we got a call in October 2010—should I just keep going?

Raad Ahmed:
Yeah.

Mark Michael:
Basically, we got a call in October 2010 from what you and I would probably, anyone who reads this or listens to this later, from a large North American traditional media company. Something like newspaper, radio, TV, Yellow Page company that was like, hey, we want to start selling digital products, i.e. websites to our small business customers, but we want to bundle that in with the phone service, with the Yellow Page ads, with TV commercial, with the radio spot. We were like, oh, my God. We can do this all over the world. Again, not true. The next five years, 2010 to 2015, we were just slogging it, and that word slog, S-L-O-G, slogged it. For freaking five years, because they're like, well, we have 5,000 sales reps on the ground. It’ll be so easy for us to sell websites. We're like, oh, my God. This is going to be great. We'll be bigger than any other website company out there. Well, they had never sold digital products in their lives. They're used to ad sales and a bunch of other stuff. So, for five years, we were working side by side with these companies, and big ones, all over the world. We're in seven different countries, six languages, and just slowly one by one by one, helping them sell digital products, aka websites, and it was brutal. Should I keep going?

Raad Ahmed:
Yes, please.

Mark Michael:
Okay, cool. Then, in 2015, those companies started moving up the food chain or people started moving out of those companies as they started acquiring digital agencies that were working with brands, basically. Those brands all want to have a local presence. Then, they're like, hey, what can DevHub do for us? We're like, holy shit. Instant scale. If you're thinking it's like a Bank of America with 10,000 branch locations or ATM locations, it was like, how do we build out those 10,000 websites? Which is basically what our platform was built to do. The last two years has been, it's been a rocket ship, but it's definitely—something is definitely picking up speed. We can stop that part there. There's more to that in a second.

Raad Ahmed:
Okay. So, it seems like you guys did this pivot, and then you experienced this rocket ship type growth. What was that pivotal change that you made, if you were to sum it up?

Mark Michael:
The thing is, I think the pivotal real change is what we just did about 45 days ago.

Raad Ahmed:
Oh, wow.

Mark Michael:
Imagine. We've been around, if you're going to really go back in our history, we've been around since 2007, but 2010 is when we launched the initial DevHub product. Then, five years of that nonsense that I explained earlier, and then these last two years of these grouped-together use cases. We've done stuff across so many different verticals, use cases, everything, but always utilizing the DevHub platform. A lot of it's just terminologies that get, this agency wants to call it something, or this brand wants to call it something else. Whether they want to call it a distributed marketing page or a landing page or a corporate website or a franchise website, it's all the same thing. What we did in the last 45 days is start splitting off products powered by DevHub. The first one we split off was this one called RallyMind, which is this specific use case. If you're trying to build landing pages tied to a performance campaign, you have a list of 10,000 keywords. We can auto-generate those 10,000 landing pages to match that search query. That was the first product that we've picked up. Nine customers in three months, basically, around that. We're like, okay, what's the next one we can do? Again, all off of the same platform. I think what happened was, we never really went deep into any one thing with DevHub, but we have a pretty big breadth of stuff that we've done. Now, it's clustering that into specific products and turning hopefully those into business units that can hopefully do $50 to $100 million a year each. That's the goal. I personally cannot be stuck in a business that's doing under $10 million a year. I will kill myself.

Raad Ahmed:
Right, right. For sure. That's interesting. It seems like you have a pretty diverse group of customers and various verticals. How do you go about growing and nurturing this diverse community with all these different verticals and personalities and business objectives in place?

Mark Michael:
Tell a lot of jokes. Honestly, I think at the end of the day, it's just being real. There's this infographic out there that has, there's 5,000 marketing technology companies, or something like that. We're a speck in the universe. In my opinion, we can't really get in trouble. As long as we do right by the customer, it can only help us, but sometimes we will do weird campaigns or something, and somebody who’s close to us will be like, oh, wow. That was a little weird. Why would you say that or do that? It's like, well, there's so much noise anyway. We have to be a little bit louder than everybody else. I think the one thing that we've been very, very, very, very, very, very good at is executing on the promise to the customer. We'll say, hey, if we can get you up and running in seven days, we won't even charge you any money. We always tell people, we can talk a lot of shit because we can back it up. We basically make rock stars out of product managers, is what we do. Before, we tried to sell the CEO and CMO and all those people, but really it was the product manager, digital marketing manager, brand managers that were really our advocates at those companies. So, we created small wins with them and then they would bring us into the larger organization.

Raad Ahmed:
Right. Then, how did you decide, when you're launching all these products, what was your process like for testing it out? How did you know what to keep and what to kill and so on and so forth?

Mark Michael:
Sales. If we couldn't sell it, it's like, it's dead.

Raad Ahmed:
Was there a specific time you had? A time limit where you're like, hey, look. We're going to launch RallyMind, and it's either we're going to give it one month, three months, a year, a couple of weeks.

Mark Michael:
Listen, it's so psychotic. I believe every time we launch something, we're going to be instantly rich. Every time. Even when we put up a blog post, I'm like, here it is. Here comes the money. It's over. Every time. It's even more profound when it's a website. A blog post, okay, whatever. Everyone’s going to read it, but when we launch a website, I'm like, here it is. Here comes Amazon. We're about to crush it. It's over. Everyone’s coming to it. Of course, obviously, no one finds it, and we're still in the same position. Basically, initially it's always like, we'll give it one week. If we don’t get a customer, screw this shit. We're going to go onto the next thing. Then, obviously, it's been 45 days and that's what it took, basically, to see any kind of success so far with just a new customer, let alone nine. We're like, oh, shit. Nine is way more than we thought. Of course, we thought we'd get that in the first day, but it took about 45 days.

Raad Ahmed:
Awesome.. How large is your team now? And did you guys raise any other initial funding after that 2009 period?

Mark Michael:
The one thing is, I'm pretty candid. If I was meeting you, let's say, at a bar or a restaurant or on an airplane and you asked me, hey, Mark, how many people work for you? The answer is basically, 157, but if you were like, hey, Mark, I just came to your office. I only see seven people sitting here. What's going on? I'll be like, dude. Only seven people work here.

Raad Ahmed:
Okay, right.

Mark Michael:
Somewhere in that range.

Raad Ahmed:
Haha that’s a good range.

Mark Michael:
No, because I feel like we do the work of a lot bigger organization. If we name drop who we do, what we do for, I think the world would basically be like, holy shit. We didn't even know this company exists at that level, let alone with that many people. Sometimes I get—anyway, yeah.

Raad Ahmed:
Cool. Just shifting gears a little bit, how would you say your job and your day-to-day duties has changed from when you started DevHub to what it is today? Or has it stayed relatively the same?

Mark Michael:
I think it's changing now. I think, really, prior to this strategy of rolling out these separate products, aka hopefully turning them into business units, it was very much, there's a saying, I forgot. It's like, we were working in the business versus on the business. I'm the one doing a lot of the sales outreach. I'm the one writing the blog posts. I'm the one doing a lot of that stuff. Now, it's more, it's starting to more managing relationships and running the business as a whole in terms of strategy versus running the day-to-day. The day-to-day was seven, eight years. It's still kind of hard for me to—we'll see where this interview goes. I can say some stuff.

Raad Ahmed:
You kind of have to just evolve as your business just grows, it seems like.

Mark Michael:
I have so many opinions. I think for any company, basically, any founders between—I think two founders is better than three. I think one is kind of lonely. I think two is the best, because it's you two versus the world. The third person’s like, well, we believe this. It's like two people versus one. It just sucks. You just want to order pizza and eat. You don’t care—the guy that wants the wine, it's like, dude, you're just ruining it for everybody else, because you're going to eat my pepperoni. There's a lot of stuff like that. I personally think that all of us founders can build the business to $5, $10 million a year in recurring revenue, if we're talking fast. That's all I know, really. All day, every day. Getting more money to hire sales and marketing people, I just don’t think that it good use of the money. I'd rather spend that money to bring you and the other founder or someone else in the business the leads for you guys to close, create that repeatable model, and then scale that. But not get money to figure out how to scale. I just don’t think that works. We spend so much money on that stuff. For us, it just never worked. It's so hard to explain that to everybody. I'm like, pay yourself more, man. Pay yourself $250,000 a year with whatever money you raise to motivate yourself to want to go crush it. You deserve it. We always want, oh, we're going to hire a marketing person. They're going to save our lives. We're going to hire the best sales person and they're going to save their lives. If you haven’t sold it, how the hell are you going to hire somebody else to sell it? It just makes no sense.

Raad Ahmed:
That's an interesting perspective. Would you say that that was one of the biggest learning lessons you've learned?

Mark Michael:
I think we made about three million mistakes, but yes. That was definitely one of them. Every time we would bring in somebody to help us build a part of the business—we got it to a certain point. Now, this person can help us, because they have the pedigree or the resume. Then, we'd be kind of disappointed, because we're sitting there like, we're trying to follow this person a little bit because they've supposedly done it, but again, who cares more about the business than the person who founded it?

Raad Ahmed:
Exactly.

Mark Michael:
No one. The shitty part is, you're paying yourself—let's just pretend anywhere between $75,000 and $90,000, or maybe $100,000. At the end of the day, pay yourself $200,000, $250,000, and go blow it out, because you're the one that's showing up every day.

Raad Ahmed:
Yes – I’ve definitely experienced that.

Mark Michael:
There's no assistant. Trust me. You don’t have an assistant under $5 million a year.

Raad Ahmed:
We had a very similar experience when we brought on our first marketing person, and I handled all the marketing up until that point. It just didn't work out.

Mark Michael:
It doesn't, dude. It's like, trust yourself. It's hard. There's so much of this nonsense hustling mentality. I don't know what the hell. It just psychologically plays these crazy tricks on your mind, like, maybe there's this somebody—I don't know. At the end of the day, I think it's all us. We're the good-looking ones. We're the founders. We have the power. It's our soul in this thing. It's not somebody else that's going to fucking save us. After $10 million? I don't know, I haven’t been there yet. We're on that path right now. Maybe our investors come in and be like, okay, now you have a real company. Now, we want to run this thing. We haven’t even run into any of those issues where people are like, we want our money. It's like, we're still insignificant enough that we can do what we want.

Raad Ahmed:
This is a good segue into my question, what is the next steps for DevHub, and what's bigger vision here.

Mark Michael:
The bigger vision, I've never looked at an Amazon or an Oracle and say, how did they do it? Why are they so smart? I never think of that. I just like Amazon just as a company, I think. Oracle—I was talking to one of the product people a couple months back, and they said, do you know last time Oracle built—this is, again, if they're wrong, this is where this is coming from. This is not me saying this. They said, do you know the last time Oracle built a product? I was like, I don't know. All the time? They're like, no. Twenty years ago. They're like, imagine sitting at a poker table and all your friends buy in for $20, and we buy in for $1,000. If we just play our hands right, we just wait for somebody to come along and take over a market and we'll just buy them out. Now, we're in that market. We have 900 different product segments. To me, this DevHub platform is, we wanted to be on that similar path, powering a lot of the marketing tech within brands and agencies all over the world across what could be two or five different business units, beginning with RallyMind. The next one will be something related to something, which I don’t want to say yet. Then, we have two more after that. If it's all powered by the same platform, I think we have a really unique way to go after the market that maybe others don’t, but who knows? The general gist is, if this thing can't be big, then we should just get out of here.

Raad Ahmed:
Makes sense. That’s cool.

Mark Michael:
I think in America, you're either an artist or an entrepreneur. I'd rather been an artist.

Raad Ahmed:
My last parting question for us is, for founders who are building brands right now and focusing on that, do you have any specific advice for them?

Mark Michael:
Do it your way. You are the smartest. Let your hair grow out. Show up. What is it? Come as you are, and just don’t be scared. There's nothing—no one can say wrong. We're all people. All there are in this world is gatekeepers, and just crush those gates over, under, through, whatever you want to say. Pay yourself as much as you think you're worth, and pay it again and again and again, and keep building. As long as you're doing right and ethical and you're not hurting people, you're right. Trust me. You're right. You may not think you're right, but you're right, and it's costly when you go against your gut. Just go for it. The other thing I would say is, when you raise money, yes, don’t hire a sales and marketing person. I would say use that money to pay yourself if you're going from $30,000, $40,000 a year salary. Pay yourself $60,000, $70,000. Take yourself to the next level. Get the business to the next level. Raise again if you want to, pay yourself a little bit more out of the next raise, and continue to pay yourself until you get the business to about $5 million. 10, and then at that point, figure out, okay, should we hire that sales and marketing person? Because you've done all the roles in the business to scale.

Raad Ahmed:
Awesome, man. I think that just about wraps up all my questions. I think this has been one of the most engaging interviews I've done so far.

//TAKEAWAYS

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"At the end of the day, pay yourself $200,000, $250,000, and go blow it out, because you're the one that's showing up every day. "

-Mark Michael, CEO of DevHub

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"You may not think you're right, but you're right, and it's costly when you go against your gut."

-Mark Michael, CEO of DevHub

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// NEXT conversation 

August 8 2016 | NYC