Podcast Transcript
Ep.3 Scott Paul
Bart: Scott thanks for joining us, for super excited to have you here.
Scott: Thank you.
Bart: Built to Stay as all about creating businesses with staying power, something that will outlast the competition and succeed overtime. Scott you’ve built and sold multiple successful businesses after starting out in sales and marketing working for other companies. I’m wondering how did you make the jump to founding your first business?
Scott: Yeah. I’m going to actually rewind. So I did 10 years of sales and marketing. But in high school, I actually was one of those early entrepreneurs, I was building before what was called Y2K. I was in high school selling like dehydrated foods and preparedness equipment. So it’s I got an early start.
Bart: For Y2K., that’s awesome.
Scott: I left my senior year and got a really expensive cell phone plan. But built a website called y2kaccessories.com. And I was like that as a high school student. I was trying to hustle an e-commerce on the side in ’99.
Bart: So you’re a natural-born you have the bug.
Scott: So I say , I had the bug early. So I was in a series of startups or small businesses. And it wasn’t until my doing my MBA and in 2009 where I literally 10 years later where I decided to strike again, try to see if I could you know. To take that jump from the day job into the unknown, the great unknown, that Abyss that people, you know at some point have to face if they want to do their own thing.
Bart: And did you feel like you did learn from these others?
Scott: A hundred percent? Yeah. I mean that was I learned what I didn’t want to do if I ever had a company and I learned what I did want to do. I took all the best practices from about four or five different occupations that I had over that decade and the worst practices, I vowed never to do to my employees or to people that worked for me. So it was a great for me. I think almost everybody should kind of do their time and to understand how organizations work. I could say that I had a stint of of doing everything. When I was in high school doing everything on my own and then I got got a few jobs doing yes sales marketing roles that.
I was out in the out in the marketplace selling at the time I was selling advertising for a company called Utah.com. They were like this tourism site for the state and I was selling space on this website, you know, it’s back before Google was pretty much everything and they had a lot of traffic to this Utah.com site and they were selling spots and banner ads to hotels and ski resorts.
But this was a this is kind of the transition into my second stint as an entrepreneur. I was out talking to all these hotels and simultaneously the iPad it just came out 2010 April. The first time that Job releases this tablet, right? And it’s fundamentally different than anything that’s come out and I immediately saw it as a not as a personal device from like how this could be awesome as, in the wild as a commercial use commercially. So the first things I started trying to figure out like how could these iPads be used in these kiosks as a kiosk in a hotel lobby where there’s always these like graphs of brochures that I kept saying and I’m like maybe there should be like an interactive kiosk in the lobby like right there right where you’re talking to your concierge or you’re checking in. They could just put this iPad up there. And yeah, let them see what there is to do in the area and that type of stuff. So I actually started trying to make software for the iPad and that was in 2010. I’m like, let’s make this virtual tour software so hotels and outfitters and things to do in the area can make content for.
Bart: And you’re making iPad app, an app for the iPad.
Scott: Yeah and I was trying to show this to the hotel. So while I had a job selling advertising I was trying to pitch my boss and why we should go this route and and personally I was just high side hustling it, you know, everyone’s got to have that first side hustle. Yeah, you got your day job, but you got to be thinking of like, what’s my backup plan? Right I found some people to help build the app and then I found a brother-in-law and ask them like, you know, if this is going to go into a lobby it’s got to actually be secure. So I had a brother-in-law bend up some metal and make it you know, essentially enclosure for the iPad so it can be mounted somewhere like as a kiosk in this lobby. And I took that around with the iPad and kind of showed my virtual tour to these hotels.
Bart: And were they buying into this, did they like this idea?
Scott: They didn’t like my app idea. Hmm, but guess what? They wanted the enclosure. Yeah, where did you make that enclosure because they wanted to do their own thing. They wanted to show the rooms, you know, they wanted to show the they wanted hotel property specific didn’t care about the brochure rack replacement. They wanted the they want to show off their rooms and the room rates. So they have their own idea of what they could use on.
They still needed this enclosure. I remember the exact place I was and who told me and I remember this other place. I went all in one day up in Park City. It’s selling you know to these hotels. After I heard that about three times, instead of getting discouraged and going my app idea is dumb-
Bart: Which a lot of people would do right? If their first idea is a failure, they get discouraged.
Scott: Or they would buckle down like double down on it. Yes my idea.
Bart: They’ve got a vision they’ve got to go after thing. And that’s a hard balance to find right if you have a vision for something but you figured out hey, there’s an opportunity here and you kind of pivoted.
Scott: I wasn’t too settled on my idea. I mean, I had gone to work and put some time into it, had bought some camera equipment to make these tours and selling this. But the second I start getting a different signal, I’m like, what’s it cost to buy a URL, you know nine bucks. Let’s go buy iPad enclosures.com. Yeah, and I had the same group that was making my virtual tour the company, I said, can you guys just like throw up a landing page with this first prototype that I have. It was a metal enclosure made out of stainless steel and we act like let’s just see if this sells. I called the first one full metal jacket I think we went on to sell about 5 to 6 million dollar.
Bart: Wow, not bad.
Scott: Yeah, so this site index real quickly and everyone across the world was actually looking for a way to enclose iPad for credit card payment systems at cafes to closures for iPads on conference rooms to kind of say what meetings in the room to trade show display and and the hotel kind of lobby. That whole idea is like iPads were going out everywhere as displays and people needed a locking enclosure and my first like Full Metal Jacket version was iterated a bit on but really became a popular product in the market. It was kind of heavy duty.
Bart: So others came and copied and did some ones
Scott: Yeah we had others come. I tell this story in you know, I don’t want to go into the same length and other storytelling that I have but this was very transformative for me too. I think the story that your audience might be interested in is how, I take that sales and marketing job and use that as my seed funding. That’s how I see it. As I was paid to go around and solve a problem, and I was a good sales guy, I was helping my company a ton. In fact, I offered the CEO to have 50% the company for 20K and he didn’t take it.
Yeah, it was a big miss on his part because it would have been later when we sold, a big big return for his passive partner. I was good at what I was doing, but I was still able to use that time and do research and and side hustle something like and and so I still able to perform for my company.
I was working for and do an MBA at the same time and figure this out this problem and then it was in January of 2011 where I had to go tell them like, walmart’s asking for 2,000 of these enclosures. I have to go. I cried, I remember I love my job so much but I’m like, I don’t know what’s around the corner here. But when these people asking for these and from Dubai to Australia to everyone the US and Canada like something’s going on and I need to jump off this day job thing and go full time. The signals were really strong that Walmart didn’t end up closing right that didn’t even happen. But there was enough signal to me that I need to go full time that I left that day job and and went on my own and and never never was it ever a rational decision that I made to do anything that I did but the coma all of them together was. It was very rational. I look at every little step I took, it doesn’t make sense to leave your job because Walmart calls. But there was a series of things that like together, it was very rational to jump off and I always see people leaving their jobs just to have an idea. Yeah, you leave my job and go get funds and raise money.
Bart: And the problem with that is you just don’t have a lot of runway at that point with something that you don’t even have traction on right.
Scott: I told everyone use your day job as your seed funder. Take that salary, live frugally, and turn like 25% of your take-home dollars into your investment to go pay another developer or whatever it is that you need to grow your side hustle. You take that money that you’re bringing in every month and turn some portion of it into capital for your other thing you’re doing. And I didn’t pay myself even when I quit I didn’t pay myself for a year and a half I think. Why? Because I saved up enough doing sales jobs to give myself a Runway. So yeah avoid avoid raising money as long as you can actually, I mean that’s hard to say because money is easier than it’s ever been and it’s really addicting to just go out and pitch a good idea to seed funding and take the money or an angel. But if you can if you can stay your day job, learn from your day job, first of all use that network and then use that income to do your thing. That’s what I tell every entrepreneur and that’s what I do.
Bart: You made a few million dollars on that enclosure business and then what I mean, did you build that into a business? Did it seem like more of a product play?
Scott: So I realized in my life that I don’t do anything for more than like three years. Okay. I’m not a quitter, I just have to do something new. So even while that was growing that business and way before we had an acquisition offer, I spun up a social network that I wanted to grow which is called votos, voting on photos. It was right when Instagram was growing and it is still around actually on the App Store, haven’t updated five years, but I wanted to grow social network.
It was the weirdest thing to, because the reason I wanted to do that was because I tried to post on Facebook question about a logo I had for my iPad company. The comments were like random, there’s like 90 comments and they’re all like random and I thought there should be a better way to like crowdsource real quickly, like just feedback on on photos.
And so we just made this photo voting social network Votto. I can’t tell you how passionate I was about that when I told my wife like I think I’m gonna need a year of just you’re not going to see me because I’m going to go all-in and I want to create a social network here in Utah and I want to give Utah a first consumer like social product.
This about the time Tinder and Vine was launching, Instagram was growing and I went all-in. I got a partner who’s just amazing, but then one day she paid this person on Instagram $20 to talk about the app. And this is a new time, new Instagram. Like influencers weren’t being talked about.
Yeah, she paid this person and that person posted about Votto on her like fashion account It was a teenager at that early days are all teenagers that were making these following all these people and making these big accounts, right? Paid them and the app got 3,000 installs like within a minute or two.
So I thought the thing broke because I’m looking at all the content like all these votos have like 10 x engagement. So I call it a developer and I think we got to do some other there’s extra zero there was broken. And I called Mikelle, my partner and she’s like, I know I did this. And I can remember where I was, everything about that moment.
And I said, can you do that again? And she’s like, yeah. Are other people that have that many followers that we could pay 20 bucks to? Yeah. How many? Like hundreds, they’re all asking me right now like this one told all her friends and they all want 20 bucks. And I’m like, here’s twenty thousand dollars and we got that out to almost a million installs in a short amount of time.
Bart: Okay, so you stumbled on influencer marketing. And what happened with Votto? Did you see an opportunity here that was different than Votto?
Scott: Voto succeeded by all accounts. I mean to this day, I think you’d probably be hard-pressed to find another social network that was born and raised in Utah that had a million users. But it didn’t know how to monetize that okay. And I went to a few Venture capitalists in San Francisco and Utah VCs don’t know anything about social networks, they didn’t get it. In San Francisco they said you’ve got to be at 10 million users. You gotta look like Tinder and Vine to actually get us interested. And I’m like I got to pay a lot more influencers. That’s a lot more money and I just didn’t have the vision. I didn’t know how to do it. It wasn’t my in My DNA to build a social.
Bart: There’s a big risk.
Scott: Big risk, a lot of money and I didn’t raise money, but I got a call about that same time from someone in the UK that wanted to advertise in our app and I don’t really have a way to do that yet, but we can help you do that. Like we can help you do what we did to get ranked next it, because we were right next to Twitter and all these apps in the social media category then app store would rank, you know by category and that’s how he found us. And so we took the gig helping him.
Bart: So a lot of people would just say hey, that’s not what we do. You know, we can’t help you.
Scott: Yes. And once again, here we go another, I just wasn’t so anchored on the app being the only way that one makes money. I could just shut this person down, but no, you’re right. I actually investigated and I mean it helped that he said I work for a multimillion-dollar multi millionaire billionaire that creates all the dating apps that you’re familiar with.
Okay, so that kind of intrigued me like, okay, this is a client that has dollars behind them. I don’t have a way to do the advertising but maybe there’s a pathway to some of this money because like you’re desperate always to find it. I could feel monetization. Like there’s gotta be some money out here. Like I’ve got something off or we’ve learned this we built a database of influencers in the early days and maybe we can do something with that for someone else. So that’s where Instafluence was born which is a the next kind of company that was actually born prior to that other company selling and armored active which was iPad company.
So I was kind of in between two things here as a social media World digital agency and then this hardware company and it was this was 2013. There was a lot going on right, a lot going on.
Bart: A couple companies, both successful actually three companies at one time.
Scott: But they weren’t … I didn’t even know that you sold companies at this point just so you know. In 2012 and 13 I didn’t even know these are bootstraps there wasn’t this idea like, oh we’re raising to do this and we’ll try to sell this and here’s our valuation. I didn’t know what I’m doing. I just knew that there’s engaged users on one end or buyers and and you hire people to like take care of that demand and I didn’t have any I wasn’t even at the point of familiar that there’s things called exits or acquisitions. That wasn’t even on the radar. And then hit boom. Boom. Boom three in a row is it was it was just a frenzy of Acquisitions happening and people wanting what we had and we were focused on customers and growing the business and that’s apparently what you know growth groups that want to buy company that they like that they like me you have. Oh, you have real sales and oh, you don’t have a bunch of VC’s you got you are the founders .
Bart: So you followed the interesting things you followed the money as well and you kind of landed on three successful startups pretty quickly and then with Instafluence, how did that become the one that you kind of built-in grew and actually did sell to Disney right?
Scott: Instafluence is really the brainchild of Mickelle, my partner at Votto. That client that called us for Voto was kind of seed Capital they gave us it had a dating app that they gave us a lot of money for to promote. Millions and millions. So it was you know, that’s the type of money you would raise normally to like start your company. We had it as a contract. With our first client, that’s beautiful. I was really nice. I good way to find things out again. I just like I’m fact I’ve been spoiled because that’s not happening again yet for in my life.
We didn’t really good work for not just apps, not just for that app. We ended up working for a bunch of different apps and different companies to you know, Viacom and MTV and brands. iTunes did a thing with us, and so we really quickly built probably the first network of influencers at the time to help all those Brands and there was other people kind of playing in the space but no one had paid as much as we had to these influencers. We had paid so much and because of that first contract we have at that dating app. We had paid so many influencers lots of money so they kind of trusted us. We had like a network of real talent that knew we were a paying client and I think that’s what Disney was happy about because we have both network and a understanding of these.
Mobile-first social networks and how to reach influencers on Snapchat Instagram or Facebook at the time and Twitter. We knew all those pretty intimately. And had a database of who was who on those and they wanted that.
Bart: So you took what success you had with Votto influencer marketing the early days this $20 initial payments as or sponsored posts
Scott: The glory days when twenty twenty dollars could get a hundred eighty thousand follower account and they post for you and the audience would actually take action.
Bart: That is amazing, now that would be thousands of dollars. So you turn around and you make this a sophisticated process and you have a bunch of high-paying clients. Disney takes note because you’re one of the first big social network or networks of influencers.
Scott: They took note and they had just bought a company doing the same thing with Maker Studios for YouTube. They wanted to kind of round out. Everything that they did so we can all we know you to be have this YouTube Creator Network now, but we need this we need these social media got intelligence is as well. So they brought in a team of about 20 to our team to kind of join that that YouTube Studio.
Bart: Okay, so you sell that to Disney you work for Disney for a while in that two years.
Scott: And during the same time, I joined the company called Scan. That was a business development for a global company here and they sold few months before so about six months after Armor Active sold, they sold Snapchat and then I went to Disney. So there was acquisition acquisition acquisition with companies I was involved with and luckily the Scan team went out to Snapchat which is in Venice next to where I was in Culver City and Disney, so I got to kind of go there was some friends that were from Utah as well.
Yeah, so it was just a crazy few years are of in 2014-15 and then I start another company that is been a hard. It’s been very very hard to grow and I took money very different thing. I actually took investment on this one and building a software company SAS company. I’m learning a lot this time.
Bart: And we’re talking about Wooly now.
Scott:Yeah, I was at Disney when I came up with this idea. And this one’s been a grind. It’s been awesome and with great clients, but it’s not been anything like that phase of two or three years. I got addicted to like, oh takes two years to build and sell something. Yeah. I mean, I’m past year three now and I were begging for money. I mean, I’m underselling it, like it’s a great company a great team in great stuff, but it’s just a different.
Bart: You’re making a point to. Everyone kind of thinks, you know, one success leads to another to another not necessarily and maybe it does but it’s not all easy right and there’s luck involved. There’s timing. I mean, it sounds like you’re making wooly happen and it’s working but it’s just more of a grind than the others.
Scott: Everything is luck for the most part. Only thing I would say is that like your you can’t get lucky if you’re not like always attempting things. So swinging is like my only analogy is like you just gotta keep swinging. I’ve done 30 different things like no one knows about my missus because those don’t get highlighted. Yeah, 26 of those are swingi and a miss. And so when we think about batting averages that’s really kind of, you know, you connect and stuff maybe one out of five.
Failure is my favorite. Like I love hearing that people failing multiple times because that’s they’re going to connect I’ve seen 80 horrible app ideas and probably just this year alone that people pitched me and try to get funding for. And I never told not to do it. Why because that’s like that’s a swing like go swing. You’ll find my app didn’t work.
It didn’t make money and that cost me a quarter million dollars of my own cash to do but it was a it was a brochure that found a multimillion-dollar contract. And if I didn’t know that it was going to be that but that was the outcome of that that swing so I never succeeded is actually monetizing my own app, but I created a calling card that found this this client and UK and so I can’t regret it. I’d never do any other way. So I tell people the story like go do your app. You’ll find something. It’s not probably most likely guarantee. Actually that idea is not going to be the thing. That’s not the one but you’ll find something by swinging
Bart: So tell us a little bit more about Wooly. What is Wooly? What do you guys do?
Scott: So Wooly was kind of the antithesis of what I was doing at Disney. A brand would come to us either Disney brand or one of their partners and want to use a network of influencers to talk about their brand and I’ll specifically call out Subaru. I remember this time. Subarus like, we have two and a half million dollars, we want to talk about the Subaru Outback and praise and we want it. We want to find owners and have them share their stories and we want influencers on YouTube and stuff like that and Instagram and I’m. Cool, why are they coming to us to like talk to meet their customers? They wanted people to own these cars. Hmm. How’s the Disney going to know this? First of all, don’t you guys know your customers? Don’t you know who’s talking on YouTube about their love for the Impreza or for the Outback? Like how would we know that? We know we have a network of influencers.
We may have a few like categorical tags in our software that say like these people are maybe car influencers, but we didn’t have that really well-built. And so I remember like we went out and bought Subarus for people. And so inauthentic to me like we bought Devin Supertramp, Shaun Duras, some local ones and a few others.
Bart: Try these out see what you use them.
Scott: No, not even try them out, use this and say you love this and you’re a great owner. And this is actually how it goes down. Everybody was doing this.
Bart: It wasn’t real reviews. It didn’t feel authentic.
Scott: This is just using a celebrity or an influencer to shout out a brand and make content for the brand and look at some of these guys do a real good job doing it. They make fun interesting. But they weren’t real owners and the whole hashtag was like, you know, it was something owners like Subaru owners. Well, you know tell their story I can remember what it was.
Bart: But this was money driven brand campaign driven.
Scott: That was all I all I saw going. I’m like, this is so dumb. I hate this get me out of here. This is the worst. This is so fake. I can’t for some reason to hate social media. So it didn’t help that on top of this I hate social media, I don’t use it, on top of my that I’m promoting the worst part of it, which is phony fake influencers talking about stuff paying them rageous atrocious amounts of money to talk about something that you know, they don’t they don’t actually care about so I’m like, I’m gonna solve this problem. I’m done, we’re gonna figure this out. I left, not left but I side hustles and create Wooly.
Wooly was a tool that would help Brands actually find inside of their own customers and their social media people who already love the brand I was able to help them identify influencers and customers who love who who are already driving the Subaru and actually talk about it online So this tool was that.
Bart: Find the authentic customer who also is an influencer?
Scott: Yeah, and then the discovery after about three years of doing this is that, screw the influencers like you and I are the actual like the customer doesn’t have to have more than 5,000 followers. They probably don’t have to be active on social media. Everyone’s an influencer of something. Everyone has an audience. That’s most people have even if it’s 12 family members or whatever cousins of every. You have people that most people have something that they are cherish and love and Brands they love and they talk about and so you’ve heard last few years as micro influencer idea. Well, we’re a step even beyond that were like, we just look for advocates. We’re looking for ambassadors and advocates of brands people that want a relationship with a brand and that could be going to their friends. I could be talking about them on social media, but now the software has moved way beyond that now our software is.
It’s community building software for Brands. And that could be you can hunt down influencers. You can hunt down them on your customer list on social media, but you can also hunt them down on somebody that’s a ski coach and they’re shouting out the telling people on the lift about their skis . So we enable brands to kind of know and manage and grow their ambassadors and their communities of these ambassadors are really just like, you know Advocates people are talking and want to share that remark that their brands that are that’s what we look for.
What we do doesn’t always work. Well if a brand isn’t remarkable or doesn’t have shareable things happening. Yeah, but I feel almost every brand that’s that’s really what a brand is actually is should be. most brands have some group of people that care about it more than the average buyer and so we just try to find those people.
Bart: So is that the next evolution of influencer marketing in your mind? Is basically Everyone’s an influencer you find The Advocates that really work for your brand really love your brand and you help to equip them?
Scott: If you even have five customers, if you have 10 customers you need to know the all of them by name at first you need to be talking to each one of them and either converting them into being advocates and asking them nudging them to share the story that if they’re involved there, how they got involved with your brand. And that turns into hundreds and out of hundreds of customers, you can’t know them all after eventually you try your best but you definitely invite them to have a relationship with your brand.
Bart: Do they want that?
Scott: Absolutely, not every. But I would love is Tesla realize that I make content for them and reached out to me and said like hey, here’s a little thank-you . The brands that we loved and talked about, most people want to know a name at that company. but when it comes to like the brands that we really care about and love, I think we all want to feel special and have the surprised and delighted by those Brands and be recognized by them.
So everyone can start. No matter where you are. But but it also helps you actually think about what is my brand what what is it about what we do that’s remarkable, that would create a an ambassador. How do like, what would my Ambassador team actually do for me? Do I have enough for a market, do have a remarkable brand? And if you don’t, figure out ways that you can create things that are shareable and are the stories can be told about that and that will actually help you on the same like your social media strategy like a lot of Brands don’t even know what to post on social is maybe there’d be to be or something like that. But there’s a story for everyone , so make a team, have an invite out there to people who your customers or people that love you, let them know that you want to bring them into Club level closer to your brand. You have a program for them. And you say thank you to them and you bring them to a user conference or. Send them something that lets them know that they’re they’re not just an everyday number of customers that they’re actually in a community that’s a little bit closer to the brand. Every company can do this.
Bart: Social media, technology, email, I mean phone calls even. Everything just makes it so much easier today is what you’re saying to really connect with your community with your customers whether that’s five, a hundred, thousands, ten thousands.
Scott: And honestly, the customer can like turn on and off how much they want that notifications to come in and and it might just be one percent of your customer base, but that’s that’s probably an important percent to talk to and ask them questions?
Yeah, so yes it’s for everybody and if anyone has questions like connect to me on LinkedIn, I’m Scott Paul. Email me at scottpaul at gmail.com if you want to. So connect me there, I’m CEO at Wooly and a few other things. Got Tangible going on. That’s my e-commerce school here in town that teaches by Founders teaching Founders. It’s really cool. But yeah, this is all I think about for the most part is kind of what we’re talking about here today and. how to build that brand community no matter where you are you want to surprise and delight and get a little more intimate, be a little more human to your to your customer base your employee base. And that’s what we’ll be trying to solve at least for the brands right now and.
Bart: Yeah, and it’s working. Well Scott. Thank you so much for coming on we appreciate the fascinating story, awesome entrepreneurial progression and evolution. Really interesting to hear about. Like Scott said you can contact him on LinkedIn, it sounds like this is the best place.
Join our email list to download the “Top 3 Influencer Marketing Pitfalls and How to Avoid Them”
