What began as little more than “a MailChimp newsletter and a Wufoo form” is now Crew, a company that connects top freelance designers and design studios to vetted projects. In two and a half years, the company has hosted over $20 million in projects on its site and raised $12 million in capital.
On paper, it may sound like an overnight success. But founder Mikael Cho is the first to admit that people thought the company was going to fail early on.
“I heard it from investors, I heard it from other people: ‘I thought you guys were going to die six months ago. I thought Crew was dead a year ago,'" he says.
But as everyone who feared for the company's survival has since learned, Crew's success is backed by its team’s ability to spot and capitalize on opportunities for abnormal growth. Months after Crew's launch, when startup funds were running low, the team created Unsplash, a site that provides free, unlicensed, high-quality images. The product was an instant hit, hosting 20,000 image downloads in its first 24 hours of operation. Today, Unsplash receives over four million downloads a month, it is the main revenue driver to Crew’s core business, and one of several popular side products created by Crew.
In the latest edition of Entrepreneurial Life, Mikael shares his strategy for developing side products, and speaks on why businesses should always take a human approach to growth.
Meeting your wife and co-founder, Steph Liverani, played a key role in the launch of Crew. It influenced your decision to move to Montreal, and put you through challenges that inspired the idea for your company. Do you feel that serendipity plays a part in the entrepreneurial journey?
Serendipity does exist to an extent. But serendipity is a small per cent. And you can create serendipity, actually, by creating more of those small per cents, or bigger per cents in different areas. For instance, by never giving up, you’re creating a higher per cent serendipitous chance that something is going to happen.
It’s one of the things that I really believe in with this company. I heard it from investors, I heard it from other people: “I thought you guys were going to die six months ago. I thought Crew was dead a year ago. (But) You just always kept figuring stuff out.”
And that actually happened with Steph, my now wife, who was my girlfriend at the time. To make things work, to be able to stay in Montreal, we had that same attitude. I lived in her parent’s basement for seven and a half years, until last summer. So, we had that grinding and trying to make things work. We were dealing with the logistical things, border control, US Canada customs stuff, legal residency, along with a huge student debt that I had. Dealing with all of that was actually way harder than starting the company.
Unglamorous moments are a very real part of entrepreneurial life. Do people look at Crew’s success and assume that the journey has been smooth?
There are a lot of people who come to our events, our customers too, who tell us they’ve been following our story since the beginning. And I think a lot of that is from how we’ve always approached the company: good times, bad times, raising money, or “we’re almost dying”, whatever–we’ve actually told people publicly what was happening. And I think people relate to that. Because when stuff is always going well, people don’t relate to that. Because that’s not life. Life doesn’t always go well.
Does Crew’s commitment to transparency stem from who are as a person?
I think it was more from paying attention to what companies I connected with, and the way that they were communicating. I adopted a similar approach to our company.
I always pictured Crew as a person, and that the brand should speak like a person, rather than a company. Whether it’s the website, email campaigns, tweets... we try to seep that into everything we do. Everything should feel like it’s coming from a person. Because it actually is. So many times, it seems like companies will go the other way. They think they need to sound like a company. But that just further disconnects you from people.
I also got a lot of it from my relationships. My wife for instance, she’s a beautiful communicator. She’ll spot things the second there’s something a little bit wrong. We’ll have a huge conversation about it, and get everything out in the open. I’ve learned a lot (from her), and to me that’s one of the best relationships I’ve had in my life. I want to create that with anybody who runs into our company.
You like to hire slowly. Is that a technique you’ll maintain as Crew continues to grow?
Yeah. I had a conversation last Friday with one of our investors about that, because hiring slowly requires a lot of time.
All four of our founders will talk to every potential hire, no matter what level they’re at. Senior. Junior. Doesn’t matter. And it does take a lot of our time. But we think it’s worthwhile time. These are investments. Every person that you’re bringing into your company is going to lead a major part of it. They’re going to be a relationship, a real thing that happens. Could you see yourself developing that relationship?
Has hiring slowly resulted in a different experience at Crew than you’ve seen at other companies who hire without the same attention to detail?
When you are hiring slow, it may be result in your company growing a little bit slower in the short term. When you’re trying to grow at breakneck speed, but you’re not hiring at breakneck speed, that imbalance can create stress. And we’re feeling some of it now in the past few months since we raised (capital). We’re trying to grow the team, and we’re trying to do it very thoughtfully. I do believe that we’re going to even out in the long run and surpass what we could have done in the short term by hiring lots of people, but maybe in a way that could potentially really change the culture of the company and damage you long term. We’re valuing and keeping the culture and spending that time versus (going for) short term growth.
Crew is at the forefront of Side Product Marketing, the act of producing a simple, often free-to-use side product that drives the growth of your core business. Can you talk about the impact that the side products have had on Crew?
Our first side product happened very early on. Two months after we first started the company, we were in a situation where we needed to grow an abnormal amount in an abnormally short period of time. If you’re going to do that, you can’t grow in the normal ways, so we started looking for the weird ways that we could potentially grow. Unsplash was the first thing that we thought of, and it came from the idea that we needed to go one step further and make something better than just a blog post.
We had some leftover photos from a photo shoot. They were really nice. And we thought rather than let them sit on a hard drive, we could give them away. We thought through the problems that we had trying to find photos for our site. A lot of stock photos are really cheesy, they’re really expensive, you don’t know what size you need. So we made Unsplash as simple as possible. No account creation. The photos will be free. Everything will have the same license, Creative Commons Zero. And rather than saying “Creative Commons Zero”, because, you know, sometimes you’ll go on photo sites and see “Creative Commons Zero – With Attribution” and you don’t really know what that means, so we’ll be very blatantly clear and say “You can do whatever you want with these photos.”
To take it a step further than just putting them up on a blog post, we put the 10 photos up on a separate site. We gave it a name. And within the first day there was 20,000 downloads of those photos. Today there’s over three million photos downloaded each month. And the site is the number one referral source to Crew. So the majority of our revenue actually comes from people who see Unsplash, and they say “Who made this?”, and they go through to Crew.
Because Crew is a product helping people who are either building a site or an app, a natural problem that people have before they do that is finding photography.
The quality of the photos on Unsplash is remarkable.
Yeah. I was just reading the other day that the attention span of humans has decreased since 2000. So in the year 2000 we had 12-second attention spans, and now we’re down to eight (seconds). And a lot of it has to do with this volume of information. When you have a huge volume of information, you will starve your attention.
If you’re going to make something or market something, it needs to be so good, because the bar is now so high. And that’s what we’ve been trying to do. Like with Unsplash–take it a step further. We learned from that and then applied the same principles to other problems that people may face before they go out and make a site, or make an app.
If you’re a company and you’re thinking about how you can apply this tool-based marketing, look for the problems that people have before the problem that your company actually solves. And all of those little micro problems, you can build something very simply, and that could feed in some way to the future problem that your customer might have, which actually is your company.
Crew has since launched a series of side products, including a moodboard generator, a guide to building an online business, and an app-cost calculator. What is your process for developing new side project ideas?
It usually happens as we’re building a product. As we were building crew, we had this one-off idea and we thought: “Oh we could add this in Crew, but that would complicate things. What would happen if we just built this separately?” And we then focused on solving that problem in a really simple way.
You get a huge benefit with a stand-alone side product, because it can act on its own, and you see how people might use it. So you’re getting potential customers that are coming in from that, and you get to see how the thing exists without diluting your core product.
Our ideas usually come from a problem that our customers are facing. Side product ideas might even come from a communication that you’re having. We were talking about our communication tool Slack, and when we were making the switch between HipChat and Slack. And we were like “Hey, there’s a lot of people considering this switch between communication tools, or trying to figure out which communication tool is better for them. We could probably turn this into something.” (You can view the resulting side product at SlackvsHipChat.com)
Finding ideas for side products is a matter of having that awareness and watching out for the things that you’re going through as a company. And if your company is the same as your ideal customer, then you have a really good shot at seeing those opportunities, because their problems are going to be happening within your own company. That’s how we’ve found a lot of these opportunities.
Crew takes a strategic approach to email marketing. Every email is highly targeted, and sent from a real person within the company. Could you share your methodology?
Yeah. It’s a bit of a mess doing it (laughs). But when somebody subscribes, we don’t have one general email list that everybody drops into. What happens is we have something like 10 or 12 lists. We do spend more time filtering these things. But as a result, our open rates and our engagement rates are significantly higher.
We’ve done a small test to see what would happen if we were to send something sort of in “general”, and it would never have any greater impact than sending it to fewer people who we knew were interested in what we were sending. So we always try to do that extra layer before anything is sent out, to make sure it’s being sent to the right people.
I read something once where comedian Louis C.K. said “You have two cycles of an act or a work of art to share with people. People will give you a pass on one. But if you fail twice in a row, you’re done.” It’s sort of like you have a very tight rope on sending somebody something they don’t like.
There seem to be parallels between Crew’s approach to marketing and hiring. Both are deliberate, not rushed.
Yeah. Sometimes it’s a burden. It creates this thing where you’re like “Oh, I could just do this and go faster.” But you have to remember the value that you set as a company, and we have that value. And I always think through that. And we know that it’s worth it. And I as a person believe that that’s the way it should be done. I don’t want to change because somebody else says “This way is better.” I’d rather fail at my way, than fail at someone else’s way.
Have you ever had to face something in your journey as an entrepreneur that has scared you?
One thing that does scare me now is we’re about to do one of the biggest investments we’ve ever done as a company. We’re investing in a physical space in Montreal. We haven’t really announced this anywhere. But physical space is scary compared to digital software, which you can shut off at any point. But physical space is different. You’re sort of tied into this thing, and it’s scary. I said to my wife a couple of days ago, I don’t know if I’m 100% excited or if I’m 100% scared. But there’s something that was telling us to do this, and we have to feel that that intuition is playing into this. And after knowing our track record of the things that we’ve created, we have to trust it, even though it’s scary.
What have you learned from going into business with your life partner?
The biggest thing is that your relationship as founders and starting a company together is going to be a reflection of the same personal relationship that you have together. Any issues that you have in your personal relationship are going to be magnified doing the business. And any good things are also going to be magnified.
For instance, I believe the reason why a lot of the relationships in Crew are very healthy, whether it’s among our team mates or our partners, I think a lot of that has been influenced by my wife. Because I know she’s influenced me to have very strong, open relationships. And then, at the same time, one of the biggest challenges we’ve had personally is making sure that family is properly integrated into a lot of the work that we do. And that definitely has been magnified, and that becomes even more challenging.
So whatever problems you’re having, you can just sort of mimic that, and just be prepared that those are going to magnify. Whether they’re good or bad, when you start a company together, all of those are going to surface even more.
Do you draw upon any daily rituals to offset the stress of managing a company?
I’ve adopted a pretty regular routine. I have a morning routine which involves making the bed every morning, and it has to do with a sense of feeling in control. So just something small like that gives you one moment of the day, early on, where you control what’s going to happen.
Also I do a five-minute daily affirmation, which is going through and saying “I’m grateful for this. Today would be great if this happened.” And just writing that down, you walk through your whole day with that thought placed in your brain. So if anything goes bad, if anything goes good, you know where your values and your priorities sit, and what you’re grateful for. And you’re sort of looking to improve into the next day.
I also take my dog for a walk. That helps a lot. I go on three to four walks a day with her. I’ll split up big work periods with that. And I also alternate between tasks. I’ll go between a more creative task like writing or product design, to something that editing another article. I’ll switch off between those two things, rather than doing two huge creative tasks, one after another.
The down time after hours… I’m going back and forth on this, but I’ve tried not looking at the device. That’s something I’m still unsure if that’s needed. It’s interesting. I enjoy looking at the things that my friends are creating, and the best place for me to see it is, let’s say, on Twitter. That requires me to look at a device. So I’m still thinking through what that looks like.
I also walk through the lens every day of a few values. The number one value for me is family. Number two is health, and number three is the business. If my family shit is going bad, and my health is going bad, then it won’t matter what’s happening in the business. I’m going to feel really bad. So I really pay attention to those values, and make sure as well as I can that those are aligned all of the time.