In this episode of DYF Podcast, Brennan talks to Joel Hooks whose site, Egghead.io, provides “video tutorials for badass web developers.” The site thrives by giving out tons of free content and supporting it with backend automation that brings in viewers. This strategy can work across business types (whether you offer a product or a service) with the big difference being scale. To find out how, and to hear tips for targeting, dealing with challenging customers, and scaling up, listen in to this week’s episode.
Today Joel Hooks runs Egghead.io, a website that provides video tutorials on every tool and aspect of web development. Today, the Netflix-style subscription service has grown to have 20 employees and over 100 instructors, but things weren’t always so promising. Joel talked to Brennan about how Egghead came to be, What he’s learned along the way, and how other consultants –even across different business types– can apply Egghead methods to their own areas of expertise.
Finding the Product
Brennan first met Joel Hooks in 2011 when both were students of Amy Hoy’s 30×500 course. Joel says that contrary to Amy’s advice, he held on to some of his early ideas far longer than he should have. At the time, Joel was dead set on selling an app for stay at home moms who are passionate about photography. He knew there was a growing community among this audience, but it took Joel a couple years to realize that they weren’t responding well to him as a male outside of their demographic.
Amy coached Joel to sell to a customer who might be more accessible to him and who he may understand better. She told him, “Sell to you.” So he began writing an ebook about Angular.js which was taking off at the time. Simultaneously, he noticed that his friend, John Lindquist, was making useful, high quality videos for programmers and distributing them for free (though donations were encouraged). Joel suggested to John that the videos could be repackaged and offered for sale via a monthly subscription. Though he wasn’t keen on it at first, Lindquist eventually agreed. While John continued to produce videos, Joel took charge of the marketing and the Egghead we know today was born.
To start, Joel assembled 50 of John’s videos (which he adds are still available for free on YouTube). He packaged them as a zip and then created a product landing page for them. Next, Joel gathered every email address John had and announced the new product. To everyone’s surprise, that first week they brought in $6000. In another week the duo went from a very simple Gumroad setup to a custom Rails app Joel built that included Stripe subscriptions. At this point, the premium content that was driving subscription sign ups didn’t even exist, but the promise of that content was sufficiently valuable to their audience. Joel emphasizes that this only worked because of the trust he and John had built into their reputations. John was already well known for being an expert in coding screencasts and had a considerable following going into this experiment.
What if People Hate Me?
With the sales offering in production, Joel worked more actively on creating a real, consolidated email list, and building better emails. He had many of the same trepidations we all face when building something new, but one thought that nagged him as he faced this part of the automation process was, “What if people hate me for sending too many emails?” Since each email he sends is goes to about 200,000 people, Joel is now well aware that there will always be some people who don’t like what he’s doing. While most subscribers will continue to enjoy Egghead’s offerings, there will be unsubscribes and some negative comments. Continuing to follow Amy Hoy’s advice, Joel does not engage with confrontational customers. He points out that responding to critics by defending your position, bending over backwards to help, or even returning the fire with fire is usually a huge waste of time. He prefers to look at what comes next instead of dwelling on what didn’t work for one person. Of course he mentions that in a few very rare cases when someone has abused Egghead’s policies or crossed a line with their customer support staff, Joel has indulged in one of the less talked about perks to being one’s own boss –the ability to say whatever you want. For Joel, that means ensuring the user was blocked on all of his social media accounts and then customizing their videos to play exclusively Rick Astley’s “Never Gonna Give You Up.”
Brennan agrees that sending sales emails is intimidating. Who wouldn’t prefer to be approached by a customer who has cash in hand and a solvable need? How did Joel learn to not take negative feedback personally? Joel says his attitude is “buy it or don’t,” and he will even recommend a competitor if he thinks they’re a better fit for the customer’s need. He points out that the bigger the subscriber list, the less of a loss one, or even several account(s) can be. Joel knows his subscribers have to opt-in to his list and he provides actionable, content-based emails to ensure the experience is mutually beneficial. That’s why he says he feels less bad when he encounters subscribers who are uncomfortable with the level of marketing he sends out. Joel brings up the example of a recent hard sales push Egghead did over the course of several days. They received numerous angry comments from readers on the last day of the sale when they sent out 4 or 5 emails in one day. Audience members said things like, “no one is going to buy product when you spam them this much,” but Joel points out, 25% of the business that came out of this promo was from the final sale day featuring the most emails. Joel’s approach is that “the people who complain are not your customers.” He treats refund requests in much the same way.
Free Content vs Community Resources
In the funnel leading up to Egghead’s subscription service, they offer free introductory courses and have free resources stashed throughout their business. Brennan asks what elements drive actual subscription sales for Egghead with so much free material available. Joel says he doesn’t like to think of these materials as “free content” but rather as “community resources.” He feels this distinction allows him to support his employees while also supporting the open source community of which he is a big fan. Despite being free, these community resource materials are valuable on all fronts. Joel believes it is essential that this content be relevant and useful to viewers. Beyond that, instructors are paid for their time whether or not the resource is for sale. Lastly, this content usually serves as a gateway to the Egghead email list or subscription service either via search engine optimization or a direct link –after you’ve watched a couple videos, the materials are still free but viewers are required to opt in for emails if they wish to keep watching. This is Egghead’s primary inbound lead funnel (although they do also use Facebook ads).
Liberating Time Through Automation
Joel says in his business, the journey from lead to paying customer is fueled by reciprocity and value. Following Nathan Barry’s advice, Joel coasts on giving freebies and soft sells to potential customers over time before delivering a hard sell. One of those freebies is an email course designed to feed into an evergreen sales funnel. Brennan asks what happens to the people who participate in the email course and then don’t subscribe. Surprisingly, Joel doesn’t really track this part of the business down to decimals. He says he knows there is potential to make more money but ultimately, he feels his work is good enough for now. Joel’s work/life balance is stellar and his sales are high enough for him to comfortably pay his employees. He doesn’t sweat the lost potential and believes he’s happier for it. Joel hopes to someday integrate more personalization into his email sequence and Egghead is just starting out in this following Joel’s participation in the DYF Drip course.
Brennan asks Joel his thoughts on transitioning from traditional sales methods (i.e. calls) to automated email marketing. He asks how Joel would convince a consultant that investing time upfront into creating a substantive newsletter is worthwhile. Joel says once the sequence is doing the work that you used to do, the time liberated by the workflows proves extremely valuable. For a freelancer, time can be significantly harder to come by and more precious than money. How one uses that time is up to the individual: they could create a new product, give a client extra attention, or perhaps, like Joel, use the opportunity to recharge. Another benefit to automation is being able to sell 24 hours a day. When working with international clients, this can be exceptionally helpful. Automation can help answer most of the questions leads will ask, and even if the client will require a sales call down the line, automation can help set that up also.
When to Hold Off on Automating
Of course, sometimes the waiting audience can be a motivating factor. For Brennan, he says their influence is huge so he has to create workflows that will help his process without hindering his productivity. Having too small an audience is another example of when automating may not be the appropriate use of time and resources. Joel agrees. He says that “you have to build a thing to use a thing.” Joel encourages listeners to think about whether or not their investments are going to pay them back and that includes purchasing automation software. He also suggests that getting started early on can make sense if you’re simultaneously working on building the list, workflows, and content. That way when business is booming and your list has grown, you will only have to provide minor tweaks to the sequence.
Automation can be “the perfect employee,” according to Brennan. In addition to working around the clock, it can be applied to a variety of tasks including marketing, bookkeeping, and customer care. It also creates an opportunity to delegate responsibility so that the business is not so dependent on its founder alone. Since consulting generally doesn’t come with a “buy now button” option, there is a point along the sales chain that will require high-touch human intervention. However, you can “hire” an email marketing app to help customers develop their ideas based on what they’ve seen you do. When customers see what your sequence does, it builds trust in your capabilities, and lays the groundwork for a successful sales call. Additionally, the shortened sale cycle is invaluable for an agency owner like Brennan whose generalized services are not easily isolated into packageable products. He then gets to focus that time on clients who are paying him, product development, and work/life balance instead of sending the same messages over and over again.
For Egghead, automated email marketing sets Joel up for success by informing his audience (who might not be problem-aware) that their development education and this knowledge is a great investment. It is also terrifically scalable as Egghead grows. Brennan adds that getting started on email marketing can be an excellent gateway for automating other parts of your business. He says, just get started on it and the rest will follow. Joel sees it as the change required to allow for growth. Freeing time up in one area of the business opens opportunities on the other aspects.
Joel has found his comfort zone in Egghead. The business is successful enough for him to employ his team and not have to worry about constant growth or missed opportunities. He has used automation to free up his own time and avoid doing the same tasks over and over again. By providing rich content, he’s developed a rapport with customers that puts them at ease with automated marketing. With team, customer-base and self happy, Joel is able to use his time more productively and freely which is all thanks to smart automation!