Jonathan Ivanco, an attorney turned entrepreneur, has developed a unique way of looking at business. He found his way into the tech world and isn’t looking back. In this episode, he talks about his journey from starting out in computer science and with a lot of twists and turns, going all the way through finishing law school and realizing that he didn’t want to practice law. How did it turn out? What is he doing now? Listen in as Jon shares how he used his analytical and problem-solving skills to make lemonade out of lemons.
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EPISODE 029
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Common Sense Is Not So Common
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00:00 Guest - Jonathan Ivanco: Sales isn't sales anymore. It's just being there at the right place in order to help someone understand something and understand if it's going to be a good fit for them. And I think that's the biggest takeaway that I've had is everything that I've done was account managing sales, healthcare, law, everything in between work, and then, they're all the same. It's processes, resource allocation, and accountability. As long as you have all three of those, you're going to do just fine.
00:27 Host - Monique Mills: Hi everyone. Welcome back to the Unpolished MBA podcast. In this episode, I had a conversation with Jon Ivanco, an attorney who has developed quite a unique way of looking at business. He maneuvered his way into the tech world and is not looking back. In this episode, he talks about his journey from starting out in computer science and with a lot of twists and turns, going all the way through finishing law school and then realizing that he didn't want to practice law. I bet many of you listening have also completed a degree and it didn't quite turn out the way you'd initially planned. So, listen in as Jon shares how he used his analytical and problem-solving skills to make lemonade out of lemons.
01:19 Host - Monique Mills: Are you an entrepreneur or employee?
01:23 Guest - Jonathan Ivanco: Entrepreneur.
01:24 Host - Monique Mills: MBA or no MBA?
01:26 Guest - Jonathan Ivanco: No MBA, did get a JD though.
01:31 Host - Monique Mills: Why the JD route?
01:31 Guest - Jonathan Ivanco: It was between MBA and JD, and I figured that it would be laws involved in just about everything. In business, you can more or less learn from previous experiences; you can't really learn law without going to school, but you can learn business without going to school.
01:46 Host - Monique Mills: It's interesting that you say that. Years, years and years ago, I thought I wanted to go into law and…I changed my mind. But I’m interested to know as an entrepreneur, how are you using your JD? What did you study in undergrad?
02:03 Guest - Jonathan Ivanco: I started undergrad as computer science back in 2002 and I couldn't pass the math. So, I ended up going to the library every day and reading three hours a day every business magazine I could get my hands on a newspaper. And I did that every day, and from there, I ended up graduating with sociology, organizational studies eventually, which was great. It gave me a foundation with a little bit of background psychology, a little bit of like everything, but understood how structures worked. And then, I was weighing my options between what would be the most beneficial to me and kind of like challenge my mind? The business stuff I'd already done all the reading on, like, I hadn't read anything that was going to change my mind on that. My dad had already gotten his MBA and I was like, not really interested. But the idea that in every single transaction law was involved, in every single negotiation, legal was involved, and the idea of understanding that side of things really appealed to me knowing that business law negotiations with something that was always going to be in existence and exist. So, that was kind of the transition to that.
03:16 Would I suggest anyone go to law school? Absolutely not. I don't think it's for everyone. If you don't want to be a lawyer, don't go. I know a lot of happy lawyers. I know a lot of miserable lawyers, but I think though that the foundations that I took away from it are a better way of thinking how to analyze and handle problems and realizing that everything is causal. It was an interesting transition when I realized I didn't actually want to do law coming out of law school. And funnily enough, having like a JD on your resume basically pigeonholes you into not being hired by anyone so I had to remove it to find jobs within tech, especially. I got lucky. One of my first jobs was my two bosses were attorneys, so they were nice enough to hire me and kind of like bring me through the sales bit there. It's logic based is I think probably one of the keys and no passive language is really big in law, so applying that to marketing makes a lot of sense. It's like the baseline of all of Apple's marketing is direct active voice, and the ability to kind of scrutinize data, but ask why, and understand like the root cause of things.
04:31 I think if you gave me a bunch of attorneys or ex attorneys, I could turn them into amazing marketers because they just have the relevant skill set to analyze and dig deeper into things and understand the causation behind certain events and the kind of the course of how things have to interact with each other in a way that a lot of people don't have to deal with logic on a regular basis and understand the why. And I think that's really crucial in this very data-driven world that people have at least a little bit of experience around that.
05:03 Host - Monique Mills: Yeah. You know, for the attorneys that I know, I can't tell you anyone that's better at getting to the root of anything than them. Sometimes it could be frustrating when trying to move forward.
05:18 Guest - Jonathan Ivanco: Yeah, absolutely. I mean, those are a lot of conversations I have in my own house. My wife's a privacy attorney, so everything that I want to do from a marketing standpoint, as soon as it gets into that gray area, it becomes like a debate of why I can't do it, rather than like, are you sure? Can we like change a couple things here and there?
05:36 Host - Monique Mills: It's interesting that you bring up marketing. And I want you to kind of dive in a little bit more on what you're doing in regards to marketing, because everything that we talk about in entrepreneurship, in one way or another leads to marketing and sales. Like everything. It's just the foundation of success, so I'm glad you brought that up. But I want to understand the realm of what you're working on now in that regard.
06:06 Guest - Jonathan Ivanco: Well, I want to start off like, sales used to be sales. Sales is not sales anymore. Sales is actually marketing, marketing's actually customer service and customer service is actually customer experience. And this was a shift that happened a while ago, and I don't think anyone noticed it, and I know no one noticed it. Because back in like 2009, 2010 when social media was kicking off, the means of social selling was planting seeds. And then, I saw that again in 2013, 2014, where all of these playbooks for SaaS sales were based on social selling. And it was nothing new from five years earlier. It was just that people had caught on that social selling was going to be a portion of things and that the customer journey had actually changed. So I think that there has been like some really big shifts in what's been going on, but there have been repeat mistakes made by a lot of people.
07:02 And the greatest example I got is if you want to watch a video, you stream it, you got Netflix, you got everything else. If you want to listen to a song; you've got Spotify, Apple music, title, whatever. If you want to get a demo for a SaaS offer product, you have to submit an email, get a response, hop on a call, talk to a SDR, talk to an AE, talk to another person that's going to be a solutions consultant and a sales engineer, and then you've got to work back to the AE to get that deal signed. Do you how ridiculous that is today? This is the problem of kind of, we used to have one role and you'd have one person that could answer all your questions. And then we moved to whole teams and pods, and it kind of got out of control. And if you've been anywhere around having to teach people or give a class or do anything else, you know that people learn in different ways. And there are far too many salespeople that don't ask, how do you best learn? Is it through video? Is it through reading? Is it through actually hands-on? Everyone learns a different way.
08:05 So we have all these salespeople that are out there that are being forced to do things a certain way in a certain pattern with no regard for the end customer. It becomes the company journey, and so the customer journey. So the original idea for what ended up becoming our current company FormToro, was based upon a broken sales process on SaaS where the buyer themselves didn't have a choice as to how they want to experience that process. And then after working for other companies more on the e-commerce realm and being heavy into the data realm of things, we started observing that B2C was even worse because you can't have a clear bit to grab information, to grab insights to figure out what people are writing about. Consumers are harder to track down then professionals. Professionals, you have LinkedIn, you have other ways of figuring out what they're into, but consumers is just a black box. We're just hoping, wishing and praying and doing too much guessing. So after running like a number of go to market programs where companies working, we started to realize how much money was being spent on acquisition of just an email, without any idea of why someone was signing up.
09:20 And then we took a step back and we looked at the irony that exists in our society, where if you sign up for an email from an e-commerce company, they send you a bunch of emails and they're guessing, and then eventually you get frustrated and you unsubscribe. And the first question they ask is why are you unsubscribing? They never ask you during the point where you showed intention and you're typing out your email address, why you were subscribing.
09:43 Host - Monique Mills: Brilliant. Simple, and brilliant.
09:48 Guest - Jonathan Ivanco: So, that's kind of the area that we looked at. We looked at the biggest drop-off which is between subscription and then the first email that goes out, you usually see a 50% drop off. And then, we were looking at other statistics that baffled us. 25% of an email list turns every single year. And people are paying five to $10 per email address to acquire them. So if you're a company and you're dropping, you got a list of a hundred thousand, you lose 25,000 a year, and it's costing you between five and $10 per; you have 125 to 250 a year. And you don't know why they signed up in the first place. So, it's just a blank hole of spent revenue. And turns out like that the standard, even for SaaS, like the standard signup for SaaS is you fill out a bunch of information and then someone gets in touch with you.
10:41 That's not like the journey anyone wants to take. If it's a weekend and you sign up, forget about no, one's getting back to you till Monday. So if you're a busy entrepreneur and you're looking for a software and you have Friday night and Saturday to look for something and you can't get someone and you have to block off time on your schedule the next week, it's just the busting system. It doesn't make any sense. So, we were looking to figure out how to apply qualitative and quantitative data to ad spent basically into the acquisition funnel because everyone knows quantitative as being like the absolute way to say is this working. Facebook ads is a great example. Did someone purchase? Yeah, but not everyone's looking to purchase right away. And after running some data, we run multi-step sign-up forms where we'd live data collect. So we get an email first and then we ask a couple questions afterwards and people just click, click, click, click, get their reward, whatever that is. 96% of people finish the entire form and give us four data points.
11:43 Host - Monique Mills: So you're saying all you have to do is ask?
11:45 Guest - Jonathan Ivanco: All you've got to do is ask. And then, if you ask correctly with the right questions and it's based on the journey that that customer is taking, they don't want spam in their inbox. They don't want you to send them sales all the time. They genuinely wants you to know what their preferences are so that they can get marketed to correctly and be given like the right stuff. The next level for us was taking those data points, applying them to revenue and then figuring out what sources were actually the best combination of those answers so that we could put qualitative on it. Because I think a lot of people right now, IOS 14.5 drop in, right? Like everyone's talking about lack of attribution and not knowing and rising CAC costs and all this other stuff. And it's true in SaaS too, when you're doing stuff, right. Everyone's complaining about the expense. It's not the expense that's going up; it's the quality of targeting hasn't improved. And it's always been relational to interests that people have said on a platform rather than said in relation to a current customer journey while working with a product that they might be interested in.
12:50 Host - Monique Mills: That's so true. And I've never heard anyone articulate that ever in any of the marketing meetings or anything that I've been in.
12:59 Guest - Jonathan Ivanco: They won't touch it because marketing is much happier to go into a room, drop personas up there, target them and figure out, you know, get as many leads as possible and then sort through them. It's the stock market fallacy, right? Like you buy something that's really, really cheap, and then it goes up, it has a higher potential to go up. It doesn't matter if you spend a hundred dollars, it's the percentage gains that you're really paying attention to. If you talked about quantity over quality, I'd rather hit up only a hundred people with very personalized stuff and get a response of 10 then a thousand. Because the flip side of this, and no one's talking about this, and I hate that no one talks about this. But if I have a thousand people and I still get those 10 people, I've just burned bridges on 990 possible contacts. And people don't like to talk about how small a TAM really is when you niche down to your product. Everyone says it's bigger than everything else. It's not. And that actual TAM can be quantified, and you have one chance of most people to make a good impression and not burn that bridge for later.
14:03 Host - Monique Mills: Absolutely. What's the name of the company, again?
14:06 Guest - Jonathan Ivanco: My company is called Form Toro, formtoro.com.
14:12 Host - Monique Mills: Okay. So, explain to the audience who your ideal customer is and the benefit they get.
14:20 Guest - Jonathan Ivanco: Right now, we work with e-commerce companies. Usually companies that have a good amount of traction to their website and traffic. It applies to everyone and there isn't really a thing. Our ideal client is seven, eight figures because then they have a lot of debt they can play with. The major benefit is quantitative and qualitatively understanding what your ad spend is doing. A lot of companies are spending hundreds of thousands of dollars a month on ad spend, and they don't actually know why people are purchasing, why people aren't purchasing, people are signing up, why people are signing up and not purchasing, why people are signing up and purchasing. It's a lot of guessing that goes on. So essentially, the best that we have right now is doing progressive profiling, where we ask people questions within an email and they click on it. The click rates are 3% and open rates are 35% if you're doing like a really great job, so we've got so much drop-off that's happening. With us, you get four data points that are relevant to the customer journey right up front when someone signs up when they're most interacting with the brand. So it puts you... like it's uneven playing field. It's cheat codes really for getting started and being able to bucket people and understand how to sell to them.
15:34 Host - Monique Mills: It sounds like you guys have really prioritized, just understanding human nature. When I first saw...
15:44 Guest - Jonathan Ivanco: Lots of experience working with a lot of companies; that's the difference This is a product that came out of my partner and I years of experience of working with companies and getting paid big advisory fees to help people go to market and then asking the same questions repeatedly. "That's great that our cost is X to sign up someone, what do we really know about them? Okay, cool. What do we do with that? Okay."
The same questions kept coming up. And then we got into the weeds and we said, “Okay, in an ideal world, how would we apply the data, and how would we create an unfair advantage for companies that were collecting this data and using this data?”
And it turns out human nature is not really that different, and people aren't hesitant to give information if you ask for information that relates to a customer journey instead of personal information. There's no need for someone to ask for a first name on a signup form when you just meet them.
16:47 Host - Monique Mills: That's so true. That's just to be able to address them in an email nurture campaign and annoy them later.
16:54 Guest - Jonathan Ivanco: Exactly. Company journey versus the customer journey, and this is the biggest thing that I think... it's funny because we'll finish this call, and you're going to be browsing the internet, and you're going to see all these pop-ups and you're going to be like, "I never thought about it like that." But the best example I have for you, you go to somebody's website and it says, "Save 10% on your first purchase. Save $10 on your first purchase." Everything's about your first purchase. It's all about conversion on that first purchase. There is nothing in it for the customer other than a single transaction. And they keep saying first in every single pop-up that you see.
We don't do that at all. We say, "Save X percent for the first X amount of months with this many uses." We built in the idea of retention based marketing from the first touch point. Because when you say first, you're not trying to build a relationship; you're trying to make a transaction happen. When you give someone the option of coming back, when they have a coupon code that they can use multiple times; you've gotten rid of bias that previously existed about what a repeat purchase should look like and what timeframe.
18:00 So now all of a sudden, instead of chasing people via emails, and discounts and everything else, you can remove all the discounts from your website. Forced everyone through one clear channel and understand without bias relative to data why they're purchasing as frequently as they are.
18:15 Host - Monique Mills: You are so smart. It's funny because I initially saw you on Twitter and it was something that was so insightful. And I'm like, who is this guy? You just have a different way of seeing things and thinking about things. And I just really have to say that the way that you described it, it's not rocket science, but we don't think that way.
18:36 Guest - Jonathan Ivanco: Your buying habits aren't actually related to discounts. Your buying habits are related to need and timing. And a lot of people have something. And it's like need, want and desire as being the three levels of when someone will buy. I don't want need because they're willing to pay the lowest possible price. I don't want desire because it's usually out of reach and they have to justify the cost, but a want fits right in between as being something that is a little bit more expensive, but people have a concerted thought process of purchasing, so I get a better understanding of why they're purchasing. But it all comes down to timing, and I think where a lot of brands get it wrong is they think they can force timing through scarcity and urgency.
19:15 I want everyone to wake up massively and realize that the competition for consumer product goods these days is massive. There are so many different options that you have to go and where there isn't scarcity and there is no urgency. And we need to get away from the idea of trying to create fake senses of scarcity and urgency, and instead, move into more value based selling, which pertains to the actual customer journey instead of what the company wants, which is again, that transaction to happen in that revenue to come in. It makes zero sense. When you start looking at things that exist and why we do them a certain way; if you ever Google something and everyone can do this, this is the greatest exercise ever.
19:57 Open new fresh tab and you Google something like, why do people abandoned carts or whatever, right? And then you open every single article that isn't an ad for the first three pages. And if you read them, you're going to realize that everyone is talking about the same exact things. When everyone starts pairing each other within something, instead of asking why in the first place this is taken place, you realize that there's a systematic problem.
20:22 Host - Monique Mills: Most marketers are trained to do it toward the metrics of how many leads we got and how many folks we got into the funnel, not really tying it to revenue. So, that's why sales and marketing should be joined at the hip and communicating in that way. Does your product help create that bridge?
20:44 Guest - Jonathan Ivanco: Well, because we work mostly with e-com, everything tied back to revenue. The long and short of the way that we see the process working specifically in our space is that the ad team needs to work with the email team needs to work with the website team, because it's one big business. And I think the biggest problem that a lot of companies have is they segment often silo everything, and they don't realize that everything is actually related to itself. I could have the best ads in the world, but if the website sucks, then no one's going to convert. I could have the best product in the world, but if the experience is bad and I can't drive traffic, it's not going to work.
So, everything has to work together in order for real success to happen. Quantitatively, like driving X amount of traffic to make X amount of conversion happened and try to repeat that in scale that isn't always smart because you're always going to be mixing up audiences. You're going to tap out of audiences. That TAM is real. Like, you've got to be smart about how you do it. We looked beyond that because my belief is there's always markers and clean data that you can use to automate and streamline. You cannot automate if you have dirty data, you can automate if you have clean data. So the goal of every project that I've been involved in for the last, I don't know how many years, has been all about cleaning the data first, grabbing insights from that data, and then building models and systems around that clean data to see incremental change happen.
22:07 Essentially the goal of any business, SaaS e-commerce, et cetera, is predictive revenue to figure out what's coming down the pipe so you can forecast. Our goal is eventually to be able to apply the data, and we're pretty close to doing it right now where we can tell based on the signup. And the answer is given what the lifetime value of that customer is over what time period, so we can start helping you forecast predictably how and based on a signup. So if you're an e-commerce company, you now have predictable revenue and you can forecast out three, six months.
22:39 And you mentioned about like marketers and falling KPIs; I think that this systemic problem with marketing is that you get involved at a low level, you work your way up. As long as you meet certain KPIs, you're given a raise to the point where you're a director or a CMO level. And in a lot of cases, you're so far detached from the data and what's driving the business and you're managing a bunch of different agencies who you're trusting to give you real information and have a better approach than you would have internally or working with your people that we lose sight of the things that really matter. I posted a series of articles on Reddit last year, and they were how I would build a SaaS company today of how are you going to build one. And it's like a six part series, and it blew up, which was really nice, but a lot of it was, I wouldn't. And that's the real answer that I give to everyone. It's the same answer that got me banned on Reddit from e-commerce for posting about why I wouldn't build a e-commerce company right now and build like a newsletter instead.
23:39 Host - Monique Mills: Can you explain that, because you always have such interesting comments?
23:43 Guest - Jonathan Ivanco: Yeah, so e-commerce companies make on average 30% margin if they're doing really, really, really well. And if you try to launch an e-commerce company without a market that's existing, you're going to spend a lot on that at initial to get stuff out there and you're not going to make money for a while, so it didn't make any sense to do that. If someone was thinking about getting involved in that; the first thing that they should do is start a newsletter and then start collecting data on the group of people that were signing up for that, so that you're within a lifestyle element, so that you can start incorporating other products via affiliates to figure out, you know, is there enough of a desire within your initial market in order to sell into that, so that you're actually building up your client list prior to doing anything. And it's a lot less money.
24:26 I think right now, if you want to start an e-commerce company, I'm going to be real, it's 15,000 to get started and you have no guarantees and that's before managing supplies, shipping and everything else, it's just 15 to get started. And then, you have to scale very, very slowly in order to make that happen. I'm not saying don't do it. I'm just saying, if you're going to do it, do it really, really smart. And it helps to have a built-in list to sell to rather than having to cold prospect people in the early days. The SaaS play was the same thing where everyone wants to jump into SaaS and sell software, but people don't understand. Customer success is the majority of why software gets brought on. The hardest part of changing software is actually implementation. It's not, "Oh, this is a great," it's how do I get my workflows internally around this new software? And this is the biggest misconception that I see with people in SaaS. They're all like, "Oh, our platform is great." I was like, "Yeah, so is everything else out there, and you have a lot of competition." What's the cost of switching over, and what's the cost from a resources perspective of losing a work time and making that transition from an existing service that's working good enough for the most part?
25:40 Host - Monique Mills: In this last part, John share some parting words of wisdom for those who get impatient and want to skip the line, or in other words, want to jump ahead in their journey. We all get impatient sometimes. And I think his words will hit home, keep listening.
26:01 Guest - Jonathan Ivanco: The best piece of advice I have for everyone is everyone wants to skip the line, and I want to skip the lines so badly. I want to skip it so badly and I tried so hard to skip it, and it took me until I was working at a bunch of jobs, most of which fired me because I want to do things differently. I didn't believe that the things were being done in the most efficient way. I didn't believe I should be doing 12 hours of demos. I didn't believe that I should be doing four hours of calculated demos. And going through those experiences, the one thing I learned is what you do nine to five for a company, benefits the company, what you do outside of those hours to help make your easier and better, not only can benefit the company, but it can benefit your own wellbeing and sanity.
26:52 Host – Monique Mills: Well, that's it. So what did you think? Well, I think John is very understated and extremely interesting. You see, he has a plethora of side projects that are all on the same wavelength of exposing his sense of curiosity, analytical mind, creativity, and cleverness, with a huge splash of just good old fashioned common sense. After this episode, I spent about another 45 minutes talking to him about new ways to think about business, ideas about the future and how companies can just be more human in their business dealings, especially when trying to acquire new customers or keep existing ones. It makes so much sense, but for some reason, it's counterintuitive to the standard practices these days. And I can only chop that up to something that I say all the time - "People are complex, most will resist change at all costs." But my hope is that this episode opened up some new ways of thinking for you, especially if you're launching a new business or new product.
Thank you for listening to the Unpolished MBA Podcast. To hear more episodes or to request to become a guest; please visit unpolishedmba.com.
00:27 Host - Monique Mills: Hi everyone. Welcome back to the Unpolished MBA podcast. In this episode, I had a conversation with Jon Ivanco, an attorney who has developed quite a unique way of looking at business. He maneuvered his way into the tech world and is not looking back. In this episode, he talks about his journey from starting out in computer science and with a lot of twists and turns, going all the way through finishing law school and then realizing that he didn't want to practice law. I bet many of you listening have also completed a degree and it didn't quite turn out the way you'd initially planned. So, listen in as Jon shares how he used his analytical and problem-solving skills to make lemonade out of lemons.
01:19 Host - Monique Mills: Are you an entrepreneur or employee?
01:23 Guest - Jonathan Ivanco: Entrepreneur.
01:24 Host - Monique Mills: MBA or no MBA?
01:26 Guest - Jonathan Ivanco: No MBA, did get a JD though.
01:31 Host - Monique Mills: Why the JD route?
01:31 Guest - Jonathan Ivanco: It was between MBA and JD, and I figured that it would be laws involved in just about everything. In business, you can more or less learn from previous experiences; you can't really learn law without going to school, but you can learn business without going to school.
01:46 Host - Monique Mills: It's interesting that you say that. Years, years and years ago, I thought I wanted to go into law and…I changed my mind. But I’m interested to know as an entrepreneur, how are you using your JD? What did you study in undergrad?
02:03 Guest - Jonathan Ivanco: I started undergrad as computer science back in 2002 and I couldn't pass the math. So, I ended up going to the library every day and reading three hours a day every business magazine I could get my hands on a newspaper. And I did that every day, and from there, I ended up graduating with sociology, organizational studies eventually, which was great. It gave me a foundation with a little bit of background psychology, a little bit of like everything, but understood how structures worked. And then, I was weighing my options between what would be the most beneficial to me and kind of like challenge my mind? The business stuff I'd already done all the reading on, like, I hadn't read anything that was going to change my mind on that. My dad had already gotten his MBA and I was like, not really interested. But the idea that in every single transaction law was involved, in every single negotiation, legal was involved, and the idea of understanding that side of things really appealed to me knowing that business law negotiations with something that was always going to be in existence and exist. So, that was kind of the transition to that.
03:16 Would I suggest anyone go to law school? Absolutely not. I don't think it's for everyone. If you don't want to be a lawyer, don't go. I know a lot of happy lawyers. I know a lot of miserable lawyers, but I think though that the foundations that I took away from it are a better way of thinking how to analyze and handle problems and realizing that everything is causal. It was an interesting transition when I realized I didn't actually want to do law coming out of law school. And funnily enough, having like a JD on your resume basically pigeonholes you into not being hired by anyone so I had to remove it to find jobs within tech, especially. I got lucky. One of my first jobs was my two bosses were attorneys, so they were nice enough to hire me and kind of like bring me through the sales bit there. It's logic based is I think probably one of the keys and no passive language is really big in law, so applying that to marketing makes a lot of sense. It's like the baseline of all of Apple's marketing is direct active voice, and the ability to kind of scrutinize data, but ask why, and understand like the root cause of things.
04:31 I think if you gave me a bunch of attorneys or ex attorneys, I could turn them into amazing marketers because they just have the relevant skill set to analyze and dig deeper into things and understand the causation behind certain events and the kind of the course of how things have to interact with each other in a way that a lot of people don't have to deal with logic on a regular basis and understand the why. And I think that's really crucial in this very data-driven world that people have at least a little bit of experience around that.
05:03 Host - Monique Mills: Yeah. You know, for the attorneys that I know, I can't tell you anyone that's better at getting to the root of anything than them. Sometimes it could be frustrating when trying to move forward.
05:18 Guest - Jonathan Ivanco: Yeah, absolutely. I mean, those are a lot of conversations I have in my own house. My wife's a privacy attorney, so everything that I want to do from a marketing standpoint, as soon as it gets into that gray area, it becomes like a debate of why I can't do it, rather than like, are you sure? Can we like change a couple things here and there?
05:36 Host - Monique Mills: It's interesting that you bring up marketing. And I want you to kind of dive in a little bit more on what you're doing in regards to marketing, because everything that we talk about in entrepreneurship, in one way or another leads to marketing and sales. Like everything. It's just the foundation of success, so I'm glad you brought that up. But I want to understand the realm of what you're working on now in that regard.
06:06 Guest - Jonathan Ivanco: Well, I want to start off like, sales used to be sales. Sales is not sales anymore. Sales is actually marketing, marketing's actually customer service and customer service is actually customer experience. And this was a shift that happened a while ago, and I don't think anyone noticed it, and I know no one noticed it. Because back in like 2009, 2010 when social media was kicking off, the means of social selling was planting seeds. And then, I saw that again in 2013, 2014, where all of these playbooks for SaaS sales were based on social selling. And it was nothing new from five years earlier. It was just that people had caught on that social selling was going to be a portion of things and that the customer journey had actually changed. So I think that there has been like some really big shifts in what's been going on, but there have been repeat mistakes made by a lot of people.
07:02 And the greatest example I got is if you want to watch a video, you stream it, you got Netflix, you got everything else. If you want to listen to a song; you've got Spotify, Apple music, title, whatever. If you want to get a demo for a SaaS offer product, you have to submit an email, get a response, hop on a call, talk to a SDR, talk to an AE, talk to another person that's going to be a solutions consultant and a sales engineer, and then you've got to work back to the AE to get that deal signed. Do you how ridiculous that is today? This is the problem of kind of, we used to have one role and you'd have one person that could answer all your questions. And then we moved to whole teams and pods, and it kind of got out of control. And if you've been anywhere around having to teach people or give a class or do anything else, you know that people learn in different ways. And there are far too many salespeople that don't ask, how do you best learn? Is it through video? Is it through reading? Is it through actually hands-on? Everyone learns a different way.
08:05 So we have all these salespeople that are out there that are being forced to do things a certain way in a certain pattern with no regard for the end customer. It becomes the company journey, and so the customer journey. So the original idea for what ended up becoming our current company FormToro, was based upon a broken sales process on SaaS where the buyer themselves didn't have a choice as to how they want to experience that process. And then after working for other companies more on the e-commerce realm and being heavy into the data realm of things, we started observing that B2C was even worse because you can't have a clear bit to grab information, to grab insights to figure out what people are writing about. Consumers are harder to track down then professionals. Professionals, you have LinkedIn, you have other ways of figuring out what they're into, but consumers is just a black box. We're just hoping, wishing and praying and doing too much guessing. So after running like a number of go to market programs where companies working, we started to realize how much money was being spent on acquisition of just an email, without any idea of why someone was signing up.
09:20 And then we took a step back and we looked at the irony that exists in our society, where if you sign up for an email from an e-commerce company, they send you a bunch of emails and they're guessing, and then eventually you get frustrated and you unsubscribe. And the first question they ask is why are you unsubscribing? They never ask you during the point where you showed intention and you're typing out your email address, why you were subscribing.
09:43 Host - Monique Mills: Brilliant. Simple, and brilliant.
09:48 Guest - Jonathan Ivanco: So, that's kind of the area that we looked at. We looked at the biggest drop-off which is between subscription and then the first email that goes out, you usually see a 50% drop off. And then, we were looking at other statistics that baffled us. 25% of an email list turns every single year. And people are paying five to $10 per email address to acquire them. So if you're a company and you're dropping, you got a list of a hundred thousand, you lose 25,000 a year, and it's costing you between five and $10 per; you have 125 to 250 a year. And you don't know why they signed up in the first place. So, it's just a blank hole of spent revenue. And turns out like that the standard, even for SaaS, like the standard signup for SaaS is you fill out a bunch of information and then someone gets in touch with you.
10:41 That's not like the journey anyone wants to take. If it's a weekend and you sign up, forget about no, one's getting back to you till Monday. So if you're a busy entrepreneur and you're looking for a software and you have Friday night and Saturday to look for something and you can't get someone and you have to block off time on your schedule the next week, it's just the busting system. It doesn't make any sense. So, we were looking to figure out how to apply qualitative and quantitative data to ad spent basically into the acquisition funnel because everyone knows quantitative as being like the absolute way to say is this working. Facebook ads is a great example. Did someone purchase? Yeah, but not everyone's looking to purchase right away. And after running some data, we run multi-step sign-up forms where we'd live data collect. So we get an email first and then we ask a couple questions afterwards and people just click, click, click, click, get their reward, whatever that is. 96% of people finish the entire form and give us four data points.
11:43 Host - Monique Mills: So you're saying all you have to do is ask?
11:45 Guest - Jonathan Ivanco: All you've got to do is ask. And then, if you ask correctly with the right questions and it's based on the journey that that customer is taking, they don't want spam in their inbox. They don't want you to send them sales all the time. They genuinely wants you to know what their preferences are so that they can get marketed to correctly and be given like the right stuff. The next level for us was taking those data points, applying them to revenue and then figuring out what sources were actually the best combination of those answers so that we could put qualitative on it. Because I think a lot of people right now, IOS 14.5 drop in, right? Like everyone's talking about lack of attribution and not knowing and rising CAC costs and all this other stuff. And it's true in SaaS too, when you're doing stuff, right. Everyone's complaining about the expense. It's not the expense that's going up; it's the quality of targeting hasn't improved. And it's always been relational to interests that people have said on a platform rather than said in relation to a current customer journey while working with a product that they might be interested in.
12:50 Host - Monique Mills: That's so true. And I've never heard anyone articulate that ever in any of the marketing meetings or anything that I've been in.
12:59 Guest - Jonathan Ivanco: They won't touch it because marketing is much happier to go into a room, drop personas up there, target them and figure out, you know, get as many leads as possible and then sort through them. It's the stock market fallacy, right? Like you buy something that's really, really cheap, and then it goes up, it has a higher potential to go up. It doesn't matter if you spend a hundred dollars, it's the percentage gains that you're really paying attention to. If you talked about quantity over quality, I'd rather hit up only a hundred people with very personalized stuff and get a response of 10 then a thousand. Because the flip side of this, and no one's talking about this, and I hate that no one talks about this. But if I have a thousand people and I still get those 10 people, I've just burned bridges on 990 possible contacts. And people don't like to talk about how small a TAM really is when you niche down to your product. Everyone says it's bigger than everything else. It's not. And that actual TAM can be quantified, and you have one chance of most people to make a good impression and not burn that bridge for later.
14:03 Host - Monique Mills: Absolutely. What's the name of the company, again?
14:06 Guest - Jonathan Ivanco: My company is called Form Toro, formtoro.com.
14:12 Host - Monique Mills: Okay. So, explain to the audience who your ideal customer is and the benefit they get.
14:20 Guest - Jonathan Ivanco: Right now, we work with e-commerce companies. Usually companies that have a good amount of traction to their website and traffic. It applies to everyone and there isn't really a thing. Our ideal client is seven, eight figures because then they have a lot of debt they can play with. The major benefit is quantitative and qualitatively understanding what your ad spend is doing. A lot of companies are spending hundreds of thousands of dollars a month on ad spend, and they don't actually know why people are purchasing, why people aren't purchasing, people are signing up, why people are signing up and not purchasing, why people are signing up and purchasing. It's a lot of guessing that goes on. So essentially, the best that we have right now is doing progressive profiling, where we ask people questions within an email and they click on it. The click rates are 3% and open rates are 35% if you're doing like a really great job, so we've got so much drop-off that's happening. With us, you get four data points that are relevant to the customer journey right up front when someone signs up when they're most interacting with the brand. So it puts you... like it's uneven playing field. It's cheat codes really for getting started and being able to bucket people and understand how to sell to them.
15:34 Host - Monique Mills: It sounds like you guys have really prioritized, just understanding human nature. When I first saw...
15:44 Guest - Jonathan Ivanco: Lots of experience working with a lot of companies; that's the difference This is a product that came out of my partner and I years of experience of working with companies and getting paid big advisory fees to help people go to market and then asking the same questions repeatedly. "That's great that our cost is X to sign up someone, what do we really know about them? Okay, cool. What do we do with that? Okay."
The same questions kept coming up. And then we got into the weeds and we said, “Okay, in an ideal world, how would we apply the data, and how would we create an unfair advantage for companies that were collecting this data and using this data?”
And it turns out human nature is not really that different, and people aren't hesitant to give information if you ask for information that relates to a customer journey instead of personal information. There's no need for someone to ask for a first name on a signup form when you just meet them.
16:47 Host - Monique Mills: That's so true. That's just to be able to address them in an email nurture campaign and annoy them later.
16:54 Guest - Jonathan Ivanco: Exactly. Company journey versus the customer journey, and this is the biggest thing that I think... it's funny because we'll finish this call, and you're going to be browsing the internet, and you're going to see all these pop-ups and you're going to be like, "I never thought about it like that." But the best example I have for you, you go to somebody's website and it says, "Save 10% on your first purchase. Save $10 on your first purchase." Everything's about your first purchase. It's all about conversion on that first purchase. There is nothing in it for the customer other than a single transaction. And they keep saying first in every single pop-up that you see.
We don't do that at all. We say, "Save X percent for the first X amount of months with this many uses." We built in the idea of retention based marketing from the first touch point. Because when you say first, you're not trying to build a relationship; you're trying to make a transaction happen. When you give someone the option of coming back, when they have a coupon code that they can use multiple times; you've gotten rid of bias that previously existed about what a repeat purchase should look like and what timeframe.
18:00 So now all of a sudden, instead of chasing people via emails, and discounts and everything else, you can remove all the discounts from your website. Forced everyone through one clear channel and understand without bias relative to data why they're purchasing as frequently as they are.
18:15 Host - Monique Mills: You are so smart. It's funny because I initially saw you on Twitter and it was something that was so insightful. And I'm like, who is this guy? You just have a different way of seeing things and thinking about things. And I just really have to say that the way that you described it, it's not rocket science, but we don't think that way.
18:36 Guest - Jonathan Ivanco: Your buying habits aren't actually related to discounts. Your buying habits are related to need and timing. And a lot of people have something. And it's like need, want and desire as being the three levels of when someone will buy. I don't want need because they're willing to pay the lowest possible price. I don't want desire because it's usually out of reach and they have to justify the cost, but a want fits right in between as being something that is a little bit more expensive, but people have a concerted thought process of purchasing, so I get a better understanding of why they're purchasing. But it all comes down to timing, and I think where a lot of brands get it wrong is they think they can force timing through scarcity and urgency.
19:15 I want everyone to wake up massively and realize that the competition for consumer product goods these days is massive. There are so many different options that you have to go and where there isn't scarcity and there is no urgency. And we need to get away from the idea of trying to create fake senses of scarcity and urgency, and instead, move into more value based selling, which pertains to the actual customer journey instead of what the company wants, which is again, that transaction to happen in that revenue to come in. It makes zero sense. When you start looking at things that exist and why we do them a certain way; if you ever Google something and everyone can do this, this is the greatest exercise ever.
19:57 Open new fresh tab and you Google something like, why do people abandoned carts or whatever, right? And then you open every single article that isn't an ad for the first three pages. And if you read them, you're going to realize that everyone is talking about the same exact things. When everyone starts pairing each other within something, instead of asking why in the first place this is taken place, you realize that there's a systematic problem.
20:22 Host - Monique Mills: Most marketers are trained to do it toward the metrics of how many leads we got and how many folks we got into the funnel, not really tying it to revenue. So, that's why sales and marketing should be joined at the hip and communicating in that way. Does your product help create that bridge?
20:44 Guest - Jonathan Ivanco: Well, because we work mostly with e-com, everything tied back to revenue. The long and short of the way that we see the process working specifically in our space is that the ad team needs to work with the email team needs to work with the website team, because it's one big business. And I think the biggest problem that a lot of companies have is they segment often silo everything, and they don't realize that everything is actually related to itself. I could have the best ads in the world, but if the website sucks, then no one's going to convert. I could have the best product in the world, but if the experience is bad and I can't drive traffic, it's not going to work.
So, everything has to work together in order for real success to happen. Quantitatively, like driving X amount of traffic to make X amount of conversion happened and try to repeat that in scale that isn't always smart because you're always going to be mixing up audiences. You're going to tap out of audiences. That TAM is real. Like, you've got to be smart about how you do it. We looked beyond that because my belief is there's always markers and clean data that you can use to automate and streamline. You cannot automate if you have dirty data, you can automate if you have clean data. So the goal of every project that I've been involved in for the last, I don't know how many years, has been all about cleaning the data first, grabbing insights from that data, and then building models and systems around that clean data to see incremental change happen.
22:07 Essentially the goal of any business, SaaS e-commerce, et cetera, is predictive revenue to figure out what's coming down the pipe so you can forecast. Our goal is eventually to be able to apply the data, and we're pretty close to doing it right now where we can tell based on the signup. And the answer is given what the lifetime value of that customer is over what time period, so we can start helping you forecast predictably how and based on a signup. So if you're an e-commerce company, you now have predictable revenue and you can forecast out three, six months.
22:39 And you mentioned about like marketers and falling KPIs; I think that this systemic problem with marketing is that you get involved at a low level, you work your way up. As long as you meet certain KPIs, you're given a raise to the point where you're a director or a CMO level. And in a lot of cases, you're so far detached from the data and what's driving the business and you're managing a bunch of different agencies who you're trusting to give you real information and have a better approach than you would have internally or working with your people that we lose sight of the things that really matter. I posted a series of articles on Reddit last year, and they were how I would build a SaaS company today of how are you going to build one. And it's like a six part series, and it blew up, which was really nice, but a lot of it was, I wouldn't. And that's the real answer that I give to everyone. It's the same answer that got me banned on Reddit from e-commerce for posting about why I wouldn't build a e-commerce company right now and build like a newsletter instead.
23:39 Host - Monique Mills: Can you explain that, because you always have such interesting comments?
23:43 Guest - Jonathan Ivanco: Yeah, so e-commerce companies make on average 30% margin if they're doing really, really, really well. And if you try to launch an e-commerce company without a market that's existing, you're going to spend a lot on that at initial to get stuff out there and you're not going to make money for a while, so it didn't make any sense to do that. If someone was thinking about getting involved in that; the first thing that they should do is start a newsletter and then start collecting data on the group of people that were signing up for that, so that you're within a lifestyle element, so that you can start incorporating other products via affiliates to figure out, you know, is there enough of a desire within your initial market in order to sell into that, so that you're actually building up your client list prior to doing anything. And it's a lot less money.
24:26 I think right now, if you want to start an e-commerce company, I'm going to be real, it's 15,000 to get started and you have no guarantees and that's before managing supplies, shipping and everything else, it's just 15 to get started. And then, you have to scale very, very slowly in order to make that happen. I'm not saying don't do it. I'm just saying, if you're going to do it, do it really, really smart. And it helps to have a built-in list to sell to rather than having to cold prospect people in the early days. The SaaS play was the same thing where everyone wants to jump into SaaS and sell software, but people don't understand. Customer success is the majority of why software gets brought on. The hardest part of changing software is actually implementation. It's not, "Oh, this is a great," it's how do I get my workflows internally around this new software? And this is the biggest misconception that I see with people in SaaS. They're all like, "Oh, our platform is great." I was like, "Yeah, so is everything else out there, and you have a lot of competition." What's the cost of switching over, and what's the cost from a resources perspective of losing a work time and making that transition from an existing service that's working good enough for the most part?
25:40 Host - Monique Mills: In this last part, John share some parting words of wisdom for those who get impatient and want to skip the line, or in other words, want to jump ahead in their journey. We all get impatient sometimes. And I think his words will hit home, keep listening.
26:01 Guest - Jonathan Ivanco: The best piece of advice I have for everyone is everyone wants to skip the line, and I want to skip the lines so badly. I want to skip it so badly and I tried so hard to skip it, and it took me until I was working at a bunch of jobs, most of which fired me because I want to do things differently. I didn't believe that the things were being done in the most efficient way. I didn't believe I should be doing 12 hours of demos. I didn't believe that I should be doing four hours of calculated demos. And going through those experiences, the one thing I learned is what you do nine to five for a company, benefits the company, what you do outside of those hours to help make your easier and better, not only can benefit the company, but it can benefit your own wellbeing and sanity.
26:52 Host – Monique Mills: Well, that's it. So what did you think? Well, I think John is very understated and extremely interesting. You see, he has a plethora of side projects that are all on the same wavelength of exposing his sense of curiosity, analytical mind, creativity, and cleverness, with a huge splash of just good old fashioned common sense. After this episode, I spent about another 45 minutes talking to him about new ways to think about business, ideas about the future and how companies can just be more human in their business dealings, especially when trying to acquire new customers or keep existing ones. It makes so much sense, but for some reason, it's counterintuitive to the standard practices these days. And I can only chop that up to something that I say all the time - "People are complex, most will resist change at all costs." But my hope is that this episode opened up some new ways of thinking for you, especially if you're launching a new business or new product.
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