Interview with Greg Scown of Smile Software – Small Business Show 227

The Small business show episode 227 for Wednesday, June 12, 2019. Greetings folks and welcome to the Small Business show here at businessshow Co. The show by, for and about small business. Sponsors for this episode include thealternativeboard.com SBS and linode.com SBS. We'll talk about why you want to visit those URLs a little bit later. For now, here back in Durham, New Hampshire, I'm Dave Hamilton.

And out on the west coast, I'm Shannon Jean. Back home after wwdc. How was it, man?

It was good. Yeah, it was. You know, conferences are always a good thing. You get to see people, you get to learn things and you kind of break up the routine all the while. So yeah, no, this one was a very good one.

So. So, yeah, that's great. We've done a few shows about attending conferences and trade shows and how to get the most out of them. So I'm sure you're an expert at it by now.

I've listened to those shows, so I must be. That's right.

Yeah.

There was one person I saw though at WNBC and didn't get to have a full conversation with them. So I'll let you take the introduction from here, my friend.

Yeah, so, you know, we talk about maximizing our time on the show all the time. Constantly focus on developing systems that increase your productivity, you know, limited resource and that kind of thing. And one of the pieces of software that both Dave and I love is textexpander. You hear about it a lot on the show they sponsor. And today we get a chance to talk with the founder of Smile, greg scown and textexpander and PDF pen2, just awesome time saving software applications, both of them changed my life. Greg, we're really happy to have you here. Thank you for joining us.

Thank you so much for having me. I'm really excited to be here.

Yeah, it's awesome. You know, we've, we've talked around you for, for probably like three years. So now it's good to actually have put it, put a voice behind everything. So for our listeners that don't know, can you give us some background talk, Tell us about how Smile got started. One of the questions I had, you know, did you get the ideas for the app and the apps first and then built a company around them or did you start the company and then the apps came later? How did all get going?

Certainly the apps came first. Let's see. I mean, I suppose the first thing to say is that my first attempt to go out on my own as an indie software developer was an abject failure.

Talk about that.

Sure. I started out of college working for Apple and ended my career there running a small development team in South China and came back to the US and had the opportunity to go work with a friend of mine from Apple on a product idea. And we worked on it for almost two years and didn't quite achieve our marketing goal. We needed it to be twice as fast as something else and it only got to about 70%. And so we actually never shipped it sort of top tail and went back to work to try and build up my war chest again. And in late 2001, early 2002, had the opportunity to live rather cheaply in Beijing for a little while. And that is where I worked on page sender fax software. And that is sort of how I got started. And it was definitely the app idea that came first, managed to achieve my marketing goal for that, shipped it in April of 2002 and by November of that year had to move back to the US to mount a presence at Macworld San Francisco 2003.

Nice.

Wow, that's great.

Yeah, that's really cool. So as the company got started, did you find your way to these two core apps and then kind of turn your focus to those because they were the most successful? Successful or has it just been a. Was it a different kind of evolution? How'd that come about?

Sure. So the next step was I met Philip at Macworld San Francisco. We worked together on disk labels, shipped that at Macworld New York 2003, the last Macworld. And again that was a case of the product came first and we took best of show there and became cash flow positive overnight and built a business out of it, really. So it was kind of a crazy start and a really wonderful one. And then we decided that we would build a new product each year, of course, right? I mean we've got two we might as well keep doing. And that proved to be fine for PDF pen. So we shipped that in Macworld San Francisco 2004. But maybe not so good for our follow on products Photoprinto and Browsepack. Browsepack was fairly well received, but it's certainly not a financial success.

Interesting. What I love about the stories is this. It seems like this very long tailed niche finding a market for a specific piece of software that does a small task, but one that's very important to folks for productivity or things like that. Has that always been your focus instead of a broader. They always say the riches are in the niches. It sounds like you've proven that point.

I suppose in a way. I think that we wrote PDF pen in part to have PDF software that we could use to do things that we were otherwise faxing or doing on paper. And, you know, we figured that if it were something that we could use, that was something that other people could use. And, you know, once we got our toe in the water, then it was much easier to build out a full featured PDF editing product and to sort of selectively add things that people needed to do their day to day.

Yeah, and the other thing I like, I always like to highlight because it's very easy, you know, we've got a lot of listeners out there who are just starting their own businesses and it's easy to get disenfranchised, disappointed, disillusioned, whatever you want to call it when the first thing that you try doesn't happen because all you hear about are these overnight successes. And certainly the story you just told, there is an overnight success in there, but it didn't just happen that way. Right. I mean, there was a long path of some failures and some experiments and some minor successes and then suddenly there was this overnight success. Except it wasn't all that suddenly. And it's really because you stayed with it, you know, and you just kept testing and trying and. And yes, there was some serendipity involved. There's always going to be serendipity involved. But the trick is being prepared to leverage that and to. And to benefit from it. And that's exactly what you just told us. And I like, to me that's the most valuable kind of story that we can impart here. So this is great. Thank you. Yeah.

Oh, yeah. And I mean, to anyone listening, stick with your goal. I mean, you may not make it the first time, you may not make it the second time, but, you know, if you don't stick with your goal, you're never going to make it.

Right. Yeah. Bullheaded persistence is what I always cite as, as my. The secret to my. I don't really call it the secret to my success. I call it the secret to my not living in a cardboard box. So, but you know, potato, potato, Right. So, yeah, yeah, yeah, that's great.

So as you develop, I'm curious, you come up with these products and page, center, facts, disk, label, these kinds of things, and then after a while, if they turn out well, maybe it was great for a while, but it's not generating much revenue now and maybe you're discontinuing them. How was the customer service handled? Was it problematic when you stopped supporting those apps and were people disappointed? Did you come up with a process to handle that kind of thing or just. It didn't come up.

Well, certainly we informed our customers that we would not be producing new updates as new versions of macOS came out. And so it is possible that either features would erode, which is exactly what happened with Disk Label, or that it would cease to work entirely, as is what happened with Page Sender. But we've always explained that you can keep around a partition to use an older version of macOS with the older version of our software. And sometimes it's worth sticking a Mac in the closet to be your fax device. And there are people who do that to this day. But just in terms of moving forward, it wasn't something that we could continue to support.

That's great. Well, I love that. Well, here is a solution if you would like to keep using the software, but we're not going to keep moving it up as the OS changes, that's a great solution.

I think basically the principle there is be honest with your customers. Certainly there are people who are unhappy that, you know, we couldn't continue to do this forever and ever, but I think the honesty bought us some credibility with them in terms of, this is what we're going to do, then we did it. And these are your options in this particular world?

That's right, yeah. Consistency, delivering on a promise, even when it's a promise that doesn't necessarily make everyone happy, it still engenders trust. Right. More so than, hey, by the way, we just killed this thing and we didn't tell you it was going to happen. You know, Right, Yeah, yeah, yeah. That's great.

Good communication. So this kind of naturally leads me into a topic that I'd like to take some time to discuss. Today is when it looks like, I believe back in 2016, you shifted smiles, shifted the text expander from a standalone product with upgrades to a subscription model. Is that about the time that it. You guys did that?

Yes, that's right. April 2016.

Okay, great. So I remember when that happened, and I remember hearing lots of discussion online and people like, what this house is going, that kind of thing. And I remember thinking, wow, there's a lot of passionate users that really love this product, which is a great thing. But I want to explore how you manage this transition, because it seems like a really important thing. And I want to talk about the reasoning behind the switch and how did you make that Decision to switch to the subscription model.

Okay, sure. I mean, I think maybe we could start with the motivation. And so we wanted to move the storage for taxi spinner from being local into the cloud. And we wanted to do that for a fairly specific reason, which was that if your storage is local, you can pretty much only share with yourself and your own devices. If the storage is in the cloud, then you can share with others. We had done sort of the budget version of that by supporting Dropbox and icloud, but they wouldn't scale to teams of any size. And in fact, actually, frankly, they didn't work that well even for the small teams. And so we wanted to build a solution where sharing snippets worked for a single person on multiple devices, worked for multiple people on multiple devices, and worked for much larger teams on however many devices they had.

Nice. Was that part of the process that you explained to your user base of like, oh, this is how we're going to, you know, this is why we're doing it, to give you what essentially is a more robust, powerful product?

Oh, yes, definitely. I mean, we certainly explained that the key motivation was sharing and to move of storage. I mean, I think that there were users who said, well, you know, I'm all set with what I've got, which is fine to a certain extent, but I mean, if they were using Dropbox or if they were using iCloud, Fine might not really have been as good as they thought, and certainly not from our standpoint because we would see the support queries and the things that weren't going right and things that were beyond our control to fix. We couldn't help some of these users make things better. Whereas with a solution that we built and that we controlled them, we actually could help someone who ran into something. I mean, we found a problem, we could fix it. You know, we. We could address bugs, we could do things that we just couldn't do before.

So this is really interesting because this existed in, in my world, right? I mean, we're all we at. At Mac observer, which is one of my other businesses, you know, we pay attention to the market of Mac software. And so this was a big deal, as Shannon said. And you definitely explained this exactly that way at the time. And most people chose not to hear it at all.

That's why I asked y.

To ask about how well you thought it came across. But yeah, okay, there you go. That's a great summary.

What you are, what you are saying now is exactly, almost verbatim, what you said on our daily Observations podcast when we had you on back then, when all of this was happening and not a single person ever actually heard it this way. Because it was change and it was change. First of all, we're humans. We don't like change. Right. And secondly, we certainly don't like change that we perceive as costing us more money down the road. Right.

Passionate users. Did I say that?

You did say passionate users. They were passionate people, certainly. It's just really interesting. It's fascinating to hear that as the reason for this. I had always assumed it was for the longevity of the product in terms of you being able to continue developing this thing that lots of people rely on. You know, the subscription model seems to work better for software than the buy once, support forever model that forces you to, you know, hold back updates and features so that you can package them into a bundle and call them version X0 or whatever it is. It's interesting. That really was a support thing and kind of the needs of the many outweigh the needs of the few scenario, if I'm digging deep enough there.

Well, I mean, I certainly won't argue that the business case is better as well, and we were certainly aware of that at the time. In particular, from a business standpoint, the thing that we were most concerned with in terms of moving the storage to the cloud was cost, because there's an ongoing cost to that versus when you purchase a piece of software and you don't have backing compute resources, backing storage, et cetera, that the company that you're working with is paying for, then it's a little bit different. It turns out that actually that works out reasonably well. And certainly the model covers what we need, and it's a good model. But I think that our motivation for making the change was much more along the lines of we were concerned that we would even be a sustainable business if we were trying to offer something that we didn't have a means to pay for.

Fascinating. That totally makes sense.

Yeah, yeah. And hearing you describe it that way, I'm like, ah, that's so reasonable, you know, but like I said, stepping back, I can just remember, you know, folks like that, and I mean, when you're, when you're trying to sell the product, and I know, you know, you're heavily in podcasts and I know that you have a sales team and do you run up against, you know, the, like a subscription fatigue, if you will, where everybody's getting hit for five bucks, ten bucks a month and it's. It's one more thing, or how do you guys work around that if it happens.

I mean, I just a little bit, but I suppose it was good to be early. So I reckon that each new entrant has to work harder against subscription fatigue than people who entered this business model earlier. But at the same time, I think that it's incumbent upon any business, any small business, to deliver value to the customer. And if you're not doing that, then you're not going to be in business for long.

That's good advice. So I want to kind of pause here. I want to talk about our two sponsors, but that's a great piece of advice. And we will come back in a minute. Our first sponsor for today is Linode at L I n o d e.com SBS because running a business means you've got to run stuff all the time and sometimes that means not running it in your office, right? If you're going to host a website, you don't want to do that in your office. You want to do that in the cloud, you want to do that on Linode's cloud. Now, Linode is all SSD based, right? They've got 10 worldwide data centers, including a new one in Toronto. They are set up so that you can get a server up and running in seconds. Now if you're the kind of person that likes to just get Linux installed and then take the command line and go from there, Linode is for you. If you are not that kind of person, Linode is also for you. Because they have these really cool turnkey setups where you can go and let's say you want to set up WordPress, right? Or you want to set up, you know, a VPN server in the cloud, or maybe you want to set up like a Minecraft server or something fun like that. You just go, you log into Linode and you say, I want to set up a server with WordPress on it and boom, it installs not just WordPress but the right distribution of Linux with Apache and MySQL and PHP and all of that stuff that you don't want to have to know about. And it's right there, it's going for you. And you just plug in your WordPress password, it configures it and boom, you've got that up and running in the cloud on your own. It's awesome. Plans start at just $5 a month for one of their Nano servers. And here's one of the, here's the thing, like I needed a VPN in the cloud, I set up one of their nano servers. You Know what else I did? I used our coupon code SBS2019 that gives you a $20 credit when you sign in. So go to linode.com SBS use promo code SBS2019. And guess what? Now you've got four months of that five dollars a month Nanode good to go. That's pretty cool. Of course you can scale up from there. You can go all the way up to Things with dedicated CPUs and distributed environments and all kinds of crazy things because they're Linode, they know what they're doing and they want to get you started now. So go. Linode.com SBS use promo code SBS2019 Our thanks to Linode for sponsoring this episode. Our second sponsor for today is the Alternative Board, otherwise known as tab. Here's the thing, as a business owner, your employees expect you to have all the answers. But sometimes you need a sounding board. You need someone to talk to, someone to go to with your business related questions. That's what TAB is for. The Alternative Board. A group of business leaders in your area that you can turn to for valuable advice. Tab's been helping owners and CEOs of privately held businesses for close to 30 years. One of their recent surveys showed that their members surpassed the average sales revenues of other privately held businesses by two and a half times. That's a pretty good thing. You meet together for four hours each month to discuss relevant business topics. Sales, marketing, hiring, etc. Plus, you get one on one expert business coaching to help build an actionable strategic plan for your business. You got to check this out. Go to TheAlternativeBoard.com SBS that's TheAlternativeBoard.com SBS and find out if there's a tab board seat available for you in your area right now. Our thanks to TAB for sponsoring this episode. All right, Shannon, back to you.

Awesome. Yeah, that sustainability part of it, and I think it's a constant battle to educate your customers, your subscribers is like, hey, this is what we need. And a lot of people just don't care. And they maybe they're caring enough about the product. So I commend you coming, you know, for, for sticking with it, coming out the other side because I imagine you're far, you know, very successful at it right now. So that's great. Good stuff. We love it. So one of the things that we talk about on the show, we've mentioned a little bit here is mistakes. And we were big fans of mistakes because we really learn, you know, a tremendous amount. They teach us so much, especially Being able to look back on them and as a longtime owner that's tried so many different things, what would you say is your best? And I'm making air quotes here, Best mistake and the one that's stuck with you. And really you know, that you think of from time to time.

Oh sure. It's definitely the one I alluded to earlier, which was the notion that we would build a new product every year. We run into that with this notion and we really did orient the company around shipping a new piece of software at Macworld each year, every year, and did so for the first six years of our existence and realized along the way that, wow, this is not bringing about the focus that we need to have for our customer base. It's really, really hard to sustain and it's probably not going to make for an excellent long term business. How many of a 20 year Mac companies out there have 20 products? Well, not many. And so I think that that was our best mistake was to sort of keep doing that long enough to grasp that it was a bad idea and then to stop as soon as we grasp that it was a bad idea.

If you could go back though, I agree that it's not sustainable certainly to do that every year. But as someone who watched you do this, there was a level of it being very impressive that you were constantly doing this. And I feel like that, that respect that, that the, that you got from the industry for being that kind of company that was very ambitious and doing these great things and proving that you could do at least more than one thing. Well, I don't want to say many things, although you do do many things well like that that helped pave your path to, for where you are today, at least from from an outsider standpoint. So you're right, it might be a mistake long term but, but a lot of those crazy things we do when we're young kind of help us even though we wouldn't ever do them again.

Fair enough. I mean, I suspect there might be better ways to have achieved the same type of respect. And I think that the way that we chose was rather. I mean I do wonder a little bit if perhaps we could have achieved greater feature set in PDF pen sooner than we did. Maybe we would have gotten to sharing in text expander sooner, you know, broad sharing sooner than we did. So, you know, I can never know and I'm certainly happy that it was a sort of a positive accrual. But you know, I do have to wonder a little bit about, gee, you know, blessed with hindsight Would I have done the same thing? To be also to be very clear, you know, I have a co founder of Philip Gower and a great team team behind me as well. So I don't want to make it sound like, you know, it's just a one person operation here by any stretch of imagination.

Yeah. Thank you for highlighting that. Shannon and I are well aware of your operation. But yes, you are an indie developer, you are not a solo developer by any stretch of the imagination. And yeah, you've got a great team there. That really helps. Yeah, helps make things happen. It's funny, we ran into each other while we were both separately having lunch. And during my lunch we were talking about, you know, diversity for whatever reason came up. And somebody was saying, well, you know, it's really difficult to hire, to hire the right people and then also make sure you have a diversity balance, especially in a small company. And what this one guy at our table said was, but if you just stop hiring jerks, that can really help a lot. And it was you and the folks from agile who make 1Password who were some of, you know, some of the folks from your team and some of the folks from their team seem to be sitting together having lunch. And as we walked away, the guy who had made the comment about don't hire jerks says, see those two teams? That's what I'm talking about. They hire the right people, they're nice to each other. You can tell that they all trust each other and get along. That's the perfect model right there. So I just figured I'd share that with you. Yeah, yeah.

Oh, they are, they are long standing friends of ours and we love them very much.

Yeah, that's great. That's awesome. So I want to talk about marketing for a few minutes. I know you do a lot of your marketing on podcasts. Obviously, we're one of them. We thank you for your support. We love talking about your products. Have podcasts, have they always been a part of your marketing plan? And how did you get involved in sponsorship?

Sure. So we ever so predated podcasts in our marketing. In fact, we were doing print advertising back in the day. But certainly when podcasts began to emerge, they were an interesting medium to us. In fact, I'm pretty sure that it would be Backbeat Media was among the first that we sponsored. So it would have been Mackie Cab and Adam Christensen's show as well.

Yeah, you are. I, I think GoDaddy was the first company to buy a sponsorship on MacGeeka. But, but I'm I, I may be wrong about that. You are by far the longest running sponsor on that show. And, and, and there are some, There are several 10 plus year sponsors on, on Macgeekab and, and on Mac Cast, but you are by far the longest running one. So yeah, it's, it actually, just prior.

To that, we did UMC Life as well. So. Oh yeah, we got started experimenting pretty early and part of it was folks said, hey, you know, you should try this. And Gene McDonald was working with us at the time, concept, very much a passionate podcast listener. And so it was really, you know, easy to dip our toe in the water. And we did one thing that, that may be helpful to your audience, I suppose, which was we've asked sort of shopping cart question, where did you hear about us? And we've asked just this one question, you know, not, we don't clutter it up with a bunch of other stuff. And we've asked it for, you know, 10 or 15 years. And that has allowed us to amass a pretty good chunk of data on where people hear about us and to get, you know, a proxy for the effectiveness of podcast advertising.

So you, and no, you've, you've solved the. I'm sorry to jump in, but this is a very interesting thing because doing what would be called a brand lift study is, you know, something that generally is going to cost six figures and very, very difficult to do and almost impossible for most small companies. But by doing exactly that, asking one question for the same question for, you know, the entire, almost the entire history of your company's existence, you've done this brand lift study and you can, you can compare what's happening now to what happened, you know, a year ago or five years ago or even a month ago. And that's, that's really smart. Yeah, it's good.

Yeah, it's super helpful to have that data and it makes it much easier to continue to sponsor a podcast and to have some sense of which ones do well and which ones don't. And, you know, we'll try some. And we, you know, generally our experiments run six to 12 months because anything shorter than that, you really have no idea. But we'll try. And then every once in a while we will have to say, you know, let's, so let's try a different one, or, you know, this one isn't quite doing it. But likewise, we have, you know, as with the madcast and Mac ECAP podcast that we've been with for over a decade, who continue to perform incredibly well, that's awesome.

That's great. And I love the your statement, you know, our experiments are six to 12 months because, you know, some companies will come in, oh, we want to run for a month and see how it goes.

We want to run for a week. I'm definitely cutting this out and sharing it with as many people as will listen. That's good.

I mean, you gotta, you gotta plant the earbud. There's no way that, you know, one mention of you in a podcast is going to solidify in someone's mind. That's just not how. Just not how people are.

Yeah, that makes sense.

Yeah. I don't disagree with you at all. That's great.

Yeah, yeah, that's some all just excellent advice. There's some really great stuff in here in your comments that I think as a business owner, you've been doing it for so long, you kind of just think, oh, this is the way it is. But you know, that niche focused and really pushing on your, your most successful products. You know, making that transition from subscription model, how you handle the customer service and communication, really critical things that are the, I would imagine, the really the pillars of your success. So we've got thousands of small business owners that are listening to this episode right now. What would you say is the most important piece of advice from a business standpoint that you could leave them with today?

Love and respect your customers and they will love and respect you back.

Oh, that's good. That's the first time we've had anybody say that. I love it. That's great. I can sense the authenticity behind it and I agree wholeheartedly. Dave, you have any more questions for Greg?

I don't know. I think that's a great place to leave it too. That's good advice. Yeah, that's really good.

So, Greg, you know, thank you so much for coming on to share your knowledge in the history of Smile and all your success. We're really happy to that we've been a small part of that with you. What's the best way for people to learn more about Smile and your awesome products?

They can learn more about us@smilesoftware.com and they can follow us on Twitter milesoftware.

That's great. Thank you again. We really appreciate it. And if you have other questions for greg feedback at BusinessShow Co, we'd love to hear from you. And thank you for listening, everybody.

Absolutely. Thanks so much for coming on, Greg. Yeah, it's great. It's good to chat, man. See us at businessshow co or businessshow.co.com easy for me to say. Wow, look at that. Businessshow Co Facebook for the small business support group where we all hang out. Thanks so much everybody, and we'll see you next week.