From 0 to a Million Dollar Run Rate: How Russ Perry Scaled Design Pickle By Going Niche

Be confident in a niche, like niche down. That to me, we talk about the struggles of the agency. I was so worried. I was trying to be everything to everyone with the business because I was so worried about revenue and cash and just making a sale. I was too afraid to go after a niche.

Do you want to impact the world and still turn a profit? Then you're in the right place. Welcome to Growth Everywhere. This is the show where you'll find real conversations with real entrepreneurs. They'll share everything from From their biggest struggle to the exact strategies they use on a daily basis. So if you're ready for a value-packed interview, listen on. Here's your host, Eric Siu.

Before we jump into today's interview, if you guys could leave a review and a rating and also subscribe as well, that would be a huge help to the podcast. So if you actually enjoy the content and you'd like to hear more of it, Please support us by leaving us a review and subscribe to the podcast as well. Thanks so much. All right, everybody. Today we have Russ Perry, who's the CEO of Design Pickle, which provides unlimited graphic design help for a flat monthly fee. I'm a happy customer. I'm not affiliated at all, but I wanted to have Russ jump on the show today. So Russ, how are you doing?

I'm well. Thank you for having me. It's good to connect.

Yeah. Thanks for being here. So why don't you tell us a little bit about yourself and talk a little bit about the company?

Yeah, well, those go pretty much hand in hand. So before we get to Design Pickle, I have to confess I was a terrible agency owner in a previous life. So my professional experience pretty much outside of college was working in an agency capacity, freelancing, building agencies, and it all kind of ended in a big fireball experience in September 2014. But, the one thing that I realized that I kind of learned how to do well was manage production-level graphic design. So, in my mid-business life crisis times of late 2014, did a lot of soul-searching, book reading, and came up with Design Pickle really after reading a great book by Dan Norris, 7-Day Startup, and just kind of had an aha moment around what I was doing on the side with some consulting. decided to make a run at the whole productized service space and, and launched Design Pickle, which, if you don't know, we offer kind of a flat rate graphic design service. So you just sign up, you get— it's one price every month, no matter how much you use it. And we help you with a lot of the— pretty much all the marketing and sales graphic design stuff that most businesses need.

And how much do you charge for that? That, uh, how much is Design Pickle?

Currently, we are at $370 a month. So if you use us 0 times, it's $370 a month. If you use us Wow, okay.

Yeah, so I mean, let's just put things in context. As a marketer, you know, I'm always looking for people to make ads all the time, and then it gets— it can add up very quickly. I was looking at my bill a couple months ago, and I ended up paying $2,000 for banners, ebook design, and all that type of stuff. But to be able to have it all in one, no contracts, nothing like that, just all in one, is actually pretty amazing, just to paint a picture there. Russ, I want to back up a second. I want to talk about the agency for a little bit. So you talked about the agency being tough times. You know, what happened there exactly?

Oh man, I don't think we have 5 hours to chat. But the main things that I realized, you know, the main thing with the agency, first of all, was, was I was really great at selling creative ideas. However, a lot of our creative ideas as we grew as a company became more and more complex. So we went from, hey, let's design you a WordPress site to, hey, let's implement a 12-month HubSpot strategy and implement HubSpot. So Things got really, really complicated really fast as we grew. And frankly, I just wasn't prepared to be a leader in that type of organization. So we ended up selling a ton of work in 2014, $3 million of revenue, and lost just about— basically had to walk away from everything halfway through the year because of one reason or another. So I just was able to do some serious soul searching at that time and be like, look, This is not my path. Like, my path is not to build the next big agency. My path is something else. I didn't know what that was, but I finally was able to come to grips with that realization after obviously some very traumatic months of losing clients.

Got it. And okay, so just to be clear here, you guys were losing clients because you were not fulfilling the work, or is there another reason?

Total over-promise, under-deliver scenario. I mean, that was the biggest thing because we had no niche, we had no specialty, we had no thing that was ours, and we were just trying to be generalists. So you, you know, you'd come to— I would bump into you at an airport and talk to you. Oh yeah, sure. Yeah, we could do that. Yeah, let's do it. And like I said, I was very good at creating the concepts, the strategies, the ideas, but implementing those at the end of the day became a huge challenge as we scaled in size and those ideas became more and more complex.

Got it. Okay. So let's talk a little bit about Design Pickle today. Where are you in terms of numbers and number of—

in terms of revenues and Yeah, so today at the time of this podcast, we just broke $89,000 a month in recurring revenue. And we're around 350 clients. It's kind of a fluctuating number. We're a bit slow with sales this month. So sales and churn is sadly kind of right at 1 to 1 right now. But we're at 350 clients. Some other fun stats, you know, we've— in 2015, we launched in January 2015. But all of 2015, we did a little north of 10,000 design requests, and by the end of this week, so the end of April, we will have done 10,000 design requests in the first 4 months of the year.

Wow.

So we're just scaling and scaling, yeah.

So January 2015, and you guys are now on a million-dollar run rate, right?

Correct. And the—

so one thing you mentioned, you mentioned sales and churn right now are 1 to 1. Why does churn seem so high?

Dude, churn is a nightmare for us. And here's the pain of it. We have so many happy clients cancel because unlike some sticky software where you're like, let's just say QuickBooks, for example, where you're integrated into like the whole function of an organization, if someone doesn't want to use us anymore, we really, I mean, it's just a decision. They could be totally happy with what we're selling or offering, but at the end of the day, we're a productized service. It's just a service they can choose not to use.

Right.

So we're trying to figure out, and I don't have the answer yet, but So we have like just churn for reasons that are unpreventable. Someone doesn't, you know, their business can't afford it or whatever. And then we have this happy churn, which is really confusing. And then we have just like the churn for churn's sake from either a bad experience clients had or a bad designer match, which can happen. So it's like these almost like different layers of churn that we're trying to figure out and tackle.

Right, interesting. Okay, well, we'll have to have you on the podcast another time when you figure out how to solve that, the 3 layers of churn.

If I could solve churn, I think I could start my own business, like a way more larger business than what I'm currently doing.

Got it. Okay, so I mean, how are you doing this all for, for a flat fee right now? And what if some guy comes in and then has 1,000 requests all of a sudden? You know, how do you make the numbers work?

Yeah, so our biggest throttle is, is turnaround time. So it is— things get slower the more volume you have, and eventually there's just a point of diminishing return to where Like, we had one guy on an 8-month queue. Like, he had like thousands of requests submitted. And we're like, okay, we'll be done with this many thousands of requests in about 8 months. He was cool with it. Like, he's like, all right, cool. Because most of it was like evergreen social media content that he was just pumping through our system. But that's the best way we throttle it is, you know, your first few requests will usually get done pretty quick within a day or so. If you stack on more, those will take a little bit longer. You stack on more, those will take a little bit longer. And then you just find what your equilibrium is with what the needs are for your business and what we can do. Most of the time we can handle a lot of our clients' needs. Other times we're only going to do part of it because they— and they'll have to go somewhere else to get the rest of it done.

Right. So are there any promises in terms of deadlines, things like that, or is it— or the client has no control over deadlines?

No control over deadlines. It's a very dangerous game to do that because I'll throw the clients under the bus in this case. Clients often are terrible at reviewing things quickly, giving feedback, knowing what they want. So for us to put the pressure on ourselves for delivering things by a certain time where most of that experience is controlled by the client, excuse me, that's setting us up for failure.

Got it.

So if you do need stuff, like, and we kind of have a clunky— it's not clunky as in hard, it's just You can't sign up and 1 hour later be using the service. There are several steps you have to go through. And actually, that's a test for us with the client to see how patient they are. Because if they sign up and they're like, I need this now, then we'll refund their money and say, hey, we're not going to be a good fit for you. And it's like a culture check almost in a lot of ways.

Right. Yeah, I can imagine that being a problem because I mean, at $370, that allows, you know, people from the lower end to get in as well. And you can have those quote-unquote nightmare clients, right? So I can see that being a problem. Okay, I want to talk about going back into January 2015 when you guys launched. I mean, how did you guys go about acquiring your first 1,000 customers?

Yeah, because we've had about 1,200 come through our system. We actively maintain 350, so we've had a lot of churn over the year. First of all, it was hustle. Like, we just— I just hustled. I just— I literally emailed every person. I exported my LinkedIn database, all the emails, emailed all those people, and I coordinated a guest blogging strategy. Like, that was the extent of my strategy for launch, was how many people could I get to commit to me writing a blog post for them and then sort of quasi-publishing all those blog posts at the same time, offering a launch special. And it worked. And I, dude, I was writing blog posts about— I didn't even know what I was writing. I was like, you have a cupcake blog? Cool, I'll figure out a way to write about cupcakes. Like, it doesn't matter. So that was the launch strategy, but it gave us enough velocity to actually get some cash to then start investing into more strategic things, and the biggest thing we did right out of the gates in March 2015 was the Infusionsoft trade show in Arizona, ICON 2015. That was but a huge hustle. I was dressed up as a pickle handing out pickles during lunchtime because we were too late. We decided to sponsor, there's no booths left or anything. And I was like, well, how about this? And I got a Mexican popsicle cart, pushcart with the bells, Wrapped it, designed pickle, bought a pickle on Amazon outfit, and like handed out pickles during lunchtime.

I love it.

It was a huge success. Like, I got selfies with the CMO. Like, it was a blast.

How many customers do you think you got from that?

I mean, I still, like, to this day, over a year later, have people sign up that was like, I saw you as the pickle. I would say at least 100 and 150 customers, like, in total have come from that. That activation, and it cost us like, like $4,000 in total. This sponsorship was the most expensive thing, and that was like $2,500.

Wow. So why not just duplicate, hire a bunch of people to be pickles around at all these big conferences and spend that $4,000 each time?

You know, we're self-funded, and there's that. We got lucky with that one. It's, it's kind of hard to negotiate the pickle thing, but it is on our strategy. I, I will actually confess We didn't— that was a one-time thing. So, you know, trade shows and events and all that are kind of cash intensive. And you think, okay, I spent $4,000, $5,000 on that, or what can I get from $5,000 of Facebook advertising without any of the effort that you put into it? But we've since come back to events, and we'll— and from starting this fall and through next year, you're going to see us at a lot more events because we realized that is pretty Pretty successful.

Got it. Okay. Now I know you did something with Digital Marketer as well, which is the perfect type of audience for you. So, you know, they started mentioning Design Pickle quite a bit. I remember in some of their podcasts or videos and things like that. So walk us through, you know, how that partnership turned out for you. What did— what, yeah, what happened there?

So officially there was no partnership. They were just a client and started recommending us, which was awesome. But yeah, we got mentioned at their big conference in February. Traffic and conversion. And so Molly Pittman became a client and started using us for all their Facebook ad designs. And with her system that she uses, the AdGrid system. So she name-dropped us on stage and it was like flood of signups. Again, further validation that we need to be at events, right? So we've actually since formalized some partnerships. We're on their recommended tools page and then we're gonna be sponsoring their new conference in Florida. The Content and Conversion one in Orlando in September, and I'm super pumped about them. I mean, couldn't be a better culture and a better organization. I've worked with a lot of trade shows and a lot of groups, and they've just been right on. I mean, and the audience— I was a member of Digital Marketer too before they signed up for our service, and everything they've been doing is just perfect for— a perfect match for what we've done, or what we can serve.

Love it. Okay, so I mean, it sounds like, you know, the live events are going well for you. I mean, what's one more effective thing you're doing right now in terms of customer Weekly demos.

Why? Every week I'm on a webinar talking and showing our service. I have persistent Facebook ads running for those. We're always tweaking how those work. But it's like, hey, sign up for a demo, check us out. And it's, it kind of becomes a, like a weekly chore at times because I basically say the exact same thing every single week, every hour.

Yeah.

Every time I do it, but we have great results. Great conversion from that, and we're just gonna continue to scale that up. 'Cause like, it's not like what we're doing, like it's design, right? So we're not, I'm not asking you to, hey, learn about marketing automation, you've never done it before, and I'm gonna teach you how to do all. It's just, hey, we do design, we just do it a different way than you're used to. So those demos really are just to kind of prove we're real, and talk about it, and show it, and we get really good conversions out of it.

Interesting, and how much, I mean, how much are you currently spending, you know, per month on Facebook, and how much are you paying for like a registrant?

So we've varied between, you know, we're averaging about $5K a month in ads. We scaled it up recently to about $15K just to see what would happen. I think the right number currently is somewhere in between there. And the cost of a lead to register is under $3, so. Yeah. Now we do, because we only do it weekly, there's about a 15% attendance rate. So I've talked to some guys and they're like, yeah, if you can do these, I know there's like clever ways to do on-demand ones and all these like fake live webinars. I don't like doing that. But I'm thinking about doing it twice a week. And that way, like no matter when you sign up, there's one just a few days away to see if that will improve our Right.

So the numbers you're giving are actually, I mean, for the registrant rate especially, are really good. So are you targeting cold traffic, or are you targeting people that have visited your website? So in other words, retargeting.

Yeah, we have persistent retargeting campaigns to sign up. That's pretty much a straight call to action, like, hey, sign up for our service. For all of our webinar and some of the other ads, we're all doing lookalike campaigns in Facebook. Based off of like our newsletter signup list or our client lists. That's the best way. I tried doing— I tried targeting based on interest and, you know, the direct, like, like the direct way, and the lead costs were like $5, $10, $15 with those.

Yeah, totally. I mean, I guess it all depends on the industry too. So, you know, with design, there's always design fanatics. I find that the design and dev community are really They're really tight like that. But when it comes to marketing stuff, you know, you can see the cost per acquisition, you know, kind of skyrockets. So registration sometimes, you know, I'm paying, you know, $5, $6 plus just because of the niche itself. But the numbers you're giving, you know, $3 for registration and then 15% for attendance rate, that's $20 per attendee, which is pretty good.

Okay.

That's good. I mean, it sounds like Facebook, you're crushing it with that. Why don't you tell us about one big struggle you faced while growing this business?

You know, it's just matching the supply of our team, like how many designers we have, with the demand of our clients. So we're always balancing that. You know, as a self-funded startup, I don't have millions in a war chest that I can just overhire and be ready for any type of growth. And when we had our big shoutouts at the Digital Marketer Camp, we— I actually told Molly and those guys, I was like, you guys broke the pickle jar. Like, we had such such fast traction into scaling and so many new clients that we just got crushed under the demand and the load. So I just got back from the Philippines last week, and since February and since then and in preparing for the fall, we've been just hustling and working on tons of new strategies and structures and processes to overcome that. I wouldn't say we're out of the woods yet, but we're preparing ourselves to be able to scale in a much more strategic way than we thought we would have to in the past.

Wonderful. Okay. And what's one piece of advice you'd give to your 20-year-old self?

Don't party so much and work on, work on your business more. That'd be one. I'll give a more, I'll give a more meaningful one though. I would say be confident in, in a niche, like niche down. That to me, we talk about the struggles of the agency. I was so worried. I was trying to be everything to everyone with the business. Because I was so worried about revenue and cash and just making a sale, I was too afraid to go after a niche. I know if 20-year-old Russ had gone, you know, launched an agency targeting artisan cupcake manufacturers, I would be a $10 million agency considering like how big that niche is now. But I was too afraid to niche down. And now with Design Pickle, while we don't niche in the industry, we niche with the kind of design we do. And that has been game-changing because I know exactly what we do well. I know what we don't. I'll say no to clients if they need anything outside of that. And it's extremely powerful for making a lot of decisions in your business.

I love it. Okay. And what's one must-read book you'd recommend to everyone?

Deep Work by Cal Newport.

Good book. We've had Cal on the show in the past. So if you guys want to check out that episode, it's a great one. Cal actually does not have any social media accounts. As far as I know. So that's how focused he is on doing great work.

He is one of the 2 newsletters that hit my actual inbox, is his and one of my friends'. So yeah, great book. Well, I'm going to have to go listen to that interview. I'm kind of like a fanboy of Cal a little bit.

Yeah, absolutely. It's there and ready for you to listen to, man. But Russ, I mean, this has been fantastic. Everybody, you should at least go check out Design Pickle if you do ads in any type of capacity or any type of design that you're going to do over and over. I would highly recommend checking it out. Russ, what's the best way for people to find you online?

You know, any social media handle is going to be Russ Perry, except for Snapchat, which I'm just learning, and that is Design Pickle. So that's the best way.

Wonderful. Well, Russ, thanks so much for doing this. I hope everybody goes and checks out Design Pickle. Thanks again, Russ.

Yeah, thank you, Eric.

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