Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is the show where I help you, as a potential entrepreneur, a solopreneur, a startup founder, maybe you've got a business of apps, or maybe you're just intrigued about what happens in the world of business and entrepreneurship.

My job is to go around and meet some of the most amazing entrepreneurs and try to deconstruct their journeys so that we can learn for ourselves. To do this today, episode 521, I've got a wonderful guest. His name is Alex Quilici, and he is the CEO of YouMail.

Let me just give some background to why I'm talking with Alex. We're going to go through YouMail, but he's also in his past co-founded a company called, and get this - he sold this company within 18 months for 200 million dollars to AOL. He then actually helped AOL with multiple product launches, and they managed to get over one million paying subscribers... Loads of wonderful history that we can tap into here to help us out. Alex, welcome to The App Guy Podcast!

Alex Quilici: Thank you for having me on.

Paul Kemp: Thanks for coming on, as well. You're incredibly successful... I want to start off by just talking about what you're doing now, YouMail, and maybe after that, we can go through your history. What is YouMail?

Alex Quilici: YouMail is a replacement for mobile voice mail that's targeted at the sole proprietor, the person running their own business themselves. The idea of YouMail is that if you're a sole proprietor, you get tons of phone calls, but you might be a plumber under the sync - it's hard to answer the phone; you may be a lawyer in court - again, hard to answer the phone, hard to even deal with text messages in those circumstances.

What we realized is these folks need to have a virtual receptionist. They need a receptionist to handle the calls when they can't, so that's what YouMail is - we replaced your mobile voicemail with a virtual receptionist, to provide your callers with a great experience even when you can't get to the phone.

Paul Kemp: What I love, Alex, is when we speak to entrepreneurs like yourself, it's fascinating... You've obviously come out of a very successful sale, an experience with your last company... Why pick this particular idea over all the rest? Did you have some kind of an assessment that it passed? Can you help us through your thinking and why you chose this particular problem to focus on?

Alex Quilici: It's actually kind of interesting because it's not so much I chose the problem, but the problem chose me. After I left AOL, I was doing a number of angel investments, finding interesting companies that I thought were tackling a problem that if they succeeded with a solution, it could be very large scale. And YouMail was one of those companies that came along extremely early stage - essentially, a prototype and a few users. But they had a vision of tackling voicemail, which everybody hated, with a better service.

At the time, the key things were you get voicemail in the cloud, so you can pick it up both on your phone, but also on your computer, sort of a very early idea of visual voicemail... They had the notion of different greetings - a public greeting that most people hear, but private greetings that your friends and spouse and others could hear, and it just seemed like it was kind of an innovative take on something that had been basically frozen for 20 years.

You look at that and think... Voicemail may be going away, but the phone calls are probably not going away, so having a platform that you could use to try to give a better experience when you're just too busy to answer call, but there needs to be a call, and being able to do that at enormous scale, because everybody has a phone number, and everybody in business at least cares about phone calls - that was just too good an opportunity to pass up.

I invested in it, and long story short, I wound up running it, long story short I wound up putting tons of money into it and trying to scale the business. So it was something I was interested in, it was an opportunity that came by, and I thought "You know, I want to tackle this. I want to see what I can do to make the phone call experience better for people because I'm not one of those who believe that it's going away entirely someday."

Paul Kemp: What I love about this story - I think you're probably the first entrepreneur that we've spoken to that has invested as an angel investor and then gone on to become CEO and owner of the company. That's slightly different from what our usual stories are.

What attracted you to wanting to run the company, rather than just continue to invest and get someone else to run it for you?

Alex Quilici: Well, it's one of those things where initially I wanted to just invest, temporarily run it to help them out, and bring somebody else in. But it got momentum... We started getting some traction at the time, with potentially getting carriers to release the product. We raised almost five million in venture capital on top of a couple million of angel money, we borrowed a couple million on top of that, so we had tons of money to work with... And it felt like "Hey, this is an opportunity where I want to see if I can help change the world."

What's really interesting about YouMail is the first incarnation of it spent a couple of years and a lot of money trying to convince carriers that their existing voicemail product had a bunch of flaws and this was a better solution, and sad to say, the sale cycle outlasted the funding of the company, to some degree.

With the sale cycle, you try to convince you the carriers, you do tests, you work your way up from small carriers to big carriers - long story short, that just didn't work for us. But as we did that, we discovered we had over a million Blackberry users at the time using an app that we built primarily as an example of what could be done with our platform.

It was really interesting, because I'd gone in to go after carriers, came back and pivoted to go after consumers, and in fact, we pivoted multiple times since then, but that's a story on its own.

What really attracted me is I like to build things that a large number of consumers can use, and where I believe that me, my team, our ideas, our development talent - we can actually build something that really makes a difference to folks.

Paul Kemp: Alex, I'm so inspired by this story so far. We have a lot of the appster tribe listening to this who are maybe venturing into their first company, sort of sticking their toe in the water... You've come off the back of a successful sale, you've been extremely successful at AOL... I would love to know what your thought process is and why you continue doing what you do. You could have gone to retire on a lovely beach somewhere. What made you carry on?

Alex Quilici: You know, it's about making a difference. One of the things I personally am interested in is how to help people get their businesses going and growing. In the U.S. there are 28 million people who've officially started some sort of business, whether it's they're a realty agent, whether they're a plumber, whether they're a contractor, whether they hand drywall, whatever it is. They're independently trying to build something up. Initially, it's always business for themselves, trying to take care of themselves and their family, but over time they start getting employees, and they grow... I wanted to be part of that and help those folks, and that's a big driver for me.

I feel like I've been pretty lucky in the success that I've had over time, and I want to help others. In this case, telephony is an area I've got some expertise in, and I just decided "Hey, these guys live and die by the phone call, so let's do that better for them." At least that was the start of this.

Paul Kemp: What I'd love to do as well, Alex, is we have also founders who have companies who listen to this. In fact, I was speaking with one today who sold his company... We very rarely go through how we can sell the company, and I'd love to know tips from you -- you took a company, within 18 months sold it to AOL, which is a big feat... I'd love to know how you would advise anyone else set themselves up to have a successful sale and exit.

Alex Quilici: It's really interesting, because I'd love to come on and say I had this plan, this 1-2-3 cookbook or recipe and it just worked out perfectly. What we did is we said "Where is there a big hole? Something we wish there was that's not there yet." Back then - it was pre-smartphone days - what we wanted was the ability to get digital information on the go. You're in a store and you're shopping, you want to be able to get a better price. Obviously, now you just plug it into your smartphone and off you go through various websites, but back then there weren't smartphones, there wasn't the mobile web... There was just an opportunity to solve that problem of getting information when you're on the go.

We just wanted to build the best possible solution for that. We built a platform, we built essentially a telephony app that people access with a 1-800 number. Just think Siri over a 1-800 number. That then became very interesting to the existing web portals at the time, because they were very big on giving you access on the desktop and wanted to expand on that. The natural place for them to expand was "Let's provide access over the telephone", initially by voice, and obviously they expanded it over time. We were a solution for providing that information by voice, which is what enabled us to sell the company, because we met a core need that those guys had at the time.

If I could give advice, it's making sure you're doing something where you can see and imagine who would buy you. Where are you additive to something a company's currently doing where you have an advantage, you've built technology, you've built something that's hard for them to simply build themselves, and then the natural thing is to buy your company.

It's much easier said than done, but you should always have in mind who might buy you and why. The answer "Well, Facebook will buy me because we're great" is not a very good answer. It's really much more detailed about where are these guys trying to go, what's a likely area or need they might have? How do I fit into that?"

Paul Kemp: I can imagine there's lots of opportunities there, because these big companies - especially Facebook - dominate the app store; Apple, Google - they can sometimes be a little bit slow to identify these needs in the market. You mentioned a couple of things, actually, that are long-running themes of this show: problem-solving, which you made us realize, and also pivoting. Let's talk about pivoting, because that's really hard for some of us.

You get this really awesome idea, and you just can't see changing it. How did you know when to pivot?

Alex Quilici: You know, that is one of the toughest questions to answer, because it's partially intuitive and partially data-driven. For me, one of the reasons to pivot is that you planned your business growing at a certain rate, and it's not. And you look at that and you start going, "Well, why is that? Is it because demand isn't what we thought? What's causing the issue that we're having with growth not looking like it should?"

That's usually the thing that says, "Hm, maybe I should consider pivoting." But then the question is "What do I pivot to?" That's where you look at the market, you look at your assets and you start thinking "There seem to be areas that are moving faster where I could contribute more to... Let's see if we should be thinking about doing a pivot to go in that area."

I'll give you an example... When we did Quack, originally we wanted to be a consumer portal. We imagined Quack as the destination. People are going to call our number to get all the information they want. But building a destination site is extremely difficult; getting people habituated in the behavior to call a phone number or even call a particular website... You see the enormous sums of money that people have to raise to do that sort of thing.

So we started thinking, "We built a great platform... Maybe what we should be doing is talking to the providers who already have content and becoming the way they get that content out on another channel." So instead of being B2C, directly to consumers, "Let's see if we can convince these large scale businesses that we're a solution." The minute we made that pivot, very quickly we had opportunities and we're starting to get a lot of interest in what we were doing.

That told us that that's the right way to go. We've done the same thing with YouMail. We tried to go after carriers very hard; we probably pivoted too late in that regard, but carriers take a long time, so it's hard to know you failed until you failed... And we looked at that and said, "Well, we've got data showing us that we've got a lot of consumers using our app with no marketing. Hm, maybe there's ways that we can organically grow off the consumer base and focus on that." That had a lot of advantages - not having to build at the scale of a carrier right away, you're not dependent on outsiders buying your product, or deciding to implement your product, like at a carrier; you're going after consumers directly.

We saw a lot of traction as we started focusing on that area, even thought at that point we had very little funding and we were sort of back to gorilla to grow. It's one of those things - set up your expectations on what you think you're going to do. If you're not hitting them, really carefully analyze why, and then look around you to see if there's an adjacent area that can leverage what you've got where you think you might have a better bet. It's much easier said than done. A lot of times you tell the story, it makes it seem like "Oh yeah, of course we knew", and it's a lot of like "Well, let's try this little thing, let's try that thing" and eventually Boom! You've decided you have to pivot.

Paul Kemp: Alex, I'm thinking... We had a wonderful chat quite a while ago now with an angel investor called Chris Jones. You're an angel investor, you've been one... I wondered if you could give us some idea of the criteria that you use when investing in a tech company in particular. Do you have a school of thought about what you will or will not invest in? Maybe you can give us some ideas on your thinking.

Alex Quilici: Well, let me first do a little bit of a disclaimer... I've done some angel investing on my own, and I've had a couple of winners and a fair number of losers. What I ended up doing was actually starting to invest in angel funds, where you've got the wisdom of crowds helping pick out what the right investments are, just because I think it's very hard to pick 5-10 companies on your own as an angel investor; it's much easier to invest in a fund that's investing in 50-100 companies, where you've got 100 people contributing ideas and helping decide what's good or bad.

I think being an angel investor is actually really hard, but what I've noticed is the companies that seem to be successful generally have a problem that everybody agrees it's a problem... It's either every consumer would agree it's a problem, or every consumer of a particular segment, or every business in a segment... It's obviously a problem. They've got some unique solution to that problem; it's not there's a hundred solutions, but it seems like there are the one or two that are really working on that.

Then it comes down to the team. Do you believe that the team that's building this technology can turn it into a company that can really hit scale while solving a problem? That seems to be the core. A big problem, some sort of unique approach to that problem, and then a team that you believe can carry on and get traction and move forward in this space.

Paul Kemp: How about this then? We do have people who have made money through selling companies, who have been on this show and listen to this show... How can we help those people avoid losing money? Because I can imagine... There is this trend that you end up having a successful exit; you're not quite sure what to do... You end up investing as an angel and then backing a load of companies that are similar to what you've done, but then lose money. So how is it we can actually help people from losing their money after having a successful exit?

Alex Quilici: I think that the thing to remind people is being an entrepreneur is different than being an investor. When you're an entrepreneur, all your eggs are in one basket and you're watching that basket and you're moving forward; you've got a domain you understand well, you've got a company you understand well, you're putting everything into a single space, a single area.

When you're an investor, it's almost the exact opposite. You want to know a little bit about a lot of companies and be able to look at big trends in things to find the winners. I find that to be the biggest challenge - explaining to people that they're not in fact investors just because they sold a company and did well doing that. Some people are, but just because you can drive a race car doesn't mean that you can drive a motorcycle; they're two different things.

Paul Kemp: Yes, I love that. In fact, before the podcast, I used to work in investment banking, and we did have quite a few investments. I'm reading a book at the moment called Unshakeable, by Tony Robbins - wonderful book. He's interviewed Warren Buffet and all these others... He comes from investment as "Try not to lose money first." That's the first goal - don't lose money.

I wondered, with app entrepreneurship, with entrepreneurship in general, we never really think too much about protecting the downside, we're always going for the big wins. Is it important to protect the downside?

Alex Quilici: You know, as an entrepreneur you really want to focus on the big win or making a difference. As an investor, you absolutely want to protect on the downside. One of the things I realized is you don't want to put more than a certain percentage of your assets into extreme early stage investment. It's very risky.

The single biggest thing to protecting the downside is avoid putting the money in at all. Put 90% of your assets into safe things, whatever they may be, whether it's a normal stock market or bonds, houses, real estate, whatever... 5%-10% is what you're willing to actually go bet on companies. That helps you a lot, because I feel like when I invest in angel investment I have to be prepared to lose it entirely. You don't want to go into an angel investment hoping to get 7% a year as a return, it's just not interesting. You want big winners, and you can't have big winners without big losers.

It's really about deciding "How much am I willing to really roll the dice on?" and viewing it that way.

Paul Kemp: Alex, in the last few minutes we have... You've been in this industry for quite some time now, and you've seen a lot of things. I just wanted to know if you had any views on trends that you're seeing, especially in telecoms, with apps in particular and mobile. Are there any particularly interesting trends that we can flesh out to talk about?

Alex Quilici: A lot of the trends that people talk about are kind of big movements. There's a movement in communication to do everything by video, right? I think that's a big one. People are trying to figure out how to interact more with video. My 9-year-old and my 11-year-old - they love Facetime. They just communicate by video very naturally, but a person who's a plumber doesn't communicate by video very naturally. But video is expanding everywhere, so one of the big trends I see is how does video take over more of our business type interactions? It doesn't do much now.

For me, what I look at is I see these big trends that everybody else sees - video everywhere, augmented reality, virtual reality etc., and what I find interesting is how is this actually going to become a part of how consumers and businesses communicate? And I think you're going to see some really interesting, surprising stuff over the next few years, as people sort all of that out.

For example, ten years ago you wouldn't have imagined texting your dentist for an appointment, where now that's becoming the kind of behavior that people expect. Some people expect to call, some people expect to text. I'm just imagining more and more of these channels of communication opening up, and it'll be really interesting to see how each of those channels work, and then how all those channels get integrated to have a really compelling overall experience for that poor guy trying to run his business.

Paul Kemp: Yes, and I can imagine it won't be very long until Google or whoever looks at our calendar and says "Hey, it's been six months since you had your last checkup. Let's book automatically an appointment for your dentist." Life is curated more and more.

Alex, we're getting towards the end, and I'm fascinated with just how incredibly successful you've been and what you're jumping on now. Is there anything you feel that we've missed to talk about that could help the entrepreneurs, solopreneurs that listen to this show?

Alex Quilici: I think the biggest thing I learned... There's a couple things: one is don't give up. There's always dark points; for us there's times we're almost out of money, there are times where a deal drops through... You can't let all of those things get you down, but the related part is that if you're having enough problems, you should be thinking about how you can pivot to a greener area where there might be fewer problems. So the key thing for the entrepreneur is don't get too depressed, but get depressed enough to switch if something isn't working well for you in the path that you're taking.

If you keep doing that, you'll eventually find some level of success, and then you need a little bit of luck to turn it into a really big level of success.

Paul Kemp: I love that advice, and especially pivoting, because a lot of the appster tribe are struggling on the app store. Their only idea is to monetize an app, and we know that it's becoming harder and harder to make it on the app store, given the level of competition and the dominance of the big companies.

Alex Quilici: The thing to think about there is that the odds of winning the lottery are one in a million, and now there's over a million apps in the app store... So the chances of just putting something out and having a big winner are -- you should almost buy a lottery ticket. So you really have to have a core problem and a strategy to try to grow your app, and that requires patience and that's very difficult for people. It's no more just build an app and Boom! It's going to be a big deal. It's a lot more than that to build a business out of an app.

Paul Kemp: Alex, this is episode 521... For the appster tribe, you can go to and search for Alex Quilici and you'll see links to Alex and YouMail. I just wondered, though, Alex... How best can people connect and start to play around with YouMail? What is the best way of getting in touch?

Alex Quilici: Right now YouMail is interesting because it's a U.S.-only app. We sort of support Canada, but more at a beta level. So the best thing is visit either app store, if you're in the U.S., download the YouMail app, and you can run it and get it going really fast, a couple of minutes... Just watch it change your life if you're an entrepreneur that gets a lot of phone calls.

Paul Kemp: Great. Okay, that's YouMail - go and download it from the app store. And actually, why not rate it as well? Getting reviews is always important.

Alex Quilici: Positive reviews are good.

Paul Kemp: Yes, we love five-star reviews, we don't take to anything less. Alex, thanks very much for coming on The App Guy Podcast, episode 521. All the best with YouMail and I can't wait until you start rolling this out globally.

Alex Quilici: Thank you very much, I enjoyed the show a lot.