Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, this is Paul Kemp. This is the show where we go around the world and get the most fascinating serial entrepreneurs, inspiring startup founders, and anyone who can help us in our lives as we pursue our dreams of startup lifestyle or maybe living independent from a corporation.
If you are in a job and you're wondering what is going on in the startup world, then this is the show for you, and in fact, this is the episode for you, because I have got a wonderful guest for you. This guest is a serial entrepreneur, he's an actor... It's a shame this is audio only, because I'm sure if you could see him you'll know who he is.
He's a startup founder, he invested in lots of different companies and has a new startup. His name is Nathan Raffel and he is with us today on The App Guy Podcast. Nathan, welcome to The App Guy Podcast.
Nathan Raffel: Thank you so much for having me, Paul.
Paul Kemp: Let's talk about the big one then, the Chevy commercial; that's what you're famous for. How did you get that gig?
Nathan Raffel: I got really lucky... Chevy came to New Orleans and I didn't know it was the Chevy until I pulled up in the parking lot and there was a bunch of cameras and a Chevy. We were told that it was a focus group, and they were just walking around the quarter with iPads. They interviewed me on an iPad, then I got a thing saying do I want to make $200 to go to a focus group? I was like, "Oh yeah, I'll make $200 to go to a focus group."
I went in the focus group, and it was like a filming thing. They were putting mics on us and filmed us... It was funny.
Paul Kemp: It's funny how sometimes for all of us life plays a funny hand, and you just have to go with it. Nathan, we are a bunch of app entrepreneurs, but you are extremely successful with eCommerce businesses. One of the things we find it hardest to do is to think about apps in an eCommerce way. Maybe you could tell us a little bit about the eCommerce businesses you're involved with.
Nathan Raffel: My first eCommerce venture was just selling online for my ex-wife and I's bakery. It was then called BB's Patisserie and we did health food, gluten-free, allergy-friendly things, stuff that was safe for diabetics... That was my first eCommerce experience.
Honestly, it's so funny... Back then, I really wanted an app. I guess it was 6-7 years ago (2011) that we first made our website, and I didn't have that... So I used a baby version of the Magento. They had a Magento Go thing, kind of a cool little backend to build your store on. It was pretty easy to keep up and it was clean.
I used that, and we started testing back then Facebook ads, and it wasn't really as big of a thing, it wasn't really converting as well, and Instagram or anything wasn't there, so we tried doing SEO stuff, and Google, and that was really the only way that we really got any traffic - doing it a little bit old-school. Six, seven years ago was forever in tech terms.
Paul Kemp: You know, Nathan, what would be really interesting is working out why you wanted to start an eCommerce business. I think the back-story is relevant in that many of us coming to this show think that we can just build an app; we don't have to worry about monetization, we don't have to worry about making money.
Then we build the app, we spend a load of money, maybe put our credit cards into debt, and figure out "Oh, we're not making any money." So what's the benefit of getting into eCommerce?
Nathan Raffel: It was the exact opposite. We had a physical location, and I just started noticing that we actually had people who would drive from Houston or Alabama or Mississippi to come just to our store, because we were making food that really wasn't sold not only in our city, but in our region, and it made sense that those people would probably just not want to drive and have stuff shipped to them.
For me it was purely a functional decision. I had customers who were in an increasingly broad radius and I wanted the simplest way to take those orders and get it to them. I didn't want them to have to drive. It was honestly a customer service move for me as a businessman.
Paul Kemp: Nathan, that's a genius thing, because often we kind of look at tech as like this hidden amount of users and customers, but here you are solving a real problem, which is a big theme of this show, by the way... Which is you have a physical location for your products and you feel like you want to help the users by giving online presence.
Nathan Raffel: Yes, I very much intersected with tech through business; I don't really have any type of background, but just because I've somehow not failed as an entrepreneur in a pretty crazy economic decade... I've been through a lot of changes during my 12+ years of self-employment. I feel kind of blessed, because I kind of sit at the intersection of tech and a couple of spaces, like tech and music and tech and food.
One of my first real travel experiences was when I got invited to San Francisco to speak at this food hackathon about startup entrepreneurship. It's really interesting that since then tech has just kind of become an integral part of my life, and how much I've been drawn back to Silicon Valley.
I think the way that business owners like me solve problems is incredible and it's old school and it works, but there's also innovation in the water out there... The creativity with which Silicon Valley approaches problems is staggering to me. I love it.
Paul Kemp: You're going to have to explain a bit more about this food hackathon; I've never heard of a food hackathon.
Nathan Raffel: The food hackathon is the brainchild of Tim West, who I'm grateful for; he gave me an amazing opportunity when he allowed me to speak in San Francisco. It was around Battery Street... I don't remember the name of the place, but I remember it was around Battery Street, kind of downtown San Francisco.
Basically, the same way people would take a hackathon to solve a problem for an app or a coding challenge, he basically wanted to hack the food system. "How do we get food into food desserts? Can we use some Microsoft APIs? Who can we have there?" They had corporate sponsors and they had lawyers, accountants... He called it a hackathon, but it was more like a food business incubator bootcamp. It was incredible, the people that Tim West had brought together...
I think it was either October or November 2013, and it was really cool for me, as someone operating in Louisiana, how much Silicon Valley and data and technology had an impact on our food and on a larger scale. That was really my introduction to technology.
Paul Kemp: That's wonderful. One of the things I want to touch on is that a lot of us get distracted with our businesses, because it's all focused on tech and not perhaps too much on the end user. I wondered, as you go into companies, what's the biggest distraction you see for new startups when they've got something going? Tell us what the distraction is for them.
Nathan Raffel: It's two things. It can be the romantic relationships of the founders and money, at a startup level... Because at a startup level often you're not looking at more than a 2-4 person team, so the whole startup lives and dies by the people running it. I think often times in tech we overlook the human elements. Even though these are codes that run, it's humans with lives that program them. I really try to focus on the human elements.
People who don't have enough money are operating from a fight-or-flight position; they're in a scramble and they're not thinking clearly. It's the same thing as someone who's in a day in, day out unhappy situation romantically. Those are really the two biggest pitfalls, I see. I see people tripping on their own shoelaces because of personal problems.
Paul Kemp: Yes, because we often neglect the human side in a lot of this... This is why we do this podcast - to bring the human side back to technology and to the startups that we explore. How can a startup interfere with the personal side, the relationship side?
Nathan Raffel: I think especially for guys, there's very much a societal breadwinner role where men who aren't making a bunch of money during their startup phase often feel a little bit more insignificant. A lot of times a startup guy can have a girlfriend who's waiting tables and making more money than him...
I feel like that's a horrible thing, that men are that insecure, but often times it plays up into people's own insecurities and they fall victim to them. I think that's why there's kind of been this entrepreneur-chic the last five or six years, but it's not something that really everyone is cut out for. It's very scary whenever the buck stops with you, and actually if you don't get enough money in your bank account by day X, then you're screwed, and it all falls on you.
I think that everybody wants that sexy entrepreneur lifestyle, but there's not enough conversation about all the stress and the collateral damage that that can cause to the people around you, during your rise to success. There's a general misconception in my opinion that success happens overnight. It's often a decade or more in the making, in my opinion.
Paul Kemp: Yes, and this is what we love, opinions like that, Nathan... Because we're trying to unravel the onion and reveal the true nature of what it takes. In my experience as well, it's quite hard to transition from a corporate job where you don't have to worry about any money; you have it every month, and you just pretty much have loans to pay off that are covered by your salary... And then to go to the point where it doesn't matter how hard you work, the money doesn't equate to the level of effort that you put in.
Nathan Raffel: Yes... I remember I was in my early twenties when we first opened our retail place with that food company (BB's)... We had like 14k/month of overhead and we were covering the overhead but we just weren't making any money; it just felt so crazy to me to look back at the end of the year and just see "I made a quarter million dollars and I have nothing to show for it." I was like, "Oh, my god... How did I see this much money? All I did was pay the bills every month, and now there's nothing left." I was like, "Man, where did that quarter million dollars go? I want it back! Give it to me!"
Paul Kemp: Nathan, we have a lot of new entrepreneurs listening to this show. They're often building something from the start, and it can be really challenging at the start to find demand and nurture demand. You've built things up from the start... Do you have any recommendations or suggestions on how to find demand?
Nathan Raffel: To start with a personal problem, one of my favorite stories of one of my friends who solved a personal problem is my friend Partha. Partha Unnava has a company called Better Walk crutches. He reinvented the crutch so it doesn't dig into your armpit. A few years back he was on crutches, and crutches are really uncomfortable; he just realized "This is stupid. The crutch hasn't changed since the 19th century. Why is it that we had an industrial revolution, we've got cell phones, Facetime... Why are crutches still uncomfortable?" He solved that problem, and he's been very successful simply because he started with a problem that he personally cared about.
Whenever you start with a personal problem, you're inevitably starting with the user experience. I think that's what missing... Too much people start an idea based on a dollar sign, and you simply can't do that. In real business (not in theory) profit is a byproduct of a well-run operation. The end.
You have to think about the user experience and doing right by your users in whatever it is - an app, a retail store... If you do right by your customer, then you will do well.
Paul Kemp: I feel like this is what we often neglect, especially on the app store. We often see the most successful apps and we come in very naively and think "We'll easily clone that and do it better", but we're neglecting any kind of personal problem that's trying to be solved. Going back to what we were talking about at the start, we're not seeing the humans behind the technology.
Nathan Raffel: Yes, that's a very important thing to remember. It's easy to look at someone as just the amount of hours they're spending on a certain app, or how many in-app purchases they're making and what that can do for you, but even data... All this stuff in tech comes from humanity; it's just being quantified.
Paul Kemp: Here's one for you, Nathan... Here's a dilemma. Say you are about to start again - do you focus more on the product or do you focus more on what the user is trying to get out of the problem-solving?
Nathan Raffel: I think that depends on a thing... If I'm doing an event where I want to educate people or something, then I'm going to center that on option B, around the user, because events are just very experiential. In Partha's case, Partha had to first design the product before he could go and give it to users. So it kind of depends on the particular problem. I think it's an either/or.
Paul Kemp: Right. The other thing is because there's just millions and millions of apps on the app store, there's tens of millions of developers, there's often a race to the bottom. You have a good idea, you solve the problem, you put it out there, and then you have ten clones around you. How do you deal with competition in technology? Copycats, and that sort of stuff.
Nathan Raffel: I think that's when you go back to good old-fashion marketing. Everybody has done everything, everybody has had every idea by the time you put out an app. If that app isn't out there, there's six other teams working on that same app right now, bar none. There's nothing new under the sun; someone else is thinking of it right now... So it's old-fashioned branding and marketing. If your real estate is that little icon on that screen, if that's your whole retail store, if someone has to see your icon versus the next icon on that app that does the same thing, then you need to figure out how you put your whole experience and your whole brand under that icon.
Look at Facebook, Twitter, Snapchat... The icons for those apps are iconic.
Paul Kemp: Yes, and I'm reminded in the app world of when Uber changed their icon, and there was uproar; it was horrendous. They had a wonderful U on the icon, and then they changed it to some weird thing. Anyway, it didn't affect them too much.
Nathan Raffel: It wasn't a large gap of time between that and a lot of changes in their culture, too. I don't think you can overlook the importance of a logo and a brand. The logo is a very, very important part of every company, that needs to really effectively represent what the company stands for and communicate that in a clear, concise way to the consumer.
Paul Kemp: Yes, and I'm reminded of... We've just recently launched an app of my own, a video app that I'm involved with, and we did a lot of split testing on the logo. We ended up going with an icon that generated three times more the number of click-throughs... So yes, it's important stuff.
Nathan Raffel: That's the best way to find that stuff out. That's the way I've really been working data into my own decisions - split testing. It allows you to remove the conjecture and the fear. Whenever I started doing business without data... In a retail store, you're just guessing what's going to make somebody walk into your store. If you put something in a magazine or on a billboard you have no way to measure the ROI.
Once I went to San Francisco and found out I could do digital advertising and track everything and track my customers, I was like "Oh my god, this is it! This is so much better!" I saw the light. Tech is great for business.
Paul Kemp: Nathan, as we wrap it up in the last few minutes here, I'm really intrigued... You've mentioned marketing and you've done a lot of digital marketing. Is there any particular standout campaigns that you would have done that you remember that went really well for a particular business you're involved with?
Nathan Raffel: No, to be honest I've never had a home run. I've sold stuff online, but I haven't had that campaign that went viral and I sold 100,000 units in a month. My successes in business lie in my opinion more on just somehow succeeding and mildly profiting in a variety of industries. I haven't had my million-dollar idea or marketing campaign yet.
I actually kind of have a feeling about this thing that I'm working on right now. It's really striking a chord with people. Dads are undercredited, and it's fun shining a light on them and seeing the response. I feel that there's really some potential for virality with that one.
Paul Kemp: Well, let's talk about that. I'm very intrigued, because I used to run a podcast for many years called The Entrepreneurial Dad; I started that whilst living in Dubai with my kids. I was seeing the trend for being a work from home dad and having a different kind of relationship with my kids than I was used to when I was growing up.
What are you trying to tap into with this "Bout Dad" thing?
Nathan Raffel: We're really just trying to tap into making some positive news, honestly. The content we're currently building is just interviewing everyday dads and just shining some praise on just good men doing good things every day. There's just so much divisive stuff being presented in digital media, in traditional media... We really want to create some content that's a little bit more human.
I'm a dad, my business partner is a godfather, but he's from a big family, he loves family... We want to do something to highlight dads and families. It's really a simply well-intentioned project.
Paul Kemp: That's wonderful. Where can people go to find out about that?
Nathan Raffel: It's http://boutdad.life. That's it.
Paul Kemp: Wonderful.
Nathan Raffel: Shouts to Teespring for the very, very easy eCommerce setup. God bless Teespring!
Paul Kemp: Nathan, it's been a wonderful chat. How best can people reach out and connect with you? What's the best way of getting in touch?
Nathan Raffel: Facebook - my name, Nathan Raffel. Instagram, Twitter and other things - N.RaffelOfficial or just NRaffelOfficial, some variation of that. My e-mail is just firstname.lastname@example.org
Paul Kemp: Nathan, it's been a real pleasure, a real joy. It reminded me why I do this podcast. Thanks so much for taking the time to come on the show, and all the best!
Nathan Raffel: Thanks for having me.