Then the Bebo's always thought this was now generally 2005 in 2005 and it took only a couple days to develop it and we went live and we had a million users after nine days. Bebo, Bebo, Bebo, Bebo, Michael Birch. Bylo and Selhi. Bebo has won million global users.
Media giant Time Warner is buying the social networking website Bebo for $850 million. Alright, I'm recording this. I just finished my conversation with Michael Birch. For those of you who don't know, Michael is an internet entrepreneur.
He built a social network back in the day. He competed head to head against Facebook. And although Facebook won the war, Michael didn't end up too bad. That company, Bebo, who we heard that before, sold for $800 million to AOL.
And when I met Michael, we got back together and we bought it back for $1 million years later. And then we actually sold that again just now to Amazon. So I've had an interesting history. I've worked with Michael for six years.
He was my boss. Then he gave me his job to run the company. He's my investor. He's my friend.
He's a mentor. I've learned a lot from him from building companies to investing. I mean, he's invested in 75 plus companies. Things of Pinterest.
He won the first investors. Calm the meditation app. He was an investor when nobody believed in Calm. And he's done all kinds of crazy things.
He's built hotels. He bought a private island off of Richard Branson. He has tons of money to different charities like Charity Water that he supports. He's a very, very humble guy.
You guys are going to hear that. And you're going to hear the humble beginnings when he quit his job as a programmer at an insurance company and made the leap of faith to build his own company. He wanted to work for himself. He wasn't planning to become a billionaire.
That was a great outcome. He really just wanted to work for himself and not have a job. He wanted to work on things he was interested in. We talked about the years of struggle, all the different ideas he had.
It's almost sort of in the weeds. But I think a lot of people have talked about his success with Bebo and the big sale, $800 million bucks. Very few people have heard the backstory before that about the different products that he tried to build, the failures, the learnings, all that good stuff, before he had his big breakthrough. You'll also hear him talking about viral marketing or viral products.
And for those of you who don't know, it's a method of growth where instead of doing ads or sales or paid marketing, you are relying on new users to send the product to other users. So things grow through word of mouth just from one user to the next. And Michael was really a pioneer of this. Before people were even saying viral marketing, that's what he was doing because, you know, like you'll hear him talk about, he didn't have the money and he didn't have the sort of sales skills.
That wasn't fun for him. So he really focused on building products that would grow, just be a word of mouth, or user spreading to other users, which is kind of crazy. So he's a real legend in the growth world for that. So I think you guys will really like this conversation.
I had a great time doing it. Enjoy. Audience wants to know who we're sitting down with today. So just tell them a little bit about your Michael and...
Sure. I'm Michael Birch. I'm a 49-year-old hippie. I'm originally from a little island called England.
I've been living in San Francisco 17 years. I've been doing internet stuff since 1999. Just startups early on and then went on to a few and obviously kind of culminated in selling Bebo 11 years ago in 2008. And then since then doing a lot of investing.
So that's a very brief polyticity. Yeah. Before I even met you, I moved to San Francisco for you almost. I was living in Australia.
I wanted to come to the startup mecca. I was like, okay, if that's where all the action is, I just got to go there. I don't know much else besides that, but might as well go where the action is and then figure it out from there. I had never heard of you.
I never heard of Bebo before, but I really liked the idea lab you had created. And so I started doing some research and there's not many podcasts or interviews of you online. Do you like doing these? Or you're doing this as a favorite to me?
Because there's not much out there, but your story's really interesting. So what's the catch? I don't mind doing them. I just sort of question why I often would do them.
I don't do really any conferences now. So I tend to do a lot of talks. I'm actually heads down doing a little bit about that later again. Well, you've done some interesting things.
I know you did a BBC documentary like what was it called? How to Be A Billionaire or something, right? Yeah, they didn't tell me what they were going to call that documentary. They didn't actually quite know what you meant.
You might even call something like that. But they threw the word billionaire in it. And I'm like, oh no. This is not what I wanted to do.
I'd already filmed it at that point. When I first looked you up, I was like, wow, this guy sold a company for $850 million. Not bad. I want to do something like that.
I should just go work for this guy. Maybe I can learn something from him. So I think that there is something to that spark or that initial motivation, even if you don't have much else to go on besides that. I would agree with that.
Did you have anything like that when you took the leap of faith? Because if we rewind the clock, your story starts where, I think, 1999, you're working as a programmer for insurance companies. Correct. As boring as it gets.
That's pretty kind of a low point in life. I think. So hard to get much better than that. And how did you get there?
How did you even get into that position? So originally I did a degree in physics and Imperial College in London, which I found quite a few people sitting in value, sitting in physics for some reason. But I had no interest in doing physics. It's one of those subjects that unless you're at the top, like 0.001%, it's probably not that interesting.
You're doing boring experiments or something. And I definitely wasn't in that top, even 1%. But I got a good degree. And then I left college at the time.
That was kind of a mini recession in the UK. So the job market was hard. And my brother was working as a programmer and insurance company. And he said, why don't you come do this?
You'll love it. And he was like, poor, that's fucking programming. I don't fucking insurance company. He doesn't get more boring than that.
It's like one boring thing on top of another. It's exponentially boring. He said, no, trust me, you'll like it. It's not like I have a lot of other offers.
So I'll go and do the interview. And they'll like a graduate intake scheme where they employ 10 people at a time. And they cleaned you on the job. So I actually wasn't one of the top 10, but one of the people didn't accept the job.
So I was number 11. I was a backup guy. And I got the job. And then I learned programming Cobol, which is a pretty old school.
And so the insurance company of programming, which is. Yeah. And a little bit to my surprise, I actually really enjoyed it. I didn't particularly enjoy insurance.
I was fairly correct on that one, but the programming side, I got into it. So I didn't love Cobol. But I did like a six-week training course and then immediately picked up a book and learned another language and studied programming in that instead. And I joined a data warehousing team.
So I was analyzing data and I became friends with the chief actually at the company and started doing all this stuff with him. And kind of enjoyed it. I actually got into it. So then I found myself a programming insurance company, somewhat enjoying work.
And so that sounds good. Why switch? Why leave? Well, my father has always been an entrepreneur.
What did he do? He was a boss in his 30 degree in botany, worked for a company in the UK called PBI, sort of rose to like number two in the company, but would never get the top job because the guy was not leaving and was very good. Still alive. He'll be alive.
No. He wrote the world's best selling paperback, nonfiction paperback books, like gardening expert books. So he was a hard guy to replace. He did that for a number of years and then left and started doing his own consultancy, but was always like coming up with new ideas and inventing ideas.
And he did one was a new type of dental floss that was made out for a special type of rubber. So as you stretch the rubber, it would get thinner and thinner and go through very tight teeth and things like that. And so he took a few products to market. He never found that like one big thing that you never found like every time and money.
So he always continued working doing the out-quarching soldie and running. And he was working from home and my bedroom was next to his office. And there was like an integrating door that was kind of open, but I could kind of hear everything. And so I'd always listen to him on the phone, like coming up with the next idea and speaking to someone and I actually found it quite intimidating.
But at the same time, I kind of loved it. Like I wanted to be able to do that. And so I went through a fairly normal childhood, very middle class suburban family. Again, a little bit dull.
It defines my early life and went to university and got his job. And then I realized that it's very hard to be entrepreneurs for sure. I mean, not that you can't do it, but it's not exactly the world of entrepreneurs. Right?
The time it doesn't. Whereas computers were clearly evolving and becoming more relevant. And the internet was like in its early days, not when I wasn't really around in any meaningful way when I started. But then as I kind of went on, it was becoming a real thing.
And I thought, this is it. This is my chance to kind of do what my dad did and be an entrepreneur. And even have to phone anyone up. I can just like learn a different language and start programming and build a website.
And so was there like a specific day? You remember that you're like, okay, this is my last day of doing this. I'm going to take the leap. Yeah, pretty much.
There was a guy I was working, I left insurance a little bit of work for Mothercare, which is a retail chain in the UK doing data analysis. And there was a guy there building internet stuff and he was starting to show me HTML. And I was like, oh, this is cool. Yeah, it was a good stuff.
Yeah. I started like reading some books and doing a bit of a development. And my wife, Stochi, got pregnant with our first child. It was born obviously nine months later, it was about a day ago.
And it was a maternity leave time. And she was like, leave a job. And I was like, that's not fair. Well, I should get to see that home.
And so I pretty much handed him my notice at the same time that she gave that data. So you went the opposite way as most people were like, oh, I'm having my first child. I need security. I need to provide.
You're like, no, I want to be at home. That wasn't lost to me. Yeah. Or her in fact.
I mean, we were both of these stable middle class families. And we knew that it may not go well. And we may run out of money. But we also knew we weren't going to be homeless.
We knew worst case scenario. I mean, we talked about it. Worst case scenario. We go only with one of our parents apply for another job.
We'll get another job. We're young and we'll start working again and go back to our kind of former life. But it sounds silly. We didn't feel we had anything to lose by doing this.
So was it like a negotiation like, give me give me X amount of time. I'm going to see if I can make something work. Yeah, I'd say three months. That's it.
I recommend not saying that. So you asked for three months. How long did it actually take? It took three years.
And so when you just rolling thing, like, I'm just three more months away or what happened? Pretty much. Yeah. You know, it's like waiting for a bus.
You're like, you know, with three months in, it's obviously going to happen soon. And so the goal, like when we left, it wasn't even to make half a million. When I left to do my entire 100% goal was to earn as much money doing my own thing as I was burning, working for someone else. That was the target for you.
Well, we were freelance. We were both working between us. We were making about $300,000 a year, which is great. I mean, it was really good money.
So it wasn't like super easy to get to that level, but also felt that must be achievable. So that was a goal. And then if I could get there, I felt I'd actually be happy just doing that the rest of my life. But then there'd always be that opportunity that maybe you go to the next level beyond that.
And so you were like, okay, if I can make as much money as I'm making my job, but doing my own thing, I'll be happy. And did you have an idea already? Or it was like first day at home, okay, time to think of ideas. I had some ideas.
So the first idea that we started on, and I did it with a friend of mine to begin with, the very first idea. And it was called interview test. That's used to some startups recently doing this. The idea was if someone was applying for a job, a technical job, programming job, you want to know how good they are technically.
So you send them a link with a timer and they would answer questions and do some exercises and you'd find out how good they were at some programming languages. I literally had someone pitch me this idea yesterday. We need a screen or we need a practical test. There are some startups now doing that.
But this was 20 years ago, and I think probably a little too ahead of its time. And we pretty much developed it and never went live with it. Came up with another idea. So you didn't even ship it.
You were like, you got excited about something else. Yeah, basically. And so the other idea, we knew that was a hard one to market. Like it would be a slog.
So the other idea was purely viral. And it was called Lemonlink. And it was a self-outdating address book. So similar to kind of Plaxo type thing, but not software purely web posts.
So we developed that big go live with it. And got, I think by the time we closed it down, I told about 2000 registered members, not the most volatile website ever. At the time where you're like, hey, 2000, not bad. Or were you like, this is really bad.
I mean, it's funny looking back in the 90s, like 90s, 30s, 30s, a million was the whole week. You know, your website. The first million users were the first million dollars. If you could get to a million users, you were like, you'd made it in internet land.
So that's why I picked Million for this podcast because I remember when I was young, all my hypotheticals, like, would you cut off your arm for a million dollars? Because I thought, well a million dollars, that's like infinite dollars. That's all the dollars. And I was kidding.
And I think for many people still today, they're like, shit, find a million dollars. I wouldn't have any problems type of thing. So I think Million is just this fantastical number that exists in people's brain. Million users, million dollars.
Now it's sort of creeping into tens of millions or billions. Yeah, and you don't have to comment on that. I'm still in a million. So you wanted a lending to work.
It's not working. And you're just at home. How are you feeling at this time? You're in a bedroom, you're working on this.
You guys have this about all year. First baby. What's life like at this time during this period? It's a little bit stressful because we didn't have financial security.
But at the same time I was enjoying it. I was enjoying the learning process. I felt I was creating things. It felt like a very creative process.
And our daughter was born during the period of the early startup days. And so we ended up having her to name. Came up with another pivot. Okay.
But you started really? Not really a pivot. And that was all babysitting and so cool. Ladies and gentlemen, if you want to make that first million, you've got to delegate responsibilities.
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That's who we use to organize things for the podcast. Highly recommend checking it out. Basically parents babysit other people's children in a circle. And so you kind of exchange credits within a circle.
Sometimes people use tokens. And so we kind of took that online and created a digital thing where you can find a local babysitting circle and hopefully join one and do it. Didn't really work. What was going wrong?
Is this execution? Is this an European? All right. Nobody knows.
But is it you weren't doing a good job or was it the market? Wasn't there? Yeah. I mean, that one again, now we've moved away from the viral thing.
We thought it would be somewhat viral because parents all know other local parents and they would tell them about it and ask them to join. But it wasn't like ever going to be exponentially viral. I don't know. I mean, I think every startup, every new website we launched, I felt, oh, I know so much now that I didn't know before.
I never know what you don't know. And then the next one, I'd be like, oh, my God, the last one. I don't know what a clue I was doing. Now I think I've really worked it out.
And of course, each time I was wrong. I eventually became true. But yeah, I just went from one to the next. And this all happened relatively quickly.
It wasn't like I was spending one to two years on each spending, maybe six months and then moving on to another. And what were the big things? I mean, I don't even know if you can remember now, but what were the big kind of like realizations? What were those big learnings where you look back?
You're like, oh, shit, I didn't know this. I didn't understand this before. But now I know. Part of it was just going to be technically bad.
I was going to be a little faster and able to build more stable websites. And this is back in the day when there wasn't any kind of cloud hosting. So you're hacking servers and doing the whole shabang on my own. So there's definitely a technical learning, but I think the thing that I should have insisted on and not done anything other than was focused on viral.
Because the problem that we always hit upon was I never tried to raise any real money from anyone that would allow us to have a real marketing budget. And so I was coming up with these ideas that then needed marketing and marketing was not my for-day. Like I'm not a sales marketing guy. And so I was creating products, but then unable to convince people to use them and didn't have the budget.
Even if I knew how to spend that money really wisely, I just wasn't very good at that. So I do a little bit of Google AdWords and that was sophisticated for me. So how do I focus on viral? I could have only become a technical challenge.
But then you've got to focus on products that are inherently viral. So I kind of eventually worked out. You found your sweet spot. You did one other website.
There was another pay to get customers. You write your wheel online. It was called Fendly Wheels. The unfendly wheels website.
Never go anywhere. It sounds like it would be a good bar too. There's only wheels that make great drinks. So that one didn't work either.
And then eventually we hit on an idea. Did you lose confidence at all during this time? Because most people would, you know, I don't have that gene. I'm too arrogant to lose confidence.
I mean, a little despondent at times. You know, I think my friends thought, why don't you go get a job? My friends start having semi-interventions. I mean, the reality was I was enjoying doing this so much more than I ever was.
Like my last job was just a hell of a miserable job. And I just hated it. And this was just fun. I was sitting at home.
I was very self-disciplined. I was working from a spare bedroom. But I would get up early in the morning and then take like a 20-minute lunch break and then work through to kind of a evening house. And just loved every moment of it.
I was like creating something, learning, building that didn't have the financial success. We mortgaged out flat twice. So it went up in value by about $3. So we took money out twice.
Basically lived off that. Okay. All right. So in those trains, you're too risk.
And so you, I like the way you're thinking about that because I've worked on projects in both fronts. I've worked on projects where I'm like, this will be great if it works and when it doesn't work, which is most likely not going to work, then I'm bummed out and I'm like, fuck, that was a waste. But then, you know, yeah, there's learnings, but like I wasn't, if I wasn't enjoying doing it, a it's hard to just wake up and do it every day. And then be then success is kind of dependent on it working out.
And now I've basically made it a mandatory thing where I'm only going to do projects where I enjoy doing them. So at the very least, I have a good time. Yeah. I would always prioritize enjoying work over any financial.
I mean, obviously you do need to do something where you can afford to live. I certainly spend a huge portion of my life working. So if I didn't enjoy doing the thing that I spend more time doing than anything else, what am I doing it for? Some later happiness.
Yeah. You're always optimizing for the future, but never the present. So that's become one thing that it's not always obvious because you're so easy to be like planning. Like I was a John Lennon made this quote famous, like life is what happens whilst you're making other plans.
And I just think it's such a true quote that it's so easy to say, well, once I've done this and then that and then that, then everything's going to be great. And then I'll be happy. And of course, yeah. And the moment of arrival is very finite because you only use really long.
So I don't like optimizing that one moment where you're like, oh, I'm aesthetically happy because that worked. And then like, well, then what? And what do you do next? Something after that?
You finally stumble into, you know, that first thing that starts to work. Describe what that is and how you even stumbled into it. So the website was called birthday alarm. When we did one of our early websites, Lemme Link, one of the options on that was you could enter a birthday.
And no one ever said anything nice about them, like the 2000 members. No one ever said, oh, thanks for creating this. It's awesome. The only thing people ever commented on, I think it was my cousin kind of commented and for New Zealand emailed me.
And I think we used to send out like, we minded to say it was someone's birthday. I said, you might have got to remind us saying it's my birthday. And he said, oh, that's really cool. Because, you know, I didn't actually know your birthday.
And then he sort of sent me a nice email or an e-card I can't remember what. Nice. And I was like, oh, okay, that's cool. So it just kind of stuck in my head that that was cool.
Then we thought, why don't we just why don't we try to see if we can now we're thinking, I'm going to do a whole other website. And all it does is just remind people about it. That's it. Super simple.
Simple as Lemme Link by far in many ways. And we knew, we thought it could be inherently vile because the reality is, if you think about who's birthday, you really know by heart. You know, you're like children's, your parents, siblings, you probably don't know your cousins. You may know one or two best friends but that's it.
But the vast majority of the people you know in life, you don't know their birthdays. Obviously, before Facebook and now you know far too many people's birthdays, but you don't care about. So you have to, in order to use it, you send an email and ask all your friends to enter their birthday. a fair request, not spamming your friends, just saying, hey, what's your birthday?
I want to keep track of it. I want to remember it. And this was back in the day when there weren't a lot of email requests from websites. Like, viral things weren't.
There weren't a lot of inherently viral websites, or people even really trying to do it for some reason. And so you've got this fair request saying, hey, I'd like to know your birthday and people you've minded each year. Can you enter here? The response rate to that email was very good.
And then the next question was, would you like to be reminded of your friend's birthday, the one that just asked you? So a lot of people would say, yes. Well, to be reminded, you need an account. So you create an account.
You want to be reminded of lots of other friends' birthdays. You want to have the one on the calendar? Let's get everybody else. And so then you take them through the email flow.
And at the time, we did copy and paste a link. So we had a little, you should also see everywhere. And like a very short email. So it was more than a link.
It was like a pre-canned email. I don't even need to think of what to say. Yeah. And just a one line.
Hey, I'd like to remind you of your birthday. Can you clear on this link and enter it for me? And so people would copy that into their address book and send it. And it didn't work immediately, day one, but we did some tweaks.
And then we were getting up one morning. This was probably the most excited I've ever been during the online. And then we were just doing a text on any highlight of people. And so as you and I got up one morning, we'd done this little pre-canned.
Do you remember what the tweak was? Or is that? I think it was even around copying and post. Because I think originally we had people entering, like enter all your friends' emails.
Right. T-minus. Yeah. And then we were like, why don't we just do a text?
I think it's my brother's idea. Why don't we just do this text-area boxing and let them copy and use their own email client rather than us sending and getting blocked because our mail server's not listed. And so we got up next one. And so we got up next one.
Let's see how it did. And we went in. And we were like, oh, we're doing. But because we had so few users, the one report we had was a list of names of those who had joined the timestamp at which they joined.
Because we'd get a few people a day. Yeah. So we were like, hey, Margaret was joined. Great.
And so we got up in the morning and then we clicked run on the report and I was like, oh, Jesus, look at that. And all these names were listed. But they were like, within a minute, there were a few, each minute and I was like, oh my God. And then I had to write another report to actually count how many users they were.
I think overnight we'd got a good few hundred users and even then it was kind of ramping up. And so we sort of jumped on down a little dance in the office and we went to the bedroom and kind of celebrated. I was like, we've done it. We've done it.
That's it. You know, 300 users. Not good. But then we thought, you know, this is ramping up.
We could get bigger and bigger. And so we carried on working on it and we got it to the point through the copy and paste mechanism where we're getting 10,000 users per day, which again, back in, this was now 2000. That was a lot of users. And so you're, this is like a sort of match bean stock.
It's like, you know, you just wake up and you get users for free every day. Yeah. It's great. And so at this time there's no business model.
No. But you're like, I'm over the moon anyways because people are actually using the thing I built. Yeah. I was still living with this, this number of a million users in my head.
Yeah. So if you're getting 10,000 a day, we need 100 days and we get to that million. So we just have to wait a few months and not screw it up and we'll get there. And so what happens from there?
Well, we still won't make any money. We were in England at the time and we moved to the US April 22nd of 2002. So we'd been doing birthday long for a while then and we had accumulated a few million users and we were doing, we were just doing through, I think it was tribal fusion ad network. We were just putting ads on the pages.
But it's not the sort of website where you come back to every day. So we were sending a significant number of reminders and we started doing some greeting cards. We thought, well, what's the one thing you're going to do if you know it's someone's birthday? You want to wish them a happy birthday?
So send them a card. So we thought we'll combine, we'll use the viable mechanics of birthday reminders to grow and we'll use the greeting cards to one day monetize in a more meaningful way than we could for ads. And so from the ads at that point, we were doing $10,000 a month in revenue and that was, you know, to pay for our living costs, the server costs, you know, all the business costs and everything. So we were living on sort of in a very conservative manner and we were just about making even on 10,000 a month.
So we hadn't reached the point where we were used to work. But we'd reached the point of kind of financial independence as it were, but not living as well as we used to. It felt like a win. It felt like a win.
It felt like a meaningful milestone. Right. And so we moved to the US. Literally we had two servers.
And you moved because for work reasons or just like reasons? So just from the East Bay. We always agreed with move between countries. We both wanted to experience living in each other's country.
And so the time had come. We're like, well, there's no reason that we can't move. And we thought, you know, maybe not the worst place to do a website. And were you talking to other entrepreneurs, Internet people at this time?
Were you learning from them? Were you getting nobody knew about the environment? I thought, I thought, I thought, I thought, I thought, I'd proven nothing. It was not worthy of meeting other people that did Internet stuff.
So it was literally myself. And so she was also a programmer. We got a job of that same insurance company. So she was helping me on some of the programming as well.
So both of us were doing programming in the early days. And she was doing it between children. We had another child born in the UK before we moved. But yeah, we just made the switch.
So I packed one of our two servers in a suitcase, checked it in, flew it to San Francisco. Went and re-acted it. Who needs the cloud? Yeah, I'd pack your server.
Check it in. We were acting in a colo. I think we were down, synchronized the database. I think we were down for like two minutes.
Well, so I flipped over from the UK to the US hosting. Probably violated all sorts of data. Thousands of birthdays lost. Yeah.
Anyway, we made that jump. And now we're in Silicon Valley. Still not meeting anyone who worked in the Internet space. And so where did things start to turn?
Where did you go from the 10,000 a month to, I believe you got to like 10,000 a day? What was that jump? How did you sort of ramp it up? Because Burger Alarm, the user base grew from zero to, I don't know, where's that now?
It's a 50 million more? I mean, I think we still actually own both of them. I think since its inception, it's probably registered about 200 million users. But over a very long period now, 20 years, pretty much.
Yeah, we're coming up for 20, I think. So it's a long time, obviously a lot of those are not active. We still haven't made the median. So we haven't got that part.
We can end the podcast. We can get that. We were doing it. We were still making 10,000 a month.
We were living in Walnut Creek and East Bay rented an office, like a tiny office. We could both just about fit two desks. We were sharing it with two lawyers. Well, a big office with two lawyers and accountant.
One of the lawyers shouted on the phone along, which was always entertaining. He was a litigation. And so we were there still not meeting anyone. And then a friend of mine emailed me a link.
Guy called Morgan Salden. He still got a friend today. He emailed me a link of Fensa. And said, check this out.
So I clicked on the link. I was like, oh my God, that's amazing. This is really, really cool. And it was just kind of immediately informed by it.
So I thought, okay. So like two minutes later, I was copying the birthday alarm code base. Would you like this now? Yeah.
Change name. It was amazing. 90% of the code. I used some birthday.
We had all this back-end systems and so on. It was customer support and so on. So I started developing this new website. And my friend, so I did that with my friend Morgan who sent me the link.
And my brother was also part of that. And he owned a domain name called Wingo. Wingo.com, which he bought, which is because he could $500. And he said, why don't we use this name for it.
And so I think about two weeks later, we launched Wingo.com as a direct competitor to Fensa. So it was an early, early social network. And kind of applied everything we learned on viral marketing to that point. And I think within, by the time he sold it, we had about 400,000 users.
But we started selling it three months after launch a good day that he sent me that link. Okay. From the day you heard of it. He heard of it.
We were selling our business. And it was definitely a mistake to have sold it. We shouldn't have sold it. I was still only making 10,000 a month.
This was now in current way bigger cost because this thing was far more intense than computer computing power than the previous one because people were spending all day on it. So we have 400,000 users, but a lot of them were active. And so I spent $6,000 on a new database server, which is like a lot of cash to save it. I racked it and we outgrew it the next week.
I was like, fuck, I can't do this. And of course I should have gone and raised money. That wasn't even a consideration. Didn't really think about it.
Didn't even speak to a VC, didn't pick up phone. And then I went to my, we went, so you know, I went to our first ever like internet networking event that we'd ever been to. And the founder of, of, of, of, of, Jonathan Abrams was there on a panel talking about social network and of course, and we were at this event and was just listening. And we spoke to a couple of people and said, oh, we're doing this thing, we can go.
And then two people that night said, we want to buy a window. Okay. Yeah. So one was Ivy Village and the other was a company, Tickle.
Yeah. Not, wasn't like a formal offer, but it's like, we'd love to talk to you about this. Yeah. So I had some follow up meetings with them and ended up meeting the founders of Tickle and ended up selling it to them.
And it took about three months to close the sale. So it took as long to close the sale as it did to build the entire business. Yeah. You can go to the business.
And we were making a tiny bit of money from advertising, but not. And how did you guys negotiate the price? Did you just have a hammer in mind or do they make an offer? They made an offer.
Yeah. It was mostly stock with some cash. So I think we sold it for very little. Again, still I'm got the million dollar bet.
Right. We sold it. I think in, in consideration at the time, I think it was around $700,000. Okay.
And at the time to give some perspective. So friends had just reached that, holy gla of a million users. And we were at 400,000. So we were the second biggest social network in the world with 400,000 users.
Right. And friends that had been valued at, I think 50 million. And we sold it for like, peanuts, really. Yeah.
So I totally should have gone away some money and got some help on scaling it and some money. But we sold it, ended up, the tickle then sold later. So ended up being worth $2 million because the tickle stock went up in value. And this whole time, I'm still kicking off money.
Yeah. And so I went to work as part of the condition of the sale. I had to work with them for a while. I can't remember the three or six months that I would work for tickle.
But I kept birthday long. They didn't buy birthday long. And whilst I was at tickle, now, for suddenly I was now meeting other engineers, other people, other entrepreneurs. And they were doing something which no one else was doing, which was doing the address book importing scraping.
So there was no APIs for like hotmailing Yahoo. Gmail was around then, but very small. So the two big ones were hotmailing Yahoo. Right.
So instead of copy paste this and send an email on your own, you say connect to Hotmail. And it says import your address book. Here's all your email contacts pushed in. Yeah.
And so they were doing a tickled, did a local emode and renamed the tickles at the time that they bought us. But they were doing these online quizzes. And so they had a famous one which was like, what type of dog are you? It went super viral.
Ten of millions of users. What type of dog are you? I can't remember. I don't believe in that crap.
They were doing this thing. And it wasn't, the front thing was it wasn't really working for them. Like they put it live and it didn't really move the needle for them. And I don't really know why.
But I thought it was very clever. I hadn't seen anyone else doing it. So I think they were the first people to do it. So I went home one weekend because I was still working for them.
And I was like, I'm going to put that live on birthday line. So I worked the weekend, put it live Sunday night and then looked at the data like 24 hours later. And we added 100,000 new members. So we were still adding 10,000 a day.
And then 24 hours later, we just added 100,000 members. And I was sort of ecstatic. I thought this is amazing. But then I also thought that obviously you're going to cut me off because it's not, I don't think the heading thing in the terms of use against it.
But all they had to do was block my IP address because it's all coming from one server. And I'm not going to be able to do it. All they got to send me a cease and desist. And so I went live with home in Lanyahu.
And then it just carried on working. And so the next day we added 150,000. I think it peaked at just under 200,000. But it stayed there, stayed at 150,000 for an entire year.
Didn't drop. Every day you're like, today's the day. Yeah. And I kept thinking.
And then every now and then it would actually start working because they changed their code. So we're not doing it through an API. So I'd have to log in and look at their HTML, work out how to delineate the different contacts. And I was like, oh, now I've fixed it.
So I've probably fixed it a dozen times. It worked because they changed something. But every time my heart was sinking. Oh, they blow me.
I was like, oh, no, they just saying something. And so that was definitely like the turning point where we knew would be successful. And then during that period, while I was working at Tickle, I went live with done greeting cards on the website and I was like, we need to start charging for green cards. So we added a subscription was 1395 for an annual subscription.
Or you can send greeting cards. And so we went live with that whilst I think we're still working at Tickle. And then it was always a very round number of zeros for us for some reason. But the first day we made $10,000.
So we went from $10,000 a month to $10,000 a day. So financially, this was by far the biggest transformation in our lives. And so we never really did reach the point of what the money we used to make in jobs. We just went way over it.
And one guy. Yeah, that's how things tend to go, right? It's like, things go from sort of nothing, nothing, nothing, nothing to you overshoot because you've been investing in something that had more potential. Yeah.
And so without first year, we made just shy of $4 million, like the first 12 months of charging. And our expenses were the same. It was still myself and so she in this little office, our colo cost was the same. So we were still living pretty much on $10,000 a month.
But we were making $10,000 a day. And that's when we moved to San Francisco. We can actually now afford San Francisco. So we moved into the city.
Yeah. And we just carried on building both of them for a while and then wanted to go back to social networking. So we had a non-compete when we sold the original social network. So we waited for that to expire.
And in fact, before we'd even had expired, we did another website which was going back to our first viral idea of lemon link and doing that again. And we called it BBO. And it was a self-updating address book. And I was like, I'm going to see if everything I've learned since we've been working.
I do the same idea. Yeah. But now better. But do it properly.
And so we applied all of the viral techniques again. It was like, you know, birthday long, save as BBO, rename, all the viral mechanics, the scraping, all of that code, still valid. And then we had a really simple thing of just like instead of entering your birthday, enter your contact details. I love how you had two constraints.
One was you basically between you and Zochi with the only programming talent you had. So you kind of just chose ideas that were somewhat similar. It's like, okay, if I can reuse 80% of what I already built, great. Then I don't have to have weeks of engineering just to get something live.
And then two was, well, I don't have money nor do I really have sales and marketing background. It's not what I enjoy. So I'm going to make products that are designed to be viral where using the product invites more people to the product. And those two constraints, I feel like major career.