Borrowing Your Bootstraps | Chris Ronzio from Trainual

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Chris Ronzio 0:00
So the really scaling the business was the the development was pretty much in maintenance mode, but it was how do we fund the advertising the marketing to really get this out into the world.

Alexander Ferguson 0:15
Welcome to UpTech Report. This is our Founders Journey, I am joined by my guests, Chris Ronzio, who’s based in Scottsdale, Arizona founder and CEO of Trey Newell. This is part two of our discussion, definitely head back and listen to part one, where he broke into and break down the SaaS platform that they’ve developed for training and onboarding. Now, I want to hear a bit more though, of your journey that you’ve been on over these six years, but more than six years, I mean, starting with a video production firm growing that selling it, and then consulting, building this product, then launching it as a SaaS platform by itself. I can only imagine that the insights there. I’ll start with asking a question. And this might be a harder one. What do you wish is that you could tell yourself six or more years ago that you know now what would you go back and tell yourself,

Chris Ronzio 1:06
and if I could go back, I would have got into software sooner. And so you know, software was something I only started to dabble with at the very tail end of my video production company. And we actually developed a product that was pretty core to us selling that company. And so I saw the value and it opened my eyes to the fact that you can dream something up that exists only in pixels, and have it developed, and it can do something that functionally doesn’t exist anywhere else in the world. And that was mind blowing to me. So if I could go back, I think I would have started into software a bit sooner, because I truly believe that the these SaaS companies that are being created today are still such a gold rush of opportunity. And if if I knew now what I knew back then I would have moved on from my my video company a lot quicker.

Alexander Ferguson 1:55
Love to hear a bit more than of yourself, like how did you get into video, but then operations because it sound like very quickly, even though you’re in the creative world, it was really the operations that you understood and dove into it, I get that correctly. Like, how did that happen?

Chris Ronzio 2:10
Yeah, so it was it was interesting, it was really early on. You know, as a kid, I was always entrepreneurial, I always had 15 business cards or something by the time I was 10. You know, I the landscaping services and car washes and waxes and selling everything. And so when I started in high school, I met a friend that was running a cable access television show. And so that to me was super cool. Because I thought growing up, I want to be a sports caster or something like that. And so I joined on for his television show and co hosted this thing. And after a few shows, we were producing these episodes that would air on our local public access station 40 times a week, you know, there was nothing else other than the bulletin board or something to air, the local town meetings. And so it was like our show is always on. And people quickly started offering us paid opportunities to come film their events, whether it was a personal event, like a wedding, or a talent show at the school or the soccer games. So we were getting these opportunities. And as the opportunities came in, we had to make a quick division of responsibilities. So even from you know, the month one or quarter one, I was thinking about roles and responsibilities. And it was my partner was the camera operator. And I was the sales person, the financial person, the marketing person, you know, all the business side of it. And so as that business grew, I had the decision on Do I go into film school and learn more about production? Or do I go to business school and so I took the path of going to business school. Ultimately I bought out my partner he ended up working for one of the news stations. I grew the business and focused entirely on the the operations of how do we do this across the country?

Alexander Ferguson 3:47
Did you say you went to school for business? What was the degree they got? Where did you go?

Chris Ronzio 3:51
I went to Bentley University outside of Boston and it’s a business management degree. Gotcha. And

Alexander Ferguson 3:57
and then how much of it was it from that knowledge that you’re like, I’m gonna apply all this versus just you as you’re going along? you’re acquiring and learning it? Was it combination? Like how much did that help? It was

Chris Ronzio 4:07
amazing, actually, because having a business through college, I had a notebook where on one side, I would take notes for the class and on the other side, I’d apply action items for the business, you know, so it was

Alexander Ferguson 4:18
like I have a having a business while going through the school. It was great.

Chris Ronzio 4:21
It was amazing. It was like this real world case study that everything I’ve learned in school, I’d have something to go apply it to. And you know, it got to the point where I didn’t really want to do the fake projects that they put in front of us in school because I had a real entity that I wanted to work on and some of my teachers were really cool and just letting me you know, use the lessons for my own business.

Alexander Ferguson 4:40
Now, that business first business, it was customer funded, right like it you just get more money, you would grow it. Do you Did you get any funding for that first business,

Chris Ronzio 4:49
no funding, no. Okay.

Alexander Ferguson 4:50
And then you grew that How long did you have that until you sold it?

Chris Ronzio 4:53
12 years, and actually, as I say no funding, but there were no no outside funding outside of debt. You know, no Equity funding. So I did do an SBA loan at one point to buy equipment. And that was an interesting understanding of how to make that work.

Alexander Ferguson 5:09
Interesting. Would you done that again?

Chris Ronzio 5:11
Sure, it was good, good experience,

Alexander Ferguson 5:14
down selling that going into consulting, how long it wasn’t until you started to build the software itself, which led to training well.

Chris Ronzio 5:23
So the software that I built in the video production company was kind of in phases. So the first thing that we did was we hired a programmer to connect our website API, this ecommerce platform to a DVD robot that would print DVD is on our local area network. And so it sounds more complicated than it was it was a simple script that would batch out image files that were associated with the the e commerce products and then send the the message to the DVD robot and say go find this file, burn it onto a DVD print the correct label and so we had you know, 1000s of events that we had videotaped from our archives. And so we were printing these DVDs in batches at the end of every day and the mail would you know, the the post office would come around and pick up a bin of these things. And so that was the first the very first insight into tech and then beyond that the next thing that we built for the video company was it was almost like a iTunes like a private iTunes where we would film all of these events we’d upload the events into Amazon s3, we would process the footage and pull out 32nd or 15 second preview images or preview videos that parents could then browse and watch so they could find their child’s video they could watch a 15 second sample and they could purchase it and then it would email them the link to the full version to download and store on their computer and so that simple little technology of how to automatically fulfill and deliver the footage that we’re capturing from around the country was really the value prop for the the what ended up being the the sale and so when when I sold that business it was kind of a hybrid one to our largest customer and to to our competitor of ours that we were always bidding against. And you know, it wasn’t like a major windfall or anything like that. But for me as a young guy It was a cool win and and it gave me the chance to think about what to do next and so that’s what led into consulting

Alexander Ferguson 7:20
now both businesses the the video production business and then the consulting where you started to build train Yule. How do you as an owner and leader decide how much energy and budget to put toward software when you’ve got this other business and you’re trying to fund it along the way?

Chris Ronzio 7:36
Great question. So the way I thought about it what with my consulting business was I had I only had so much time and capacity at the beginning it was just me and before training we launched we had built a team of five in the consulting business so real small boutique kind of kind of shop we thought about training all the product as one of our clients so when you only have so much capacity to take on clients and you’ve got a product like that that you have to maintain for yourself and build for yourself you have to allocate so many hours of your attention such percentage of your time and we just thought about it as one of our clients so that was actually a big part of the inspiration to rebuild and launch the product into its own business was we had a few client projects wrap up at the same time and I thought oh this would be a great chance to to just put more everything into changeable and we all got really excited about what we were doing to train you on thought well why don’t we end all of our consulting projects and just try this while

Alexander Ferguson 8:33
now for then the funding of this was it did what point and Did you get any funding to build triennial

Chris Ronzio 8:40
eventually yes but at the beginning it was just funded initially by the consulting firm and the profits whatever we have in the bank and then it was funded by the whatever debt I could get and so at first it was a like a line of credit for the consulting firm and then it was credit cards for the company and then it was my personal credit card so saying is it starting just build build build build and it’ll build build Yeah, so I mean and and it got scary I mean you know, the first year of training well as its own business I had racked up about $300,000 in personal credit card debt and it was where I was to the point where I was just opening as many cards as I could get I didn’t care about my credit score I was just maxing them all out they would send me these checks you know those blank checks that credit card send you and they’re like no fee is for a year and so I would write myself you know check deposited positive cash into my bank account I mean it was a tough like shell game of trying to figure out how do I fund this thing but what we were seeing the the the reason I was comfortable doing that is month over month we were seeing customers cold customers come from our social media ads into the product and sign up and the math seemed to make sense.

Alexander Ferguson 9:51
So where were you putting that revenue then like what made you feel good? You already had the product and it was putting into marketing like what is that?

Chris Ronzio 9:57
What how it worked? Yeah, so we had the front For three years like I mentioned and we’re able to rebuild it with just our internal team that we had without much additional expense before we shut off all the consulting and so the really scaling the business was the the development was pretty much in maintenance mode but it was how do we fund the advertising the marketing to really get this out into the world and so we went from having you know, a few dozen customers at the beginning of 2018 to 600 or 700 customers at the end of 2018 and it had grown to a point that now we could really attract investment at favorable terms and not have to sell a big chunk of the business for some kind of seed funding.

Alexander Ferguson 10:39
So that’s a that’s a really interesting strategy to first rack up some debt when you know your numbers are correct to get us X amount of customers paying customers which any investor will say oh okay all that

Chris Ronzio 10:54
yeah so I always recommend you know, don’t don’t use debt to start something but use debt to scale something you know, and that’s what we were doing we had this product we knew it worked we had happy customers great case studies and we were trying to take it out to the world and debt was an effective vehicle for us to be able to do that until a max shut me down and I had to pay all the bills back and you know, so so it got to that point where there was no debt left available you know, we didn’t have anything on the personal car the home equity line of credit my wife’s calling me from the grocery store like what car do I use for the groceries they’re all failing

Alexander Ferguson 11:28
see your level your comfort level of risk is must be pretty high then to to take that on or you just had such confidence that you knew wasn’t going to fail

Chris Ronzio 11:39
I’d say both you know, I have I’ve been risk tolerant and because it wasn’t my first business I sort of knew what to expect I’d have a lot of you know a lot of credit card Christmases and that sort of thing so the the comfort level of investing in myself and in the business was was there but I also knew the math like I was saying and so I think it’s really important that you understand the funnel for you know, what is your cost to acquire a lead your cost to acquire a customer the lifetime value of the customer how often they churn and I basically got a PhD in that the first year of the business so

Alexander Ferguson 12:13
that’s actually a great transition and we look at and marketing for a moment how long did it take you to to define those metrics and and to be able to then scale

Chris Ronzio 12:23
three months or so was was how much it took and so at first took a substantial serious investment in adspend which I’d never done before to me putting $50 on a promoted Facebook post or something was like oh, let’s see if this works. You know, and and it never did. And so making a substantial investment

Alexander Ferguson 12:41
was substantial. If you don’t mind me asking like what was that first substantial investment look like?

Chris Ronzio 12:45
It’s like the equivalent of someone’s salary you know, like when you’re when you could hire someone for three or four or $5,000 a month and you decide instead you’re gonna put that three four or 5000 a month into adspend that’s substantial. And so to you know, we started to think about a salary of adspend and and how we like that investment Yeah, so it took that and it took doing that for a few months but by the third month we had a good understanding of what kind of cold traffic we got percentage of traffic to trial percentage of trial to conversions, and then you do that pencil yourself.

Alexander Ferguson 13:20
Like did you figure that out? Or do you hire an agency Did you bring someone on to help you with that?

Chris Ronzio 13:25
So it was my my brother is our cmo and he was there from the beginning and so it was me and him trying to figure it out. And we hired a contractor for eight weeks to teach us how Facebook worked. So it wasn’t to do the work but it was to sort of mentor us on how to make the ads and how much to turn the ads up when we’re seeing certain results so that you know is a great experience to bring someone in to coach us

Alexander Ferguson 13:50
but you own the knowledge so you could actually run with it after the fact and speaking of actual tactics, Facebook that was the main tool that you invested in

Chris Ronzio 13:58
yeah so as a business that is primarily solving serving small businesses you know a few employees a few 100 employees those people tend to be you know on Facebook on Instagram on Pinterest and so we’ve we’ve done really well with the more consumer social media ads by just trying to be really organic and tell stories and authentic stories about we’re growing our business we’re using this product so you should do

Alexander Ferguson 14:23
saying I appreciate that whole notion around authentic story what would you say are some common mistakes that you see people are making with marketing in today’s environment,

Chris Ronzio 14:32
you want to be too polished you know my my first company my video company, we had like a you know there at the beginning there were like five of us and we had a 800 toll free phone line with like a British accent and a you know, some it making it sound like we’re some big conglomerate, and I think everybody kind of wants to do that a little bit. But it’s almost the reverse now where the authenticity and the craftsmanship and you know that like at sci fi All people really can connect with. And so when, when we were first starting training while my brother and I went out to a conference in HR conference, there was this big worldwide kind of event. 10,000 people there, we walked up and down the trade show floor, and everything felt so stark and so professional and everything was stock photos and bold color. You know this, this just whitewashed reality. And so we thought, well, what’s entirely different from that? It’s just us walking around with an iPhone on the street. And so we actually shot an ad outside of the conference on the street, and ended up running for several months and acquiring a ton of customers for us. But you know, it’s just having the authentic conversations, because I was my own customer and knew the conversations that were being had, you know,

Alexander Ferguson 15:46
do you still feel that that style still is applicable today?

Chris Ronzio 15:51
Yeah, today it is, it’s it’s just, you know, I think more people are doing that. So today, we try to stand out with more humor, we use celebrities, we try to catch attention, but still be the fun brand that we are, you know, if you go to our website, you won’t find stock photos, you know, we use all of our own employees all of our own. You know, the reality of our company is very apparent through the website. And and that’s been important to us for our brand.

Alexander Ferguson 16:17
Speaking of people. You, your team has obviously grown, you’ve gone through multiple companies with growing teams. How big is the team today?

Chris Ronzio 16:26
We’re just over 50 people today?

Alexander Ferguson 16:28
Wow, what would you say, is one of the biggest lessons learned on hiring now multiple times and growing a team,

Chris Ronzio 16:37
go for spring for the person you can’t afford, would be my my lesson because especially if you’re growing quickly, you know, we have a tendency as as founders, as entrepreneurs, as executives to want to conserve cash, preserve our budgets and, and make safe choices. Because we don’t want to mess things up. But when you’re growing a startup, and you’re growing quickly, the person that you decide is a safe bet for today might not be the right fit six months from now. And so I always think you should push the limit a little and higher, someone that’s much better. That’s kind of from the next stage that you want to get to. And it took me a while to be comfortable with that investment. Looking forward,

Alexander Ferguson 17:17
and what do you see as the biggest challenge for continued growth.

Chris Ronzio 17:20
So for us, you know, we’ve had a ton of success with our branding, our advertising, our paid social advertising, and now, we were putting a lot of emphasis on partner channels, and how we can really get the flywheel going aside from what we can do in house ourselves. And so I think that it’s important at the beginning of a business to have a strong product, and a really strong foundation of early customers that can tell your story and be case studies for you. But then once you get that foundation, now you’ve got to build a bunch of buildings all around you. And so that, you know, for us, it’s like we’ve got this this amazing foundation or single building, and now we’re trying to build the city.

Alexander Ferguson 18:01
I love it. Love it. Last question for you, Chris. What kind of tech innovations do you predict we’ll see in the near term next year, so and long term 510 years from now.

Chris Ronzio 18:11
So tech innovations in my space, or just in general,

Alexander Ferguson 18:14
in both mostly around your space, but it can be on? Okay,

Chris Ronzio 18:18
so aside from like space travel, and that sort of stuff, I’ll just stick with my space, my area. I think that some of the big things are going to be you know, people consumers have gotten so used to voice interaction with Google and Alexa and Siri. And I think that type of interaction will become increasingly important in b2b tools. So I think we’ll see a lot of that. And I think we’ll also see that the the, with with the new smartphones that are coming out, and how improved augmented reality and virtual reality are becoming, I think that’ll be important to onboarding and training experiences. So that’s something we’re experimenting with and having some fun with.

Alexander Ferguson 18:58
Oh, now that I’m very intrigued, we’ll have to circle back and do another interview once you’ve got a VR onboarding tool. Now that would be killer. Okay,

Chris Ronzio 19:06
let’s see it lets you know, okay.

Alexander Ferguson 19:09
Thank you so much, Chris for your time. And for those that want to learn more about training, you can go to Trainual.com also listen to part one of our discussion, head to Uptechreport.com. To see all the interviews, and a lot more, get our sponsor for today’s episode is TeraLeap learn lm to power video at teraleap.io Thanks again, Chris. And we’ll see y’all next time. That concludes the audio version of this episode. To see the original and more visit our UpTech Report YouTube channel. If you know a tech company, we should interview you can nominate them at UpTech report.com. Or if you just prefer to listen, make sure you’re subscribed to this series on Apple podcasts, Spotify or your favorite podcasting app.