Why the Founder of Kit Built a Chatbot to Solve Every Entrepreneur’s Biggest Problem

kit shopify

On this special episode of Shopify Masters, you'll hear from Michael Perry, the Founder of Kit: a virtual employee recently acquired by Shopify that you can hire for $10/month. 

Learn the story behind Kit and what it means to be an entrepreneur in today's world. 

In this episode, we discuss:

  • How to decide if you should jump into your business full time.
  • How to use your competition to motivate you rather than overwhelm you.
  • How to find advisors for your business and how to work with them.

Listen to Shopify Masters below…

Show notes:


Felix: On the last episode, Ashley Drummond from abspancakes.com shared her story of transitioning from selling digital products into selling physical products. In this episode you’ll learn from entrepreneur that developed an app that was acquired by Shopify.

In this episode you’ll learn how to decide if you should jump into your business full time, how to use your competition to motivate you rather than overwhelm you and how to find advisors for your business and how to work with them. [inaudible 00:01:04] Michael Perry from Kit at kitcrm.com or shopify.com/kit. Kit is your virtual marketing employee and a company that was acquired recently by Shopify and was started in 2013 and based out of San Francisco, California. Welcome Michael.

Michael: Thank you for having me, Felix. Extremely excited to be here.

Felix: Yeah, so this episode is going to be a bit different because you obviously are an entrepreneur. You started a business and had a great exit. A different industry than what most of the listeners might be in, but I think that there’s a lot of lessons here that can be applicable and there’s overlaps here. You are obviously the founder of Kit which was recently acquired by Shopify. Let’s start with that. What is Kit and how does it help store owners?

Michael: Yeah, absolutely. As you mentioned when we kicked this off, Kit is a virtual employee for those of you don’t know exactly what that is it’s basically like a little AI robot that works for your store. You communicate with Kit over text message or Facebook messenger. We also work on telegram. Our goal for Kit is that you will entrust Kit to basically handle all the heavy lifting of your marketing. Kit is incredibly smart, capable to do Facebook ads, Instagram ads, email marketing, send thank you emails to your customers, update your Facebook page and then we actually recently launched a program where developers can build apps that Kit can use.

If you have a [Yapto 00:02:22] account or use Bold’s products discount app or New Lease SEO manager you can connect those things to Kit and Kit is able to use those marketing apps for you as well. We’d like to believe that Kit is, for a lot of Shopify merchants, their very 1st hire, their very 1st employee on their team that helps them manage and sell their business, their products on Facebook.

Felix: Very cool. Where did this idea come from? How did you come up with the value that Kit provides?

Michael: Yeah, we started like a lot of startups as a software company that built a platform that people could log into. We were really seeing a large opportunity with small business owners that where not using Facebook or leveraging Facebook to drive more sales or effectively use Facebook’s ad platform and it really was because it’s such a complicated product that we really started just thinking how could we build a Facebook ad builder that took really complex 20 steps down to 3 basic steps.

We had hundreds and hundreds and hundreds of phone calls with shopify merchants and small business owners and really realized what the problem was. We were trying to solve a problem to build software for people to better market their products, but it was this constant reality for people who are selling on Shopify, the majority of them are trying to run their business by themselves.

It wasn’t that they weren’t comfortable with using software. Actually a lot of them were very tech savvy, it’s that they just didn’t have the time to do it. They’re trying to do customer support or inventory management or make the products, do customer loyalty, handle the logistics. Their day is so filled that for some reason marketing continued to fall down to the bottom of the task list and we thought, how could we scale our operations?

Really what they wanted was somebody to do the marketing for them and we took this very courageous, ambitious step to try to build a person that could work for them and handle a lot of these items on their to do list and that’s really where we got started in the summer of actually 2014, a year after we launched, and that fall launched Kit the person and we like to think we stopped being a software company and became more of a human company at that point.

Felix: Kit isn’t your 1st, I guess, stab at entrepreneurship, right? Tell us a little bit more about your background, like how you started down this path of starting businesses.

Michael: Yeah, actually right before Kit I ran another startup in the software space. I did a mobile loyalty app for small business owners that basically turned your traditional punch card into a loyalty card digitized on your phone. I’ve always had this deep, rich passion for small businesses because I grew up working in small family businesses. When I was 7 or 8 years old, my uncle ran a video store. I used to work for him on the weekends being a video stock boy. He eventually opened a jewelry store. I worked for him, again, on the weekends, sweeping the store, selling products, wiping down counter tops, restocking inventory. It was a jewelry and coin store.

I worked with him for a long time and actually my father ran a car dealership and I went and worked for him selling cars for a long time and while I was in college I built my 1st website. It was a photo sharing site that was a pretty cool site, but just didn’t really go far and that really opened my eyes to what does it take to be an entrepreneur and the 1st thing is that you have to be really excited about what you’re making.

The 2nd thing is you have to be deeply passionate about the problem you’re trying to solve. I wasn’t really passionate about the art world and I realized that I was incredibly passionate about the small business, family business world and I wanted to enter that arena. That’s how I started my 1st loyalty company that didn’t do well and that’s how I started Kit and that seemed to work out for me. I’ve been a full-time entrepreneur for almost about 8 years and feel like I’ve been a lifetime entrepreneur since I was 7 or 8 years old.

Felix: Yeah, so this is something you shared with me over email. Hopefully you’re okay with me saying this on the air, too. If it doesn’t, we’ll cut this part out anyway. You mentioned that you quite your job, you sold your car, you’ve maxed out your credit cards to try to get this company, this loyalty company, off the ground. What made you feel comfortable with all those steps?

I think this is a stage that I’ve been thinking about, or that I’ve been talking to a lot of entrepreneurs about and thinking about a lot which is about where you’ve kind of reached a crossroads where you have to decide should you go all in? Should you be safer? Should you just put 1 foot in the door or should you retreat and take the safe route? What was going through your mind at the time that you made this decision?

Michael: Yeah, it’s not something that happened overnight? I vacillated a long time. It’s not for everybody. I think a lot of people will hear this next segment and think, “I’m going to do that.” It just really is not for everyone. There’s a lot of sacrifice and high gamble, high reward. When you sell your car and liquidate every single thing you have and max out credit cards to start your business, you have to be prepared about the consequences.

For me, it was just a stage where I was working every night and working every single a weekend. There’s a saying that there’s no such thing as a halfway crook. Either you steal or you don’t steal. For me, I just badly wanted to be an entrepreneur. I just felt like it was in my DNA. My grandfather ran a carpet business. I just came from this family of men who kind of forged their own path and I just badly wanted to see if I could make it. I badly wanted to chase my dream and really take this approach that you only have 1 life and if that means I walk away with nothing then I walk away with nothing.

I certainly did not do it for an economic win. I really did it because that’s where my heart wanted me to go. It was not easy. I feel very fortunate to be in the position that I’m at today. I raised venture capital and sold my business and all that kind of stuff. That certainly makes the gamble feel great, but it also doesn’t necessarily mean that it was the sole reason why it feels great. I would have done it and continued to do it with or without the win. I’m just feeling very fortunate that there was a financial win there.

It was really just like my heart was calling towards it. I just didn’t want to live a life not listening to what I thought was going to drive my happiness and I was 100% correct. I’ve never been happier. In my darkest, most difficult times of having nothing, I never lost focus. I never wavered. I never thought about quitting. I anticipated that it would be hard. I just really wanted to see if what I felt about myself was true. I felt that I was an entrepreneur and I wanted to prove that I was an entrepreneur.

Felix: Makes sense. Like you’re saying, it’s not for everyone. I think it’s important to emphasize because for everyone that is like you that has seen the success that you’ve seen, there’s maybe 50, maybe 100 people that didn’t make it and 1000s that we never hear their stories because it’s not interesting or no one knows about it because it’s swept underneath the rug.

How do you know if it’s free? How do you know if this path is right for you? I think this is another entrepreneurship recently, maybe the last 10 or so years, has become very attractive. It’s been glamorized. There’s movies about it. The social network and everyone thinks that you’re meant to be an entrepreneur. How do you know if you’re just kind of following that path or you really are or should be an entrepreneur?

Michael: Well, I mean 1st and foremost, you’re going to find out very quickly. It’s so hard to make it that you’re going to turn back really quickly. The way that I look at entrepreneurship Christopher Columbus, he left Spain, and he didn’t know when he was going to hit land, so to speak, but regardless of how harsh the wind was and how turbulent the waters were, he didn’t turn his ships around and head home. He just kept soldiering forwards and he kept moving towards land.

I think that along the way, most entrepreneurs or most people who believe that they want to be entrepreneurs because they get into it for this very romanticized reason. When the seas get really rough and you have a hole in your boat and the boat is sinking and people are jumping overboard that’s often times people will say, “You know, this is not for me.” They want to enjoy their nights. They want to enjoy their weekends. They want some comfort. They want some consistency.

Then there’s this courageous few, “I have to hit land. If I have to get there by myself, if I have to get on driftwood and float, if I have to capture a whale and ride it to shore,” whatever it is, they are destined to find land. That was just my mentality. I was going to stay laser focused and I was going to get to land.

I met a lot of entrepreneurs along the way and I think that the reality is it gets really, really, really hard depending on what kind of business you’re trying to build and those are moments where you have honest conversations with yourself, do you want to move forward or not? I think putting your feet in the water and trying to find out is a beautiful thing because no matter what you learn a lot about yourself. I think that there is no better life than the life of an entrepreneur, but I also think think that there’s no harder life than the life of an entrepreneur.

Felix: Makes sense, yeah. I agree with you, you really can’t know for sure unless you just try it out. For folks that are thinking about trying it out, either they haven’t started anything at all or they have started a business on the side, a side project, but haven’t really dived into it, how do you prepare for this kind of leap? Maybe not to the same degree that you’ve done where you’ve sold your car, maxed your credit cards and everything, but at least put themselves in a place where there are repercussions. How do you prepare for this?

Michael: Well, unfortunately, it’s one of those things where you can read every single book about becoming a parent, but until you’re a parent there is no preparation. I think it’s just getting in the mind frame about what could come. I also think that there’s nothing wrong with being a part-time hustler. I think there’s a big difference between someone who hustles on the side and someone who’s an entrepreneur.

If you work at a pet store and you decide as a side hustle you want to open up a Shopify store that sells dog collars online, there’s nothing wrong with that and there’s nothing wrong with slowly growing your business and then at some point realizing that you can make more money just working on your own business full-time and you can slowly get to that comfort level.

For me, I was impatient. I’m working in software. It’s a different world, right? I wasn’t willing to sit back and wait and see if my work on the nights and weekend would get me to a point. I had to go all in. I think the best way to look at it is if you get a tattoo you’re going all in. I had to tattoo entrepreneurship on myself.

Felix: Makes sense. I think this next question is going to be applicable for other store owners that might be selling to other businesses in the B2B space. You mentioned before that small business has been a part of your life from the beginning. You worked in small businesses, your family was involved in small businesses. What opportunities did you see, though, that made small business owners, I guess, a good opportunity to focus on as a customer or to go after as a customer.

Michael: Well, the reason I went after them as a customer because I felt like it was very relatable to me. That’s just the honest answer. It was about some mass … There’s obviously tens and millions of small businesses out there so there’s a huge market for you to sell to, but for me it was just like that’s what I cared about. I cared about the people that were working in these stores. I cared about the people who were trying to do it by themselves. I care about the guy who’s standing behind his counter on saturdays missing his kid’s soccer game or the guy who’s standing running a detail business and missing his son’s basketball game.

I just cared about these people and my opportunity was that I wanted to try and contribute to improving the quality of life. I think what’s really amazing when you look at Kit, still just scratching the surface, but if you go and read the reviews on our app page it’s people saying, “Kit’s the best employee I’ve ever had. Kit works nights and weekends. Kit’s the 1st person at work.” We’re trying to give them some balance. I’ve seen it firsthand. It’s scary to stand inside of a store and let days go by and not make a sale.

I got into the business because there’s an empathetic piece of me that just really, really cared and that’s why I was able to sell my car and max out my credit cards and quit my job with no funding and live on food stamps and let my electricity be turned off because at the end of the day I wanted my body of work to represent what I cared about above anything else.

Now, if you’re in the B2B base whether you’re selling software it’s a massive opportunity because companies like Shopify are making more and more entrepreneurs ever single month. The barrier of entry is lower than it’s ever been. There’s all kinds of opportunities for people to be an entrepreneur and so it’s an everlasting, incredibly elastic space where you have a million people you can sell to any given moment and so it’s just a very ripe time to be selling to small business owners. Again, I have to reemphasize it was not the fuel to my fire. You know what I mean.

Felix: Yeah, it makes sense and obviously you’re super passionate about this so it might be hard for you to answer this next question, but I want to know how do you know if you are deeply passionate about what you are working on if there are listeners out there thinking they are super passionate about it? How do you know if you’re really passionate about it or you just have a passing interest and it might pass 6 months from now? Is there a way for you to identify that?

Michael: Yeah, I think, you’re right. It is a hard question to answer because I think everyone finds passion differently. I mean, someone can be super passionate about something, but they’re not losing sleep over something, right? For me, I so badly wanted to be the guy who solved what I felt like was such a large problem. It made me physically sick to think that some other person was going to beat me to it. I was not willing to turn back for anything. I really wanted Kit and I really want Kit and I really want my time at Shopify to be a representation of my life’s work.

I’ve come across a lot of entrepreneurs that are crazy passionate about what they’re working on, but if they don’t succeed it’s not the end of the world for them. They just love what they do. They can’t imagine themselves in any other capacity because they’re really passionate about it, but if they were 2nd or 3rd or 4th place or whatever they’re okay with that.

Our degrees of passion, our degrees of drive are just so radically different as humans and entrepreneurs. For me, it was just like I absolutely want to be the person that gets to solve this difficult problem and I really want to be there for them and make it all better. If somebody else solved it I’d be happy that the problem solved, but I lost sleep over the idea of someone else beating me to it when I invested my life into it.

Felix: Was this very stressful for you then? Just always this constant thought that someone … You’re not being chased, but there’s a race going on. I think there’s going to be a lot of listeners out there that are in that same situation, that maybe they’re not in a cutthroat industry necessarily, but they’re always thinking about the competitors, always thinking about where the competitors are at. Is there any ways that you found ways, not necessarily to cope with it, but at least to manage it to a point where you can do the work and not be so consumed with by the thoughts of your competition?

Michael: I mean, yeah, I mean at some point you kind of realize you have to just stay focused in your own mind and keep moving fast and you’d rather be the guy that’s blazing trails than the guy that’s following them to some extent. I know that’s kind of a harsh way of putting it, but it’s also like welcome to the real world, right? Entrepreneurship is a very competitive sport, maybe the most competitive sport in the world. Everyone’s looking to try to climb the mountain of success. Everyone’s trying to stand on Mount Everest. There’s only so much space at the top of the mountain.

I think it’s just a matter of are you okay with being number 2 through number 10 or are you really fighting hard to be number 1? I mean, those are 2 really different … You could build a really, really, really nice business being in 4th place, or a really nice business being in 5th place. That’s the big difference between drive and passion.

For me, 1 of my early advisors said something to me and I never thought it to be more true and that was only the paranoid succeed. I lost tons of sleep wondering if someone was out working me. I lost tons of sleep wondering if someone was out hustling, but that’s also why I haven’t taken a vacation in 5 years. That’s why I work every weekend, but that’s also why I was able to create some early success in my life that I have.

It just really boils down to where you want to be positioned within your industry. The same way Shopify is the number 1, leading e-commerce platform in the world, they’re not here for 2nd place. Everyone that works there, everyone I meet, is like very ambitiously focused on bringing commerce to everyone. That just drives a different type of mentality and work quality that you put into your work.

Felix: You want to be number 1, makes sense. Was there ever a point during this whole journey maybe now, maybe never, I don’t know, where you could realize where you could at least take a breather and there’s a base camp that you could set up along the way up where you can rest and think, “Okay, now where do we go from here?”, or is it just kind of full blast from day 1 until now, kind of just full throttle?

Michael: There certainly were times where I carved out a weekend to take a step back and reflect on what we’ve accomplished and mostly what we were doing wrong and where did I see areas of improvement. I think it’s a terrible idea to be constantly full steam ahead and never taking a step back just to look at the lay of the land, because that’s how you start making mistakes, but certainly at any given moment that we could hit the accelerator, it was all about full throttle. It was all about pushing our chips in, being courageous, being bold, being willing to fail.

I’m totally okay with failure. What I’m totally not okay with is responding to that failure. I let every mistake be a very valuable lesson. Something comes out of everything. I just so ruthlessly wanted, and I continue to want, to make Kit special. That’s just what it comes down to. I really believe that Kit can be a special person for store owners and I try to look deep into the horizons of life and think, “What is it going to take for me to get Kit to that point?”

Now it’s also to a point where I’ve invested so much of my life into Kit, do I know want to let up on the gas? Is now the time I want to back off? The answer, every time I ask myself, the answer is no. I just don’t.

Felix: Yeah, that makes sense. When you take this time to take a step back and, again, I think this is a valuable lesson for any entrepreneur which is not to just be heads down the entire time, but actually take that time, take that day, that weekend to look back on your business and decide where to go. How do you structure that day, how do you structure that weekend? How do you set it up in a way where it’s actually productive and you are looking objectively at your business?

Michael: There’s a place in northern California called C-Ranch. I try to go there once a year for the weekend and basically power down my laptop, just go notepad and pen and just really ask myself some really painful, difficult questions. Forcing to have very honest conversations, answering the why’s, why are we making these decisions, and is it really the right move, is it really the right step, where do we need to get to, kind of reversing engineering your success a little bit and asking yourself if you’re on pace to achieve those milestones and goals that you’ve set for yourself and set for your team. That is the way that you climb the mountain. The way that we climb the mountain and the way that we try to help businesses climb the mountain is help them envision what’s the goal.

I always love asking myself, why am I here? Why am I building Kit? Why do we make those decisions? Because you have to continually bring back laser focus of why you’re making all the sacrifices? Why am I working every weekend? Why I am working on the holidays? Why am I doing these things is because I’m trying to build a virtual employee for millions of entrepreneurs around the world. That opportunity, when you make that statement, it’s so overwhelming and it’s so powerful that it helps you regain conscious focus.

I think for anyone whether you’re selling, again, dog leashes online or jeans or shoes, maybe your goal isn’t to bring that to millions of people, but maybe your goal is, “I’m trying to get to $10,000 in sales. I’m trying to build strategic partnerships. I want to hire my 2nd employee. I already have kids so I want to hire my 2nd employee.” You can have short- and long-term goals, but you have to have moments to step back and have conversations with yourself if you’re on track to hit those goals. That’s why I take the opportunity, at various points in the year, even on my walk to and from work to ask myself, “Am I making the right decisions every day that’s keeping us on pace?”

Felix: Yeah, I like how all the questions you ask yourself during this, I guess, kind of retreat are why questions. I think we spend so much time asking how, how, how do I accomplish these things, but I think those questions are very primed for next step types of things. How do I accomplish this the next day, the next week, the next month, but when you start asking why it really zooms you out and gives you a much higher view. When it comes to the more tactical questions, are there any general business kind of questions you ask yourself or think about when you do take this time off to look back on your business?

Michael: From a tactical perspective, I’m constantly wondering how we can scale better. That’s why I ask myself the how question. Usually a followup answer would be like, “Well, at various points, well, maybe we can partner with Paypal?” Then it’s like, well, why would we want to partner with Paypal? It always kind of boils down to how and why. For us, it’s like what pieces of the puzzle are we missing.

We survey, for instance, we surveyed all of our Shopify merchants back in November right before Christmas and 68% said they depend on Kit to do all of their marketing for them. They’re completely are hands off. I was like astonished with this. I was so proud of this 68%, but then I took a step back and said, “Well, why wasn’t it 100%?” That’s the goal. The goal is 100%.

Then, when you start digging around and finding those answers, it really helps you kind of strategize where your focus should be. It helps you have that ruthless prioritization. I think often times we do, as a society, want instant gratification. We want to move so fast. We want to climb the mountain, but we don’t really want to put in the work to figuring out what we need to do to climb the mountain and why we’re climbing the mountain.

I just think it’s an important piece of the puzzle for all entrepreneurs to have a little bit of patience with the process and constantly question themselves and question their effort and question their decision making and just remain a student. The only closing note on that question, I would say, it’s also really great to balance these conversations with mentors and people and peers and have really open conversations about how you’re executing and get some value out of that.

Felix: Yeah, I think one thing that you’ve been able to do really well is just be able to grow this business so quickly and you’re focused so much on scale right now. What do you focus on to make sure that you are moving as quickly as possible, as fast as possible. What do you think other entrepreneurs out there might be doing that’s kind of slowing them down from executing faster?

Michael: Well, I don’t know what other entrepreneurs are doing that’s slowing them down. It’s a very personal question for them and I don’t want to make any assumptions, but 1 thing I continually push is having laser focus. Just say no to everything. If it’s not a part of the goal, if it’s not part of the equation, if it’s not a fundamental piece towards what you’re working towards, say no. Don’t fall into distractions. Stay laser focused. Stay committed to the quest. Just have ruthless prioritization of your time and your day. You could have a billion dollars, but that doesn’t buy you more time. You just have to be ruthless with your time.

Again, this goes back to having conversations to why you’re doing it. Why are you doing these things? I think the 1 thing that is really misleading is when people talk about having focus, they think it’s about having focus on saying yes and focused on the business and focus on time limits, but really it’s staying no and prioritizing your time on what you’re working on for the business. I’m sure my team, they’re so sick of hearing me say, “Have laser focus,” but I say it every single day. Have laser focus. Say no to everything. Make sure it makes sense and just work very diligently on the tasks at hand.

Felix: It’s amazing how many successful entrepreneurs say the same thing which is about focus being the key to success and I think it’s a struggle that a lot of people get into because everyone understands that focus is important, but then when it comes down to making the decisions that allow you to be focused that’s when things start falling apart. That’s when the creep starts happening.

That’s when all the sudden your scope starts widening and you start saying yes to things that you actually don’t mean to say yes to. What kind of questions do you ask yourself when you sit down the night after work or the morning before starting your work to put together your kind of to-do list of things you want to get done. How to evaluate each thing, whether it should be cut from your list or should be allowed onto your list?

Michael: I mean, yeah, I simply outline where are we at with product? Where are we at with customer success? Where are we at with our marketing goals? It’s about working towards goals. If the item that I’m adding to my list doesn’t lead me to accomplishing my goal, I have to remove it or I at least have to back burner it for a second.

The only things that we should be focused on are those things that help us achieve the dream to achieve the goal. It’s really hard to do. It’s easy to fall into distractions. It’s easy to want to go to meetings. It’s easy to want to go to conferences. It’s easy to want to do all these different things. It’s easy to want to build these new features. It’s easy to feature creep. It’s easy to get excited about things, but then we have to ask ourselves, “Is that helping us achieve the goal?” If the answer is no, then we have to move on without it no matter how attractive it may look.

I remember turning down multiple partnerships, before we were acquired by Shopify, and it always boiled down to even when I personally wanted to go for it, being challenged by my advisors to say, “Is this really helping you achieve the goal or is it just a flashy distraction.” It’s a really hard thing to do, but it’s a harder thing to identify when you’re a young entrepreneur. You don’t know if those things that you’re saying yes to or saying no to are the right things to say yes or no to and that’s why I highly encourage entrepreneurs to have a more seasoned mentor and to remain a student.

I think the biggest mistake that entrepreneurs make is that they think they’re an expert about their business. Let me take that back. They think they’re an expert about their domain. You may know your business and the ins and outs of your business, but someone may have more knowledge about you about the stage of your business and how to get to the next stage for your business. I just think it’s so valuable to build those relationships and let people kind of coach you and have someone you can conversate with because they will help align you. They will help you stay focused. It’s a big undertaking to expect yourself to have those natural abilities with no life experience to guide you through it.

Felix: I think that’s 1 of the common themes I hear, as well, from other successful entrepreneurs is that one of the keys to success is to be humble and not think that you know everything, because once you start thinking you know everything, that’s when you start falling behind because someone out there working like they’re not number 1 and working like they’re number 2, trying to be number 1 and that’s the person that’s going to beat you or the person who’s going to be a really strong competitor at the end of the day. Mentorship, I think, is very important. This is a topic that I don’t think comes up enough on this podcast and I want to talk about it a little bit more. How did you find your mentor? How did you even begin the process of this idea of finding a mentor is definitely a great goal to have, but how do you begin to find somebody that can help you out.

Michael: It’s like anything. How do you find a best friend? How do you find a wife? How do you find a life partner? It’s about building relationships and letting them kind of naturally come together. One of the mentors I have he’s 15 years older than I am so he has 15 years worth of live experience on me and our businesses are obviously in very different stages. We started as friends and then he became an advisor to my business and then he became a personal mentor who’s now my kind of business shepherd and even when things are going great we talk about them and he reminds me.

It’s never a moment of celebration. It’s always figuring out how to get to the next step. For a very, very, very long time, and I’d still say it’s standing true today, my father’s been a huge mentor for me, right? Reminding about just intense work ethic. My father’s the hardest working guy I know. Intense work ethic, staying focused, staying humble, staying grateful, seizing the moment, seizing the opportunity. Different people will come in and out of your life and those relationships will naturally kind of take place.

I don’t think that they necessarily have to have the title of, “Hey, you’re my mentor,” it’s more so that you have that kind of loving relationship with somebody where they want to see you succeed and they know a lot more than you know and they’re kind of willing to share their wisdom with you and there’s a lot of gratitude that goes into that. You don’t give a mentor a percentage of your company, you give an advisor a percentage of your company, and those are 2 very, very different things.

Felix: Let’s talk about that then, let’s talk about advisors. I think this is also something that maybe not a lot of entrepreneurs think about doing and I think it applies at different stages of your business. Talk to us a little about an advisor. What does an advisor do for you and how does it all set up for people that don’t have ones or don’t even know where to begin to find an advisor.

Michael: Again, it’s a relationship building exercise. I think the best way of finding advisors is just pure networking, going to conferences, going to work events. I think with an advisor it needs to be a very outlined thing like where are you struggling within your business? For me, in the beginning, my advisor helped me fund raise. They were making introductions to investors for me. If it’s recruiting they can help me with recruiting. Having a quick phone call conversation to discuss partnership opportunities. Do I think they’ll give me their insight if they think it’s good for the business or not.

They are coaching you, but they’re not telling you what to do. They’re giving you feedback. It’s your job as an entrepreneur to filter that feedback. Some of my advisors have given me feedback. It was very good feedback, it just didn’t apply to my business. Sometimes they gave me feedback where I followed their feedback, even though I thought it would be bad for my business and it turned out to be right.

It’s your job to filter that, but it’s also your job to define what you expect out of an advisor in terms of how it’s going to impact your business. Where a mentor it’s a very personal level. It’s coaching you through how do you handle hiring and managing people and firing people and letting people go or what are you struggling with personally? One thing I loved about having a mentor who is an entrepreneur is we can relate on a human level. Being an entrepreneur when you’re all in when you’re working day and night, that impacts your personal relationships. It’s hard to maintain friendships. It’s unfair on your spouse it’s hard on your parents.

People are watching you struggle. People are watching you fight very, very hard. Even if you’re making momentum slowly for a lot of people it’s hard to witness and so kind of having that camaraderie is a really nice piece of the pie. In either form, a mentor or an advisor, I strongly, strongly encourage it and I strongly encourage it to be from the genesis of a very, very, very, very, very good relationship that you have with somebody.

Felix: It sounds like a mentor is somebody that’s more intimate with you on a personal level while an advisor might be more intimate with you on a business or industry level. What are some typical ways that an advisor relationship is set up? Are you usually paying them? You don’t have to talk about your particular situation, but …

Michael: It’s usually equity in the business so you’re giving them anywhere from 0.25 to 1% of the company in stock. Everyone’s advisory structure is different. I have some friends that have given advisor’s 1.5%. It’s kind of an exchange. I’m going to give you 0.5% of the business. You’re going to stay on as an advisor for 2 years. In that 2-year window, here’s what I expect out of you. Are you able to deliver on that? Yes or no?

Whether that is help me fund raise or help me structure strategic partnerships, whether that’s make introductions to people within your network, whatever it is. Going back, the 1 thing that I would strongly suggest is really clarifying what that relationship looks like from day 1 and really setting some framework around that.

Felix: Is this something that, an advisor, is this something that makes sense form the very beginning or what stage of your business should somebody consider getting an advisor?

Michael: Again, it’s a personal preference. Some people in the very beginning they want to kind of stumble a little bit on their own and kind of feel things out and you also have to assume that a lot of people may not devote their time to somebody just in the beginning because anyone that’s gone through it knows how hard it is and they might say, mentally they might be thinking when this person gets to point A then I’ll offer to jump in and kind of help.

I also had a lot of people who offered to be my advisor. As you make more traction, you’re going to become more attractive to people that want to help you, specifically if there’s equity stake in the game. It’s just really a preference point. I had an advisor earlier on and that’s only because I had flunked 2 businesses in a row and so I kind of knew what my needs were at that point and where I was going to need some help and some people were with me from day 1 and then I had an advisor that joined more like 6 months down the road and it’s just really a preference, to be honest with you. It’s a really hard question to answer because it’s just a matter of how you want to conduct your business.

Felix: Mm-hmm (affirmative). Yeah, that makes sense. Let’s talk about your experience networking with stores because I think out of the, obviously, guests on the podcast, you have the most experience since you work with so many different stores with Kit. If there a listener out there that is an entrepreneur that’s working on the side or maybe just starting out for the 1st time, what do you usually recommend that they focus their attention on doing at the very beginning?

Michael: I would recommend someone find product find. Understand who your market is, understand who your customer is. I’m going to go with the assumption that you have a store set up and you have some products and things like that. Do a little bit of homework whether that is you’re setting up a Facebook page and you’re investing a little bit of money in your Facebook page to try to understand who’s interested in your brand, who’s interested in your business, use that data to start targeting customers to drive your 1st sale. If you don’t know who you’re supposed to be selling to or who you’re supposed to be messaging your brand to, it’s very hard to find success.

I think it’s very understated for the people who don’t do enough homework on who their customers potentially could be. It’s something that’s actually a problem that we’re trying to address with Kit. Not to give myself a selfish plug here, but what we’ve realized is that a lot of people, they don’t have a full grasp of understanding who their target audience is. They think they know who their target audience is. This goes back to too many people jump into entrepreneurship being an expert and having too many assumptions versus the willingness to be a student and find out the answer. That would be my number 1 feedback.

My number 2 feedback, of course, would be to try and find some brand advocates. Let the people talk about your brand. Maybe it’s worth you giving away 100 or $200 worth of merch, product, to get some people excited and give you feedback about what they like or what they don’t like. I think that, ultimately, again, it goes back to a key issue in today’s age and that is people want instant gratification. They don’t want to do the homework or the legwork to position their business for success.

I would just take 2 steps back, have some patience, understand that it’s a process to find success. Once you have your market carved out, once you understand your target audience, then go all in. Then be impatient, then be pedal to the medal. In the interim of that, if you just start diving in without really trying to make that 1st sale before you’re thinking about your 100th sale. Get your 100 Facebook fans before or get whatever it is. Try to understand who you should be communicating with before you go crazy otherwise it’s going to be a very frustrating experience for you when you don’t see results.

Felix: Makes sense. What is the onboarding process for Kit? If someone signs up for the 1st time, what is that experience like?

Michael: Yeah, so someone goes to Shopify.com/kit. There’s a hire me button. They go through an onboarding process where they connect their Shopify store, they connect their Facebook page, and they connect their phone, by way of adding their telephone number or they select Facebook messenger or telegram, and then they’re basically able to communicate with Kit over 1 of these messaging platforms and Kit pulls in, Kit tries to understand where their business is at, the stage of their business, and then they start kind of working together to have some marketing success.

Felix: I’m not sure how much you can share about this, but I think there’s this new, Shopify has talked about it on the blog, we’ve talked about it a bit on the podcast as well, about this more focus on messaging, being able to contact your customers through messaging. How were you able to scale something like this up so that it’s at a point where it still feels like obviously you’re talking to humans, I’m not sure how it’s all set up on your end, but how do you keep that human touch to something and scale it up at the same time when you are trying to communicate with so many customers?

Michael: For right now, obviously, Kit’s not engaging any customers directly. Minus the ability for Kit to send thank you emails to customers and that’s coming on behalf of the store owner so it looks like it’s signed by Felix, not signed by Kit. Working with that employee relationship as store owner to Kit that’s a much easier process to scale to build that empathy and trust than it is to have Kit responding and talking to customers on behalf of the store owners.

There’s 1 big section of conversational commerce that there’s some really great teams out of Toronto and Ottawa working on that are just totally focused on helping merchants have more meaningful conversations and relationships with potential customers by way of Facebook messenger. Then there’s the Kit team who’s trying to build these conversations between a merchant and Kit to work together to drive more success for the store. Those are 2 really different problems.

Eventually at some point we hope that Kit can become sophisticated enough to speak to customers on behalf of the merchant or just speak to customers as a sales associate on a more reg basis and have a more relationship building opportunity with customers, forward facing relationship with customers. We’re just not there yet. It’s just not our internal emphasis.

Right now our goal and our emphasis is for people in their mind to trust, believe, and build their relationship with Kit the same way that I work with my colleagues at Shopify and Kit. That’s a very, very real relationship and they treat Kit in a very real way and that’s just where our focus is at today, helping Kit better understand their business and making Kit smarter or making Kit more empathetic, but we’re really focused on the merchant to Kit experience right now.

Felix: When someone does sign up for Kit, I think you mentioned earlier that most people don’t have the time for marketing which is obviously very, I guess, scary, to think about if you’re having a store and you’re not focusing on feeding that pipeline. What is the marketing channel that you try to get them to focus on 1st because I know you do email marketing, Instagram, Facebook ads, this is reading from your page here, and all these integration with these apps. Where do you recommend that most entrepreneurs, either if they’re using Kit or not, where should they be focusing their attention marketing wise?

Michael: By far, Facebook. That’s where even internally at Shopify that we focus a lot of our time. The world is on Facebook. There’s a tremendous amount of data there. There is well over 1 billion people who are using Facebook every day. I like to believe there is a potential customer for every single business on Facebook. It is the best bang for the buck. It is the best opportunity to leverage this massive well-categorized catalog of data to try to find somebody to drive interest in your products and a better understanding of your brand. It’s just the most obvious one.

Felix: How does Kit work with stores to help them with their Facebook ads? How does the process work?

Michael: Yep, the beautiful thing about Kit is that we worked really closely with Facebook over the year. Kit’s really designed to use Facebook in best practice whether they’re a seasoned business and are really pulling their customer email addresses and hashing those to create custom audience which in turn we create look alike audiences to find people on Facebook that best represents their customers. We target directly them. We do pixel placing to do retargeting. We do pixel placing on thank you pages, to do measurement. We follow these same practices with Instagram.

We then, if you don’t have enough of that, we kind of look at your Facebook page. We try to figure out if we can find customers that look like your customers off of your Facebook page. If you don’t have enough of that we use insight. We’ve really mapped every single scenario out based on stage of your business and what Facebook’s APIs and Shopify’s APIs are able to tell us based on the stage of your business to make really sound marketing decisions for you. This is why in 2015 innovative company of the year with Facebook. We were mentioned at their marketing partner summit. We’ve had just a lot of success because what we try to do is simply be text messaging Kit we remove all the guesswork from actually building a Facebook ad.

Felix: Because you work with so many stores, and I’m going to ask you this question because I want to help the listeners see, I guess, see into the future a little bit which is are there stores that you work with where you see that they’re going to have a hard time making it, being successful, and the stores that you see that are almost guaranteed to make it, what are the themes between the going to be successful versus the ones that are going to have a hard time.

Michael: There’s no guarantee in life, period, right? The beautiful thing about that is there’s also no guarantee for failure. I think the things where we see a harder time making it, like people whoa re selling very, very, very, very niche things where there’s a very, very, very, very small customer base and if you don’t know how to navigate the Facebook ad ecosystem or you really don’t know how to market your products best to those customers it gets a little bit harder, right.

We had a guy who I’ll never forget. He lived in Hawaii and he was selling fish tanks. I was like, “Well, that’s interesting, but that’s under the assumption that people want to have fish or that’s under the assumption that people who already own fish want to invest money into a new fish tank.” It’s just a very, very, very small market. They’re obviously going to have a much harder time than someone who’s selling jeans or someone who’s selling golf polos or products that there’s mass market appeal.

Those are easy indicators to look who might have a little bit more uphill battle than the other, but with that being said, the guy that was selling fish tanks out of Hawaii was killing it, doing great and we’ve seen people who are selling women’s bags who are struggling and they’re not doing so well. We see the full gamut of everything and that’s what’s kind of beautiful about Shopify because it’s really built a platform that gives every single person the chance to find success. It’s just a matter of how hard they’re willing to work at it and how much time they’re willing to invest.

The guy that sells fish tanks, I’ve talked to him, and he goes to meet ups. Not all of his sales can happen by running ads. He does a lot of face-to-face business. Sometimes the person that’s selling bags needs to do the same thing, but they probably have a better chance at making sales if they really leverage on social networks and email marketing to it’s full potential.

Felix: Awesome. What are the future plans for Kit? What do you want to see Kit doing the next year?

Michael: I think when we think about Kit, we’re trying to figure out how can Kit start building a relationship with the merchant where it’s not just helping them make that 1 sale. It’s not just helping them with marketing, but how is Kit helping them best position their business for success and building a marketing agenda or building a game plan to help their business get on the right path? How can we help them reach the vision?

I think everyone becomes an entrepreneur because they see something for themselves. Whether you don’t want to work for the man anymore and you’re okay with just being by yourself I you have income of X amount of dollars per month or you’re a guy who’s crazy like me and you’re like, “I want to have 50 people working for me and I want to build this big empire,” there is something for everyone when it comes to entrepreneurship.

Our goal is how can Kit become their companion to help that dream become a reality and that’s what I want to keep working towards with Kit. As we get millions of people using Kit, it’s are we helping their dreams come true? Are we helping that vision come to life and that’s what we continually strive towards every single day at Kit.

Felix: Awesome, thanks so much Michael. Again, Shopify.com/kit. [inaudible 00:48:21] this tagline here on this page is hire your 1st employee for just $10 a month. I think it’s a great offer you guys are putting out there and a lot of value just hearing you talk about it. What’s the 1st thing you recommend a store owner I guess try once they are ready to sign up for Kit? Do they need to have anything prepared? How do they approach this set up.

Michael: The beautiful thing is that when you sign up for Kit Kit’s going to try to assess what’s the best next step for you in terms of marketing. Kit will actually proactively message you and ask you if it’s okay to move forth with this marketing activity and you simply have to say yes or no.

Felix: Awesome. Thanks again so much Michael.

Michael: Thank you, Felix. It was really a pleasure. Thank you for having me.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com/masters to claim your extended 30-day free trial.

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