Collis Ta’eed – CEO, Co-founder – Envato
To Market, To Market – How Envato became one of the world’s largest creative hubs and online marketplaces
There aren’t too many startups on the planet that regularly make millionaires of their community members. Or who have doubled user, traffic, and revenue numbers consistently for the better part of a decade.
The story of Envato going from a modest Flash design resource to a multi-site, multi-million dollar, online heavy-hitter is the essence of startup success. In fact, as a case study, it should probably be taught in business school. Except for the small fact that the journey of CEO and Cofounder Collis Ta’eed has been anything but textbook.
Since its inception in 2006, Envato has boomed. Actually, you would have to say it has BOOMED. One and a half million active buyers, eight thriving marketplaces, 250 employees and over $215 million paid out to authors to date — all born from an idea to start a business that could support the travel aspirations of Ta’eed and his wife Cyan.
“We had just got married and we had a lot of freelance clients. It was beginning to feel like a drag! Cyan said, ‘Let’s go traveling!’ I had always wanted to start a business and we had some ideas about how it would work, so we just thought, let’s go for it. Even though we had to keep freelancing for a long time to keep living as we built the company,” Ta’eed recalls.
Since Envato launched FlashDen, its first digital marketplace that sells content created with Adobe Flash, the company has grown to include eight online marketplaces. There’s a good chance you’ve heard of at least one of them. The Largest of the Marketplaces is ThemeForest, which sells website themes and plug-ins. ThemeForest, is to digital creatives what Home Depot is to DIYers, The Envato Market also includes GraphicRiver, CodeCanyon, VideoGive, PhotoDune, 3DOcean, AudioJungle and ActiveDen (formerly FlashDen), while the broader Envato group is also home to freelance hub Studio and learning platform, Tuts+. Phew.
Early days of Envato
Ta’eed credits their willingness to experiment with different promotional strategies and “guerrilla tactics” as the reason for their early momentum with FlashDen.
“I had sold Flash before and knew people would buy stock Flash. But our first hurdle to get customers was actually having content to sell them. As a marketplace, there is the whole chicken and egg problem — you need stuff to sell people and you need people to buy the stuff. We started by seeding the marketplace with content that we had made and sourced. We tried to buy our way in, I guess, which is a typical sort of marketplace strategy,” he explains.
From the first day, Ta’eed’s instincts appeared to be on the money, making their first sale on day one and growing to $1,000 a week in revenue within four months. Seeding content in places where their target market was hanging out was an important initial strategy, with the small Envato team of Collis and Cyan Ta’eed and Collis’s best friend, Jun Rung, exploiting the fact that their buyers and sellers were the same person.
“The people who were buying Flash were really just Flash designers — no one else knew how to use Flash. So we tried everything we could think of to reach them. Things like getting our content featured in design galleries, buying ads, social media traffic. Actually I got banned from a few social media sites for gaming them! We just tried everything to see what would stick and get that early fire going. It became a virtuous cycle; the more people we brought in the more stuff got made,” Ta’eed says.
Despite the fact that FlashDen grew to $20,000 a week in sales within a year and Envato had begun expanding into other areas, Ta’eed recalls that he suffered from a case of imposter syndrome in those early years, something many young entrepreneurs and professionals will attest to.
As a mathematics student, Ta’eed envied his roommate Rung, who had chosen to study design in college. Ta’eed ultimately decided to take on a design degree in the evenings while working at a café during the day. It was during these years that his passion for design really grew legs.
“I was in this really slow coffee shop, so I would spend my downtime reading design magazines, a pretty good set up for an aspiring designer! But I kept thinking, one day people will realize I’m not a designer. I’m just a refugee from maths. Then, with Envato, for a long time it was, ‘I’m not a real CEO.’ But these days I’ve come to peace with that one,” Ta’eed says.
The fact that Ta’eed has viewed each of his roles through a learner’s lens has also helped him keep it real, in terms of recognizing personally where his strengths and areas for improvement lie.
“I’m not a big believer in ‘fake it til you make it,’” he says. “When you realize you don’t know something, you need to actively try and learn it is. When I was learning design I was a prodigious reader and consumer, always trying to improve my skills until I felt I had a legitimate place. It was the same with being a CEO. For a long time I was worried there were things I didn’t understand well enough, like how to lead or manage culture or finances. But I knew they were important enough to learn, so I did.
“I look at my early years at Envato as being on my learner driver’s permit. You know when, legally, you can be on the road, but shouldn’t go too fast! Although these days I feel I’m closer to the full license.”
It’s evolution, baby
Once Envato had started to own its niche market with FlashDen, Ta’eed and the team started exploring side projects, several of which have since become the heroes of their business. In 2008, they moved into audio with AudioJungle, which rapidly took flight, and shortly after, ThemeForest was born.
During this time, he recalls that Envato began to develop its thirst for emerging and niche markets, spreading its wings, and its focus, across several different products and marketplaces.
“For some startups, it’s a good idea to keep focus in one area, probably more than we did. But I was always having ideas. In fact, I have always found that the best ideas keep coming back over and over, which I took to mean that I needed to do something about them. So we started thinking about how we could split the marketplace to serve multiple niches. At the time, it was a bit of a land grab. There was nobody really in these markets and we needed to establish presence quickly to corner an advantage.
“It’s important to understand the specific opportunity you are in. For us it felt like there was a lot of opportunity for spreading horizontally, before starting to go deeper in each area. But not every industry is like that and there is a price you pay. The more you spread, the thinner your resources are. We probably could have become profitable much sooner if we had just stuck to FlashDen, but then we also wouldn’t be around today.”
Hang onto your bootstraps
As their business was growing, as a bootstrap operation, Ta’eed and Co. were also reinvesting heavily back into the business. Their level of commitment to growth was such that Collis and Cyan even shared a $50,000 salary for several years, after business demands required them to phase out their sideline freelance work.
“Sure bootstrapping can be difficult, but I don’t think we really understood the idea of raising capital or that it was really a thing. I just thought you were supposed to use your savings and make sure everything stays afloat!
“Startup culture back then was a little less fleshed out. These days there are incubators and things to help you, but a lot of those weren’t around back in 2006, 2007. There was more happening during the dot-com era, and it was all quite flashy. But when it spectacularly failed, things got a lot quieter for a while. It has come a long way since then,” Ta’eed explains.
For Envato, while it wasn’t always easy, Ta’eed believes he would probably still choose to operate as a bootstrapped startup, since remaining in control has always been important to the team.
“If you have capital you can probably make things better. But there’s a trade-off. You have a different set of expectations and more things to balance. The act of getting capital can also be time and focus intensive, and if you’re not careful you can overspend. The good thing about bootstrapping is that when you have very little money, your culture starts in a really economic way. You’re forced to think about your decisions. If you’re flush with capital it’s easier to spend your way to size. There’s good and bad to both! Certainly capital is a very viable, legitimate path. But for me, I never liked debt, or owing somebody something.”
Getting the right fit
As a startup, Ta’eed believes that if you can provide value, there’s something you can sell, but it requires diligent market testing and a feedback loop to see which ideas or products have genuine legs.
“Community is an important part of Envato, so we have some very large, active forums. We hear feedback on every new feature direct from our sellers and buyers and we do surveying for different types of features, qualitative, quantitative and AB testing. Knowing when you have the right fit has always been clear — it’s when people start buying. That is one of the benefits of a business with revenue. What’s trickier is if your business is much more intangible, like social media. To generate revenue you need to get massive traction, so you need different barometers for different types of businesses.
“It’s also important to know the difference between market fit and something you have forced into existence. For example, if you have bought so much traffic that some of it is converting, that’s not the same as people flocking to your product and buying it. I would rather people came organically and bought less, than us acquiring the traffic and people buying more. The former would indicate greater fit, because more people were going out of their way to find your product and give you money.
“Think about spam emails. They operate on the principle that if you put something in front of enough people, some people will do surprising things! You just need to be wary that you don’t accidently make that mistake with a new business. Be realistic about the cost of achieving the fit you seem to be getting,” he says.
The Holy Trinity of Things to Get Right
From a learning perspective, Collis Ta’eed believes it comes back to recognizing what you don’t know and making it your business to know it. Here, he explains the three key areas that posed the biggest learning curves for him in business:
Early on I didn’t take finance seriously enough. We did engage an accountant and a lawyer, but didn’t really understand the long-term ramifications of getting this right. Later on we had to do a lot of work to unwind some early decisions. For example, our website trades in American dollars, but as an Australian company we pay in Australian dollars. That got very complicated during the global recession when the dollar dropped! These things didn’t seem like a big deal when we set them up, but became a little troublesome later.
I would also spend time on creating the structural aspects of your business. Especially with a global business, consider what you might want to do in future and the structure of your ownership, in case you bring other investors in later. It’s easy to think that it will just work out, but this stuff is serious and worth investing the time in.
I have learned, and am still learning, a lot about management over the years. It was one thing I underestimated. If you are constantly bringing in different people you have to lead them and give them the things they need to develop and have a happy career in your company.
For a long time, I didn’t really understand that it’s a good idea to talk to everybody, and often. Which seems obvious now! When you are six people in a room it’s much simpler in terms of communications. Talk to your staff, check in with their goals and unblock things for them. Early on I was really focused on what I wanted us to accomplish, but, as a leader, I think a lot of your time should be spent on just clearing a path for your team to execute.
Also, in the early days, I think delegating for me was much more about giving directions. Now, as Envato has gotten bigger and the team more senior, I delegate better. Here’s the context, now how do we get there? And finally, flexibility. I used to believe the hours a person worked was really important, which is a bit of a trap. Results and outcomes are actually more significant, not just how busy someone looks.
Jump in, get dirty
While recognizing that each business or industry is unique and therefore requires a customized approach, Ta’eed’s top-level piece of advice for aspiring entrepreneurs is to simply jump in at the ground level and try everything you can to get your business off the ground. That also means identifying your own yardsticks against which to measure successes and failures.
“You have to find out what works best for your business, but for us, SEO and search played a huge part in our growth. There’s no silver bullet. But the core principle of trying lots of things, sitting down and thinking creatively about what might work, and also learning from successful competitors. It takes time, but if you’re bootstrapping you should be using time and not money.”
That also means keeping an eye on the next big step for your business. It’s easy to get caught up in each day’s plan, but Ta’eed learned an important lesson from FlashDen — something hot now might cool way down in the long term.
“Envato has always had something on the boil for next year or the year after, and that’s worked really well for us.”
- What it takes to manage a large team and becoming a leader
- How Collis validates his business ideas for marketplaces and how he chooses the right ones to pursue amongst the hundreds
- Raising capital vs Boostrapping
- How he got his first 1000 customers
- Marketing tactics and strategies for growth
Full Transcript of Podcast with Collis Ta’eed
Nathan: Hey guys. I hope you’re having a great evening. My name is Nathan Chan and I’m your host of the Foundr Podcast, and today I bring you a very, very cool guest. His name is Collis Ta’eed and he’s the founder of Envato and that is their parent company. They have eight online market places. So in creative stock themes, graphics, video, audio plugins, photography, 3D Flash, you name it. So you probably have not heard of Envato before but I’m sure you’ve heard of their websites like ThemeForest, Graphic River, AudioJungle, PhotoDune, CodeCanyon, just to name a few. ThemeForest was actually the 88th most trafficked website in the world.
So we have an inside seat on how someone like Collis thinks and operates and how his business started. And I think you’re really gonna like this interview. Something that sat with me that I took away because every single one of these interviews I do, you know, I’ve done over 100 of interviews now, every single one I always take away one thing and I’ll call upon that one thing sometimes when I’m making business decisions or when I’m speaking to somebody. And I’d just like to share with you the thing that I took away from this interview and what that was was, you know, Envato have so many different marketplaces and they keep launching, launching, launching.
And I said to Collis, “Would it make sense to just focus on one marketplace? How do you evaluate those ideas? How do you know which ones to choose?” And he said, “Well, when I write them down, and I’ve got a whole ton of notepads.” I spoke to Collis in person actually because they are situated in Melbourne and he showed me, he’s got like, you know, 10s, 20, 30 different scrapbooks of all these ideas. And I said, “Like how do you know what ones to pursue?” And he said, “Well, I think if I could boil it down to one thing, I chose the ones that just keep coming back to me and that excite me the most.”
So ever since speaking to Collis, that’s how I make some of my decisions. Like, you know, that’s how I know which products to launch. Of course, I’m finding out what people want and what people need and what their deepest frustrations and desires are and how at Foundr we can help with that. But on the fundamental level, I don’t do anything now. I don’t work on anything that doesn’t excite me. And I guess that’s what life is really all about. It’s all about doing things that excite you, and that’s what keeps you going. That’s what it’s all about.
So that’s it for me. Just wanted to share that little golden nugget that I took from this interview. There’s a ton more around…you know, Collis has developed an epic marketplace with a ton of different websites. Envato’s a very, very well recognized startup in Australia and the world. So there’s a lot you can learn from him. So that’s for me. If you are enjoying these episodes, please, please, please I’d love to hear from you, [email protected], and also please take the time to leave us a review. It means more than you can imagine. Okay, let’s jump into the show.
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So today I’m speaking with Collis Ta’heed. Is that how you pronounce your…
Collis: Yeah, Ta’heed.
Nathan: Ta’heed. And he’s the founder of Envato. They are, in my opinion, one of the most successful Australian startups and you guys have been around since 2006, right?
Collis: Yeah, that’s right. August 2006 we launched.
Nathan: Wow. And they’ve come a long way. They have many different marketplaces. They’re most known for ThemeForest, PhotoDune, AudioJungle…what are some other ones?
Collis: VideoHive. We sell a lot of aftereffects. GraphicRiver. We also run a freelance marketplace, studio and Tuts+ which is like a learning platform.
Nathan: Yes, yes, that’s right. Well, look, thank you for taking the time to speak to me today, Collis.
Collis: No worries.
Nathan: So let’s just start off with how did you get your job?
Collis: How did I get my job as CEO of Envato? Oh, well, I started the company, that helps I think. No one else wanted the job. No, back in 2006 I used to be a freelancer and that time, Cyan, my wife and I, we wanted to start a new business, do something online so we could like travel around. And we came up with Envato. One of the first things to do was like, “Well, what are our titles? Like, I guess I’ll be the CEO.” But you feel like such an idiot calling yourself a CEO of a nothing enterprise, but it’s kind of fun still. I would say it grew overtime. Now it seems a little more respectable.
Nathan: So you started in 2006 with your wife. What did you first launch with? Because you have many different marketplaces now. Let’s go back to the start, humble beginnings, 2006. Entrepreneurship wasn’t really glamourized. You know, I was just getting into Uni, but was entrepreneurship glamourized like it is today?
Collis: Not as much. I don’t think. There’s certainly wasn’t as much of a mainstream startup culture. I mean, the top… I think there was a lot of stuff happening with startups but it was a bit more…and it was quite flashy at that time. But then it went all spectacularly right because it think things got a little quieter for a while. That said, there was definitely a startup community and there was definitely businesses out there talking to startups and reporting on and whatnot. I think it’s really come a long way though since then. A lot more resources, a lot more stuff, and obviously there’s been like movies and social network I think really…I don’t know.
Nathan: Silicon Valley.
Collis: Yes, Silicon Valley, that’s right. I think that sort of stuff has really taken it up a notch.
Nathan: So in 2006 you wanted to travel and that was the main focus for Flash 10.
Collis: Yes, that’s right. So we started with Flash 10. That was our first marketplace for Stockflash. We still actually run it. It’s called Active 10 because eventually Adobe told us to change the name, and it’s a shadow of its former self. But at that time Cyan really wanted to travel. We just got married and she was like, “We should travel.” And all these freelance clients they’re really like, “Wow, it’s a bit of a drag.” So we thought why don’t we… I mean, back then…actually now I’ve since realized that you can freelance online, but at that time that did not occur to us. We were just like, “Well, I guess freelancing and travelling is not gonna work.”
I had always wanted to start a business and I had been selling Stockflash already on another stock marketplace, so we had some ideas about how it would work. I kinda had seen it, knew that people would buy Stockflash and then observed another marketplace and learned how it worked. And I think that all kind of came together and we were like, “Let’s just go for it.” And we kept freelancing actually though for a long time. For like a good 18 months after we started business just so that we had money and could live. That was all things and in the meantime, you know, sort of built up the company.
Nathan: And that’s actually one thing that, I guess, a lot of people don’t touch on is when you start something like a business from scratch, you have to have money coming in somehow. So you have to freelance. Sort of like when I started the magazine, I started while working fulltime job and you have to make money somehow. So how did you get your first 1,000 customers?
Collis: Okay. So in the beginning, as I said, I had sold Flash before and so I kinda knew that it could sell. Our first problem to get customers was actually to have content to sell them though, if that makes sense. Because we’re a marketplace and marketplaces have that whole chicken and egg problem where you need stuff to sell to the people, otherwise nobody shows up. And you need people to buy the stuff otherwise no one shows up to sell the stuff. We started by like seeding the marketplace with content that we’d made and we sourced. And so I made a bunch of stuff and then we hired a few people to make things and kind of tried to buy our way into having something to offer which I think is a typical sort of marketplace strategy.
I met an Uber driver not long ago who was telling me that when Uber first arrived in Melbourne, his company, his car company was just paid extremely high rate just to be available on the app. And even though they took no rides or anything, it was just important for Uber to show we’ve got supply. It’s kind of the same for us where it was really important for us to have stuff on the proverbial shelves to sell. And so we kind of made some stuff for ourselves and when we launched we kind of sailed in our first day which now when I think about is quite remarkable. That time the way we got people in the door was to go to…and I guess this is the kind of thing you can always do, we were looking for the places that the kind of person we wanted was gonna hang out in. So we needed this.
The other people who buy Flash are Flash designers and Flash droppers. Nobody else knows how do use Flash. These days nobody knows how to use flash and back then people still used it. And so we knew the target market was Flash designers and so we were like aware of those people hanging out and design galleries and flash sites was the place to go really for them. So we tried everything to reach these people but we wanted the most successful strategies we had was to get either Flash 10 or sort of marketing sites the we made featured in galleries. So designers and flash designers in particular would go visit the gallery and be like, “Oh, what’s the thing?” and end up somehow back at Flash 10.
And it kind of just became a virtual cycle. The more people we could bring in to buy things the more stuff got made because other Flash designers were like, “Well, you make stuff to sell.” We’re lucky that our marketplaces are buyers and sellers especially with Flash was the same person. So anyone who could buy could in theory go, “Actually, I’ve got this little thing that I made one time. I’ll put that up for sale.” So that kind of helped. Now the first 1,000 buyers came a lot from those little guerrilla tactics. We just tried all kinds stuff like going on the forums and chatting one-on-one to people sometimes. Other times we would buy adds, make things fit into galleries.
We tried even all kinds of social media traffic. Looks of the sites are not that important anymore, but back then delicious indeed and whatnot. We would experiment with trying to get traffic in different ways. I got bans from a couple of social media sites for gaming them and then I became much more legitimate in how I used. But we just kind of tried everything to see what would stick and just to get that early momentum and get the fire sort of going.
Nathan: I see. So after Flash 10, what was next? And I’m curious before we move onto that, sometimes people say that you have to focus on one thing. And as an entrepreneur you always want to start all these other different things, you always have all these other crazy ideas. Was this something that you were actively engaging like, “Okay, we’re owning the marketplace with Flash 10. Now let’s move on to something else?” What advice would you give around focus and knowing when to move on to that next thing?
Collis: I think it’s good idea to focus more than we did. I think we did a very good job of focusing. I was, as you say, kinda characterized exactly, and you words is someone who’s just like, “Oh, I’ve got this other idea. We should kinda do that thing.” It’s actually lots of ideas never even made it off the ground. I think we did a decent job of focus within our marketplace product. So when I say we had a lack focus is more than, I think we just started other products as well. But with the marketplaces we spent a lot of time on Flash 10. Then once it started picking up traction, we immediately began thinking about how to split the marketplace application so that it could serve multiple niches. It was actually quite a big project and took quite a while. I can’t quite remember how long but over a year. And then we used that to get into audio and started there next.
And with the marketplaces, we kept picking niches that nobody else was in and I was quite convinced at that time that it was a bit of a land grab in that there was nobody really in some of these markets and it was important for us to establish presence quite quickly so that we could have that sort of first move to our advantage, which I think…so I guess to answer your question of when should you focus, I think it’s important to understand the specific opportunity or in for us it felt like there was a lot of opportunity just from spreading horizontally and ending up in lots of different areas and then starting to go deeper in each one.
But not everywhere is like that and there’s a cost sort of a price you pay. Like the more you spread, the thinner your resources are, like we probably could have become profitable much, much sooner if we just started Flash, but we also probably wouldn’t be around today I guess. I think sometimes the team at times of the year has been a bit like, “You know, we could do a really good job of each of these things if we focused more,” which is true. I think long-term we’ll do a good job of everything, but when you spread out sometimes you have to get more generic experience of things or I know you can’t have as much specialty in that space. So I think you cannot focus or you can focus, but you just have to understand the customer benefit of each one.
Nathan: I see. So you started to get some traction with your first marketplace and you guys were freelancing on the side and when did you move to the next marketplace and when did you focus fulltime? And can you run us through how the company has grown? Because I’m in the office now. It’s such a cool office. It’s like one of the best offices I’ve been to in Melbourne that’s for sure.
Collis: Oh, thank you.
Nathan: And, you know, you’re a massive company now. So let’s go step by step on how it’s kind of evolved.
Collis: Yeah, sure. So, too much detail. In 2006 February was the day we decided to start and it took us six months to get even Flash 10 out the door. And during that time, it was myself, my wife, my best friend, Jonas as well, and he kind of took care of some of the early financial stuff and we hired a contract developer. And the four of us basically worked on Flash 10 for those six months. We launched in August. By the end of that year, so three months after launching, we’d hit a $1,000 a week in sales which is quite a lot, but obviously, there was four people working so it’s not that much especially when you have to pay the people who make the things. But still it was pretty cool.
That was the point where I think we realized it was gonna go somewhere. And over the course of the next year we grew 2 folds. So by the same time the following year, it was 20,000 a week. So quite significantly bigger. The weird thing is at the beginning of that year, 2007, I wrote these emails, my other founder, and so Ryan our first developer. I was like, “This year our goal would be to grow 20 fold.” I mean, it happened. And I would say, “Oh, my God, I’m like Nostradamus of business.” And the following year I wrote, “Again, we’re gonna do it.” But of course, it did not happen again. I think a complete coincidence happened that first time.
But so in the year 2007, we continued mostly just working on Flash 10 that year. On the side, I started up freelance which was a blog about freelancing, which was since closed or what merged into Tuts which was another product I started at that time. So in 2007, we were mostly in theory constraining of Flash except I had a whole bunch of side projects and some of which turned into longer-term businesses. And in 2008 was when we managed to get AudioJungle which was our second marketplace up and then shortly after ThemeForest. Once we’ve broken the back of splitting the applications so they could do multiple niches, we started churning out markets quite quickly over the next few years.
But that first 18 months until about AudioJungle came out, we were still freelancing and just slowly lessen over time. We started taking a very small salary and for a long time Cyan and I shared a $50,000 a year salary at first after we started freelancing. So in those early times, and to this day it’s something we’re re-investing heavily back into the business because we felt like there was a lot of opportunity, but we were doing it in a bootstrapped way. So if someone has to fuel it, it’s basically coming out of the profits of the business in our pockets really. But once we got past that mark and started actually working full time, I think that was the next point where we really were like, “This is…this seems to have some major legs,” which is quite exciting as you can imagine.
Nathan: And I’m curious did you guys ever think of taking outside funding? What are your thoughts between, you know, taking capital or just bootstrapping and owning 100% and just from ground up?
Collis: It’s like now I that we’ve done it, I’m really glad we’ve done it, but I don’t know that I would do it again. That’s like, I think, bootstrapping is quite difficult. Sometimes you have no choice, in which case that’s the option you take. And I don’t even know if we would have had a choice. I certainly just didn’t really understand the idea of raising capital or I thought that was a thing. As we were discussing before, startup culture is a little less like flushed out. These days there’s VCs in Australia who you can talk to and incubators and all kind of stuff. A lot of that stuff wasn’t around and just didn’t really occur to me.
I just thought that was what you were supposed to do was use your savings and put your money in and work hard as you can to try to make sure the whole thing stays afloat unless you were…like I had read about Silicon Valley and like Google and I was like, “Well, let’s hit Google,” and obviously you do some stuff which I don’t really understand. And then these kinds of things and to this day I always about term sheet and stuff sounds like a scary thing, but I think you can negotiate. And certainly, if you have capital I think that can make things work better. And so with everything there are tradeoffs. So since you’re bringing capital you just have a different and ultimate sort of expectations from whoever is giving you money, more things to balance.
The act of getting capital can be quite time and focused intensive just because it’s not a simple task necessarily. And I think if you’re not careful…the good of bootstrapping is when you have very little money your culture starts in a very economic way. You’re forced to really think about early decisions. None of these that’s got pluses and minuses as well, but that plus of having a lean business is quite a good one. I think if you have Flash capital it’s a bit easier to go, “Oh, well, we’ll just spend our way to size,” which can also be good. Oh, there’s good and bad to everything. So much new ones to these decisions.
Nathan: I’m curious, if you were to start a business, like let’s say if you were to ride like, you know, have a clean slate, would you bootstrap from the ground up and would you raise capital for an internet business that you wanted to start?
Collis: So if I was not me, not Envato, starting afresh today, look, I think maybe I’d still bootstrap. I do like control, so I think that also matters. Like I never liked dust and I never like owing somebody else something. So the idea of having some other group or put in a lot of money, I think might have always been a thing for me. But I guess I do think it’s a very legitimate path to raise some capital as there’s a normal sort of thing to do, I think it’d be a very viable option which I’d certainly consider any out and maybe do.
Nathan: So let’s switch gears. You’re a designer by trade.
Collis: Sure I am.
Nathan: So how did that all start?
Collis: So I used to study mathematics of all things in university and really did not enjoy math very much. Managed to sort or Ecoute my degree, finished it and at that time my roommate who is one of the founders of the company was a designer hence I kind of paused, “Like, wow, this job looks way better than my plan of the job that I don’t know if I would actually be able to get.” And so I got him to teach me some basics and I just started teaching myself online. Eventually I went to the degree in and I worked as making coffee in the daytime and just, I was in like this really slow coffee shop, so I would redesign magazines while I waited for customers.
I mean, it was kind of a good setup really for an inspiring designer. And that I really discovered a bit of a passion for design. I had a lot of impostor syndrome for a long time which I think it kind of comes to thing where you don’t believe your real whatever. For a long time I was like, “Oh, one day people would realize I’m kinda real designer,” and I’m like refugee for math. Eventually, I came to like, “No, no I’m a real designer.” And then I had for a long time, “I’m not a real CEO.” But these days I’ve captured a piece of that as well.
Nathan: You know, this an interesting point that you make because so often you have people just…they feel like they’re an impostor. And what do you think it took for you to overcome that and do you think that while you were feeling that at least being the CEO and one of the founders of Envato, do you think that was a detriment to the growth of the business?
Collis: For me, no. I believe there’s a lot to learn in any new field. So I when I was designer later running a company, I feel that there’s a lot of things you need to learn and I’m not a big believe in you know there’s that phrase “Fake it til you make it,” I’m not actually a big believe of “Fake it till you make it,” I’m much more like when you don’t know it’s important you realize you don’t know and you’re actually trying to learn all the time. So for the whole period for that, I had a bit of lack of confidence about being a designer.
I also was a prodigious reader and practitioner and I was constantly trying to improve my skills until I felt that I had a legitimate place as a designer. It’s kind of the same running a company for a long time. I was very worried that that being the things that I didn’t understand about how companies were supposed to be run. Whether it was to do with how to manage people or how to lead or how to create culture or how to manage finances or just like the whole garment of things that are involved in running a company and I look back and I’m like, “Yes, I did not know those things.” And those things are, you know, important to learn.
And so I suppose for me I look at it as a period where I was…like I look at many of the years of Envato as being on my help plates as CEO and like you could be on the road but you shouldn’t go too fast. You probably should warn everyone that you’re on your help plates. So these days I feel like yeah, at least I’ve got provisional, maybe a full life sentence. But yeah, that is the alternative school of thought which of course you should just project confidence and go for it. It happens to not be the way I think though.
Nathan: Interesting. You seem very casual and you kind of it just going to happen and, you know, here we are now. Can you tell us some really hard lessons learned that the listeners and the readers can learn from your experiences? Do you have maybe three action items that you would give to aspiring and nervous entrepreneurs?
Collis: Yeah, absolutely. Look, I think, early one I didn’t take finance serious enough and so, you know, accounting, hiring a good accountant or lawyers or putting a lot of money aside for that. Like we did hire an accountant and we hired a lawyer, but I don’t think I understood sort of these things have long-term ramifications in how you setup a business and then later on we still had some work to unwind some early decisions just around like structure, and not that a big deal but it was much more troublesome later. Of course, the flipside is you never know whether your business is going to be successful.
So it’s very easy for me to say eight years later, “Yeah, I should have invested more time upfront in accounting and legal.” But then the sort of thing is we spent a lot of our money and maybe we wouldn’t have gotten off the ground. But anyhow, yeah, I think if I was doing it again I would definitely, at the very least, spend a bit more time on those kinds of structural things especially with the global business. You need to kind of think about what you might wanna do in the future or what are the right ways to structure your own share or, you know, if you want to bring in investors if you’re in that sort of capital rising or should you do there.
I just think there are some key decisions you should make and that one I don’t think in retrospect I gave enough attention to. So for example, we are a company that trades in U.S. dollars because everything on our marketplace is sales in U.S. dollars but we’re an Australian company so we pay everyone in Australian bills. Well, and we actually pay our sellers in U.S. dollars as well. So anyhow, during the 2008, 2009 financial crisis when the currency exchange rates were trenching really dramatically. I had to learn some add lessons about holding money in the currency that’s hoarding because we had just being moving money back to AUD and then our sellers, our liabilities were certain USD.
It’s like confusing even to this day I still find it completely lost. It was one of those things where I was like, “Oh, this stuff is serious.” You know, it doesn’t always just work out. So yeah, I think taking finances more seriously. I think like currency stuff was stuff that I characterize as more serious. I learned a lot about management over the years. I think I was not a very good manager. I still have lots to learn probably being a manager, but I think that was one thing that I underestimated as well in those early years was that at the end of the day if your company is successful and you’re bringing in other people, leading people, giving them the things that you need to develop, have a happy career in your company, all those things are actually quite big and it take a lot of effort.
It’s not easy. You have to invest a lot of time in them. At the beginning, I was very focused on just making products but, again, if you go back you sort of think, “Well, product is the thing that means you have got a business to start with.” But I think those are three things if I was starting out I probably would take a bit more seriously. People management, finance things, and just the setup and structuring.
Nathan: Okay. And there’s quite a few things I would like to unpack there certainly around management and leadership, what advice would you give?
Collis: Well, it’s very broad. I think for a long time I didn’t really understand that it’s good idea to talk to everybody often. It just seems kind of sensible now, you know, meet with all your stuff, check in on what their goals are, how they’re trying to develop, what their aspirations are with the company, what they need, how you can unblock things. I think early on, I was quite focused on what I wanted us to accomplish rather than I think as a manager and leader some of your time, at the very least if not most, should be towards just clearing a path for your team to execute, and I think that probably could be something I could have and probably still could do better at.
I think for a long time I wasn’t quite sure what level of delegation and responsibility to give people, so you know, how much context versus how much direction. And that depends a bit on the person, that depends on the situation. Over time the company has gotten bigger and the team, most senior I do much more delegation and just, you know, in case of context, how do we get there versus in the early days it was a bit more directional and maybe that’s always the ways it is, but I think I could have done better there.
Other things about management, I guess understanding what’s important. Like for example, early on, I used to think what hours a person works was really important and the why. I was like, “Oh, you know, when they show up as if we weren’t there.” Actually, I’ve realized well not really the results that produce the outcome is important, not just kind of how busy they look or…which I think is just a sort of a trap of like convincing yourself of someone is productive if they look productive and isn’t. So we had this guy early on who used to just best work at night. He always came late. Actually there’s a time I came to realize that didn’t really matter because he did great work at night time.
So sort of understanding flexibility is bit important. Understanding how much communication is important has also been something I’ve learned through the years and this is a bit more. Like less so with a very small team. When you’re sort of six people in a room you can communicate pretty easily, but when you get the past sort of 20 or so, communication starts to be a more and more important. Now that’s 250 people. It becomes really important because a lot of the job becomes coordinating all these people to make sure everyone is rolling in the same direction, so to speak.
Nathan: That’s another interesting lesson.
Collis: Sorry, I’d probably go on all day about it.
Nathan: This is great because, you know, your company has grown really, really fast and I’m sure there’s lot to be learned. Let’s switch gears and talk about growth. Do you have any strategies or tactics or anything that you’d like to share that has being incremental in the growth of Envato?
Collis: Yeah, absolutely. I think there’s a few definitely. So like from a low level tactics, you know, in terms of like the very practical things we do, I think the only real advice I have for other entrepreneurs is just to try everything because things work quite differently in different businesses. Try everything and make sure you’ve got at the very list some basic analysis tools for determining which tactics, which promotions, which campaigns work better than others. You kind of need to find the thing that fits for your business. So for us, CEO and search was a huge part of growing. We have user-generated content that users optimizer their pages. We have also sort of search terms which then come up really frequently with the most search traffic which lead to more content and kind of have this virtual cycle.
Of course, if you have an app, CEO doesn’t really matter, honestly. I guess you have to think about it. So it’s completely different. So yeah, I don’t there’s any specific silver bullet at that level which works, but I think the sort of core principal of trying lots of things and when is say try lots of things, I mean both sitting down and just creatively trying to think through what other types of things can we do but also learning from what competitors , other people in your area are doing. So for example, I often visit inbound.org which is like a social site for instant marketers, and they’re always sharing like 50 different ways you can do X, Y, Z.
It’s not a bad idea. Just literally try everything necessary. It takes a lot of time. Of course, if you were a bit strapping then you should be using time instead of money. So I think yeah, the low level, trying lots of things and then measuring them and trying to understand which ones work for your business at a higher level for growth. I think that’s worked well for Envato is always having an eye on the next horizon. So it’s quite easy to be very involved in today’s plan. So like if I go back in 2006, if we had stayed on Flash 10 and not really thought, “Hey, what about next frontier or next horizon?” then we would have grown, Flash 10 would have grown much the same way as it did, I guess, which was pretty sizeable.
You know, it grows to a multimillion-dollar marketplace, but then it would have shrank in the exact same way that it has now. It’s now back to tens of thousands. Whereas we have always had something that’s in the boil for next year or the year after, and I think that’s if growth is important and unless you are on…you know, every now and then someone comes up with some idea like Instagram which has massive growth potential just in itself, and you really just need to focus and ride that one wave. But I think for a lot of businesses you’re on smaller waves and you need to…this analogy is going to break but you need to build multiple ladders to get there to a single area that you can…
That totally didn’t work. Actually, there’s a lot more business that are like Envato where there isn’t a single like, “Holy molly this is the mother of ideas.” And instead you’re sort of piecing together, building up a business strategically and then when you’re in that frame of mind then you need to be thinking about the next frontier, the next horizon.
Nathan: Yeah, okay. No, this is great. So I’m curious just to touch on that, is there any advice or I’m curious to hear your insight on how you guys identify these kind of opportunities and new areas that are hot that you wanna tap into and you think…because you guys have a really big proving track record for that.
Collis: Yeah. Look, a big part of it is being involved in things. This is actually stupid but like I think that two approach is right. Like one which is maybe more strategy consulting and management consulting at the way they would approach it is almost like a bit of an academic problem of, “Okay, well, these are kinds of customers, what things do they need and what spaces are they in, and what competitors are in those spaces?” And I think you can probably approach in that sort of very rational way. The way that I’ve always approached is completely not that. I’m much more just…so like I was making Flash and I was like, “Wow, there’s an opportunity in the Flash.”
Hence I was a web designer and once Flash 10 started I was seeing that other web designs and I was like, “Oh, WordPress is really taking off.” And I suppose, for me, it’s much more about just being involved but having your eyes open with that sort of frame of mind of looking at opportunities. So I constantly think about what things could be sold as a digital creative item. Whenever I see anything I’m like, “Could we sell this? I would probably sell this. I bet there’s something we can sell here.” And I think that sometimes just leads to opportunities.
Often or some of them fall flat on their faces. I think you need to be a bit at peace with you’re not going to get them all right. And then you just do many small bets rather than like one like…unless you’re some kind of visionary. So as for me I’m, you know, in entrepreneurship you’re still thinking of there’s two different types of archetype entrepreneurs. There’s sort of Steve Job technological visionary who’s like, “This is the future. We’re just going to bet big on this future.” And then there’s much more the type that I see myself as just a bit more industrious and thinking like, “Could we sell this? I think we could try and sell that and use analogies from that to sell that other thing.” And it’s a bit of a different approach.
So with that caveat that if you’re like Steve Jobs visionary or borrowing Instragram and or whatever that you maybe we’re just gonna bet big on this thing. But if you’re a bit more like the type of entrepreneur that I am, you look for many small chains, you find small ways to test and bet and then you exploit the ones that work. And the way to find those options is to actually be involved in lots of things. One way to not plan opportunities is not to engage with the world. You know, if you’re…and I’m a bit of introvert so I’m not the type of person who goes out and meet lots of people, but I love browsing the internet and just thinking about how people are doing things and what kind of technology they’re using, which technology might go and the types of problems a person might have and how we could help solve them.
And there’s lots of different sort of frameworks I think you can use for analyzing opportunities in that sense. So you can think about the problems a person has or you can think about where the technology is going. Or like there’s different approaches you can take, but they all kind of lead to the same thing which is, “Is there something we can sell?”
Nathan: That’s really like, you know, businesses are, buying and selling.
Collis: That’s right.
Nathan: In the simplest form.
Collis: That’s right. Like providing some value and if you can provide value then that’s something you can sell.
Nathan: Okay, I’m curious, you said that you do a lot of testing, so some of these marketplaces that you have started, have you started others than you’ve just soft launched and they didn’t take off?
Collis: We launched categories constantly. So that’s the way we found. So for example, we run CodeCanyon which is quite a substantial marketplace for WordPress plugins and page kinds of things. Before we launched CodeCanyon itself, we started with just a single category on ThemeForest which we had already running. So we had a category and the job description category. We’re like, “Yeah, the same speed but attraction lets grow it out as more categories than it offers its own thing.” So I think that’s probably been the main way we’ve tested and there’s has been lots of categories which just didn’t go anywhere.
At one point we launched audio personal music tracks which was the most stupid idea with retrospect because I just completely annulated that market. Recently we launched type engine theme which hasn’t taken off yet. Yeah, we test constantly. So we put out I don’t know how many categories, yeah, but quite a lot and see if any pick up.
Nathan: So you’ve got a good foundation and then you just kind of build on that and then sort of see what takes and then just keep building on top of that foundation.
Collis: And in that sense, when we launched Flash 10, we launched with four categories on the Flash 10…obviously one from the Flash, but we also had audio and pixel funds. Hence when audio got a little bit of traction, we spun that out to be an audio side and later video to be sort of side. So yeah, I think in some ways having your first product as an entrepreneur is the hardest one. I think it’s you’re building some kind of audience, some of kind of business framework. But once you have some kind audience and some resources you can use that audience to test other ideas and you can try to build off it.
Nathan: I’m curious, how often do you guys seek user feedback and stuff like that? Are you always talking to your customers?
Collis: Yeah, certainly. Because community is kind of the important part of Envato. We have some very large forums which are quite…
Collis: Yes, active and the feedback you get for every new feature we hear from especially our sellers, our offers, but also there’s a reasonable number of buyers on there. We also do surveying for different types of features, testing with qualities of data. So interviews and thinks like that. But also quantitative in that we do at every test and see how produce features or changes actually impact revenue. I think testing is definitely an important thing. Feedback from customers I an important thing. And in some level, intuition I think also factors in there.
Nathan: And in the early days, did you do a lot of customer development?
Collis: Yeah. More with the sellers, the authors. Again, our community started from day one, really. We had forums that were not super active at first, but they rapidly became active as sellers started making more money. So we always had that feedback cycle. So I don’t we really started engaging much until quite recently. We were quite focused on the seller side of the market, which was good in the sense that the sellers had often a good sense of what their buyers wants as well. But yeah, I think that’s something we’ve gotten better at over time.
Nathan: Okay. Interesting. Look, we have to work towards wrapping. There’s a couple more things I’d like to touch on. What it’s like starting a business with your partner?
Collis: Yeah, I don’t it works for everybody because there’s been a lot of people who have been like, “Whoa, that’s not a great idea.” But for me, I thought it worked really well. I mean, it’s not even just my partner, my big brother is also a director of Envato and my dad as well. So at one point my little brother was doing support here as well but then he became a doctor. And so he completely wasted his life obviously. He should have stayed in the internet game. Yeah, so it’s not just part of it, lots of families as well. I think…
Nathan: What’s that like? Can you tell me?
Collis: I think, well, look, it has some challenges in the sense that there’s a few different things happen. One, you often never switch off. So when I’m hanging out with my family or my wife or whatever, most of the times we’ll just be talking about Envato. That kind of works okay for me because I’m slightly obsessive. I probably be thinking about Envato anyways. But I think there’s definitely a factor of not being able to switch off. I think it’s nice in the sense that so Cyan and I, like I use her as a selling board a lot for our things and she reads most of my communication before they go out and she’s a good selling board for ideas I’ve got or plans. Has put to bed some of the stupid plans over the years. She’s also a good project manager.
So I think we have quite complimentary skills sets. So I think that’s quite important in your family team whether they’re related partners or not. Well, you need a couple of things. One is trust, I think is quite important with a founding team. It doesn’t need to be, you know, the trust you have between husband and wife whatever, but it think trust is quite important, and then complimentary skills. So for myself, my big brother, my best friend, my dad, my wife, we all have kind of complimentary skillsets which works quite well. We’ve always been fairly clearly about the leadership of the business and how that should work, and I think that cement has gone quite smoothly.
I think you can have a lot of contention if it’s not clear. So with new founding teams, the kind of advice I often give them is to make sure it’s not just three people who can all do exactly the same. They’ve got, you know, different sets of skills. They have some clarity about who’s kind of leading or making the ultimate decisions. Look, for us, we still discuss everything. We still build consensus and whatnot, but at the same time we also have some clarity on at the end of the day as CEO I would often chose the direction and I think everyone is okay with that, and that’s good.
I think if, you know, you’ve got very different ideas about where your business is going to that can be not too good. And then of course, to find people you like and trust. You’re going to spend a lot of time with them, it’s good idea to like them. I enjoy seeing my wife all the time, so that’s good. I’m happy to work her. So yeah, it’s worked for me. Don’t know if it would work for everybody.
Nathan: Okay, interesting. Two last questions. One around, you said you have a lot of ideas. How do you capture those? What tools are you using?
Collis: Right. I write a lot down in notebooks and mostly I have dozens and dozens. I think that’s not even…it’s like six of them. So I’ve got lots of old Bostcon notebooks which have all kinds of scribbling’s. But for me actually I find the best idea is keep coming back over and over and if that makes. Like both in that I fix right on the middles. So just if something is a good thing, like when we were planning ThemeForest and selling WordPress themes, I just kept coming across stuff about WordPress, you know, other people selling themes or its rising popularity or I’d read about it and it would just keep coming up until I thought, “Jeez, this is like an option we should really jump on because it seems to have some likes.” Whereas some themes are just like, “Oh, yeah, what about…” blah, blah, and then nothing ever pops up about it again. It’s like wow, maybe that wasn’t this burning need of the world.
Nathan: I see. And these and all this noise, how often do you look at them again?
Collis: Right. I will periodically review my albums often and it’s my part of my gut as that plan or amusements. So not that regularly. I will review my like courage notebook over and over while I’ve got those, so yeah, and sometimes the one before. But I have to know. I don’t go back in time too often and it’s usually the things I find there are not as brilliant as I thought they were right then.
Nathan: Interesting. We have to work towards wrapping up. One last question, was there any advice, any words of wisdom that you’d like to finish off this cool session with?
Collis: Oh, put pressure. Look, I think for entrepreneurs the probably the main thing I always tell people is that is go ahead just to get started. Like I think if you overthink it, there’s so many things that you could end up worrying about or considering, and some of them are actually kind important but if you can find that core of your business like a product should actually has achieved some sort of market fit. A lot of the other stuff you can figure out in some way overtime. Like you’ll learn more about running a business, or you’ll figure out how to capitalize the business, or you’ll figure out how to do about its structure whatnot.
If you don’t get that fundamental fire started though, then not much else matters and the only way to start a fire is to try starting one. So yeah, I often just say, well, you know, jump in. You can always jump back out and jump back in letter. There’s not rules against that.
Nathan: Awesome. One last question. One last one, one last one. How do you know when you obtain product market fit?
Collis: Yeah, look, I guess it depends on different products. So for us, the fit seemed clear when people started buying, and it’s one of the benefits of a business with revenue is that once people start giving you money then you usually got the fit. I think what’s trickier is businesses that are much more intangible, like social media is a good example of one where in order to generate revenue, eventually you need to get massive traction. And so I think you need to have quite different barometers for different types of businesses.
Then the other thing is you shouldn’t confuse product market fit with something you have forced into existence. So for example, if you bought so much traffic that some of it is converting, that’s not the same as people flocking through your product and buying it. So even if, like I would rather people came organically and bought less than you’re acquiring traffic and then buying more. Like the former would indicate more fit, would indicate people are more willing to go out of their way to try to get to your product and they give you money, than if you were…because at some level, you know, you think about Nigerian’s spammers or just general email spammers, they operate with a principal that if you put something in front of enough people, some people will do surprising names and go, “Yes, I would send my money to this bank account.”
And you just need to be weary that you don’t make a lot of mistakes with a new business deal. Like, “Look, we bought so much traffic and some of it is converting.” I think you just need to be realistic about the cost of achieving the fit that you seem to be getting. With that and yeah, I think revenue or often it’s, you know, views or traffic, you kinda need to figure out what the right metric is for the different business.
Nathan: Awesome. Well, look, I just want to say thank you so much for taking the time. It was an absolute pleasure talking to you.
Collis: Oh, good. It was a pleasure. Really fun.
Key Resources From Our Interview With Collis Ta’eed
- Checkout Envato’s website
- Follow Collis Ta’eed on Linkedin
- Checkout Collis Ta’eed’s Blog Posts
- Follow Collis Ta’eed on Twitter