“Netflix and the Future of the Entertainment Business” offers a fascinating look at Netflix’ strategy moving forward as outlined by Reed Hastings.

One thing that stood out in the presentation is how the company currently offers only one content type…

...So you’d expect Netflix to aim to expand into those other content types, right? But actually, the company’s strategy is to stay focused and avoid going into those other areas (see second bullet point below):

The whole thing is worth a clickthrough. Actually, I think it’s the first time I’ve ever made it through an entire one of those online slideshow things.

Mark Hurst fills my email inbox each week with a lesson on customer experience. He’s been echoing the same message for over a decade. For people who have followed him that entire time, it may seem like old hat. But every day, there’s a new person out there who’s just discovering the notion of the customer experience and why it’s important and what they can do about it.

Thomas Friedman keeps has written column after column (and a book) about the need for a “Green Revolution.” Are some readers tired of it? Sure. But others are just coming to the message now.

Warren Buffett doesn’t worry about delivering shiny, new, exciting ideas in his annual letters to shareholders. He just keeps hammering away at the same themes that have guided him throughout his investment life.

Reaching the new class
In REWORK, we talk about how you need to be willing to let your customers outgrow you. There are more people who are not using your product than people who are; You need to make sure you make it easy for these people to get on board. That’s where your continued growth potential lies.

It’s the same for your marketing message. There may be .0001% who have read everything you’ve ever written and who want you to deliver something brand new. Follow their wishes and you’ll wind up with a tiny audience of experts while excluding the 99.9999% of people who have no idea who you are or what you think.

There’s a new batch of freshmen every year. Every day, there’s a new person discovering you for the first time. If your message is simple and accessible, they can become fans. If it’s geared exclusively to PhD candidates, these freshmen will never latch onto you.

A drop in the bucket
It’s also wise to keep in mind that it takes multiple mentions for an idea to really sink in. For most of those who follow you, your ideas are just a drop in the information overload bucket. That’s why you need to keep plugging away.

Marketing something is akin to being Andy Dufresne in The Shawshank Redemption chipping away at his cell wall. Like Andy, you’re not gonna dig a tunnel overnight. It’s going to take years. You need to hammer away at the same point in the wall to get anywhere. If you keep changing spots every week, you’re never going to break out.

Honing your message
Plus, you keep getting better at making your point(s). You can’t just expect to say it perfectly out of the gate and then never have to repeat it again. The first time you say something, you get to guage its impact. If you hit on something, you can start refining it. It’ll keep getting better. A blog post can lead to a conference presentation which can lead to an interview which can lead to a magazine article which can lead to a book. And each step of the way, the message will get tighter and clearer.

Your foundation is your foundation
Doubling down on a message is how you take a stand. Of course, you don’t want to sound like a broken record. You should find new angles and new ways to present those ideas. But remember it’s ok to keep plugging away at the same themes when you really believe them because, well, they’re what you really believe. The way you get to be the Buffett of your message is by sticking to it.

This is part of our series “Bootstrapped, Profitable, & Proud” which profiles companies that 1) have $1MM+ in revenues, 2) didn’t take VC, and 3) are profitable.

Q&A with Andy Wilson of Logik

What does your business do?
Logik helps companies find, organize, process, and make searchable terabytes of digital documents for legal discovery. I always say we sell digital aspirin to attorneys experiencing discovery migraines.

How successful is your business?
Financially, we’ve been very successful considering our size relative to the competition (most have close to or well over 100 employees, we have 16). We don’t reveal internal financials now, because 1. we are private and 2. we don’t want VC’s beating down our door anymore after what happened with the 2009 Inc 500 ranking.

With that said, from 2005 to 2008 we grew revenue by 1,067% from $373,866 in 2005 to $4.4 million in 2008 with about $3 million in profit. We did that with 8 employees, a ton of servers, niche software, and 1 dog. This, minus the profit, is all public information now. We were ranked #181 overall on the 2009 Inc 500 survey and #1 for eDiscovery companies.

Getting on the Inc 500 was a great marketing tool for us, because it helped some of our more skeptical, on the fence, customers realize we were indeed legit despite our small size. Although we don’t reveal financials anymore, we have doubled our company size, moved to a new, bigger, and more open office space closer to our customers, and we are hiring for more engineers and support staff.

How did you get started?
In 2004 Sheng and I met for some quality Chinese food in Virginia to discuss what would become Logik. Prior to Logik, we were working for a small legal printing company helping to destroy rain forests. No seriously, we would print hundreds of thousands of emails to paper, so that massive legal teams could manually review each page. Very efficient ;) (odd fact: I worked on the Microsoft antitrust litigation and at one point was printing out Bill Gates’ email for a few weeks. He is very long winded.) After a few years of doing this and inhaling enough toner to paint your entire house black a few times over I decided I needed out and to find a better way to solve this problem. I mean, why would you “print” electronic documents to paper? Why not just print them to PDF or TIF? Ah-ha!

So, after letting the Chinese food settle we got to work drawing out the process flow for our document processing software. We quit our jobs, cut back on expenses, leased some servers, and got to work. I have a CS background, but Sheng is the real engineer and created the first version in just a few months. We got our first real customer 9 months after we started. This is how we got started.

Logik founders Sheng Yang and Andy Wilson.

Continued…

Jim Joyce is the umpire whose wrong call cost pitcher Armando Galarraga a perfect game. Everyone feels bad for Galarraga. But ya gotta give Joyce credit for manning up and giving a full-on apology.

“It was the biggest call of my career, and I kicked the (bleep) out of it, I just cost that kid a perfect game. “I thought he beat the throw. I was convinced he beat the throw, until I saw the replay.”

Joyce also apologized to the pitcher.

Joyce felt badly enough about it that, long after the game was over, he asked to meet with Galarraga. It’s an incredibly unusual move, but given the circumstances, it was understandable.

Tigers president/general manager Dave Dombrowski brought Galarraga from the home clubhouse into the umpires’ room.

“He asked if he could see Armando and I brought Armando in there,” Dombrowski said, “and [Joyce] apologized profusely to him and he said he just felt terrible. They hugged each other and Armando said, ‘I understand.’

MLB gave Joyce the option to take today’s game off but he refused. Before the game, he said he was ready for boos.

“I’ll take it,” he said. “I’ll take whatever you can give me, and I’ll handle it like a man, and I’ll do the best I can.”

Here’s what happened:

Classy all the way around. Mistakes happen. Character is revealed by how you handle them.

Update: This was originally posted as part of our “Profitable & Proud” series but commenters rightly pointed out that Shopify’s angel investor broke the “no funding” rule that is part of the series. We’ll leave the interview up but we’re removing it from the P&P series. We’re sorry about confusing our readers and Shopify (we are the ones who originally approached them about participating). Thanks to all who pointed out the error and stay tuned for another P&P profile that fits the bill.

Q&A with Tobias Lütke of Shopify:

What does Shopify do?

The short version is that Shopify allows people with great products to create awesome online stores that do those products justice.

The long version is that Shopify is our idea of how an online store should be run. We originally started the company not to create an online store system, but rather to sell snowboards. Back in the day, we hoped we would find software that would allow us to run our store on the Internet; we never found anything close to what we wanted, so we built it ourselves.

How successful is your business?

Certainly, we’ve always been pretty transparent with our numbers. We have about 6000 active merchants ( selling products this week ) from over 60 different countries. Collectively, they have sold over $100m in products in the last year.

In terms of our own business; I can’t really share our actual revenues but it’s in the multiple millions. We recently won some recognition as Ottawa’s fastest growing company. We have been profitable since 2008.

Cody Fauser, Tobi Lütke, Daniel Weinand.

You originally started a snowboard business called Snowdevil. How did you decide to start that? How did that lead to Shopify?

To tell you the truth, the main reason I wanted to start a retail store was because of programming burnout. I had just moved to Canada a year before and was still working for a startup company in Germany. I disliked remote work and found the job isolating, not to mention we did a lot of software development in Java. We mainly worked on financial backend software – the driest of the dry kind of stuff. What I was drawn to was retail and the margins that could be had in the right niches. I also thought that online retail had been implemented poorly thus far. This was in 2004.

So the idea was to use my technical expertise to give me some leverage in creating an online store. The idea at the time was that this would eventually let me earn my money, without having to do any programming. I loved programming, but I decided back then that I wanted to recover it as a hobby, instead of a day job.

I set up our online store based on a variety of different systems such as Miva, OsCommerce and Yahoo stores. Truth be told, all those systems made my skin crawl because of how bad they were. The final straw was when I got a custom design made for my snowboard store and I couldn’t get it to work in Yahoo stores. We had this great CSS based layout done with all these new fanged “web standards” and the customizability of Yahoo Stores barely allowed me to change the background color of the top frame (!!!).

In a moment of utter disgust, I got an IM from a friend who told me about this Ruby on Rails thing that David just released. I downloaded it, fell in love with it, and decided it wasn’t programming that I was burned out on; it was programming in uninspired programming languages. With my newfound enthusiasm and tools, I spent 2 months building our own Snowdevil store software.

We had a great season of sales in 2004 and turned a profit, but at this point we had the itch to fix the broken e-commerce industry and create a software that merchants and designers would truly love. I’d say we spent slightly too long working on Shopify before its first release, but ecommerce is complicated, so it took about 1 1/2 years from this point until Shopify’s release in 2006.

In the end, Shopify is the software that I hoped to find in 2004 for Snowdevil.

How did you fund yourself at first? Did you ever consider taking on any investors?

We had a tiny bit of money from the profit of the Snowboard sales. Other than that we essentially funded it by ignoring money. My co-founder Scott and I didn’t take salaries until well after the launch. My wife and I moved in with her parents and kept costs down. I also had some savings from my job in Germany, and friends & family chipped in a bit in exchange for some equity.

We ended up taking an investment from an angel investor, who just called us up one day because he heard about our company. This is certainly an outlier, but taking this investment from John H. Phillips was probably the best decision we ever made. Apart from allowing us to meet payroll for the first year, he has spent countless hours teaching me all the things I needed to know about running a company. Without him, we simply could not have survived the years and would not be around today.

We use Ruby on Rails, we are in the ecommerce space, and we are profitable. That seems to make us a Perfect 10 in the VC world. I’ve spent a lot of time talking to potential investors and meeting with them in person. Contrary to their reputation, I’ve found VCs to be some of the nicest, insightful and kindest people I’ve met. Many of them made introductions that have lead to lasting business advantages, even without any immediate benefit to themselves.

That said, at the end of the day, our company has been built and bootstrapped. We won this battle. This is the battle that VCs usually help you win. I see private equity as a tool – probably one of the most sophisticated and effective tools if you happen to have the particular problem it solves – but still only one among many options. Luckily, we are at the point where we can self-finance our ambitions. I don’t rule out that we might take an investment in the future, especially if we are up to something particularly costly, but I have no immediate plans.

Continued…

Time: 23:14 | 05/25/2010 | Download MP3

Summary
Kiran Max Weber and Sarah Hatter, two members of 37signals support team, discuss what it’s like helping out customers, the pros and cons of email-based support, and more.

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“Profitable and proud” is a new series here at Signal vs. Noise. We’ll highlight tech companies (and others) that have $1M+ in revenues, didn’t take VC, and are profitable. First up: Campaign Monitor, a small software company in Sydney that makes elegant email marketing software for designers and their clients. Co-founder David Greiner tells us about CM’s path below.

How successful is your business? Any numbers you’re willing to share to back that up?

Success is a tricky thing to define because it means different things to different people. From a financial perspective we’ve been very successful. We’re a private company so don’t share any numbers. I can tell you we’ve managed to more than double our revenues and profits every year for the last six years. All without taking any outside investment.

While the financial success has been great, there are other aspects of the business that I would consider more of a success personally. I genuinely still love what I do. I work with interesting, funny people. My wife and I are expecting our first child soon and I can work the hours I want. For me these things are much better indicators of a successful business than anything on a spreadsheet.

You started as a small web design shop and then clients started approaching you to send email newsletters for them. How did you make the switch to selling a product? How much time did it take to build something on the side?

The idea for selling our own software really came out of frustration more than anything else. We were designing email newsletters for a lot of our clients but couldn’t find the right tool for the job. After trying everything on the market, we built a simple app that let our clients manage their own newsletters. All our clients loved it and it created a nice new revenue stream for us.

We quickly realized this was something other web designers would love too. In early 2004 we cut back our schedule a little and built Campaign Monitor on the side. The majority of our days were still spent on regular web design work, but every spare moment was spent building the first version of Campaign Monitor. It took us just over six months from having the idea to launch.

Dave (left) and co-founder Ben Richardson.

Did you ever consider taking on any investors? Why or why not?

Outside investment was never an option that interested us. I think there are a couple of reasons for this. First, we were building something for ourselves, so we already had a good idea what the problem was and how to solve it. Our background was designing and developing for the web, so we didn’t need to hire anyone. Plus, we could fund the whole process with the profits of our consulting business. We’re not talking big numbers here either. It’s amazing what a small team can achieve when you really focus for a couple of hours each day.

On top of this, the first version of Campaign Monitor was deliberately simple. We hosted it on a relatively cheap shared server with the rest of our clients. We spent next to nothing on marketing, and just relentlessly improved the product week after week.

How long did it take you to get the product to a point where it was profitable? How long until you stopped doing client work completely?

After launch we continued to spend an hour or two a day improving the product and talking to customers. By our sixth month Campaign Monitor revenues were already on par with our consulting business.

We’re quite conservative, and waited another six months before focusing on the product full-time. By this time Campaign Monitor was generating more than three times more revenue than the web design business, so we were comfortable making the transition. We didn’t want to leave our existing consulting clients in the lurch, so we created a new company to focus on Campaign Monitor and hired on a new team member to take over the web design business, which is still operating today.

Screenshot of Campaign Monitor.

Continued…