Developing SaaS Platforms and Products That Provide Solutions with Mitch Russo

Intro (00:09):
Welcome to innovations and breakthroughs with your host, Rich Goldstein, talking about the evolutionary, the revolutionary, the inspiration and the perspiration and those aha that change everything. And now here’s your host, Rich Goldstein,

Rich (00:33):
Rich Goldstein. He host of the innovations and breakthroughs podcast where I feature top leaders in the path they took to create change. Path include Joe Polish, Roland Fraser, and Kevin nations. This episode is brought to you by my company, Goldstein patent law, where we help you to protect your ideas and products. We’ve advised and obtained patents for thousands of companies over the past 27 years. So if you’re a company that has software or product or a design, you want protected go to Goldstein patent law.com, whether are amazing for resources, for learning about the patent process. And you can email my team@welcomegoldsteinpc.com to explore if it’s a match to work together. You could also check out the book I wrote for the American bar association that explains in plain English, how patents work it’s called the ABA consumer guide to obtaining a patent. I have with me here today, Mitch Ruth Mitch built one of the earliest and most successful software enterprises in the eighties, which he sold and then continued to run as COO with a team of more than 300 people.

Rich (01:32):
Uh, since then he’s dedicated himself to helping numerous entrepreneurs to grow their businesses. In addition to founding several successful ventures of his own among these, he founded business breakthroughs into national in which he partnered with Tony Robbins and Che Holmes to create a phenomenally successful business while serving countless entrepreneurs. He’s the author of the bestselling books, the invisible organization, and power tribes. And he’s been featured on numerous programs throughout the media. I’m very pleased to welcome here today. My friend, Mitch Russo welcome Mitch.

Mitch (02:02):
You mean Mitch Russo, and bunk mate that you didn’t say that part Rich.

Rich (02:06):
I didn’t say that yet. Yes, I guess we’ll, we’ll get, we can get there. So, um, we, we both had the, the privilege of, uh, kind of being bunk mates at summer camp, not back when we were kids <laugh>, but, um, but, uh, just a few years back when we went to, uh, a kind of a fun entre camp, which took place in a, um, in, in an actual kids summer camp in Pennsylvania and, and we spent a few days up there and, uh, and that was awesome, um, awesome event and great to get to know you.

Mitch (02:38):
Yep. Yeah, it was same here.

Rich (02:40):
Cool. So, um, but well, before the summer camp, you were, um, very involved in the software business back in the eighties, which is really, uh, when, when people even thought of software began to think of software as being a possible business or a possible business model, as opposed to something that just comes along with the, the computer or, or like that. So, so how did you get involved in, in computer software and how’d you get involved in the software business?

Mitch (03:11):
Well, I was selling semiconductors as a rep. Uh, so there there’s in, in the semi in conductor industry, there’s two different ways that semiconductor manufacturers distribute their products. One is through a distributor like arrow electronics, or, uh, you know, some of the others and, and then companies would then buy them from a distributor. That’s how most wholesale businesses operate. But then that to higher level there’s rep a rep represents the company, hence the name rep. And we go out and we try and sign new distributors in very large scale clients. So I was tagging along as I normally did. I was an applications engineer for Motech, which was a software, which was a semiconductor company. And I was being paid, made a very nice salary. Uh, but I frankly was, you know, I was highly educated and very skilled at what I did, but the guy who was, I was tagging along with was making about five or six times what I made.

Mitch (04:13):
And he had never even got a high school degree. He was calling on the buyers in the purchasing department and he was closing these deals and making fortunes. So I started to get a little curious about what he was doing. And I said, well, wait a minute. Uh, I wanna do that too. And so I transitioned from being an engineer to being a salesperson. And as I got deeper and deeper into the electronics industry, a rep, I started to understand what was going on on the software side. So I realized that all this great stuff people were doing on the semiconductor side required software to drive it. In fact, I was involved with microprocessors quite heavily. And then finally, um, Bill Gates, you remember that he, uh, he had, I think I recognized the name. Yeah. Yeah. He had a little software company called Microsoft.

Mitch (05:07):
He had a cute little product called basic and dos, and I said, we’re gonna miss the boat. I kept saying myself, you know, I’m gonna miss the boat here if I don’t do something quick. So I’m having breakfast one day with one of my new Abers. And, uh, I said to him, look, I’m having a problem. I’m trying to build a database to sort my accounts. And, um, I’d like to, you know, I’d like to create like a, a D base to database, so I could do this. Uh, and, uh, and in the process, I kept explaining to him that I can’t deduct my own personal computer from my tax return because the IRS said it was a toy. And so this started a discussion until we got to the point where it had come down to the fact that there was a legal ruling that said that if that computer is documented, if you keep the word was contemporaneous records of its usage, you then can deduct that computer from your taxes as a writeoff.

Mitch (06:09):
So I said, great, I’ll get some contemporaneous record keeping software and do it well, rich, there was not. And that became the beginning of Timeslips corporation. So we, uh, we built this product, we released it, or just about to release it. In fact, we both quit our jobs and were, and Monday morning, we’re just about to release this product. We’ve been working on it in this, in the background for six months. And that same day, the IRS relaxed its rulings that’s said, Nope, we don’t need ’em anymore. That’s fine. So we now had a useless product and we, we had to pivot rich because we had no idea what we were gonna do with this cool new software technology that we had kind of invented. And that’s when the idea of building software for lawyers came up. And so we did some research into what lawyers needed, uh, actually quite a bit of research. And we had discovered that in fact, um, we had two thirds or three quarters of what we needed to build a very powerful time tracking and legal billing system. And so we went about and started that work and that’s how I got into the software business. Got

Rich (07:18):
It. And you kept the name Timeslips, I think.

Mitch (07:21):
Yes. Yes we did. We, we, we trademarked that name and that became an asset later, which we sold the Sage. Oh, wow.

Rich (07:27):
Okay. Um, so, uh, uh, essentially though, um, and it’s funny you used the word pivot because I don’t know if anyone used that word back then, that probably came about in the last, uh, you know, 10 years in the lean startup and people talking about pivoting and, you know, but, but back then, it’s like, nobody, people didn’t even talk about pivoting, right. People just thought like you launch your company and you take a straight hour approach towards, towards building it. And, uh, and I guess that was the textbook example of the ones that failed. Right. Well,

Mitch (07:59):
You know, I should have used the word panicked instead of pivoted <laugh> because, because that’s what we basically did. We panicked, I mean, it was like, it was, you know, stuff getting thrown around the room, cursing and screaming. And, you know, we just, by the way, burned the boats. I mean, we both left our jobs. So now we had no work. And so we had no choice, rich. We had, look, we got this base. We it’s pretty cool. It works really well. What else can we do with it? And that’s when we started brainstorming. And that’s when we came up with this whole idea of, of, of just in fact technology wise, it was quite simple to move to where we needed to go. Now, I I’m a believer of everything happens exactly the way it’s supposed to at the moment. You couldn’t have convinced me of that, but in looking back had that not happened, we would’ve probably had a cute little company sold a few dozen copies of our, of our little software product to deduct your PC. Instead, we ended up with a 10 million company with 250,000 customers.

Rich (08:58):
Yeah, that’s fascinating. And, um, you know, and I guess the interesting thing too about that time is that like you had, um, um, you know, you had an initial need, which evaporated and you found a new need. Yeah. Uh, and, uh, a, you know, and a new need for, for something rather similar that used similar infrastructure that you’d already created for this, for this product. Yep. Uh, and, uh, and I guess one of the cool things about that time though, too, was this, there was nothing but needs out there for software. There was just, uh, you know, almost anything you could think of, hadn’t been to yet with regards to software and automation. And, and I think you’ve, you’re kind of, uh, you were involved in the beginning of the software business, but you’ve taken that same stance and have, um, helped people to automate businesses and processes throughout your career, correct?

Mitch (09:52):
Yeah, yeah. Again, as, as my career proceeded, as I built and then sold Timeslips corporation, I got in the business of helping venture capital firms, uh, take their problem companies and accelerate them. So I became sort of a, a debugger, uh, I’d be sent in and in, you know, anywheres from two to six weeks later, we’d, we’d restructure the startup and we’d accelerate growth rapidly from that point forward.

Rich (10:21):
Got it. And so you got involved in, um, in helping people, um, throughout, um, in the business world, but really you took a focus toward personal growth as well. Like we’re getting involved with, um, partnering with Che homes and Tony Robbins. So how did you get, how did you get into that world into the personal growth world? Was it through your expertise in automation or was it through an interest in personal growth that actually got you there? Well,

Mitch (10:49):
I, I always had an interest in personal growth. I had listened to Tony Robbins and owned Tony Robbins, uh, uh, audio tapes for years before I ever met him. Uh, but what, the way, the way that I got together with Che and Tony in this venture was because Che was at the time I was building Timeslips. He was selling software. Yeah, I’m sorry. He was selling ad space in California, lawyer magazine. And you’ve read Chad’s book, uh, the ultimate selling machine, one of the concepts in there, he calls the dream 100, uh, and I was one of his dream, 100 clients. In other words, he would do anything to get those hundred people, those hundred clients to work with him. So he sent me gifts. He flew out to scene. He took me to elaborate dinners to, and we did all this fun stuff together until finally after a year and a half, I finally agreed to go into the magazine, which was an amazing experience, frankly.

Mitch (11:48):
Uh, and we had become at that point very, very, very dear friends. And, uh, and that was in 19 88, 87, 88. And then later after I sold to Sage, I invited Che in to help train our sales team. So Che I hired Che at that point, Che hired me. Then I hired Che and he was helping me train the Sage sales team. And then later, uh, Chad asked me for some help and I helped him with his little, um, consulting company, uh, uh, which, uh, Chad Holmes international at the time. And, uh, before long, I started out like doing a few little things as favors before three or four months was over. I was president of the company. And that’s when he received that momentarily, uh, uh, famous phone call from Tony Robbins. And Tony said, I’ve been following your stuff, let’s get together. Uh, and I was not included in that first meeting.

Mitch (12:49):
I think Chad flew out to Canada or Toronto to meet with Tony. And then, uh, after Ted came back, uh, he had told Tony about me and said, well, we, the three of us should form a company together called business breakthroughs international. And that’s how I got involved with that. Now, just to answer your question more directly before that, I spent a year as a vice president of sales and market marketing of a little, uh, personal development company called the Sedona training Institute. Uh, if you go to sedona.com, they publish a product, uh, uh, originally by Lester Levinson called the Sedona method, which is like a, uh, a personal development, meditation type product of, of which I loved. I spent a lot of time with it. I enjoyed the product, I enjoyed the company and I enjoyed that space. And so by the time I ended up joining and the time Chad, Tony and I built business breakthroughs international, I had already been well steeped into both growing companies, personal development, uh, and automation and running things were of my technology and engineering background. Got it.

Rich (13:59):
Uh, that’s fascinating. And it’s, it’s really a, a great place to be though, too, to be running a business in the personal growth space that you can’t, you have no choice, but to grow yourself that’s right. Being, uh, being in that world. Yep. Um, and so then where does certifications fit in? Like what, well, uh, how did that lead towards your interest in certifications and helping people create certification programs?

Mitch (14:21):
Well, you see, I, I didn’t really know what certification was. So when I was building Timeslips corporation, we had a severe, but good problem. We were selling so much software that our technology, I’m sorry, our tech support teams couldn’t keep up. And so what was starting to happen is I was gonna, I was basically walking around my call center, watching the hold times, go beyond 12 minutes. And I was freaking out. I said, this isn’t gonna, I gotta hire more people. We gotta, we gotta make the software easier. We gotta attack this from three different angles. And then the, the thing that happened is I received a, threatening phone call from the, uh, and I won’t mention names, but it was, she was the, uh, the head of the technology division of the Los Angeles bars, those and said that my software had crashed a computer.

Mitch (15:13):
And she was gonna tell the world how terrible Timeslips was. And I said, well, no, no, we gotta fix this. Uh, cuz I know the software doesn’t crash computers. We have thousands of people using it, but it didn’t matter. That was her perception. So what I was about to do was I was about to fly down there myself or get somebody on my team to do it when I had the thought, well, wait a minute. I was just in Los Angeles and met a bunch of people who told me how much they loved our software and how good they were using it. So I remember one in particular individual, her name was Ann and I called her up out of the blue. I said, Hey Ann, this is Mitch Russo. And she goes, Mitch Russo my God, I can’t believe you called me.

Mitch (15:54):
Uh, and so we’re now on the phone and she’s telling me again how much she loves Timeslips. I said, look, I, I got a favor. I I’ll pay you for this. If you, if you just tell me how much and no problem at all, but I have a client, uh, who is really in need of some help. Um, and she goes, no, Mitch, I can never take money. I, you you’ve made my life so much easier, blah, blah, blah. So I told her to please go over to this person’s office and help out, see if you could fix what’s going on or report back to me and I’ll do it. And um, next thing I know it’s like five hours later, I’m pacing my, my little house at that point, hoping for the phone ring. And finally it rings and it’s it’s Anne and she goes, oh yeah, it was no problem at all.

Mitch (16:37):
We solved the problem and she’s completely up and running and she loved Timeslips. Now she’s just loves Timeslips. And uh, I gotta tell you the best part Mitch. I said, what’s that she gave me a hundred dollar bill and I was so excited, uh, to get that. So thank you again, Mitch. I said, and then she said the words that changed my whole life, she said, and if you ever need anybody else that is needed, my help, you just let me know. And it was like all of a sudden, like my brain exploded and I couldn’t go to sleep at that point. I said, oh my God, what would happen if I had two, or top five or tens or a hundreds all over the country, helping my clients get Timeslips running and, and, uh, using it more effectively that would solve my tech support problems.

Mitch (17:27):
And that was the motivation to create a test that I sold to my user base. If they passed, they were certified big mistake, but I didn’t know that at the time. So we started selling these tests. It’s far long. We were generating, you know, remember now this is 19, this is 1987. We were generating 25,000 a month selling tests. I mean, it was crazy. But what happened was, is we did not. All we tested was competence in the technology. We didn’t really do any examination of the individual at all. And that’s where we almost lost the company. So I had about 60 of these people out there. We were deploying them out into the, into the fee yield. I’m happy tech support times are starting to drop a little bit. And then I start getting complaints. Complaints led to threats. And these were from clients who said, these people come into our firm.

Mitch (18:22):
They, they smell like they have been bathed in three weeks. They look like Elmer FUD. Uh, they’re completely unprofessional on top of that, they’re rude to my staff and they didn’t even do what they said they were gonna do. I said, oh my God. So I shut down the entire program. And I called everyone who had a complaint and there were many, and I, I documented by hand in writing every single problem in complaint and committed to solving it on the spot, which I did. But I learned a lot. I learned that what we were missing, wasn’t just the technology part of the training, but the culture part of the training. And that’s when I created an entire culture generation system, along with the pillars of what we call the code of ethics. And I took these components and I reintroduced the entire system back to my client base.

Mitch (19:16):
And we went from, at that time from 60 certified consultants down to zero, cause they closed the program back up to 350 certified time subs consultants. And that little team they begged me, can we sell the product? Can we please sell the product? I finally said, sure, that turned into my third largest sales force. So now I’m generating money from selling a yearly certification. I’m generating money from them being a sales force and selling my products. I’m generating even more recurring revenue from them showing up every year to be with us once a year at a symposium. And on top of that, we started building marketing programs and they bought into those marketing programs as well. Now we had some amazing success stories. We had people become certified in Timeslips, go off, start their own consulting business. So it was a super win-win for everybody. And it wasn’t until years later that someone had read an article about what I did and asked if I would do it for them. And that became the beginning of me, helping people create powerful multi recurring revenue systems called certification. And then finally, after I got done with several clients, I said, you know what, it’s time to document this process. Uh, and that’s when I wrote the book called power, our tribes.

Rich (20:34):
Oh, very interesting. So, so initially, uh, it all came about because, um, because you realized that the people that were, um, to help your business didn’t didn’t have any customer service training, didn’t have any culture, uh, to be the type of people you want of representing you. Right. And it kind of led you to reinvent the team, uh, reinvent the process of creating the team, right. So that you could, uh, have people that could fairly represent you. And then, uh, I guess, uh, other people, well, someone else took notice of that and said, could you do that for me? And, and you realized, again, like you’ve got an opportunity to take something that you created and, and bring it out there into the world.

Mitch (21:15):
Right. And you know, it you’ll see that throughout, uh, the time that we’re talking today, you’ll see the same theme emerge each time. Uh, I run into a problem. I can’t solve, I look for a solution. I can’t find a, so I decide to create a solution. And then I turn that into a business or a service.

Rich (21:31):
Yeah, no, absolutely. I, I, I see that. And, uh, um, and I’m noticing that, and I, I think a lot of people, uh, follow that. Um, and, and actually a lot of people I’ve interviewed on this program, like notice those patterns of how they’ve taken this, the DNA of the thing that’s worked and they’ve done it over and over again through different businesses and different contexts. Yep. And, um, that’s helped them to, to create the success that they were after, in whatever field they, they were in. Um, and so then now circling back again towards sous. So you, you created certification programs then now, um, you know, you brought the, um, the, kind of the knowledge of the certification programs and your knowledge from software and creating software back around to create new software that has to do with, with client certifications. And I think client folio is the, the name of the product.

Mitch (22:26):
Yes. Now client folio is a SA platform for coaches mm-hmm <affirmative>. And it basically is a, a automation system for coach session management. It’s a platform. And the reason I created this rich is because I needed it and I couldn’t find it. So over the years of being a coach, I have perfected certain processes that highly accelerated the progress of my clients. And I needed to find a way to keep track of these elements of the process itself, along with session notes and homework, and next session dates and all these things that are part of what you do when you’re a coach. And I, I just tried have different coaching platforms. None of them work for me. Some of them were more expensive than I could ever imagine. And I said, well, look, I think what this industry needs is a highly, highly productive, low cost, um, powerful platform that I believe I can bring to market.

Mitch (23:27):
And so I, I went to work. I, uh, I, I basically, uh, created a framework for the way the interface should be. And I wrote a, uh, an entire feature set and explained each feature in detail and the hierarchy of the system. And I sent it to a team I have been using for years in India. And I asked if they could help me with this. And they said, yes. And, um, they said, well, how long is it gonna take to make? And I, they said, oh, about three months. I said, oh, you mean like a year. Right. And they go, Hmm. Yeah, maybe a year. Yeah. <laugh>. So the bottom line is that, you know, uh, and, and they’re wonderful folks. I mean, they are amazing at what they, uh, and so, and I expected that, look, I know software takes time. It takes more time than everybody, everybody could imagine it would take. And it does so. Right. Uh, but, but we, we released it in March of this year. And since then, we’ve gone through two major iterations. It’s just gotten better and better. And, uh, and now we have, uh, north of a hundred paid subscribers and, uh, truth is, everybody loves it and I’m so happy.

Rich (24:33):
So, um, so it, and, and that is a SAS company. So you, you like the SAS model, do you think that the SAS model, um, really is the one that makes the most sense for software developers today, aim people that have a solution or, um, you know, do you think that it’s, it’s overplayed and what, what do you, what do you think is the, um, you know, like I is the, I guess the best advice for someone who’s thinking about what business model to follow, whether SAS or, or downloadable of some kind?

Mitch (25:06):
Well, you know, it all depends on the application and it all depends on the markets. There are certain markets that will not utilize SaaS. Certain large corporations require that if they were to engage with any software platform, they must run it from their own servers. Hmm.

Rich (25:22):
As a matter of security,

Mitch (25:23):
I suppose, as a matter of security. So, uh, we don’t right now, we don’t support that now again, if a corporation came to me and said, this is the only way we’ll do it. Uh, and I said to them, well, we don’t do that. And this we’re looking to buy 6,000 seats. I said, well, then by, we certainly will do that. <laugh> so we will adopt if we have to. And we will, you know, we will create a server based version, but, but for most people right now, I’ll give you an example. Rich, when I was running time subs corporation, we had a room, the size of a, of the average bedroom that had at the time, about $350,000 worth of telecommunications, equipment of PBX, uh, that, that one room required triple the amount of electricity, uh, because of the air conditioning them and the electronics in that room.

Mitch (26:09):
And it would go obsolete every three years that now I could get that the equivalent of that room except unlimited for $29 a month. So, I mean, it doesn’t even make sense to think about buying equipment and setting up a, an internal PBX again, when I could lease it for $29 a month per person, and have more functionality than I ever had before. That’s what SAS does. SAS gives us the ability to basically share the expense among many customers for something that costs a lot to do. So to develop client fol is, you know, it’s basically a six figure bill, uh, but you know, once you get a thousand people on it paying every month, um, it starts over time to amortize and then become very profitable. So it’s worth it.

Rich (27:02):
Absolutely. So, um, what’s something that you’ve learned about, uh, finding a solution and automating that you think would be helpful to your average entrepreneur. Um, that’s kind of struggling through, um, generating their initial results.

Mitch (27:17):
Well, I, I think in a general sense, um, when you are having difficulty in a particular area, it may be good to get a third party opinion. It might be good to seek outside council if you will, uh, and, and find maybe a perspective that you’re missing. Uh, but once again, what I find when I work with newer entrepreneurs is that they have a generalized view of the market in the world. And in most cases, they haven’t done the ridiculously hard and detailed work of understanding their own niche, uh, as well as it takes to really be successful. Now, you might say at some level, we got a little lucky with Timeslips because we already had a time tracking product and we were searching for a solution for it. So that niche turned out to be lawyers, but I mean, we did not go out and say, well, what problems are lawyers having right now that we can solve? We, we don’t even like lawyers, why would we wanna solve any problems

Rich (28:18):
For them? Exactly. Right. Right.

Mitch (28:20):
So,

Rich (28:21):
So the, so we have a way to make the life more difficult. Yeah.

Mitch (28:25):
But like, for example, you know, my partner and I, we talked about, well, look, why don’t we build a little secret into the software that says if our name ever gets put in the client field that automatically discounts the bill by 50% or something <laugh>,

Rich (28:37):
We couldn’t do that. Right. That’s funny, but you could, uh, have an unlock code of some kind. Right. Right, right. Yeah. Um, so, uh, that’s awesome. And, uh, I mean, it just sounds like you’ve had such rich, rich experiences. What do you, think’s next for you? What do you think is the, the, the what’s the direction that you most enjoy that you think might pull you, um, you know, towards other ventures or other, um, whatever’s next,

Mitch (29:03):
You know, one of the beautiful things about life is sometimes you just don’t know what’s next. Uh, but what you, what, what I find is that everything you’ve ever done has prepared you to be in the moment you’re in right now. And the next time an opportunity presents itself to me. And I look at that opportunity from the, a perspective of 40 years of business experience, I will know whether it resonates and I would like to move forward with that. Here’s and, you know, from what I know today, I’m quite happy doing what I’m doing. I love the work I’m doing with client folio. I love my clients. I love working with them. Uh, I certainly just thrills me to build a certification program, uh, as I am right now for another BA member, a board of advisors member. Uh, and I love to see that program prosper for large and make them, uh, a lot of money and more importantly, cement their position in the marketplace, cuz when you certify a group of people and they represent you in the field and it’s done with full oversight and carefully with, with a culture program in place, it multiplies the, the reach of that company by as many people as they’re out there being certified.

Mitch (30:22):
So it’s an incredible opportunity under the right circumstances to create a very powerful worldwide presence with certification.

Rich (30:31):
Awesome. And people wanna learn more about you get in touch with you, how they go about doing

Mitch (30:35):
So they can go to Mitch Russo, three sixty.com. And from there they can see my book, my software, my, my power tribes certification program, my, my home website for coaching, all that stuff is right there.

Rich (30:53):
Awesome. Thank you so much. And really thanks so much for being on the show. My pleasure rich,

Outro (31:04):
Thanks for listening to innovations and breakthroughs with your host. Rich Goldstein. Be sure to click, subscribe, check us out on the web@innovationsandbreakthroughs.com and we’ll see you next time.