A Master’s Guide To Acquiring Millions of Customers With Dan Engel

Dan Engel serves as the Managing Partner and Founder of Santa Barbara Venture Partners, an early-growth VC firm focusing on technology startups. Renowned for his expertise in B2B and B2C domains, he has emerged as a luminary in devising customer acquisition strategies. Early in his career, he played a primary role in significantly growing Picasa, which Google later acquired before its public debut. Moreover, Dan co-founded FastSpring, a SaaS fintech platform that achieved remarkable revenue exceeding $100 million despite minimal funding. With a track record of successful exits, Dan’s entrepreneurial journey traces back to his upbringing in New York, where he embarked on diverse side ventures ranging from neighborhood services to operating an ice cream truck.

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Here’s a Glimpse of What You’ll Hear:

  • [0:32] How a network of investors and entrepreneurs creates a powerful community
  • [2:44] The childhood hustle that led Dan Engel into entrepreneurship
  • [6:18] Insights into investing from legendary figures in the finance world
  • [10:59] Lessons learned from early stumbles with an Amazon-like magazine subscription model
  • [17:11] How a startup can revolutionize remote computer access and grow to $800 million in ARR
  • [21:08] The strategy behind scaling Picasa before its Google acquisition
  • [28:30] The challenges and triumphs of developing a B2B fintech solution
  • [36:25] The critical decisions and risks faced leading up to selling FastSpring
  • [45:19] How the changing landscape of venture capital affects fundraising
  • [51:53] The recent success story of an investment in Jackpocket exemplifies the potential of strategic venture plays

In this episode…

In a world driven by the ambition to scale, attracting millions of customers becomes the ultimate quest for businesses aiming to leave a mark on the competitive landscape. What secrets fuel successful customer acquisition strategies? How does a company transform from a concept to a household name amidst market saturation and consumer indifference?

Software entrepreneur Dan Engel unravels the complexities of customer acquisition with the precision of a seasoned strategist, offering a roadmap for capturing and retaining a vast customer base. Dan’s approach, characterized by innovative thinking and relentless adaptation in the entrepreneurial battlefield, underscores the significance of deeply understanding market signals and customer behavior. Through his stories, listeners gain a front-row seat to the tactical maneuvers and strategic pivots that have propelled companies from the fringes of obscurity to the center stage of their industries.

Tune in to this episode of the Smart Business Revolution Podcast as John Corcoran interviews Dan Engel, the Managing Partner and Founder of Santa Barbara Venture Partners, about attracting millions of customers in a saturated market. Dan shares his journey from childhood ventures to becoming a seasoned tech entrepreneur and venture capitalist, the power of community in entrepreneurship, strategies for scaling startups, challenges in B2B fintech, and how to navigate the evolving venture capital landscape.

Resources Mentioned In This Episode

Related episode(s):

Quotable Moments:

  • “Don’t try to think about what’s going to work in marketing. Try a lot of things. You’ll be surprised at what resonates with your customers.”
  • “Success didn’t come easy. The biggest reward came from enduring the struggle and risks that entrepreneurship entails.”
  • “In the game of venture capital, it’s not about enjoying risks—it’s about meticulously managing them.”
  • “Selling early isn’t always a regret; it’s about weighing your future against the reality of your current success.”

Sponsor: Rise25

At Rise25, we’re committed to helping you connect with your Dream 100 referral partners, clients, and strategic partners through our done-for-you podcast solution. 

We’re a professional podcast production agency that makes creating a podcast effortless. Since 2009, our proven system has helped thousands of B2B businesses build strong relationships with referral partners, clients, and audiences without doing the hard work.

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When you use our proven system, all you need is an idea and a voice. We handle the strategy, production, and distribution – you just need to show up and talk.

The Rise25 podcasting solution is designed to help you build a profitable podcast. This requires a specific strategy, and we’ve got that down pat. We focus on making sure you have a direct path to ROI, which is the most important component. Plus, our podcast production company takes any heavy lifting of production and distribution off your plate.

We make distribution easy

We’ll distribute each episode across more than 11 unique channels, including iTunes, Spotify, and Google Podcasts. We’ll also create copy for each episode and promote your show across social media.

Cofounders Dr. Jeremy Weisz and John Corcoran credit podcasting as being the best thing they have ever done for their businesses. Podcasting connected them with the founders/CEOs of P90xAtariEinstein BagelsMattelRx BarsYPO, EO, Lending Tree, Freshdesk,  and many more.  

The relationships you form through podcasting run deep. Jeremy and John became business partners through podcasting. They have even gone on family vacations and attended weddings of guests who have been on the podcast.

Podcast production has a lot of moving parts and is a big commitment on our end; we only want to work with people who are committed to their business and to cultivating amazing relationships.

Are you considering launching a podcast to acquire partnerships, clients, and referrals? Would you like to work with a podcast agency that wants you to win? 

Contact us now at [email protected] or book a call at rise25.com/bookcall.

Rise25 Cofounders, Dr. Jeremy Weisz and John Corcoran, have been podcasting and advising about podcasting since 2008.

Episode Transcript

John Corcoran 0:00

All right. Today we’re talking about customer acquisition. How do you acquire millions of customers at scale for your business? We got an expert. His name is Dan Engel. I’ll tell you more about him in a second. Stay tuned.

Chad Franzen 0:15

Welcome to the Smart Business Revolution Podcast where we feature top entrepreneurs, business leaders and thought leaders and ask them how they built key relationships to get where they are today. Now, let’s get started with the show.

John Corcoran 0:32

Alright, welcome everyone. John Corcoran is the host of this show. You know, if you’ve listened to previous episodes, we’ve had some great guests. Every week we talk to smart CEOs, founders and investors, entrepreneurs from all kinds of companies. We’ve had Netflix Kinkos, YPO, EO Activision Blizzard, Lending tree, OpenTable, and many more. And of course, this is part of our Santa Barbara series. We’ve been featuring a number of different investors and entrepreneurs from the Santa Barbara Community, which I went to college at a beautiful community. We’ve had Paul Orfalea, the founder of Kinkos, who came on that became FedEx Office, Craig Cummings, founded a number of unicorn businesses, John Greathouse, who I’m sure will come up in this episode because he introduced me to today’s guests. And of course, this episode was brought to you by Rise25, our company where we help B2B businesses get clients referrals and strategic partnerships done via podcast and our new platform. Podcast copilot. Learn more at Rise25.com. 

All right, Dan, pleasure to have you here today. As I mentioned, John Greathouse introduced us. He’s a mentor and a friend of yours who you worked with a number of years ago. And he was a great past guest on this podcast. And you are the managing partner and founder at Santa Barbara Venture Partners. It’s an early growth VC firm. And you have an amazing array of experience in background extensive experience in b2b and B2C software entrepreneurship. And really, customer acquisition is kind of one of your Forte’s. And you were involved in the growth of Picasa, which became Google Photos and was acquired by Google before Google went public. Also, you co-founded fast spring in 2005, which is kind of like an early stripe, a fintech SaaS firm, which grew tremendously. 

This is an incredible statistic from zero to over 100 million using about $30,000 in funding, which is absolutely bonkers. And a number of different stops along the way as well including GoToMeeting, go to my pay my PC and and now of course you are an investor and had a couple of exits in your young firm. But I love to start people with what they were like as a kid. You grew up in New York. And you were I imagined maybe shoveling snow maybe lemonade stands in the summer. What were you and what was your side hustle when you were a kid?

Dan Engel 2:44

Yeah, well, thanks for having me. This is fun. Well, let’s say I definitely shoveled snow leaf raking was my big thing and then became kind of an ice cream man. In high school. We had the ice cream or ice cream truck for a little while. That was really fun. 

John Corcoran 3:00

Wait, you had your own ice cream? 

Dan Engel 3:02

Well, we kinda like we’d go to a firm, they had a bunch of trucks and then you know, we’d get a percentage of the sales. Do you bring it to the school? Yeah, we drive it around to different locations. And yeah, it was an interesting time. Sometimes there were ice cream men. Turf Wars. We didn’t always win those. Unfortunately, we’re pretty young.

John Corcoran 3:23

So I’d say half the time when I asked about this, I hear people say that they, you know, sold gum in school or weed or something like that. And they got busted by the principal’s so I’m picturing you showing up with an ice cream truck at school and the vice principal coming out and being like, What the heck are you doing, kid?

Dan Engel 3:40

I didn’t do much schoolwork during the summer. So we would go to beaches and people would get up off the beach and come get ice cream. Yeah. So we had to, you know, sometimes get kicked out by the vendors who were already there and see that kind of thing.

John Corcoran 3:55

So was there an experience where you know, another ice cream truck was like, shaking you down? Or what was that? 

Dan Engel 4:02

There was a guy down our street. When I say we are my brother and me. We had the truck. And he got really, really angry when he came over and yelled at us. And I learned years later, there was actually an ice cream truck, man turf war that led to someone being shot. So you know, people are possessive about their turf, even when it comes to ice cream.

John Corcoran 4:23

That sounds like either a podcast series or a Netflix documentary in the making like that someone needs to pick that one up. So bouquet. Now before you became an entrepreneur, you actually thought you were going to be interested in investing what you eventually came around to. And you had a bunch of internships at Fidelity and you met a man named Phil Caray, who Warren Buffett really credits as an amazing investor and Peter Lynch, also legendary investor. What kind of impact was that meeting those iconic investors early in your career?

Dan Engel 4:55

It was awesome. You know, I was like 19 years old and I just wasn’t afraid to ask anybody kind of anything. And so I would send out letters. That’s what you did back then. And I would follow up by phone. I was persistent, I still am. And I was, you know, got myself into really neat places. And, you know, there was a point in time that I was focused on trying to find a way to work with Warren Buffett. And I thought that going through his dad’s broker, his dad was Howard Buffett, which was Phil Cray, who kind of invented mutual funds and lived in the town next door, would probably be a good way to get an introduction. 

So that was part of how I decided to start spending some time with Phil and learn about what he invented, which is value investing. People give a lot of credit to Ben Graham, but actually, the first book on it was a number of years before by Phil, when I met Phil, he was 99 years old. And there was a lot of wisdom to be gleaned. He made it to 102 103. But you know, he used to tell me things about, you know, what, what to buy in times of war and times of peace and you know, how to, how to think about things and and, you know, our politics weren’t always the same. He was always ranting about Roosevelt. But I learned a lot.

John Corcoran 6:18

You met him in the late 90s. He still was Rand ranting about Roosevelt in the late 90s. Yes, like it’s overdue, like, a pitch Roosevelt Civilian Conservation Corps.

Chad Franzen 6:29

Damn WPA. 

Dan Engel 6:32

Yeah, yeah. So you know, we didn’t align on politics, but that’s okay. And maybe he saw a little bit of himself in me, I don’t know. But we had a good time together. And we’d go out every once in a while. And for lunch here and there. And, you know, he told me things like, secret to living as long as he has was eating meatloaf and mashed potatoes, which

John Corcoran 6:50

Buffett and Munger have definitely copied that as well. These guys must be, well, we knew we should listen to them about their diet, because they’re all in there. You know, Munger just died at 99 or something like that. And Buffett is 93 or 94? 

Dan Engel 7:05

Well, something tells me they didn’t help their odds with some of their eating and drinking habits. But, you know, they’re just small case studies.

John Corcoran 7:12

So in I read about this in 96, I think you created the first website for Sanford Bernstein, which was an investment firm, which when you think about it, now considering cybersecurity and all that kind of stuff, it’s a little bit crazy to think that you I think you were 19 or 20 years old, or something like that when you did this, but how did that come around?

Dan Engel 7:34

Ah, You know, so I was really ambitious in high school and college, wanting to get really far in the investment world, and find all the key people that had a lot of the power and influence and find ways to work with them. And so just like I did at Fidelity, where I ended up getting to work with the fund managers, Nate Johnson, who was running the place. And some of that some of the other stars that were over there, Peter Lynch, for a time, I did the same kind of thing at Sanford Bernstein, because they were considered one of the premier investment management companies. And very, very well respected, especially for the quality of their research. 

And so I got an internship there, where I was supposed to, I think I was supposed to just put a serial number on everybody’s computer into some book clog. But I was like, Oh, this is an opportunity to meet all the investors when I go to their desk, and get their computers here. And so I would time it so that the people I wanted to meet, I would go get their serial numbers when they were physically in their office. And then I would get to know them, we’d start talking about investing not computer serial numbers. And that’s how I got to know a bunch of people there. 

And eventually they had me and the other intern they had that summer do their website, which was quite an experience doing HTML, kind of annually back in around 96. And we created their first site, they now are called alliancebernstein, formerly Sanford Bernstein. So it’s a pretty big investment company. You know, I was pleased to be able to spend time there and learn from some of the experts.

John Corcoran 9:08

Now a couple of years later, you end up finding grape ape, which I’ve read is described as an Amazon for magazine subscriptions. How did that idea come about?

Dan Engel 9:19

Well, the idea came through my dad as a lot of my good ideas do and, and have a lot of my success I attribute to my father’s guidance. In the 60s during college, Will had a list of magazines, he was able to go around and sell and it helped him pay for college. And my brother and he and I don’t remember the exact conversation, but somehow it occurred to us to wait a minute, we’re paying, we’re paying like 20 cents to get a subscription for Sports Illustrated, which normally would cost $20. That’s quite a margin and we were seeing what Amazon was doing there. was a company called CD now that was selling a lot of music CDs. Nobody really was doing anything having to do with the other part of media, which was magazine subscriptions. 

And so we went into that business. And the idea was to do what Amazon was doing, but just not for books, but for magazines. And we did. And, you know, went through all the kind of craziness of the.com era, the highs and lows. And ultimately, it turned out as wonderful sounding as it was people to this day, and even back then, really don’t subscribe, want to subscribe to magazine subscriptions through the internet, obviously, it’s gotten to be a less popular thing now, and lots of problems in publishing, but even back then it just turned out not to be a great category. And, you know, we kind of figured that out after the fact, none of the companies in the space no matter how much they raised, ended up really making it. But we sure learned an awful lot. And that was my fate. I did that out of college. And it’s been crazy to get that experience ever since.