Dusan Babich is the CEO and Co-founder of Device Magic. Device Magic is used by customers around the globe, including the Clinton Foundation, Lego, unicef, MIT and others.
Subscribe to EOFire
- Your Big Idea: Successful Entrepreneurs have One Big Idea. Follow JLD’s FREE training & you’ll discover Your Big Idea in less than an hour!
Worst Entrepreneur moment
- Dusan was investing BIG time in Nokia’s smartphone dominance, and then the iPhone was released, and he got CRUSHED.
Entrepreneur AH-HA Moment
- 10x the results without 10x the effort. Listen close to hear the POWER of this statement in action!
What has you FIRED up?
- Device Magic: Build Data Collection Forms for Phones and Tablets. 50% off for 3 months for Fire Nation through this link!
Small Business Resource
- Zapier: Makes it easy to automate tasks between web apps.
Best Business Book
- The Art of the Start by Guy Kawasaki
- Device Magic: Build Data Collection Forms for Phones and Tablets. 50% off for 3 months for Fire Nation through this link!
- Dusan’s twitter
Dusan Babich: I certainly am, John. Thanks for having me.
Interviewer: Dusan is the CEO and co-founder of Device Magic. Device Magic is used by customers around the globe including the Clinton Foundation, Lego, UNICEF, MIT, and others. So Dusan, I just gave Fire Nation a little taste of what you have going on right now. We’re going to be really getting into your journey in a few minutes here, but first we’re going to dive right in to what I like to call the one minute mindset. There’s going to be five questions, five insights into your mind, Dusan. So, number one ideally what are the first 60 minutes of your day look like?
Dusan Babich: I guess ideally – and this is not always the case – but it would be coffee within the first 60 seconds and exercise thereafter, probably an hour or so.
Interviewer: Wow, what kind of exercises are you doing?
Dusan Babich: At the moment I’m quite into Olympic lifting and power lifting. But, yes I’ve always done a variety of sports but those are the ones I try to do at least three and four times a week.
Interviewer: Do you listen to podcasts while you are working out?
Dusan Babich: You know I actually don’t.
Dusan Babich: I don’t. It just proved too difficult to perform those movements with headphones in and I try to use that as kind of a proper, meditative break.
Interviewer: There you go. That can be good. I can totally understand that, and you’re kind of breaking yourself off from the world, but I will just say a quick side note. There are some amazing new headphones out. I can’t think of the name right now, but they just wrap around the side of your head and they’re Bluetooth and they go right into your ear, so it’s almost like wearing sunglasses backwards. And so there’s no wires; there’s none of that – powerful stuff. Dusan, what’s your biggest weakness as an entrepreneur?
Dusan Babich: I would say that – my educational background is engineering, so I don’t tend to be a very good marketing person or I don’t think about those things naturally. So to me that’s all – promotion, marketing, understanding message copy – that kind of thing, I would say is my biggest weakness.
Interviewer: What’s your biggest strength?
Dusan Babich: Focusing on the technical – yes, I think I’m a good technical founder. I can code. Analytics and engineering just comes naturally, so I can work my way through complex problems like that. That will never be a concern for me, but obviously the caveat is that marketing and some of the softer aspects I don’t do as well.
Interviewer: What’s a habit that you wish you had?
Dusan Babich: Being bootstrapped mostly co-founder I do tend to do a lot of things in a lot of places, so there’s quite a bit of procrastination on things that I determine to be less important, like travel bookings. So I’m frequently doing these sorts of things at the last minute and I do wish that I would be a little bit more forward thinking and crossing things off to do that I know I don’t really have to think about. I do tend to leave those till the last minute.
Interviewer: Powerful. Well, now just take about a minute and tell us a little bit more about what you have going on and where you’re at in the world and then end with the one thing that has most fired up right now.
Dusan Babich: Well actually I’ve just recently moved from Johannesburg, South Africa to Raleigh, North Carolina to run Device Magic. This is my second proper startup and so I’m full time now. It’s quite a big change. I’m obviously very excited about Device Magic and we’ve got a great product, a great team, a really exciting market that’s probably in single-digit penetration for mobile phones, so it’s just a lot of things to be excited about.
Interviewer: Now, did you say you moved to Raleigh, North Carolina?
Dusan Babich: I did. Yes, so I started Device Magic out of Johannesburg, South Africa actually. And I’ve been building the business and finally it was time to – we have a U.S. office – it was finally time to be on the ground here and yes, I made the move about a month ago.
Interviewer: Now, of all the places you could choose, what brought you to Raleigh?
Dusan Babich: Well, actually I met a couple of founders of, I suppose, other web software-as-a-service businesses at various conferences during my travels in the U.S. and there are quite a lot of lot companies that are based out of the area. I mean, it’s got the Research Triangle Park and there’s some big, established businesses with offices here, but there’s quite a lot of entrepreneurial stuff going on, too – Adjunct, ShoeBox, just to name a few – ShareFile, which was bought by Citrix came out of this area.
So I definitely think the area punches above its weight and there are a lot of other things familiar to me being on the east coast and communicating with our team back in South Africa a lot easier. Getting in and out of the country is a lot easier because it’s on this coast. So, a number of practical things like that, but it’s just a lot of talent coming out of Duke, UNC, NC State, so I think there’s a lot of boxes it ticks.
Interviewer: I love that phrase, the area punches above its weight. I can definitely tell, Dusan, you’re a weightlifter. You’re just kind of into those big, aggressive-activity sports that you like to do because that’s a phrase that obviously came from that area and it clicks. It makes sense.
And Fire Nation, what I want you to be taking away from what Dusan is telling us right now about his move to Raleigh – he went to conferences. He got out of his comfort zone. He didn’t just stay in South Africa and do everything virtually. He went out, he met people; he saw where people in his niche, in his industry were doing cool things and then he went there.
For SaaS, Raleigh proved to be great. If it’s going to be something different, maybe San Francisco; something different, maybe Dallas; something different, maybe San Diego, but you’re not going to know unless you get out to those conferences, engage, build relationships, find people who are doing what you want to be doing right now and find out what they’re doing and where they’re at and how you can become part of their inner circle
And Dusan, you’ve given us a little glimpse of your journey. There’s obviously a lot more to it and that’s what I want to get to right now. So, take us to what you consider your worst entrepreneurial moment and Dusan, I want you to tell that story. Take us to that moment. I want to feel like I’m there. Go.
Dusan Babich: Well, this is probably quite an easy one for me, because the net result of this moment was having to tell my best friend’s father that the $1 million invested in our startup basically had to be written off. So that’s a quick, high level summary and obviously the back story I can expand upon –
Interviewer: And take us down to that ground level, right?
Dusan Babich: Sure. So, this startup was probably 2005. My co-founder and I set out to build this business, which was a developer tool. And at the time it was – the Smartphone ecosystem looked completely different to the way it is today. At that time Symbian and Nokia Smartphones dominated the world market, probably at about 80% share and Microsoft was very strong with developers. So we were providing this tool and platform that let you use Windows and Microsoft tools to write applications for the then-dominant Symbian and Nokia Smartphones.
It seemed like a great idea at the time. It took a long time to build out that product. It took a lot of funding, and we were building this out of Africa. Eventually we got to the point where we had this product finished or at least a solid version of it that was very useful, useable and we had customers. We had started to achieve some early revenue and then the iPhone got launched.
For the first couple of months there was a bit of denial out of Symbian and Nokia about how significant it was and at the time when the iPhone launched, it didn’t have an app store. So, there was sort of speculation about third party apps but it quickly became clear that the stronghold that Nokia had in Smartphones was quickly going to become eroded.
So, although we built the product and we succeeded in that phase of it, the business just kind of evaporated over the next 12 to 24 months. And at some period of time we just had to say look, it doesn’t matter how much better we execute or there was no natural improvement we could do. We’d just made a big bid that didn’t work and it made more sense to say to our investor the remaining money we have, let’s just return that – we can’t see how this business can go forward. So it was a pretty big hit.
Interviewer: So, Dusan I want to talk with Fire Nation now about this for a second because this is something that is an ever-living fear of all entrepreneurs in any industry. For you, what happened? Iphone came in and crushed the landscape and no matter what industry we’re in, Fire Nation, no matter what landscape we’re in, no matter what niche that we’ve chosen, there’s always this opportunity for this to happen in a different area. Who knows what’s going to be that next thing to replace the podcast? I surely don’t right now, but I know that I’m going to try to have my eyes widen open for when that happens: one year, six years, 10 years down the line; whenever that might happen.
And there’s a great book, Dusan, by Seth Godin called The Dip and in that he says sometimes you’ve got to just keep forcing through and push through that tough times in the plateau and the valley to get to that success. Sometimes that is true. Nokia, you said, was blind to the fact and maybe they just said you know what, maybe this might just be a dip. We’re just going to push through and we’re going to see success on the other side.
But at the same time, Fire Nation, the only way to get out of a hole is to stop digging and Dusan, from what I can gather, you chose the latter as the correct move. You chose to stop digging in this hole, to stop wasting your most valuable resource: time, energy, resources, money into something you saw was going not forward but probably backwards or at the very best standing still. Would you agree to that and speak to Fire Nation on your thoughts?
Dusan Babich: Well, I think if there was any opportunity to return some of the capital to the investor that was what we should have done. But the only way we could achieve that was by some kind of pivot or maybe even a license to sell IP and we explored those options. We wanted to recover whatever funds we could, even if we could only return 10 or 20 cents on the dollar invested, we should try that. But yes, basically we were open and honest and said we don’t see a future for this. We’ll recover what we can, but then we want to move on. It’s in nobody’s interest to continue.
And yes, the only thoughts I have is that I’ve spent a lot of time since then thinking about what was the bid that we made wrong or did we not look at the information correctly? I suppose you could argue that there were some signs that the bid a bit risky, but we determined those risks were acceptable at that stage we were at and when everything else was taken into account. But, there’s a lot of winner’s back, so this is the story of if you make a big bid and it doesn’t work, this is what can happen.
It wasn’t – I still have a very good relationship with that investor. My friend was best man at my wedding and they appreciated that we worked out butts off. It wasn’t like we were messing around or something. It’s just that the market changed very quickly and caught us off guard, so I think that that is still a good relationship, but yes, perhaps if I wasn’t doing everything and really working hard and then he would be quite disappointed about the way it turned out.
Interviewer: So Dusan, let me cut in here. What I basically want to wrap it up with this section is you lived to fight another day and Fire Nation; sometimes it’s what we need. We need that fighting chance. So be willing to pivot. Be willing to change directions and always, always – especially with all those people who have invested in you – be open, be honest, be transparent. Do the right thing by them. Don’t ruin those relationships because they can end up being incredibly valuable for you down the line and plus the fact that it’s just the right thing to do.
So Dusan, I want to shift now to another story and I want you to get really specific, time-wise. Take us to a moment when you had an Ah-ha moment, an epiphany, and a light bulb that went on. You’ve had a lot, Dusan, but take us to one that you think Fire Nation will really resonate with.
Dusan Babich: Probably the one that was quite a big epiphany was with Device Magic and I don’t even know if I gave this background, but we actually have a mobile app that replaces paper forms and paper processes for things like invoices, work orders, inspection forms, for companies that have a lot of people in the field. And we started building that product probably a year to two after that first startup failed and we got to a point where we’d built the core technology we were selling on the web and we eventually, through a lot of effort, got to – I think we were doing about $5,000 a month – in recurring revenue and it’s a software-as-a-service product. For the first time we could sort of squint and say okay, we could actually get this to be $50,000 a month with really the same core product and company. We just needed to acquire more customers.
And I’ll say that that’s the first time that in terms of leverage, we could 10 X the result and we wouldn’t have to do 10 X the engineering or 10 X the effort. The signs of a business machine were there.
So that was the epiphany for me, because at that point when we achieved that we were doing a lot more revenue than we ever made on the first startup, so that was kind of a huge deal.
Interviewer: What I love about that is your phrase we could get 10 X the result without 10 X the effort. So Fire Nation, one focus that I really want you to have is number one, you have to build that foundation. Dusan could have never come to that epiphany, that realization, without having the foundation in place first, so he worked his little hiney off. He put the nose to the grindstone. He built a great business with a great foundation and a customer base and then, at that point, he could step back and say okay, where are our leverage points? Where can we achieve 10 X the results without 10 X the effort? He could put his focuses there. That’s a great place to be. That’s where you want to be and Dusan, that’s the biggest takeaway that I got from your Ah-ha moment.
But break it down for us: what’s one thing that you want our listeners, Fire Nation, to walk away with from that light bulb that went off in your mind?
Dusan Babich: Well, the outcome from me, or the takeaway for me was you know you’ve got to just focus on the next phase because I can tell you that that time was shortly before we were doing $5,000 a month. We were excited because we had one customer paying us $100 a month.
I remember at the time thinking – this was when we had just started out with the web model – and we were thinking does this customer that they’re paying us $100 a month? Are they seeing their credit card bills, because that was a huge deal for us, that they were paying us that amount of money and it can be quite – you can get despondent if you’re trying to measure how are we ever going to get to be a $1 million business or a $10 million business, but just try and focus on what it takes to double or get to the 10 X, because that you can kind of imagine and realize what you to do to effect that change.
Interviewer: Fire Nation, a lot of great takeaways here, and I hope it’s kind of liberating too, and a little freeing to know that you don’t have to sit down and plan out the next 10 phases of your business, especially in this day and age. Things are changing so quickly. The landscape is always evolving. It is ever-evolving, and if you’re just sitting there spending so much time, energy and bandwidth on Phase IV when you’re only at Phase I, by the time you get to Phase II, Phase IV may not even be a goal of yours or even obtainable because of things that have changed in the marketplace.
So I love that, Dusan: just focus on what’s in front of you on that next phase crush it and then it’s time to focus on that next phase above that. And Dusan, we are about to enter the lightning round, my friend. But before we do, let’s take a minute to thank our sponsors. Dusan, welcome to the lightning round, where you get to share incredible resources and mind-blowing answers. Sound like a plan?
Dusan Babich: It sounds great. Let’s go.
Interviewer: What was holding you back from becoming an entrepreneur?
Dusan Babich: You know, actually not much. I did that right out of college and I in fact thought I wanted to do businesses in college. My father did say he didn’t think it was a great idea to jump straight into a business, but I can’t really say that anything held me back.
Interviewer: What is the best advice you’ve ever received?
Dusan Babich: There’s a funny saying that we had in engineering at college, which was nothing is so bad that it can’t get worse, which I found pretty funny and maybe cynical. But it just sort of reminded me that as bad as this sounds I’ll just make sure that it doesn’t get any worse.
Interviewer: Yes, like I could lose all of my fingers and never be able to type again.
Dusan Babich: It is very cynical, but it also reminds you that okay, it’s not so bad. It could be 10 X worse and then you’d really be panicking, so this is not going to kill you.
Interviewer: Dusan, what’s a personal habit that you do have, that you believe contributes to your success?
Dusan Babich: Well, I think it contributes to my success, but I do try and do a lot of physical activity and get a lot of sleep and try to be grounded in my lifestyle. I think in the first startup I was very willing to just burn the candle at both ends and compromise on health and I don’t know that that always was net-positive in the long term. So, now I try to be a lot more disciplined about saying you’ve got to sleep, you’ve got to eat, you’ve got to exercise properly; like that’s the core thing that you’ve got to do every day. You can’t trade those off for work for more than two days. If it’s an emergency, do it for two days, but you can’t just have two weeks go by where you didn’t exercise. I want to view that as important as the other two.
I try and do sports that I suppose try and force me to drop everything that’s going on in my mind. It really is a half an hour to an hour of a proper break from work. I can’t really think about work whilst I’m performing those sports exercises.
Interviewer: Absolutely, and to a point that you made at the beginning of this question, I’m going to go out on a limb and say it’s never a net positive to work both ends of the candle, never. Maybe in some circumstances it’s a net positive in the short term, like you said for those two-day sprints, but it’s never in the long term, because Fire Nation, that is not how our body is going to be able to support ourselves in day-to-day living. It needs those seven-plus hours of sleep. It needs the right foods going into the body. It needs to get that fresh air and to get that exercise. This is part of the core of what we are as humans, and remember that’s what we are first and foremost, about everything else, above even being an entrepreneur, believe it or not. We’re human beings. Treat your body well.
Do you have an internet resource, Dusan, like an after note that you can share with our listeners?
Dusan Babich: Yes, I’m quite a fan of Zapier, which is a product that lets you connect various web based systems together. So, before maybe you were scouting your expense receipts with a certain application but then you wanted those to be in QuickBooks so you’d have to manually export, so Zapier is like a bit of Cloud middle-way that allows you to take data from one web system and then insert it into another or vice-versa.
So there’s a whole lot of scenarios you could construct. They’ve got hundreds and hundreds of applications, so literally your imagination is the only limiting factor. Even with Device Magic that’s something that we do where you can take an expense receipt that you’ve scanned in – and I’m not very good at the expense receipts – you scan those in and have them automatically saved and put into a drop box, into a big collection of all your receipts. They’ll also have the line item function in QuickBooks.
Interviewer: If you could recommend one book for our listeners, what would it be and why?
Dusan Babich: Well, I’m a huge fan of Guy Kawasaki Out of the Start, which is a book – it’s pretty thin – but I don’t know any entrepreneur who can say it’s going to take too long to read that. It’s just really; really clear and concise about getting started and how to approach almost anything you’re starting from the ground up. It’s not just web businesses or internet businesses. It’s modern though; it’s written recently, but I think he’s just a great author and really amusing to read and really on-point.
Interviewer: Fire Nation, I know you love audio, so I teamed up with Audible and if you haven’t already you can get an amazing audio book for free at EO-Firebook.com. Dusan, these next questions, they’re the last of the lightning round, but it’s a doozy. Imagine you woke up tomorrow morning in a brand new world, identical to earth but you know no one. You still have all the experience and knowledge you currently have. Your food and shelter are taken care of, but all you have is a laptop and $500. What would you do in the next seven days?
Dusan Babich: I would start an online business, but probably the first step would be start building an online audience. I think these days it’s become easier and easier and cheaper and cheaper to build those kinds of businesses with Amazon and the amount of free and open source tools you have and the resources. So before what would cost $1 million to do and take a year, you could really get done in a couple of months and a lot less investment if any. So I would do that. I would start an online business and then maybe the first step to there is getting an online readership or listenership.
Interviewer: Dusan, I want to end today on fire, my friends, so share a parting piece of guidance, the best way that we can connect with you, then we’ll say goodbye.
Dusan Babich: I assume that a lot of your listenership is in the U.S. and that is such a huge advantage. If you can already be living and working in the U.S. it’s as Warren Buffet once said, you’ve won the lottery of life. So you start with that advantage already. There’s almost nothing that you cannot achieve and do in this country so that’s like an amazing head start and one that I don’t have and have come to appreciate what it means to be able to work here. So, that’s what I’d say. It’s already a lot easier. You’ve already got so many things in your favor. Life has played its hand already so make the most of it.
Interviewer: And what’s the best way we can connect with you?
Dusan Babich: I’m on Twitter at Dusan Babich. Our account is DeviceMagic.com. In fact, we’d like to offer your listeners a three-month, 50 percent off on any subscription with us that they’d like. They can just go to the standard URL that you provide: /DeviceMagic.com/fire and yes, I’d love to connect with any other entrepreneurs or anybody on Twitter.
Interviewer: Well Fire Nation, you know how big I am on mobile. It’s in everybody’s pocket right now. It’s 24-7, seven days a week, within arm’s reach: your potential clients, customers, listeners, leaders, viewers, you name it. Get your voice, your message, your brand out there via mobile and Device Magic is going to help you do that. So again, that was DeviceMagic.com/fire for three months at 50% off. Cool stuff. Dusan, thank you.
And Fire Nation, you know this. You’re the average of the five people that you spend the most time with and you have been hanging out with Dusan and do miss today, so keep up the heat and head over to eofire.com. Just type Dusan and that’s D-U-S-A-N, so like Susan, but with a D in the search bar. His show notes page will pop right up and Dusan, thank you for sharing your journey today. Fire Nation and myself, we salute you, and will catch you on the flip side.
Transcription Services by GMR Transcription
- Moo: Make a lasting first impression with unique business cards from Moo.com! Moo’s range of top-notch paper and exclusive design templates make it easy. For extra WOW, try Printfinity: print a different image on every card! Stand out with Moo.com.
- Wealthfront: An automated investment service that helps you rebalance your portfolio, reinvest dividends and maximize your after-tax returns. Get your first ten thousand dollars managed completely free by visiting Wealthfront.com/fire!
1) The Common Path to Uncommon Success: JLD’s 1st traditionally published book! Over 3000 interviews with the world’s most successful Entrepreneurs compiled into a 17-step roadmap to financial freedom and fulfillment!
2) Free Podcast Course: Learn from JLD how to create and launch your podcast!
3) Podcasters’ Paradise: The #1 podcasting community in the world!