Oct 31 2009
Steve Shapiro Interview, Digsby Founder Reveals His Entrepreneurial Secrets
Hi Everyone
Another exciting Young Entrepreneur interview, this time with Steve Shapiro (26), founder and CEO of Digsby.com
A few facts about Steve:
1) After an entrepreneurship class in his last year of college at RIT (Rochester Institute of Technology), Steve had a business plan sitting in his lap and the confidence that he could pull it off. And so after a round of seed funding, he started work on Digsby – which is a desktop application that helps people manage all of their IM, email, and social network accounts from easy-to-use interface.
2) Digsby.com has grown from less than 100,000 users to over 1,000,000 in just over a year. Digsby.com now have over a million users managing over 4 million IM, email, and social networking accounts. Digsby.com has received coverage in the New York Times, the Wall Street Journal and are frequently featured in blog posts in several top 100 blogs including Mashable, Techcrunch and CNET.
3) Most importantly Steve has been able to monetize an IM application without showing ads in the actual program like other major players (AIM, Yahoo, Live Messenger). Digsby.com have an innovative and unique opt-in research module that allows users to contribute their spare CPU cycles for research. This is similar to non-profit projects like Help Conquer Cancer, The Clean Energy Project or FightAIDS@Home. Along with non-profit projects, it does have commercial applications as well.
My Big Takeaway from this interview:
“The biggest lesson has been that things always take longer than you think they will and there will always be unforeseen road blocks”
Wow Steve — I can certainly relate to that one 
Enjoy the interview – let me have your comments and feedback
To Our Success
Michael
Steve Shapiro Interview
1) Hi Steve, thank you so much for agreeing to this interview.
You are founder of Digsby.com- can you tell us a bit about how the company formed and what made you go into this niche?
Digsby started as a school project for an Entrepreneurship class I took while doing my MBA at RIT. The goal was to build a product which helps people save time by making it easier to manage your IM, email, and social network accounts. After the semester was over, I closed a seed round of financing with two angel investors and hired the team. The entire team is RIT grads and our office is in the campus incubator.
2) Digsby has grown from less than 100,000 users to over 1,000,000 in just over a year, could you give the readers a bit of insight into how you managed that?
The product is not naturally viral – you get no benefit from inviting your friends like you do when you get them to join Facebook or Skype. In our eyes, that makes the growth even more impressive. We now have over 1.5 million users manging more than 4 million accounts and exchanging over 25 million IMs every day. I think the reason for the growth is that Digsby provides these people with real utility. As a result, our users have been spreading the word just because they like the product. We’ll keep pushing to make it even better!
3) Can you share some of the biggest lessons you have learned personally and as a business as digsby.com has grown? If you were to start again, what might you do differently?
I don’t think we would do anything differently. It’s hard to say what effect even the smallest change has on an outcome and we are happy with the outcome thus far. The biggest lesson has been that things always take longer than you think they will and there will always be unforeseen road blocks.
4) What next for digsby.com? Where do you see the business in say 5 years time?
Next on our list is adding group chat and launching for Mac/Linux. We have over 400k people on our mailing list (http://www.digsby.com/signup/maclinux/?os=mac) awaiting the mac release. That’s a lot of potential users and potential evangelists we are leaving at the table.
As for 5 years from now, it is hard to say. We help people manage their online communication, whatever channel that may be. I bet 5 years ago no one could have predicted the rise of Twitter. Similarly, who knows what will happen with Google Wave. It may go nowhere or it may become our most requested protocol. We just need to keep our ear to the ground so we can understand the trends early and ride each wave (no pun intended) as it happens to simplify people’s lives.
5) Do you have any recommended strategies for getting customers who use your service once and come back and use your service again – other than of course good results?
Keep making the product better – that’s all there is to it. When you uninstall we ask you why and we read every response we get. It helps us focus our development efforts. I read tons of tweets of people saying that they tried Digsby, didn’t like it, and are now trying it again with much better results. We’ve come a long way since our launch last year in terms of functionality, usability, performance, and reliability.
6) How long did it take to develop Digsby.com’s technology?
It took two years to develop the initial alpha – 3.5 years to get it to where it is today.
7) Do you have any suggestions for coping with set-backs, negative experiences?
Don’t give up – the essay by Paul Graham entitled “How Not To Die” has always been inspirational and I couldn’t put it in better words.
8: Is there anyone that you look up to and model yourself on? (You can name more than one person)
There are lots of great entrepreneurs out there and I try to learn from all of their experiences. As for who I try to model myself on, I think Steve Jobs would be at the top of that list.
9) Do you have any favourite business related or web design related books that you can recommend to other entrepreneurs?
Crossing the Chasm was a great book about how to take technology products into the mass market.
10) What is the best advice you have ever been given?
You can accomplish anything you set your mind to (courtesy of immigrant parents)
11) As someone who has achieved success at a relatively young age, what advice would you give to a Young Entrepreneur starting their first business today?
Do it while you are young – before you have a mortgage, and house payments, and kids, and other things that prevent you from dedicating yourself fully to the success of your startup.
12) What do you like best about the Internet?
That it is endlessly evolving.
13) What do you like least about the Internet?
404, 500, 501, 502, and 503
14) Have you any plans (personal or business) that you can share with us about your future plans / goals / lifetime goals?
At some point it would be nice to end up living in the same city as my wife again. She is off in England doing her PhD right now 
15) Digsby.com is based a lot on the boom of social networking – do you feel this is a niche that is going to continue to grow?
I don’t think it matters. I think the Internet will always be used as a communication tool. More importantly, no single medium will ever kill all the others. There are times when an email is the appropriate medium (long letter). There are times when Facebook is most appropriate (share photos). There are times when IM is most appropriate (synchronous conversation). As a result, people will always need to manage multiple accounts and if you can make that process easier then your product has value to the end user.
Checkout the Paul Graham Essay “How Not To Die” here
from Making Money Online With Young Entrepreneur Michael Dunlop
