The Rise of Magai: Dustin Stout’s Entrepreneurial Triumph

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Casey Cease: Hey everyone, welcome to the KCC show. This is Casey and I’m super excited to have you join us today as we go through and talk about life and faith and business and hear great stories. And today I’m honored to have a good friend of mine on the show. Dustin Stout, and Dustin is the founder and CEO, chief supreme, whatever titles that we like to give ourselves as a startup founders of Magai, and he’ll tell us a lot about his journey to that place.

Magai is a wonderful AI platform for creatives, and it’s just been [00:01:00] amazing to watch this journey as a friend, as a small investor and it’s been a wonderful time. So Dustin, thanks so much for joining me for an episode of the Casey Cease Show. I guess I should probably call it like the name of my guests, but you know, it’s my show, so I can do what I want to do.

But anyways, why don’t you take a minute and just share a little bit with those who are tuning in about yourself.

Dustin Stout: Sure, Uh, glad to be here, Casey. So I am a digital tinkerer. I love all things digital. I am a Jesus follower and that sort of dictates every decision and choice that I make in my life. How could I best glorify my creator? And I love just making cool stuff that improves people’s lives. I uh, didn’t start out that way.

I grew up wanting to be an actor. And moved out to California after I graduated high school to pursue acting and quickly found out that, it’s kind of a difficult business to break into and something in me sparked the entrepreneurial bug. Maybe it was you know, part of my upbringing, seeing my stepdad struggle with in and [00:02:00] out of you know, layoffs different times in our life.

And and knowing, seeing that, idea of having a nine to five isn’t necessarily the secure thing that it’s sold to be. And I kind of always wanted to be the sort of have control of my own destiny, so to speak. And so, becoming a business owner was sort of a natural inclination of how I was built without getting too far into it.

I started a marketing agency. That turned into me realizing that I’m probably not the best consultant in the world because I’m too much of a perfectionist and found digital products and found that I can put all my perfectionism into one product and help a lot of people at once. And that was sort of, the catalyst for where I’m at today.

Casey Cease: So it was fun. I met you in, I believe the fall of 2019 at a conference in Georgia. I was actually working in the green room, just kind of hanging out, talking to people a runner of sorts. And you and I connected and I ended up being able to take you to the airport. We [00:03:00] became fast friends and you were there speaking, I believe on social media for the church and just godly dude, very kind super smart, hilarious but it was always interesting when we first met, you were telling me about, I don’t know, was it a plug in or an app or something that you had created?

And. And I don’t know if you had exited that yet, but you were working on trying to figure out next steps with that as well. Why don’t you tell us a little bit about some of the specific projects you’ve worked on? You had the marketing agency, and then you started developing other products for people.

So tell us a little bit more specific about the entrepreneurship journey that you’ve been on.

Dustin Stout: Yeah. So I was actually a youth pastor for a while. And as a youth pastor, I had a target market, so to speak. My task was to win over the youth in the, our local area. And at the time the youth were on Facebook. That was, it was peak Facebook in you know, 2008 ish and social media was just beginning to really you know, come into itself as this society changing thing. [00:04:00] And so I learned very quickly, I sat in a room with a guy named Michael Hyatt, and

Casey Cease: Heard of them. Any anybody, anybody ever heard of that guy? Yeah.

Dustin Stout: maybe possibly but he spoke about this idea of how social media and blogging was a way to build a platform and to grow an audience. And I wanted to grow my youth ministry.

And I thought, you know, doing an online Strategy would be the best route to go. It turns out that’s true. I started a blog mostly to capture the lessons that I was teaching on Sunday. And, but also I was, I started writing about things I was finding in social media, like things, how to do things.

And it was very practical, very hands on like, Oh, I found this way of doing this thing, or this seems to be trending on this social network or try doing this to improve your reach here. And in that part of that journey was me learning web design because I had a design background as just like a hobby as a graphic designer, and I wanted a blog that looked good.

And so I kind of taught myself how to make [00:05:00] a good looking blog. And that just sort of turned into me hearing from business owners saying, Hey, you seem to know about the social media thing. You Could you help my business with its social media? And then people would say, Hey, who designed your website?

It looks really good. Well, I designed it and they said, well, can you design ours too? And long story short the church didn’t have a budget to pay me anymore. So I needed to make a living. And thankfully God had given me those skills to go into full time consulting eventually and build people’s websites and help them grow.

Traffic to those websites through the means of social media strategy. And eventually SEO became something that I was very interested in and figured out. But again, going back to this idea of like, I’m a perfectionist and because I’m a perfectionist, I’m the kind of guy that’ll sit there and spend two hours just trying to figure out how round should the button corners be.

And that doesn’t scale very well when you’re consulting businesses

Casey Cease: especially if you’re charging hourly. I

mean,

Dustin Stout: It doesn’t scale well. So, and I had a hard time, [00:06:00] you know, with that aspect of it. So, 2014, I got together with a couple of friends. We had some ideas for some, for a WordPress plugin. At the time the landscape of social media sharing buttons on WordPress sites was terrible.

It was really

Casey Cease: I remember that. Yeah, it was bad.

Dustin Stout: Yeah, 20 pre 2014. was, it was an ugly place. Let’s just put it that way. And the buttons were slow. They were bad. They didn’t do anything intelligent. So we had some ideas. You know, I brought my ideas to the table design wise and from a strategic standpoint, maybe they can do some more intelligent things than just sharing a headline and a link and they had some ideas to put all those together.

They were developers. And so we came up with this idea for a social sharing plugin became one of the most popular social sharing plugins on WordPress. And that was going great for a long time. And it gave me this taste of like recurring revenue.

And I got this revelation that like, this is the way like I love helping people. I love building cool things, but when [00:07:00] you’re working with a business who has limited budget, limited time, they have their own opinions that they want to sometimes have you take on. Even if they’re contrary to your own expertise.

So I found that building my own digital products was just a better fit for me. And so I couldn’t shake that. Long story short, the partnership the WordPress plugin became a bit toxic. My partners and I grew apart. I was kind of grinding every single day on the business where they had some other interests that they were pursuing.

And there was just a great imbalance there. And then, so long story short, I had to exit that company. I didn’t exit until 2020 well into the pandemic and should have done it three years earlier. But you know, some of us entrepreneurs we stick things out a little bit longer than maybe we should.

But after exiting that, you know, I realized like I had all these ideas for digital products and I had two in particular that I was super excited about and that led me to, you know, this path of, [00:08:00] okay, now I’m in startup mode again, just left a business that was doing quite well. And it was very steady and very stable.

And now I’m in startup mode again. And

Casey Cease: So, I want to get to the startup, but I want, just, it’s so funny that the guys like us who’ve been in different companies have started businesses and everything else saying, Oh, I should have done this almost as a, you know, an afterthought and then we move on. But why don’t you help us a little bit?

What were some things that hindsight being 2020 that could have been indicators that was time for you to perhaps move on or change your role or exit a company? What were some things that you said I should have three years earlier. What did you not pay attention to?

Dustin Stout: Yeah, well, it wasn’t that I didn’t pay attention. I think the Christian in me just tends to give people more chances than maybe we need to. I’m a firm believer that, you know, you look for the best in people and everybody makes mistakes. I’m not perfect. I made some mistakes in the business and in the partnership and the relationship there.

And I own those. But there were certain things that clearly [00:09:00] weren’t changing that were harming the business and started to become very to deal with relationally, because we would, we were butting heads consistently. The primary thing that I think was the main factor that was repeating and was one of the things that I thought to myself, I saw this coming and I just kept ignoring it.

I kept saying, no, it’ll be different next time. It’ll be different next time. And one of them was. Again, I was grinding. I was very in tune with our target customer. I was very in tune with the product landscape. I was very in tune with all the competitors starting to pop up and copy us exactly. My partners, again, they had other interests.

One of them had a whole other web development business. The other one was like a freelance developer himself. So they had different projects. He was also remodeling his house and doing other stuff. So they didn’t really have the investment in the audience that I did. I was there every single day.

And so they had ideas of what should be built or what should be focused on or what, [00:10:00] who are customers were, and I had my own ideas and on a number of occasions, it just seemed like it was an uphill battle, trying to communicate to them what I know needs to happen for the business versus what they think needs to happen.

And it just again and again, just kept coming up and then our main developer, he would sort of disappear for a few weeks at a time. You know, he would kind of burn himself out on development and just And when you have a digital product that relies on a developer to maintain and keep secure and keep up to date and he disappears, that’s really bad for business because something breaks and all your customers websites break, and then, who gets all the hate mail, the one who’s the face of the business. And that was me. My other two partners weren’t quite as public about their position in the company. And so I would get the private Facebook messages, people screaming and hollering at me. I would get the angry Tweets from people saying, you’re plugging broke my website.

So, it was very taxing on me. I felt like I had no control [00:11:00] over the destiny of the product because I had to go through my partners. And there were several acquisition offers that we had from very big potential partners that didn’t go through despite my best efforts, because my partners didn’t share my vision, they didn’t share my philosophy.

And so, became very clear real quick that our values, the things that we valued about business, you know, integrity and hard work and, you know, just not that they didn’t have integrity or a sense of hard work that we were just not aligned. We didn’t have the same ideas about those things.

So yeah, eventually, you know, after three or four come to Jesus moments that we had to have one actually involving attorneys. I finally had to call it quits. I should have called it quits right after that first attorney come to Jesus moment where we needed to like bring lawyers into the but I gave it one more shot and that one last shot was eventually the one that was the straw that broke the camel’s back.

Although it wasn’t a straw. It was more like a, you know, piano [00:12:00] that, that

Casey Cease: Yeah, well, and so, I mean, I think, that’s an interesting point there, Dustin, where you’re saying after the meetings with the attorney, was it the outcomes or the fact that it had to get attorneys involved, that was an indication that you should have probably bowed out?

Dustin Stout: Well, it was the fact that we had to get the attorneys involved because it wasn’t the first time about this same set of circumstances, which happened that led to this. It was like. we tried to solve it on our own and then we tried to solve it on our own again. And then finally, that issue kept recurring.

And finally we had to bring lawyers into it to say, Hey, this issue needs to be solved. with

Casey Cease: So you finally were able to get past that beat up a little bit, but not destroyed. And then you had these two new ideas that you were going into. Then I interrupted you and said, no let’s drudge up some stories because really people want to know, like, you know, that’s how we learn, right.

From when people miss the boat or maybe go too farther. And I’ve been guilty of the same thing of. Well, meaning [00:13:00] but also hoping for more, but also getting caught in the fact that like, man, the hassle of untying yourself from a situation or from exiting or from all that is a pretty painful process, especially when you’ve committed yourself full on to something for so long, then to have to pull back a little bit or realign.

And so you exited that, you know, 2020, and then you moved into. You said you had these two new ideas. So I’ve been along for some of the journey with you. So, but I want you to share the story as a founder from your perspective, because I’m certain I had more fun along the way and have been more encouraged than you have per se.

So I want to let you share the story, the two ideas and how we ended up with Magai.

Dustin Stout: Yeah. So these two ideas were two products that I’ve been sort of noodling over for a number of years and they were separate, but similar and had very similar paths into how they might integrate in the future. So my idea was, you know, execute both of these products individually. As individual [00:14:00] products sort of test the market on how the market responds to these types of products and then start to weave them closer and closer together over time, because some of the underlying technology that needed to be built was very similar.

And so, I was able to get a few investors to help me with the seed capital to get them off the ground. Now, unfortunately, my ideas for these products were so big and so lofty that they would have cost in the tens of million dollars to actually build all the way out. So what we as entrepreneurs tend to have to do is we have to like tame down the vision, right?

We have to like, what’s the minimum viable product that we can bring out of this that will be minimally costly, I guess, will cost the less, but still have enough functionality where it’s giving value to the customer. And so that was kind of the balancing act that we had to play with these two products because we didn’t have a whole lot of funds to work with.

And so, grand vision stripped down to it’s bare minimums. [00:15:00] And the unfortunate thing was both of these products took longer to build than we anticipated. We built them. You know, 100 percent custom. So I had a, I’m not a developer myself. I more of a front end guy. So we had to outsource the development and the development just took longer.

It cost more. And by the time we had the MVPs ready they were even less of an MVP than I really wanted them to be. And you know, the vision for these products, both of them had AI at the heart of them before AI was even a mainstream. Possibility. This is well before the chat GPT is well before the Jaspers and the copy eyes of the world were really taking off.

I had these ideas for bringing, you know, even then existing AI technology, seeing where it was headed and trying to invest them. But there was no way possible at that time to for me with my limited resources to develop that. And so these these MVPs were just what they were. They were the smallest [00:16:00] version of that idea and wrapped in it is as pretty a package as I possibly could.

And the unfortunate thing was they just didn’t catch product market fit.

Casey Cease: That was what was surprising to me, Dustin. I mean, as one of the small seed investors you know, just to say, like, I invested in you, like meeting you having developed a friend, we worked together on some projects for my company, Plantify agency. And you’re always great, but always innovating, wanting to help and asking those hard questions.

My investment was more like, I want to go on the ride with you and see what happens. But I was shocked as well in those two products, because I was like, these are amazing, like what they do. And do you mind sharing what those two products were? Or

Dustin Stout: sure. Yeah. And when you understand the core concept of them, the concept itself

Casey Cease: And this is before ChatGPT came out. This is before even Jasper, which, you know, I was an early adopter for Jasper. You know, but tell them what it was because it was quite brilliant. Yeah.

Dustin Stout: So, so the two products, one was called SoVisual, which was the parent company that we created. The second project was called [00:17:00] SocialRemix. SoVisual, the whole goal of it was to take what Canva had done to the graphic design industry, made it accessible to all, but sort of, Take it to the next step because one of the things that, you know, I was very fortunate to interview Melanie, the founder of Canva when they were first getting launched and I caught her vision and I was a big fan of it.

Even as a graphic designer myself, I saw the huge value in democratizing design and bringing the capability to do designs for non designers. I love that vision, but I think they fell short in a lot of ways. What you find when you jump into Canva is it’s not that you don’t have to be a designer.

It’s just easier to pretend you’re a designer. You still have to do a lot of design things and sure they have like template libraries that you can pick from but you still have to like customize things. You have to like size things and position things and there’s just a lot of design work that needs to be done.

I wanted to see how far I could push that envelope because there are business owners [00:18:00] that I’ve worked with over the years. There are consultants, strategists, who want to do, they need to design things, especially for social media, but the, as easy as Canva is to use, it still takes a lot of time and effort.

And I knew that I could push that forward in a way that Canva hadn’t done. So, So Visual’s idea was simply a form. You type in the text that you want, you pick the design style that you want, and you hit a button, and it automatically designs uh, a form. It’s the graphic according to your text in every size you could possibly need.

So a Facebook size, an Instagram size, a, you know, a story size, blog post featured image size. So it was like crank all these images out at once by just filling out a form. All you’re doing is typing. There’s no need to toggle things. No need to drag and drop. No need to reposition things. Everything is repositioned, resized, recolored, logo added.

Automatically just enter text [00:19:00] and the concept makes a lot of sense for a lot of people, but in execution, it was very difficult to pull that off in a way that made sense and made it super easy for the average user. And for that reason, people tend to go back to their habitual things that they’re used to when they’re, you know, if you’re trying to teach them a new method or new way of doing things, it’s much easier to just stick with what you’re doing already.

And we found that it was very difficult to pull people away from Canva even though if the promise that we had was, a sense, easier and faster than Canva. So, it just didn’t work in execution. We didn’t execute it in the best possible way. The other product was called social

Casey Cease: I think I will say this is so visual. I thought you executed it beautifully. On an absolute shoestring duct tape and bubblegum budget. I mean, like, I mean, as far as execution goes, like you put in, I mean, you made up for a few of the millions of dollars that would’ve been required to do that, just with your grit and your [00:20:00] perseverance.

So like, I wouldn’t be so hard on yourself because there was a lot of great execution, but I do think there’s a disconnect to a market that just couldn’t fathom typing, which is funny to say now with everything that’s out that you can do that in but, but just to fathom, like, you mean I can get a social media image by just typing words.

And that was super exciting. And you did well, but you’re right. We were about eight and a half million dollars short to

Dustin Stout: Right. Yeah.

Casey Cease: nine and a half to 10 million dollars short of what it could have been, but it was great.

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Casey Cease: And then tell me a little bit about social remix as well. Cause this is,

Dustin Stout: Yeah.

Casey Cease: was awesome as well.

Yeah.

Dustin Stout: Social Remix was especially amazing because in some capacity, well, I’ll tell that story later. So Social Remix, the idea was you enter a link, whether that’s a blog post link or a landing page link, link to any website. You paste your link and instantly the app will generate 40 different social media posts based on that content.

So you would have 15 different Twitter tweets, you would have five different Facebook posts, five different Instagrams, five, 10 different Pinterest pins, descriptions all in an instant with just a single click of a button. And on top of that, it would generate images [00:22:00] based like social media images based on that content. What’s on the page.

And so you kind of instantly see the the way that it connects in a way to so visuals technology as it generates those images and different sizes instantly for you. And again, what makes a lot of sense. If you’re a blogger, if you are a content marketer, who’s promoting content a lot, and you want to repurpose content in the simplest possible way, as fast as it’s a no brainer.

It makes a lot of sense. Paste a link, get a bunch of content. But again, the execution of it made it difficult. It was, I think we could have done some better work on communicating the value and the target audience and focusing on who the specific target audience was for that product. But also, you know, again, it was just a bit clunky.

We were trying to teach people how to use something that doesn’t really exist elsewhere. In a format that maybe they’re not used to. So it didn’t catch the product market fit. The image side of it didn’t [00:23:00] quite land well, the templates that we were trying to use just, they didn’t always work and they were kind of janky.

They worked, but just not as well as you might hope. And by the time we ran out of money and resources and it was just too late, like, we couldn’t improve it much more, did everything I could. As a bootstrap founder to try to Jerry rig it myself. But yeah, it was very

Casey Cease: And I remember explaining it to people thinking like, I got it like I understood it. I was like, bro, seriously, put a link to your blog post or whatever. And it spits out social media and people are like, how does it, they cared more about how it did it than just giving to try like, no, seriously, try it.

And so here you are, you’re out of money, you have so visual, Which solves a problem that people didn’t understand. And then you had social remix that was, you know, creating, doing a lot of the heavy lifting. You’re sitting there, you’re out of money. You’re pretty, if I recall correctly, pretty discouraged at that point.

Um, And to be honest, we’re all kind of scratching [00:24:00] our head saying like, don’t know, and then all of a sudden what happened, how did Magai get birthed out of the

Dustin Stout: I think it’s worth noting that when you met me in 2019, I was just entering this very dark season and it wasn’t, it didn’t start with business. It started with my wife’s health declines. She was having some very intense and very scary health issues that were for a very long time undiagnosed and then was complicated by a bad emergency room visit with a doctor who prescribed some bad medication that she had some bad responses to and caused some very difficult psychological stuff for over well over a year to try and recover from.

So on top of business chaos I’m dealing with trying to figure out how to navigate my wife’s insane health issues and trying to help her through that while keeping it all together and having, you know, three kids running around.

Casey Cease: [00:25:00] you were working some side jobs still, right? Like working for clients and doing client

Dustin Stout: yeah, I was still, you know, maintaining clients

Casey Cease: part of it as well.

Dustin Stout: Yeah, to pay the bills. I mean, I live in California and you got, it’s not cheap. And my wife hadn’t worked for almost all of our married life. And so she was still stay at home mom and trying to be a stay at home mom, even though she really couldn’t function most days.

But so like all of that is still happening while these two startups are completely failing and I reached some of the lowest lows of my entire life on a number of occasions, praying that God would just take me home because I don’t see a way out. I don’t see any purpose. Nothing I’m doing is working.

And you know, if it weren’t for my wife on her good days, having the energy and strength to say. Hey. You know, if God still has you here, it means he’s still got a plan for you. So, yeah, I mean, I had no choice really, but to just keep putting one foot in front of the other and trying to figure out how to, how to make something work.

And [00:26:00] when I was at my very. Like, I was completely out of ideas. I didn’t know how I was gonna make SoVisual more attractive, how I was gonna make SocialRemix more attractive. But I started to discover these no code tools, like Bubble.io and a lot of tools. And this is when AI had started to pick up already.

You had the million different Jaspers out there that are all copycats of the same exact thing. And I thought to myself, well, these AI companies, they have APIs. And if I can just figure out how to integrate with an API, maybe I can build like a widget into so visual, there’ll be like a little widget and they can ask it for social media ideas.

That would be really cool. They could just, you know, enter this and I can do a simple AI API call to give them social media ideas. And taught myself how to do that. I figured that out, was able to execute it. And just as I got done building that ChatGPT hit the scene. And all of a [00:27:00] sudden I realized.

Everything was going to change. It only took me about 30 minutes working. Well, not even that three minutes working with ChatGPT And I was like, this is going to change the entire universe. Nothing is ever going to be the same because I’ve used all these AI copywriting tools. I had been a Jasper user since it was called conversion AI before it changed its name to Jarvis and then almost got sued out of existence and had to change its name

Casey Cease: Yeah, and then they became I, we were using Jarvis as well. I mean,

Dustin Stout: Yeah. And copy AI, like they had done a great job. The

Casey Cease: And I remember when you, I remember when you put that prompt in there, add it to like, you know, to social or to, was it so visual or whatever, but you put it, I remember you saying, Hey bro, go check this out.

And I was like, dude, this is crazy. And then ChatGPT rolls out. And I remember, you saying like, oh my gosh, this is a game changer. So.

Dustin Stout: And here’s the reason why, because I’d used all those AI tools out there, the Jaspers and the copy AIs and the 15 million copycats,

Casey Cease: Yeah.

Dustin Stout: And there was always this issue I had with them, always a [00:28:00] problem with how they were predicated on this idea of templates. It’s. I had to, before I can get the AI to do something for me, I had to figure out what template do I need from these hundreds that I have to choose from, and then I had to fit my idea into somebody else’s box or somebody else’s template, and that just never really worked the way that I hoped. I ended up, it felt like a lot more effort than it needed to be, and it always ended up being Like just very lackluster for what I needed it for.

And, you know, it was like this combination of the paradox of choice. And you heard of the psychological principle it’s best explained this way, if you’ve ever gone onto Netflix and spent 20 minutes looking for something to watch and end up not watching anything, that’s the paradox of choice. We think we want more options.

We want more selection. But the truth is when we are overwhelmed with selection, we tend to not choose anything at [00:29:00] all because it just takes too much time and energy. So I realized that was the problem with these AI tools, that they were predicated on templates and it’s too hard to choose and it often doesn’t really fit what you want.

So when ChatGPT hit the scene and it was No templates, just tell the AI what you want and it gives it to you. I instantly saw this was the unlock. This is going to hit mass market. This was going to hit every type of tool, every type of product, and nothing was going to be the same. And so I started using it prolifically for client work, for my own blogging and article writing and social media, and just really pushing the technology to the limits.

But thankfully I had gotten so low and so desperate that I had to like teach myself how to build no code with no code tools. And I had learned in that how to integrate with API APIs. The beauty of these, chat GPT was it had an API, so you could literally build products. On [00:30:00] top of chat GPT. And that’s when I started noticing little nuances about chat GPT that were just annoying, just little annoying things like, okay, I want to find the chat that I made a week ago where I had it come up with a brand voice.

Okay, why can’t I search? Why is there no search function? Why can’t I search for these chats that I have? Okay, that’s annoying. Why can’t I put these things into folders? Why is everything just one long list? Why can’t I organize these things like I can my Google Docs? You know, when you start using it prolifically, you realize like, organization tools alone are way too complicated. a huge help.

Chachi PT has none of that. You know, why can’t I invite my VA to like my team to, so she can share chats and contribute to chats. So like this laundry list of little quality of life things started to pop up. And I realized, well, Hey, I taught myself how to do no code tools. I know how to work with APIs now.

What if I just built a better version of ChatGPT that has all the features that ChatGPT is miss missing? And that was the [00:31:00] genesis of the idea of Magai. And I started building it, I think, mid January of last year 2023. And within eight weeks it kind of snowballed into a lot more than just a ChatGPT alternative.

You know, all these other AI companies popping up, like Anthropic and Google and all these other AI tools, like image generators, video generators, and I realized like, well, the problem that people are going to encounter next is they’re going to have to jump ship to every new AI thing that comes out.

You know, Claude comes out with something that’s better than ChatGPT. Oh, now we’ve got to go sign up for that. And then ChatGPT upgrades something else. And oh, now we’ve got to go over to that. And now we’ve got to use ChatGPT’s image editor, which is a different login and a different app. And so I realized like, no, this is too much for people.

I’m just going to put it all into one place, one subscription, one login, all the tools in the world and one way to access it. So you don’t have to re learn different app interfaces. It’s all the same and it’s comfortable has [00:32:00] tools for teams, has tools for business owners, makes everyone’s lives easier, and you get all the best, most powerful AI tools.

And that’s what Magai has become.

Casey Cease: It has I mean, I remember when you rolled it out and I saw Magai, I was like, Hey man, like, this is pretty awesome. What is it? And he’s like, yeah, it’s our company. And I was like, Oh, I get to be a part of this. You had such integrity because you could have told myself and a couple of the other, you know, early investors, like, sorry, I ran out of money on that project.

Good luck to you or whatever it be said. No, I want to honor, You know, the investment you made in me and again, I invest in people way more than just the product. And, you know, there was a point where I think all of us were like, well, that was a learning experience. And, you know, we chalked it up and then out of the ashes rises Magai..

And since that time, I mean, you’ve been building in public and sharing stats with people and everything else. I mean, to date of recording early March of 2024, where does it stand as far as users and all that, that you’re willing to share with our listeners?

Dustin Stout: Yeah, we’ve, I mean, this is the fastest growing startup I’ve ever [00:33:00] built. And it was built with zero capital. It was built with me, myself, and I just grinding it out. And if it weren’t for that extremely difficult season that forced me to learn how to be even scrappier and even more innovative than I had to be previously I wouldn’t have been able to create Magai out of nothing.

And, you know, you mentioned that I didn’t close that company that was failing and start a new one because to me, integrity is. The utmost of important characteristics that we need to have. You know, you guys invested in me early on and I never forget the people who support me.

So, you know, it was very important to me to make sure that the Magai is still the same company that you guys invested in and bring you along for the ride. It was hugely important. And in the same way, the users. Who bought into so visual and bought into social remix. you know, those apps are still living.

They’re still there. You can still log [00:34:00] in if you are a previous user, but I also wanted to bring them into it because they trusted me, they supported me and I believe very heavily in honoring the people who’ve supported you. So, you know, when I created this new company, all those people came along with me.

But yeah, I mean, as of now we are very close to making 30, 000 a month in revenue. And that’s.

Casey Cease: That’s huge. I mean, how many months is that eight months

Dustin Stout: I think,

Casey Cease: a year?

Dustin Stout: So the actual launch date of the public signup link was March 31st. So we’re about to

Casey Cease: year.

Almost a year. You had 30 grand a month in recurring revenue.

Dustin Stout: Yeah. And we have over well over 1500 users. I haven’t done the math or calculated recently, but well over 1500 users. 1, 100 of those are paying subscribers. Some of them had bought it like a lifetime deal at the beginning, or some of them were again, grandfathered in from other products.

And yeah, it’s been a heck of a ride. I mean, stark difference from the last four years where just nothing was [00:35:00] working and everything was going downhill to now just a hockey puck or a hockey stick growth uh,

Casey Cease: Well, and you also did a one time lifetime deal thing or something, didn’t you? Do you want to share a little bit about that story? Because I remember when you were thinking about that and kind of weighing the pros and cons and all

Dustin Stout: Yeah. So, you know, I knew that when I first launched a product that I was going to have to focus all of my energy on building the best product possible, because again, like the last products, I spent a lot of my time on marketing because somebody else is building the product. And I had that luxury and then they also failed really hard because I did such a huge marketing launch campaign and just kept stoking the marketing.

And so really what I want to do with this product is focus entirely on the product and on the customer and the feedback that they were giving me. So, to this point, I still haven’t done a whole lot of actual marketing apart from building in public, but one great marketing hack that has been around for a long time is doing these lifetime deals, you know, the app Sumo [00:36:00] model of.

You know, make one time payment for your software and get millions of users right away, right? To Make the deal so good that they can’t pass it up. And I’ve always been very hesitant on those because for those who don’t know AppSumo takes a big chunk of that revenue from the people who created the product.

And it can be anywhere between 70 and 90 percent that AppSumo keeps

Casey Cease: And that’s because they’re opening up their platform right in their audience and saying like, Hey, we’ve built this and it gives you the opportunity to get that kit jump kick. I’m going to hopefully try to get no on here sometime. And cause he’s up in Austin. He’s not very far from me, but,

Dustin Stout: And it’s, in many ways justifiable because they’re bringing the audience, they’re bringing the distribution, right? They’re also creating the marketing materials. They’re doing all the, you know, the copywriting, they’re probably putting ads against it as well. But even still, you know, and, I respect Noah to no

Casey Cease: but, But if you’re, if you were funded [00:37:00] VC back funded, it’s one thing to go out and say, all Right, let’s,

Dustin Stout: you can chop this off as a, as a loss leader,

Casey Cease: that.

Dustin Stout: right? I couldn’t afford to do that. Particularly because an AI product that’s predicated on your users using an API through you, that you have to pay for, I have significant costs compared to the average software product that doesn’t really have a whole lot of

Casey Cease: Set it and forget it. Yeah.

Dustin Stout: Yeah, so I have heavy Cost of goods sold. And so a lifetime deal doesn’t really work as well as it would for a traditional software company. So if I were to do something like that, I couldn’t give away 70 to 90 percent of the revenue. I would need to keep as much as possible, but thankfully I had a friend named Charlie Patel.

Charlie created a company called Rocket Hub and Rocket Hub is very similar to AppSumo. They’re much smaller and the big primary differences were they only take 50 percent of the cut. It’s a split partnership. It’s actual [00:38:00] partnership, 50, 50. They still do all the marketing. They still do all the copywriting.

They pay for the advertisement out of their cut. On top of that, they give you all the marketing materials afterwards. And not only that, but. You know, because AppSumo is so successful, they have a lot of deals going on at once, which means, again, paradox of choice. You have a lot of things to choose from as a customer.

They can’t really give the attention to to you as much as they would if there were only a few. So with Rocket Hub, they only do one or two deals at a time. And so you get all of the attention when you launch with Rocket Hub. And that was really what sold me, you know, having known Charlie for like 10 years online kind of helped as well.

But I decided to do a deal on Rocket Hub and we did a very limited two week run where users could buy one of three packages for a lifetime payment. The other thing about Rocket Hub too is they tend towards higher ticket items, whereas AppSumo, you’re used to like 29 49 deals. Rocket [00:39:00] Hub usually is 100 or more for their, you know, lifetime software deals, which made a lot more sense, again, for a product like mine that had heavy cost of goods.

And it was very successful. Like we did really well with them. In two weeks, we did over 115, 000 in sales and got to keep 50 percent of it, which is really cool. Gave us a nice little influx of cash so that we had some reserves in the tank. You know, again, bootstrap, not sure if it’s going to work.

I’ve got cost of goods and you’re just having that little, you know, buffer or a little bit of runway that we had allowed us to, you know, just feel a little bit more secure out of the gate to, you know, to really build into that product even more.

Casey Cease: So what’s next for Dustin and for Magai? What’s coming down the pipe for you?

Dustin Stout: Oh man our roadmap is like a mile and a half long, because I don’t know if you’ve seen the industry is kind of moving a little fast things are popping up.

Casey Cease: apparently Nvidia is going up a little bit, so there’s

Dustin Stout: Yeah there’s there’s something new like every day. And so I’m doing my best to keep up, but [00:40:00] we’ve gotten to the point where. You know, the revenue is good and I’m finally able to not worry about my mortgage getting paid anymore. And I’ve been able to hire a couple of developers to help me with the workload so that I can maybe start focusing on some marketing things, but I’m not quite there yet.

We’re finalizing a deal with another investor and going to have an influx of some capital so that I can just kind of make that leap. Now, if we kept going, we might be able to get to this point, you know, in 12 months or so where I can just hire full time developers and get that off my plate.

But doing so now, getting an influx of cash now so that I can make these will accelerate our growth and really just put our stake in the ground as a, you know, one of the go to products in the market, really capture the market. So, we’re about to bring on our devs full time 40 hours a week.

And just met with them this morning. We’ve got a really aggressive first sprint that we’re on with some really cool [00:41:00] features. I mean, multimodal video AI text to video. Can’t wait for Sora to drop and get our hands on it and give it to Magai users. All kinds of things, improvements, mobile app, Chrome extension.

I mean, we’ve got some real amazing things cooking for Magai And it starts this week as our developers start to kick into full time gear. And then from that, now that I can step away from development, I’m going full bore into marketing mode and creating free tools that people can use and try out.

It’s funny. One of those free tools that I’ll be releasing is. Social Remix, which took me all of five minutes to create inside of a chat bot. The original version, six months in development, about 25, 000. This version, all text, of course, no images, five minutes in the chat So it’s going to be really cool.

So I’m going to be building some [00:42:00] free tools. blog posts, articles heavy push on just learning, teaching materials, because the whole world is still trying to figure out how do we use AI for our daily

Casey Cease: Ethically with integrity. I mean, I have friends that still think, it’s the antichrist is going to be an AI bot. You know, but ultimately, it’s, that’s one of the things I really appreciated about you is you’ve asked those hard questions of what is the integrity and ethics of utilizing AI?

How do we do that? Well, I know you’ve had major universities come and work with you and other deals coming down the pipeline for larger enterprise type deals. one of the unique things that you bring to the table also, is your sense of responsibility to ethically build something that is good for humanity and good for the world.

And so what else should I have asked you or what else would you like to share before wrap up this episode?

Dustin Stout: mean, I don’t know, man. You asked a lot of questions. You were

Casey Cease: I asked a lot, bro. I get after it.

Dustin Stout: That was really good. I can’t think of anything. You know, it’s a future’s bright and you can’t stop a person who won’t [00:43:00] quit. So, that’s my story.

Casey Cease: That’s what I love, man. So, where do we, where do people find you? How do they follow along on this journey and monitor along where it’s the best place to go find you?

Dustin Stout: you can go to magai.co, M A G A I dot C O. Find all of the info there. I’m at Dustin W. Stout on all the social things. And I’m pretty active on, most of them. Most of them anyways.

Casey Cease: It’s been very entertaining and I love your transparency. I mean, I felt like it was a grand slam even when we were at the absolute pit of like, there’s nothing coming in or anything else just because of you were pressed, but not crushed. You were feeling the weight and gravity of the situation, but you were still holding onto Christ and limping forward and to watch this thing bloom and to see just the many people I come across are like, Oh my gosh, Magai saved me so much time.

And thanks so much. Cause I sent a lot of people there. I’m an affiliate. I’ll probably drop an affiliate link on this post. There’s no shame in my game. But a huge fan [00:44:00] of you and of Magai, and I look forward, I’m sure I’ll have you on the show many more times, but Dustin want to thank you all for coming.

I thank you for coming on and I want to thank everyone who showed up either watch or listen to this first episode for stopping by. And so Dustin, I’m sure I’ll have you on again. Thanks so much for coming by.

Dustin Stout: My pleasure.

That wraps up this episode of the KCC Show. Make sure to visit our website, thekccshow. com, where you can subscribe to the show on iTunes, Spotify, or via RSS, so you’ll never miss a show. While you’re at it, if you found value in this show, we’d appreciate a rating on iTunes, or if you’d simply tell a friend about the show that would help us out too.

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