How did understanding customers’ pain help today’s guest build a profitable theme company?
Kyle Wakefield is the founder of ThemeCo, which makes a theme that is incredibly customizable. I would even call a framework, more than a them.
This is part of my ThemeForest Series. I actually emailed the founder, and I said, “Could you introduce me to some of your top sellers, people who built real businesses by selling themes so I can learn from them how they did it.” And I specifically asked for his top earners, and he introduced me to Kyle.
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Kyle Wakefield, ThemeCo
Kyle Wakefield is the founder of ThemeCo, which makes a theme that is incredibly customizable. I would even call a framework, more than a them.
Andrew: Hey there freedom fighters, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. In this interview, we’re going to find out how understanding peoples’ pain led today’s guest to build a profitable theme company.
Kyle Wakefield is the founder of Themeco, which makes a theme that is incredibly customizable, easily customizable. In fact, I wouldn’t even call it a theme, I would call it a framework. We’re going to find out how he did it, and I met him through ThemeForest, not FemeThorest, ThemeForest. It’s part of my ThemeForest series. I actually emailed the founder, and I said, “Could you introduce me to some of your top sellers, people who built real businesses by selling themes so I can learn from them how they did it.” And I specifically asked for his top earners, and he introduced me to Kyle.
Kyle, welcome. Good to have you here.
Kyle: Thank you. It’s good to be here.
Andrew: The problem that you noticed is exemplified by utah.gov, right? What’s the issue that they had that they needed this theme? Help me understand the problem.
Kyle: Sure. They were a customer that came kind of early on and when we were talking with them, they basically had an issue of having multiple content producers, as they call them that were responsible for writing different parts of the site. And they all had varying backgrounds in terms of abilities and skill sets to, you know, to make sites and to write [??] So we were talking, they wanted something that was extensible enough where they could take a product and customize it as they needed, which they did an unbelievable job with, but they also make it friendly enough to their staff of people to come in and, you know, write blog posts, write pages, manage it.
So it wasn’t some huge custom CMS that, you know, was hard to train people on and hard to get people familiar with. So they approached us and we got to [??] what we were doing. We were honored they chose X, and we were really excited after we saw the finished product because they liked it so much they came back and bought twenty copies, and they turned X into their de facto platform for every site they build now within their department.
Andrew: X is the theme, or we can call it a framework because it could adjust, that’s the name of it: X, the letter X, right?
Kyle: That’s correct.
Andrew: How much money can you make doing this? What’s the revenue that you guys pulled in, say, in 2013?
Kyle: Well, we actually launched it December of 2013, so.
Andrew: Oh, really?
Kyle: We did. So it just came out. Basically, 2014’s been our first year. And so within six months we were able to do a million dollars. And actually, the process hit some records at ThemeForest by setting that benchmark. They kind of track things, and a million dollars in their world is called Power Elite, and so we were able to reach that level within just under six months.
Andrew: You know what, I saw that, and I said, “That can’t be right.” It’s got to have been a year before because I see right here on my screen your million dollar sales.” Wow, a theme can do a million dollars! You initially submitted the theme to ThemeForest, and by the way, guys in the audience, this is not going to be a ThemeForest plug, but it’s part of the story, and we’re going to find out more about how he got his, how he understood the problem, how he got customer [??]. Kyle, you submitted it to ThemeForest, they rejected you, you came back at them, what’s the point? You’re an affiliate guy. Why didn’t you just say, “Screw it, I’m going to go sell this on my own, on the internet”?
Kyle: Yeah, it’s a good question. There’s a long answer to that, but I’ll try to give you a succinct, you know, answer as well.
Kyle: The original concept was always to sell this product to ThemeForest. You know, there’s a lot of opinions about the pros and cons of a marketplace like ThemeForest. For us, we felt like it was a big enough group of buyers that we wanted to really go in and make something that we felt was transformative enough to be meek and to set us apart from kind of the pack that was there right now. So,
Andrew: Help me understand more, because frankly, your theme enables e-commerce, people can sell shirts using, using X. Why couldn’t you just say, “I’m going to sell it on my own site, I’ll do some search engine optimization to get some traffic, I’ll buy some ads, I’ll pay affiliates, I will do all this other stuff, I’ll work with ClickBank and all the other places, I’ll get people in the door.” Why couldn’t you just do it on your own?
Kyle: Well, and you know, it’s a good point, because we actually, I’ve been with ClickBank for a number of years. I’ve been one of their top affiliates as well, and I feel like I’ve got a pretty good handle on the different channels to promote products. To me it was always a question of, if I can go out and make something that, that people like, that’s in a channel that has a lot of buyers I’m looking for, then that’s a good place to be.
Now I could go out, and I knew a lot of affiliates, and of course we [??] setup merchant accounts, affiliate programs and do all that, and we could go that direction. But I kind of view ThemeForest as a partner that I wanted to go into business with to be able to open, you know, our company up to their world of people who are looking for this. So, you know, if you can go to Apple and if you could make a way where your app could get in the top ten on Apple, well Apple will then give you all sorts of traffic and exposure just for doing that. Because they’ve got a marketplace of people looking for those kind of things. ThemeForest, in a lot of ways, is a similar market within the ThemeSpace. So we knew if we could make something that was unique and transformative, it would get the attention that we wanted to get for it and then, from there, we can leverage other things we can do from there.
Andrew: All right, that makes sense. I think I’m such an independent, bull-headed person that I’d want to control it and own the whole thing, but i have to acknowledge that there are time when it makes sense to be on another platform, to be part of another marketplace, and your example of Apple is a good one. When the app store first came out and they had all of these restrictions, people created ways of selling HTML five apps, essentially apps, on their own and it just doesn’t work because you have to go out there and try to get your own customer base, your own audience base, and it’s so much harder than just leveraging the app store. You mentioned that you were previously an affiliate, right? What kind of stuff did your sell? Let’s be open here.
Kyle: I started back in 2005. ClickBank is how I got introduced to the world of internet marketing and I was fascinated, from the beginning, about digital products, obviously, that’s kind of all ClickBank is. So I promoted everything from health and nutrition products to language learning products; Anything that was digital that was on ClickBank, that wasn’t morally objectionable, to me, anyway, was kind of fair game.
Andrew: Payday loans?
Kyle: No, no Payday loans.
Andrew: No Payday loans? Okay.
Kyle: We haven’t gotten to that market. No. Yeah, so that’s where I got started and pay-per-click was actually my form of traffic in the beginning. Google and Yahoo! specifically.
Andrew: So you’d buy pay per click ads, you drive the traffic not to the affiliate’s website, but to your own site, right?
Kyle: No. I was the direct linking guy. I would take them directly from Google to the merchant’s site and then they would not come through landing pages. Back in 05 06, that was a great gig to have. It was very competitive, but Google, at the time, didn’t have a lot of the rules they have now with landing page quality score and all the new stuff they have, daily, that they’re changing. So, I was able to go out and take these products and direct link to them and, then, just be kind of the middle man that people didn’t know about. So as people were searching, obviously, for different keywords, I was directing them to those sites and, then, earning the commission in the process.
Andrew: Oh, wow! That’s a tough way to make money because you’re really, essentially, selling the same thing anyone else, online, can sell. It’s just about can I get traffic at a cheaper rate and phrase my copyright.
Kyle: It’s really about finding the right keywords. If you can find the right keywords and have the right product. Are you an old ClickBank guy? Do you remember some of the products?
Andrew: I know them through interviews that I’ve done here. I’ve interviewed Mike Colella, for example, who used to do the AB product. [??] really well.
Kyle: Well, there was a product, it was the cheesiest product in the world. It was called Fat Loss for Idiots and it was this cartoon website, but it converted like crazy, and it had the lowest refund rate of any digital product I’ve ever promoted.
Kyle: Once I found a good product like that, I really just scaled up my efforts. I didn’t want to try to promote hundreds and hundreds of things. I wanted to find a few good products and really focus my energy on how to just blow the market up. So I picked a couple, like that, that converted well, that had a really low refund rate, that people liked, and then I just really focused on finding the right kind of keywords and direct linking. Now, that, you can’t do that in this day and age. You can direct link. Google’s okay with that, but obviously with the one display URL per keyword thing, it’s a very different landscape, now, than it was a few years ago.
Andrew: So you and I can’t both buy ads using the same keywords for the same URL.
Kyle: For the same display URL, that’s correct.
Andrew: What’s the difference?
Kyle: I’m sorry.
Andrew: What’s the difference between the display URL and the URL?
Kyle: You can have a target URL that may take them somewhere. It needs to match, but maybe the target URL is a tracking link so it looks ugly and nasty, but you want the display URL to look nicely. So as long as it resolves to where your display URL states, you’re good to go, but if it mismatches, if you say you’re going to my site and you take them to your site, that’s what they don’t like.
Andrew: So FatLossforIdiots.com, only person can buy keywords that send traffic over. I can’t do the same thing. I could use a redirect URL to MixergyTracking.com, which then redirects, and tells me data. Got it.
Kyle: Now, as long as MixergyTracking.com went to FatLossForIdiots.com, ultimately, then you couldn’t do that because Google will look at where it finally resolves.
Andrew: I see.
Kyle: That’s kind of the key.
Andrew: Anyone who’s interested in this stuff, we did an early course on Mixergy, with Mike Colella, on affiliate marketing. You’ve got to check it out. He’s a guy who did a lot of business in that and, one of the things that he did, was he would see where people were buying ads. I guess this is impossible today, but he would see where people were buying ads online for a product that he was signed up for an affiliate program for and, then, he would rewrite ads that were better and, basically, buy ads on those spots. That specifically can’t be done, but a lot of what he did before is still applicable today and you can still learn from him. You’ve got to check out Mike Colella on Mixergy, guys. All right. So you’re doing all this. How much money were you making back then?
Kyle: You know, I had some pretty good years. I kind of don’t talk about revenues so much, but I was doing really well. It kind of hit really fast. It was one of those things once you learn how this works you can take this and apply it to any product you can find an affiliate program for.
So I was fresh out of college when I started doing this. So within a few months it was going pretty hot and heavy. Now I was also kind of a one man show. That was kind of the blessing and the curse about this was I didn’t have to have a team of people. It was just me and there’s some nice things about that, but there’s also some challenges about that. So it was nice.
Andrew: Got it.
Kyle: Well, you’re kind of an island to yourself a little bit, and I didn’t know anyone that was really in this same space. And so I was just kind of out there just figuring it out as I went. I’m kind of one of those people. I never wanted to buy a how-to product about how to learn it. I kind of wanted to try it out for myself and figure it out.
I realized over time you can do that to a point, but then there’s certain areas where it helps to know the right kind of people just to be able to connect with them, talk, talk shop.
Andrew: So how did you do it? Where did you connect with people to talk shop?
Kyle: You know, I didn’t really. That’s the thing.
Kyle: I was kind of a lone wolf. I just kind of hung out and did my own thing. I would say for the first four or five years I had very little interaction. I talked with ClickBank some because I knew quite a bit about business then. So I had a good relationship with them. And I actually they’re the ones who introduced me to the people in this world. After a few years they invited me to kind of one of their big parties. And I got a chance to meet who is now my business partner [inaudible} at that event.
Andrew: Who’s that?
Kyle: His name is Scott Marlowe.
Andrew: Okay. I see also on your site there’s a guy named Chris Luck. When I first started selling anything of Mixergy Chris emailed me.
Andrew: And then he Skype chatted me, and he said, “Look people are going to rip into you and say it’s not possible. I’m going to show you screencasts of what I do only because I love your interviews. I don’t want anyone to know about this. Keep my secret” and then he just showed me what he did and it was amazing. But also he was like an island on to himself. How did you guys connect? I see that he created content for your theme because the theme is more than just software. It also includes some of the wisdom of these guys. They would do copyrighting. They would include in their site if they buy the theme.
Kyle: Chris is actually the one I met, also the one I met at the ClickBank party. Someone at ClickBank tried to connect the two of us. They thought we would be kind of good to just get to know each other.
Kyle: So he’s part of the reason I went out to that first ClickBank conference just to meet him and us to connect and talk. And so what he ended up doing with those other experts you see listed there is we realized we knew a lot about development, and we knew a lot about marketing. And we also knew that there’s really a lot of smart people. Many of them are interviewed on these podcasts and interviews.
Kyle: So we want to go out to those guys and stay, “Listen you, Andrew, are really good at talking about entrepreneurs and after all the entrepreneurs you’ve talked with, what is like the one important point that you would say every entrepreneur needs to know before they go out and start a business or work on their business, what is that thing? We asked each of those guys based on their area of expertise. And we took whatever they said and in some way we integrated it into the theme.
Andrew: Give me an example.
Kyle: Well, like Chris, he talked about video sales letters.
Kyle: How important they are. So based on his feedback we created a way for you to make blank page that you then can add videos to and have a very simple page with a video on it and a call to action so you can go promote a product. They’re very simple. They’re easy to make, but they convert like crazy. So he gave us some actionable numbers on “Hey, if you make the play button this size, it’ll do this. If you turn off the controls, it’ll do this.” Just unbelievable stuff from years of testing this thing and tens of millions of dollars in sales.
We took that and built it into, in that case, it was an actual theme t-shirt. Every one of the experts was a huge SEO expert. And she talked about one of the most important things when you have a website and you’re getting orders in and to have traffic is to have that engagement metric be high where people click past the first page of your site.
But she basically came up and told us a way where if you have a table of contents and you can get people to click through to another page on your article, Google loves seeing clicking past that first page. So we said, “We can make a short code for that.” So we made a short code to be called Table of Contents that lets you break up an article into multiple sessions so that the people can see more. They have to click to go to the next page, and it shoots up your engagement metric.
So we took all those things and integrated them into any way we could to make this something that was more than just a theme but also was training and specific actionable information about marketing.
Andrew: That’s Shelby Larson [SP]?
Kyle: That’s correct.
Andrew: Did you suggest that? That’s cool. You know, just a moment on Chris because he will not do an interview yet, unless someone in the audience, maybe even you, Kyle, could push him a little bit and tell him I’m not going to bite his head off. I’ll be OK. But the guy just created these beautiful landing pages. I would see them over the years and he has fantastic numbers.
Then he did a podcast and he asked me for feedback and I told him, “You’re giving out this generic data about how well Pinterest is doing and about the importance of SEO. Give me your specific . . . get into the kind of data that you gave Kyle. Be open about it.”
Kyle: Andrew, I am cut from a very similar cloth to him. We both are in [??] camp and I won’t speak for him, but I’ve never been one to like to talk about the stuff that I’m doing, because I feel there’s a tendency to once you start talking about every single strategy, of course people are going to go exploit that and take it down directions that [??].
Andrew: Yes, no doubt.
Kyle: I think he’s probably somewhat in that camp. I do think that obviously he has a lot of experience in that arena. Maybe you and I together can nudge him in the right direction.
Andrew: I’m up for it. I get it and I’m glad that you’re actually getting out there and speaking. I get the feeling that the only reason you’re talking right now is because people know what your revenues are. When you’re on ThemeForest, they could easily do the math. Multiply the number of sales times the price, get a sense of where you are, right?
Kyle: That’s exactly right.
Andrew: Otherwise, you would not be sitting here and letting me ask you what your revenue is and answering it honestly.
Kyle: Well, you’re a good guy, so I might talk to you guys.
Andrew: I see, so since I am a good guy, when you were doing affiliate, you were definitely doing more than a million a year, right?
Kyle: I had some years that were in that arena, for sure.
Andrew: But you never got to fully pocket a million dollars and bank it and look at it in your statement, did you?
Kyle: No, obviously, there’s a high acquisition cost for pay traffic. Some could call it an arbitrage business and in that margins can fluctuate heavily. Yeah, it was definitely a highly capital intensive business, but it was such an automated business. There’s nothing like it.
There’s very few businesses that can generate that kind of revenue on one person and have to have a laptop as their operating equipment [??]. I should clarify. Actually, the SEO expert who contributed to that was Laura Betterly. It wasn’t [??]. Just to clarify.
Andrew: I saw you had a couple of SEO people, and I thought I had the right one. All right. I see how you’re getting a sense where the product should be, but did you do any customer development interviews or anything like that? Just because Chris tells you here’s a problem that I had and a solution that works doesn’t mean that anyone else will have that problem and be willing to pay for it.
Kyle: Yet, we didn’t actually do any kind of customer screening. We basically took the experience we had had selling products and owning websites, because I’ve also bought and sold. For about three or four years I bought and sold several web-based businesses that did any number of different things.
In doing that, I realized there’s a big difference between having a business that just gets a lot of traffic and makes no money and even some businesses that get very little traffic but converted like crazy and did very well. We didn’t go out and ask people what they wanted. We decided for them what we knew was important and then we built that into the theme.
Then we went to people like Chris and Laura and Shelby and other people who had specific expertise and said, “Listen, we know SEO, we know how it works, but what can you share with us about how we can practically make this work. It was never about polling the audience, so to speak, but coming to them and saying here/s why you need this product.
Andrew: You know, I still don’t know though why anyone would buy it. I mean, I get it. Once I understood it, I got it. But I’m a guy who looks at ThemeForest’s themes and their CodeCanyon sister site on a regular basis. I’m sitting here having lunch instead of looking at news sites and wasting time and I can’t often over lunch really get serious work done.
I just look at themes and get a sense of what’s out there and what could be done without any programming expertise. I should have passed over your theme and understood it, but it just totally was over my head. How are you communicating to people what the theme is and all this goodness that works for them.
Kyle: That’s something we’re actually trying to work on too, is making ti more consumable in terms of . . . because there are a lot of moving parts to X. It’s a simple idea, but explaining the full breadth of it can be a little challenging at times. I think what we did was we tried to put together — if you go through the theme.co site, there are and we always are [??] this, we’re adding more resources to explain the different sub-features of every aspect of X.
Obviously, most people don’t want to spend hours understanding every little feature. They want to just have you tell them how it’s going to help them do their job better, quicker and faster and so we did put together a video that actually we just recently . . .
Andrew: I saw it. Has a bit of a cartoon, also has some screen shots. I actually didn’t see that before. That’s one of the reasons why I wanted to take a few more minutes before we started. I got lost in that. I get it. It’s really well done, but when you tell me that you signed up before and wanted to be on ThemeForest because they were the marketplace. You wanted to leverage the big audience that they had. I tell you what, I’m looking at the title, and it says, “X, type, the theme.” So, that doesn’t tell me enough. If I only saw that, which I often do, I wouldn’t get enough. If I moused over, and I think that’s the way we usually see search results, I would see a screen shot which shows all these different possibilities. Maybe then I would look, but I still don’t fully get it. It wasn’t until I prepped for this interview that I got how good this was and really wanted the theme. So, but you did something to communicate how good this was, you did something to communicate the features to an audience like me. What did you do?
Kyle: Well, I mean, the initial thing we did was we realized we could get people to our listing. The first thing everyone does when they’re on a listing is they click the live preview button.
Kyle: Like, they don’t read the description, they just click, they click live preview. So we wanted to make that page people got to something that was, yeah, it is a lot to communicate. We wanted to do it in a visually appealing sort of way. And that actual page that you go to when you see live preview.
Andrew: That’s on your site.
Kyle: Exactly. We get a lot of engagement on that, and people really spend a lot of time on that particular sought page and that entire site. So, I don’t think there was anything, you know, kind of black magic that we did in the beginning to really get people to engage. I think people were so pleasantly surprised by the breadth of options that were available that they took some time to go through the features. And we, of course, spend a lot of our time, I spend most of my days thinking about traffic generation, how we drive traffic. And, actually the name, it’s kind of a funny little side story. We first got X approved, which, that’s a whole funny story in and of itself. I don’t know if you heard that, but it was a very long, roundabout,
Andrew: We’re going to get to what happened there.
Kyle: Well, that name, actually we had, it used to be “X: The Ultimate WordPress Theme.”
Kyle: And, you know, of course we liked the word “ultimate,” we thought it was a good word. Well, ThemeForest has some rules about subjective words, and so they came back to us later, even after they had approved it, and said, you know, now we feel that’s a word that, you know, we shouldn’t really allow people to use, so we want you to remove it. We kind of had a back and forth, obviously, because you know, it’s a good word. I think it helps describe the theme, but I get their position. So we actually had to change it from that, what it was, “the Ultimate WordPress Theme,” to just “X the Theme.” The reason I chose that. It was a little bit more of a branding, kind of wanting to be different. If you look at most of the themes on ThemeForest, they cram in these words that really no one, I don’t think, cares about. You know, it says, responsive, multi-purpose, creative, blah, blah, blah.
Kyle: It’s all the same. So I wanted something to say, “X, the Theme,” and people would go, “What does that mean?” I mean, at least hover over it to click, to see a little bit more about what it can be. Because in our mind it was so much different than just, the next hit.
Andrew: Ah, I see, this thing that I thought was causing you to be hidden, and maybe it is from search results, is what gets people to pay attention to you because they see X, and they stop in their tracks and say, “All right, what is this? There’s nothing about the title that tells me what it is.”
Kyle: Exactly. And then also, now that we’ve had some success, a lot of people use, you know, ThemeForest sorts products by popularity, and so we get a lot of traffic based upon that because of our numbers in that regard.
Andrew: Yeah, the rich get richer from these kind of systems, right? That’s the problem with the app store, people say.
Kyle: I would say we spend, you know, there are a lot of people that think that, and I think that, you know, if you’re an Apple or a ThemeForest, of course you’re going to put the product that sells the most in front of people. And yet we also spend a lot of time and money and energy marketing. We don’t just sit back and kind of let, you know, Envato do all of our marketing for us, we do a lot of,
Andrew: The parent company of ThemeForest.
Kyle: That’s correct.
Andrew: So what kind of marketing do you do? I’ve been looking to see where your traffic comes from. Eighty-eight percent comes from ThemeForest.net, you get like 2% from the number two spot which is Smashing Magazine. What am I missing?
Kyle: Well, we do a little bit of everything. We do, we know site owners who own web design space, we talk to them. We do BuySellAds, we use other private networks that are related to BuySellAds. There are real small networks that are in the design space that we’ve partnered with that we use. We do Pay-Per-Click, we do all sorts of stuff. Anything that will attract or get us in front of people who are interested in web design and WordPress and that kind of world, we test out.
Andrew: I see, I see your ads a big X on an interesting looking, very Apple-y background. I see “Best theme of 2014,” is one of the search terms, one of the search ads that you have. Let’s see what else we can find. I’m getting some of this stuff from WhatRunsWhere, and I’m getting others from similar web dot coms [??] people see. The word “theme,” the word “WordPress,” the word “WordPress theme,” I see. So when we see a million dollars in sales, obviously it’s not all going into your pocket. What share does ThemeForest get from that?
Kyle: They have two options. You can be exclusive or non-exclusive. Non-exclusive you keep 30%, they keep 70%. If you’re exclusive, it’s a sliding scale. It starts at 50% and it ends at 70%. So once you reach a certain threshold, $75,000 in sales, you’re at their upper tier, which is 70%. They keep 30%.
Andrew: I see. Well and then you buy ads on top of it?
Kyle: Absolutely. We do all of our own. Now occasionally they have certain levels you reach where they will do little advertising campaigns. And they’ll say – which is great. Like any relationship there are things we agree with them on. There are things we don’t. But one thing I have to give them credit for is they do care a lot about their marketplace and the individual authors. So the little gestures they make to give us little budgets here or there, once we’ve reached certain thresholds. They send t-shirts when you get to certain stuff. They like to foster that sort of thing.
Andrew: Oh, that’s good for me to know. I’m always curious about how they built that marketplace up. Marketplaces are murder to put together. People have had their business die on the road to trying to build a big marketplace. And here these guys build so many marketplaces, one for themes, for code, et cetera. And so those little hints are helpful for me.
The other thing I’d like to learn from you is about ad buying. You’re doing interesting ad buys. You’re keeping your cost low. Do you have a tip for us about how to do ad buys if we’re just getting started?
Kyle: What kind of ad buys? Like pay-per-click? Or what? Third party media?
Andrew: Let’s suppose that there’s some – you know what? Let’s just take me. I always tell interviewers, “Be selfish so that you can, if you’re trying to learn for yourself, there are other people out there who are going to learn the same way.” So I have these courses that I create. One of them, for example, is called, “Interviewer Heroes” where I teach people how to do interviews like I do and build a site around it, and so on. If I wanted to buy ads. If I said, “Hey, you know what? All the people who are coming to my site are really good. Many of them are also converting into customers. I’d like to dip my toe into the water and buy an ad.” What does someone like me who hasn’t done it…
Kyle: Well first thing, I’d probably try to look at is your market. So your market is entrepreneurs, right?
Kyle: Who are looking to understand more of the finer details of how to launch a business, how to get started, how to be inspired.
Andrew: Most of them are actually running businesses right now, and that’s why they’re listening. But we can also segment out that, we can also accept that there are many that don’t have businesses.
Kyle: Right. Well I would imagine that you probably know three to five sites where a lot of those kind of guys congregate, whether they be social networks of sorts, or whether they be industry-type sites. The first thing I would probably do is contact those people directly. And if they don’t already know you, which they probably do, introduce yourself and explain what you’re doing. What I’ve found when I do that a lot of times, they already have some kind of interest in the industry because that’s why they have a website about that.
So if you are in that industry and you have a market that’s somehow related to that, they love talking to you about anything. So once you establish that kind of rapport, then we just talk about what they’re interested in advertising-wise. Some people are very, “Hey, we don’t do ads.” Some people are like, “Hey, whatever you want. You just tell me. We’ll do whatever you want.”
Andrew: Got you.
Kyle: We find everything in between. So I would start there. And I personally like to kind of go off the beaten path route. I mean Google’s great. You can get a lot of traffic from them. But there’s a lot of smaller sources of traffic out there that when you add them together really can make a big difference. So I would start there. I would go out and find industry sites, connect with them privately. From beyond that Google and Paid Search is still a big part of any kind of traffic generation plan because it’s just darn near infinitely scalable.
And once you find that sweet spot of key words and traffic, you can just kind of blow it up as big as you need it to go. It takes a little bit of time. It takes a lot of time to test and refine then. So it’s not an easy “you can do it today.” But if I was starting out, the first thing I would do is go find industry sites, introduce myself, get to know them, establish a relationship that way.
Andrew: And buy ads directly from them.
Kyle: That’s right.
Andrew: You’re also exceptionally good at SEO. It seems that your search engine traffic, I guess, you tell me if I’m wrong. It seems like your search engine traffic has grown month to month.
Kyle: Yes, we have really focused on making or trying to make a site that is appealing to a search engine. Now as you and I both know, I couldn’t even begin to tell you everything such as what Google’s looking for to make it perfect. If I did – none of us here, that’s what we spend our days trying to figure out.
Andrew: Right. It seems like you figured out some of it.
Kyle: Well a lot of it is we have a really high user engagement. You know, the time on site is really high. What I think Google really looks for is the stuff that you can’t artificially inflate. So you can’t artificially inflate time on site. If someone is spending 12 minutes on your site, Google knows that and they’re very aware of that. And they like that, because we have other sites that we own that people spend 30 seconds there and they’re off to something else. Well if someone spends 30 seconds on one page, and then on another site they spend 12 minutes and they visit 6 pages, Google’s going to compare those two and go, “Hey, we want to send people more to that site because they’re getting more out of it.”
Andrew: What do you do to get people to spend more time on your site?
Kyle: That’s a good, that’s a very long… the answer to that’s very long. But I would say we look at the data, and we try to understand where some of the leaks are to get people off. Like we want to engage people, we think of it in chunks so like when someone first comes to our site I’m not trying to sell them on the theme right away. I’m trying to get them scroll down and once they scroll down I’m trying to get them to go click off to maybe read about more of the features.
And it’s kind of this stair step process. Were some people, you know, and marketers would tell you it depends on the marketer I guess you’re speaking to. But it depends on the goal of the campaign. Some people want this simple call to action a button. In our market it’s a very design-centric world, people need to see it they want to check the demos they want to check… they get their phones out they resize them every device. I mean, they pick this thing apart.
We have to provide resources that let them spend some time to kind of get familiar with it. So we spend a lot of time looking at the different sections of the page and try to find ways to get people to go from one to the next.
Andrew: I feel like I might be missing the part where it’s off that main page. I’m on Theme.co, and you are really good at getting me to scroll.
In fact, as soon as I scroll a little bit I see the top menu bar which allows me to easily scroll to the right part of the page if I’m curious about Commerce or features etcetera. I click, and you scroll to that. I don’t see where you take me off of that page to another page.
Kyle: Well if you scroll down to the very bottom, and this is kind of intentional, but this is a way you can get there. There’s a features link at the very, very bottom and it’s over in the blue section. You see that?
Kyle: If you click that, that takes you to kind of the sub-site in [??] where you’ll see a big message about features. You click there and then it gets you into this whole sections that walks through all of the features as you scroll down you’ll see sidebar to the right. And you can click through to kind of read about all of the unique features within the [??] think.
The other kind of challenge for us was so much of our time, so much of our customer’s times on site they spend in the demos. So we have to also
provide in the demos a way to explain the theme. So instead of making a demo that’s about dogs and cats that means nothing. We chose to make our demo content about the theme so that our content in the demo was about the theme. So it helped people learn more about the theme while they were learning about…
Andrew: What you mean is when people want to buy a WordPress theme what they do is they see what a site that has it looks like, and that’s the demo. And usually you’re right the demo pretends that it’s a site for selling shoes, and then everything about the theme is used to sell shoes so that you get a sense of how this theme would be used to sell shoes.
And you could draw on our imagination and image what it would look like if you were selling jackets or even just writing a blog. And you’re right with you it’s here’s how all these features would be used on your site and in our theme, and it’s much more of a way of exposing the features of the product.
Kyle: That’s right. Another reason we tried to keep that page very… we want people to stay on that page is because the main thing people do is they go through demos. And so we wanted to get them away to get to the demos quickly, but also explain a little bit more about the theme before they get to the demos. Once you’re on the demo’s, there’s actually all of the one demo’s for each stack have a lot of extra content if you click around those demo’s to learn about that stack, about features, about short coves, you can see them live.
Every site has a lot of stuff on there. So that’s part of the reasons also took a long time to put those demo’s together. We basically had 30 some odd full size that have their own content, their own structure.
Andrew: I see them now. I didn’t catch it before but now I see it. It’s under what looks like those columns for payment that tells you what features are, okay. I see and if I click on renew two, renew three I didn’t understand that I could do that. I thought that was an example of what a pricing chart would look like.
Kyle: Hey, these are all good things to know because I’m big believer that, you know, you come out of something you see how people respond to it, you try to understand it’s if you accomplish what your goal was and making a page that explained that well. And then if you need to refine it and make it better you do that. It’s good feedback for us to hear. I’m in the camp that nothing is every fully optimized there’s always room for improvement.
Andrew: See that’s the thing that I don’t get about how you guys work cut out because you don’t… it’s just you being the creator who say’s,
I know what this is going to look like, and you hit it. I know what people are going to think when they see X, and it works.
Kyle: I can’t take all the credit, and you’re very kind for sharing that. But we did spend quite a bit of time talking through these features to try to understand what we think makes an effective Website and what really sells well. So yeah, some of it is just timed experience and working with hundreds of sites of the years and lots of different verticals. Some of it is just thinking through, you know, what common sense is when it comes to what do I like when I’m on a Website in terms of consuming information. And then trying to merge those two.
Andrew: It seems like there are places where there’s room for improvement. But you compensate for it by being extremely good at other things, like buying ads. There aren’t a lot of theme makers who know how to buy ads, frankly. Right? There aren’t a lot of theme makers who know search engine optimization, especially not in the ThemeForest store, as far as I can see. What do you think?
Kyle: Yeah, I think generally most people that go to a ThemeForest want to think of ThemeForest as their traffic generator, which they are and they can be, so you are more than welcome to come in and just let ThemeForest drive traffic. That’s part of what ThemeForest wants to do. They want to be able to get exposure for your product, which is part of the reason why you pay them so much to do that. We took a different approach where we wanted to come in and leverage that, but also bring our own marketing to the table and then put the two together.
Andrew: Fair to say, profit overall has been 200,000 over the last six months?
Interviewee: Oh, it’s been quite higher, it’s been a lot higher than that.
Kyle: We got to that 70% really fast and then within 30 days we were there. Then over the next five months, we reached that million part. ThemeForest just raised prices, which, it was a funny thing, because when you sell with them, I don’t get to control the price. They determine that. We had some conversations with some of their guys about pricing and they watch that stuff like a hawk. They’re very aware of what’s selling, what’s not. They monitor it closely.
They just recently raised prices, but we were able to get to that 70% quite fast. Now at the new price point, we’re making a pretty amount per sale, 70% per sale that has enabled us to do quite a bit very fast. We’re working of course, right now on other things as well that are related that people that are interested in X might be of interest to them as well, now that our community is getting larger.
Andrew: And you know who’s buying your stuff, unlike the Apple App store where you don’t get an email address of each customer. Here you do. You have to do support.
Kyle: Well, that’s a good point and it’s yes and no. We only get their information if they register at our members’ site. We don’t see any customers. . .
Andrew: What percent would you say registers?
Kyle: I’d say, last I checked, it’s about 50% of the people that buy, register. We hope more would, because we have an unbelievable support staff and other resources just waiting for them in the site. But about 50% end up registering.
Andrew: I don’t get when someone wouldn’t register. I always feel like I have to. I mean, even if I’m good at using the software myself, Gravity Form, for example. You know them, you guys integrate with them. I bought Gravity Forms, I registered instantly and there are so many times I just go to them with a quick support questions opposed to spending two hours trying to figure it out myself.
Kyle: Yeah. Our guys, if you experienced the staff to, I mean, they are . . .
Andrew: How do you find such good staff for tech support? That’s not an easy thing to do because you have to get people who are smart, who are technically sophisticated but don’t want to go create their own thing.
Kyle: Yeah, we pray a lot. We pray and ask the Lord to bring good people, but we spend a lot of time filtering. For every 100 people or so that we interview, we hired one. So we are very strict with the . . .
Andrew: How do you filter 100 people?
Kyle: Manually we do it, which it takes a lot of time, but we have a predefined path we send potential applicants through. If they make it through those paths, then they get to talk with us live. They talk with us live and they make it past that, we take them to the next level.
Andrew: What’s the path they go through before that allows you to tell who’s good?
Kyle: We send them questions. We’ve come up with technical questions that we want to see how they answer. Some of them are very linear in thinking. Some of them are like, we took a quarter and how many quarters would it take stacked on end to reach the moon from here?
We want to see how they think through that. If they get through those and how they respond to that, then we take them to the next level, which is talking with us live and then understanding more about their background and we go from there.
Andrew: What do you use to do that, to ask them all those questions?
Kyle: Help Scout is a tool we use for our mail for our team which, I’m sure you’re probably familiar with it. It’s a really cool tool. We love it. It’s great for collaboration, so we have some saved replies that people when they come in and apply, we send them that reply. Then they reply to us, and of course, the reviewing takes the time where we look at their answers, we reach back out to them, we send them another round of questions, they go through those.
That part is fairly automated. Once that’s done, then we start talking with them live. A lot of people self-filter out in that process. Either they can’t quite answer the questions right or they . . .
Andrew: They don’t want to because they think who are you to suddenly hit them with all these questions.
Kyle: Right. Interesting enough, we’ve been in a position where we’ve had quite a few people, only a couple out of the probably hundreds and hundreds we’ve sent these to have ever had any kind of objection to that. That’s a good sign, because we want to know that up front. Most people are happy to say here’s what I can do, here’s how I do it, as opposed to me saying, hey, let’s go get on Skype and let’s talk and let’s hear. . . That doesn’t really . . .
Andrew: It doesn’t scale. It doesn’t allow you to look at as many people. By the way, I have to say something about Help Scout. That Help software is so fricking good. I interviewed the founder and I understood how good it was and I didn’t understand until we fully shifted Mixergy to Help Scout. So you used them?
Kyle: Yeah. I used them on the side but it’s not until I fully used it and I personally went in and answered email from it that I understood how good it was. It takes away all the junk. It’s like the Apple, better than Apple. They removed more junk than Apple does from their software, keep it really lean, have extra plugins.
If you want to integrate Infusionsoft into it to see if someone whose email who’s a customer, you can do it. But I don’t even want to talk about the integrations because the integrations just add more to it. It’s the simplicity of their software. Everything you don’t need is out of the way. Everything you do need, like keyboard shortcuts, like the ability to send a link to an article that you’re written that answers the question so you don’t have to answer it again, all in there.
Oh, they’re so good. I sent a love note to the founder of the company. I said, “I did not understand how good you were until I used your software.”
Andrew: I sent a similar letter. I don’t really send letters, but when they . . . They have these blog posts that come out every Wednesday, and I literally will stop what I’m doing if I get that email to go read the blog post.
Andrew: I finally sent them an email. I just said, “Stop it. Every time you send an email, I stop what I’m doing to go read it and I always get something out of it.” It really is helpful information, so I’m with you. I think they’re a wonderful team of people.
I will say this to anyone who’s listening to me, if you’re doing any tech support, any customer support within your company, just, I swear, you’re going to thank me. Go and check out Help Scout. I hope they have an easy way for you to move. We had an easy way to move. They’re so good. They’re so good. You’re going to thank me for it. Hey, you said earlier that there was a funny story about how you got accepted into ThemeForest. What happened?
Kyle: Well, so we started the development of X at the end of 2012, and we knew it was going to take a while because the concept was a big concept. I put a self-imposed deadline of May. I just picked that out of the air and thought, hey, we’re going to be done by May, thinking that was the wisest way to set deadlines for software.
Of course, we got to May and there was still a lot to do. We finally got it done a couple months after that. We were excited. You’d finished this project you worked nine-ten months on. We submitted to ThemeForest. Finally it’s here and we get this letter back, this canned response, that was this rejection letter. You talk about demoralized, it was like what?
Andrew: Did they explain to you why you got rejected?
Kyle: No. It was this canned letter and that was what was so frustrating was we spent a year putting this thing together, making something we knew was different and I felt like we couldn’t get the time of day. I was so frustrated right away that I wrote this letter that I was going to send to Collis, which I never actually sent to him, just to vent my frustration about the whole process.
Then I realized, you know what? These things happen. We have to just stop, regroup, figure out what’s going on. Put the letter aside, never actually sent that and we tried to figure out what we could do to help make it even better. Which I was frustrated by because I felt like I don’t want to be forcing in features that, to me, feel unnecessary just to make it look more flashy.
Andrew: Did you know that you needed to add more features? I imagine that you didn’t even know that.
Kyle: No, yeah, exactly. They don’t tell you what it is. They just don’t accept them. They basically say we can’t give you any feedback and we’re not going to give you feedback. So you’re sitting there like a blind man in a room trying to figure out where you’re going. We added some more stuff that we thought would be helpful and we liked.
Took us about a month, submitted it again, they rejected it again. Then I’m just going, this is insane. About that time last year, 2013 was a rough year. We’d spent the better part of a year, a lot of money, investing in this product which was pretty substantial.
Andrew: Didn’t you also have health issues?
Interviewee: I did. I had to have surgery around that time and it was. . . we’ve all been there when there’s just . . .
Andrew: What was going on if you feel comfortable sharing?
Kyle: I had surgery on my lower back. It wasn’t a major procedure, but it was not a very comfortable procedure and the recovery was quite a while. We’ve all been there. We’ve had times where things just feel like they’re piling on.
You do not see the end in sight and I remember getting back from the surgery and laying on the couch here in my house and we had just submitted the theme again, I think for the third time and we got rejected again. I remember sitting there feeling like, physically I was weak, emotionally I was weak, everything felt like it just was not going our way.
To me, my faith has always been important and it’s been a big part of my life and I trusted and believed that the Lord would lead me where He wanted. We reroute, we talked and we said, this door is closed. Looks like it’s closed, it’s not going to open, so we’re going to sell this on our own. We know what we’re going. We know how to drive traffic, we’ll just do it on our own. So we spent about a month getting it ready to sell privately. And somewhere in that month after we got it done, we got a merchant account, we had our own affiliate program we had all of that stuff. I get an email from someone at ThemeForest and it’s totally unrelated to X and he just says, ”Hey Kyle you happened to be one of our top affiliates and we want to send you a little thank you gift. Is this your right address? And P.S. if you ever need help with anything let me know.”
So I sent him my address and then after I sent it I thought, I should tell him about all the stuff that happened. I sent him a second email, and long story short within a couple days he connected me with the head of the review team. Once the head of the review team saw it he was like, now this is great of course, you know, just there’s a couple little things we’d like you to do. But it was more administrative it wasn’t product related and he approved it and within the first week it was in the top ten, and then it just took off from there.
And so, I know perfectly well who opened that door and I’m very thankful for the path that we were taken on, because I know I didn’t do it myself. It’s like, I had done everything I know how to do to try to get it going and it just couldn’t happened. So, in the God’s time that he opened up that door, and we’re thankful to be there because we wanted the whole idea from the beginning was to partner with ThemeForest to sell up there.
And we couldn’t get past that first line of reviewers. And I tried to communicate back to them that like, hey there’s probably some good products that you all are missing because, you know, and their response is, well we get so much coming in it’s hard to standardize the process, and I get that. But if we hadn’t got email from him about sending me a t-shirt for something we would be here today.
Andrew: It’s funny how that works out that way. I frankly, today if I had that problem I would be better off because I would contact you and I would say, ”Hey Kyle would you mind introducing me, passing this along.” We also have this thing that we give out to our members at Mixergy which is an email finder. I would then… the other thing I would do is I would find [SP] Calais address and I happened to know it could be found. I would email Calais.
Kyle: Well, here’s the deal, I have Calais email.
Andrew: Did you email him at the time?
Kyle: I didn’t and I was trying to be kind of diplomatic about it. I didn’t want to go and circumvent the system. But many times I thought about that. Because he and I have actually interacted once before we met at a conference a couple years ago. And I was very close to doing that. I probably should have graciously reached out and said, here’s the issue. But I never did. So now I do though, and now I’ve go several contact at [??]. So if you ever have any problems over there, I’m sure I can connect you with someone.
Andrew: Well I appreciate you doing that. This has been a fantastic success story. You’ve done incredibly well with this theme and I believe tell me if I’m a jerk for saying this. I believe it’s going to do even better because I think there’s so much in here that it’s hard to communicate. I think you’ve lost a lot of sales to people like me who just love to gawk at this stuff, who don’t fully understand it.
Let me explain, let me see if I could explain one thing that draws me to it. It’s these pages that just look like there professional sales pages but they’re as easy to create as other quickie landing pages. And it’s the flexibility to say, you know what I want to move this menu over there, but I don’t want to contact my developers because it’s a pain in the butt to contact WordPress. And we have them. I work with two different WordPress development teams, it’s a pain. They have lots of stuff going their way, you know.
All right, congratulations on your success here. I hope when you break $10 million you’ll come back and do an interview largely because I think you’ll be doing more than just listing your stuff on ThemeForest. So there’s so much more to talk about like what you’ve learned about AdBin, what you’ve learned about up selling or selling more to people who you start a relationship with and so on. Congratulations, Kyle.
Kyle: Thank you very much. I appreciate it.
Andrew: All right. If people want to check this out, I think the best place for them to go is to theme.co, theme.co. If you’re there and you take a look at some of the other people on there and Chris Luck. Actually there is no way to connect with Chris Luck, if someone knows Chris Luck tell him he should do an interview.
Kyle: I’ll get in touch with him. I’ll pass your…
Andrew: Send him an email say look I did it, Andrew asked me some probing questions about my finances but it wasn’t the end of the world you should do it.
Andrew: I appreciate that.
Kyle: I would have to say too, just as a final little aside. We view too like you said about the, one of the things that people love about X is the ability to quickly change from designs and move stuff around with the live previewer. But we also realize that big part of what kind of a pain point is that people sometimes want to ask little quick question about, well how do I do this and what does that happen. And we view it as we want to be able to help them with that. Because we know it’s not always easy.
Andrew: I don’t see why you want to do that though. Because, I mean, you wanted me to talk about that in the interview and I asked you what is your win and I ask every quest that and you said, you know what I’d like people to know that we have good support. I’m looking at the price of this thing, its 63 bucks, forever. How much support are willing to take on. It seems like you should just be saying, buy it and only contact me if you have a big issue.
Kyle: Well, you know it’s funny you say that, because we’re actually working on some kind of premium support options and we’ll be releasing. But we view… to me people are everything. And I want to treat people in a way that I’d want to be treated. And so we’re going to work on the business side of it because obviously we don’t want to… we can’t just provide something forever for free and not ever charge anything. But the way people can actually help us the most, there’s two things. One the license is for a single use, so to use X on let’s say three sides you would buy three different licenses. That’s one way we can make additional revenue.
Second, is we are going to be offering other kind of linear related products that people will want. And so to us support is not something we want to kind of highjack over to them and say to them you’re on your own. We want to bring them into our fold and kind of treat them in a way, help them with the small questions they may have so they can get the most out that…
Andrew: I see, you’re saying, hey you know what I’m investing in relationship with this customer if I give them really good support then they’re more likely to buy another copy which they’ll use on another clients sight. Or they’ll buy the next thing that we sell and then we have an ongoing relationship with them.
Kyle: Exactly right.
Andrew: All right. Kyle, thank you so much for doing this interview. Everyone out there, thank you so much for being a part of the Mixergy community. Bye guys.
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