Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of mixergy.com, home of the ambitious upstart. I’m smiling, because Anne Marie is actually here in the office for the first time. Usually when I record interviews, she gets right out, but I’ve been recording all day, and she can’t keep staying out of the office. Well, today I’ve got in interview for you with an entrepreneur, whose company failed.
So he started blogging about conversion optimization. He started building an audience and building a reputation, and as a result of blogging, he helped people. He got his name to get out there, and that lead to a profitable new business. And I invited him here to talk about how he did it, because I want to encourage you, the person who is listening to me right now, to blog, to write, to get your voice out there and to build your reputation the way that this guest did.
Well, the interview here is with Peep Laja. His blog about conversion is called Conversion XL. Bookmark it if you’re into conversion optimization. All, you’re going to thank me for it. His company is called Markitekt. It’s a firm that helps businesses make more money through conversion optimization. The interview that you’re about to hear is sponsored by a company, called leadpages.net. If you’re really good at creating pages that convert, you know they get people to sign up for email news letters or to buy, I want you to create a page that leadpages will sell for you. They will make it into a template, and they will sell it to their customers and ship 100% of the money to you. Not 99%, not 97%, 100% of the money will go to you.
So if you’re good at creating landing pages, go to mixergy.com/leadpages. They will help you create your template that they will sell for you to other people, and they will ship the money over to you. I’ve done interviews with people who have created templates for other platforms. They’ve done over a million dollar businesses that way. I want you to get in on this before it’s too big for you. Mixergy.com/leadpages. All right, Peep, welcome.
Peep: Thank you. Good to be here.
Andrew: Hey, you were telling me that at this previous company that didn’t do so well: you got together on a phone call with your team. And you said to the whole Traindom team that you wanted to have a conversation about the business, and a couple of people didn’t show up. Why didn’t they show up to that call?
Peep: They were pissed, and they felt that they could not control their anger. And it would be better if other people would be on the call with me, so we could actually have a conversation.
Andrew: What were they pissed about?
Peep: When I started this business, I came up with the idea, based on what some of my customers were telling me about their needs. So, I found this guy’s development shop and I told him, “Hey, guys do you want to build this together?” And I sold him the dream. I’m kind of like a sales guy. So I sold him the dream, and people were asking me for the software. They had an unfulfilled need. “Let’s build it. We’ll make money.” You know, all that stuff. And so they bought into it. They invested all their time and energy into building this software, and it never took off.
Andrew: You know what, that’s one of the things that keeps people from ever saying to potential employees, to partners, to cofounders: ‘This is my dream. This is how big we can get it.’ Looking back, after having these people hate you so much that they didn’t want to get on the call with you, do you regret sharing your dream in such a vivid way?
Peep: No, no, no.
Andrew: You just have to accept it?
Peep: I sincerely believe in the dream. It wasn’t a lie. I wasn’t trying to scam anybody. I really believed in it. And you know, the software, though, it was better than anything out there, even still today. I still miss it. I want to build my courses on it, but it’s still not around. So I don’t regret the past experience, the two years of trying to make it. It was like my third MBA. I don’t, by the way, have a MBA degree. It was just three big failures.
Andrew: You were trying to solve what problem for yourself that lead you to building Traindom?
Peep: So back in 2007 until 2010, I was a info-marketer. I was selling ebooks, online courses, different markets, and people in my audience started to ask me, ‘I, also, want to build an online course. Which tool do I use?’ And I built my own, because I’m a former coder. I said, ‘Let me google that for you.’ This was 2009, maybe 2008. I googled it, and I found nothing. There was no easy to use software to build your own online course for non-techies. So I said, ‘Let’s build a tool that enables anybody to build an online course, and make money.’
Andrew: And so you said, “All right, this is the thing that I’m going to build.” By the way, you did brush over the kind of info-products you were selling. That made me curious. What kind of info-products?
Peep: Nothing scamming. It was a fitness market. I found an ex-Olympic athlete, who was the face of the product. I held the camera, and Phil did the exercises. Then I sold it and marketed it on click bank and whatnot.
Andrew: How did that go for you?
Peep: Yeah, we made money. If it was a launch, it made about $10,000 per launch and then about $1,000 per month. Then I also had overall small business marketing courses for Estonian markets. I’m from Estonia. I used to run a blog in Estonian language, talking about intro to marketing. It was the most read blog in the country, a country of 1.3 million people. So the biggest blog wasn’t very big. So through that audience, I sold this small business digital marketing course. It did pretty well, and that was my main income for about 2 years.
Andrew: I want to focus this interview about how you built your blog and what it did, and it really did a lot for your business. But let’s just understand a little bit about Traindom. If you got a MBA from it, I want to crib off of your MBA. It seems like a really great idea. You needed it, people are coming to you saying that they needed it, so obviously there was some need out there. I look at screenshots of it now, and it’s beautiful. What did you do right before we get to what didn’t work out? What’s the first thing that you did that you’re really proud of, that makes you say, ‘This worked out great.’?
Peep: We actually had customers that were making money.
Andrew: From the beginning?
Peep: I live in Austin, Texas, here, and there’s this intern marketing party that I go to once every three years. So I went to that party, and somebody yells out to me, ‘Peep!’ And I’m like, ‘What? Who’s that?’ And that was my one customer for Traindom, who made a lot of money, selling some investment advice products, or something.
Andrew: Okay, did you get that customer before you built?
Peep: No, he just found it somewhere, signed up, and set up his first course there, teaching people how to invest. And he was making money.
Andrew: You didn’t have a ton of cash, you didn’t raise money for this, so how were you able to hire all these developers, who created the software for you?
Peep: Well, our agreement was that we just split the money once it comes in.
Andrew: I see. And then how many hours did they spend to create the first version?
Peep: So the first version, it took us about 3-4 months before we released it. We built it based on word press engine, but rewrote most of it with some business logic in python. So it was an extensive project. The idea was that we’ll just share the money that we were going to make in the future.
Andrew: I see. How do you get somebody to buy into that?
Peep: You sell them the dream.
Andrew: The dream, and so when you did, what was your vision that you sold them on?
Peep: You know I don’t remember the exact numbers anymore, because it’s been like 5 years or so, but I believe it was like we can make a couple million bucks a year.
Andrew: I see. “And we’ll split it, and we’ll all do well. Don’t worry you create the software, and I can bring people in, because that’s my focus.”
Peep: Exactly. And I thought that I could get my first thousand customers just from my existing audience in Estonia alone, which was not true. I landed, like, four.
Andrew: How did you learn that it wasn’t going to work out? What’s the first test that you did of your marketing skills?
Peep: I had no structured approach to marketing at all. I was like, ‘Well, now what?’ I started a blog there and blogged, but actually looking back, the blog was just mediocre.
Andrew: It was blogged on Traindom.com?
Peep: Yeah, traindom.com/blog or something. My strategy was that, “Hey, I’ll identify the influencers, so people who are teaching people to sell eBooks or online courses, and I’ll get them to spread the word about it.” I set up an affiliate program as well. So I did video interviews with them, I engaged with them on Twitter, built a relationship, I played this slow game and the slow game was not fast enough. So I did build relationships and some of the relationships are still there.
I met my good friend, Noah Kagan, during those times, but it wasn’t fast enough, you know. So I even spammed people. So I looked up people who were selling PDF eBooks through Click Bank. I just hired a guy to just mass email everybody selling eBooks saying, “Hey, don’t sell eBooks, sell courses. Here’s a link.” That didn’t work.
Andrew: Go on and then I’ll ask why all these didn’t work. What else did you try for marketing?
Peep: I tried some pay-per-click, you know, paying with my own personal credit card. And the cost per conversion was too high. I just could not afford to buy traffic. I was losing money because already back then the keywords were pretty expensive. I think it was like three bucks a click, and we maybe converted two, three out of 100 clicks.
Andrew: Customers or into users?
Peep: To sign up as a lowest paid users…
Andrew: Got it.
Peep: …which I think was five bucks a month.
Andrew: So let me break it down, I understand why pay-per-click didn’t work, you weren’t able to crease your conversions enough to make it profitable.
Peep: Yeah.
Andrew: Why didn’t going directly into Influencers help? You’re a friendly guy. I’ve gotten to know you a little bit, and I feel like you’re the kind of person who, if anyone’s going to win us over, you’re going to be able to do it. Why didn’t it work out?
Peep: It’s one of those questions I keep asking myself but ultimately I don’t know. I think my main thing was that I didn’t know what to do to make money now. So the Influencer also, they didn’t want to pitch my products. And, of course, I was naive back then because now the tables have turned. Now I’m getting pitched every day about products. Of course, I’m not signing up. I’m not emailing my list about those pitches, you know, that I get.
So it’s the same thing. I was just one random guy that nobody had ever heard of, dude, with a weird name sending an email, “Hey, here’s my software.” So my approach was wrong. I only tried to form a relationship with a very select few, and then I just wanted to do the shortcut where, “Hey, here’s my product. It’s awesome” because I wanted people to just see my product and say, “Oh my God, it’s so amazing” That didn’t happen.
Andrew: I see. So you know what? I interviewed one of your competitors. The guy’s from Kajabi.
Peep: Yeah.
Andrew: They essentially are doing the same thing, and one of the things I learned from them was they partnered with an info marketer who is well known in the space who then told everybody else about their product.
Peep: Yep.
Andrew: And so what you felt it from my conversation with you before we hit record here is you felt like you lacked that credibility yourself, and you couldn’t then bring it to your product. You lacked that personal recognition over time, and you couldn’t bring that to your product.
Peep: Right.
Andrew: So people aren’t going to sign up for a guy who just happened to spam them. They’re now going to sign up with a guy who they like and email their audience. You needed to have your own audience, your own followers who cared about what you were doing.
Peep: Exactly.
Andrew: And maybe give you feedback if it didn’t work.
Peep: Exactly right. So, yeah, I had no personal relationships, no name recognition, no nothing plus my approach was kind of clueless as well. So that [??]
Andrew: You had creditable recognition, the only problem was everyone knows you as Peep.
Peep: [laughs]
Andrew: Because it’s spelled P-E-E-P.
Peep: Yes. That’s a conversation starter.
Andrew: Is it?
Peep: Yeah. So, you know, it’s a test. Even when I tell people how to pronounce my name the first time we meet, “Hi, my name is [??]. Shake hands. Here’s my card.” And they read my card and say, “Oh, Peep.” I just told you what my name is. So yeah, people will believe that they see, not what they hear. “I must have misheard it because your name couldn’t possibly be Pep, if it’s spelled like this.”
Andrew: [laughs] How does a name get spelled P-E-E-P if it’s pronounced Pep?
Peep: Well, it’s not an English name, so if the language has different pronunciation rules. So it’s as easy as that.
Andrew: I feel like it’s kind of a good test. Back when 37Signals was called 37Signals instead of Base Camp, I remember people really pontificating about the brilliance of their company and saying, “You know, that 32Signals is the way that everyone needs to run their business because 32Signals is about simplicity. And you realize, if you can’t get their company name right, then you really are talking out of your butt.
Peep: Yes.
Andrew: Right? And so 37Signals was a really good indicator, the name was a good indicator of how well people knew what they were talking about.
Peep: Right.
Andrew: And the same thing here. If someone’s calling you Peep, they’re just reading the blog and they haven’t taken the time to get to know you better.
Peep: They’ve never seen me speak at a conference because I always make a point to have fun with my name or hey never met me in person. And that’s okay, I mean I’m not mad at anybody, now.
Andrew: Except for the marketers that’s when you know they’re really calling you. When someone calls me as Andy on the phone I know that they’re a marketer. They really are clearly trying to befriend me quickly and to cutely. All right, so Trandem isn’t working out. Do you remember the day when you said all right I’m done with this?
Peep: I was speaking to me, I think wife at the time, depending whether I was already married or not. So I was speaking to my wife and telling her that I’m feeling so stressed about this, especially the human relationship aspect of it. The money was also really bad, I did not have money. And that effects your well-being as well.
And so I remember telling her that I feel like I need to end this. I’ll put so much into it and it was kind of like the feeling of some cost. I’ve already invested so much in this I need to make it work, you know that was the main thing that kept me on it.
But then once the personal relationship got so bad that I was working on it out of guilt to make the other guys happy not because I enjoyed the process. So then it’s like yep it’s time to call it quits and so I had a really difficult conversation with the guys that I partnered with.
And we tried to sell it initially that was our … at least we’ll make some money we’ll sell it. And we pitch directly to potential people who might have a use for it. People who were teaching people how to create online courses, hey you could have your own software.
And then we tried to list on sites like Flipa.com. And here’s also [??] nobody just well how you value your software is not in relation to the actual value of your business. So we could have sold it for ten thousand dollars maybe, but we asked way more. And then our pride to not let us sell the name and the software off for very little money, we’d rather kill it.
Andrew: I see. I’m looking at Conversation … oh by the way actually before I move on. How did you feel once you decided that this was it?
Peep: I felt relieved, I felt I’m free. And I felt that I should have done it a year ago. In hindsight it was like yes this was the right decision why the hell didn’t I do it before.
Andrew: I had a business like that where I know I should have done it before, I couldn’t bring myself to and I finally pulled the trigger on it and I just felt such a sense of release. And infinite possibilities because now no longer … you felt that too.
Peep: Exactly like new beginning. I can do whatever. And you know I was kind of having an identity crisis as well. Like the sense of freedom is also kind of overwhelming, oh my God you know if I can be anybody, who. So I read this book called, Now Discover Your Strengths. So did the test and found out my top five talents were input, achiever, significant but all these things but when I look at these talents, you know I retain information really … I learn really fast, I like reading, I’m always learning. I know all this obscure facts. And I like to do stuff and I like to be important.
So I should be an expert. What should I be an expert in, so well I mean I didn’t want to choice biology or something like completely far away. I’ve been doing intra-marketing forever, dabbling here and there. So of course everybody and their mother is a digital marketer online. So I didn’t want to be yet another digital marketing dude. So I got to be more specific than that. And so well I listed things that I’ve been Excel well to competitive, PPC to competitive and blah, blah, blah.
I was like hey, Conversation Optimization you check the key word volume, check kind of stuff that comes up if you Google that phrase. Hey well not a lot out there, couple blogs nothing major, and maybe one two books on Amazon. This is an open market but the key words in Google trends. This is the beginning of something here, so okay.
So basically that’s when I decided I’ll go into Conversion Excel, Conversion Optimization and I registered the domain name, conversationexcel.com. I learned from the Trandem experience that I failed because I had no audience to sell to and I did not really know who to build and audience for Trandem.
And I wanted to fifth one, I wanted to start with an audience figure out what I’m going to sell them later once I have the audience. So focus on the audience.
Okay I’m going to start a blog and Conversation Optimization how I grow the blog fast. So I did this huge research into what kind blogs get most social media shares, most back links, and just most fans. And luckily enough several reports were published one the topic.
And then conclusion was that I need to write long form posts, two to three thousand words. Lots of pictures, well structured, meaning that sub headlines, bullet points, so it’s interesting easy on the eye. Every claim backed up by a source I’m not saying do this, this works. And then I link to a study the study found that this works. And finally to publish as frequently as possible because publishing schedule matters.
So I started that and I first well I don’t have an existing audience so I want community to spread the word about my content. So I transferred my old blog post that I wrote for Trandem blog that’s C’s for the blog content. So I don’t write this amazing blog post and then that’s the only post there is it’s pathetic.
Andrew: Is that why there’s so many post on your site for October 13, 2011?
Peep: Correct.
Andrew: That’s when you transferred all those post over?
Peep: Yep, that’s [??].
Andrew: So you told me before that blogging didn’t work for Trandem. And now this is the foundation of you renew business. Why didn’t blogging work for Trandem then?
Peep: Why because all these things that I was telling you about right now I didn’t do any of that.
Andrew: None of the research, none of the focus, none of the … I see. But these are long term articles.
Peep: One lousy stock photo they had … they were short maybe three four hundred words. They weren’t really saying anything new. I didn’t really work that hard on them because how hard is it to write a four word blog post, you can write two an hour.
Andrew: I see, so here’s one nine steps to improve website readability. There is a photo that you found on line then says, number one large font, larger font is easier to read then small font the font size should be at least 14 pixels or even 16 pixels.
Then number two line height, line height is the distance between two adjacent lines of text. I see. So that is not the kind of quality that you ended up moving to of course. All right but it gave you a foundation by having some content on the site. What’s the next thing that you did?
Peep: So I thought well let me try to write for specific audience’s that twill spread the word. And since I had been in the start-up space of course my go to news site was Hacker News. So I thought well why I don’t write blog post for Hacker News audience.
So I did some digging through what kind of post ranked well regularly excluding all the programing topics. So what kind of business topics have done well. And I found one of discussions I can use on pricing, well great.
And I just recently had the time or so had finished reading this amazing book on pricing called, Price List. And thought well why don’t I find out all pricing experience that have ever been done into a single blog post. And which is what I did.
So did it, wrote a book post, it was like three thousand something words it took me like three, four days to write it, pull all the research together. It was really, really hard work. And sure enough on Hacker News it stared trending, it was maybe number two or one somewhere up there. Really started to trend, went crazy. It’s to date I think my most read blog post that I’ve ever written.
Andrew: I see here on Hacker News this is from … so the first set of post you copied over where October 13th, this is October 31st. So within about 20 days, you had this post on your hand and I see it on hacker news, this guy’s saying, really liked the article post together a number of things that I had heard of before, someone new to me and a lot of really complimentary comments like that one and it’s called Pricing experiments you might not know, but you can learn from. All right. And that got you a start
Peep: And that made me start. I had made shared my Email capture mechanism in place in the blocks. And once they come I am able to capture some readers. But the hacker news crowd did not convert. They came and left. But not many people opted for them. Some of them bumped upon it even though it was nice to see that huge traffic bump. But what ended up happening is since I had got more than 100 points on even more than 500, I don’t remember, on hacker news, Twitter went crazy, sharing it with people who even didn’t read it through the automatic sharing tweet bots.
Andrew: Yeah, there are tweet bots out there that are designed to tweet the top 5 posts on Hacker news, the top 20 posts and they are saying even the ones that have the number of points but haven’t cracked the top 5 will get tweeted by these bots and shared by others.
Peep: Right so that happened so the blog post got shared. And a lot of bloggers [??] round up posts interesting articles they found this week. They include this article. So you got back links, social media traffic and showing up the ball started rolling. Yeah. This is going great. All right another one, what else could I write about? Just write about persuasion so same thing I looked up all these not known persuasion techniques. So I wanted to avoid Schialdini [SP] stuff that everybody knows.
What are some of the lesser known persuasion tactics and wrote a blog post about that. And again more than 3000 words. And again Hacker news picked it up and it went viral. And actually, the funny thing about this persuasion article and the pricing experiment article, the pricing experiment has gone viral three times. Twice it was number one or like top in the hacker news. I don’t know how it was possible. But it was there twice. And one time Tim Faradays tweeted it and shared it on Facebook and that took my blog down, which is when I upgraded to a content delivery network. So the same blog post, if you write a very good blog post, can go viral multiple times during its life.
Andrew: I see a few of these you did. But I still want to understand more about what you did to understand that it would go viral. So the first is which you said, I am going to find a platform where if I created it would be shared. And that was hacker news for you. Today I see that your site is on GrowthHackers.com. A smaller community than Hacker news is today. But it’s easier to penetrate the top ten on that site, right
Peep: Absolutely. For a while it was inbound that [??] infrequently managed to rank high there with my content. But growthHackers is a nice fit. GrowthHackers is also growing. They are doing about 125 thousand uniques a month now.
Andrew: You want to get in to these things on these networks when they are big enough to matter for traffic, but not so big that you are just a speck on their radar. And I can see how growthHackers is that for you and HackerNews is before. With all these networks, you are going to have some friends who are going to bump you up even if it’s not an orchestrated thing where you are tweeting at them and asking about and texting them and asking them . It helps for them to know you and to have them help you out.
Peep: Absolutely. And you know with smaller communities. HackerNews is big but let’s say GrowthHackers. Com or Inbound.org, those are small enough that you can actually get to know the people that run those, which I do. So growthHackers people, they shared my content voluntarily because they know it regularly does well with their audience. I don’t even need to push myself any more.
Andrew: The other thing you did was you did research in to the topic. How did you figure out what topic to write about that people will care?
Peep: I guess it was not too scientific. It was more me going through hackernews top news that were business related and tried to find what’s the common denominator. To me it seemed that it was, people liked this mind game you know mysterious stuff. So pricing the experiments, persuasion, inner secrets of mind power.
Andrew: You just look and see what are people voting up and if they are voting up then it’s a good indication of what else they want. And the other thing you said I don’t want to give them what they have already heard of. With pricing, pricing that you have never really heard of. With influence and persuasion, you said I am not going to give them Robert Giordani [SP] everyone read his book. So you were looking for new esoteric ideas. Where did you find those?
Peep: Just Google the crap out of everything.
Andrew: I see. You just came up with stuff like that.
Peep: Yeah, I was going through scientific papers on persuasion and trying to find interesting tid bits.
Andrew: It all sounds so professorial when you say I was doing reading scientific papers and it really is helpful when you are trying to communicate an idea and do it with authority. But Like you said, just Google for it.
Peep: Yes Absolutely.
Andrew: So anyone listening to us can do it.
Peep: Everybody can do that and I got so much credits like I have been referred to that pricing expert [??]. None of the research was mine. You know.
Andrew: All right. And you put that all together in a blog post that was long and meaty and well structured so that there were headlines, subheadlines and so on and some images. Did you do anything else to get the ball rolling on it? Did you ask the people to tweet it? Did you reach you to anyone who is especially good at getting ideas out? No.
Peep: No. Did not reach out to anybody. I just posted it. Also reddit, sub reddit. So anywhere where I thought people could there is a community that could share Digg you now.
Andrew: If you had to guess what percentage of time did you spend marketing it compared to writing it.
Peep: Writing was definitely, took longer. Because writing a good quality post was just hard work. And most of it was research and not actual typing. Most of it is research. And once I saw that these really long set of posts actually do well it was really a realization that a) content marketing really does works and b) strategy that affects, it really works.
So I just, well if it works, let’s do more of it and started to do it. And of course I did SEO keyword research. To try to tank for certain keywords and just well I thought , well conversation optimization what is there to write about , so I many a huge long list of possible topics and then Okay, so I haven’t written about Images. Today post about images. Same process. Cool the crap out of published case studies research, [??] write a blog post about it. In the beginning, my articles were mostly research based.
Andrew: You basically what you are doing is, you are becoming the expert by studying in public. It’s not like it you are saying, I am not the expert so I am writing about it. Instead you are saying, I want to learn and instead of keeping the notes in Evernotes I am going to publish the notes publicly
Peep: Right, exactly Right. It’s a kind of fake it till you make it thing where I was sincerely interested in the subject matter and learning by writing and teaching. And since I had conversion optimization experience since 2007 but not at the scale that I do now.
Andrew: Not enough to become an expert who is going to teach everybody else who needs to know about it. You know one funny thing that I noticed in your old blog post is this is on the pricing page. On the very bottom, you said you had an Email capture form. Here is what it says; Want this document in PDF format sent to your inbox, enter you Email address and that was the giveaway. But today you have got more sophisticated I can see that there is a complete guide to AB TESTING, a little box coming up on the bottom right of the screen. And that’s the giveaway today.
Peep: Lots of different mechanisms. And what I have also learnt is that you cannot have too little ways to capture Emails. If you have a static side bar and you have a [??] box and a pop up, they all work. They are not cannibalizing each other. They are adding…
Andrew: That’s Amazing.
Peep: So capturing Emails is so important. Without my Email list, I wouldn’t have a business.
Andrew: So You have an audience of people coming to your site. You are building up your reputation. You are building up your mailing list. You are doing a ton of writing and tons of promotion, it’s time to start to bring in revenue from all these. What’s the first revenue you brought in?
Peep: So my first clients were my former contacts in Estonia, where I am from. So I landed up a couple of clients there mostly redesign projects, where I also learned how hard redesigns are.
Andrew: Did you pitch them on it?
Peep: Not really. So because of my blog in Estonia, you know, i had a certain reputation there. So it was easy but, so that part was kind of like just to get the ball rolling.
Andrew: How did they even know you were selling services at all? Did you put it on your site?
Peep: Yeah I set up, like my idea was actually that I’ll start building websites that sell based on the best case practices out there, also naively thinking that the best case practices always work.
Andrew: But it’s a starting point right.
Peep: It is a starting point if you have no data, it’s the right starting point.
Andrew: Mercy Myer, when she was working at Google used to talk about all the different ab test she did to help create a better search experience and then someone in the audience asked a question that I thought was so smart, said “what if we don’t have that massive amount of traffic and we can’t run these ab test?”, and she said there was a time when google didn’t and what we did was look at best practices. So they started what you did.
Peep: Yeah.
Andrew: Right, you see what works for other people in the majority of the times is better than just throwing the dart against the board and trying to figure out what the answer is. How much of an audience did you have before you started pitching yourself as a guy who can recreate people’s sites?
Peep: My first month of blogging, thanks to Hacker News I had like 50,000 visitors then it dropped down to 10 and then it slowly started growing from there, and I reached 100,000 monthly readers at the end of my first year of blogging.
Andrew: 100,000 a month?
Peep: 100,000 a month, yeah. And I think it was maybe 6 months of blogging when business started to come in.
Andrew: How did people even know? I’m looking at an early version of your site, I don’t see where somebody would click to buy. Where did you pitch yourself as a guy who can do people’s sites based on conversion?
Peep: So, the way it happened was also that I set up the a separate site for the agents of services, Markitekt.
Andrew: Okay.
Peep: My good friend, former high school classmate was in between jobs, and so I said hey.. I wanted to put together this team, would you like to come and run it? And be the manager? So we hired a developer a designer and my friend, because I’m in Austin, Texas and those guys are in Estonia. So I needed somebody I can trust to run the team while I’m away. And I thought this was going to be hands off for me, the team was going to take care of everything, but little did I know that a. I had the most experience so I was looked at the best we had, and also, people wanted me…
Andrew: Because they got to know you from the site.
Peep: Yeah, exactly right.
Andrew: Yes.
Peep: Even today, they request specifically for me every now and then. So put together this landing page, early draft, then a link from the blog in the menu I think… it was like…
Andrew: It was home blog about and contact, for the longest time those three options and then the fourth option that you added to the menu somewhere around the middle of the following year after you launched, was services tab. And that said: will increase your conversion rate and you’ll make more money.
Peep: Right, exactly.
Andrew: Got it.
Peep: So that was a click through, a link there to the landing page off the agency. And at the agency in the beginning was, just we built websites you know, we were precise or whatever, and a year into doing this we realized.. while people are hiring us to make more money, but 90% of the project is the development phase. Developing projects, often get overtime, creates a frustrating experience for the client, and so it was a pain in the butt this development part.
And I went to my first conversion conference, and then all these other guys that were running conversion agencies, I went to each one them, “Hey, tell me how you doing this.. tell me how you’re running this.. tell me how you’re managing this.” And I just learned and learned and just took notes, and I asked you know, very straight questions,” How much are you charging? What do you deliver for that much money? How often do you talk to the clients?” Just taking mental notes and came back to the team after the conference said, “Guys, announcement.. we’re stopping all development work.” And they are like, oh my gosh that’s like cash cow, what do you mean? Well we have to fire everybody, and my team was I think like six people at that time. And I said, not, no, this is the right thing to do, make some arguments. And once we stopped doing development couple of weeks later, the following year the revenue per employee went up by 60%. Because we were just more focused.
Andrew: What do you mean? I see the early versions of the site. They said, we build websites that sell. We don’t build the kind of website you need. We are going to increase your traffic, increase your sales. We are going to help you focus on increasing sales. That’s the big thing more than anything else
Peep: Our whole approach was if you want to have any say about the kind of website that we built for you, go over to somebody else
Andrew: But then why was the problem?
Peep: The problem was that we need to code it. The software development part of it and that took a long time
Andrew: I see. If you get out of Word press and start to develop even [??] even that takes a long time. Is that right?
Peep: That takes a long time
Andrew: And what you learnt from going to the conference was get out of this business of creating website for people. It’s too intense and it doesn’t deliver enough money and it’s not an ongoing thing. Get in to instead
Peep: It’s a commodity. Like any idiot can do that
Andrew: I have interviewed people who said high school is when they started doing this kind of work. Obviously not as beautiful as Markitekt did, but at least they are starting out and you don’t want to compete against them. So you said, all right, I am learning from all these people, the real money is without the headache is, taking a site that already works and running AB tests for them and increasing their conversions.
Peep: Exactly right. Take optimizing existing sites. Not doing radical changes. We still do design work, but we hand over the PST files. So and that was a really smart business idea, business decision to stop doing development work. We could handle more clients. We weren’t tied in these horrible long development programs or projects whatever. We made more money and we got Laser focused on our messaging. And also since we were doing one thing in our company, our competency level just increased. And now having run thousands and thousands of AB Tests and increased revenues for so many sites. It seems like yeah that’s the way to do it.
Andrew: You already have a distinct advantage over somebody new who comes around because you have seen so many of your clients’ inner working. And have got to test on other people. So now when someone hires you, they get the advantage of all the tests that you had done in addition to the research that went in to your blog post. Do you ever look on your older blog posts and say, I was so naive back then.
Peep: Yeah, I am even contemplating deleting some of them or completely rewriting like new content. Because if somebody finds those articles and charges me based on those.
Andrew: Be Open, what’s the one you are really embarrassed about?
Peep: I don’t think I have that website readability thing that was pretty stupid. I think I have also an article that was called ” what you need to know about conversion optimization?” It’s pretty naive stuff.
Andrew: What is it about that that is so naive? About conversion optimization. I am googling it right now. Conversion XL.com. let’s see, what is it about that? The reason I am asking is, a lot of people would hesitate to write because they are worried that in the future, their future self will think it’s ridiculous. And people who were smarter than they are at that time will think it’s ridiculous. And that holds them back. We have all had that as a bug in our head. I want to understand, how bad it is for you now?
Peep: It’s not bad. I haven’t heard any specific comment. It might be hurting me in ways I don’t know about. Also think, my thinking is this. The articles that I wrote at that time will still be useful for some audience that hired me. so they were at my level. I wasn’t getting hired by Marriot at that time, because they were above my level. So as my own competency increases, my level of content increases.
Andrew: I see.
Peep: I am getting smarter and smarter clients. So for instance I am also losing audience. Recently, in the last year, my blog posts are getting more complicated and sophisticated. So for a lot of people it is above their head. And I don’t want to write stupid ABC blog posts anymore. I mean I can’t understand bloggers and business owners that market to complete the inners is so boring for me. So it’s so boring to me. So I relish talking to and teaching to people who are extremely intelligent, it’s not about intelligence, I mean experienced, you know. They know stuff, they have done stuff.
Andrew: One of the things that you had said, you were naive about was, that and you and I had talked about this before we recorded. You said most people think as soon as their AB software tell them to stop testing that the test picks the winner and that’s the end of it.
Peep: Right.
Andrew: Why isn’t that? I also think that if my AB testing software said here statistically relevant results are done. Whether it takes an hour, a day or a week, I figure out my winner and move on.
Peep: Not true. Unfortunately, it’s the number one rookie mistake that I had made thousands of times in the past. So the truth is your AB testing tool is optimized [??] is optimized or whatever they all do it. They say yeah, you have reached statistical significance. But that does not equal validity. So, scenario you see all the time, a company runs hundreds tests a year. Some of them big winners, 25% up lift. Roll it out live. But you don’t see a 25% lift. Actually, you don’t see any lift at all. And after running hundred tests, the conversion rate is still the same. What’s up with that? The thing was that you were seeing imaginary lift. The 25% thing that your testing tool said was not actually there. Because your sample size was too small. So 10 conversions versus 19 conversions would be statistically significant as the difference is big. But the actual numbers are pathetically low that can change in 5 minutes. So what you need to do is that you need to pre calculate your needed sample size. And the bigger your conversion rate, the less sample size you need. So and also.
Andrew: How do you calculate that? Where do you find the formula that tells us?
Peep: There are many tools out there. So if you call AB sample test calculator. You will find some. One is the AB testguide.com.
Andrew: ABTestGuide.com.
Peep: ABTestGuide.com. or there is the famous Ewan Miller’s ABtestingtools. So you go there and punch in your traffic number existing conversion rate.
Andrew: That’s bringing up some junkie site. We should google it later. Well this is really junkie site; it’s just doing redirect redirect. ABtestGuide, I will Google it. And the other thing is not just about the number that you told me look you want to make sure that even if you get enough people on Monday, it’s not that significant because your traffic on Tuesday and Saturday and Sunday and Thursday are all different. And so you want to run at least for a week and you said it’s not enough for even a week because that doesn’t capture it, how long should we do it for?
Peep: So let’s say that you calculate that you need at least 20000 visits and so and so many conversions to look for and you can even look at the statistical significance. But high traffic site like Marriot would get that in 2 minutes. But it’s not that you can call a test in 2 minutes. You need to also, time is a variable that you need to take in to account. So every day as you say, the conversation rate fluctuates. So, Monday is different from Saturday. Also you have different traffic sources. You want to make sure that your tests, that the people in your test in your experiment including every single traffic source so if you send a weekly newsletter on a Thursday, you want to make sure that you have atleast one newsletter cycle there. If you publish on Mondays and Thursdays you want to have those in there. And probably two weeks because one week might be weird you know not your ordinary week. There may be some external things that affects this. The phase of the moon.
Andrew: We were saying may be for a full month. That way we get the whole cycle.
Peep: Full month. Figure out what’s your business cycle it and test out for two business cycles. If you don’t know what your business cycle is, the easy way to look at it is to open up your Google analytics and you see a traffic sign like these pumps. So measure the length of the pump.
Andrew: From the top of one wave to the top of next wave. Because you see the traffic goes up down.
Peep: So typically it’s one week. So you want to run the test for at least two weeks. But my experience also shows that, I see this all the time, at two weeks’ time, my test B is kicking A’s a** by 20% already. We could like this is the winner. Let’s roll it live, test something else. But if you wait another two weeks, actually what happens is regression to [??], so your lift disappears. And if you’d just called it at two weeks, you think I had a winner…
Andrew: That happens to me all the time.
Peep: …maybe you’d have an explanation why it won. And you build new test type offices off of that winner that actually did not win. So it’s just going to waste more and more time because you’d have false confidence in a test that actually didn’t win.
Andrew: All right, I’ll give you the URL. You Skyped it to me. It’s abtestguide.com/calc, C-A-L-C, for anyone who wants it. Another thing that you did as a blogger is you raised your profile by having other people include you in events. I don’t know the specifics, but I think Unbounce would have you at one of their online webinars. I think Noah Kagan created an e-mail tutorial about how to grow your mailing list. You were included in both of those. You’re included in all kinds of things like that. How did you get your name out there to be included in all those places because I think that that adds to your credibility tremendously.
Peep: Right, so in the beginning, I figured out who is podcasting about conversion stuff, and I’d just e-mail them, Hey, I want to get on your show. And mostly, they would say yes ’cause they need casts as well. And especially if they’ve done it for a while, they’re running out of ideas. And whenever somebody asked me to be a guest on their show, I said, yeah, of course, so as many podcasts as possible. Also, I started to do where bloggers who did roundup posts, 10 experts that say something. I e-mailed those bloggers, hey, next time you do a roundup blog post on the topic X, I want to be included as well. So I was building that up to be visible.
Andrew: I’ve heard some people actually go back and e-mail them afterward and say, hey, you left me out, or if you think I’m a good fit, would you add me to the list, and retroactively get added.
Peep: Yeah, I personally dislike it ’cause I never edited my blog posts that I published a year ago myself, so I didn’t ask them to go back and change.
Andrew: You just said next time you do it. Okay, what else did you do?
Peep: So it goes typical, and once you write one post, you want to do more ’cause also for bloggers, [??] post is like the cop out. It’s just the easiest post you can write, so probably they’re going to write more ’cause they’re lazy.
Andrew: So you figure all right, if they did it once, they’re going to do it again, and I’ll be included.
Peep: Right, and another big thing, actually meeting people face-to-face, in person, no substitute to it. So conversion conferences, all kinds I just started to attend. I tried to speak at every conversion event there was, so I just applied as a speaker to speak everywhere. And then meeting, for instance, Unbounce’s people, I just met at conversion conference in San Francisco. They saw me speak there. They liked it. They had me at their webinar, thanks to that. And then later on, we all became friends. Now we’re doing these monthly page fights, online marketing entertainment show.
Andrew: Yeah, where you look at people’s web pages, and you talk about what they could be doing better to increase conversions.
Peep: Yeah, plus it’s consulting through insulting. It’s like we’re mean and we’re funny.
Andrew: So you spent some time on Noah’s E-mail 1K. It helps raise your profile, and I noticed you because of that. Do you get any new customers because of that?
Peep: Not really, ’cause Noah’s audience, Noah is selling to small business owners.
Andrew: And specifically with this one, he’s reaching out to people who don’t even have 1,000 on their mailing lists, or at least that’s his marketing…
Peep: Exactly right.
Andrew: …approach [??] other people too. So then they’re not your customers. You want people who have…
Peep: They are not, yeah.
Andrew: …a lot of money to spend.
Peep: The problem with running an agency is that it’s not really scalable. It’s fun. It’s huge learning. I can be constantly sharpening the saw of working on actual client problems. And then starting from this year, inspired by Noah and some other people, I started to sell courses. I wanted to create a conversion course ’cause so many people could not afford me, but they had a problem. So I said, well, why don’t I create a course where they can just teach themselves to do it. First of all, I wanted to do the course on the side, so on the side, like during the day, I do the agency stuff. I go home and work on the course. That didn’t work out because I have kids and stuff. So, and I think it was Noah or somebody who told me, why you don’t need to create a course all at one.
And so, I said I will create a coaching program. So, I did, and I announced the coaching program. And so I would create a twelve week program, and I would just create one week of content ahead of time and I charged them money before I had written anything. So, I priced it at $2,000. I sold seventy five spots in my program, which was the limit I set. This is how many I will accept. And that was it. For twelve weeks, I just created content. And then in last spring, I also sold it as a self-study course. Sold about $400,000 worth of course accesses.
Andrew: Wow.
Peep: So, in that sense, being on Noah’s list, there people might by my courses once I re-release them in the future.
Andrew: I see.
Peep: Now, I am also adding a conference. So I want to diversify. And you know, talking about why I got into conversion optimization was that I saw the trend. And now I see the trend even more so. Conversion optimization is the next SEO in the sense that it is going to go mainstream. Everybody and their mother are going to be doing it or claiming that they are going to do it. Every SEO company needs to start offering it. And I want to capitalize on that trend. I want to be the guy that teaches the world on…
Andrew: The Rand Fishkin of search optimization. Oh, excuse me, of conversion. Right, and we don’t have many names. In fact, I can’t think of another name when it comes to conversion. I’m sure they are out there, but I don’t study this stuff. And you just happen to be in my world because of all these places where you speak.
Peep: That’s the plan.
Andrew: So how much money are you making with your consulting company?
Peep: I think last year we did about half a million dollars.
Andrew: And in 2014?
Peep: We’re going to add about 50%.
Andrew: Fifty percent more. And so the course essentially is doing, wait about half a million dollars total for the course?
Peep: Yes.
Andrew: Wow. [??] Sorry, say it again.
Peep: The money that I make off the course is money in my pocket.
Andrew: Versus the consulting world where you have to pay people.
Peep: Yeah, pay people. That is the number one cost is just salaries.
Andrew: Wow. Wow. And that all happened in the last year. So this is the model, right? You don’t have to be the expert. You just find a topic that you care about and that other people are starting to get curious about and you establish a website around it. You create content by figuring out what people care about and then studying itself yourself, and writing it the way other people might write in a notebook what they are learning, you wrote in WordPress. Find a community that is going to talk about it. In your case it was Hacker News, then Inbound, then Growth Hackers, and all these different communities talking about it. Start with a consulting company. Do you think that’s the first step?
Peep: Well, it is the easiest. They should still start publishing something. Videos, audio, tech. Something consistent to build up their reputation. Look at how much you’ve been able to do because of it. Build 2 business essentially, because of this.
Andrew: When you do that, your content just needs to be better than everybody else’s content or you’re just wasting your time. Everybody can write 300 word blog posts and they do, you know? You’re never going to stand out. I mean, you have to have something unique about you. You need to just be outrageously better. How many people want to write 3000 word blog posts? Very few because it’s hard work.
Peep: But who can read a 3000 word blog post? It feels you could only read two of them a month. Yeah, you know, the thing is, people probably don’t read the whole thing. They read the headlines, they read some bullet points, some tidbits. They feel like this is a great resource, I’ll bookmark it, I’ll Tweet it, I’ll share it. Looks legit. If you have so much to say, you must be smart.
Andrew: I see. All right. The website is ConversionXL.com and as I said at the top of the session, if you care about conversion optimization, you’re going to want to bookmark it, so head over there. Check it out. As always, if you got anything of value out of this conversation, find a way to say thank you to Pep. Be the person who walks up to him at a conference who says, “Hey Pep, how are you doing? I saw you on Mixergy.” Maybe you pepper him with a bunch of questions the way that he did other people when he was trying to figure out what his product should be.
Thank you so much for doing this. You recorded with me before this, a session for Mixergy premium where you teach people how to do basic research that can get really intense if they want it to, that will allow them to increase their conversions. How do you study your costumers? How do you understand what they’re looking for and how do you make small distinctions to your site that can have outside results based on that research?
If you guys are a part of Mixergy premium and I know that many many, many who are listening to me right now are, you’ve got to check it out when we publish it, and if not, go to MixergyPremium.com and sign up right now. You can prep for that session with over 100 sessions with proven entrepreneurs who teach you, in detail, what you need to know to build a successful business. Go to MixergyPremium.com. Pep, thank you for doing, now two sessions, here on Mixergy.
Peep: Thank you.
Andrew: All right. We’ll keep looking for you all over the net. Bye everyone.
