How does a founder build a company with nearly a quarter-million dollars in revenue each month?
Louis Rix is the founder of Netcars, a used car classified website with the unique pay-per-click billing model. This is the story of how he overcame several setbacks on the road to building a hit company.
Louis Rix, Netcars
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Remember Patrick Buckley, who I interviewed? He came up with an idea for an iPad case. He built a store to sell it, and in a few months he generated about a million dollars in sales. Well the platform he used is Shopify. If you have an idea to sell anything, set up your store on shopify.com, because Shopify stores are designed to increase sales, plus Shopify makes it easy to set up a beautiful store and manage it, shopify.com. Here’s your program.
Hi everyone. My name is Andrew Warner, I’m the founder of mixergy.com, home of the ambitious upstart. How does a founder build a company with about a quarter-million dollars in revenue each month? The founder is Louis Rix, he is the founder of Netcars, a used car classified website with the unique pay-per-click billing model. Louis, welcome.
Louis: Good to be here. How’s it going Andrew? You ok?
Andrew: Great. I want to dig into your story, figure out how you built up this company and along the way just suck up as much knowledge as possible for my audience, so that they can fill my inbox with success stories based on this interview. That’s my ideal.
Louis: I’ll try my best.
Andrew: Let’s get to know you by going back in time a little bit to the period before your success to when things were a little bit rough. Can you tell me about that?
Louis: Yes, not a problem at all. Netcars.com as it is today, originally started out – or started life as Netcars2000 back in the year 2000. It was founded by my brother, Reg whose 18 months older than me. If I’m completely honest, the business didn’t succeed – we’re talking 11 years ago now. The automotive industry didn’t catch on to the power of the internet; dealers didn’t have digital cameras to upload pictures of cars, there was no broadband, so it was a bit of a [??] trying to sell a dead horse to be honest Andrew. The business actually failed after, it was around about two years, we got a bit of funding from our father, and it didn’t work out. That was our first failure in business life. Obviously we’ve evolved, and here we are today.
Andrew: Before I ask you about that turning point that got things going and made you feel like this is a successful business, I want to find out a little bit more about this setback. How did you personally feel about yourself, as a human being – as a man, after that big failure?
Louis: It was a tough time. I was 18, 19 years old and it was a very, very, difficult time for myself, and my brother. My dad actually said, “Would you like to come and work in the family business?” We decided we wanted to stick it out and do our own thing. It was a sinking ship at the time and we knew we had to abandon ship and it was very tough. It was quite emotional if I’m honest, but things happen in life for a reason and we just took that as a step backwards and obviously you learn by your mistakes, but it was a very tough time Andrew.
Andrew: I’m so glad that we’re doing this via video. I could actually see in your eyes as you were telling what was going on at the time, I could see your eyes change. I thought, boy he’s going to cry here. How do I…
Louis: Don’t worry, don’t worry, I’m not, no tears, don’t [??]
Andrew: Well actually it might help get more viewers if you cry. It might let people feel that there’s something real going on here.
Louis: I don’t think it would do anything for my streak.
Andrew: Let me push a little bit further, see if I can make you cry – no. What I want to understand is this: I get that way a lot; for me it doesn’t matter how successful the business is, if revenue isn’t strong for some reason I start to doubt myself as a man. It doesn’t matter how much money I have in the bank. It doesn’t matter – not that it doesn’t matter – it’s not as impactful, it doesn’t make up for it.
Having a lot of viewers, having a lot of readers, having a lot of traffic doesn’t make up for it; having a lot of positive feedback doesn’t make up for it. There’s something about revenue that makes me feel more like a man, and lack of revenue that makes me feel less like a man. And the problem is, I need to find a way when I’m at my low point, to build up my confidence so I can get back to having the revenue that I feel makes me earn my confidence.
Anyway, what I’m trying to get at with you is: when you’re at that low point how do you get yourself back up?
Louis: It’s a number of things, potentially. I mean, from my point of view (and looking back sort of 10 years ago) I’m not one to dwell on the past. You’ve got to pick yourself up and obviously move forward.
Myself and my brother are creative people. We always believed in our own ideas and you know, we knew if we stuck at it that we would succeed. So you know, you’ve just got to pick yourself up.
Andrew: How do you know? I mean, you hadn’t at that point had a hit on your hands.
Andrew: You had a failure, which makes the possibility of future failure feel more real. What is it about you or what is it about the world that makes you feel like, yeah, you can build a successful company here?
Louis: As a person I’m incredibly passionate; I’m a positive person, you know? I think at the time, given the option of go and work for my dad (who is a great guy and has supported us a hell of a lot through the years), me and my brother didn’t want to take that path. The sun always rises the following day, and you have good days and bad days at work, and we just took that as a bad day, and you adjust yourself down and move forwards.
I think the most important thing really is to believe in a product (or your product), and believe in what you do and actually enjoy coming to work and delivering, really. Looking back, we didn’t want to work at my dad’s place.
Andrew: I see.
Louis: And one of the reasons for that is my dad’s quite a rare individual. You know, he’s successful in his own right and he does have his own car dealership over here in the U.K. It’s quite a large car supermarket. But my two younger brothers, Charles and Henry, went to work with my dad, and if all four of went the pie’s not big enough. And that was again another reason why we wanted to do our own thing. We wanted to earn money at the end of the day, so that’s why we’re here.
Andrew: All right. So then fast-forwarding a little bit. You were driving and you got a phone call from your brother. Tell the audience a little bit about that.
Louis: Yeah, this is sort of fast-forward 10 years, really. We’d had another relatively successful car finance business whereby we provide cars and financed people in the U.K. We had a horrendous time in 2008 when the credit crunch hit and we decided to relaunch Netcars and get the project back up and off the ground. But I won’t dive into too much detail just yet; I’m sure we’ll cover that further down on the interview.
But yeah, a successful sort of highlight in my career so far is we had a meeting with David Crossland who’s our current investor, and his right-hand man Richard Joynt. We’d had a good meeting and we discussed the new Netcars.com business plan and the potential that we believed it had as a business. When brother actually got a phone call from Richard saying, you know, they would like to take it further and staff the investment process, after having such a bad couple of years that was such a huge moment for me personally.
It’s like our hard work is actually paying off when someone else believes in what we want to do and what we want to achieve. So that was a huge moment for me, and it fills me with pride talking about it today. It’s one of those moments that I’ll always remember because we’d had a couple of bad years [??], you know, and that was one of those moments where you just give it one of those.
Andrew: One of those is your making that (inaudible) yes I did it. I want to know how you went from there to here. How you went from being a guy, like me, ran a failed company, and ended up finding a way to turn it around. Like me and many people in the audience you had that big failure. So let’s go back and time and see how you got here. Where did the original idea come from?
Louis: My brother. I can’t take a great deal of credit. I was still in school, and I was only 16. My brother was working at my dad’s car garage (inaudible) mention that. He worked there for 6 months, and he was selling cars for my dad. At the time, going back to the late 90s here; the early 2000s, and internet companies were raising tens of millions of dollars.
There was one story that stuck out for my brother. It was Boo.com, a fashion website. They burned through about $135 million of venture capital funding, and they went obviously bust in May 2000. It didn’t really get off the ground. Anyway, that was the story that stuck out for my brother. The internet companies were raising fortunes. The internet is the way forward. That’s where we want to be.
So my brother came up with the idea, obviously taking my dad’s business which is used cars, and obviously transferring that on to the web. It was my brother’s idea.
Andrew: You guys saw Boo.com take clothing retailing online. You saw Amazon.com take books online, and so on. You’re right. Boo is on of the biggest stories of that period. These guys brought in, as you said, over $100 million in funding. I think that was the number, and they failed. They relaunched, and they failed over and over again. I remember those times because …
Louie Ricks: Yeah, but they were exciting times. You know.
Andrew: Not for me. I was a piece of garbage at that time. I really was. I’d go to conferences, and at the time I had an audited financial statement that showed I did over $30 million in revenue. Because no one would believe it unless I had an audited statement from one of the top firms. So I paid extra for it.
I’d go to conferences, and people would ask me about my business. I would tell them what it was, [sic] Brad for Read Online Greeting Cards, and they’d say, “How much money did you raise?” I go, “Nothing.”, and immediately lights went off. Their eyes shut down. Just like earlier I could see when you were distressed by looking in your eyes. I could see as soon as I said, “No funding.”, that it was like, “How do I get out of this conversation, and go somewhere else?” Like I was a piece of garbage.
If they cared at all about the size of the business, I’d want to talk about revenue. They’d want to talk about well, “How many people do you have in the company?”, as is number of people is an indication of success.
Andrew: Just complete mental patients, and to this day … I’m going off into my little rant, and I’ll go forward in a moment. To this day if I started my interview by asking, “How much money did you raise?”, I would have much more main stream acceptance in the tech space. The fact that I start all my interviews, many of them anyway, with “What size revenue are you earning?” I’m belittling the whole industry. It’s like talking about money is beneath us except for in the since of how much revenue did you make.
Andrew: So anyway, and excuse me, talking about money is beneath us except in the area of how much money did you raise. All right I got to pull it back here. Speaking of how much money did you raise, you said you raised money and I didn’t ask about that detail.
Louis: Yeah, it was a seven figure sum of money. I can’t disclose the exact amount, but our investors so far have been superb. We’re all fully behind the project, so it’s exciting times for us, and exciting times for everyone involved in the company.
(inaudible) it’s just great to see even over here in the UK times are still very, very tough.
Louis: There’s still people without jobs. The automotive market isn’t fantastic, and dealers are pulling back their advertising budget. So we’ve got a doubly difficult job. But we’re doing OK. We’re doing well, we’re doing well.
Andrew: You are doing well. That’s why I have you on here. I want to find out how you are doing so well. How you recovered, and then how you built up this business.
All right, so then there was another mile stone. You met a manager a- … why don’t you tell that story of how you met a manager at PC World.
Louis: Yeah, it was actually my brother when he was launching Netcars 2000.
Louis: My brother had the idea. My dad thought it was a good idea at the time, and obviously decided to put a little bit of money into the business. My brother was literally on his own. He needs a PC. So obviously to start the business. He went to PC World, and he got talking to one of the managers over at PC World. He started talking about the project, and how sort of excited he was. Obviously he needed a computer.
My brother and the manager at PC World obviously struck a chord. I don’t think he was particularly happy in his job, and before we knew it the manager, it was a chap called Guy, he was round my mom and dad’s house putting a business plan together for the company with my brother. After a month he quit his job at PC World and he was on board for Netcars 2000 and it was 11 years ago. Yeah, a bit of an interesting story. That sort of comes with it.
Andrew: What’s PC World?
Louis: Oh, a huge retail store so selling computers and TVs. Just a big retail outlet.
Andrew: OK. And his name was Guy, you said?
Louis: Yeah, Guy Redmon [SP] , I think it was or Guy . . .
Andrew: What did Guy do at the business at Netcars 2000, beyond helping your brother put together the business plan?
Louis: He was general manager. Obviously, it was Guy and my brother that set the business up . . .
Louis: . . . with obviously [inaudible].
Andrew: So, the business didn’t even start, and the first person your brother brought on was the general manager, not a developer, not a salesman, not a designer.
Louis: Yeah. Well, funny enough Guy actually knew a few developers, and that’s how the snowball got there.
Andrew: I see.
Louis: Guy came on not as the general manager. His role evolved into becoming a general manager, but he knew developers, and that’s the reason why he got involved. Yeah, he was a very good guy, a very good chap. He was working with us for nearly two years before the business actually failed, and we still keep in touch with him today.
Andrew: OK. All right. So, your brother and the whole family knows about cars. Guy knows about developers and actually knows computers. You get together, start building this business plan, start launching. You were still in school, and what do you do when you watch this train start to leave the station?
Louis: We were still living at home at the time. I remember talking to my friends. I was quite passionate about it and how I was going to help my brother. Even at 16 I didn’t want to go to college or university. I had a keen interest in business studies at school, and I just wanted to get involved in the Internet and the World Wide Web as it was back then and is today. But it was very exciting times, and I knew I wanted to get involved.
Andrew: OK. And so, do you leave school to go do this?
Louis: After my GCSE, so after my exams at 16 I left school to go and help my brother. Yes.
Andrew: OK. I don’t know what the British system is like, but at 16 we have no graduation in the U.S. Are you then supposed to go on to university after that?
Louis: No. After GCSEs you do your A levels, and then you go to university.
Louis: It’s not mandatory that you have to do you’re A levels so I just decided to leave school at the time and jump on board.
Andrew: Do you ever regret it?
Louis: No, not at all.
Andrew: Why not?
Louis: Because you can’t learn in a classroom what you can learn in the real open world, the big wide world, so to speak. I mean, imagine the stuff what I’ve learned over the last 11 years, our commercial would be into 30 years of education. So I don’t regret it one bit, Andrew. No.
Andrew: All right. So, even though you didn’t want to go and work for your dad, you told us that you went to your dad asking for a loan.
Andrew: How was that? Was it hard to ask your father for money?
Louis: Well, actually, to be honest with you, it was my brother at the time because I was still at school.
Andrew: I should be interviewing your brother. Where’s your brother now? Was that who you were waving to earlier?
Andrew: No. I want to have you on here.
Louis: I remember the process. Like I said, we were living at home, at mom and dad’s house at the time. My dad’s one of those people if you put a business plan in front of him, he wouldn’t even open it. He wouldn’t even read the first page. He’s an ideas man. Anyone submit a good idea, he’ll just do it. It’s not like you have to go through a whole process. This is the business plan. This is what we’re doing. X, Y.
He’s very good like that. He’ll just make an instant decision, and he’ll go with it. And so, it wasn’t a massive deal at the time, at the moment, Andrew. It wasn’t much of a deal. We were very lucky, don’t get me wrong. It’s great to have access to a father review who can just help me set up the business. We were in that position so we took advantage of it.
Andrew: How much money did he give you or lend you?
Louis: Initially, it was right about 50,000¬£.
Louis: Yes, but over the course of the two years. We sort of burned or lost a quarter of a million pounds.
Andrew: A quarter of a million pounds.
Andrew: This is before you had to close it down and relaunch it in its new incarnation.
Louis: Yes. But, as individuals, myself and my brother, obviously we went on to the car finance business, and we did pay my dad back a lot of that quarter of a million pounds over the next six years.
Andrew: Did you grow up in a family where your father talked to you about business where you told stories of what happened at work and how he closed a sale or was it just not discussed around the house?
Louis: Good question. We’re a very close family. There’s Austin, mom and dad, then there’s four. Reggie’s the eldest and there’s me, Charles and Henri who are my two younger brothers, and my younger sister, Henrietta. We’re all very close. Reggie’s 29 now and the youngest, my little sister Henrietta, she’s 19, so we’re all quite close. My dad is a larger than life character. He used to come home jumping up and down about how he’d done ten deals and he would explain to us all how he’d done each deal. As kids, me and my brother would go to my dad’s garage. We’ve got the Mosey trade work ethic in our blood, really.
In the Mosey trade over in the UK you work long hours and that’s just the way it is. But, as kids on our holidays, we always used to go to my dad’s work. We helped him out cleaning cars, selling cars, just going out on test drives and chipping in. We learned a lot, and we still do today, from my dad.
Andrew: Do you remember one of the deals he told you about?
Louis: Yes. Quite, but one sticks out.
Andrew: Tell me.
Louis: I don’t know how this will go down with all your viewers because he’s such a big character. An Asian chap came into the show room to buy a car and he didn’t have any money on him as a deposit. At the time my dad said, “Come on. If you want this car, you need to leave a deposit.”
The guy really wanted the car. It was a sheik, so, not Asian but Indian, and he had a turban on his head. So, my dad asked him to leave his turban as a deposit, and the guy thought it was fantastic. He started laughing. He took his turban off and left it on the desk. He went home, got his deposit, came back and bought the car. That just is hilarious.
Andrew: That is awesome!
Louis: My dad asked someone to take their turban off for a deposit, but that’s just the way he is. From my point of view, I don’t think that’s offensive at all. It’s just my dad’s humor.
Andrew: I don’t think that’s offensive at all. Maybe a sheik in the audience will tell us differently, but I don’t think that’s offensive at all. I think it shows that he found a way to make it work. It seems like he was telling you without specifically saying, “Kid, listen to me, you have to always find a way to make it work” he gave you a story that put that thought in your head.
Louis: Oh yeah. That will go down in history as one of the most funny stories I’ve ever told. I couldn’t believe it. My younger brothers obviously still talk about it today. The sheik didn’t take offense. He was laughing and that’s possibly what secured the deal. Just a bit of humor. So, that’s just the way it is. It’s a very funny story.
Andrew: One of my friends in high school was a Sheik and for rock concerts he would always take the turban off and let the hair go all flowy and have the longest hair there at the show. Were you able to use that at any point? Was there any point in your business where you said, “You know what? I’m going to find a way to make it work. I’m going to find the equivalent of asking my client to leave a turban behind. I’m going to come up with that clever solution. I see a smile.” Do you remember one?
Louis: I think coming up with the business model that we have for Net Cars today, we had to come up with something unique to stand out in the automotive market. We did actually start off with one idea that we might cover shortly, and we had to change it. The current business model that Netcars has today is unique, especially in the automotive market. I know it’s not unique in global terms, but it is unique to the automotive market here in the U.K.
Andrew: What do you mean? Help my audience understand what I’ve hinted at when I read my intro, which is that you’re the founder of Netcars, a used cars classified website with a unique pay-per-click billing model. It’s that last section that I’m sure people are waiting to get an answer for.
Andrew: OK. Then we can continue with the narrative. But yeah, explain that to me.
Louis: Just so everyone can understand, over in the U.K. there’s one huge main player in the automotive market who dominates it currently. They’re just taking the old [inaudible] print model and paying upfront to advertise your products online, and that’s the way all of our competition do it. So, let’s say you’re a car dealer now, Andrew, and you’ve got 15 cars. To advertise your cars on one of our competitor’s websites, you have to pay upfront to get those cars listed. Now with Netcars, the beauty is that there’s no upfront fees, there’s no contracts and you can upload all of your cars on our website for free and you only pay when we deliver you a highly targeted visits to your website.
So, it’s from a car dealers point of view, Andrew, there’s no investment decision to make, it’s a bit of a no-brainer. Which is why obviously, we’ve had really good uptake and that’s how the model works. That’s the difference between us and the competition currently.
Andrew: An idea came, or started in 2002, right?
Louis: Well, no. It was sort of an accumulation of sort of a few years, really, to be honest Andrew. Because in 2002 the old Netcars business failed and we, at the time, were charging dealers upfront to advertise their cars on our website, and the business just really didn’t take off, obviously, we’ve covered that.
Then we put Netcars, as it was then, on the back burner. We just shelved the project and the idea for a number of years. We started generating car finance applications via pay-click, it was very uncompetitive at the time, so we gained hundreds of car finance applications through our website, today, which is Car Finance Business. It was sort of like in 2007 when the idea came about, we need to get Netcars going again, you know. We still believe in the business, we still believed in the idea, even though it failed the first time around.
Myself and my brother came up with the idea of pay per inquiry business model, and he got that from a very successful company from the UK called Moneysoupmarket.com. They’re a huge lead generator for insurance and mortgages and credit cards, they’re on TV every other minute. They just literally an aggregator, you know.
So we thought we could do the same in the automotive market. So we kind of had the idea in 2007, but the car finance business was doing well, and it wasn’t until 2008 when the finance business really took a big hit that we thought right, this is the time, we need to get the Netcars project back up and running again. We need to get on the business trail, put our investment plan together and start to try to raise the funding that we required.
Andrew: Tell me more about the car finance business that you just mentioned. When did you get into that and what happened with the business?
Louis: Well, it was in 2002. Obviously the Netcars 2000 business had failed, and we’d gone through the point [inaudible], you know we don’t want to come and work at his business, and we had a new website designed. We started advertising to people at finance, or who wanted finance online, and we’re talking like nine years ago now. The competition was very low, the CPCs were very low and we just started generating, like I said, hundreds of car finance applications on a daily basis, and we just thought oh, we’re onto a winner.
Andrew: So you’re saying you were buying ads cheaply, sending that traffic to a car finance application process that you had online. Then what would you do with the applications? Would you service them yourself, or your dad?
Louis: No, and this is a good point. Initially we just used to sell the data. We would pass it on to that third party company, but they were converting very highly and their commissions were great and we just thought we could do a better job at this ourselves. And we can transact the business and process all the data and do it ourselves, basically. So in mid 2002 [inaudible], we became a finance broker purely online.
So we used to get people applying for car finance all over the U.K., if we could get them approved we would say go and find your car from any dealer, we would then get the paperwork signed up, the customer would send all of the documentation through to us in the office, we would process it all, get it paid out, we would just get a commission, and move on to the next deal. We just grew over from mid-2002 onwards all the way up to sort of, even today the business is still going but, up to 2007 and early 2008 we were rocking on. We were doing very, very well as a business.
Then obviously all the lenders we used to deal with, they [??]. Told us, they’re not leading any more money. So all of a sudden our approval rate, Andrew, went down from 50%. Let’s say from every 100 people that applied we could help 50 people. That approval rate went down to 8, 9% at one point. We moved into a new office in January 2008. It was a horrific time, one of our biggest lenders, British Credit Trust rang us up in March of 2008 and says we’re not lending any more money.
For us as a business we’re round about 40 staff at the time, Andrew, we had to let 20 people go there and then. Then a couple of months later, another finance company that we did huge amounts of business with, they were called Welcome Car Finance, our account manager rang us up, we’re not lending anymore money. Oh my god, our worlds caved in around us. We went from the crest of the wave to the trough, so to speak.
Andrew: Before we go into that. I want to first find out about the crest of the wave. At your height, how much revenue were you bringing in? You know I love revenue talk. How much profit were you bringing in, at that height?
Louis: In our best year in 2007, we turned over near on to 2 million pounds. Our net profit was round about 400,000 pounds in 2007. WE had a storming year in 2007. We were riding high, we thought this is never going to end. We moved into our new premises, which we purchased at the time. Especially as young lads really, I’m 26 now, no 27 sorry [??]. As young men you don’t see it coming, you don’t expect it.
Andrew: How much were you personally taking home at that period?
Louis: Christ. We always re-invested. I know this might sound a bit funny, but we were taking maybe 60, 70k. You know not massive amounts of money.
Andrew: 60, 70 a year? Pounds?
Louis: Yeah 60, 70,000 pounds. A year.
Andrew: Right. Let me ask you this: even if you’re not taking that much out, you’re business is going well. You, as you were saying, feel like it’s never going to end because it’s built on a real foundation. You’ve got real people. You’ve got a real business model and so on. At that point, how does life change? What’s one of the nice things you’re able to do for yourself because there’s some revenue coming in?
Louis: Yeah. One of those things, obviously you can buy your own house, have a nice car. But it’s funny how as you move on through life those materialistic things, they lose value. I’ve got two young girls now and we’re getting married in January. You can’t put a price on that type of stuff. But when you’re a 21 year old, 22 year old lad earning decent money, it’s all about having a flashy car really.
Andrew: What was the flashy car?
Louis: I had the 911 Porsche Carrera 4S, which was a beautiful car and I had to get rid of that when obviously, we lost the finance we were working with.
Andrew: How did that go over when you were going out? When you were taking a date and picking her up in this Porsche 911?
Louis: You’d have to ask a couple of my dates, Andrew. My brother is more flashy than I. Even though I had the nice car, my brother is quite a flashy guy.
Andrew: What’s a flashy thing that he did?
Louis: Oh Christ. Well, he used to have a Porsche, but he would be pulling it up outside the new bar so everyone could see. Even though I had a Porsche as well, I’m quite understated. I’m quite a private guy. Even though I’m talking quite openly to you today, I like to keep my business my business. That’s the way I like to keep it. It’s funny how today, my outlook has changed massively on materialistic things like big cars and obviously I would love to have more money and hence to reason a new business. That’s what [??] worked for is to earn money, but your outlook changes on life, you know.
Andrew: I know what you mean.
Louis: I was going to say that I sound like a therapist here, but I think it’s just one of those things. You learn the value of money, you know. We were taking home sort of $60-$70 K, but we knew we wanted to move in a new premises and that’s the reason we kept the money in the business. Because we wanted to buy our own business premise so we weren’t taking huge amounts of money out of the business.
Andrew: I’m sorry to interrupt, but I’ve got to ask a follow up question on that car. So here’s the thing, you’re feeling like the good times are never going to end, because you feel entitled to it. One of the reasons I feel like why we accomplish things in life is because we feel we’re entitled to accomplish them, we have a sense of determination, a sense of confidence in ourselves. And then we can do it, and it disappears. The car disappears, the revenue disappears and so on, you have to now, face your dates in a cheaper car or no car, you have to face yourself. Is there buzzing in your head, or is there buzzing in your head of what your friends thinking of you at the time, was that going on?
Louis: If I’m honest, no.
Louis: No. It’s how do we turn the business around. I mean that was our number one priority. I had a young girl at the time, I’ve got two now but a young girl back in 2008, and number one priority is how do we keep the business growing, Andrew. I think really, yes, it was not quite upsetting but you don’t really want to let your prize possessions go, I had to sell the car and all that type of stuff. Me and my brother share a car now, because we live quite close to each other. So even today, we don’t have plush cars, we share, it’s actually my brother’s car and my partner has an X5, and we share it when we can. It wasn’t at the forefront of my mind, Andrew, it really wasn’t.
Andrew: So how do you get yourself to that recovery mode? I talked to, in private, to a well known venture capitalist about what happened during the .com bubble burst, in his life, like how he recovered from it. He said, “You know, Andrew, self-help book helped me get through it”, and he said I had this big thick self-help book, and he took it and he did every exercise in the book and just worked on himself from a point of desperation. He had to find a solution and he was feeling so low that he needed every bit of outside help he could get in order to pick himself back up. I don’t want to brush over the fact that you went through two big setbacks that other people might now have recovered from, and you recovered. I want to know, what did you do. You don’t just wake up the next day and say, alright I’m going to find a solution. Or do you? What do you do, how do you get back on your feet?
Louis: You’ve got to think quick. We changed our business model in the finance company. The amount of business models that we have been through is quite frightening but you’ve got to evolve, you’ve got to react quick.
Andrew: How do you play the mental game? How do you get past the inner doubts, how do you live with the fact that you just saw your prize possession, on of them, get sold? How you have to let go of people, how you have to bow your head a little bit and say you know I need a solution, how do you get yourself back on track? It doesn’t just happen like that, does it?
Louis: Well yeah, you feel a bit down for a couple of days. I don’t know whether it’s just me, but me and my brother, like I’ve said at the start, we’re incredibly passionate people. We fully believed in the business at the time, we just had to make tweaks to the model, and the way we did that was to change from being a broker, as a broker we just provided finance. So because the approval rate dropped, and because finance commissions dropped, there wasn’t as many finance companies in the market, we said look, it’s not as much money anymore in finance commission, so why don’t we start selling cars to our customers.
That was just the next step to take, because my dad is in the motor industry. We just thought well, look we’re getting people applying for finance, we’re getting them approved, nowhere near as many, so why don’t we make more revenue and more profit by actually selling the customer the car as well. So now we make most of our money by selling cars and not in the finance, and that’s the way that business has evolved.
Andrew: I see. So was this still the finance business that evolved into also selling cars and financing them?
Andrew: It was. So, that’s where you went with the business.
Louis: Yeah. That’s how we evolved the car finance 24/7 business. Yes.
Andrew: OK. Where’s the cars come from that you’re selling to people?
Louis: We get them from my dad or we’ve got partnerships with local traders and local dealers that we work very closely with, and we’ve built up relationships over the last couple of years. What we’ll do, a customer applies for car finance, we’ll get them accepted with one of our lenders, and our sales agent will get on the phone to the customer and say, “Great. You’ve just been approved for finance. What car do you want?”
We’ll take all the information down, and we’ll go back to the customer with a couple of options and obviously, with all the pictures and specifications, “Which one do you want?” They’ll say, “That one”. We’ll take a deposit on it, and we’ll then send the finance paperwork out, get it all lined up and all sealed, and then the customer comes to collect their new car from our office in Manchester.
We’ll bring the car to order; we don’t stock cars. We will only buy a car once the finance is approved, the deposit taken, the proofs are signed off, it’s a done deal. We sort of buy cars to order for our finance customers.
Andrew: I see. Who does the financing? Do you do it yourselves?
Louis: We do the finance with a number of lenders. (?) Lenders, Carlyle Finance, Moneyway and Advantage Finance, First Response.
Andrew: What’s happening now is you’re no longer getting a 50% approval rate. You’re no longer getting 50% of your applications approved. It’s smaller. Apparently, it’s higher than the 9% that it dipped to at its low, but . . .
Louis: It’s around 22%.
Andrew: So, it’s 22%, a big drop but you’re making up for it by selling cars and getting some margin on the car.
Louis: Yeah. Exactly. We make good margins on the car.
Andrew: OK. All right.
Louis: That’s got business pretty much covered modestly, and that’s still going today. It’s a great little business, but it’s kind of like a pension fund, if you want to call it that. We’ve had that business for well over nine years now. There’s no way in a million years we were letting go of that. When all the problems happened, we were determined to keep that business going.
Andrew: All right. But you didn’t see enough of an upside in that business to make it your full-time focus. Why not?
Louis: Netcars.com. We’d always had the ambition and drive and hunger to get this business up and off the ground, and some people think, “You’re crazy. It failed eight or nine years ago. Why do you want to revisit it? And we just believed in it. It’s sort of a testament to where we are now. If you believe in something and you go after it and you work hard, you will get that.
Netcars has always been a bit dull for myself and my brother. We can turn this thing into a monster.
Andrew: I want to understand what analysis you did on the past failure. You look back and you say, “Something didn’t go right the first time we tried Netcars, back when it was Netcars 2000.” What was that?
Louis: I think the big thing was timing, Andrew. The Internet was nowhere as near evolved as what it is today. One thing that we’ve got to battle against over here in the UK is the automotive market is a little bit of a dinosaur. It takes time to react to change, and it’s just the timing that the year 2000 was all wrong for the business model.
Andrew: What do you mean? What specifically was wrong about it? There were people online at the time, but was it? Was it the car business?
Louis: Yeah. It was the uptake, Andrew. Dealers did not believe in the Internet.
Andrew: I see. So, they weren’t racing to advertise on a new classified site. They were happy with the paper classifieds that they had.
Louis: Oh, they were happy with the local newspaper and a bit of radio. That was it. The Internet was a fad. They were assuming it would be here today and gone tomorrow, but obviously that’s not the case as we know. And we knew that, but that’s why the old business did not take off.
Andrew: All right. But you did have this vision for it being a huge business. Can you describe that vision that set you off to build Netcars.com again? What was that vision? What did you say to yourself was going to happen if everything worked out?
Louis: I mean, we’ve got a five year plan. We want to grow this business as big as we possibly can. The great thing we have over our competitors is we can move quick. We’re a nimble company, and we don’t have all the red tape that big corp companies have. We just want to grow this into a household into a household brand. That’s the idea, you know, that is the aim; to have Netcars.com as a household brand within the next 12 months.
Andrew: All right, and here’s what you told Jeremy in the pre-interview, you said, “We saw Money Super Market, and what they’ve done. How they had a seamless affiliate model selling data. We were going to bring it to the automotive arena on a pay per inquiry model. That was where you were going. That was the vision.
Louis: Yeah that was the vision. We saw that it was working in the sector. We thought we could migrate that into the automotive market. And the idea was, we would allow car dealers to advertise all their cars for free, and charge them on a pay per inquiry basis.
Now pay per inquiry was a phone call and email inquiry. So we were going to charge a set fee per email and phone inquiry we generated for a particular car dealer. And that was the model that raised the investment on, and that’s what we launched with. We quickly realized that it didn’t work.
Andrew: Why not?
Louis: Dealers, car dealers, in the UK, you know they’re fantastic, you know, they’re great people. But they’re (inaudible), and one of the reasons, Andrew, was particularly the phone calls. We would bill a car dealer, let’s say, for 100 inquires.
We’d say, “Right. XY(inaudible) Motors, here’s your bill for 100 phone calls and 50 emails.” They wouldn’t particularly have a problem paying for the emails, but when it came to the phone calls they would scrutinize the itemized bill.
They would say, “I’m not paying for that one, that one, or that one because it’s under a minute. I’ve listened to all the phone calls, and 10 out of the 100 servicing inquires. I’m only paying for 70.”
Now if you replicate that out across 1000 dealers, and we bill fortnightly, it’s just one huge (inaudible) accountancy nightmare. So, you know, we have a phone call one day from a large dealer group, and obviously highlighted those issues that I’ve just talked about now.
And we thought get back to the drawing board. We’ve got to change quick because, you know, we’re not going to survive if we continue to use the pay per inquiry business model. So, you know, that’s the great thing about being an internet startup business. You can move quick, and you can change (inaudible). So that’s why it didn’t work.
In our heads it was a great idea. You know, it made sense. It made sense to everybody and our investors. But sometimes you just try things, and for some reasons they don’t work. Rather than sticking your head in the ground you just got to pick yourself up, and come up with something that is going to work.
Andrew: And so the model that did work. The model that you’re on now is a user comes to your site, does a search for a car, comes across the car that he’s looking to buy, he then clicks on it and goes to the dealer’s website. That’s where he gets to drill down, and get more details. That’s where he gets to figure out where the dealer is, and go see it.
Andrew: And that’s when you make your money on the pay per click model.
Louis: Yeah pay per click. That’s where we make our money. And the great thing is car dealer’s; they understand it. It’s been around for years with obviously Google. And you can’t argue with facts, hard facts. We have delivered a visitor to your website.
Andrew: Now if the visitor bounces right back out it’s your fault because you didn’t create a website that’s more engaging. You didn’t explain what the product is.
Louis: Exactly, but we’re all about delivering target to traffic to the car dealer’s website. Where the visitor can view more information, view contact details, all the stats and facts, and standard equipment. Because there’s a lot of information that can be displayed on the dealer’s website that you can’t have on our website.
So that’s one of the advantages that we had over our competition because dealers have all sorts of different offers at different times of the year. So we give the visitor more choice, if that makes sense. If you think about it the visitor wants to click on a car from our website to view more information that reached the end of that journey. That is the end of the destination.
So there’s no where else to go. What we did find is that people were coming on to our website, this is with the old pay per inquiry website that we had, and they were leaving our website to go and have a look at the car on the dealer’s website.
And we could see that in the upstream traffic on Hit Wise Data. So it was kind of like we were hemorrhaging traffic and not charging for it. So it just seemed the only sensible way or sensible option to go. Luckily for us it’s proving to be successful.
Andrew: All right, so when you had this idea to bring back Netcars, one of the first things you did was to hire a finance director. And then the finance director joined the team, and helped put a business plan together and helped you guys to get money. Why didn’t you and your brother Reg say, “We can do this on our own. We’ll go and pitch investors. We’ll put together the business plan.” Why do you need a finance director to do that?
Louis: We have no experience in doing a business plan. We’ve always been quite independent, and we didn’t have that skill. It’s funny how Lawrence Gilbert, who is our current finance director, it’s funny how he actually got involved in the company.
When the crisis happened with our car finance business, and we moved banks, we were explaining to our new bank manager at the time the great idea with Netcars.com. He said he new a very experience chap who was a close personal friend. He said, “You need to meet this guy.”
So a couple of weeks later we met Lawrence. We told him about all the ideas and the plans for Netcars, and he instantly just said, “I get it. I love it. I want to get involved.” And initially we took him on as a consultant to help us with the business plan.
Lawrence who is an accountant by trade, but he has a lot of experience in the automotive sector. We thought he would add a dimension to the team that was missing. I look after all the marketing at Netcars. Reggie’s the day to day sale. He looks after all the sales. We got our IT director, Jonathan, who looks after the debiting. Lawrence, who is our finance director, looks after obviously the funding side.
And it just made up a complete team. We were missing that dimension. So as I said we brought Lawrence on as a consultant. After a bit of time it was taking a long time to do the business plan. You know, we wanted a business plan that was going to impress, and it did take a long time.
To save the car finance business a little bit of money because the car finance business was financing Lawrence’s time and work. We decided to give him a small part of the business, and get him involved. Which was a great thing for us to do because …
Andrew: Is that because of where you’re living. That in the U.S., if all you had was a Power Point deck, that you could go out to investors and say, “Look my brother and I are experienced in this base. We’ve been building two internet companies over the past 10 years. My farther and whole family is in the car space so we know this backwards and forwards. Here’s my Power Point slide. Hand us our money.”
In the U.S. it feels like it would be like that. Is it that the UK is different and that’s why you needed Lawrence? And that’s why you needed to put the finance team together?
Louis: It wasn’t necessarily a finance team. It was just we needed an individual that could help us out on that side things because me and Reggie were lacking experience. To be completely honest, we’ve never pitched to investors before.
We didn’t know what the protocol process actually was. So we just knew from the off that we wanted to do it properly, and give ourselves the best opportunity of succeeding.
So that’s why we took our time, and obviously it has paid off. You know, we got the investment, and we’re here today. So rather than messing up the sort of first go, you only get one chance, you know. If you’re pitching to an investor you’ve only got one chance. They either like what they see or they don’t.
And at the time when we were trying to raise money the economy is on its ass, and we were very lucky to get the investment that we got today. So we thought we did well. Well certainly on that note anyway, so.
Andrew: How was it to get dealers to sign on?
Louis: Initially it was … I was going to say you get your early (________), Andrew. So you get your dealers that are willing to try new things, and then you get people who hate change. They just stay with the market leader, and that’s all they want to do.
Andrew: How do you get your dealer list?
Louis: Initially we offered free trials because we need to build product to sell cars. We needed to have cars on the website because the last thing we wanted was for people to come to the website, search for a car in our local area, and there’s no cars there. There’s no product, and they’ve had a bad experience, and they never come back.
And they had a bad experience, and they never come back. Initially, we launched the trial and sold cars, I believe, in the UK in November of 2011, so last year, this time last year. We launched the market with a free trial. So, two month free trial to any dealer and once they advertised on that car would get two months worth of advertising free, and that’s how we launched Netcars.com.
Andrew: Were you making phone calls to them, or were you sending out email, letters?
Louis: Yeah. At the time we were doing lots of advertising in all the trade magazines and trade events. We have a key accounts team of five people, so five people are out on the road all over the country. Their job is to look after all the larger dealer groups and (?). You get your larger clients and they need lots of attention.
Andrew: Because they’re spending so much money.
Louis: Yeah. Because they’re obviously the bigger clients spending more money. Obviously, they’re not more important. That’s completely the wrong thing to say, but they just need that little bit of extra care and attention. For all the smaller independent dealers across the country, there’s thousands, there’s over 10,000 dealers in the UK. We’ve got a tele sales team internally. We’ve got 12 people internally, and their job is to constantly cold call dealers in the UK. “Have you heard of Netcars? Would you like to come onboard?” Maybe, give them a little bit of an incentive or an offer to come on board.
Andrew: What’s the incentive and offer that works the best?
Louis: Well, the incentive that works best is if they sign up; we offer no contracts. A dealer doesn’t have to sign a contract; however, if they do sign up for a contract, we give them a better rate. We give them a cheap (?). So, it works nicely.
Andrew: I see. Then, that locks in a customer for you that you can count on.
Louis: It’s a thank you for our business, and it’s a better deal for the dealer. This December we’ve got a Christmas offer. For any new dealers that come on in December, they get the month of December for free. We’re always looking to do incentives to help our dealers out.
Andrew: When you launched, in order to get consumers . . . So that’s how you got the dealers. In order to get consumer attention, you launched with celebrity cars. Can you tell the audience about that?
Louis: Yeah. No problem. It was an idea that a PR company had had, and we thought that it was a fantastic idea. We didn’t have megabucks, and we didn’t want to spend megabucks on consumer advertising because at the time in March, I’m talking seven months ago now, we had around 40,000 cars on the website. To put it into perspective, the number one player in the automotive market in the UK, they had around about 350,000 cars, so they had a hell of a lot more cars on their website than what we did.
So, we didn’t want to go on national TV, newspapers and radio because we didn’t have enough cars on the website to satisfy demand. We knew we had to launch in some way to consumers, and the way we did that was with the celebrity car convoy in Trafalgar Square in London.
The idea we came up with was to have KITT from Knight Rider, the General Lee from the Dukes of Hazzard, the Ectomobile from Ghostbusters and (?) which was from Only Fools and Horses, which a big sit-com over here in the UK. We had another car. I can’t quite remember, but we had a big event in the middle of London, and we did a big convoy all around London. And we got quite a lot of press attention around that. It was quite – I wouldn’t say it was cheap, but it was a good way to make a bit of a splash, if that makes sense.
Andrew: What about a more sustainable way of getting customers, of getting consumers to come in?
Louis: Partnerships is a big thing for us. The great thing about our business model is we can white label our search on other people’s websites and give them a kickback.
Louis: That’s a fantastic revenue shared model, well, for us and them. It’s a great way for us to get traffic, and it’s a great way for the affiliate to earn money. It’s a great way for us to earn money because we know we charge to click a certain amount of pence, and we can give the affiliate 50%. It’s not always 50%. Sometimes, it might be 30 or 40%, depending on the deal, but that’s a great model for us.
Also, pay-per-click. I know it’s been around for such a long time, but it works. You can measure absolutely every click. We know it. We deliver (?) to our website. We know what the user does. We know whether they are certain keyword converts or not. We know what times of day convert. That’s a number of times a day. And so, it’s a great model because you can just monitor it on an hour by hour basis.
We actually manage our PPC in-house. If there is one advice I give to anyone watching the video is always try and manage whatever you can in house. I mean, not everything. I mean, you’ve got to go outside to get external expertise. But with something like PPC, especially if you’ve a big budget. From my experience, I would always prefer to have a PPC manager in house that’s experienced.
Andrew: What does more for you? Do you get more from buying PPC or from partnership deals?
Louis: At the moment, PPC.
Andrew: PPC sends you more consumers?
Louis: Yes it does, at the moment, yes.
Louis: We’re looking to, I mean we spend, we’ve got a big budget. I mean, we spend six figures a month on PPC. So you know, we’re spending a lot of money. But the partnership deals are great because you know every click that’s generated is profit, which is fantastic. But another area where we invest heavily is obviously optimization. We’re getting to a twenty percent month on month rise in organic traffic which is great to see. And we work quite closely with agency, a well known and respected in the UK. And we’re getting some good results. So we invest in all areas. We’ve even got a social media company to actually manage our Facebook and Twitter accounts to engage consumers. So, we’re all over the place really in terms of activity on the web.
Andrew: All right. And just last month. We’re now in November, 2011. Last month you and your brother, Reg, who we heard so much about in this interview, were sitting around having lunch. Can you tell us about that?
Louis: Yeah, I think what you’re referring to is the, we had a luncheon which just attracted over a thousands dealers onto our website. And it was certainly a milestone that you’re waiting for. And it’s a bit of, I will call it breathing space. You take a bit of a sigh of relief and then you move onto the next goal. I mean, we’re looking to try and get a hundred thousands cars on the website as quick as we possibly can.
We’re at seventy thousand cars today. And we’ve given ourselves a target by the end of January, so in two months, we’ll have a hundred thousand cars on the website. And we’ve got the biggest dealer group in the UK, Pendragon, back up 15,000 cars. And they’ve agreed to come on board. And we’ve just got some stock feeds up at the moment, so that’s great news for our business. And you know, that was just (?). We’re not out of the woods yet. We’ve got a hell of a long way to go.
Andrew: I’m always fascinated by how companies build up marketplaces because it’s a tough space. In a marketplace you have to convince two sides to come together at the same time. You have to convince, in your case, dealers, to come on the site and not just register but keep feeding in their cars and keep it up to date and pay you per click and manage their paper clicks. You have to convince them to do all that. And on the other side you have to convince consumers who have so many other websites to go to and so many other things to do and so many other brands that they’re aware of, to suddenly pay attention to you and come on to your website and engage in the website in the way that’s profitable for your dealers and for you. And you’ve been able to do it.
One of the things that I’m learning from having conversations like this about how to build a marketplace is the need for incentives on one hand, the need for partnerships on the other. You’re not the first person who’s told me that partnerships are a great way to bring in traffic. That there are other people who would like to have marketplaces on their websites who can’t do it. If you partner up with them you get to give them an instant marketplace. And of course paper click which we’re hearing a lot about, though it’s not so unique to your space.
Louis: Yeah, I mean, we are coming up with a couple of other ideas as well, Andrew. Because from the consumer’s point of view, you’ve made a good point, they do have a lot of other websites to go to. And one of the problems we suffer is actually getting consumers when they are actually going down to dealerships and to say, I’ve found my car on Netcars.com. Because we’re a new brand. And we’ve only launched and we’re not a household name yet. What it is, they go down to the dealer and they’ll just say, they’re a market leader.
And I’ll give you one example of that. We have a small car dealer who’s got twenty cars. He advertises his cars on Netcars. And he didn’t advertise his cars with the market leader. Now a customer came in and the dealer asked him, where did you find the car? Where did you see it located? And the customer said, oh the market leaders website. And he said, I don’t advertise my cars on the market leaders website, I only advertise with Netcars. And obviously he said that and the customer said, oh yeah, I went on Netcars, too. So what we’ve got to try and combat is, you know, trying to get Netcars in the forefront of customers’ minds. And the way we do that. We’ve got a promotion with Amazon. So, for every customer that locates a car through Netcars, and takes a voucher which they can print off SMS to the phone, and gives it to the car dealer. We will give them a free 20¬£ Amazon gift certificate.
Andrew: I see.
Louis: So, it gets the consumer using our website, and it actually gets the consumer telling car dealers that they found the car on Netcars.com.
Andrew: I see. I like that.
Andrew: That’s a clever idea.
Louis: Yeah. It works.
Andrew: I like, by the way, too, how you’re not using the market leader’s name. I have no idea who the market leader in the UK is, and we’ll leave it out. I like that because if you were to mention their name, suddenly that’s the name that would stick in people’s minds.
There’s a famous case here in the U.S. of the Energizer Bunny. For a long time Energizer would buy these ads with the bunny hitting a drum and going on forever because the Energizer . . .
Louis: Is it Duracell?
Andrew: Sorry? Yeah. And people kept saying, “The Duracell Bunny is so cute” because the Duracell brand was bigger than Energizer.
Andrew: In time, Energizer said, “Well, we better rebrand this thing, call it the Energizer Bunny. Put the big Energizer on there. Make sure the people understand this isn’t the Duracell Bunny. It’s us. All right.
And Digital Talent Agents is the company that introduced me to you. I interviewed their founder, and they said, “Hey, Andrew, do you want to get to know – I was about to call you Louis like I did in the conversation before.
Louis: Louie, don’t worry.
Andrew: If you want to get to know Louie, he’s a car expert. I said, “What do I care about cars?” Maybe he’ll work with me to find a way to fit you in, but before we got to the business angle, I understood from them that you’re branding yourself as a car expert. Is that right? Is that part of your model? Tell me about that and how successful it’s been.
Louis: Yeah. Well, it’s what I know and what I love, anything that does have to do with cars. I do know a lot about cars. On the other side of things, because of our two businesses and they’ve both been based on the Internet for the last 11 years, I’ve learned a hell of a lot in the online marketing side of things. I’m a gotten a bit passionate for search engine optimization . . .
Andrew: Have you been getting a lot of media hits for that as the car expert?
Louis: Not massively, to be honest. It’s the profile that I’m trying to build, and potentially it’s a way of trying to build it into Netcars.com website. If anyone’s got any questions, that they want to buy a certain make and model of car that they don’t know the answer, they can ask the expert which potentially could be me.
Andrew: I see.
Louis: We’re looking to try and build an expert. It could be a celebrity. We don’t know. We’re talking with the PR company. It could be one of the experts from the Netcars management team, or it could be actually a celebrity in the UK that’s got attachments to the automotive industry. So, we’re working with that idea.
But, yeah, I know a lot about cars. It’s the profile that I’m trying to build.
Andrew: I’ve got to tell you. If you ask me, I’d say you should be the expert that people get to know.
Andrew: It’s your company. For some reason, people can get to connect more with the owner. It feels a little more personal.
Louis: That’s a good point. It’s good to get your feedback on that.
Andrew: All right. Well, whichever way you go, I’m sure I’ll be happy for you, and I’ll have you back on here to tell me about how effective it was. I’m going to read an email here from a viewer, and then I’m going to ask you one last piece of advice. I want a specific kind of advice, if you don’t mind.
But let me read this email that I got from – actually, which email do I read? Yeah. Let’s read Ian, Ian Dooley’s email. He said, “Hey, I’ve just started listening to the premium content after buying it like, two months ago. By the way, I’ve discovered this. We have a premium membership on this site where people can pay one monthly fee and have access to all the courses we have on the site.
What I notice is people will buy it, and then they won’t use it right away. They’ll wait for a week or two, and then maybe in his case, he’s waited two months here. Sorry?
Louis: Is he a good customer there?
Andrew: [laughs] Well, to me it costs me pennies to serve up the bandwidth for each new course. The more people use it, the more it becomes a part of their life, the better it is for me, but I’ve noticed actually that I do that myself, too. When I have a problem, I’ll often sign up for a solution, like I needed to do some AB testing on the website. So, when I signed up for an AB testing software, then I took a pause and then I went and did other things.
I think that taking that step felt like a lot of work for some reason, and then the next step of actually implementing it felt like way more work, so I said, “Let’s just rest on the satisfaction of just having taken one step” which is ridiculous, but I do it and it seems like he does it to.
Then, he goes, “I finally started listening after buying it like, two months ago.” He has a reason why he didn’t go. I didn’t realize you had audio of each course as well” which we do. I know a lot of people prefer to just listen to the audio of the courses and don’t need to see every bit of it, and he says, “I don’t have time to take a course but I’m just going to keep listening to the courses like the interviews and they are fantastic.” Here’s what he’s saying, “I’ve listened to Juan Martitegui about blueprint, that one is terrific. He shows people how to blueprint their businesses.”
I’m going to pull this in because I realize I’m reading this email for too long. “…Derek Halpern’s “Lead Generation” course, he’s going to rave on and on in this email about all the courses that we have here. I’m realizing that it’s going to be way too long if I read his full email. Instead I’ll say this, if you guys aren’t aware that there’s audio of every course that you’re paying for, it’s in there. Go to mixergy.com/premium, you’ll see the mp3 version of every course.
You can find out about Patrick McKenzie’s “Hacking Content” course, you can take Derek Halpern’s, “Getting Leads” course, you can take Dane Maxwell’s course on how to write great copy, it’s all in there for you, and if you’ve signed up and you haven’t started, go start one of the courses. All right, you know what I need to do, by the way? Louie, I need to script these out better.
What I’ve decided to do is read some of the emails that people sent me about these courses, and I feel that that tells the audience, look we’ve got hundreds of customers and they’re real people. I’m giving you their full name. This guy, his website is workingsoftware.com.au – real people. I feel like reading email helps the audience understand that real people are buying and it feels like there’s some momentum behind it, but I need to script out my little presentation of the premium membership so it doesn’t go for as long as it has been. It should be 15, maybe 30 seconds, and then move on. Don’t you agree? You can tell me I was going on too long with that little promo.
Louis: Yes, it’s one of those things. We’ve used a company called Conversion Rate Experts. There’s an office based in the states and they’ve got an office based over in the UK.
Louis: On audio, I’d agree, the shorter, the better. If it’s an email promotion or a sales email, apparently, so the conversion rate experts say, the longer and more informative the read and the information, the higher it converts. Obviously, you have call-to-actions throughout the post or throughout the email, or whatever it is that you’re pushing out, so yes. I’d take tests to mean all you can do. I know different sectors and different environments are completely different [??] so you just test and see what works best for you, Andrew.
Andrew: I’m going to test smaller and I’m also going to use one of the things that I learned in another Mixergy course which is, state the problem that we want to solve. Make it clear but state it up front and then state how this is going to solve that problem and then have the call to action. We’ll test that.
Louis: Yes, but I’d go the shorter the better on audio.
Andrew: Shorter, right, on audio. I actually can see in my guest’s eyes I’m going to long. You’re not the only one. I’m looking in your eyes and going, this guy is a friend of mine. I listened to him for an hour, now it feels like I’m boring him for an hour. I’ve got to pull it in.
Louis: I can talk a bit; hopefully I’ve not bored any of you.
Andrew: You haven’t because I’ve been learning a lot and taking a lot of notes here as we’ve been talking. Here’s a final question for you. You’ve built up a successful marketplace that’s growing and growing and growing. You say that you have 70,000 cars listed, 1000 dealers already on the website, you’ve got six figures in sales, which you told me in private but you won’t reveal publicly what the numbers are. What’s one piece of advice for the person who’s in my audience right now building a marketplace and needs two sides to come in at once to make this thing successful? What’s the best piece of advice that you can give that entrepreneur?
Louis: Come up with something different and unique. You have to stand out from the crowd, and that’s the most important advice I can give.
Andrew: Is your big unique thing the pay-per-click model?
Louis: It is, yes.
Andrew: That’s what differentiates you.
Louis: That is what differentiates us from the rest of our competitors anyway so if you want to get big wins I think you’ve got to stick your neck out on the line and some things work and some things don’t. The amount of ideas that myself and my brother have come up with, and failed – the list is as long as my arm, but you will strike gold at some point. Rather than copying whatever or following the leader like a herd of sheep, you’ve got to come up with your own creative ideas. That will be my one piece of advice.
Andrew: That’s great advice because we tend to think of creativity as just having to do with design of the site, or the approach of targeting customers, but even the business model can be more creative, can take on a spin that’s different. Thanks for leaving us with that great piece of
advice. I’m looking at the website to see what I need to promote here. All I need to tell the audience is go check out Netcars.com and get to see Louis’ website and in time if Louis’ going to be the expert who answers car questions or if it’s somebody else. We’ll see. Thank you so much for doing this interview.
Louis: Really enjoyed it, Andrew and great talking to you. Thank you very much indeed.
Andrew: Thank you all for watching.
Louis: Check it out.
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