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THE PROGRAM:
Hey, everyone. It’s Andrew Warner, founder of Mixergy.com, Home of the Ambitious Upstart. And by the way, there’s a little bit something in the background. I know most people read the transcripts of these interviews or download the audio, but for the people who are watching us, the reason I had to adjust my camera a little bit is one of the lights went off a couple of minutes before I got on the phone with you. So hopefully people can see me this way. All right. I’ve got with me today the CEO and co-founder of Involver. Involver is the fastest growing social media platforms for brands. I invited him to find out how he’s helping brands grow. And actually, do you have an example, a stat, that shows what you can do for brands online? Maybe the one that you and I talked about before we started the interview?
Interviewee: Sure. So we started working with Us Weekly, the popular gossip magazine, in April 2009. And they used the Involver product, and its suite of applications, to grow their Facebook Fan Page in about six months, from 2,700 fans to over 250,000.
Andrew: Two hundred fifty, a quarter million people, have hit that Fan button, and joined them.
Interviewee: That’s correct. That’s right.
Andrew: OK. How do you do that? What exactly do you guys offer?
Interviewee: Yeah, it’s a great question. So what we realized for being effective for a brand sites like Facebook is that, you know, these brands need to do more than just advertise to their customers. They need to provide tools for their fans to tell their friends about them. So with Us Weekly, what we did was we provided them with a suite of applications, everything from polls to coupons, and video galleries, photo galleries, that they were able to easily install on their Fan Page, customized with their Us Weekly branding. And then automate the distribution of content from their website and their YouTube page, their Flickr page, automatically, into those applications. And not just into the Fan Page, but also directly to fans. So what it started to do was really populate a Facebook Fan Page, which was very static, into something that was interactive, and also provided tools for, you know, the fans of Us Weekly to share the content that they love so much, with their friends. And that’s how that page grew so fast.
Andrew: OK, so here’s my promise to the audience that’s listening to us. If you guys will listen to this whole program, what I promise that you guys will get is two things. First, you’ll find out how to get more people engaged with your brand. Right? Using social media platforms.
Interviewee: You’ve got it.
Andrew: And the second thing is, we’ll talk about why that’s important because I know that there’s someone sitting at home right now, or going for a run and listening to us and they say to themselves, “All right, great. Us Weekly got a quarter million people. Who cares? Who cares?”
Interviewee: Right, right.
Andrew: “What does that mean for me? I’ve got tons of other things to do. I don’t want to grow my Twitter followers, or my Facebook followers, and the rest of it.” So actually, why don’t we start with that one. Who cares? If they do this, if they grow their engagement, what’s in it for them?
Interviewee: Yeah, it’s a great question. So we hear that from brands all the time. So you know, you think about what a Facebook Fan Page means, not just for a big brand, but really for any company of any size. And you think about the parallels between email marketing or even you know, direct marketing, those flyers that we used to receive in the mail with those coupon inserts, that’s what a Facebook Fan Page is becoming, and is increasingly becoming more valuable as a channel to companies today. So you know, when you think about email…
Interviewee: So you know, when you think about email, for example, and companies have, for the last ten years, tried to build up their email lists. And over the last, you know, number of years, the effectiveness of email as a marketing channel has decreased. Right? Because there’s been increased spam. You know people are now using their inbox a little bit differently. And people are ultimately spending more time in places like Facebook. Right? And so for a brand to create a direct communication channel that is persistent is incredibly effective for developing an ongoing relationship with them. So you can think about it as Facebook becoming, you know, almost a new like yellow pages listing for a small business. Or an alternative, an increasingly more effective alternative, to email marketing or traditional direct marketing.
Andrew: OK. I’m going to help clarify this in a moment. But first I want to talk about why you. You guys, well, two reasons why I ask you, Rahim, here. You guys are the leaders in this space.
Interviewee: Hmm-hmm.
Andrew: I’ve implemented some of your tools on Mixergy’s Fan Page. And man, it went from, the Mixergy Facebook Fan Page, went from being this ball of confusion, to being something we could just master,
Interviewee: Yeah.
Andrew: and make just about anything happen on.
Interviewee: Yeah. Yeah, yeah.
Andrew: Right from the landing page that people see when they sign up, the video that they see,
Interviewee: Hmm-hmm.
Andrew: what happens after they become a fan, it just became so easy that I had to rush out for vacation, but needed to make a change, and within, and I’m not a coder,
Interviewee: Yeah.
Andrew: I just copied and pasted a couple of things. And I was able to add the change. The change I wanted…
Interviewee: Yeah.
Andrew: was I wanted people to be able to be able to invite their friends. So that’s one reason.
Interviewee: Yeah.
Andrew: You guys have great tools.
Interviewee: Yeah.
Andrew: The other reason is you’ve worked with top brands like Best Buy, Proctor and Gamble, Sprint, Levis, McAfee. From all of these now, do you have one example of a company that you’ve helped grow…
Interviewee: Hmm-hmm.
Andrew: their presence on Facebook? And then, what that did for their business?
Interviewee: Yeah. So we have a number of different examples. I think some of the ones that you mentioned are really interesting. I think one of the examples that got a lot of press, that’s an interesting one to highlight is RCA Music/Sony BMG, that used the platform in a very innovative way in December, to launch an exclusive premiere of the Alicia Keyes album on Facebook. So why this is important is because for years, music labels, and you know that industry has gone through a lot of turmoil, they’ve been looking at ways of leveraging new digital channels to really build an effective business model. And so, when I talked about direct marketing as the benefit of building out and investing in your social media site.
Here is a great example. So, they started with the Alicia Keyes page, I believe, had a million fans on, and what they were doing to build that page was starting to distribute tweets and other personal messages from Alicia Keyes. But there wasn’t anything really more engaging than a steady stream of content that was being published into the page. What they wanted to do for the first time was to give some exclusive content to the Facebook audience, almost as a reward for opting in and being loyal fans and telling their friends about them for the last year. So, what they did is they involved with Involver, and we built out a music application that was installed on the fan page. And on December 7th, 2009, I believe, they launched the entire Alicia Keyes album, exclusively, about a week before it even hit the stores. What was interesting about the way they did it was in order to listen to the tracks, and the tracks were full CD quality, the entire album, every single track, was on there, was they asked you, if you not a fan, to become a fan in order to gain access to the content. It was something we call fan gating, and we can talk about some tips, or effective fan pages later, or you can always send me an e-mail or a tweet.
But what it did was take that fan base of a million fans that were somewhat dormant and turn it into an active, engaged audience that went from about a million fans to two million fans in 90 days. And the level of engagement went from very little engagement to over, I believe, were hundreds of thousands of engagements or interactions, likes, and comments and things like that on every single week. And with it, ultimately, realized for RCA and for Alicia Keyes was an increase in their album sales that was directly attributed to the links that they had embedded on the application on their Facebook fan page. So, there is an incredible example of how you can use a Facebook fan page and as well, exclusive content in order to not only…
Interviewee: –in order to not only build up your audience, but also keep them engaged and turn them into something that is really measurable.
Andrew: OK. So she’s a big name. We’ve talked about big brands that you’ve worked with. We’ve talked about how you guys are the leader in this base. I think that sounds so big, that now it might feel a little out of reach to the person who’s listening to us. I want to now maybe bring it down to an individual and see how they could benefit from it. So let’s talk about someone who’s here in our audience who’s also a mutual friend of ours.
Ramit Sethi, he’s a guy who teaches people financial independence or..I got to get a single sentence to explain how he teaches..He teaches people how to, actually his web site is Iwillteachyoutoberich.com and so is his book. Let’s suppose that Ramit wants to teach people about finances, and he’s got a funnel that he goes through where people register for something, end up on his mailing list, and end up buying from him down the funnel. That was an awkward way of phrasing the question, but do you know him? I think I did an OK job of explaining what his goals are. How can Facebook, how can social media help him get a very tangible result?
Interviewee: OK, great question. So you know, there are really three parts to the life cycle of a Facebook fan page. And Ramit and I have talked about this several times and what we have sort of been discussing is that the three parts start with acquisition, the second piece is engagement and the third piece is monotization. So I’ll tell you a little bit about those pieces.
The first one, which is acquisition, is the concept that a brand, or someone like a personal finance [xx] needs to build their audience first on Facebook before they can make any use of it. The second piece is once they’ve got that audience, then they’ve got to figure out what to do with them. And so they’ve
got to keep them engaged, they’ve got to activate them somehow. And then the third piece, and this piece is the most difficult one so it’s not to be taken lightly, is monotizing that audience. So once you’ve got the audience and they’re engaged, how do you really monotize them?
And so for someone like Ramit, who has a pretty active following, an incredibly active following on his web site today, he’s got hundreds of thousands of subscribers to his blog, the first piece is how do you really build that acquisition, how do you populate the Facebook fan page?
And so I’m sure Ramit can share some of the things that he has done, but there’s an opportunity to cross-pollinate the audience that he has, the very active and engaged audience that he has on his web site, and build a map or build those relationships on Facebook. In a slightly different context, right?
Because Facebook is more of an impersonal, social context, and so it provides a slightly different way for Ramit to engage with his audience on his page.
And so the first piece is build the audience up. And I think Ramit has over a thousand fans now on Facebook in a very short period of time. The second piece is now engage that audience. And something that you’ll see on Ramit’s page if you search Facebook for “I Will Teach You To Be Rich,” you’ll find that he is republishing a lot of his blogging content, as well as he’s asking direct questions to his Facebook audience. He’s syndicating Tweets into his Facebook fan page. And what this is doing is giving people a reason to keep coming back to his page, to engage him in their news feed, and ultimately create a level of activity and loyalty between that audience that has opted into his fan page
and Ramit, the author.
And then the third piece, and I’d be interested to hear what Ramit is doing around monotization, but is really now to take that engaged audience and start to moratize [sp?] them. And so I know that one thing that Ramit is doing on his fan page is start to drive traffic from his Facebook fan page back to his
web site where he has exclusive content that he sells to his audience. And so there is just an incredible way. People may not, he has a very active newsletter and a very active blog, but people are spending so much time on Facebook, giving Ramit an opportunity to reach those people in a place
where they are already spending so much time and logging into every single day, is an opportunity for him to increase the third piece, which is monotization.
Andrew: OK, so we’ve got acquisition, engagement and monotization. For acquisition, what I heard you say about Alicia Keys earlier I think might apply to him, too. Offer something to people who exclusively are fans on Facebook, right? And the more incentive you give them to become fans, the more likely they are to join up.
And he could come up maybe with a report for how to save your first thousand dollars, or a report for how to invest your first thousand dollars or something else that’s of use to his audience, and he’s got a better sense of what they want. But we all have a sense of what our audience wants and what that would be that would hook people in. The second thing is engagement, you said. Engagement could be, from what you talked to me about before, and what you said here in the interview, could be a poll, where you ask people to answer a question. And I guess, whenever they answer the poll, that poll result shows up in their news feed and all their friends get to see that they’re engaged with your brand, and some of them come back to your brand page and become fans.
Interviewee: You got it.
Andrew: Do you have another example of engagement?
Interviewee: Ah, yeah, for sure. So, General Mills uses Involver on the Tablespoon Fan Page. If you type that into the Facebook search bar, you’ll find a tablespoon, which is a recipe data base. Now General Mills has aggregated hundreds of thousands of recipes in the last five years, that it has locked away on its web site and in other places. And what they’re now doing is running applications on the fan page where people can, it’s almost like a quiz where they can input their preferences and a little bit of information about their demographic, which allows General Mills to then segment them into one of four different categories. So, for example, stay-at-home mothers, and if you segment yourself into the stay-at-home mothers category, then General Mills, the Tablespoon Fan Page, will send you a personalized recipe every morning that you can then use for your home cooking in the evening. There’s an incredible example of engagement. I think General Mills has done a very good job there.
Andrew: OK. And the reason that you want to get people engaged is first, that they feel a tighter bond with the brand. And second also, so that they start involving their friends with it, because on social networks, when you engage with someone, your friends tend to see that that’s going on, and they tend to want to know why you’re engaged with them. All right, and the final step is monetization, which very often from what I understand, happens away from Facebook, and then for someone like Ramit, it might be, hey, I offered this class on how to earn your first thousand dollars. Anyone who comes over from Facebook right now can get a slightly lower rate and can log in before I allow everyone on my web site to come in. And so that’s how he might monetize. For General Mills, it might be, go out and buy one of our products, because we’ve given them a coupon. And that’s the process. Let’s do one more example here. Moses, from Monogiggle.com, always makes me focus on e-commerce sites, and I’m glad that he does, because there you can track results. Let’s talk about an e-commerce site that sells, and we’ll make one up, one that sells special pens, since I always have some writing instrument in my hand. How do we go through acquisition, engagement, and monetization with them?
Interviewee: Sure, so I think the first piece is that the e-commerce site needs to figure out where its existing audience is, right? And so that might be on its web site, it might be in an e-mail marketing list, it might be on YouTube, it might be in other places. But the first key thing is to identify where the existing audience online is. Once they figured that out, then it’s important for the e-commerce site to let people know that there is a Facebook fan page that they can get involved with, and start to aggregate some super facts, right? Sort of the early adopters, the real enthusiasts for the e-commerce site. And even, we use the example of Us Weekly, for them that was 2700 people. So the point there is that it may not be thousands or ten of thousands of people that you’re looking for in the first phase. First phase is really just identifying who the super fans are. And so that many only be tens of people or up, or hundreds of people. But identify who those people are and get them to opt into your Facebook fan page. The second piece is the engagement piece, right? So, now that they’re on there, what do you do with them? And I think one key piece is to start taking content that you already have somewhere, and I think we talked about this with the Mixergy fan page, that we don’t have…[lost audio]
Andrew: Sorry, it looks like we’re… I’m sorry, we lost the connection. You were saying the second something and you mentioned the Mixergy fan page and we lost the connection, but we’re back.
Interviewee: OK, great. So, the Mixergy fan page, when we were thinking about how to best build it out, one of the key issues was that, hey, listen, we don’t have the resources or the time to start creating all of this new content for the page. And I think it’s the same thing for an e-commerce site owner. So, the piece around engagement is to figure out what content are you already producing somewhere, right? And it may be photos of new products, blog posts about new pens for example that are coming out. The next big pen really for Q2, and start to publish that content into the fan page.
Interviewee: …and start to publish that content into the Fan Page. So now that you’ve got an opt-in base, they can start engaging with the content. And the third piece is the monetization piece. And you might be thinking that the obvious answer to this is, “Well, why don’t you just, you know, bring your items into your Fan Page, and start selling the pens in a tab on Facebook.” Right? So let people know, “Hey, we’ve got these pens.”
You know, it’s almost like bringing your catalog right into the Fan Page. And there is your monetization. And it’s not as easy as that. Right? Because it’s all about context. Right? So the reason why Google Search works so well for lead generation is because there are people in a buying mood. When they’re searching for a pen on Google, they want to that pen. On Facebook it’s a little bit different. Right? Or it’s a lot different. You’re not necessarily looking to buy a product. But, you know, over time, you know you start to engage with the buyer. And they have an opportunity to, rather than to generate that demand from you. Right? So rather than just putting the items from the catalog on the e-commerce site right onto the Fan Page, you might want to use an offer. You know, a coupon, for example, or some sort of promotion that is tied to some interesting piece of content, like you know, some photos, exclusive, you know, news content about a new phone that it’s about to release. And let people know that, “Hey, as a direct benefit of being a fan of this page, you can get 20% off your pre-order.” Right? And that’s what, again, that’s what Alicia Keyes did as well. You know they sold a pre-order of the CDs on the Fan Page. And in that same way, the e-commerce site owner may want to generate demand by allowing people to pre-order the next shipment of pens right from the news feed.
Andrew: OK. All right. I want to dig in deep to some of what you said over here. The first thing is that you said, “Go find the audience.”
Interviewee: Hmm. Hmm-hmm.
Andrew: Where would you even find an audience?
Interviewee: Well, you know if you’re a business, or you’re even an individual, you have access to that audience already. I have seen people who have just started, for example, you know, when we began this company, it really started with a grassroots cause, where a family was looking to find a bone marrow match for its son in Boston. And he had about five or six weeks to find a match. And they were using social media sites. And they ultimately used Involver to help, you know, indentify those fans and engage them, and ultimately convert them into bone marrow sign-ups, you know, at various collection locations. And their question was, “Well, you know, we’re not a company. We’re not a brand. We’ve got very little time. Where are we going to find these people?” And the beauty about Facebook is that those people are already there. So start by looking at your own profile page on Facebook. Right? How many friends do you have? The average person has about 150 or 200 friends on Facebook to contact.
Andrew: Well… we’ll have to…
Interviewee: That audience right there, that’s the perfect audience to start to seed your Facebook Fan Page with.
Andrew: OK. All right. The second thing you said is, “Start by looking for Super Fans.” Why start a new community with Super Fans? Super Fans are hard to get. Shouldn’t we just go out there and try to get anybody who will join up?
Interviewee: Yeah, in fact, you know, it’s not a new community. And it’s not a new Super Fan. It’s the same folks that are already engaging with you somewhere, whether that be on your Facebook profile page or your email newsletter or your website. Those folks are already there. And they are the sort of shortest path to seeding, and really building up, base because they are so engaged that you will have, in a very short period of time, an opportunity to provide them with tools through syndicating this content, exclusive content, and things like that to help them bring their friends to you, and ultimately grow the audience much, much quicker than trying this sort of a very broad approach, where you have to do a lot of work to convince people to help really support you. There are already people who are supporting you, and you can find those people on your website, your email newsletter, all of the different locations that we’ve talked about already. Go to those people because that will be the fastest, and most efficient way, for you to build out your Facebook Fan Page.
Andrew: OK. And as you said, it doesn’t have to be millions of Super Fans.
Interviewee: Yeah.
Andrew: It doesn’t even have to be hundreds of thousands. Ten Super Fans, a hundred Super Fans, whatever you’ve got.
Interviewee: Yes.
Andrew: That’s what you start off with.
Interviewee: Yeah.
Andrew: Which brings me to my final question from what you said earlier.
Interviewee: OK.
Andrew: What do we have these people do? These are passionate, committed, lots of energy people. Where do we direct that energy?
Interviewee: Yeah, I mean we direct that energy to them engaging with you and your content in a way that creates sharing with friends.
Interviewee: –content, in a way that creates sharing with friends. So I’ll give you an example of this. You know, you often think about engaging your fans, or your super fans, to help you build your audience by putting a big share button on a page and having them invite their friends to the fan page.
Right? But that’s not the most effective way of doing it. The most effective way of doing it is giving them access to content. For example, like a pool. So if you go to the Mixergy fan page, you’ll find a pool on the fan page. If you engage with the fan page, it gives you an opportunity to share your answer with your friends.
That is sort of an indirect way of sharing, not just the content but the Mixergy fan page to all of your friends on Facebook in your news feed and then people find out about the fact, “Hey great, I already know about Mixergy, I watch all the interviews on the web site. I didn’t know they had a fan page. Let me take this pool and find out what it’s all about.” That’s again, that’s how US Weekly grew from a small pool of superfans to 300,000 fans today on their fan page that they’re actively engaged with.
Andrew: So you’re looking for ways for your super fans to spread the word, to go out there and evangelize.
Interviewee: Right, right. Remember, it’s not about advertising to your audience. It’s about giving tools to your fans so they can tell their friends about you.
Andrew: What would somebody who’s a super fan of US Weekly go out and evangelize about? Or tell their friends about? It seems like the kind of information you consume on your own, and then you move on with your day. How did you get them to start spreading the word?
Interviewee: Well, think about context again. How we looked at Google Search, for example, and I talked about how that’s a great way of demand generation. And it’s worked very well for legion advertisers, right? Because the context is people go to the search engine site to look for something that they want to buy, for example. Because it’s created that context it’s been very effective for transactions.
On Facebook, the context is all about socializing with your friends. It’s about communication, it’s about entertainment. It’s about sharing, right? And so having a fan page is one thing. But also giving content, and particularly exclusive, high value content. Things like a pool, or a coupon to your super fans gives them a reason to engage with you, and gives them a reason to share that content with their friends. Because that’s what they’re there to do.
I mean, when you see a video, a U Tube video, you take the URL, what we used to do. We don’t do this anymore as much, but we’d put it in an email and send it to all of our friends. Right? You might send it to 10 or 20 friends, or something like that. Imagine taking that context and turbocharging it on Facebook where you have hundreds of different friends that you can share it with in a very easy way. With just one click. That is the power of a Facebook fan page for a brand.
Andrew: OK, so if there’s an article from US Weekly that’s being syndicated into their fan page, it’s easy for fans to share that with their friends on Facebook. Do you guys at Involver ever make it any easier than Facebook already does? I think they’ve got that little share button, but I never press that share button. I might comment or I might like, but how do we get people to do more?
Interviewee: Yeah, I mean, it’s all about creating the experience. So creating an explicit share button is one way. But the most effective way of creating virallity in Facebook is really integrating the sharing component into the experience. So for example, you’ve just take a poll. We talked about this example a couple of times. Once you’ve taken the poll, you’ve taken four or five different questions, you may want to share those results, right? Or if you’re taking a quiz, you may want to share your score with your friends.
And so creating an experience that has this sharing component integrated into it is very effective. Right? Skittles, for example, there’s a great article that came out on Ad Week today. The Skittles fan page is powered by Involver. And what they did around Valentine’s Day was create a way for you to, it’s
a really interesting concept, create a way for you to send a Valentine’s Day card to a traffic cop in your area. To the traffic department.
Interviewee: –a traffic cop in your area. To the traffic department, right? And so usually they don’t get much love, and Skittles wanted to make it fun for you to create something special for these traffic cops. And they had different traffic cops in every different city, and you could create a nice Valentine’s Day message and share it with a traffic cop.
And in doing so it got posted to your news feed, people thought it was really interesting and unique, and they wanted to get involved and do the same thing. What’s nice about it is, you talked about the conversion funnel over a period of time, they had this going for about a week’s period and everyday they had a new Valentine’s Day card and a new sort of public official that you could send a greeting to.
And so what it did was, people engaged over a period of time, taking them through that funnel where at the seventh day they had a smaller audience, but a highly engaged audience that had invested seven days. Not only engaging with the app, but telling their friends about it. And then they offered a special
reward to that group of people that had made it all the way through the seven days leading up to Valentine’s Day. There’s another really effective example of integrating sharing and this concept of virality [sp?] directly into the social experience.
Andrew: I love ideas like that because they help spur creativity in us. You talked about polls, you gave this great example from Skittles. Do you have another one?
Interviewee: Yeah. Let’s use an example that comes from a small business. So one of our engineers took a break to get his hair cut like two or three weeks ago. He went to the barber shop, he’s getting his hair cut, and they guy says, “So what do you do?” And he says, “I work at this great company called Involver, we create these fan pages.” And he goes, “Oh, well I have a fan page. Tell me what you guys do. How can I use this thing?”
And so the Involver employee talks about how we have this great set of apps, including a coupons app. And the barber goes, “Oh, coupons? Interesting, because I’m running coupons right now in the newspaper. I’m running them through email and things like that. Interesting, I wonder if I could also use
your coupons app to run a coupon on Facebook.” So he says, “It’s really easy. Just sign up and you’ll have access to this coupon. It’s really simple, too.”
Now by the time this engineer left getting his hair cut and came back to the office, the barber had already signed up to Involver, installed the coupon app, set it up, and distributed this 20% coupon to all the fans. There’s an example that I think we can all relate to of how easy it really is to engage people using the right tools on Facebook.
Andrew: All right, that brings me to something here that people in the audience have been asking. Cost. What does it cost to set this up? Because you guys aren’t free.
Interviewee: So what we offer is three different tiers of service. We have a starter package, which is free. And you can go to Involver today and you can sign up for the starter package. And you’ll get access to two different applications that you can customize and start playing around with on your fan
page. And they provide great value, don’t get me wrong, the starter package. We have people like Brittany Spears who uses the starter package on her fan page. So there is something there for everyone.
The second segment is the small business segment. And this is in the hundreds of dollars a month. It gives you access to more applications, more customization, more content, more reporting and measurement.
And then the third one is for the big brands. This is where we have General Mills, Best Buy, and Sara Lee. And even the Olympic Games, the Vancouver 2010 Olympic Games used us for their fan page. Where they get access to fully custom apps, unlimited content, hosting, sort of an end to end measurement, social media monitoring. Sort of an a la carte box that gives them everything that they need. And that is in the thousands of dollars a month and up from there.
Andrew: What percentage of your revenue comes from those big brands and what comes from the smaller businesses?
Interviewee: Great question. So about 80% comes from the big brands.
Andrew: Wow.
Interviewee: Yeah, about 80% comes from the big brands. And I think that really tells a story about where we are in the lifecycle of the social media industry. Right? So social media’s very interesting because of the sheer volume of people. And the engagement that’s happening on places like Facebook and Twitter. But we still haven’t really figured out how to monotize [?] it. And it’s the small business owners who really look at performance driven measurement of their ad dollars. And social media really hasn’t created a great case study for small businesses yet.
And I think it’s really just a matter of perception again. And that’s why we talked about looking at the three pieces of the social media life cycle, starting with acquisition, engagement, and then monetization. And really encouraging small businesses to look at Facebook not as lead generation or conversion tool today. It’s not going to help you sell thousands of dollars of product tomorrow. What it is going to do is help you build a persistent, long-term communication channel that ultimately can be used to create direct marketing with your audience that will ultimately take the place of email marketing, and traditional offline direct marketing. And that’s why it’s important for small businesses to start investing in social media today. Which is why Involver offers a Starter Package, because we know once small businesses get a taste for how effective Involver can be to help build out and maintain your social media site, like a Fan Page, you’ll start to see the ROI there.
Andrew: The barber, did he have to pay for the coupon app, or was it free?
Interviewee: The barber had to pay for the coupon app. We have different tiers of applications. And so applications like coupons that are really about, they’re really about not just engagement, but also then, ultimately, monetizing, are higher value applications that we do charge for. But so this again, can send you hundreds of dollars a month.
Andrew: So this barber… Sorry. So he heard about Involver. He believed in it so much he went back. He paid. And then he started using it?
Interviewee: That’s right. So what we do is we have a 30-day free trial for businesses. And it’s something that we’re not going to offer for too much longer, but we are offering right now. And it gives businesses an opportunity to test out what a more fully-featured offering from Involver looks like, where you do get access to something like a coupon, or polls, or other high-value applications like that. And once, you know, businesses start using it, they start to see the value in it. And they become long-term customers. Our term, for example, with our small business segment is under 5%. I mean it’s incredibly effective. And for a small business, we don’t just provide applications, but we also provide things like exclusive seminars, newsletters, white papers, things like that, that really help, you know, these small business customers understand how to more effectively use Facebook, how to maximize the dollars they’re investing in it.
Andrew: OK. Moses in the audience is asking, and he’s such a big supporter of my work here at Mixergy that I try to get as many of his questions in as possible. He’s saying, “The free service offers two apps. Which ones are most popular and most beneficial?” So I guess he’s trying to figure out which ones he should try.
Interviewee: [Laughs]
Andrew: And he’s trying to keep free, because he’s running a small business.
Interviewee: [Laughs] OK. So there are about six or eight different free applications. And the thing I should mention is that we add about two to three applications to our suite every single month. The ones that are most popular today are the Twitter application, the Flick application, and the news application. And the reason why those are most popular is because those are the applications that take content that businesses are already producing and syndicating those into Facebook in a social, personalized fashion right into the page itself.
Andrew: OK. And Moses is saying ìhe’s not a cheapo, he’s already e-mailing the sales department to get some pricing.î All right, I don’t have a problem with anyone trying to try things for free or keeping their costs low. I’m an entrepreneur myself. OK, I have two big categories for us to talk about. The first is I want to get to know about you, I want to know about your background because I know you’ve had an interesting business career. And then I want to go back to something you offered us earlier. You said you got a bunch of tips that you can share with us. So, I want to go through those. So, first things first. Part of my research on everyone includes looking at their Linked In resume. And yours has something that really grabbed my attention. Let me see if I got it exactly written down…
Interviewee: You see my photo? My…
Andrew: I didn’t even look at the photo because I saw this. It said ìco-founded a web hosting company and negotiated its sale for 1.5 million dollars, apparently while you were taking final exams in school. So, first of all, is that information right, or did I get it wrong? Did I misunderstand it?
Interviewee: Absolutely right.
Andrew: OK, and you co-founded it, does it mean you own half of this business?
Interviewee: Yeah, I was the co-founder and the CEO, so yes, I was part owner in the business with my best friend from elementary school.
Andrew: And so, before you graduated from school, you sold this business for 1.5. How did you start this web hosting company as a student? And guys, we’ll get back to Facebook…
Andrew: …and guys we’ll get back to facebook but i have to ask about this stuff
interviewee: (laughing) well, ahh, so I started the business when we were about 16. I was working at a web-hosting company and we were talking to customers on the phone. I was helping with troubleshooting ahh modem connectivity and ahh we would talk to small business owners on the phone and try to help them get setup on the internet and what i found out was that a lot of people who were calling in were also small business owners and a lot of these small business owners would also say at the end of the call “oh yeah, ahh thanks for helping solve this problem, ahh you know i also have ahh a business and im trying to setup a website. Do you have, do you also sell websites?” and the company I was working with would sell web-hosting, but it was quite expensive at the time, it was a hundred, couple hundred dollars a month and you also had to figure out how to design the site yourself. So my best friend and I who worked at the same place together figured that if we could create something similar that would sorta be like a geo cities but for web hosting, we could create ahh a real nice business and at least solve some of these customer problems that we would get on the phone at the very least and then it would be something fun for us to do besides umm just answering the phone calls all day, well, i should say after school cause i was in school all day, every class of course.
Andrew: ok so you had the idea. What what did you do? How did you act on it?
interviewee: So what we did was, umm my friend is more of a programmer so he programmed the site I was more of web designer business guy so I designed the site. We took ahh took $1300 that we saved up from this ahh part time job and we put a newspaper ahh ad, ahh full color, about quarter page, ahh took the entire $1300 to buy the ad and we launched the company ahh in s i believe it was something like umm ahh the summer of ahh 1999 and we got exactly 8 people who came to the website from this ad and we were completely heartbroken. That was all the money we have saved up so we started gorilla marketing, we started to umm do a lot of the same things we talked about for building up your facebook fan page right. We started emailing everybody we knew, we put umm you know sign up for free 50meg ahh website on the bottom of all our emails, ahh we did some of the traditional stuff like umm you know poster put up posters and things like that in the neighborhood and umm you know over time it started to grow and one thing that help us grow significantly is that everybody who signed up would also have a ahh a a link on their website to sign up for a free account. So you know visitors to the small business website would see a big banner saying “this page this page is provided by MAL B.C. which is our web hosting company and then they would go sign up. Now interestingly enough it’s the same concept that we used with involver to grow from you know 100 fan pages to about 45,000 fan pages today where you go to for example the Britney Spears facebook fan page you will a big involver logo there on her twitter application. And that’s how we have grown, one of the major ways we have grown the business today but umm with the web hosting company it grew very quickly in about 9 months it grew to 25,000 customers, all small businesses, all carried the our logo and sign up links on their website pages.
Andrew: How much did you get in up to in sales?
interviewee: So we didn’t really make a lot of money, ahh to be frank, with ahh with selling website subscriptions. I mean we in in its not I think because that opportunity wasn’t there, it just I think we really didn’t care about it. I mean the cost were so low for us to run this run this business and we were going to high school ahh at the time so we were really more focused on trying to get into college so we offered a we offered a $10 a month subscription only because people asked for it and what they wanted was their own domain you their own personalized www.com so what we ahh started to do is offer a $10 a month ahh subscription fee, we ended up getting you know probably i dont know several hundred people paying us making making a couple thousand dollars a month but is was really more of a hassle than anything else because these people would then call you and the way this all was setup was if you paid us, you could call my pager anytime and get customer service within four hours of calling me but of course i was in class during business hours so i would have to put my hand up once and then it became two and sometimes even three times in a class to go to the bathroom which then raises suspicions ahh among your classmates particular your history teacher…
Interviewee: …history teacher, about if you have a medical condition with your bladder for going to the bathroom so many times. Or, maybe you up to something else funky because there should be no reason you carry a pager and cell phone around with you at school.
Andrew: Yeah, sounds like you are a drug dealer.
Interviewee: Yeah, if you do a little Google search on me, you’ll find some interesting stories about exactly what happened there.
Andrew: Oh, will somebody please find that for me? And let’s link to it in comments. I got to see that. You sold it for 1.5 million in shares, or in cash?
Interviewee: That was a mixture of cash and stock. We made some good cash off it. It clearly changed our life. I think we, my parents are both university educated and they wanted me to go to college. So they had been saving up 30 bucks a month since I was three into a college savings plan. And then we sold this business and I told them that I wasn’t going to school. I said, ìI’m going to finish high school. But, there’s no way I’m going to college, because I don’t believe in school.î And so, what ended up happening was, I took the money that we had made, some of it I gave to my parents and some of it I took and invested in a second business, which we eventually took public. And it became certainly the most, biggest learning experience of my life, but also in doing so, the biggest professional disaster I ever experienced. Where I took this company public at 20, and had got shorted all the way down from 80 cents to less than a penny in about six months.
Andrew: Oh, wow. What was the company that you took public?
Interviewee: It was called Merchant Park. And the idea was an extension to the first business. Rather than just offering web hosting, we wanted to offer a whole suite of online applications, like contact management and document sharing. You can kind of see a parallel in all three businesses I’ve started where we provide absent services to small business owners and ultimately larger businesses to run their companies more effectively online. We had an incredible vision, and rather than just running this out of our basements, we had a real office and real employees and all of that stuff. But we couldn’t just make it happen, and I think it was a mixture of having a huge ego and thinking at 20 we knew exactly how to run a multimillion dollar business. Although we were spending most of our time flying back and forth to Vegas where we had a small corporate office. And also then just really bad market timing. It’s 2002, and it was an ice storm in the public markets.
Andrew: I got to bring you back and do an interview just on that alone. But let’s do one thing. First of all, people love for me to do interviews with successful companies, but what I love to hear is about the tough times. I think that’s where we learn the most. So, what did you learn from that experience? What’s one thing that you could have done differently that the rest of us can learn from?
Interviewee: I think the biggest thing is, you need to really pick the people you surround yourself with early on as carefully as possible. And you need to set expectations with those people in a way that creates a shared vision and shared path among you. And so what I mean by that is, with my first business, it was my best friend and I who were these very green entrepreneurs, very young, didn’t really know much about scaling a business., but were very passionate, enthusiastic and product people, right? And we understood the market and all of that stuff. We wanted to build a very very big business.
The partners and early employees that we chose were folks who had a slightly different mindset and set of expectations. They were folks who wanted to create a business that provided liquidity much quicker, which is one of the reasons why we went public. And it was going public that created not only a huge distraction for me in that rather than focusing on building a product market match, I was focused on talking to potential investors and creating private placements and run board meetings in Vegas. And that ultimately led to a big distraction. And I think it was really a combination of not picking the people who shared the same vision and had a shared set of expectations that altered the course of that business. With Involver, I was much more careful and my co-founder and the original Seven team here in Involver were all guys who wanted to build a big business, were in for the long run, were ready to work for nothing for years and years. I mean, we were working for maybe 25, 30% of market salary for the last three years.
Andrew: You guys ever had some outside funding?
Interviewee: We took some angel money about a year ago or so and that’s really the only money we’ve taken.
Andrew: How much did you take?
Interviewee: We’ve taken in total about 2 million bucks. And I’ve just taken some more debt, I should say some additional debt. Which was something new for me but something I really got my head around quickly because of its positive effects on delusion and control and things like that. And because we have been cash flow positive for the last six months, we were in a good position with respect to access to …
Andrew: Why take on debt then?
Interviewee: To grow faster, so if you think of some of the things we talked about today in the interview where the market is, for social media, in particular the opportunity to offer brands in social media. Let’s think about Facebook, for example. It’s growth has doubled, and continues to double every year. In fact, the president of CNN just said that he’s not afraid of any of the traditional media companies like Fox. He said ìFox has 2 million subscribers. Facebook has 500 million.î He’s afraid of Facebook. And that’s the same thing that brands are afraid of. They don’t want to miss the opportunity.
Andrew: So where do you put your money then to get them?
Interviewee: We put the money into two places. On, into sales, and two, into R&D. So, with sales, we have benefited, we’ve grown this company through guerrilla marketing, right, like I talked about one tool, about having the involved local one dollar free pages. And all of the revenue that has come in that has gotten us to the point of break even and profitability now has all been inbound, which is pretty incredible. We’ve never really done any outbound. So at the end of 2009, we started to invest in sales. So now we have a fairly large sales team, in fact today we got a big sales meeting with all of our different sales teams from around the world who are here at the office who are putting together and executing on a plan for Q2. And then the second piece is in R&D.
In order for us to stay ahead of the market, we have to invest in providing the tools and technologies that brands not only need today but will need in three months. What I mean by that is the reason why General Mills and Best Buy are choosing Involver is they’re not only getting the applications and the measurement that they need for Facebook fan pages today but they have the comfort in knowing that when there’s a new platform like Foursquare or Twitter opens up its platform a little and there’s more APIs there and more functionality that Involver will support that. Involver-B will support, enable the social media efforts of these brands over the long run. In order to do that, I need to invest in R&D.
Andrew: OK. All right. I want to get to the tips, and I know we don’t have much more time, but before I even get to that, I got to, Casey Allen found the link. This guy finds links quickly, the link we talked about earlier. And he even highlighted the best part, he says. Here’s a quote. ìWhen a meeting was called with his parents and teachers to talk about his possible drug dealing, Fazal had toî, did I pronounce your last name, right?
Interviewee: Fazal, yeah, sure.
Andrew: Fazal. ìFazal had to pick the lesser of two evils. So he pretended he was dealing. The sacrifice meant the business could survive. So he pretended he was dealing drugs just so he could keep his online business going.î All right, let’s talk about some tips. Let’s see if we can get some rapid fire tips from people. The first one you said earlier, did I get it right, was it called fan baiting?
Interviewee: No, not fan baiting, but close. Fan gating
Andrew: Fan gating?
Interviewee: Fan baiting, actually that could be the name of a new product. I’m going to think about that.
Andrew: Fan baiting, that’s very good.
Interviewee: Very good.
Andrew: That’s where you offer them something in return for them becoming fans.
Interviewee: That’s right. So, with Alicia Keyes, you offer exclusive music, with a CPG company, you offer a recipe or a coupon.
in exchange…
Andrew: What’ the word here? What’s the phrase to describe it?
Interviewee: Fan gating.
Andrew: Fan gating, OK. So, you gate…
Interviewee: …gating, yeah, with Involver.
Andrew: OK, all right. What else do we have? What other tips we have for people who want to grow their fan page?
Interviewee: So, the second piece is, create an editorial calendar. So, publish regularly. So, just don’t create the site and expect people will come and keep engaged with you. Have a regular calendar. So what I suggest to most people is, every week, publish some content, right? Publish some content. If it’s not exclusive, you don’t create it especially for Facebook, that’s OK, but just publish something so that you show up in people’s news feeds again. And I think the third piece in that is an extension to that is create exclusive content just for Facebook. So, we have brands like Five gum that are offering exclusive coupons today just for their Facebook fans, right. The fourth one is a branding one which is create a vanity url and start to create a professional look and feel. So, you look at.. You know,one of the things we help with our starter package is creating a level of professionalism on Facebook.
You’ll see some big brands actually have tabs on Facebook that don’t work or they produce errors, or there’s nothing in them to display. You know, that’s not really conveying the level of professionalism that you want to convey in order to get people to really care about you on Facebook. So, you know, bring some nice branding into it, make it look nice; give a nice look and feel. And then the fifth one is create integration with your other points of distribution. So, what I mean by that is you may have a.. Everyone has a website today,right, you may have a blog. Start to integrate those with your site. So, we talked about what Remyth is doing with his “I Will Teach You To Be Rich” fanpage where you know, he’ll give a slight teaser, you know, where it might be a short one or two line teaser on his fanpage with a short url that clicks back to a longer format page on his website. And that creates a nice integration point. And what it will do is create a nice loop over time where you can start to tease content on Facebook, have that redirected to your website, you can tease content on your website, have that redirected to your fanpage. Create a nice loop where you’re connecting all of your communities together.
Andrew: Okay. Alright, I think we’ve given people alot of information here. Thank you for doing this. Any last piece of advice for somebody who wants to get on Facebook?
Interviewee: Get started. Get started. If this interview isn’t enough to convince you that there’s something there for your business on Facebook, then I don’t know what will. So get started today. Check out our free package Involver.com, you’ll get access to a couple free apps. It will get you started. And, hopefully, it will help you to get well on your way to maximizing your social media presence.
Andrew: Cool. And if you guys do it, if anyone’s listening to us ends up using Involver, and I’m sure many people will, I want to see it. Email me a link on to what you’re doing on Facebook. Email a link to show me how you’re using Involver, or anything else on Facebook. I’m always curious to hear how people are using it. And of course give me feedback on this interview. Come back to mixergy.com and let me know what you thought. Rahim, thank you very much for doing this. I would like to.. I’d to make this suggestion. I’d like to see you speak at more conferences. Facebook, as you said, is huge, it’s growing. It’s a big topic. What I’m finding is that there are alot of posers who are speaking. You shouldn’t be saying this. I’ll say this. There are alot of posers who are speaking because they have the time to go and solicit the conference organizers and get them to speak. I would like to see people like who are working with real brands, with real companies, who are really showing measurable results on Facebook. Are you speaking at any conferences?
Interviewee: I’d speak at more conferences if I got the speaking fees that Remyth gets at his conferences. But I do actually speak quite..quite alot, alot more in the industry areas. So the next conference that I’m speaking at is at the beginning of April, the IAB Social Media Conference in New York, where we’re actually unveiling not only some case studies that people haven’t seen before, but also a brand new product that I’m sure everyone will really enjoy.
Andrew: Alright. Well, I hope people from the audience will go and say hi to you there. Thank you for doing this interview. I’ll see you guys all in the comments.
This program was sponsored by
Wufoo– The easy way to add elegant forms and surveys to your site. (I use them on my site’s contact page. When we got married Olivia and I used Wufoo on our wedding web site to collect RSVPs because their forms are beautiful.)
Shopify – Thousands of stores are built using Shopify because it’s easy to set up and manage. Tim Ferriss recently announced a contest that offers $100,000 prize for the highest grossing store. Go start your store now.
Grasshopper – Entrepreneurs (like me) love and use Grasshopper because it offers all the features of the big, expensive phone systems (like multiple extensions, music on hold and call forwarding) but it works with any phone and starts at only $9.95 a month.
[Thank you Gabe Audick & Jon Bischke for introducing me to Involver & Rahim.]
