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Here’s the program.
Andrew Warner: Hey, everyone. It’s Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. What that means is that this is a place where entrepreneurs teach what they did to become so successful so that you can go out there and build your own success story. A few weeks ago, I did an interview with an entrepreneur who ran a newsletter company that sold to Disney for a reported $20 million. Jason Baptista was listening to the interview in the audience and he said, “Andrew, you should meet Amanda Freeman of VitalJuice.” “VitalJuice is already bigger,” he told me, “than the company you interviewed.” So, I invited Amanda to Mixergy to hear how she did it.
VitalJuice is an email newsletter that covers fitness, nutrition, beauty, and wellness. They have 200,000 subscribers. Before we get into the interview, I’ve got to tell you that because of a bad connection, we lost the first two minutes of this interview where I ask Amanda how she got the idea for her business. We’ll pick up the interview where she gives the answer. Here it is.
Amanda Freeman: Exactly. Our lives were less about the restaurant opening sample sales, and we were more about things like the hot exercise classes or what people are doing to get sick abs or what ingredients shouldn’t be in our beauty products. I had gone to a nutritionist at the time really to figure out what I [interference] and I can’t tell you how many of my friends wanted to photocopy the shopping list that the nutritionist gave me. Everyone was really, no pun intended, hungry for this information. There wasn’t a go-to resource out there that was speaking to young, urban women and young, I use the term loosely. The women who love VitalJuice range in age, but they’re young and healthy at heart. We really felt like there was an opportunity to fill this void in this wellness space.
Andrew: Why do it by email and not do it as a blog the way so many other people who are in the publishing business started at the time?
Amanda: I think there’s two reasons to do it as an email. The first one is the consumer experience, the fact that the information comes to you. It’s this daily reminder that comes into your inbox in the morning saying, “Here’s a healthy thing you can do. Here’s a healthy thing you can know. Just a general reminder to make healthier choices throughout the day.” I was never one that checked a ton of websites or blogs throughout the day, because I would just be busy with work and I wasn’t always on those sites. So I loved that it came to me. Then from a business perspective, email can be a much better business than a blog can be, especially because email CPMs or the rates that we can charge for the advertising within the emails, there’s a lot more value put on that.
Andrew: What kind of CPMs can you get for email? CPMs, of course, I’m assuming everyone in the audience knows, but just in case, it’s cost per thousand impressions. What kind can you get?
Amanda: Our CPMs can range anywhere from $40 CPMs to $250 CPMs, depending on the position and type of ad.
Andrew: What kind of ad goes for $250 CPM?
Amanda: A dedicated email. We all have different names for them, but in the end, they’re dedicated where it’s a complete advertorial email where 100% of the copy, content, visuals are about an advertiser. We have our editors write it as if it is content, but it is all advertorial. It’s 100% share a voice throughout an entire email. Obviously, the most effective way to reach an audience such as ours.
Andrew: That’s list. What kind of discounts do you give customers off that list price?
Amanda: That is the rate card, as you say. We give discounts based on certain size buys. A $500,000 buy will get a certain, we could give a discount on that. We do stick pretty closely to our rate card.
Andrew: You’ve done $500,000 buys already?
Amanda: Yes.
Andrew: Really?
Amanda: Yeah.
Andrew: Wow. All right. So, $40 CPM, what does a customer get for that?
Amanda: A $40 CPM can get you a logo placement in an email, and you can also buy on the website for a CPM like that.
Andrew: Logo placement. I subscribe to your newsletter and I saw a box on the upper right. Is that what you mean by logo placement?
Amanda: No. It’s actually by the toolbar on the bottom, near where it’s “send to a friend” or “like this on Facebook,” those kind of buttons. There’s space for a logo, and it’s perfect for a company who wants to commit to some branding through their advertising.
Andrew: That logo ad goes for $40 CPM?
Amanda: Yep.
Andrew: Wow. Email is phenomenal.
Amanda: Yes.
Andrew: Wow. Okay. Who’s selling the advertising?
Amanda: We have an in-house ad sales team. There’s three women on my ad sales team as well as myself. We work with everybody from packaged goods brands to a ton of beauty brands. Then there’s a lot in the nutrition space, gyms, even healthy liquor brands.
Andrew: By the way, when we say cost per thousand impressions, do we mean impressions in this case? People who actually see the ad? Or do we mean delivered emails? Cost per thousand delivered.
Amanda: It’s delivered emails.
Andrew: So, if you send it out to 1,000 people and only half of them open up their email, you still get to charge for the full thousand.
Amanda: That is how CPMs are charged for email. The tricky thing with the open rates, which is what you’re referring to, is it’s pretty much impossible to know exactly how many people open your emails based on the fact that if it’s read on a mobile device or within Outlook without opening it fully or if the images aren’t fully enabled, none of those count as an open. Open rates are really something in our industry that no one focuses on anymore. It’s impressions and then it’s also, what we call, an engagement rate or a click-through rate. Those are really the metrics everyone focuses on.
Andrew: Do you sell more on click-through rates or based on impressions?
Amanda: On impressions. We do entirely CPM.
Andrew: Oh, wow. All right. Even though when I first saw your newsletter in Gmail, the images didn’t come through and there’s no way for you to know that I opened it up. You could tell that I didn’t see the ad because if the images aren’t coming through then the ad’s not coming through. Right?
Amanda: A lot of our ads are text-based ads. We have what we call a sponsor listing. It’s all text-based. Anyone who doesn’t enable the visuals still gets that ad. Any dedicated email, they would still see that. Also, if you download . . . there’s a lot of tricky technology things that hide whether someone’s actually seeing the email.
Andrew: I see. Wow. All right. You said from a business point of view, that’s one benefit of email. What’s another? What about as far as holding on to customers that you worked so hard and spend so much money to get to? How does email work that way?
Amanda: Email’s great that way because people, first of all, they’re opting in. They’re opting in. They’re choosing to be a part of the email, so they’re a way more valuable consumer there. Then, they’re committing to get this email five days a week. So it’s not like if they forget to check it today or if they decide they found another site that they just move on and they forget to come to us. They’re making this commitment and forming a relationship with the brand, which makes them more valuable. We also appreciate that our customers, our consumers, our subscribers are in a lean forward mode when they’re reading an email. They want to take an action. They’re waiting for VitalJuice to come into their inbox, and then they want to see what we’re going to recommend or write about. They take our editors’ suggestions extremely seriously.
Andrew: Mm-hmm. Versus Mixergy where, on Mixergy, if you come over to the website, you see this interview and you love it. I have to hope that you come back tomorrow to find out who else I’ve interviewed. On your site with VitalJuice, you know that they’re going to come back because they’re signed up.
Amanda: Exactly.
Andrew: Why did you go local?
Amanda: We thought local was great from two points of view. Again, from the business point of view as well as the subscriber point of view. Subscribers want local information. It’s significantly more relevant to them when it’s local information, things that they can act on, places they can go, items they can buy, websites that they can check out. Sorry, someone just walked in the room. People would much rather commit to something that’s actionable and something they can do. We also have an everywhere edition, which is actually still our most popular edition, for people who aren’t in the big cities that we cater to right now with sole editions. In that edition, we feature things that are accessible no matter where you live. They’re things you can get online. They’re things that are available in the big chain stores, in the Whole Foods, or drugstores around the country. The local, it’s just much more relevant and actionable.
Andrew: How’s customer acquisition when you’re going after local customers?
Amanda: Since we have local and we have national, we have to have a two-pronged acquisition strategy. Similarly, you can target them in ways on Facebook by their home market. You can do local events and target them in that way. We work with local businesses and target them in that way. We have to have a more physical strategy as well as this online strategy. What you find with the online business, even an email business, is the best way to find new customers is online. No matter how big the reach of TV or magazine or newspaper, the key is really to find your future subscribers online.
Andrew: How does the cost compare? How does the cost of finding a local subscriber compare to the cost of finding a national one?
Amanda: I have, first of all, a great marketing person. She’s been able to really bring down the cost and get really high-quality subscribers. That’s our key. We grow organically in a big way, and then we obviously reach out through other websites or Facebook. We have it about the same price, whether it’s local or national. We got it down to that.
Andrew: Oh, wow. What, roughly, is the cost per subscriber?
Amanda: We set a target of about a dollar or two, and we’ve actually come in below that, based on, again, a lot of organic growth and a lot of what we call cross marketing or partnerships with other websites that have audiences that might be attractive to us.
Andrew: What kind of partnerships do you do that work?
Amanda: We’ve done partnerships with people like “New York Magazine,” where we have a contest going or we have some great piece of content that we think their subscribers would love and then we bring it out to the portion of their list that might be interested in that messaging, whether it’s a contest or whether it’s . . . we do something called “Skinny Black Book” every year which is a must-have guide to the best of the best in all our categories. That’s something that is extremely popular and we’ll bring it out to their list. We found it best to partner with other emails for the same reason that we wanted to be an email. The quality of the subscriber, the click-through rates, the engagement rates are significantly higher than if you partner with a website that offers more static and not as deep involvement with their consumers.
Andrew: If you’re partnering up with, say, “New York Magazine,” you’re taking your content, you’re running it to their mailing list subscribers or to a portion of them. How are those people then coming back to your website and registering?
Amanda: It’s a direct click-through when they get this email about VitalJuice. They can click through to find out more about VitalJuice. They’re taken to a landing page where the information about what VitalJuice is and they can sign up right there. If it’s a contest, it’s got information about that. If it’s content, the content lives there as well.
Andrew: Oh, so it’s a specific email that the partner sends out about how to join your newsletter and why their audience should join your newsletter with a call to action to go do it?
Amanda: Exactly.
Andrew: I see. What do you give them in return for that?
Amanda: We’ll find a way to give them exposure to our subscribers.
Andrew: Where you might say sign up to their magazine or sign up to their newsletter or what?
Amanda: Exactly. It depends on what they want to promote. Right now, you have different businesses that want Facebook, people to like them on Facebook. There’s other businesses that are very interested in Twitter followers right now. We come up with a relationship that can be mutually beneficial. Honestly, that’s probably the biggest way, other than organic growth, that sites like VitalJuice are growing right now with small marketing budgets. When they say paying for subscribers is not usually the best strategy, so these are more natural and organic ways to grow.
Andrew: Buying ads, does that work? What kind of ads work?
Amanda: We don’t do a lot of buying ads. We have found on Facebook, by targeting people very specifically, according to their interests or other emails they read or other publications they’re into, that can be effective. We’ve, honestly, almost never found paying for an ad on a website to ever be worth the cost.
Andrew: I see. When you say that you try to get it between $1 to $2 cost per acquisition and you actually come in under a buck, where does that less than a buck cost per acquisition go?
Amanda: We have other marketing costs. We do launch events in our different markets. We do, as I said, some Facebook advertising. We’ve experimented with Google ads. There’s PR efforts that go under the marketing budget as well. Having coverage or being featured on AOL or CNN or “Good Morning America,” those are all things that can get you wide exposure to the audience that you really seek out.
Andrew: I see. How are launch events for getting new subscribers?
Amanda: Launch events aren’t great for actually getting the new subscribers, but when you target the influencers in a market . . . we just did a launch event in Chicago. We launched in June. In July, we had a lunch where we invited 60 of Chicago’s most influential journalists and wellness influencers, so we had the people who run the fitness studios, we had some of the highest profile nutritionists, and then we had, obviously, the media folks. Really, just getting the word out there is often what those events are about and creating buzz. Hopefully, they’ll write about VitalJuice, and their audiences will then learn about us. Or at their studio, the people who come to their studio will know about VitalJuice. You have to take a little bit of a leap of faith with those things, but that stuff is very important.
Andrew: When you and your co-founder had this idea, what’s the first thing that you did when you were ready to launch?
Amanda: The first thing we did is we wanted to see a) if we can produce the content on a regular basis. We did create mock content, but it was stuff that we would have written about had we actually had subscribers at that point. We were wondering could we create this content every day and it be new and relevant and different than what’s out there and different than the magazines. What we found, and what we have found after doing this for over three years, is there’s so much out there. It’s all about us editing rather than all about us reaching for anything. That was the first thing.
We both wore tons of hats, so we were doing it all. When we first started the business, we needed to fund it, so we were also doing a little bit of consulting on the side. We were both writing. We were both . . . she specialized more in technology and she was dealing with the technology aspect. I had more of a marketing background. I was doing the marketing. We had to do a little of everything. We sent out to a list of 500 people that were our nearest and dearest and started the list at that size.
Andrew: Oh, so you started out with 500 people who you knew. You added them to the mailing list. They gave you feedback and helped you spread the word?
Amanda: Exactly.
Andrew: I see. What software did you use to send this out at first, do you remember?
Amanda: Yeah, we were using Silverpop pretty much from the start.
Andrew: What’s Silverpop?
Amanda: Silverpop is an email service provider, and they allow you to create your own templates with a designer. Then you put it in their system and you send all your emails through them. They help you manage that. I think most people think sending emails are free because they have free personal email accounts. But once you get into our territory, our kind of content, you need to be getting through all the spam filters, you’re sending to hundreds of thousands and hopefully millions soon, you actually need a very sophisticated system and it costs a lot to send an email.
Andrew: It’s accessible technology. You didn’t have to develop this yourself. You didn’t have to find a way to get whitelisted by the email providers. You went out and you found a company that already does this, and at first, it couldn’t have cost that much to send to them, right?
Amanda: Right. They definitely have a scaled system based on if you’re sending 200,000 emails a week, here’s your cost structure.
Andrew: Right.
Amanda: We actually raised funding from The Pilot Group. They’re a private equity, VC firm that loves the email space because they had a huge success with DailyCandy, Ideal Bite. They still are invested in Thrillist, which is doing is amazingly, and they’re also in Tasting Table. When we received that investment, we actually shifted the platform because as you get bigger and you keep working with someone like a Silverpop, the costs just get higher and higher, whereas if you can create your own system, you’re containing some of the growth. The scalability works better. We then switched platforms where we’re on a platform that we share with some of the other Pilot companies, but we’re not using the standard software that exists out there.
Andrew: Okay. What about a website? What did that look like?
Amanda: What did our website look like?
Andrew: Yeah.
Amanda: We really wanted the website to be secondary. Again, I feel very strongly about the email model. When I meet with people who are saying they’re about to start a website where the business model is 100% advertising, I try to talk them out of it usually. Our website is pretty much for sign up. With sign up being so big, a lot of our website consists of landing pages or sign-up pages. The other big feature of the website is archives. We believe our subscribers will want to come back to a lot of the pieces that they saw. So it’s a great resource for archives. We write a lot of recipes. Those live on the website. We’re doing more video now. Because video can’t really live in email reliably yet, those live on the website. Increasingly, there’s more content on it, but we’re still primarily about the emails and not as much about building a website.
Andrew: Okay. Someone who wants your content doesn’t really have to be subscribed. Email is just the best way for you to reach them. It’s the way that you encourage them to sign up, but the content is on the web, right?
Amanda: Exactly. Once a piece is published via email, it then lives on the site. What we found is people want the emails to come to them especially in our category. Again, part of why we think our emails are great, the big reason is the content’s great. But the other great reminder is most of the women who are signing up for VitalJuice want to make healthier choices because they want to look and feel better and they need a reminder. Having an email come to you, not only is the content great, but it’s a reminder to make healthier choices. We always send the email first thing in the morning around 10 a.m. depending on your local time. That’s one of the assets of the email as well. In terms of when it comes to advertising, we’re significantly more focused on selling the advertising in the emails, because we do tout that relationship that we have with subscribers, that they’re inviting us, that they read us five days a week, that they forward us to friends.
Andrew: Why do you only take email address and not email and first name or email and full name?
Amanda: We actually do ask some more demographic questions, mostly for our information of where we should launch our next edition or what’s the age of our subscribers so we can cater the content more to them. We do ask them after you’ve already put in your email address. The key is you want it to be as easy as possible for people to sign up. You don’t want to lose them because they get distracted or they feel like this is too much personal information. We ask email address, that’s all you have to give us. Then we appreciate if you give us more information because then we can make everything more relevant to you, but we don’t require it.
Andrew: Ah, I see, okay. Right, right. I must have done that, too, and I forgot. Right. There’s an email address on the website, makes it really easy to get people in the system, and then after you get their email address and they’re subscribed, the next page is where you get more information from them.
Amanda: Exactly. The interesting thing is you’ll notice more and more daily emails because everyone has a Twitter account and everybody has a Facebook account. They want to get you signed up for the email. They want to get you on the Twitter account. They want to get you on the Facebook. It’s just almost overwhelming. So we really try to keep it simple. First and foremost, we think you’ll love the emails if you sign up for them, so sign up for those, and then maybe the other stuff will come after that. We want to make it simple.
Andrew: How often did you publish at first?
Amanda: We started out doing five days a week. We had an everywhere edition, which is what we still have, which is still our biggest list. Then we, pretty quickly after launching the everywhere edition, were doing weekly local editions. We did New York and L.A. on a weekly basis. Again, once we got the funding and felt like our business was in a good place, we launched local editions and then we hired an editor in each market. Right now, we have five editors. We have five editions. We’re planning to launch a San Francisco edition soon, so that’ll be our sixth.
Andrew: Let’s see. We had first thing you did was you created the content on your own as an experiment to see if you could continue doing it. Then you found a company to send out your email. You launched a basic website. What’d you do from there to grow beyond that?
Amanda: From there, we did try a lot of different things. We did hire a PR company for a few months and realized that was not a good idea.
Andrew: That was on your dime, right?
Amanda: Yes.
Andrew: Okay.
Amanda: Exactly. It’s way more painful. Actually, I’ll say they’re both pretty painful when you put money . . . it’s hard to put money out there when you have no idea what the return is, whereas there are other things you can spend money on and either with confidence have some sense of what you’ll get based on past performance or other metrics that you can use. We did spend money on a PR firm, which was just a mistake at that time. It just didn’t work. I’m sure for other people that can be the key to the business. We did that. We did try a bunch of different marketing things. I don’t know if you’ve heard of the company BzzAgent.
Andrew: Yep.
Amanda: We worked with BzzAgent because they happened to be beta testing an online version of what they often do offline, which is send people product. Offline they send people products to get them in their hands and to have them talk about it with friends and give them feedback. They were launching an online version where they were exposing websites. We exposed our website to their list and that was great. We had a fan of VitalJuice pretty early on who worked on the “Rachael Ray Show” as a producer. So we were featured on the “Rachael Ray Show.” That helped us grow. The other things that we did, we hired our first employee to help with everything basically. She was an editorial assistant, she helped with ad sales. The key, though, is you have to wait until a certain point in your business to really make the ad sales pay off. It’s not something we focused on until we hit a certain size and felt like we had a compelling enough audience for an advertiser to take us seriously.
Andrew: What was that size?
Amanda: The funny thing about that is when you’re at 10,000 you say it’s 20,000. When you’re at 20,000, you say it’s 50,000. I’d say 50,000 is when it really gets meaningful, but you can sell ads before that. Now that we’re 200,000, we say it’s a quarter of a million. What would really be the number, you really want to get to the point where no one is saying you’re too small to advertise. That’s the marker of when you’ve reached a good size.
Andrew: Now there are no ad agencies for email, are there?
Amanda: There aren’t ad agencies for email but we work with digital agencies.
Andrew: The digital agencies, would they have worked with you when you had 10,000 people?
Amanda: Most of them, no. When we were smaller, we worked directly with the clients, and they might have been more local, high-end meal delivery companies or gyms or things like that. It wasn’t the McCann-Ericksons and the MediaVests of the world.
Andrew: AndrewSG in the audience is asking, “Who was your first advertiser?”
Amanda: Our first advertiser was actually Equinox.
Andrew: How’d you get them?
Amanda: We got them because the brand fit was perfect. We had a contact and had a few meetings and just convinced them that our audience was right for theirs. Our second advertiser was Vita Coco, the coconut water. I literally think I was in an elevator with a Vita Coco guy bringing a ton of boxes, and it turned out he was senior at the company. We had the conversation and it turned into a meeting. They were just launching at the time, and again, we had the perfect audience. This was when coconut water wasn’t what it is now. We got a dedicated email from them.
Andrew: How’d you know what to charge?
Amanda: There’s an industry standard. There’s kind of an email mafia, as I think has been written out there and everyone knows what everybody charges, at least what they say they charge. That’s all out there. There’s a standard, I guess I would say, in the email business.
Andrew: How did they measure success? How did they know whether the ads that they ran with you were effective or not? I mean the first two sponsors, Equinox the gym and the coconut water.
Amanda: Well, usually when you’re running advertising, you have two purposes. One is just branding and that you can’t measure, just like you can’t directly measure that in a magazine or on TV unless you have Nielsen telling you. The second, you actually can measure, which are the click throughs or the engagement rate. They have a certain value they put on whether it’s traffic to their website or prospects that they have in. A gym might say, “Most members are worth $2,000 over the course of their life.” If they can generate two paying members from something and they’ve only spent $1,000 on the ad, then it was totally worthwhile. Some of them have more specific metrics, whereas others it’s a little more about branding and they can’t measure it as closely.
Andrew: I see. Okay. Were these sponsors looking at their metrics? Do you remember what their response was?
Amanda: I can’t say specifically for the first and the second ad. For Vita Coco, we definitely drove people to buy cases. I can’t tell you exactly how many we drove. We had a number of advertisers early on in our business who said for the money they spent on us, which was significantly less than maybe they spent on CitySearch or Time Out New York, some of the other things they were advertising in, they got a higher payoff. We have a very high engagement rate or click-through rate compared to the industry standards. It’s like four to ten times higher than the industry average. We generate a lot of traffic.
Andrew: Okay. That’s the first couple of sponsors. Did you eventually get into a groove where you knew how to find sponsors and had a system for bringing them in before you hired people to do it full-time?
Amanda: No. I think it’s a constantly evolving process. I think it’s all about getting your name out there. We’re still not a household name like DailyCandy or I would say Thrillist is at this point. It’s all about, I always say the key to getting an agency or a client interested is having someone at that company who subscribes to VitalJuice and loves VitalJuice and wants to be that champion for VitalJuice. If you don’t have someone there, it’s way harder to make that sell and say, “We’re worth the money.” If someone loves it and knows that five of their friends send it around, then they get it.
The key is getting the meetings, getting in, even if the meeting, if they say, “Oh, we don’t have budget until 2011.” You say, “We suggest you sign up for VitalJuice.” Then hopefully they get hooked because we think most people do. Then when it comes time for them to actually have budget, you’re on their radar. It’s a constantly evolving battle. As I said, when we were 20,000, we had clients say to us, “When you’re 50,000.” We’ll be happy when we’re really over a million and the people like Walmart can’t say, “You’re not big enough for us.”
Andrew: I know that when I was selling advertising in any business, at first what I would do would see who’s sponsoring my competitors who I don’t know well and I’d go talk to them. Then after that, the rest of the business would come because they talk to each other. Is there a process like that where you went through, where you’re looking at who is sponsoring other newsletters and knew that they would be an in? Or did you find some other way in?
Amanda: We do that all the time, every day. I get 50 newsletters if not more. My ad sales team, we’re always looking at who’s advertising on DailyCandy, who’s advertising on Tasting Table, and who fits with us. Some of the challenges of getting advertising is someone who gets the email model and who understands why the CPMs are a little higher. You know that if they’ve bought on DailyCandy or on Thrillist that they get the model. They can be someone who you’ve already screened them from that point of view. We do that.
We look at the competitive magazines, who’s advertising in “Self,” who’s advertising in “Shape,” and figure out which ones would fit with us. Then there’s people that we’ve written about before that had a great response and we’re not going to write about them again. There’s going after them. There’s walking through the grocery store and seeing what are the new products that fit. We go to all the trade shows that are in our space and talk to people there that could be good potential as well. We’re looking everywhere.
Andrew: Okay. What about the design, the early design? How’d you do that?
Amanda: The early design of the site. My partner and I went to a very inexpensive design firm when we were starting VitalJuice. We had an image for what we felt like what the brand should be and the name, I think, had a lot to do with that. The juice aspect, we felt like it should be citrusy colors. The design firm created this logo that we fell in love with. We actually don’t have it anymore. It was so hard to get rid of it, but we had a ton of people in the design community criticize it for being too faint. It was like a gradient of orangey, pinky, yellow. It just didn’t pop as much as people in the design community think things should. It was painful to get rid of, but now that we did, we have a more sophisticated look. We stepped it up with a more sophisticated design firm that had more experience in our field. A lot of what email design is about is functionality. There’s the make it look pretty, but there’s also make it function the way you need it to and make the things that are important stand out in the email. We had to strike a balance of fashion and function.
Andrew: You hired a design firm right from the start?
Amanda: We did to create the logo.
Andrew: You did, okay. Roughly how much money did you spend on design in the beginning?
Amanda: We probably spent $2,000, I would say.
Andrew: That’s for logo and also the design of the email newsletters that went out?
Amanda: We used the logo to inform the design but then you have to pass that over to the programmers who are going to create the templates, which is what emails are based on. They were primarily creating a direction for the tech firm.
Andrew: Do you think if somebody’s listening to us now they could start off with maybe one of the templates on MailChimp or AWeber, maybe not AWeber, but one of these services that has good design?
Amanda: Definitely. I think it depends on what your email is. We felt like our branding was key because we are higher end, more aspirational. We felt like it needed to be luxury but in the soothing, wellness space. We felt like the design was key. We needed to get it right from the start. The one thing that you don’t realize is people get attached to what they see in their inbox every day and when it changes, it throws them, even when it changes for the best. So you don’t want to be redesigning too often. If you can get it right from the start, there’s plenty of people that start businesses that have the design capabilities themselves and they can throw it together. We just happened to not be able to do this on our own. We felt like we wanted to get the brand right, and we had the same branding for about two years. Then we changed recently to where we stand now. I don’t think DailyCandy’s ever changed their logo. They got it right from the start.
Andrew: AndrewSG, again, in the audience has another great question. He’s asking, “Do you double opt in your subscribers or is it single opt in?”
Amanda: Ours is single opt in, but you do get the confirmation when you sign up. There’s a second messaging but you only have to sign up once.
Andrew: How much of your own money did you invest in the business before you went to Pilot for an investment?
Amanda: Together, my partner and I put in about a couple hundred thousand dollars to start VitalJuice.
Andrew: Wow.
Amanda: Yeah. You can do this for cheaper, but we were pretty confident we wanted, again, to do it right. We got the templates made. We worked with the right email companies, and we got ourselves to a position where we were attractive to funding and that was the goal. Yes, you can definitely do it for cheaper especially if you have a lot of the capabilities that we had to go outside for. We did end up putting money in. We wanted to be able to try the PR firm. We wanted to spend some money on marketing. We had an office, we hired someone. You can do without the office. You could probably not hire the person. You may or may not need the PR firm. There’s definitely things, in retrospect, we probably didn’t need, but it got us to the place we wanted to be.
Andrew: When you got the investment, does Pilot Group take on more than 50% ownership in the company?
Amanda: I think it depends on their investments. In some, they get in earlier on the ground floor, and they might have a bigger chunk of the company. But there are others where they might step in later or play a slightly smaller role in the investment process.
Andrew: How big were you when they invested?
Amanda: We had about 35,000 subscribers. Again, we really went for quality. It was a very high-quality list. It was a lot through the organic growth. We did try things like BzzAgent and PR and stuff. We were about 35,000 and obviously since then, we’ve grown significantly.
Andrew: How’d you get to 10,000? We talked about the first 500 people who came in. We talked about how you now have organic growth today. What about the first 10,000? How do you get to that level?
Amanda: A lot of that was about forwarding to friends, telling friends you’re launching, asking them to share the information with women that they think would be interested in it. There’s that viral effect. We then went out to different blogs or websites in the space to tell them about us to try to get coverage there. We did BzzAgent, as I said, pretty early on. We probably did BzzAgent when were about 5,000 subscribers, so that was a big help then. We worked with a PR firm pretty early on. What we felt was that if we didn’t use them as an announcement of VitalJuice, then that would probably be the premiere time to get press is to say we’re launching. That’s why we did spend the money on the PR upfront.
Andrew: I see. What was the best use of money in the early days?
Amanda: In the early days, I would say the best use of money was, we did pay for ads to list Spa Week, where our messaging went out to the Spa Week subscribers. We did Facebook advertising from the start, that can be really good for you. Then we did spend money sending product or sending fun things to editors to get them to write about us. Those, I would say, were the most effective in terms of growth spent.
Andrew: Pilot Group, we talked about earlier how they’ve invested in multiple email companies. They must have a ton of experience at this point in this space. What did they teach you that you wouldn’t have learned otherwise?
Amanda: Constantly they’ve been a great resource for us. When we have hiring challenges, they help us get around. How we can come to terms with what the ad sales person is making now, but make it work for where we stand versus a big company. They’re very creative in structuring. They’ve given us guidance for hiring. We’ve been able to tap into the Thrillist guys and the Tasting Table guys as resources telling us what things work and don’t work. There’s a lot of communication in the Pilot portfolio, I would say.
Andrew: Do you have an example of one thing that they’ve taught you?
Amanda: What Pilot Group taught me?
Andrew: Maybe one thing Thrillist taught you, another portfolio company.
Amanda: The guys at Thrillist, Ben and Adam, they’re on our board. So whenever I have a question about raises for salary or how much should an editor in this market be making, or when should I expect to add another ad sales person, they tell me all that. They look at our budget, they tell us what we can expect. I’m looking for office space now and they’re a resource for that. There’s just a lot of things that they can be helpful for, and it’s kind of a this and that, but together they add up to be great help.
Andrew: Speaking of office space, where are you today?
Amanda: We actually are squatting in somebody else’s office. Around 55th Street and it was just empty offices that no one was using about two years ago that we claimed and will soon probably have to vacate.
Andrew: I heard that you were getting free office space. What about now? Where are we doing this interview? I saw somebody go into the refrigerator behind you. I figured I’d address it.
Amanda: It was my sister. Yep. It’s summer and it’s almost Labor Day, so I’m working from the beach right now.
Andrew: Oh, really? You’re actually getting work done in the Hamptons?
Amanda: Oh, yeah. All day.
Andrew: Can we say that it’s the Hamptons?
Amanda: Excuse me?
Andrew: Can we say that it’s the Hamptons?
Amanda: Sure. [laughs] It’s not only beach going.
Andrew: That’s one of the things I miss about living in New York.
Amanda: Excuse me?
Andrew: That’s one of the things I miss about living in New York.
Amanda: I know. The Hamptons is fun, but we only get to do it like three months a year.
Andrew: Right.
Amanda: You’re on the West Coast, and I think you can probably do it almost every day.
Andrew: Yeah. I was living in California up until recently, and yes, we could do it every day. I happen to be in Buenos Aires today.
Amanda: Oh, how fun. Now, I’m more jealous. [laughs]
Andrew: All right. Thank you. Thank you for doing this interview. I’m looking at my notes, I think I covered everything. Is there one bit of advice for somebody who’s listening to us, this is the last question, someone listening to us says, “I want to launch a business in the email space. Sounds like it makes more sense than launching a blog.” What advice do you have for them?
Amanda: I think my biggest piece of advice is figure out, and this is a few pronged, but really figure out if there is a space that no one’s occupying that you can fill, because if you’re doing what someone else is doing and you really can’t do it better, then it’s going to be really hard to grow. You really have to have a compelling, new niche product. Then you also have to make sure that there’s an advertiser market out there. Who are going to be your advertisers? Are they going to be able to pay the higher CPMs? Is there going to be enough of a constant flow? You really have to think about how you’re really going to be able to grow and is your market big enough and then is your advertiser market big enough and how are you going to differentiate and how are you going to get the higher CPMs and make sure that you’re compelling to both sides.
Andrew: All right. That sounds like a lot of work, too. How much time did you spend doing all this work before you launched?
Amanda: We probably spent six months playing around, getting the design right, getting the templates right, getting the content and the voice right. That’s the key. If our content sucks, then we have nothing. Getting the voice and the content right was the first thing we really spent a ton of time on. As I said, hopefully the growth with aid comes along, and then the advertising once you’ve really grown to a certain size comes then.
Andrew: Okay. I’m going to suggest that people sign up to the newsletter just to see what it’s like. VitalJuice.com. Go out there, check it out, sign up. You’ll see it’s pretty similar to what you find in a blog post. In fact, maybe it’s a little bit shorter because no one wants to read a long email in their inbox, right?
Amanda: Yeah.
Andrew: Check out their website. Sign up to the newsletter. Get a sense of how they’re doing, and I think you’ll find it’s the same stuff you’re being taught to do on blogs and on the web but delivered in a medium that holds on to subscribers and doesn’t force you to go out there and keep bringing new people in. If only I could do video by email, I would convert all of Mixergy into email. Follow your lead.
Amanda: Totally. Thank you.
Andrew: Thank you for doing the interview. Thank you guys all for watching. Bye.
Amanda: Thank you. Bye.
Andrew: Thanks a lot.
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