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Here’s your program.
Andrew: Hey everyone, it’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart. How does a bootstrapper create a profitable, very profitable company by democratizing advertising online? Joining me is Arjun Dev Arora. He’s the founder of Retargeter, a company that allows you to continue to market to your visitors after they leave your website? Arjun, welcome to Mixergy.
Arjun: Thanks. Good to be here.
Andrew: What size revenues are you doing?
Arjun: We are doing well into the seven figures and on a healthy clip towards eight figures here.
Andrew: I was right when I said profitable, right?
Arjun: Yeah, absolutely. We’ve been profitable since month six.
Andrew: Since month six. When did you launch the company?
Arjun: We launched in April of 2009.
Andrew: I didn’t say this to you before the interview started, but I always say this to interviewees so I might as well say it on camera, no editing once we continue from here. You and I talked privately about certain numbers. Don’t reveal those numbers that you don’t feel comfortable revealing, but do understand everything you say is stuck in here. I can’t edit it because it’s a frickin’, it’s a pain in the butt. I send this video to Guatemala, and it’s out of my hands. It goes up on the website almost auto-magically.
Arjun: All right.
Andrew: All right. Fair. So, profitable business. What else do I want to know about it?
Here’s my plan for the interview. I’ll tell you and the audience. I want to know how you did this thing. First of all, retargeting. Most people don’t even understand retargeting. We’ll explain what it is in a moment, but you took an ad medium that most people don’t understand. You built an insanely successful business from it.
I want to understand how you did that, how you explained the product to people, and then I want to get some ideas, some tips from my audience about how to use Retargeter or retargeting in general to grow their business, to advertise properly. First, let’s make sure we explain this to the few people that don’t know what retargeting is. Give me an example that will help people understand it.
Arjun: Yeah, definitely. I’ll use an example from the off line world and then translate that to the online world. An example that we like to use in the off line world is imagine if someone walked into a store. Let’s say they walked into the Macy’s down the street here, walked inside, took a look at some products, decided not to purchase anything.
Now, as they left the store, we tagged that person. Let’s say we tagged their shoe. As that person then walks around the city of San Francisco, they start to see ads for Macy’s. As they look up at a billboard, they see an ad for Macy’s. They open a magazine. They see an ad for Macy’s. Two days later, they’re watching television. The ad, the commercial is a Macy’s commercial.
And then we just take that same concept of being able to capture interest, walking into the store, and then market to those folks after they leave the site on billboards, TV and magazines. We take that onset and apply it online.
The similar example online is you visit a website, and then as you surf around the web you see banner ads for the site that you visited and the point is it stays top of mind. And you get folks to actually complete actions that they may have started there. Andrew: I remember once going over to Blackberry.com, looking around for an app back when I was experimenting with the Blackberry, and then saying it’s not very good. I’ll go look around the Internet, and I kept seeing Blackberry everywhere. I thought, maybe I’m not giving Blackberry enough of a chance. If they could afford to advertise on all the websites that I go to, maybe there’s more strength there. Maybe, I need to really pay attention to them. And then it occurred to me. No, I’m being retargeted. They know that I was on their website. They bought ads on every other website that I’m on, all the tech blogs and all the general interest blogs that I’m on.
It’s incredibly powerful and, of course, tell me about the click rates. How do they compare to ordinary click rates?
Arjun: That’s a great question. We typically see with directly advise or behavioral advise, CTRs can be .01 to .05% range. And with retargeting banner ads, we’re seeing anywhere from .25 up to half a percent CTRs. We’ve done a lot of optimization on our own banner ads, and I’d love to talk to you about that more, but we’ve even gotten our CTRs up to 1% based off of optimization, so huge up to 100X increases in click through rates for retargeted banner ads.
Andrew: 1% click through rate.
Andrew: I feel the audience pushing me to find out more about how to do retargeting, and at the same time I feel them pushing me to find out how this guy built this company. I’m going to try to merge both starting with when you launched it. Where did the idea come from for this business?
Arjun: Retargeting has actually been around for ten plus years. I was previously at Yahoo, so I was running business development around real estate and had a lot of exposure to the display world. I had seen big display campaigns run. I had even seen retargeting campaigns run in the context of some of our Yahoo real estate partners.
Andrew: What do you mean? How did you guys do retargeting over at Yahoo?
Arjun: Sure. For example, at Yahoo we worked for the company that was in the real estate space that was helping folks find homes online. That company was actually looking to retarget people that had been to their site but only across the Yahoo platform. The ads would only show up across Yahoo sites and a few others that were in the network. It was a large span. It was north of 50 grand for just a one month test to be able to have access to this technology and the display space across the Yahoo network.
That’s the previous example where we ran that campaign. It was a laborious process. We had to get the creatives, get it approved, work through getting things ready, get the code up on their site. It took quite a while to get the campaign launched, probably two to three weeks. In that context we noticed how powerful of a technology that retargeting was. Also noticed that there was kind of a transition happening in the display market.
There was lots of ad networks and that exchanges were appearing A bit of real time technology was just on the cusp of becoming main stream.
And so, noticed that hey, there’s an opportunity here to democratize this technology and make it available to small to medium size businesses that frankly had never heard of it before, but giving a small business access to a technology like this, so much more meaningful than a large company.
With Blackberry, seeing the ads everywhere on the web, hey, maybe they are buying that. They’re a large company, that makes sense. But when a small company can have that effect, it fundamentally changes their marketing spend and people’s perception of that family. That was really the impetus for starting it was to find this amazing technology and then be able to democratize it and make it available.
Andrew: I used the word democratizing. I said you democratize ads in my intro. I kind of hated to say that because I feel like everyone is supposedly democratizing, and I’m not explaining how in the intro by just saying democratizing and leaving it at that. I figured we explain it in the interview, and I think now is the time to explain it.
What you mean is this, before you had to buy a huge number of ads and have a big ad buy. Now, anyone listening to me and I’m not doing a commercial for you, but I have to explain the product and just go over to retarget.com, buy an ad for as little as how much?
Andrew: $500. In fact, here’s the big criticism that I’ve heard from people in preparation for my interview that it works really well, but they can’t buy enough ads because you just don’t have a big reach for them.
Arjun: Sure. I think that’s generally kind of an issue with retargeting. Retargeting is fundamentally limited by the number of unique users that are coming to your site. If you only have, say, 100,000 unique users or 50,000 unique users coming to your site, we can only show X number of ads because we’re actually targeting that audience specifically.
That is a great point, and that’s why actually recently we’ve started to kind of expand our capabilities and offer folks the ability to buy ads directly on the network that we have access to because retargeting is fundamentally limited by the number of unique users that are coming to your site.
Andrew: Is it also limited by the number of partner sites, the number of publishers that you guys are working with?
Arjun: Yes, technically, it is. We actually have partnerships with about 20 or so ad networks and ad exchanges, everything from Google, Microsoft, Groupicon, Glenn Media, just a host of…
Andrew: I see. If the publisher is not working with you directly, it might be working with one of the ad companies that would reach his customers. Let’s continue with the narrative. You saw what was going on at Yahoo. You said, “Hey, I could probably launch a business around this.” What’s the first thing that you did to launch the business?
Arjun: We reached out to some angel investors that we were actually introduced through a close friend of mine that I actually went to college with. I met with Auren Hoffman, who is one of our angel investors, and Auren actually looped in Tod Sacerdoti, who is the CEO of a company called BrightRoll, which is a video ad network.
We have some really seasoned company builders, folks not only who built companies before but also are in the advertising space, specifically not only be our angels but help us get things off the ground but also provide that expertise and those relationships, and kind of make the right introductions for us. That was invaluable.
From there, we just started and got a very simple website up. Frankly, I’m a big believer in the adage, if you’re not embarrassed by what you put up, you’re taking too long.
Andrew: Let me pause the story right there, if you don’t mind. I’m going to come back to the embarrassing website. First of all, can you please put your Skype on “do not disturb” so that we don’t hear the alerts as they come in? I should have asked you before. It’s my own fault.
You said that you raised money before you launched the business, right?
Andrew: I know how much you raised, and I still called you a bootstrapper because it was peanuts. It’s absolutely, frickin’… Most people who are listening to us, I don’t know about most, but many people who are listening have more cash available, cash advance available on their MasterCards and on their Visas than you took out. It’s peanuts.
Andrew: Why did you bother? Did you need the money?
Arjun: I think it was more about the relationships, and it was more about the angel investors who are extremely well connected, have a ton of experience, and are a great sounding board for us kind of growing.
Andrew: But did you need the money? As a person who worked for Yahoo, was this the kind of money that you needed?
Arjun: No, I think the amount that we raised was not.
Andrew: Did you have the money in the bank? Did you have savings at the time?
Arjun: I did, I had savings. It was more about having the angel investors on board and leveraging their expertise than it was necessarily about the money.
Andrew: This is important for me to understand. I’m not pushing you because I think, hey, you made a mistake by taking money. Everything that you did here all worked out really well, so I’m trying to learn, not try to correct retroactively. What do I know? If you did it, I want to learn.
Why is getting money from these people who would help you different from calling them advisors and giving them shares and getting their help, too? Why is it different when they put money in, even if it’s insignificant to them and not that big for you?
Arjun: I think it’s more symbolic in a certain sense. I think it’s more about putting skin in the game and saying, “Hey, we’re committed to this.” Even at a small level, it’s a commitment, and I think that’s what been helpful for us. Obviously, that commitment to us comes with shares, and it comes with equity, but it’s a small amount and it’s meaningful. I think that’s the reason why we decided to do it that way.
Andrew: I stopped you earlier when you were telling me how embarrassing the first version was. Tell me about the look. What was it that you feel many people would have waited on or would have thought was imperfect at the time?
Arjun: Well, initially I think it was literally one page, yeah, I think one or two tabs. It was basically a kind of a cheesy, hacked together image and a “contact us” form and a few bullet points about why retargeting was helpful and effective. Other than that, it was really just a place holder, frankly.
I don’t think we ever sold anything from that website. I don’t know that we even got too many leads. Initially, we just started off leveraging personal and professional networks to kind of get the word out. The website was only frankly enough to legitimize the fact that we were a web company, but a lot of our initial sales came just through personal and professional relationships that I had from Yahoo days, that our investors had. And then as we kind of continued to grow revenues and put some cash in the bank, then we invested in a better website.
Andrew: Actually, before we get to the first revenue, I should find out about the product itself. You built this software behind this, yourself?
Arjun: Yes. Myself and actually, interestingly enough Tod Saceroti was helpful, and one of our angel investors was helpful in putting that first iteration of the software together. We were able to leverage a lot of third party tools, open source software and build the initial retargeter app to make it work. Frankly, initially, a lot of it was just quite manual.
We were just kind of doing things on the back end that appeared to be
Andrew: Well, sorry, the connection just dropped out there for a second. You were saying you were doing some things on the back end that appeared to be what?
Arjun: That appeared to be seamless when handled through technology, but in actuality it was all manual.
Andrew: For example?
Arjun: Some intern scrambling on the back end. For example, some of the networks that we had relationships with, we could plug into our system, so to speak, our ad system. We were actually trafficking those ads directly through that network. Imagine here we’ve got four or five ad networks that are all synched out, kind of leveraging our technology. And then, over here we have one ad network that at this point in time doesn’t play nice.
We’ve got to go in and manually add additional code. We’ve got to manually run and traffic the ads on that additional network in order to get the ads up and running for our clients.
Andrew: I see. Let me get my video back up here. It looks like it dropped off for a moment. There I go. Speaking of using technology that’s just a little bit embarrassing, that’s pretty much what we’re doing here with Skype. It is sometimes really frustrating. My video cuts out. Your connection cuts out. We have to do a lot of work afterwards to piece things together. Thank you, Joan, in Guatemala for doing that.
The whole idea is you’re cooking users when they’re on your site, and you’re making sure that they get ads afterwards. How do you do that manually? How do you cook e-manually, and how do you manually make sure that if you’re sending the ads to ad networks that they’re hitting the right person? I mean, in the very beginning when so much of it was happening behind the scenes with interns and hamsters on wheels.
Arjun: Right. Initially, the manual piece was around one particular network. What we do now is we have one universal cookie. We just have to put one line of code on your site that connects to all the ad networks. It’s a pretty seamless process in that respect. All of the recording is available directly online.
When we started what we were doing is that we may have had our clients place one universal cookie for the majority of the networks and then two or three additional cookies for other networks that we had access to. Our clients would have to do that. Instead of us having to upload at one location, we would have to go and upload ads into multiple different networks in order to make sure that they were running on behalf of our clients. Each of those specific networks would require a manual touch to make sure their clients’ ads would show up on their sites.
Andrew: The technology that you were saying earlier that followed people around properly, that wasn’t even yours in the beginning. That was the ad network’s technology, or did you guys build that yourselves?
Arjun: Initially, we built some of that ourselves and some of the ad networks had access to that technology as well. The ad network ecosystem is quite complicated, so some of the ad networks have the technology themselves. Some don’t, and so where initially we were able to leverage their technology, we did.
Andrew: In the beginning, essentially, were you just reselling the technology that they already had? They had the retargeting technology in place. You were kind of reselling it with a little bit of tech work.
Arjun: Yeah, exactly. I think for some of the networks we were doing that. For others, we had actually built it ourselves. It was kind of a hodge podge of both of those things.
Andrew: I see. If you were able to make small purchases from these networks, weren’t they already essentially democratized?
Arjun: We had large minimums that we had to satisfy for these networks in order to have access to their inventory.
Andrew: I see.
Arjun: We were making those… We were taking on that risk and making those large commitments to these various ad networks saying that, hey, we’re going to run a bunch of mini campaigns that will hopefully add up to that minimum and allow us to be able to run those campaigns for our clients.
Andrew: You launched the business in 2009, right?
Andrew: In 2008, according to my research, you were a non-employee co-founder of something called Weatherista, a company in stealthy mode it says here. What is that?
Arjun: Weatherista was a great learning experience for me. It was a company that was launched and was basically, I was involved as kind of an advisor/non-employee co-founder for this company. And Weatherista as an idea is basically a way to make the online weather process – so someone coming to look at weather online – just kind of move it into the future, frankly. Traditionally, weather has been just a data dump. It’s been, ‘here’s all the weather and a couple of icons.’ Weatherista was really focused on allowing people to look at models, wearing things that are appropriate for the given weather conditions.
Andrew: I see. And what did you learn by that; what did you learn from that? You said that it was a big learning experience for you.
Arjun: Yeah, I think it was a great learning experience for me. The company went on, had a CEO and was actually recently sold and was kind of bought back by its investors, and they’re doing things at this point in time. But I think that for me the key learning experience from that was, it’s great to be a non-employee co-founder, and kind of be involved in an ancillary capacity. But if you really want to build something with your vision, the way that you want to execute and implement things, you have to be doing it full-time.
Andrew: What, what did you miss out? I love that.
Andrew: That’s something that answers a question that’s been coming up a lot in my interviews: Do you have to do it full time?
Andrew: And it seems like it depends. For most people it’s yes, for some people it’s not. So I want to understand, what do you feel you missed out on by not being there full time?
Arjun: Yeah, fundamentally I think it was around vision, and it was around where the company’s looking to go, and where they’re looking to grow. I think my personal opinions around where the company should go and what they should do and how they should do it were differing from those of the founding team. And I still, I think it’s a great idea, I think it’s a great company. We just had kind of differences of opinion on where the company should go and how it should be run. And with that in mind, I think that was one of the big lessons that I learned – that if I truly wanted to be involved in that company, in that idea, that it would require me to really be 100% dedicated to it. I can’t be kind of making comments from the sideline and adding color commentary here and there.
Andrew: I see; because people don’t take it seriously?
Arjun: Yeah, I think people don’t take it seriously.
Andrew: I see, right.
Arjun: I think if you want to say, OK, this is something I’m really passionate about, then you have to jump in 100% and be there, feet on the street, and get things done. And I think that also applies 100% to ReTargeter. I think that’s what’s helped us be successful to the extent that we have.
Andrew: Why did you launch as a single founder instead of looking for a co-founder?
Arjun: You know, initially it was things were shaky at Yahoo, I was looking to do something new. And it never frankly, really crossed my mind. And in retrospect we’ve hired a great executive team and it’s awesome to have folks on board who are executives who have ownership who are taking those sort of roles that a co-founder would. But initially it never crossed my mind. And going forward, doing it a second time (which I hope to do) I definitely will have a co-founder, so yeah.
Andrew: OK. So I understand what the first website looked like. I’ve got an understanding of what the technology initially was. Tell me about how you found customers? How did you do that?
Arjun: Yes. So the first few customers were really through our personal and professional network. So, it’s folks that I had worked with in the context of Yahoo Real Estate previously, or folks that I had worked with, or known through the UC Berkeley alumni network.
Andrew: Were you allowed to call up customers of Yahoo and essentially recruit them to a competitor or to a new business? Arjun: It wasn’t that we were calling them out necessarily, it was just announcing, ‘Hey, this is where we’re going.’ It wasn’t that we were selling to them directly, it was more that we had built those relationships over time. And we said, people obviously want to know, hey Arjun, what are you working on; why did you leave Yahoo? And said, oh, this is the announcement for the new company, and the conversation started from there. So it wasn’t that we were actively solicited them as clients.
Andrew: I would have actively solicited – would that have been a problem with Yahoo? I don’t imagine that they would care that much.
Arjun: I think our team, Yahoo Real Estate, was very understanding and super-supportive of my decision to leave and start a company. But at the time it was something that I don’t know how Yahoo Corporate works with these sort of things. So I didn’t want to necessarily be aggressive about that. But we were definitely very active. We announced, did a monthly newsletter (which we still do) to everybody in the professional and personal network, which startsconversations.
Andrew: I see. So, you’ve got all these people in your address book. You’re sending them updates about what you’re doing, like most people do when they get a new job. They send an email to all people in their address book saying, my old email is not active anymore, here’s the new one. Andby the way, this is what I’m doing. That’s what you did. And you happened to have better qualified contacts in your address book than most people would, for you business.
Arjun: Yes, exactly.
Andrew: All right. Cool. So, you called them up. How long did it take you to get your first customer?
Arjun: I think we got our first customer about a month to a month and a half in.
Andrew: Was that a month of working to get the customer? Or, how soon after you starting working looking for the first customer did you land him?
Arjun: Oh, I think that probably happened within two weeks.
Andrew: Because of your contacts.
Arjun: Because of the contacts, right. So, it was just really spending time to cultivate meaningful relationships. People now, hey, he’s got to be doing something interesting. I’ve worked with him in this context. The context is a little different, but our relationship prior was meaningful, so let’ssee what he’s up to. They put a lot of faith in me and a lot of trust, and I definitely respect them for that.
Andrew: I remember a friend of mine who used to work at Proctor and Gamble went off and started his own company. And I asked him, what have you learned so far? He said, that you need to use your friendships to get an advantage in the start-up world. That, at P and G, if you had a friend that happened to work at a publication, you wouldn’t be allowed to go andbuy from him just because you have a friend there. They would worry that you were maybe going to rig the bidding process in your friend’s favor, maybe get some kick-backs. You know, that’s something that you try to avoid. But, in the start-up world, if you have a friend that you can buy from, or a friend that you can sell to, Boom! That’s golden. That’s an advantage that you need to look for when you’re thinking about the new business that you get into.
Andrew: And, in your case, that worked out naturally well. OK. So, that’s the first customer. How long did it take you to get to, you said six months of profitability?
Andrew: What happened that got you to profitability?
Arjun: I think it was really just building the customer base and staying super lean. I think, initially, it was myself. It was a handful of interns. We hired our first employee right around the time that we hit profitability. So, initially, it was very much about leveraging technology to the best of our ability, being super efficient with time, and with our “sales process.” I think that was really helpful in building up that initial client pool, which then gave us a steady rate of revenue. And because our model was based on a month-to-month basis, and we aimed to satisfy our clients every month, we get that revenue not only in month one, but, ideally, indefinitely. Between those two things, that’s really what allowed us to hit profitability and then grow rapidly from there.
Andrew: Tell me more about that model that allows you to earn money on a regular basis?
Arjun: So, the way we price is based off the number of unique users that are being targeted in any given month. Then we look to show ads to that user base month-over-month. So, retargeting is effective, just as Adworks is something that you do everything month, or focus on your SCO is something you do every month. Just like that, retargeting is something you need todo every month. You need to stay in front of the people that are coming to your site. So, we charge based off the number of unique users that are coming there, and as those number of unique users grow, our plan grows with that. So, we’ve been fortunate to have a lot of clients that we’ve grown with, as well. And they’re retargeting budgets have grown also. Overtime, it just keeps scaling.
Andrew: So, you charge based on the number of unique users that a website gets per month. How does the number of sites that those users visit influence pricing? In other words, if you have 100,000 users who happen to each be, on average, on two websites that you represent, that’s 200,000 impressions I’m imagining. Versus having them hit four websites that you represent which is twice as much. How does it influence pricing?
Arjun: What we’re able to do, because of the extent of our network, is we’re actually able to show, and what we recommend and do is 15-20 impressions per unique user per months on average. And the reason we use that number, is that we found that number to be most effective in, not only showing enough impressions to get people to remember, but not so many impressions that it’s overbearing and annoying. And because we have access to so muchinventory, we’re sometimes able to show 30, sometimes even up to 60 impressions per unique user per month. But we actually limit it to 15 to 20, because we found that to be most effective. That’s what our pricing is based off of.
Andrew: You know, one of the big complaints that I get, not so much for — I guess for everything: for interviews, for the courses we do — is that they come across as infomercials almost for the company that I’m interviewing, or love fests.
Completely guilty. I’m not listening to this saying, “How quickly can we start buying these ads? I know about the process; I know how your company works. I don’t know why we haven’t bought before. Now that I’m spending…” I don’t know long we’ve been together, including the pre-interview, I’m saying, “We’re making a mistake by not doing this.”
And so it is. I’m not bringing people on here who I don’t admire. The vision has always been to bring entrepreneurs on who I admire enough that I want to learn from, and who other people need to and want to learn from. We admire their businesses. We admire the products that they do. We want to duplicate their businesses, and often use their products. I’m happy to say that I use a lot of my interviewee’s products here, and I should use them all.
All right. I now understand it. Here’s the thing that I’m seeing: Launched the business in 2008. Profitably within six months. About to break $10 million a month in revenue. It feels too easy.
Arjun: Not easy at all.
Andrew: Not easy at all. Tell me about the hard part. So far, it all seems like a snap.
Arjun: Right. I think the hardest part has really been building a culture and hiring the right folks. I think that’s really where I personally have learned my most important lessons. I think it has taken us two-and-a-half years to really solidify what our values are, what we stand for.
Andrew: Get open with me here. I didn’t push you on how much money you raised, because it’s the difference between — the exact amount is insignificant. I gave people a good understanding of what it is, so I’m not going to push you for something that’s going to violate your agreement with your investors and make you feel uncomfortable.
This is something that’s important to understand. Be open with me about a mistake that you made in hiring. Without saying the person’s name. Let me understand the process.
Arjun: Yeah, absolutely. I think we’ve made a few mistakes in hiring. I think initially out of the gate, we’ve hired… One example is, we hired an account manager who had a lot of experience outside of the technology space, so to speak. A lot of experience in retail, elsewhere. Came off very polished. We had that person integrated into the team right away. Excited about bringing them on.
Then within the first week to two weeks, we realized, “Wait… Their understanding of technology and the Web is not as strong, not even close to as strong, as it should be.” For some reason, we had missed that during the interview process.
Andrew: Why? What were you focused on in the interview process that would keep you from being aware of that?
Arjun: Yeah, I think what we were focused on more at that point in time was specifically around hustle and the ability to, in the account manager role, really take care of our clients. The ability to work hard, and the ability to be positive, be friendly, work well with our clients. That’s what we were, at that point in time, very focused on.
What we realized later is that our team at that point in time had such a strong understanding of technology and the Web that we almost assumed — and again, it comes down to faulty assumptions so often — that everyone else was comfortable with email, display, and basic social media and things like that. We didn’t really look to test for that.
Andrew: Can you give me an example of what someone might not be aware of online? We assume — I assume that everyone is aware of everything that has to do with the Internet, because I live online all day long. Give me an example of what wasn’t there.
Arjun: Yeah, I think what wasn’t there was specifically around email efficiency: one just being cognizant, being able to get through large volumes of email. In the account management role we have thousands of campaigns. We’ve got to manage all of those. There’s a lot of requests coming in and out. Not being efficient and being able to be quick with handling a large volume of email was one definitely huge issue.
The second thing was a basic understanding of social media. We are starting to receive a lot more requests through Twitter; support, being able to handle that. Having not even a basic understanding of how social media works and how relationships are formed through that platform was another big red flag.
Then I think lastly, not only just the technology piece, but also the attitude, I think, and the willingness to learn, which in our industry is so important. Things are changing all the time. Really having that willingness to learn is so important.
Andrew: How do you test for willingness to learn early on, and test for ability to respond to email well?
Arjun: Yeah, that’s a great question. I think over time what we’ve learned is that instead of hiring folks who have a lot of experience in retail or other vertical folks who have professional
preferably in the Internet space specifically. I think some of it is just how we do our job search, frankly.
Andrew: What do you mean? How do you adjust your job search in order to find the right person?
Arjun: It’s more the job search process, so to speak, or the hiring process. We get a lot of great interviews from all over the country, and I think we were open to initially working with folks who had great experience in other verticals. Now, we’re just being just much more refined and much more clear about… These are the type of people we’re looking for, specifically, and that has helped us tremendously.
Initially, it was more, hey, we’ll just take any interview. Let’s interview. Let’s bring folks in rather than saying these are the specific requirements we want. These are the specific types of people we want and just getting more clear about that. I think that was the initial lesson that I learned the hard way, so to speak.
Andrew: I feel that. I’ve got to say though, that doesn’t sound like a big pain. It seems like a small bump in the road. Did it feel like it at the time, or am I misunderstanding it?
Arjun: No, I think that was kind of the first example. I’ll give you another one. Another one more specifically was around kind of values alignment. We have a very clear set of values, ones that were written down but now expounded on until recently. Examples of those values are respect, focus on the long-term relationship, hustle, intelligence, willingness to learn. Those are the things that we really pride ourselves on as a team.
We had made some hiring decisions earlier where the person may have been a top performer, but may not have actually been in alignment with those values, or that person was in alignment with those values but wasn’t necessarily performing well really. I think those two things were so powerful we actually learned lessons in both of those avenues, someone who is a really strong performer but doesn’t align with the values and someone who is not so great on a performance basis but really kind of in line with the values.
Both of those people… One of those folks we had to let go. One of those folks left of their own accord.
Andrew: How painful was it to your business to have this situation happen?
Arjun: It was painful.
Andrew: It was. Why?
Arjun: Why? I think more so from kind of an internal perspective. From a business perspective, yes, it was challenging the first three weeks as we scrambled to get resources and make sure that everyone has to put in a couple of extra hours to make sure that everything goes along just fine. I think more so it was challenging to the business, especially when you le someone go who is a top performer but doesn’t align with the values because someone who is a top performer, everyone is looking up to that person saying hey, they’re doing really well.
It kind of makes people rejigger and rethink about what’s important in the company. I think having a clear message internally after taking an action like that was really important saying hey, performance is very important to us. We’re a growing company, and we’ve a long ways to go, but at the same time having alignment with our values, treating people internally with respect, treating our clients with respect is more important than performance. It’s more important than dollars.
Being very open and honest about that and spending time to really codify what our values are and giving specific examples of it was helpful to kind of surmount that, but initially it was, well, am I going to get fired? What’s going on? Are we fundamentally changing our strategy? Who’s important and who’s not? How can you let someone go who’s been a part of the team for so long?
A lot of those questions came up, and that was hard. It was very, very challenging, and it was one of the hardest things I’ve personally done.
Andrew: Good. I’m glad you explained that. I don’t want to blow off these issues that are important because they’re unsexy to talk about. What else do I want to talk about? Let’s go to the sexy part.
First million dollars, how long did it take you to bring that in in revenue?
Arjun: It was a little less than a year.
Andrew: Tell me about the feeling when you hit that number.
Arjun: It was awesome.
Andrew: Do you remember when you noticed it?
Arjun: I think we’d kind of seen the progression happening. I don’t remember the exact date, but I just knew that we were kind of heads down and we were working. And it’s just like, here it comes, here it comes, it’s getting closer and then boom, we hit that number.
We went out and we celebrated. We took the team off site, and we had a great time, and we partied it up. That was a lot of fun. At the same time, I think what has allowed us to be successful is that we celebrate the small wins. But we’re always open to learning and improving and saying, what can we do better. How can we better serve our clients? That’s really built into the ethos of our company. So, as much as we love to celebrate, and we celebrate hard, we always still have that, “What can we learn? What can we keep improving on?” mentality. I hope that we never lose that.
Andrew: What do I want to find out now? There’s so much here. I’m looking at my notes. I’ve got to stay focused on one thing. Let’s stay on this for a moment, and then I’ll go back to my notes. There’s something that I want to follow up on.
At first, when you launched the business, was there any fear that you were going to go under? Was there any, what did I do? I was working for Yahoo. I didn’t even get that much money in the bank from these investors. It’s basically me against the world, taking on this big risk. I’m dead. Did you ever feel that?
Arjun: Yes. I think the thought crossed my mind a couple of times.
Andrew: Just crossed your mind? No deeper than that?
Arjun: No, because I think that I had to purposely block it out. I think fear is such an enemy in business and in one’s personal life. It really can hold you back. I think that, initially, I almost treated it, frankly, as a personal experiment.
Andrew: You treated this whole business as a personal experiment, and youhad enough distance from it to not be paranoid and not be panicked attimes?
Arjun: Yes, I think I frankly did. I don’t know if that’s insane of me to think that way. But, at that point in time, I really just felt that, OK, if it doesn’t work out, then it doesn’t work out. I’ve always grown up with that mentality, and it’s something that my parent’s, frankly, instilled in me from a very young age. You’ve got to do the best that you can, and whatever happens will happen. So, that refrain has been in the back of my head for a very long time. I think it just naturally translated to the business as well.
Andrew: At what point did you realize, I’m going to be OK now? This thing is a hit.
Arjun: I think when we hit that first million, it was a pretty good feeling. It was, OK, I think we’re OK. Now we’ve really got to focus. Let’s buckle down. Let’s scale this. Let’s work out all the kinks. Let’s get this optimized. I think when I became even more excited after that, was when we brought on our first executive, our VP of Revenue and Operations. That wasanother great feeling. Just saying, hey, we’re growing even more. Now we’ve got people who are managing people that are reporting into me. So, that was another great moment and feeling.
Andrew: OK. One more question about the business, and then I want to learn more about retargeting and how to do it right. I’ve got in my research here, a note about you saying that one downside of being so lean is lack of customer service. But, because we’re so lean, Retarget is able to pivot quickly and utilize different sources to overcome obstacles. So, no customer service, meaning what?
Arjun: I think that means, not no customer service, but I think it mean not as much customer service as we would have initially probably liked. In the beginning, say the first year to year and a half, we would have loved to be able to have each of our account managers touch each of our clients every two to three days. That, frankly, just wasn’t possible. So, it ended up being maybe once a week we’d send a report and provide some insight. And for the first year, maybe up to a year and a half, it was like that. It was a little bit more reactive on the account management, customer service side, than it was proactive. And that’s something that, having a proactiveaccount management team is what we’re pushing at now.
Andrew: What does a proactive account management team do? I know reactive, you sit back and wait for problems and you deal with them. What’s proactive do?
Arjun: Proactive is looking at paying customers on a day-to-day basis. Providing suggestions on creating landing pages, such as if you tweak that or did that, your campaign would perform better. And this would be unsolicited. Not an email from the client saying, hey, what can we do to make this perform better? Rather, us reaching us and saying, hey, if you edit this creative and change a click here to “learn more”, you’re probably going to see a higher CTR. And that will help your campaign down the road. That’s more what I mean by proactive.
Arjun: That’s what will make that proactive and that’s what we’re really pushing for now and hiring folks to do that.
Andrew: I see. So of course you get paid the same whether the ad does better or worse, but customers are much more likely to stick with you longer term and continue to do more ad-buys if they get a hire click-through rate and if they get ads that perform better, so you have an incentive to help them out. If you help them out in an unsolicited way, they really appreciate it and they feel like boy these guys are on top of it.
OK. So I’m dying to learn this stuff. I kind of know what my fantasy is to say, I’m going to sign up to ReTargeter. I’m going to pay my own money and buy these ads and talk and do a session where you look at my computer screen and see how I’m doing it, or maybe you show me your computer screen and show me what’s worked for your other customers. Say, ‘Andrew you should do this and do that,’ and we learn here at Mixergy, but the audience learns along the way. I’ll put that out there if the audience wants us to do that, I’ll do that with them watching and if not, then it’s a bad idea and I’ll accept it. So I’ll put it out there, you guys demand it and let me know either way, but I’ve got you on here teach me a little bit, teach my audience a little bit about how we can do retargeting well. What are some ideas that we can implement today?
Arjun: All right. So I think retargeting starts from the beginning. It starts from your actual audience. The biggest question is what are your goals and who are you trying to target? I think that’s really where our consultative sales process, the education that we’re passionate about, it all begins there with asking those questions. So what is actually your goal? What are you really passionate about? Is it about brand awareness? Is it about generating more leads? Is it about selling more [??] product? So us getting very clear about how your [??] business operates [??] you want example.
The second question that’s equally important, is do you want to tag your entire audience, do you want to tag some segments of your audience, or do you want to tag maybe two different segments of your audience and then show each of those [??] segments [??]. That question comes down to I’ll give a specific example [??]
Andrew: Boy the connection’s really bad, sorry we just missed that answer. The connection’s really bad, sorry can you repeat what you were just saying, that first thing is to figure out whether you want to target a small segment of your audience or the whole audience, take it from there if you don’t mind.
Arjun: Yes, so [??]
Andrew: Again, we lost the connection and as you were talking shoot –
Arjun: So I’ll start one more time, so basically the segment is defining who we want to actually show the ads to, whether we want to show the ads to people who are maybe visiting your products page [??] or maybe they visited your services page. What’s most important to you so [??] this example that your services business [??] is something you really want to focus on, you only get a place retargeting code on the services page from your website and then show ads to encourage people to learn more about your services page or to come back and fill out a lead [??] form for the services page. So that’s kind of an[??] in depth example [??] of how [??] we retarget people.
Andrew: Boy, the connection again went down, all right I get, we lost the connection again as you were saying it, but I get the point. Let’s do two others, the point is this, you’re saying you don’t want to target just necessarily every single person that hits your website. You might want to say we’re only going to sell services, so let’s wait till somebody hits our services page, which means they’ve expressed an interest in hiring us for the services that we perform and those are the people we targeted and try to sell on the services that we have, that they just looked at. As opposed to saying anyone who happens to hit our website for any reason at all we’re going to pay money to reach, give me another two tips.
Arjun: Absolutely, so yea, definitely, thank you for putting together part two really appreciate it and excited to share some tips around retargeting. So specifically with retargeting, I think there’s a couple of different places where one has to start in the pre-planning stages when putting together a campaign, so the first place is understanding from where or whom do you want to target. It’s really getting a sense for which subsection of the site or which particular audience, from either site or email blasts or widgets that you’ve got on the web, do you want to actually target. Once your very clear about that the next strategy is what types of messages do you want to show those folks specifically. Then it gets into the actual creative self so understanding and optimizing and creating really good ads that either get brand awareness or incentive to get folks to click-through and actually complete an action and then on to the specific campaign management piece there’s another set of –
Andrew: Let’s hold off on campaign management. I want to dig into every part of what you just said, first of all what you said is you want us to think about segments of our audience that we’re going to be retargeting, not the whole audience. Why wouldn’t I just say, ‘Hey I’m Mixergy I’ve got a 100 to 200,000 unique people who come into my site every month. I’ve got a product to sell them. Everywhere they go on-line, all 100,000-200,000 people need to see my ad. I’m going to come to you and have it shown to all of them and let’s see if they can all become premium members. That sounds like a good plan, no? Why not?
Arjun: No, I think that is a great plan. I’d say about 50% of the time, probably even a little bit more, is where we end up. Let’s target everybody. Let’s keep it totally open. Anybody who hits the site, we’re going to target them with ads that encourage one particular action.
Now, in certain cases, probably not in your case, but in certain cases, there may be product, there may be services. There may be two different sides of the business unit. They may have a billion unique users and only have the budget to target 50,000 for something in particular. Or, they maybe driving a lot of “garbage” traffic, and want to really focus of people who’ve taken one step further down the funnel. So, there are a lot of different use cases where it doesn’t make sense to have that conversation. It sounds like, in your particular example, targeting everybody makessense.
Andrew: I see. But if I had a much bigger audience, now, suddenly I’m feeling like I have too small an audience. But if I had a much bigger audience, and I was selling the premium package that was more expensive than it happens to be right now, what I might want to do is say, onlypeople who saw that offer should be re-targeted first. And then, later on, maybe expand to others.
Arjun: Correct. Exactly right.
Andrew: Gotcha. OK. So, that’s who to target. What’s the next step after we figure out who to target?
Arjun: Once figuring out who to target, we figure out what your goals are with that particular audience. In your case, it sounds like you want to drive folks to the premium membership. In other cases, it may be lead generation, or the actual sale of a particular product. So, really getting clear around that. And the reason that’s so important is because that affects the messaging. That affects how you design the creative, and to a certain degree, what sort of campaign you set up. We can get to that a little bit later, but understanding exactly what the goal is will helpdefine what the ads look like, specifically.
Andrew: Do you have an example of someone who walked in thinking that they knew what the goal was, but after they had some clarity, they were able to really understand it and shift their ads?
Arjun: Yes. What we often find is, folks will say, all we want to do is just drive leads. Their only core focus is to drive name, phone number, and email. And as they think about it, and as we dive deeper into the conversation, they realize, hey, we actually want to really build our brand for the next year. Or, we’ve got this conference that we’re also looking to launch. Or, we’ve got another product that we want to announce, or educate folks about who’ve been to our site. So, through that kind of discovery process, we realized often that there are other things that are important to the company, or the organization. We can actually create a campaign that, not only helps to garner leads, but also may educate people about a new product, or provide some other insight. Because you have that active audience who’s going to be seeing your ads.
Andrew: So, you’re saying another reason to have them look at ads. OK. What else do we need to do?
Arjun: So once you have a sense for what’s the creative messaging, or what that actual goal is, then it’s around creating the right ads for that campaign. There’s a lot of best practices there, especially for those folks who are looking for a strong click through rate. Certain folks are just going to want people to come back to the site and fill out a lead form or buy a particular product. With those types of campaigns, what’s really important is to have the logo large placed in either the top right or left corner, and having one clear call to action. Interestingly enough, what we’vefound is that a red or blue button with white text with rounded corners is what, for whatever reason, seems to perform really well. So, it’s an interesting thing that we’ve learned over time. A well-designed button, that even pops out a little bit from the ad unit, is what perform best froma click perspective. Another interesting thing, as a tidbit, is that, putting an arrow at the end of a button, is really helpful in increasing CTR. So, there’s little things like that we learned.
Andrew: What do you mean by an arrow at the end of the button? Oh, the button text, so it will say, click here, with an arrow.
Arjun: Exactly. Two buttons to the right of the “n” on the keyboard.
Andrew: I see. Interesting.
Arjun: We found that to be helpful in increasing CTR.
Andrew: This is button that’s on the ad the ad that we’re buying and usingto retarget?
Arjun: Yes. Exactly. So, that we found to be pretty powerful. Also, testing the actual copy is super-important. We found that “learn more,” for example, converts much higher than “click here,” with retargeted ads specifically.
Little things like that, we definitely encourage a lot of A/B testing to get a sense of what works. Especially if you’re targeting 100,000 to 200,000 folks. That’s a couple million impressions, and little differences in click-through rate make a big difference down the road.
Andrew: Now we’ve figured out who we’re going to retarget. We’ve created the ads to retarget them. What do you recommend that we do with the landing page that they see?
Arjun: With the landing page congruency is super-important. Having an experience that is similar from the site example, the clear logo, the clear design aesthetic, to the ad itself; the ad itself should have that same look and feel. Then all the way through to the landing page.
With the landing page, what we generally recommend is to still have a lot of solid content on the page. A lot of folks, we’ve seen, make the assumption that “Oh! They’ve already been to the site, so let’s just grab their email address, or let’s just put up a landing page that has a few lines of text.”
What we find works really well is re-educating folks; understanding that, yes, they have been to your site before, they are familiar with it, but pushing hard the points that you really want to get across, that will lead to that particular conversion, especially around capturing leads.
Andrew: Can you be a little concrete about it? Can you give me an example of what one of your clients might have done?
Arjun: Yes. I can give your our own example, and those of three of our clients. What we do is, we’ve got a landing page that has the actual lead capture form here on the side. Then, has social proof, has the actual three to six key bullet points. We’ve got a couple of images that cycle through that have either client logos or a quick recap of what retargeting in. Then, at the bottom, we’ve got quotes and testimonials from some of our clients.
We leverage Unbounce, which we find to be an incredible tools to create those landing page quickly. Again, we leverage that tool to A/B test pretty aggressively.
Andew: Can you give me an example of something you discovered through Unbounce testing? I use them too. I love them. We’re always learning interesting things, though. What’s one thing that you learned?
Arjun: Most recently has been to put the lead capture form above the fold. We had a landing page designed by Digital Telepathy. I think you interviewed Chuck as well. They designed the landing page. They had a very nice-looking slide deck up at the top of the page, and then the lead capture form here, and a couple of bullet points in the middle.
What we noticed, and found to be quite interesting, was that the conversions were higher when we moved the lead capture form to the top, and placed a slide deck down towards the middle of the page.
Andrew: The call to action happens before you explain why they should take that action?
Arjun: Right. I can’t explain it. It may be that folks naturally scroll down anyways, and look for the content. They check it out, then go back to the top to fill out the lead form. A little counter-intuitive, but for us that’s worked recently.
Andrew: On the page that you have, the Unbounce page, are you just collecting email addresses so you can follow up with the user later on, or are you trying to make the sale?
Arjun: We’ve got a couple of different landing pages, but the one we use predominantly is the lead capture one. We’ve got name, email, company and phone number.
Andrew: I see, it’s just leads. What do you do afterwards?
Arjun: We use a tool called LoopFuse. It’s a marketing automation tool. We’re big fans of that. That puts folks into our marketing automation system, so they start to get emails, and get our monthly newsletter.
It places the lead into SalesForce, which is then assigned either manually, or via a set of rules that we have, to the right business development or sales person from our end. We’ve got that piece automated to make sure that we’re as responsive as possible, and make sure that our folks can get in touch with people.
Andrew: What’s the first thing that happens to me once I land on your page and decide that I’m going to give you my information? I’m now a lead. What do I see after that?
Arjun: What you would see immediately after that would be an email from the LoopFuse platform. That would go to you directly. It would just say “Thank you for contacting us. We’ll provide you with a phone number if you need anything immediately. We’ll let you know that someone will be in touch within a couple of hours at the most.”
Then an email blast, just a monthly email blast, general updates about what’s going on with us. Then, within three to four hours, if not sooner, someone from our team would reach out to you and start the process.
Andrew: What else? What else would I want to know? What are the CPMs for ads?
Arjun: For retargeting?
Our pricing model is probably a little bit different than the traditional advertising model. We charge based off the number of unique users that are being targeted. For every 10,000 unique users, we’re charging $500 to show about 15 to 20 impressions to each of those uniques over a month. The effective CPM there is somewhere between $2.75 to $3, in that range. It’s $500 for about 200,000 impressions.
Andrew: All right. I think I’ve got it all. I’m afraid to continue with the interview because the connection might die on us today, just as it did yesterday. But it’s holding up better today than it did yesterday.
All right. Thank you for doing the interview. The website is retargeter.com. Thanks. Thank you all for watching.