Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It’s the place where I’ve done interviews since 2008 now with proven entrepreneurs about how they built their businesses.
Because I’ve been doing this for so long, I get recommendations for guests from people who’ve heard about Mixergy, who know about Mixergy’s history who want certain people to be interviewed here. A few months ago I got an email from a guy who said to me, “Andrew, you should email and interview the founder of my company.”
I looked into him and frankly, the person who made the suggestion even sent over revenue numbers for 2014-2015 and I looked into the company, I looked into the guest and I said, “Yes, absolutely. We’ve got to get this guy on.” I especially like interviewees where someone on the team says, “You’ve got to interview my founder.”
So that’s what we have here with us today. Ben Kirshner is the founder of Elite SEM. It’s a digital marketing agency that kind of flipped the organization chart on its head, which means a lot of things, but one of the things it means is he’s sharing the profits from each sale with each individual employee who’s working on that client’s work. I don’t think I did such a good job of explaining that, Ben, but you’re here, so we’ll get into that in the interview.
For now what I’m going to say is this interview is sponsored by two great companies that I’ll tell you more about later. They’re called Toptal and HostGator. But first, Ben, welcome.
Ben: Thank you, Andrew. It’s a pleasure to be here.
Andrew: Hey, do you feel comfortable saying what those revenue numbers are? What were your revenues for 2015?
Ben: Yeah, sure. We put them on Inc. and some of the other awards that we apply for. So in ’15, we ended the year at $22 million, up from $14 million the year before.
Andrew: Wow. And you are roughly halfway through 2016. Where are you guys now?
Ben: We’re expecting another 30% to 40% growth this year.
Andrew: And how much of this company do you own?
Ben: I own 100%.
Andrew: And that model that I tried to explain earlier that I don’t think I did such a good job explaining, how would you explain this revenue share deal that you’ve got?
Ben: It’s basically a meritocracy. So what happened in the agency world–I started my career in the agency world. I saw the issues with the agency model. Agencies, I think, have a very broken model for the new economy. Back in the day, advertising agencies, the real value that an agency would provide would be mostly in aggregating media spend. So if you wanted to go buy a billboard on the highway and you called Clear Channel or CBS Outdoor, they’d give you a horrible price. But if you bought it through an agency since they were buying so much, they would give you a discount.
So the agencies really played the role of a media aggregator and they could get you a better deal. Nowadays, with all advertising media being essentially auction-based or exchange-based, now it’s all about the people. So, at the end of the day, it’s not about Ben Kirshner. It’s not about Elite SEM. It’s about the people in our organization. They’re the real heroes.
Andrew: Let’s me stop you there. It’s not about the methodology that you have? It’s not about the software that you use? It’s not about the collective company experience–it’s about the individuals who are going to be working on a client’s project?
Ben: Sure. Absolutely. They’re the heroes. They learned from the things that we have. I guess our proprietary IP of how we do things, they learn. We have trainings, but at the end of the day, if the people aren’t happy, our clients are not going to be happy. What happens in the agency world that we flipped on its back is the agencies typically have on average a 30% turnover, annual turnover.
That means really good agencies like mine, we’re less than 1%. I’ve only lost 7 people in 12 years of doing this who have left to go work at other agencies or companies in our space, where the average is 30 and really bad agencies is probably closer to 50% of the staff is turning over. At the end of the day, the people who work at Elite are the real heroes and they deserve the money.
So what we’ve done is we’ve said–I don’t want to take this interview into too much of the inside ugliness of the ad world, but in a very short 20 seconds, basically everything that people, employees who worked at agencies hated, we’ve taken note of, we’ve flipped on its back and that’s what we provide at Elite SEM. The proof is in the pudding. In 12 years, as I said, we’ve only had 7 . . .
Andrew: In 12 years to have 7 people leave is just incredible in any space. But I wonder if actually having a little bit more turnover might be healthy. I looked you up to see which of your clients said what about you, and I saw this one video of Gary Vaynerchuk, founder of Vayner Media, talking very positively about you and that reminded me about how he did this show once where he said he’ll hire just about anyone.
The reason he’ll hire anyone is you can’t tell until you put someone in a seat how good they are. By allowing himself to hire more people, he gets more experience with different kinds of people, he lets more people experiment on projects with his customers and if he fires the people who don’t work, that’s actually a net positive overall because he’s gotten to sample a lot of people, kind of like he samples a lot of social media apps to find the next Snapchat or Instagram. So aren’t you missing out on some of that because you don’t do that?
Ben: I said seven people have left us. I didn’t say we haven’t fired people over the years.
Andrew: I see.
Ben: I’ll tell you a great story of how we do that as well.
Andrew: Okay. How do you do it?
Ben: Well, I would say this. One of the things that makes us unique is we don’t just fire people for the sake of firing people, but I believe that like what probably similar to what Gary says and a lot of founders say is turnover is healthy. We’re all about getting right people in the right seat on the bus.
So, we’re very cognizant of always making sure we have the right people. We have people quit. We have people who we push out because they’re not in the right position at the right role. So, we definitely have turnover, but I was saying from a voluntary turnover of people who leave to go work at a competitors, only seven people in 12 years, which is incredibly low.
Andrew: So how do you let people go? Is it like a teenager with a girlfriend who decides he’s not going to call her up anymore? Do you stop inviting them into the office?
Ben: No.
Andrew: What do you do when you want to push them out that’s so different?
Ben: We have a really cool program. It was actually an unintended consequence. So we have this program where if someone tries to poach my employees–I’ll ask everyone not to try this because it will cost me a fortune–but I’ll pretend, Andrew, you have two people listening and to those two people who are listening, if they go on LinkedIn and send an email to one of my employees trying to poach them to work at a competitor’s shop, they go on the Google App and they said, “So and so tried to poach me.” And we give them a bottle of wine.
We take something very, very uncomfortable, “Someone’s looking over my shoulder. Someone from LinkedIn just called me or emailed me.” We make it a game. So what we we’ve done is we’ve encouraged people to say, “We’re very happy working at Elite,” to put it on a Google Doc. The reason we do a Google Doc is because usually recruiters are lazy and they just won’t call one person at our firm, they’ll call like 20. So the first person to put it on gets the bottle of wine.
So it’s taken something very uncomfortable and made it comfortable. But the best thing that’s happened from doing this exercise is we have seven offices around the country, we know who’s hiring where. So, let’s say we have in our San Francisco office where we have 20 people and in the last two months they’ve gotten 40 poaching emails, we now have a list of everyone who’s hiring in San Francisco.
So if we have to let someone go in San Francisco, we don’t just say, “Hey, you’re fired.” We say, “It’s not a good fit, but here’s a list of the 20 companies who are hiring in San Francisco. By the way, if you want to move to New York, here’s another 60 people.” We give them their first name, last name, email, whether it’s a recruiter, if it’s an in house recruiter or if it’s an external recruiter and we’ve helped everyone get jobs. We just don’t say, “You’re out of here. You’re horrible.” We say, “We want to help you find your new job.”
So this wine bottle recruitment program has basically given us a list of who’s hiring for what position. We don’t just say, “Write the first name, last name and you get a bottle of wine. We ask for all that extra information. So we use that to help people find job. I like to say I want to be a little more humane when we have to let people go. By the way, I don’t enjoy letting people go, but if we do, it’s usually for their betterment and our betterment.
Andrew: Ben, you mentioned the phrase, “The right people on the bus,” which calls to mind the book “Good to Great.” Before we started this interview, you showed me a book that you like that you’re about to read. You talked to our producer about one of your favorite books being “The Founder’s Dilemma.” You seem like a big reader. I’m especially curious about this idea behind the Founder’s Dilemma because you started telling me about what it was before the interview started. Can you repeat that so the audience hears it too?
Ben: Yeah. In “The Founder’s Dilemma,” it talks about do you want to be rich or do you want to be king and it was one of the biggest aha moments about being an entrepreneur. The author, Noam Wasserman–he’s a professor at Harvard who wrote this book–essentially, it’s really what Gary Vaynerchuk preaches all over the world about and gets a lot of credit for talking about, but it’s the idea of self-awareness.
This guy basically talked about it years ago in the book, “The Founder’s Dilemma,” which is when being an entrepreneur, taking the risk and starting the business and going from zero to a million is a skill and it’s very, very hard to do. The numbers are totally against it. I think 4% of companies started make it to $1 million and all the data is in the book.
I’m probably going to mess up the numbers. But then to go from $1 million to $10 million, it’s like less than 1% of companies who hit $1 million get to $10 million. Then $10 million to $20 million, it’s 0.2% and to get from $20 million to $100 million, it’s 0.001%. It’s very, very, very few companies get to those levels.
What it talks about in the book is about being self-aware of your skill because just because you took the company from zero to $10 million doesn’t mean you’re the person who can take it from $10 million to $100 million, although many people feel that way. They get cocky and confident that, “I’m the smartest guy in the room. I started my business. I got to $10 million. I can go to $100 million.” But no, you can’t.
Actually, I just attended a program at Harvard Business School, which this exactly what they talked about in that the MBAs of the world, people who get their MBAs, they’re learning all the frameworks and all the systems and all the processes to go from $50 million to $1 billion and they’re learning and getting training on how to do that, where a lot of entrepreneurs maybe who haven’t gotten that kind of schooling, it’s a different skill set. It’s a completely different skill set.
Andrew: Do you feel that in your business you’ve noticed that too that there was a certain set of skills that took you from zero, not business, no idea, to about $1 million and then from $1 million on to $5 million, $10 million? You feel that too? You’ve noticed it in your business?
Ben: Oh, absolutely. It’s all about not making the wrong hires, not hiring your friends, not hiring for nepotism reasons. We’ve had situations where people have been with us for a long time. They’re not the president of the company even though they’ve been with us for a long time. A lot of entrepreneurs or founders just, “You’ve been here for eight years and the company is eight years old–you deserve to be the president.” That’s person’s never been a president. They don’t have the experience to be president or the skills to be president. So it’s about not … I’ve learned, of course, along the way, what not to do.
Andrew: So, let’s break this interview down into those sets of milestones. Let’s start now at this part of the interview talking about zero to $1 million. The idea came to you–and we’ll get to the zero to $1 maybe, or zero to idea–came to you when you were working at an agency. I guess you were working at 24/7 Media, right?
Ben: There are then at a company called SendTraffic, another digital marketing agency.
Andrew: Okay. And you noticed over there what?
Ben: Well, I saw that people were leaving very often and they were usually leaving because they were not getting treated well and they were not getting paid for what they were doing. They were underpaid, overworked, they were forced to work on accounts they weren’t passionate about. So, I basically saw that there’s something wrong with the model here and also the manager to employee ration was like one to four.
Also, they had sales people they were paying a lot of money to who were getting paid a lot of money and weren’t doing much work. So, a sales person would call a company, close a deal, get paid a ridiculous amount of money but not actually have to do that much physical work, where the account managers were doing all the work, staying late.
Then you’d see the sales people crapping on the account managers for, “Do a better job, do a better job.” They were making all the money the whole time. The account managers were getting paid very little and then they would just leave. When they got called by a competitive firm, the unknown was better than the known.
So to stop that–this is the light bulb moment–okay, why don’t I just take care of these employees and make it a meritocracy and say to the employees if you do a good job and you get your client to spend more–this is all performance digital marketing, so it’s all very measurable–so if you get your clients to do better and they pay you more, you deserve more money.
Andrew: Was that the impetus for starting your own company or was it that you said, “I see SEM, search engine marketing. It’s pretty straightforward. If I get one or two really good clients, I can feed myself and make more money maybe that I did at SendTraffic and then I can expand beyond that somehow.” Which one was it?
Ben: It was a combination of a lot of things, but ultimately I saw the world was shifting to digital marketing. It was one percent of all marketing spend was digital. I saw the world was going there. So, digital marketing was a great business to be in, I felt.
Andrew: Even as an independent?
Ben: As an independent. Number two, I felt that how can these businesses who treat their employees so horribly be in business and be that successful? I want to flip it on its back and try this new model out. And in the beginning, it was very hard. I couldn’t recruit many people who wanted to join me. So I ended up hiring people with no experience right out of school and I kind of … they didn’t know any better. They never worked for these huge agencies.
But now what’s interesting–I guess this is more as we’re above the $20 million mark–now what we’re seeing is we love hiring people from other agencies because after they’ve been with us for a week or a month, they’re like, “Wow, this place is heaven compared to what else out there.” In the beginning, I had to take people and convince them my way was the only way because they didn’t know any better.”
Andrew: Wow. It looks like you bought SendTraffic.
Ben: That’s another longer story.
Andrew: Interesting. As we’re talking, I’m looking up … I remember SendTraffic a little bit. I remember 24/7 a lot. I think one of the problems that 24/7 had when you worked there, 2000-2001 is they went from being these superstars of the dotcom age to suddenly suffering maybe even worse than most other companies in the dotcom age, right?
Ben: That’s another longer …
Andrew: That’s another longer story, but they got hit pretty hard from what I know.
Ben: I think there was some lack of decision making going on there that was ultimately the demise of that company. There were a lot of great people that work there. A lot of my good friends–I want to dedicate this interview to him–was Ari Bluman, who just actually unfortunately passed away. He was a luminary in our space and was my first boss there. Unfortunately he’s passed away. In any case, he was one of the good guys there.
Andrew: They had a bunch of good guys. Yeah.
Ben: They had a lot of great people there. I think it’s just bad timing and bad direction.
Andrew: Did you start out by yourself at first working your first customer, getting your first client and working for your first client or did you immediately hire?
Ben: No. I managed all the clients myself. Then once I got past my bandwidth of managing four or five clients, I hired my first employee and then once he was on board, I was able to sell more and get more clients and then …
Andrew: Okay. So, let’s spend more time on that for a second.
Ben: Sure.
Andrew: Actually, I’ve got to take a quick sponsorship break and then I’ll come back and we’ll talk about how you got those first four clients, what you decided your focus would be, how you hired the first person and what you set them out to do and so on. My first of two sponsors is Toptal. Do you know about Toptal?
Ben: I do not. No.
Andrew: Ben, I kind of feel like the secret plan behind the Toptal guys buying of ads here on Mixergy is to just let the interviewees know about them. They probably sat down and said, “Andrew’s prices are really high, but look at who he’s interviewing and what he does is reads the ads within the interview. So, if we can just get in front of these great people, like the founders of Airbnb, the founders at Y Combinator, etc., the founder of Elite SEM, then boom, that’s all we need.”
Ben: Are they recruiters?
Andrew: They’re not recruiters. What they do is they have this agency, not an agency, they have this network of developers that they went out, found, tested, vetted, ran by other developers to make sure they were the best of the best.
Now when somebody needs to hire a developer and doesn’t want to hire them as a full-time employee at the company, they go to Toptal and they say, “Here’s what we’re working on, this new iOS app. We need an iOS engineer. We don’t have one on staff. Can you get us an iOS engineer who works with this kind of environment, who can take this specific product and turn it into a great iOS app and here are the people who we have on the team who can interact with them and here’s our temperament. We like to work this way, etc.”
Toptal’s matchers at that point go out and they find someone from their network, they make the connection. If the company is happy with that person, they can work part-time, full-time, on a project basis. There are some people who work there for years. Toptal’s rates are really good, but their people are spectacular. That’s’ one of the reasons why Andreessen Horowitz invested in them. That’s one of the reasons they’re making a ton of money right now. They really have just changed the recruiting business completely.
Ben: Wow. That’s pretty interesting. I have a friend who does that, but he doesn’t pay you so I’m not going to mention his name.
Andrew: Good call. Now they’ve branched out from there to designers. Designers especially you need a lot of help to find the right one because you want to talk through what your design sensibility is, how long of a project it is, who you want to work with, etc. So, they’re branching out way beyond developers. I’m also hearing people do something interesting.
People who have dev shops say to themselves, “We don’t have enough work for an Android developer full-time. We’re not going to hire a full-time Android developer. When we need an Android developer, we’re going to go to Toptal. We will find our right Android developer from Toptal and we will brand that person as if he’s on our team. Our end client, when they interact with the Android developers, doesn’t even need to know that they don’t work for our team,” the dev shop says this. They will go and hire.
I think we’re going to eventually see a world where there are virtual dev shops, people that can say they do all mobile development but essentially hire nobody except for a project manager. That’s just my theory based on what I’m seeing Toptal do right now.
Ben: I like it.
Andrew: Yeah. Lots of different uses for Toptal. They really want to get in front of our interviewees and they also know that Mixergy listeners are big influencers. So, they’re giving us something that they’re not giving other people who just go to Toptal. Mixergy listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours. We’re talking about a lot of developer time that they’re giving up here in addition to a no-risk trial period of up to two weeks.
If you are not happy at the end of your trial period, if you’re not 100%, you will not be billed. It’s a fantastic offer just for Mixergy listeners. If you’re interested, I want you to go to Toptal.com/Mixergy. Top as in top of the mountain, this is what these guy care about, just the top people, and tal as in talent–Toptal.com/Mixergy, really good sponsor.
Your very first client, how did you get that very first one?
Ben: Oh wow. My buddy at PrintingForLess.com–I know they don’t pay you–but that was one of my first, if not my first client.
Andrew: What was the name of the company?
Ben: PrintingForLess.com.
Andrew: Okay.
Ben: They’re still around. Great guy.
Andrew: This was a friend you met.
Ben: No, not a friend. He was a sucker for my cold call.
Andrew: You cold called him?
Ben: I cold called him.
Andrew: Okay. This guy does, from what I can see on his website, catalogs, postcards, business cards, that kind of thing.
Ben: Printing for less he does.
Andrew: Okay. You just cold called him. How did you know that he would be a good potential client?
Ben: I don’t know. I was probably selling SEO services or search. The one thing that 24/7 did, they represented GoTo.com at the time, which eventually become Overture. So, we were actually selling banners on top of search ads. That’s how I actually learned a lot about search and I saw that my clients were buy banners on top of search keywords on GoTo.com had the highest conversion rates and that’s what turned me on to search to begin with.
Unfortunately, I remember going–we represented ATT.net at the time, which is one of the big portals in the early 2000s and I went to them and said, “You guys need to do pay per click,” and they’re like, “No, just sell banners.” I couldn’t convince anyone at 24/7 to jump into search.
Andrew: GoTo.com later on became Overture, then was bought out by Yahoo, what they did was they invented search engine marketing as we know it today. They said you can buy an ad which will lead to the top search results in our search engine. So, were you doing that thing where you went to see who was buying keywords and then went to them?
Ben: Yeah, or I went to them and said, “On the word printing, no one’s buying the word printing.” I also did web hosting. I’d see no one was buying the keyword web hosting on GoTo, so I called web hosting companies and said, “Hey, do you want to show up at the top for some of the visitors for web hosting, dedicated hosting, all the keywords.
Andrew: Got it.
Ben: That was my strategy. I just cold called advertisers and said, “Do you want to advertise here?”
Andrew: Anyone who’s advertising not just a print shop, but someone who is running a print shop and advertising somewhere so you knew that they were open to ad buys?
Ben: That or yeah, I’m sure they must have been spending something online, or if they weren’t, it was hey–these guys were coming off the yellow pages. It was like, “Take some of your yellow page budget, put it on GoTo.com and your ad will show up.” I think we were only charging CPMs at the time, not even cost per clicks. So, I built a bunch of clients doing that.
Andrew: Before you go on, why would they just not take that idea and say, “Great, man. We’re going to go and do it ourselves. Thanks for the tip. Keep calling us up with more ad buy tips. Why did they need you?
Ben: Because we had the exclusive banner spot on GoTo, 24/7 Media rep …
Andrew: Why did PrintingForLess not just say, “Great. We’ll go and do our own search engine marketing ad buys.”
Ben: Oh, because we probably made them a lot of money. There’s a backstory. So, from there I went to SendTraffic. At SendTraffic, which is 2001 to 2004, the time I was there, I was one of the original advertisers on Google. So, I was advertising on Google before AdWords and was around. So, we were buying CPM banners on Google before they turned into a self-service system.
Andrew: I didn’t know they did that.
Ben: Yeah. So PrintingForLess and all my clients from back in the day, we were the first movers on Google on buying the banners. They only sold two spots on a CPM and you can only optimize the ad every six months. You can imagine that–what a wild, wild, west. So from there in 2004 is when I left.
Around the same time, they introduced AdWords, which was a self-service platform due to the buying of ads. Ultimately, I thought, “Oh, crap, my business is over,” because now to your point, everyone can do it themselves, I’m not going to have a job. They can just do it themselves until they realized and why I’m still in business today it’s not so easy. It’s very labor-intensive. There’s a skill to do it. Who has the time to do it?
PrintingForLess is Montana. How many experts in digital marketing are running around in Montana–no offense to Montana, I’m just saying it’s not the epicenter of digital marketing talent, but maybe there are ten people there. What happens if that person leaves? Who’s going to pick up and start doing Google AdWords? But you also had to do Google. You had to Microsoft. You had to Yahoo. You had to do AOL. You had to do Ask.com. I’m probably missing Lycos and AltaVista.
It wasn’t just advertising on Google alone and doing search marketing on Google, it was all these different players and they all had different platforms. So it was picking the keywords, writing the ads, they all had different specifications. They all had different bids. We all used different technology. It was a very labor-intensive service. Today, it still is the same even though Google is 90% of it.
Andrew: Okay. I see where you got your customers. I see the value prop for them. I see why they would keep hiring you and how you could improve your results for them with time. Let’s talk about how you hired your first employees. How’d you bring them on?
Ben: The first guy came from SendTraffic. He was passed up for a promotion. He was pretty happy to get out of there. I wanted–we were friendly from my time I worked with him there. So, I got him out. He was my first employee and then he came and worked with me and he was actually very instrumental in bringing on a lot of my next employees.
The first ten employees was pretty incestuous. It was a little fraternity house because everyone was connected to the first guy. His name was Lorne. Everyone was connected to Lorne. So, it was Lorne’s girlfriend’s best friend and then his next girlfriend and then his girlfriend’s brother and then the brother had his friend and then everyone was connected to Lorne.
Andrew: Okay. Let’s break down the skills that you needed as an entrepreneur at this stage in your business. What skills did you need to come up with the idea? What skills did you need to find your first customers, to hire and manage your team and then we’ll talk about how the skills change later. What were those early skills that needed to get you to that $1 million?
Ben: I would say I think it’s a combination of our business model was very different. The clients who found our business model, learned about our business model loved it. If I was pitching a local flooring shop, I would say, “Look, there are a zillion people offering search engine marketing, the difference is it’s not Ben doing it, it’s Mark doing it. Mark is amazing at search engine marketing and Mark is getting a piece of the business. So, if you pay us $1,000, Mark is making $500. If you pay us $2,000, Mark just got a $500 raise to $1,000.”
So, it was kind of like what your Toptal guys are doing I’m doing for search experts, where I’m saying, “Hey, Florist To Go,” I’m making this up, but whatever the client was back in the day. “Work with Mark.” By the way, we have a two-day out clause. If we don’t perform, you can fire us, just like your Toptal gives you a two-week free trial. We basically have a money back guarantee. If you’re not happy with this at any time, you don’t have to pay us. We have a no pay guarantee at any time.
Andrew: I get that, but what about you as an entrepreneur? What skills did you need? Was it the skills of hustling and making phone calls and not taking rejection? Was it the skills to make up a sales presentation on the spot? What allowed you to make it from zero to a million where, as you said earlier, most entrepreneurs don’t even make it that far?
Ben: It’s a good question. I think it was definitely a lot of blood, tears and sweat, I think a lot of working late. I was very fortunate in 2004, I was dating my girlfriend, who’s now my current wife. I had her support from very, very early on. I was working from 6:00 a.m. to 10:00 p.m. every night and weekends and never stop working. She could have been a horrible partner and said, “What are doing? I never see you,” and gave me a lot of crap. She was the most unbelievable partner, I think. She gets a lot of credit for that zero to one million timeframe.
Andrew: Just because she was tolerant of you working?
Ben: Beyond tolerant.
Andrew: It does take a lot of tolerance. Were you ever at a dinner and had to go take a phone call?
Ben: One hundred percent, vacations, on my honeymoon I was working. I don’t think wives and spouses get enough credit. I shouldn’t say wives. Spouses of entrepreneurs I don’t think get enough credit. I’ve seen friends try to be entrepreneurs and they struggle so much in the beginning just because their partner where they are in life isn’t as supportive. They’re not willing to take the risk.
They signed up. I have a friend who’s a doctor. The wife thought she was signing up to get a doctor. He’d work 50 to 60 hours a week and he’d be a doctor. All of a sudden he says, “I don’t want to be a doctor anymore. I want to go be an entrepreneur.” The wife is like not supportive of that, was never in the back of her mind that we’d be risk taking. We thought we’d have a steady family, steady income as a doctor.
Andrew: When you’ve got the management that you need of your spouse, of communicating what you need, of setting down the law, saying, “There’s no way that I’ not going to make this phone call because I care that much about my customers and my business,” what goes into that?
Ben: Yeah. Look, at the end of the day, she has been told from day one, “This is for us. This is your business too. I’m doing all this work, but you being a support system is crucial to the success. If you’re not supportive…” And look, we had blowups. We had fights because sometimes I’d miss a birthday party and she’d be frustrated. It happens.
I just have to remind her, “Look, I’m not doing this because I want to do this. I don’t want to have to take this phone call.” Back in the day when I was doing a lot of the advertising–Christmas, weekends, Thanksgiving, I was doing the work. I was missing a lot of family dinners and my wife was very supportive and sometimes she wasn’t.
Andrew: I get it.
Ben: It was probably in hindsight, there’s nothing I could have done, but the reward is look what she has now. Now she’s the owner of this company, whether she realizes it or not. So, she’s definitely benefitting from those sacrifices and she deserves to.
Andrew: What’s a benefit now that you have because of that? A house, stability…
Ben: The financial freedom. She can do whatever she wants. She can go wherever she wants. She doesn’t have to worry about finances at this point in our lives as much as we did when we first started. But when we first started out, we both had nothing and we were–we didn’t have much to lose, I guess, because we both didn’t have much.
Andrew: What about managing people internally? What does it take to manage people when you’re going from zero to $1 million? What did it take you? Why were you a good manager from zero to $1 million?
Ben: So, I think in entrepreneurship there’s not one right answer. I think it’s a combination of learnings that I’ve gotten. I was very fortunate to grow up in a household where my parents were entrepreneurs. My father owned a coffee business. From the time of eight years old I’ve been working.
When you talk about management of people, I look at my father as the inspiration of how to manage people. He has a business that’s 40 years old. He has people working for him for the last 30 to 40 years. I remember as a young kid growing up, one of his employees unfortunately passed away and the whole time at the funeral, they were talking about how much he loved my father.
Andrew: Why? What did he do that got someone at the funeral to say that?
Ben: He had I think empathy.
Andrew: Did you have empathy in the early years of Elite SEM?
Ben: Absolutely.
Andrew: You did. Give me an example of how you expressed empathy and that won people over and got them excited about working with you.
Ben: Sure. First of all, for me it’s genuine. I honestly really do care about my employees and I’m grateful that they work for me and I know there are a thousand other agencies they can work for and a thousand other smart entrepreneurs they can work for. So, I’m beyond grateful that they even come to work for me every single day and trust me to lead them. But it’s all about caring for them. It’s asking them questions, “What’s important to you. What makes you happy? We’re only on this earth for a short amount of time. What drives you?”
Andrew: And so you would sit down with your team in the beginning and say, “What makes you happy? What are you looking to do?”
Ben: Absolutely.
Andrew: What’s one thing that you remember that somebody told you that helped shape the way you led them or led the company?
Ben: Sure. Well, the reason we have seven offices, which never in a million years I would want to have seven offices. It’s not fun. It’s not profitable to have seven offices necessarily. But we do it for my people. The reason we started each and every office is because my people, who I cared about, want to live in these locations.
Andrew: Yeah. I see Philadelphia, for example, is one of the places where you have an office. How did you end up with an office there?
Ben: That was for me because I moved there.
Andrew: I see. You’re in Philadelphia now. How about Atlanta or San Francisco? Give me an example of a conversation.
Ben: So I have an employee, Abby Stone. She was, I think, our third or fourth employee, I said, “Abby what’s going on?” She was living in New York. She said, “I really want to be in Atlanta. My sister is there. My family’s there. I want to be closer to my brother.” I said, “Okay, let’s open an office there.” She was like, “What?” I was like, “Yeah, go open an office. Go move three. I don’t care. I’ll pay you the same you were getting paid in New York. Go do it.”
She did it. And Chris, this guy in San Francisco who worked for us, he opened our office first in Silicon Valley, then San Francisco. Then we had some people wanting to move to LA. So we said, “Let’s open an office.”
Andrew: Why open an office and not work from home?
Ben: So they had the option. So in Austin there are a bunch of people wanting to move to Austin. I said, “All right, we’ll open an office.” Three or four people moved to Austin and they’re living there working from home and I said, “Guy’s, whenever you want to open the office, go for it.” They’re enjoying working from home, but if a bunch, a few more people want to take the bull by the horn and open the office and do it, we’re very supportive of it.
Zach is my number two, my president who’s been with me for 10 years. His wife was pregnant. I was like, “Why are you in New York? Your father is a pediatrician in Florida. Your mom is there waiting for your grandchild. Your wife’s family is there. You’ll have a better lifestyle living there. What’s holding you in New York?”
Andrew: Just go work there. I see.
Ben: He opened it and then another guy moved. So it’s about–and if you ask the employees, they’re beyond grateful, but I’m the grateful one because they’re happy. If they’re happy, they’re going to stay loyal. So happy employees will stay loyal. They’ll also do great work for your clients. So it’s a win, win, win. They’re getting what they want. Clients are getting what they want. Me as the owner is getting what I want, which is less headaches.
Andrew: I’m looking here at the notes that our producer took on your conversation with her. You said that one of the ways that you got new customers is you were a professor at NYU. That gave you credibility. It made you a thought leader. Did that allow you to get more people into Elite SEM as customers?
Ben: No. I think being a professor at NYU has been a very humbling experience, very amazing experience, but the main reason I do that, I tell my students from the very first class, “I’m not hiring you and you’re not hiring me.” This is purely to give back to the community that’s been so great to myself.
So, I teach. I think we need more people to have the profession of online marketing. It’s an ever rapidly changing field and also it’s been a great way for me to make a lot of frenemies. I’m friends with a lot of the CEOs of other agencies. I’m actually a great lead generator for them.
Andrew: What do you mean? How do you end up being friends with other agency owners?
Ben: I bring them in to speak. I tell my students, “I want to be non-bias. Here’s another perspective.” I also fill them up with employees because I told my students I’m not going to hire them, but–
Andrew: What do you teach at NYU?
Ben: Search engine marketing.
Andrew: To undergrads?
Ben: I started as a School of Continuing Ed. So it was a lot of people in professional flux. Now my latest two years I’ve been teaching people getting their Master’s in marketing, MMA.
Andrew: Wow. I didn’t know they did that. My favorite professor at NYU, one of two, was an adjunct professor. He was a guy who ran a business who would come in just to teach this one class. His perspective on business and entrepreneurship was so much different from everyone else, much more practical.
I think I’ve said in past interviews that he would do things like say, “We’re going to task you guys to come up with the business plan here so we can talk about how you think about business. It’s totally okay to steal or copy or borrow someone else’s…” actually, he didn’t say steal. But, “Go get someone else’s business plan who aced my class before because in the business world, you’re allowed to share information like that, but be prepared. I’m going to ask you questions about it and if you don’t know what you’re talking about, you’re going to look like a fool.” That kind of perspective was really helpful.
Now we’ve got to $1 million roughly. Let’s take a break and then come back and talk about what you did to grow beyond that. What are the next sets of skills, next sets of practices that allowed you to grow your business beyond where most people ever get. While we take the break, I want to tell everyone about HostGator. It’s a great hosting company. Ben, you’ve actually been exposed to tons of businesses.
Ben, you’ve actually been exposed to tons of businesses. Let’s suppose that you were going to start over right now with nothing but a web hosting plan for free. You’re starting with nothing, you had to give up all your money and I’m saying, “Here’s a hosting plan from HostGator. Start a brand new business from scratch. Let’s see where you end up with in a year.” What’s the business you would build on this hosted website of yours?
Ben: Starting from scratch… That’s a tough one.
Andrew: Starting from scratch right now today.
Ben: I was thinking as you were talking. I think we use HostGator. I think that we’re a client of HostGator. So, there you go.
Andrew: I wouldn’t be surprised.
Ben: Does that get me off the hook for answering that question?
Andrew: There isn’t one? I imagine because of where you are that you’re probably seeing so many companies that you actually would come up with the guys who are making a killing right now are in the printing business and no one knows about it or the guys–do you see any of that?
Ben: Yeah. It’s so hard. I see so many businesses all the time, so I want to be careful because a lot of the good ones that are my clients’ businesses, I sure don’t want to compete against them. But I think I’ll pass. Just for the sake of time, I’ll skip that question. If there was something I found that I was passionate about, I’d probably be doing it. I’d probably be passionate about running this agency and changing how we are in the world, the agency world, I’m really focused on that right now.
Andrew: I’ll do this, then. I’ll come up with a quick online example based on your experience.
Ben: Okay.
Andrew: Anyone who’s working somewhere right now and realizes they don’t need their company to do what they’re doing really well should just go and start a new site on HostGator right now with their own spin on it and just start from scratch. All you need is a website for credibility these days, right? People go to your website. They see you’re a real person and they say, “All right. I’ll give you a host,” specifically if we’re talking about a consulting company that’s performance-based.
Another thing you could do is see that maybe there’s something brand new that most businesses still don’t know about. Do they not know about how to use Instagram to get customers? Do they not know about how to use Instagram to get customers? Do they not know about Snapchat? Is there something else out there that you’ve seen that works that you can build a business for?
If you want to, you can just go to HostGator.com right now, start your site, they cost very little, especially if you use this discount code I’ll give you in a moment. And they have incredible, incredible tech support. And of course if you already have a company and you’re not happy with your hosting company because they don’t have this great tech support that I’m telling you about, because they don’t have good uptime, because they’re just not a human being there, I urge you to go switch to HostGator.
So, what’s the unique URL that will give you a great discount? It’s just HostGator.com/Mixergy. Of course, they do have a 45-day money back guarantee. If you don’t like what I’m telling you, they’ll give you your money back.
What’s the next set of skills that allowed you to go from $1 million to $10 million, Ben?
Ben: I think I’ve got to give credit where credit is due. I hired a coach. I’m a big believer in coaches. Just like in the MBA there are 28 or 32 NBA teams. They have 32 different coaches. Then within each of the coaching organizations you have assistant coaches, you have shooting coaches, you have running coaches. Guys like LeBron James obviously are very gifted, but he didn’t get to where he is without coaches. Not all coaches are perfect for you. So it’s about finding the right coach.
So business coaches that are out there are very rigid and goal oriented and you better show up and they’ll scream and yell at you and people need that and want that. Others are like, “Whoa. I don’t need yelling and screaming. I’m self-motivated enough.” So I found a coach over the years. The first coach I had and I still have today is a guy, Cameron Herold, who I think has been mentioned on this show a few times. His book is called “Double Double.” It’s double your profit or double your revenue in three years.
Andrew: I thought it was double revenue, double profit. Let me take a look. I didn’t realize you were working with him.
Ben: Yeah.
Andrew: Working with him directly. So this was before he wrote the book.
Ben: No. he’d written the book “Double Double” and I worked with him. I think it was like 2000. It’s probably been five or six years.
Andrew: So you saw the guy who wrote the book. You went after him as a coach. What did he teach you? How did help you?
Ben: He just taught me the rules of the road, everything from how important culture is and how important core values are and how important processes are and write people in the right seat. He was that guy who basically said, “This person in this job, I know you like him. I know he’s been with you four years. Get rid of them. Fire them. Move them off the seat. I don’t care what you do. Get rid of him. Don’t call be back until next month until they’re gone. These people are horrible. They’re toxic. Go do it.”
That was some of what I need and he explained to me why. It wasn’t just to it for the hell of it. There was reasoning and rational behind it. So, a lot of what’s in “Double Double” is what he taught me in kind of my view and tracked me and also helped me just from finance.
He’s like, “Ben, you’re doing finance yourself. You’re doing all the billing, the receivables, the payables, the payroll, the health insurance. He’s like get a finance person.” I’d be like, “No. I don’t want a finance person. I don’t want to pay $50,000 a year or $100,000 a year for that. He’s like, “Ben, you’re never going to scale if you’re doing it all yourself.” It was hard to give that up, give up all the billing and receivables and seeing money coming in and cash flow and giving it to a professional who I didn’t know from a hole in the wall. We hired some really bad bookkeepers. Then I was like, “I’m never going to hire a bookkeeper again until he’s like, “You’re the CEO. This is not what CEOs do. You’re never going to get past $10,000 if you’re doing the books. And he’s right. If you think about it, you only have so much time in a day.
So he was probably the big impetus to get me over to the $1 million to $10 million. I had some other … he encouraged me to get some other coaches. I hired a finance coach and then from $10 million to $20 million I had other coaches, which I’ll talk about when I get there.
I think he was probably the main driver of getting me to the $10 million mark, not only from the learnings from his book, but he gave me the insight that a lot of entrepreneurs I don’t think get from brilliancy. He’s a brilliant guy and he has brilliant insights and brilliant ideas. He’s done it before. So, it’s being able to get a guy who’s done it before telling you what to do, not to make the same mistakes that he made.
Andrew: What are the systems that he helped you implement?
Ben: So a lot of them are … there were different systems along different stages of the evolution. Some of it was situational leadership, how to be a better leader or how to talk to the people who report to you. A lot of it was how we were organized and who’s reporting to who. We had too many direct reports. A lot of it was he basically did an audit and then showed me, “Here’s what you’re doing. Here’s where you need to be. We’re going to focus the next year or two in getting you from point A to point B, but we have to fix this first.”
And everything from the finance, like I mentioned, to situational leadership, to having core values and hiring on core values and firing on core values and having a mission and a vision, he did this painted picture process where you think of what your business is going to be in three years and write it out. He basically made a three-year plan and said, “This is where we’re going to be in three years.”
And then we reverse-engineered the plan of where we need to be. So if I said we’re going to go from $4 million to $6 million in revenue, that’s $2 million over three years. So you can do that math. It’s $80,000 a month. So let’s say it’s $80,000 a month. Well, how are we going to get $80,000 a month? How many sales people do we need? How many account managers do we need to do $80,000 in the business.
Andrew: I see.
Ben: It was a whole process of reengineering your goals. Then if you did that and you’re like, “There’s no way I’m going to do $1 million in a business. Well, maybe your goals aren’t realistic. So you should make realistic goals.
Andrew: I see.
Ben: So it was a lot of that. If you think about the timing, when I was at $1 million and I had to do everything and I couldn’t afford to not have profit. I had to do finance. I had to HR. I had to bookkeeping. I had to do health insurance. When you’re a $1 million dollar business, you have to wear multiple hats. When you get to a $10 million business, maybe you should be wearing three hats. To go from $10 million to $20 million and beyond, you have to have one hat. That’s a CEOs hat.
Andrew: What are the three that you have in that earlier stage?
Ben: In the three hats?
Andrew: Sub-million?
Ben: No.
Andrew: You were saying $1 million to $10 million need to do three things.
Ben: I probably gave up payroll but I was still probably doing benefits HR, worrying about HR, benefits, legal. I was still doing a lot of sales. I was probably still doing–I wasn’t doing account management. I probably gave that up as far as doing the day to day of account management. But I was doing pretty much some of the finance job, all the HR, all the IT, all the sales. So, I was probably doing maybe I went from ten hats to six but now I’m at one.
Andrew: By the way, I love this framework. Sorry?
Ben: I would say facility management I just literally gave up after 12 years.
Andrew: I love this framework, by the way, for understanding how you grew your business because I know there are a lot of people out there who were at that stage where you were $1 million to $10 million is where they’re headed and this is probably the most useful part of the interview for them. You were saying you needed to learn situational management. What’s that?
Ben: It’s basically how to–in a very summed up situation, it’s how to help–basically it’s figuring out–it’s a system of delegation and helping people prioritize what they’re working on. So, instead of coming to me with four priorities, it’s helping them figure out what they can do without coming to me, doing it on their own or there are things on their plate, helping them bring things to me in less quantity or me helping them, like they’ll come to me with an issue and me coaching them on, “Can you really do it yourself?” or, “You can do it yourself except you’re missing this one piece. I’ll fill this in, then you can do the rest of the project yourself.”
Andrew: I see. You said you also kept doing sales. How did you find the next batch of customers? When you’re going from $1 million to $10 million, what are you personally doing to bring in new sales? I imagine it’s not the same kind of cold calling that you did in the earl days.
Ben: So, the magic of our system is our client referral network. So, we’ve been very fortunate to have really, really big clients who just love our model. Literally our pitch is, “You’re not hiring Ben. You’re hiring these guys. They’ve here for five years. They’re not going anywhere. By the way, you’ve been burned by other agencies, right? How many account reps have you had in the last year at your other agency? Six. Well, I’ll pretty much guarantee that if anyone leaves within a year, you don’t have to pay me if you’re not happy. I can do those types of brand promises because I know my people aren’t leaving.
So, our model as far as sales is concerned without paying people or encouraging it, our clients, we made them so much money. We made them so happy. They were happy to sing out praises in the industry. So, a lot of it was referrals.
Andrew: Do you do anything to get them to actively refer? I know for example that you encourage and incentivize your employees to refer other employees. If someone refers someone who sticks around for a year, that referrer gets $500. The second year, they get $1,000, third year, $1,500. So, there’s an incentive to bring someone in who lasts with a company so that they can get paid as the person survives with the company. I’m wondering do you have any kind of formal structure that allows your customers to spread the word about you?
Ben: Can I talk about what you just said because I think it’s’ important for your listeners.
Andrew: Absolutely.
Ben: So just to clarify that process, if I bring you in Andrew as an employee after the first year–and we actually upped it a little more now, it used to be $500–you get a $1,500 or $2,000. So if I bring you into Elite, I get $2,000. Every time it’s your anniversary, it goes up by $500. So after your first anniversary, they give me a check for $2,500. If you’ve been there for two years, they give me a check for $3,000.
Andrew: Oh, really?
Ben: You’ve been there for another year, it goes to $3,500 another year, $4,000. So it goes up $500. In perpetuity, you get that. What’s amazing about that system is let’s say you’re a little upset. You’re not liking the new travel policy. You’re not liking the new office decor. You don’t like the coffee we went from Starbucks to Peet’s and you’re not happy. Well, I have a huge incentive as a coworker to make sure you’re happy.
So the first thing I’m going to do is go to the facility and say, “Can we get Starbucks back? I have $4,500 on the line to make sure Andrew doesn’t leave.” I don’t want to say everyone rats each other out, but we have an environment of people making sure everyone’s happy. If someone’s not happy, someone’s probably going to lose a lot of money if that person leaves. So everyone makes sure everyone is happy. So it’s a very good system.
Andrew: That’s a great system.
Ben: For clients, we do the same for the employees, if they bring in a client, they get an 8% or 10%, some percentage of the deal before they got rewarded for bringing it in. But we don’t do anything for clients. We just actually launched a platform called Influitive, which is influencer marketing for B2B. So we actually just rolled that out today. I missed the training, unfortunately. But we’re doing that for clients. Now we’re going to have our clients come into our system and they will get credit for referring people.
We’re doing great things like once in a lifetime meeting opportunities, once in a lifetime educational opportunities, so we’re going to have contests for them to refer each other and get rewarded for doing that. We’re not giving money, but we’re giving once in a lifetime experiences as thank-yous for referring us. We do things, if you refer clients, we do small things, but we haven’t actively done it. We’ve just been naturally blessed that our clients would do such a thing and put their neck on the line and endorse us.
Andrew: So, if you’re employees are incentivized to bring in new customers, what do they do that brings in new customers? Do they have a process? Is there something that they do?
Ben: So most employees aren’t sales people. They usually just bring people in and they know our sales pitch a little, but as long as they bring it in to the lead pipeline, we have a sales team and we’ll go close it and they get all the full credit. But yeah, a lot of them are passionate. You’ve seen the client stories. A lot of them love the company. They want the company to do well. Part of the compensation they get is based on how profitable the company is. It’s not just about what they do. We’re not a culture of I, we’re a culture of we.
So if I’m managing Skype.com as an example and they’re paying us $10,000 a month in fees, it’s not just I get $5,000. Some part of it is based on how much they’re paying, but some of it is based on how profitable the company is so everyone is incentivized to make sure that company is profitable, but the way that meritocracy works is Andrew, if you’re managing $30,000 and I’m managing $15,000 in fees, you’re going to make double me, but the question is are you making $7,000 and I’m making $3,500 or are you making $6,000 and I’m making $3,000. That’s based on how well the company does.
We don’t want to be like a real estate firm where everyone wears the Keller Williams hat but really no one cares about each other. They’re all out for themselves. We want to be kind of a hybrid of a wealth management firm and a real estate firm in an advertising agency. So, we all care about the bottom line. We all care about helping each other grow and manage more business, but if you’re going to work harder and longer and manage more dollars, you should get paid more than the person who doesn’t.
Andrew: So it looks like there’s a little bit also of a formal structure for bringing in new customers. You guys have a sales team that has a process, I imagine, for closing the sales. What about the top of the funnel? Do you have anything for that? I’m trying to figure it out by using SimilarWeb to kind of hunt around and what I see are things like you do appear on Search Engine Land a lot, MediaPost seems to send you potential customers. You do some ad buys, I imagine.
Ben: Yeah. So this is all post-2015.
Andrew: I see.
Ben: So when you’re at the size we’re at now, we have resources for marketing, PR and sales. You’re talking a lot about the future of the business versus what I did from $1 million to $10 million. It’s a much different structure. The trade shows we were doing, we might not even have had a booth. We’re just showing up and running around and hustling. Now when we go to a tradeshow, we have a booth. We’re sponsoring dinners. We have partners with do it with. We have more credibility.
So to get on MediaPost and some of these other outlets in our space, it’s building credibility. We’ve been doing this for 12 years. We’ve built a great reputation. We have seven people who are professors at different colleges around the country because I started the program at NYU, so I had the syllabi and the course materials. Tony Edwards, one of your fans …
Andrew: Tony Edwards who introduced us I think is an adjunct instructor at NYU.
Ben: Yeah. He is. I helped him get in there. He teaches on SEO. So you build thought leadership over time and we get picked up. But we do the basic blocking and tackling. We’re not doing anything crazy to get deals and leads nowadays. We have a PR strategy. We have a content marketing stagey. We have the Influitive strategy. We have a sales team who’s mostly doing inbound. They’re not going out there cold calling the world. We only hired the sales team because we had so much inbound business.
We didn’t have the sales people to deal with it, so we had to build a sales team. So they’re doing mostly inbound based on reputation. But we’ve won some great awards, US Search Awards ranked us the number one search agency for three years in a row and it’s voted on by our peers. So it took a while to get to where we are. Now we’re benefitting from the fruits of our labor.
Andrew: Do you kind of regret calling the company Elite SEM considering that there are so many other digital marketing models now?
Ben: Yeah. That’s probably … I don’t know if someone plugged that question to you because that’s what my biggest struggle right now. When we talk to Google and they see it all and they know everyone who’s out there, who all the best of the best are. We ask them all the time. I always ask Google–this is a great lesson for your listeners to do in whatever industry you’re in–is talk to the suppliers and say, “What could we doing better? You don’t have to tell me the company name. Who’s the best of the best? What do they do that I should start doing or what should I stop doing so I can be that way?”
So, Google, every year we ask them this and they go, “You’re the best.” We’re like, “We can’t put that on a billboard in Times Square.” They’re like, “Of course not, but you’re the best.” We’re like, “Come on, give us something.” They’re like, “No, you guys are the best.” “Give us something. And they go, “Well, your name sucks. Change your name. You don’t just do SEM anymore. You do other things.”
I was like, “Well, why don’t you guys provide me your branding team to help us out. So they did that.
Andrew: Really?
Ben: We had the Google branding team come in to help us, ask us questions, where do we want to be and all that whole branding exercise. Ultimately the thing that’s eating at me–and this is probably what’s been eating at me and this is probably a good case study for us to write in a few years if fit was a good idea or a bad idea. The reality is we’ve been growing 50% a year for the last six years. That’s a good problem to have. My name is not holding me back. This year we’re not growing 50%, maybe closer to 30% to 40%, but that’s just because the law of big numbers is more to blame than that. It’s not our name.
So if look at it like it was growing at 2% or flat or other agencies out there that I know, sure, I think a name change makes a lot of sense. The way we’re growing and the amount of people we’re hiring and the offices we’re opening. It’s just not a top priority for me.
I will say this–the good news about being Elite SEM, and a lot of my competitors has changed their name to get PPC and SEM out of their name, is this–sometimes companies just need the best search emergency because were, Elite SEM. We’re the best search agency. Then once we get them in and we show them that we’re really good at search, we cross-sell them on everything else once we’ve built the relationship.
If I change my name it to The Kirshner Agency–I’m making this up–or Digital SEM or Elite Digital, if I changed my name to Elite Digital and I’m going up against 25 other huge companies–Razorfish, Digitas, 360I, you name them. All the big, big guys out there, no one knows what it do. If I said, “360I, what are they good at,” you couldn’t tell me.
Andrew: No.
Ben: They’re good at everything because they do everything, but what are they good at, Andrew. If I say, “What is Razorfish good at?” You would say, “On their website they do 30 different things. They do development and marketing and design and search, SEO,” but what are they good at? What are they known for? You couldn’t tell me.
So I think the strategy of having SEM is a blessing in disguise on one hand because when huge clients call me and say, “We need SEM. We need SEM,” they’re not calling and saying, “We need SEM, we need SEO, we need social,” they hire us. Then eventually they need those other things and we cross-sell them the other things.
So, I kind of look at my strategy of being focused on SEO as a winning strategy. In the long-term sure, I probably have to get the word SEM out of our name, but it’s one of those things where I’d rather wait until I’m growing 2% a year than 40% a year to rock the boat.
Andrew: Is it a lot harder at that point because then it’s too late?
Ben: I don’t know, to be honest with you.
Andrew: You’re just taking this risk based on your analysis.
Ben: Yeah. When I pitch a client, they walk out of the room and they’ve been pitched by every agency under the sun, I always ask them this, “What do you think? Whether you sign with me or not, what do you think about our pitch, our value proposition, our story?” They honestly say it’s the best story I’ve ever heard. It’s the best pitch that I’ve ever heard. They’re not saying Elite SEM is the best pitch.
I don’t think the name matters that much. I think the story you’re selling and the value proposition you’re offering means a lot more than the name they’re hiring. I don’t think we’ve lost business. I think we lose employees. I’ve been given feedback where we try to hire people for our social team or display team and they go, “I don’t want to work at a search agency. We don’t do search.” Fair game.
But if we can get you on the phone and explain our strategy like I just explained, we built out teams of people outside of search and we plan to hire–those are our fastest growing divisions, all the non-search division. It’s an interesting strategy, business case conundrum. And it will be addressed. We’ve bought domains. We’ve figured out different–I’m looking to see if Elite.com was available, but it’s a hard one.
Ben: No. Once again, if I change it to Elite Digital or Digital Elite or something along those lines, is it really going to get me new business? I don’t know. I don’t think so. It’s going to cost me a hell of a lot of money to start rebranding seven offices and business cards and 140 people’s businesses cards, all the awards I’ve won, the Inc. Award, the Cranes, the Mashable, all the amazing awards we won for culture, now formerly Elite SEM.
Andrew: Right. That’s so tough.
Ben: It’s a tough call once you’ve built a great brand. We have competitors who have done and made the switch seamlessly and they’ve even coached me on it. They said, “It takes about a year.” They also said, “No one really cares.” At the end of the day, clients don’t care. Employees really don’t care. No one really cares. But if no one really cares, why change it? It’s like Berkshire Hathaway, right?
Andrew: Yeah.
Ben: They do houses. They do insurance. They don’t real estate.
Andrew: But they have a generic name. If they started off with Berkshire Textiles and stuck with that, then I think it would be something different.
Ben: Look at Danaher. Danaher is the most successful, one of the most successful companies ever, outpaced the S&P by six times in the last 25 years, it’s Danaher. What is Danaher?
Andrew: I agree with you. If you’re growing that much, I think you probably don’t have the issue. It’s not worth it. Here’s the other place where I agree with you. I know as someone who reaches people a lot, if you say that you were an Inc. 500 company, I go take a look to see if you’re an Inc. 500 company. And if I don’t see it up there, it’s usually a signal that something is up. Like maybe the founder was an Inc. 500 company with his previous business and now he’s taking the logo and putting it on his current site. It does take away something.
Ben: Yeah. At the end of this story we’ll be able to look back and see lessons learned. Maybe I should do it today. Maybe I should never do it. Maybe I should do it once we’re slowing. We need a reinvigoration in the business. As I said right now I have bigger problems and things. I need to hire great employees.
We’re growing at 40%. I need to hire great staff. I need to build up my leadership team. I need to build my advisory board. I have other priorities to worry about now than to change my name. But it’s a fair point, fair question, probably my personal big rocks to figure out. One of my big priorities is to kill the name. But if Google is telling me the worst thing we’re doing is we have a dumb name, we’re doing alright.
Andrew: All right. Well, thank you so much for doing this interview. I think you’ve got an incredible company. There’s so much I didn’t get to talk to you about that I even spent some time researching, like the coffee company that you did, Coffee For Less.
I even checked to see is that still up and running. You guys offer incredible support there. I was chatting with one of your people to test if the business is really still cared for and the business is cared for. You said, “Established since 1975.” I went to see, “How could this guy who started this website in 1998, how is he established 1975?” It’s your dad’s company.
Ben: Yeah.
Andrew: He was in the coffee business before. There’s a big story there I didn’t get into. I didn’t get into the story of how you acquired the company you used to work for, SendTraffic. I hope we’ll get another opportunity.
Ben: I didn’t acquire that. That’s not going on the record. I didn’t acquire that.
Andrew: How did you acquire the URL then?
Ben: They went out of business many years ago.
Andrew: You just bought the domain.
Ben: Yeah. And the trademark.
Andrew: Got it. Okay.
Ben: They ended up selling, I think, in ’05 and then the company they acquired dumped them and changed the name. I think they changed the name after they acquired them and it just went to the wayside. So, for nostalgic reasons, I bought the domain.
Andrew: I get it. I would do that too.
Ben: But maybe that’s the next iteration of our company.
Andrew: I wonder if you’ll end up renaming it that.
Ben: It could be.
Andrew: That’s a tough one. I was Googling them to see what was written about them in the past and I couldn’t come up with anything.
Ben: This is 12-14 years ago.
Andrew: That’s part of the reason. Another part of the reason is their name is kind of generic. SendTraffic…
Ben: Which is a good name for putting yourself out there. Their value proposition and business model is literally the complete opposite of mine. I don’t know if I’d want to associate with what they were and did and they… longer story over a beer, but in any case, it’s fun to have the name for nostalgic reasons.
Andrew: How about just Elitesem? We no longer call it Elite SEM, Elitesem?
Ben: There you go. We can rebrand just SEM.
Andrew: You really have created a kickass company from everything I’ve seen as I kept digging in. Like I said, there are so many other things I could have gotten into. Thank you so much for coming on here and doing it. Congratulations on all the success here.
Ben: Yeah, my pleasure. Thanks for having me, Andrew.
Andrew: You bet. Thank you all for being a part of it. Remember my two sponsors are HostGator for hosting and Toptal if you need to hire a great developer or designer. And if you haven’t yet, please subscribe to the podcast. Thank you and check out EliteSEM.com. Bye, Ben.
Ben: Thanks. Take care.
