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Here’s your program.
Hey everyone, I’m Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. You guys know what we do here. I bring on a different entrepreneur for every program to find out how he or she built their business, learn about the setbacks, the milestones, and everything that it took to build up the business. And my hope is that you’ll take those ideas, go out there and build your own business and come back here and let me interview you.
Today I’ve got an interview I’ve been looking forward to doing. I thought email newsletters were dead. How did today’s guest do it? I have with me Jen Boulden who launched Ideal Bite in 2005 and sold it three years later to Disney for a reported $20 million.
Ideal Bite was an email newsletter that delivered bite-sized ideas for light green living.
Jen, my first question is this. Really, I did think email newsletters were dead. We were all getting excited about social media back in 2005 when you launched the company.
Jen Boulden: Right.
Andrew: Why did you decide on email?
Jen: Well I think it’s dead to early adopters, right? But there’s still a huge swath of people where email is pretty freaking cool. And the fact is, even though we’ve been proclaiming the death of email for even longer than since 2005, you still use it, right? Right?
Andrew: I spend hours on it.
Jen: Thank you. And the fact is, it’s just not going to go away and especially for our demographic, it made perfect sense to deliver something in their inbox as opposed to expect them to remember to go check a website every day.
Andrew: So where did the idea come from for the business?
Jen: It was really a coalescence of a lot of things, the perfect storm, the aligning of the stars. Basically, I had a consulting company catering to green businesses, right? From that, picked up on a market need, which is always number one if you’re trying to think about what kind of company can I start. You say, ‘What does the world need?’ So we found a market need for, basically, companies to go and target what we call the light green consumers, these are the ones that drive their SUVs to Whole Foods.
As opposed to have to try to pick them out of a haystack, right? With different marketing targeting methods, like, are they watching Jerry Springer? Are they reading National Geographic? Who cares? Why don’t we bring them to one database, which is ours.
Jen: So how do you bring them to the database? You offer them something for free. And that’s kind of where the idea came from, combined with the fact that we watched DailyCandy, a comparable business model, get funded by Bob Pittman. They took in, I think, a few million dollars from Bob’s group called the Pilot Group and we’re like, ‘Hey listen, Bob’s one of the smartest guys in media. If he thinks email’s king, so do we.’ [laughs]
Andrew: I see. So you did the same thing that Thrillist, the founder of Thrillist came here. He said he saw DailyCandy, he saw the way that they were funded, he saw the way they were building their business and he said I can probably do that for my niche.
Jen: Did you have Adam or Ben on your show?
Andrew: So you know them? You were funded by Bob Pittman’s group, he was funded, so was DailyCandy. I see.
Jen: Yep. Yep. I know Ben and Adam well. [laughs] We’ve been in Bob’s Mexican villa together for offsites.
Andrew: I couldn’t find out how much Bob invested in your business. Was it public?
Jen: It wasn’t.
Andrew: It’s been a few years now. Can you give us a sense of how much it was?
Jen: A few. A few million.
Andrew: And he was the only investor?
Jen: Well it’s not necessarily him.
Jen: It’s his private equity group.
Jen: It’s called Pilot. And yes, we raised friends and family first, and then we bought them out eight months later so that Bob and his partners could have a clean run.
Andrew: Okay. I see. All right. I want to get into the whole story. We discovered how you came up with the idea. Now you got to go out there and get people to give you their email address, and that’s a tough thing to do, and build up your mailing list. How did you do it in the early days?
Jen: In the early days it was two things. We didn’t have money for marketing, right? Which is great, because you have to make sure that your product is amazing and people want to talk about it and share it, so that really ensured that we were delivering something of value. So, the viral, word of mouth was number one.
Number two was PR. I realized that we had something to say, that we could basically help reporters report on the green thing by doing their homework for them and that we were good representatives of this light green idea that really was resonating with the mainstream audience.
Both my co-founding partner and I would go and do as many interviews as possible, getting to a point where I was doing television about once a week.
Andrew: I saw that. And you’re really good on TV. And people who are watching us or even downloading the mp3 and listening to us can tell that you’re articulate, you come across well, but I didn’t see in your history a lot of PR experience. How’d you get good at this? How’d you get so good that you can build the early part of your business on PR?
Jen: That’s a really great question. You’re right, I had no experience in PR necessarily, and no experience in front of the television. A lot of it was baptism by fire and it was just one of those things where, again, the stars aligned and it was fine. I actually liked live television because it was a big adrenaline rush.
In terms of the strategy and the know-how, it was trial and error because we had to do it. We had no other option. We didn’t have multiple millions for big marketing campaigns. So I was like, ‘How am I going to get on Martha Stewart?’ Right? Like, okay, let’s be creative. I had a whole bunch of products in my office because people were sending us products to try. I put together gift baskets. I’d find their producer’s mailing address and send them off, being like, ‘Hey, these are some of our favorite products. We’d love to green a house for you.’ And three months later, there we were greening a house for Martha Stewart.
Andrew: All right. Now I’ve seen so many of my friends send stuff to Martha Stewart, to Oprah, to everyone else and they don’t get a response. Why did you get a response do you think?
Jen: Another great question. We were pretty early, right? We were pretty new, in 2005, this was pre-Inconvenient Truth and Al Gore. IT was pre-Cameron Diaz showing up to the Oscars in her Prius. So we were one of the only people out there doing what we were doing, again with the shtick that resonated with mainstream. And yet, we didn’t look like tree huggers. We had a trustworthy personality and voice, and some call it telegenic. They’re like, ‘Okay, well this a sure bet. We can have green without scaring away our audience and so let’s book them.’
Andrew: By the way, guys in the audience, I see the questions that you’re posting up here. I see AndrewSG has got an SEO question for you, Jen. I’ll bring that up later. I see Jason Baptista, with a guy who’s been telling all the web 2.0 heads out there that email’s powerful, is saying that email is still powerful. I want to ask you about that. I want to see if it really is anymore or is everything going into the spam folder?
What was the original product? What did it look like?
Jen: In terms of what was delivered into your inbox?
Jen: Okay. So it was highly designed, it was highly crafted, like our voice was very unique, very original. That was our inimitable piece, because anybody can send out an email, right? It was both educational and entertaining which is a very hard nut to crack. Okay. But in terms of how it looked, it was 250 words max because the whole thing about Ideal Bite, bite-sized. No one wants a diatribe of ideas. Just give me one little thing, do it or not, hit the delete key, and go on with your day.
It had a few different sections because we researched how people like to access the information. So there was something called ‘Bang for the Bite’ and that quickly quantified the tip in terms of was it good for the earth, was it good for your planet, was it good for the people?
There was also something called a ‘Cocktail Fact.’ That was something that you could take to your cocktail party and say, ‘Did you know that the least popular flavor of edible undies is chocolate?’ And then that whole tip was about organic underwear. Right? It was just something to help you queue and remember.
But the tip was, like I said, highly researched, highly designed, and very enjoyable to read.
Andrew: And this was the first version? You knew immediately that this is what had to go in to it? Or was the first version more basic than that?
Jen: Actually, no, the first version was what you saw on day one and what you saw on the final day. Heather, my co-founding partner, and I, she and I are both light green, right? So we were our own target audience. We had been reading a bunch of environmentally-related content. And, for example, I always thought, ‘Well I’m all charged up now about this issue, what do I do?’ But there was never a take action or go forward button.
So we developed a ‘One to Try.’ So we might tell you about fair-trade coffee, why it’s great because it helps keep the trees standing in the rain forest and making sure people get a living wage, and here are the best ones to try. We have links to those companies to actually go out and buy it, buy it online, find the store in your ZIP code.
We kind of empowered people with, like, hey you can actually do one green thing a day.
Andrew: I see. Okay. And the website? What was that? At the time, was it just a request for an email address?
Jen: More or less, plus our, we called it our tip library. So we called our email newsletters ‘tips.’ We hated the word newsletters but it’s like, eh, whatever. If you can’t beat them, join them. It keeps being called a newsletter. Basically we had the signup and the tip repository which, getting to one of the caller’s questions, was our golden key for SEO.
Andrew: Ah, I see. So the tips were SEO and once people got there, you were trying to get them to join the newsletter.
Jen: Exactly. For example, one of our highest SEO search terms and its conversion, not just raw data but that converted the most subscribers, was organic coconut oil. It turns out that we had done a tip on organic coconut oil. You can use organic coconut oil to cook. You can use it in your hair. You can use it on your skin. You can use it for acne. You can use it for so many different things. So I guess enough people heard about this and whenever someone would search, our tip on ‘Cuckoo for Coconuts’ came up.
Andrew: Actually, what he was saying was that when he searched for Ideal Bite, your name didn’t come up for some reason.
Jen: Right now?
Andrew: Yeah. But the company’s been sold and now it folded into a Disney property right?
Andrew: Okay. All right. Where was the revenue going to come from in the beginning?
Jen: It was going to, it did, and it always did, come from advertising, period.
Andrew: And you were going to sell the advertising yourself?
Jen: We did sell.
Andrew: You did? Right from the start you were selling advertising?
Jen: Yeah. In month three, we sold to General Mills, Cascadian Food Farms, which is an organic food company that they purchased. Again, we benefitted by being one of the few in the space.
Andrew: What kind of CPMs were you getting?
Jen: Anywhere from $20 to $250.
Andrew: $20 CPM in an email newsletter? That’s $20 based on the number of people who are subscribed. Wow. Ben blew my mind with his numbers too when he was rattling off those CPMs.
Jen: Exactly. It’s one of those things, if your open rates are high you’re going to have great results and advertisers keep coming back. Not to mention, we’ve done all the hard work of targeting, so we can charge more, right? Everybody in that database is prequalified, signed up, saying, ‘I’m interested in this general topic and I’ve invited you into my secret inbox.’ And the brand association alone is worth it, but then you also usually get a pretty high activity click rate.
Andrew: That generated a lot of questions when people heard you were getting $20 CPMs. By the way, were you getting those or was that just rate card?
Jen: [laughs] No we were getting them. We got up to $250 for our advertorial products too.
Andrew: And the advertorial product was a standalone email that was just for the sponsor?
Jen: Yep. Yep. But our editors would write it, so it would be in our voice and we’d make sure that it was providing value to the users. Right?
Andrew: Right. I imagine everyone in my audience knows what a CPM is, but just in case, it’s a price per thousand readers. Jason is asking how much space did you sell, especially at first?
Jen: How much space? So basically if we had 5,000 subscribers month one, we would just be selling that space. We didn’t do any website advertising at all. It was all based on our subscribers. Of course we’d always try to sell it in packages.
Andrew: Okay. If you have just 5,000 subscribers in the beginning, which is still a big number and I want to know how you got to that, when you had 5,000 subscribers, how did you find sponsors? Who were the sponsors who didn’t think this was a too small an audience to go after?
Jen: We cut our teeth on all of the small green businesses.
Andrew: You would just call them up and you’d say, ‘I want to tell you about my new product. It goes out by email’?
Andrew: Wow. So what kind of advertisers did you get back then?
Jen: Let’s see. A lot of the pure play green websites, some of them are still there, some of them aren’t. I’m trying to think of one that would still be there if anybody wanted to go and look at it online. Like I said, our largest advertiser was when we only had 35,000 subscribers and that was General Mills/Cascadian Farms. Some of our smaller ones, if you go to Branch Home Design, maybe, is what you would Google, it’s just this pure play green e-tailers usually.
Andrew: I see. And they were actually trying to sell and they were measuring results from you? They wanted to see will we back into more money in profits from this ad than we paid her?
Jen: That’s usually the idea, especially with the smaller ones. The larger companies don’t care as much because they just need brand awareness.
Andrew: Okay. I see a few people who were asking how’d you get the early subscribers? SEO helps a little bit. To get people to come in for the tips, you asked them to sign up for an email newsletter. What else did it?
Jen: Okay. Will you ask that one more time? Someone was knocking at my door.
Andrew: No problem. Do you need to get that, by the way? Do you need to go up and get the door?
Jen: I think they went away. [laughs]
Andrew: All right. Good. How’d you get beyond SEO? How’d you get the early users?
Jen: Okay. We started out with 300 people that we basically cajoled into signing up, right? Friends, family, schools, what have you. From there, people started to really forward it around, so we had an inital viral bump just because it was our friends and they were like, ‘Hey, look what they’re up to. Isn’t this silly or isn’t this great?’ what have you.
And then early on, I basically tapped all of my, I have a green MBA. I got an environmental policy and management MBA and I have a lot of experience in the green space so I sent this out to all of my people, right? And some of my people were writing blogs and then they would say, ‘Oh look at this from Jen Boulden and Ideal Bite,’ and they’d post it up within the green community.
What happened was we actually had a much darker green user base at first, but it was great because we cut our chops, right? We had our feet held to the fire in terms of authenticity.
Jen: Sometimes we’d catch flack for being a little too light green, like when the time we sent out a tip about humane veal. If you’re green at all, you know that eating meat is not so great, but veal is like the worst of the worst. Our whole thing was if you’re already eating veal or you know someone that is, why don’t you just consider a more humane source? So we did a tip on humane veal. Our user base at the time, again, remember that they’re pretty dark green, went nuts. A lot of them unsubscribed. A lot of them fired off in blogs and we had one of our largest upticks, this boomerang effect, where maybe that whole week we gained another 5,000 subscribers because all of the green blogosphere was talking about us.
Andrew: So if I were reading one of these dark green blogs, and dark green I’m assuming means more of the aggressive, more passion, more. . .
Jen: More greenpeace.
Andrew: . . .more greenpeace-y, and I would read this and I’d get pissed at you and I’d want to go and find out what you said. I’d have to go in, give you my email address, and then would I get that original email? No, right? That’s not the way email newsletters work. I’d just be subscribed and in the future I’d find out what else you had to say, but I couldn’t read your archives.
Jen: We actually built a platform where our editors would put in the tip, they’d hit publish, and then 12 hours later it’d go out to the email newsletter list. Then it would publish to our tip library. So they can link directly.
That’s what I’m saying, from an SEO standpoint, from what’s on the website standpoint, you can link directly to, like if you had a product, a green widget, and you’ve got greenwidgets.com and you were on Ideal Bite, woo! And we crashed your server that day and it was all types of exciting, you would end up putting a link from your website ‘As Featured on Ideal Bite’ back to ours. So we had something like 180,000 inbound links, because people kept, so that was our tip library.
Andrew: Ah. I see. Okay. So technically, really, people didn’t even need to subscribe to the email newsletter. It was really essentially a blog with an excuse and a reason to get people to sign up and get more committed to it.
Jen: Sure. I wouldn’t call it a blog. A blog is more like an online diary to me. Our tips took about 8 to 12 hours to produce.
Jen: Right? So it was very much a product. It wasn’t just freeflowing thought, it was incredibly orchestrated. So the fact that they were available online makes it more like a magazine that you can reference forever.
Andrew: I see. Okay. All right. How did you design this? What in your background allowed you to design it and to think it? I guess you answered that question earlier, but did you hire people to do the artwork? Did you hire peope to help you with the editorial voice?
Jen: Yeah. As soon as we could, basically from my consulting company that I told you about that was prior to Ideal Bite, I basically claimed the top of the stack of interns and said, ‘Okay. All you guys that are great, come with me. We’re going to start this new company.’ We paid them very little. They helped basically sell the first ads and even design our logo. We just did everything really on the cheap but we knew we were working with great people. Both Heather and I liked to cultivate them to be executives, right?
It was a win-win and certainly when Disney bought us, these 25-year-olds now, we scooped them up at 22, and now these 25-year-olds were the envy of all their friends’ eyes.
Andrew: I see. What kind of technology did you use at first?
Jen: We used a very simple, home-grown, patched together stuff. Our first email was sent out using Constant Contact. I hired basically a designer slash intern, she’s very junior, to design something that looked but spoke, but not like a Constant Contact template. Right? We didn’t want it to look like that. She spent some time, maybe 10 hours, designing something a little bit more fancy, but we still pushed it out via Constant Contact.
And then while Constant Contact was carrying our tips out, for probably the first year, we were then working on the custom designed platform that would allow us, like I say, for an editor to put something into the admin form and hit publish, goes out in an email, 12 hours later publishes to the website.
Andrew: I see. Okay. Let’s see what else I’ve got here. I’ve got a few questions from the audience about advertising. Were you cold calling in? Were you just trying to figure out, how’d you find out who to get as an advertiser and how’d you get them on board?
Jen: Well we just do research, so you just start popping around on competitive, comparable websites to see who’s advertising so then you don’t have to convince someone to, ‘Oh, you should try online adversiting,’ right? We would never go and say, ‘Oh, you’ve never tried online? Let me teach you about online. And then while you’re thinking about online, let us teach you about email,’ right? We would never get the sale.
So we just said, ‘Who is out there? Who is in our sympathetic category?’ meaning it doesn’t have to be green but if they care about people, they care about animals, they care about adding that nice little goodwill to their brand, being associated with a green company, then that was usually prime pickings.
Andrew: Were you the one who was making the calls?
Jen: No, thank God.
Jen: No. I’ve always done marketing my entire life. I always say I like to be the one with the money not looking for the money. But of course that had to change when we were fundraising. Heather, my business partner, was a brilliant salesperson.
Andrew: I see. Okay. What else did you do to bring people in? You said that you like to be the person with the money. Did you buy advertising?
Jen: We did, eventually, once we got money.
Jen: But we didn’t buy any advertising until we got some money coming in the door from our friends and family around. Then we started testing the waters by doing, basically, just CPA ads, CPA buys, which is cost per acquisition. I didn’t like the idea of paying for anything that wasn’t going to actually convert.
Andrew: What kind of places were you able to buy cost per acquisition ads?
Jen: You can do a one-off, but you would spend all your time, so I would just go to the different CPA networks and then you would just. . .
Andrew: Like Commission Junction.
Jen: . . .pay them. Right, exactly.
Andrew: Do you remember what you were paying per subscriber?
Jen: We tried to keep it around a dollar.
Jen: Sometimes you’d go much higher, but I had a really savvy marketing manager that I trained and then she just took it to the next level in terms of finding the quality ones out there and making sure we stayed the hell away from any sweepstakes sites. These people would just sign up and try to get whatever offer and then they wouldn’t open their email ever again, so then your list gets all junky.
We really had to be mindful of both costs, but also quality. It was a constant everyday vigilance of making sure that when you go in to the Commission Junction or ShareASale or whatever type sites, we did a lot of the networks, that you’re looking at each and every website and really understanding is this going to produce quality subscribers.
Andrew: What size audience were you able to get from the CPA networks?
Jen: What size, so basically how many impressions did we generate?
Andrew: How many subscribers? Are we talking about thousands, tens of thousands of people did you get that way?
Jen: Oh, tens of thousands.
Andrew: Tens of thousands. So that was an effective channel for you?
Jen: Very much so.
Andrew: How soon after you launched did you raise friends and family?
Jen: About nine months in we realized that our back was up against the wall. We were writing credit card convenience checks to pay our employees. We thought we were going to get a fast track loan from the SBA, from the Small Business Association. And then we were like, ‘Ugh, this stinks actually. It’s only $50,000. It’s at eight and a half percent. We have to start paying on it soon,’ so they red tape, as much as they say it’s fast track, it’s still actually dealing with the government. We’re like, ‘This was a bad plan.’
That’s when were like okay, well let’s not only start our business, which is, of course, a 14-hour day job, but now let’s start fundraising, which is also like a 12-hour day job. So that’s what we did. We just didn’t sleep until we brought in eight investors at about 25 to 40 each. So our friends and family was a little bit over a quarter million dollars.
Andrew: What was it about the business that convinced them to invest? What was the magic that drew people in?
Jen: I have to be honest, I don’t think that it was apparent at first if this Ideal Bite was going to work. Also, people were like, ‘Oh, email’s so 90s.’ [laughs] Now if you plan to go to back to this, you would be like, ‘Really? Because you missed out on Disney. Sorry.’
Jen: Yeah. They told us email is very 90s and that green was never going to be big. And so it took a while to find people that really believed in us. Half of them believed in either Heather or myself because they worked with us before so they’re betting on the jockey, not the horse, right? And the other half thought, ‘Well, let’s give this a whirl because it would feel good to invest in a company that’s doing good for the world.’
Then when there were, about half of them were in, the other half were still on the fence, and then we got booked to appear in Vanity Fair’s first green issue in a two-page spread. So we went back to them and were like, ‘Hey, we’re going to be in Vanity Fair’s first green issue, Laurie David. It’s going to be a two-page spread, about a $350,000 photoshoot in Griffith Park in LA. Are you in or you out?’ They’re like, ‘Oh, we’re in.’
Andrew: Wow. Were these experienced investors?
Jen: Yeah. They were all accredited.
Andrew: Oh, okay. All right. And then at what point did you raise the next round, which is from Bob Pittman’s group?
Jen: Right. That took us another year and a half plus. Then we took on Bob’s money.
Andrew: Okay. And was this. . .
Andrew: . . .I’m sorry. Pilot’s money. But he’s so well-known that you got to say Bob Pittman. This is a guy who co-founded MTV. A guy who we all knew was one of the leaders at AOL, one of the revolutionaries of the Internet.
Jen: Nickelodeon too, he started. So yeah, he is well-known. Whenever he’d come to our parties, we’d throw Biter Bashes, and there would actually be paparazzi, people following him around and they’re like, ‘Hey, are you Bob Pittman?’ And he’d be like, ‘Mm, sorry, no.’
Andrew: [laughs] So he has a lot, and his organization has a lot of experience in this space. What did they bring to you beyond money? How did they train you to think about this? How’d they help you grow your business?
Jen: That’s actually one of the reasons why we chose them. We had some other contenders, some more typical venture capitalist firms, that were interested in investing in us. We ended up taking on the Pilot deal in lieu of the other VCs because the Pilot deal offered more strategic guidance, even though the terms weren’t as good. Right? So they didn’t value our company as high as we could have with others. But we had monthly board meetings with Bob, with his crew, with Andy Russell, who is his right-hand man in these email deals, and he’s really become just the go-to source for all companies’, all solid companies, email.
So we had every single month about three to four hours of their brain trust. They would certainly advise us on which way to go if we had questions. Sometimes they’d say, ‘You don’t have to do this but we highly recommend it,’ and other times they’d be like, ‘Hey, whatever you want.’
Andrew: Can you give me some examples of what they taught you? Of how they directed you?
Jen: Sure. We had about four or five book offers, right? Big publishers coming to us and saying, ‘We want to do a book. We’ll give you an advance. We can give you a ghost writer, but Ideal Bite is on fire and you should do a book, green, whatever.’ And we were all excited about this and thought gosh, that would be fun, we’d have book tours, maybe a six-figure advance, money doesn’t suck, right, all this stuff. And then Bob basically put the kibosh because he’s like, ‘You need to focus on building your corporate company.’ He’s like, ‘Does everybody in America know about Ideal Bite?” We’re like, ‘No.’ And he’s like, ‘Well, you’ve got work to do.’
Andrew: What about for growth? What kind of ideas did they share with you about growing the newsletter, for getting more people to subscribe?
Jen: I think that we were always on the same page there. Again, I come from a marketing background, so I’m constantly thinking what would resonate, what would sell, what would attract people? So, in fact, we were able to show them some of the things that were working so they could take it to their other email properties, like Thrillist.
Andrew: For example, I’ve got people in the audience who are building on a smaller scale, who are building an email newsletter, or maybe there are guys like Jason Baptista, I hope, Jason, I’m pronouncing your last name right, who just keep wanting to Evangelizing email newsletters and teaching others what they’ve learned. Can you give them some fuel? Give them some ideas?
Jen: Sure. The things that we talked about in the beginning are still my go-tos. Which is, number one, your product has to rock. If people talk about it, great. It’s just done all the hard work for you because if I’m subscribed to your newsletter, that means I’ve got 10 friends just like me that would probably love your newsletter as well. And you want to motivate them to send it to a friend, so of course make that super easy. And sometimes even incentivize that. So once a month, we would have sweepstakes for tell-a-friend, and if your friend signed up, your name would be dropped in the proverbial hat. Right? And then you would win $1,000 worth of eco gear.
That helped motivate things too. It wasn’t the end all, be all, but we just thought, what can we do to make it super easy to tell your friends? So any touch point we had with the subscribers, there was always a tell-your-friend component.
That’s number one because viral is quick, easy, cheap, effective. You’re going to get high quality subscribers. You just want to do everything you can around increasing your viral growth, starting with having a great product, product being content.
The next is the buzz. Anything that you can do to get people to write about you, talk about you. Obviously with social marketing, it’s so much easier now, like when you have that hot, newsworthy item. For example, when H1N1 came out, we quickly aligned all of our editorial staff and said let’s put together something about the kind of antibacterial versus antiviral soaps, because everybody’s confused. And which ones can you actually buy that are going to be good for the earth, and you can even take on a plane, the little travel-sized stuff.
We put together a really great tip and then we made sure our social marketing director was also tweeting it and Facebooking and everything else. And because it was timely and it can be just kind of picked up, retweeted, that was a great strategy.
Andrew: I see. Okay. Anything else? Maybe one other one?
Jen: Let’s see. So the viral component, empowering that, being timely and using social marketing wisely. Yeah, try CPA. Why not? You’re only paying for subscribers that you actually get so it’s not like you’re going to waste everything on a big billboard ad.
Andrew: You know what? CPA is incredible for this space because you know how much money you’re going to earn per subsriber, right? It’s going to be $20 per email that you send out per thousand. Sorry. $20 per thousand people who are subscribed to your newsletter. And so you know what your costs are, you know what your revenues are, and you can connect them, which you can’t really do on a lot of other spaces because you can’t count on the repeat audience.
Jen: Exactly. We knew our open rate, right? We could easily figure out how much we could spend to acquire a subscriber and how much we’d monetize them for. And that delta in between was our profit margin.
Andrew: How often would you send out an email?
Jen: Every day.
Andrew: Every day. Five days a week?
Jen: Five days a week.
Andrew: Okay. How many people were you bringing on average to sign up, AndrewSG is asking in the audience.
Jen: It would totally depend, because growth fueled more growth. As that pyramid base got bigger, then our growth also increased. But on average, in the last few years, about 4,000 a week.
Andrew: 4,000 a week, okay. And what about the size of the form? This is when I get so deep in the tactics that some people say, ‘Andrew, go bigger picture,’ and others say, ‘I love you. You’re getting me the kind of information I could use tomorrow in my office.’
Jen: Right. Right.
Andrew: So what size form? How did that impact?
Jen: Size signup form?
Jen: It was nothing. It was nothing. We didn’t care what ZIP code you’re in. We would rather have. . .
Andrew: It was just give me your email address, nothing else?
Jen: Nothing else. I kind of used my, again, background in relationship marketing, right? So it’s like give a little, ask for a little, give again, ask for a little bit more. So over time, we would actually build up more entries in their database, right? So when we would run surveys, we’d have their survey responses linked to their unique identifier in our database. We could actually query the database. We could actually give advertisers a lot of insight into what these people were up to, their habits, what they’re clicking on in terms of the ads, in terms of the content. So we had both empirical, we had basically explicit and implicit data.
Andrew: AndrewSG is asking about the open rate. This is going to become a dialogue between you and AndrewSG at this rate with me as the intermediary. But he’s asking good questions. So what was the open rate like?
Jen: It was really high. It was about 40%.
Andrew: 40% of the people who got your email would open it up? Wow.
Jen: Sometimes we’d dip down into 27%. That’s when we realized that we were hitting bad pockets of CPAs.
Jen: So we’d then make sure we’d go back and have no bum deals out there, like, again, those stupid sweepstakes sites. [laughs]
Andrew: So I’ve interviewed some people at companies that send out email and they recommend incentivizing the registration, giving people an immediate reward for joining the mailing list. Did you do anything like that, an e-book, access to a special area of the site? Nothing? It was just you’re going to get these tips every day from people who know?
Jen: Yeah. Yeah. We really didn’t want to be gimmicky. I’m sure it works for some people, but it depends. We live and die by the quality of our list, so why would you want someone that is just looking for that quick high of getting a free bag or something? [laughs]
Andrew: Do you remember what the clickthrough rates were?
Jen: Oh it totally depends. It depends on so many factors, but we had maybe about 10 links in our content, either from one to ten depending on what the topic was. For example, in the ‘One to Try,’ that was usually our highest click rate. Again, going back to that coffee example, if the first link was for equal exchange, and it’s like, ‘This is Jen’s favorite!’ and blah blah blah, and there was a link, that would probably get around 22%. And then everything else varied. Same with our ads, it really depended on the offer, on the creative. . .
Andrew: What about a set back? Everything looks like it just worked, worked, worked, and grew. What was a big set back that you can talk to us about?
Jen: Gosh, I don’t know. I think it was probably just the sustained energy that it took. We really had to make a lot of sacrifices in terms of personally, to make this work. The set backs are still almost happening now. Heather and I didn’t go to the doctor for years because we’re just too busy. Right? [laughs]
But in terms of any kind of set backs, it was always around raising money and thinking that you’re going to have to go out business, and then barely by the skin of your teeth, pulling through.
I’m trying to think what else. We had some technology glitches and set backs, but everybody does, right? It’s like lessons learned, okay.
Andrew: But at the time it doesn’t feel like it. At the time it can feel like this is the worst mistake I’ve ever made.
Jen: It’s so true.
Andrew: Can you describe what that felt like so maybe we can identify with it when we get there? And we will. I’ll probably get there in a half an hour.
Jen: [laughs] Yeah. That is the start up thing, right? It’s like high highs and low lows and so everything is on a hyperbole level. I’m trying to think, yeah, sometimes our email wouldn’t go out and we had an advertiser that we wanted to bring on long-term, like the soy milk called Silk. They were pretty big for us, right? That was like, I remember, the next kind of quantum leap of advertisers. And our tip, and our database, and our whole backend engine just broke. And they had a time-sensitive campaign and their marketing manager, of course, was all over us thinking, ‘Who are you junior varsity people?’ Right? It just broke. It was all types of bad.
When the tip did go out, it went out with wonky formatting. [laughs] We had a guy managing the database and it was just him. He was 25, not to say that there’s anything wrong with 25-year-olds, but he had no support. He was figuring all this out for himself, by himself.
Heather and I, as much as we aren’t afraid of technology, we also weren’t coding. So it was like, ‘Hey, Brad, go figure it out. Good luck. I know you’re not going to get any sleep, but remember those stock options, buddy.’ [laughs]
Andrew: How did you get yourself to keep going at that moment? Did you even think at that point, well maybe we are junior varsity, maybe we’re in over our head, maybe we need to bring in an adult who’s going to organize this?
Jen: Yeah. You just pull out your hair, you have a cocktail, you sleep for five hours and you get up and you’re like, ‘New day and I’m going to kick some ass.’ That’s it. You just love your idea so much and you believe in it so much, that it pulls you through.
Of course we had those self-doubt type thoughts, but few and far between, to be honest, because we had that naivete and that passion that you have to have.
Andrew: You mentioned earlier that there were times where you almost went out of business. Can you describe one of those times?
Jen: Yeah. It was actually before we were able to bring in the friends and family money and it was because we waited too long to raise cash thinking we were going for the SBA loan. Right? So Heather and I started the business by putting about $20-something thousand each of our own money. Then we didn’t take a salary for the first year. We also just did a lot of things like used our own frequent flyer miles, used our own technology equipment, whatever.
Then we were like, ‘Yeah, we’ll just get this SBA loan. Oh, we’re so smart. We’ll just pay this SBA loan back in a year because we’ll be cash flow positive in two years.’ And it was just, again, really naive.
When our backs were up against a wall, I actually received an offer from Comcast to go consult, in Phildadelphia of all places, and I was like, ‘Okay. We might have to take this, Heather.’ The plan was I was going to temporarily move to Phildadelphia, take this really high-paying consulting job, pay Heather half of my salary to keep Ideal Bite running just in case we could find investors. And that was the plan.
Andrew: And why didn’t you do that? Because you ended up getting the friends and family around?
Jen: Yeah, like two weeks later.
Andrew: Wow. So what about Jason Baptista’s point? Is there still an opportunity today in email or are we just too far? Is it too old at this point?
Jen: I know a lot of companies that are banking on email. Right? I get contacted to consult and to speak in that space and there’s a lot of interest around it. So, my feeling is, and also I work with different venture capital firms, et cetera, to see what they’re funding. I don’t believe email’s dead. I really don’t. I’m not just sticking in my heels and saying, ‘I did it so it must be great.’
Point being, what we talked about when we first connected today, you still use email. Email is still your sacred place. Marketers have already started to run amok of all the social marketing networks. Right? When people are tweeting, it’s like, ‘Okay, what’s behind that? Is it a company? Is it a person?’ It’s just like, oh, God.
But email, you have a filter. It is, again, this really special place if you’re managing your inbox. So I don’t see why it would cease to be valuable. I just don’t. I might not be seeing something. I’m kind of old school at this point. [laughs]
Andrew: It seems like you’re still seeing something and it seems like other people are looking for opportunities here. I wouldn’t get these kinds of questions if the guys in the audience weren’t out there trying to do something similar, or at least incorporate this into the business they already have.
What share of the business did you have at the end, by the way?
Jen: What shares?
Andrew: What percentage of the business did you end up with after going out and getting venture capital?
Jen: Well, then you can back into how much money I made so I’m not going to share that.
Andrew: Can you give us a sense of the two of you, did you and Heather end up with the majority share of the business?
Jen: Oh, God, no. [laughs]
Andrew: Pilot wants majority, right?
Jen: He what? Yeah. Yeah.
Andrew: Pilot, from what I see, wants a majority.
Andrew: Okay. All right. How’d your life change afterwards?
Jen: By the way, I’m not trying to be cagy about that, it’s just money is an interesting topic and I don’t like how it changes dynamics interpersonally, so I just don’t share that with anybody.
Heather and I would always debate as we’re giving away chunks and chunks and chunks to employees, to friends and family, to all this. We’re like, ‘Half of nothing is nothing.’ Right? And if we don’t have money, we’re not going to exist. So, it is what it is.
Your other question was? Sorry.
Andrew: What was my other question? Guys, can you help me remember what my other question was? I’ll tell you this, I’m just always curious, how does a deal work out with investors? What do you end up fighting for at the end?
I guess the question was how did your life change? How did your lifestyle change?
Jen: Once Disney bought us?
Andrew: Mm-hmm. Once Disney bought you.
Jen: Okay. It didn’t change too much, to be honest. I’m a little bit different. I don’t care about fancy cars and I don’t care about a new Gucci purse to match every outfit. I only care about a few things and one of them is competitive horseback riding. So I bought a truck and a trailer. Woo-hoo! So that was my big purchase. [laughs] And it was a used truck and trailer because an entrepreneur at heart doesn’t ever want to waste money, right?
Other than that, I did start a foundation involving animals because I really believe in helping people and creatures that can’t help themselves. We have to take responsibility for how we basically enslave these animals in factory farms. So my foundation is set up to basically educate people about the tragedy of factory farming. That was kind of cool to be able to do that, to actually know that I’m adding value to the world and not just to my own bank account.
Sometimes you meet people that are clearly out to just try to hit you up for whatever. In general, because I’ve made my stance pretty clear that I’m not changing who I am or I’m not going to go buy your cruise ship deal or whatever it is, [laughs] I’ve been able to stay pretty much sane and the same person.
Andrew: I actually read that you’ve got egg-laying chickens in your place in LA. I’m from New York, but I’ve been living in LA for a long time. I don’t see this very often. How do you do it? I would love to have that.
Jen: You can do it! It’s easy. First of all, they’re legal, which people can’t believe. In the township of LA, you’re allowed one rooster, and I’m like, ‘I don’t want a rooster. I like my sleep, thank you very much.’ Yeah, chickens are fabulous because it feels like you’re living in the country.
I live in Silver Lake and I’m not sure if you know where that is, but it’s kind of the gritty West Village part of LA. I have a little backyard and I just built, with all reclaimed materials, I renovated my house. I took all the materials that I pulled out of there and the best ones went to the chicken coop.
Andrew: Oh, cool. I didn’t realize you could do that.
Andrew: I figured Silver Lake, or maybe Topanga Canyon except Topanga Canyon’s got animals that would get your chickens.
Jen: It’s so true. Sorry about my phone ringing in the background.
Andrew: No, it’s cool. It’s gritty and it’s real.
Jen: There you go! Yeah. I looked in Topanga first, because someone said Topanga’s all about hippies and rockstars and it reminds us of you. I’m not a rock star but I’m a hippie I guess. You should go look into Topanga. And I thought this is a phenomenal place. But you know that Canyon Road? I’m like, ‘I will never be driving that road after having a cocktail,’ and I like to go out every once in a while and do so, but it just wouldn’t have been safe.
Andrew: Or even late at night. I don’t know how people do it. Imagine you come home at 2:00 from a party in LA, even if you didn’t have a single drink, you’re exhausted, you got to navigate that little road.
Jen: Exactly. Exactly. So I thought, not too smart. I’d be marooned up there. [laughs]
Andrew: All right. Well, thank you. Thanks for doing the interview here. I’m really glad to meet you. What’s next for you, by the way?
Jen: That’s a really good question. I am basically doing consulting with start ups primarily. I’m writing a book about women’s entrepreneurship. It turns out that I’m one of the handful of women in the United States that has kind of concepted and raised venture capital and then sold a business. That puts me in a unique spot. That’s going to be fun, to relay our stories from the trenches that also have the business insights.
Then I’m doing some public speaking, which is also fun to get out there and inspire other women, basically, to start values-focused businesses. I think that’s going to help us get out of this economic hellhole that we’re in.
Andrew: I got to tell you, I get emails from women all the time saying, ‘Andrew, why don’t you have more female entrepreneurs who have . . .’
Jen: There you go.
Andrew: ‘. . .gone through the process, who have raised money?’ I can’t find enough.
Jen: There you go.
Andrew: I love it.
Jen: Yeah! Yeah. So hopefully I can inspire more people to do what I did.
Andrew: Yeah. They want that. They want to hear how you did, they want to learn how you did it. I’m looking forward to that book and I hope you’ll come back on here to talk about the book when it’s published.
Jen: It would be an honor. Thank you.
Andrew: Well, great. Thanks for doing this. Everyone, thanks for watching. And as you build your email-based businesses, come back to Mixergy and tell me what you guys are building. Thank you, Jen.
Jen: Thank you, Andrew. Bye bye.
Andrew: Bye everyone.