Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart.
Imagine this. Pinterest takes off, but it’s considered a site for women. So you have the idea to create something similar, similar site for men. Would it work? Well, today’s guest is proving that yes, it is working and partially it’s because they expanded beyond where they started. I invited him here to talk about how he built up his business.
John Ellis is the CEO of Tapiture, a social curation and ecommerce site that helps people discover, share and buy the best of everything online. We’re going to talk about how he built up the business.
It’s all sponsored by Toptal. Toptal is a network of developers. If you need to hire someone, you just go to Toptal.com and you can hire a developer. But I’ve got to tell you, I had the founder of Toptal over to my house last night. I made tacos and we had some scotch. I said, “Are the ads working?” And he said, “Yeah.” And I said, “How can you tell? How do you measure success?” And he said, “Well, frankly, I don’t know if what you’re saying in the video is working, but people are clicking on those ads on your homepage and going over to our site. Those clicks alone more than make up for the money that we’re paying you.”
So, basically, frankly people what I could say instead is, “Toptal blah, blah, blah, blah, blah.” I don’t know why I’m sweating these messages. I should just say nothing and let people click that ad because apparently it’s so effective. But I want them to actually get a really good result so I’ll tell you-if you need a developer, go to Toptal.com. They guarantee that they’re going to get you a great developer who’s also a perfect fit for your company. Toptal.com-I’m so glad to have them as a sponsor.
John, it’s good to have you here.
John: Yes. Thank you. It’s great to be here.
Andrew: Let’s go a little behind the scenes here. You and I and Jeremy, the pre-interviewer, we went back and forth through email a lot because we thought that you were not the founder of Tapiture. We wanted to talk to you about a different business that you started. You said, “Hey, I’m running the show here. This is my business. This is what I created.” So, what’s your position here?
John: So, I’m CEO. I’m Chairman of the Board as well for Tapiture. Yeah. We’ve been doing it here since 2012.
Andrew: The company was spun off of theCHIVE.com, right?
John: Yeah. So, the parent company of Resignation Media, which was founded by John and Leo Resig, initially had this idea to create kind of a Pinterest for dudes. It was sort of spun out of theCHIVE initially. It was initially going to be called myCHIVE, actually. That was sort of the concept.
I met John and Leo, as I said, back in 2012 and saw what they wanted to do for it. I thought it was really interesting. They had a great background of kind of combining the whole community with commerce and really trying to figure out the best way to sort of ignite a community behind certain things that they love.
So, I really liked what they were doing but I thought this had the potential to be something much greater than that. As you mentioned, Pinterest had sort of taken off as well a couple of years earlier. I liked that idea of sort of solving the problem of indexing the visual web and sort of seeing how you could kind of tie that into different demographics with sort of a slightly different nuance in terms of how-tos. They liked the idea as well.
So, we spun the assets out from Resignation Media and kind of created its own company. I took the reins in September of 2012 and sort of went out, raised the initial seed capital and treated it just like any other startup.
Andrew: But was the site off on its own before you joined?
John: Yeah. So, they had created just a very rough alpha version of the site in that summer of 2012.
Andrew: Okay.
John: They put it up there with no registration, all the sort of basic, basic stuff. It was like running off of one server just to kind of get it off the ground and sort of see what happens and see if there was some market demand there. But there wasn’t a lot of business plan behind it and kind of thinking about where this goes long-term. They knew that they needed to bring in a team and bring in resources to kind of do something with it.
So, really, when I came on board, the first thing that we did was sort of put that business plan in place. After we spun the assets out, we put the plan in place, go out and raise the initial capital, build the foundation team and basically re-launch the site in early 2013.
Andrew: I’m now looking at a version of the site that was up in the summer of 2012. I see what you mean. Your site looks so good today. This does not look so good. I see what you mean. This is just a quick and dirty experiment almost, an alpha. I almost asked your permission when we started to see if comparing you to Pinterest and saying that this is kind of in reaction to Pinterest was something you’re comfortable with.
I know a lot of entrepreneurs don’t want to say that they were looking at someone’s idea and launching off of that. But you seemed comfortable with it. Was the original idea to say, “Hey, Pinterest is doing well. Men don’t relate to it. There’s something to sharing photos in this format. Let’s see if we can create something for the kind of audience that we have over at theCHIVE who are more male.” Is that the thought process?
John: Yeah. That was the original idea. The idea was that, as you said, Pinterest really wasn’t for everyone. I think as much as they were trying to kind of make it a platform play and it was truly available and frankly, they are still trying to expand beyond that, the reality is that they service their core audience, sort of that suburban mom market, very, very well.
So, there’s that power of the brand that they’ve built. So, they’ve sort of become the brand for that core audience. But the reality is there are a lot of Pinterest orphans out there, so to speak. That’s men. It’s millennials. It’s sort of that broader, younger audience that maybe look at Pinterest as sort of a place they can’t connect with.
Whether or not the feature set may be the same, you can compare the two in that term. But yeah, the idea was essentially to kind of go out and service those other markets that really couldn’t connect, for whatever reason, with the Pinterest platform.
Andrew: It does kind of seem like more and more the visions are different and they’re changing. They’re going off on different paths. Let’s get to know you a little bit better before we talk about the business. Frankly, I’m really excited about the way you guys came up with this business idea and how you’re growing it. There’s logic to it that we could extend to other businesses to see another idea that works but doesn’t really relate to a certain audience and then bring that idea to a new audience with a new business feels like something that’s repeatable.
But I want to get to know you a little bit better. You spent some time in Japan studying. What were you doing in Japan of all places?
John: I did. Yeah. So, I went to school there. I actually was studying international business and international relations back in college. So, I was very fascinated with Japanese culture. This was the late 80s, I guess, when everybody thought that Japan was going to be taking over the world, especially America. They were sort of coming in and buying up lots of properties. I was really just fascinated by the culture. So, I went to school there for part of my education, sort of studying foreign trade policy and corporate management.
So, I graduated actually with degrees in international relations and international business and spent some time kind of applying what I learned there and some of that international stuff into other stuff, even though I didn’t go specifically into international management consulting or something like that.
Andrew: And you worked at Kinko’s, that copy center that was bought out by FedEx and now is called FedEx Office.
John: Correct.
Andrew: You actually got to meet the founder, Paul Orfalea. I remember Paul back when he was running that business was so mysterious that even when Forbes magazine wrote about him, he would not allow them to publish his photo, right?
John: Yeah. He’s a very interesting man and, I think, a brilliant businessman.
Andrew: So, you got to meet him. What was that experience like for you?
John: Well, it was frankly transformative. It was a part-time job in college that became a career, due in large part, frankly, to Paul. So, I was, as I said, working part-time in the computer services center, that kind of like 25 percent of the retail square-footage where you come in and rent computers and print stuff out.
Paul was coming through on a store tour and just walked up to me and said, “Hey, what do you do here? What are your ideas?” that kind of stuff. He said, “What do you think we can be doing better?” I think a lot of people, frankly, would shy away from that kind of question when they’re asked. But frankly, at the time, I just thought, “Well, this is a dumb part-time job and I’m going to go off and be an international management consultant after I graduate here in a few months and I’m not really focused on it.”
So, I just spoke my mind. I told him some ideas and he really liked it. He said, “Would you mind putting those down on paper and coming back in tomorrow and having a more detailed conversation about it.” I was dumbfounded that he actually did that and that he kept his word, frankly.
So, I did it and the next day I went in. We had a long talk. He liked the ideas. He was saying, “You ought to stay working with Kinko’s. They actually just opened a store in Japan.” He sort of found that connection from me. So, when an opportunity opened up just as I was graduating, I went for it. Nine years later I sort of worked my way up through the management chain.
Andrew: What was the idea? What do you think was the idea that got his attention?
John: Well, Paul is an idea guy in general. I, frankly, don’t recall the one particular idea. It was just sort of a number of things. With him, frankly, it could have just been the things that I said and the fact that I was willing to kind of speak my mind. He was always someone who really encouraged people to come up with ideas and improve the business. It didn’t matter what level you were at. He was not into titles or management structure or anything like that. So, he always wanted to kind of promote that creativity within the business at all levels.
So, the fact that I did, the fact that he took the time, the fact that I took the time to write this down sort of encouraged me to push forward with some of those ideas. I felt open to do it with him. As a result, I think that meant a lot to me. I think it meant a lot to him that I was just one more coworker who just sort of went up through the ranks and wanted to make Kinko’s better.
Andrew: It’s interesting. I should also say that he wrote a book finally. At some point, he said, “Alright, no more hiding. I’m actually going to come out and let people get to know me.” He even has a website right now. His book “Copy This!” is a really good autobiography about a guy who had a small idea and grew it up. He didn’t make it into, I don’t think, a billion dollar business, but it was a solid, huge win for him and as a result now he’s a big philanthropist. I can’t recommend that book enough. It’s a really good book for anyone who’s interested in this kind of company.
John: Yeah. As an aside, for the record, so, when I left there, we were doing about $2 billion a year in revenue. My PnL was about between $200 and $250 million depending on the year. But we were up there.
Andrew: Get out. I was actually looking it up to see if that number was right. And then I said maybe it wasn’t that. Wow. So, just copies, essentially is what he had-copies and computer rental time became that big. And then, I guess, there was also shipping. Wow.
John: Yeah. It was definitely a high-growth time. It was a fun time to be there.
Andrew: I bet. So, then you went out and you did start your own company. You started PurePhoto.
John: I did some stuff in between there, yeah.
Andrew: Sorry?
John: I said a did a lot of stuff in between there.
Andrew: Yeah. You did. You were working at, from what I remember-where’s my list of things here? ValueClick, you were working at Fastclick. You were working at Earthlink. But I’m really interested in this PurePhoto. It feels to me like you think that PurePhoto might be too small for us to talk about.
John: No, no, not at all.
Andrew: Okay. I don’t want to spend too much time on PurePhoto, but I am curious about it. What are your thoughts on the business?
John: I love the business. I started it with a co-founder of mine, Ryan Phillips. He actually runs the business now or has been for several years. We had this idea to really kind of go after the semi-pro to pro market and help photographers build up a community to sell their work.
So, we started the idea in, I guess, early 2009. It was a rough time for the economy overall. But I had been passionate about photography since I was 14 and he actually was a professional photographer. We had lunch one day. He started sharing some ideas with me. I obviously had some entrepreneurial background and said, “With your knowledge about the industry and my knowledge about how to build a product, we could build something really interesting.”
So, we went off and did that and did it for several years. Like I said, Ryan has been running the business, I guess, since 2010 or 2011, somewhere in there. It’s been a very nice business. It has very healthy margins. They sell art all around the world. So, it’s been great, actually, for the company. I see Ryan from time to time and we talk on the phone probably every couple weeks or so. So, I kind of get the updates on how things are running, but it’s a great business.
Andrew: I imagine. Maybe it’s more of a lifestyle business, but boy, the artwork is beautiful and it costs money. I’m looking at this one print, $6,000 is what it would cost me to get a 60-inch by 60-inch print suitable for framing.
John: Yeah. It’s geared towards interior designers in more the B2B-type space. So, they sell a lot into hotel chains and cruise ships and high-end homes and stuff like that, commercial properties and stuff. But the nice thing about it is you can come on as a consumer. There are prints on there, I think, as low as $100 and obviously, as you pointed out, things for several thousand dollars too.
Andrew: Was it hard after starting your own business to go in with these guys who already had an idea up and running?
John: No, it really wasn’t. John, Leo and I shared a lot of the same vision for where we wanted to take this. Just having more of a product background, I realized that to really take it to the size you want to take it to, it requires real scale and real investment and you’ve got to treat it kind of like its own business. So, frankly, that’s why we spun it out.
They have been great about saying like, “Hey, you’re running Tapiture.” They moved to Austin, Texas and we’re still here in Santa Monica. So, there’s definitely a separate line there in terms of their role kind of as a board member and investors in the company and my role as sort of the strategy in the business and where we want to take it.
Andrew: How did you meet them?
John: So, we actually met through a mutual friend, someone who is actually a partner there on the ad sales side, a company called Woven Digital. I know the founder of Woven Digital. So, he knew that they were looking for someone to run product. I said, “I’m not really interested in running a product, but I love that space and I love the idea. I’d love to meet them and kind of talk about where the opportunities are from my perspective.” That introduction happened and here we are.
Andrew: So, there was this understanding that Pinterest is starting to take off and they wanted to create a guy’s version of it, as we said at the top. But it’s not as easy as just having the idea. They also had a community of people who were really into their work. TheCHIVE has rabid fans, right?
John: Yeah.
Andrew: TheCHIVE has things like-I’m on their site right now. Here’s one of the top posts on there, “Old Man Casually Crushes a Pop-A-Shot Game.” Oh, I see, the basketball game. So, you get to see an old man really crush it. “Girl Gets Blasted in the Butt with Paintballs,” and you can actually see what happens when she gets hit in the butt with paintballs, “Celebrities then and Now, 1990s Edition.” To this day, theCHIVE still sends, I think, more traffic than any other site to Tapiture, right?
John: No. They’re actually a very small contributor to our overall traffic, in fact, only about three percent or so last month. I had the advantage of sort of leveraging theCHIVE community and sort of the marketing relationship we have in place with theCHIVE. It was very beneficial for us to kind of get things going off the ground.
So, probably unlike a lot of startups, we had the benefit of being able to go out through a marketing relationship. That’s not to say that anybody can’t go out and create marketing relationships with other partners. But that enabled us to kind of get off the ground and build up that initial community within Tapiture.
But it was also very important for us since we were a separate company and everything else and we had a bigger vision here as well to also keep a fine line between us and theCHIVE, right? We didn’t want to be just seen as part of theCHIVE because if so, it could potentially ruin our growth.
So, we really had to kind of build our brand as our own company, as our own entity. While a lot of Chivers, as they’re called, have come over and checked out Tapiture and sort of become Tappers, so to speak, we’ve built up a huge audience of people frankly that don’t even know about theCHIVE. So, we kind of had the benefit of that early relationship that kind of got us off the ground. But we’ve sort of grown more beyond that, at this point.
Andrew: I’m looking at an article in TechCrunch by Anthony Ha from 2012. He says that Tapiture started out as photo sharing on theCHIVE. Is that what got the original likes and submissions and allowed you guys to test out the software before launching into its own domain and its own business?
John: Yeah. So, Leo’s, I think, original point of frustration was he was actually looking for a photo on theCHIVE and he couldn’t find it. He said, “Guys need to have a way to go back and see photos from other posts that they used to like or whatever.” So, that was sort of, I think, the initial spark for the idea. That sort of grew into the Pinterest for men. When I met them it sort of grew beyond that. So, that’s probably where Anthony was taking that from.
Andrew: I see. And then when you launched the alpha version of the site, did the likes get transferred over or did any of the content get transferred over or was the alpha version starting essentially from scratch?
John: It was started from scratch.
Andrew: It was? Wow.
John: Yeah. There was no content from theCHIVE other than the stuff that people were saving. It was really more about telling people, “Hey, you can now come out and save stuff into your collections if you want and go back and visit that.” So, again, a lot of our early audience were those Chivers that kind of came over and used it as a place to save their favorite things from theCHIVE. That was great.
Andrew: I see. So, there wasn’t original content on there, but if someone was on theCHIVE and hit the button to save it, they were saving it on Tapiture.
John: Correct.
Andrew: One of the cool parts about the site is that you don’t have to create your own username and password. You can just login with Twitter or Facebook. I forget what others. Can you tell me a little bit about that decision?
John: Well, we wanted to make it really easy. The social logins, I think it’s become the norm for a lot of sites. Some users like them, others don’t. So, we wanted to have the option there for people to do that. Ultimately, for our platform and where we’re going with the platform, we really see Tapiture as being more of a place to come and get personalized content that you love in a feed and ultimately, then, take that content and share it somewhere else.
So, when people are able to come in and register using Facebook or Twitter or whatever login they want to use, it creates a link to that account, which then, in turn, makes it very, very easy for them to go off and share that content with others on other social networks as well.
Andrew: Actually, one of the things that you told Jeremy in the pre-interview was that guys don’t like to pin, but they like tapping things. What’s the difference?
John: I’m not sure how that was paraphrased. But I think one of the key things that we’ve seen with guys-and you’ll see this in upcoming iterations of the product-Pinterest is very much formed as a product feature kind of around collection, where it’s meant for people who want to collect ideas and then go off and kind of do something.
Then the CEO of Pinterest often talks about how they want to inspire actions in the real world. So, whether you’re making something in the kitchen or some do-it-yourself product or something like that, it’s about creating those ideas, planning it for your wedding or whatever and then going off and doing it somewhere else.
Tapiture is much more about that entertainment destination, where you might want to like something and share it and stuff like that, but you don’t necessarily want to go through the time to organize it. So, right now we still have that feature of being able to add things to a collection. But we’re, I think, moving even further away from that so it’s not just for people who want to use it, but it’s not necessarily a requirement to save things to your profile going forward.
Andrew: Okay. You got the original users from your site, from theCHIVE. Where did you get the next batch of users? How did you grow beyond that first audience?
John: Yeah. So, it was really important for us to think about this as not just a tech platform, but more importantly as a community. I think it’s important for anybody that’s trying to work in the social space and build something of our size. So, we did a lot in the early days, in fact we still do, to kind of foster that community feeling.
So, one of my first hires, actually, was a community manager. That person’s sole job was to kind of manage all the social profiles on Facebook and other networks that we had. That was actually a big growth channel for us, sort of going out and trying to build up those audiences off of other social networks.
Also, kind of within the platform, we did a lot to really encourage that feeling of community. So, we did things like run contests. We would pick random people from the community and send them gifts, like we’d get their info and say, “Hey, thanks for being part of Tapiture.” And we’d send them like free t-shirts and stuff like that, Tapiture swag, basically.
And then that person would say, “Oh my gosh, this is amazing.” They’d go out to their other networks like Twitter or Facebook or Instagram or whatever they were a part of and start telling everybody how great Tapiture was. That sort of helped build the awareness that there’s this whole site out there and they were essentially going out and referring their friends.
Andrew: I see. So, the first thing that you said was you were growing your own social presence on sites like Twitter and Facebook. That seems like a lot of work to get people to pay attention to you there and then to bring those people from there to your site. How effective was it?
John: I mean, it’s been very effective for us. Those channels vary by channel and the audience segment that you look at. But no, it was very important for us to go out-most of these social networks, as people know, I’m sure this is true for you as well, it’s not a zero sum game where it’s like, “Okay, I have Facebook. I’m now done.”
The reality is people are using Facebook and Pinterest and Tapiture and Snapchat and Instagram and all the other networks. They have preferences for doing different things. So, maybe if you’re sharing photos, in terms of like selfies or whatever, maybe you have Instagram first. If you want to talk with your family, maybe you have Facebook first. These are all kind of like different communication channels and ways people connect with one another.
So, for us, Tapiture was about a lot of third-party content, where it’s like, “I’m going to express who I am through other people’s content, whether it’s photos I like or videos I think are funny or whatever.”
Andrew: I see that. So, I’m on Facebook.com/Tapiture.
John: Yeah.
Andrew: You guys have something like 27,000 likes there. You post photos that are the kind of things that I might find on Tapiture. There is no link usually back to Tapiture, but occasionally there is. You’re not getting a lot of likes here. How is this helping grow the business, then?
John: So, that was important for us early on. If you looked at our network numbers on Instagram and some of the other networks, since our target audience and sort of people that we really resonate well with are sort of that millennial crowd. Quite frankly, a lot of them are not on Facebook. So, I think our Twitter followers, I haven’t looked at the numbers recently but I think we’re up around 40,000 on there. I think we’re like 50,000 or 60,000 on Instagram. So, we still leverage other networks.
But we’re also kind of at a point now where we’ve got that scale. So, because of that, you get that network effect that starts to happen where people are just referring friends either through the referral program within Tapiture where they’re telling a friend like, “Hey, check out this app.” So, a lot of that kind of stuff happens now a little more organically than in the early days.
Andrew: Okay. What do you do to ensure that that happens, that it’s not just a hope? It’s not just something that happens to happen, but something that you plan into your software. What do you do to encourage virality?
John: Well, first off you’ve got to have the tools there so that it makes it easy within the platform. So, as you mentioned, we have kind of a referral program there already. So, I think we use that to refer friends in. Because we have shopping on the site as well, we’re able to tie in economic incentives as well. So, if people refer a friend and use our platform, their friend, when they sign up, gets $10 to go shop in the shop. If they actually buy something, then you get $25 back.
Andrew: I see.
John: So, there’s a bit of an incentive there that we’re able to use. I think that helps a little bit. But again, on top of that, we make sure that we have a very solid product and we’re still sort of working within that community. So, a lot of it is about the personal relationships that we can make with our audience and with the community that we have and sort of encouraging them to go out and bring more into the platform.
Andrew: I do see that because I signed up with Twitter, I think, and one of these accounts that I have, you ask me to invite other people who I’m following on Twitter. I click the invite there and then I can tweet directly at them and let them know that they can see my Tapiture collection, right? That makes sense. I do see that on every photo, not only can I hit the thumbs up and like it, but there’s a share button that allows me to post to Facebook. What are you measuring? What’s the most powerful thing for you for getting more views on one of these? What do you call it? It’s not called a pin. What do you call it?
John: That’s actually a good question. We’ve been debating it. Historically we’ve called it a tap. So, we’re sort of taking the focus off of that now and focusing more on the action of that, especially in the mobile world where when you’re engaging with a piece of content on a platform, you’re tapping it to do some form of action.
So, for us, just think of it generally as content right now. But it can be anything from photos, videos, gif files. We export audio off of SoundCloud. We’re looking at other forms of content as well that you’ll soon be able to explore within your feed and throughout Tapiture. So, it’s really going to be kind of that homepage or home app for you. We can kind of come in and get all the stuff that you love.
Andrew: So then what’s worked best for you for getting a tap to be shared outside your network with someone who will bring new users into your system?
John: Well, frankly a lot of it is just the quality of what our members are already uploading. All of the content on Tapiture comes from our community. So, you tend to sort of see like-minded individuals sort of coming in. Probably the same way this has worked historically on Pinterest, where you have all these recommendations of like how to get more followers on Pinterest.
The same sort of rules apply within Tapiture, where when people are curating good content, whether it be funny or something that is aspirational or whatever the theme is for your interests, those like-minded individuals are going to see that and if they see that content is getting a lot of likes and it’s been re-tapped and saved to other collections and stuff like that, they’re going to measure those metrics and go, “Oh, I’m going to share stuff like that as well,” if their main goal is getting an audience.
Andrew: I see. You’re saying by giving someone metrics on how well their taps are performing, you encourage them to share more of what’s working and stop the stuff that’s not. Am I getting that right?
John: Well, good content in general draws people in, right? So, if I shared a funny gif with you, if it’s not funny, it’s not going to draw people in. So, what happens is people see in the notifications that their content got X-amount of likes or retaps or whatever. So, what tends to happen is when those people share that great content out and they get the pat on the back that like, “Oh, this was great,” they tend to go find more stuff that’s like that because they like the feeling like, “Oh, people love the stuff I’m sharing.”
Andrew: One thing that I noticed that works really well with you guys is that the on-boarding allows me to pick content that is interesting to me right away, which would then hopefully keep bringing me back. So, I’ve registered with Facebook, Twitter-I think it was also a Google account.
The next step says, “What are you interests?” I get to click some of my interests. The next step after that, from what I remember, was, “Here are some people who post things based on your interests. Pick the ones that you’d like to follow.” So, now I’m following people who have things that are interesting to me and I’m maybe more likely to tip a thumbs up and like button and maybe more likely to share it out.
John: Right. So, the goal is during the on-boarding process, we want to learn a little bit about you, like what you’re into and recommend some things just to get you started in terms of delivering content that would be of interest. And then the more time you spend interacting with Tapiture, the smarter our algorithms get. So, you essentially start to see more content that we think you’re going to find interesting.
Andrew: What I’m doing right now-so, I have SimilarWeb. I’m punching in some of your competitors to see how you guys do. You’re beating them all, from at least what SimilarWeb is showing.
John: Oh, really?
Andrew: What are you doing differently? So, you’re the ones that TechCrunch in the original article compared you to Dudepins, Gentlemint and Manteresting. You’re beating them all in traffic according to SimilarWeb. They’re all essentially allowing people to share images. They’re all essentially allowing people to find other images that they like. What are you guys doing that allows you to grow beyond them? What are you doing? I was going to suggest something, but I should let you answer.
John: Well, I think first and foremost, as I said, we’ve invested in technology and we’ve looked at this as something being beyond Pinterest for guys. So, look at the brands that you’ve just named off. Those are all very much geared towards guy stuff. It’s sort of the cliche. They’re looking at just sort of the feature set. So, for us, it’s been much more about thinking this as more of a personalized platform for people versus just trying to be the cliche thing.
I would say, for instance, even if you were just trying to create-put all the other stuff I said aside-let’s say we were trying to create a Pinterest for guys and that was it. The reality is that you and I, both guys, probably possibly have very different tastes, right? We might like different things. You might be into sports. I might not and vice versa. You might like art. I may not like it. So, you can’t just make a broad generalization about like what a guy is.
So, that’s kind of what we’ve tried to do in our platform, go beyond just that and think a little more broadly in terms of the opportunities that can present itself. So, we’ve done that. All the other things I mentioned, growing the community, all those things help. So, we’re on a path right now in terms of our growth. Last month we hit over 20 million visits, about 11 million unique visitors.
Andrew: 11 million unique visitors?
John: Yeah.
Andrew: Wow.
John: Our stats are very strong. People are sharing a lot of content. Traffic has been climbing month over month. We’re in a very good spot.
Andrew: Let’s talk about Man Card. Man Card is this piece of metal. It has a mustache shape cut out of the center of it and I can use this piece of metal that I would take out of my wallet because it’s the size of a card, use it to open up cans of beer, bottles of beer, right?
John: Or whatever, yes.
Andrew: How does that fit into your story?
John: Yeah. So, that came up, I guess, in the pre-interview. One of the elements of Tapiture is that we have things for sale on the platform as well. So, the question always comes up, “Well, how do you find products that are unique?” Well, we have a buying team that actually goes out and procures-actually, we don’t procure product but we actually setup business relationships with merchants who are trying to sell products. They’ll drop ship on our behalf.
But a lot of the content that we find that we think would be interesting for sale is actually stuff that appears on Tapiture. So, that was actually a product that somebody had tapped into the site. They saved it into their collection. The popularity rank was like skyrocketing. This all happened the day before we were due to launch the shop. So, we saw it. I was like, “What is this thing? Why is this thing becoming so popular?”
Literally, the day before we looked at it and said, “Can we sell this thing in the shop? Let’s see if we can contact the manufacturer of it.” A couple of hours before we were set to launch, the guy responded and said, “Yeah, let’s do it.” We quickly grabbed this image and threw it in the shop and the thing took off. It, at least in the early days, became one of our highest selling products of 2013.
We’ve done that actually with a number of other merchants too who were selling things on other sites, either like Fancy or Etsy or whatever and they just weren’t reaching the right kind of audience. I’ve heard of several instances where frankly we’ve enabled people who had their own products and their own passion that they wanted to go off and create and sell who have now been able to quit their day job and they do that full time and we keep them in business.
Andrew: But what you did was you saw a product that people were liking on your platform and you said, “How do we sell it within our shop? You got an arrangement with the creator for you guys to sell it and him to fulfill the orders.”
John: Correct. That all happened in about nine hours total.
Andrew: I see. Do you remember how much revenue you made from it?
John: I do, but we don’t really share those numbers. I’ve said publicly that we’re doing $7 million in revenue in total. Like I said, that was one of our top sellers.
Andrew: $7 million in annual revenue?
John: Annual revenue, yeah.
Andrew: More than $5 million last year, 2014?
John: That’s a very good question. We don’t disclose a lot of those metrics. But we’ve been very pleased with the revenue success. Quite frankly, we have one form of monetization on Tapiture right now. We see a lot of other opportunities for us as well. The way we currently sell, it’s enabled us to not only generate some cash flow, but at the same time, test the way in which people kind of want to buy products within this kind of environment. We have some other ideas that we’re cooking up for this year as well that we’re going to be playing around with a little bit.
Andrew: How did you know that adding shopping would be a good idea?
John: Well, that was one of the initial things with Pinterest. You heard in the early days and I certainly experienced it-frankly, I think I was one of the early guys back on the site in like 2009-2020. There were a lot of people who were saying, “I see stuff on here, but I don’t know where to get it.” So, we saw that was a real opportunity to kind of come in and create a shopping environment.
But it was key for us as well, especially with our early audience. Fundamentally, I believe that shopping sites in general can be a very challenging business. You can make a lot of money at it. But people get burned out with shopping. This is especially true for guys, right? Most guys, I should say, don’t like to go shopping.
Andrew: I hate it.
John: They either are very like tactful and say like, “Okay, I need to buy this. I’m going to find the best price, go get it now,” or it’s an impulse buy where they see it and they’re like, “That’s really cool. I’m going to go pick it up.” So, you see that kind of play out in our model as well, where we’re not trying to be a pure shopping site, but at the same time, we think that the same way that people may see some inspirational photo that happens to contain a guy on a boat with a watch on and be like, “Oh, what kind of watch is that?” We want to empower that person, if they’re into that, to also look at something, discover it and say, “Oh, that’s cool. How can I buy that?” So, this was sort of the first step in that direction.
Andrew: But beyond just the sense of, “We’d like to allow people to buy,” there was no indication that this is what they were looking for? Were people starting to see on Tapiture? Was it looking at competitors and seeing they were doing well with the shop? What got you to do that?
John: Well, we know that our other competitors, Pinterest and people like that, were not selling yet. And then you have kind of the pure ecommerce players who, frankly, are looking for ways in to bring in an audience. So, our original hypothesis was, “What if we connected that? Compressed the sales funnel, in a sense, where you have a combination of a content site and the ability to actually by stuff off of it.” We thought that was pretty interesting.
So, we threw up the initial shop with some early products that we thought people would be interested in. Some of that was actually stuff like the Man Card that actually appeared on Tapiture that we sourced. Others were things that we just wanted to test and throw in there and see what happened. That sort of proof of concept in our first month of sales, I think we did like $30,000 in our first month of sales. That was only a few days’ worth of the month. So, we felt pretty confident that we were onto something.
Andrew: I see. So, that was your test. How long did it take you to build that test version out?
John: I think we had the theory and we were trying to figure out when timing-wise to kind of role it in. From start to finish, it took us probably a month of the whole team kind of going, “Okay, this is what we’re going to go after and see if this thing works.” So, it was a lot of late nights working through the product design, putting business relationships in place and all that stuff. So, it was a fun time.
Andrew: Before we started, I told you that one thing I learned is that you should take the video of me that you see as we’re talking and move it underneath the camera because when you do that, it seems to the audience like you’re looking them in the eye. Every time you look at my video, it looks like you’re looking them in the eye. That little thing has more of an impact on your trustworthiness with an audience then, frankly, what you say, go figure.
John: Yeah.
Andrew: Meanwhile, throughout the interview, you might have noticed, I’ve been clicking around and my eyes aren’t up at your video and up by the camera. I should explain why. When you mentioned number of users, I said, “Let me go and just check it out and see where they’re coming from.” I looked at SimilarWeb and SimilarWeb is showing monthly users for January, 2015 at about three quarters of a million. I went to Alexa. They actually don’t give clear traffic data. So, then I went to Quantcast and you guys aren’t using their pixel, so all they’re showing is 20,000 people for the month of December.
Where’s your number coming from? Your number is huge, especially compared to everything I’m seeing online.
John: Yeah. Well, first off, you should know that unless you’re writing those tracking pixels, they’re not accurate. I think there has been lots of question about the accuracy of some of those numbers in the past. So, a couple things-we get our numbers from Google Analytics. We also run RJMetrics for our metric counting and internal reporting and stuff like that.
Frankly, all of those sources that you just mentioned aren’t looking at mobile. So, mobile for us in particular was something we launched in 2014. It was very, very successful for us in terms of both customer growth as well as utilization. So, what we see is that a lot of our users tend to go back and forth between mobile and web. They tend to, probably like a lot of other social networks, they hit Tapiture a few times throughout the day to be updated on their mobile phone or whatever. They may go home and night and see a larger screen experience.
But I’ve seen some of those numbers that you sited and we sort of laugh every time we see them because they’re off by orders of magnitude.
Andrew: Dramatically off.
John: Yeah.
Andrew: When you say Tapiture Mobile, you mean the app?
John: Yeah. So, we have native apps. There’s mobile web, but also most of our mobile traffic tends to come from both our Android and iOS apps.
Andrew: More from the apps than from mobile web?
John: Correct. Yeah.
Andrew: So, as I was doing that, I also said, “Let me see what revenue looks like.” I couldn’t come up with the place where you were showing revenue. But what I did see was who you raised money from.
John: Yes.
Andrew: You guys raised, in 2014, actually this month, February, 2014, here’s a post from TechCrunch. You raised $1.25 in new capital as well as $1 million convertible note from people, including Hilary Swank and who else? Herb Simon. Tell me about the funding that you guys have raised and many others whose names I shouldn’t even go in to list.
John: Yeah. So, that was our seed round of financing. So, combined it was like $2.25 million. So, we got in some great investors through the network that we had. Brian Lee, who’s founder of The Honest Company and LegalZoom and ShoeDazzle and lots of great brands, he’s a serial entrepreneur with an amazing track record. He’s an awesome guy. He actually joined as a board member in 2013. I knew Brian even before he invested. I said, “Look, I’ve got this idea. I really want you to be a part of it,” and I kind of pitched him on it and he loved it. In fact, Tapiture is the only company outside of his own company that he’s a board member of. He invested in a lot of companies.
Andrew: Here’s from his Wikipedia entry, “He’s the co-founder of LegalZoom, ShoeDazzle and The Honest Company,” Jessica Alba’s company that I keep reading about how well it’s doing.
John: It’s doing very well, yeah.
Andrew: So, how did you get him on board?
John: So, frankly I don’t remember even how we met. I know the CFO at a prior company that I was a part of is CFO now at LegalZoom. So, it might have been through him or just at some social event or something. But I pitched him on the idea and he liked it. He joined the board in 2013. When it came to seed round financing, I was fortunate to get him as an investor as well. But we said, “Everybody open up their networks.”
Brian has got a tremendous network. He introduced me to Randy Kaplan, who has his own fund as well, JUMP Investors. So, Randy actually led our round. He’s actually co-founder of Akamai. So, he led the round. A lot of those connections were sort of him and Brian’s personal network and people that they thought would be really interested in what we were doing.
Since we were a little bit more entertainment-focused, a lot of those people, obviously, come from the entertainment space. They really saw how we were different from Pinterest and some of the other players out there and saw our metrics and thought they speak for themselves.
Andrew: What about Hilary Swank? How did she, the actress, get on board here as an investor?
John: She’s actually friends with Randy. So, Randy introduced us and brought her into the fun.
Andrew: One of the hardest parts of building this business was moving to a new platform. Why did you decide to move to a new platform?
John: Yeah. So, we were running through most of 2013 on the initial alpha version. We scaled up a number of servers to kind of allow for the growth. But frankly, it was maxed out. So, in February, I guess it was, of 2014, we ended up working on sort of Tapiture 2.0, which was meant to be more of the extensible platform that was going to allow us to tie together the mobile apps and web version and everything else.
So, it was important for us to kind of get on a system that was much more scalable and really would allow us to take Tapiture to where we wanted to go. So, we spent a total of probably eight months trying to keep the core platform running as well as sort of building the new platform and building all of the core features into that that we wanted to have in there. So, it was definitely a challenging transition, but it all worked out well.
Andrew: Help me understand. What was different about it? Beyond the stability and the ability to handle more users, what was different about it? When you get to start from scratch, what do you decide has to stay in? What gets added? What gets taken away?
John: We didn’t actually take away any features per se. The things that we did primarily were things that probably are not that evident to the masses. Previously, we wanted to do mobile. The way the code was written on the alpha version of the platform, it was very challenging for us to be able to like, for instance, sync notifications in real time between a native mobile app and the web version. That’s something that most people just sort of assume happens now in modern day apps. The alpha version of the platform couldn’t support that.
There were also things that we wanted to do in terms of the personalization and understanding more about our member base or audience to help them have a better experience. So, a lot of the analytics and stuff like that that we wanted to sort of bake into the user experience all sort of happened behind the scenes, but at the same time provide for a better user experience. We couldn’t build it the way we wanted to build it on the alpha version of the platform.
So, we really wanted to just kind of say, “Okay, we knew this time was coming. It’s now here. Let’s start thinking about the next version of this platform and where we’re going to take it.”
Andrew: One of the things that I notice as I go through the site is if I look at something, at a URL like the one for Man Card, the bottle opener, I go to the Google search results and some of tweets I’ve seen send me to Shop.Tapiture.com/Products/ManCard. When I click to that, it shows me something for a second and then I get redirected to another page that’s Tapiture.com/Product. Why is that happening?
John: So, that’s happening because when we launched the shop initially, we launched it on Shopify. I don’t know if you’re familiar with that.
Andrew: Yeah. I am, an early sponsor.
John: So, that was our quick ingredient solution to get the ecommerce shop up and running. So, we migrated off of that in the fourth quarter of last year. We actually still use some of their technology. But that front end, for instance, you now go to Tapiture.com/Shop, you’ll see that actually is sort of within Tapiture itself.
So, the shopping experience was much more disconnected when we were on Shopify. Shopify is a great platform, by the way, especially if you’re running just a pure ecommerce site and nothing else. It’s great. But it really had limitations for us in terms of where we wanted to go long-term with that integrated shopping experience and some of the things that we intended to do off of that.
Andrew: I see.
John: So, we moved off of that. But I would imagine Google still is indexes some of those old results.
Andrew: I see. I get it now. So, now I’ve got-I think it’s from Google-a cached version of what that site used to look like. It does look so much like Tapiture that I thought it was Tapiture. It’s not. It’s on the Shopify platform. I get it. That’s the way that you are able to launch a whole shopping experience within a month without having to redo your whole business.
John: Exactly.
Andrew: Got it. And this was your way of verifying. Interesting. How was that? It seems like that would be a tough process, to move to your own platform after using Shopify and having so many people know the Shopify URLs.
John: Well, no, it wasn’t hard. We have the redirects. So, if people have it bookmarked or something like that, it still passes that through. But overall, the shopping experience is much, much better now than it was. We’re using things like our own recommendation engine, for instance, to recommend products. So, there were a lot of things in that Shopify ecosystem that made it very, very simple, the reporting tools and everything else around that. But it wasn’t too hard given the infrastructure that we already had in place to make that migration.
Andrew: I see. So, the other one was the one that kept you up nights. Were you literally up nights?
John: Yeah.
Andrew: You were.
John: As my wife would attest-
Andrew: Scared? Would you be open to sharing some of the ways you felt about it personally? Was there a time you thought maybe this thing was going to blow up?
John: No. I wasn’t scared. But as any entrepreneur can attest, it’s your baby. You have this nervous energy. You want to obsess over the details and just make sure everything is right. There are things that are going to happen that you’re not expecting. So, you try to mitigate any risk there by basically going through and thinking about every possible scenario, making sure that you’re ready for it. So, I spent a lot of nights obsessing over the product, waking up at 4:00 a.m. and sending off emails, driving lots of people crazy. That’s part of the DNA of an entrepreneur, I think.
Andrew: You do have an entrepreneur’s DNA. You actually, as a kid, used to sell TV Guide, the magazine, door-to-door?
John: Yeah. I did. Yeah. I was doing that. I was selling golf balls I found that were out of bounds.
Andrew: Really?
John: Oh, yeah. I grew up around the 18th tee of a golf course. So, that was a very lucrative business for me. I was mowing lawns. Anything I could do to fund what I wanted to go do, I was doing it.
Andrew: What made you a good TV Guide salesman or good golf ball salesman?
John: Oh my God. That was so long ago. I don’t know. I just had a way, I guess, with connecting with people that worked well.
Andrew: I grew up in New York. On snowstorms where you got to stay home, instead of watching television being glad that I didn’t have to go to school that day, I was glad I didn’t have to go to school, but I walked door-to-door and asked if I could shovel my neighbors’ snow for like $20 or $30.
What made me good at it was I just kept knocking on those doors. Even when they said no, I would just keep going. For some reason, I didn’t feel let down by that. As long as you keep knocking on doors, you can get enough customers to basically keep you busy all day, as long as you’re willing to go out there and work.
The time it takes to knock on an extra door is nothing compared to how long it takes to shovel. So, you might as well go and knock on 20 more doors to get another person to pay you $20. That’s what got me good. Do you remember anything like that that you took away from your experience that now is still staying with you?
John: Well, perseverance is definitely key to being successful with anything. You do have to get used to people saying no, as you can probably attest to as well, starting with shoveling drives or whatever. That’s probably one of the key things. I grew up, actually, in Ohio. So, I’ve got kind of this Midwest hardworking mentality kind of thing. Honesty and integrity is also big. If you combine all those things together, you’re going to connect well with people. You’re going to do the right thing for the business.
I think probably along those lines, it’s always been important to me to treat your coworkers with respect, much like the Paul example I gave early on. It doesn’t really matter what role people play in the organization or how you’re thinking about the business overall, whether it’s your customer or you coworker, it doesn’t matter. If you treat people with respect, they’re going to reciprocate. That kind of trust that you build with whoever it is you’re building it with goes a long, long way to making you successful.
Andrew: Alright. One more thing before we finish. That is that you and I connected because of a program called MentorNight.
John: Yeah.
Andrew: This interview is part of a series of interviews with people who are part of MentorNight. Can you tell me about what it is? I know it goes on in Los Angeles. What is MentorNight?
John: So, it’s a networking event, basically, where people get together, not just virtually over a podcast, but in person and hear other stories that people are going through and really get a better feeling for-almost like sort of a workgroup where you can kind of work through problems that you have. These are the people who are going to either inspire you with ideas or help you solve problems with your business.
Andrew: So, if I go out there in Los Angeles and watch the presentations, I guess they’re more like panel discussions, in addition to that, I can get to know mentors like you and maybe tell you a little bit about what I’m going through and get some feedback from you.
John: Exactly. The panel stuff is great, but the networking stuff is even better.
Andrew: Okay. It looks like mentors need to apply to be a part of it. You’re a mentor there. Also, entrepreneurs who want to be a part of it can apply.
John: Yeah. That’s right.
Andrew: I should say that is at MentorNight.com for anyone who wants to check it out. There are a lot of really impressive mentors who are a part of it. I’m proud to have you here as not just an interviewee, but the first person that I’ve gotten to know through MentorNight.
John: Thank you.
Andrew: You bet. And thank you all for being a part of it. The website is Tapiture.com. Thank you for doing this.
John: Yeah, my pleasure. Thanks again.
Andrew: Thank you all for being a part of it. Bye, everyone.
