Andrew: Hey there, freedom fighters. It is your buddy, your friend, your interview host. My name is Andrew Warner. I am the founder of Mixergy, home of the ambitious upstart.
And I got an email from a super-fan named David Rousch who emailed me and said, “Andrew, interview this guy.” This is from an email from April 14th. He says, “Having dinner from Matt Paulson at MicroConf and his business is amazing. He’s using computer-generated content to crank out thousands of articles a day on financial news. The stuff gets picked up by Google Finance and he’s collected 20,000 new email subscribers a month. He’s selling hem premium subscriptions and software and will do over $2 million this year.”
Of course, I had to check the guy out. The team invited him here to do an interview. Today, you’re going to get to know the man behind that story. His name is Matthew Paulson. He is the founder of market Beat, which publishes a daily investment newsletter to more than 200,000 email subscribers and operates a network of financial news sites with more than 3 million page views a month.
So, he’s great at getting traffic, great at getting those hits to convert to email addresses and then once they do, some of them end up buying his premium subscription. That’s what this interview is about, how he setup that whole model. He’s also the author of the book, “Email Marketing Demystified,” which you can find on MyEmailMarketingBook.com.
This interview is sponsored by Bench Accounting. If you have a lot of customers–in fact, even if you don’t have a lot of customers, maybe you just have trouble keeping up with your books, taking up too much time or you hired an accountant who’s charging you too much, you don’t have to. You can have Bench Accounting’s team of bookkeepers organize your books so that you know month-to-month how well you’re doing and they’ll use their proprietary software is organized and easy for you to go through. All you have to do is go to Bench.co/Mixergy.
This interview is also sponsored by HostGator. I’ll tell you more about how they are the company that keeps websites up. If you want a big discount on them, go to HostGator.com/Mixergy.
Matthew: Thanks for having me on. So, first of all, how accurately was David portraying your business model?
Matthew: I think it’s pretty accurate description. We publish a financial newsletter to retail investors every morning. Right now about 235,000 people get it. Basically what it is, is it’s a way for people to keep up with the stocks that they own. So, it’s a lot of older white men that subscribe to the newsletter. They have plenty have time. They play around in single stocks. They just want to know what’s going on with their investments and our newsletter makes it easy for them to know what’s going on with their investments.
Andrew: So, if I was just to pick a really big company they’re probably not following. Let’s say I was investing in Apple, you would send me Apple news directly to my inbox.
Matthew: Yeah. The value add is that usually an investor will invest in 10-20 different companies at once and just to know what’s going on with all them is not an easy task.
Andrew: Aren’t there other services that do this already?
Matthew: Not in the way that we do it. There are services that let you look up stuff about stocks, but there is not really a way to get all that information at once in a convenient way. So, if you followed Apple on our newsletter, you’d get all the usual headlines, you’d get analyst ratings, earnings, dividends, insider trades. When Tim Cook sells shares of the company, we’ll let you know about it, stuff like that. We just make it into a feed that’s easy to consume and send it out into an email everyday so that it’s in your inbox and you won’t miss it.
Andrew: You’re just sucking that data in from the internet the way Google News does.
Matthew: Yeah. It’s a lot of that and then there are data feeds that we buy, specific types of financial data and then we aggregate all of those into a single feed.
Andrew: What about David’s note here about how you’re going to do $2 million this year? Does that sound accurate, 2015?
Matthew: Yeah, it will be about $2.5 million when all is said and done.
Andrew: What about 2014?
Matthew: That was about $1.56 million.
Andrew: All right. Was it weird that David was sitting there at lunch with you, that he met you at a conference and he was emailing me that whole time?
Matthew: That was kind of funny.
Andrew: Did you know he was doing that?
Matthew: No. I did not know he was doing it. He told me afterwards. He’s like, “I’m going to email Andrew and say you should be a guest.” I was like, “Okay. That’s fine.”
Andrew: Good. I’m really glad that he did it. I’m glad you said yes. This whole thing started out for you when you were running a personal finance blog. What was it called?
Matthew: It was 2007. It was called American Consumer News. Back then, everybody had a personal finance blog. There were hundreds of them and I was one of many.
Andrew: What kind of articles did you write on this personal finance blog?
Matthew: At the time, I was maybe 23, 24 and I didn’t know a lot. So, it was a lot of crappy content that got put out. I don’t know if it be anything I’d be proud to share today, but it was the usual budgeting scores, investing real estate, everything that you would see on most personal finance blogs.
Andrew: How to increase your credit score, that kind of thing?
Matthew: Yeah. It was a lot of that. I did that for three or four years. I just kind of figured, “Hey, I’m not going to be the next J.D. Roth. I’m not going to be the next whoever the big personal finance blogger is.” So, I was like, “What is working here?” I saw the investing stuff.
Andrew: Did you really aspire to be J.D. Roth?
Matthew: I did at one time, yeah, not so much anymore.
Andrew: That’s pretty cool because he just seems like such a quiet, unassuming, almost a nerdy guy.
Andrew: And there are people out there who are aspiring to be like him. What I meant to say at the top of the interview was to point out a bunch of links that I found out to websites that don’t seem to be owned by you that link to you. I’ll bring this all up later on in due course.
But I want the audience to know this is not just a typical interview where we talk about how the guy went from being a blogger to being a content creator and membership site creator. But there’s a whole network of sites as I was researching you–do I call you Matt or Matthew?
Andrew: Matt. As I was researching Matthew, it was like this whole network of sites that I discovered. I’ve got to ask you about it. Who does the writing? There are a whole bunch of writers that I couldn’t find any information on even though they’re writing for these sites that seem to be yours. But let’s continue with the story.
So, you’re doing this whole thing. Are you making a living with personal finance?
Matthew: Yeah. I was probably doing $50,000-$60,000 a year, 2008-2009. I had a day job too. It was right as I was getting out of college. I never had the guts to go full-time with it. I kept my day job until the middle of 2012, actually.
Andrew: You were a web developer. That was your day job.
Andrew: Did you feel like a fraud writing about personal finance and not really making much money at it?
Matthew: Well, no. Compared to where other people were at my age I was doing pretty well. I paid off my first house. I bought it in 2009 and I paid it off by early 2010. If you’re a 25-year old and you have your house paid off, to me it seems pretty legit.
Andrew: I see.
Matthew: So, I think the benchmark for people my age, I was doing pretty well.
Andrew: So then why stop? You couldn’t be J.D. Roth but you were still making enough money. What was the problem that you saw that led you to reposition your content?
Matthew: Yeah. It was all the Google updates in 2010-2011. Panda hit me reasonably hard. I had a site that wasn’t authoritative. It had a lot of content on it. Those are the kind of sites that got hit in the first few Panda updates. So, I saw a pretty big traffic decline. I was one of the many finance bloggers that were selling text links on my website. That business kind of went away. So, it was just a combination of things. The business model changed and I wasn’t the guy that was going to be able to ride that wave. I knew it was time to do something else.
Andrew: I see. How did you figure out what the next thing should be?
Matthew: I had a website called American Banking and Market News at the time.
Andrew: American Banking and Market News?
Matthew: Yeah. It’s still kind of around, but not really. So, I got that and did Google Finance and Google News and Bing News and MSN Money and some of those financial news portals. I figured out that, “Hey, if I start writing about some of the big banks that were getting bailed out in 2009-2010, I would get a ton of traffic from those financial news portals.” So, I was like, “Okay, if I write about Citigroup, I’m going to get at least 3,000 people that read this story no matter what.” So, I’m going to keep writing about Citigroup every day. That’s kind of how that started.
Andrew: How did those news portals know to link to you?
Matthew: So, there’s an application process for each one. They’ve got a list of their guidelines and you have to apply and get in.
Andrew: And you would just sit and apply and then you’d write your article and they’d hook it up?
Matthew: Well, once your site is approved in the index, they’ll pull into their feed and index your stuff.
Andrew: I picture you going home. Do you drink beer?
Andrew: I picture you going home after a day’s work, drinking your beer, sitting there at the computer saying, “All right,” maybe with a second monitor while you’re watching “The Simpsons” something mindless but entertaining and just cranking away at this stuff back in those days. Is that really what it looked like?
Matthew: Yeah. So, one of things that worked for us early on is covering equities research. There were 300 stock brokers in the world. They all issue research notes about companies. I would report on what they were saying. So, I would pump out 15 or 20 of those every morning.
Andrew: So, it was in the morning with your cup of coffee.
Andrew: Sitting there saying, “Here’s what other people wrote about this news story. I’m going to write my own take on it and publish.”
Matthew: It’s not really a news story. Stock brokers put out research notes for institutional investors. They aren’t covered widely. So, we try to make some information available to a more broader audience.
Andrew: How would you get those research reports?
Matthew: You can get them through a Bloomberg Terminal or you can get them through services you can pay for that are pretty expensive.
Andrew: You had a Bloomberg Terminal?
Matthew: I didn’t, but that’s other ways to get them.
Andrew: How did you get it?
Matthew: There are few services you can pay for. One is called First Call from LexisNexis. I had that one. There are a lot of other places you can get that information from if you want to pay for those research notes.
Andrew: Did you pay for it or did you have a friend give you the user name and password?
Matthew: No, I paid for it.
Andrew: You paid for it? What does it cost for that? Bloomberg Terminal is like $20,000 a month, right? That you didn’t have.
Matthew: Yeah. It’s a few thousand, but it’s doable.
Andrew: I see. So, basically what you were doing was taking stuff that was behind a pay wall, rewriting it for a general audience and making it available for free and then going to these other news sites and saying, “Here’s a story that you want to link to.” Did they link to it or just post your story?
Matthew: Yeah. So, with Google Finance, MSN Money, any of those portals, you go to a company’s ticker page and then there’s a list of news stories for a stock. My stuff would show up there.
Andrew: I see.
Matthew: That’s kind of how it worked.
Andrew: That’s a fantastic model. So, now you’re starting to see things take off.
Matthew: You would think somebody would sue you for this, but somebody already sued somebody else for that and the other person won. It was a company like Barclays versus Theflyonthewall. So, it’s like I knew what I could get away with doing what I doing. So, I was like, “Okay. I think I’m pretty good. I’ll stop reporting on their stuff but I know I probably won’t get sued over it because there’s already the case law there.”
Andrew: I love how much thought you put into this. The model is so beautiful it makes sense. What year did you start this?
Matthew: I started doing financial stuff in early 2011 is when I started building the email list.
Andrew: Here’s what you told our producer. You said by 2012, you already had a team of writers and you were doing $1 million or is it 1 million page views a month?
Matthew: Yeah, 1 million page views.
Andrew: 1 million page views, so not $1 million business yet.
Matthew: Yeah. In 2012, we were probably doing between $300,000 and $400,000 in revenue.
Andrew: Wow. All right. So, things are really started to get going. The problem is we haven’t’ talked about revenue and we haven’t talked about this email subscriber thing that you’re so freaking good at. Which came first, email subscribers or revenue?
Matthew: Probably the revenue. Even today, I was at $2.5 million in revenue. Over $1 million is just display advertising from Google AdSense from advertising specific display networks like investing media solutions, some of that stuff.
Andrew: I see. Because you have such a profitable audience, it makes sense for you to run advertising to them.
Matthew: Yeah. It’s display advertisements on our websites. It’s also advertisements in our newsletter. We do pretty well with that. People pay to email our list. There’s a co-registration ad at the end of our thank you page. So, there are a lot of different monetization points where you’ve been able to leverage, in addition to the subscriptions that you would normally think of.
Andrew: Okay. So, the first thing you did was run ads. That’s where we’re talking about the first $100,000 or $200,000 in revenue?
Matthew: Yeah. And then after that, it was getting subscriptions, some of that stuff going. Then it was co-registration advertising. I don’t know if you’re familiar with what that is.
Andrew: Dude, that’s where I made my first big money, co-registration. Nobody knows what co-registration is. Just describe it.
Matthew: Right now I do about $40,000 a month in co-registration advertising revenue.
Andrew: $40,000 a month in co-registration?
Andrew: All right. Let’s pause here and just explain how you do that. Maybe you have a better way of explaining it.
Matthew: So, when you sign up for somebody’s email list, if you went to MarketBeat.com and you typed in your email address, usually after you sign up, there’s a thank you page that says, “Thank you for signing up for our newsletter. You’ll get your first newsletter tomorrow morning or whatever.
Then below that, there are a bunch of different offers that you can check and then you click a button. It’s just an ad unit. If the person that signed up for the newsletter clicks the button, your email gets sent off to whoever that advertiser is through the network, the advertising network. So they pay the advertising network $3. Then I might get $2 of that as the publisher.
Andrew: So, let’s look at more specifically because I just went through that. As soon as I come to your site, MarketBeat.com–well, not as soon as, but within seconds, there’s a modal pop that says enter your email to get the newsletter. I enter my email to get the newsletter.
At the very top of the follow-up page, it says, “Thank you for joining MarketBeat Daily. To complete your registration, please choose your free trading and investment guides from our trusted partners.” And then there’s a pre-checked box for a free eBook, “Ten Common Mistakes New Traders Make.”
Underneath that is an unchecked box next to “How to Safely Invest Like A Wall Street Pro,” and a little more description next to it, then “It’s Time to Sell,” etc. You get paid how much every time someone checks the average box. On average, what do you get paid?
Matthew: It’s usually about $2.
Andrew: $2? Son of a bitch. Can I curse here?
Matthew: Finance is a very good space for co-reg.
Andrew: It’s a really good space because there are actually people who are willing to pay for it and of course they have money. So, I pre-check a box next to “How to Safely Invest like a Wall Street Pro.” I hit submit and continue. You get $2 as an average.
Andrew: And then again the follow-up page, this I don’t think I’ve done before, says, “Your subscription is now confirmed. As our thanks, please consider these free trading and investments guides from our trusted partners.”
Matthew: There are actually two units that run from different networks. They both know we’re doing it. So, it’s fine.
Andrew: But it’s a whole other network that’s in here.
Matthew: Yeah. So, one of them makes about $30 and the other one does about $10. I just have a cookie. So, whatever reason, people will fill-in our opt-in forms multiple times so I always show them the one they haven’t seen last so it rotates them through.
Andrew: Got it. Maybe the next time I come through, I might see this one first. Now I see, “Free video: Best Cash-Proof Options Trading Strategy,” etc. Let me check that. They want me to enter my name, but you’ve pre-populated my email address because I gave it before. Now I’m going to hit submit and continue. They say no, full last name is required. I tried to cheat. Okay. Continue. And now I’m even offered more.
Matthew: There is a no thanks button at the bottom.
Andrew: I see, bottom of this one. Let me just keep going here. 202-563… Sorry to whoever has this phone number. Submit.
Matthew: I think you just made me like $6 or $7.
Andrew: Really, you get money even if I put in a fake email address? They just average it out.
Matthew: I guess if the email bounces, that will get returned. But if it’s a real email address, I probably would get paid for it.
Andrew: Wow. I don’t know if anyone noticed this, but every second of this interview, you’ve been smiling. Now I understand why. Go back and rewind and see it. I see. So, co-reg came. It was email and then co-reg and then you created your product?
Matthew: So, it was display ads. It was the products. Then it was co-reg. A guy name Tim Bourquin from After Offers hit me up and said, “Hey, why aren’t you doing this? You’re leaving a bunch of money on the table.” I kind of knew who he was from the Podcast Expo days. I was like, “Crap. I was leaving $15,000 on the table at the time.” It’s only grown since then.
Andrew: I know Tim Bourquin. He’s the guy who came here to do an interview in the early days of Mixergy and he said, “You should be charging.” I said, “How would you feel if I charged for your interview and you didn’t get any part of it?” He said, “Great.” I said, “Usually I let people watch the interview free for a few days and then I charge.” He says, “No. Make mine charged. I believe in this. I think you should do it.” I got to know him to because of the Podcast Expo days.
Andrew: So, is this available just to finance people?
Matthew: So, co-reg is in a few different spaces. So, obviously finance is big. Apparently survival is another big one. Internet marketing it’s available. If you want to know, you should just go track down Tim Bourquin and talk to him and see if it’s a good fit for your website.
Andrew: I don’t know if it’s a good fit for my website considering who my audience is, but for other people listening, I think this could be a really good revenue source.
Andrew: Wow, $2, that’s incredible.
Matthew: Even if your industry isn’t a good fit for co-reg, you can still just have a pretty blank page that says, “Thank you for signing up,” and stick an AdSense or a display ad unit on there. Those tend to perform quite well.
Andrew: Oh because there’s nothing else going on.
Matthew: There’s that and somebody has already taken an action, which indicates they’re likely to take another action after that.
Andrew: But Matthew, what about the fact that you want people to confirm their email addresses.
Matthew: Yeah. It’s not single opt-in and it’s not double opt-in. It’s somewhere in between. So, it’s single opt-in for a few months and then if you don’t take any action or if you don’t confirm, they’ll kick you off after a few months.
Andrew: Oh, I see. You don’t need me to go back to my inbox and confirm.
Matthew: Yeah. You’ll get one of those emails which will take you to yet another co-reg ad unit.
Andrew: I see.
Matthew: You don’t have to. You’ll still get the email.
Andrew: Even if I don’t confirm, I still get the email. The difference is if I confirm I go longer, if I don’t confirm I go shorter.
Matthew: We’re looking for activity metrics. So, if you open a bunch of our emails, if you click on links, if you confirm your email address, then we know your active. We get 20,000 organic opt-ins every month and some of those aren’t going to be active. So, we need to be able to, I guess, trim out the people who aren’t paying attention pretty quickly in order to keep our list clean.
Andrew: I’ve got a feeling people are listening a lot closer now than they expected to, to this interview. So, you’re now starting to get some revenue, going back to where we started in the story. It’s time to grow the business. Before we get into how you grew the business, why don’t I do a sponsorship message for my sponsor, HostGator?
When I asked you before the interview, “Do you have any gripes with HostGator?” Before I start doing it, I always ask my guests, “Do you have any problem with me doing these two spots in the interview?” No one has ever said, “I have a problem.” You actually said, Andrew, not only do I not have a problem, I actually use HostGator. How do you use HostGator?
Matthew: Yeah. So, I have a standard HostGator retailer account. I use it for a lot of my smaller sites. I’ve had it for years and I’ve never had any problems with it.
Andrew: Site stays up?
Matthew: Sites stay up.
Andrew: They have incredible support. Do you ever have to use their support?
Matthew: No. It’s [inaudible 00:19:59], all the stuff people are used to and it works just fine.
Andrew: If you’re out there and you’re listening to this and you hate your hosting company, HostGator will help you move to them. They have support. They will do what they need to, to help you move without making a headache for you. I know a lot of people in the Mixergy audience actually have websites and they don’t need to start from scratch. HostGator will move you and give you their super low rates and give you their incredible support and their uptime and everything else that comes along with it, including a 45-day money-back guarantee.
And there’s something new that they’ve got. Actually, if you need hosting, I want you to go to HostGator.com/Mixergy. Sign up. You’re going to get a deep discount, 30 percent off because you’re a Mixergy fan.
There’s something else that they now have offered. You know, one of the problems with WordPress is that you have to fight malware yourself. On Mixergy, we had malware. People actually were somehow injecting ads to–what was it? Some penis enlargement stuff all over the site. It was like the most embarrassing thing. I couldn’t stop it. It was just taking over the site.
Thankfully, because I do these interviews, I got to talk to Matt Mullenweg, the creator of WordPress, via email about it, Chris Pearson helped me out to try to figure out how to solve it. There was a company that jumped in and they helped take care of it for me. Anyway, all these people had to be brought in to help me out, an eclectic group of people and they all helped me out. I hated doing that.
If you don’t have that access and you don’t want to beg your friends to help you solve this kind of problem, protect yourself before it happens. HostGator has new WordPress hosting. They will make sure malware goes away. They will back up your site. They will update your plugins. They will make sure that WordPress with all its issues work for you.
All you have to do is go to HostGator. Search for–let me see, I’m going to go to HostGator.com and they have something called Optimize WP. I know there are other services that will now do all this stuff for you for WordPress. I dare you, go find the best of them. I dare you to compare the process.
I know you think, “Maybe because I’m paying those guys 10 times more than HostGator, they’re going to give me 10 times better service.” It’s not true. You know why? Those bigger guys don’t care about you if all they have is one little sites. They want the big banks. They want the big publishing companies. That’s who they’re really after. They don’t’ care about your $100. They don’t care about you. But HostGator is all about you, companies your size. As far as I can tell on your website, there’s no place here where they’re even courting the big banks. They want you.
So, if you need WordPress hosting, go to their Optimized WP service. It’s right at the top of HostGator.com. If you want generic hosting, all kinds of hosting, including WordPress and you want to keep it light and cheap, just go to HostGator.com/Mixergy.
And since you guys probably won’t remember the name of the hosting company, I bought one of these, completely unauthorized. I’m sure they have money they spent on their own logo, their own mascot. I’m now ruining it by buying this thing for $20 off of Amazon. I’m making a point, HostGator, like a gator. That’s why I got this gator hat. I’m grateful to them for sponsoring Mixergy.
All right. Matthew, we’re now at a place where you want to grow–I’m pretty proud of that sponsorship message. In the future–I always like to do analysis of my own sponsorship message. Actually, you want to give your feedback? There’s something I would do differently. What would you do differently?
Matthew: You know, that was a pretty hard sell. I was impressed. You sold it pretty well. I think if you got a guest on that’s used the product, you should ask them.
Andrew: You’re right. I should have asked you. What do you think of HostGator?
Matthew: I think they’re good. If anybody needs a standard web hosting account for a website that doesn’t get a crap ton of traffic, I think that’s a good choice, the pricing is good. They give you everything you need. Why not? Why would you go with somebody that you’ve never heard of before when you know there’s a big company that you can yell out on Twitter and keep them accountable or post on Hacker News about them if they give you problems.
Andrew: You’re absolutely right. In the future if somebody says, and many people have, that they use HostGator, I’ve got to just jump in and let them say it. That’s one mistake I made. Here’s the other one. I think you need to sell one thing at a time. I should have talked about Optimized WP and their standard service. It’s too confusing, right?
Matthew: Yeah. People aren’t going to remember a lot of an interview a week after they’ve heard it. It would be lucky if they remember one thing about an advertiser.
Andrew: Right. It’s the kind of mistake that frustrates me when I see other people make it. Their business does this and that. Now I have to understand both things even though they’re different but they’re relative. Now I see how easy it is to fall into the trap because there are two things I want to tell people. I should have just been patient. Pick one at a time. All right. I like to improve in public. So, I call myself out in public.
All right. So, now you’ve got your model. You’re starting to add email addresses because you want the business to grow. You don’t want to keep having to fight for new readers. What’s next? Is it getting more readers? Or, “No, we have enough readers. We have enough email. Its’ time to bring in more revenue.” How did you figure out what to sell your audience?
Matthew: So, in 2011, 2012 when I first growing the email, I had probably gotten it up to about 50,000 people that had subscribed. Maybe it wasn’t quite that. I don’t even know. It was in the tens of thousands. People were telling me they liked the newsletter. But they were also saying, “Hey, it would be great if we had this in the newsletter or it would be great if you sent it by 8:00 so I can read it before the stock market opens,” or, “I really don’t want to see these ads,” stuff like that. I had gotten a lot of future requests for the newsletter. So, I thought, “Maybe I can make a paid version of this thing.”
So, I took all the feedback that I heard over and over again, like, “Okay, you can kept he newsletter just the way it is now or you can pay me $15 a month and get this version of the newsletter that has all this stuff that you told me that you want.” So, that was kind of the initial sale. I didn’t sell a lot of subscriptions at the beginning because I didn’t know email marketing. I didn’t know what I was doing. But over time, I kind of figured that out.
Andrew: I want to learn how you figured it out. But let’s talk a little bit about the product. Was the product as customized as it is today?
Matthew: No. It’s been improved on over time. Yeah. So, it was basically the same newsletter and then it had the watch list where you could add your own stocks. It was just sent earlier in the morning and there were no ads. That’s all there was.
Andrew: It was just your watch list. You say, “Here are the stocks I think you should be watching today.” Did you hand write them?
Matthew: No. It was so people could enter their own watch lists.
Andrew: I see.
Matthew: So, the core of the newsletter is equities research, so what stock brokers are saying today about stocks. And then the premium version added the watch list where people could follow their own stocks.
Andrew: How did you know–I know that you figured out before the market opened because they were telling you and you actually were contacting them asking what they wanted and that’s what encouraged them to tell you even more. How did you know about the watch list?
Matthew: So, what people told me is that the problem with our newsletter is there are as many as 1,000 research notes that go out every day. So, how do you surface the ones that people care about the most? That’s not an easy challenge because you don’t really know what stocks people care about.
So, we would filter out international ones and we would filter out when there wasn’t that big of a change. But really people just wanted to see when something was happening to a stock they really care about. So, it’s, “Okay. Give me a list of your stocks. We’ll make sure those get surfaced to the top and you won’t miss out on them.”
Andrew: How did you code that up?
Matthew: We used some [inaudible 00:27:38] but everything else is an internal database that generates a newsletter.
Andrew: And you wrote it yourself?
Matthew: Its’ a lot of .NET code and Microsoft SQL. That’s a codebase that’s seven years, maybe six years old now and it’s just been upgrading and improving on it over time. It works.
Andrew: Where did you get all the information that you were linking to?
Matthew: So, we would scrape Google News and Yahoo News and MSN or Bing News and we would grab those headlines. We’d put them in a table for the day. That way we would query a stock once and we would put the links in.
Andrew: And you know that’s legal because that’s what Google News is doing too. They were scraping those sites and so are the other search engines.
Matthew: It’s just linking to news websites.
Matthew: It’s not anything you’re going to get in trouble about or anybody is going to care about.
Andrew: You wrote the scraper yourself?
Matthew: Yeah. It’s just a script that runs. It will start about an hour before you need to send a newsletter out. It will take a list of any stock that person has followed. It will go through. It will update those with a parallel loop and do the appropriate calls. We switch up the news portals. We don’t bang any of them too much and it works reasonably well.
Andrew: Matt, I know today your sales process is really sophisticated. Back then, what did you do to sell it the first time?
Matthew: So, I did the Jeff Walker product launch formula kind of stuff. I never bought his product, but you listen to a few of interviews, you get the general gist of it. I did that. I sent out maybe five emails for the launch period. I cut the price by $5 a month for the first people that signed up. I think I only sold 30 subscriptions the first month I did it. It took a while to figure out the marketing and the copywriting.
Andrew: 30 subscriptions with this whole product launch. What Jeff Walker says is something like ask people what they want via email. Do you remember what the subsequent emails are?
Andrew: I forget what they are too.
Matthew: There are different types of emails you send. You send a, “Hey, this is available.” You send an FAQ email. You send testimonials. You say, “Hey, the discount is going to end tomorrow. You better take action.” And then the last day you send, “Hey, today you need to take action or it’s going to end and you’re going to miss out,” and that kind of stuff. You’re creating urgency.
Andrew: Okay. And you did all that and you sold 30. What was your monthly price on it?
Matthew: So, that was $10 a month for the discounted launch price.
Andrew: $10 a month. Now when you think back on it, what do you think of that price point?
Matthew: It’s still a discount we offer every now and then. We’ve raised our prices a little bit. So, we have two products. One started as $14.97 a month and the other is $12.97 a month and now we’re up to $15.97 and then like $20 a month.
Andrew: Can people, do you do annual prices or monthly?
Matthew: We do monthly and then we have an option for annual and we have an option for bi-annual, so every two years. We tested that and a percentage of people would choose it and if they want to give me two years money up front I’m happy to take it.
Andrew: Your sales page is so freaking basic. I was watching your video before you started. It’s a little bit of text, then it’s a video of you just doing a screencast of what people get and showing them.
Andrew: And it’s like a four, five-minute video and then they get to buy if they want. Then under the subscribe–you’re using a PayPal subscribe button on there too.
Matthew: Yeah. If you click through the payment page, you get another choice.
Andrew: Why is that?
Matthew: What do you mean?
Andrew: Why do you have two different payment options on there. One is PayPal where it’s just a PayPal button and the other is a full sales page with a credit card–
Matthew: They both go to the same place. They both go to that sales page.
Andrew: Oh, I see, so even though the button looks like PayPal, it’s not taking me to PayPal.
Matthew: Originally, we had accepted just PayPal and then I never swapped out the button.
Andrew: I see. I thought maybe on one page you were using PayPal’s website–I see, you’re right. So, if I click it, it doesn’t take me to PayPal. It just takes me to the sales page.
Matthew: When we switched to Stripe as our primary payment method. That basically doubled our conversion rate, believe it or not. It was a huge win for us.
Andrew: Because Stripe allows you to accept payment on your site and PayPal at the time, I think, required you to send people to their site.
Matthew: Yeah. I think the rule with subscriptions was you actually had to have a PayPal account to setup a subscription. I think some people just don’t trust PayPal. So, I think offering both payment options is kind of a must for anybody.
Andrew: I freaking love Stripe. I interviewed the founder of Stripe here. In the interview, I said, “I’d like to try you but it’s a pain in the butt.” He said, “We’ll help you.” Sure enough, the interview is over. He sends me a guy from his team to help us out to install Stripe. He says, “Here, you guys want to get into it. I care that much. Let’s get you on.”
Matthew: It’s ten lines of code to write your first charge. It is so easy.
Andrew: We needed less lines of code, I think, but more integration. It works out beautifully. It’s a great service. All right. That’s not a really good business so far where we are, right? 30 people paying you $10 a month. It’s good. But that’s not really exciting for a guy who’s already doing hundreds of thousands in ads. So, what was next?
Matthew: So, at the time, I was trying to juggle four or five different businesses. The finance was the only one making any meaningful money. Eventually, I killed the rest of them and focused on the finance one. So, while I let the opt-ins run for a few months just to see what would happen, it wasn’t until I think maybe November that year of 2011 when I did a Black Friday sale and that actually worked reasonably well. I had gotten maybe 50 out of that.
So, I was like, “Oh, maybe I just didn’t know what I was doing. Maybe it is a fundamentally decent business model.” I need to learn how to do this. It’s a lot of copywriting over time. It’s testing price points. It’s testing landing pages. It’s improving the product. There’s just so much optimization that happens at every different point that has made it a real business.
Andrew: Back then, it was these launches, very much the Jeff Walker-style product launch. At some point, it became part of your sales funnel, right?
Matthew: Yeah. We have like a 60-90-day auto-responder series. So, you get all of the emails you would normally get in a lunch as part of your onboarding now in addition to getting some other content. So, it’s kind of–we’ve honed it in.
Andrew: How long after the email–how long after someone subscribes do you offer a purchase?
Matthew: I think like the next day.
Andrew: The next day. So, you get numbers pretty fast.
Matthew: Yeah. I think we do. I think out of all the people that will ever subscribe to our newsletter, half of them do it within the first 90 days is about the metric.
Andrew: And how many do it within the first week?
Matthew: I don’t know.
Andrew: So, that’s not important to you because you don’t buy a lot of ads, right? If you were buying ads, you’d need to know much faster, wouldn’t you?
Matthew: We’ve done more of that co-registration advertising. Again, that’s been a good marketing channel for us. So, we work with a couple of the big companies that do that in the finance space. Last month I got about 20,000 leads through co-registration in addition to our organic stuff from Investing Media Solutions.
We were running on TheStreet.com, Jim Cramer’s website. We started out doing a network on co-registration advertising. It’s like, “Okay, put us on all the sites.” I let it run for three months. I paid him $10,000. He’s like, “Out of these sites, which ones are performing the best?” Then I became a pre-check offer on TheStreet.
Those were working very well for us. Those subscribers converted well. So, if you’re a pre-checked offer then you get about ten times as many leads. It was almost but not quite too much for us to handle. So, we did $50,000 on that. Now we’re going to let it run for a couple of months to see how those perform.
Andrew: What do you use to track all of the different lead sources?
Matthew: Yeah. You would think I have something fancy in place, but it’s really just a SQL database. I can run queries. I have reports I call up.
Andrew: Right. You’re a real Microsoft geek.
Matthew: That’s the wrong way to do it, but that’s how I do it.
Andrew: What’s the right way to do it?
Matthew: I don’t know. There’s got to be some better reporting stuff out there. For me, I think it was a mistake five years later to try to do everything myself through code. I think I would be better off with an ESP and try to work around some of the unique use cases I have.
Andrew: Email service provider. But I don’t know that an email service provider would allow you to do things like customized email the way you’re doing.
Matthew: Yeah. It would have to be like half MailChimp, half Mandrill. There would still have to be some software involved.
Andrew: Like your email marketing definitely could be an ESP email service provider.
Matthew: Yeah. But even the recurring subscription stuff, that’s all custom code and Stripe.
Matthew: That probably shouldn’t have been that way, but that’s the way it is.
Andrew: This is one of the problems with being a developer entrepreneur. You know you can do it. Why start hunting for solutions that are not as good as what you can build? The problem is they’re not as good today, but you have to keep updating your stuff to keep up with what they’re doing.
Matthew: Yeah, like Baremetrics and some of those things like track your Stripe stuff, I can’t use those because I don’t have Stripe subscriptions setup. I just have a con job that charges people every month because they’re not using Stripe subscriptions, I can’t use their services because I did it myself.
Andrew: I get it. Baremetrics is such a bad thing to lose. It’s a beautiful, polished service. That interview with the founder of Baremetrics was really good. Anyone who’s listening should go check that one out too. All right. I see now what’s going on. Your model is all setup. The only part of the model that still exists today that we hadn’t talked about is this thing that I saw when I just started searching for where your traffic was coming from. So I have a SimilarWeb Professional account.
Andrew: That gives me all kinds of data. Do you have them?
Matthew: Yeah. I use SimilarWeb. I use it to see where my competitors are getting their traffic from.
Andrew: You pay for the Pro account?
Matthew: I don’t. I probably should, but I don’t right now.
Andrew: If you want, we can do a screen share after all this is over and I’ll show you all your competitors’ traffic and see where it’s coming from. It’s pretty freaking good. The only thing that I don’t have with them is they have this website content feature that allows you to see what pages on your competitors’ sites are doing well. So, that I don’t have. But I do have the rest. So, one of the things that I’m doing is I’m now looking at Sleekmonkey.
Andrew: SleekMoney. You know the site. What is SleekMoney?
Matthew: So, that’s a website we own. It’s a website we produce. So, the way that you publish content into places like Google News and Yahoo News and Bing News and the finance sections, you have to have a news website that’s indexed in one of those. So, we have built specific websites, one for Google News, one for Bing News, one for stock quotes even.
Andrew: Each one of them is for just one news site?
Matthew: Yeah. So, the approval process is kind of random. So, you might get one site into one, but not the other. So, our main Google News site, SleekMoney, is not in MSN Money and Bing News. So, we have another site that got into that. So, we just published the same content to both places and get both traffic sources.
Andrew: I see. So, you also have Dakota Financial News.
Andrew: How many of these sites do you have?
Matthew: There are probably four or five of them floating out there.
Andrew: Now, all of these sites have the same look, which is pretty crappy.
Matthew: Sure. That doesn’t matter, though.
Andrew: Why doesn’t it matter?
Matthew: People still read the content. They still click on ads. They still sign up for the email newsletter. It just doesn’t matter that they aren’t all that polished.
Andrew: I did the standard source code lookup to see what’s going on here and you’re just using standard themes, right? Like News Plus is a standard theme that people can buy for under $100, I think.
Matthew: Like $70 or something.
Andrew: The only thing that seems really to be important–there it is, Theme Forest, $58, but I think you can buy it even at a cheaper rate–the only thing that seems to be important is it may be crappy–by the way, crappy is your word, so the audience doesn’t think I’m insulting my guest.
Matthew: I own it. They don’t look pretty.
Andrew: I tend not to want to let the audience in on how I get away with stuff. I want them to think I can be so edgy that I can call a guy’s site crappy to his face. I’m realizing that I’m also developing this reputation for being an a-hole. I’m not. I’m like a really well-researched guy.
That’s why I can do this stuff, not because I’m a jerk, but because you happen to have used the word “crappy” to describe your site when you were talking to April Dykman on our team. She wrote it down. I’ve got it here in my big Evernote doc on you. Anyway, how puts this stuff together? Is this what David Rousch was saying is computer-generated?
Matthew: Yeah. We do algorithmic content creation. There’s a company that works with the Associated Press to do their earnings articles because there are 500 companies in the S&P that do their earnings every quarter. They’ve decided it’s not worth it to have a human write that. That company is called Automated Insights. We’ve actually been doing what they’re doing for three or four years now.
So, whenever a company will announce their quarterly earnings or they get upgraded by a brokerage, we don’t need a person to do that because it’s a pretty standardized article that has all the same information in it. So, it’s a game of mad libs where this company announce their earnings on this date. They got this per share. Analysts were expecting this per share. Here’s what the CEO said about their earnings announcement.
Andrew: Yeah. So, you’re saying you could just put these articles together using a machine.
Andrew: And you said you created your own or are you using Automated Insights?
Matthew: No. We’ve got our own stuff going on. So, we take all the data that we buy, borrow, scrape, steal, whatever. We can turn that into content.
Andrew: It’s amazing that you do that. So, there was an On the Media piece on this. On the Media is an NPR show that just analyzes where the media is today. They did a competition between a fast journalist for NPR–did you hear it?
Matthew: On Planet Money.
Andrew: Was it Planet Money? That’s why I couldn’t find it. It was “Computers vs. Man.” Were they using Automated Insights as the example?
Matthew: I think so. Yeah. That was the AP stuff.
Andrew: Here we go. An NPR reporter raced a machine to write a news story. They said that the reporter won. I don’t think so. It was the machine that won in my belief.
Matthew: the machine had some kind of developmental hiccup that paused the guy running it for a second.
Andrew: Right. It was a fun piece to hear, but essentially, the machine did a great job. Anyone can find it just by Googling–let me see the name of the reporter. It’s Scott Horsley.
Matthew: That’s a great podcast. People should listen to it. If you want to know how we produce that content, go listen to that podcast.
Andrew: It really is a great podcast to show how easy it is to automate this stuff. I don’t know why reporters are fighting it. They should be spending their time working on more intellectually curious pieces and less of the rote profit reports like this.
Matthew: Yeah. I totally agree. There is some stuff that is so standardized and happens so regularly–this company announces a dividend. Who cares? You don’t need a human to write that. You want a human to go dig inside of a company and see they’re lying about their accounting.
Andrew: Exactly. No machine yet could tell that you’re smiling at different parts of this interview, right?
Andrew: So, there is no Doug Madison. That’s why if I was searching one of the writers for Dakota Financial News, I couldn’t come up with anything on him.
Matthew: It’s a requirement of those news portals that you have to have a certain number of writers on there. Those are just pen names we use.
Andrew: What would happen if Google knew that you have a pen name for a machine?
Matthew: There are lots of people that do it. I suppose it’s probably technically against their news guidelines. We are definitely not the only ones that do it.
Andrew: Like you said, the AP is doing it. NPR talked about lots of news sources are doing it today.
Matthew: It’s pretty common. I think we do it pretty well. There are a bunch of Indian guys that are doing it very poorly and are probably giving us a bad name.
Andrew: Someone else did a piece on that. Maybe this was On the Media. They did a piece on this outsourced local reporting. They weren’t great. Let’s see… Actually, speaking of Google, you were hit with Google. There was one time you were in your car. Where were you driving and what happened?
Andrew: Weren’t you driving in your car one time, Google made a change and you couldn’t do anything about it?
Matthew: Oh, yeah.
Andrew: I researched you like a hawk. There’s no way I could know enough about you.
Matthew: So, I was driving to Minneapolis one day from Sioux Falls. It’s a four-hour drive. I have a tool that makes sure that everything is good with my websites. Stuff is getting indexed in the places that we publish content to and that there aren’t any issues. I checked it one day. It turns out like six or seven of my sites out of maybe ten that were floating out there had gotten hit with a low-quality content penalty.
It turns out it wasn’t any of the content we had, it was that we had a bunch of tags and categories on our website and all of those had tags and category pages that were getting indexed. It was a ton of thin content that I didn’t know was there. Google saw it and they said, “What is this guy doing? He’s got 2,000 tag pages on his website.” We had to go and remove all those. It took maybe a month to fix everything. It almost gave me a heart attack in the car. I was like, “Crap. What am I doing? What’s going on?”
Andrew: You were really dependent on them.
Matthew: Half my traffic is probably Google.
Andrew: And the reason was that every tag that you had create a page in WordPress for all the posts that were associated with that tag.
Matthew: Yeah. We do have some people that write our websites too. They use tags liberally. That somehow set off your algorithm. That was bad news. It ruined my day.
Andrew: Why is it that you’re still using WordPress and having your software pump articles into WordPress instead of writing your own? Why is that the one thing you decided not to do yourself?
Matthew: I just don’t see a need to do it. With a Super Cache plugin, the websites are fast enough. There are some edge cases around WordPress. We had to write our own site map plugin because it just couldn’t handle the volume we were doing. It would try to make a new site map every time we published a post. I think it’s fast enough. There are a lot of templates out there, a lot of decent plugins. It was good enough to the point where I didn’t see the need to do my own thing.
Andrew: All right. I want to find out, then, how you deal with customers because we haven’t talked about that. If all you did was automate everything, then it seems like a dream of a business. But there are some things you can’t.
Matthew: It’s not.
Andrew: It’s not. Before we get into it, I want to do a quick sponsorship message for Bench Accounting. Let me something, do you have any bad experience with bookkeeping that I can milk for my sponsorship message for Bench Accounting?
Andrew: What is it? Thank you.
Matthew: I was part of this entrepreneurship accelerator program through my college. They helped setup my company. They setup an S-corp. So, I was supposed to be doing payroll. I wasn’t doing payroll. Nobody told me to do it. So, I was breaking the rules. I didn’t know it. Two or three years later when I met with an accountant, he’s like, “Hey, you know you’re supposed to be doing payroll, right?”
I had to redo like three years’ worth of taxes. I had to hire myself as an employee. I had to go setup unemployment insurance. I had the state yelling at me. It was a lot of stuff like that. It was all because I decided I didn’t need an accountant when I was first getting started. That was a big freaking mistake.
Andrew: That goes to show why software alone isn’t enough. If you do your own books, you can get software that will do it for you. But all the software is going to do is just allow you to do your own books a little bit faster. The thing is, it won’t help you think through issues like, “Are you paying taxes properly. Are you accounting for things properly?
What you want is not just software, but software and real human beings, bookkeepers who know what they’re doing who can go through your work and make sure that it’s organized enough for you, you the entrepreneur who is listening to me right now, organize it well enough so you know how much revenue you made last month, so you know what your expenses were last month, so you know last quarter compared to the quarter before, so you know that you don’t have to get sucked into doing all that work and that someone is on it for you and then presents it in a way that makes sense for you to make your business decisions based on.
That’s what Branch Accounting is all about. Branch Accounting has real human beings who do this for you and software to back them up.
If you want try them out, go to Branch.co/Mixergy. When you do, you’re going to find that they created a page just for Mixergy fans, even though all they’re doing is testing to see if this is a good place for them to advertise. What they did was they gave 20 percent off for the first six months of their service. Their service is super cheap right now, cheaper than an accountant, cheaper than if you hired on bookkeeper to do your work and if that bookkeeper got sick or wasn’t up to snuff, you’d be stuck.
Cheaper, much better service–all you have to do is go to Bench.co/Mixergy. Check out how they made this page just for us, offer us a discount. I think this is the last sponsorship message that they have for me. Frankly, we don’t have that many ad spots. Big companies like HostGator have locked up a lot. They’re also just testing. That’s why they’re doing the 20 percent discount. So, get it while it’s still there at Bench.co/Mixergy.
Matt, I’m more impressed with the way that I did that sponsorship message.
Matthew: Yeah, I think that was professional.
Andrew: Thank you.
Matthew: Have you ever thought about asking your guest what questions they would have about a sponsor? I’m guessing if a guest has a question about a sponsor, your audience might too.
Andrew: Ah, alright. I don’t know that I would be able to answer all these questions about the sponsor.
Matthew: I would kind of know what kind of deliverables Bench is going to give me. Are they giving me a monthly P&L statement? Are they doing my taxes for me?
Andrew: I believe what they do is they do give you a monthly P&L statement and all the other statements that you need and they make it ready for your CPA to file it. Let me see. Let me just confirm. Your Bench team will work with you and your CPA to ensure your statements are ready to file by the deadline. So, they will not–
Matthew: They don’t file taxes.
Andrew: They don’t do it, but they’ll avoid the tax crunch by giving you all the date and then you get a CPA who will do it.
Andrew: All right. So, there’s a question I can actually answer.
Andrew: Super. And there’s nothing else on this page that I want to especially point out. I’ll let people see it for themselves. The human being part comes from what you said earlier. You said you have old white men. How do you know, by the way, that they’re white?
Matthew: It’s a couple things. One, it’s analytics information based on where people tell me they are, their age, that kind of stuff. So, those numbers back it up. The people I talk to, I check them out on LinkedIn. Every now and then, I call one of them to help them with a problem. That’s who the demographic is. I’m not trying to be racist. Please forgive me if I sound that way.
Andrew: I don’t think you are. I think you’re aware of who your audience is. That’s a really good point. A lot of–
Matthew: I said that to somebody and she said, “You’re a racist.” I said, “Well, it’s kind of true.” I’m not saying any race is superior to any other race. That’s who my customers are.
Andrew: Is that a problem for you, that they’re so homogenous?
Matthew: No. I guess in the sense that in 30 years, they’re all going to be dead that would be a problem. Hopefully I’m doing something else by then.
Andrew: What that does mean, though, considering the experience that they have with the internet, you’ve said that they want to be walked through things. How do you know and what does that mean that they want to be walked through things?
Matthew: It’s mostly that people, my customers, they’re older. They don’t really have a lot of experience using web apps. They just need help getting stuff setup initially. Most of them know how to use email. So, that’s a very good format for us, a platform. They already check email from their kids and that kind of stuff. The email makes it really easy to them.
But we have to do a lot more hand-holding than I think a lot of companies would just based on who our demographic is. So, there’s stuff that’s really easy to do like add a stock to your watch list, sometimes they just can’t quite get the job done. So, they’ll email our customers for our email address. My assistant Stevie also lives in Sioux Falls with me, she’ll go and add their stocks for them.
Andrew: Just manually do it for them so they don’t have to do it themselves.
Matthew: Yeah. We’re happy to do that.
Andrew: Interesting. What else does it mean? Have you ever added a new feature that you thought would go well but because your audience isn’t into new stuff it just flopped?
Matthew: Yeah. Some of our research tools–we have stuff where they can filter through our database. We thought that would be… We have a second product called Ratings DB, which is kind of our web app that provides tools to search through our data. I think that’s a much better interface than the email newsletter. I thought once we launched that product it was going to easily overtake the email newsletter. Its’ still maybe only a third as big as the email newsletter is, just because that’s the format they find easy.
Andrew: I see it here, $19.97 per month is what it offers. It is very web-based. I think I would prefer that. I don’t want more email.
Matthew: Yeah. But my audience wants email.
Andrew: Wow. That’s pretty good to know. Why is it $19.97 and not $19.99? Is that something that’s significant for you?
Matthew: It’s always been that way and I’ve never changed it.
Andrew: I see. You just came up with it. Is that like a Walmart thing?
Matthew: Yeah, probably.
Andrew: Let’s see what else we haven’t gotten to… Where was that? Where was that? Newsletters create themselves automatically. Sorry?
Matthew: Yeah, go ahead.
Andrew: Why don’t we talk a little bit about the name change? Your site wasn’t always called MarketBeat.
Matthew: Yeah. It used to be called Analyst Ratings Network, which is a long name. It’s seven syllables. It’s kind of hard to remember. I never thought it was too big of a problem because I didn’t talk to my customers a lot. Over the phone I had maybe one or two phone calls every other week. If they just messed it up it was like, “Not too worried about it.”
I went to MicroConf, a conference run by Rob Walling earlier this year in April. I was telling people about my business. Any time that anybody would try to repeat Analyst Ratings Network back to me, it was always something very mangled and it didn’t sound like anything it actually was. It was like, “Maybe this name isn’t all that good.”
So, I thought for a while, “Hey, maybe I should change the name to something better.” We do a lot more than cover analyst ratings not. We’re more of a broader financial publication. I thought I should change it for that reason. I went to that conference and people would call it Analyst Network or just Analyst Ratings or anything like that. It was like, “Oh god, I need to change the name.”
Andrew: This happened like months ago.
Matthew: Yeah. That was in April and now it’s July.
Andrew: We’re talking about within months of hearing about this, you decided that I’m going to do this and you actually made a really dramatic change.
Matthew: Yeah. So, the hardest part wasn’t making the name change, it was just identifying the new name. The way I found MarketBeat was I was just on Sedo.com, the site that people list their domains on. I was like, “MarketBeat. That sounds pretty good. It was for sale for $9,500.” That’s not all that unreasonable for a domain that good. I was like, “I think I could do that.” I checked the trademark search. The Wall Street Journal had used that name but they haven’t in a couple years now.
There were no active trademarks on it. I checked with my trademark lawyer guy. He was like, “I think you can get away with using that.” I was like, “Great, I’m going to take it.” So, I bought the domain, made the switch over and tried to make my audience very aware that the name was changing but nothing else was changing, like, “Don’t freak out. Don’t worry about it. We’ve got a new name, but same great stuff. We’re good.” So, all my emails I wrote for the rest of the year would be Matthew Paulson, MarketBeat.com, formerly Analyst Ratings Network.
Andrew: How has it gone over with your audience, people who don’t like big change?
Matthew: They have been pretty cool with it. The numbers have all stayed the same. Every now and then I’ll get an email saying, “Hey, I love the name.” No one has said, “It’s a terrible name. You shouldn’t do it.” I got a lot of feedback. Before I like finalized the name, I sent an email to the people that pay for the highest level subscription and said, “Hey, what do you think?” I got positive feedback from that. I talked to some of the advertising networks I work with saying, “You think this is going to be an issue?” Everyone said, “Yeah, I think it will be fine.” And it has been for the most part. I haven’t had any issues with it.
Andrew: You talked to your subscribers. You have great subscribers. But any time you sell something on a monthly basis, you also have to battle churn, people who just cancel. Sometimes they come back. Sometimes they plan to and they don’t. Sometimes they never want to. What has worked so far for you to reduce churn. I know you want to do more. But what has worked so far?
Matthew: Yeah. Our churn rate is about 5 percent per month. One of the biggest reasons we have churn is because there is a good chunk of international subscribers and those credit cards don’t always work so well through Stripe.
So, whenever somebody’s credit card fails, we send all sorts of email notifications in our newsletter saying, “Hey, you need to update your credit card.” So, we’ve been able to reduce some of that through emails and that kind of stuff. That’s been good. We’ve also started collecting zip codes, which has increased our approval rate through Stripe. That’s been a good change for us.
Then just for regular churn, we ask every customer that’s quitting, we ask, “Why are you unsubscribing?” We get that feedback. We make changes based on that. For people that cancel by accident, I actually do another auto-responder series for people that cancel and say, “Hey, if you want to subscribe again, here’s this discount, click here to get it.” Some of those things have worked pretty well for us.
Andrew: That’s pretty interesting, actually. I hadn’t thought to do that. So, for people who cancel, the first question is, “Why did you cancel?” And then after that, you go into trying to win them back.
Andrew: Who helps you with your email writing?
Matthew: I do it all.
Andrew: You do it all. Where do you learn how do it?
Matthew: Writing a lot of bad emails in a row and then just looking at the numbers afterwards like, “Oh, this subject line worked,” or, “This call to action worked well.” If you know any of the courses that teach you how to write email marketing, it’s different from how I write. I write in a very professional and conversational tone. It’s because I think that’s what my audience connects with the best. It’s not aggressive copy. It’s not the every other line email that’s pretty short and tries to get people’s attention. It’s more conversational. I think that’s worked out well for my audience.
Andrew: For a second there I thought I could get one of your domains and make a big point of it in this interview. Then I realized it was a typo. I said, “Hey, MyEmailMarketingBook.com is still available. I should just register it as a joke and then give it over to him.” But no, I had a typo in the way I put it in. It’s not available. It’s fully developed. I’ll close off with that. But let me continue with one more set of questions before we finish. That is about systemizing. You’re a pretty small operation. It’s just you and Stevie is, I think, the only full-time person.
Matthew: Yeah, Stevie is the only other employee in the business and I have a handful of contractors that help out with random stuff here and there. It’s a pretty small organization for $2.5 million in revenue. So, we rely heavily on automation and systemization to just–
Andrew: Teach me a little bit. What’s the one system that you’re especially proud of?
Matthew: Yeah. It’s just the content publishing. Our newsletter is automated. Our content we produce is automated. All the transaction stuff is automated. Everything we make as self-serve as possible. Our goal is to minimize the number of recurring tasks that we have to do. So, if we see ourselves doing one thing every week–
Andrew: Give me an example. What’s one thing you were doing every week that you said, “We’re going to have a system and maybe it will involve software to fix it?”
Matthew: So, our newsletter sponsorships, there’s a company that sells those on our behalf. We get paid $1.40 for every click-through. But it was like, “Here’s all the ones you can run this week. Rotate them as you want.” I was manually putting in the code. I was like, “This sucks. I’ve got to have a system for this.”
So, I made a standard operating procedure for Stevie to follow. I wrote the software for her to use to manage the rotations that automatically inserts them. The advertising network agency communicates with Stevie. Stevie puts them in. She sends them to me to approve them. Now something I spend three or four hours a week on, now I spend ten minutes a week on.
Andrew: So, you said standard operating procedure, SOP. That’s like the document that says, “Here’s how we do X.” In this case, X means, “Here’s how we add email ads to our newsletter.” What do you write that up in?
Andrew: Really? Okay. And it’s just an .RTF file or a text file?
Matthew: Yeah. So, when I want to show Stevie how to do something new, I write it out as an SOP first so I know the stuff she needs to do. Then she and I will meet at a coffee shop and I’ll show her what to do. And it’s like, “Okay, here’s an SOP in this Dropbox folder we share so you can reference it if you ever need to.”
Andrew: We do that too. We use Google Docs. It took me forever to find the right format for it. The format I use is like a recipe for cooking. It shows, “here’s what the finished product will look like,” with a screen shot and a short description. “Here are the ingredients you need, like you’ll need access to Infusionsoft. You’ll need access to PipeDrive, etc. And here’s the steps that you need to take, complete with photos,” when I cook, if I cook, I need screenshots or photos of every step of the way. What’s your outline like?
Matthew: Yeah. So, at the top there’s a background of what this task is and why it needs to happen, what the importance is in the overall business. Then there is a list of steps to follow with links and all that kind of stuff, like, “Here’s the link in our system to add a new sponsorship,” and stuff like that. So, she knows right where to go. Then it tells her what to click and what to do. Then at the end, it shows an example of, “This is what the finished product should look like.”
Andrew: All this makes sense. I see how you’re just really getting your foot on the gas, buying pre-checked co-reg ads on other sites, increasing the number of subscribers, improving your churn rate and so on. What I’m curious about is why get into MyEmailMarketingBook.com. Why write a book on “Email Marketing Demystified?” Why do all that?
Matthew: So, in the summertime, there’s not a lot that goes on in the finance world. People aren’t paying a ton of attention and I kind of got bored. I wrote a book last year when I was kind of bored. I was like, “Maybe I can do that again this year.” So, email marketing is something in my local community I’ve come to know a lot about. I don’t have time to sit down with everybody. There are a lot of email marketing books. A lot of them decent. There are a lot of bad Kindle eBook marketing books.
It’s like, “You know, it would be kind of a nice if there was a step by step guide for people to get started and learn some of the stuff that I’ve learned.” It’s like, “I think I can write that.” I decide I’m going to write that book. For the first two and a half weeks in a July, its’ like, “I’m going to write this book. That’s what’s going to happen. So, in 18 days, I wrote a 45,000-word manuscript and sent it off to the editor I had lined up.
Andrew: It’s all done.
Matthew: It’s going to come out in October. Yeah.
Andrew: October 1st.
Andrew: Hey, we’ve now chatted for an hour and 15 minutes, including the setup. I feel like we’re friends. Can I read this book before? I can I read this book now, the way you sent it to the editor?
Matthew: Yes. I will send you a copy.
Andrew: All right. I’m so curious about this. What’s the one thing that’s going to shock my audience, an audience of people who feel like they know email marketing. It feels like there’s nothing new to learn though co-reg, I think, is a really good one that they probably didn’t know. What’s one thing that’s going to really amaze them and make them feel like this book is worth their while?
Matthew: I think the thank you page is really a secret weapon that people don’t’ know about. Even if you can’t do co-reg, if you just stick an ad on it–there’s a business I’m involved with that just has an AdSense ad on their thank you page and they get maybe $300 to $400 RPM form the ads on that page. So, not a lot of people sign up through it, but that one page makes just as much on AdSense as the rest of the website. So, you’ve got to think about your thank you page in great detail on how you’re going to set that up and that’s all in the book at MyEmailMarketingBook.com.
Andrew: Like if I sign up for this, where’s the revenue for you on this? It’s a free book.
Matthew: So, when it comes out in October, we’re going to make it free for the first week on Kindle. It’s a pretty known book strategy. I’ve got a guy who did a book called Taylor Pearson called “The End of Jobs” and another one by Dan Norris called “The 7-Day Startup.” The same guy that worked for those two is doing mine. He’s like, “It worked for them and it’s going to work for you. Let’s do it.” I was like, “All right. Let’s try it.”
Andrew: I see. It’s free for a couple of weeks and then it’s paid and by making it free for a couple of weeks, you rise up in the ranks on Kindle, once it’s paid, people are starting to buy this thing.
Matthew: An interesting fact on the first book I did–I make more money on the audiobook than I do on the Kindle or paperback combined.
Andrew: I’ve heard that. Is that because Audible pays you?
Matthew: Yeah. So, it’s a service called ACX that Amazon owns. They publish into Audible and iTunes. The royalties are pretty good. If you’re the first audiobook that somebody buys through Audible, you get like a $25 bounty. So, I might make $500 to $600 a month from the first book through Audible and maybe $50 to $75 from the rest. It’s really not about the money. It’s more about the business opportunities that will show up because I have a book out there.
Andrew: All right. That is MyEmailMarketingBook.com for anyone who wants to check it out. This was a great interview for me. How was it for you?
Matthew: It was great.
Andrew: Yeah? What did you like about it?
Matthew: You did a lot more research than anyone else has done about me and have found some stuff that I’d be okay if you didn’t find. You found it, so it’s fair game to ask about.
Andrew: I am so into systems like you. I’ll tell you–15 minutes before we started, I barely knew anything about you.
Andrew: But now I just have this system where the whole teams knows exactly what I care about. They pull everything together. I don’t even have to go into SimilarWeb and type in your URL. Somebody will go, in this case it’s Andrea, she’ll find the URL in SimilarWeb. She’ll put it in my notes on my screen so I can really do some–all I have to do is click and start digging in on the site. It’s a great system.
All right. It’s not one that I–we did invent it on our own. But it’s based on past interviews that we did here on Mixergy. If you guys want to learn more about systems, check out my Sam Carpenter interview. It’s fantastic. In fact, any interview that I did on systems is fan-freaking-tastic. All right. Matthew, it’s so good to know you. I hope this won’t be the last conversation we have. I think you’re a really bright guy and I’ve just enjoyed having a conversation with you.
Matthew: Yeah. I hope to run into you again.
Andrew: Cool. And for everyone who wants to follow-up, there are a few things you can do. First of all, check out Bench.co/Mixergy, see the page they created for us. And check out HostGator.com/Mixergy. They also created a special page with a 30 percent discount. Feel free to offer that to any of your friends who need it. They both give discounts.
If you like this interview, I urge you to systemize getting the latest interviews from Mixergy. All you have to do is go to your latest podcast app, type in Mixergy and subscribe and at that point, every new interview I do is going to come directly to your phone or mobile device. I have been saying it. At first when I said it, you guys might have heard me feeling like a goof trying to promote my podcast. What’s the point of that and asking you guys to subscribe? But the more I do it, the more people actually subscribe. So, I have to do it.
The other weird thing is I’m asking some people to review it. That feels especially goofy, “Weill you please give me a nice review?” And I’m not even giving you anything in return for doing it. But I’ve asked and I’m actually getting nice reviews and I really, really, really appreciate it. Apparently that’s all I have to do is show appreciation. I really do appreciate it. So, I’m going to show you.
All you have to do is go into iTunes and review Mixergy. In fact, all these links that I just mentioned, including the one to Matthew Paulson’s website is available in the show notes, so if you are a podcast subscriber, all you have to do is click on my face or on the cover art for this podcast and you’ll get linked directly to Matthew’s website, directly to sponsors and everything else.
Matthew, thanks for doing this.
Matthew: Thanks for having me on.
Andrew: You bet. Thank you all for being a part of Mixergy. Go out there. Build something great. Tell me about it. In fact, come back here and do an interview about it. Bye, everyone.