Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. When I’m not doing that, I am running. I just bought like my first GoPro. I hate GoPros, but if I’m going to videotape my runs, I want to capture them. So I’m going to use it. My goal is to run all over the world in 2019. I’m just putting that plan together, but I’m excited about it enough that I have to talk to you about it.
All right. When I’m not running though, I interview entrepreneurs about how they built their businesses. And joining me today is an entrepreneur who seems to have come up with this idea, not because he saw a great opportunity in the market so much as he said, “I have a vision for my life. I want to have a business that supports the life that I want.” And so he did it. And today, we weren’t even able to ship him mics. You guys know we now ship mics to . . . we buy a mic, we ship it out to every single guest, I guess we weren’t able to ship it to him wherever he is. Where in the world are you, Kean?
Kean: In Puerto Vallarta, Mexico.
Andrew: Yeah, it’s not even that far. But there’s some countries that we can’t ship. We just use standard Amazon, to be honest with you. But still, I guess it’s an issue sometimes. But that’s what happens when the dude decides I am going to prioritize my life, my travel, my experiences over little things like having an environment where Amazon can deliver anything that I want. All right, so Kean, whose voice you just heard, he is Kean Graham. Gram, right? That’s how you pronounce your name?
Kean: Yeah, yeah, second time.
Andrew: Kean, am I right that some people who have the last name Graham pronounce it Graham, instead of Gram?
Kean: You know what, I always kind of wondered about that. My family says, Gram. I have heard other people say Graham. I don’t even know where the fork on the path kind of happened. But I guess that’s a mystery man is not meant to know.
Andrew: The site that he created is called MonetizeMore. What they do is they increase ad revenue for really large publishers by implementing an auction where all the different ad networks, Facebook, Google, Amazon, and some of the lower . . . some of the ones whose names aren’t as familiar but probably workhorses within his stable, they all compete to run ads on the publishers that MonetizeMore works with. We’re going to find out how he came up with this idea, how he built it up, how he’s competing in a world where it feels like, you know, there are three dominant players in the advertising world and there’s no room for others. There’s one dominant publisher. There’s no room for others. It seems like it, but he’s saying he’s seeing otherwise, and he’s able to continue to grow his business.
This interview where we find out how is sponsored by two companies. The first is a company that Kean and so many others who I’ve interviewed use. It’s called ActiveCampaign, great for email marketing. And the second is a company that will help you host your publishing empire. It’s called HostGator. We’ll talk about those later.
First, Kean, good to have you here.
Kean: Thanks for having me.
Andrew: Kean, what kind of revenue you guys pull in?
Kean: So we’re on track. We’re now at the end of 2018 on track for 20 million.
Andrew: $20 million? Yeah, we’re just a few day . . . we’re recording it just a few days away from the end of the year. And so you’re in Puerto Vallarta. Do you actually get to experience it? Are you the type of person who’s just basically in an office anyway, and it doesn’t matter what’s outside your office? How are you experiencing it?
Kean: I’ve been able to really kind of engineer my ideal lifestyle over the years, and it’s something that I really look for in business, in life is balance. So I’ve done a good job kind of delegating and engineering myself out of the business. So I’m working on the business rather than in the business. So I am able to enjoy the places.
Andrew: Like what? Give me an example. I’m looking at photos of Puerto Vallarta right now. It looks beautiful. I don’t know what I would do there. All I would do is go for runs outside, and what else is there? Or go swim? What did you do yesterday?
Kean: So this is a bit unique. I am with my family. This is kind of like a Christmas vacation for us. So we were kind of walking around, doing some sightseeing, taking some photos. We went up to a viewpoint yesterday and saw this incredible view of Puerto Vallarta, you know, going out for food. I’m still active. I still go to the gym. And it’s kind of like I’ve mix some work in here, mix some activities. My family right now is at the chocolate museum, probably gorging themselves, enjoying themselves as they should. So it’s always a mix of activities. If I’m 100% off on vacation, I get a little kind of stir crazy. I always like to have that balance of a little bit of work, a little bit of fun, and, you know, some activity, some socialness. I always like to have that balance throughout my week.
Andrew: You know, I see the photo here, Puerto Vallarta. It does look beautiful, and still, as you were saying that you went up and you saw a beautiful view. I go, who cares? Who cares? Wouldn’t you rather just sit and work more on your business instead of that? What do you care about another great view? Look at it on Facebook and move on? Look at it on Instagram move on. Why? Why does that mean so much to you that you would adjust your work life to get more experiences like that?
Kean: One of my biggest passions is to see the world, to travel and experience those experiences that are very unique that I don’t get back home in Canada. So I do like to see those views. And I do like to get a little bit everything. I’m greedy. I want everything out of life. So when I’m working, it’s more about, not about the quantity of work I put in, it’s the quality of work I put in. And that’s why I do two to three-hour increments at a time. And then, you know, once I see my productivity kind of dip off, that’s the time to hit the gym. This is the time to go play squash, and then I kind of refresh, go on another increment of work and then be social or do something unique in the place that I’m in.
Andrew: You know, one of the advantages that I’ve had from going overseas to countries where the time zone is tough for people in America to work with, is that I get to disconnect from people. And I’m forced to think about my business in a different way. I’m forced to say, “Here’s the direction. I can’t micromanage you, even though I would want to. You have to now figure it out. And I have to let it go and give you enough direction to figure it out.” You’re smiling as I say that. Have you found the same thing?
Kean: Yup. I’ve had some of the biggest realizations or ideas for my business from looking outside of the window on a plane, train, bus or boat.
Andrew: Do you have an example of some way that you’re managing differently or thinking about your business differently because your way? And if you don’t have one now, when it comes to you in this interview, I’d love to hear it. But do you have a specific, I’d love to hear that.
Kean: Absolutely. Travel brings clarity. And there’s a lot of tough decisions when you’re growing a business and they only get tougher as the business grows and becomes more complex. So if I’m struggling with a decision, I feel clouded. I don’t force to make that decision right away. I kind of give it some time. And a great way to do that is get the endorphins going. As you know, you’re a big runner. You know, I like to go to the gym. I like to play sports. That’s a good way. But also traveling is a bit of a muse as well. It kind of gives you not only clarity, but it kind of gives you these kind of abilities, grandiose ideas, you know, gives you those important priorities in life, in business. And things just become more clear when you change your environment. So it’s something that I’ve had a lot of success with. And I’ve been able to kind of repeat over the years.
Andrew: You grew up with an entrepreneurial and, I’d say, hippie set of parents. Am I right?
Kean: I guess you can call them hippie in their own rights. It’s a very unique childhood. I grew up in the Rocky Mountains of Canada, just beside a small town called Golden of 4,000 people. And they had a bed and breakfast still in the Canadian Rockies, and for a five-year period, we pretty much lived off the grid on solar power. So yeah, it was definitely a hippie experience. My mom is a very spiritual person. My dad, he looks like Grizzly Adams. He’s got the big beard and kind of looks like a lumberjack. So I’d say we’re pretty stereotypical on that part.
Andrew: And one of the things you took away from that was you like entrepreneurship, right? What was it that they did that was so entrepreneurial, that inspired you to be an entrepreneur yourself?
Kean: I don’t think I’m actually got to the point where that maybe like entrepreneurship. I think it gave me a foundation to be open to entrepreneurship. It was a very different childhood. And I didn’t kind of grow up with that pressure to become an employee for a big well-known company. I have a lot of friends that grew up like that. And I had a different perspective. And when I went through university, I studied business. And I had the opportunity to take the entrepreneurship program, but it didn’t call to me at the time. I just did general management. I was more interested in marketing. And then eventually, I, you know, had my first job. It was entrepreneurial, but I had the opportunity, at one point, to become an entrepreneur. It was the right time. And that’s when it happened. I always thought though that, “Yeah, I can become an entrepreneur at one point,” but I never thought I would become an entrepreneur at the age of 24 when I started.
Andrew: And 24 it was a layoff that led you to go down a path that eventually made you realize I want to have my own life, and my business is going to support it. You were laid off because of what?
Kean: So I was laid off at 23, a year before I started the business. And this was, you know, 2000 . . . it was the beginning of 2008, and, oh, sorry, 2009. And so right in the recession, and I was working for an online classified, called UsedEverywhere, at the time. And it was owned by a newspaper company. And as you probably know, newspapers are one of the first type of companies that feel a squeeze of a recession. So they went from this investment model, let’s go make long-term gains, and, you know, grow this company to getting pretty scared and wanting to make profit right away.
So they laid off the marketing department, which was four people at the time, and I was included in that layoff. And I remember my head of online media, who laid me off and my friend, and I remember him saying, “Well, we don’t know how this whole thing online things going to work out. He talked about Facebook as an example, because this is before they were having trouble. They were not profitable at the time. And he would say, like, “Well, who knows that this Facebook thing is going to really work out.” And, you know, we all know what happened there.
Andrew: And so at that point, did you decide to travel a little bit and figure things out?
Kean: Exactly. So five days after I got laid off, I jumped on a plane to South America, met up with a couple friends and went on a five-month backpacking trip.
Andrew: Aren’t you afraid if you don’t have money going out for five months without a job?
Kean: That’s exactly what my mom told me.
Andrew: And what did you say?
Kean: I pushed against. I said, “I have some savings. And this is not the best time to get a job because jobs are at all-time low. I was thinking about going traveling anyway, this is a perfect opportunity. It intuitively feels right. And I’ve made my best decisions intuitively, you know, those big decisions.” So it totally felt right, and off I was in South America, five days later.
Andrew: And then you’re sitting down. Was it to meditate? Was it to do what? Where you decided, I know my life’s vision.
Kean: So four months into the trip, I went on the Machu Picchu trek, which was a four-day trek, up to the very famous, one of the wonders of the world, Machu Picchu. And I hiked up to the what you see in that classic photo is [winding 00:12:32] picture, that mountain that towers over a Machu Picchu ruins. So I hiked all the way to the top. And it was a beautiful day, completely clear. You could see Machu Picchu, the Andes mountains surrounding. And I kind of had this euphoric moment when I was sitting there, reflecting on the trip. Well, it’s been the time of my life. This is an absolutely incredible, life-changing. And I kind of had this realization like, “Okay, what’s next? I don’t want to go back to Canada, get another job. And just kind of continue on. I want to keep this going.”
And it kind of just snapped for me, I can do this. All I need is a laptop and an internet connection. I can do this. I can start my own business. And I can continue this travel where I have location and schedule freedom. I could work from anywhere. I could travel while I work. I can work any time of the day. I’ll have this freedom to engineer my ideal lifestyle. And that right there was a fire that got me started.
Andrew: And the first project that you took on was for your previous employer. What are they called? They’re called the Black Press. Black after the founder of the company, right? They own a bunch of newspapers in North America. Didn’t they own the . . . Did they own the San Francisco Chronicle at one point, I think, or several years ago?
Kean: Yeah. This was after I worked with them, but I believe they might have purchased them after. I think heard something about that.
Andrew: They’re huge. And so you went back to them, and you said, “Listen, I’ve got this idea. I want you to be my first client for this new idea.” Is that right?
Andrew: And what were you going to do for them?
Kean: So yeah, I kind of came up with them. I came up this . . . So my goal when I was coming up with my business idea was to increase revenues in a measurable way via digital means. So very wide and, I use my old employer as a case study. Okay, how can I increase their revenues? And I realized the majority of their revenues are from Google AdSense. And I looked at their ads, they weren’t even that targeted. And I kind of realized Google has a monopoly over their ad inventory. Just looking at simple economics, if you keep the supply the same in the traffic, but you increase the demand by increasing the number of bidders within this marketplace, I can increase the price. So that’s all I have to do. All I have to do is find a way for Google to compete against their competitors.
Andrew: Is that the first thing you did or was the first thing you did simpler? Like adjusting fonts, adjusting the way that they display their ads, making changes to the types of ads that they were showing within the Google AdSense network. What did you do first?
Kean: So when I got the . . . preparing that proposal to get the contract was that grandiose kind of vision and they totally bought into it. I said, “Okay, I’ll charge you a percentage of increase in ad revenue. So it’s not risk for them, so they loved that. And then in that first month, that’s when I went into a mad scientist mode. I did like you were mentioning, I was testing different fonts, colors, borders on or off. What color were the borders, the background, and I did all these different combinations? And I ran this A/B tests, and I found the one that performed the best, went with that one, and then did additional tests on top of that. Eventually, I did multivariate tests. And within that first month, I was able to increase the revenues by 10%. And I made a percentage of that 10% increase.
Andrew: What kind of money are we talking about?
Kean: So the money that I made, let’s see here.
Andrew: I don’t want the specifics.
Kean: Yeah, it was about the first month was around 1,000, something like that.
Andrew: Okay. And enough to encourage you, not enough to . . . actually, was it enough to keep you going, keep you traveling?
Kean: So I didn’t start traveling till month 10, actually. So I’m in Canada, in Victoria, BC, and I was kind of working closely with them. And that first month, the contract okay, I made $1,000, this is pretty cool. And then the second month, that’s when I added AOL to compete against Google. Business took another jump, 25%, okay, that things are going to excited. This is starting to get some traction. I was testing all these different things. And then, but the publisher, they’re just like, “Okay. Maybe it’s just a fluke, you know, a seasonality, something like that.” So then I started, I had another one called Casale, which is called Index Exchange right now. And out of that, kind of played around with the optimization, because you can do all these tweaks and tests and like I said, I was in that mad scientist mode.
And the third month it was 40%. And that’s where they start getting excited. They’re like, “Okay, there’s something to this.” And this company that was laying people off before I started with them, they started to get excited, and their revenues and their budgets were growing. And it kept on going up and up and up, I was able to make some additional millions and that changed the trajectory of their business.
Andrew: That is inspiring, especially for a company that seemed to have been worried about being online at all at that point. What did you use to have those networks compete against each other, to have Index compete against Google, against AOL? What did you use? What software?
Kean: So I used a Google technology called DoubleClick for Publishers.
Andrew: Got it.
Kean: So it was called DoubleClick for Publishers at the time. Now it’s called Google Ad Manager. And it’s, an ad server is essentially the brain of the [admin tool 00:18:22]. It’s the software that decides who shows up on the actual page. So before they were just running Google AdSense directly on page, then we implemented an ad server. And that’s what I used to compete Google versus AOL and Casale Media.
Andrew: Okay, all right. Let me take a moment to number one, sit down. I ran into the office today. I did not have time to really chill out. And I feel like I want to sit for this conversation. The second thing I want to do is talk about my second sponsor because you use them, ActiveCampaign. I’d love to hear from you why you as a guy who’s a marketer, guy who must try lots of different piece of software before committing to one, why are you using ActiveCampaign when there’s so many other tools out there for doing email marketing?
Kean: Yeah, so we’ve been using ActiveCampaign for over a couple years. Their automated marketing has been really key. We’ve really kind of upped our game on the marketing side. We use all their little tools, the automations, because we use many different tools as well. So as we grew, ActiveCampaign was able to kind of grow with us. And it’s, you know, it’s . . .
Andrew: Like what? What’s a good tool that you that you use? What’s a good marketing automation feature that you guys are using?
Kean: So, some of the like, kind of email reach out, so the automated emails that people receive, and kind of pick users in certain categories, so that we can send them relevant messages, that’s been really huge. And, you know, whenever you have some leads that go cold, we have been able to use ActiveCampaign to warm them up with some content that we send via ActiveCampaign. We organize it in a very kind of useful and strategical way to keep our leads warm at the time. Oh, we have this new product. Okay, let’s hit this email list with this kind of, this type of email drip campaign.
Andrew: You know what, I never thought of that. That if somebody starts to get cold, meaning they’re not opening up their emails, and not clicking on anything, to have a set of messages ready to go and then have a trigger for when those messages go out? I never thought of that. You do that?
Kean: Yup, absolutely. We have our leads. You know, we have 10,000 leads now. And then we organize in certain ways and we activate them with our content. We have a big content marketing strategy. And ActiveCampaign has been very complimentary for us to use that.
Andrew: Like what? What would you use? Because I find that when somebody goes cold, we internally start to have a discussion about removing them from the mailing list. What do you guys do instead, to activate them to get them to click, to get them to start opening up your messages?
Kean: So we have some ebooks that we, you know, we’ve just released an ebook, okay. With this, the last, say, six months of cold leads, let’s send them this new ebook. And, you know, there’s certain call to actions with an ebook that can kind of get them warm again. So that’s one thing. You know, we’re coming up with some new products. For example, we’re coming on with a new SaaS solution called PubGuru. Once that’s available and fully automated, we can go after the leads that we rejected from the beginning because their traffic was too low. All of a sudden, now that we can go after leads that have lower traffic segments, we can start emailing them with these new email drip campaigns with a product that’s relevant.
Andrew: Because you tag them differently. You to tag them to know that these people are too small for you guys to work with. Got it. Got it. Got it. Okay. And then now that you can have two different products, one for bigger sites and one for smaller sites, you can start creating two different sequences of messages, one for each of them. Am I right?
Andrew: Okay. Now, look, guys, if you’re listening to me, there are a lot of different pieces of software out there that will do this for you. The thing that separates ActiveCampaign from the others is number one as Kean said, they keep updating and they keep improving where others I feel like they find their niche and they just stick there.
The second thing is that the features that ActiveCampaign has, even if they’re duplicated on other software, they’re easier to use. You actually will get to use them. There are a lot of different email marketing solutions out there that are so complicated you will never use them, you’ll end up hiring somebody else to use it, and it becomes just way too expensive and hard to adjust, hard to be agile. If you have to say, you know, “I need this feature and that feature. How do I explain to this guy who’s working for me, but he’s remote, but he’s an expert in this? How do I explain to him to get it done?” No, it’s not nearly as good as saying, “Oh, it’s a checkbox over here. Oh, it’s a switch.”
Guys if you’re out there and you’re hearing my voice, and you want to give them a shot, activecampaign.com/mixergy has got a few things that are exclusive to our audience. Number one, they’ll let you try it for free. Number two, hey, they changed the page, activecampaign.com/mixergy. You will see on the . . . somewhere on the page, even if they change it that they’re going to give you the second month free. If you decide to sign up after the free trial, second month will be free. Two free one-on-one sessions. And if you’re using some other piece of software, they will migrate you for free, activecampaign.com/mixergy.
All right. You got your first client, when did you start going after client number two?
Kean: So it was the first client for a while. It was kind of the time to really perfect the model. And it took a lot of my time to kind of really optimize and really kind of find and standardize a model that would work for other sites. So that was good. And it was also kind of tough to sell the second publisher, because a lot of them look at this and say, “Well, could been a fluke with one site. It was all Canadian traffic, maybe that doesn’t apply to U.S. traffic or Dutch traffic.” So there was a lot of questions that were unanswered. So that second publisher was really my chance to prove this wasn’t a fluke. And the second one was pennysaverusa.com.
Andrew: Those people are still are still around now?
Kean: They aren’t, and that’s another interesting story. They went bankrupt back in 2015. And yeah, that was our second client. You know, we worked with them.
Andrew: Sorry to interrupt but, for anyone who doesn’t know them. I remember listening to Howard Stern and he used to make fun of his joke writer, Jackie “The Joke Man” Martling, who was actually on Mixergy a while back, for being the guy who would go to the PennySaver, the little newspaper that they throw on to your doorstep, and looking for things like doctors and dentists and whatever it is that he needed. He would go get deals on them from the PennySaver. And I guess they went digital. I’m actually on their website right now. It’s still active, pennysaverusa.com, even after bankruptcy their site is still up. But when you were working for them, what did you do, and how did it turn out?
Kean: So that was our kind of chance to or that was my chance, because it’s still just me, to prove that it wasn’t a fluke. So I applied the model. That same model where implement and ad server and start competing Google versus all these different ad networks. And I applied that and was able to get very similar results, was able to increase your revenues by a three times. And it was another huge success, a really great testimony as well as, you know, B2B is very kind of . . . that’s a very necessary part of it, and it kind of grew from there.
So from that point that was a really important validation factor for the business. And if you were to fast forward, an interesting part about PennySaver is, after they went bankrupt as a opportunistic entrepreneur, I made the right contacts and found out about a private auction that they are running for the online assets and we were able to win the auction. So now we own pennysaverusa.com.
Andrew: Oh, you guys have this website?
Kean: Yup, so that’s why it’s live right now.
Andrew: Got it, yeah. I’m on it right now. I didn’t see any connection to you, but I hadn’t investigated that deeply. And there is no paper-based section for their . . . I mean, there’s no paper-based part of their business anymore, is there?
Kean: Yeah. As you can imagine we’re not really interested in the paper side of it. I believe that was sold to some other companies. I’m not sure what kind of happened with that, but we were very happy to take the online assets and keep the PennySaver name and legacy alive.
Andrew: Okay. You told our producer, Brian Benson, that it took you four years to earn your first million dollars. What happened year number four that allowed you to get there?
Kean: So, for the first three years a lot of it was working with UsedEverywhere, perfecting the model and a lot of traveling, you know. I start traveling on month 10. I was traveling about six months of the year. A lot of backpacking, going to new countries, and we’re enjoying the lifestyle. And after a six months trip to Europe, this was following UsedEverywhere, finishing the contract. They went with another vendor that was able to offer the services for a lot cheaper than I offered, because . . .
Andrew: Same thing that you did?
Andrew: And how did they do it differently from you?
Kean: They pretty much did the exact same thing. They just offered it for cheaper. It was one former employee and another guy, they were opportunistic, and they pretty much offered to replicate it.
Andrew: Why didn’t you compete with them on price?
Kean: It came as a surprise. And that option wasn’t available. They already made their decision.
Andrew: Okay. All right. So then that happens to you, you lose your number one biggest customer and your first one. What happened to your business that still allowed you to continue to grow?
Kean: Well, it’s interesting how one door shuts, another bigger door opens. And I had PennySaver USA at the time as the client, and was about to go to Europe. But all of a sudden, these interesting opportunities in the leads started coming in. And I was going to Europe. And serendipitously, they were European publishers. So I fly over to Sweden to meet this website, thesimsresource.com, the largest website in the world for The Sims video game. And I meet them in the northern part of Sweden in Lapland in the small town of like 10,000 people, get to know them, work from their office and really get along with their ownership and get them as a client. And they are another big client.
Then I meet another one in Denmark, which is a newspaper site over there. And then videogamer.com in England and things are just . . . things are happening. Things are . . . you know, when you get that traction, and things start rolling that momentum is happening, I start signing all these bigger publishers. And then come to the epitome of the six-month trip in Europe, I go to the Google office, the Google EU office in Dublin. And I meet with the team and I find out about this kind of partnership program that they’re doing. So, you know, Google AdSense, kind of the more premium version of it is Ad Exchange. That’s kind of more focused towards bigger publishers, so you have more to manage, more sophisticated targeting technology and end of the day, it earns publishers higher revenue.
So what they did was, they partner with companies like MonetizeMore to offer their demand to these smaller publishers that aren’t large enough to have a direct account with Google. Because Google is a technology company, and I’m a sales company, they don’t want to deal with all these, you know, millions of publishers. They want to outsource it to companies, and then they can have a chance to get a bit of revenue share. So that was us, I was able to get this partnership with Google. And that’s where things started to really roll in 2013. I had this partnership, all these new publishers, and I was at a point where I was capped out as an individual, as a solopreneur.
Andrew: Let’s pause there. What I’m curious about is, and I know exactly where to pick it up. I’ve got some notes on that, that I want to follow up with you on. But I’m curious about how you got all those clients while you were traveling? Were you going out of your way to meet publishers to get to know them? Or was it part of this tropical MBA network that I know you’re a part of, or what was it that allowed you to meet people while you are traveling, and then convert those meetings into clients?
Kean: So when I say it was serendipitous, they literally came through the website. So from day one, I’ve been blogging about ad optimization. And, you know, when someone searches about these kind of niche topics, they find it on the site, and then they sign up. And then when I was in this trip through Europe, they just happened to be European. So I’d be kicking around Ukraine, and I see this lead come from Denmark. I’m like, “All right, well, I guess that’s where I’m going next.” I fly over to Copenhagen, meet them in their office, get to know them as entrepreneurs, and eventually get the sale, the new clients, and, you know, same thing in Sweden, same thing in England, and, you know, kind of all through Europe, this was kind of my style of being opportunistic, meeting them in person, really making that connection.
And, you know, something that I really realized because we have a lot of publishers that we’ve never met in person, but the ones that we do meet in person, I make a point of staying a few days to a week, really get to know them is they turn into clients for life.
Andrew: Yeah, that makes a lot of sense. And if you are someone who is living the standard entrepreneurial life of living in Canada, staying in your office, or your house and going to work every day, and doing it all online, you’d miss out on those connections. And the impact of coming into somebody’s office is huge. All right, I see that. So you said, “I’m tapped out as an independent entrepreneur. I need to hire,” and then you went and hired 15 people all at once from?
Kean: So it was we hired pretty quick . . .
Andrew: It wasn’t 15 people at once.
Kean: . . . over 2013.
Kean: It was pretty quick. And, you know, I realized, you know, I’m capped out a solopreneur so I need to start hiring people. So I started with two people at the very beginning of 2013, two people from the Philippines. And they still work for the company today. One actually lives in Seattle now. And they were the first ad optimization experts.
Andrew: What did they do?
Kean: So they did this ad optimization where they work on the ad server, DoubleClick for Publishers, and they do the tweaking. They’d be those mad scientists. I would do all these different tests to see how they can further increase revenues saying I have . . .
Andrew: Did you, sorry. Go, I’m sorry to interrupt. But did you give them a list of things to do an experiment, or were they figuring it out on their own?
Kean: So that was because it was a bit . . . it was a challenge to kind of teach them. So I was trying to teach them, it was very difficult to kind of distill this knowledge because ad optimization comes to me very natural. I’m very good with numbers and it’s just something that I kind of pioneer. So when it comes . . . what I learned is something that comes naturally to you doesn’t necessarily make you a good teacher for it, you know.
Kean: Michael Jordan’s not the best basketball coach for a reason.
Kean: So it took a lot of time and energy for me to kind of distill it and teach it. And, you know, it took, you know, six months for them to kind of do stuff on their own and a year to be kind of more self-sufficient.
Andrew: So how did you teach them? What was it that allowed you to figure out what you do and then find a way to explain it to them?
Kean: So they needed kind of this huge context. They initially kind of started working with the leads and then I kind of gave them bit by bit of the theory but I already had blog posts so I’d have them read the blog posts. I’d get on calls and kind of do kind of screen shares of like, this is why, how, you know, what I would change and this is kind of why I changed it. But my explanation, you know, looking back weren’t that great, because my thinking wasn’t as solidified. I didn’t kind of standardize. I didn’t even know what a standard operating procedure was at the time. So it was a big learning process for me to kind of like standardize things to actually teach it.
Andrew: How did you eventually do that? When you got it right, what was the format that you gave it to them in?
Kean: When I got it right, and I wouldn’t say it was me who got it right. I would say it’s other people in the team who have been able to teach it way better than I have via hard work learning themselves, and then actually creating SOPs, you know, step by step with screenshots, how to do things, screencast and just really kind of holding their hand.
So the person that I’ve been able to teach, you know, the most thorough and then he has been able to kind of turn around and build this teaching system and he, you know, he’s been a really good kind of mentor and teacher for the other team members is our current COO, Julio. And this did not come to him natural. He had to work his ass off to figure this stuff out.
And I was roommates with him at the time. He’s a really good friend of mine and I had that in person time and he would just ask tons of questions. And, you know, we would just like just get through everything and you make sure that he understood everything very well, even though it took him a lot more time, he finally got it. And then he was able to kind of use that to distill it to the rest of the team members because he has more empathy for them who don’t get the stuff naturally.
Andrew: Right. And it’s Google Docs with screenshots and stuff like that. Am I right?
Kean: Yeah, Google Docs with screenshots. You know, we eventually went into screencasting. There was a lot of video calls and kind of a combination though, since then, you know, fast forward to now one of our first employees, that now lives in Seattle, she is our head of training and she is the guru in terms of training ad optimization. And she, we have this kind of Google Sites portal that has all these videos, lessons, quizzes, tests, prizes. It’s this whole kind of database of how to learn ad optimization and we have it tight and how to kind of work off the ranks of ad optimization.
Andrew: It’s exciting when it works and I could hear it in your voice. I remember when I met, you and I met through Christopher Gimmer. I remember when he was here in San Francisco, I got to meet him in person. And I said, “How are you so calm? Everyone else who comes here is anxious about work.” And he told me that he’s organized kind of like what you described, maybe not to that intense level because he’s got a smaller organization. And he started showing me on his phone because I think he didn’t bring a laptop with him at the time. And it’s really exciting when the whole thing’s organized. When you know how to teach people what you do great.
All right, let me take a moment to talk about my second sponsor and I want to ask you something in relation to them. And then we’ll come back to this story in seconds because you had what you described as a tragedy to Brian, a tragedy in 2014.
But my second sponsor is a company called HostGator. It’s place to host websites. And I asked you before we started if you’d feel comfortable kind of riffing on what content site that you would create today. You’re a guy who’s worked with tons of exceptional publishers. What’s a good idea for a content site that people could launch today?
Kean: One type of site that I’ve seen do quite well is quiz sites.
Kean: Just have a quiz. Yeah, you know, the quizzes, ask a question, multiple choice. True and false. People love those. People love these kind of like relevant quizzes whether it’s trivia or something really niche, there’s a lot of engagement. You could get what we’ve seen in some of the analytics is the page views per session are really high and if you’re running, if you’re monetizing it with display ads, you can get a lot of ad impressions per session. And ultimately if you are getting a user, you know, you’re really working your ass off to get a user on your page, you want to kind of maximize the revenue you get out of that. So the longer they’re on the site, they more that they engage, the more revenue you’re going to get per session. And what we’ve seen for some of these quiz sites, they tend to be pretty long but they’re very relevant and niche that they do get really high revenue per session because the page view per session is so high.
Andrew: Do you think I should add quizzes to Mixergy? Should I like have quizzes on entrepreneurship? Should I have quizzes about this interview? Should I have quizzes about famous entrepreneurs? Would that help?
Kean: I think it’d be an interesting experiment.
Andrew: I like it. I already started Googling quiz and the word WordPress to see if there are simple plugins I could use to experiment with. All right, if you want to run with that idea or frankly any other idea out there, all you have to do is go to hostgator.com/mixergy. When you do you’re going to get a super low price, 45-day money back guarantee if you decide that you don’t love them but you will because they just work. Hosting done right, inexpensively and dependably.
I’m going to start another website soon and I’ll announce it on Mixergy, and I’m using HostGator to host my site, hostgator.com/mixergy and yeah, frankly by adding the /mixergy at the end you’re helping me. Their prices are already so low that you’re saving pennies by getting their lowest price through me. What you’re really doing is helping Mixergy out. And if you want to support us go to hostgator.com/mixergy and I’ll really appreciate when you do.
All right, the tragedy 2014. Do you know what I’m talking about?
Kean: Yep, I know exactly what you’re talking about.
Andrew: What happened?
Kean: Boom. It’s the end of January 2014. I open my laptop, I’m in Singapore and it’s like 3:00 in the morning. And, you know, it’s something that I tend to do when I have a few drinks. Sometimes I like to go on the computer, get some work done and then things kind of wall down. And I get all these pings, Skype, email, Slack, Facebook, everything just ping nonstop. I get this call right away. And some people in my team say, “We’ve been banned by Google.”
Andrew: And your whole business is about serving ads and Google is the number one ad company. Banned for what?
Kean: So it was for invalid traffic. And what happened was, you know, this master Ad Exchange account, you know, this partnership that I got back in Dublin and we’ve been able to grow it and have, you know, tons of publishers on there. We’re doing really well. Our revenues were higher than ever. And then all of a sudden this ban happened, and it was because our largest publisher got a spam attack from one of their competitors.
So what this spam attack does is it’s bots that go onto their website and click on their Google ads, and when Google detects this, they see it as invalid traffic. And invalid traffic is one of the biggest threats to the Google ad business model because if you think about it, if you are buying clicks on Google, one of the biggest ways to diminish that value is fake clicks. So Google does everything in their power to minimize these invalid clicks and this invalid traffic. So as soon as they detect invalid traffic, you’re banned and [inaudible 00:42:13]
Andrew: And it was a bot that went to your publisher’s site and started to hit those ads because every time the bot clicked an ad, it was generating money but Google said, “No, we’re not paying that money. These guys at MonetizeMore are tricking us. We’re going to ban them.”
Kean: So it wasn’t one bot, it was, you know, hypothetically, it was in the millions. It was a huge spam attack. And once Google detected it, you know, they put it on the publisher to be able to kind of block that type of traffic and, you know, that the attack happened. It created this investigating . . . So the sub-account was banned, but that’s typically what happens, but it created this investigation because the attack was so big, and three weeks later they concluded the investigation and said, “Okay, you’re banned.” And when you get banned by Google, that means you don’t hear from them again and you just get one generic email and all your unpaid ad revenues are revoked. And for us, that was December, January, 62 days $2.2 million gone overnight.
Andrew: And you have to pay that to your publishers?
Kean: So we shared that loss with our publishers. We had it in our contracts, we only pay out what we get paid by our ad networks.
Andrew: Okay. How pissed were they weren’t getting paid for something that they didn’t do? I saw your eyes.
Kean: Very. It was . . .
Andrew: I’m looking at forums by the way. I’m looking at product forums on Google where people are ripping into you. They’re calling you a scammer for this happening.
Andrew: How did your publishers, even the ones that you met in person, how did they handle it?
Kean: So they were obviously furious. That following month was the toughest month in my life. I had to really just put my head down and take everything head-on. And also credit to my team, they stayed with us and were able to kind of really kind of handle this brunt as well. So the publishers were furious. You know, there was threats of lawsuits. There was, you know, this Google product forum where you can see how kind of angry people were, and I pretty much fielded everyone as professionally as I could. It was very difficult.
And yeah, yeah, I pretty much had to work through it. We lost a lot of clients because of it, but we were able to salvage some and made some one-off deals how we could make it up to them via credits or kind of creative type of deals to keep them happy, keep them with us. You know, we can bring this back. We can bring value. A good thing was our specialty is increasing ad revenues. So this already happened but we can still increase their revenues and make them better off than if they were not with us otherwise. So that’s how we kind of salvaged it. And, you know, we were losing money.
Andrew: Forget losing money, people are just calling outright spamming. This is . . . there’s someone named [Lindsey 00:45:25] who put the link? You remember Lindsey or is it . . . You do?
Kean: I remember replying to some of those and [inaudible 00:45:34]
Andrew: I see you commenting. I see you commenting in there. I guess you’re the one who’s on the Monetize handle.
Kean: That’s me.
Andrew: Lindsey is saying, “This site would be outright illegal in my country and I guess anywhere else in the Western world,” and then there’s a link to monetizemore.com/ about no names, no addresses, no phone numbers, nothing. And then this other guy who ripped into you at least came in and said, “Well, not to split hairs but AdSense is like that too. They don’t put their phone number on their website.” But they’re arguing about like, how bad you are. Wow. So what did you do to get back into Google’s good graces?
Kean: So yeah, once we got through this, you know, we pretty much worked with our publishers that stayed with us. And we pretty much, we made three really important changes. Number one big problem was we were too reliant on Google Ad Exchange revenues. So we needed to diversify our revenue portfolio. So we focused more on our premium publisher business, publishes over 20 million pages per month, that had revenues from all these different ad networks and they had their own direct Ad Exchange account. So if our account gets banned, they are not affected which was the case for a lot of our huge publishers. So they were completely unaffected and we still had those revenue streams and that’s really what kind of brought us through.
So we diversified and we kind of leveraged more the premium publisher side. We created a screening process, a very, kind of tough screening process that if a publisher has sketchy traffic, sketchy content, if their ads are too close to [abundance 00:47:19] where they have clicks that were invalid, then we wouldn’t accept them or we provide them customized feedback, how to become 100% Google compliant. So we implemented that, and we’re really tough about it still today.
And then the third one was we partnered with a bot detection and suppression company so we can implement their technology on our publishers, so if they were to get another spam attack, it would all be blocked and it wouldn’t happen.
Andrew: And then Google actually took your emails, took your phone calls and allowed you to get back in?
Kean: After a very long time. So I would say it took us about, maybe about two years. I think it was two years.
Andrew: Two years.
Kean: Yeah, and we were still . . . . so we were still kind of working with them because we had these other publishers that had their direct accounts and we were still working with their Google reps on representing our publishers. So we’re still kind of talking with them. You know, they knew what was happening. There was no secret. But after two years of showing them the differences, showing the changes and how we were able to build the company back up in a sustainable way, then, you know, they really kind of respected that.
And I remember telling one of the Google leaders there, you know, in the AdSense team and who were making decisions for the AdSense publishing partners is the people, the companies and people that are going to respect the rules the most are the ones that have been burned by them and we were a perfect example of that.
Andrew: Yeah. Yeah, I get it. And then in that two-year period were you working with other companies that didn’t have their own Google Ad account?
Kean: So we would work with companies. We kind of focused on the premium publisher side. So these were companies that were big enough to have a redirect Ad Exchange accounts. For Google AdSense, pretty much any publisher with clean traffic and clean content can get an AdSense account so we’re also working with publishers that had their own AdSense. So that’s where we did kind of the manual ad optimization via DFP to increase their ad revenues.
Andrew: Wow, all right. Two years later you get back in. And when did you hit your first 10 million in sales?
Kean: The first 10 million in sales, so we were just shy of it in 2016. And then 2017, that was a big growth year. We went from 9 million gross revenues to close to 17 million at the . . . for 2017.
Andrew: What did you do?
Andrew: So I keep hearing the Google and Facebook basically own all ads online. What is it, like 80%? Am I getting that number wrong? I’m googling it myself right now to see what it is. It’s significant, isn’t it? Oh, so here it is. Google commands 37.2, Facebook commands 19.6 according to Investopedia as of middle of 2018. So basically it’s more than 50% about 60% of the market. The other 40%, is that significant?
Kean: So there’s two factors that are really interesting here. The first one is the trend. Google used to have a monopoly of this and then Facebook came in. And then they have a huge amount of advertisers, and now all these bigger players like AppNexus, OpenX, Index Exchange, they’ve been kind of eroding the market shares of Google and Facebook. And this continues to happen. It’s a trending thing.
You know, AppNexus really kind of showed its kind of legitimacy. You know, they were just bought by a telecom for $2 million. You know, these other companies are really kind of showing their legitimacy and this continues to happen. Google’s and Facebook’s penetration, their market share, it keeps on getting eroded. So there’s that trend.
And also another thing that’s important to consider is advertisers don’t just advertise on one platform, they advertise on many platforms. And this is especially true with the largest advertisers and agencies in the world. They advertise on so many different platforms that, you know, it’s spread out quite a bit. So it isn’t necessarily the amount of advertisers, it’s the amount of advertising budget and that’s more dispersed than those stats kind of show.
Andrew: And then before we started you talked to me about how Facebook made a drastic update, a big change and how that impacted sites like BuzzFeed and how it impacted influencers. What was the change they made and what happened?
Kean: Yeah, so this really affected social viral sites. These kind of, these social viral sites, they’re kind of entertainment content like, you know, top 20 beaches in the world. Kind of that more clickbait type of content. Some are less clickbaity but it’s usually around entertainment. It’s the type of content that you see when someone’s boarding on a bus and they’re scrolling on their phone, it’s that type of content that they’re looking at. So it gets a ridiculous amount of traffic and a big kind of propeller of this traffic are social media influencers and the majority of them are on Facebook. So think about . . .
Andrew: So, just to be clear, when we’re talking about those sites are we talking about BuzzFeed? Is that one of those sites?
Kean: Yeah, so BuzzFeed is a good example. They’ve kind of moved away from the social media influencer stuff because they have such a good brand and base.
Andrew: But they had social media influencers sending traffic to them?
Andrew: How? How does that work? I thought it was all mom and pop people who saw a quiz or something funny about how you know that you were a kid in the ’80s and they were sending it to their friends. That’s not what happened?
Kean: Nope. They . . .
Andrew: Yeah, what was it?
Kean: That’s the PR story that they like to give but what kind of actually happened for these kind of BuzzFeed type of websites, they were partnering with these social media influencers. They come to a deal say, “I’ll pay you a penny a click or I’ll give you . . . we’ll do a revenue share. The social viral site gets 20%, the influencer gets 80%. Okay?” Now I’m going to send as much traffic over, they track it with a customized link and they are able to attribute how much revenue a social media influencer traffic has gained and then they kind of do the revenue share split or they pay on the click.
Andrew: So somebody who has a big following and a Facebook group. Was it just Facebook groups or other places too?
Kean: Facebook was the biggest. Twitter’s another big one. It extends to YouTube, Snapchat, Instagram, pretty much all those big, even Pinterest, all these big social media channels there’s influencers that have huge communities and this is a big way of how they monetize their communities.
Andrew: So what’s an example of an influencer who’d have a big community? Somebody who was into like makeup or something and showed off them, showed themselves off in makeup, taught makeup tutorials and then every once in a while would say here’s a cool BuzzFeed post? That’s the way it would work.
Kean: Totally. Well, a lot of these Facebook groups, they’re even kind of generic kind of interest. There’ll be like, you know, funny fail videos or hot girls or empowering stories.
Andrew: And so if I was in funny failed videos Facebook group, every once in a while another post from there would show up, I hit the link, I go . . . Got it, got it. Okay, so I’m with you on that. And then what did Facebook do to change all that?
Kean: So Facebook has, you know . . . They commonly have an algorithm change. And what they do, because they get a lot of pressure from their investors to increase revenues, increase profits, and the way they do it is there’s that Facebook feed that everybody looks at when they’re bored. See what their friends are doing and every once in a while those groups that you’ve liked, they’ll show up the latest content. And you know, if you click on it, you go to the site and that’s how these social media influencers will get so much traffic because they get tons of organic traffic from the Facebook feed.
So what Facebook would do over time is they’d tweak it. They’d do, okay, less organic traffic to the Facebook groups and more organic traffic to the friends and the actual advertisers. So what they found was the more that they tweak organic traffic away from the social media influencers, those Facebook groups, the more now that would incentivize them to pay for advertising. And then all of a sudden middle of 2018 they just floor it. No more Facebook organic traffic, no more social media influencer traffic, it’s just done. So that floored a lot of social viral sites, that floored a lot of social media influencers and it was like a huge shift all of a sudden.
Andrew: And so how did that impact your business or did it?
Kean: So if it hurts our publishers, it hurts us. It did impact our business. You know, we had a couple of quarters that were underperforming. You know, we didn’t hit our goals and we were less profitable because of it. And, you know, it took us a bit of time to bounce back from it.
Andrew: Are you guys profitable?
Andrew: You are. We’re talking more than $2 million coming in a year?
Kean: No, less.
Andrew: Okay. More than one?
Andrew: Okay. All right. Here’s something that I know you’re not going to talk about because Brian put a note about this. Andrea, put a note about this, said, “Don’t even ask him about whether he had a co-founder or not or what happened there.” I’m not going to ask you about it. I’m going to ask you instead about what you learn from it because I know you feel comfortable talking about that. What are some things that we should take away from this, I don’t even know how to characterize it without like, turning you off, co-founders? Tell me tell me what you’ve learned about having partners in business?
Kean: Yeah. So, you know, unfortunately, I can’t share. I would love to but because of NDAs, I got to kind of stay away from it. But I did learn from this kind of business partner situation and a lot of entrepreneurs listening, I think there’s some takeaways that they can take from what I kind of learned. And for anybody who is thinking about partnering, don’t and so on. So I’ll give my situation.
You know, I was just me for the first three years, and then I was looking for a tech business partner. So what I recommend, if you’re in that situation, you already have your own business, you know, it’s doing well and it’s profitable but you want to grow it even more, is look at this business partner situation with skepticism. You know, how is this person incentivized? And, you know, kind of be skeptical, to begin with. I’m a very trusting person and that is a positive but it can also be a negative. And I was unfortunately too trusting and I needed to approach it with more skepticism.
And a good example I can give is, you know, when you look for references, something very simple, don’t just be happy with references that they give you. Look for your own reference. I know you do this, Andrew. You don’t just, again, with your research. You don’t just go with, you know, ask who you can talk to. You guys do your own research and talk to some people that they wouldn’t necessarily want you to talk to to get the full story.
Andrew: Yeah, it’s true. It’s true. Yeah, you know what? And it’s because I’m super paranoid that people are going to fake me out and it’s really hard to tell who’s a faker and who’s not because fakers have a lot of time on their hands and all they do is fake. They don’t do the work, right? So all they have is time to fake. So you’re saying, check in with references, be skeptical about what this person can say they do. And then what? Have them prove it before they earn part of the share?
Kean: Be willing to say no.
Kean: That’s something that was, so looking back, that was a big issue because I was so excited about the possibility of building this amazing technology that would scale the business and grow to hundreds of millions of dollars that, and I, you know, I felt it was so serendipitous that there’s no way this could go wrong. So I wasn’t really willing to say no, and that pretty much eliminated any of my negotiation power.
Andrew: I know, I get that way too. The same drive that gets me to keep moving as an entrepreneur is the one that makes me want to get somebody to say yes and continue even when things don’t seem right because I’m determined to get my goal. And I have to remind, actually, I’m not good at reminding myself. What I do then is I have people around me who are good at saying, “Andrew, this is not a good idea. And I’m going to bring you back down and remind you this is one of your problems.”
All right, you know what I didn’t get into, is how you built out the product. We went from you using Google software to you now having your own software to the point where you’re actually going to make that available for people who don’t want you guys to manage their auction process and just want you to, just want your software so that they can go pick the advertising networks that they’re going to run with. You guys created something called PubGuru. I guess it’s almost launched. What I’m curious about is at what point did you decide, “I’m going to do this and not use off-the-shelf software,” and why? And we’ll close it out with that.
Kean: Our technology started at the beginning of 2015. So I hired our current CTO, he’s also a good friend of mine, and he works for the very first client that we had. He was leading their developer team. So I was able to convince him to come on as our CTO, and he built our first technology, which was a recording interface for Google Ad Exchange. So when they’re running this Google Ad Exchange demand publishers could go on there and see how much they’re making and what their revenue stats were. So it was a pretty key, like, next step for us. He did a really great job. And then from that point, that’s when we started to build a developer team around him.
Andrew: And so you’ve . . . All right, I’ve got more and more questions about how you became, how you got to that point. Well, why don’t I ask this? How did you . . . You went from having someone who’s going to be your co-founder to then having someone just be CTO. Not a co-founder, not own a huge stake in the business. How did you guys connect again? How did you know that Jose was the guy who was going to do this. That’s a pretty big role.
Kean: I worked with him briefly before at [inaudible 01:03:56]
Andrew: And you just stayed in touch?
Kean: Yeah. Oh yeah, we live in the same city. We’re friends that see each other, you know, multiple times per week. I trust him. And that’s . . . When you’re a business, you know, business side type of owner and you’re looking to hire someone like a CTO the trust is so important.
Kean: And he was someone that I could trust. And he was something that I already knew what it was like to work with him. He’s very logical, he understands the business side so it was key. The only thing that was questionable was whether I can actually convince him to join the business. And luckily for me, he was very excited to join the business and he’s been an amazing part of the business ever since.
Andrew: I was trying to look into him. I don’t see anything in his past. The only work experience he lists on LinkedIn is MonetizeMore. And then if I look at the bottom, his interest and I should have known that you guys own this, his interest are his university, Texas Tech University, and PennySaver USA. And now I understand why he’s so interested in PennySaver USA. Well, congratulations on getting this far. What do you have planned for next year that’s going to be fun since you’re going to be traveling so much?
Kean: So I’ll be in Mexico till the first week of January. Then I’m taking off to Kenya. And I’m going to be doing a safari in the Serengeti in Kenya, Tanzania. So I’ll be doing that early in the year. I’ll be going to the beautiful beaches of Zanzibar. After that, I’ll do a little pit stop in Dubai, and then I’m going to spend a couple of months in [Holland 01:05:39].
Andrew: All right, I’m going to pick up on some of where you’re going. One of my goals next year, 2019, is to run a marathon on every continent and I want to interview entrepreneurs in those different continents and publish it here on Mixergy. I would love to know if anyone was listening and that includes you to, Kean. And if there’s an entrepreneurial hub somewhere in the world, somewhere that’s not so obvious, where I should go and interview people, let me know. Just email me and my team. What’s our email address? email@example.com and Andrea who’s going to be booking my travels is going to be following up on that. Kean, thanks so much for spending the time with me here.
Kean: Yeah, thanks for having me. I had a great time and a very interesting conversation.
Andrew: Yeah, I dig it. The site is monetizemore.com and I want to thank my two sponsors who made this interview happen. The first is the company that will do your email marketing right and does Kean’s and so many other companies. Really, I can’t recommend them enough. It’s activecampaign.com/mixergy. And the second, if you want to bring your idea for a quiz site or any content site or frankly any site at all, get it hosted at hostgator.com/mixergy. Thank you all for listening. Thank you, Kean. Bye, everyone.