Wall Street Oasis: Bootstrapping A Community-Based, Lifestyle Business

Patrick Curtis is a Mixergy viewer who recently emailed me his site’s finances and said he was in Argentina. When I asked why he was in South America, he said it’s because he bootstrapped a profitable community that he could run from anywhere.

His company is Wall Street Oasis, an online finance community that offers career guidance. I invited him to teach how he built it.

Patrick Curtis

Patrick Curtis

Wall Street Oasis

Patrick Curtis is the founder of Wall Street Oasis, an online finance community that offers career guidance.



Full Interview Transcript

Three messages before we get started. First, copy this Facebook idea for your business today. See how they make it super easy for their users to import their contacts from AOL, Yahoo, Hotmail, etc.? You can add that functionality to your site today using CloudSponge. By using CloudSponge, your users can easily import their address books into your service and invite their contacts to use your site. And, if you use the discount code Mixergy, you’ll get a couple of months free. CloudSponge.com.

Next sponsor is SuperConf where I’ll be speaking on February 25th and 26th. Come watch me and the guys behind Blippy, Wufoo, Grasshopper, and other successful Internet companies live. Also, SuperConf is where mind-blowing startups will launch. If you come, e-mail me so we can meet up in person and I can introduce you to some of the speakers and the guests and hopefully we can have a drink together. SuperConf.net. That’s where you want to go.

Finally, Scott Edward Walker is the entrepreneur’s lawyer. His firm, Walker Corporate Law, will handle your big transactions, like when you raise money or when you sell your firm. But if you’re just starting out, Walker Corporate Law can make sure your paperwork is in order so when it’s time to sell your company or raise money or do any other big transactions, everything will be in place and be just right. Walker Corporate Law.

Here’s the program.

Andrew Warner: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How do you build a profitable Internet business that you can run from anywhere? Joining me is Patrick Curtis. He first e-mailed me when he was in Argentina, and he said that he went there because you could work from anywhere in the world. He launched Wall Street Oasis, an online finance community that offers career guidance. I have the breakdown of all his revenue here in front of me on the computer that I’m talking to you on. I’m not sure what I can reveal, so I’m going to start instead with this question. Patrick, what’s your monthly revenue?

Patrick Curtis: First off, Andrew, thanks for having me on here. I appreciate you taking the time. I’m a huge fan of Mixergy.

Andrew: Thanks.

Patrick: Our monthly revenue now, I don’t want to disclose the exact figure, but we’re well into tens of thousands of dollars per month. Our profitability’s close to about 90% of our revenue. We run it pretty lean over here.

Andrew: How many employees do you have?

Patrick: We have anywhere between 15 and 20 people working with me at any given time. Employees but most of them are outsourced contractors. I have writers that do one-off basis. Try to stay away from the employees. I guess one employee technically and about 15 with outsourced contractors.

Andrew: Okay. One employee, tens of thousands of dollars in revenue, and the rest are outside contractors. I was going to say if you had 10 to 15 people who are working for you then this revenue would all disappear.

Patrick: Yeah.

Andrew: Even with one employee, 90% margins? Are we talking about 90% net margins?

Patrick: Talking about 90%, yeah, net margins. Probably between 85% and 90% to be fair. It depends on how you break it down. People get gross revenue. We have basically agreements with a lot of our authors and some of the publications we sell. They get a share of that. If you take the gross of that, it probably drops it down to 75% to 80%. We don’t offer a lot of services. The only service we offer is resume review. Most of our stuff is information products. Basically our main costs are our content generation from our authors and our server costs. It’s something we’re able to run pretty lean.

Andrew: Okay. It’s content generation because you guys are a blog plus a community which is a forum.

Patrick: Right. The majority of our content is still user-generated. We do have four writers that do anything from one blog post per day to one per week. It varies.

Andrew: How many blog posts do you guys publish every day? On average, I should say.

Patrick: On average, four or five. We put to the home page probably two or three posts from the community. Whatever hits the home page, it’s a mix between user-generated and actual paid content.

Andrew: When it’s user-generated, sorry to get so deeply into the details. . .

Patrick: No, that’s fine.

Andrew: . . . but I want to get to understand the whole thing. When it’s user-generated, are we talking about a user-generated, user-written blog post?

Patrick: No. We’re talking about someone asking a specific question like, “How should I interview at Jefferies? I have an interview with this specific group,” and someone giving really detailed advice. Oftentimes the stuff we promote to the home page is almost more philosophical in nature like, “How much is enough money to walk away with? What they call ‘F You’ money in Wall Street?” It’s a little crude but, “How much where you could walk into your office at any given point and say, ‘I’m done. I’m never working here again,’ and basically be free from the golden handcuffs?” That’s the type of stuff we like to promote. It fosters a lot of debate over whether you need a number at all, whether it’s $10 million or $1 million. It gets people talking about different lifestyles and how you can get locked in. We find that to be more interesting.

Andrew: I see. These open-ended, opinion-based questions breed conversation online. Let me take a look at some of the other headlines that are on your site right now. “Poverty Breeds Conservatism.” Say what? What else do we have here? “Ugly Women Land More Job Interviews.” I see a man with a beard in a white dress.

Patrick: I think it’s important to remember who our audience is. The majority of our audience is anywhere between 18 years old and 25 years old. I’d say average is probably 22, 23 and just out of school. We try to make it so it’s not just a place where people come to get career advice. It’s a place where they can be entertained and actually laugh.

Andrew: There’s a fun spirit to the whole site. Here’s another thing that I see on the home page, “Business Analyst.” It’s a job listing. One of the sources of revenue for you guys is a job board, right?

Patrick: Correct. Yep.

Andrew: What other sources of revenue do you have? Job board, what else?

Patrick: The job board’s probably only about 10% if not less of our revenue. About 20% to 30% is our ad revenue. You see the banner ads, that’s pretty standard. We have two partners that work with us on that in terms of vertical ad networks. One is RGM Alliance. The other one is InvestingChannel. They target different types of communities. Since we’re a finance community, InvestingChannel targets them. Since there are a lot of investment bankers and private equities professionals on there, there’s also an affluent community. They’ll market anything from high-end cigars to Jaguar cars. We have a partnership with them. We also do one-off sales with publications. We have actually 11 interview and industry guides that we’ve written in-house or partnered with someone and syndicated their content or their book and sold it through Wall Street Oasis. We’ve also started going out to career centers and student clubs and selling one-year licenses to these on an annual basis.

Andrew: So they can take your guides and sell it to their audience?

Patrick: We have an affiliate program, but no. It’s basically us going out to the universities and saying, “Would you like to license the Wall Street Oasis library?” It’s similar to Vault and WetFeet. I don’t know if you’ve heard of those companies, but they’re basically in every single university or career center you go to. They cover a whole breadth of industries. We really just focus on the finance vertical. We go to a lot of business schools and say, “Hey, we have these 11 publications. Look at the testimonials we have from the people that have read them.” Sometimes it works, sometimes it doesn’t. I think selling into the educational spaces can be a little bit challenging.

Andrew: From what I see, the biggest sources of revenue are advertising on the site, which equals about a third, interview guides is another third, and affiliates, I think you said earlier, was about maybe 15%. What do you mean by affiliates?

Patrick: With affiliates, we have several different deals with various companies. One is a financial modeling training course. We tried to find products that really fit our audience in terms of what they’re looking for, how they’re looking to improve themselves in their candidacy when applying for jobs. I think financial modeling training fits into that really well. We made that deal earlier this year. We also do affiliates with GMAT prep course. We actually launched a GMAT prep business as part of Wall Street Oasis. It was called WSO GMAT Prep. We really weren’t able to generate the volume needed to keep it going. It didn’t make as much sense. It was taking up a lot of my time in terms of trying to manage it, hiring new tutors, and interviewing new tutors. We would get an occasional student here and there, maybe one a week. The margins weren’t high enough and it was a lot of work. That we decided just to partner with an outside GMAT tutoring service and do an affiliate deal with them.

Andrew: By affiliates you mean you promoting other people’s products and you get a share of the revenue or you get a cost per lead that you send over. How many members do you guys have on the site?

Patrick: Currently we’re about to hit 43,000.

Andrew: Forty-three thousand people who signed your registration form and who are active members or just members in general?

Patrick: Active members, probably much less than that. I’m thinking we get about 350,000 unique visitors a month. Actual active members is probably 10,000 to 15,000 I’m guessing. We don’t really track that. I look at the member number and I look at my overall traffic numbers.

Andrew: I want to go back in time and figure how you got here and find the best ideas you can give my audience. Let’s stick around with this for a little bit longer about where we are now. I want to full understand what we have before we understand how we got here. What software are you using to run your site? Is it WordPress?

Patrick: It’s a content management system called Drupal. Basically, it’s all open source. I feel like it’s a very powerful platform. The hardest thing about Drupal is finding the right people to manage it. I have that right now and I feel very blessed to have the web developers that I do have and the back-end IT guys that I have. They’ve been great.

Andrew: Why do you use Drupal and not WordPress?

Patrick: When I started the site back in ’06, I started with a partner actually and he was an MIT guy. They say, I think, Drupal’s a little bit more geeky but it’s also much more powerful and flexible in terms of what you can do with different community sites especially. That’s why you see a lot of non-profits use it. It’s a really good platform if you have a lot of different sets of permissions you need to give to different roles. If you have administrators, moderators, normal authenticated users, job applicants, it’s a perfect system for that. It’s very good at having granular permissions.

Andrew: I see. You give job applicants access to one part of the site. You give writers access to another part of the site.

Patrick: Right. It’s known to be pretty powerful in terms of doing that. Right out of the box it’s pretty flexible in order to do that sort of detailed permissions that you might need. I think it might have been a little bit of overkill when we first started. Whenever someone comes to me and asks, “What should I start with?” and if they don’t have any web or development background, I usually point them to WordPress, because I think out of the box you can’t beat it.

Andrew: I interviewed Tim Sykes here who says that he started off with Drupal and switching to WordPress was the best thing he did. It opened him up to way more developers, much easier for him to manage his site on his own. It’s pretty flexible, especially when you consider all the plug-ins that are available for it.

Patrick: I don’t have a WordPress blog, so I can’t comment but I can tell you that Drupal has . . . earlier on especially when I didn’t have the right people in place, it was hard. Now that I have the right people in place, I feel like it is a great solution. It’s always nice when things are going well. It’s much easier to say. I have one of the better, if not the best, Drupal optimization guru working on my back end to tune the site so he’s able to deal. . .

Andrew: Is he the full-time person that you have?

Patrick: No. When I say full-time person, that’s me.

Andrew: Oh! You’re the only full-time person. I see. Okay. All right.

Patrick: He’s part time. I guess you could call him full time, but he’s spending probably an hour, couple hours per week just making sure all the security updates are there and the site’s running quickly.

Andrew: All right. I’ve got a good sense of it. By the way, Drupal costs under 200 bucks to run when you’re starting out. Same thing with WordPress. We’re talking about such easy solutions for running a website today.

Patrick: I think Drupal’s improved a lot. When I started, it was Drupal four-point-something. Now they’re about release seven. It’s just gotten better and better and faster. I’d recommend more people . . .

Andrew: I have a side hosting account with, who do I have it with? DreamHost. For like 150 bucks, I can run all the websites I want in Drupal, WordPress, the rest. It’s easy to get up and running with them. Mixergy I moved over to Media Temple, because they give me a little more flexibility, a little more customer service and technical support and so on. Let’s go back to how you got started here. What were you doing just before you launched the business?

Patrick: Giving you a little bit of history might help explain why I started. I graduated in 2002 from Williams College up in Massachusetts. I decided to go do investment banking probably for a lack of a better idea of what I wanted to do with my life. I said, “Oh, at least I’ll be independent from my parents and I’ll be in New York. It’ll be a learning experience and a challenge.”

Fast forward a couple years later, I’d been working about an average of 90 hours a week, sometimes up to 120 hours a week, for two years straight. I was really burnt out. I think that and then when I transitioned into what’s called private equity, I think a lot people think, “Hey, I’m going into investment banking, what’s the next step? What’s the next greatest thing?” A lot of people point to private equity because they say, “The hours are better. The pay is as good if not better.”

I get the dream job in private equity in Boston and I’m fired six months later. It was a good wake up call at a young age to say, “This is a very cutthroat industry.” There was no real reason they fired me except the fund was underperforming so they decided to cut some salaries. That was a big wake up call. I’d always thought if you worked really hard and put your head down, you’re going to be fine. It opened my eyes up. It made me feel very expendable. It made me feel like, “Okay. What can I do to secure my future a little bit more? What can I do to take control a little bit?” I ended up getting another private equity job in New York. At the same time, I still didn’t feel comfortable. At any point, I felt like my job could be gone.

I started looking at what other entrepreneurs had been doing. I stumbled across a Top 30 Business Entrepreneurs Under 30 Business Week article. I remember reading through that. I think I was 25 at the time. I was thinking to myself, “Wow. Some of these are great ideas but some of these are pretty basic ideas. Why am I not doing that? Why am I not going out on my own and at least trying something?” I figured I was 25 at the time and by the time I was 30, which I am now, I would like to have something more that I could call my own even if it wasn’t something I could live off of, it would be nice to have. That was the inspiration behind it.

It was also the fact I knew nothing about finance or private equity or other options coming into investment banking. I was very lost. After my first year working so many hours, what’s the next step? Am I going to be working like this the rest of my life? I felt like there needed to be a place where people could not only share their own horror stories but also give each other good advice on how to prepare for whether it’s a hedge fund interview or private equity. That was the whole idea.

I remember talking to my friend Greg, who I started the business with, and saying, “If we’re going to do this, we have to make it more fun. A lot of these people are suffering at their desk. We got to provide them some entertainment and make it fun. Otherwise it’s going to be just another very serious business networking site,” which I didn’t really want.

Andrew: How many hours were you putting into it at first?

Patrick: I was working probably around 50 to 60 hours a week and I was probably putting another 15 to 20 into the site. Sometimes it got up to 30 or so. I put in usually eight to 10 hour days on the weekend.

Andrew: Why didn’t you quit your job and do this thing full time? If you wanted to make it into the 30 Under 30 list, why not go gung ho, everything you got, no more work?

Patrick: I think probably just fear. I think I was just scared. I already had an apartment in New York. Just to pay the bills, it’s tough to say. I had some money saved up, but that would have gone really fast in New York. If I was maybe coming up at the end of a lease . . . plus I didn’t know if it could be a real business. I knew I had something but I didn’t know it could grow to the scale that it has. I knew that it was something that would eventually generate some money. Until this last year even, it generated very little money. Until we made the vertical ad network deals, until we started doing some of the affiliate deals, it was bringing it what? A thousand, two thousand dollars a month for a long time. If you look at the traffic, it was growing steadily, but it didn’t really take off until, I think, November last year, so about a year ago.

Andrew: Let’s come back to what you did in November of last year. For now I’m curious about what you imagined the business was going to be. What was the model that you had in mind for getting your customers and bringing in revenue?

Patrick: I think initially I didn’t have a focus on . . . it costs so little like you mentioned earlier to start something up. Naively we thought, “Oh we would run advertising.” You don’t realize that the rates you’re getting from any sort of general ad network, from a Google or ValueClick is going to be not enough to support anything. Maybe a couple hundred bucks a month if you start generating good traffic. Naively a lot of people think, “Oh, we’ll just throw some ads up there and that’ll be enough.” Ad networks don’t start becoming meaningful until you’ve hit a million or couple million page views a month or at least until you get into some sort of vertical ad network where you’re lucky enough to get some of the CPMs that are in more of the $5 to $10 range instead of the 50 cent range.

Andrew: Okay. Advertising was going to be your main source of revenue. I understand you might have overestimated how powerful it was going to be, but that’s what you were going for. What about getting customers? How were you going to get people to come to your site and how are you going to get them to stick around and return?

Patrick: I think that was actually critical. It’s a really good question, because a lot of these community sites start up and they will send out a bunch of e-mails to everybody saying, “Hey, come join our site.” Not having the proper hook I think is a really big error. With the proper hook, you can get people to actually give you their e-mail. What we used is I had actually gone out the months before we launched and surveyed a bunch of my friends who were already in Wall Street and doing all these investment banking jobs and tried to get as much compensation data as I could. All the students always want to know how much people are getting paid this year and what are their bonuses. We just had a compensation report that we put in bold letters right as soon as they hit saying, “Take two seconds to register and you get this free compensation report.”

Something that we actually did early on, it’s so long ago I’m not even positive this is how we did it from the beginning, but we also had something where you had to register but you also had to participate. You had to get what we call banana points. We give out bananas every time someone participates. They start off as chimps, they graduate to monkeys, and eventually baboons and King Kongs. What we do is we would make it so that when someone would register with the site, they wouldn’t just get the report right away. They would have to participate, earn three or five banana points before they could actually get access to the report. It was another way not to just encourage people to register but also participate and get them attached to participating in the community.

I think early on it’s not about getting 10,000 registered users to be active. I think that’s unrealistic. If you can get 100 people that are real fans that are on there for an hour or two hours a day keeping the forums active . . . when we started out, we really were nothing more than a message board and we still are very much message board focused which is not a new idea by any means. If you can get people to participate and make it fun for them, I think that’s enough to actually generate enough repeat users where you’re actually building the community. I think having the compensation database was key because it probably doubled our conversation rate on the number of people that would have registered.

Andrew: Okay. That gets somebody who is on your website to register and it makes it easy for you to bring them back. How do you get the people on your website in the first place? E-mailing your friends isn’t enough.

Patrick: You spend countless hours going through investment banking club websites at different universities and collecting the e-mails and then sending targeted e-mails to each club instead of one mass email. I would send out, let’s say, to 20 people at University of Michigan investment banking club and say, “Hey. You’re a member of the University of Michigan club.” I made it very informal. I’m actually about to launch a new site called JD Oasis for lawyers. It’s very similar. What I talk about with my partner right now is how it’s very important that we tailor each e-mail that we send to them. It’s not something like, “Come check out our brand new shiny website.” It’s more like, “Hey, we built this for you guys. We have a compensation report and we have this data. We thought you’d find it interesting. Check it out. Let me know what you think.”

Andrew: You’re going to use the compensation report again?

Patrick: We’ve been talking about that. It’s tougher with lawyers because the compensation is so lockstep. We want to have something whether it’s benefits or some sort of interesting data that people want to see. I think it’s going to be harder with the lawyers. We may have to find something else like other incentives.

Andrew: What you’re telling me is something I’ve heard a lot in interviews. You spammed. You went out, you found people’s e-mail addresses online, you made sure you were more targeted than most of the others who told me that they spammed here. Basically you got their e-mail address and you did one-off e-mails to them. One at a time, you brought people over to your site? That’s a lot of work.

Patrick: It is a lot of work. For my best friends who I knew would help and spread the word, yeah, for let’s say 20 or 30 friends, it was one-off emails. For the people who were in clubs, it was one e-mail to each club. When you have 500 clubs, it is a lot of work. I wasn’t using a mail merge software or anything like that either.

Andrew: It was one to the head of the club and then the head of the club was supposed to send it out to everyone else?

Patrick: No, it was to whoever was available, wherever I could that e-mail I would use. Specifically in the subject line I wouldn’t say, “New investment banking website,” I would say, “Member of this club,” and specifically target to them. I think it’s important to do that. It shows you’re not just blasting everyone with one e-mail.

Andrew: Patrick, I’ve got tell you, now I see why it took you so long for the site to do well. One e-mail at a time even if you get a whole group of people when you send out that e-mail.

Patrick: Not exactly time efficient.

Andrew: It’s still very slow. It’s very inefficient. Once they got to your site, you did something smart that I should have done from the beginning. You hooked them in by getting their e-mail address. You got them to convert from viewers to members by offering them a gift and incentive. They became members, you were able to e-mail them back and say, “Keep coming back to the site.” What was on the site beyond the forums, beyond this little community?

Patrick: Just real fast, Andrew. I did that at the beginning where I went out and e-mailed all these people. I didn’t really continue doing that very much into my second or third year. I think it was the first six months where it was more of that, especially the first weeks. The key focus is getting a critical mass. If you don’t have a critical mass in a forum, it dies. You see an Internet with thousands of forums out there that have five posts in them.

Another thing I would say if you’re going to start a business like this is you need to create interesting topics that people feel incentivized to contribute to whether it’s controversial, anything that gets them to feel like they need to register or post.

Another thing I did early on is I made it open. I allowed anonymous people to post, which can create problems nowadays with people spamming your boards. I feel like the additional contributions and lowering the hurdle for people to participate is important. Sometimes people would get addicted by participating as an anonymous user and then they’re like, “Oh I really do want to see that compensation report,” and would register. Letting people get a feel of it. A lot of people aren’t into this whole message board thing. Some are. Some are addicts and they’re on there all day. Other people think, “That’s for the nerds.”

Andrew: What else did you do to keep the conversation going? There’s nothing sadder than an online message board with just four messages.

Patrick: I was very active early on as were a couple of my friends. I called them super users. We were lucky enough to have just enough super users early on, maybe 10 to 20 super users, that loved the idea that got a kick out of helping other people. When we’d have a college student go on there and ask a question or advice, they would get answers. That’s the key. If they’re not getting answers by one of what I called our super users, they’re getting an answer from me or one of my friends.

Andrew: How’d you get your friends to be super users of your site? That’s a pretty big ask, isn’t it?

Patrick: Some of them just enjoyed it. They were in the industry. I shouldn’t say a lot of friends did. Most of them were kind enough to sign up and register. The majority of them would post a few times and leave. There were a few that actually enjoyed it and participated. It was mostly, I’d say, me and my partner and whomever else we could get. If there was a specific question that I knew someone could answer, I would forward that on and ask, “Would you mind answering this question?”

Andrew: Got you.

Patrick: A lot of favors early on. It wasn’t a big business. It was AdSense. It was, like I said, at first a couple hundred dollars a month and then a couple thousand maybe by a couple years in. It still wasn’t the tens of thousands we discussed early on. That came in this last year and a half once I really started focusing it more as a business and as a way to support myself.

Andrew: Why did you continue going when it was just pulling in a couple thousand a month considering that you’re in the finance business where there are hundreds of thousands a year that you could earn? Why continue at that low rate?

Patrick: I think it was more that I just loved it. I love seeing people get good advice. People started coming back. I remember we launched in May and by that November we had some people coming back. That’s when the recruiting cycle starts, in the fall. They were actually thanking the community and saying, “I couldn’t have gotten this job without your support. Thank you so much.” That’s inspiring and that’s rewarding in and of itself.

The money wasn’t going to do anything. You’re right, it wasn’t anything to get excited about yet. But I also felt like it had momentum. By word of mouth, it started growing a little bit faster and a little bit faster. It wasn’t like I was looking at the bottom line and saying, “This only made me $500 this month. I’m going to walk away from it.” It was something like, “Wow, we built this from nothing. We have a couple thousand users and people are active on it.” To me, that was something. I had never created anything like that. It was my first attempt at starting a business. It was exciting for me. As much as people thought it wasn’t a big deal or whatnot, I felt proud of it that we could help a couple kids get into a job they didn’t think they could get before. That alone was fun.

By the time I actually got into business school and thought about doing this full time, it was actually starting to get a little bit more momentum. The traffic was really growing. I figured if I actually knew what I was doing, then I could probably make some money off a couple million page views a month. I figured I’ll go to business school, see what I can do for two years, and if I can make it run . . . I knew I was going to do no recruiting. I was going to focus 100% on this business. If I can make it run, great. If not, then I always had a finance career to fall back on.

Andrew: I want to get to the November period . . . I should explain to the audience. We knew before the interview we were going to have a lag today. It’s not that we’re stepping on each other or interrupting each other the way that it seems, I’m sure, when you’re watching the recorded version of it. We just knew going into it that we were going to have a lag and we’re just going to have to deal with it one way or the other. Before we get to November, give me some advice for my audience and for me, what do we need to do in the early days of building a community? Communities are so important to your business and to other businesses. They help bring people in. Give us some advice based on your experience.

Patrick: I think it’s really important that you focus on a very narrow niche and you serve it really well. That’s my overarching theme that I want people to take away. When I started the community, it was I-Banking Oasis. It wasn’t Wall Street Oasis. It was only focused on one specific vertical. I think that’s another reason why it really helped in conversions. People felt like, “I’m an investment banker,” or, “I want to be an investment banker. This community is only for me.”

I know investment bankers now have a terrible reputation everywhere. I think back then it was something to be proud of. This was a very competitive industry. This is something that I worked really hard to get into. Now I’m working very long hours. Who else out there is in a similar situation to me that doesn’t really know where to go next? What other students are out there that are trying to break in from a non-target school? I don’t go to an Ivy League, I go to state school XYZ, how do I actually break in when these companies aren’t coming on to my campus? I think we got a lot of that and when people were getting feedback, they felt encouraged.

Andrew: You focused on a very narrow niche. In your case, it wasn’t all of Wall Street, it was investment banking that you were targeting. It wasn’t everything to do with investment banking, it was specifically for people who wanted to get a job in the industry.

Patrick: Yeah. It was young investment bankers basically or students trying to break in.

Andrew: The other thing that you said earlier was you were participating very actively in the community so there was always somebody who was responding. Your friends were participating less actively but they were still actively involved. If you saw that anyone else needed to be recruited into a conversation, you’d e-mail them and say, “Hey, join that conversation. I think you have something to help out with that’s supportive.” One more thing that you said that you learned maybe later on was ask provocative questions that don’t have a clearly defined answer because that gets conversation going. What else?

Patrick: I think what else is by the time you launch you should have tested the site. It doesn’t have to be perfect by any means but the key areas need to be functional. People need to know how to post and reply. You’d be surprised. Sometimes you go in there and it’s like, “Where’s the reply button?” You can lose someone like that.

Another thing I’d say is try to make it fun or different. That’s the whole reason we had monkeys. People like to laugh at themselves. We wanted people there who had a good sense of humor who could say, “Oh, yeah, we’re monkeys. Ha ha. We’re basically monkeys that keyboard all day.” I felt like the whole banana user point system that we incorporated from the beginning, we’ve had that since day one and I think people love that. I remember some people, we were joking around about removing it, were like, “Don’t take my bananas away.” As silly as it is, a virtual currency is a virtual currency. People feel like they’ve built up that reputation. It takes a [inaudible 34:40] status, and now we have, I think, 30 King Kongs or something along those lines. It’s pretty amazing that people have . . . there’s a handful of people who have spent that much time on the site and given that much great advice that they’ve become that. I think a lot of them are proud of it, and a lot of them are starting to network offline. I think I’m going off on a tangent though.

Andrew: No, this is actually very useful information especially considering that you had it in place in the early days. I’m now seeing that a few people in my audience are building badge-like systems where anyone can add points to their system and keep track of badges and so on. Back when you did it, that didn’t exist. You had some quick rudimentary but effective way of adding a point system to your site. I want to learn from that. What did you use?

Patrick: It was all within the Drupal system. The guy who runs my back end, he wrote a module for Drupal called User Points. Back in the day, it worked. You could assign different point values for different actions. Someone posting a new forum topic could get two bananas. Someone posting a new comment could get one banana. Someone uploading their resume gets 10 bananas. Someone inviting a friend gets 20. We tried to make things like inviting a friend and reward them with a lot of bananas. What do we care? It’s bananas, right? It basically was I used Drupal. I guess that’s a good example of how Drupal has different modules that allow you to plug into the core set that are a little bit maybe out of the box a little bit more flexible. I don’t know if WordPress has a . . . I’m sure by now it has a points module or some sort of thing.

Andrew: I wouldn’t be surprised if it had it. I just don’t know of one. I hope that it has it, and I hope the guys in my audience who are building it out will do a good job with it. I can see the power of it. I went on to a website earlier today. I had a question about my Mac. I saw that I only had one point on the website. I wanted to figure out what I could do to get more points. I’m too busy to even write that question up on their message board, but I still get so carried away that now I’m thinking, “How do I get more points from them?” It’s just something about human nature. Until we get tired of it, we’re all going to be pursuing points on as many sites as will give it to us.

Patrick: To build on that, Andrew, I took it so far where last year I realized the points system was such a beloved thing about the community that gave the community character. The problem was certain users . . . I think this is important to talk about because this is like talking about how online message boards and communities evolve and how there’s different status within the community. What was happening was we had some users that were participating all day but they were college students that didn’t have much experience. People were complaining that some user with 800 bananas or 2,000 bananas actually wasn’t that knowledgeable. How do you deal with that? What we started doing was creating a peer review system. This is crude but what we allowed people to do was we gave credits and if certain people have credits, they’re allowed to reward another user a silver banana if they like a contribution they give. If they don’t like what they contribute, they can throw monkey shit at them.

Andrew: Interesting.

Patrick: If you’re rewarded a silver banana, that’s actually worth three banana points. If monkey shit is thrown at you, you actually lose one of your bananas.

Andrew: You’re creating a website that’s a professional website that’s designed to help people get jobs in Wall Street and not in television . . .

Patrick: Correct.

Andrew: . . . or not in porn but where you’re tossing shit at each other? This doesn’t take away credibility of the site?

Patrick: Correct. I think it’s funny because . . . here’s the thing. You probably looked at the site before the interview, right?

Andrew: Yes.

Patrick: You didn’t see the monkey shit did you?

Andrew: Not one.

Patrick: You probably didn’t know about that.

Andrew: No clue.

Patrick: Most of the career centers don’t know about it. No one knows about that. You don’t see it until you register for the site. It’s a fun thing for the users that are there. It’s kind of a joke to say, “Let it fly. This guy’s going to get hit hard.” He said something stupid or he was very pompous or whatever. It just adds another element of fun for the community. It backfired a little bit when I initially launched it because even though the best users were accelerating in rank, the problem was some of the good users were actually getting shit thrown at them. They didn’t take it too well when they were giving honest, heartfelt, spending 20 minutes writing out a long comment and then somebody threw . . . even if they got five silver bananas, they still felt angry about the one piece of shit that was thrown at them.

The majority of people took it in good fun and it actually worked. I feel like it helped reward the users that were spending so much time but were giving really quality advice. They were able to accelerate through the rankings much faster. The people who were more trolls and people who were obnoxious were getting held or actually lowering in ranking. It’s actually a good way for me to identify trolls now on the site.

Andrew: This was all through the module that you mentioned earlier right?

Patrick: We had to build a new custom one for the peer review one. I had to actually build that custom. That wasn’t out of the User Points module. We had to actually build something that attached that for peer review.

Andrew: Okay. My seat, by the way, stinks here today. I don’t know what’s broken with it but something’s not working right on it. I was going to explain what’s going on with the seat and the desk here but screw it. Let’s focus on your business instead. All right. How about one more thing that worked for you? One piece of advice for somebody who’s building a community online and then we’ll move on to what happened in November of last year.

Patrick: I think it’s important early on, especially for a community site, if someone comes to a website and they see a forum and they go into it and see that it’s empty or they see there’s one or two posts or they’re outdated, they’re gone. You’ve lost them forever. I think it’s important in the early days to seed that content, those interesting discussions, but seed it at the right time. To launch one of these . . . I don’t know how I-Banking Oasis actually ever survived. Now as I’m looking at all the things we have to put in place to launch JD Oasis, I’m just like, “Oh my gosh.” It’s a major headache because you have to have interesting discussions. You have to have all of the e-mails lined up, be ready to go work 20 hour days in the first week of launch to make sure when people go, there’s activity. When people go, there are new users registering all the time. I think early on it’s important that you don’t just have an empty set of forums. You have some seed content there that you’ve spent several months or weeks . . . five or six discussions in each forum topic, so that when people come, there’s something that’s interesting there.

Andrew: Okay. In the beginning, was that you guys just filling it out with fake names so that it looks like there’s activity?

Patrick: Yeah, you do five or six users and you have arguments back and forth or whatnot.

Andrew: What happened in November of last year?

Patrick: November of last year?

Andrew: Yep.

Patrick: When I got to business school two and a half years ago, we redesigned the website. That seemed to help streamline the commenting and it made people . . . if you had seen the site three or four years ago back in ’07, you would have been like, “Oh, that hurts my eyes.” It wasn’t exactly a thing of beauty. It worked and it had a lot of character. I’ll give it that. It had a lot of character. It wasn’t something that I could go to a career center at a university and stand behind and say, “Yeah, we want to sell you our publications.” It just looked very unprofessional.

What we did was, number one, redesign the entire theme of the site to make it more professional. A piece of advice I’d give people there is don’t try to create your own theme. Look at websites you really enjoy and give your web developer some guidance through that. Tell them, “I like that color. I like that layout.” Do it that way. I think it’s much more productive. It’ll save you a lot of time and money.

Second though, in November, we were getting more traffic. Some of the performance of the site was struggling a little bit. I made the decision it was time to go to a much more powerful server and bring on Khalid. Khalid from 2Bits.com is my IT back end. He’s a Drupal guru when it comes to optimization. He’s known to be able to serve two or three million page views on one server. Besides the point, I knew I had to do something in terms of the performance of the site because I think we were losing people because it was taking two or three seconds to post something. As the database had grown, it had actually become more cumbersome to deal with. I started talking with him. We invested some money in him becoming our consultant on a monthly basis and managing all of our back-end servers.

I don’t know if the timing happened to deal with the recruiting cycle with faster performance, but I know as soon as we brought that server on and the recruiting cycle hit, the site just took off. Year over year, we’re now like 150% on traffic. I really think a lot of it just has to do with being a better performing site. I think that’s something I delayed on for a while because I was nervous about putting the extra cash down. I worked in restructuring and banking, so I saw a lot of failed companies that spent too fast and overextended themselves. I think I went the opposite extreme. I continually bootstrapped and that was almost a little bit too careful. When I had something that was growing, it was like put some money behind it idiot. It’s like this is the most important thing that the site performs and it wasn’t performing. That was something I wish I had done earlier. In looking back, it still seems to have come out okay. I wish I had done it earlier.

Andrew: I’m seeing that speed impacts everything, more orders, more time on site, more number of people who are willing to come on site, and so on. That’s something that you did. You improved the performance, the speed of your site. The second thing you said you did was you redesigned the site. I noticed that happened to me too. When I redesigned Mixergy.com, and I didn’t do it, Pallian.com did it, but when they redesigned my site, it’s like a whole new credibility happened overnight. I didn’t change. Nothing else changed except for that and suddenly boom. I did the same thing you did. I said, “I like what Tim Sykes is doing on the top of his site over there and I like what Tim Sykes is doing on the bottom of his site over there.” Other websites too but Tim Sykes was a big one.

Patrick: It’s good you did that. It means you learned either probably from a different experience that if you try to create something from scratch, it’s a lot bigger headache if people don’t have something to guide themselves on. There’s a lot more chance for miscommunication.

Andrew: You improved the site. People were spending more time on the site. That helped you out with the user base. What about revenue? You said you went to a different ad network. Tell me about that.

Patrick: At the time when I started business school, I was still only using AdSense and a couple general ad networks that were paying anywhere from 50 cents to a dollar CPM, nothing to write home about. With the traffic we were having at the time, which was over a million page views per month, you could make a little bit of money. It wasn’t anything I would have felt comfortable being like, “Hey, I’m going to go eat ramen noodles for the rest of my life and run Wall Street Oasis.”

It was important to get into a vertical ad network to be able to grow out other parts of the business. Vertical ad networks, I don’t know how familiar your users are, are basically an ad network that specializes in a specific vertical of people. It was a natural fit for us to go with InvestingChannel because they have a pretty good reach into the financial world. They sell to the Scottrades, E*TRADEs, and those types of brokerage accounts.

I had actually been trying to reach out to vertical ad networks for probably six months. I had heard about them and that was a way to get a better CPM. I was having very little luck until I made a partnership deal with a company called UpDown. It was a virtual trading website that was actually doing very well. It was started by a couple guys out of Harvard. I asked them, “Who runs your ads? I noticed you guys have this company and this company.” They said, “InvestingChannel. Do you want me to put you in touch with them?” I said, “Yes, please.” They put me in touch with them and just like anything else, a warm lead is usually 10 times more effective than a cold lead or you trying to sell yourself.

Once we threw out the traffic numbers, they were interested. They said, “Yeah. You’re targeting the exact vertical we want. Let’s work something out.” When we did that, our ad revenue really jumped, I’d say, about fivefold just overnight, as soon as we brought them in. That allowed me to say, “Okay. We have enough money now to run the site. I can invest in other things whether that’s content generation and bringing on other writers. I can invest in, eventually, a new server.” Does that answer your question? I don’t know if I’m going off on a tangent.

Andrew: It absolutely does. What about adding affiliate programs? At what point did you do that?

Patrick: I had some affiliate programs. I worked with The Analyst Exchange for a while. I still do. They provide online training as well. When we went with Breaking Into Wall Street as another financial modeling training, I think that was a better fit because it was a lower price point. I should have realized earlier that about half of my audience are college students. The budget of a college student is a little bit different from the budget of a Wall Streeter. I feel like I should have provided them with a solution earlier because when I did, the response was immediate. It was a great program. I had actually seen it before and heard about it. Promoting that was . . . overnight it helped our revenue doing that. Also reaching out to other types of affiliates, like we did one recently with Veritas Prep, a GMAT prep business.

We had done some before but mostly as a sponsor. It wasn’t actually doing affiliate deals. I feel like now if you can show an affiliate that you have significant traffic in the people they’re trying to target, you can get a better deal. It’s almost better for both of you instead of doing a sponsorship or an ad. If you’re able to show them performance, you’re both happy. If you think it’s the right fit for your audience, it should perform. Oftentimes before, I’d prefer to have a sponsor or an ad where I knew I was getting paid. Now that we have a certain base, I almost prefer going with affiliate deals because I feel like you have more traffic and you can pitch them a better story and say, “Look, we’re going to get your product out to everyone. We’ll do an exclusive deal with you. Give us a good deal and we’ll work together for several years.”

Andrew: Another thing I want to make sure to spend a lot of time on is the guides. Looking at your revenue, selling guides seems to be the biggest single source of revenue that you have. I’ve got a list of your guides here on my screen from your website. You’ve got the “Technical Questions Interview Guide” sells for $29.99. “A Look Behind the Wall,” $19.99 you sell that for, “The Business School Bible,” $29.99. Nothing more than $29.99 as far as I can tell. Right?

Patrick: That’s correct.

Andrew: It’s either $29.99 or $19.99. How did you get started with that?

Patrick: It’s interesting because I wanted to do publications for a while. I figured it was a natural progression. It was a perfect product to sell to the audience of college students trying to break in, some sort of interview guide. The problem is I felt like I didn’t have the time to actually write it.

It was funny. A guy I work with now who still helps me do the updates came to me and said, “I’d like to do a partnership with you because I’m thinking of writing interview guides and launching a new website for it.” Immediately I thought, “No. Don’t do another website. I have all of the traffic here. Let’s do a partnership and we’ll both make a lot more money that way if you write a good quality guide and we partner and I can sell it under the Wall Street Oasis brand. It’ll help me get the name out there.” We did that.

Initially what we tried to do was provide a really thorough interview guide. We looked at all the other interview guides that are out there but also we looked at what people were asking in the forums for the most current questions. “The Technical Interview Guide” was the first one we launched. We wanted to make sure it was really top notch so people would just talk about it everywhere. What we did was we only charged $10 for it initially. We wanted to say, “Hey, look. We realize the other guides are $40. We have everything they have plus more plus we’re more detailed plus we break it down a different way. We’re only focused on the technical aspects here.”

We know that’s the thing most people want to drill on. It’s what the people that feel the most insecure about is, “Are they going to ask me a technical or brainteaser question where I’m going to be stuck?” Addressing that need and addressing it in a much lower price point I think really went off well. I was absolutely shocked when we launched it. We sent it out to our newsletter. The number of sales we had . . . I think we launched it in November ’08 or December ’09. That first year it was a shock to see how many people really were willing to shell out 10 to 20 bucks to have that edge.

Andrew: How many people were willing to shell it out?

Patrick: I think early on in the first month we had several hundred sales.

Andrew: By several hundred do you mean 300?

Patrick: I don’t know exactly to be honest but I think it was around probably 150 or so.

Andrew: One hundred and fifty people each paying 20 bucks out of how many people in the newsletter mailing list?

Patrick: Initially it was $10.

Andrew: Ten bucks. Okay.

Patrick: Remember the business was small then, so that was real money for us. When it started, it was something that we felt we could improve on year over year, release new versions. Now the version we have out there has a lot more questions, a lot more detail, and actually comes with a financial model. We’ve pieced together, and as the years have gone on, we’ve increased the price as people realize this is actually a very legitimate guide. We’re selling it now to the country. Once the brand is developed, you’re able to charge a little bit more of a premium.

Andrew: What was in it in the first version? The first version had a list of questions they should be expected to answer at a job interview and the answers they could give?

Patrick: Right.

Andrew: Got you.

Patrick: Specifically technical interview questions geared to finance interviews. We actually broke it down into basic, intermediate, and advanced, which was different from what other people had done. People could work their way through the different levels. Make sure you know the basics first and then graduate on to the intermediate and advanced. That’s where we focused. We thought that would be the best seller. It still is the best seller.” The Technical Interview Guide” sells probably close to 30% or 40% of all guide sales if not more.

Andrew: This was just a PDF that you were sending them.

Patrick: We use E-Junkie to sell our PDFs. It’s a pretty popular system and very easy to set up. We just did a PDF. They allow you to stamp the person’s name and transaction number on there.

Andrew: Really? They will stamp the person’s name into the PDF that you’re selling so if they spread it around, it’s their name on it?

Patrick: If they spread it around, it’s their name and e-mail on there. I think it helps slow down the pirating. I think people will probably share guides with their friends. When we heard about that, we installed that immediately. I think that’s something a lot of these larger companies struggle with is people sharing their log-in names and saying, “Here read this PDF. Print it out. Here’s a copy.” I know a lot of illegal versions are floating around. It’s not something I’m as concerned about. I feel like a lot of people in the community actually want to pay us and help us because they know we’re smaller. They’ll sometimes just buy a guide and say, “I didn’t actually need this guide but here’s the $20 or $30. I think you guys are doing a great job.” That’s the model.

The guides were a shock and it was a good shock. Again, it was still a smaller business until this past year. When recruiting season came this year, I think the name finally started getting out there as we were in more business schools. There are a lot more students. When people ask, “What guide should I study?” people say, “Go to Wall Street Oasis,” instead of always, “Go to Vault. Go to WetFeet,” especially in the finance world.

Andrew: When you created your first guide, you basically took the guides that were out there, you used them as research, you took the best questions from those guides, reshaped them a little bit and published your guide. True?

Patrick: Yeah. We also looked through the forums. We compiled a lot of brainteasers. We noticed that the brainteaser forums always get a ton of hits because people hate not knowing what the right answer is. We noticed that and added a huge section on brainteasers. We’ve continued to expand that. We basically went through and tried to restructure everything so it was in a more digestible format. It wasn’t like the guide that basically told you this is what investment banking is. It was more about we assumed that you’ve done the basic research that you know what this industry is, but here are the actual questions you’re going to be asked in an interview. It was very cut to the point. Almost like a CliffsNotes for interviews. The feedback we’ve gotten is people are like, “I’ve almost never gotten a question in an investment banking interview that wasn’t in some shape or form been in your guide.” That’s the feedback we’ve gotten. We try to continually update it to make people happy. That’s about it.

Andrew: One more question before I sum up what we’ve learned so far. That is this, I can see a lot of people in the audience listening to this and saying, “It would be great. Forget the guys who are doing millions of dollars in revenue that Andrew has in interviews on Mixergy. I like what Patrick is doing. I want a lifestyle business that pulls in enough money that I could travel so I could be in Buenos Aires working the way that Patrick’s working.” When they get there and they get to whatever tens of thousands you’re pulling in a month, I can imagine them saying, “Where’s the giant business? I want to go even bigger.” Do you ever feel that way? If you do, what is that bigger, bigger, bigger vision?

Patrick: I think that it’s tempting to always want more. For me, the wanting the more isn’t so much money anymore. I think early on when you aren’t making any, you want some money to be able to support yourself especially when you’re accustomed to making certain wages or certain bonuses. When you get to that point, I think the more becomes challenge and the more becomes “can I do it again?” I think that’s what I’m doing with JD Oasis.

The bigger vision for me is creating a whole portfolio of these career-oriented communities that are more fun. Whether it’s actually something that takes off or whether it falls flat on its face is less important to me. What’s more important to me is just enjoying my time and enjoying the challenge. I don’t think it’ll fall flat on its face. I think I’ve learned a lot from my first five years doing this.

I guess takeaway is you want to be able to wake up in the morning and be challenged and be happy about waking up and be excited to go to your inbox, not dreading to shave. I don’t shave very often so I dread shaving. Not dreading to shave after you’ve slept three or four hours and have to go back to the office. I enjoyed my work but it wasn’t something where I was like, “Yes! I’m excited to see what’s new today.” Nowadays when I want to work, I’m excited and I’ll do that. I’ll work a 15-hour day. If I don’t want to work and I want to go out with friends, I’ll work two hours. I love that freedom. It’s something that I really wouldn’t give up.

Andrew: Let me sum up what we talked about here. First of all, you said don’t write your own website software, your own content management system. Just use Drupal. You’re even advising people to use WordPress because it’s very simple. Use that at first and then later if you want to, and you probably won’t, you can go and build something bigger. That’s the first thing you said.

Second thing is build community. We talked about different ways of building that community. You go in there and you interact. You create five different accounts for yourself so your accounts interact with each other. You e-mail your friends and get them to join the conversation. Then you go one-off one at a time. You brought people into the conversation where it was appropriate. If somebody asked a question, you always wanted them to get an answer. Where it was appropriate, you’d find the right friend of yours and say, “Hey. Can you go in there and respond to this?” That’s how you build community. We had more earlier on.

Next thing you said that was very powerful was a point system. Have a monkey or some kind of point system that will get people into the site and give them a number to increase. What else did we talk about? We also talked about getting people registered, not just coming to the site, but registered so you can collect their e-mail address and reach out to them so you can promote guides to them.

Sell your own products. That’s something else I learned from this interview. If you just do advertising, it’s going to do well but selling your own product, it’s all 100% profit. You get to learn from your community and improve that product. That was the number one source of revenue for you. I made good notes in this interview. Final thing you said was don’t use AdSense from Google. Use a vertical ad network. Find somebody who talks just to your community who will sell at premium prices and work with them. That helped you a lot you said. You increased your revenue by five times. How’d I do with that summary?

Patrick: Amazing. The last thing is sometimes you’re forced to use AdSense because no vertical ad network will take you early on. Overall, absolutely I think you covered it extremely well. Impressive notes.

Andrew: What about this? Somebody who’s brand new to this interview who says, “This is all great. It’s too much information. Andrew, thank you very much for doing the summary, but I think you gave me 20 billion points there and throughout this interview too. What do I do first?” What’s the first thing you advise them to do?

Patrick: I would say become an expert in something very narrow. Learn and start a blog targeting that very narrow focus. If you can become an expert in something, people are going to want to hear what you have to say. Even though that’s not exactly what I did, I still focused very narrow. What I see in terms of the most successful people online is they become an expert in something. Andrew’s the expert at talking to entrepreneurs. I know a lot of other experts in other very narrow niches. I think that’s something that’s the most important. Don’t try to be something general. If you’re going to be the next Google, great. Go for it and do it. I think the easiest road to success, and it’s not easy, is focusing on something very narrow and serving it better than anyone else.

Andrew: Okay. If they’ve done nothing before this interview and they like the business that you’ve run and they want to create something similar to you, the very first thing they should do is find that narrow, narrow niche, blog about it, and then the next thing, if they’ve already done that, is add some kind of community portion to that. That could be vBulletin Board. That could be if they’re on Drupal, start using the community features that are within Drupal. Tons of different ways of keeping people in a conversation. You should start that next. True?

Patrick: Exactly.

Andrew: Last piece of advice is go check out WallStreetOasis.com, the website that we talked about. That’s WallStreetOasis.com. Click around. Check out the guides that he has to offer. Check out how he’s doing business. See what you think of the blog posts. Join the conversation too so you really get a sense of what the guy’s working on. I don’t think that me sending my audience to you is going to triple your audience. It’s not about getting you more hits, it’s about getting my audience more informed. They should go over to WallStreetOasis.com and participate just so they can really learn from you. Thanks for doing the interview.

Patrick: I appreciate it, Andrew. Thanks for having me on.

Andrew: All right. You bet. Thank you all for watching.

Patrick: Take care. Thanks.

Andrew: Bye.

This transcript brought to you by www.Speechpad.com.

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.