Andrew: Before we get started, this interview is sponsored by Fast Customer. If you ever have to make a phone call, say, to your bank, but don’t want to wait on hold for half and hour for until a real person gets on the phone. With Fast Customer, you just do what I do. It’s right here on my iPhone and I’ve had it since it launched. You just type in the person you want to reach. In my case, I’m going to go Citibank, credit card, support. They will call them. They will get a person on the phone. And then they will connect me. I don’t have to press one or press zero or do any of it or wait on hold. I get to go back to work and they call me when the person is available to talk to me.
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Here’s the program.
Hi, everyone. My name is Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious up-start and the place where I’m so grateful to have this happen. Where successful entrepreneurs come back to share their stories with you so that you can take their ideas and go out there and build your own success story and do what today’s guests are doing, which is pass it forward and teach others. Big question for this interview is, how do you go up against a well-funded competitor and win? Ricardo Poupada is the co-founder of Ask Men. When he launched his business, a competitor raised millions and outspent his business. Today the competitor is gone and Ask Men is the largest lifestyle website for men. In fact, in 2004, the company was sold for $13.5 million to IGN. Ricardo, congratulations on this success story, and I’m sure there have been many proud moments along the way, do you have one or two that you can share with the audience?
Ricardo: There is a pretty long list. What comes to mind first is a story that I was just told last week. I suck in all things British. U.K. culture is something that I’m very attentive to. There is this actor called Vinnie Jones, who was pretty popular a couple years ago. Movies like Snatch and a few others. I had heard from his agent that he had just landed in L.A. recently and he used our website to, sort of, navigate the waters of Los Angeles. Considering that he’s a bit of a cult hero for me, it was a very interesting story. The list of proud moments, especially when you’re creating something where, it’s not just information for guys. We really do have this motto to helping guys become better in all aspects of their lives. I remember a story a couple of years ago when we were just starting. Technical problems were occurring, let’s say, much more often. I got an email on a Saturday morning around 12:00, I’d gone out the night before, there was a problem with the website. We weren’t paying attention, because chances are we had a pretty successful Friday night.
When we came in the office in the morning, we got this email from this village in India. Who told us, is something wrong with your website? There was a dot com at the time and they were afraid that we had lost our funding or gone out of business. They said that the entire village gathered around every Saturday, because there was only one computer, and they would look at the Ask Men articles that would come out. You would have one person would print out the articles and read it to the rest of the town, I guess, in a town square type of setting. The fact that the site wasn’t updated, it was the articles from the previous day, caused a lot of concern. To get an email like that from halfway across the world with folks you’re never likely to interact with again and to tell them that you’re having an impact on what they’re doing and their lives are at a stand still because of us not publishing was one of those first initial proud moments I think.
Andrew: I can imagine. I remember when I interviewed the founder of Fresh Books, Mike. Mike said to me, “before we had money coming in and before we had a profit, when we were looking to see whether this was a good idea or not, when we were looking for encouragement, it would be in the inbox that we would get it. People would use our software and tell us how they used it we would feel like yes we are having some kind of impact and it keeps you going until you have more traffic, more money, more other things.”
Ricardo: The thing with us is that, because we’ve been around now for 11 years, there are actually readers who have grown up with the site. One email in particular that I actually use when I go to meetings to illustrate the why of Ask Men is this user who started going to the site when he was in college.
He literally took us through his life stages. He said, “I came to your site and you gave me advice on how to fit in in college, then how to get my first job, and how to ace my job interview, and then how to approach my what then was a girlfriend and now is my wife, and how to be a good father,” and then whatever the next step in his life is.
The fact that we’re able to change people’s lives over a course of these past couple years is, at the end of the day, honestly I think in any business you could be successful and in any business you can certainly generate revenue or profit, but when you’re actually having that kind of impact, proudest moment for me at least.
Andrew: I talked about the size of the sale, let’s talk just a little bit about how big the business is now and then we’ll go back in time and figure out how you got here so that my audience can learn from your experience. What my researcher was able to tell me was the unique visitors for 2009, which is a little outdated, what is the most current unique numbers that you can share with us?
Ricardo: We actually have it right up on the board there so that every time somebody comes into our conference room we’re always reminded of how many people we’re serving. We just had a record month in August just short of 18 million uniques worldwide.
Andrew: 18 million uniques in one month?
Ricardo: Yes. That was our number in August. Or just shy of it, I’m reminded we were a couple thousand short of that number. The majority of the traffic is obviously coming from the US, but we actually publish in five countries. We have our US flagship site, we have a site in Canada, so a lot of the hockey content that we publish will probably bubble up there a little bit more than it will in the US, we have a UK site, Australia, and believe it or not, Turkey.
Andrew: Turkey?
Ricardo: Turkey. That one is a partnership with Mynet, which is one of the largest portals in Turkey where it’s a licensing deal that we have in place, but certainly it still makes me chuckle every time I go to the site and I see our site unfortunately in a language I can’t read right now.
Andrew: I wrote down a note as you were saying that to talk to you about partnerships. Is that one of the ways that you grow and get traffic? I want to hear about that. Let’s go back in time to when you launched. You’re one of the early dotcoms, where did the original idea come from?
Ricardo: It’s a story that I’ve told quite a few times. I think my employees are certainly tired of hearing it. It originated when I was finishing college in 1999 and I had been on the web since 1995 or so looking at ways to transmit information. There was a million and one directions you could go into that that point, especially in 1999.
I was in a coffee shop with a friend of mine and we were trying to figure out our next move when this gentleman walked in and he was wearing this beautiful suit and it seemed like he was on a date. We noticed him because he was wearing a fitted, tailored suit with nice shoes, and we just sort of were looking at his game, so to speak.
He bought his croissant, or whatever he bought because it was in Montreal so things have to be in French, obviously. He sat at a table next to us and when he crossed his legs, he had white gym socks on. We knew that as soon as the woman he was sitting with saw the white socks with this fancy suit, that he was dead in the water. Sure enough, she looked over, horror face look, and this epiphany came like, how do guys, and even the smartest guys, because obviously this was a young professional who had to be relatively successful to afford the threads that he was wearing, and yet, such a simple mistake. So many guys make similar mistakes, not just on the fashion side, but in all aspects of the life. Why not create a site that tells guys the simple things they already know. Sometimes when it’s on paper it adds a different kind of credibility.
From there I applied the marketing strategies that I had learned from 1995 on. Again, to go back in time, in 1999 Yahoo and Yahoo’s search listing was alphabetical. If you wanted to be listed high up on Yahoo, you had to have a name that started with an ‘A.’ I literally took a dictionary at the time and I went through the dictionary looking for words that started with ‘A.’ I knew that it had to have ‘men’ in it so it would sort of be self-explanatory when someone landed on the site for the first time.
I got to one word and it was taken, and finally I got to ‘ask,’ and I was like ‘well, Ask Men, it’s six letters, it’s relatively short, and the genesis of the site will be guy asks you a question and we’ll answer it.’ Even though we were relatively young and inexperienced, I think every 23 year old sort of figures that they know everything and that was the idea my partner and I had at the time, and the site launched.
Andrew: I like when sites and people tell me things as clearly as, ‘don’t wear white socks.’ It bothers me when they say, ‘just be yourself.’ Be myself? When I’m in the store I don’t know what to get. ‘Be myself’ might be sweatpants and a t-shirt, or shorts and a t-shirt, or flip flops that look kind of weird and ratty.
I want specifics. I get where this is coming from and I get the appeal of it. What’s the next thing that you do? You have the name, it’s time to launch, what do you do?
Ricardo: One of the things at the time that really inspired me was that I was a huge Apple fanatic. 1999 was probably the worse shape the company had ever been in.
Andrew: 1999? The company was in the worst shape?
Ricardo: Apple.
Andrew: Oh, Apple. OK. Right. I thought all of a sudden you had launched the company and it was in terrible shape.
Ricardo: No. No.
Andrew: OK. So Apple, yes was in bad shape.
Ricardo: That’s another question we should talk about because it was incredible how quickly we became successful, and especially how profitable we became successful during those times and I’ll explain why in a second. In 1999, Apple was in really bad shape, this was either when Steve Jobs just came on board, or maybe he came on board at the tail end of 1998.
I was fascinated with what happened to this great company because I had an Apple and everything I learned about computers I learned through my Macintosh. There was a book that came out at the time called, “Why CEOs Fail,” or something of that nature.
It was six stories of six great companies that had great products, great brands and failed, including the reign of Gil Amelio at Apple right before Steve Jobs came on board. There was a common theme through these six stories. They just failed to execute. From the get go I was just absolutely hell bent on execution.
We knew, and there was another interview I remember reading with Jeff Bezos at the time who said, ‘work fast and fix small mistakes later. The greatest mistake you can make on the web is working too slow.’ Those two things kept ringing in my head. No matter what we did, no matter what the idea was, I just knew that we had to move very quickly. I think that it’s something that is back in vogue again with the lean start-up concept becoming popular again.
When we started we didn’t really have a concept of what the web was. My background was on the finance side. I think the fact that I didn’t come from a publishing background was something that helped me because my approach was very ROI centric. When we built our initial business plan, I looked at how much money we needed to sort of survive for two years.
If we were able to survive for two years and get some traction in the meantime, I knew that we could potentially have a business on our hands. Being so ROI driven, you’re also looking at expenses and costs from a very different perspective. Once we launched and got our initial funding, which was probably at the tail end of 1999, we officially moved into our offices in January 1st of 2000.
I said, “We’ve got two years to do this before we actually have to get a real job.” Thirteen months later, we were profitable. I remember my first reaction when I got the financial statements was, ‘how is this possible?’ By the end of year two or probably year three, we were doing seven figures, which not only was unheard of on the web, it wasn’t even cool. It was better for you to be losing money because then you could actually calculate a p ratio against your business. For the longest time with the exception of maybe one month, we had a winning streak in terms of profitable months for nine years straight. That really was a result of us looking at the business as being very ROI driven, hiring people that believed in our why, believed in what we were trying to do.
If we were ultimately trying to be the biggest and baddest starting the next Yahoo at the time, or today it would probably be Facebook or Zynga. At the time, being the next Yahoo was sort of an impossible dream, so let’s be a little bit more realistic. I think the huge advantage that we had in the men’s space was that all of the established brands, the GQ’s and the Maxims of the world, definitely saw the web as an enemy.
They saw it as cannibalizing your sales. For me this was a golden opportunity. I remember a turning point in 2002 as we kept building the business and we were relatively SCO savvy, which was something we always have in the back of our mind even today in many ways, so by March of 2002 we were the largest site in our space in terms of monthly uniques comparing to the Maxim, Men’s Health, and GQ’s of the world.
I remember reading a story that the publisher of Maxim wrote saying that the web is dead. This was in 2002, and they said this was a good thing so we could focus back on the things that are important which are print. When I read that I said, ‘we won.’ That attitude was similar to a lot of the attitudes of the print publishers.
Even though they had great magazines, and I was a fan and inspired in many ways by GQ and Esquire, I knew that their focus was going to be back on their core businesses and they didn’t recognize the shifting online that was occurring. Certainly during 2002-2005, while our competitors, and we had very few competitors enter the space, it was our opportunity to put the building blocks to launch the company.
Andrew: Let me unpack what you’ve said. I want to talk about how much you raised, if you’re going to launch quickly what you launched quickly with, how you got anyone to come and view the website, and then of course I wrote a big note here to come back and ask how you were profitable so quickly. First, you raised, do I understand this right? Half a million dollars from venture capital?
Ricardo: Half a million from angel investors.
Andrew: From angels, OK. And that was all it took to launch the business?
Ricardo: That was all it took and we actually only used half of that before we became profitable.
Andrew: And never raised again?
Ricardo: Never raised again.
Andrew: So where did the money go? What were you going to do with it?
Ricardo: The initial money we did look, and I actually wasted I think a good six to eight months looking for additional funding because that was the thing to do. I remember putting plans together saying, ‘well you have to raise 10 million now.’ What am I going to do with this money? Things were still rolling, so I had to invent these plans where we had nationwide sales forces and take out our ad in Times Square etc.
In fact, that kind of thinking was exactly what our well funded competitor, which…
Andrew: I’ll bring that up in a little bit. I want to talk about them too. That’s the kind of thinking they had, and you didn’t.
Ricardo: We didn’t. Which is why they went bankrupt after 10 months and we kept going.
Andrew: So what did you do with the quarter million that you did use?
Ricardo: Well most of it was focused on just having a core team in place. If I look back at the average age of our initial five employees I think it was 22. We probably spent very smartly on online marketing.
My notion at the time, and it’s still the case today is that offline branding comes to internet companies is practically useless because the step it takes for you to have brand retention, get online, you don’t have to dial the modem anymore, back then you did, then remember it, then type in, it just wasn’t worth it. I think we had a lot of very effective CPC buys early on. We certainly had to invest a little bit on the technical side. I honestly think the vast majority of the money was either focused on rent or employee salaries and that was it.
Andrew: Rent, employee salaries, and then a little bit of marketing, and I’ll ask about the marketing in a moment. You’ve got the money. It’s time to launch the site. What was on the first version of the site that you launched back in the year 2000.
Ricardo: It was actually in 1999. We have it up here on the wall, sort of on our wall of honor.
Andrew: You have the first version of the site up on the wall?
Ricardo: Yes.
Andrew: OK. What was on that?
Ricardo: Not that different than what you see today on the site and I think that’s part of the reason we’re still around. We’re very consistent with our message of trying to help guys. If I look at the content from the page, easily, obviously with some exceptions, maybe Carmen Electra isn’t as popular as she was back then so she would be replaced by whoever the cultural equivalent is today. Otherwise, every single article that I see on that page is just as relevant today, or with minor tweaks, could be just as timely as it was back in 1999.
Andrew: So it was essentially blog posts or article about how you shouldn’t wear white socks with suits, about answers to common questions and issues that men have, and photos of women that they’d like to look at and get to know.
Ricardo: Exactly. And, any advice on your careers, and travel pieces. Essentially, very, very similar to the structure that we have today. Obviously, a very different look. I thought at the time I was a great graphic designer and I’d designed a beautiful site and now it’s a great internal joke. Certainly, at the time it looked OK.
Andrew: All right. So, you’ve got this great site. The articles are timeless and the format is one that has legs, obviously. How do you get people to come to it?
Ricardo: Well, what was amazing about those days was that SEO in general was something that people didn’t understand. In fact, there was eight or nine search engines. I remember when we started printing out the SOP for how to optimize for all of these search engines. The thinking, at the time was very simple. You can optimize a site, and that’s going to get you so far, you’re going to have a person coming in. You obviously have to create great content to get them to come back on a regular basis. And I looked at the model of magazines and I said to myself, what are the magazines I’m most likely going to purchase? A lot of it has to just do with distribution. It’s still, again, a common issue today where if a magazine was on a newsstand and I see it in enough places, maybe it’ll trigger me to buy. If you have limited distribution for your magazine you’re not going to buy it anywhere because you couldn’t find.
So, for us the thinking was if you had a million websites out there and each one had a link going back to AskMen, with a compelling reason why they should link back, then all it took is each one of these websites clicking and getting one user to come back and we had a million uniques a day. That was really the premise of what is now sort of common, the link-exchange world that exists especially amongst entertainment blogs, was something that just didn’t exist at the time. In fact, we were one of the first that was very aggressive in exchanging content, exchanging links where it was relevant and so from that base you’re able to have a constant [share] of new users.
The second phase of that was really to create an environment where users felt that we had compelling enough content that they should be coming back every single day. We had these visual cues. I laugh at it today, but back then something as simple as ‘make use your home page,’ there were businesses that were built, AOL and a Canada company that was called Sympatico that was owned Bell Canada, literally built their businesses because people weren’t smart enough to change their home page. I figured that once we got locked in into as many users as possible, as soon as you load up the page, you have no choice but obviously to come to AskMen. So, there was all kinds of visual cues to get our audience engaged long before there was the share buttons of today and certainly not the commenting systems, the sophisticated ones…
Andrew: So you had a button that essentially said, ‘click here to make us your home page’ and as soon as users clicked it their browsers said, ‘do you really want to make this your home?’, they said yes, boom, you’re the home page, and now you’ve got them and its sticky. What else did you do that was sticky?
Ricardo: We also applied the same thing for bookmarks. I think what we were able to do at the time, that today is sort of par for the course, is create relevancy on a page. At the time, with our very primitive tools, it wasn’t a sophisticated algorithm. It really was part of our SOP. When an editor would publish an article, to make sure that we had content as relevant as possible to the subject at hand. So, somebody was searching for let’s say, how to tie a tie, and they landed on our site, our mission was to supply every thing that we had in terms of, not just how to tie a tie, but tie fashions or accessories that you should utilize, etc, etc. And that created an experience that you just didn’t get from a magazine. You have to think about when you got a magazine you had one story or maybe you had a sidebar and it did one thing and that was it. To have our wealth content, especially related content, available to users and create what, at the time was, a male equivalent of Wikipedia which sort of veered off from our initial goal of creating this very basic text-rich site was something that was new. And I think that went a long way to having our users see us as a resource and ultimately evangelizing on our behalf.
Andrew: I see. Alright, I get that. That was a tough concept for people to get, that if people are reading one article and there’s another one that they might want to be able to hook them in and get them to see the other articles and click over.
Ricardo: It’s seems so natural today, but it did not exist back then.
Andrew: I’m hesitating because, you know what, frankly I should be doing it even on my site, and I’m not doing that and that’s how common it should be and isn’t, or that’s how common sense isn’t being used enough even by me. What about, let’s go back to what you said earlier about getting the user on the site in the first place. You were asking other sites to give you links, the idea was that you were going to get two benefits. One is that some of those websites users are going to click over to your site and the other is that you’re sending messages to search engines, Google specifically at the time, that this is the site that the other sites trust and are pointing to. How do you get a million people to point to you? How do you get even a thousand people to point to a new site?
Ricardo: I mean, it was actually a third benefit, which was branding. That minute that you have your name on some other website is building brand equity which is something that we always have in the back of our minds. I think that the key, at the time, to get this kind of distribution is to create content that people wanted to link to. So, we were very savvy and sometimes even crafting contact that we knew was going to get picked up by other sites. We had a very similar philosophy, it makes me laugh today that a lot of the theories that worked back then are sort of coming back in vogue again, and if you’re able to build a sports article that focuses on the six best ways for you to get in shape if you have no time, well those are the kind of articles that sports sites, blogs didn’t really exist back then or anything to do with fitness, would sort of pick up because it complimented the content they had on their site. Even if they didn’t republish the entire article, they could certainly put the link, saying additional information go to AskMen and we would sort of return the favor. So, it was a way for you to circulate and traffic a lot more smartly then, let’s say.
Andrew: How could you return the favor to so many sites, where would you link back to them?
Ricardo: At the end of our article, we actually built on our pages, sections where we had relevant content across the web. You know, when you do a profile let’s say on Richard Branson, that was really easy because you would have a profile on Richard Branson and if there were sites that had either case studies on how he became successful. Or let me use another example, if you had a profile page on Tom Cruise, and there were Tom Cruise fan sites, we could go to those Tom Cruise fan sites and say, “Well, look at what we just published, we published a profile and a commentary on his career and there is enough content here that it makes it worthwhile for users, so link back to us and we’ll return the favor”. I mean these are really crude, basic online marketing 101 tactics, but frankly, it worked, because across the board, and certainly we also encouraged other sites to link back to us because we knew that if they’d link back we were building our link equity with Google and any other search engine. So, we said if we’re successful in all other efforts, especially branding efforts, people will come to the site on their own, if not, we have to have a plan B. Plan B really was the essentials of online marketing. We are still doing that.
Andrew: Where other sites might just publish a Tom Cruise post and say this is fantastic, people need to read this. You would do that and that would be when the marketing would begin. You’d go to Tom Cruise websites, fan sites and you’d say, “You should point to us”. That’s a lot of work, especially for a start-up. How do you get, how do you do that in a big way without stretching your resources beyond where it’s capable of going?
Ricardo: The thing that, one of the greatest things that I learned and I encourage young entrepreneurs, is actually to work in dysfunctional environments because when you work at a company, and I actually had an experience prior to starting AskMen, where I worked at a company for six years that had some management failures. I think that having gone there I realize the things that I needed to do, if I ever started my own company, things that I needed to do well. Sometimes when you work at a great company, you might take for granted the things that they do well because you just assume that that’s the way of the world. I think, one of the things that I learned is that being efficient, in terms of your process, being efficient in creating you know, SOP’s, standard operating procedures, for everything you do is essential for really getting the highest return on your work day. It’s not that we want to be factory like in our approach but when somebody’s sitting down and you’re thinking about this linking scheme, they should be informing our editorial team on where they could potentially get the most traction.
So, if you’re going to write about a very obscure type of article, that you know, we didn’t lead with this linking strategy but certainly the kind of feedback that we could get from our marketing team definitely helped us craft the kind of article that we built. And so, if you are able to kind of tie the two together, you’re not wasting time writing articles that no one’s going to pick up and at the same time the marketing team has content with enough substance that they know it’s a lot easier to get traction on other websites. Through that, obviously, in doing it through many, many years almost every single day, our on-line marketing team, which at the time was my little brother, got very good at doing things on the fly quickly and efficiently.
Andrew: You mentioned standard operating procedures and the need to organize and systemize, I’ve been so fascinated by that. How did you systemize early on to enable your people and the company as a whole to get more done in a more predictable way?
Ricardo: I actually had a system that I’m looking at re-implementing in the company today, where I felt that there was a certain sense of accountability that we needed in our company and a certain urgency and speed, whether it’s manufactured urgency, a market’s telling you to move fast or something that you feel that you need to move fast on because things are changing so quickly and you have to keep up. I actually created this chart, this board with my name and the other top managers and the days of the week and every single day, at the start of the day, we would write the big tasks that we wanted to accomplishment, not necessarily the long term strategic goals, because ultimately that’s baked into what you’re doing day-to-day.
It was a way, for both myself and the rest of the team, to really stay on top of what we should be working, getting daily updates, making sure that whatever we tackle, especially because we were such a small team. I mean for the first five years, we were maybe nine employees until the fifth year, maybe we grew to twelve when we got acquired we were twelve. So, when your just nine people for the majority of your early history, you have to be extremely smart and efficient in what you’re doing. It forced both myself and the managers, through this board system, to have this daily accountability and a daily need to be efficient, to create these SOP’s, to sort of make sure that we were moving forward as quickly as we needed to.
Andrew: So what, for example, would be on the board?
Ricardo: So, on the board it could be some project that say on the sales side, a couple of key clients that we needed to hit up. On the editorial side, looking at an editorial calendar, dealing with the daily publishing schedule that we had. On the marketing side, or the business partners, we should be reaching out to, was there, at the time, let’s say an e-commerce play that we should investigate? So, it’s insuring that we have this sort of very fat pipeline and then it’s also a great way for us to sort of weed out the things that weren’t important. On a daily basis I was very in tune into what everyone was working on, because I didn’t want to waste time during the day going through a variety of meetings. I had a morning meeting, I knew where we stood, let’s just get back to work and do what we need to do.
Andrew: I see. So, if someone’s listening to us and wants to implement one of the ideas that you had, say for example, the request for links every time they do a new post. You’d have, they should have it up on a board somewhere that someone in marketing needs to go and follow-up with say ten websites, or contact ten websites and say, ‘This post is going up, do you want to link to it, and we’ll of course link back to you?”, or that kind of accountability is what you’re talking about.
Ricardo: Absolutely, so the next day, whether it’s myself or the manager, can look and say, well this was up on the board, did we get it done? And if we didn’t get it done and there was a roadblock, let’s look at what that roadblock was.
Andrew: I see, why aren’t you able to contact ten people and if you can’t contact ten people let’s give you a better system for doing it or maybe we should reduce it to nine, or get rid of some other.
Ricardo: Exactly, visualizing the goals I think is very important and here were, certainly in the last couple of years, let’s say how important building your social graph is and so if it is something, that to us is very critical and we’re always looking for way to expand our base on whatever, Twitter, Facebook, Foursquare, wherever. It was something that had to be front and center for the rest of the staff, so in this room, this is our main conference room, up on the board I have like almost a real time count of where we stand in terms of YouTube fans, Foursquare, Twitter. I’m looking at everything right now and so it’s the constant reminder that these are part of our strategic goals and so if you have those visual cues throughout the company it’s easy for you, as you pass by them any given day, to say, “I did have an idea for Facebook, maybe I should mention it to somebody in marketing, let me go over to his desk.”
That’s the culture we try to foster. Scratch your own itch. If you have a good idea, you are always going to ultimately have the responsibility to lead and see it through. We gave everyone a huge platform to pursue the good ideas that they were passionate about. In fact, one of the things that I, also, learned very early on, is you have to put people in their position of strength. When you hire an initial team, when you’re a start-up, you’re going to hire and you’re obviously going to be wearing many, many hats. Over time, hopefully very quickly, you would get to recognize that some people are more passionate about one aspect then the other. Putting those people in those positions where they could fully exploit their passion is something that I see a lot of start-ups not doing right. Sometimes a little bit more regimented then you need it to. If somebody has an idea and let’s say, in our case, they’re on the editorial side and yet it’s a marketing initiative, he’s thinking about it. He’s in the shower every day saying, “We should do this.” So put him in a position where he could actually exploit it.
Andrew: There are a couple of things here that are still hanging over this interview that I’ve got to get to, because I’ve promised the audience, including the big competitor and partnerships. Let’s talk, now, about profitability. I understand how you got the content. I understand how you got the audience. Now, where do you get the revenue and the profits?
Ricardo: Well, the revenue, initially, a lot of it came from eCommerce. Whether it was affiliate programs, site advertising was important. Not as important as it is today. Our profitability didn’t necessarily come from revenues as much as it did from us controlling our costs. It goes back to that whole ROI mentality that we had from the get-go. What I encourage young start-ups that I speak to today, is that you should have a two-year plan, your plan B.
You always should dream big. You should always have, in the back of your mind, this scenario where, if you won the lottery in terms of funding, what you should do with those funds. If you don’t and you have to boot-strap it, you should also have a very short term plan or a worse-case scenario plan. To survive long enough to see your product get traction. We had that in place. Because our competitors were so well funded, taking out the ads in Times Square that we couldn’t compete to, it made us boot-strap even more. Because we knew we couldn’t compete, so let’s just stick to what we know. That helped us get to profitability a lot quicker then a lot of people around us did.
Andrew: What kind of affiliate programs were you a part of?
Ricardo: You’re taking me way back, Andrew.
Andrew: Was there a special way that you did it? Because affiliate programs were available to everyone. Most people just, nothing happened from them. The affiliate program that they signed up for was just a last-ditch effort to find advertising revenue, because they really couldn’t sell ads on their own. But you guys apparently made it work so well that you could get to profitability within months, within just about a year.
Ricardo: It was the message around it.
Andrew: Tell me about that, what did you do?
Ricardo: Well, it’s a similar model to what Groupon is using today. If you put the product in the context of it being interesting or being part of an experience . . .
Andrew: How?
Ricardo: How?
Andrew: Yeah. What, specifically, would you do? Would you do a whole post on a specific product that you are about to sell? Would you try to introduce the product as part of a story? Like, if you talked about Tom Cruise, would you send people to, what was that website that was big back then, art.com, where they could get their own poster or poster.com?
Ricardo: Exactly, the poster, you could get the DVD. Honestly, that wasn’t as effective of us writing an article that said, “the top ten gadgets you’ve never heard of.” It could be that not every item on that list. We did have an affiliate program. For the ones that we did, we would try to link up to. But there were a lot of times where we just built content because we thought it was great content. If there was a product link, which is something that, originally, we were very hesitant to do.
Let me give you an example. We might have written an article on the ideal perfumes for summer. We would talk about how you should buy a perfume that’s breezy and smells like the ocean. You’re sitting there saying, “What the hell is that?” We get emails from users saying, tell me which perfume I should buy, because I don’t have time to waste investigating what smells like ocean. So we quickly learned that it’s not just something that we could benefit on the revenue side, but was actually a service that our users were asking for. It was something that we focused a lot more in the beginning, where we had product intensive content.
Over time, as advertising took over, on an ROI basis, certainly advertising is in many ways a lot more profitable, we geared off writing that type of content. What’s interesting for me today is that everything is back again. We see the daily deals sites. We see the success that companies like GroupCommerce are getting and some of our competitors, as a result combining content with ecomm, and certainly an area that we’re exploring now. Again in any business cycle you always have these circles, and certainly I think we’re in a phase right now where a lot of the tendencies and trends started in 1999 or 2000, where for a variety of reasons companies didn’t have the technology or traction that they do today are coming back in vogue and being applied.
Andrew: I almost think that it makes sense to go back and get those old business 2.0 magazines and red herring and see all the ideas that people came up with back then and relaunch them today with the tools and resources that we have with the ability to software quickly, with the crowd sourcing approach to getting content and other things up and with the cheap bandwidth.
Essentially, it feels like Groupon did that. They didn’t go back and steal the idea from Mercato or I forget what it was…
Ricardo: If I was [??] I would dust off all those old business plans from that time period because [??] in there.
Andrew: A lot of things are really possible. Andrew Mason told me he went back and he studied those old business models before he launched Groupon. All right. I got a sense of profitability, is there any other element of revenue that I missed? Were you guys selling anything directly to users? Were you also getting significant revenue from advertising?
Ricardo: The advertising revenue did come. We had certain things that we sold directly to users. We would have a fitness plan, very similar to the Men’s Health model, except our fitness plans were all online. We would take experts, whether it was on fitness or dating or travel side, and we’d have these experts write on the site. Ultimately, if the user was really interested in the content and gave enough weight to the credibility of the author, they wanted to find out more.
They eventually would follow that author onto their own sites. Through the author’s own sites we would also make a percentage of their sales. It wasn’t sexy ways of generating revenue. Certainly not as sexy as when you’re able to get in front of an agency and start pitching the big execution and big ad ideas. Certainly during those early days it got the job done for us and got us to profitability.
Andrew: I’ve got to tell you with my audience, this stuff is sexy. That is the difference between an audience of real entrepreneurs and business people, and wantrepreneurs. The wantrepreneurs have no interest in the details. The real entrepreneurs are like, ‘interesting idea.’
Ricardo: Right.
Andrew: When you say that you created fitness programs, what physically did they look like? A series of web pages that walk people through exercise regiments? Are they calculators where you…what was it?
Ricardo: All of the above. You either had a page that had instead of video you might have had animations on how to do certain exercises. You were able to enter all your critical data and it would calculate your BMI or you would track your weight programs where you would go online and it would give you charts and graphs. Things that today are available through apps.
Apps didn’t exist at the time. This is what we had at the time. For a lot of men all of these betterment and lifestyle tools were all very early. They certainly didn’t exist in the 90’s, so I think there was a general excitement on purchasing and applying these lifestyle products whether it was fitness, career oriented content, or even dating content.
It makes me laugh every time I speak to certain CEOs where we will talk big picture we’ll talk strategy, but when the subject of dating comes up everyone’s eyes just light up. Obviously, there’s a chord that we hit with our dating content that was almost nonexistent to guys online that certainly helped us during those early days.
We’ve obviously diversified and created all sorts of different content today, and one thing I had forgotten to mention at the beginning is our focus on local content and our big push on the newsletter side two years ago. It’s not the main focus of the company, but something for us that was absolutely critical because not only were guys getting advice from us, but we’re able with local content telling them what was happening down the street.
That creates a very different relationship than the relationship we had with our users during our first couple of years.
Andrew: How significant was the revenue that came in from the fitness and other lifestyle products that you guys created?
Ricardo: Significant is all relative. At the time it might have added up to 50% of revenue.
Andrew: 50% of revenue is coming from your own products?
Ricardo: Through year one or two, and then over time that number obviously dwindled down. It seemed when we got acquired, it might have been maybe 10% of our revenue, 15%.
Andrew: I remember in the early days, or back then…we’re talking about after-[??]
Ricardo: We’re dating ourselves, Andrew.
Andrew: Sorry?
Ricardo: We’re dating ourselves.
Andrew: Well, I think it’s important to talk about, but I see what you mean. But I do remember being there when the dotcom bubble burst, and I remember talk to one of the board members of Ziff Davis just to get advice from him on what he thought I should do, and he said, “You know, back in the early days of MTV, MTV tried selling their own stuff…you content websites need to start selling your own things. There’s no better revenue source than that, especially in a market where advertisers are drying up.” And for some foolish reason at the time, I said to myself, “He is just blowing my off because he’s afraid that I’m going to sell him advertising,” instead of internalizing it and saying, “What do we do.” I could see that you actually followed that direction and it worked for you.
Alright, so now I see how you got profits. The competitor: we kept alluding to a competitor. How much money did the competitor raise?
Ricardo: They raised $17 million and set up shop roughly in the area of 2000 and went out of business in November of 2000, so they lasted all of 10 months with those $17 million.
Andrew: $17 million over 10 months – we’re talking about a website called TheMan.com.
Ricardo: That’s right.
Andrew: When they raise that money – I mean, you obviously won and it’s easy in hindsight to call out all of the faults that they had and I could see them here in my research, but when it’s going on, how are you feeling when a competitor has got so much firepower behind them?
Ricardo: It was frankly very scary and on top of their funding, they were the cover story on Time magazine. So we certainly felt that they had a lot of momentum behind them, but it actually led to our first big break. I don’t necessarily believe in luck, but I think that if you set yourself up right, when it finds you, certainly you’ll know what to do with it, and I think this was the case with us because TheMan.com at the time had a relationship that they were building with MSN, and MSN – again, dating ourselves – MSN and Yahoo! and AOL were the three big sites during the ’99-2000 period.
And they had a deal in place with MSN where they were going to pay a sliding fee to anchor one of their channels and once they went out of business, MSN still had the infrastructure and they had the channel and maybe even had advertising commitments to fulfill – they were sort of left saying, “What do we do next?” What I found out later going through the research, talking to different people in the company, they said, “Well, there’s this great site called ‘AskMen.” Why don’t you ring him up and see if they’re interested in taking TheMan.com’s space?” We certainly didn’t write the $3 million check that TheMan.com, like I alluded to before – you know, how much money we spent, or how much money we received in funding – but that was sort of like one of the turning points and it also illustrated how our competitor was thinking.
They really were going for broke, probably pressured by VCs which is why a lot of the advice that I’m starting to get today is don’t ask for too much funding, just ask what you need just to get the product off the ground, because inevitably there is pressure on you the minute you have either large funding or even depending on who the investor is, to just get the market, think big, spend quickly, because you expect revenues to sort of follow suit very quickly as well.
Andrew: I remember feeling very resentful that competitors were raising so much money that, “Why do they get all this money? Why am I not part of this party that’s going on?” And part of it was I didn’t know how to break in, part of it was they were going in the wrong direction and I wasn’t willing to do it, but I felt that. Did you feel any of that?
Ricardo: You know, of course. You know, I think that…during that time you were seeing dotcoms – I think it was the magazine that you get on airplanes announced that they were launching a website and their market cap went up by a million. You’re sitting there saying, “Geez, how do we do that? How do we get our valuation to just increase overnight?” And I think it’s sort of easy to fall into the trap. I think one of the things that we did – we’re also a little bit isolated.
The fact that the company was founded in Montreal, even though now we have a global footprint, definitely helped us because I think that if I was caught up in the startup world, either in San Francisco or New York, I probably would have made very different decisions. Instead of just putting our head down and saying let’s just put the building blocks to create a great content company. Because we felt that it was going to take a bit of a time, that it was no way that we could accomplish what we wanted to in such short period of time. That I’m sure competitors like TheMan.com, they certainly felt the need, that if they didn’t have traction within a year, they were going to go out of business. Why else would you take out the three million dollars ad at Times Square?
Andrew: And that was just 3 million dollars billboard that they had at Times Square. One of the reasons why they went out of business.
Ricardo: It was expensive.
Andrew: In 2004, you sold to IGN for 13.5 million, according to my research.
Actually why did you sell? And then I’ll ask how life changed afterwards.
Ricardo: Well, we actually sold in 2005.
Andrew: What’s going on with my research here today, I’ve got to talk to Ari about this. I got the date wrong for when you launched, now I’ve got the date wrong for that. Thankfully I’ve got the amount right. So you sold, why?
Ricardo: So, the thing that in 2005, the media landscape was changing, I mean, content was starting to become king again. I think that during the 2002 to 2004 period, anything web related was toxic and we certainly, like I mentioned before, used that to build the company.
In 2005, the landscape was starting to get scary, for the simple reason, that everybody was partnering up, with acquisitions, and I’m looking at, thinking of the contemporaries of our time. It be the college humors and other sites that, we sort of like started up with and saw grow along side us. Everybody was getting gobbled up. And in my case, and I say this with a smile, because, I still think it’s one of the greatest things that Mark Jung, was the founder and president of IGN said. Because he came into my boardroom and he looked around and he saw these twelve men operation and he saw our profit line and he saw our market size.
At the time we had 6 to 8 million uniques. And he’s saying to himself, ‘How are these guys pulling this off?’, and at the same time as impressed as he was, he realized that it was a market that he had to get into. So he set me down and he said, ‘We want to purchase you, we want to purchase you for a lot of money, we haven’t really settle on a price yet, and we love for you to be part of the IGN family, so either you sign, and you get acquired or we’re going to take that same money, and do everything we can to destroy you.’. And he had a big smile on his face at the end of it.
And it was a tough decision. You’re sitting there and you’re saying to yourself, like the media landscape is changing. I certainly wanted to do a lot more with AskMen. I thought that we certainly haven’t run our course. And we had started to look for additional funding, but that for very different reasons. We want to build a presence, a sales force across the US. And we felt that, potentially with the big brother behind us, it was going to be a lot easier.
And another factor that was for me was important, was the fact that our original Angel investors, was so hands off that they never ask me for anything. They never ask for dividend, even though we have been profitable for four years, like I mention, we were doing 7 figures. So it wasn’t as if we didn’t have enough money, to sort of redistribute back, and yet they never asked, and I felt that it was part of my responsibility, and I owe it to them. The faith that they had in us, to sort of give something back.
And so, those are probably the two main factors. And a threat always goes a long way, right?
Andrew: I’m thinking of the Godfather, what was it, ‘Your signature or your brains are going to be on this piece of paper’. So how did your life, personally, apart from work, how did it change, after you sold?
Ricardo: I mean, I think from a personal perspective, it didn’t change that much. A lot of young entrepreneurs might go through a phase of, especially when you sell your company, you will have your crazy, call it the 3 to 12 months phase. Where you buying the Ferrari , and you’re traveling the world, and spending a lot more than you should.
I didn’t necessarily go through that phase. Because we were so busy, and we were still growing so much. I think it was really important to the IGN team at the time, to keep both myself and my partners on, to keep growing the company. I think from a personal perspective, I think the biggest change for me was the fact that, I didn’t have the pressure of meeting payroll. Even though we were doing well, there was always the fear of, things can turn very quickly. And so my own management style changed. I certainly became willing to take a lot more risks. I certainly start thinking a lot more long term, because the stakes were very different.
Andrew: But, did you do anything for yourself? You were talking about traveling the world, I did that. I wanted to just go and travel, own nothing but experience everything. Did you do anything like that?
Ricardo: In terms of things extravagant enough to put in the rob report, no really because, again, going back to my finance background, I said to myself, ‘If I invest this money well over the next 10 to 20 years, assume that it is not even there, I am going to have a very different amount.’
Andrew: And that is what you did?
Ricardo: That is what I did.
Andrew: From 2005 to now, you just said, ‘I’m investing this money.’ And you did well with it.
Ricardo: Almost all of what I earned got invested.
Andrew: Wow! I’ll give you the last word, but let me acknowledge someone in the audience here. First of all, congratulations. It couldn’t have been a different story. I do not see how you could spend $3 million on an ad in Time Square and end up triumphant, but, it could have been a different story only if you were intimidated by that.
So, let me say this, a Mixergy fan is doing well with his company. He quit his job, this is one of the newer entrepreneurs and I want to acknowledge and congratulate him. He quit his job to focus on a startup, Nathan Gilmore told me by email, here is what he said, ‘Andrew, I signed up for the Premium Level a while ago and I found it to be one of the best investments possible. We quietly launched in November and bootstrapped our way from zero to…’ and he gave me the number, but he said, ‘Andrew, please do not reveal it online.’ So at some point in the future, Nathan, come back and let me say it online, for now, I will tell the audience he is doing very well. I am not talking about as well as [Ask Men], but he is on the way there, he is doing well enough to quit his job.
So congratulations to Nathan. His website is teamgant.com, if you want to go and check it out. Thanks for being a Mixergy Premium Member, Nathan.
As long as I am thanking him, let me thank you for understanding. Guys in the audience, you may not know this but my computer crapped out on me and I called Ricardo and said, ‘Can we please reschedule?’ Man, you were so good to reschedule and to work with me here on this as I found a new system to do it. Thanks for doing that. At that moment you could have just said,
‘Dude, I am huge. I am here to help you with your website and now you are rescheduling on me.’ You were really generous and really considerate, so was your team and I appreciate that. I know in those tough moments are when some people get frustrated, and I really appreciate that you were not.
Ricardo: I appreciate that and I think that would be a great way to end off. I think that the unrelenting customer service hat that we apply to all the partners that we work with, any person that comes our way, even a student that emails us and asks us a question that they need some help on a report, to us, building those relationships are critical. I think part of the reason why we got to where we are today; we had a policy of answering every email that came in, because you just never know. I am glad that you felt it from my staff, that warms the heart.
Andrew: 100%. So if there is an entrepreneur in the audience who wants to learn from you, he says, ‘You know, this is the kind of story that inspires me. This is the kind of approach to business I want to incorporate into my life, into my company.’ Is there a way that they could learn from you? Is there a way they could meet you? Are you speaking somewhere? Are you blogging about this? Is there a way for them to get you as an advisor? What is a way for them to follow up and get more?
Ricardo: They could certainly go to the website and email the marketing department, who can get in touch with me. I spend a lot of my time now, through my duties at I.G.N., overseeing international and overseeing the new acquisition that we had, so I am kind of busy. I know that when I was starting off, I would love to reach out to certain entrepreneurs and C.E.O.’s and get them to respond. I would always say to anyone, try. You would be surprised. I got a request a couple of weeks ago from a student and he wanted me to write an email, and I think he was shocked when I actually called him. He was in class and was not expecting me to call. He said, ‘Oh my God, you’re like a hero of mine. I can’t believe that this is a site I have loved for so many years and you are actually calling me.’
So not only for me, but for everyone else, I have learned this: Just pick up the phone and magic happens.
Andrew: I love that! I hope I have an audience of people who are willing to do that. I hope I have an audience who, at the end of this interview isn’t saying, ‘I spent an hour I could have been spending watching T.V.’ and then move on with their lives. I hope they get on the field with you somehow, and I know that they learned a lot, but I hope that they don’t just sit back and admire you, but do something with it and hopefully connect with you in addition to it.
The website of course, is askmen.com. Ricardo, thank you for doing this interview.
Ricardo: Thank you. I appreciate it.
Andrew: Thank you all for watching. Bye.
