Back in the spring of 2011 I decided to step away from the boutique internet marketing agency that I co-founded, move to Austin, and join the core team of a growing software company named Clarity Ventures to lead its marketing initiatives. That time represented a lot of changes for me professionally, but one of the biggest adjustments I had to make was moving from a book of small business clients to one full of Fortune 500s, funded startups, and prominent mid-sized businesses.

I quickly realized that client relationships as I knew them were going to be much different, and I was playing an entirely different ballgame.

The relationship I was used to involved one person, the small business owner. This person called all the shots and usually “just went with” what was suggested by me, the consultant. I was now a part of a bigger puzzle, and had to learn to navigate executive management and get things done.

This Saturday will mark 2 years for me with Clarity, and I would like to share what I’ve learned about getting executive management approval in order to run successful projects.

The Common Misconception

I hear this common complaint from online marketers when working on a corporate website with many decision makers:

The executives don’t get it, and they won’t allocate the resources I need to get __________ done.

If you’re not getting buy-in, it’s often not because the executive doesn’t get it. It’s often because you have not pitched the right business case. Marketers (especially ones focused online) live in an echo chamber of self-confirmation that doesn’t benefit you in the boardroom with C-levels. They simply have different and more high level priorities than you do.

The classic battle between marketer and CEO is over the ROI of online activities. Before any campaign is approved, it usually needs to go through profitability analysis and a vetting process in order to reduce risk. Now, this becomes hard for the creative marketer that wants to innovate with tactics the company has never pursued. Here is the best way that I’ve found to get creative ideas passed through management without a fatal amount of scrutiny:

Low and High Risk Allocation

Organizing and allocating risk is one of the more important things you can do at the beginning of a planning stage. Not only does it give your tasks a way to be structured and prioritized, but it also shows management that you have their best interests at heart. In many of my discussions with execs, they’ve explained that one of their biggest concerns is bringing their marketing team down out of the clouds and into reality where activities have to play into ROI and CAC figures. In these cases, this ratio is not an add-on to strategy planning. It is how you plan strategy with management.

Low and High Risk Allocation is the act of organizing your projects or tasks into two categories: Low risk strategy and high risk strategy.

Low risk strategy is comprised of tasks that are either proven as “fundamentals” or tasks that have provided some sort of positive ROI for this company in the past. They are most likely to produce stable returns for the company, and fit into “best practices” of online marketing. This includes classic on-site optimization and link building on sites with highly targeted traffic.

High risk strategy is comprised of tasks that have no identifiable ROI before you complete them. Examples include creative content strategy, social outreach, and certain types of link building. In return for the additional risk, these tactics should have the potential to produce outsized returns for the company.

Note: These tasks usually aren’t actually “low risk” or “high risk” in the SEO sense of the phrases, but anything with unidentifiable ROI is high risk to management. This is why I identify them as such.

Companies take risks all the time. It’s a fundamental part of business. Executives aren’t uncooperative on your requests for resources on “high risk” tasks because they are 100% risk averse. They’re uncooperative because it hasn’t been accounted for in an upfront strategy. This is the way I’ve typically been able to solve it with a simple agreement:

The Pareto Principle (law of the vital few) splits “things” into the 80% and the 20%. Under the principle, the 20% of tasks are supposed to provide 80% of the results. I use this principle to define a low-high risk strategy allocation. In my experience you can usually ask for an allocation of 20% of your resources toward high risk strategies, while maintaining their comfortability with the fact that the tried and true methods will still get done and provide stable results. In an ideal world, because of the outsized return potential of your high risk strategies, they will begin to provide the majority of the results.

Here’s the best part: As you start to show positive ROI on high risk strategies (thus, becoming validated or “proven”), you can move them into your low risk bracket and it frees up more room for the unproven tasks you want to pursue. This can be done in a quarterly review, when campaign results are analyzed and can be viewed from a high level.

Establishing Trust With Communication

The easiest way to get things done is to have management trust you. If you can establish trust, the entire project becomes much easier and more strategies will get approved with less scrutiny.

Out of everything you can do to establish this trust, responsiveness is one of the if not the most important aspects to dedicate yourself to. On my projects (especially ones with high frequency communication), I ensure that I have a project manager watching my client messaging like a hawk. If I’m wrapped up, in a meeting, or otherwise unavailable when a client sends an email or Basecamp message, I want them to get a response within 1-2 hours. A PM can pick up slack for you when you’re busy with other clients.

But just as you need to be direct and clear about your own communication, you need to set the expectations about what you need out of them. This isn’t just about outlining their involvement in marketing tasks and what you expect to happen pre, during, and post implementation. It’s also about letting them know what will happen if/when they don’t give you something you need. Give them ultimatums. Executives need to be micromanaged in many cases just because of the sheer amount of items on their to-do lists. I use an example of this below in the email template.

Have a Clear and Consistent Email Template

This is an example of an email template you can use to send approval and/or input requests.

Hi team -

I’m excited about getting started with ___________. It’s really important that we pursue this part of our marketing strategy because ___________. This is part of the strategy we put in place on [date].

(Begin emails with enthusiasm. If you’re not excited, they won’t be either. Then remind them why this thing is important. If you think they need another brief on what the actual task is, give it to them. You can reference the agreed upon high-level strategy as I have done at the end of the paragraph.)

I need your approval and input on the following:

1. Thing 1

2. Thing 2

3. Thing 3

(Be straight and to the point with what you need. Ordered lists work better for me than unordered lists because it looks more like a task list. This matters.)

I’m looking forward to the implementation of these items and once I receive your approval I can get started. If I don’t receive approval by this Friday, we will miss our start deadline and it will negatively affect [insert really important KPI here].

(Be sure to include the consequences of a potential missed reply from them. This is half CYA, and half motivation for them to get back to you ASAP.)

Thanks so much for your attention on this.

Best regards,
Your Awesome Marketer

Boom. You’re done. Keep it simple and you’ll make it simple for them to give you what you need.

Bring in the Top Decision Maker When It’s Important

Anecdote time. Last year I was working with a corporate client and almost exclusively coordinated with the CTO and CMO. This worked well… some of the time. These top managers were always hyped about the things we came up with in brainstorm meetings, but when it came time to execute they fell through the cracks. Eventually, I was able to discern that the managers I communicated with directly still needed to get approval from the CEO to move on marketing ideas.

For this post, I went back through my notes from Q2 and Q3 of 2012 for this particular project. In that time, I brought 7 new initiatives (some big, some small) to the CMO. He told me all 7 were great ideas and that they should be put to use immediately. In the end, only 2 were actually approved and allocated resources. That’s a 29% success rate, even with full backing from my direct contact. When I started to get a handle of what was going on, I decided to bring in the CEO for discussions about 3 more suggestions I had. All 3 were immediately approved and were being executed on next day. A 100% success rate.

So what happened here? It turns out, the managers I was working with weren’t autonomous. In every conversation, the CTO and CMO were on board with my ideas, but had to pass them off with someone else first. As it turns out, I received little pushback from the CEO himself when he was finally involved in the meetings. So, with everyone on board, the 71% difference in approval rate had only to do with the communication between my directs and the autonomous decision maker. Previously, I had no control over this communication, and I paid for it. When I took that control my ideas went undefeated.

Moral of the story: Although you might work with decision makers, autonomy is key. If your directs don’t have it, make sure you have a plan for how to compensate for the gap that’s going to exist between your ideas and their approval.

Conclusions and tl;dr

In the last two years, I’ve learned that there are specific ways in which marketers can improve process and communication with management to ensure a project’s success. However, I’ve also learned that every project is different. As much as we like to assign universal rules to process, variance is inevitable and you need to figure out what works best for you and your clients. With that said, I hope these tips help, and here’s the tl;dr for the lazy:

1. Set expectations for low and high risk activities (they might not actually be “high risk,” but is defined by activities without a clear ROI outcome). This is a great way to put a systematic strategy in place for tasks that don’t have a predicted ROI upfront.

2. Be diligent in your communication, in response time and objective. Tell management what you need from them as early as possible, and let them know what will happen if you don’t get approval or input by certain dates.

3. Communicate in a systematic and simple way, so they know exactly what you need.

4. Always know if your managers are autonomous. If they’re not, understand what you need to do to get approval on your ideas.

Thanks for reading, please let me know if you have thoughts or questions in the comments.

I talk with many early stage startups (everyone in New York City is building an app) who tell me “If I just create a great product, users will come and love it.” Sound familiar? If you’re in marketing it should, because it’s the old “Build it and they will come” fallacy which we all know is not true. Dan Martell talked about this in my interview with him

While building a great product is incredibly important (and you should read Zach Holman’s take on it here), it’s not enough. Great marketing is the key to a great product taking off, but not necessarily typical marketing. For a great product, often marketing like influencer marketing is the best way to go, where you connect with influential users of your product and make them feel special, therefore endearing them to your brand so that they became a brand advocate and will talk about, link, and refer more users, sometimes in droves, to your product.

But a problem arises here. People don’t connect with brands. They connect with personality, which a brand in and of itself does not have. For instance, check out this stat about people interacting with businesses online (source):

16% of customers use Facebook, Twitter and the other major social networks to interact with businesses

At first glance, that seems like a strong metric, but that’s only 1 in 6! I would wager that brand engagement is even lower than that, meaning the percentage of followers that engage with a brand versus the percentage that engage with a person (not including people begging for RTs and follows from celebrities).

This is why, I believe, your brand needs a face, a person or mascot that users can connect and identify with. They say “Yes, I identify with that person or mascot’s personality/way of being.”

As a marketer, and more specifically a search marketer, leveraging a personality as a brand builder is a great way to build buzz and links, often very strong links, back to your website. Services like Onboardly, which is essentially a founder PR agency, or your SEO firm (if you allow them) can get placements for interviews and thought leadership pieces which then naturally link back to that brand face’s biography or About page.

Set Yourself Up For Success

Let’s face it – people love CEOs and want to be around CEOs. Even if you’re well known yourself, you probably still get giddy when you get to talk to someone that you respect in business or life. Therefore, I think every startup should have a founder that is amiable and outgoing, willing to be in the public eye to help build their startup’s name outside of their direct circle of contacts.

In order to do this:

• Leverage your network for interviews (and links) with the CEO
• Use PR to get their name out
• Encourage them to blog, use social media, and let it be known that they are willing to talk to others
• Have a page on your site that talks about them, including their biography. For a great example, check out Rand Fishkin’s on SEOmoz.

Examples

I could reference a few well-known SEO brands, like SEOmoz or Hubspot, who have well-known founders (Rand Fishkin and Dharmesh Shah respectively), but those examples are played out in marketing circles. Instead, let’s talk about a few different examples.

Neil Blumenthal – Warby Parker

By now, many of you have heard of Warby Parker, an eyeglasses startup that has disrupted the eyeglasses world by cutting out the middle men and making fashionable designer eyewear accessible for only $99. They also have a “Get a pair give a pair” program that gives eyeglasses to children in need. Basically, think of Warby Parker as the eyeglasses version of TOMS shoes.

Neil Blumenthal, one of the founders, is in the public eye. If you check out OpenSiteExplorer for the About The Founders page, you will see that the page has 13 links back to it that have his name. David Gilboa, the other founder, has 7 domains linking with his name.

Their public facing manner has also gotten them great press:

Neil Blumenthal on NY Times
Forbes on Influencing People

Dan Martell – Clarity.fm

I interviewed Dan a few months ago here on my site because I was contacted by Onboardly. Dan’s name accounts for about 8% of the total links to Clarity at this point, and many of the experts on Clarity have come from Dan encouraging them to be on the site. He also has a popular blog and good Twitter following.

Jennifer Hyman – Rent The Runway

One of my favorite examples is Jennifer Hyman, who runs the fashion rental startup Rent The Runway. Jen has attracted a good number of links to the team page (OSE page here. She has done many interviews to build the brand of Rent The Runway and tell their story, such as this interview on Grovo’s Expert Series and this mention in CNN Money.

See more of this Expert Series

Michelle Rhee – Students First

Michelle Rhee is the Founder and CEO of StudentsFirst, which calls themselves a “movement to transform public education”. Michelle has done many interviews and her about page has attracted links from sites like Forbes, Huffington Post, NPR, and many more (OSE here).

I’d love to hear your thoughts.

Here is David’s official biography, and you can read their blog here (including an interview with Simon Sinek on The Power of Why):

David Hassell is a serial entrepreneur and CEO of 15Five, a software company focused on producing transparency and alignment in organizations through structured, efficient and effective communication practices. David has also been named The Most Connected Man You Don’t Know in Silicon Valley by Forbes.

John: All right, so welcome again folks to another interview here on my site johnfdoherty.com. Today I have the great pleasure of interviewing David Hassell who I’ve been connected with, he is currently the CEO and Founder of 15Five, which is a SaaS product basically, to help offices function better to provide good feedback, real time feedback in positive ways to help teams work better. He’s also a long time entrepreneur connected with Dan Martel, who I interviewed here on the site a few weeks ago, as you may remember. So basically today we’re going to be talking about entrepreneurship, going to be talking about 15Five a little bit again, it’s productivity hacks, so it should be a great conversation. So welcome.

David: Yeah, thank you, great to be here.

John: Yeah, so, tell us what you’re currently up to these days. What sort of things are keeping you busy out there on the West Coast?

David: Yeah, right now I’m 100% focused on 15Five. In kind of a past life I billed myself not as a serial entrepreneur, but more of a parallel entrepreneur. I think I had a little bit of entrepreneuritis in doing five things at once and realizing that the only way I could be super productive was to narrow my focus down to not only just one business, but even within that like a few core things at any given time. So, for the past two years I’ve been building 15Five. We launched about a year ago, or we at least announced the product a year ago and launched for public use last June, so it’s been about 10 months. And we just closed a round of financing in January and we’re releasing, hopefully, our 2.0 product toward the end of Q2, so a lot going on.

John: Wow, congratulations.

David: Yeah, thanks.

John: Yeah, how’s that first year been?

David: It’s been pretty amazing. It was, I think the product was a lot more, was better received than I had anticipated. We got a lot of great press. Inc. Magazine wrote about us right off the bat and called us “The most have way to keep track of employees.”

John: Wow.

David: So, that was really fantastic and so, in fact, they just wrote another piece on us a couple of weeks ago, about tying us to the original Inc. Magazine article, but talked about the 15Five concept in March of 1988, which is 25 years ago. So they wrote about how they had originally introduced the concept to the world, how we took it on 25 years later, combined it with modern technology, and are now delivering it to the masses.

John: Wow, very cool. It’s not a bad way to go out the gate with a write up in Inc. Magazine. That’s pretty cool.

David: Exactly.

John: Yeah, but you’ve been an entrepreneur for a long time, right?

David: I have, yeah, ever since second grade.

John: Okay, what was your first entrepreneur adventure?

David: Well, you know, I had a best friend growing up, we created a company in second grade. We actually didn’t do anything until eighth grade when we started selling candy.

John: Okay.

David: It took us about six years to come up with that business plan. I started doing things in college where I would sell time fixing computers and selling RAM when you could actually make a huge amount of, there was a lot of markup in selling upgrades and things to computers. And then right out of college I started a Internet advertising tech company in New York, which is my first, kind of, real venture. I ran that about seven years in New York City with a partner. And then I started, I had a hobby business it was kind of a fun business doing adventure travel for kite surfers in North East Brazil.

John: Wow.

David: And started that company up and around 2004 – 2005 with a couple of partners and that’s also still going today. And then in the past five years I’ve been focused on a consulting practice called Strategy Day; where I work with CEO’s and their executive teams to help them narrow their focus to a few key things that would produce highest leverage in their business in doing these quarterly or annually off-sites. And then also 15Five is the latest venture.

John: Okay, so you still have your hands in multiple things even though your focus is on 15Five, you’re still doing the Strategy Day and all that?

David: Yeah, I still have, I’m still connected to the previous businesses, but I don’t spend any time on them. For Strategy Day I have just a limited number of really close clients that I’ll still do a day or two throughout the year but it’s not a focus.

John: Sure, gotcha, gotcha. So it sounds like, I hear about, I talk to a lot of entrepreneurs here in New York City that they’re like, “Oh, this is my, you know, this is my fifth start-up the other four didn’t really work out” it sounds like you’ve had some pretty good success. You’ve built companies that are still going. What do you think is the, what’s the key there?

David: Yeah, that’s a good question.

John: I’m sure there are a lot, but I mean it’s obviously not one thing, there’s no silver bullet, but . . .

David: Yeah, and I’ve had varying degrees of success in each one. I read a great quote recently by Paul Coelho, about that “The reward of our work is not what we create, but who we become”. And I think each one of these ventures, who I was at the beginning and who I was at the end were very, very different people. I’ve learned different ways to view the world; different skills, different things that I’ve now been able to parlay into the next enterprise. So my ability to be able to create momentum and success in 15Five is really tied to the things that I’ve done in the past at Indie, at Kite Adventures, at Strategy Day, all learning since.

I often think about in looking back and saying, “Wow it’s so bizarre, I never thought that starting this Kite Surfing company would lead me to being connected with a really powerful network in Silicon Valley, which would lead me to be able to attract the right investors for 15Five.” And, you know, really inspired by what Steve Jobs said in his commencement address about, “How you cannot connect the dots looking forward. You’ve got to follow your heart and do what inspires you and then you realize ten years later that what you were doing is actually perfectly aligned with what you’re creating now.”

John: Right, yeah, that actually really makes sense. So, I mean, which one of the, what’s the biggest lesson that you’ve learned throughout all of these, all these different ventures that you’ve done? I mean you’ve done everything from agency to like an outdoor adventure company to consulting and now you’re doing a SaaS product like . . .

David: Yeah.

John: I mean, it’s still varied right? You’re not like a one, just I do SaaS or I do consulting.

David: Exactly.

John: What’s like the common theme weaving those together?

David: You know, the interesting thing is that, I think ultimately the thing that kind of drive, that drove me previously was like the desire to create something new. And so regardless of whether that was a, you know, an adventure trip along the North East coast of Brazil that people hadn’t experienced or a new type of ad format, there was something there that, you know, I was drawn to create something new. As I got into it I think the biggest lesson was that when I started my first company it was, I was driven a lot by wanting to, you know, create something new and make money. You know, it was all about the money. Then I realized, wow, my heart’s not in this, I’m not really, it’s not really tied to my passion or what I want, or how I want to contribute to the world. And so then I said well let me do something that, I’ll follow my passion. So I said all right I love kite surfing, I’ll start this kite surfing travel company and so I followed my passion, but there is not a lot of money necessarily in that, right? So here I was venture number one follow the money no passion, venture number two follow the passion, no money. Then I realized, wow, I think the ultimate success in life is when you can bring those two things together. And so with 15Five, you know, I really connected to the real, the why that drives me. I don’t know if you’re familiar with Simon Sinek, but he’s pretty, got a great tech talk called: Start With Why, Get A Book.

John: One of my favorites.

David: Yeah, so Simon’s, you know, Simon’s great, dear friend and one of our advisers at 15Five. And for us it’s, you know, my why and our why, is to really help individuals and organizations achieve their highest potential. And so when we think about creating a product that helps organizations achieve whatever potential they’re out to create, you know, that really inspires me. That wakes me up in the morning. That has me have a lot of, like, energy and drive to create the business and know that we’re creating something that is highly scalable that will create, you know, a lot of enterprise value and there’s money in the process as well.

John: Right, yeah, that absolutely makes sense. I mean that I watched the Power of Why probably a year ago. I had been in marketing, I’d been out of school, like, five years at that point, I had been in marketing for a few years and as soon as I watched that I was, like, it was one of those, like, paradigm shifts, that all of a sudden, like, yeah, I get it now.

David: That’s exactly it. And I love when you get those moments, those paradigm shifts in your life and all of a sudden, you know, everything starts to click and make sense and you see the world in a different way. And I had the same experience when I first heard Simon speak.

John: Yeah, that’s awesome, so what is it about 15Five that, I mean, like, I mean, the why, what’s the why about that, why behind that, that inspires you? Like what gets you out of bed everyday with 15Five and tell us a little bit about 15Five, like why, how did you come up with the idea, how did you start it?

David: Yeah, so, you know, like I said, I love paradigm shifting ideas and things that once you learn about them, you know, something clicks. And when I learned about getting things done, for example, about getting everything out of your head and creating these light weight structures, there’s a book called “The Rockefeller Habits”, that’s really popular in this group called: The Entrepreneurs Organization about creating these, you know, these meeting rhythms that you put in place in your company and all of a sudden it becomes the heartbeat of your company. So I heard about the 15Five concepts through a friend who had heard about it through the grapevine and what not. It was originally something the founder of Patagonia, Yvon Chouinard, had come up with as a way to do two things. One, to be able to know what was happening in his company even when he was traveling half the year; testing gear, climbing mountains, following his passion he built his business around his lifestyle. And then also to have his employees feel really engaged in the company that they had a voice, that they were part of a mission. And Patagonia is one of the, premium values driven organizations, the ones that really have strong, strong values, they’re making a difference in the world, they adhere to those values. And here is this great business practice that allowed the CEO to be free and roam around and stay in touch and have the employees feel like they were engaged and had a voice and create this heartbeat of the company.

And, you know, me realizing that I wanted to create a business that had something to do with communication and collaboration, to help organizations to be there best and to achieve their potential. And realizing that communication rhythms, and often times the breakdowns a lot of companies had were breakdowns in communication. So I heard about this super, simple idea to basically put the structure in place that’s so light weight that anybody could do it without much effort. I was just like wow, that’s it, everybody needs this, this is like a baseline. So that was the impetus to start the company. And I see a lot of like, the guys at 37Signals have been really, like, you know, forging the path for creating great, simple, beautiful, easy to use software out there, and we want to be part of that movement. I think often times people when they’re building software they don’t realize they’re building software for human beings, you know?

John: Yes.

David: We talk about the users and the things like this so, instead of saying “Invite a new user”, we say “Invite somebody”, you know. We don’t have a user’s administration, we have a people’s administration. You know, this is really thinking about how do we make the software human-centric for real human beings to use and better their lives? And then make sure that everybody’s on the same page, that people feel engaged, that, you know, we flatten the hierarchies and the distance between a front line employee and an executive or a CEO.

John: Gotcha, gotcha, cool, so you think that, do you think this business could of worked out, you know, ten years ago when people weren’t working as remote? Do you think, you know, would of been as successful and people needed it as badly?

David: I, you know, timings everything. Ten years ago I was working with the Erickson’s Cyber Lab when they first came out with triangulation of cell phones and we were building mobile coupons to push down to the phones when people say, walked by a Starbucks. Little bit too early.

John: Yes.

David: Here we are and all that kind of stuff is happening. So I think the timings right. I think the, what we’re offering in addition to, so first of all, people are familiar with social networking and there are elements of 15Five that are inherently social. You know, people have conversations and there’s avatars and things like that that we’re building into the 2.0. So we’ve got those elements, people already understand how that works, people are more distributed. There’s more information that we’re just being hit with, like, all day long, like, always on social networking, email, news, and all this kind of stuff. So we’re almost a reprieve to that saying, “Hey, we don’t want to be an always on technology. Literally we want you to box this into 15 minutes a week; where you come in and you dump all of the most important things that are going on in the organization from your perspective. Your manager takes no more than five minutes to read, review, and respond and everybody’s synced up.” So it’s almost the antithesis of the overload of information. We want to boil it down to the essence. So I think that it is really timely.

John: Yeah, absolutely, that makes a lot of sense. How did you, how did you first validate the idea? Obviously it’s an older idea, coming from the founder of Patagonia, who’s one of my personal hero’s as well. I love the company. I’m an outdoorsy guy as well, so once I, I love Patagonia gear and then I heard about the company I was like, wow, that’s amazing. But how did you validate the idea for 15Five? What kind of steps that you went through? Eventually you said, like, “Holy crap we need to build this, this has legs.”

David: Yeah, that’s a great question because, you know, what I often see with entrepreneurs doing is they follow kind of a traditional path because that’s the way that it’s always been done. You know, so you run out and you raid friends and family around financing because you have a great idea. Then you use that money to try to validate your idea. And the problem is that’s the highest risk period of the company and your risking your closest friends and family’s money on a guess.

John: Right, right.

David: So I said, “Wait a minute, we don’t have to follow that, let’s see with the connections and resources and time that we have, you know, myself and a co-founder, what have we got that we can actually do without going out and raising around? How can we validate it before we do that?” So we actually built a really light weight prototype, I had a bunch of CEO friends and said, “Hey, would you try this out?” Thankfully they’re still my friends, even because it was somewhat of a painful experience early on with their employees and trying to get this to work right, but they were gracious enough to let us really be a part of their company and talk to their employees and figure out what was working and what wasn’t.

And we actually got it to a point, in about ten companies, it was working pretty well and then we went out to a friend’s design firm and he agreed to give us some design services on a convertible basis. So we actually got to a point of having our first paying customer before we had raised any money and it was all done, kind of, on part-time weekends, nights and weekends while we were focusing on our other endeavors. And we got to a pretty reasonable proof of concept, we had, someone say, “Yes, this is really valuable, I’m willing to pay money for this.” And then we went out and raised a small amount of financing to take it to the next level.

John: Gotcha. Yeah, that’s something that Dan and I talked about a few weeks ago. He was basically like, I was like what’s the number one, you know, piece of advice that you would give to entrepreneurs that are, you know, building a product? He was like, get money in hand. You know, don’t just go and ask, don’t just say, “Hey, would you do this?” right, and people were like, “Oh yea, sure I’d do that” like, that’s not good enough. Like, get someone to pay you.

David: Absolutely.

John: And then when someone pays you and then when someone pays you it’s like, all right, let’s go. Will the first person pay me? Will the second person pay me? Will the third person pay me? Okay, let’s make it happen.

David: That’s really good advice. You know, actually in, related to that, so in the exploratory phase, kind of the two years between I left the last company was doing consulting looking for what this next venture would be, you know, I was really in this exploration about what’s my why? What do I share about? Who do I want to help? All this kind of stuff and I had lots of ideas that’s the point, you’re in this ideation phase, right, and I was talking to a lot of people. And every single one of my ideas in looking back they were all pretty terrible, but every single one I would go out to folks and say, “What do you think of this?” and they’d be like, “Ha, that’s a great idea.” All right, people like to tell you that you have great ideas.

John: Right.

David: What I realized though was when I hit on 15Five and I’d go out to CEO’s and tell them that they said something a little bit different. They said, “That’s a great idea, when can I use it?” So it was that “When can I use it?” that indication of oh, I think it’s great and I need that, that’s what you’re looking for and so, you know, you want to be careful when you’re talking to folks, you’re talking to the right people who would use your product, that they, you know, express genuine interest about wanting to use it themselves, and ultimately, yes, paying is the ultimate validation.

John: Gotcha, gotcha. Yeah, that’s really, that’s great advice. That’s kind of like the next, the next step is the people saying, the people you’re talking too directly, like, “Oh yeah, my mom and dad might be interested in that” it’s like, “I want to use this,” right because those are the people that you, I mean, those are the people that you know, that’s the market that you know and it’s easiest and I would say, I would argue best to create something for, in a niche that you’re already familiar with, at least to start there and then you can go broader.

David: Yeah, that’s exactly right and just like anything else if you follow, like, Jeffrey Moore’s model of the Law of Diffusion of Innovations, you want to find those people on the very, very edge of the bell curve who really care about your problem. Don’t try to make it the ultimate solution for everyone right off the bat. Solve a small niche percentage population, you know, problem for that niche percentage with a very clearly defined, pain or world view, and then, you know, ultimately, you know, you want to be able to look at this and say, “Yes, this would be broadly applicable to the mass market eventually,” but you’re not solving, you know, the mass market problem right off the bat.

John: Right, absolutely. Would you say you guys are getting to that point with 15Five?

David: We are, you know, the past year we’ve acquired, you know, hundreds of customers which I didn’t expect we would do in this first year. So pretty happy about that, but we’re still, we’re still really focused on I would say still those early adopters and innovators. In our view, the people who are really focused on are companies who really aspire to be great. Who want to build awesome cultures. Who care about their employees. Who, you know, are mission and value driven. So those are the companies that we’re targeting first and foremost, and we think if we have success in that cohort, then it will, you know, then the idea will easily spread.

John: Yeah, absolutely. So one question I have there is there are, you know, obviously there are a lot of companies that do think that way.

David: Yep.

John: That would be great. That want to invest in quality. There are also a lot of companies out there that don’t or that are afraid to or something like that. How would you, have you come across people like that, and do you have people like that signed up to 15Five?

David: Absolutely, yeah.

John: And how, I mean, how do you, when you come across companies like that what sort of advice do you give them?

David: That’s a good question. Ultimately, here’s the interesting thing, you know, in my work with Strategy Day, you know, I worked with dozens and dozens of companies and, you know, just run of the mill companies that you wouldn’t think that they’ve got a strong purpose that’s driving them. And one of the things that I would do with every company who hadn’t seen it, is I would show them Simon Sinek’s video. And there is not a single person left who isn’t inspired by that message, and realizing that they were in their business for some deeper purpose, right? So I believe it’s in every body to connect with that and we have companies who maybe aren’t in that perfect niche that I just described who are using 15Five, but we want, we want to not only provide the tools, but provide education and resources and, and things that can help them now as a customer move along that path. And so long term I do want to see 15Five move into the mass market. I want to see it as a mass market tool and really help the, kind of, part of that cause to get people to look a little bit deeper about what’s the purpose of why they are in in business? What are they really trying to do?

I mean, you look at Zappo’s, you know, they were a shoe company, but they realized no, we want to provide WOW experiences for our customers. That was, the first thing was, we want to be the most shoes you can buy online. Then it was, we want to delight our customers. Then it was like, no, we want to delight everybody, and they eventually kept peeling back the onion and realized that they’re whole reason for being in the world is to just deliver happiness to everybody who touches the company, and they just happen to sell shoes. And, you know, had a hugely successful company as a result. And so I think that that is possible for every company and every person and so we just want to provide a great service that will work for any company, but also be a source of inspiration for people to look a little deeper.

John: Right, absolutely. So, this has come up a couple of times, but I guess this is the best time to bring it up. You talked about the founder of Patagonia and how he built a company, kind of, for him it was kind of a lifestyle business, but he also wanted to keep up with what was going on.

David: Yep.

John: You mentioned these different CEO’s that you talked to that, you know, they have a very strong vision, they, you know, they have their “why.” I think about, and there’s been a lot of talk recently, you know, like, in tech blogging circles about company culture like Dharmesh Shah from HubSpot recently had a presentation that went, it was like number one in Hacker News for a while I think, and went hot on Slide Share. It was, like featured as probably 50 to 100,000 views now.

David: Yep.

John: You talked about HubSpots culture, my friend Rand Fishkin, you know, talks about culture all the time at his company SEOmoz .

David: Yes.

John: Is it the CEO’s job to drive culture? Is it their job to drive that “why?”

David: It absolutely is.

John: Okay.

David: It absolutely is. I believe that if you look close enough, often times you’ll find that the companies “why” is the founder’s “why” or at least very, very closely aligned. You know, Steve Jobs is an example, Simon Sinek’s is an example about his “why” was really to challenge the status quo and the company was an expression of that. And so the, what caused the founder and co-founders to start the company was something about the company, right? There was some purpose there for them, and so often times they don’t even know it. I mean, we only got to a deeper level of clarity, like, last week, I mean, we’ve been in this for two years and we keep peeling back the onion, right?

John: Yeah.

David: And, but once you get it clear, then it really is your job to make sure that everybody you bring on to the team is aligned with that. Because the difference between an employee who’s inspired by the “why” and who’s not is enormous. Like, we have such a high caliber team even though we’re such a small team, because everyone is so bought into the mission, the vision. And then the value piece is also really important, what HubSpot has done is an excellent example, HubSpot and Zappo’s are two great examples of companies who have clearly defined their values that drive them; and it’s not enough just to write them down. The key thing is to make sure that you’re hiring people who already believe those values, not trying to push them out to somebody. So you bring people who already share that mentality and these become like, these become like points you can reference back to. One of our design values is this concept of elegant simplicity. It comes up in conversations all the time. You know, one of our culture, on piece on values and I think it’s really important to know is that the, the, kind of, definition of values just in its basic form, is like something you value. Like I value accountability or I value health. I value, these are things I value, like actionable verb statements, Zappo’s has done this, Hub Spot has done this so, for example one of our, one of our core values is: Hold and Be Accountable. So I’m going to hold my team accountable. I expect my team to hold me accountable and I agree to be held accountable for my work.

One of our values is to embrace freedom and flexibility. So that I’m here in Sedonna and I’m just as productive as if I’m with my team in San Fransico. Another one is find the leverage, we’re a small team, we’ve got like, we can’t just be, you know, going through the motions. We’ve got to have high leverage with our work. And cultivating health and vitality. So these are things that we can keep going back to in every one of our conversations about how we really want to be in the world. There are commitments. There are what we care about. And ultimately if we live the sum of our values and we all do it together, we’re going to create an extraordinary organization. And so that’s why Hub Spot’s culture stand that they put out there is so popular because it really does paint a picture about what an amazing organization it would be to work there.

John: Yeah, yeah, it’s funny to me that you talk, that you say, “We’ll build an amazing organization, not an amazing product.” Because amazing products come out of amazing organizations, right?

David: That’s exactly right, yeah, that’s the key. I think that 15Five and the product that we built is a great product and I don’t, I don’t think that’s where we’re going to stop. You know, if we keep focusing on our “why”; which is to help individuals and organizations to reach their highest potential, and we keep focusing on our, kind of, our sweet spot, which is super, simple, software as a service for human beings who aspire to be great, that’s where we focus on. So it’s like those two things in concert, I mean, there are lots of different directions we can go on and it may be three, four, five years before we actually branch out and do other things, but we want to build an amazing group of people, an amazing culture that inspires innovation, that inspires keeping, looking out at our customers like where they’re struggling and where we can help and what other services and products and whatever else we can deliver, you know, to help them do that.

John: Gotcha, that really, that really makes sense. Look at, I feel like I mention these guys in every interview that I do, but look at Ever Note, right?

David: Yep.

John: It’s a product that you probably use it, I definitely use it, I use it for everything. I write blog posts on the subway on my cell phone, right? EverNote, you think about it, it’s crazy.

David: Yep.

John: But like I saw an interview, or read in an interview with their founder awhile ago and someone is basically like, are you going to, when are you going to sell? He’s like, what are you talking about? Like, I want to build EverNote into a $100 million company, right? I want it to be a company that lasts for a hundred years.

David: Yes.

John: And obviously they branched out into different things and they have like, the desktop client and the mobile client and the thick client and what have you, are what they’re known for, but they also all these other apps that are also popular.

David: Yep, one of my favorites.

John: Yep, so yeah, I think that’s really interesting and then it doesn’t, I mean, markets change. So then you’re not kept into just one, you know, into one market, into one product. You can start with something small and then you, kind of, dominate that. Then all right, what’s next? You still have that entrepreneurial or intrepreneurial spirit..

David: That’s right.

John: Going on.

David: And balancing that with focus, right? So we were talking a little bit about productivity earlier, you know, I’m a big believer in, in extreme focus. You know and sacrificing the good for the great. Sometimes you have to, you have to let go of the 50 things that you want to do to really get the five things that really matter done. You know, when Steve Jobs came back to Apple, he drew like a cross on the board and said, you know, “Consumer, business, desktop, laptop that’s all we’re going to do.” He cut out the printers and all this other stuff and said, “We’ve got four products.” And they went, it was a huge backlash, but it was a brilliant strategy because it forced the company to narrow their focus to just the essentials, and then of course they built back out from there. And, you know, hugely successful today, here’s a company with 55,000 employees that decided to put the iPad on hold for three or four years to launch the iPhone because the iPad was actually in development first. You know, to have that kind of level of extreme focus, you know, shows you that even at that scale, that size of organization how important it is. So we’re big believers in staying really, really focused and only branching out when you have the capacity to do so. Because if you over reach, if you reach to far and you don’t have a solid base, you know, you can easily get knocked off. And so, you know, I think it’s great to have the “why” to keep referencing back to and to decide yes, what’s next, but also make sure that you’ve built a solid base before you talk on too many things.

John: Right, yeah, that solid base is really interesting to me because you talk about focus obviously you’re focusing on 15Five, but you’ve done a bunch of other things in the past, right? Which you focused on for a time and then move on, you know, so how, I have so many different questions about this because I love this topic. But, I mean, what is, how, how do you get there as a person to be able to do this? I mean I love Inbox Zero. I love, you know, getting things done. You know I have my, I have my checklists, I basically set it out the day before everything that I’m getting done tomorrow.

David: Yeah.

John: You know, focus, obviously sometimes something slips through, you know, managing people it happens, but like, how, what do you do to keep yourself focused? As a person, as an entrepreneur, as a boss, as a CEO?

David: That’s a great question. You know what you’re talking about, you know all these things Inbox Zero, about, you know, doing your To Do list, all these types of things, you know, ultimately you’ve got to cultivate great habits. So a lot of people think, oh I need, I wish I had more discipline. I wish I had more discipline to get my email or my Inbox to zero or to stay focused or this and stuff. The problem is that every single day we only get a very, very, very limited amount of will power that we can use towards discipline. So if you try to use up that will power to, just by keeping to all the things that you think you should be doing, you’re never actually, you’re never actually going to make any difference. Instead, it’s better to channel that will power into developing one great habit at a time. And then those habits just become automatic. So there’s a concept that I heard once, it was brilliant, it said, you know, “People wish they had more discipline, but if you look at every single person, they’re 100% disciplined to their existing set of habits.” So I’m really big into creating great habits for yourself and creating great habits for your organization. So one habit that we have as an organization is that every three months we get in a room for a whole day and we list all the possible things that we could do over the next three months. And we narrow it down to just five. There are five things that we are really going to focus our attention about all else, and we actually put everything else on what we call an avoidance list.

These are things that we’d love to work on, but we’re not allowed to touch them until we get the top five done. Because it’s not all the stuff that you think that is getting in the way, like all these errands that you have to do and the emails and stuff that’s keeping you from, you know, the five most important things, it’s actually the 35 other things that you kind of want to get done to that you think are important, so you dabble in those and you can’t channel your energy into the most important stuff. So it’s an organizational habit for us to create our top five, as an organization, and then each one of us has our own top five. And we only get no more, each person in the company, gets no more than five big rocks to work on, on any given time and once a week we all get on the phone together and update our status on our five rocks, green, yellow, red, help each other if we’re behind. And as we knock one off the list we go back to our avoidance list and we pull one off. So that’s an example of how we maintain focus.

John: Gotcha, so it’s kind of like, it’s like a super drawn out Scrum agile methodology, you basically do three month sprints and then once a week you get together and basically have a stand up.

David: Yeah, basically, that’s right, yep.

John: Very interesting. I actually, I really like that idea, I’ve never thought about taking that and just focusing down into five key things like, you know, we’re focused on making our customers happy. We’re focused on, whatever it is like, version 2.0 but not just the admin section of the product, that sort of thing that . . .

David: Exactly.

John: And so then, I heard something interesting, it was awhile ago, I don’t remember the exact quote or even where I read it, or if I read it or heard it or whatever, but it was basically talking about, like, you know, the power of focus allows you to say no. So once you figure out where you are going, it becomes very, very easy to say no if someone’s like, “Hey can you do this?” It’s like, “No, that’s not what I’m focused on. That’s not what I’m doing.”

David: That’s exactly right.

John: That’s not one of my five.

David: Yep, yeah, that’s exactly right. So I have, I have some pretty extreme practices around my own personal productivity and really blocking out my time. I don’t know if you ever heard the rocks analogy where, you know, you have a glass jar. So a professor walks into the room and he’s got this big glass jar on the table, and next to it he’s got a big pile of giant rocks. And he starts putting the rocks into the glass jar until he fills it all the way to the top. And he asks the class, you know, “Is the jar full?” And they say, “Yeah, definitely full.” So he pulls out a bag of gravel and he pours it all into there or smaller rocks and gravel, fills it up. Asks again is it full? And the class says, “Yes.” And he pulls out a thing of sand and he fills the glass up with sand and he fills it up to the top, asks the question again and then he pulls out a picture of water and fills all that in. And so if had started out with putting in the sand, the gravel, and whatever there’s no way you can fit the big rocks in, right? But if you put them in first, you know, the rest of your life, the smaller things and the secondary priorities all fit in around them. So I have a practice every week, you know, looking out at my calendar and scheduling big 90 minutes blocks for all of my top five rocks and make sure those are handled first. And I have one day a week that I do phone calls. And, generally I only do phone calls if they’re related to my top five. I have one day a month that if I want to have an exploratory conversation with someone, it might be a great future, I don’t know, who knows, it might be a great potential partner down the line or an employee or something like that, I don’t want to just say no forever. I think it really is important to have those conversations, but I limit it to one work day a month and I book myself from morning till night, all, what I call my exploratory meetings and phone calls and I just sit in a place either in San Francisco or at my office and they come to me and we go for walks and we have coffee and we have lunch, but I limit that to one day a month, because there are only 22 work days in a month and I can’t really, if I keep breaking up my workdays with things that aren’t tied to my top five, you know, I’d never get those rocks done.

John: Right, yeah, that’s really, that’s really interesting. I mean, that takes, that obviously takes a ton of discipline, where this is planned like, you know, we were just talking about . . .

David: Actually it doesn’t. Yeah, if it took a lot of discipline I wouldn’t be able to do it. It’s actually, it’s actually taking the time to reflect, to step back and say here’s how I’m going to structure my calendar. And then my assistant actually handles that, so she handles, she knows which day of the month that is and he schedules them all out. But, you know, it’s taking me, like, you know, eight years to get to this point where I’ve got the structures in place to let me focus and the right habits. But it’s a journey. It’s not easy to get there.

John: Got it, yeah. So, maybe it’s not discipline, but it’s intentionality. You’re being very intentional and focused on what you’re . . .

David: That’s it.

John: On what your setting out to do.

David: Yeah.

John: Okay.

David: And practicing, it’s like we all fall off the bucket or the wagon, you know, it’s like, so it’s realizing okay, I’ve got to keep bringing my focus back and practice and every time you, self-reflection once a week, taking a step back and saying was I focused this week? Where wasn’t I focused? What can I do better next week? What new habits should I be taking on?

John: Right, right, absolutely, cool. So, I mean we’re starting to kind of run out of time, I want to be very cognizant of your time as well, but hopefully there are going to be a lot of entrepreneurs looking at, you know, watching this and gleaning a lot of value from this conversation. I know I’ve gotten a ton from it, but as a long time entrepreneur, what would you say is the biggest thing that’s influenced you, what’s the biggest thing that you’ve learned in all your time as an entrepreneur?

David: You know, I, the biggest thing, I think, is life’s too short not to work on something that matters, right?

John: Dan said the same thing.

David: Is that right?

John: Yeah.

David: That’s great. Find something that really matters because if you, anytime you start one of these things, you know, you’re in it for like a minimum of three years, could be in it for a decade. If you got four decades of your work career, that’s like four opportunities to do something. And so, do something that matters. I was actually watching, I can’t remember the name of the guy, he was a former SAP guy I think, who started something called: Better World or it’s this network of, of battery powered car replacement stations that he built across Israel, I can’t remember the name of the company, but he spoke at a conference called Summit Series that I attended and he spoke out to the audience and said, “Hey, you’re all working on something, you know, maybe it’s free, maybe it’s not” he said, “But when you’re done I want you to look around and ask yourself the question, like, what needs to change in the world? What do I really care about? How can I solve some big problem?” And he said, “Find your question.” So, his company has raised a billion dollars in venture capital. He’s making a huge change, he’s now built infrastructure to drive all the way across the country of Israel without having to stop the electric vehicle because the batteries get replaced, there is no charging.

John: Wow.

David: And that’s a huge concept, and I think it costs them, basically what it would cost for a week worth of oil in the country. And the question he said he asked was how could we get Israel off of oil? I mean that’s a big question.

John: Yeah.

David: And he realized to put that same infrastructure across the country in the United States would basically cost one week of what we spend on oil in the U.S., to create the infrastructure of these charging replacement stations. So, start out with, that was a great, I mean, a great frame of start out with the question, like, how could we do this and let the ideas flow from there. Find a question that matters to you and follow that.

John: Yeah, it’s kind of the biggest boulder, right? I mean we talk about, you talk about sands or stones or rocks, I mean, that’s basically a boulder.

David: A boulder, yeah.

John: How do we end homelessness, you know?

David: Right.

John: It makes you dream huge.

David: Exactly.

John: Cool, very cool. Well David, I really appreciate your time. It’s been a pleasure talking to you, connecting with you. If you’re ever in New York City, you know, look me up, I’d love to meet up, you know, beers are on me.

David: That would be great. I’ve really enjoyed this. I love talking about this stuff and it’s great to connect.

John: Wonderful. All right, you have a great evening.

David: You too, take care.

Entrepreneurs are ideas people. We think a lot, we try to optimize our lives to find better ways of being. We are known for being eccentric, disciplined, and sometimes a bit unsatisfied with life. This way of being has very real challenges and benefits.

One challenge is that we can set out to build something that will potentially make us money, but at the end of the day we are not passionate about it and therefore are almost destined to fail from the beginning.

As David Haskell (interview coming next week) told me, “When you start a new venture, you are committed to it for at least 3 years usually. That can easily turn into a decade. We all have about four decades of work to our life. Is what you’re working on worth that?”

I’ve heard multiple VCs talk about being pitched the same idea multiple times. The most commonly used example is “a social network for pet owners.” Aside from it being a terrible idea, this is also a great example of a problem that probably very few people are actually passionate enough about to spend years solving (if it’s even a problem in the first place).

How Do You Know?

Let me tell you a story. When I was 13 years old, I started drawing a design that I liked. It was a Celtic cross with flames around the edge and writing over top. I drew the design so many times that it became engrained in my head. I would tell my parents that I wanted to get it as a tattoo when I was old enough, to which they said “Draw it, put it in a drawer, and don’t look at it for a year. If you still want it after a year, then you know it’s a good idea.” I don’t know how they knew this, since neither of them has tattoos, but I did just what they said.

Years later (finished when I was turning 22), I had this on my back:

A problem worth solving, or idea worth building, is one that you can’t stop thinking about. How this comes about will vary, but in my experience manifests itself as:

• A lightbulb moment that won’t go away
• A problem you’ve had for a long time that you wish you had a solution for

Validating The Idea

When I interviewed Dan Martell back in February, he said this:

Here’s the filter, and people always say you have to have goals. It’s not, ask yourself, are you worthy of your goals. It’s ask yourself, is your goal worthy of your life? I don’t get today back. I’m going to work on Clarity. If I’m not super-passionate about Clarity, I’m wasting my time, and I don’t get it back. I take that seriously. I want to work on problems that I feel it would be an honor to invest my life into that problem, and no matter what happens, if it’s good or bad, I know that I tried, and I had a lot of fun doing it, and that’s my filter for starting companies today. And it has to have a big impact.

After you’ve decided that this is something you can look back on and be proud of spending your life on, next you need to validate the idea with the people you want to pay you.

Don’t Build Yet

If you have an idea, start telling others about it. Especially start telling people who you could see turning into customers, and gauge their reactions.

A point of note: don’t be afraid that someone is going to steal your idea. Truth is, most people are lazy and won’t build your idea. Very few people exist who will actually go and steal your idea, so don’t be afraid of talking about it. If you are not talking about your idea, you have no way of knowing if the way that you are thinking about it is correct.

I recently launched a new project. During the vetting phase of it, I was shooting emails back and forth with a peer in the industry that I respect. Long story short, through the course of the conversation I realized that I was thinking about my business model all wrong. If I had never had this conversation, I would still be wrong about the business and not nearly as far along.

Get The First Payment

Another thing Dan told me was to get the first payment as soon as possible. A lot of people will say that they would pay for something, but when it comes down to it few will actually do so. So push them to do so. Provide the value and then ask for payment.

If they pay you, you know that you have a winning idea. I took the first money I got from my idea and used it to buy a domain name and hosting. And I still had extra money in my pocket.

Now Build

Once you’ve validated your idea, build the first version of your product. It doesn’t have to be groundbreaking, but it should be functional and have the basic functions (if you want people to sign up, build that functionality first. If you want to process payments, that’s a feature you need built in from the beginning).

Sometimes your MVP will not get traction, and that’s ok. You haven’t dedicated a ton of resources and time to building it at this point. If you do get traction, though, then go build your focused product and keep gaining traction.

Your Life

We have a finite amount of time on Earth. Don’t waste time building something you’re not going to be proud to be part of, or to give up other things for.

At the end of the day, I believe that whatever you’re doing should be something you’d be willing to do for free. You do it in your free time, on the weekends, and on airplanes. You think about it in the restroom.

You stick with it, and eventually you catch a break. Make it worth your life.

Geraldine did:

Source

My talk is on data driven content marketing. We believe that in order to know what content to create, you need to first know:

• What content you have;
• How that content is performing
• What content your competitors have
• How their content is performing

I will post the slidedeck this evening once the event has finished and I get back to my computer, but I built out a spreadsheet to give away to everyone. I figure I’ll give it away here and explain how to use both for the meetup goers as well as for all of you who read this post on its own.

Download the spreadsheet here.

Data-Driven Content Auditing

The first step before you do any work is to figure out what your goals are from the campaign. Why are you creating content and how are you going to get buy-in, and therefore budget, to create it once you have figured out what you need? Lucky for you I presented on this at SearchFest in February -

Your KPIs (Key Performance Indicators) could be many things, including:

• Links
• Traffic
• Leads
• ??

Settling on what you will be measured on first is the key to a successful campaign, or future successful campaigns as you learn and do better campaigns each time.

Pull Data

Once you have your goals in mind, you know what kind of data you need to gather. I always recommend gathering:

• URLs
• Content type or category (ie “Infographic” or “Marketing”). This can give insight into the kinds of content they create that you do not, and if it works for them.
• SEOmoz Metrics for the site/page (Domain Authority, Page Authority, possibly Trust)
• Number of linking root domains
• Social Metrics (Twitter, FB, Google+, etc)
• Traffic (for your own content) from Analytics

This data will be gathered from a multitude of places, including but not limited to:

• ImportXML/Linkclump (Chrome)/Multilinks (Firefox)
• Scrape Similar Chrome Extension
• OpenSiteExplorer or SEOmoz API (if you have a tool)
• SharedCount Multiple URL Dashboard

Graph and Action

To keep all the data in one place, I’ve provided a spreadsheet here that you can download and use to audit up to 3 competitors and their types of content. Also, please customize it as you need (as it is impossible to meet everyone’s needs) and share with the class what you have done if you think it will be useful.

Here is a preview of the sheet:

You’ll be given some charts as well to help you see visually what is working as well:

You can download the spreadsheet here.

Here is my presentation from the meetup:

I started full time in Philadelphia, working with a couple of other awesome guys who mentored me, taught me the importance of hustle, and made me get insanely better at my job through data. We were a powerhouse team, and I still say that if I were to go back inhouse someday I would want both of them on the team with me.

That’s not the point of this post, though. You see, this past Friday (March 15th) was the final Linklove that Distilled plans to put on. We don’t believe that linkbuilding is dead or dying, but it has definitely changed and many of the old tactics and tricks that worked so well for so long (crap directories, aggressive anchor text, spun content, sidebar widgets en masse) have gone out the window and even become toxic. I wish I could tell you all about my adventures in the past months with link removal and the insanity of the cost both in terms of effort and impact to the business being affected.

But that’s also not the point of this point.

You see, two years ago today Linklove changed my life.

Distilled’s Awesome Robot

Linklove Changed My Life

Linklove London literally changed my life back in March 2011. Working inhouse, my two coworkers attended OMS (Online Marketing Summit) in San Diego that year. I was told that our company would only pay for two of us to go to that conference, but that I could pick another one to go to. I said “Ok, I’m going to be on vacation in Europe, so I’ll go to Linklove in London.” I had always loved London, having been there multiple times on my travels (and through the airport more times than I can even count at this point).

I made a purposeful effort to make contact with Lynsey, Distilled’s head of events, before I went. Then one fateful day, I saw Tom Critchlow tweet that they were looking for someone to write a blog post about why they were excited about going to Linklove. Being the new guy in the industry that I was, I jumped on the opportunity to write the post. The conversation went something like this via Twitter:

@tomcrithclow: We’re looking for someone to write a blog post about why they’re excited about Linklove.
@dohertyjf: I’m coming and would love to do it. Will write it tonight and tweet it at you when it’s done.
@tomcritchlow: Great, thanks! Will definitely share it out when we see it in the morning!

So I wrote the post and Tom shared it out, along with Will and I believe a few others. I was stoked, and probably was giddy all day from that happening. It was a big occurrence in a young SEO’s life to have people that you look up to share a post of yours (even if they requested it). I still remember the first time Rand Fishkin tweeted one of my posts and how giddy I felt (I still smile when Rand shares one of my posts, by the way).

Protip – Do nice things for people you want to meet.

Fast forward to March 2011. I arrived at the conference venue that morning, a bit tired from my travels (I had already been in Istanbul and Switzerland that trip) and needing more coffee. I think I was one of the earlier arrivees, so I received my badge from Lynsey and made sure to introduce myself. Around the first break, I was hanging around the table at the entrance to the venue, where all the Distilled people were as well, and introduced myself to Will Critchlow and explained that I had written the post about being excited about Linklove. He remembered me, thanked me, and being the nice guy that he is (and I believe that even stronger now after working for him for almost two years) asked me more questions about myself.

Aside from meeting a couple of my industry heroes, including Will, Tom, and Rand, that conference is where Distilled announced that they were opening an office in New York City. I was in Philly at the time, remember, and upon hearing this, to be honest, my heart sank a bit because I did not want to move to New York City.

I was in Philly at the time, remember, and upon hearing this, to be honest, my heart sank a bit because I did not want to move to New York City.

But, I knew that Tom was great at his job and a really nice guy, and when I heard that he was going to be running the office I knew I needed to apply. After harassing Tom a number of times (nicely, of course) for an interview, we finally had it and I was actually hired before Tom even had a budget to hire people (he had to get special permission from Duncan to do it). So three months later, I moved to New York City to join Distilled NYC as we opened the office in Manhattan.

And it was all thanks to Linklove.

Some Lessons Learned

I’m often asked by young SEOs, often over beers that they’ve offered to buy me, what they can do to get started in SEO. I wrote a post a long time ago called How To Learn SEO and Find Your First SEO Job. All of that advice still holds true (I wrote it not a year after I started fulltime in SEO), but I wanted to add a few things to it.

Make Friends

One of the best decisions I ever made upon starting in SEO was seeking to make friends instead of contacts. I have never enjoyed “networking events” where people are always trying to sell you their services and give you their card. Sometimes I wonder if some companies put a quota on handing out your business card at events where they send their employees.

One of the best decisions I ever made upon starting in SEO was seeking to make friends instead of contacts.

I never set out to make “industry contacts”. Instead, I set out to make friends and see where I could be of most help to people. This has served me insanely well as I now have a great group of industry peers who I can actually call friends, who email me to check up on me, who are around to give me advice when I need it, and who I greatly look forward to seeing at events. A few weeks ago, I presented at Searchfest in Portland where I talked about technical SEO. The greatest part of the show for me, though, was seeing friends like Jonathon Colman, Rand Fishkin, Matthew Brown, Michael Cottam, Mike Pantoliano (also my coworker), Rhea Drysdale, and many more there.

Because I set out to make friends, I get to go to conferences and see my friends. I get paid to hang out with friends. How amazing is that?

Share Your Knowledge

I started this blog back in February 2011 for a number of reasons. The first was to learn how to build a website, as I figured I should probably know how to do that if I was telling people how to fix their sites. I didn’t want to be a hypocrite.

But second, I wanted to have a place where I could share my knowledge and establish my name. I never set out to “get known.” Instead, I wanted to share what I was learning and didn’t really care who read it. If I found it interesting, I published it. That’s still my approach to writing on this site.

If I found it interesting, I published it. That’s still my approach to writing on this site.

One of the best things I ever did in my SEO career was launch this site and begin writing on it. This site has given me a platform off of which to share useful information, show what I am learning and doing, and a place to connect with others.

But sharing knowledge goes far beyond having a website. I also share a lot of content on Twitter, which is also a conversation mechanism. Often, relationships start on Twitter before coming to my site. Twitter is where I have met a lot of industry friends (see above point about friends), and that has all come through being engaged and sharing good content.

Hustle

One of the key points to the Distilled culture is that of “hustle.” We believe that if you hustle and seek to get things done, that is when true change happens in businesses and clients. As a company grows it can be hard to keep the hustle mentality, but Distilled has managed to do it incredibly well. We’re a company full of hardworking and wicked smart marketers.

When I started at Distilled, I was a bit intimidated to be a part of the company. So many SEOs that I looked up to were now my coworkers and I wasn’t sure I had what it took to be successful. So I dug in and worked as hard as I could, doing as much as I could to add value to the company. I’d work long hours, brainstorm ideas over food and drinks with Tom (who has become one of my best friends), and learned new skills as they were required either by my job within Distilled or for my clients.

Two years later, I can’t believe how far I’ve come.

Learn To Relax

The final lesson I have learned in the past two years is the importance of focus and learning how to relax in what you are doing. Relaxation does not mean being lazy, but rather realizing that a job, and even more pointedly a career, is a longterm play. Just like building a business (which I recently realized is like building a house – plank by plank, nail by nail), it takes time to build your career and your name.

So relax and enjoy the ride. Don’t overcommit yourself for too long, but rather find what you are passionate about and go do that. As the great Howard Thurman once said:

Don’t ask yourself what the world needs. Ask yourself what makes you come alive and then go do that. Because what the world needs is people who have come alive.

About six months ago I realized that I was working too much, was incredibly stressed out, and wasn’t enjoying life. So I made a decision to reduce the amount of things I was doing and to focus down on doing a few really well. This has meant a number of things – I publish less on here and only when I want to, I do less writing but it’s better, and I make time to refresh my mind away from the computer. All of this has made me a happier person and, honestly, much better at my job.

This has been a wandering post, but it’s been my journey over the past two years. It started at Linklove, and while I’m sad to see it end from a personal perspective, I’m excited for the future.

Up and to the right

I defined technical SEO debt as:

A metaphor referring to the eventual consequences of poor or evolving architecture or SEO problems/dependencies within a website.

Both talks started with the statement that many sites need to quit focusing on linkbuilding and fix the technical debt that they owe on their websites. You see, every executive is busy and has their hands in multiple pots, so for any of the departments under them they need something to hang their hat on – rankings, traffic, revenue, whatever. For a lot of marketing managers or CMOs, who have only a very rudimentary understanding of SEO, that will be links, so they push for more links as that is what they understand. They think links will get them the money that they want, but we all know that is not true.

If links are all that mattered for SEO, then the sites in positions 6-8 in the below chart should rank at the top -

But they don’t. Link analysis would reveal this when analyzing the top 10 results of any SERP -

Technical debt runs rampant across the Internet, partially because of this insane focus on linkbuilding. Linkbuilding is sexy and important, I get it. But in the shift from page-centric to site-centric focuses by Google in the past couple years (favoring strong websites), technical SEO has become more and more important, yet it is still largely ignored. I even joked at Searchfest that I was glad that no linkbuilding session was occurring during my technical SEO session alongside Justin Briggs because no one would have attended our session.

Achieving Buy-In for Technical Changes

You have probably had someone, either a boss or client, say to you, “We need to know the ROI before we will allocate budget for this.” When you are working on the enterprise scale, we are not usually talking small budgets either, but rather at least in the 10s of thousands of dollars, and sometimes even higher than that.

Step 1: Potential Revenue Modeling

The first step to achieving buy-in for changes to dig into the technical debt on our sites is to model the potential ROI. This means:

* Identifying the keywords
* Identifying the debt and changes that should be made
* Identify the cost of making changes (effort needed to make the change times the developer hourly rate)
* Average conversion rate for that type of page
* Average amount of revenue per conversion

Once you have all of this, the model is:

Step 2: Pitch a Test

In these cases, I recommend pitching a test big enought to give statistically significant results (at least 30 data points), which will require only a portion of the budget needed to make changes across the site. This way, you can measure the results and pitch a more accurate revenue amount once all of the changes have been made.

An example that I gave was of a client where we added internal links and saw a good increase in rankings:

Then, based off that test, we were able to get buy-in to make more changes. We changed keyword targeting and saw another good jump:

ReModel and Repitch

Once your test has had time to process and the pages have all been recrawled, measure the results. Then, you can pitch to complete the rest of the changes, the remainder after the test, using:

1. Updated revenue per conversion
2. Updated conversion rate based on page type
3. Updated cost to fix (hours times developer hourly rate)

Here’s the model in case you missed it:

It’s unfortunate that Google’s ranking system (quality/quantity of links) forces SEOs to try to scale everything. Reciprocating cycle.

— John Doherty (@dohertyjf) January 21, 2013

I tweeted this about a month ago when I was frustrated at Google for still allowing sites in some verticals to rank off of bad content or links simply because they are a brand and “belong” in that search result. In fact, one could argue that users expect these companies to be there. After all, it makes sense for a company like John Deere to rank for [tractors], no?

Is this fair of me, though? Is it Google’s fault that SEOs have to scale their efforts of content creation and linkbuilding to become competitive in competitive verticals?

I’ve stewed on these thoughts for a bit of time and come to a few conclusions. Many of these might not come as a shock to you, but I think they’re worth stating.

Sometimes SEO Isn’t The Answer

Let’s be honest – SEO is a subset of online marketing. Sometimes I even wonder if it really is marketing, or if it’s website tweaks and links, and the real marketing comes in with the content we produce and outreach we do.

SEO is a slow burn of traffic. One of the biggest mistakes that people make when they think about SEO is thinking that all they need to do is rank for a few choice terms, and they’ll win the Internet. The problem in some verticals, like travel, is that many of the head terms are incredibly competitive:

I would argue that a healthy SEO campaign reveals results like this:

To win online, you need to invest in more than just one channel. I wrote here about the importance of varying your traffic sources, and this especially applies in competitive verticals where you have to pay handsomely to play.

Choose Your Vertical Wisely

Following on the last point, some verticals are going to be easier to enter than others. Before you enter a vertical, you should do extensive competitive analysis to know what it will take to rank, or even better just make money, in that vertical.

This includes, but is by no means limited to:

* Cost of keywords for paid search
* Competitiveness of keywords
* Competitors (amazon is hard to unseat, for example)
* Types of content needed onsite

You then need to calculate the amount of traffic you need to generate to turn a profit, and the amount of effort required to achieve this traffic. The equation is actually pretty simple:

Traffic*avg conversion*avg sale = revenue
Time*hourly rate = cost

Quite simply, can you put in the money up front to generate a return later?

If you want to read the most exhaustive piece I’ve ever read on this subject, check out this post on SEObook from January 2013.

Quality Wins Longterm, Quantity Burns

Some wise people have said recently online that anything good can become bad when you try to scale it, such as guest posting. Multiple examples have shown that the slow and steady approach to marketing and brand building is the way to really win online.

Mike King recently gave an example in his Searchfest presentation about the one guest post thst he wrote on SearchEngineWatch. He had just spoken at a conference and discovered that it was possible to migrate your social share counts when you move URLs. Through this one guest post, which sought to answer a real problem, he landed a client worth about $250,000 to his company.

One of my favorite examples of quantity burning you down was this test done about what happens when you build 10,000 dodgy links to a site. The site ranked well for a little while, but then suddenly disappeared off the face of the SERPs.

Distilled has taken the approach of building our brand steadily and purposefully. Last year, we had over 852,000 visits to our website. What other consultancy do you know of that does that? We publish content twice a week on our own blog, once a week on SEOmoz at minimum, and engage on social media channels. No scale here, but it works.

• _blank – opens in new tab
• _self – opens in same frame (default, can also just be left out)
• _parent – opens link in new parent frame
• _top – opens link in the full body of the window

One of the features (or lack thereof) that has irked me about HackerNews is that when I click on a link, it opens in the same window thus taking me away from HackerNews, which is where I went in the first place. Let’s say I click on the first link:

It takes me directly to the page (watch the tab at the top):

But then I have to hit the Back button. Who hits the back button on the Internet anymore, especially techies like myself who live off of keyboard shortcuts? Why make me go from using my keyboard to using my mouse or trackpad just to go back? No one uses the Delete key to go back, let’s be honest.

What HackerNews should do, though, is take you to a new tab, like so (notice the tabs at the top):

Proposition

I propose a test. Dear admins of HackerNews, I would like you to implement a test for 24 hours.

Implement target=”_blank” on HackerNews
Track the time on site and number of votes over the course of that day
Report on it, and then make an informed decision.

It won’t be that hard to implement:

<a href=”http://on-advertising.tumblr.com/post/42994773187/maria-popova-have-you-made-1m-on-affiliate-ads-while“>Making $1 million from affiliate links on “Ad-Free” blog</a>

Becomes:

<a href=”http://on-advertising.tumblr.com/post/42994773187/maria-popova-have-you-made-1m-on-affiliate-ads-while” target=”_blank”>Making $1 million from affiliate links on “Ad-Free” blog</a>

This is how Inbound.org works:

<a href=”http://contentharmony.com/inbound-2012/” target=”_blank” id=”click-30712″>Inbound.org: 2012 By The Numbers</a>

Well HackerNews, what say you? I dare you to increase your traffic and engagement.

After I interviewed Leo Widrich of BufferApp a couple of weeks ago, I was put in touch with Dan Martell of Clarity.fm. Dan is the founder of Clarity, which exists to connect experts with other entrepreneurs in order to create a knowledge-sharing ecosystem where the experts can also earn some money in return for having conversations with those seeking to learn from them.

We talked about products, the importance of focus, the importance of revenue generation as early as possible, freemium, entrepreneurial goal setting, and more. Have a read or listen and let me know your thought in the comments!

Interviewer: All right, so let’s go ahead and get started. Hello, everyone out there. My name is John Doherty, as you know. Welcome to another interview on my blog. I wasn’t planning on continuing these, but today I am very privileged to have Dan Martell of Clarity.fm here with me. Dan, why don’t you introduce yourself real quick? Tell us who you are. Tell us a little bit about Clarity, and what you have going on these days.

Dan: Cool. Thanks for having me, John. My name’s Dan. I am first and foremost Canadian. I spent the last five years in San Francisco. I’ve been an entrepreneur my whole life. I’ve done five companies. First two were complete failures, but I started early, so I got those out of the way. Then when I was 24, I started a company called Spheric Technologies, and grew that to 30 employees. It got acquired in 2008, and moved to San Francisco. I started another company called Flowtown which is a social marketing application. I grew that over two years. That got acquired in 2011 by Demandforce.
Then last year, I started working on a new idea called Clarity, and that’s what I do today, and Clarity’s kind of like eBay for business advice. What we do is, we help business owners and entrepreneurs and professionals get on a phone call with other experts and entrepreneurs, seasoned entrepreneurs, thought leaders to talk about their challenges, and their issues, and try to get some clarity around the problem. We launched it in May of last year. We’ve done 13,000 calls across more than 50 countries, and things are going really well. We announced our funding last year. We raised 1.6 million.

Interviewer: Congratulations.

Dan: Thanks. And we’re just really hard-core focused on product, and making sure that we create a great community.

Interviewer: Awesome. So how many people do you have on Clarity right now? What are the sorts of things you can do there?

Dan: We’ve got over 9,000 experts. Everybody from guys like Eric Ries from the Lean Startup to Mark Cuban to the World Series of Poker champion. We’ve got 100+ venture capitalists and angel investors. We’ve got New York Times bestselling authors. We started off with 1,00 really curated experts, predominantly around the tech entrepreneur space, New York and San Francisco and Toronto. You can search the site without creating an account, and you can request to call as many people as you want. The average call is about 30 minutes and costs about $50.
We use Clarity everyday at Clarity to reach out to reach out to people in different specialized areas. The way we see it, is we help entrepreneurs and business owners make faster, better decisions. Everybody knows that getting advice from someone who’s been there before is the best way to make a decision. We let you do that in your real time, even if you don’t have the network to find those people.

Interviewer: Totally, awesome. So when did you launch Clarity initially.

Dan: We launched publicly in May of 2012.

Interviewer: May of 2012? Wow, so you’ve only been going for what? Eight months now.

Dan: Yeah.

Interviewer: Okay. So one question I get asked a lot, I work with a lot of startups here in New York City, advisor to some, mentor to others. I’ve been around the tech startups crowd, and one thing I always get asked is, “How do you launch a product?” Obviously you’ve done a number of different ventures, a number of different businesses, and this one has obviously done pretty well so far. How do you think about launching a product? Is it like, do you get a couple of influencers in there and they get everyone else? How do you go about it?

Dan: I think there’s different types of launch. Really, I look at it as different types of marketing.

There’s marketing at before- product market fit, and marketing post-product market fit.

Most of your audience, unless they’re doing $100,000 a month in revenue, they’re probably pre-product market fit, and it’s not really a launch, it’s more like a search and discovery, and the marketing you’re doing is really to attract early-adapters, and to learn from them, and to talk to them. For instance, our funding, we announced it in December. We actually raised it before then, and we just never had a need to announce it, because we felt like the product needed certain things before we wanted to capitalize on that traffic.
I just think that a lot of startups are too quick to launch publicly to the world when the product’s not ready. Really, the way I look at it is, all you need is about, I say “just,” but about 50 sign-ups a day. Honestly, if you have 50 sign-ups a day, that’s 350 sign-ups a week. It’s enough people to run experiments, to talk with, to get feedback from. And I don’t believe in launching publicly to the world until you do that.
We started working on Clarity, the first time there was ever a transaction on Clarity was in January, and we could’ve launched in January, but we waited January, February, March, April, May, because there was no purpose. We were still learning. We were still trying to figure out what the heck this thing was, and how was it going to work. So yeah, I believe that you shouldn’t launch . . . the version launched by most people watching this versus mine is two different things. Once you’re ready to launch, the best way is, come up with, obviously you want to have a product that solves a problem. You want to be able to communicate clearly what it is, and why it’s different.
And then, if you can, try to find a story that’s unique and different, like a human-interest angle. For us it’s really about helping the 400 million entrepreneurs around the world get connected to each other and move their goals and dreams forward. That’s our passion, that’s why we started the company. It’s trying to figure out the story that the writer is going to write about. You’ve got to do that. Right? And people don’t spend enough time trying to figure out “What is that story?” Whys should they write about you?” Just the fact that you’ve built an app does not mean anybody cares. You’ve got to figure out why somebody should care.

Interviewer: Right, that totally makes sense. So if you started building the product in, you obviously started building it before January, because you had your first transactions in January of last year, I’m assuming.

Dan: Two weeks to build the prototype.

Interviewer: Two weeks to build the prototype?

Dan: Yeah, it’s easy.

Interviewer: You just reached out to some friends and got it started?

Dan: The first thing I did, and I tell this to everybody, is I went on Skype, and I found some people, and I said, “Would you pay X for advice about this?” and they said, “Yes.” Then I went to my buddies, and I said, “Hey, would you $250 an hour for your advice on SEO, or for your advice on social marketing, or whatever?” and they said, “Yes.”

And then I just said to my other friends, “Send me the money on PayPal, and I’ll make the introduction.” I wanted to know, Did anybody care about getting great advice?

And if I was the filter, that was step one. What I always tell entrepreneurs is do as little as possible to validate your idea. Then the next version of Clarity was this simple HTML5 form that used Stripe, Twilio, and Phonegap, and that was it.

Interviewer: Nice.

Dan: It was just, you Facebook connect, you put your cell number, created a profile, and you could share that on Twitter, people could put their name and number in the request, then enter a credit card, and then after you talked, it charged you. It was not complicated.

Interviewer: I get it. That sounds super smart. You’re just figuring out, basically you’re asking your friends, “Hey, would you pay for this?” “Yes.” “Would you pay for this?” “Yes.” Would you pay for this?” “Yes.”

Dan: Send me the money. You got to get paid.

Interviewer: Yes.

Dan: People forget the next step, which is, “Great, give it to me.”

Interviewer: Right. So what do you think about the Freemium model. There’s been a lot of talk about it in the last year or so, and some people say it’s dead, some people say it doesn’t work. I’ve seen it work, and not work.

Dan: It’s dangerous.

Freemium is a marketing decision.

You’re offsetting the cost of paid marketing channels, by offering a free product. The free product is the product. The free version of Evernote is amazing. The free version of Dropbox is amazing. The free product is the product. There’s a difference. Freemium is not trial. It’s not limited versions. It’s not tiered pricing. It is, free product is the product, and a very small percent will upgrade, and it’s a marketing decision.
And you can go there eventually like MailChimp did. Right? For ten years, they were a paid product, and then they said, “Look. We could really scale this up if we offered a free version because we know our numbers. We know our metrics. We know how much we spend to acquire a customer, and we can offset that cost of acquiring by giving away something free knowing that a percent’s going to turn into a paid customer, and here’s the lifetime value of a customer.”
So it’s not dead, it just doesn’t work for many products, and when people implement it in early days, it’s usually because they’re too scared to charge and have anybody not pay. So they’re like, “Oh, I’m just going to make it free for now, and eventually I’ll charge them.” Do paid day one.

Interviewer: Makes sense. So you said at the beginning that you had a couple of, this is what, your fifth company, you said?

Dan: Yeah. It’s like the fifth “company” I’ve incorporated. If I asked you how many domains for ideas you’ve had, you’ve probably had 20- 30, right?

Interviewer: Absolutely.

Dan: We all have that, but five real companies that I had an earnest effort towards, yeah.

Interviewer: So you said you had two at the beginning that didn’t really work out. Can you tell us a little bit about those and what are some of the biggest lessons you’ve learned? I worked with a company in Europe for about a year, and you know I didn’t have the experience, and it just didn’t take off. It didn’t succeed. I had to go do something else, and I learned a lot through that. What are some lessons that you’ve learned?

Dan: The first one was a vacation rental site called Maritime Vacation. I grew up in this Atlantic maritime region of Canada.

The lesson learned there was pick a bigger market.

Anybody in Canada doing a startup, doing a .ca, don’t. Do a .com, do a .co, do a .anything, but don’t localize it. Don’t be like, “Twitter apps for Eskimos.” That was the biggest thing. I actually did well, I got 100 cottages listed on there, and then I realized that the name didn’t lend itself to grow further, and I didn’t know what the heck I was doing anyway. At the end of the day, today, I would’ve just pivoted quicker, but it was the first time. You make a lot of decisions. You weren’t 100% focused on it. The second one was a hosting company. Lesson learned there was don’t start a hosting company. It’s the most ridiculous . . . we all do it. If you know how to code-

Interviewer: Or you think about it, yep.

Dan: You build a CMS product, right? Because you’re building websites for people, so you need your own content management system, and you usually start a hosting company. This is before the days of resellit programs and stuff. But the lesson learned there was don’t go into a market that’s a commodity. Right? I don’t want to be in the selling silver, or gold, market. Well, selling hosting is no different. Right? You’ve got to come up with something super-innovative to differentiate. That’s what I’ve learned now is, make sure your product is actually unique and different, and addresses a real problem, that doesn’t exist in the market, because that’s how you really build great big businesses.

Interviewer: Sure. So would you say the companies you’ve done, are things that you were definitely passionate about? I’ve seen people say, “Oh, I can make so much money with this certain idea that I have.” I’m like, “But you’re not passionate about it. You don’t care.” What’s your take on that?

Dan: Well, let’s put it this way. The other companies that I never incorporated, were all those kind of ideas initially. Now for the last seven or eight years, I’ve not done that, but I had this crazy idea called “XLights.” XLights.com was a way for you to order your Christmas lights to go up every Christmas. Like you just pick, click, click, click, and all the sudden, a group of guys in trucks would show up and put your Christmas lights up. And I didn’t even own a house. I never put up Christmas lights. I didn’t care. I just thought, oh, people are busy and have money, and they don’t want to do this.
So it’s a no-brainer today that I don’t do anything for the money. I do it because I have the problem, and I feel that the problem is worth me spending my life on. Here’s the filter, and people always say you have to have goals. It’s not, ask yourself, are you worthy of your goals. It’s ask yourself, is your goal worthy of your life? I don’t get today back. I’m going to work on Clarity. If I’m not super-passionate about Clarity, I’m wasting my time, and I don’t get it back. I take that seriously. I want to work on problems that I feel it would be an honor to invest my life into that problem, and no matter what happens, if it’s good or bad, I know that I tried, and I had a lot of fun doing it, and that’s my filter for starting companies today. And it has to have a big impact.
What I learned, and I got inspired by, a guy named Peter Diamandis, he wrote a book called “Abundance”, founder of Singularity University. He challenges every company he talks to, to build a ten to the ninth power impact company. So within a decade, could you potentially have a positive impact on a billion people? That was my filter for Clarity. And it wasn’t apparent at first when I built the first prototype, but once I realized that I’m helping entrepreneurs around the world get advice and grow their companies and achieve their dreams. If I can help a hundred million of them a year talk to each other, that’s going to leave a positive impact on the world, and that’s what I’m working towards.

Interviewer: Sure. I love that take. I’ve recently been, I look up to Brad Feld a lot. He invested in my friend Rand Fishkin’s company, and Brad writes a lot of awesome stuff. Just came out with his book “Startup Life”, I believe it’s called.

Dan: He’s on Clarity. Both of them.

Interviewer: I saw that, right before we hopped on this. I may actually use Clarity to talk to him.

Dan: You should.

Interviewer: Yeah, he seems like a cool guy, but he’s been talking a lot recently about entrepreneurs and depression. Which I personally think, and I have a lot of weird views on stuff, and I’m probably wrong on 75% of them, if not more, but he talks a lot about pouring yourself into your job too much. An entrepreneurial type person is a certain type of person. Right? We’re all very driven. We all work very hard, probably work too hard, take too much on, that sort of thing, but it sounds like what you’re talking about, launching something that you really care about, could be one way to mitigate that.

Dan: Yeah, I mean, to me the way I look at it, the company I did called Spheric, I did that one wrong in the sense that I sacrificed everything for it to be a success. What you end up learning is, you can’t associate yourself to the company. What I do now is I associate myself to the problem and the purpose. So I don’t care if Clarity succeeds or fails. Obviously, I want it to be a success. It’s going to be a success, but if it doesn’t it’s not an attack on my personality, or my abilities. It’s just the idea. The purpose and the problem is still worth solving, helping entrepreneurs get advice from other amazing people. There could be a different way to attack the problem. I could revisit it later if it didn’t work out. It doesn’t matter.

I feel like that’s my purpose, and the vehicle for that is not what defines me anymore. That’s the difference. Where a lot of people, they’re company is what defines them. If something bad happens to that company, they personally take it as an attack on their character, and that’s where it gets dangerous.

Interviewer: I totally agree. So you’re talking about building something that really could, whether you were around or not, it could keep on going, and your ultimate goal was to impact the world.

Dan: It has to. I’m looking at Clarity, and every company. It’s got to have an impact way beyond me. I think that’s what Steve Jobs did really well, and Jeff Bezos. These are these organizations that should be around for a hundred, two hundred years. Why don’t we think like that anymore? Why are people building companies to flip 16 months later? I’m not doing that anymore. I want to build a team and work on a problem that I feel is worthy of my life, and should exist way beyond my time here.

Interviewer: Right. And you can’t do everything as well. If it’s just built around you, you’re the developer, and you’re the marketer, and you’re all of that, you’re going to burn yourself out, and you’re not going to succeed, and you’re also not going to being on the right people that have other ideas that are going to help make you a success as well.

Dan: And you probably won’t have the impact that you could have.

Interviewer: Right. Totally, makes sense. So talking about the impact that you could have, obviously you have to grow. You have to have a large reach to have a big impact. You said that Clarity’s at 9,000 mentors right now?

Dan: Experts. Yeah.

Interviewer: Experts, right.

Dan: We don’t really call them mentors because we’re not mentoring. We’re really about, “I need to talk to somebody who has this type of background experience. 30 minutes, transactional, you can talk to three people on the same topic.

Interviewer: Right. So you have 9,000 experts now. How big do you want it to go? How big do you think it could go? How are you going to get there?

Dan: Hundred million entrepreneurs every year, talking to each other.

Interviewer: Wow.

Dan: It has to. I wouldn’t be happy with myself if it didn’t do that. Anything short of that is not interesting enough to me. I wouldn’t get out of bed. I would go spend time with my newborn son. I would just not do a startup. I don’t have to work. I’ve had two successes now. I do it because I fundamentally love the problem, and the customers, and the users.
We have a 97% satisfaction rate, so that means out of all the calls they’re rated four stars or five, most five, and some four. That means that they’re getting the answers. They’re having great conversations, and I know from the reviews, and the feedback that we get that we’re changing lives. I can’t think of anything cooler than what we’re doing. It’s just really interesting and powerful, and doing anything less than a hundred million entrepreneurs, helping them doesn’t have that impact. I want a billion people positively impacted in the world. If I can help those entrepreneurs build better companies, they’re going to hire more employees, they’re going to help the economy, they’re going to create great solutions to problems, and that’s why I get up every day.

Interviewer: Sure, that’s awesome. So what are you doing to get there? Can you give us some insights on the things you guys are working on?

Dan: Everything possible. Everything.

Honestly, the number one thing we do is focus on the product.

The best thing we can do is get people to that core product value, that promise that, for us, is getting them on a call. Here’s the funnel. I look at it every day. We have real-time metrics. In my office, I have three TVs. I would pan around if it didn’t show you other sensitive information, but we have TVs with all our metrics.
We just care about getting new users, as fast as we can, on a call with somebody awesome. And everything else marketing wise, we don’t do any paid marketing. People write about us, free media, earned media, that kind of stuff, but we’re really product focused. I think that’s the best thing any company can do, is just figure out what’s the difference between your curious, your casual, and your core users? And try to get people to core. Engage, checking it out every week, using it every week, using it every day. So that’s all we do, is really just product focus.

Interviewer: Is that different from past companies? You had one that was around social media as well, right. So what was different about the past ones?

Dan: I used to think; I didn’t really understand how growth engines worked. I understood the concept. Eric Ries is a friend, all the Growth Hacker guys. I talk about product development. What I’ve really understood this time with Clarity is two things. One: You need to measure the core metrics as frequent as you can. For us it’s weekly. We set weekly goals, and every day we have daily forecasts on where we should be to hit that goal, and the percentage of where we’re at. So we have history, and we know the data. So the more often you check the goals, the higher the probability that you’ll be able to hit.

Most entrepreneurs don’t have goals. They may have yearly goals, at better; they’d have quarterly, and maybe monthly. But I get 52 chances a year to adjust what we’re doing to make sure we hit our numbers.

You would only get twelve if you did it monthly, or four if you did quarterly, or once if you did yearly. So that’s one, the frequency of the metrics, and how often you set those goals and measure them. And then the other one is really, crazily, almost obsessively, try to understand what it is that your product does that adds value, that people will pay for. It depends on the business you’re in. If you’re in a social product like Instagram, what is it that makes people come back? Engagement would be the core metric. For us it’s transactional, so who are the highest lifetime value users?
And the way I look at it is what’s the journey they went on to get to that point where they’re engaged? Really understand, what they did, and how they did it, and when they did it, what the frequency was, and they’re experience, and then try to model that journey, that path for every new user to get them to that point. Those are two things that I’m doing totally different with Clarity that I didn’t do before. And Flowtown was awesome. I mean, we grew 30% month over month. My goal with Clarity has been 10% week over week. That’s a totally different trajectory.

Interviewer: Totally different animal right there, yeah. So how do you even, when you’re launching a new product like that, with Clarity, you had it ready to go after two weeks. You had it validated that first check.

Dan: Yeah, but there’s so many things I didn’t understand. I have a list of 75 different beliefs that I had about the product and the market that were totally wrong.

Interviewer: Really?

Dan: I didn’t have a search. There was no search for three months. It was a utility. The way I looked at it was, you use Clarity as a utility to share with your network, but there was no search. That was probably one of the bigger ones. The other one was there was no scheduling, so the way the call worked is, I request a call with you, and it was on your call list, and whenever you felt like it, you would call me back. That’s just crazy.

Interviewer: No triggers to get people coming back in or anything like that?

Dan: That was like that for eight months. We only changed that in November. To say that we were validated, or knew what we were doing, that’s crazy. No, but we’re fast learners. I think that’s slow learning, but we did a lot of stuff, we tested a lot of stuff. Sometimes what happens is your personal opinion gets reflected in the product. I’m the type of guy that I hate scheduling, and that’s why scheduling didn’t get in the product, because I didn’t want it, but I didn’t realize that 99% of our users needed it because they felt weird to not schedule. I was trying to solve from the experts point of view, but the real user, the customer, is the person looking for advice.

Interviewer: So obviously you’ve been very product focused, but when did you . . . I’ve heard of Clarity before because it’s a great product, because I’m in the tech field, but there are probably a lot of people out there that haven’t heard about it. So I just signed up right before we got on this call because I was like, oh I should probably poke around in here and see what’s going on. What do you think is going to be the biggest driver of growth for you guys? Word of mouth can get you to a point, but then there are so many others. There’s email, there’s social, there’s so many of them.

Dan: Have you ever seen Dropbox do an ad?

Interviewer: Nope. I have not.

Dan: It’s powerful. 250 million accounts. People underestimate–Facebook’s never run ads, right? They just built a really great product. They were very thoughtful about how they deployed it, and what markets and verticals they went after. Because of that, they grew because they had a great product. And people don’t understand that. You can optimize for that, right?
We optimize for that by making sure that when somebody signs up as an expert, they get activated. They get a call request. And if you sign up as somebody looking for advice, we do everything in our power to make sure you get on a call. We recommend people. We suggest people. We insure you understand how the product works. We take care of all the risks, etc. So I really think that if we just do that, people are going to write about us. They’re going to talk about us, and that on it’s own- You see, you can’t force yourself into a market. We were really focused on tech entrepreneurs, and now we’re really focused on real estate, retail, restaurants, etc. And people are like, “Are you ever going to do telehealth or other consumer stuff?” And we’re not. We’re really focused on business advice.
And so far, the numbers are proof that you can actually just make sure that the product gets better and better, and you will actually grow. And I think that is the fallacy that people spend money on paid marketing, ten grand a month on Google, Facebook, social, whatever. At the end of the day, if your product isn’t great, it’s not going to get distribution. Nobody’s going to talk about it.

Interviewer: Right. That’s totally fair. Do you think that marketing can help? I’ve seen that marketing can help validate, or invalidate, an idea as well, as you’re going through those different product iterations. I’ve worked with some startups here in New York, we were doing SEO, and we were optimizing their site, and some link building, but mostly on-site stuff, content stuff, all of that, and we realized it just wasn’t getting the return that we wanted, and they actually ended up pivoting their product. Not all because of what I did by any means, but they ended up changing their product focus. And that was validated through those early pushes.

Dan: Yeah. I think, like I said, try to get to 50 sign-ups a day. If you do that by content marketing, or PR, or some kind of viral product, or social sharing, or influencer outreach, whatever you want to do. But honestly, once you have fifty sign-ups a day, all your energy should be focused on the final, to the core- product value experience like the ah ha moment. If you signed up, and we didn’t walk you through to the point where you felt comfortable enough to do a call request, and get it scheduled, and have that call, then bad on us. And I know a hundred things I can do to make it better. And you could probably tell me. Right? That’s the only place I should be spending time, other than talking to people like yourself, or when the press wants to write about us, that’s cool.
But all that comes because you build a great product. If it wasn’t great, Brad Feld wouldn’t be on there. He wouldn’t be doing calls. And if he wasn’t on there, people wouldn’t sign up because there would be no social proof that there’s people that trust us. So I think at the end of the day . . . so I know what you’re getting at. Once you get to a point where the product is great, and there’s different ways you can measure that. Obviously, there’s the “How disappointed would you be?” survey question, custom development question. There’s engagement metrics you can look at. There’s lifetime value of a customer, etc.
Once you understand your lifetime value of a customer, and you need three or four months of data to kind of get an idea, then you look at paid channels that can allow you to acquire a paid customer for less than, hopefully, 50% of the lifetime value. That’s when things get really interesting. That’s when you get crazy growth, if you can pull it off. Most startups can’t. It’s really difficult to do. But that’s the game. In content marketing, the SEO has a cost, hiring somebody to help them out, writing content, restructuring their website has a cost.
And I think you just need to figure out all the different channels you want to test. Spend $500-1000 on each channel. See how they perform in your funnel, and then decide which ones you want to invest in. And then also, which ones are your competitors not investing in? Because if you’re trying to go head-to-head with a national chain on Google AdWords, good luck. They’re pockets are deeper. You’re not going to be able to outspend them. You might be able to ad a product feature like a referral program, or invite program, or some social engagement stuff.

Interviewer: So it’s good market research. It’s good competitor research. And you wouldn’t have founded Clarity probably if there had been a product that already existed that did that. You might have, you might have tried to solve it on your own, but it would have been different.

Dan: I think a lot of us do. I think what happens is, we start out of ignorance. How many times have we started companies, and we didn’t know? And thank God we didn’t know. I’m glad. Ignorance is awesome. I’m glad I didn’t know how hard it was to build my first company. Or that I would fail, because I probably wouldn’t have done it. So I think what you do want to do quickly is get validations on those assumptions.
What are the key assumptions that are wrong are meaningful to my business. Like the first assumption is, if I can’t get people to get on a call then there’s no business. People are like, “Why don’t you do video?” Doing a call’s hard enough. “Why don’t you do it in person?” Again, call is hard enough. Let me just focus. I think there’s these riskiest assumptions that you have that you need to validate. And doing marketing will help you do that. Because you can run paid ads right now to a landing page to kind of get an idea for traffic costs, and then figure out that my product’s only going to sell for $30 a month. I’m not going to be able to use that source of traffic to make money. There’s a lot of different ways to use paid marketing as a way to validate the idea.

Interviewer: I want to be conscious of your time, so I just have a couple more questions for you, one just about Clarity. If I wanted to become an expert on Clarity, how would I go about doing that?

Dan: So today you can’t. We closed it down two weeks ago. The reason why is, we’re retooling our expert acquisition funnel. We’re making it very much like you’ve got to earn your way onto Clarity. Initially it was open to everybody. We’ve retooled our whole community. It’s very much curated. But you can sign up, and fill out your profile, and then probably in a week, we’ll be emailing everybody that’s a member, and saying, “Here’s how you do it.” But you just sign up, and essentially you fill out your profile, and you seem like somebody who might be the right fit for our members.
We’re looking for CEOs, founders at all-level marketers, interesting thought leaders, authors, etc. I don’t want an expert to be on Clarity if they’re not going to get calls. That’s not a good experience for them. If you fit the professional advice . . . If you’re the kind of guy that gets people asking you to pick your brain over coffee? You’re probably a good fit for Clarity. So jump on, and then our job is to get you calls.

Interviewer: So last question, and it’s actually two questions in one. Since you’ve been starting companies for a long time, you’ve probably had a decent number of mentors, talked with a lot of people. What’s the worst piece of advice that you’ve ever been given? And what’s one piece of advice you would give to someone that’s starting a company?

Dan: So the interesting part is the worst piece is not because the advice is bad. It’s because the timing, or the context, was wrong. For example, my dad, everybody wants to pick on their parents. I love my dad. It took me many years to figure out that he was doing it out of love. That he didn’t want to step on my dreams, but he just didn’t want to see me fall down and scratch my knee. That’s parenting. I have a kid now, and you learn, he didn’t want to be not supportive, he just wanted to be realistic to make sure that I didn’t go out into the world and fall on my face. But anyway, my dad always used to say, “Don’t grow too fast.”
And out of spite, I didn’t listen to him. And we grew 150% year over year, and I learned that what he was really saying, and maybe he didn’t even know this himself, was, “Only grow as fast as these things are true.” Cash flow, etc. Revenue, forecast, pipeline, cash flow. That was the right advice, but he didn’t give me context. “Don’t grow too fast.” That’s like telling Mark Zuckerberg, “Slow it down.” Why? You know what I mean? If all these other things are good, go. So I see a lot of bad advice because they lack context, but the advice in concept is good if it was in the right context.
So the best advice? Is that the second part? What’s the best advice I ever got?

Interviewer: What advice would you give to people that are starting companies now, if you were starting now. And you gave one at the beginning; it’s pick a big market. That’s why your real estate one didn’t succeed, but knowing what you know now, what’s the biggest lesson you’ve learned that maybe you didn’t expect to learn?

Dan: I’m going to give two. One, I’ve got to say a lot of advice is generic, but this is probably the most helpful generic advice. Get paid as soon as freaking possible. And I’m talking about no product, no website, get paid. If you are not capable to go out there and convince somebody else to believe in your vision, to believe in you as a person, to believe in your skills, to give you $20, take the money from their pockets, put it in your hands, you’ve got to do that. If you’re a first-time entrepreneur, and you don’t know any better, regardless of everything else, do that. That is the most honest exchange of advice you can get from somebody. They will vote with their wallets, so try to do that as often as you can, right off the bat, and then rush like heck to build whatever you promised them to make sure that they’re happy.
The second one is, and I got it from my buddy Randy, who was the cofounder of Square with Jack Dorsey. And it was after I sold Flowtown, and we were sitting there having lunch and he was like, “Why’d you move to San Francisco?” I told him I wanted to build a big company, etc. And he asked me, “What would you build if you had already made a billion dollars?” And he goes, “And the reason I ask you that is because I have.” Square’s valuation is X, I own blah, blah, blah, I’m a billionaire, and all I can think of is what would I work on after that?” And it was that question that made me realize, that’s the idea that you need to work on. If it wasn’t about the money at all? If you’re already financially independent? Those are the ones that are really interesting. That’s the best advice, I’d say. If you already were a billionaire, what idea or problem would you work on? Do that one.

Interviewer: Interesting. And the funny thing is that that idea is probably also one that could make you a billionaire as well if you’re not already.

Dan: It is. Because it’s going to take all the restrictions [away.

Interviewer: And be happier.

Dan: Like payments, who would do payment. Yeah, if you’re already a billionaire, who cares if you fail? Try to fix email. Those are huge problems. You wouldn’t think like that if you didn’t have that perspective. So I think that was some of the most meaningful advice I’ve ever gotten in my life.

Interviewer: Awesome. Well, like I said, I want to be cognizant of your time, so I really appreciate it. It’s been phenomenal talking to you. I think you’ve said a lot of awesome things. I know I’m spinning around in my head now. I’m sure I will be for a while. I really appreciate your time, Dan. It’s been a pleasure.

Dan: John, thanks for having me. If anybody wants to get a hold of me, it’s Dan@Clarity.fm, or @DanMartell on Twitter.

Interviewer: Brilliant. Awesome. Thank you so much.

Dan: Cool. Thanks, again.

Thanks Dan for your time, and leave your comments below!