In 1999, years before major traditional publishing outfits cared about making money online or knew their bottom lines would soon depend on it, a small Melbourne startup called SitePoint figured out how to make money as the premiere destination for those looking to learn about building websites.
I remember my visits to SitePoint as a teenager fondly. I had a head full of ideas on grand businesses that would make me rich, and all I needed to do was pick up the skills to build them — or so I thought. I got my hands on the classic ‘Build Your Own Database Driven Web Site Using PHP & MySQL‘ by Kevin Yank and read SitePoint’s articles (this was before blogs existed) as often as I could.
In the end, things didn’t quite go as planned. My first job after high school and a bit of uni was (fortunately, before corporate life could claim me) my own business, which involved pushing out word count at breakneck speed, not creating web apps. Even still, I imagine those hours spent learning what SitePoint had to offer had a part to play in my early success, or I wouldn’t have know where to begin building my completely web-based service business.
Humble Beginnings
SitePoint was co-founded by Mark Harbottle and Matt Mickiewicz. Before SitePoint, Mark was a founding member and programmer with the company that developed HotDog, which you may remember as one of the few HTML editors available in 90s. Matt, on the other side of the world in Canada, had started a site that would soon become very popular — Webmaster-Resources.com, which these days redirects to SitePoint (and would probably sell for a small fortunate on the domain market).
By 2000, the two were working on SitePoint full-time and making advertising deals to keep the site in the black. In 2001, they turned their most popular tutorial into a book, which they sold themselves through a print-on-demand service.
The experiment was worthwhile, because the book was a success, enough to warrant a switch from the print-on-demand model to ordering large print runs. The company’s library today features books and kits on everything from running an SEO business to hosting your site using Amazon Web Services.
They’re also the company behind three popular marketplaces — 99designs, a design crowdsourcing site, Flippa, where users buy and sell websites, and Learnable, which is a platform for user-generated education.
Making Money with Information
SitePoint was one of the earlier companies in the world to bring in enough revenue from online content to support a growing staff — and on top of that, was listed several times in the BRW Fast 100, Deloitte Technology Fast 50, and the Deloitte Asia Pacific Fast 500. I spoke with co-founder Matt Mickiewicz to find out how they figured it out so early while News Corp continues to flounder years later.
“When we first launched our Forums in 1999, I made going in there, reading discussions, and helping out people personally one of my core daily activities. I used to answer hundreds of emails every week providing feedback to people about their websites, helping them troubleshoot problems, and in general be as helpful as humanly possible,” said Mickiewicz.
When the infamous ‘social media experts’ talk about building community as an essential part of doing business online, they’re not wrong — even if they don’t seem to know how to do that themselves. Putting some elbow grease into daily and helpful interactions with visitors put SitePoint in the right place for the company’s expansion into new markets. According to Mickiewicz, even SitePoint’s weekly newsletter would result in hundreds of email responses — something I’d be surprised to see today.
“SitePoint really was a community in every sense of the word, and when we published our first books and asked people to buy from us, we had build up a huge amount of trust and goodwill so that people happily opened up their wallets to us.”
Advertising’s No Golden Egg
In the last few years, the annual online ad spend has declined, but SitePoint still walks away with both a good profit and happy customers. To SitePoint, selling ad space isn’t just about slapping banners up when their clients’ ad-men send it over. They work hard to deliver extra value, and that means SitePoint doesn’t have to bring ad rates down to the point of commoditization while its competitors slash their inventory prices in desperation.
“Ad agencies & clients are as demanding as ever, so it’s our job to provide them with the absolute best customer service and justify our value and offer out of the box ideas to clients,” said Mickiewicz.
Mickiewicz and SitePoint started in an era when online advertising was a Wild West and have watched as Internet advertising standards were established by the IAB and the technology that made it possible to target their ad serving based on user demographics — things that have made the job of delivering a great experience for advertisers easier.
Even still, Matt doesn’t recommend that new media businesses rely completely on advertising revenue. “Products sales play a very important role in our business to this day in monetizing our traffic,” he says, though he’s not eager to tell me how much of their revenue is made up by products versus advertising.
“No one wants to buy advertising from you when you’re small, and when you get to a certain size you end up backfilling with ad networks which devalues your ad inventory.”
SitePoint’s continued success has been born of diversification. With a business that gets its revenue from marketplaces, subscriptions, advertising and a plethora of popular products, the company is largely resistant to recessions and market disasters — if one revenue source gets knocked out, they know they’ve got plenty of backups.
Gaining Discipline and a Strong Work Ethic at a Young Age
Entrepreneurs mostly fall short because they don't have the work ethic needed to start a business from nothing. It took a while, but I had to train myself to work 17 hours a day.
I've learned that it is the indirect work that an entrepreneur puts in that makes him or her successful. For instance, I continuously read new books that I feel may be pertinent to my job. I always take detailed notes so I don't forget the concepts.
If I'm not at the gym or sleeping for 7 or so hours, I'm available for my clients. This is what compels them to continuing working with my firm.
The biggest problem I have with my vendors is that it takes them too long to execute a request. Corporate America has set a standard of 8 hours a day - no more no less. It is imperative that the entrepreneur exploit this status quo and stand out from the crowd.
Advertising and Marketing on a Budget
I knew that I could not rely on cold-calling forever. Also, I am a firm believer that you should never rely on current clients. They can move companies and no longer need you, they can experience budget cuts, or you can have a disagreement that leads to a falling out.
However, pay-per-click would not work for me because candidates who yielded little to no return would kill my budget through costly clicks. Obviously it was important that job seekers visit my company's site, but they aren't the real revenue-drivers in the recruiting world. Therefore, I found various industry directories that were accessible to my target market and only cost a hundred or so dollars per advertisement annually.
Once I closed enough deals to support a marketing budget, I decided that we needed some form of SEO. I found a company out in California through the web and the sales representative, seemingly desperate for business, threw in 35 programmed new pages per month with the SEO.
At this point, I had an intern from NYU come to my apartment full time, and together we wrote over 150 landing pages. (Landing pages are website pages geared toward ranking on a particular keyword phrase or two and, mostly they are not linked to from your website's homepage.)
While their programming skills were satisfactory, when it came to SEO, my vendor had no idea what they were doing. Before we parted ways, over the course of approving programmed pages, my vendor sent me their programming and meta tags for my site.
This piqued my interest and I began studying SEO. I ended up studying it all day, every day. I knew it was the only way my company would grow. I read SEO blogs, contacted sites that would give links to recruitment agencies and, at this point I began the uphill battle that was cold-calling universities for.edu links.
In total, I probably contacted 350 or so university career centers in order to present my company as a career resource and, subsequently get a link from their site. I got a lot of resistance, mostly because I was a recruiter and recruiting has a certain low reputation, but some of the career center people were simply hard to negotiate with.
Partially, that's due to academia being its own, insular world, where rules apply differently than in the business world. A university in Arizona would not even accept donations to be listed because we were a staffing agency. Another university's career center got in a lot of trouble when the woman asked for $500 for us to be listed, but there was no cost for any other firm.
I knew something was wrong when she emailed me right away with a "First-Ever Best Career Center Intern Award" in which she would give cash to the student who did the best job of convincing her that they were the best intern and should get the money.
Then, there was my alma mater, who took a donation, only to tell me that the woman who swiped my credit card was no longer there and she didn't have authorization.
In the end, I ended up with only 30 or so links after literally days' worth of cold-calling hours. Even so, it was a higher number than my competition had. Right now, SEO is what fuels my business. We get around hundreds of visits a day and our advertising budget is a mere pittance compared to what most ad and marketing agencies quote.
This means that our firm does not need to attend trade shows and is not reliant on one particular customer to maintain a steady stream of revenue and fuel growth.
Recruiting the Right Employees From an Apartment
I started my business from a studio apartment on Manhattan's Upper West Side, and continued to grow it when my wife and I moved to a larger place on the East Side. But a Manhattan apartment with the attendant space restrictions it still very much was.
I decided to prioritize growing our online presence and business base, as described above, rather than investing in office space before it made logistical sense. But I was quickly busy enough that I couldn't run the business on my own, and that meant bringing on employees.
Recruiting employees to work out of your apartment is very difficult. This is especially true when they are of the opposite sex. I knew that remote employees would not work, as they have a significantly higher turnover rate than in-house employees.
Also, I wanted to hire entry-level people, and too much autonomy leads to failure at that experience level. I wanted them trained by me and not another recruiting firm, therefore we would have to teach them the business.
When I set out to get new full-time people, I already had our Managing Director, Alison, on board so it was a little easier, but many applicants would not consider working out of an apartment.
They would get very skeptical as to the legitimacy of the company. Most would not show up to the interview.
The only way to accomplish recruiting the right people was to increase the salary for the position to roughly 25% over market. It was worth it, as we found one great employee who would help us find the 4th member of the team.
We also assured our employees that we would get an office, a promise that we kept and signed a lease after a few months of the new team members being on board.
Recruiting, even if you have the tools, is a very difficult thing for a start-up. However, the hurdles I cleared can apply to many industries, not just staffing or consultancy services. Work hard, plan smart, and hire right. Aren't those the basics to any start-up's success? The trick is getting them right the first time, or if not, to try, try again.
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