How I Make $14M Net Profit Per Year With a Team Of 16 People | Matt Paulson Interview

My guest today is Matt Paulson, the godfather of email marketing. Matt is the founder and CEO of MarketBeat, which is a go to resource for stock analysis, market insights and education. Thanks a lot for coming to the whole gobuilders show, Matt.

Absolutely happy to be on the show.

You've built a massive email subscriber base of over 4 million subscribers, generating over 30 million in revenue annually. And what's even more fascinating is that you've done it with a team of 16 people, which means you guys do 2.3 million in revenue per employee in this year. Let's talk a little bit about the early days, like how on earth have you built such a business? And maybe you can give a short story of building MarketBeat.

Yeah, so MarketBeat is really kind of. It's an evolution of a couple different ideas that I've had in the past. It really started in 2006. I was doing freelance writing to make some money in college. I kind of figured out that I knew how to write so maybe I could make my own personal finance blog. Blogging. This is back like in the peak of blogging when everybody had a blog and you were writing content and tried to promote it on social media. And I did okay with that, you know, nothing earth shattering, you know, probably $50,000 in a year. And then I did it for a couple years. And the first kind of big stair step moving forward was switching from personal finance content to investing content. Because when you write about public companies that are, you know, stocks, you can get your content featured in like Yahoo Finance and Google Finance and MSN Money, places like that, stocktwits, where it's really vertical search engines for stocks. And you know, so many people are competing in SEO to rank for whatever keyword. But you know, people typically don't really think about the other tabs at the top of Google. So there's like the main Google and then there's images and news and video and search or finance. So my goal was to dominate that finance tab. And that worked really well for us for a long time. The second big kind of stair step up was we figured out how to take SEC filings and use technology to create automated financial reports based off that. So, for example, like a Form 4, where an insider is disclosing a stock purchase or sale, we would take that SEC filing and then turn that into an article saying, you know, the CEO of Starbucks just bought company stock and we would publish those. And since there's a ton of them, we could publish a ton of volume, you know, hundreds of stories per day and put them on our financial news websites and just get a lot of traffic doing that. So that's kind of the second big unlock. That's probably 20, let's say 12, 13 when that really worked. Third big unlock was Brand. The old name was analyst ratings Network and we changed it to MarketBeat in 2015. And that was kind of when people started to realize like, oh, this is a real company and it's not just some guy's website. So I used to be kind of a skeptic, skeptic of kind of, you know, the value of a brand. But you know, as market gets bigger and MarketBeat, like means something to people, really, really get that, then third big unlock was Covid. We were, you know, a low single digit millions company prior to Covid and that just created a massive boom of retail investors. And then we were pretty well positioned. When the madness around GameStop and AMC happened in 2021, we ranked for like GameStop, short interest in Google, AMC, short interest. So you know, there were days when we had like a million people on a website a day. It was just wild. So we kind of rode that wave of kind of the Reddit investing craze and have really been able to capitalize that on that. And then as we've grown, we've just taken about a third of the revenue and plowed it back into advertising to continue growth. So now we're spending a million two, a million three a month on advertising just to build our email list. And that will allow us to do 40ish million this year in revenue. We did 12 million in first quarter, so we're well on track for that.

Okay, was it like a smooth. I guess it wasn't, but maybe some remarkable events over this journey of building MarketBeat. Some moments maybe you're thinking back, you were like, okay, maybe I should do something else. Can you, can you share stories a bit about these periods?

Yeah. So, you know, if you have a content website on the Internet, your biggest fear is always that Google is going to change the algorithm and then your traffic goes away and your website is worthless and you're not making money anymore. That was kind of the cycle that I was in. Like I would have a website, it would do great, it looks too great and then it would get knocked down. You know, this is the Google panda update in 2011, the Cool Penguin update 2012. When these algorithm changes were first starting to impact people like me, you know, I have to escape this cycle of like building a site up, getting it knocked down. Building another site like this, just not sustainable, like long term. I can't do that for 30 years. So I was listening to the Internet Business Mastery Podcast. These, these guys that use like anonymous names, they went by Sterling and Jay, but they were like the like OG Internet Business Podcast. And the message that they had was like, you know, these content websites are great, but they're not going to last. And you really need to have your own audience of customers that buy from you, buy things from you directly. And that was a really, I mean it's such a basic concept, but so many, even today, like people I know that built sites on the Internet, they just miss this. They don't build an email list, they don't have any products to sell to their subscribers, and then an algorithm change happens and they just get whacked. So listening to that podcast episode, where that podcast was a very instrumental early moment for me.

What are the specific ways on how you're making revenue? Maybe there's some secrets you don't need to share. But what are the typical revenue lines for this type of business you're running?

There's three main ones. The biggest one by far is advertising. So we have an email list of 4.6 million people. We have about 125,000 SMS subscribers, probably about half a million web push subscribers, and then 3, 400,000 people on our website a day. So plenty of attention to monetize through advertising. Our three kind of big groups of advertisers are kind of boutique financial newsletter publishers, public companies looking for exposure, and then fintech providers that have, you know, like a new credit card or new savings account that are looking for customers. So those are advertisers. That's kind of bucket one of revenue. Bucket two of revenue is subscriptions. So we sell a product called Market Beno Access. It costs $40 a month or $400 a year. And then we also sell a lifetime subscription for $1,000 that some people buy. And that just gets you access to more tools on our website. It gets you a premium newsletter, premium content. Think of like, you know, an online newspaper subscription. It's basically that. So that's kind of the second biggest budget bucket. And then our third bucket of revenue is syndication. So there are people that will pay us for our content. LexisNexis is our biggest customer for that. And that is kind of a growing source of revenue for us. And then they put it in your database and then they license it. And in their newest agreement, which is really interesting, they are actually like selling our content to people training AI models, which is really interesting. That's a new thing that used to not be in their agreement, but it's pretty good revenue for not really having to do any work. So we're excited about that as well.

Okay, now there are 81% of small businesses rely on email as their primary customer acquisition channel. Can you give us a short master class on how to build an email list, how to grow it, how to sell your products and services using email, be it the traditional small businesses, private equity fintech business. Because I think the email is like very like unused way of selling products and services.

Yeah. And I think it's underutilized because you know, it requires, you know, some work to do. It's not just something that you can, you know, create a Twitter account and start posting in a few minutes. It's, you know, you have to go sign up with an email service provider. Like on my personal stuff I use ConvertKit. That's worked really well for me. But you have to like go sign up, you have to create your account, you got to pay them money and then you got to like connect your domain name to send email. So that's kind of step one. And then like even after that, then you have to go to your website and put an opt in form on your website to collect opt ins. And typically like give me your email address is not enough of a reason to, you know, get somebody to sign up. So you have to give people a reason to sign up. So it's either like a newsletter that you publish or maybe it's a free course or a guide or you know, could be anything, video course, YouTube course, anything. So you have to have some incentive for people to sign up on your website and you got to drive people to your website and get them to fill out your email opt in form. So there's like a lot of steps involved and really that's just the basics. Like there's plenty of ways to get more sophisticated with it. Like you can buy email signups for services like Sparkloop, or you can run Facebook ads through an opt in page to get email signups that way. And there's just a, there's a lot to it. But really the magic is like with email you can have somebody on your email list and you can send them a message anytime you want and they could be subscribed to you for years. I mean I have some people that are on our list since 2009 and so 15 years later they're still on the list. Which, you know, what other Social media channels. Are you going to be subscribed to where somebody might follow your content for 15 years? It just doesn't happen. Right. Because the networks change, the algorithms change and they just kind of come in and out of fashion, but email really, really stays there. So yeah, I mean I wrote a whole book on the topic, Email marketing Demystified. If anybody wants to look it up. It's 99 cents on Amazon. So not making money off the deal. But if you really want that, step by step guide of here's how to set up an email service provider. Here's how to put optic forms in your website, here's how to buy traffic to your email list, here's how to set up a lead magnet. Just go read the book, it's 99 cents.

So the secret really is doing the same thing for 17 years and becoming an expert in this.

Oh, absolutely. Doing something, same thing for a long period of time. It's just highly underrated. Too many people start a business, maybe they try for 18 months, it doesn't get them a million dollars and then they quit and do the next thing. So then they end up with like one year of experience five times and haven't really gotten anywhere. The way to get stupid success, in my opinion is to keep working on something for like long past when somebody else would give up on it. You know, you just think like what the top, top, top professional athletes do for their training. And it is just wild of like everything you do all day, every day is dedicated to like being the best basketball player or whatever. And I think that's true for business as well. Like when my classmates in college were playing Halo 2 on Xbox360, I was in my dorm room writing blog posts and I'm running the same business 18 years later and you know, doing pretty well with it.

What are the ways not to win in this business? One is obviously you give up, you do something else, you try all sorts of different things, different industries. But what are the ways not to win this business other than that?

Yeah, how to fail. There's lots of ways just to fail. A good way to fail is to not talk to your customers like one on one directly with them and ask them what they want. Like if you just assume what people want and build something for them without talking to them and asking them what they want, that's a great way to fail. Because what you think your customers want and what they actually want, that could be two very, very different things. So there's that two, you know, what industry you pick it is really, really important. I had a company, you know, want to pitch me yesterday that was selling software into the restaurant industry. And you know, restaurants have terrible profit margins, they go out of business all the time and turnover sucks. And like why would you want to sell into that industry? Because they're not going to want to buy from you because they don't make any money. So it's, it's just a really tough sell. But there are other industries that like there's plenty of money going around, they have high profit margins, they can afford you. Like I have another buddy who sells this enterprise software that allows like software companies to sell like integrate with other software companies. So it's like they're selling into big venture funded tech companies that have 50% profit margins. They need their business, they're happy to write a $50,000 check every year to buy the software. Like you're selling into a high margin business. That's great.

You mentioned different service providers and why people shouldn't focus on so called industries that are not doing well. Restaurants for example. But what about you? How often do you change your services because obviously you are very public about your numbers on how the business is going, how much you're spending on ads. That means you're doing extremely well. How often do you change the services and how often you being approached by those, for example, software companies.

So I've used ConvertKit for probably two or three years and this is going to sound really stupid but before for my personal stuff I was using the same custom tech that MarketBeat uses and I just wasn't maintaining it very well. So I thought I should just be on a regular platform for my personal stuff. But for MarketBeat, we've been on SendGrid since 2009 so we don't change very often. Like if something is working and continues to work, we just don't switch. We've been on Twilio for SMS for nine years now, something like that. And people come along all day, every day saying hey, we could save you some money if you switch to our platform. And it's like that's great. I don't care. What I'm doing now is working just fine. I've got 50% plus profit margins, I don't need to save money. If some private equity company sells, you know, buys me someday and they want to cut costs like they can do that. Like this thing is working great, I'm not going to mess with it.

I want to talk more about why one should blog or run a weekly or a monthly newsletter Because I want to you know so much about this and you probably see the rewards on day to day basis. So why should one do that?

Well, I don't think people should blog anymore. I just think that as a medium is dead. It's moved all over to social media. I think there's still value in sending out like a weekly email newsletter or for my personal stuff, like the map branded stuff. I just send out something whenever I've got something interesting to say. And maybe I'm on a podcast and I want to send out to the audience so they can listen to that or I publish a quarterly update. I think there's a real value in that because it helps kind of do a build your relationship, your audience kind of on a one to many basis and over a long period of time. So it really builds trust on a topic. So you know, the people that have followed my content for like 10 years, they know me, they know who I am, they know what I'm about. So then if something comes where I want them to take action, maybe I publish a new book and want them to go get it, or maybe I'm promoting an event and I want them to come like I've already built that trust with them over the years and so that they're more likely to say yes when I have something I want them to do.

There is this luck and skill ratio in success in building a business. What's your story about this when it comes to luck and skill or luck versus the skill of building MarketBeat?

Yeah, obviously with every business it's a little bit of luck in terms of timing and picking the right opportunity and then skill of like being able to execute on it. I think I hit some pretty good timing in terms of just the Internet becoming a part of everybody's life and investments moving on to the Internet. So the timing was good, the COVID timing was great for us. From the investing perspective. There's a lot of people who tried to do the same thing that we did during the same time and didn't get anywhere because they didn't have the skills. And I don't know if they didn't have the perseverance or what. There, there are plenty of investing websites that get no traffic and make no money. It is definitely a little bit of both. I think when I do think about luck though, like MarketBeat wasn't the only thing I tried. Like I tried. I had like an audiobook website, I had a personal finance website, I had press release distribution service, I had a service where I would go People like fix people slow WordPress websites. I tried a bunch of different things. So when you increase kind of the volume of things that you try, that will increase your surface area for luck so you can get luckier because, you know, you try this, well, maybe that didn't work, but if you try 10 things, maybe one of them won't work.

Have you had some mentors on this journey or you've been more of this guy figuring things out yourself using Internet?

I definitely have some mentors, but more on a personal side. Some friends here in Sioux Follows that are a few years older and wiser than me. That's been really helpful in like understanding what to get involved with, you know, in the community and what not to and how to spend my time on a business side, I haven't had a whole lot for mentors. Definitely some people I've learned from. Like there's a guy named John Knudsen who's in the financial media space. He's kind of an influencer of sorts. I've learned a lot about the industry from him. He's been incredibly useful just, you know, both meeting him and going to his event. And then also his YouTube content is just fantastic. So in the financial media space, I definitely consider him like a mentor. But that's only within the last few years. A lot of it's just been listening to podcasts, watching YouTube videos, seeing what other people are doing, going to conferences like Trafficking, Conversion Summit, Ryan Deiss's event. I would go to that every year and see like what the co marketing people were doing in other industries that I could bring back to the financial media, financial publishing space and see what I could do in our industry.

MarketBeat is run by you and 16 people. What have been the biggest hiring mistakes and what were your lessons?

We've had employees for 11 years now. We have 16 currently and we've only had three of them leave us either by choice or we told them like, you're fired. And I think the mistakes that we've made are when there is kind of a misalignment of incentives. Like I tried to bring on a business partner probably five years ago now. You know, the misalignment was that he had like I was all in on MarketBeat, but he had three other things that he wanted to pursue at the same time. So MarketBeat just was never getting the time that it was supposed to. So that didn't work. The other. Yeah, the other kind of misalignment were had an employee who had a side business and they were more concerned about side business than their day job. So when these, when people have divided, you know, you hire people that don't. Aren't like all in on their job or their business and have like, you know, some other big part of their life that's also making them money. That's. That's kind of where I've. I've had issues before.

What about the last four or five hires? Did you do it yourself or you have someone else doing it?

I'm part of the process for sure. So our hiring process is. Well, we have whoever the person is going to report to, they write the first draft of the job description. Then I edit it. Then our CFO edits it to make sure it's got all the stuff you're supposed to put in there and nothing that will get us in trouble. Legal. And we'll publish it. We have all of our employees share it on social media. They love their job, so they're happy to do that. Then we'll publish it. On local job sites, we let applicants come in. Once we have about 50 of them, we'll go through them. Then I'll score each candidate. My CFO will score each candidate, and then whoever the person that this person is going to report to will score each candidate from there. We'll take the top 10 of those people. We'll do phone screens with 10 of them. I don't do that, but one of my team members would do that. And then we'll invite usually like four of them in for an interview, and then we'll kind of pick one, and then we'll do a team interview where it's not really an interview, but it's more like a meet the team thing. And then if we like them, at the end of that, we'll offer them a job. So there's definitely this kind of funnel process that involves a lot of different people and a good process. And that's been working really well for us.

What do you believe are like three, four main reasons people go to work in MarketBeat?

You know, we pay people really well. People love the culture. We're nice to our employees. Like, we have an employee who's like at home sick with their kid today. So we sent the kid flowers because the kid's been sick for like three days. So, you know, little stuff like that where it doesn't cost a ton of money, but it tells them you care. I read a recent study, like, about what employees really want in a job. And pay is like number four, and number one is being recognized by your Supervisor showing you're working on significant work, having good teammates, good culture, and then pay is like number four. So I try really hard to recognize you, you know, our employees. When you do well, just show them that their work matters and that I value them. And that goes such a long way. Obviously, you got to pay people well, but, you know, people don't quit their jobs, they quit their managers. You can treat people like adults and treat them with respect, that they'll love you for it.

A little bit about your investment strategy. Why did you decide to bootstrap MarketBeat and not raise funding to grow, like, more aggressively?

You know, gotta understand. I live in South Dakota. It's a very rural state and very limited venture capital. And I started it when I was at a college town of 7,000 people. So there was no venture capital. And if there was, like, it was probably in Minneapolis four hours away. So I didn't even know it was a thing. I didn't know it was an option. Like, I knew a bank would give me a loan, but I had no idea venture capital existed when I started MarketBeat.

So now a little bit about you being extremely transparent in pretty much everything you do, business wise, personal life wise, and the numbers even while you are like a private. You're running a private business.

No, no, that's. That's a good question because, like, obviously your choice is to, like, never mention your numbers publicly, keep it totally private, or share something. And ultimately I decided to share some information because you can't really get the credibility that you want without it. So I really want to be seen as a email marketing expert that is really in the top of my field, top of the game. Like, I like speaking at conferences, I like creating content I publish in books. And you can't really do that without the credibility that goes behind it. And when I first decided to build a personal brand, there were some other kind of email people that said, you know, I've got a list of, you know, 250,000 people and I'm making a million dollars a year in email. It's like, my numbers are way better than that, but nobody gives a crap who I am because they don't know my numbers. So I thought, okay, I'm just going to share some numbers and then that will give me the credibility to be this thought leader in email marketing.

So what sets MarketBeat apart from other financial news and analysis platforms?

You know, I'd say there's a lot of similarities. We have a lot. We have a lot more tools than a lot of other Investing news websites. So a lot of different stock lists and stock screeners and tools like that. So we have more of that. I would say our platform changes a lot more than others. We have a development team of five people and they're always making improvements to the website. I'd say content is very similar, really. Like if you're just thinking about MarketBeat as a website that people go to and read content like it's very similar to other businesses where we are very unique is that we are a marketing machine. You know, we drive more than a hundred thousand clicks a day to advertisers. And of the, you know, we'll generate probably 35 ish million this year in advertising revenue. So that's where we're unique is we're really good at generating sales for our customers.

So your return on equity is extremely high while pretty much putting the money back in the business, back in ads. What type of investments are you looking for when it comes to outside of MarketBeat? And maybe you can share a bit about your two or three last investments.

Financial media marketing companies, from a business perspective, they're a lot like a marketing agency in that, you know, there's not any hard assets. Your value is really the people and these other. And really every month you're kind of starting over at zero in terms of revenue. So you know, media companies typically don't sell at really high valuations. Um, and we recognize that. So like my wealth building play is not build up MarketBeat and sell it to somebody. It is to operate MarketBeat profitably as long as I can. So if MarketBeat does 40 million this year and we make 20 million in net income on that, I'll probably pay 6 million in taxes on that. So that leaves me with 14 million. Maybe you'll live off a million on that and then you just go invest the rest of it. So that's kind of my wealth building plan where I'm investing primarily. I have kind of three buckets. Real estate, so local apartment complexes, strip malls, individual buildings. I'm doing a ton of that with my partner Kevin Tupy. And then I have a venture capital fund called Homegrown Capital that is a kind of a boutique venture capital firm that invests in technology startups in the Midwest, the United States. And then the third bucket is just public equity, stock market stuff, index funds, stocks, stuff like that. My most recent kind of big investment, actually there were two. I bought 15 acres of land in the northeast part of town. We're going to build apartment complexes on that or an apartment Complex on that, probably starting in fall. And then I also just put or agreed to put a couple million dollars into a private credit fund that a guy in town here is running. I'm pretty optimistic about that. So those are the two most recent ones. But a lot of real estate. Real estate's the big one. Just because it's slow, steady, probably not going to lose money over the long term. It's also fun to own, building some talent set. It's fun.

So a little bit about the challenges because often these teach us the most. And building MarketBeat as well, I guess it always hasn't been easy. So reading about your journey. 2016 was a bad year. Your second child was born and you said your family was frankly a mess. Market didn't grow. You thought about selling the business because you were burned out, out of ideas. And thankfully no one offered you more than three and a half times ebitda, which you were looking at at the time. And you decided, okay, I better just keep running the business. So today, obviously, you're happy you didn't sell the business. I'm quite sure. But can you tell us more about this period of year 2016?

In 2011, I was kind of the first bad year. We got married. And then five months into our marriage, my wife's father died. So that was not a good year. And then the next year we had a kid and named Micah. He's 11 now, but he was born 10 weeks premature. Weighed 3 pounds, 1 ounce. That was a tough year. And then 2016, when Addie was born, that was also a tough year. My wife, Green, had a really tough pregnancy. Very, very difficult. Um, and Addie was also born premature. She was five and a half weeks premature. So, you know, we had two premature babies, both had therapy, both have issues. My little girl, Addie, has a genetic condition that we didn't learn until she was three. So now she is eight years old. But she, you know, her speech is pretty limited. Because of her, she has a, you know, rare genetic condition. So, you know, business is, you know, I've never had problems that are like an existential threat. But, you know, we've been through a lot on the personal side and just family health issues. Like all four members of my family, like, had a prescription last week and, you know, we always kind of have stuff going on that's kind of chronic medical stuff and we just have to deal with it.

So business wise, 2017, 18, 19. And then Covid happened. Everyone was stuck at home and getting free government money. Then the whole GameStop AMC short interest thing happened and you crew 86% in 2020 and 77% in 2021. Wild times. Tell us a little bit about the wild times.

Yeah, it's. It was weird, but it was awesome. You know, 2020 and Covid, like, nobody knew what was going on. You know, we didn't have a big drop in revenue in early 2020 like a lot of people did because, you know, the products that we sold tend to sell or like, people buy at home anyway. So, you know, we didn't, didn't get hurt in 2020. And it was like kind of summer, fall of 2020, when things just really started to shoot up. And then, you know, I think it was like November, December of 2020, somebody posted on the Wall street bets subreddit saying, like, you know, if we just all bought GameStop stock, like the shorts could not buy enough stock to cover, you know, their positions. And that would just keep driving the price up over and over and over again. And then it'd be a short squeeze. So GameStop stock shot just shot up to the moon. And people like, what's going on? Like, the rules of Wall street have changed. The retail investors are back with a vengeance. They bankrupted or basically bankrupted a hedge fund doing that. So people really thought the rules of investing had changed. And maybe they did in some way, but then they didn't. And then they thought, okay, you know, the fundamentals of GameStop are like garbage, right? Like, people aren't going to be buying video games in stores in five years. It's just not going to happen. But people decided like, oh, the fundamentals of business don't matter. It's all about sentiment. So they, you know, they drove GameStop up to some crazy numbers. And then they did the same thing with AMC theaters, like during COVID when nobody was going to a movie theater. And then, then the question is like, okay, what's, what's the next one of these gonna be? And then for a while it was like silver. And you know, there were a handful of other companies that. And even like recently, like in the last year, like, there was this EV startup called Mullen. Well, in automotive, that was like, gonna be the Tesla killer. And, you know, retail investors are just buying that up. And, you know, they're, they're, they're really like, viciously defend their, their stock of choice on social media. So, like, even today you say something bad about GameStop stock on Twitter, like, people come out of the woodwork to attack you and just because, like, it's almost Like a religion to them. And it is just a wild kind of part of the stock market these days. And but we've, we've been able to ride those waves pretty well. Like we saw, we didn't see the GameStop thing coming, but like we saw it when it was happening, then we capitalized on it. So like I mentioned in 2020, 21, like you would go to Google, you type in GameStop short interest or Game Shops, Gamestop short squeeze on like their market beat was. And every two weeks, you know, know the NASDAQ and the NYSE publish new short interest reports. So like the data came out like everybody's waiting to see what the number was. And it was just wild on those days, you know, we get like a million people on our website looking for those numbers and it was fantastic.

Where were you prepared for this type of growth? Or it just, you saw it, it just started like clicks started coming in, traffic started coming in. And how were your days back then? Were you working longer hours or how was it?

It was pretty manageable. The main thing we had to do is go get some more servers. So we used to have like Mark Speed on one web server and now it's like on four or five, I don't know. So we had to do that. And that wasn't a big deal. It just took some time. Thankfully we had really smart kind of IT server guy that was able to do that for us and that was the main thing. But honestly, like our website could, our business could handle two or three times as many people as it does today and it wouldn't be a problem from a staffing perspective.

You've been growing like organically, just not acquiring businesses. But have you looked around on the market where you could buy email like a newsletter list from your competitor? Maybe they for some reason wanted to shut down or sell their business. Have there been situations like that?

There have. And what I've kind of seen is I haven't really found anything worth buying because with an email list you really have to maintain it well and you know, unsubscribe people that don't open and you have to mail to it regularly. And when somebody is selling the mailing list, it's usually either not very big or it hasn't been well maintained. So it tends not to be worth very much. The other thing is like people will try to sell me like investing websites that have tools and then you have to inherit somebody else's like software development work that might be in a language that you don't know. Or don't use. And, you know, you. You just inherit a lot of technical debt. So we've kind of strategically decided, like, acquisitions aren't going to be part of our, our strategy because it's just too much work, too much money for what you get from it. And we decided instead, like, okay, we don't really want to acquire other websites. We don't want to acquire other email lists, but what we do want to acquire is their subscribers. So the money that we would put into acquisitions, we just put into advertising.

So you spent a lot of money on advertising. How much or how is your focus, how is your time spent on unsubscribers? Like, why did it happen, how we can make it slower, or what. How do you work on this?

Yeah, for. For advertising, we do a bunch of different stuff. Some of it is through different marketing agencies. So, like, a big one we work with is a company called Thousand Marketing. They are niche to the financial media publishing space, and they spend about $300,000 a month for us. And that's fantastic. Some of it we do on our own, like all of our YouTube spend and our Twitter spend is all internal. Then we work with different agencies. So there's another one called Net Effect. They buy placements in other people's newsletters for us. So you kind of have to identify people who are good at one thing and then pay them to do that one thing and then like, not have them do anything else. Because usually if you're like a good. You're good at one thing, you tend not to be good at other things. So you just have to go pick and choose people based off their superpowers and do that. And so, you know, about a year ago, we were spending maybe $300,000 a month on advertising. And what I kind of figured out was, you know, if we spend $300,000 in January, by the end of March, we've probably broken even on that. And then anything after that is profit. So my thought was, I'm just going to keep scaling this up by $100,000 a month until it stops working. And we've continued to do that. You know, we're spending a million two, a million three a month on advertising, and lots of keeps working the way it has. Like, we're just going to keep. Keep growing it. You know, the goal, you know, I really probably want to spend about a third of our revenue on advertising. So if we made 4 million bucks a month, we'll spend a million three. And after that, you know, I do want to maintain Our profit margin. So we'll probably kind of slow down and not keep growing until the revenue catches up with it.

You spend a lot on ads. Does it sometimes keep you up at night or you're used to it?

No, I sleep really well. We have a really good handle on the advertising that we buy. We understand the performance curve and a lot of what we'll do, like when we're testing out a new channel, I'll say, okay, we'll give you $10,000 a month for three months and then we'll reevaluate. And then if we can kind of see where like the first month's ads have like made a profit, the second month's ad are breaking even, and then the third month's ads are kind of on the way to breaking even. Like, we can see that performance curve. And we say, okay, we gave you 10 last month, we'll give you 20 this month. And then we just kind of grow it, you know, steadily over time. And that allows us to, you know, not spend $100,000 and make nothing back from it.

So a little bit about the biggest lessons you've said on your blog. There are some really cool investing tools out there that are frankly better than MarketBeat. But you know what they don't have? 4 million email subscribers, 700k web push subscribers, 120k SMS subscribers. A few lessons from my career. Number one, distribution means more than product. Number two, build your audience using platforms other people are ignoring. Number three, email is best channel to build your audience on. And number four, work on same thing for 15 years for outsized success. Can you maybe give a short comment on each? Like, number one, distribution matters more than product.

Yeah. You know, if you're in the media space, like your only distribution is your only moat or competitive advantage is your audience. Because anybody could go build a site like MarketBeat. The value is just having, you know, 4 million people on email list because, like, anybody can go buy the data. There are like services now that you can just go buy financial data from, like Quandl and Intrinio, Nasdaq data link. You just go buy the data. So you hire a developer. You can make the website. So anybody can do that. It's not a competitive advantage anymore. What is the competitive advantage is the email list and the web push list and the SMS list. People can't copy that easily without spending millions and millions of dollars in advertising. So that that becomes a moat. I think it's really important to understand, like where your audience is on the Internet, like who your demographic Is so, you know, for us, that tends to be primarily older people, primarily men. You know, these people aren't on Facebook that much, but they are on Twitter, they are on stocktwits. So you want to build an audience in those places. Email is great. Email is the best channel and it is the best channel because nobody owns it. So, you know, Google can add features to Gmail, but they can't change the underlying specification of email because Hotmail and Yahoo and everybody else would have to agree to it. And email just doesn't change in big ways over a long period of time. Like every now and then, some new things will be added, like the list and subscribe header. But email is. Email is email. It's probably always going to be email and no one company can mess it up. So that's fantastic. Then the last thing, work on the same thing for a long period of time. Um, I just don't think you become the best in the world at anything until you work on it for 15 years. Uh, you just have to do it for a long time. You have to try everything. You have to do everything. You have to, you know, listen to all the podcasts, read all the books, meet all the people. And then like, once you kind of do all that, then like you could say, okay, I think I understand how the industry works. I know who all the key players are, I know what they do, I know what their strategies are. And then you've been in it longer than anybody else and you snowboard anybody else and then you can do better than everybody else.

You have quite a lot going on. I mean, I was looking at your LinkedIn. So my question, how do you manage it all? You run MarketBeat, you're a general partner in Home Grown Capital, and you're a general partner also in Creston Capital Holdings. So how do you manage it all time wise? Energy wise, focus wise.

So MarketBeat is probably 80% of my energy. And then, you know, Homegrown Capital and crested are 10 projects. So, you know, my partner Tim runs Homegrown Capital on a daily basis. My partner Kevin mines Crested Capital on a daily basis. So they're the operators. I'm, you know, those are five hour a week projects for me at most. So I don't have to put a ton of time in them because I have great partners. That's what it amounts to.

One of your tweets, you posted it 2020 March. If you want to achieve great things, stop caring about the things that masses care about. Sports, politics, alcohol, gossip, television, etc. Instead care about your craft. Care about the one thing you can be better at than anyone else. Focus on it. Obsess over it. We've covered a lot of it that being focused, doing something for 15 years. But is there anything else you bring out when it comes to, I would even say the success you had?

You know, everybody has hobbies, but if you could make your business your hobby, where, you know, you're thinking about it all the time, you're listening to podcasts about it, you're always trying to learn about it. Even, like, you know, I met markbeat during the day, but I think of Markbeat, like, basically all the time. So usually the great insights are happening. Like when happening when I'm sitting at my desk. It's like when I'm on a walk or when I'm in my car and I'm thinking about markiped, and you get a great idea. So a great business will consume your life in a way, and you kind of got to be okay with that. Like, it's like, yes, I'm married, have a wife, two kids, and like, I spend all day on Saturday with my kids and. But, you know, I'm thinking about market B2. And, like, because if it consumes your life and consumes your thoughts, you know, it's probably going to go pretty well because you're just always thinking about it.

A little bit, about your personal and maybe inspirational things. You're a watch guy, you're a car guy, and recently you became a playing guy. But what drives you? What motivates you to do all that, what you do? For example, this podcast, it's early morning for you.

Yeah, it sounded like fun. I like to do things that are fun. And it's going to sound maybe stupid, but whether it's like a watch or a car or like the plane that I bought last year or like any of the community stuff we do in Sioux Fall is like, you can't see it from here, but just over the river and down the road, there's an outdoor concert venue. And we're going to sponsor 50 free summer concerts this year. There's a children's science museum down the road, and we're helping them, like, revamp part of it. And we just think these things are fun, so we like to do them. And, you know, maybe that's me being simple, but if something's fun and we can do it, we do it.

So the charity part, did you already know when building the business, that one day when things are going better, we have a lot of profit did you already think about that already or all this came now when the real success, so called, arrived.

Yeah, we gave money away on the way up. So, like, it's always been part of the deal. My thought is, you know, I'm 38. Most people live until they're 80. I'm going to be dead in 42 years and I have all the money I would ever need now. And like, if you give money to your kids, it tends to screw them up, so there's just no reason to, like, hold onto it all forever. Um, and I'd rather like, do some fun stuff today while I'm around to enjoy it than, you know, have the money be given away to somebody else, like, when I'm dead. Because, like, your money's gonna go to somebody else at some point, so it might as well happen, like when you're around to see it happen and enjoy it.

So another post. It comes about goal setting, I guess. Be careful what goals you set in life because you may achieve them. Lots of people want to be extremely wealthy, but. But that comes with a lot of demands on your time, people that want things from you and business complexity that you have to manage. It comes at the real price. So what has changed? When we take 20, 15, 2016, and when it comes to today, and maybe.

Last year, you know, people will see somebody who's in business doing really well and kind of be jealous of that. But there are some real costs that come with it. Like in Sioux Falls, like, everybody knows who I am. So, like, there's no. I'm not anomaly. A nominated. You can't be anonymous. Like, you go to the movie theater, somebody will say hi to you and like, you know, maybe want to talk for a couple minutes and like, you know, that's okay. But, you know, sometimes you just want to be anonymous. So if, like, I just want to be a face in a crowd, I got to go like, somewhere else. And so, you know, that's a price. You know, people always want to get involved with their stuff. There's a lot of asks, there's a lot of meeting requests. You know, can you be involved with my nonprofit? Can you be on this committee? There's. There's a lot of that stuff. And that kind of can become a challenge too. So, like, there's just kind of this expectation that you give a lot of money away, that you serve on all these nonprofit boards, that you just get involved with everything. And it can be a lot. And like, you know, I think there's some value and, you know, that's just not for everybody. Like some people may want to be anonymous and just be able to like I could never just be gone for two weeks and disappear because like, too much work and too many things to pile up. So like, there's a cost to this. And you know, I think it's for me it's been a great trade off. But like, say there's no cost to being a successful business owner is just not true.

Now, three questions in one. And it's about the future. Number one, what motivates you today? What do you want to accomplish next? And what is the future for Mat and MarketBeat?

Yeah, good question. I don't know that you know this. This year we're trying to hit 40 million in revenue. I think we'll do it. That's kind of the big financial goal this year. My future with MarketBeat is to run it until I'm 60 or 65 and then shut the door, close the doors and write a big check to my employees and call it a day. So I'm kind of on the never sell bus. Love running a business. I'm going to run it as long as I can and pay my people well along the way. Don't really plan to sell it. So this guy in town, his name is Scott Lawrence, but he runs the largest advertising agency in town called Lawrence and Schiller. And he's probably in his 60s now and he never retired, maybe in his 70s now. So he keeps running his business as kind of the chairman of the board, but then he has people that oversee the day to day stuff. And then he just goes and does the fun stuff that he wants to do. Like he, right now he's our chamber board president. So he's the president of the Chamber of Commerce. And I think that's a pretty good path for me. Like maybe don't retire, keep showing up to work, but maybe over time I get to work on more fun stuff and less work.

Like a general question. How has entrepreneurship and building MarketBeat changed your life and changed your family life?

We have way more money, so we get to do a lot of fun stuff. You to go on a lot of trips and do a lot of fun things. So we still like live in the same house we've lived in for the last 12 years. We never went and bought a giant mansion because, like, I don't really want to. I don't want my kids to like live some crazy life where it's just not realistic for them. Like what their life's gonna be like growing up so you know, we live in like a 3,000 square foot house. I walk my kids to school every morning and I'm trying to give them kind of a normal childhood so I don't mess them up. So yeah, so like our lifestyle is other than like when we go on vacation, we take a private jet like day to day. It's very similar to like what the people down the street is. It just we don't do anything too wild. We do go on vacation, but everybody goes on vacation. So yeah, I don't know.

You mentioned not selling the bus, not selling the business. There are many investors, fund managers listening. Is there an amount or a level of you would consider selling MarketBeat or at the moment it's a big no.

Every business has a price, right? I think Somebody said here's $200 million for MarketBeat today. I'd probably have a hard time turning that down. But I don't know. I like what I'm doing. Whenever somebody sells me that, emails me and says, hey, I want to buy your business, we just tell them it's not for sale because if they're really serious they'll just come back and offer a stupid amount of money. But only one person has really done that and it wasn't the right number.

Matt, it's been a lot of fun. Let's wrap up with a famous five. How old are you?

I am 38 today.

Favorite book?

Oh, my favorite business book is Business Brilliant by a guy named Louis Schiff. And my favorite non fiction book is To Kill a Mockingbird by Harper Lee.

Married, single, kids.

Married. My wife's name is Karine. And then we have two kids, Micah who is 11 and then Addie who is 8.

What car do you drive?

So two cars. I have a Mercedes G Wagon, a G63. That's kind of my daily driver. You know, you can use it winter here. It's great driving. Basically anything never gets stuck. And then I have a. Right now I have a Ferrari F8 Tributo and I don't really like it. I'm probably going to sell it this year. It's kind of a pain in the ass to drive. So I'm going to sell it and then I'm thinking about getting like a Mercedes, just AMG GT where it's a fast car but it's maybe a little bit more practical to drive around in South Dakota.

What's the best investment advice you've ever got?

Oh, don't invest in things you don't understand.

Last one, where can people find you.

Two places to find me. If you want to get my quarterly updates, just go to mattpulsen.com m a t t p a u l s o n.com and then you can sign up to get my quarterly updates, email updates there and or you can follow me on Twitter and then my Twitter handle is attpulson sd.

Again, thanks a lot Matt. I really enjoyed talking to you and when I sent you a message that would you come to the podcast, you right away answered yes, you would like to do that. It was a good day. So thanks a lot for doing this.

No, happy to. Great to be here.