Bootstrapping to $100M in Revenue with Neil Patel, NP Digital

I've just released a book from grassroots to greatness 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike Disaster to Gainsight. To give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomenon. Check it out at from grassroots to greatness dot com. The digital copy is on for 99 cents.

People don't like faceless companies. Look at Kylie cosmetics. Look at what Lebron James has done. Look at what a lot of the celebrities like Rihanna has done with Fenty. People don't want faceless companies. They want to interact. People have emotions and I don't think that means a personal brand is better than a corporate brand. I think an ideal world, you need both. That's how you win. I need some traction.

You need some traction. Let's get some traction. Hey, what's up innovators, entrepreneurs, visionaries and disruptors. This is your Traction podcast host, Lloyd Lobo. We're a community of over a hundred thousand people just like yourself, on a mission to help you get the methods, the money and and the madness to explode your business growth. Featuring stories and tactical advice straight from those who've done it before, like Shopify, Twilio, Asana, and many more. Hey, Traction fam. Super excited for our session today. Our guest is a New York Times bestselling author. The Wall Street Journal calls him a top influencer on the web. Forbes says he's one of the top 10 marketers. Entrepreneur magazine says he created one of the hundred most brilliant companies. He was recognized as a top hundred entrepreneur under the age of 30 by President Obama and a top hundred entrepreneur under the age Of 35 by United Nations. He's helped Amazon, Microsoft, Airbnb, Google and many more grow through marketing. And his blog generates over 4 million visitors per month. His marketing school podcast generates over 1 million listens a month. His YouTube channel about marketing has over 31 million views and 765,000 subscribers. He has more than 1 million Facebook fans and nearly 400,000 Twitter followers. He's a frequent keynote speaker at hundreds of conferences. But what's most interesting is he's bootstrapped his company NP Digital to 100 million in revenue with zero investor money. Love to have him back here. He was our first keynote speaker at the first Traction Conf in Vancouver. Neil Patel, thanks for joining us again, man.

Thanks for having me, man.

I am super, super excited because when Everyone thinks of Neil, they think of Neil as this marketing genius, this SEO guru. And all the sessions about you that you're on, videos, et cetera, I went through like hundreds of them. They're all about SEO and marketing. But there is the man behind it, the journey of the entrepreneur. And that's what I want to dive into today for our audience. So your journey has been incredibly inspiring. Let's start by sharing your early experiences and influences that sparked your interest into entrepreneurship way back when you started kissmetrics. Like how did that come about? How, how did you venture into doing companies?

Yeah, So I was 15 at the time, so 23 years ago and I was looking for a high paying job on the Internet. There were sites like monster.com, career builder, et cetera. I don't know if they exist today. And I couldn't find a high paying job because they all required a college degree and a lot of them required like technical certifications for the jobs. I paid six figures. So I was like, I can't find a job. I'm just going to create a job board and make money like these people and they're like oh, okay. So then I created a job board, paid some people on, I think the form was called web hosting Talk. Found some developers on there for a thousand bucks, paid them using money I got from cleaning restrooms and toilets at a 9 to 5 job. And then no one came to my website and I had to learn marketing cuz I was like, okay, I don't have tons of money. Funny enough with the money I had left over I tried paying someone, didn't get results. But eventually I was broke, frustrated. I learned it on my own. I got good at it, got tons of traffic to my website but still made no money. And it was at that point where I had a passion for marketing. And then I went into creating an ad agency and then software companies and then got out of the ad agency business in 2008 when the market crashed. Focused on software because that's where I felt the opportunity. And around five, six years ago I jumped back into the ad agency world because that's where I saw the opportunity shift to fantastic.

Now were there any particular moments or experiences in your life that ignited this interest that I should go and start a company or was it just I want to make money but I had no, I don't have a college or a sort of Ivy League degree.

It was the second one. It wasn't like some amazing like aha moment. It was more so I don't have tons of options. I'm too young. No one's going to hire me and pay me a hundred grand a year. So let me just go build something and try to make 100 grand a year. It was like I just couldn't find a solution. And I'm not saying I took the right approach. It was just when you're 15, 16 years old and you can't find a high paying job, which most people can at those ages, the only way to really make money is do it yourself.

Did you go to university or what was that like?

I did. You know this. My parents said no good Indian girl will ever marry you unless you have a college degree. Funny enough, I didn't end up getting married to Indian girls. There was a point in my life where my parents didn't care who I was dating or anything. They didn't care if I was a girl, a guy or what race. They're like, just get married with someone, we don't care and we would be happy. Eventually I did end up getting married, but my parents believed if I didn't have a college degree, no one would marry me. So I went to college.

That was in a way my story. I actually didn't, didn't finish high school. I don't have a high school diploma. And most kids who don't have a high school diploma, they wouldn't apply to university. And this was Canada. I applied to every single university. One college called me for an entrance exam because there's no SATs in Canada and they said, what happened to your high school transcripts? I sent them the previous year and I said there's political unrest in my country, so they're coming. So I wrote those entrance exams. I did well. They said start the semester but before the end of the month we need those transcripts. Luck would have it, they never followed up without high school diploma. I graduated engineering, so it's pretty easy. But Indian parents, right, that's the commonality is always engineering. Do your master's get this degree? Basically society's definition of success is go and get a degree, an advanced degree even. Because that's what defines you, your job defines you. And you've carved a completely different path. I often believe that pain is the precondition for growth. And in your journey, building companies, building software companies, ad agencies, has there been any difficulty or failures that shaped your approach to entrepreneurship and decision making? Maybe you can share a significant example.

There's not really difficult things that have shaped the way I make decisions. I'm not the smartest person. I've just made a lot of mistakes. What's really shaped what I do in the future is a few things. One is I look at all the mistakes I've made because I made a too many to even count. And I continually try to avoid making the same ones over and over again. Now when I make my decisions in the future, it doesn't mean I'm not going to make mistakes I still make a lot of, but I tend to not make the same ones I already made in the past. And that's the big way that I operate in my life. I'm gonna make more mistakes I always will. Just try to make avoid making the same ones over and over again and eventually led down a path on what you should be doing.

Definitely. I like that. Because failures are just learnings. In our cultures especially, failures are seen as taboo. We're not given the room to fail or talk about it. And if you don't fail, you don't learn, you don't move forward. But was there like any big like multimillion dollar f up? You're like, damn, a lot of those.

Not one of those. I've done a lot of them. Like before there was aws. I tried to create a cloud computing company like aws. I'm not saying it was my idea before. Theirs did not work well. Lost over a million dollars of borrowed money in that. Not investment money, borrowed money. So I had to pay it all back. But there's a lot of stuff, a lot of other big mistakes. None of my earlier businesses ever got to the place they wanted to because they I lacked focus. So then eventually, once I realized I need a focus, I did that and fixed and made more of them grow. Another big failure in my life was I picked too many businesses with small TAMs. TAMs total addressable market. I know, but for your audience, the bigger the market, the easier it is to capture a decent amount of money. And I would go after really small niche ideas. They always say riches are in the niches. No, it's not. That's far from true. Riches are in the broad markets that apply to everyone. Like Procter and Gamble and Unilever.

Definitely. Unless you target a niche and you know it's going to blow up few years down the line. If you start in a small obscure market that's not going anywhere, it's not necessarily true that it'll blow up. Right. You might lose money, but the focus is really important. A lot of entrepreneurs, we chase shiny objects and we realize then that damn, we're spread Too thin. Dive into that focus issue in some of your businesses where you said you were not focused.

I would make money from one business. Like my first real business. Real not. I don't count the job board, but the first real one was an ad agency where I was just helping people get marketing. More visitors to a website, made some money. Then I invest in cloud computing and then I would invest in software and then made some money from software and then invested more software and more. More random investments. It was just never ending. I never put the money back into the business itself that was generating me the money. That was a big mistake.

Definitely focus is everything. It's better to be an inch wide and a mild beep at least when you don't have the Neil Patel brand. Now you have a brand like on par with Gary Vee and things like that. You can launch five businesses and put five different CEOs and your brand will probably drive the buzz for it. But in the early days when you have nothing, I think focus is key.

I don't know if my brand is. I would say it's definitely smaller than the Gary Vee and a lot of the people out there. But even with that, whether it was bigger or smaller, I actually focus more now than I did in the past. Because even though I can launch more, I only have so much time and mental cycles. Why not spend those mental cycles growing what I have? Yes, it's growing and it's a decent size, but some of my competitors are doing like $15 billion a year in revenue. I'm not. Why have my eye off the ball? Like just focus, you know.

That's a good way to put it. The single richest person in B2B SaaS is Larry Ellison. I think why he never sold a share of Oracle. He played the long game. He's still running it or in some capacity. The largest shareholder, the single richest person I think in investing is Warren Buffett. He just never stopped focused on that. So I like what you said. Your competitors have billions in revenue. You're not there yet. Yes, you're at 100 plus million in revenue. And focus will drive you there and help you dominate the industry. Now, somewhere between NP Digital and Crazy Egg on all the other things you've done and the agencies KISS metrics happened 10 years ago is a very hot company. Did you guys bootstrap that in the early days or how did that come about?

It was bootstrapped. It was spun out from Crazy Egg. Where we messed up is we had a lawsuit over data rights and data privacy and that's what derailed the company. But before that lawsuit, the company was very close to breaking even with millions of dollars in its bank account. So we didn't need, and I remember at that phase, we raised roughly 4 million bucks. Million Series A, 3 million Series B, or however you want to call the numbers. It was somewhere around there. And the company would've just kept going. We didn't need any more money. And we even had other larger publicly traded companies that wanted to buy us. We had a few of them, but that were, at least in the talks, nothing that was ready to rock and roll. And the main reason for that is we had the lawsuit over data rights and data privacy class action lawsuit and FTC investigation. We passed the FTC investigation with flying colors. We're like, oh, you didn't do anything wrong here. But the other stuff we learned in America, sometimes it's cheaper to settle a lawsuit than fighting it in court, even if you knew you could win. And I was like, wait, this bothers me. I'm like, it's cheaper for me to settle than it is for me to pay the legal fees and fight, even though I'm right. So we ended up settling.

What was the key learning there? Because then you and your co founder departed and was raising VC after bootstrapping the millions in revenue was the right decision.

Raising venture capital wasn't the wrong decision. I've actually done better with companies when I bootstrap over raising money. And I don't think there's anything wrong with raising money. But if you know why you need money, that's the best part. Time to raise money. And what I mean by that is a lot of people raise money because, okay, I need to cover my burn. That's not always the right reason to raise money. But like I'll give you an example. Let's say my business is growing and it's profitable and I can buy up someone in ancillary space and be like, wait, if I combine their revenue with my revenue, I can A, cut costs, save more money there, B, the market's best so I can get a really good deal or steal, and C, I can end up selling all their customers my services and their customers my services, right? So you flip flop in which you cross sell between both the customer bases. And that's how in private equity they call it one plus one equals three in which you're not just taking both the companies and combining them and having the same economics. Economics increase less cost, more revenue, better profit margins, et cetera. Scenarios like that. Raising money makes a lot of sense. Going after a big market like ChatGPT makes sense. But I see a lot of entrepreneurs raising money for their startup. That's a terrible idea. They're not getting traction. They don't know how to do sales and they're just raising money when they should just move on to something else.

You said you've done better bootstrapping than raising money in your companies. Why do you think that is?

You end up being more scrappy when you end up raising money. A lot of times you get pressures from investors to spend. I remember when we first raised our million dollars from True Ventures back in the day. Great investors, very supportive. Even through all the stuff we went through, they're like, yeah, of all our companies that raise money, you guys do the best with cash management. You barely spend any money. My background's Indian, but being Gujarati particular, really cheap, so didn't spend money when we didn't need to. Now that's not a good thing either as well because if I spent more money in certain areas, I would have had faster growth. But I think the problem is people get really frivolous when they raise money. In a lot of cases I've seen, they start buying everyone lunches and crazy offices. I'm not saying you shouldn't take care of people and provide lunch, but I'm getting at all these expenses really add up. And then you raise this money to get more growth in your business, but you spend a lot of money on stuff you didn't need to and then you're not going to get the growth. For example, you're better off instead of buying lunches for all your team members and employees, you're better off just saying, hey, everyone can work from home and you don't need the office space and you don't buy on lunch. And you know, they say the hour to commute each day to work an hour back and spend more time with their family, more productive. There's better ways to slice and dice it.

I completely agree. We built Boast as a company we want to work for and we had offices in different cities. But we're like, if Alex and I are not going in, how can you and meet other people? And that that played out is when we got to over 10 million. ARR. We're like 30ish people. And it plays out because people then have time in their day to spend on the things they draw joy from. And they're not spending energy in meetings after meetings. They're doing focused work. So I agree. What ended up happening with KISS Metrics. Then after that lawsuit because there was all this buzz then you guys like what is the story after.

Yeah, we left. I first left, my co founder left, I think within a year after I left. They put CEOs to run it and stuff even while we were both there. And then eventually what ended up happening with kissmetrics is when you look at the business didn't do well. Investors stopped funding it. But right before the company ran out of money, I gave them 500 grand to take over the domain name. And I took the domain name, redirected the traffic, all the blog posts started generating way more leads and then they sold the remaining of the assets. They changed the domain name thing to like kissmetrics hq.com or something, I don't know what they called it. And then I think that person eventually ended up selling it again as well. Cool.

Now you are learning there in terms of bringing hired gun CEOs when the founders are still there. What is it learning there? Does it work? Does it not work? Clearly it didn't work here. Why have a new CEO when two of the founders who are the passion, the vision behind it are still in the business?

The first time we put in a CEO was because they sold in an analytics company in a similar space and we thought they could provide us faster growth, help us raise more money. And all that stuff didn't work out. The guy never really understood the business. And then the second time the guy did stuff like mismanaged money. In my opinion, I don't really have any stats or data, but would you pay your girlfriend 50 grand to redesign a logo? Bad use of money, right? I'm not trying to talk crap. It is what it is. If you look at big corporations, they probably spend even more to redesign a Logan. If you look at my company, NP Digital, we probably waste more than the 50 grand on random crap we shouldn't waste money on. But what I'm getting at is I think it was just the wrong executives. My co founder should have stayed CEO, but with lawsuits and a lot of that kind of stuff, you don't necessarily always have choices. And. But I would have to say out of the whole process, the one thing for certain, our investors like people like True Ventures, they really did back and support us and they were really good to us. Like even when we weren't taking salary, they're like, you guys should take salary. What are you doing? They really encourage us to do what's best for us and not always just the business. Like they looked out for both the business and us as entrepreneurs.

That's what true investors and true partners should do, right? Building any company is a lifelong journey. It's a marriage, right? And probably one that's. You spend more time with your business probably than your spouse even. So, it's important to have the right partners now. Key learnings in terms of bringing on the right executives. Because it's like a ship, the individual rowers, they can't probably steer you in the wrong direction. But too many bad people at the top or at the front can completely change course of your company and take you down the wrong path.

I learned this way before NP Digital. It never clicked for me in my previous business. So when we were at a company called kissmetrics, which we talked about, the investors, there was this. Both our board members, there's one guy named Phil Black. There's another guy named Tony Conrad. They kept saying, your number one job as a founder is to hire really good leaders who have done it before. Right? Like, you don't have to figure out everything, just go hire people who have done it before. And I was just like, okay. And we didn't really do that. We hired executives that were good, that were more affordable. At NP Digital, we were like, all right, let's just hire people who have already solved our problems in the exact space for competition. So pretty much we're hiring proven guns in our exact space, not ancillary space, but like, exact space. And our growth just shot up and we're like, oh, whoa, this is just easier to do. We don't have to figure it out. You just hire people who have literally done this before and are proven. When I say proven. Worked for competitors, been there for a while. Worked for, ideally, multiple competitors, right? So that's the second one. Continually climbed in the ranks and kept getting job promotions and stuff because everyone says they're good and they provided all the results. But if they continually got promotions at both organizations they worked for, assuming their competitors, chances are other people felt they were valuable, right? Those are the people that we started hiring. That's what changed.

Now, somewhere between KissMetrics and all the things that went down and you launching NP Digital, which a lot of people probably don't even know, like, in the startup world, that there is this massive company called NP Digital because they see Neil Patel, the brand. Neil Patel, the brand exploded, like, to the stratosphere. You went from being the founder of KissMetrics and this guy to being New York Times bestselling author and a big personal brand. I would love to Believe that this happened accidentally, but I know nothing happens accidentally. You were very deliberate about building this personal brand. So can you explain why you believe building a personal brand is more relevant than ever in today's age for founders?

People don't like faceless companies. Look at Kylie cosmetics. Look at what LeBron James has done. Look at what a lot of the celebrities like Rihanna has done with Fenty. People don't want faceless companies. They want to interact. People have emotions. And I don't think that means a personal brand is better than a corporate brand. I think an ideal world, you need both. That's how you win.

I've just released a book from grassroots to greatness 13 rules to help you build iconic brands with community led growth. We cover stories from big brands and small all the way from Harley Davidson to HubSpot to Nike Disaster to Gainsight to give you the frameworks to build a community led business that will take you from an obscure idea to a movement to a cult like phenomenon. Check it out at from grassroots to greatness.com the digital copy is on for 99 cents. Key lessons here from your journey in creating that voice and that brand and building this audience and community. Like how did you you do it? Maybe like five learnings.

Number one, respond to people. Everyone wants to build a brand, but no one cares to help others. So you're not going to build a brand unless you're willing to help others. To put in many years, five plus years, not one or two or three, but five plus years of just giving a ton of stuff away for free and not expecting anything in exchange. Number three, it's not just about building a brand online, it's offline. So you got to go to events and conferences and venues and meet up with people and speak and network and all those kind of things, right? Number four, collaborate with other big brands, corporations, companies, people, because that'll help you grow your brand faster. So it could be as simple as jumping onto 10 other podcasts. It could be doing interviews with the press or getting on tv or it could just be there's two popular influencers on the Internet like Logan, Paul and KSI and you join forces and you create a business together or something like that. Or you do collabs or go live together, right? And the last one, and this one's really important and people tend to forget it, is you gotta go Omni Channel. You're not gonna build a brand just on Facebook or just on Instagram or TikTok or just from conferences, but a mixture of all of Them combined will get you the results that you're looking for, assuming you do the other elements as well that I talked about.

I think one of the key things you nailed here is also being consistent. Right. Five plus years. How many people will sustain for six months? Five years seems like a long slog. So that is amazing. Now, one key thing you may have learned in this journey, that is a no that people shouldn't do at all as a personal brand builder.

Yeah. So one thing that I've learned that is a big note that most people make mistakes on is actually what you just mentioned is they're not consistent. And what I mean by consistent, I'm not just talking about five years, I'm talking about output. So a lot of people will want to build a brand, but they'll create content two, three times a week and then they'll take a month break. That doesn't work. It's not just about doing something for a long time. Each and every single day, you need to be consistent. If you're not and you're not putting in the hours, it doesn't work out.

What has been your cadence? You've been writing for more than 10 years. I know, I see your content now on Omnichannel, like on Insta, on LinkedIn, on TikTok, you're everywhere. But when you started, what was the channel that you were writing on very consistently? What was that cadence like?

It was a blog three times a week. It's changed now. I do blog and social media and I blog once a week. I do social media every single day. And yeah, but you don't necessarily have to create content too. Like I'll take this content, like I'll ask you for the recording at the end and my team will just put it everywhere on our social profiles.

Now you got the team, you can click it, clip it into multi format. Like the text to LinkedIn and tweets and the clips to shorts and whatnot.

Exactly. So the team handles all, like literally, I'll just reply to our calendar invite that you sent and I'll add someone from the team. I'll be like, hey, can you send him the raw recording? And then you'll eventually send it and then the team will figure out what to do with it.

This is epic. A lot of people don't think about this, but in this conversation you've outlined one hack, right? You're like an online channel to build that audience. But then don't ignore offline. Go out there in person to turn that online audience into a community. So you're interacting with them and bringing them together to interact with one another. But all this content that you're producing, appearing on other people's shows, that means you don't have to create your own content. You can just slice that into so many forms and throw it out there and it just spreads. Right? And so that's a good hack for people who think, ah, this is big Mountain. Where do I get started? You can just start by applying to be on other podcasts or creating your own podcasts, and you'll have a lot of video, audio content. Now let's dive into NP Digital. When did that start? Or was it just like a natural flow of things and it just happened along the way?

It started in 2000, end of 17. We really started in 2018. So it's been five years. End of this year will be our sixth year. And it started because we were selling leads for consulting, because we were getting inquiries to other agencies and taking a cut. And we're just like, wait, we should just do this ourselves. We would make way more money. And that's how the business started.

And Bootstrap versus raise. You bootstrap. But why did you bootstrap? And I guess you had a huge personal brand and you were able to get clients, so customers were paying you from day one.

It was a little bit different when I started some of my earlier companies. I didn't have as much money. Right. You had to keep in mind, I'm 38 right now. I started when I was 15, 23 years. So there's a point where, yes, I know a lot of people, where I can just leverage those relationships to raise money, but I don't need money anymore. I'm not saying I'm rich. Like, it's not like I can go buy a company for a billion dollars tomorrow, but I can do most things on my own right now where I don't need other people's money. Like, even NP Digital, it wasn't really bootstrap. I put 3 to 5 million dollars into that business. I don't know the exact amount. I know it was more than three, less than five, because I was taking money out at the same time and then putting money in when it was needed. But it's not like I had to worry about bootstrapping it. Right. I don't really think putting 3 to 5 million into my own company is bootstrapping either.

Neil. In 2023, where the media has perpetuated this addiction to unicorn porn, raising sub 10 million is actually seen as bootstrapped. By most couples.

Are you serious?

I just saw a post the other day saying, you know what, if you've raised sub 5, 10 million, more or less is like being a bootstrap company. Whereas I like the cultures we come from, taking other people's money is seen as like cancer, not bootstrapping. Not only not bootstrapping, but it's something you never do. My dad would rather die than take a loan from somebody else. Like it was very hard for him to come to terms with. Oh, you guys raise money from other people. Like why?

How?

Like how can you take a loan? How can you take somebody else's money and go to sleep? So that's the cultures we grew up in.

Right? It's I get it duty. My dad would ask me first raise money for Kismar. So long as if you lose a $4 million, what happens here? Who's responsible for this board? You have to give it back. And he was asking all these questions.

But yeah, there are so many companies I've talked to that have gotten to 50, 60, 70 million in revenue and they say, oh, we're nearly bootstrapped. But when you peel the tea leaves, they've done friends and family of 1 to 10 million in funding, which they don't talk about. So that's why I said, you know what, it's your own money, you've self funded it. What were the key steps you would say? Maybe top five things you did to get this company to a hundred million in revenue?

Sure. So one thing we did was hire amazing leadership from our competition. People who have done it before. We talked about this earlier, worked at multiple competitors, gotten promotions, they're good. The second thing that we've done is when you're going for enterprise based business, it's all about servicing, like how do you do really good for customers, take care of them. Because there's only so many enterprise brands out there and we really do put the customer first. The third thing is the way you make more money in the enterprise world. And people forget this is actually land and expand. Big companies typically have tons of divisions and they're in tons of countries. You get one country, one division, you do really well, you get more divisions, you do really well, then you get more divisions in multiple countries. Right. So that's the third thing. The fourth thing that we really did was we figured out where our customers are. Everyone's, oh, you got to be in Google, you got to be on Ad Age, you got to be an ad week. But when we actually look where customers going to make decisions. They're in a lot of random different places like Forrester or they were in places like, okay, you need to go to this conference where CMOs are going to be and there's only a hundred of them and they're not a popular conference. And we started focusing on marketing efforts on where our customers are going to be, even though it doesn't give us the reach. You don't get as many followers, you don't get the notoriety, but you're actually closing more business. And the last thing that I say that really helped is started also hiring people with really good Rolodexes. If you look at a lot of enterprise businesses that have done well, they've grown because partners, managers, executives have really deep connections. And we actually generate a lot of our revenue over 70% from employee referrals, client referrals or RFPs. Wow.

And the first five, 10 customers, how did they come about? Because you probably didn't have this team leads from website.

It was all inbound. We started with SMB and then we worked our way up to enterprise.

And you had a pretty strong personal brand, which you're acquiring. The KissMetrics blog as well, your personal blog, all this personal brand content that you created help you own the SEO around the services you are providing. I think you still own the search around the services you're providing. And so that is the value of the personal brand. People see Neil the expert, Neil's the godfather of SEO. And so if I need to drive my company's search rankings or digital marketing, I need to talk to Neil. You built that brand effectively.

Yes, but at this point we grow in really different ways. Like I'm at a point where we're just buying up revenue. So it's like now we grow, we do have organic growth, but we look at M and A and things like that to just grow faster.

I was more talking about like the early days that give you the springboard. You got the SMBs and then you transition. How did you decide though? Because a lot of companies find it very difficult to transition from SMB to enterprise. It's a very different DNA. What made you decide to make that transition and what were the key things you did churn?

SMBs were churning so much. We kept going from and there wasn't really one key thing, we just kept slowly going upstream. So you close some SMBs, you close a little bit larger SMBs, then you start closing midsize businesses and then a little bit bigger mid sized businesses and then you start closing enterprise. It just takes A long time. But we don't really do anything different other than slowly work our way upstream and figure out what people wanted and then try to give them that and the quality of the work and the pitches and try to slowly close them. It doesn't happen with the snap a finger. Everyone's, oh, you just go enterprise and you get all these big accounts. No, it just, it takes many years. It's just a slow grind.

The slow grind. It's a long slog, so you better love what you're doing or else you're going to burn out. And I like that you level up. Use that social proof to level up and level up. It's like playing a game. It doesn't happen on day one. No matter what Rolodex you hire, it doesn't happen on day one. So would you say like in the early days and even now to some extent you are a key influencer in the sales. Do you go on sales calls? Do you meet customers at all or you've taken a backseat and you just do speaking?

I don't get on as many sales calls. I do still do some sales calls. I still do some sales meetings, like in person. I get on a lot more client calls, like after they become a customer and going over strategy and trying to figure out how to improve things.

I had Jason Fried on the podcast recently and he said the job of a CEO versus a founder, like having founder and CEO in the same title is like having CTO and chief Luddite in the same title. They're opposites. The CEO is supposed to stabilize the business and a founder is all about growing the business and injecting new risk in the business. So what's your view on that? What do you do as a founder at a hundred million company?

So I don't know if he's right or wrong, but he's right. In my approach, the CEO actually makes it more stable and is logical. I'm all about like, what else can we do to grow faster? Oh, let's do this. And he's that's just a million dollars you're gonna burn. I'm like, yeah, why not? So I'm more of the risk take and it's not always a million dollars. I'm just exaggerating, but it would maybe 60 grand. We actually went over something that was 60 grand. And me and my co founder always come up with really crazy, unique ideas. And the CEO sometimes tries to bring us down back to earth and keep us grounded. But we still do a lot of experiments that probably shouldn't be approved. Not because they're bad, but because we're more risk takers and we want to grow faster.

So you're about re injecting or keep igniting new risk in the business. Because pain is the precondition for growth. If you don't do new things, it's hard to grow for the long haul. And the CEO is about stabilizing the business. And I truly believe that. At what point did you decide that you know what the CEO role is? Never for me. That's not one I ever want to do. What were some key traits you have in you that you felt like I just can't be a CEO.

I was never the CEO in any of the companies, even from day one when I was. Yeah, I started the job where I was a CEO for that, but other than that, I was never the CEO.

Why though? It's an important question because a lot of founders listening, they think they need to have the CEO title to drive impact. But you're driven more impact than anyone just being the founder of the company. And so what made you recognize that I don't want to be the CEO.

I'm terrible at operations and I'm terrible at management. Those two things.

So you run like a lone wolf in many cases and like a solopreneur pulling people in as you need and do the things that are fun for you which inadvertently ends up growing the business, which is injecting your risk building brand, talking to people. Awesome.

Yeah, Cool. Got it right.

As we close out now, it wouldn't be a podcast with Neil Patel if I didn't ask this question right. The future of marketing and top trends. What do you see that's going to shape the future in the next two to five years?

So one ChatGPT, according to SimilarWeb, they get 1.4 billion visits. I just wrote a blog post on this the other day. ChatGPT. I get their indexes from September. The current version is from September 2021. But what we found we were doing analysis. The more brand mentions you get, the more reviews you get, the more relevancy, like keywords that people are asking ChatGPT questions related to your company. The older your business, the more authority you have. We're seeing those factors causing ChatGPT to more so recommend organizations, products, services, companies. Keep in mind, yes, it's September 2021, so it's too late to optimize for ChatGPT 3.5. It's probably too late to optimize for ChatGpt 4 but that doesn't mean you can't optimize for ChatGPT 6 or 7 or 10, right? So start doing this stuff now. So they recommend you. That's one trend. The second trend is everyone's talking about AI, but they focus too much on AI and it's solving all their problems because it won't. And they focus on AI and writing content. No one cares for regurgitated information. That's already been talked about a hundred times on the Internet. What they don't talk about is using AI to analyze your data and analytics to come up with more informed decisions. $160 billion is roughly being spent a year on Google Ads. Over a hundred billion on Facebook ads. You know how much wastage there is. If your AI was analyzing your wastage in your marketing spend, it'll give you more feedback and then you can adjust from there. It doesn't mean the AI makes the changes. It can give you insights and then you can take your own action. But companies can save a lot of money. The third big trend that I really see, and I've seen this one for a while, but very few companies take action on it, is marketing keeps getting more expensive year over year. Companies need a transition to product led growth. Doesn't mean you shouldn't do marketing. But what can you give away for free and sell them something more this expensive? In the marketing world, around 24, 25% is being spent on software. If you give away a lot of software for free, you can sell them on services and ad management and other things, which makes up a lot of the other 75%. So you're giving away something for free to pitch them on something bigger. Gillette, you can give away free razors because you're going to make your money by people continually buying blades. There was a company called Orabrush that gave away free tongue cleaners you paid for shipping. Then they sold you on toothpaste and mouthwash and all this other stuff. If you're in SaaS, you can do stuff like giving away free payroll software. Like Paychex is a $40 to $50 billion company somewhere around there in market cap, they're publicly traded and then charge people and upsell them. A portion of the customer will pay for health insurance. If you look at United Health Care, their market cap is roughly 10 times the size of paychecks. Right? So you got to figure out larger markets what you can give away for free that is of value and then charge them for something that isn't a much bigger tam.

Fantastic. That Makes a lot of sense. What advice you have for businesses and marketing teams as they brace for the future? There seems to be a lot of chaos. And as I look at 2023, given what's happened over the last two years, people seem to be spending less and less. People, even consumers, are starting to feel like mistrust with brands. What are some things brands and businesses can do to build that trust and optimize their marketing spend? My personal thing is try to cultivate your company's inner Neil Patel's build more micro influencers. Give your employees a voice. But I'd love to hear from you, what are you saying to brands out there?

Yeah. So I look at it as if you're a brand. Embrace the chaos. Don't worry about it. The big thing is you need to experiment and experiment within. With controls like ex. You don't. Or for example, you don't put all your data in the public and have these AI tools analyze it. You start creating instances. So then that way your data's not everywhere. But all I'm getting at is how can you end up making it where you're embracing all these changes and having your team start experimenting with stuff? And then on a weekly basis, they get together and like, oh, here's some cool marketing things we've done to make our job more efficient or get better results. And they do a show and tell. You do that every week for a year. People learn a lot of new stuff and it'll help bring everything down to a place that's much more manageable because you'll figure out where to spend time and where there's a lot of wastage.

Definitely. Now, as we close out, one piece of unconventional advice that founders ignore. But shouldn't you talk to a lot of people and you share a lot of advice?

That one's a tough one because most founders are usually pretty open to a lot of stuff. Right? But I would say the big mistake that I think founders make is they actually try to do new, cool, crazy, sexy stuff. And if I was a founder, I would look at boring, ugly businesses that no one cares for and figure out how to disrupt those. Like, for example, H Vac, everyone has heating and air conditioning in their homes. Or a lot of people do. It's something that people have to pay for whether you're in a recession or not. Where's the innovation in those kind of industries? All I'm getting at is there's so many boring, ugly businesses and startup founders tend to ignore them when those are the ones with massive TAM and they're not as competitive.

Everyone's chasing the next sexy idea out there and you can build a big business chasing the unsexy. We were going after R and D credits and nobody wanted to touch that. And they were said like ah, big four accounting firms are doing it and the next thing you know you build a big business around it. And then as long as the TAM is big, right? Like as long as it's servicing a TAM that can grow, you can sell them multiple things. Once you have that initial beachhead, just because it's not sexy, we get especially Silicon Valley and with all the media we get caught up in the sexiness, right? How many ChatGPT rappers. We talked about ChatGPT and generative AI being the biggest trend, but how many rappers are getting funded? Like chatgpt rappers, like they shouldn't probably get funded, right?

There's way too many that are funding that should never even be around.

Do you still angel invest?

No, I stopped. It's too much work now. I'm just LP in a lot of funds. I let them deal with all the work. I agree.

I was told by my banker then that it's like you won the lottery and now you're buying more lottery tickets. Why don't you just invest it in an index fund and leave the real money to make you money rather than buying more lottery tickets? So I like that analogy.

There's a lot of proven VCs and angels that have a proven tracker investing in these lotto tickets and turning them into gold, right? So it's just easier to invest in them and let them place 2030 bets versus you know, finding the 2030 bets. This was fun.

This was fun, man.

Awesome. I need some traction.

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