From 0 to 1m Monthly Visitors - How NerdWallet Built a Massive Audience - Hustle Con 2015

So yesterday was a pretty surreal moment for me. I did an all-hands in front of our company, and there were 200 people there. So becoming— it's kind of interesting. I was thinking becoming a successful entrepreneur is kind of like getting fat. You just go day to day. You're doing what you're doing. You have to hire someone. They do a great job. More needs pop up. You hire more people. And then all of a sudden, there's 200 people. And what's also interesting along the way is more and more opportunities unlock. And you realize you have more and more reach to actually change the world. So pretty crazy. And it's super humbling for me to be in front of 500 hustlers today. This is pretty cool. All right, so life before the hustle was really good. Like many people, I totally squandered my college years. So I went into college in, I wanna say, September 1999. So I skipped class and day traded. I was partying all the time. And I played too much StarCraft. I actually got an ultimatum about StarCraft from someone and chose StarCraft. So that was interesting. Yeah. And then so after college, I kind of lost the entrepreneurial bug, to be honest, in 2001. A market crash like that can really do it to you. I'd always wanted to be an entrepreneur going into college, but that just didn't really seem like a reality. So I joined the investment banking finance hedge fund world. So I was investing in a lot of big technology, media, and telecom companies. And then Christmas Day 2008. So I felt like I had been winning and winning and winning in life. You know, I had landed this amazing job. At a great hedge fund. I was one week away from getting that bonus that was going to change my life, and I was pretty stoked. And then I got fired. So, I mean, I kind of became a bit of a social pariah among my friends. A lot of people were getting let go at this time, and everything fell apart. So it was pretty horrible. So two things kind of happened in the next month or two. One was my sister asked me for help finding a credit card. Poked around online. Was pretty dissatisfied with what was out there, but couldn't quite articulate what was bugging the crap out of me about the experience. And then my parents called me about a month later as well. They said, "You know, the market has been doing really horribly. Our investments aren't doing well. We're gonna hire a financial advisor, and by the way, we hired this financial advisor. He sold us this great product that locks your rates and gives you like this fixed payment, and there's a 5% fee, and like all this other crazy stuff." So they got totally screwed. And the two problems sound pretty distinct, but over time I reflected a bit on this and I realized they're actually quite similar. There's just information asymmetry between the people who are providing the service and the people who are looking for things to buy or for great advice. Now your friends and family have your best interests in mind really, but they may not know what's what's going on. I mean, they're not really financial professionals, and they don't spend all their time creating Excel spreadsheets. And the broker, the agent, the retail banker, the financial advisor, they're really just doing their job. And the affiliate marketer, they're just doing their job. They're feeding their family. They're not bad people. Now, the internet had pretty much changed this in every single other vertical out there. But not yet in finance. So my first thought was, "Hey, I can solve my sister's problem." You know, I've been doing Excel all my life. I can just suit up, shoot some Excel lasers out of my elbows, and crank out this spreadsheet with, you know, hundreds of credit cards, and I can give her the objectively correct answer. So this spreadsheet started getting kind of forwarded around to my friends and forwarded more and forwarded more, and I said, Hey, this could be a web app. I mean, I haven't programmed in 10 years, but let's just put this out on the internet and see if it can help people. So I'll talk more about that later. So another interesting point. I mean, consider this. My social network had zero entrepreneurs, a bunch of useless finance people, and And I was launching into this endeavor of starting a company. And so why did I even have a shot? I couldn't raise venture capital financing if I wanted to. I mean, where would I go? Who would give someone with no programming experience, no startup experience, and, you know, like money? It just doesn't make any sense. So thinking about this, you have a huge advantage when you're kind of launching out towards a niche. So I don't know if you guys know sites like Mr. Money Mustache, or— yeah, so compare Mr. Money Mustache to Money Magazine. If you have the same values as Mr. Money Mustache, you're gonna love everything he writes. Money can never compete with Mr. Money Mustache when it comes to that crowd. The same with The O'Reilly Show versus CNN. I mean, you kind of— or CNN might be a bad example now. But when you're targeting that niche where the values of the people who are your customers are perfectly aligned with you, no one can compete with you. So that was kind of our situation. You're also more nimble than the big guys. That one's more self-explanatory. You don't have overhead. You don't have to build consensus. You can just go. My sister knew a thing or two about affiliate marketing. She had started a coupon website that had done pretty well, and I thought, hey, you know, at least she can explain to me how this works, and now I have a mental model of someone else who has done this that's had some success, so maybe I can do it too. Now, finance background is kind of interesting. That was really more, less about the finance, and more because I could get journalists to actually take me seriously. So that turned out to be really important over time. Life as an investor, the one thing I was actually good at as an investor was short selling companies. Figuring out which companies were going to crash and burn. I had met thousands of companies over the past couple years and seen certain patterns that just weren't quite that good. I highly recommend Peter Thiel's book, Zero to One. A lot of common principles. You know, there's kind of companies that are going to be mired in brutal competition their whole lives, and companies who have just these amazing businesses that are going to get less and less competitive over time. And it's kind of always one or the other. So figure out which one yours is. So here's the first version of NerdWallet. It's a non-technical founder's website. Any of you can cut and paste from Stack Overflow and put together something like this in a few weeks. So this is really trying to convert a spreadsheet into kind of a kayak for credit cards. This is kind of our growth over the next 6 years. The numbers aren't huge by a lot of standards, but these are really high-value, intent-driven customers shopping for financial products. So these are really valuable people. So this is me coding the first version of the website. This is a bathroom in Granada, Spain, in a hostel. So— but I splurged and got my own bathroom, so that was cool. Okay. So a few things I learned quickly. Launched the website. Knew it was better than anything else out there. I mean, there were so many more cards listed on the site. It actually told you how to sort the cards in a logical manner. But no one came. And I bet this is a really common problem among every entrepreneur. So one thing I quickly realized is, when you're at a Sunday barbecue, you're not really triggered to talk about credit card comparison websites. So I would definitely keep that in mind. You have to figure out how to do acquisition. So the second thing I did was— to say, hey, you know, maybe journalism or PR is a good megaphone for what we're trying to do. Well, I made the mistake of not talking to people who had done this before, journalists who receive pitches all the time, or PR people who do this for a living, and just tried to go at it on my own. And that was really inefficient. As you can imagine, journalists probably get thousands of emails a day. From companies just like yours, so if you want to figure out how to get in their head, you have to understand what bugs them, what they need to do their job, and then you'll know how to approach them. The third thing I realized is SEO is a slog. So it was really about deciphering, hey, what does it take exactly to get to where we want to go, and that required figuring out exactly how much the leaders had of the main components of search. So I'll talk about that a bit later. But, you know, within 5 minutes of doing that calculation, realized there was no way we were going to do this in less than a couple years. Last thing that I bet all of you have run into as well is that paid channels are prohibitively expensive. So you're basically at auction for people's attention when you go into a paid channel like SEM. And chances are, our problem was, if you wanna be more consumer-friendly than anyone else, you're gonna be monetizing less than anyone else. Therefore, when you're at auction, you're not gonna win. So paid was out of the question. So at that point, it was about, okay, I figured out what the most viable acquisition channel to build a sustainable business was. At this point. For us, it had to be SEO. So this is Jake and I, my co-founder, in Barbados on vacation, when we had a poorly timed lifehacker hit and the entire website went down because it was cut and pasted from Stack Overflow and hosted on a server that cost $7 a month. So we were trying to fix the site, and I realized— this is when I learned about database indexing, which is kind of funny if any of you are coders, but that's not the time you want to be learning about database indexing. Okay, so 2010 was actually really demoralizing despite these two successes. So Money Magazine featured us as the best credit card website in 2010. So we saw maybe— I remember we got about 7 cents a visitor. So whatever $300 divided by 7 cents is, that's how many people came. So I thought, well, what better success with this press megaphone could we possibly have than getting into Money magazine? I mean, this is a magazine that millions of people read. So what do we do? I can't get Money magazine every day. And even if I did, that wouldn't be nearly enough to sustain a business. So that was highly demoralizing. The second thing was, so Jake happens to be— well, I won't mention this. But we got a— so Jake got us into Lifehacker. But it only generated $5,000 in revenue. So Lifehacker is actually much better because it's an online publication with millions of people visiting it. So better conversion rates and traffic, but still, you can't get Lifehacker every day. Okay, so what did we do? We realized that SEO was this massive, massive fire hose of traffic, and nothing else mattered. So we dropped all of our product development and just focused on SEO. You have no idea how horrible that feels. Everything is burning around you. Your friends mock your website for being so ugly. It runs really slowly. But hey, your most limited resource is your time as a founder. And you better let stuff burn if you're going to figure out how to do the things you need to do correctly. So this was kind of hard work. We kind of like worked, worked, worked. And eventually we started hiring interns off Craigslist. One of who actually turned into a full-time employee that was super, super instrumental to our success. So that's Anisha, who ended up running our credit card business for 3 years. Okay, so 2011 was the first time that we realized, hey, this might work. There's really only 2 things that matter in SEO. So a lot of NerdWallet people will give me a hard time about saying the word drivers way too often. But it's all about figuring out the drivers behind whatever acquisition channel you're pursuing and just focusing super, super religiously on those drivers. You wanna build your entire business organization around those drivers if you're gonna get them right. Otherwise, people are gonna start running off and trying to help out but not doing the things that really matter. So in SEO, it's about quality links and quality content. What does this mean? Product doesn't matter, engineering doesn't matter, VC funding doesn't matter. In fact, VC funding is detrimental because no VC is going to wait around for you to do this the right way. And PR only matters if it builds links. So this was 2011, things are way different now, but this is kind of like the hustle stage when you're trying to get off the ground. Okay, so the other thing that was super important was realizing that Google's not a black box. Use your common sense. Don't read anything online about SEO. I mean, it's kind of important to read it to get the basics, but you have to think from the perspective of a Google engineer or a Google quality team. What's gonna happen in 5 years? How would you write the algorithm? If you have a question in your head, say, "What would I do if I were the engineer writing the search algorithm?" And we always went by that. There's also no secret sauce. It's just hard work. This is kind of the pitfall of most SEOs I've met. They want this payoff in 2 weeks, 3 months, 4 months. They're not willing to invest 2 years, 3 years to really win over the entire market. And again, your most limited resource is founder time. If you don't extract yourself from the business drivers, you're never going to get to the scale you need to succeed. So that's why it's also important to know exactly what kind of output you need on links and on content to get to where you need to go. Okay, so our first big investment as a company was spending every dime we had on hiring a PR firm, Prowess PR. So this was $5,000 a month, and it was the first big investment. So, what did we learn? Building a reputation is really tough with journalists. They don't want to get burned. They have a job to do. So, their job is to put out informative news every day. They have a quota to hit. They have deadlines to meet, and they're flooded with emails. So, you can't burn them, and you have to speak to them in a language that's conducive to get them doing their job as quickly as possible. So talk to an ex-journalist, they'll know exactly what I'm talking about. This is Anisha again, our first content hire. So she was put in charge of writing all the content. I instantly realized she was much better at writing than I was. And this isn't— well, I'll talk about that some other time. But she hired and inspired great content writers who actually cared about the topic at hand. To really push our brand and content forward. Every single piece of content is a touchpoint for your brand. Your brand is just an aggregate of everything everyone hears and sees about your company, so this was super important. So Anisha was actually studying Arabic at Brown. She wanted to go to Syria and spend some time there to learn Arabic, and fortunately for NerdWallet, The Arab Spring happened, and she couldn't go. So we asked her to drop out of school and join us full-time, and she was super instrumental. Okay, so 2012, we were starting to grow a real user base. We had people focused on all the drivers of the business. 2013 was more of the same. And what got us there, what got us through all the hard times, the slow ROI at first, was realizing, hey, what exactly do we need to do quantitatively to win over time? And that forced the org structure, the hiring, the business practices that actually ensued. So, okay, so I'd say when you're small, you gotta do whatever it takes to figure out how to beat your small competitors. You gotta give yourself credit. You're not gonna get to where you need to go immediately. Not on a run rate basis. So give your credit that you're gonna iterate and get better over time. It's gonna happen. However, if what you need to do, if it's 500 great links a month or whatever it is, is so far-fetched that you know it'll never happen, don't even try. Be realistic about what's completely futile. And then when you're at scale, you're really screwing up if you're growth hacking or thinking about tactics. There are people that are way smarter than you, I guarantee you, at these things. Your job is to hire and inspire them and put them to work in effective ways. And so I'd say my biggest successes and failures in the last 4 years were all people's names. So 2012 to 2013 was probably the hardest part of my entire career as an entrepreneur. Managing people is really tough. I had a lot of really poor preconceived notions of what a good culture or management situation looked like based on my previous tenure as a hedge fund analyst where people would throw telephones at you and pay you a lot of money. So that's not really the right way to inspire people. And then last thing I realized is that people build companies. As an investor, I had this totally warped perception that business models and business modes build companies. That may be true later, later, later on in your company, but it's very logical. Your output as an entrepreneur is going to be the quality and enthusiasm of people working in parallel, doing the right things. Okay, so a few tips for first-time managers, 'cause this really— hit close to home and I learned a lot of lessons the really hard way. First of all, it's not about rah rah rah. You gotta be authentic. People can handle the truth. People want the truth. People will freak out and think you don't know what you're doing if you don't tell them the truth that they obviously know. So be authentic and don't be afraid to communicate what's wrong with your company, vulnerabilities, employees, everyone. People are just really perceptive. Alignment is super tough. So you got to totally over-communicate on your mission, your expectations, and give immediate, candid feedback in a really supportive way to people. Big mistake over time— my assumption going into management was that the issues were usually DNA-related. I'd be like, oh, this person just can't do this. That's almost never the case. Once you have a really candid discussion around what is going wrong, you realize there they're not set up for success, or they're not doing the thing that they're actually good at. So that's important. So number 3, super critical, especially as you scale. You are guaranteed to run into shit tons of problems, misunderstandings. People are going to step on each other's toes. You have to confront these issues candidly and quickly. You want people to tell you when they think your product direction is wrong. You want people to tell you when they think you're not leading the company properly. Otherwise, you're never going to get there. And lastly, learn about people. It really becomes more about understanding people at this stage. The business strategy, super easy. The people, really hard. And so now we crossed 2.2 million users at the end of last year. We're at nearly 200 employees. And at this stage, when we were about 100 people, started thinking really hard, well, where's this company ultimately going? And how can we be successful in 2 or 3 years? So hired some great people. Bhaskar built the data infrastructure and security teams at LinkedIn. Dan ran Biz Ops, which is business operations and strategies at LinkedIn. Flo was the first recruiter at Zynga. And Ken ran communications at Trulia, which was kind of interesting because they had succeeded in the exact same way we succeeded. And Ken was there from pretty much the beginning. And so a few summary points here. So first of all, yeah, understand what channel do I need to dominate? What are the drivers behind that channel? What exact metrics do I have to hit? And even if I'm making $0.07 per visitor now, understand what are the big guys making? What will that ultimately be? So that you will have faith that you will get there eventually. Tactics. Tactics become pretty commoditized pretty quickly. So it's about quick iteration, accurate diagnosis, candid conversations. And you want to build your business processes around the drivers of your acquisition channel. And then hire great people. I can't emphasize this one enough. If you don't learn how to sell a vision, you're not going to attract great people. Companies are built by people working in parallel with differing talents than you. So you have to learn how to do that. Yeah, but thank you. Open it up for questions. Thanks, Tim. We have time for one or two questions. Hey. Great talk. Thanks. So you're talking about SEO, and you were saying not to look on Google for SEO tips. So I was wondering how you'd go about learning about SEO and the good strategies. Yeah. So just on a really high level, I mean, if you think about it from Google's perspective, their company succeeds if they surface the best results to consumers. That's how people ultimately end up going back to Google over and over again over time. So if you think what— about what that means in the long term, it means the indicators of search quality are going to change over the time. They're going to constantly improve. Also, Google has Chrome. Google has Google Analytics. Google has all these other indicators of search quality that they may or may not claim that they use. But hell, if I'm Google, I'm trying to offer the best search results. I'm gonna track everything that these different sources of data give me. And so you ultimately need to figure out how to build to meet that need to win 5 years out rather than getting mired in this, like, brutal competition in the short run. So what about, like, resources like SEOmoz? I don't know if you know about that. Yeah, I think Moz is a great resource. Especially when you're earlier on. I think it's more relevant in terms of understanding what other people are doing, but tactics commoditize quickly, and there's pretty much open transparency across the board in terms of what everyone's tactics are if you use Moz. Thanks. Yep. Thanks again for the talk. So you talked about hiring some really great people. At what point, like, how do you manage that, you know, you're working with some really great people. Wouldn't you feel like at some point they could just, you know, kind of bend off and go do their own thing? Like, how do you make sure that you're continuously inspiring them and, you know, kind of holding the reins of the company? Yeah, so I have every expectation that great people will peel off and go do their own thing. So I really think about, you know, finding people at the right cross-section in their careers where this is the right opportunity, they're going to grow in the right way, and they're going to have chances to do things that excite them. And that's really, to me, what a company is. It's just a collection of these people. I mean, of course they're going to go leave and do bigger and better things afterwards. Great. That's all the time we have. Thank you. OK. Thanks.