How Match.com CEO Sam Yagan Uses Content to Drive Pageviews – Hustle Con 2016

Hello everyone. How's the conference going? Alright. So he told me I was supposed to start by telling my story, but he just told my story, so hopefully we can maybe make the speech part of this a little bit shorter and do a little bit more Q&A. So basically, Uh, there's a big black box in the middle of my story. There's probably a message in there somewhere. Um, but you can read all that, so I'll just do a quick voiceover. I was born in the cornfields of Illinois, um, and spent my childhood doing a bunch of things that you do in the cornfields. Um, certainly nothing that would prepare me for a life of entrepreneurship. And then I went to college. I was in college in the late '90s. Everyone here is way younger than me, way younger than that. And my class was the first class in my college that was assigned an email address, which I thought was pretty interesting at the time. I studied applied math. One of my biggest regrets is not studying computer science. I think I should have, and I mean, applied math is plenty hard enough, but for some reason, I decided not to do that. One of my friends on Thanksgiving of our senior year reserved a domain name called thespark.com and started putting up some content. And he sent me a link to the content and said, "You should check this out." And I was like, "This is just silly." So I ignored it and I went through the regular recruiting process. And I ended up getting a job with a consulting firm. And I was all set to become a consultant. And then he emailed me again, and he said, "Hey Sam, I've now got a few hundred thousand people visiting." We had unique visitors, we didn't have MAU at the time, we had unique visitors. And he was like, "Hey, I've got a few hundred thousand unique visitors, you should really check this out." And at the time, in the late '90s, there were still so many ideas that hadn't been done yet. Now you kind of have to, be really creative to start a new company. You have to like create some app that does something that you've gotta like concoct 2 or 3 ideas together. But at the time, there were just all these obvious things that hadn't been done yet. And so we started this company called thespark.com. We'll get into more of that later. But we basically pivoted that business to be SparkNotes. We sold that company, we got very lucky, we sold the company 6 weeks before the market crashed in 2000. We sold it, as Sam said, for way too much money. And then the company we sold it to went out of business 11 months later. So that's what you get for buying a company for way too much money. A lesson to be learned, but for some reason is never learned by acquirers. I then started a company called eDonkey. Anyone here remember eDonkey? Okay, peer-to-peer file sharing. That was a very interesting ride for me. Get it? Okay. It was a very interesting ride. Ended up getting sued by the record labels for $1 billion. I testified before the Senate Judiciary Committee, started a lobbying group to try to lobby Congress. I've got a whole bunch of war stories about that that I'm happy to talk about. I actually went and got an MBA, which I know is generally scorned and looked down upon in the tech community. And then decided to go back at it and start OKCupid, with the same founders that I started SparkNotes with. We sold the company to Match. While it took us like 8 months to build SparkNotes into a business we could sell, it took us 8 years to build OKCupid into a business we could sell. Sold it to Match, and then expected to do my year at Match and get out. That's what most entrepreneurs do when they sell their company. But the folks at Match took a huge gamble on me and offered to make me CEO of Match. And I went from one day running a $10 million business with 30 employees to running a billion-dollar business with 1,000 employees all around the world. And that was a huge, huge learning experience for me. I spent 3.5 years as the CEO of Match. While I was the CEO of Match, we most famously incubated Tinder and grew it into one of the most successful startups really ever. It's certainly one of the most successful startups to come out of, a corporate, um, uh, come out of a corporation. Um, we spent about $1 billion on acquisitions around the world, and then we had an IPO last November. So that was my 3.5-year run as CEO of Match. Um, and then, thanks. Um, and then, while I was doing all that, I moved back to Chicago, and I'm very passionate about the Chicago tech community. Um, so I started what is now Techstars Chicago, and we've graduated 60 companies through that program in the last 6 years. And then I started a small little venture capital fund called Corazon Capital, where I really have a totally different approach to how the relationship that VCs and entrepreneurs should have together. And I think my, my 16 years as an operator, I think I bring a very different approach to how to mentor and how to develop great entrepreneurs. So that's kind of what I've been up to, but they asked me to talk about content. Is it commodity? You've heard both. Content's just a commodity, or content is king. So I'm going to take you way back into the '90s to our site called thespark.com. And we, again, in the span of just a year, became known as— we won basically a dozen awards as site of the year in 1999 because of our content. And here's an example of some content that we wrote. It was called the Fat Project. We found Eric and Nicole, and we offered them $3,000 if they could gain 30 pounds in 30 days. How many of you think you could gain 30 pounds in 30 days? That's impressive. Okay. So basically, this was like reality TV before reality TV, or reality internet before reality internet. We took pictures of them in their underwear every day for 30 days. I won't take you through all 30 days, you can find it on the internet. Here's day 15. Let's go back, day 0, day 15, getting there. All right, so here's a question: if this is day 0 and this is day 30, do you think either of them made it? How many of you think Eric made it? How many of you think Nicole made it? No. So it turns out you guys are kind of wrong. Eric made it, Nicole didn't. And what Eric was able to do is really nail day 30. I mean, he gained 6 pounds in the span of 2 hours, which is pretty impressive. And so you can imagine, we were just, we were kind of doing this every single day. And this became a total viral sensation on the internet. So we said, "Okay, that fat project was pretty cool. What else can we do?" So we did something called Stinky Feet, where one of our editors, Christian Rudder, who's now of OK Trends fame, tried to give himself athlete's foot. He literally walked around locker rooms and shower stalls with no feet on for 30 days. Stinky Meat, we just put a plate of rotting meat out in the yard and watch the maggots. It's all good stuff. And then we did Stinky Meat 2, 'cause it was so good to do Stinky Meat 1. So this was an example of a business that, you know, based on content, generated a ton of value in just a few months. We did something else called these personality quizzes. We were really the first company in the '90s to do personality quizzes. This was not the final tallies, but these quizzes were taken over 100 million times. In one year. This was pre-social, pre-any of the sort of built-in virality systems that we now have today. This is all just— sorry, this is all just on the quality of the content that we built. And then we built e-cards. E-cards were a thing in the '90s. One of my favorites. Eh, I don't know, just think about it. And so the problem with this kind of content, though, is that you have to constantly produce humorous content. And we realized, by the time we decided to become a company, but even before we incorporated as a corporate entity, we decided the humor business is a crappy business to be in, because you have to be funny every single day. So we thought to ourselves, "Well, what other business can we be in? We've got all these millions of users. What else can we do?" And so we looked up, I was in Chris's dorm room, and we looked up and he had CliffsNotes up on his shelf, and my other partner Max just looked up and said, "We should do SparkNotes." We didn't do any market research, we didn't do any ideation on the name, the name just kind of came to us, and we started making SparkNotes. And we found 10 of our English major friends, Any of you English majors? Yeah, so it turns out English majors will work for free, almost. So we basically went to these English majors and said, you just spent $100,000 on your education paying our school to let you write papers. We're going to pay you $400 to write a paper for us. And so these 10 English students went out on their spring breaks, and they wrote SparkNotes, and they brought them back. We put them up on the site, and we got all this hate mail from our users who said, I can't believe "Hey, you don't have my book," which is great. It's a great kind of hate mail to get. And so we went and we produced another 100 SparkNotes over the summer and launched, and really in the span of 1 year killed Cliff's Notes, which had been around for 50 years. Now a lot of people ask, well, SparkNotes wasn't about the content, it was just because it was free. And so it wasn't, it was a commodity. But there were tons and tons and tons of study guides out there. Um, and yeah, we were better marketers, yeah, we had a better brand, but at the end of the day, um, you know, it was a no-brainer to students that we were better, and it was even, you know, pretty clear from professors and journalists that SparkNotes were the best. And so that pair of businesses, the Spark and SparkNotes, was the business that we built in 11 months and sold, uh, first to an internet company called iTurf, and then later to Barnes Noble. So OKCupid is a business I've been working on for the last, God, 12 years. I feel bad for anyone trying to do dating businesses. They're really hard. And the hardest part about them is how do you build critical mass, right? How do you get the liquidity? And the way we did it was with content. We went back to the well of the quizzes that we had built at at the Spark, and we said, well, let's build an online dating personality test, and let's make the personalities that you can get really, really funny. So we had 32 different personality types. You don't have to read all this. The conference organizers said you can't have more than 50 words on a slide. It's like, who makes that kind of rule? So anyway, I think there are more than 50 words, but I'm a rule breaker. I don't know what to tell you. But we had all these different personality types, and people would post their personality types all around the web. And that was how we drove a lot of traffic to OKCupid in the early days. We then said, "Well, let's keep going down this content road, and let's use content to help people find their matches." At the time, eHarmony was one of the market leaders. Have you guys seen the eHarmony commercials with the old guy and the granddaughter? Isn't that creepy? So I never understood that marketing concept. But we basically let people write their own questions. And these are just 8 questions that I found. And we let people— What? I have no idea what he's saying. Anyway. We're gonna go to— okay, so basically, so we let users create the content, and then we created algorithms that sorted the content, sorted the questions, that allowed the most interesting content to come to the top. And so these are just some of the questions. They're actually very interesting questions if you read them and think about what your answer would be, and then what you would want a potential date— how you'd want a potential date to answer them. But we're gonna take a quick segue out of this conversation and do some audience interaction. OK, so, show of hands, how many people enjoy horror movies? OK. Have you ever traveled alone in a foreign country? OK. And wouldn't it be fun to chuck it all and go live on a sailboat? OK. Of the thousands and thousands of questions that are in our database, those are the only 3 that predict relationship success. If you and a potential date both agree yes, yes, or no, no on these 3 questions, you are statistically more likely to end up in a successful relationship. Okay, show of hands— oops, sorry— show of hands for men. If you would answer yes to any of the questions on the left under men, please raise your hand, men, and leave them up for a second. Okay, women, how many women like the taste of beer? Okay, hands up, keep your hands up. Everyone who's raising their hands right now are statistically more likely to have sex on a first date. So hopefully you paid attention to— there's a party tonight, right? So hopefully all of you were paying close attention to that. Back to the regularly scheduled programming. So we have all this interesting content, right? And so we knew that yes, we were using this content to drive, to improve our matching algorithms, we were using this content for targeting ads, but we thought we can really use this target, this content to go drive more traffic. And so we did what many people do and we called a PR firm. And this was the friendly PR firm that we called Schwartz Communications up in Boston. And they said, "Great, we'd love to take on the account." And so we started mining our data. And one of the first pieces of nuggets, one of the first nuggets of data that we got was that when gas prices go up, people narrow their search radius. Super awesome, right? Like, it's— like, after you say it out loud, it's obvious that that should happen, but it actually happens. Right? That's so cool. And so I was like, I was so excited, right? It's like, yes, we have this great finding. We had Schwartz call 100 journalists. Every one of the 100 journalists was like, oh my God, that is so cool. And every one of the 100 journalists said, I'm not writing a story today on the effect of gas prices on dating. Call me back next week with your next little nugget. And so we did this over and over and over again. And for a year, for 6 months, and no one really ever wrote any stories about the things we wanted them to write stories about. And so we said, well, screw it, we're going to pivot, we'll try something else, we'll iterate. And so we started blogging. And the blog OK Trends became ultimately super famous, but it took us a while to get our footing. And I should say, I should give all the credit to Chris and Christian who did the writing. I just get to talk about it. We first thought that we would have to be really provocative with our talks, and so this was the very first blog post we wrote. And I remember thinking when it went up, I remember thinking, wow, do we really want to like, we're trying to build like a dating brand that people feel good about, do we really want rape fantasy to be the thing that everyone associates with OkCupid? And, but, you know, Chris and Christian were very, they said, look, we have to be provocative, we have to go out there, and we have to like sort of scream real loud to get the attention. First of all, some super interesting findings. I mean, Wyoming? Who knew? Any Wyomingites in here? No. Okay. So anyway, this was the very first blog post we did, but it turns out that that actually wasn't what we needed. The data was so powerful, that first finding of like gas and gas prices and search radius, that kind of stuff was actually much— ended up being much more compelling. It just had to be packaged the right way. These ended up being some of the most successful blog posts that we wrote. And you'll see none of these are clickbait. None of these are artificial. None of these are especially provocative. But these are the kinds of posts that we put up that got millions and millions and millions of views. Of shares and reads and views, and there was a time in the summer of 2010 where we were literally on the front page of a Sunday Times section 3 weeks in a row. One was Sunday Style, one was Arts, and one was Business, where the New York Times was basically just saying, "This content is unbelievable." I would argue, I would argue that the blog probably is the primary reason why we were able to sell our company. And probably on its own in the span of a few months probably generated, I don't know, $20, $30 million of equity value to the business. And with that, that's it. So we, I'm 2 minutes early, so we get 2 extra minutes of Q&A, or we can all go drink faster. All right. Be better with a mic. It's probably an obvious answer, but so with the weight challenge, you said you would pay them if they reached 30 pounds, or increased 30 pounds. I'm gonna guess that you pay them anyway. Uh, we definitely paid Eric, because he made it. What about the woman though? Yeah, we probably, yeah, we paid Nick. Okay, yeah, simple enough. Wow, that's the question? Alright. Hey Sam. Yo. Uh, in today's day and age, the internet's flooded with content, flooded with bloggers that have tons of knowledge about tons of topics. We know a lot of things, but we don't know what's important. How would you stand out? I think ultimately this goes back to my belief in the power of brands. You know, and I kind of look at this through like the dating context, right? It's not exactly a blog, which is not really the world I live in right now, but like, do you know how many dating— how many dating businesses have launched in the last decade? In the last decade? Hundreds? Do you know how many dating businesses launched in the last decade have any, any noticeable amount of success? One. Right? And if you think of liquidity and users as content, right, it ultimately gets back to the fact that like all these businesses didn't— all these dating businesses didn't build brands, right? They just found— they thought they had like some slick way to get a few users or whatever, but they weren't building sort of this lasting permanence. And I think In the blog context, you have to think over a very long time horizon and just say, like, you know, I want to build a reputation for being smart or funny or whatever it is. And those people who do that over time can have sustainable edge, an advantage that you can't take away. I think, like, clickbait and stuff like that is all very temporary, and then you're just in an arms race, and eventually you'll lose. Hi, Sam. Thanks so much for your talk. So, quick question about content. Content seems like it could be extremely time-consuming. So how do you evaluate the impact versus the effort of content creation? Um, shh, you know, it— of course it's a lot of work, but, you know, I think startups are a lot of work, and work is a lot of work. And I just think, you know, think about producing content pre-internet. You had to actually, like, go get things printed and get things distributed, and, you know, your ability to you know, make video content on the fly, you know, use Twitter, use, you know, social media to get your content out. I think all the more, I would actually go the other way, which is because distribution is so easy now, you can spend all your time on making great content and making— and winning on quality. Quality is the thing that can give you sustainable edge over time, and, you know, I think too many people try to shortcut it. They're like, "Oh, I just want to get more content out," and that's almost never the right answer. And just look at the great content brands out there and think about how they built it. There are a few that did it on quantity and clickbait, but the vast, vast majority are just the best content out there. Hey, Sam. Thanks for chatting with us. My name is Gary Ely, and the fact that your blog was able to increase the value of your company $20 to $30 million is mind-boggling to me. I was curious to know— you're kind of answering this as we go, but I'm curious to know how that happened and what metrics you measured in order to determine its success. In the early days, we measured— we had this— I remember the first couple blog posts at the bottom, we had this sign up for OkCupid and share. Sign up and share. And we were like, couldn't figure out what we wanted people to do because we didn't know what our metrics were. And it turned out that the temptation was to get people to sign up for OKCupid, right? 'Cause that's what everyone wants to— we want them in the funnel, right? You want that email address. You wanna be able to do all the stuff you do after you get the email address. And it turned out that, again, I'm a big believer in brands. I think that is your long-term differentiator. And what we ended up realizing was that all that mattered about this was getting into becoming a household name. All right, think about how many— How many startups actually make it? And you have to get out of San Francisco, you have to go to a cornfield in Illinois. You have to do people, like that, to be a great business, to be a business that like is permanent, to be a business that is, you know, that your kids will know about, you're gonna have to get to the cornfields, and think about that, right? And so what we decided was we wanted to be a household name, and the way to become a household name was to make sure, to drive KPIs, and metrics, and to evaluate KPIs and metrics that had that kind of breadth and reach. And so we were looking at things like, how much press did we get? Right, how many, that was really the primary thing that we were cared about. How many interviews, every time we did a blog post, we would end up on TV, we'd end up in the New York Times, we'd end up on all the influential blogs, and there was a period of time in 2010 where I would argue the OkCupid blog was must-read in sort of digital media. We would get requests from journalists to just say, just please give me a 5-minute warning before you post. People were offering to pay us lots of money to just get the blog post a day early so they could already write the sort of, you know, analytical posts about the blog post. Hey Sam, SparkNotes and OkCupid are such different audiences and they're solving such different problems. What other industries are next for you? Ah, that's a good question. You know, my current, you know, I think there was a thread between SparkNotes and OKCupid, and that was really sort of producing best-of-breed content for free with a brand voice that was very different from the incumbents that tended to be stodgier and more conservative. OKCupid sort of really opened up big data and sort of all the appeal that comes with that, and I think whatever I do next, I really want to think about how can we use data to do something else. So whether it's in e-commerce or something else, I'm just super interested in thinking about data and what else we can do with it. All right, thank you, Sam Parr. Thanks.