Kyle Taylor built The Penny Hoarder from a Blogspot site to a 100-person company while paying off $50,000 in debt through mystery shopping and beer auditing. He shares how radical transparency and hiring for teachability over experience shaped the culture, and how the CEO role evolved from writing newsletters to managing crises like server failures and hurricanes.
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LD, aka the independent variable. Trap God, I'ma serve another one. Hey, HustleCon. I'm so excited to be here. I gotta tell you, I've been getting asked the same question over and over again recently. How did you make your first dollar at the Penny Hoarder? Well, it was in a way It was a little bit unexpected. In fact, I don't know that I've ever admitted this, certainly not in front of 2,000 people, but the way I made my first dollar was through mystery shopping. Here's how it worked. Companies like gas stations and restaurants would hire me to go to their store, pose undercover, and then pretend to be a customer and see how clean the store was, how nice the associates were, and then I'd go home and I'd write a report about it. And then I would get paid anywhere from $10 to $30. But when I was done, I wrote another report on this site here. This is one of the original versions of the Penny Hoarder. And I would write about how much money I made. I'm actually really embarrassed to show this to you, not because it looks awful, but I'm remembering now that that logo I think came from the Microsoft clipart gallery. And I think they're the sponsor. Please don't sue me. I know it sounds kind of gimmicky, but mystery shopping was a big part of The Penny Hoarder. And I wasn't just a mystery shopper, but I was a beer auditor. I got paid to pass flyers around neighborhoods for a penny apiece. I stood on the side of the road with signs and waved them for $8 an hour. I was doing anything I could, and that's because I was in a lot of debt. Like a lot of debt, like $50,000 in debt at the ripe age of 23. And much of it was student loan debt, but I hadn't been to class in years, and I certainly didn't have a degree to show for it. I found that debt to be so very shameful. I would often hide my phone when I was around friends and family because I didn't want them to see the collectors calling. All day long. When things got really bad, I would sneak into a hotel to steal a free banana from the continental breakfast. It was a dark time, and because I was so embarrassed about it, I did the only thing I could think of, which was to start writing about it. First on a free Blogspot account, I would share how much debt I had, what I was doing to pay it off, And through 3 years of mystery shopping and penny hoarding and beer auditing, I paid that debt off, and along the way, something kind of special happened on the blog. I started to hear from readers who would say, "Thanks for sharing your story." They would cheer me on, they would share their own story about paying off debt. And I realized I wasn't the only one feeling all that shame when it came to our debt. In the last couple of years, The Penny Hoarder has now scaled into a personal finance brand that reaches millions of people. I'm proud to say that in the last couple of years, Inc. 500 has ranked us the fastest-growing private media company 2 years in a row. And in the last couple of months, we opened a new headquarters in St. Petersburg, and I hired my 100th employee. Thank you. It's been a crazy, Crazy ride. And I know that sounds like a lot of easy success, but what I want to talk to you today about is all the challenges and difficulties that came along the way. I want to be honest with you, I was terrified to hire my first employee, absolutely terrified. I was 28, a complete introvert, I still am. So introverted that I refused to go to social gatherings. In a carpool because I want to make sure I can sneak out the back. And so the idea of working with people every day and having to put clothes on and not work in my pajamas was absolutely terrifying. And for a long time I thought I was the only one, but I've met enough entrepreneurs now to know that there are many introverts. Who here prefers to work at home in their pajamas by themselves? Okay, okay. There's a few of us. I was absolutely terrified to hire that first person, and so I did what any stalling, procrastinating entrepreneur would do. I put an ad on Craigslist. Because who wouldn't work for a college dropout who wrote about couponing and mystery shopping? That's an ad you'd answer, right? In fact, I was so embarrassed that I didn't want to tell people they'd be working out of my house, so I had them meet me at coffee shops. And in the meantime, I found another way to grow the company. For years I had been working with freelancers, and one of those freelancers owned a content agency, and I convinced her to sell me the company and move her 4 folks to St. Petersburg. I know what you're thinking, that sounds even more scary, acquiring a company. But for me it was less scary because these are folks I knew. I trusted them. And more importantly, I knew I would enjoy working with them every day. We eventually did hire, and when I think back to some of those early hires, there's a few things— oops— there's a few things that we all had in common. One, those early employees, they were all willing to teach me, and it can be extremely difficult to admit this as an entrepreneur, but I knew absolutely nothing. Still don't. These folks were willing to come in and teach me everything that they knew and be very humble about it. The second thing that those early employees all had in common was they were all willing to adapt and change very quickly. One of my Craigslist employees, as I call her, came on board as our bookkeeper, but within a few weeks I asked her to take on benefits. And then a few weeks later, she became our HR rep. And then she became our office manager and our receptionist, and on more than one occasion, I asked her to play my personal assistant. She took on a lot of roles, and I think she's probably had about 10 titles in the last 3 years. But that's what you need with those early employees, because the company you're building today is most certainly not the company you're going to have tomorrow. People who can adapt and change with you. The last thing that those early employees all had was that they were early believers. Nobody believed that The Penny Hoarder could be a thing. I remember telling my parents, "So I'm going to quit my job, and I'm going to work on a blog called The Penny Hoarder." I think my mom would have preferred if I said I was going to deal drugs. That's how bad that came across. But these people believe. They quit their real jobs and came and answered my Craigslist ad, met me at a coffee shop. They were crazy enough to do all of those things. And that's important because those believers are the people who are going to convince the next group of people to come join your company. And they're definitely the people who are going to get you through the hard times. And believe me, there have been some hard times. Around the end of 2015, we had about 20 employees, and this is probably the toughest time I had at the company. I was playing a lot of roles. One of my jobs was to write the email newsletter every day. I was just focused on getting the product out the door. We moved into a new office, but nothing went as planned. There were termites, servers went down. One of our big advertisers left us. Johnny hated Sally. Sally definitely hated Johnny. Yelled at him in the middle of the workroom. Everything went wrong, and I was working all the time. I was hustling. And I would go home after working 18 hours, and I would pour myself a glass of wine, have a quick cry, sleep for a couple of hours, and then come back and do it all over again. It was hard. I think back to that time now, though, and so many of the decisions we make— made back then are why we have a culture of transparency today. I certainly wasn't telling my employees every fear I had. Can you imagine? I just finished crying, but I'm ready for our meeting now, so don't worry. ¡Ah! But I was open with them about how little I knew and about how terrified I was to run a company. I didn't have all the answers, and ironically, I come to find out that they didn't expect me to have all the answers. What they wanted was a vision. They wanted to know where we were going, but they were willing to help me figure out how we were going to get there. And they also wanted to know that I cared, and of course I deeply cared. One of the ways that I try to show that I care is through our benefits. From the very beginning, we've given our employees unlimited sick time, paid parental leave, we've paid 100% of premiums for health insurance for both them and their families. And I— and that's something I want you to take away, is that if you can hire great believers, big believers who believe in what you're doing, and then treat them really well, they will help you figure out all of the things in between. Yeah, absolutely. And they have helped me figure out quite a bit. As you hear me talk about my employees, I think you can tell I think about them like family. And so one of the hardest moments I've had as a CEO is having to say goodbye to one of them. It's something every entrepreneur goes through at some point. We talk a lot about how important retention rates are at startups, and they are important. Finding good people and holding on to them is absolutely important. But it's also important to say goodbye when it's no longer working. And this is a lesson that took me a little too long to learn, so I want to encourage you to learn it now because what I've come to find out is that when you do finally make that decision, it's better for the company, it's better for the team, and in almost every case, it's better for the person as well. If you're interested in knowing more about this, I highly recommend Radical Candor by Kim Scott. It has helped me on numerous occasions get through those difficult periods. I'll fast forward to 2017. We now have 80 employees, and we're humming. Like, we're humming along. We've built processes, we've got a plan for onboarding new employees, we've got a plan for offboarding, we've got a plan for how to get you on Slack and how to make sure you're ready to go on day one. We've got a plan to make sure our sprints run on time, and we have hired a ton of people, and we're making a lot of money. But of course it's not that easy, and of course right around 80 employees, it started to feel heavy. Like things started to take a long time. When we were small, the 5 of us could sit around my kitchen table and all make a decision together. And then once we got a little bit bigger, 30, 40, 50 employees, us 3 executives could make decisions. Just by slacking each other. But at 80 people, there were thousands of decisions to be made. Content was taking too long to get on the site. We were pursuing IT projects that had no plan of bringing us money or engagement in the long run. And so we blew it up. We said, what got us here is not going to get us to the next place. Place. We formed an employee-led committee, and they went through every tool we were using, which was over 50 third-party tools, and came to decisions about which ones would make sense for us to scale to tomorrow. We reorganized the company. People changed managers in a way that allowed decisions to get made at the department level. We formed a steering committee so that it wasn't me deciding what IT projects were going to go forward, but the staff. And we started over, or at least that's how it felt. And I got to tell you, starting over is not easy. In fact, it was pretty darn stressful. People wondered, will I still have a job? Who will I report to? What will I do all day? Will this company survive? But it's in that moment that those early believers, those people who are really good at adapting and changing, started to rear their head and say, we can get through this. We can do it. We've done it before. And that's going to happen. We know the systems that we're building now for 100 employees, we'll probably have to start over again at 200, and again at 500, and again at 1,000 employees. So what I want you to take away today is to know that it's okay to change course. It's okay to start over again. That's part of it. I've also found in the last couple of years that I've had to change myself as well. In fact, the job I have is nothing like the job I had 3 years ago. As I mentioned, my job was to get the email newsletter out the door. I had to get 3 Twitter posts up that day. And the second year, I had to think about things like infrastructure. How would I attract and retain employees? How would I— where would we all work? What would our office look like? And the third year, I got to figure out how to run a company through a hurricane. That's something they don't tell you in the handbook. It's a joy of being a Florida CEO. And now in the fourth year, my job is a little bit more about thinking about long-term strategy and developing leaders so that we have a company that can be around 20, 30, 40 years from now. I have to change myself, and that's terrifying. Most days, I'm doing something I've never done before. This week I got to meet with TV agents in LA. I got to review drone footage from one of our photographers. I got to become an expert in trademark law. That one wasn't so fun. I dealt with a fire code violation at work. I never know what the week might bring. It's also the most terrifying part. I worry about whether I'll be able to keep up my own growth with the growth of the company. Will I be able to meet the company's needs? And so I think about, you know, when that voice comes in the back of your head, the one that says, "You can't do this. You're not a real CEO. Don't let them find out you don't know what you're doing." When that voice comes up, and it comes up all the time, no matter how far or how many accomplishments we have, I try to think back on the last 3 years about what we have gotten through. The servers being down, the hurricanes being down, finding good people, paying them really well, and sometimes having to let them go. I think about all those things that we've already accomplished, being able to create all those processes and then say, "No, none of those work again." And that's what I lean on in those tough moments. Being a CEO is probably one of the toughest jobs that you can take on, but it's also probably one of the most fun jobs you can take. And if it ever gets to be too much, and it will, I want you to think about something that has worked for me. Go home, put on a pair of pants, you know, one with the drawstring, something real comfy, pour yourself a glass of wine, have a cry if you need it, no judgment, play some Mario Kart, some RuPaul, take a deep breath, RuPaul gets me through a lot. Take a deep breath, and then you come in tomorrow, you believe in yourself, you believe in your team, and you hustle your ass off because it's the thing that got you here, and it is the thing that is going to get you to where you're going. Thank you so much, HustleCon.
