Transcript
This isn't your average business podcast, and he's not your average host. This is the James Altucher show on the Stansbury radio network. I'm here with Gabriel Weinberg of DuckDuckGo, a search engine of all things. Gabriel, you must get that all the time. Like, if you're at a c**ktail party and you say people say, hey. What do you do? And you say, oh, I made a search engine. Don't people kinda, like, look at you funny and say, well, isn't there Google? Yes. Yes. I pretty much avoid it if I can. So honestly. You avoid c**ktail parties? Or you avoid saying what you do? Or you lie about what you do? All 3 to some extent. Sometimes I just say run a search engine. But oftentimes I'll say just, you know, I do programming or something like that. And, like, what's the most common joke you get back? Like, oh, are you CEO of Google? Yeah. I just have to well, I I I have to give the company a pitch at that point, which, you know, I'm happy to do now if you like. But I just I generally don't like pitching, you know, at random c**ktail parties. I just find it, you know, I'm not there to pitch people. Yeah. And your wife must get sick of that anyway. She's heard it a 1000000 times. Exactly. So so but since my listeners are not your wife and I am not your wife, how about you tell me like and look I've been to DuckDuckGo, I like it. I I like the fact that these these are the raw results for instance on my vanity search as opposed to, Google's kind of pruned results about, you know, it's like Google knows everything in my brain. So they only they Google doesn't like to it's like somebody who's, like, afraid to upset me. So Google only gives me the results that don't upset me. That is exactly right. Yeah. So, okay. So the basic pitch is, you know, we're a search engine like Google. You can switch to us. Pretty much did not look back at all. We focus on things that, you know, we think Google can't do very easily, not generally for technical reasons, but for, you know, legal, business, cultural reasons. So those have been privacy. You know, we don't track our users at all. Less clutter. You know, we we just focus on web search. We don't put things like Google plus in our results and other clutter and things. Design. You know, we just have a cleaner design, much more like the Apple of search engines. And then Let let me dispute that a little bit. Like, Google's design is pretty clean. I you know, this is the interesting thing about, search engines, and I make the analogy to web browsers. You know, people have, preference for web browsers, but they basically do the same thing, often based on designs. People like the Safari design or the Firefox design over Chrome. And, that's the thing with design. It's like some percentage of people prefer our design. It's a cleaner, funner design, if you will. You can customize it, but it's not everyone. But we believe that, like, with privacy, design, clutter, and then smarter answers is still the last one, more answers above the legs. We think a significant percentage of people prefer that search experience. And and you make it custom like, what I like about your search engine is you you make it super easy to customize. Like, I could say, you know, where I'm from so the the results, I guess, get skewed, depending on that. Like, you definitely have a product and a search engine. So I guess the the couple and I wanna get by the way, you're the author of a great book, Traction. It's all about and this is a common question I get. How do I know if my business is getting traction? Or how do I get traction with more of my business or how do I get users? Your book answers all of that. We're gonna talk about it in a second, but I do wanna drill down on your company as well if that's okay with you. Yeah. Great. So so One other point. You you mentioned a more nuanced benefit of UpToGo, which is this concept of the filter bubble where on Google, you know, they're basically showing you links, that you they think you're gonna click on, but not necessarily the most objective researched links. And if you're, like, you know, you're a Democrat or Republican, you're seeing those kind of links and not opposing viewpoints. I I believe that is pernicious, especially in politics, and that is a benefit of using deck.co. I usually don't say it because it's kinda nuanced and hard to explain. But since you brought it up, I thought I just mentioned it. Yeah. No. And I and I appreciate that. Look. I appreciate knowing what and this is really appropriate for vanity searches, but I appreciate knowing what other people see about me when they search on Google. And I can see that to some extent when I search for me on duck.go. Right. As opposed to when I do a vanity search on Google. Yep. Now, of course, if I search on, I don't know, San Diego, I might see flights from New York to San Diego pop up because Google knows I'm in New York. But I can set that if I set region on duck.go. Yeah. What what's kind of interesting is we can get, localized results without knowing anything about you. So you can type in weather in duck.go or local restaurants and get those. We can do that without tracking you, and we do that in the instant answer area, just not the the link area. It's interesting. Okay. So for instance, I just typed in weather, and it did actually know where I was. So Hopewell Junction. Yeah. It's overcast today. Hope it doesn't rain or anything. But, so when did you start your business? I started working at the end of 2007 and we launched at the end of 2008. And what what made you think, other than the privacy issue, what made you because I I wanna get to the privacy issue in a second because some people care about it and the majority of people don't care about it. But, what made you think, oh, now is the time for another search engine. There hadn't been another search engine made in, call it, a decade. What what made you think you could start one? I was not terribly thinking about, you know, business or anything. I had just sold a business, and was kind of doing personal projects and did a bunch of projects enhancing Google in ways that I felt Google was lacking. So removing spam, adding these instant answers, and then thought, you know what? I could put some of these together and kind of roll my own search engine and see if anyone's interested. That was a genesis. Right. And what was your initial usage? Tiny? My dad. So when we launched, you know, it was not a big to big fanfare and the product was really not at a point where you could switch to it. So we were getting on the order of, you know, 10,000 searches a month, and now we're getting about a 150,000,000. 150,000,000 searches a month. Is that because are you the are you a white label search engine for any big sites? We are not. It's all organic. All people switching to DuckDuckGo, and we we think it's gonna increase a lot because we just, you know, became a search option in Safari. So all these new iPhones coming out, you know, DuckDuckGo is an option you can switch to built in to the OS. Is that because Apple didn't want to, essentially hand over any information at all to Google? Like, why should Google get all the names of every iPhone user? I mean, Google is still the default. But I I just you know, I can't totally speak to Apple, but I think they've just value privacy and giving the privacy option to their users. They should make you the default. Right? Because now Google knows everybody like, Google, which has a competing product, knows the names of every iPhone user. We are the default in a bunch of open source browsers and distributions, and, you know, we hope one day to be the default in a major browser. Unfortunately, it's a there it's not just, you know, there's an there's a big revenue deal there, and we don't, have that kind of money at the moment. Right. So so how do you think you got from 0 to a 150,000,000 searches a month? So it has been, many stages of growth. And this one thing we talk about in the book is, like, we figured out a traction channel, marketing channel that worked for us, and really took it until it reached diminishing returns and then switched channels. So we've been through about 6 of them. Started off of SEO, believe it or not, people on Google typing new search engine. When that kinda maxed out, we moved to, Reddit, ads and then our own content marketing, sweeping out microsites, things like that. Then we did, try to get in print PR. There was a billboard in the middle of that. And then we did TV PR over the last year, in the wake of the NSA scandal, and now we're doing business development like this Apple deal I mentioned. So so before DuckDuckGo, like, right before it, you sold the names database to United Online for about 10,000,000. Were you the primary owner of the names database? Yes. I was a cofounder, so it was 5050 split, and we had no investors or employees. That's great. Those are always the best businesses when you could kind of like you know, I I I have one friend who has a company, and he was trying to get, venture capital. And I said, you know and it was hard. And I always say, you know, if when it's easy, that's when you take venture capital. When it's hard, focus on your business. And when you're pushed up against the wall, sometimes that forces you to find profits and customers and make your business a lot better. And it's true. That's what's happened to his business. Now it's it's huge. Yeah. I wrote a a dime. I wrote a this is kind of a side post. I wrote a post a few years ago called the path to $5,000,000. And, you know, laying out the numbers of privately owned versus, you know, taking VC. And it if you're going for that kind of level, it is often easier to get that on a bootstrapped level and selling for $10,000,000 for that can be meaningful. Whereas if you, and I know you sold this for 10 about 10,000,000. So if you And and around the same time, and I didn't take any money. I would if I had taken money, it would have been impossible. Totally. You have to often get to, you know, more like a 30, 40, $50,000,000 sale to make the same amount of money, which is way less likely. Right. Yeah. You could almost I I don't wanna say you could start any business, but look. If you could start a business that has a $1,000,000 in EBITDA, it you could sell it and make a lot of money for an an individual person who's never had money before. Right. Or, you know, if you can get to that level, you could just sit on it for several years and spend off that cash. Right. Well, that's another good point. I was always afraid to do that because I've always been terrified that, oh my gosh. I'm making a dollar today. It's gonna be gone tomorrow. So I I get too too terrified. I have to sell. Yeah. That was kind of the problem with our business too. The risks. The existential risk too were just too high. But I've seen, other people that have businesses like that, and they just, you know, make cash year after year. Yeah. Like, subscription businesses are good. Be like a newsletter business because they can make cash year after year. Exactly. Now let's let's talk about the names database for a second because just like DuckDuckGo seems I don't I'm not gonna say derivative of Google, but it kind of, like, builds on, you know, the whole concept of of a well known business model. The names database sort of builds on top of a a well known business model, which is social networks, which at that point was essentially, being dominated or about to be dominated by Facebook, and before that was dominated by Myspace. Now I know you were bought by classmates.com, essentially, but, what was your idea with the names database? Yeah. You know, that it it's interesting. So, I talk a lot about, you know, spending a lot of time on traction because people are drawn to product development and waste spending all their time on that at the expense of getting traction. This is a kind of a a roundabout answer, but it'll explain it very well. So I had the opposite problem. You don't often see this, but I was interested in getting traction through viral marketing. And so it was really focused on a way could you, you know, make that exponential growth curve happen? And so really focused on that and not really the product much at all. It's one of the reasons we needed to sell. And so ended up with a lot of users, but not you know, didn't necessarily know what to do. And so that's why we ended up in the Classmates direction because we ended up with a lot of people internationally. And Classmates hadn't really penetrated there, and we said, okay. These people are interested in finding their old friends and classmates. Let's make the business there, and that's why we ended up selling to them. So we kinda backed backed into it, if you will. So so, essentially, once you had, quote, unquote, attraction, you were able to sell. You had enough value you're able to sell. And United Online was a perfect choice because their their dial up business, of course, it's it's classic. Their dial up business was was going down, but it was a huge cash generating machine. So they had all this cash, and they needed to invest in the future. Yeah. They they were they were trying to become an Internet conglomerate, kinda like interactive corp. They had bought classmates a year before and saw us as a way to get cheaper user acquisition and, you know, international expansion. So it fit kinda perfectly. So so DuckDuckGo, it's interesting because around the same time of 2,006, 2007, I was thinking of building kind of a social media search engine, which rather than having a crawler go through all the social media sites, I was just gonna, use APIs to grab stuff and have, like, different windows showing the results from different top sites and search engines and and social media networks and so on. And duck.go was kind of created I don't wanna say in an exact similar way, but similar in that you're you don't have a crawler that you use, but you're stripping the results using the API from, like, a whole bunch of sources like Yahoo Search, Wikipedia, Wolfram, Bing, and so on. Right. So we we do have a crawler. It is not used as extensively. It's mainly used to remove aggressively remove spam, which is one of those things I mentioned earlier. But you're absolutely right. I mean, I I saw the same thing you did. There was a explosion of APIs, right, and data everywhere. And the thought was many of those places have awesome answers. Like, you mentioned Wolfram Alpha, integrated math, you know, Yelp and restaurants, Wikipedia, biographical information. And as time has gone on, there's literally thousands of these. And so the vision with the answers is that any search, you probably have a site out there that could give you a good instant answer, but you as the individual don't know what that best source is. So we've made it our job to essentially take the query, classify it, figure out what that best source is, go to the best source, get it from their API, and then format it to you above the links as an instant answer. That's the grand vision. And and from beginning to end, how long did it take you to develop the product? And and I'm gonna guess and say 3 months for for initial version of the product. So I it it was kind of weird because I was doing these side projects, and I did those for about 6 months. And then February 2008 was like, oh, I could put these together. And then I did another 6 months to get it to a point where it was launchable. So about about a year, but, like, yeah, you're probably right. 6 months of really actively focused on it. Well, let me let me ask you a question. Why don't you make DuckDuckGo totally open source so that any phone developer that doesn't wanna use Google or any any enterprise that wants to have enterprise search and doesn't want Google, like, in their enterprise can use, the source of DuckDuckGo. And then and then kind of like a Red Hat, you become the consultants for anybody who's using DuckDuckGo open source so you can kind of send your programmers in and for a fee, charge them to, to modify it? So all the answer platform is all open source already. The site search kind of component, we started doing that kinda going down that road early on and realized that when you get these site search installations, they don't really convert into general search engine users. And our goal is really, you know, to get people to set it in their browser as their primary search engine. And so we kind of backed off that business model after a while. I see. So the the way I view it is every every every at every point, like, a business has a narrative that it wants to be able to say. And so you wanna basically be able to say, every month, we're growing users on duckduckgo.com. That's your narrative. That is right. And and the other business you mentioned is a good business. There are a bunch of places that have been making inroads there. And so I I think you're right. That's good business. It's just not our narrative. So your your basic approach and and I'm gonna kind of quote, Fred Wilson who invested in your company. He's a very one of the greatest investors of of all time really on Internet businesses. He basically said, this is the search engine for Internet anarchists, you know, the type of people who use Reddit, for instance. People people who care about privacy in their search. Would you say that's a true statement? So I would say we definitely appeal and care for those people, and I would consider myself among them. But I'd say also that we're we're made way more mainstream beyond, you know, beyond that. I mean, you you could use us and not care about privacy. I think we try to educate that you should care about it, but there are many reasons to use us independent of privacy. Like what? So you switch to us and get these answers we've been talking about, and that's really the vision is you come to DuckDuckGo and you start searching, and it just saves you time and mental effort. Additionally, it's just, to some percentage of people, just a more fun, clean, experience. And and your argument is you're gonna get for for for the user who wants correct answers as opposed to answers that are only correct for me, DuckDuckGo might be a better search engine than Google. Yeah. I mean, it's it's like try us out. We think that it'll be you'll like the experience. You may try us out because of privacy or but you're probably not gonna stay for that reason, at least the mainstream user, because day to day, they're not thinking about it. It's really an added benefit and peace of mind. Right. And, so so a 1000000000 you're you're so so clearly, you're getting over a 1000000000 searches a year. Clearly, people buy into the model to some extent. How is it going in terms of, revenues, profits, that sort of thing? Good. I mean, it it kinda scales. Like you said, the the the search business is pretty fat figured out already, you know, and it's decently lucrative when you get high enough volumes. So revenue basically scales with traffic. And, do you do, is there is there a widgets I could put on my site that for instance, handles your run over inventory on on advertising, you know, the way Google does with Google Ads? Not currently. We currently syndicate, the Microsoft, Yahoo, Search Alliance ads. And we focus almost 0 on, you know, in our own ad products or anything like that. Yeah. You know what though? I I like that because you don't have, like, 600 or 600,000 servers lying around. It's better sometimes to build a significant business by outsourcing as much as you can. Exactly. And and if you look at some of these other search engines, you know, basically, they're split down the middle of their company. Half is sales and marketing once they create this ad business. And to us, that is lack of focus where focus can be just spent on building a better search engine. So how many developers do you have working on building a better search engine? So we have about 20 people in the company, which is obviously very small compared to others. But we're hoping to have, you know, thousands of people out there working on the open source platform developing these answers, and that's why it's all open source. So any user can suggest, you know, an instant answer source or idea. You know, it could be money related, some better stock, source. And then, you know, you could develop it. Someone else can come along and develop it. It's all open source. You're probably very familiar with how that works. Yeah. So so look. That's great. I real I'm really impressed that you've you you're you're like the first company after Google to build a search engine and actually get, like, a, you know, a 1000000000 people using it or a 1000000000 users, a year. Thank you. Yes. Very proud of it. Do do you see revenues growing up every month or is this Yeah. Revenue revenues definitely grow with traffic. It's it's directly correlated. And are you for sale? Are you trying to sell the company? No. We're really not. I mean and it honestly related to the way we built the business, it's almost an anti sale business in a way because we're privacy focused. Our team is distributed. We have a small team, etcetera, etcetera. You know, but I would think, like, you know so, like, Mark Cuban just launched Cyber Dust. And the idea, I would say, is almost similar. Like, it's it's sort of, an instant messaging system but with total privacy. So so so his whole idea is that people should reduce their digital footprint. And that kinda falls under, you know, what you're the umbrella of what you're doing a little bit that this that using your search engine, using cyberdust for instant messaging, this all of this is related to reducing one's digital footprint which, you know, could may or may not be a trend in the in the future, but it's interesting. Like, he for instance, so he could be someone to talk to as well. Yeah. No. Absolutely. I mean, I I could see a lot of people are skeptical. I think you are too about how mainstream privacy is. I think there are aspects of it that are very mainstream. For instance, you know, people don't like ads following them around the Internet. That's become obvious and annoying to the majority of people over the past few years. Yeah. It's sort of funny. Like, on Facebook now, when I look down the right, it's sort of scary that all the ads are like my friends. Yeah. Exactly. Like my friends' businesses. They leave off of Facebook too because now with retargeting, you know, Google is the same way. These companies are running ad networks across the whole web. You know? And so these ads are following you everywhere. I don't think people realize, like, how deep retargeting is going straight into your brain. Right. They do not. They do not. But they're they're starting to wake up to it. That's the thing. As people wake up to it, then they're gonna care more. Like like and it it you know, sometimes it's not a bad thing. Like, let's say I go to, I don't know, Hot Rod Cars Magazine's website. And then I go to Forbes Magazine's website, and on Forbes all I see are ads for like hot rod cars. It's not the worst thing in the world because maybe I'm interested in in those ads more than I would be interested in, I don't know, shampoo ads or whatever. But, you know, sometimes it could be a bit like, how did they know I was just at that magazine? Yes. There are situations where it can be good and there are situations where it's not. And in any case, I think people generally would like to reduce it or control it at least. Yeah. So okay. So so duck duck go but we can that this could lead into the conversation with traction. Like, how do you know and this is a common question I get asked. So I I run a a q and a on Twitter every Thursday. And almost always, every Thursday, someone asks me, how do I know if my business is getting traction? Now that's not necessarily what your book is about, so I thought your book was excellent. Your book is more about how to get traction, but before you know, but but the main but but before people even start to think, oh, I need to try all these 20 different things. How do that how do I know initially if my idea is getting traction? Yeah. I think that is the premise in that question is that they don't have a traction goal to measure against. And I think that's the starting point with all of this is you need a goal that is meaningful. And so what I advocate for is a goal that is related to an inflection point in your company. So for DuckDuckGo, it was initially getting to a point with the product where people could switch to it, then it was getting to a 100,000,000 searches a month, then it was getting to 1% of the search market, which is what we're working on now. Each of those correlate to a different inflection point with us. The first was product market fit. The second was breakeven point, and the third is, you know, taking much more seriously entrenched in the market. Oftentimes, what people want though initially, I'm sure a lot of people do q and a, are their traction goal is, I need enough traction to get funding, right, or enough traction to be profitable. So if that's your goal, then you need to answer, okay. Well, how much action do you need to get funding? That's also an answerable question. There are a number of ways. What other companies are getting funded? How much action do they have? Talking to investors, that kind of thing. How much action do they get profitable? That's pretty easy too. You should know how much you're making and be able to calculate, you know, how much customers you need. Once you have the goal, then you know if you're getting traction or not. You know, you look at the core metric and see if it's increasing. Well, okay. And and and then the follow-up question is, how many months do I go without traction before I should give up on the idea? Right. That is a other interesting question. You know, again, this this gets real this relates to kind of somewhat personal preference, but I I look for 2 things. 1 is, is there any real product engagement? Like, are there people out there that are actually interested in your product? I call them bright spots. Right? Are there bright spots? If there are no bright spots and you've been doing this for a while, you know, that real market feedback may tell you that it's time to move on or pivot or something. If you have some, then that's like an open door of, let's go look at these people. Let's go talk to them. Why do they like what I'm doing? You know? Are those repeatable customers? Is that actually a big market there? Or are these just isolated early adopters and there really is no mainstream market here? That's kind of the question you need to answer before deciding that. So so, you know, one of I'm gonna go, in and out of order on your on your book table of contents. So you give, like, basically, 20 ways of developing traction for your business. And a lot of it depends on the exact business, but I I think, you know, obviously, the most attractive is viral marketing. So when people, do something that causes their, business and site to go viral, then that's an incredibly amazing that's almost like this dopamine inducing way to build your business. Because, like, you wake up and there's another 100,000 users on your business that you wouldn't have even planned for. So that's that's an amazing but I wanna focus for a second on what I think is the most valuable to to or actually 2 of the most valuable. One is content marketing. So I was talking to, so a lot of people ask me also, how do I drive users to my site? And, you know, they're thinking in terms of, I don't know, ads or other people writing about them. But I always say, and you say this in your book, and I think it's incredibly valuable, Guest post on other very popular trusted sites that maybe aggregate post in your area or whatever and link back to your site. That's an if you're a good writer and you have good content, which you should be able to have if you have a good business, that's an incredibly valuable way to drive people to your site. Agreed. I mean, so content marketing is one of these, I would call, underutilized channels. Right? It's it's a channel that, for whatever reason, people are biased against. I think mainly because it's perceived as a lot of hard work and it's out of people's comfort zone. Right? Another reason is it takes a while to get going. And so, like, if you have your blog, you know, you're writing for the 1st 6 months basically to no one. And guest posts, like you said, is a great tactic to to kinda jump start and catalyze it. I suggest people do it. But I still think people just get frustrated that, oh, their audience isn't really big right away. And that's just the reality has started an audience. But if you can get over that hump, then you're in an area that, you know, is underutilized because your competitors aren't doing it, and it and it really is an amazing channel once you get it to work. Well, you know, one guy I spoke to, Brian Johnson from from Braintree, they do, credit card processing. Yep. They he, you know, that he was going door to door getting clients from retailers, and then he started, blogging about everything going wrong in the credit card processing industry and, like, all the corruption there or scams there or whatever. And so he had a very small, you know, market that he was appealing to, but he was, essentially and I'm gonna kinda borrow Peter Thiel's phrase in it. He essentially building a monopoly in that market because he was basically saying how he would, change things. Like, everybody else is a scam except me, and people should come to me. So he started building this, For him, it it was a significant audience. Now for everybody else, it might be a small audience, but since he had a small market, that was okay. And then, you know, Braintree just sold for, I think, over $1,000,000,000. So he built up his business that way. Yeah. I mean, it it's amazing stories there. I mean, the spin of that is is or one way to frame that is, you know, people in any industry, they wanna be on top of the the most intelligent things being written. Right? And they usually, historically, have gotten that from kind of news coverage or Bloomberg or something. But now they're people happily read the best few blogs in that industry. And, Totally. Yeah. And and there there usually are not that many. So, like, in in that area, there was probably 0. Right? Yeah. So you your break you you you're often wide open in these things. I I have a friend who's in the business of, SMS marketing as opposed to, let's say, email marketing or banner ad marketing or whatever. And I said to him, start writing more he's getting traction on his blog. So I said, start writing more blogs about just the actual statistics. Here are the conversion rates on SMS marketing versus the conversion rates on all these other kinds of marketing. And you're going to get clients that way. It's just it's like almost like a manual. That's a good tactic insight. I mean, some of my best post have been the numbers post. You know, just write x x by the numbers, you know. And just put out your numbers on a campaign. Like, people are so I think you you see so little of those because people are are so hesitant because they think they're gonna be criticized or they're worried about giving out their financial information or whatever. But you can usually do it in a way that that, you know, isn't really revealing much, and people love that stuff. Well and and some degree of authenticity and and openness is is good because then people know you're a trusted source. Yeah. I mean, I I wrote one a few years ago when Reddit ads first started. It was like, I read it ads by the numbers, and I just put out all the information, and it it's still one of my most traffic posts. Interesting. I'm gonna have to check out that post. I've been thinking of advertising on Reddit. So and then and then of course, you know, so related to this, email marketing, people don't realize again how critical email marketing is. Like, nothing converts better well, SMS converts better. But but nothing else converts better than well written copy on email marketing campaign on a good list. So understanding the ins and outs of email marketing is incredibly important for your product. Yeah. I mean, you're hitting on, the underutilized ones, which are my favorite because, you know, generally, your competitors aren't doing it well, and so you have more of an open field. And email marketing is a great one. I mean, I think people in the last 5 years with with the rise of social media and all that stuff, people are like, oh, email is dead. It is not dead. Like you said, it is still super high conversions. People read their email every single day. And if you can build the list successfully, you could you could have I mean, that that is the channel that could just make you successful. Yeah. Completely. Like, and it's funny. Email's a technology that's been around since the seventies. Okay. And maybe more popular in the eighties and of course, became mainstream in the nineties. But we're sort of going back to that as we're we're we're we're not even going back to email. We're going back to texting. Like, my my 15 year old doesn't email. She texts. So just the people should always stick to the basics. Now I I know in this book you kind of say, well, and and you say for an important reason. Check out what the new marketing media are because that's where you want that's where there's still and I'm I'm gonna paraphrase you a little bit. That that's where there's an arbitrage still in the ads. Like, if you wanna advertise on Facebook or Google right now, the arbitrage is gone. Like, your your ads versus your conversions are gonna probably either be equal or or you're gonna do it at a loss. But if you find the new media, the the ads are still inefficient, inefficiently priced so you can get good ads and good conversion rates. But still email and SMS, the back to the basics is incredibly strong if you if you if you find your way through the thick industry. Agreed. Another way to kind of look at this, because like you said, you know and part of the, premise of the book is you don't know which channel is gonna be successful, so you need to kind of experiment. But one way to look at that is that you gotta find out where your customers are hanging out. So like you said, your daughter is on SMS, not on email. If all your customers are like your daughter, you probably don't want email. But for a lot of businesses, email will work. And so you you kinda gotta start from the perspective of where do your customers hang out online or offline and then figure out which channels are the most effective in in those hangout areas. Right. So let let's talk about, you know, and and and and just in this, some of your chapters kinda overlap, like content marketing. You you should target the blogs where you could put your content, and you have a chapter targeting blogs. And you mentioned you know, and I've had Noah Kagan on the podcast. You mentioned Noah Kagan's work with Mint where he targeted blogs rather than just going to an ad network that was hitting every finance blog, he targeted blogs specifically that would that had users or readers that would appeal to the Mint, services, and he just gave them $500 to advertise Mint. And that was a very strong tactic. And a similar could be used for content marketing, like target the blogs where you want to appear so that you can, you know, get the most you you know, you optimize where you're gonna get the users. This gets to your arbitrage point, you know. So what what we advocate for is that in any given growth kind of, trajectory of your startup when you're really taking off, usually one channel is dominating. And so because of that, we think you should focus on that channel. When you focus on it, that's where you're discovering the arbitrage opportunities. So you mentioned, you know, Noah giving these people $500. That is not a normal tactic. Right? If you read a blog on targeted blogs, they're gonna be, like, you know, write guest posts and things like that. He's uncovered these additional tactics. The only way to do that is to really focus on it and be brainstorming and thinking about how do I make this better? How do I make this better? Yeah. He went all out, like, with the badges or would show up high on SEO. Like, it's very impressive to read the case study, or almost the various case studies you use on Noah on, in your book. It's very interesting. Yeah. He's a great illustration of creativity. And I think that that is how you really get the growth curve kicking up. Yeah. And and so let let's go back now to chapter 6 in your book, which I think is, again, the mo somehow, this is the most happiness inducing marketing technique, which is viral marketing. What what are some of the ways a business, can can get viral marketing going? So I I'm with you on the dopamine thing. I mean, that was essentially my previous company, you know, and that's why I got sucked into it so so much at the expense of product. It's because it really is, you know, addictive. But for Viral to work for real, I mean, it really needs to be kind of mathematically tracked and built into the product. It's not just word-of-mouth offline. That is great. Any great product will get that, but it needs to be deeper than that where you are essentially, you know, having people invite other people and having them come back to the product. And there's a loop there, and they call it the viral loop. And that has to be functional, and it can't be too much drop off at every any one step. And and can I can I just add, there's a case study that you don't mention, which I think it was the most viral, campaign ever, which was genie.com, which was the ancestry site? And if I added my sister, say, to my family tree, she would get an email, hey, James just added you to the family tree. Do you have more people to add? Then she would sign up, build her family tree, and it and then all those people would get emails. And this viral loop became I think they got, like, a 100000000 users in a week. Yeah. What's funny about that is that was coming off the hills, my first company, that was the business I was gonna start because it seemed directly translatable. And what what's actually even more to say about that is, you know, the the genie was David Sachs. And then they actually even though they got that viral to work, they ended up in the same situation I did where the product just wasn't monetizing as well. And, you know, they pivoted into Yammer, which sold for over $1,000,000,000 to Microsoft. And they he he used viral again in Yammer in a business context, which even more underutilized. How did he use Yammer? Because that's hard to do in a business context. I know it was. So he you know, Yammer is essentially a social network for businesses, and so it had kinda viral in its DNA as well where you got on the product. It was really only useful if you invited your colleagues, and so that's what happened almost instantly. And then, you would able to have guests, you know, into your Yammer network, and that's how it kind of, like, got seeded across to other companies. So you get this it would grow viral in a company almost immediately. It's like the Twitter for your company. And then it would have a connection to a guest, and then it would get to their company, and then it would go viral in there. And it also spread, virally. And then he kinda built on inside sales to make the business work. It's fascinating. I didn't know that. And, you know, another example I think of when I think of viral and it's not quite the loop. It's sort of like, kind of a a Hail Mary viral. But, like, hotmail.com, of course, had the message at the bottom of each message. Hey. Did you got this message on the web? Sign up for hotmail.com. So if that works if it works. Right? I mean, you're right. You can track that stuff, and PayPal had one somewhere where they were just like, we'll give you we'll give you $5 initially to your friends if you sign them up. It was Right. It's sort of like a viral advertising as opposed to a viral loop. Right. And there are exactly. And there are a number of ways you can do it. Dropbox is another where they they give away free space for you and the person you refer, if you sign up. And it's all a matter there there's a number of ways you can bake it in. It's just a matter of getting the numbers to actually work out. Like, are enough people inviting other people? Are they really converting? And you you mess with those incentives to really get it to work. But, you know, a lot of the viral stuff sort of fails because I feel like it gets a little gimmicky. Like, I don't know. There was something called names a few years ago that I was always getting invitations, and I just wouldn't respond to them. Like, oh, there's a message waiting for you at names. And who cares? I don't I got enough messages on my email. Exactly. Bad Badu is a example of a company that's worked like that. It's it's funny because a lot of this stuff, I learned this at CitiBay's, there's a lag time between the US and some emerging markets. So a lot of these things are kind of gated and are too gimmicky in the US but still work in emerging markets, which is kind of interesting. Interesting. So what would you recommend? Like, let's say right now, I wanted to say start, a dating website, and I don't know. I had some special dating thing going on. How would you recommend, I I do viral marketing to get users? So like you said, additionally, like, it doesn't work for all companies. Right? Unfortunately. Mhmm. But what you would generally do is you need these invitations to be kicking off, and the easiest thing to do is have them be part of the product. So when you are on a a a site like a dating site, you are kicking off an email every time someone does anything, like you said, writing a message or or whatever. And then inside the product, you need some additional incentive to invite your friends. You know, you're gonna unlock, you know, premium part of the dating site if you invite your friends or you want to invite your friends because, you know, you wanna get them on a date or something like that. I think dating itself is a little problematic because, you know, people don't necessarily want to expose all their friends to the fact their online dating profile, which is why you see companies like Badoo, which are kind of dating related, taking a more broad messaging. Like, we're about just new experiences. You know? And they kinda broaden their message away from dating. And so that happens a lot with Viral because when you're Viral and you invite a bunch of friends, they they may not all be in your target market. But if they're not in your target market, then they're gonna, you know, churn out on your sign up page. And so you see a lot of viral companies that end up getting to viral broadening their message to be almost completely mainstream. Yeah. Interesting. So I you just made me think of an idea though. Like, what if, what if I set up a dating site and I sign up for the dating site, and I like someone on Facebook, but I don't know what their relationship status is and I don't know if they're going to like me or not. And I don't necessarily wanna directly, ask them on Facebook. I could say I could have the dating service send out a message to them saying, oh, someone in your Facebook network likes you and wants you to sign up. And then if that person could decide, you it's almost like it's a filter before they get to your name. Yes. That and and that exact thing has worked in the past. I've seen that before. Interesting. So it could also be good for recruiting on, like, LinkedIn or whatever. Yeah. Absolutely. I mean, I think that's the kind of incentive that makes it, kind of mainstream, you know, that anyone could be interested in. And that's kind of the key for for Viral. So let's talk about I I I'm kind of just picking and choosing because I'm using all the things that that I'm interested in. Like you mentioned public relations, that's an example of where I hate hiring a PR firm. I think they're a 100% useless. Unless you do PR and you mentioned him the the Ryan Holiday way, where you figure out how how public relations and media actually works, and then you you kind of start from the bottom up instead of top down. And by top down, I mean pitching the Today Show as opposed to pitching kind of these small niche blogs. Yes. I mean, we've we've actually doctor Goh echoed your kind of sentiment. We've had a lot of success doing it ourselves. I think there's a lot of authenticity to that too in making crafting your own story. Where we've had some usefulness in the PR firm has been TV, getting into some TV, because it does seem very relationship based if you're trying to do it outbound versus inbound. I wish there was I wish there was just one more thing about DuckDuckGo that could get me to to use it. Like, some extra benefit where I feel like a winner because I switched from Google to DuckDuckGo. Yeah. I mean, you talk about viral. We we've tried to figure out viral with DuckDuckGo for years. I mean, the benefit well, first of all, I would try it for a week. That's what you think. You might discover the benefit. Oh, and I I enjoy the search engine experience on DuckDuckGo. But then what if I'm on my phone, it's just automatically gonna use Google. Well, that's why we I mean, if you use an iPhone, that's why we're embedded now. So if you'd upgrade, you know, you can switch to us natively. And then it solves that problem, which took us obviously years years to get to work. But it well, you should have a closed ecosystem. But one of the benefit is really the peace of mind that, like you said, you're reducing your digital footprint and less ads are tracking you across the Internet. And, you know, your searches can't be legally requested. All these things just add up to more peace of mind. So so okay. I I wanna I wanna hit some of these more, traction you know, more things from your book traction. So let's say I was starting a newsletter or an information product. I think affiliate you know, not all I think email marketing is probably number 1, and may you know, or maybe content marketing number 1, email marketing number 2. But affiliate programs are incredibly important. How would I identify the correct affiliate programs? What what is affiliate marketing, for for my listeners? Sure. So so to back up, I think you hit on exactly what you would do if you start this company is that you really need to look at all the channels and, you know, try to brainstorm realistically if they could be useful and then actually go out and test, you know, a few. We advocate, like, 3 to see what is actually working for you, because depending on the exact business, one may be significantly better than the other. But affiliate, I think, is a great thing to try. Affiliate is, you know, people already have relationships selling things, and you are offering them the ability to sell your product and then giving them a cut. And depending on the product, the cut could be large. But in an information products like in a newsletter, it often is, you know, all over the map because you have all the margin to work with. Right? Well well, I I've seen deals where I will give you a 100% of the revenues to the affiliate because I'm getting the email address and I know the lifetime value of an email address. And so it could totally vary. And so that's actually a a market where affiliate can be really valuable. And in fact, the more margin you have, the more valuable it can be because the more incentive you can give for these affiliate people. And, you know, the really good affiliate deals like that, right, hinge on you understanding your business and how much, you know, the email is really worth and things like that. When you're just starting out to test it, you may not know that, so you you would give less away. But, essentially, you craft an offer and say, if you sign people up for my newsletter, it could be just give them the email. It could be actually pay for it. If it's a paid thing, you're gonna give a cutback. And then there's a bunch of affiliate networks that you can join to kind of make this offer to people. Or if you have your own email list that you've been building up for years, you can even run your own affiliate program, on your own users. You know, this is this is incredibly valuable, all all of this information. I I have one friend. He's he sells, subscription access to a database that contains rent to own homes. There's no real, common site that you know, like, Zillow will show you homes for sale or homes for rent, but there's no database of rent to own homes. And so he you mentioned something very important, which is to test several of these. And I think using small amounts of money to do AB testing on, let's say, 4 of these marketing techniques is incredibly valuable. And that's what my friend did to build up a huge, subscription database subscribing to his rent to own database. And then he he uses that list to sell leads to, lawyers who buy, credit repair services. So so all of these things are incredibly important for building a business. I wanted to hit on one other, speaking engagements. Like, does that work? Because you're only hitting, like, 50 people in a speaking engagement. Yeah. I mean, again, it really depends on your business, but, yeah, absolutely can work. Because oftentimes, depending on the business, there are places where people congregate because they like to meet offline, like you said in the beginning of this, in c**ktail parties. Right? People like to go where other people in their business are. So there'll be conferences, where if you were, say, a speaker or the keynote and had a bunch of credibility, you could get a bunch of your big sales done all at once. And so I I think speaking engagements for a certain sector of business could be, the exact place you can get traction. Especially another way to put that is, early on, you know, there are different phases of the business. Right? When you're first getting started, you often need those first customers. Speaking engagements is also almost always great for that phase for any company, getting in front of, like, you know, a bunch of people that could be customers to get that first batch of customers. The problem with speaking engagements is it's often out of people's comfort zone. Right? And so people wanna stay away from it. But it's I think it's worth testing even if it's not the right channel just to get out of your comfort zone and, you know, because it's for personal development purposes. You know? And also, you you another one you I wanna touch on is community building. So so and there's lots of ways to do community building, but I wanna add to that like offering a q and a section on your site is like automatic community. And people will come back, it's very sticky. People spend a lot of time going through all the questions. So I I think that's incredibly valuable as well. Community building is often the quickest path to evangelism. So, like, you hit on viral marketing earlier. Right? If you can't get viral marketing to work because the viral loop just doesn't make sense for your business, kind of the way to back into viral and word-of-mouth spread is via community building. Because if you can really get a community working, those are the people who will spread offline, and the community can just grow and grow and grow. And if you're not you know, if you're a business where, you know, if you had 10,000 customers, that would be a great business. Community building can really get you there. I agree. So on on my last business, which was, or or my last, bigger business, which was stockpicker.com, we added a community aspect, which was this q and a, and our traffic went up 50% the the next day and kept growing. Like, it was incredibly valuable to us. And since we were selling ads, the traffic was really important. So so, Gabriel, I have to, wind this up, but I do wanna I I wanna do 2 things. 1 is I wanna highly recommend that everybody should have traction in their library. You can get it on Amazon. It's not expensive, but it gives you 20, you know, incredibly important techniques for marketing your business. You don't have to use all 20. You can do AB testing on 4 or 5 of them and see what works. But I do think if if your business is not working after these marketing techniques, then very quickly start a new business or pivot your business or whatever. So so I recommend Traction by Gabriel Weinberg. The other thing is, Gabriel, I wanna challenge my listeners to help you with DuckDuckGo. Like, I think you should have somehow that one extra service that puts you over the top and gets you to your 1%. I love the challenge. So anyone How can people how can people share their ideas with you? I I know you don't wanna get flooded with emails. So is there any way people can, like, come up with 10 ideas for you? I love you? Sure. Sure. I love Twitter feedback, so similar to you. So I'm on Twitter at y e g g. I'm actually constantly searching people who don't even write DuckDuckGo or me directly, just who are meant talking about DuckDuckGo. And if they say anything negative, you know, I ask them what's wrong, what can we do better, that kind of stuff. So I'm constantly looking for ideas like this so feel free to send them my way. Okay. Good. Maybe if your idea is good enough, Gabriel will bring you on board as an advisor. We'll see. So Gabriel, thanks so much. I I really enjoyed reading your book. Well, I as soon as I got it, I I contacted you. You you graciously agreed to come on to the podcast. So I I really appreciate it. Thank you for having me on. It's been fun. Thanks, Gabriel. I'll talk to you soon. Bye. Bye. For more from James, check out the James Altucher Show on the Stansbury Radio Network at stansburyradio.com, and get yourself on the free insider's list today.
Comments