Interview with KISSMetrics co-founder Neil Patel

This week, I had the privilege of interviewing entrepreneur, marketing genius, growth hacker, and self-described ‘professional web surfer’ Neil Patel.

Neil is the co-founder of KISSMetrics, and previously co-founded CrazyEgg and ACS SEO. He’s well-known for his abilities to get on the front page of Digg and the top three results in Google.

We talked about KISSMetrics, Neil’s philosophy of angel investing, SEO, and social media marketing. (This is my first video, so I apologize in advance for the poor quality of the videography and editing.) Hope you enjoy it!

Links

Neil’s Companies

QuickSprout
KISSMetrics
KISSInsights
CrazyEgg
ACS SEO
Online Poker Lowdown

KISSMetrics Advisors – “Original Gangsters of Startup Marketing”

Dave McClure
Sean Ellis
Eric Ries

Neil’s Investments

Bonanzle
Sandlot Games
Devhub
LiquidPlanner

Non-Broke Social Media Experts

Brian Solis
Chris Brogan

Awesomeness

The Oatmeal

Thanks again to Neil for doing the interview – and go read his excellent blog Quicksprout or follow him on twitter @neilpatel.

(This is my first video – the videography and the editing are poor, and Neil’s table appears to be a major character. Additionally, Barbara Walters’ job is very secure, because I am not a great interviewer. I know these things. Don’t feel compelled to point them out in the comments.)

Why Google Should Be Afraid of Facebook

This is a chart of keyword searches over time for ‘San Francisco Wedding Photographers.’ It’s about a $2.75 cost per click. If you search it now, you’ll notice that it lights up like a paid search Christmas tree.

Keyword volume for san francisco wedding photographer showing search becoming less important over time.

Notice the downward trend over time. What’s going on? Are fewer people getting married? It doesn’t seem correlated to the economy or overall marriage volume.

I think today people are going on facebook and asking “Who had a great wedding photographer?” and immediately viewing their friends’ pictures.

These queries – the kind that you want real people to answer – are why social is rapidly becoming the new search.

And as these queries and their buying intention moves to social networks, conventional search engines are left with factual queries – like “When was Einstein’s Birthday?” I don’t know about you, but I have little interest in buying ads on search queries like that.

What do you think? Is social replacing search? Leave a comment and share with the community…

Update: As my friend Ishan Anand correctly pointed out in the comments, this chart actually refers to relative search volume and not absolute search numbers. It seems logical that overall search volume would go down over time for a query that’s done mostly by 27-34 year olds in the Bay Area. Additionally, facebook launched in 2006, well after the big drop.

All of this is completely correct. And I want to make a note here and say if you disagree with me about any of my points, please make a comment. (If you’re going to be a trolling, insulting fanboy, I suggest you take your commenting business elsewhere. But everyone leaving civil, insightful comments should stay.) I want this blog to be a place of fascinating discussions about business and technology, and not simply a platform for me to blather on about my unfounded opinions.

So we emailed back and forth a little, and did some more research.

Our main conclusion was that we do not have enough results to experimentally confirm this hypothesis. Just to go from first principles, what could be happened here?
Potential Outcomes:
- The absolute number of searches for this particular keyword has stayed the same, and Google remains the main research source. This bodes well for Google, because they can continue to sell profitable search ads.
- The absolute number of searches for this particular keyword has gone down over time as more social recommendations are used. This is bad for Google and good for facebook.
- The absolute number of searches stays the same, but people are also asking their friends. They are placing more weight on their friends’ recommendations, so search, but do not click on the ads or make their buying decisions based on the SERP. (Search Engine Results Page.) This is good for facebook. This is also fundamentally unmeasurable from the data we have, and would require things like CTR and conversion rates.

So I ran a Google trends report looking at the search volumes for California, ensuring the overall growth wouldn’t overwhelm the signal. I also ran a report of the % growth against the wedding category, which would give us a better idea of % traffic against other terms.
Growth of San Francisco Wedding Photographers Against the Category as a Whole

This is not a particularly clear graph, but it seems to show some amount of seasonality and a general year over year decline. I’m not sure what the second blue line is, but that appears to show a plunge around January of 2009. This doesn’t seem to correlate with, well, anything.

It appears that we do not have enough data to draw a conclusion. (This is beginning to sound like a GMAT question.) I still think Google should be afraid of facebook for the same reason, though.

What I Learned from the Other Tribe: Five Lessons from Grey Hat Internet Marketer John Chow

As all of my awesome readers know, I’m a serious technology marketer.

Accordingly, I don’t associate myself with those sketchy “internet marketers,” who claim to make hundreds of thousands of dollars a year, from AdSense, or affiliate deals, or selling people PDF files. (It seems like most of these PDF files teach you how to sell people PDF files. What a great industry.)

I found the email list pop-ups spammy, the disclosure policys misleading, and the whole enterprise stinks of ‘get rick quick – instant success with no work’ promotion. While this is often a great way to get lazy people to buy things, it seldom is a path to real revenue. But, even with their cheesy sales tactics, these guys were making real money.

But I was curious – what are these people doing? What’s really their business model? And most importantly, do they know something we ‘legitimate marketers’ don’t? They don’t have to answer to VCs, they keep their team as 1099 remote workers, and they (apparently) travel around the world, constantly. In many ways, they optimize their businesses for personal freedom instead of scale. But can we learn something from the internet marketers and apply them to ‘legitimate’ company building?

I’ve been reading a lot of these materials lately, trying to branch out beyond the Silicon Valley online marketing knowledge. (I think Dave McClure’s stuff is probably the best guide to this, although Patio11 has a lot of good stuff too.) In this series, I’m going to break down what a few of these people are doing, how the written and unwritten business models work, and see what Silicon Valley can learn from the Internet Marketing Circus.

John Chow – Dot Com Mogul

The website I started with belongs to John Chow. It sits at JohnChow.com – the tagline is “Miscellaneous Ramblings of a Dot Com Mogul.” John claims to make more than $100,000 a month from his website, while living an expensive and location-independent lifestyle. (I would use words like gauche or extravagant, but it’s amazing how your perspective changes with your bank account balance)

It’s also worth noting that John has been banned from Digg and severely penalized by Google. Word on the street is this has to do with being public about selling links and blatant link exchanges.

I don’t think you’ll really understand the rest of this unless you go look at John’s site, so go take a look at it now. Notice the email address collector pop-up. It’s incredibly obnoxious. Also notice his disclosures section, which may be the most entertaining disclosure section I’ve ever read:

I make money from every post I put on this blog. If I’m not making money from every blog post, then it was an oversight on my part and it will be corrected soon.

Now that’s something you won’t see on TechCrunch.

John Chow’s Secret

Go download the eBook about making money with your blog. It’s pretty interesting, it’s a quick read, and it’s free. I believe most of the links are affiliate links, but when you’re dealing with the grey-hat corners of the internet, expect every link to be an affiliate link.

Most of these people have a pretty straightforward business model – they get people to their site a variety of means – anything from social traffic to SEO to paid search. Then, they try to get you on their email list, from which they sell you a variety of products on a direct, affiliate, or drop ship basis. Most of them have ads (and I mean LOTS of ads) on their sites as well, which also generate revenue. You’ll also see things like paid links and paid posts, which should be nofollowed to maintain compliance with Google Webmaster Guidelines.

But how, with a free eBook, is John Chow making thousands of dollars a month off his web properties? Lots of companies have unsuccessfully tried to give things away to make money, but a few have made it work. John Cho isn’t using a freemium model – he’s doing something much more devious.

In addition to normal, e-commerce and advertising based revenue streams, John Chow has found the motherload of passive income. Imagine you could have thousands of people paying you,every day, without even noticing it. That’s what John has done – and it’s (mostly) legal.

What is John Chow’s Secret?

John Chow attempts to sign people up for niche ad networks that he has affiliate deals with. He then receives a percentage of that publisher’s future revenue stream. Sure, most of the people interested in this kind of thing never really get their act together, but if anyone does, John makes a good deal of money, wherever he is and whatever he may be doing that day. That’s pretty clever.

So that’s his secret. But what can we learn from John Cho?

Five Lessons About Blogging & Business from John Cho

Deep Link from Your Blog Posts

One way to really leverage the SEO “juice” from a dynamic part of your website (like a blog) is through deep linking. (By deep linking, I mean using your keywords like this – Matt Gratt – to link to static parts of your website from your blog. Often blog posts that draw links will be about slightly different topics than the pages you’d like to rise in SERPs , so you can use deep links to use your blog for SEO.

Additionally, deep links can often get RSS subscribers onto your site. If you’re doing something advertising or page view driven, this is a good tactic.

Canonical URLs

Typically, WordPress sites have posts accessible from multiple pages – the post itself, the home page, the archive, the category pages, the tag pages, etc. Your WordPress pages are also both available at http://yourdomain.com as well as http://www.yourdomain.com. All of this causes your “link juice” to be spread out over multiple posts, when you really only want it in one place.

This can be fixed with canonical URLs, where I believe all the URLs are 301’ed to the main post. (A 301 redirect passes link juice while others do not.) Most good SEO plug-ins can fix this, so you should use one with canonical URLs.

Nothing is Free. Even Free Content.


As most people know, it takes time and effort to put things onto the internet, and even more time and effort to make that content interesting, discoverable, and aesthetically appealing. Very few people do things for free (with maybe the notable exception of the open source movement), and there are frequently ulterior motives behind content creation.
John Cho’s eBooks are free. You can enter his contests, generally for free. You can visit his site for free. But between the paid links, the affiliate links, and doubtless other clever ways to make money I haven’t even thought about, your attention and your clicks are being monetized.

Don’t Taunt Market Dominating Technology Companies

John has been one of the most outspoken advocates of paid reviews, paid links, and reciprocal link exchanges. One day, he was penalized and didn’t even rank for his own name. I imagine his traffic got hit pretty bad (although in the sites I’ve run I’ve seen a pretty solid distribution between search and social traffic), and thus his income. At that time, he didn’t even rank for his name. JohnCow.com and NotJohnChow.com were ahead in the SERPs.

When this happens, you must go hat in hand, and attempt a strategy of appeasement. John worked with Google Search Quality Frontman/SEO Whisperer Matt Cutts, and got his site compliant and resubmitted. Now he does rank for his name.

The Money is in the List

Getting peope to your website for the first time is tough. It’s gotten both harder and easier over the last several years (which I know sounds counter-intuitive), but getting that first order is still tough.

Rather than try to acquire a large number of one-time customers, John Chow focuses on using free content to build lists. These lists can be used to sell John’s own products, or to sell affiliate products through a astonishing variety of schemes. However, for this tactic to work, you need to deliver real value to your customers.

Even internet outlaws have things to teach use. What are your favorite lessons from the Internet Marketing guys? From other communities online? Leave a comment and share with the community…

case study: the kindle and the chumby

In Silicon Valley, every product claims to be a platform for something.

(Every company will also make $20 million in revenue in year five.)

Which is odd, because when I wake up in the morning, I want solutions to my problems, or cool things.

I want one great application – the killer app.

I don’t say “If only I had an extensible platform that I could create a whole class of cool solutions on!”

Once it does something awesome, I’m more than happy to have additional features and solutions.  But a product has to be an application before it can be a platform – see Facebook, salesforce.com, PayPal, the iPhone, WordPress, etc.

Let’s take a look at two products: the Amazon Kindle, and the chumby (made by chumby).

(The chumby is my absolute favorite product to beat up on for being an early-adopter targeted platform without a compelling application.  At the same time, I absolutely love the design of the chumby, the company voice of chumby, and the very idea of a chumby.  Yes, I want a bean bag that connects to the internet.  But most normal people (which I use synonymously with with early majority, late adopters, and laggards) don’t.  Or at least not yet. Read on chumbophiles, because I have a solution.)

The Kindle

Kindle 2

I own an Amazon Kindle, and I absolutely love it.

I don’t love it because it has apps.  It doesn’t (at least not yet).

I don’t love it because it browses the web well.  It doesn’t.

I don’t love it because it even browses the Amazon store well.  It doesn’t.

But I can read for hours and hours without  running out of power.  The screen doesn’t hurt my eyes.  I can get new books as I walk down the ramp onto the airplane,  saving me from the airport bookstore.

What is the Kindle?  It is an electronic book.  It is designed almost perfectly for heavy readers.  It doesn’t try to browse the web well.  (Now it will get apps, but I don’t think many people will use those.)  In fact, it doesn’t do anything very well beyond read books.  But for reading books, it’s awesome.

The people marketing the Kindle did a great job.  When something has an application, you can then communicate it.

Updated: Check out this video of Jeff Bezos answering criticism about the Kindle versus the iPad.

The Chumby

Chumbi

This is a chumby.  It’s a bean bag with a 2.5″ LCD touchscreen.  It has Wi-Fi, and runs widgets (in open-source Flash).  The developer community is pretty strong (the forum has about 4200 users, the catalog has 1500 apps), and makes some really neat stuff.

Go check it out and come back.  It’s part of our story.  Particularly, look at the Most Popular for All Time, and Most Popular for This Week.  Those will give you some idea of what people are using it for.

Compare this to what chumby says the chumby is:

chumby takes your favorite parts of the internet and delivers them to you in a friendly, always-on, always-fresh format. It’s is a window into your internet life that lives outside your desktop, so content like weather, news, celebrity gossip, podcasts, music, and more has a place to play away from your world of documents and spreadsheets. Just plug in your chumby, connect to your wireless network, and use your computer to create a lineup of favorites from over 1,500 apps in more than 30 categories, with new ones arriving all the time. Then let your chumby do its thing — streaming everything you like, from sports scores to stock quotes, from video clips to interactive games, from photos to trivia.

- from store.chumby.com

What does the chumby do?  It does everything.  What you need to explain here is why someone needs it.  Which means it needs to do something specific.

The good folks at chumby identify some different places for the Chumby to go:

  • in the kitchen
  • on your nightstand
  • on your desk

I’m going to put mine in my bathroom.

(While writing this post, I ordered one.  It’s irresistible.  The guys at Gizmodo feel the same way.  )

What I Think chumby Should Do

(This is merely my opinion.)

Chumby has suggested three use cases.  Thinking of Sean Ellis’ ideas about finding product-market fit, I would multivariate test these on the website.  (In case you’re curious, chumby gets a whole ton of traffic.) Maybe try landing pages with “chumby: the internet clock radio,” “chumby: the computer for your kitchen counter,” or “chumby: widgets for your physical desktop.”  You could also do Google AdWords for these, and see what kind of response you got.

This test should give you an idea of what people would find the most compelling application for our internet bean-bag friend.

Then, you find some of the very best applications you can around this space.  If you have to pay to get them made, pay for it, but make sure they’re beautiful.  Bundle them, and have them install in one touch on set-up.

Now, you suddenly have a whole product that does something people want.  And you have beautiful applications that you can show off.  So go get the word out.

(In the unlikely event the good folks at chumby take my advice, I would be overjoyed if they sent me a chumby. Hint hint.)

How can platforms find applications?  Leave a comment below.

how to give a better software demo

(I wrote this piece for the course I am assistant-teaching, Mobile Applications and Entrepreneurship, at UC Berkeley.  While it’s not advanced, it was good for the class at the time.  I figure I’ll post it here so if people look for some help with a software demo, they’ll find it.  This is intended for demoing mobile apps – so you may have to alter what’s here to make it relevant to you.)

Structuring Your Demo
‘Simplify, Simplify, Simplify.’
-       Henry David Thoreau
Before you begin, ask yourself the fundamental question – “What am I trying to accomplish with this demo?”  In your case, you’ll be trying to demo a prototype of a service to a venture capitalist in an effort to attract investment.  Notice I said ‘service’ and not ‘application.’

This is not a code review or an opportunity to show off every feature you’ve built.  (People often approach software demos like this – an attempt to show off the number of features in the product like some sort of incredibly boring show-and-tell.  This is unnecessary, and boring.  Products are dynamic things – show me the value, don’t show me the code.)

You’re trying to show off the fundamental value proposition of your application and show how it is delivered, not how hard you tried.  I would even say that your goal is to construct the most exciting, shortest demo that still conveys the value of your service.

So how does one structure a good demo?

One way is to start by thinking about how you’d demo a service that everyone uses, like facebook.  (Now that facebook has so much functionality, this is made a little bit harder, but think about what the core value is: adding friends and being able to share with them.)

a)      Set it up appropriately ( ‘Imagine that you meet someone while you’re out during your first few weeks in a new town.  How do you keep in touch with that person easily?’)

b)      Show where your service fits in. (‘Now, with Facebook, you can keep in touch with that person; share with them; and communicate with them.  Facebook helps you connect and share people with the people in your life. Here’s how.’)

c)      Show the core functionality of the service.  If you had five words to describe it, what would they be?  Show that. (‘Now, let’s add Jennifer as a friend. I simply click ‘add,’ and then a request is sent to her.  Now that she’s added me, I can write on her wall.’)

d)      Quickly get back to the overall value proposition, and keep going with your presentation.

Giving a Great Demo
Much like getting to Carnegie Hall, the key is practice, practice, practice.  Giving a demo is a performance skill, and practice is key.  Aside from practice, here are some other quick tips:

a)      Always have a back-up, if not two.  This will stop you from worrying, which will make your demo more effective.  Additionally, when things go wrong, you’ll look smart, resourceful, and prepared.

Things go wrong with astonishing frequency, especially when someone important is watching.  Always have another way to do your demo.  If you have a mobile app on an emulator, and then you should also have a pre-recorded video of the app and the app on an actual phone, for when something goes wrong.

b)      Practice, Practice, Practice.  Be able to give your demo perfectly, five times in a row.  Keep practicing until you get there.  If you really want to be on it, invite someone to interrupt you while you do your demo, and practice answering questions while you make progress.

c)      Remember the tone of your voice and your body language are just as important (if not more) than the words you say.  Communications theory suggests that something like 10% of your communicated meaning comes from your words, while like 30% comes from your vocal tonality, and 60% comes from your body language.  If you really want to become a master presenter, film yourself, and correct all those little body language and vocal tone habits.

foursquare and user onboarding

Most websites are terrible at user onboarding.  Especially the social ones.  There’s a lot of great services out there that are just hard to get into.

Twitter suffers from a uniquely virulent variant of user onboarding issues  - when explained to a non-early adopter/innovator, that person says “Why would I want that?” And then you have to explain that it’s cool and really fun, despite doing nothing that sounds cool nor fun. But really, once you get into it, it’s fun.

Here, we can watch Kevin Spacey attempt to explain Twitter to David Letterman.

Dick Costolo, Twitter’s COO, even admits that Twitter sucks at user onboarding :

“It’s no secret that when you sign up for Twitter, you fly into this cliff and catch fire.  If you’re a brave soul and climb back up the cliff, you can look over and see the vistas beyond, you might be able to figure out how to use it.   So we’ve got this onboarding challenge…”

- Dick Costolo at the Real-Time Crunch Up (TechCrunch was kind enough to give me a free ticket to that event.)

As both Costolo and Letterman have figured out, Twitter doesn’t make sense when it’s first explained to you.  It just doesn’t.

But then you start to use it, connect with it, express yourself with it, and some magic starts to happen.

Foursquare, everyone’s favorite location-based game start-up (except the people that like Gowalla), has made some progress on this issue by disguising a social network as a game.

Immediately, new users (who I will henceforth refer to as “nusers”) figure out that they can earn badges.  Then, they understand that they can become mayor of places.  Nusers can also integrate their social feeds on day one.

Soon after that, a nuser will try to check in somewhere and find it isn’t on the map.  Then, the nuser will then add the place.

Foursquare is a social network disguised as a game.

The game teaches you to use the social network.  The social network encourages you to play the game.  And all around, users are delighted.

(Don’t worry, loyal readers, we will return to Foursquare in a future post, and what I think they should do given the recent entry of Yelp into their space.)

Conclusion: Be kind to your users – teach them how to use your service effectively.

How did you learn to use FourSquare? Leave a comment….