Sramana: What were some of your early benchmark numbers?
Collis Ta’eed: It took us six months to build the site. The first night we sold $10. I was disappointed at the time, but looking back I am impressed that we sold something our first day. As a new entrepreneur, I had the idea that the world had been waiting for the product and customers were going to come flooding in. Of course, the reality is that you need to build it brick by brick.
By December we had reached $1,000 a week. We had close to 200 content authors at that time as well as several hundred buyers. We had a lot more people who had joined the site as members but did not transact. There is a group of active users and passive users, and it is interesting to look at that ratio.
Sramana: In December 2006 you were doing $1,000 of sales a week. How much of that was yours?
Collis Ta’eed: At that time our author commission was about 30 to 40 percent. We have increased that rate five times over the year. As we have gained volume we have looked to increase the wealth of the authors. Back then the author commission was low so when we did the $10,000 give away promotion most of that money came back to us. So, of the thousand dollars a week that we were generating in revenue in December of 2006 about half came back to the company.
We had a single part-time developer who worked as a contractor. I did the front end and he did the back end. During 2007 we grew twenty-fold, and were bringing in over million dollars a year. I remember when we hit $20,000 a week because I did the math in my head and realized that 50 times $20,000 was a million dollars a year. That was very exciting!
It was also exciting to see that we had grown twenty-fold in just one year. I remember at the beginning of the year I wrote an email telling Cyan and my brother, who had been roped into the business, and told them that we were going to grow twenty-fold. Miraculously, we did. The next year I thought we were going to grow another twenty-fold. We did not do that, instead we grew another fivefold, which was still quite exciting.
Sramana: What was the commission structure when you grew twenty-fold?
Collis Ta’eed: We increased commissions during that year for the first time. We increased it a few more times over the years. Today our exclusive authors makes between 50% and 70% of sales. We use a ladder or incentive-based system so the more they sell the more they earn. It is almost like a game for some of them.
Sramana: Between 2006 and 2007 you grew twenty-fold. What strategies enabled you to grow to that level? How did you attract new authors and buyers?
Collis Ta’eed: In 2007 we did a lot to grow our customer base. Some of it was organic growth. The thing about a marketplace model is that buyers stimulate the seller economy, which stimulates authors which in turn stimulates buyers. We also engaged in grassroots marketing, and we tried social media. We started talking about running competitions. Our software developer was having a huge amount of workload coming in from this business. I came to him with the idea about doing competitions and he told me that we should do our competitions on a blog.
That is when I started looking into blogging. At that time we started up FreelanceSwitch where we could put our lessons learned. We also started a tutorial blog. Those sites today receive close to 10 million visits a month. They have grown a lot over the years. The company today comprises two parts. We have the market places and 12 tutorial sites that cover everything from game development to making music sound like a DJ.