Sramana: Earlier you mentioned that you were making money by up-selling new products to your customer base. Where did your initial set of customers come from?
Scott Skinger: My earliest customers came from a variety of sources for a variety of reasons. The organic traffic and pay-per-click traffic both brought in customers. In 2003 our revenues were right around $100,000. In 2004 our revenues were $500,000 and in 2005 our revenues were at $1 million.
During that revenue ramp, I experimented with a few different things. One was affiliate marketing. I partnered with a couple of people to try something different. They sent out emails to their large lists of customers, and I only had to pay them when a sale was made. That was a big help.
There was another trick that helped a lot. In late 2004 I was doing research for a course, and I kept coming across an Israeli website. I found out that it was a great IT knowledge base that lot of people visited. I struck a deal with that owner to do revenue sharing, and that deal alone resulted in about $300,000 of revenue in that year. Situations like that one really made a big difference in our customer acquisition.
Sramana: Can you talk about how you recruited affiliate partners that were productive? A lot of times, the people you sign up to be your affiliates turn out to be useless.
Scott Skinger: This was seven years ago, so I think the market today is probably different. For me, the most important thing was reaching out and forming partnerships with websites we have a lot of synergy with. The way that the owner of the site represented products, with integrity, meant a lot of us. Reaching out to him was a win-win situation. I found that taking a custom approach to affiliate marketing instead of the mass market approach was far more effective.
Sramana: The mass marketing approach would probably work on the consumer side. When you get on the B2B side, it does not work as well.
Scott Skinger: I would agree. I think that even today, our partnerships are very much custom focused. We partner with very specific bloggers.
Sramana: Were there any other strategic nuances in that period that are worth discussing?
Scott Skinger: There was a lot of normal growth from 2005 to 2010. Something that really held us back a lot was employee hiring. If I were to go back in time, I would put a lot of emphasis on finding top talent before I did. We ended up with some B and C employees and meandered through a couple of years when we should have had substantial growth. That is not something I fully comprehended at that time.
Sramana: Do you have any statistics to correlate that story?
Scott Skinger: In 2003 I was the only person working. In 2005 I had two other people working with me. In 2006 we had six people, and in 2007 we had 12. In 2008 we had 15, and in 2009 we had 25 people.
The time between our five employees and our 15 employees, and again between 15 employees and 25 employees, we struggled with the upfront recruiting process. From the very beginning, the job description was not written with as much care as it should have been. The candidates we brought in were not as good as they should have been, either. We did not do a good enough job during the screening process. When people walked in my door, I had an interview with them because I had prepared for only 15 minutes before they walked in. I had probably glanced at their resume. That is not how we conduct interviews today. We have a regimented process with at least three interviews. We want a 90% chance or better that we are going to land an A-level employee.