Sramana Mitra: I have three questions as you were relating that portion of the story. It sounds like this is an experimental period. Were you financing this period yourself?
Yaron Galai: Yes. I did finance our early days. I also had a couple of our investors at Quigo.
Sramana Mitra: The second question is the people who were putting your recommendation or rating button on their sites, how did you distribute? How did you get to them? How were they finding out about you? What were the ways of recruiting this army of sites?
Yaron Galai: The reason why we decided on top RSS readers to focus on bloggers was exactly that. We needed distribution for this. We said, “What better way than journalists that can both use it on their own sites and also talk about it?” Bloggers read bloggers. We thought that was a great way to do it. Our first KPI for the entire company, before we focused on revenues and click-through rates, was how many times does a blogger write about us in a positive way.
I would do customer support myself and you’d have a random blogger that might have 15 readers. They’ve got customer support from the CEO. They were so blown away that many of them would just write a blog post. Bloggers read bloggers so that, very quickly, got distributed just by bloggers. Many of them do not have the following that you have.
You know when you publish something, you know exactly what your audience thinks about it. For many bloggers, especially when we started in 2007, they published into the ether and they have no feedback. For them, just having rating functionality gave them a lot of feedback on what their audience like and what they don’t.
Sramana Mitra: When did you have enough critical mass with this kind of feedback that you were able to start recommending things? What was the go-to market strategy on the next level?
Yaron Galai: It took about a year or so before we were comfortable that we can open the recommendations. The pitch with that was very simple. We told the bloggers upfront that initially, there will just be the ratings. Then when we felt that the quality was good enough, we’ll open the recommendations internally. It will be great for them because it just creates better engagement on their sites. They all loved it.
When we started talking with bigger blogs or smaller newspapers, we told them in advance that once the network is big enough, we plan to introduce paid content as well. They’d also make money out of it. The roadmap for them was they’ll get feedback from their audience. They’ll get better engagement on their site and more page views. For the bigger ones, it will be a source of revenue.
Sramana Mitra: That whole roadmap was worked out in your head by about 2008?
Yaron Galai: We had that roadmap in our business plan in 2007. Granted, it did take me whole eight years with my previous company to figure it out. It wasn’t that genius. It took a a lot of thinking through. We turned on the ratings immediately. We turned on internal recommendations probably in 2008. We turned on external recommendations in 2009. We fell flat on our face with that and shut it down and reopened that in 2010. It took two iterations of the paid site.