Wed, 26 June 2019
A Digital Meet Cute
How Geoff Cook linked up dating apps and live-streamed video to form a happy and profitable relationship.
Geoff Cook has built a small empire of successful meeting and dating apps—beginning long before anyone ever swiped right on Tinder—by following a philosophy of fearlessly trying new things.
“Ten years from now, what will I have regretted—losing half a million dollars or not having done the thing that I wanted?”
Of course, the fact that he has a half a million dollars to lose in the first place should be some indication that a lot of those risks have paid off. Thanks to a series of auspicious business decisions, starting with a profitable essay and resume editing business he launched as a sophomore at Harvard, Cook is living proof that experimentation lies at the heart of a successful startup career.
While his fellow Harvard-attendee Mark Zuckerberg was busy refining Facebook, Cook launched his own spin on a social media platform. Rather than focusing on adding friends that users already knew in real life, his platform would be geared toward meeting entirely new people. So myYearbook was born.
Today, myYearbook has evolved, changed hands, and expanded to encompass a whole collection of meeting and dating apps, all housed under The Meet Group, where Cook serves as CEO.
“I tend to be a tinkerer,” he says. “I’ll push forward an idea even if it seems strange, just because it’s an itch and just keep moving the ball forward. Sometimes, opportunities fall out of that, and sometimes you just lose a lot of money. But it’s an itch I had to scratch.”
In this instance, Cook’s itch proved to be so much more.
Cook started his first business in 1997 when, while still writing college essays of his own, he decided to put his economics classes to work and start a small side hustle editing his classmates’ papers and resumes.
But in astoundingly short order, EssayEdge and ResumeEdge had scaled to millions in revenue, and the Thomson Corporation was knocking at his door with an acquisition offer.
So Cook sold his first business in 2002, and just like that, he had the seed money to begin his first post-grad venture. But it wasn’t until he was in his mid-20s, when the social media era had just begun, that the light bulb flicked on.
“The thought was that there needs to be a place to connect to people you don’t know,” he says. “It seemed both MySpace and Facebook were heavy into connecting to your real life friends.”
Teaming up with his brother and sister, who were both still in high school, he created a social network designed to introduce rather than deepen existing friendships. Using games and his search algorithm, making new connections was simple.
All they needed now were users. Luckily, the Cooks had the perfect in.
At Montgomery High School in Skillman, NJ, where both of the younger co-founders were still in school, myYearbook rolled out in 2005. In the first two weeks, there were hundreds of users. Within nine months, there were over a million.
But the road to a million required some clever maneuvering.
“I think we built a pretty good mousetrap in the beginning, but we had nobody in it,” he says, laughing. “What really helped it take off was…we were able to create this great quiz app that ended up getting millions of users every month.”
Reminiscent of today’s Buzzfeed quizzes, users would take a quiz to determine what Seinfeld character they were most similar to. They would then share their results on their MySpace profile, and when a friend—intrigued to learn whether they were an Elaine or a Kramer—clicked on the link, it whisked them away to myYearbook where they were invited to register.
“Quizzes are a very high-uniques business,” Cook says. “You get a lot of uniques, but you get very few page views per unique, because you only basically need to see the quiz and the quiz result. So we turned that business from two page views per user to closer to two or three hundred, because we brought them into a very social experience.”
Once the former MySpace users began chatting with the new people they met through myYearbook, the platform blossomed.
“That was when we were basically off to the races,” Cook says.
But unfortunately, “the races” had an expensive entry fee.
‘The Servers Were Melting’
“We had to raise some money,” Cook says. “The servers were melting. The traffic was growing. The expenses were going up.”
So, in 2006, to keep their rapidly growing platform afloat, Cook and crew decided to begin their first round of funding. The success of this venture round left them with enough money to put a team and an office together.
The social media website continued to flourish, and in 2008, they began a Series B round of funding that enabled them to raise $12.8 million just before the financial crisis laid waste to the economic landscape.
Grateful for their luck, but tired of raising capital, they vowed that this second round of funding would be their last, which meant only one thing: it was time to monetize. Luckily, Cook had a rapt audience at his disposal.
“I’m of the belief that if you can amass a big enough audience…you can monetize it,” he says, “especially if it’s an engaged audience that’s spending 10 or 20 or 30 minutes a day with you.”
In 2011, revenue was up to around $25 million to $30 million, and Cook was thinking long term. What was next for his company?
When he was introduced to Quepasa—a company similar to myYearbook but for South America, and the first publicly traded social network—he knew he’d found a fit. The two companies merged, transforming myYearbook into a publicly traded company, and Cook thought the time had come to rename the company, as well.
“We were always a social network for meeting new people, but the name [myYearbook] to people who didn’t know that made people think of Classmates.com,” he says. “It was not really what we were about, so we changed the name to Meet Me.”
As part of the merger, Cook stepped into the role of COO with the intention that he would soon move back into the CEO role. In 2013, he made his return as CEO of the company, a position he has held since.
When asked how the job of CEO at a private, venture capital-funded company differed from that of a publicly traded company, he says that the two roles are far more similar than they are different.
In a privately owned, venture-backed company, he says, the CEO answers to several large investors who are knowledgeable about the industry and who demand growth. It’s the same for a CEO whose company goes public, he says. There are just a whole lot more investors to keep happy.
Cook says it can be difficult to know when the time has come to take a company public, but he did offer some insight for founders.
“I think the best time to be public would be when you have a lot of insight into your future revenues and profits,” he says. “One of the key differences of a public versus private company is that…you offer some guidance for the year—or even long-term guidance—on how the business is going to go, and then you’re measured to a quarterly yardstick on that.”
Without a degree of foresight, he says that going public would be an extremely difficult task.
“If you don’t have enough insight into your business to know your revenues except within a very wide range, or to know your profits except within a very wide range, that’s probably not the best candidate to be public,” he says. “You’re just setting yourself up to have some very bad quarters.
In other words, the key is predictability. But he reminds business owners that even the most predictable companies can present a challenge.
“You’re never gonna know everything, and there’ll always be some surprises, because things happen,” he says.
But despite the added pressures and challenges, Cook insists that there are many advantages to being publicly traded.
“There’s definitely pros and cons of being public,” he says, “but I would say we’ve had more pro than con.”
And the primary advantage of going public for Cook was a clear path toward acquiring other companies.
Forming the Group
Not long after myYearbook became Meet Me, the business was renamed The Meet Group, the moniker it’s known by today. Because the business encompassed more than a single app, the name change was apt, and it only became more appropriate as the years passed.
In late 2016, The Meet Group acquired Skout, a meet-up app that was approaching its 10th birthday. Then in 2017, they acquired Tagged, the San Francisco-based meeting app with high engagement in the African-American community, and Lovoo, a European dating app. And this year, The Meet Group also acquired GROWLr, a dating app geared toward the gay community.
But Cook says all of these acquisitions stemmed from a strategy inspired by one popular Chinese dating app. The company decided to start building a live-streaming video product after seeing its success at a Chinese dating platform called Momo.
Cook felt the app was somewhat similar to Meet Me, and when Momo added live streaming, he says that about 90 percent of Momo’s revenue was a result of that service. The Meet Group wanted to give it a try.
“We were also kind of clear-eyed enough to know that building a live-streaming business is a big commitment,” Cook says. “It’s essentially kind of an all-in sort of company bet.”
It was the kind of bet Cook was comfortable making. So they dove in headfirst and got to work building up the infrastructure, talent, and moderation capabilities they would need to execute their plan. And it paid off in tens of millions. Cook says that their annualized live video revenue grew from $0 to $82 million in just 16 months. This became the inspiration behind their acquisition of meeting and dating apps—to integrate video and watch as revenues skyrocketed.
“If we believed in our story enough to make that bet, well, then we could make that bet again and again,” he says. “There’s no reason not to double down, triple down, quadruple down on it.”
As they acquired social apps and fitted live-streamed video into them, they noticed that the engagement on those apps markedly increased.
“In meeting- and dating- and chat-oriented communities, there’s often periods of time where you just don’t have any inbound chats,” he says. “So, it’s kind of boring.”
But rather than exiting the app, the users of the video-fitted apps can simply hop into the tab labeled “Live” during those gaps.
“Our users are coming to us for human connection,” he says. “Meeting new people is kind of all about that. Interactive live video is actually human connection, right?”
Cook says that around 20 percent of their users visit the live streaming sections of the apps each day and that those users, on average, spend 20 minutes more a day on the app. Users can watch popular streamers, send them comments and witness their reactions. They can also buy and send digital gifts to the streamer.
“They do this because they want the attention of the streamer,” he says. “It’s almost like buying someone a drink at the bar. You don’t have to, but if you want a better shot, you maybe should.”
Cook is pleased with the success The Meet Group has found by incorporating live streaming into the apps—but he still has his eyes on Momo. Thirty percent of the Chinese app’s users visit the live section daily, a goal that Cook wants to push toward.
He also wants to continue pushing the boundaries of live video and sees one-on-one live video and various video dating experiences in the company’s future.
As the social media landscape continues to coalesce around a select few apps, this self-proclaimed tinkerer believes that the unique nature of his business will allow it to keep flourishing.
After all, as long as there are people searching for connection, there will always be a need to meet someone new.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo
Wed, 19 June 2019
Great service is hard to come by. This eternal problem is what Jim Penman set out to solve when he started his part-time lawn-mowing business—and even though his business has since grown into a multimillion-dollar enterprise known as Jim’s Group, it’s still the core focus.
Jim’s Group was an unintentional empire, started by an aspiring academic back in the 1980s. Today, Penman’s company has almost 4,000 franchisees that provide over 50 services around the world. As a result, Jim’s Group has become a household name in Australia for all things home services.
Here’s how Penman grew his business from a humble mowing service to the largest franchise in Australia.
The Unintentional Founding of Jim’s Group
In the 1970s, Jim Penman was pursuing his Ph.D. in history at Latrobe University in hopes of joining academia. His plans changed, however, when he graduated in 1982 and realized he had little to no chance of working in academia: “My ideas were far too wild.”
At the time, Penman also happened to be operating a part-time lawnmowing business, as he made his way through the grueling grad school years. This turned into a full-time gig upon graduation. “It was something to do until my real business came along.”
Or so he thought. While he waited for his real life to kick in, Penman was excelling at his temporary one. He had a passion for making customers happy, which made it easy for him to attract and keep regular clients. “It was the biggest thing I had going for me,” he says. He also found success building and selling ramps (for transporting mowing equipment onto raised beds or platforms) to his customers.
As his business grew, he tried employing subcontractors, but he couldn’t find people who matched his quality of service. Then in 1986, necessity forced him to evolve.
Major competitor V.I.P. Home Services came to town. This was a turning point for Penman. “I simply franchised in self-defense,” he says. “Otherwise, they’d swallow me whole.”
For those unfamiliar, franchising allows other entities to use your company’s name, trademark, business strategies, and so on in order to share essentially the same products and/or services offered by the franchisor. Franchisees typically pay a licensing fee and a percentage of sales revenue to their franchisors. It’s an effective way to quickly expand a business without massive financial investment.
Penman started with about a dozen franchisees, most of whom were previous customers. But even as Penman expanded his business, his focus still remained on the short term. He truly had no idea his business would grow to where it is today.
“When people asked me how I thought might go, I said, ‘If it's really successful, one day I could have as many as 100 franchisees,’” Penman says, laughing. “That was my reach goal. Now, I have just under 4,000.”
Franchising Jim’s Group to 4,000 Strong
When Penman was a contractor, he had one simple idea: He wanted to make customers into raving fans. “I wanted customers to be so delighted that they’d recommend me and use me forever.”
That was the core concept of Penman’s business, and when he franchised, he had the same concept for his franchisees.
With that in mind, he developed a contract that would catch the eye of any prospective franchisee. His goal was to make it so enticing that potential owners would be “mad not to join the system.” Penman even got ahold of a competitor’s contract to better understand how he could make his more favorable.
For example, he promised his franchisees that he wouldn’t take regular clients from his franchisees without their consent (unless a customer complained). He promised territory rights—meaning he couldn’t give any client in their area to anyone else, but they could take work wherever they wanted. Penman also promised an automatic right to renew.
“This was all really strange stuff,” Penman says. “One reason it took nine months to get the contract done was because the lawyers kept arguing with me.”
They thought he was being way too nice and that the contract was unreasonable and extreme. They encouraged him to “soften it down,” but over time, he actually provided his franchisees more rights. These included the right to move to another regional franchisor, to walk away from the franchise for a small exit fee, and to vote out their franchisor.
At every stage, Penman put his franchisees first. In his opinion, the secret to looking after your customers is having a great staff. The same thing applies to great franchisees—you make them the actual first priority.
“There’s nothing particularly clever about what has done,” he says. “It’s more how we do it that matters. The way we treat our franchisees, how we maintain quality, how we make sure they're looked after, that they're happy…that's the innovative part of the system.”
As you can imagine, Penman’s franchisee selection process is quite rigorous. With such a favorable franchising package, many people apply, but few are chosen.
“We are very selective,” he said. “Unless I’m convinced they’ll succeed, I don’t accept them.”
When interviewing franchisees, Penman looks for a handful of key attributes: Good character, a concern for customers, reliability, and basic decency. He takes each interviewee on test drives to watch them perform their service. He also never accepts anyone who is not putting up their investment money themselves.
“To run a successful cleaning or mowing, you don't have to be a genius,” Penman said. “You have to be somebody with good character.”
Expanding the Jim’s Group Services
In the first few years of his business, Penman didn’t just expand through franchising. He also began adding different service divisions.
With a successful mowing system in place, Penman considered how he might apply his approach to other services, such as cleaning. He created a separate cleaning brand called SunLite and sold a couple of franchises. That avenue failed completely.
Penman liked the idea of expanding under the Jim’s Group name, but he didn’t think it’d be successful, because the brand image was so vastly different. Who’d hire a cleaning service with a brand image of gardening and mowing?
Well, a lot of people did. Penman added a cleaning division to Jim’s Group and found that the familiar brand name actually helped grow his new business.
Penman continued expanding under the Jim’s Group brand to include services such as dog washing, computer services, bookkeeping, and roof repair. Today’s Jim’s Group has 52 divisions, and the company cross-sells through a client newsletter with about 500,000 recipients.
“The brand just works far beyond what you think it would,” Penman says.
When asked about how he manages such a wide variety of services, he says, “There’s no real difference between mowing and cleaning and dog washing. The basic issue is the same: Follow up on a lead, respond quickly, turn up on time, provide a reasonable quote, and satisfy the customer.”
To Penman, it doesn’t matter what the service is. His goal is getting everyone to do provide consistent, high-quality service.
Still, Penman is always making tweaks to Jim’s Group to constantly improve that service. For example, Jim’s initially offered a flat rate fee system to its franchisees. Over time, Penman learned that franchisees weren’t always following up on leads. In fact, a survey found that 25 percent of client leads never received a follow up. Penman changed the fee system to reflect a lower base fee and a separate charge per lead. After that, the number of leads not being followed up on dropped to just 3 percent.
Penman also made recent changes to the Jim’s Group complaint system. In the pre-franchise days, Penman would see approximately 100 complaints for every 100 leads. After franchising, that number dropped to about five complaints.
However, Penman wasn’t satisfied with 5 percent. To fix the issue, he went to his regional franchisors, who manually receive these complaints. The team decided that every time a complaint comes in, the franchisor would alert Penman and the respective franchisee. Then, the franchisor would call the franchisee to better understand what happened and how to solve it.
Today, Jim’s Group has an automated complaint system. If a franchisee gets six complaints within six months, they receive a warning letter. Another six, and the franchisee has to attend retraining. They’re now down to just 1 percent, and working to cut that at least in half.
In a world full of new ideas, how does Penman stay focused on Jim’s Group? “You might think we do 50 different things, but as a national franchisor, I do one thing: I provide a service. Jim’s Group is a very focused and limited company.”
With almost 4,000 franchisees, it’s even easier to provide global services. Today, the company also benefits from a much more sophisticated software and a wide variety of resources for franchisees.
Beyond Jim’s Group
While Penman continues to expand Jim’s Group, he never forgot his original passion: research. The only difference now is that he can afford to really pursue it.
Until his academic career stalled, Penman never considered becoming wealthy. “I've never been that interested in money,” he laughed. “I'm notoriously stingy. I go around the house and office turning lights off.”
But now he’s able to use the success of his company as a vehicle for funding, so he can dedicate more time and resources into continuing his research on the epigenetics of social behavior. He believes this could help in the treatment of mental illness and addictive disorders.
Valuable Advice to Franchisors
In Penman’s opinion, many people have a misleading idea of business. They think they must have a breakthrough or a big idea to be successful.
“It's not the brilliant ideas,” he said. “It's thousands of little ideas. Every day I say, ‘How can I do this better?’”
Penman encourages anyone who wants to grow to focus on yourself before considering franchising. “If you don't do it well, there’s no point in franchising, because you don't have anything to teach anyone else.”
He encourages entrepreneurs to build a brilliant business, then, master a working model that you constantly change to make better.
Penman also believes in a people-first mindset, instead of money first. He encourages people to ask themselves: What's the long-term interest of the people I'm dealing with? How can I make my customers and franchisees into raving fans?
“Every day, I’m asking myself the same question,” Penman says.
Finally, he recommends keeping in touch with the grassroots. Every single franchisee has Penman’s personal number and email. “I get multiple contacts a day,” he says. “I’m always listening to what's going on. I also read through most complaints.”
After all, it's the thousands of little things that count.
Thu, 13 June 2019
Success doesn’t happen overnight.
This is something Foundr CEO Nathan Chan knows all too well. Before he started his business, Nathan was in a common predicament: he hated his job and he had no idea what career path to take. It took many steps to plant the seed that eventually became Foundr.
Even then, it wasn’t an easy path forward. He stayed in his job long after starting Foundr, and at one point, Nathan even launched a webinar from his parents’ basement. There was no magic involved—only hard work, strategic decisions, and many lessons learned.
In this video interview, Dave Hobson, our Head of Growth and Marketing and one of the first to join the Foundr team, has a raw conversation with Nathan about his journey to building a global brand. Nathan opens up about what it took to get Foundr off the ground, shares the key takeaways he picked up along the way, and reveals the nitty gritty details around how he turned a webinar presentation he hacked together into a multimillion-dollar product.
This episode is chock-full of sage advice, life lessons, and even an embarrassing story or two from our CEO’s humble beginnings that you’ll definitely want to hear.
Tue, 4 June 2019
253: How Refinery29 Defied Critics and Became a Digital Media Pioneer, With Co-Founders Christene Barberich and Piera Gelardi
“I think about how little we knew, but how—I believe—how courageous we were,” says Christene Barberich, reflecting on the early days of Refinery29.
Before she and co-founder Piera Gelardi were the women at the helm of one of the fastest-growing digital media companies in the world, they were new entrepreneurs working tirelessly on a vision (first sketched on a napkin) that outsiders failed to understand.
The Refinery29 founding team formed in 2004, and in those early days (before Twitter had even launched), people struggled to grasp even the concept of digital media. The co-founders’ pitches were met with skepticism.
“We would go talk to people, and they would act like we were trying to sell them a carpet or something,” Gelardi says. “They thought it was a scam.”
Potential advertisers and brand partners also didn’t think customers would ever want to buy something online. “I just remember thinking, like, ‘I don’t think that’s true,’” Barberich says.
That skepticism gave them an advantage, though: It gave Refinery29 the freedom to operate and experiment without the pressure of competition.
Today, Refinery29 has an international audience of 550 million and has earned multiple distinctions, including Webby awards and Inc. 500 list mentions.