← Startup Stories - Mixergy
Startup Stories - Mixergy
#2270 Zillow laid him off, so he started his own company
John Doherty of Credo & EditorNinja
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- [00:00]
A
Hey, there, freedom fighters. My name is Andrew Warner. I'm the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of entrepreneurs who are just listening in and picking up some good ideas for their own companies. John Dougherty is someone who I interviewed a while back, and he and I have stayed in touch because I've been impressed with what he did with Credo. He created what to me was a marketplace of agencies. If you need to hire an agency to do your SEO work, you could either ask all your friends or you can go to Credo and they'll help you find the right one. Or if you need to find, I don't know, someone to do your digital ad buying, you can look around, ask your friends, or you can go to them and you know they're going to have a vetted agency for you, and they're going to do a little bit of a. Of a matchmaking service. That's what Credo was. I watched the thing grow. I did an interview about how it launched, and today he's here to talk about how he sold it and how he has now been running this new business editor Ninja, which is a service that will basically give you editors on demand. If you're writing content, you turn your content over to them and make them part of your workflow, and they make sure the thing looks good. I've used them. I've been a customer. All right. And we can talk about this interview thanks to my sponsor, Gusto. If you are like me, if you are like John, if you need somebody to. If you need a service that will handle your payroll and benefits. Right. Go check out gusto.com mixergy but first, John, congratulations on the sale. Sold the business.
- [01:10]
B
Thank you, Andrew. Thank you. Yes. Yes, it was. It's quite the ride. I'm. I'm happy to be back. Thanks for having me back. I always, always appreciate it.
- [01:19]
A
John, I saw you here in Austin. I didn't realize that you had sold the business at the time. You were kind of like on an almost sold, almost not. Was there ever a moment where you looked and you said, all right, I did it. I crossed the finish line, or was it always a slow exit from this thing that you had created?
- [01:37]
B
Yeah. So I think when I saw you in Austin, we hadn't inked the deal yet, so I was like, not. I may have mentioned it to you. I'm not. I don't remember, but we were, like, super close to it. I think it closed a few weeks later. That moment of, like, got it across the line happened. I mean, like, the. So the day after we closed the deal in, like, into September 2022, which, like, ironically enough, was seven years to the day of me getting laid off from Zillow. So, like, you know, in the Bible, it's a. It's a number of completion. And so it was just, like, ironic and hilarious to me that it was seven years to the day. But we closed it at like 3pm on a Wednesday. And I had an 8am flight to Mexico City the next day with my wife, and that was going to a conference in Cabo. And, like, we landed in. We inked the deal. Next day, my wife and I landed in Mexico City, and I looked at my bank account. The money had hit. And like, dude, that whole next, like, four or five days, I was just, like, out of my body. Like, just did not feel like me. Just this huge, like, just boulder lifted off my shoulders, you know. And so, yeah, I just kind of, like. I kind of floated through life for the next couple of months, to be honest with you. Um, but, like, felt just out of my body. And my wife looked at me at one point, I think it was like that Saturday, and was like, this is the most relaxed I've ever seen you since we've been together. And it had been almost 10 years at that point. So I was like, okay, I made the right choice. So that definitely happened.
- [03:03]
A
How much did you see in your bank account?
- [03:06]
B
Uh, I can't talk about that, unfortunately. I can't talk about more than a million dollars. Not more than a million dollars? No, no. But it was. It was enough for us to feel comfortable for a while with me getting a new thing off the ground.
- [03:18]
A
And so the thing that I wondered was, why a new thing? Why not just stay in this business? This business was growing. It was produ. Was it growing? Actually, I assumed it was.
- [03:28]
B
It wasn't, actually. It had. It had tapped out. You know, I started the business. I first started at Credo in 2013 as a side project when I was working for an agency in New York City. It was before I went in house. And. Yeah. And so basically, just short answer is, over the 10 years that I ran it, nine and a half years I ran it, the economics changed. So many people came up. Alex Hormozi wrote his book about, you know, offers, and all these people came up offering, you know, an insane number of leads and X number of days, like, sort of thing. The pandemic happened. Marketing got a lot more expensive. Like, it just the economics of the business really changed. And I spent a ton of time, ton of money, I mean, multiple six figures, Facebook ads and Google Ads and all that, just trying to get it to grow. And it just wouldn't. It just wouldn't grow. Or at least wouldn't grow. Like, there were wiggles here and there, but to be honest with you, like, I know how I could have made it grow, but I was just so burnt out on it. I had been working on it for so long and I was so burnt out on it. And I'm a growth and marketing guy, and when you're doing all the things and it's not working, it just kind of kills your soul a little bit. And so I was like, I gotta, I gotta move on. I gotta do the next thing. And so that's, that's why. And I had an interested buyer and so I went for it.
- [04:46]
A
Funny that it started and ended with a vacation. What happened, from what I remember from our first interview was you had just come back from a vacation in Europe and you went to work. Your wife goes, how was your first day?
- [04:58]
B
And you said, I got laid off. Yes, that happened. I had just gone on a two and a half week European vacation, was unplugged. And I got back and I, I was reporting to a vice president and they were like, hey, let's catch up this afternoon about how things have been since you, you know, since you were gone. And I was like, okay, cool. And so they sent me the calendar invite. And when I went to look at it, we were on like the third floor, I think, and it was on the seventh floor, which is where all the admin stuff was. And I went up. I was like, that's weird, but whatever. And so I went up and I sat down on the couch outside the room and this, this blonde woman sits down next to me and I introduced myself and she goes, yeah, I'm the new head of hr. And I knew there was a new head of HR coming on. And I was like, oh, great. Great to meet you. Look forward to working with you. And then, you know, my, my boss came up and walked into the room and I walked in and the HR person walked in with us. And I was like, ah, I see what's going on here. So, yeah, that happened. So that was a Monday. And the next day I woke up and went to work for myself.
- [05:57]
A
You had credo, or as it was called at the time, I think hired gun, hire gun.
- [06:02]
B
Yep.
- [06:03]
A
You had it before. Was it a side hustle? What was it?
- [06:07]
B
Yeah, it was a side hustle. People were asking me like, hey, what's going on with this? I was like, I'm busy. I'm newly married. I've got a busy job. You know, all of that. And yeah, so like the month before, if I'm remembering correctly, this was eight years ago. Nine, Almost nine years ago. The month I got laid off, it did like $85 in revenue. So like nothing, basically. And the next month, October 2015, it did like 2,500, I think something like that, and went up to like 5,000 by just a month by December.
- [06:35]
A
So what was it back then, before you got laid off?
- [06:39]
B
It was. I mean, it was high touch, like also like matchmaking. So it's kind of. We kind of went back to that, that same model just because I saw at that time especially the challenge was people just. There were so many SEO agencies and PPC agencies and that sort of thing. There were no real leaders. And basically people needed help vetting out and like hiring the right agency for them. So I always had this idea of like, you know, hire the best B2B SaaS agency, the best, like E commerce, Facebook ads agency, like that sort of thing. And we did it in just like a high touch way. Eventually our technology got, you know, we had a whole like matching algorithm and matching score for projects once you put. Once we put into the system. But early days, it was just like I would take calls when I could and would. And would vet people out and would match them up and basically got a commission on the back end once the agency closed.
- [07:28]
A
So agencies would say, we need people, we need new clients. You'd vet them, make sure that they knew their thing, ask the kinds of questions that an experienced client might ask. Then clients come to the site because they've seen your search engine optimization work. You were big on SEO and. Or they just know you because they know you. A lot of us know you from social media. Got it. And this is what the thing was. And then you go online after you get laid off and you say, you know, I don't think you admitted that you'd been fired, but you said, I'm, I'm looking to help people find agencies or something like that, right?
- [08:01]
B
Yeah, yeah, I said. I think what I said was, I'm no longer with Zillow. I didn't say I got laid off. I started talking about that later. But, like, I'm no longer with Zillow figuring out what's next, but picking up some SEO consulting work and building higher gun. Let me know if you're interested in working together. And Andrew, it was, it was insane. Like I tweeted that out at like 10am on Tuesday. I had like, I don't know, 15, 16,000 followers on Twitter at that point. And. And it was still called Twitter at that point, I guess. But I, by Thursday I had to stop taking phone calls because I was just like, my DMs were inundated. Like I signed my first client, like SEO consulting client. Like two weeks later it was a five figure SEO audit for the largest used car website in India and just started like doing a bunch of SEO consulting. I did that for the next few years just to kind of like fund stuff and then would basically build up a, like a bank, literally a bank of money. Stop consulting for a few months, just work on Hiregun, which became credo in January of the next year. And then I'd pick up some more consulting work, crank on that again, build up a bank of cash and kind of just like self funded it that way.
- [09:05]
A
But what I'm wondering is this was roughly 2016, right when you were doing this?
- [09:10]
B
1516. Yep.
- [09:11]
A
Why did you get so many people who were looking to hire agencies at the time?
- [09:17]
B
I mean, there are a lot of businesses growing and I think we had a unique offering in the space as well, where we'd actually like match them up with the right people and take kind of a high touch approach.
- [09:27]
A
Does anyone know that at the time when you first tweeted out, talked about it?
- [09:31]
B
No.
- [09:31]
A
When you tweeted out, it was more like explore here. I think I've got it in front of me announcement. I'm no longer with Zillow and exploring SEO consulting opportunities. Let me know if you want to chat. My sense is that you had been talking about SEO. You done SEO? Is that what you did at Zillow? I know you've done it at other companies and so I get that people said, all right, I want to work with this guy who I'd seen talk about SEO. And some of them might get to work with you and you take on that consulting work, which would pay more. So some you couldn't help and you'd refer to people who are in your directory.
- [10:03]
B
That's the model right at the very start. Absolutely. Yep, yep. That's what would happen. People would contact me and if I couldn't take them on, if it wasn't a good fit for me or they couldn't afford me or something like that, then I'd be like, can I refer you to other people? I have this service and they'd be like, yeah, sounds good. And I do that. And dude, I was just slinging it via email, like cold email. I was manually like writing these introductory emails. I mean I wrote hundreds of them. And that eventually became like what we put into our like process and our templates in order to like scale intros as we grew. But yeah, that's kind of how it worked at the start, I guess.
- [10:36]
A
One of the things that I'm realizing is that I think this was a period when SEO was still hot. It's not so hot now. But there's always a thing that is hot. And if someone is known for doing it, instead of just offering consulting, the takeaway from your story is say I'm available. And then if you can't service them, move them into this network that you've pre vetted and make referrals and get commissions.
- [11:01]
B
Exactly.
- [11:02]
A
The thing that sucks about that, as I just talk about it, is it's like a one time sale. You don't get ongoing revenue unless you make a deal with them where you keep ongoing revenue from the client. Right?
- [11:13]
B
Yeah. Well, there are a bunch of different ways to do it. We explored them all. Our initial business model was we got 10% of a closed client for the first three months, which was dumb because I built in like 100% churn every three months of revenue. Really dumb. Then we went to a like, it was kind of a more automated legion system where people could subscribe. It was like 100 to 400 bucks a month, something like that. And that really like grew the, the supply side, the network side. It wasn't great for the, the person looking to buy. We ran an escrow service for a while, which actually like we launched that in fall of 2019 and we went from nothing to about $125,000 a month held in escrow for agencies in about five months. And I mean, just like mistakes made, right? Andrew? But if the pandemic hadn't happened, actually even with the pandemic happening, when the pandemic happened, we changed our model to just a straight like vetted agencies pay us X dollars per month. It ended up being like 1700 to $5000 a month plus we got a commission on the back end. Like a one time commission. Half of the first month was what the. But if we had kept, if we had just like written it out for like two, three months, like through the start of the pandemic, Andrew, I would have had a multimillion dollar a year business on my hands before the pandemic.
- [12:32]
A
Agencies were paying you a monthly fee to be listed in the network, and they were paying you a commission every time you match them up.
- [12:38]
B
That. That's what it moved to at the end. We had like some version of that as well, like before the pandemic. But like once the pandemic hit, that's what we moved to. Just because it stabilized revenue. Right. We went from like kind of not knowing what we'd make every month to knowing exactly like it was an MRR sort of thing. So like, basically we moved from being like a escrow service that would also like match them up with agencies. Agencies would close work through our, our portal or through our, our platform to an agency model where.
- [13:11]
A
Well, an agency model where you're referring out, right? You're not.
- [13:14]
B
Yeah, yeah, well, so agencies were the ones paying us. They were paying us for leads, certain number of lead, like qualified pipelines, what we called it, because we'd. We'd basically had a calculation that we'd make off of what the lead told us their budget was, their expectation was, and all of that. And then we'd match up agency, we'd match up agencies, and we're basically going against a cap for agencies.
- [13:33]
A
I guess the thing that I am seeing though is that even that model doesn't get really big unless you get the monthly fee from the agencies, and then you have to keep sending them a lot of business. Do you think it would have made sense if you instead said, I'm just going to be an SEO agency, I'll create my agency. Instead of referring business out and making money quickly, I'll just slowly build my team out?
- [13:54]
B
Yeah. You know, I'm a stubborn man, to be honest. And I just. I just didn't want to build an SEO agency. I was honestly really tired of SEO at that time. I wanted to build my own thing. And I, I mean, it was my first business. Right. Like, after going out on my own and I. I didn't know how to build an organization. I didn't know how to like, hire people that were better than me or could do these things. And like, I've just found that like, it's hard for any business to scale when the person starting it is a subject matter expert in that specific area. Like Editor Ninja now is as big in monthly revenue as Credo ever was. And. But I'm not an editor. I'm a writer, I'm a marketer, but I'm not an editor. So I've been forced to build out our delivery side with like, with editors, with like, professional Editors like running the whole system, the delivery, all of that. So I can focus on business, marketing and sales, because that's my jam. But, like, I could have built an SEO agency. I probably could have done it pretty easily, but I would have become quickly overwhelmed because I didn't know how to hire good people and how to hire good SEOs to take stuff over. And it would have been really hard for me at that time to give over any control. So that's why I didn't do it. Now with Editor Ninja, we do some SEO stuff. Some like SEO formatting and that sort of stuff. We update content for SEO. We'll like review it for like keyword optimization, you know, on stuff that the agencies are writing for their clients. But. But we're like. But I'm very firm on, like, we are not an SEO agency. We're not going to do SEO strategy, we're not going to do technical audits, like that sort of stuff.
- [15:24]
A
You know, what I'm seeing is on the task side or hiring side, there are lots of examples of businesses that work. So you've got Growth Assistant Jesse Puigi's thing where he was. He had an online marketing agency and he realized there a bunch of tasks that go along with that. Pulling data, putting things into ConvertKit or whatever it is that you're doing.
- [15:46]
B
Sure.
- [15:46]
A
And so he created a service essentially where you get to hire their people and they'll do the growth assistant work for you. There is.
- [15:54]
B
You're like a peo, right? Like partial employee, partial employment organization. What those are called, obviously it's service. It's called a peo. Yeah.
- [16:00]
A
Okay, so there are a bunch of those for different topics. Right. There's the person who will do just your email. I interviewed Yarrow Starak, who's got that. So in that sense, that does work. What I guess I haven't seen is the model that to me would be more interesting, which is a marketplace. Come to the website, find the person you're looking for, get ratings on them, and then move on. Kind of like Yelp is for restaurants, but for all this other work. And do you think that maybe that just doesn't work?
- [16:26]
B
It does work. The thing is you're up against upwork and, you know, Alt Fiverr and like all these big ones that have.
- [16:33]
A
Oh, because they also have agencies. I think of them as individuals. Got it. And so you're still up against. So is Growth Assistant. Right. If you're thinking about I need to hire somebody to do some. Some help to just help out my Growth people. Upwork has all that, but they don't have the vetted people. The. I guess what they have, though, is.
- [16:50]
B
Vetted, the matchmaking high touch. I think. I think they have that on, like, the higher end. But yeah, I mean, Upwork is just like, find anyone and any type of entity to do anything versus, like, Growth Assistant is like, we help you hire assistants from the Philip. We hire assistants for you from the Philippines who are vetted out and have the experience to do this thing for you. And they're like, you're hiring an employee as opposed to, like, getting a task done. So that would be the challenge. Like, you just have to go so niche to get, like, something like this off the ground. And then there's just. Marketplaces are fricking hard, man. They're so hard. Like, so. Yeah. And, like, I don't consider Growth Assistant a marketplace at all. Like, they're. They're definitely a placement service, you know, like a support shepherd or someone. Or shepherd, I guess they're called, but something like that. And we're. We're somewhat similar. We're more of like, the design pickle super side.
- [17:37]
A
Editor Ninja. Yes.
- [17:38]
B
Video. Video Husky model at editor Ninja, where that model.
- [17:41]
A
That part I see. I don't see a lot of marketplaces for services that do that do well or even for agencies that do well, which is kind of disappointing because I. I like that model better. When I look at Hip Camp, for example, it's Airbnb for campgrounds. I love the model. Every time she improves it, she improves it for all of us. The more people she gets on the platform for either people who have land where you can throw up your tent or people like me who just want to throw up a tent somewhere. It becomes more valuable for everybody. And I kind of thought of Credo that way. All right, so that was not what I imagined it. Then you found the model that worked, charging monthly. Then the pandemic hit. I know in the beginning of the pandemic, everything was chaos, but eventually we all settled on everything online all the time. And wouldn't that have helped credo?
- [18:29]
B
It did for a while. For a couple years. Like, we went. I mean, we were probably doing, I don't know, 60, 80, like, vetted projects a month, coming through our systems, getting introduced to agencies. So we were making a few hundred, and we introduced each of them to three to four. So we were making a few hundred, like, qualified intros a month. And these were all projects, like, minimum, I think value that we had in there was like 18,000 a year. Like average contract value. So like and some much bigger than that. And so like, so say we were doing 80amonth and then like March, like I mean it just fell off a cliff right of 2020. And then the next month was about the same. And then we saw a little bit of an uptick and it just blew up. Like it over doubled. Basically our lead volume over doubled in about six months time.
- [19:15]
A
But I guess I thought you said earlier that the pandemic knocked your legs out from under you. That if not for the pandemic you would have been doing millions. What happened?
- [19:24]
B
So remember. So we were, we. We had basically moved to an escrow to being an escrow service. So agencies would, or clients would hire agencies through our system, including contracts, proposals, all sorts of stuff. We had a whole like proposal builder in there. And Andrew, the metrics were amazing. Like the average agency closes about 15% of. So this is actually a business someone should build, just to be honest with you. But um, like they, they. So someone should do it. Now the average agency would close about 15% of the leads that went to them.
- [20:00]
A
Okay.
- [20:01]
B
And, and it should be higher. But digital agencies are notoriously bad at sales. Through our system they're closing 35 to 40% of the projects that we sent that we sent their way. And then the client then. So they would close it. The client would then fund it. So say it was a $5,000 a month SEO and content project. The client would then fund it in credo. The agency would deliver the work. So they were guaranteed to get paid as long as they delivered. Right. And we required them to, we required them to, to, to report to the clients by the fifth day of the next month was just kind of the line, the sand that we set. And then they'd get paid and we would take our cut from that. So we weren't charging the clients anything more. And the agencies were basically saying yeah, we'll pay you, you know, whatever percent. I think it was like 15 of the total contract value for this because they were basically guaranteed to get paid. So it that like agencies do have new accounts receivable and all that sort of stuff. And it was working really well. Like I said, we went from Nothing to about 125,000amonth in February of 2020. Held an escrow through our system. So we were getting 15% of that. It was very quickly catching up to like our old model. And then the pandemic hit. We lost 30% of our revenue because. Because clients fired their agencies or paused with Their agencies. And, and to be frank with you, Andrew, I got scared and I was like, this isn't going to work. I'm not going to go back and get a job. I don't know what the f is going on with the world right now, but I know I can sell like, basically retainers, like, as an agency model. And so we just lopped our product in half, doubled our prices and went and went from there. Had agencies who were currently billing through our system, had them take over the billing, got them to buy out the project from us, which I still can't believe we pulled that off. But we did, you know, added 40, 50, 60 grand to our, like, bank account in like a month's time, which is awesome. And it had a super fair deal for them as well. And then, yeah, we just went to the straight agency model, did that. That was probably April ish of 2020. And by May, June, everything was ticking back up. So if we had held on for about two more months, the escrow service just would have taken off for the next few years. Like we would have been, you know, holding millions, multiple millions a month in escrow for agencies and getting 15, you know, probably would have bumped it up to like 20, 22, 25%, but we did less.
- [22:15]
A
The way the escrow service worked is a client would pay you, you hold the money. As soon as the service is done, the money goes to this, to the agency, and you take that.
- [22:24]
B
The client would fund it in our systems. Exactly. Yeah. They weren't, they weren't paying us and we had to be very clear about that to them. Like, you're not paying us this money. Like this is going into an escrow, like held for this project to this agency. As long as they do the work and report to you, then they're going to get paid. Right. And we had some like, arbitration and like that sort of stuff. Honestly, that part of the business sucked because, you know, a lot of these agencies and like that we were matching up with these clients. They were friends of mine. And it sucks to tell your friends they're not doing a good job or to have people complaining about your friends not doing as good of a job as they expected. So I didn't love that. But it just came with the territory.
- [22:59]
A
And the part that you think somebody else should do is just create that part of the business.
- [23:04]
B
Escrow payment service for between clients and, you know, freelancers or agencies, because clients.
- [23:11]
A
Don'T want to pay unless the service is done and agencies don't want to wait and maybe they get paid. Maybe they don't do this work, and then maybe they end up getting stiffed for whatever reason. So having that third party in between helps a lot. I totally get that. I can see that working for sure. Just escrow service for agencies. All right.
- [23:31]
B
Escrow service for digital service providers. You know, freelancers. It could be designers, it could be marketers, could be developers, whatever. You know, it's just like. Do you know Codable? Codable IO. It's just WordPress developers. So I use them fairly often, actually, for development needs for Editor Ninja, because we have our own tech built on top of WordPress. They hold the money in escrow. So it's like you say, this is what I need. People like, scope it and bid it. And then you say, yes, I'm hiring this developer. I mean, I just finalized a project today, just like paid the developer. They say, all right, cool. It's going to be $725. You fund it. So it's in escrow. Developer does the work, you say, yes, it is done, I'm happy, et cetera. And then the payment gets released to them and Codable takes their cut.
- [24:08]
A
Oh, I like that.
- [24:10]
B
So basically, we. We built that for hiring marketing agencies.
- [24:15]
A
I see. All right. And I could see that then being useful for other. For other work. By the way, you said you got scared. I do remember the beginning of the pandemic that I was trying to figure out what was going on. What does it mean for me? Is everything gone? Do we just bunker down here in the middle of San Francisco, which is where we were at the time.
- [24:34]
B
Yeah.
- [24:34]
A
And I remember watching people who were not just bold, but a little too brazen, and those were the people who were right. And that's the big thing that I take away, that it's really hard to say things suck, but we are going to still double down and we're still going to take. We're going to grow our business here. It almost feels like you're being opportunistic when people are suffering. You're trying to sell more. But somewhere in my phone, I also remember taking photos of things like Apple that somehow had an ad out saying, you can't touch anything, then you might as well use Apple Pay. And they were taking advantage of it. And maybe the language that I'm even using is the wrong language for me to have in my head for the next crisis, which is maybe it's not taking advantage of it. Maybe it's just making the best of a tough situation and not. Not being a little bitch. About it, which is what I think I was in the beginning until I got my legs strongly under me and.
- [25:26]
B
I think we all were. And like this kind of thing happens, you know, people did it, people got super scared in the financial crisis of 2008. And like, we see this stuff, history repeats itself. I, I learned a big lesson from this for sure. Like when. So I doubled exited credo in September into September of 2022 to double down on editor Ninja, which was going and was working. And then in November, Chat GPT launches.
- [25:52]
A
Yeah.
- [25:52]
B
And we're like, I'm like, what does this mean? Right? I was even, I was at a conference, you know, Mastermind talks mmt Jason Gaignard. So I'm in mmt. I joined MMT right after I, I exited and I was in Costa Rica January of last year for an MMT retreat. And everyone I told, so this is like two months after ChatGPT launched and everyone I told what we do, they were literally the first question from like 80 plus people was, what does AI mean for that? And I was like, I don't know. Like Monday I was like, I don't know. By the end of the week I talked with Nathan Barry and talked to some other smart people who were there as well, Nathan from ConvertKit. And by the end of the week I was like, all right, I had a hypothesis of like, we're see a ton of like bad content for six months. People are going to start figuring it out, then people are going to operationalize it and we're going to start seeing services launched around AI content. And then eventually Google's going to come in and whack it and whack the low quality stuff which happened last week. And. But we're, but basically I put a line in the sand of like, AI content is going to need human editing and a human touch before it's ready to publish. And it's going to rank long term, it's going to convert and do all of that. So I launched like, I've always been a, like, like a, a late, early adopter. So if you know, Crossing the chasm, it's the book Crossing the Chasm. It's like right before something crosses the chasm to the mainstream. I've always been right there, right before it crosses the chasm, before I'll adopt something with this. I was like, we're doubling down on it. We're going to figure out what it means to edit it. And we did. And so like I was bold. It was like two months later, we're the first or second editing service on the Internet to say we work with AI content. Like, I launched that in mid January of 2023. So, you know, I was like, I see an opportunity. Yes. There are content marketers who are terrified for their jobs. Freelance writers are terrified for their jobs. But I think this is the future, and I think we can do it in a way that is also sensitive to those people and their, like, potential plight.
- [27:43]
A
Yeah, I remember seeing. I think you might have tweeted out, you said something like, we lost business to AI and then we became the agency for AI writers to make their writing more human. All right, tell you what, let's. Let's do an ad for Gusto here and then we're going to go into where the idea for Editor Ninja came from, how you grew it, where it is today. Gusto. I mentioned it. You said you use it. Tell me about it.
- [28:06]
B
I do. We use it to pay all of our editors who are contractors. So we pay them every two weeks. And I run payroll through there also use them for payroll. For Credo. Yeah, I mean, they're, they're a great tool. I love that they've added on, you know, international contractors as well. You know, kind of like a deal competitor. So used to not be able to do that, I don't think. And now I can pay my. You know, we have one editor in Canada, had one in Romania for a while. I can pay them all through there in one platform. Super easy to use. Support is awesome.
- [28:33]
A
You know what, that's interesting. I've got editors in. In the Philippines. I wonder if I could use them for that.
- [28:40]
B
I don't know. Maybe. I know they have a list of. List of countries they use, but possibly.
- [28:45]
A
The thing that I love about them is it's just so clean. It's so easy. It's like if you had created it yourself, someone within the startup, a community who was really into user experience, had created it, they would have created Gusto. And I don't know how they resist. I know that they do other things. They do employee benefits, they do time and attendance, hiring, onboarding. They do all that stuff. Unlike this one competitor of theirs that I used to use, which just crowded everything and you couldn't find what you needed. I don't know how they keep it clean. And so it is easy to use, easy to move on from. And the same thing for the team. They just use it. They get what they need and they move on. I'm going to see if we can switch the Philippines people, people into them Anyway, if you're out there using, using anyone else, please go check it out. Even if you hate me and you don't want me to get credit by using my URL, and I think you should, because you're going to get free time with it. Go find a way to try it. You're going to love Gusto. I and many of the people who I I've interviewed have used them. Here's a URL if you want to try them for free. It's gusto.com mixergy gusto.com mixergy all right, where did the idea for Editor Ninja come from?
- [29:45]
B
So the idea for Editor Ninja came from I actually launched it in May or June of 2020. So I saw all these content marketers, content writers, editors getting laid off. And I was like, I'm pretty good at matching up service providers and people looking to hire service providers. So I just, I started investigating it. You know, I've known Russ from Design Pickle for a long time and kind of was interested in that, like, unlimited model, but was like, I'm just gonna put a site up and see if people will hire editors. And so. But then I needed to, you know, was working to stabilize CREDO and working on that and was hiring a team because we were growing and all that. And so it was kind of a side project for a while. And then I got to the end of 2021, right? So fast forward 18 months, ish. Got to the end of 2021, and you still had the idea for. For the Design Pickle of content editing, the, like, unlimited subscription model. And I was burning out. You know, we've talked about that already. I was burning out on Credo and I was like, I need. I'm an entrepreneur. I'm a builder. I was like, I need something. I need something to revitalize this. And I was like, I wonder what it was like November of 21. And I was like, I wonder what Editor Ninja has done this year. Because we had had some projects come through and such, and it had done like a thousand dollars in revenue. And I worked on it like seven hours all year. And I'm like, that's interesting. I just finished 75 hard, which is like a mental toughness, you know, physical challenge. And so I was like, kind of geared up and, like, ready to go and ready to work on some things. And so basically, long story short, over the next six weeks, I kind of rebuilt the original Credo product using WordPress paid memberships, Pro Gravity Forms, Gravity View was like, I know how to build this system. So I started, like, messing around with it, already had the domain and formed the business mid December of that year. Um, I remember sitting in the living room of our cabin in the mountains and formed the business and got the ein. And we launched January 7th of 2022 and had two customers lined up. So I had a thousand dollars in monthly recurring revenue by the end of that first day. And it was just a side project. SEO, content connections in the industry. I mean, basically, the way I built CREDO is how I got the initial traction.
- [31:58]
A
CREDO was you writing a bunch of content.
- [32:01]
B
Yep.
- [32:02]
A
It was you reaching out to people on Twitter and other social media. And what was it? What else was.
- [32:07]
B
Was also people reaching out. People reaching with CREDO is people reaching out to me, wanting me to edit, wanting me to not edit. I'm not an editor. Wanting me to do SEO for them.
- [32:15]
A
Right.
- [32:16]
B
So Editor Ninja didn't have that one, but I know a lot of content agency owners and content marketers and that kind of thing, and. Yeah. And so people just. And I had been talking about it a little bit. You know, I probably put an announcement on Twitter or Facebook or something, I don't even remember, and just started taking sales calls and kind of carved out. I think I carved out a day, a week to work on it. I was like, I'm going to give it time. I'm going to give it more time than it merits right now just to kickstart it. And then as I see more traction, if I see more traction, I'll put more time to it. And so by the time, basically by summer of 22, when I was like, all right, I'm ready to, like, let CREDO go. Editor Ninja was doing, I don't know, high four figures a month, probably mid to high four figures a month. And it was just fun, and I could feel the energy. And I was like, I need. I want to work on this, like. And Andrew, like. And this was. This was kind of the burnout talking, I think. But, like, anytime I was working on credo, I was just like, I was short, I was frustrated. I was angry. Like, it was to the point where my team, one day we get on our, like, weekly call, and one of them goes, john, are you okay? Because I was so angry and frustrated and mad. I was like, I hate this freaking business. You know, that kind of thing. And every time I'd go back to work on Editor Ninja, it was just fun and it felt light, and I was like. So I just started paying attention to that energy, and it's it's still fun and I still feel light and I love running it and I love building it. So like it's very much the right, the right move.
- [33:46]
A
I do remember the very first versions of Editor Ninja. They weren't what they are now. Now I'm looking at the pricing page and it's a clear subscription service. You pick the service that you want and you pay per month. But I thought it was you send. I thought it was a service where clients pay per edit project based on how long it was.
- [34:05]
B
No, we still have that capability and we'll often start people on that if they're like not sure they want to see the work, that kind of thing. They can pay for a single document to be edited. And we do have the ability for people to create a free account and just like get documents edited one off. We have a number of customers that do that. A couple documents a month, you know, makes us thousand ish, fifteen hundred dollars a month. But you know, we're, we're like, we're probably gonna do 40, 42,000 this month in revenue, something like that. So like it's a, that's a small part. Like the main one is main services, subscription business. But we've also like, over the last year we've gone up upstream so we've gotten agencies with more people that are producing more content. Basically anyone producing under about 50,000, about under about 25, 000 words a month of content. So 15ish blog posts. It just doesn't really make sense for them. Not necessarily from a money perspective, but from a, like it's not a huge pain for them, but like agencies that are growing fast, that are creating a lot of AI content, that kind of thing, they just don't have the people to edit. And so they can plug us in and we can literally get content back to them. Two business days later, their first like piece is edited.
- [35:10]
A
But that was a realization is what I mean. I feel like you at some point realized, you know, why are we doing this one off? It really is challenging to build a business with one off. You can't predict, you can't build relationships. And every time someone touches you, they have to think, do I want to pay for this or not? Right?
- [35:24]
B
Yeah. And pay for it again. Totally, totally.
- [35:28]
A
Versus when it's a subscription, they stop thinking about money and start thinking, I have this service I now need and I paid for it, I now need to use it and I paid for it. I now need to work to get the most out of it. And without that you don't have them fully there and instead you have them constantly evaluating whether they want to interact.
- [35:47]
B
With with you a hundred percent. And the goal was never to build like a one off, put in a single request sort of thing. Even our competitors that are not like an unabashed like subscription like retainer service, they like, they do one off documents basically as like a, a way to get people in and then they have like a high ticket sales like op like high ticket retainer on the back end is the way a lot of our competitors work. We're just clear about like we edit marketing content at scale and we're like focusing on marketing content like that is our niche at this point. We do some other stuff as well, but like 95% are blog posts. 1200 to 1500 words long is the content that we edit. But it's very much like it just became about 2023 was figuring out who needs this, who has the big pain and what will they pay and what makes sense for them and what do they need from like multiple users. We have our own portal built out like multiple users and like account controls and that sort of stuff. And we've, we just figured that out over the course of 2023 and then like doubled, really doubled down on it a couple months ago. And like we 4x our average customer size, like average customer monthly payment in about six months time. And then part of that too, Andrew was like I was doing high ticket sales or I was doing like phone sales for people for like 500 bucks a month. And I still get those and I still like talk to everyone. But like it only takes marginally more effort and time to close a $5,000 a month retainer than a $500 a month retainer and they stay a lot longer and it's higher profit for us. So like, and I love selling high ticket stuff. It's what I did with SEO and like I just didn't enjoy slinging the 400, 500, 700amonth like retainers. It just, it's just so much work. It was gonna take so many customers and so much like operations and people on our end to deliver that I was like, we can make a lot more money with the same number of customers with better customers because they're bigger and they're more established and they have the real felt like holy crap, we need this need not the like. Eh, sounds interesting. I'll give it a shot for a month.
- [37:44]
A
One thing though that you do that you, that you have going against you when you charge A subscription is. It's a really hard commitment for somebody to make. They're not looking at you and saying I'm going to pay this much. It's I'm going to pay this much forever even if I don't use it. And it makes them really second guess it. How have you found that that sales process?
- [38:06]
B
Two way, two. A couple things. One is we're month to month. So we don't say like we, we give people the option to pay up front for a, you know, for a small percentage discount, which some people do. We just had one big, very big company just renew for a full year, just paid up front, which is awesome. But it's month to month. You can cancel any time. You can also scale up and down. So we have like sort of pricing scales based off of the amount of volume that they have. So like say they have 25000 words in 1 month x price, right? Let's say thousand dollars a month because they have some AI content mixed in there. But then the next month they're gonna have 75000 so we can scale them up for that month. We always have the editors to handle it. They're not have to worry about finding editors and training them and all that stuff. We have them, we plug them in and then they're like well that was just like a 50000 word, like one shot for one customer. And moving forward we only need 25 000. So we scale them back down so that helps they like the flexibility. And then the other one is Andrew and I learned this trick with credo where people would be like, we'd get people coming in agencies wanting leads, right? And they're like I want your $5,000 a month, like top tier package. I'm like whoa, whoa, whoa buddy. Like we don't know you. You don't know us. Let's start you on this. On the bottom. We start everyone on the bottom one is what I told them. Like let's start you on the bottom level. 3, 4, however many leads a month it was, we'll start getting you leads, we'll start learning what you want. You start, you tell us what you want, you learn what you actually want. And then as we have the like capacity to scale you up, then we can send you more leads, right? So I do the same thing with editor Ninja where I say like hey, you don't need to commit to 100,000 words a month right now. Let's start on the bottom level. Send us 10 documents, give us feedback and then integrate us more into your, you know, into your systems. So we've had a number of customers go from like a thousand a month to like 4000, 5000, 6000, $8000 a month just for editing. Because we proved it. They worked us into their workflow, and from there it's like they're like, why would we stop using you? Because, like, we don't have to staff up all these people internally or pay them or whatever. It's like we just pay you and you and we get it done, and that's what they're looking for.
- [40:13]
A
You know, I'm not nearly as good as you at figuring out where traffic comes from to a site, but I don't see that there's a lot of SEO traffic coming to Editor Ninja. Is that really where you're getting your customers?
- [40:26]
B
There is a fair bit coming.
- [40:28]
A
It is.
- [40:28]
B
I mean, couple five figures a month of organic traffic. A lot of like, top of funnel stuff. But like, you search like, we rank really well for some of our main keywords, so we get a fair bit coming from there traffic. Those leads aren't nearly as good. We get, honestly, we get a lot from LinkedIn. I publish a lot of content on LinkedIn and then it's a lot of referrals and like, relationships and that sort of stuff. Like, I know a lot of people in the space and, you know, I'll like. I also very much believe in the, Like, I'm still trying to learn, right? And we're still like, adjusting our service and figuring out what exactly do these bigger agencies need and that kind of thing. So, like, I'll reach out to my friends and be like, hey, you run an agency of this size? I'm thinking about this, I'm thinking about this positioning. What do you think? Right? And they'll be like, oh, well, I would adjust it this way. By the way, we've been, We've been needing some editing help. We just lost an editor. Can we hop on a sales call? It's the old, like, ask for advice and get a customer. Ask for a customer and get advice or get ghosted. So, like, But I'm not even doing it in like a haha. I'm gonna ask for advice and, like, get a customer. It's like, genuinely, like, I want to build the best service on the Internet for marketing agencies that are producing content at scale. So, like, the more people you're gonna.
- [41:41]
A
Like, I've texted you in the past, I've asked questions like, all right, if we have somebody who's Paying us to edit their podcast. If my team is editing their podcast, what should I use to charge them? And you told me what you were using, and I was experimenting with different options, and it helped to see what you were doing. You are quick with that. Is that the kind of thing that you do, Just staying in touch with people and staying on top of responding?
- [42:05]
B
100. 100, man. I love. I love people. I love, like, I love good pickup and smart people. And I've, like, I've always been the friend or the person that, like, I'm super loyal, and I've always been the person that'll, like, that'll be like, oh, I haven't talked to Andrew in two months. I'm just gonna text him and say hi and see how things are with his new son, you know, with his new child. It's a son, right?
- [42:27]
A
Yeah.
- [42:27]
B
Yeah. I'll just be like, hey, I'm just gonna check in and just be like, hey, man, was just thinking about you. How's it going? Like, it's nothing more than that. There's no, like, you know, nothing behind it. I'm not looking for anything. I'm just, like, I just want to keep up with good people.
- [42:40]
A
I suck at that. Like, if there's something that's going on, I will reach out, but if not, I really suck at that. And I've seen some people who I've interviewed who are amazing at it. They'll just randomly ping me. I'm in Austin. Here's what I'm up to. I got married. We're in. Whatever. Like, little life moments are really. Or big life moments. Moments, I should say, are really good times for them to contact. And I. I'm just not.
- [43:01]
B
It's a superpower. It really is. It's a superpower to building a business, especially getting a business off the ground is just like. Just keeping up with good people because. Good. Because good people also know good people.
- [43:11]
A
Right.
- [43:11]
B
And so, you know the connections that have come from just, like, being good to people and keeping up with them and genuinely being interested in their lives and how they're doing, just good things.
- [43:21]
A
Just then you're working on something, and anyone else's message could interrupt your flow. And you're okay with that?
- [43:28]
B
Well, I keep my phone on do not disturb almost all the time. Um. And, yeah, so, like, I. I don't a lot. I have, like, set times where, like, I'll check my phone and see what's going on. But, yeah, I don't know. It. It works. It works well enough and like my main thing right now, Andrew, my main role within Editor Ninja is running the business. Branding, marketing, sales that, hiring good people when we need them. But I have a head of operations that handles most of that. So like I see it as, you know, building my network and building friendships and relationships is also building the business. And so like I, I put time to it.
- [44:07]
A
So you were at south by Southwest recently here in Austin.
- [44:10]
B
Was.
- [44:11]
A
Is that intentional? Is that you just kind of building relationships with people who might refer you out or what's the thought process? There's.
- [44:18]
B
Yeah, well, so I came in for one conference specifically. So it was run by the Content at Scale AI team. They're an AI content writer, like focused on SEO. Great, great product. I'm not paid to say this. They're a great product. The team is awesome. And they were putting on a conference called Content Hacker Live. All around AI, Future of AI and content marketing. Bang on. Perfect audience for us. So we, so we sponsored it, we sponsored the, the conference. We actually ended up being like the headliner sponsor. I got time on stage and met a ton of awesome people and it was just a, like I flew in our head of ops, Sophia and so Sophia and I got to hang out. Sophia was my executive assistant at Credo, so like worked with her for a number of years now. And yeah it was, it was a building of relationships thing. So like I met some incredible people. We'll probably get some business out of it. Um, but it was like this is where people who are doing the things that we want, people who are doing the things that like we're a good fit for, but also like just want to know and just want to like know them and them know us. And it was a great opportunity just to get there in person. So that's why we went like I find, I mean it's relationships and I find that just like meeting up for people for. Meeting up with people for drinks when they're in town or something like that. Like we've gotten so much business off of that that you know, just the in person building relationships, people coming to trust you is just the way it's honestly the best, it's the most effective and most fun way to grow the business.
- [45:47]
A
And these posts that I'm looking at your LinkedIn to see what kind of posts you're doing, most of them are just social stuff or an interesting observation. And then there's one like this one. Let's talk for a minute about quote, edit free writers. They don't exist. And then you go on that. And that's got what, 70, 80 different people who liked it. 50 comments. Does that then lead to customers?
- [46:11]
B
Yeah, it does, it does because it spreads, right? That's the thing about LinkedIn. Like for B2B businesses, like one person that you're connected with will like it and then their connections will see that they liked it. And you know, if they're a content marketer that I'm connected with, then they're connected with other content marketers I'm not connected with. And they'll see it and they'll comment. And then I have a whole process for like seeing who did it, seeing who liked it, seeing who commented. If I'm not connected to them, I'll connect to them. I'll send them a message just saying like, hey, thanks for, you know, thanks for, you know, commenting on my post, like, really appreciate it, you know, and sometimes I'll ask like, you know, if they're like, yeah, sure, no problem, cool, you know, great to be connected to you. Sometimes they'll ask about Editor Ninja, or I'll be like, I see you're at an agency, how's that going? You know, and just like start that conversation. So gotten, I don't know, dozen plus, like sales calls off of that. But once again, it starts with value first. Like, I'm not, I'm not. I, like, yes, I am investing time there to, you know, to, to. For people to learn about Editor Ninja and to, you know, to, to kind of see that we're doing what we're doing just because at this point it's still like an education problem because people still think about like, they're still struggling to find writers. So I don't even think about editors. And now with AI, they're scaling, they don't need writers, they're scaling it up. And now they're like, oh, shoot, I need editors. Well, I want to be, I want to be the first one they think about when they, when they think about that. What was that company I heard about, I saw their founder on LinkedIn. Right? And then they find us and they reach out. I. It's kind of a short term play, kind of a long way, but it works.
- [47:37]
A
I thought I'd see more AI on your site, but it doesn't look like you're playing that part up.
- [47:42]
B
Not a ton. We're like doing a bit more of it. We do. I did ship an adjusted homepage a few weeks ago where like AI content editing is like near the top of our homepage is like one of the main Things that we do. But yeah, I mean, at the end of the day, man, we're talking about content and about marketing content. And so whether it's with humans or with AI, like, I. I don't know. I've. I've not. I haven't seen the need yet to just say. To say like, just AI content. Because there are a lot of great agencies out there that are working with great freelancers that need editing as well. And I don't want them to be like, oh, no, it's only AI. Or what a lot of people think is that. And I've never been able. Well, they think we're editing with AI, not humans editing content created with AI. So I get a lot of questions about like, well, is AI doing it or humans doing. I'm like, all humans. So that phrasing is. Is kind of weird still. So I try to talk about like, content editing for AI generated content or something like that. I should lean into like real human editing or AI generated content or something like that.
- [48:43]
A
Yeah, yeah, I think there's something in that. All right. And you're doing over 40,000amonth.
- [48:46]
B
It seems like that's what we'll do this month. Yep.
- [48:49]
A
Net profit or net is what, 50.
- [48:52]
B
Comes after, after call, after cogs, after paying editors and people. The whole delivery side, it's about 70%.
- [48:59]
A
Wow. And like I said, I've used you guys several times. I love that you just use the tools I already use, which is a Google Doc. Everything's commented, easy to see, good feedback. And there was a time when you were doing SEO feedback too. You don't do that anymore, right?
- [49:14]
B
We still do that.
- [49:15]
A
You still. So it's like as an add on. I like that you would say, here's what you need to do in order to make this SEO friendly. And I like that because I can't stand SEO. I know that it works. It's just not my thing. But if you just say, andrew, write this stuff and it'll make it more friendly to search engines and you'll get more traffic. And I like the stuff that you suggested anyway, I might as well add it in. It's.
- [49:37]
B
And so I'm giving you stuff like I think I suggested, like, here's the URL that I would use. Here's the title tag that I would use. Like that kind of thing.
- [49:45]
A
Right?
- [49:46]
B
Like you could copy paste it. I mean, definitely, like, take a look at it and see if, like, you want to add anything in or whatever. But like, here is a good optimized, like, SEO, like URL. You know, like. Or title or whatever. So, yeah, we find that adds value to people. I still do those, honestly, just because I like it and we don't have a huge volume of it, but, like, I'll probably build out an organization around it at some point to do it. But, yeah, that's. That's kind of how it works.
- [50:13]
A
That was my favorite surprise of it. I didn't sign up for that, but that was my favorite part to discover because I can't stand SEO. And it was like having a friend go, hey, Andrew, it's not that hard. Here's a couple of things you need to do. Just do those things and. Well, sure, why not? All right. If anyone wants to go check it out, the website is editor, ninja.com and of course, John. John, you're Don Doherty on all the different services, right? It's not like they're with them.
- [50:37]
B
Doherty, JF on most of them.
- [50:39]
A
Okay. All right. And you are pretty active. A lot of it is social, fun stuff like what you're doing in Colorado, skiing and things like that. And then occasionally you'll hit us with some work stuff. And I want to thank Gusto for sponsoring this. Everyone out there, go check out gusto.com mixergy. Bye, everyone. Thanks, John.
- [50:56]
B
Thanks, Andrew.