Matthew: Since you’ve been in operation, what have you learned about your business and your users that you didn’t realize?
Niel: Well, it’s interesting. As we’ve grown and the underlying market has grown and the opportunity has grown, one of the things I’ve learned is that optimizers, people who actually do the paid search work, they really care about their reputation on Trada.
I have been hiring for a marketing position over the last month and I received two resumes, not sent to me directly but through the different mechanisms we use, that actually listed work in Trada on their resume. This was completely independent of them submitting for a job or not.
We started looking around on LinkedIn and we actually found a lot of people that list Trada and the level they’ve achieved, because we have a leveling system. We thought that was a pretty powerful concept. One of the things that’s very important about our system, and I’ve written extensively about this in our blog, is we require for you to use your real name. We verify where those people are, where their location is, their credentials, etc.
We fundamentally believe that reputation is core to good human behavior. And now that we have stakes that are high enough for someone to make the equivalent of a full-time earning, all of a sudden it really does matter what people’s reputations are because they want access to that.
That’s great, because that means that when people care, that means they will engage with you do to the right things that you want them to do. They will learn with you as you make mistakes, which are inevitable. That’s been awesome.
It’s also been really fascinating to understand how to scalably work with a small business to get them to understand how to approach performance based advertising online. I’m not specifically saying paid search, because essentially all performance based advertising works the same way, which is really an exercise in collecting data. Looking at it and finding what works, paring out the things that don’t work and then focusing on the things that do, the process that you go through, how much time that takes, and how to think about things like when you’ll see results based on how long your buying cycle is.
Small businesses, many of them are not that well educated. No one teaches you in college how to run an advertising campaign and how to look at the data. We actually work with that a lot with our customers and we’ve learned a lot of techniques about how to set their expectations correctly so that they can get the most out of the marketplace. Once those expectations are set correctly and they understand how to really leverage what’s there on the market, it’s amazing to see customers grow.
One of our businesses I was just talking to was a four hour a week hobby. And then, because of a lot of the advertising stuff he did, he was actually able to turn this into a full-time two person business with a distribution center for his product, because he felt that he had some confidence around his ability to market it himself.
Matthew: Lots of people admire entrepreneurs because they appear to make building companies look easy even though it is challenging. What talents or skills come intuitively or easily for you? What has been difficult and how do you manage that?
Niel: That’s a great question. What comes easy for me, I think, is constantly being able to take a look at what looks like an ambiguous landscape and decide how to kind of navigate through the rocks. That doesn’t mean I get everything right. It means I can course correct pretty quickly and be able to set milestones and strategy for the business so that we don’t get somewhere and then not know where to go next. I think that’s something that’s just a little bit in my nature, [03:50] to understand that really well.
I think what has been harder. You know, this is the first time I’ve been a CEO of a company, I’ve been the CTO always. My background is I have a CS degree from MIT, so I’m like a hacker. That’s what I used to do. Is just dealing with the emotional burden of having everything roll up to you. In the end, wanting that and loving that and understanding that, that’s part of the gig. I do think a lot of people. They read tech blogs, they watch interviews and they think it’s just all getting on the cover of Fortune or you know, we had a three page article in Forbes, or whatever the case may be. Taking orders and deciding who you want to take your next round of money from. That couldn’t be further from the truth.
I and the rest of my team work around the clock, knowing we’re making mistakes, and taking stones from every single person that wants to throw them at you. And that might just be, you know, someone that’s not happy with your product for the day. It might be an investor that says no to you so they’re going to tell you that your baby’s ugly. I mean, there’s so many ways that people throw stones. I don’t mean that in an aggressive way, but just that no one ever tells you that everything’s perfect. You know, someone you thought was going to be great but didn’t work out the way you wanted in the business.
Everyone talks about the emotional roller coaster. It is a heavily weighing thing on your life and you have to really, really want to sign up for it. The only thing I can analogize it to is if you ever want to open a restaurant, come talk to me. I’ve opened two. I’ll talk you out of it, right? If you ever ask yourself if you want to be a CEO and you don’t just know that you want to be a CEO, or even just sort of an entrepreneur, it takes a lot of responsibility in business, you don’t have to be a CEO, come talk to me and I’ll talk you out of it.
I don’t mean that to say woe is me. I’m one of the luckiest people that I know because I get to go do this every day. That does not mean that it’s easy. It’s actually quite hard.
Matthew: Niel, I know that Trada is evolving into many more things. Would you like to talk about that a little bit?
Niel: Sure. From the first days of Trada, we always felt that there was a very large opportunity in the business. One that was larger than paid search, one that was larger than the United States. If you think about what it is that we’re building, we’re really building a marketplace where we have pools of expertise that join together to build performance based campaigns for advertisers that define the results that they want. Two obvious dimensions to that which we haven’t really explored very much in the business so far, but we will in its up and coming eras, the internationalization of that.
If I am a large business and I want to build a French language pay search campaign, nothing I can think of would be better than having paid search experts that live in France who know idiomatic ad slang and they know ad regulation and stuff like that, to go and build that campaign for me. That’s pretty powerful and we get a lot of demand for that. We’re going to extend our community to enable that. That’s one thing.
The second thing is that once you go outside of paid search, the thing that creeps into all the performance based advertising is the concept of creative. It’s that you need a picture, right? Facebook ads have images, display ads or banner ads, rich media ads, video, mobile logo banner ads, and that is a really hard thing for most small businesses, and actually big business, to do.
We are actually announcing at ad:tech the release of our product design for Facebook. It’s something that we’ve been working on with Facebook for a while. We’re very proud of it. What we’ve done is we’ve introduced a third person into the marketplace which is the graphic design creative. If you’ve done Facebook advertising you’ll know to do it quite successfully you have to think of lots and lots of little profile targets. So men, 35-38, that live in Florida, that like golf clubs, that live within 100 miles of Orlando. Then you’ve got to take an ad that’s very specific to that profile target, put the two together, wrap it in copy and that’s how you get good response on Facebook. It’s incredibly hyper targeted, you have the potential to hyper target it really well. But, you also then need to do all the work related to that and you need the ads related to that.
What we do in our marketplace is we have Facebook experts that are certified to understand how to do Facebook profile targeting and bidding really well, then we introduce this graphic designer. The graphic designer essentially goes into a contract, implicitly with the Facebook optimizer, that says hey if you want to use my ad image, that’s great. For every click and for every sale or Like or whatever the case may be you get, I want a little bit of the earnings there.
What we’re enabling for the first time ever is graphic designers that get to essentially build out a portfolio of ad assets that continue to pay them on a pay for performance or royalty basis. All the other crowdsourcing models that are out there for graphic designers now require you to enter contests or submit work and win, in some cases, and otherwise not. And even when you do win, some of the payouts are phenomenal, right? It’s a single time winning proposition.
The reason that paid search experts in our marketplace can do well is that they build up these portfolios of campaigns that are really performing very well and they continue to perform as the advertiser continues to roll with us month to month. It’s exactly the same thing for graphic designers. We really feel like we can revolutionize the graphic design, sort of freelancer marketplace, around this. It also enables us to essentially go into any medium that requires an image, whether it be Facebook or display or mobile, etc.
We’ve been planning this for a long time. We’ve just finished a pilot that had been running for a long time and it went extremely well. Huge demand from the graphic design community that we talked to about this. But most important is, because the contract for earnings is between the graphic designer, the creative, and the optimizer, the advertiser gets all the creative for free.
The old model is, “I need to go pay someone $30 an hour or $5 an ad. I don’t know if the ads are going to work very well or not. What if I need to change them?” That all goes away. We now create a combined incentive structure which is, you get hired for three weeks because the ads in the targeting are better, you get lower sale prices because you’ve really focused on the right people. Everybody wins.
And it’s a model where the graphic designer can essentially build up that portfolio of assets just like the optimizer can, all running the same essential system. It is really groundbreaking and it will enable us to move forward in the business very, very quickly. It will enable a huge amount of advertisers, where any kind of display advertising which was essentially tenable, to sort of flip that around immediately. We’re super excited about this.
Matthew: Congratulations. What advice would you like to share with our audience about building a startup? If you have to distill it, what are the key elements?
Niel: I don’t know the key elements, wow. I think it’s really important to spend a lot of time, before you start the startup, talking to a lot of people. I think there’s this inherent fear, I call it the Starbucks problem, right? Like, if you are discussing this idea that you have ,that someone behind you in the line at Starbucks is just going to drop everything they are doing in life and go and get a company funded to compete and steal your idea. That just never happens. It’s probably happened a couple of times in history but, statistically, it just doesn’t ever happen.
But, what it makes people do is be very conservative in the beginning about talking to people who can give them really good feedback about the ecosystem they’re going to go play in. That’s the point in time when you need the most information, you don’t need the least information. That’s where you’re going to need to play your cards as broadly as possible. It’s a very nerve wrecking thing. Of course, you have to be sort of thoughtful about who you go and talk to
But, I spent a huge amount of time before we funded Trada going out and talking to a lot of people and I actually brought it to the first partners’ meeting at Foundry, who did the A-round of my deal. I brought over 35 interviews written up. The good, the bad, and the ugly. People that were like, “That’s a stupid idea,” to people that were in the ecosystem that said, “Hey this is the piece of it that I want. I don’t like that idea.” I basically just dropped it on the table and said, “Here’s the due diligence. I went and did it.”
And we learned a lot of things in that process that actually changed how we navigated the first six months to a year of the company. Very few companies that I have seen ever go out and do that primary research. You’re going to learn it one way or another. I’d rather learn it before I was spending any money. I’d rather learn it before I had ten people on staff and was getting them really excited to go storm a hill and then realize, “Oh, that’s actually the hill we want to go storm.” I think people make that mistake and it just thrashes people around. People will talk to you, they’ll give you advice, they’ll hear your idea. Very, very rarely is anybody actually going to go and steal it or do anything with it. That’s, I think, the number one thing I can say is learn before you spend money.
Matthew: Before we close, we’d love for you to give our audience your vision for Trada and how you hope it will change the world.
Niel: Well, it’s funny you should ask. When things are just tough and a lot of work, that we all get excited about at Trade is the fact that work is changing. There’s a concept of work-shifting, people want to work for coffee shops. There’s a concept of a lot more freelancing that people want to do. They want more control of their work environment. There’s the concept of gaming mechanics around work, the fact that people are incented by different things. There’s a great book by Daniel Pink called “Drive” if you want to read more about that.
We believe fundamentally in the meritocracy of work, right? That people should get paid based on what they accomplish with their work. The United States has moved away from that. Or I should say, the world has moved away from that, generally speaking, because, for the most part, it’s a knowledge based society. People get paid by the hour based on a resume, not necessarily by what they perform or don’t perform. I think bringing the world back into a meritocracy is really, really interesting.
I also believe that in the United States, because it’s a tough economy, we don’t have a job problem. We have an access to jobs problem. The point is that most jobs are actually geographically constrained. I’m looking for a graphic designer within ten miles of me. I’m looking for someone to do CAD design within ten miles of me.
Once you remove that and you create a generalized labor market where people can essentially get access to work, and then based on their performance get access to more of it, you can fundamentally shift the nature of how people can make a living.
I listen to sort of what’s going on with a lot of people in the streets right now talking about things and they are saying, “I invested a lot in college and I came out and can’t get a job.” Clearly, what I’m talking about doesn’t solve the problem of wanting to be an archeologist, right? That’s a very physical line right there kind of thing. But, I think the concept of I came out and I can’t find a job would be an anachronistic statement in 20 years if we’re successful.
I think if you want to work, there will be a huge diversity of work that you can have and you will get access to it. You’ll be able to do it how you want and where you want and as much of it as you want. What will matter is how well you will do it. I think that will slowly start to align people with the correlation between the work they do and their happiness and their purpose. Because you simply aren’t usually good at things that you’re not happy at doing. But, many times, because you don’t have access to a job, you take one that doesn’t make you happy. If you can remove all those barriers, I think it actually will align people to a much happier place where they can be as successful as they want to invest in.
Matthew: Niel, it’s been a pleasure having you as a guest on FounderLY. We’re rooting for your continued success. For those in our audience who would like to learn more, you can visit their website at www.trada.com. This is Matthew Wise at FounderLY. Thanks so much, Niel.
Niel: You’re welcome, thank you. I appreciate it.