This is a follow up story for MarketBeat. If you're interested in reading how they got started, published about 1 year ago, check it out here.
Hello again! Remind us who you are and what business you started.
I am an entrepreneur, a private equity investor, and an author based out of Sioux Falls, South Dakota. My business, MarketBeat, is a financial media and marketing business that publishes stock market news, data, and research tools for individual stock investors. Our company publishes a free daily stock newsletter, which just surpassed 2 million active subscribers. We also ended 2020 at $14.3 million in total revenue, which was up 85% compared to 2019.
MarketBeat’s growth story and my story have been documented in my book, The Ten Year Turnaround. In the book, I talk about how I grew MarketBeat from nothing and how that has informed me as an investor, a business owner, and as a leader. I also periodically write about the business lessons I’ve picked up on over the years on my personal blog.
Here’s a photo of me at our new office:
Tell us about what you’ve been up to! Has the business been growing?
2020 was a banner year for MarketBeat. Between renewed interest in the stock market and people spending more time online at home due to COVID, many companies in the financial publishing space had their best year ever, including ours. The volatility in the stock market created by COVID-19 and the subsequent boom in the stock market in the second half of the year was probably the best tailwind our business could have ever asked for. Our website grew from about 6 million monthly page views at the beginning of the year to more than 17 million monthly page views by the end of the year.
In the last year, we also realized that we were maxed out on our traditional growth and marketing channels. We could not buy any more co-registration sign-ups because we were already buying sign-ups on every website in our industry that sold them. We also saw diminishing returns from search engine optimization because our website ranks well for the names of most publicly-traded companies already. We knew we had to invest money in new advertising channels and expand horizontally by launching new brands if we wanted to grow in 2020.
One of my beliefs about our industry is that people visit a lot of different investing websites and sign-up for a lot of different investing newsletters. So, why limit yourself to being just one of those websites? We launched a new investing newsletter brand called Early Bird Publishing and a new investing website called Analyst Ratings Network that would focus on buying and sell ratings issued by Wall Street analysts. We have had significant success with our Early Bird newsletter by cross-pollinating it from subscribers from our main mailing list. That newsletter generated north of $1 million in new revenue in 2020. Analyst Ratings Network is still a new site, but we are hoping it will start to show up in the search rankings soon.
We also started doing some more traditional online media buying in 2020, by buying advertisements in other investing newsletters and doing search campaigns with Google and Bing. The cost of leads from these platforms has been quite a bit higher than we are used to paying, but we find that users that sign-up for our list through search ads generate more revenue, on average than a cheaper lead that came through a co-registration path.
What have been your biggest lessons learned in the last year?
One of the lessons I learned this year is that you have to ignore conventional business trends and just do what’s right for your business. While everyone else was having their teams go remote and was shutting down their physical offices, MarketBeat opened its first office in the middle of the pandemic. We had previously been an entirely remote team that periodically met at coffee shops and co-working spaces to collaborate. That was no longer possible in the age of COVID. We are still a remote team, but now we have a start of the art collaboration space to meet periodically for critical team meetings (using masks and social distancing as appropriate).
We also saw other companies cutting back expenses and furloughing employees as a way to hunker down and get through the pandemic. We wanted to thrive during the pandemic and not just get through it. We increased our marketing budget and our people budget during the pandemic. We hired two positions in 2020, a chief strategy officer to help identify and execute growth opportunities for our business, and a new member of our customer support team to help handle our increasing ticket volume. We also increased our advertising budget at a time when everyone else was cutting back. We have a very healthy profit margin, so buying all the leads that our competitors stopped buying made a lot of sense.
What’s in the plans for the upcoming year, and the next 5 years?
This might sound a bit counterintuitive, but we have no five-year plan or grand expansion strategy to make our business 10 times the size that it is today. We don’t have plans to go after new audiences and we don’t have any goals that are more than one year out. MarketBeat has always been a company that believes in incremental growth. What is the next report that we can publish that will get us 1,000 extra page views each month? What is the ad placement on our website that we are missing? What is the conversion optimization tactic we need to implement? What new traffic source can we implement that will get us 1,000 additional email sign-ups each month? These are the types of questions that we ask ourselves and we ask them every day.
Growing a business takes sustained effort over a long period of time. You can’t get a business off the ground by working a few hours per week here and there.
Our North Star is to become the largest website where people can go to look at information about individual publicly-traded companies. In other words, we want to be the next Yahoo Finance. They are about 10 times the size we are today, so we have plenty of room to grow. Of course, you can’t just copy the type of content and tools that Yahoo Finance does. That doesn’t work. For us to become the next Yahoo Finance, we need to be the best MarketBeat that we can be. We look at every aspect of our business at least once each month and ask ourselves, “How can we do this 1% better?” Over time, these incremental wins have compounded and led to substantial growth.
Have you read any good books in the last year?
The business book I enjoyed the most in the last year is What it Takes by Stephen Schwarzman. Schwarzman is the founder of the Blackstone private equity group, one of the largest and most successful firms of its kind. What I liked about this business book is that it doesn’t contain the same generic business advice you’ve heard 100 times before. Rather, the book contains the hard-fought lessons that Schwarzman picked up during his decades of doing business deals.
Advice for other entrepreneurs who might be struggling to grow their business?
Most businesses fail because entrepreneurship requires following an uncertain path, having an immense belief in yourself, and doing uncomfortable things for a long period of time. It’s easy to spend time doing things that don’t move the needle, such as fussing with your brand name or logo, listening to business podcasts, or going to entrepreneurship meetup events. Those types of things make you feel like you’re making progress, but won’t actually get you, customers. For your business to become real and grow, it requires talking to potential customers daily, regularly facing rejection, and doing work that may not come naturally to you.
The other big mistake that I see businesses make is that they underestimate how much work it takes to get a company off the ground by an order of magnitude. They call 10 prospects when they should be calling 100. They work on their business 5 hours per week when they should be working on their business 50 hours per week. They invest $5,000 into their business when they really need $50,000 to get it off the ground. Growing a business takes sustained effort over a long period of time. You can’t get a business off the ground by working a few hours per week here and there.
Are you looking to hire for certain positions right now?
We are currently looking to hire an in-house media buyer to manage our $2 million in annual advertising spend. This person would be responsible for creating and managing Google ad campaigns, Bing ad campaigns, Yahoo Gemini ad campaigns, and co-registration ad campaigns. We’ve had mixed results outsourcing our media buying and feel like it’s time to bring someone on in-house to manage this ad spend.
Where can we go to learn more?
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