We Make $2.5M/Year Selling White Label SEO & WordPress Hosting

Michael Borgelt
Founder, 51blocks
$210K
revenue/mo
1
Founders
30
Employees
51blocks
from Denver, Colorado, USA
started February 2009
$210,000
revenue/mo
1
Founders
30
Employees
185K
alexa rank
188
followers
market size
$917B
starting costs
$15.7K
gross margin
90%
time to build
210 months
growth channels
Organic social media
best tools
Instagram, ADP, bench
time investment
Full time
pros & cons
39 Pros & Cons
tips
3 Tips
Discover what tools Michael reccommends to grow your business!
platform
customer service
social media
accounting
productivity
payments
other
Start A Post Labeling And Sorting Service Business

Hello! Who are you and what are you working on?

Hello, My name is Michael Borgelt and I’m the Founder & Owner of 51Blocks (Est. 2009) and BionicWP (Est. 2020), two agencies focused on helping other agency owner’s offer quality digital marketing and hosting solutions to their clients and small businesses a quality marketing experience.

Our flagship products include fully managed white label SEO (Search Engine Optimization) and Hyper-fast Wordpress hosting. Our white label SEO is completely tailored to a client’s goals with white-hat strategies and all of our services come with management from onboarding through client-facing account management. It’s one of the easiest products someone who wants to focus on sales can scale using a long-term product that offers lasting results. We also help retail clients (anyone with a business of their own) optimize for lead generation through search. We also offer everything from website development to paid advertising as well.

Our hosting product (BionicWP) is one of the fastest Wordpress options with the highest level of customer support out there right now. I built this as a sister company to 51Blocks because I could never find the type of support we provided at 51Blocks (back when I started hosting sites). At BionicWP we offer a complete migration platform that is fully managed on the backend for all updates and security.

Since customer service is what we’re most passionate about, we currently have a customer LTV of 2.5+ years (in an industry where it’s 6-9 months) and make 2.6M in annual revenue (216k/mo.).

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What's your backstory and how did you come up with the idea?

I was born and raised in Minnesota. Growing up my grandfather had a big impact on me with the way he did business. He was a business owner in Southern Minnesota on the farms and he would help a lot of farmers through the rough times. He taught me that at the end of the day, it’s about helping people. That’s the kind of business I wanted to own. One where a handshake represents your word and we work to help business owners in any way we can.

I graduated from a small school in Minnesota where I played college basketball and majored in computer science (two very different worlds). I followed my passion for basketball from 2002-2009 as I went from playing to becoming a Division 1 Referee. The tipping point of my basketball career was when I refereed during the 2009 NBA strike season. No longer feeling fulfillment from the game, I refocused my passion back in the digital marketing world.

I saw a need for agencies in the digital marketing space that could not find people who had good skills in the SEO world (a lot of bad SEO people in general). So I started 51Blocks.com. I knew marketing online was headed somewhere so I doubled down on growing my business (not everyone was online in 2009 yet), so I started building websites and getting them ranked. I learned how to develop my SEO product through the time I had spent with mortgage101.com where I got them to rank #1 for the keyword ‘mortgage’. This site sold for 5 million dollars and it opened my eyes to how I could use this model to grow my agency.

At this time I had just started my agency and only had 1 major client who paid me roughly $50-$60k a year. I started to hustle growing my client base, even using Craigslist as a lead source.

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Describe the process of acquiring your first customer.

My very first sale was an SEO audit. I pitched my services on craigslist and someone bought it. I had no idea what the end product would look like, but after spending 8-9 hours putting together a carefully crafted document I was proud of what I had made. I presented it to the client, they thanked me for my work then never hired me. I went back to the drawing board to figure out how to fine-tune my offering.

Looking back to my time at mortgage101, I couldn’t figure out why we ranked above some other massive competitors. I spent time educating myself on the data, and then I realized it was because people were linking to a mortgage calculator we had on the site. Back when links were a huge power play in your rankings, mortgage101.com was getting hundreds of organic links this way. From there I developed more than just a deliverable, I crafted a methodology to get real results for clients.

You have to believe in yourself. Starting and running a business is an emotional rollercoaster.

My businesses were both fully bootstrapped ventures. Getting into digital marketing wasn’t that expensive into 2009, and only required knowledge and a computer. 51Blocks has been a profitable company all but 2 months of its 12 years. The cost for Bionic was a different story. I invested about 150k in the first year to get this business up and running. This business required a full team of developers to create the product I wanted. We went through a lot of recruiting to find the right team. We hired an entire team based in Pakistan to begin then created our dream team by recruiting globally (it was a combination of platforms).

Describe the process of launching the online store and business.

Launching the business starts with a good name, something I didn’t think about when launching 51Blocks. It’s unique though and seems to stick with our clients. 51 was a lucky number to me (my basketball number and I was a senior the year my mom turned 51), and blocks. Well, those are just building blocks of a business. BionicWP was well thought out and targeted for Wordpress hosting customers. We used referrals (i.e. just crushing it for people) as a way to build both businesses. No cold outreach. Once our brands became established through word of mouth our inbound leads picked up consistently. We spend very little time and effort on our marketing these days to allow our results to speak for us.

The biggest lesson I have learned in this process is that you have to believe in yourself. Starting and running a business is an emotional rollercoaster. You have to be able to handle the ups and downs and in the first 3-5 years I struggled in this space. That’s something that a lot of people skip over in their success stories -- the struggle that most of us face.

I remember one instance in 2012 when I was talking to someone who owned a pretty big agency and we had been friends for several years. I felt like I was really struggling and we were chatting online. While I am talking to him I remember thinking “if he asked me to come work for him, I’m going to say yes. He never did, but after that, I called my mom and asked her if I could move in should this business not work out. Of course like all good moms she reassured me she would always have my back which renewed my spirit. From then on I pushed forward - working from 6 am to 2 am for months on end. I wasn’t going to fail.

When you can deliver on your word, over time this will elicit the trust that is needed to retain clients for a long time.

Over time I developed not just a product, but a team of experts who took care of my clients. By 2017, I had a full structure from sales to operations scaling each year. In 2020, we rebranded and relaunched 51Blocks to be an eCommerce platform that allows agency owners to sign up without going through all of the proposed steps. This was a big game-changer in automating a portion of my business and removing the roadblocks of chasing after prospects.

Version #1 (2009) - Super basic to establish what we did as a brand. (very normal for sites back then!);

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Version #2 (2017) - We approached more branding by incorporating sports references and giving the site a masculine feel. We also revised our logo to appeal to our name;

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Version #3 (2020);

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Since launch, what has worked to attract and retain customers?

51Blocks was built primarily through great service and referrals. We didn’t start focusing on our marketing efforts (ironically) until we got into the white label space about 6 or so years ago. Currently, we focus primarily on social channels and retargeting ads. So our brand reputation has grown most of our client base (and still does) as the primary source of lead generation. I also like to educate so I’ve gotten into some mentorship opportunities that have helped us establish more partnerships.

Twice a year we’ll run a sale on something like an audit, but I think the best retention strategy comes from solving pain points for customers and making sure they feel cared for. This is our model at both agencies. When you can deliver on your word, over time this will elicit the trust that is needed to retain clients for a long time.

Getting yourself in front of your potential clients is huge in the digital marketing world. We’ve done speeches and written a book on our solution for agencies as ways to show our industry expertise. Both are great ways of attracting clients who are in your market. We see this same strategy with niche agency owners who appeal to small business owners. When you can develop a reputation for being ‘the expert’ your lead base is already warmed up before you even have your first strategy call.

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How are you doing today and what does the future look like?

Right now we generate about $10,000+ in new recurring revenue each month from our inbound leads alone. BionicWP is growing steadily as well (we’re hosting 2,000 sites now in about a year and a half). These are people who either know of us through our reputation or find us through search engines and contact us.

Outside of this, we also have our white label partners signing on new clients every week along with marketing efforts we may be pushing in any given month (speeches, social campaigns, etc.). Over time we’ve been able to increase our average customer subscription by about double by developing a “healthy spend” structure by niche. It allows our partners to sell our product at various price points depending on their need which helps them close more deals (thus benefiting us).

Trying to reduce “shiny object syndrome” as an agency owner can be hard with so many ideas running through your head at all times, but creating a daily list seems to help.

Last year we spent a significant amount of time working on dialing in every aspect of 51Blocks to deliver world-class results and a unique client experience as a white label solution. It paid off very quickly for us and allowed us to spend time focusing on the operations for BionicWP. 51Blocks can now thrive without me in the day-to-day, which is a place I haven’t been able to enjoy for over a decade. This is largely due to hiring passionate people, putting the right people in leadership positions, and creating in-house training and processes that are measurable and produce incredible results for clients.

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BionicWP YTD Growth

Through starting the business, have you learned anything particularly helpful or advantageous?

When you run a digital marketing agency, hiring the right people is key. Mistakes I’ve made in the past include hiring mediocre talent or not retaining through higher pay. I now know you hire the best, pay them well, and show them you care often. This is why our team at 51Blocks is more like a work family and less like a transactional employee relationship. I try to make it possible for all of us to get together as well with annual trips (both fun and work-related).

Great decisions for marketing have been joining mastermind groups where I can expand my passion for coaching business owners and in the process offer my solutions if they’re interested. I’m not a salesperson, so my intention isn’t to push people towards 51Blocks or BionicWP. If they like what we have to offer though I’m always open to having a conversation.

One of my helpful habits is writing down the top things I want to get done for the day. This helps me stay focused and cross off tangible steps towards larger goals. I remember a time when I had about 10 projects, all 75% done but none moving quickly. I made a list and started dedicating time to finish each one. These were projects that had a positive impact on our bottom line (automating processes, enhancing our solution, developing new products). Trying to reduce “shiny object syndrome” as an agency owner can be hard with so many ideas running through your head at all times, but creating a daily list seems to help.

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What platform/tools do you use for your business?

  1. WooCommerce - Online shopping cart
  2. Stripe - Payment Processor for our checkout on both websites
  3. Monday.com - Project management
  4. Front - Shared email inbox
  5. Slack - Team communication
  6. Baremetrics - Revenue monitoring/metrics
  7. Bench - Bookkeeping
  8. ADP - HR & payroll management

What have been the most influential books, podcasts, or other resources?

I’m not a huge fan of reading books, but I do listen to audiobooks. In recent years Traction by Gino Wickman was a big one for me as we moved our internal structure into the EOS model. This is a process of putting the right people in the right seats for optimum efficiency in your business. Some other great books include Good to Great, also by Wickman. This one focuses on being an excellent CEO.

On a personal level, I found The Four Agreements by Don Miguel Ruiz a good read. Looking back to the struggle of being a business owner, the four agreements covered in this book allow you to make decisions based on fact, not emotion. One of the hardest things when your business is your ‘baby’. I highly recommend all three of these books.

Advice for other entrepreneurs who want to get started or are just starting out?

  1. Automation where possible

  2. Know your numbers (financial, client management, client KPIs)

  3. Get ready for an emotional rollercoaster

  4. Reputation matters -- always uphold honest business practices

  5. Hire and know you are going to cycle through people (champions league)

  6. Hire based on passion, train for success

  7. Buy vs Build -- know how & where to spend your time and money

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Adash.io -- Our tool we built leveraging various tools we currently use (tip #7).

Are you looking to hire for certain positions right now?

51Blocks and BionicWP are both global teams. We’re always looking for excellent candidates no matter where they may live. Our goal is to hire the A-players across the world to collectively work together.

For more information, you can visit our website.

Where can we go to learn more?

Connect with us!

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Michael Borgelt   Founder of 51blocks
Pat Walls,  Founder of Starter Story

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