SaaS Interviews with CEOs, Startups, Founders
719: Question Based Advertising is The Future, $40M In Sales Doesn't Lie!
13 Jul 2017
Chapter 1: What is the background of Stephan Goss and his companies?
founder of samples.com. He bought that domain for call it mid six figures, four or 500 grand several years ago. They've processed, they do about 40 million top line there on about, you know, call it 25, 29 million bucks in ad spend. Again, generating just millions and millions and millions of leads that they've been sell to targeted advertisers in a very efficient way based off user surveys.
I hope his model replaces advertising because I think advertising is totally broken and the incentive structures are messed up. Check out his new company Zito, which I'll link to in the show notes. Coming up tomorrow morning, you will learn from Steve Olsher, who breaks down how wealthy people put on a conference.
Chapter 2: How did Samples.com evolve into a profitable business model?
But first, here's today's episode. This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per talk. Five and six million. He is hell-bent on global domination.
We just broke our 100,000 unit sold mark. And I'm your host, Nathan Latka. Hello, everyone. My guest today is Stefan Goss. He's the founder, entrepreneur, and technology executive behind his first company, Zito, at 22, which he created at 22 and continues to run today.
Chapter 3: What strategies did Stephan use to generate targeted leads?
He's led the company expanding from a team of three people to over 70 in just under five years. And with the launch of the ad network he plans on continuing the company's growth story here in 2017. Additionally, he also founded samples.com and getitfree.us, which is the biggest free samples property on the internet. Stefan, are you ready to take us to the top? I'm ready.
So you're giving us a bunch of free samples today on the episode, right? We get everything for free, anything we want.
That's right. That's right. Just check out samples.com.
In all seriousness, tell us about that real quick before I jump into Zito.
Chapter 4: How does Zeeto's advertising model differ from traditional methods?
So first off, samples.com, did you buy that? There must be an interesting negotiation story there.
It was actually really random. So yeah, we did actually buy that about three years ago. We were surfing for a better domain than getafree.us. How much did you buy it for? You know what? I don't even really remember.
Come on, Stefan.
You have to remember that number. It was like the mid-six figures. I don't remember the exact number, but it was like mid-six figures. So call it like 400? It was right around there, I think.
Chapter 5: What technology supports Zeeto's question-based advertising?
Where'd you get that money from? We were profitable at the time.
Okay. And get it free was profitable.
Correct.
Yeah. So, so you want me to quickly tell me that story? So, so yeah, you're like, well, you back off and stop asking me all these numbers questions so I can tell a goddamn story. Yeah. Tell me the story. I think the numbers will make a lot more sense right now.
So yeah, it really all started with samples.com.
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Chapter 6: How does Zeeto optimize questions for better response rates?
And when I say samples.com, I mean, both samples.com and get a free, obviously we acquired the domain later, but the domain is much better. So now we just call the whole thing samples.com. Um, And it really kind of got started like a kind of unique problem that we ran into. So at the time I was like 22. I just left Switzerland. So I'm originally from Switzerland. I left when I was 19.
I think weirdly enough at that time, I'd literally just spent the last 10 months living in a tent, um, like 10 feet from a runway in New York. Cause I was a professional skydiver at the time. And I decided that did not, was not potentially my calling forever. So I moved to San Diego and that's kind of where it got started on samples.com.
You're 23 now or still 22.
Yeah.
Chapter 7: What challenges do publishers face in monetizing their traffic?
At that point, I was 23. OK. 23, that's right. So either way, at that point, I was foreign. So I kind of just figured out I had to make money online because I couldn't really get a job. And so at the time, we're like the three of us. And we're making like $1,000 a day kind of like running ad campaigns just on the internet. So it was pretty good.
So we're basically just buying ads based on Facebook, collecting some information, and then sending users on. So that was the samples.com get a free model.
Chapter 8: What insights does Stephan share about the future of advertising?
So we spend like $1 and make $1.25. And so our ads were all for free.
Over what period of time? What did it take you to recoup that cost? Oh, like 15 minutes. So that was like the initials. The average cart value was $1.25 right after you spent that dollar.
So interestingly enough, everything is lead gen. So we don't actually charge anything. So everything is completely free. So when I say $1.25, I mean, so we acquired the user for a buck. We basically collect PII, first name, last name, email, phone number. And then we'd forward that to some lead buyers.
PII is personal information.
Correct. Correct. Exactly. Yeah. And so it was an, it's an arbitrage play. Right. And so we basically give away free samples just on top of that. We found a ton of them online, right? There's a ton of them. We just aggregate them and we actually ship out a ton of them ourselves.
And what, so give me like an example, how big you built it in one month. What would you spend on ads to acquire new leads?
So in the beginning, it was fluctuating a ton. We were probably doing about 20%, 30% margin. So it was pretty solid. We were maybe making $30,000 of profit a month.
When you say 20% or 30% margin, you gross margin or net margin?
which was pretty much the same thing at that point because our costs were literally just kind of, I mean, ad spend at that point, like the office was like 800 bucks a month. So you make 20 cents on every dollar you spend. Correct. Yeah. Got it. The dollar would turn into $1.25.
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