Today I’m talking to Neil Patel, one of my mentors who’s ran many successful companies and is a rock star of the internet marketing world.
We tried to avoid the typical questions he gets asked during interviews, and instead dive deeper into topics like mentoring, business partnerships, and what it was like to be in the trenches of a startup no one wanted to fund, but turned into a huge success.
A Young, Naive Entrepreneur Learns Internet Traffic Isn’t Easy to Come By
At just 16 years old, Neil knew he wanted to be an entrepreneur. He started a job board website that was an exact, yet terrible, replica of Monster.com.
He said there were no job postings or companies willing to pay for job postings. He realized he needed traffic to his site, so he hired a few internet marketing firms to do the work. They took his money, but didn’t drive any traffic.
Since he was just a kid with a minimum-wage job who couldn’t afford to keep throwing money at marketing firms, he didn’t have any other choice but to learn how to do marketing on his own.
“I got into the business I am right now because I thought when you put up a website, people just come to the website, and it magically becomes popular,” he said.
He became an internet marketing expert, and then got into making software for internet marketing because he realized consulting wasn’t scalable.
Why He Stopped Consulting But Still Does Speaking Engagements
Consulting isn’t scalable, and neither is speaking, but Neil still takes on speaking engagements for purposes other than the events and conferences in and of themselves.
Rather than speaking in the US, he prefers to speak overseas so he can know and understand different cultures and how they do business.
Even though the US has a high GDP, the majority of the population is elsewhere and other countries are developing at a quick pace. By getting to know other people and learning their cultures, it helps him expand his businesses into new territories when the time comes.
For example, in a recent trip to Tel Aviv, he learned what a great location it is to set up a sales office.
Because the labor is inexpensive, there’s a hard-working and competitive culture, and there’s immigrants there from all over, you can effectively target most of Europe via Tel Aviv at 1/4 the cost of having a sales office in the US.
Other Ways for Entrepreneurs to Learn from the World Around Them: Local Events
Neil suggests for entrepreneurs to go to networking events, local meet ups and conferences as the quickest place to get feedback on their ideas and their product development.
“I think knowledge is the one thing in this world that is really priceless,” he says. “The more I learn, the better off my businesses are going to do.”
As an example, Neil said he loves going to healthcare and financial events because those entrepreneurs think differently than the tech-based startup ecosystem, and getting different perspectives that can be leveraged in a startup can be very valuable.
What He’s Learned as a Business Advisor: Why Startups Fail
By sitting on different boards, Neil sites two key problems entrepreneurs have when it comes to growth:
- They’re stuck in their own ways: Too many times, well-meaning entrepreneurs have their heads stuck in the sand developing their products, but don’t actually get out to talk to people outside of their own customer base. Because of this, they lose insight on what’s happening in the marketplace or places where their business should pivot to optimize their success.
- They don’t execute fast enough: They are busy people, but they let busyness get in their way, not necessarily realizing that the thing they’re putting off could be a total game changer by immediately increasing their revenues by 30%, opening up more cash to expand.
Helping as a Mentor: Why He Wanted to Help Eric
“You were aggressive, in which you just kept pestering me and I don’t mean that in a bad way,” said Neil to Eric. “Pestering is probably a bad word. You were persistent.”
In the course of time that led up to Neil deciding to take Eric on as a mentee, Eric was constantly messaging Neil with short, to-the-point emails that contained sophisticated, non-basic questions – asking just one question at a time, making it easier for Neil to reply.
After getting to know him a bit through email exchanges, Neil saw potential in Eric so he decided to help him out and took things a little further by suggesting they do a 30 minute call together.
He said he was willing to give up some of his free time, because deciding what to do with your free time (whether helping someone or watching a TV show), has an effect on your future. Because he saw the potential, he knew it might not pay off immediately, but they may be able to work together and turn a profit in two to three years.
The key takeaway to getting a mentor, says Neil, is to be persistent, but to also try to be equal.
At the same time that Eric was asking him questions to help his business, he was also trying to help Neil’s. For example, he gave Neil suggestions on ads by comparing his ads to someone else’s and showing him the statistics.
Even though he didn’t take much of Eric’s help in the beginning, he did appreciate it.
High-Level Content Production on Quick Sprout
Neil says reaching a high level of content production is all about streamlining the process from coming up with topics, outlining them, and cranking them out. He suggests two posts he’s written on Quick Sprout about coming up with ideas and quickly creating powerful content (see resources below).
“You’ve got to go above and beyond,” says Neil. “So much that no one’s willing to copy you.”
As an example, he creates guides to educate his audience that take a ridiculous amount of design time, making the content far too time-consuming to replicate. Banking on your own hard work and other peoples’ laziness is one way to differentiate yourself to get a fair amount of traffic.
With his streamlined process, he’s able to put out 30,000 to 40,000 word guides within just two months: While it’s being written, there’s someone taking care of the proofreading, then that chapter gets sent to design while the next one is being written.
In all, he spends around $30,000 just to complete one of these guides.
So… Why Does He Give $30,000 Guides Away for Free?
“It’s a marketing experiment, right?” he says. “I like learning and the quickest way I learn is by spending money.”
“Some of it’s also ego as well,” he goes on. “I do want to brand myself as a great marketer.”
Giving all this great content away for free is a sure-fire way for him to brand himself as a top internet marketing mastermind.
And, Why Exactly Does He Help People So Much?
Neil credits the success he has today to his early mentors who helped him out without expecting anything in return.
He wasn’t expecting their help, but the men who helped him were solid entrepreneurs.
So today, when Neil does mentoring or decides to help people, he doesn’t want anything for himself, he just wants to see other people succeed in the same way these men did for him.
The Batman & Robin Partnership: Neil Patel & Hiten Shah
Neil and Hiten met when they were both pretty young… and when Hiten married Neil’s sister.
In the beginning, they weren’t thinking about doing long-term business together, but they were both finding ways to grow and doing whatever they could to make more money.
Neil had a technical background and saw that Hiten was smart, studying business at UC Berkley. So they made the partnership.
Over the years, they’ve gotten to know each other’s work patterns and mindsets really well, to the point that it’s actually far more efficient for them to stay together as partners because their goals are very aligned.
But giving credit where credit is due, Neil says the success of the partnership has a lot to do with his sister acting as a go-between, giving hints to one when the other needs help with certain things.
“She’s actually the glue of our business partnership,” says Neil. He even cited an example of her working from the hospital while giving birth doing support emails for Crazy Egg. A lot of their work would not be possible without her.
The Work & Email Productivity Balance
Since both Neil and Hiten are both really great at responding to people via email, we were curious about what Neil had to say on this subject, since so many people swear off having their inbox open to boost their productivity.
“My whole workday is within my email,” said Neil. Elon Musk spends most of his time in emails, too.
The trick is not letting your emails sit around.
“When you open up your email,” advises Neil, “respond to it right away – don’t mark it and respond to it later. It creates inefficiencies and you’ll spend double to triple time on email.”
That Time When a Lawsuit Landed KISSmetrics in a Downward Spiral
At one point, KISSmetrics was in a lawsuit and at the center of an FTC investigation. (There were no problems, but the investigation came about due to bad press about privacy and had to be conducted.)
This cost Neil and Hiten a lot of money, their client list suffered, and they found themselves in a position where they needed to raise more money because they were getting really close to profitability before the lawsuit hit.
Unfortunately, no VC wants to provide funding to the company that’s in the middle of a lawsuit and and FTC investigation simultaneously.
Luckily for them, they had True Ventures, a good VC that knew them well and has always had their back.
But even though they found some cash to help pull them through, they still had to find ways to cut costs.
Because they needed to expand sales due to their lost customer base, their product suffered, they had downtime, and companies were complaining. They were in the middle of cutting costs when they started getting more customers, which overloaded their systems, so things started hanging and it became even harder to improve their product.
With a venture-backed startup, says Neil, there’s more stress to get it right and grow quickly than their is with a self-funded startup like Crazy Egg.
Fortunately though, they pulled through the fiasco and KISSmetrics is alive and well.
Hard Lessons Learned from an Instagram Press Project
At one point, a lot of Neil’s older, wealthy entrepreneur friends were telling him about Dan Bilzarian’s Instagram account and how they liked living vicariously through him.
He didn’t exactly want to replicate what Dan was doing because the vast majority of his posts were of half-naked women, but he did want to apply the same principles in an experiment to get more press.
It worked, the internet buzz about him almost doubled, but not without spending $70,000 and learning two key lessons.
- He realized that the vast majority of outreaches he was getting as a result of this publicity stunt weren’t from people who were qualified in business.
- He saw that the well-meaning men and women who were accusing him of sexism were right, so he quickly changed what he was doing.
He’s calmed the experiment down a bit, but still invests $13,000 per month in having people post about him.
Investing: What Has Worked Well & What Hasn’t
When comes down to it, Neil says he’s best at investing in himself and crating software products for SMBs, so that’s what he does. Right now, all of his cash flow goes into his products.
He says he’s done alright with angel investing, but he won’t make a killing on it. He missed out on the chance to be an investor for AirBNB and a few more startups that turned into $5 to $10 billion companies.
Because he’s not very good at predicting which companies will make it big, he prefers to stay away from giving other people money for their ideas and instead invest in his own.
A Piece of Advice to His 21-Year-Old Self
“Invest in yourself and focus,” he says. “One problem, one company, and then grow from there.”
Why Elon Musk is His Idol
“The way he thinks is so out there,” says Neil. “He makes other peoples’ dreams into reality. And I just love the way he thinks. You need people like that in this world to think like that, or else there’s going to be no more growth.”
One Must-Read Book
Neil recommends The Dip by Seth Godin because it tells people when to stick with their idea and when too quit. He thinks this book is helpful because too many people don’t know when to bail out of a business – even himself.
Resources from this Episode:
- Quick Sprout: Running out of Topics to Blog About? Follow These 5 Simple Steps
- Quick Sprout: A Simple Plan for Writing a Powerful Blog Post in Less Than 2 Hours
- My interview with Jon Miller of Marketo
- My interview with Hiten Shah
- Hello Bar
- Crazy Egg
- Quick Sprout
- True Ventures
- Dan Bilzerian on Instagram
- What Spending $57,000 on Instagram Taught Me
- The Dip by Seth Godin
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