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If you’re looking at a SaaS business for sale, one of the primary advantages to buying rather than building relates to product-market fit. A SaaS business on the market has already spent the time and cash it takes to get there. The story of new SaaS app InfluenceKit is the story of how one business did just that. Web developer and entrepreneur Bruno Bornsztein expanded his business model from online publisher to influencer to SaaS. And now he’s helping content sites make a lot more money with metrics.
The old story goes that when J.P. Morgan was asked by a nervous investor what the stock market would do, he replied dryly, “It will fluctuate.”
It seems the only given in business and finance… things will change, and then they’ll change again.
As business owners we face ups and downs, and the marketplace requires us to constantly respond to new information.
We’re kind of like sharks that way…it’s swim or die.
In online business, particularly, the speed of change seems cranked up a notch.
Ten years in our world becomes a century.
A SaaS business for sale today uses entirely different tools than one just 5 years ago.
And look at website design. Our little patches of real estate on the web look nothing like they did a decade ago.
Pre-AB testing and heat maps, it was an entirely different world.
Check out the site of the airline Ryanair (below) circa 2007 and imagine landing there today.
From the vantage point of our current best practices, it looks a bit like the back of an off-brand cereal box.
And it’s not just the UX that’s changed dramatically.
Consider our business models.
When Bruno Bornsztein built his site Curbly in 2006, he wasn’t thinking ad-based content site at all.
At that time, Facebook was just beginning to work with advertisers, and sponsorship was for NBA players and race cars.
He definitely wasn’t thinking a SaaS app to help content sites make more money through sponsored content.
Major advertisers at the time hardly knew what a blog was, let alone how to profit from one.
But Bruno kept swimming.
Rob Moore in his book Money defines the formula for wealth this way:
(Value + Fair Exchange) x Leverage = Wealth
For online business, a couple of those variables have changed pretty drastically over the past ten years…it’s possible to create value online now in ways we never dreamed of then.
And you can scale revenues today, through a single ad platform or on Amazon for instance, with tools that didn’t exist in 2006.
Bornsztein’s story – from publishing content to developing InfluenceKit (a SaaS app for Influencers) – is the story of growth, customer development, and product-market fit.
But it’s also the story of responding to new information, building tools to solve new problems, and evolving to take advantage of the opportunities created when, once again, things change.
Frans Johansson who wrote The Click Moment proposed that, “success is random—far more random than we would like to believe,” but that, “there are a number of specific actions that we as individuals and organizations can take to capture this randomness and focus it in our favor.”
Bruno Bornsztein is a great model for doing just that.
In this post, we’ll follow the path he’s taken from one somewhat-unplanned success to the next and discover what that path means to the future of bloggers and other content sites who profit from Influencer Marketing.
In 2005, pre-Facebook-domination, Bruno was working as a freelance web developer on a social network project.
When the project ended, he dreamt up the idea for a social network for home improvement.
“It was a little bit random,” he says looking back.
The idea was to build a social site driven by UGC (User Generated Content) and focused around home design and remodeling.
They built the MVP in about 6 weeks and then set about populating the brand-new site with content.
In doing that, he stumbled upon a different more streamlined business model than the one he’d originally planned…generating high-quality content and monetizing it.
Here’s what happened:
“We were really lucky with Curbly,” he casually mentioned on the podcast last week, “I think in our first month we went from 0 to 250k page views a month.”
Hello, Adsense? It’s me, Curbly.
The DIY-type content he hired out to populate the site was picked up by the likes of Digg and Lifehacker and traffic exploded.
From the perspective of a social network, the project was a failure. He wanted 250k active users, he explains, not page views.
But Bruno kept swimming and revenues grew.
He captured the randomness and focused it in his favor, to borrow Johansson’s words.
By 2009, he says, 95% of revenues at Curbly were from programmatic display ads.
The rest came from affiliates.
0% of revenue that year came from sponsored content.
2009 marked a shift for Curbly’s revenue.
That was the year they published their first sponsored posts on the site for a fabric company.
“It was the first time we got paid just to create content on behalf of a brand,” Bruno says.
Let’s take a step back and look at the context in which this shift happened:
While the first banner ads appeared online around 1994, advertisers didn’t really have a way to measure ROI or analyze the results of those campaigns until 1996.
That’s the year Doubleclick began offering an ROI tool called D.A.R.T. (Dynamic Advertising Reporting & Targeting).
Brands like Coca-Cola, L’Oréal, Apple, and Nike signed on.
Around 2000, advertisers began paying serious attention to paid search, and the pay-per-click pricing model gained traction.
While others had gone before them, Google introduced Adwords that year and changed the game.
Then, as I mentioned, in 2006, Facebook started out with small display ads and sponsored links.
Ad targeting would never be the same and would soon become standard practice everywhere online.
Around the same time that Bruno published his first sponsored content for that fabric company, websites like Buzzfeed and Mashable began bringing the age-old “advertorial” format online.
Advertisers began paying the big news and media sites to produce promotional content like videos and articles and get that content in front of their audiences.
By 2013, however, things had gotten a little out of hand.
That year The Atlantic was widely criticized for running a Scientology ad that looked like a news story, forcing them to pull the ad and redesign their ad policies.
Again, things changed quickly, but Bruno was an early adopter with Curbly in the blog world.
Around 2012-2013, he says, pitches to the site from brand and PR agencies became commonplace.
By 2016, 50% of Curbly’s revenues came from sponsored content.
Once he saw the opportunity, Bruno adopted a proactive approach – reaching out to brands, replying to press releases, and offering to produce sponsored content.
As click-through-rates for online ads continued dropping, brands saw that the site had a large active audience and the perfect way for them to communicate with that audience in their native language so to speak.
Bruno kept swimming.
From the beginning, Bruno says, “Curbly was never a personality-driven site, and that helped us in some ways and hurt us in some ways.”
How did it help?
Instead of the exhausting model of the personality-driven influencer who must constantly update their audience on the personal content of their lives, Bruno had created a much more sustainable influencer-as-brand model.
More Influencer than the standard traffic-driven publishing site (think Buzzfeed) with a more targeted audience.
Less owner-operator dependent than the traditional and popular blog model.
How did it hurt?
“In terms of selling sponsored content,” he points out, “it can be easier for a known personality [to do that].”
But Bruno, a self-described web-developer turned publisher, was clear from the beginning that he was building a business.
Statistically speaking, pro bloggers who earn over $50k a year do the same.
They put more systems in place, tend to put more emphasis on SEO, and are 4x more likely to conduct keyword research than bloggers who earn less.
Plus, as a web developer, Bruno was accustomed to building tools rather than building an image.
As lead developer for his projects, “If I do something twice,” he says, “I never want to have to do it again.”
Spoken like a true engineer. (When you look at a SaaS business for sale, by the way, a founder-engineer is common and can bring a whole set of opportunities for those who want to develop the sales/marketing side.)
It was that engineer-mind that led to the latest evolution of his business model.
SaaS company, InfluenceKit, was born out of necessity. Another case of capturing randomness and focusing it in his favor.
In other words, he solved his own problem and in doing so stumbled upon a new business model that could push sponsored-content-style influencer marketing forward into a more lucrative future.
What DoubleClick did back in 1996 for online display advertising, InfluenceKit does for bloggers and other online publishers who create sponsored content.
The problems Bruno needed to solve for Curbly as the sponsored-content side of the business took off and they were managing 4-5 sponsored campaigns each month were:
- Tracking the deliverables. They needed a system in place to answer the big questions about each campaign. “What do we have to do? When is it due? Did we do it?”
- Measuring the results of the campaigns.
At the time that he started building InfluenceKit as an internal tool, he says, there were just “not a lot of metrics that were expected or deliverable for brands.”
What did most content sites do about the problem? One of two things…
- Nothing. They offer no metrics to brands.
- They spend far too many hours collecting data and preparing their own reports
Now by grabbing the data from the relevant sources, analyzing it, and creating a report around it, InfluenceKit solves the problem and potentially changes the game for their target customers.
Who are those customers?
Not social media influencers, Bruno says.
But professional bloggers and digital creators whose “primary platform is content creation on a website that they own, and their social platforms are supplementary to that.”
The size of the businesses the tool serves might range from a solopreneur with 1-2 contractors to a small media organization with 10-20 employees.
For that community of entrepreneurs, this could be a serious game changer.
Why? Because with better reporting and the ability to show brands specific and actionable ROI metrics, comes a potential flood of new revenue.
It’s like the dam-gates holding back the waters of sponsored-content revenue for the smaller media organizations is about to be opened.
Already the InfluenceKit reports have drawn the attention of brands and agencies keen to have access to better metrics. In many ways, it’s a tool that the industry’s been waiting for.
Bruno swims on.
When you look at a SaaS business for sale, it’s a good idea to be mindful of their approach to growth.
Bruno’s approach to growth can be summed up in one word.
He’s not about to let growth destroy his lifestyle or the companies he’s built.
Right now, InfluenceKit is in the testing, pre-launch phase.
They’ve taken on a limited number of customers in order to optimize the product and their own growth rate.
“I want to grow this business at a rate that’s sustainable that we can actually keep up with,” Bruno says.
When asked what the restraints to that growth might be, you can see he’s put a lot of thought into that very question.
Scaling quickly, he says, brings on challenges and will require the company to evolve into its next form. Those challenges center around two categories:
SaaS apps are heavily dependent on people. Not just developers, but customer support and onboarding. Building a solid organization at the beginning will be essential to successful growth.
InfluenceKit, for one, integrates with many third parties in order to collect the data that goes into their reports. That integration takes server time, involves rate limits, and requires careful planning as well, as the company takes on greater numbers of customers.
Growth in SaaS, Bruno points out, doesn’t follow a simple linear trajectory. Look at any SaaS business for sale right now, and you’re likely to see evidence of that fact.
Basically, more customers bring on more complications and problems.
The solutions to those problems have to be built into the foundation of the app. The critical mission now for InflucenceKit will be to create a solid foundation on which to scale intentionally.
With all the changes that have come to the world of online business in the past decade, since Bruno first built Curbly, the basics of business don’t change.
We swim or die.
We solve problems.
A pessimist, the saying goes, is someone who complains about the noise when opportunity knocks.
We respond to the knocking.
We capture the randomness and focus it in our favor.
Bruno did just that, and in the process he’s building a solid SaaS company that may help push the evolution of online advertising one step further into the future.
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