Transcript continued from the Episode 075 Show notes

Mark Interviews Brian Kaldenberg from ProofreadingPal.com

Mark:      I’m very excited, this is so great, to catch up with someone who is going to just blow your mind with the amount of vision and progress this guy has been able to make online. I’m talking about, when you think about going big with business, this is one of the guys that a lot of people are talking about these days.

Brian Kaldenberg, how are you today sir?

Brian:     I’m good Mark, excited to be on your podcast and excited to share my story with your audience.

Mark:      I’m pumped up because you’re different than a lot of people in the following way. A lot of people start online because they want to make money. From what I understand from your story, when you were in college you started online, and I’m sure you wanted to make money, but you had a great idea.

Can you talk about it a little bit and try and catch my listeners up on that whole thing with GameRosters and how that got started and put us back in that dorm room at Iowa State?

Brian:     Certainly. Always, ever since I was a young child, I’ve wanted to be an entrepreneur. In college I started thinking of ideas to start a business online. I kind of knew some basic web design and I had some internships. This was back when Yahoo was the only search engine really letting you advertise for search advertising. I don’t even think Google had a platform yet.

I started to dabble in that through some internships. The bottom line is what I did in college, more than anything, is play NCAA Football. That’s a very popular game among college males and we would play that against each other. We would play it online for hours on end.

There was a website out there, and this was back when everyone was playing on PS2 and the original Xbox. There was a website out there called PS2Rosters. It was started by a guy by the name of D. Q. Linder.

The game, when you play EA Sports NCAA Football, it doesn’t have the players’ names. It only had their position and their number. Instead of being Running Back Smith, it would be Running Back #22. The announcers would say, “Running Back #22.” and the game when you’re playing, it would say, “Running Back #22”.

The game allowed you to actually put in the players’ names. If you put in the players’ names and save that file, then when you’re playing it would show that player’s name and it would even say the name.

There’s this guy that owned PS2Rosters.com. He would actually go through and put in the players’ names for every single team. Back then it was 119 teams. We would download this file through a special tool you had to have.

We’d lay with the real names and it just made the game better. I contacted that website owner, because he wasn’t charging for his file. He was basically letting people download it for free and on donation basis. I tried to talk him into partnering with me and he declined.

It was March of 2004 when I registered the domain name GameRosters.com. I knew how more exciting it made playing the game. Back then, not many people knew this little add-on, this niche little product existed.

GameRosters just blew up. Through search advertising and search engine optimization, we did a good job of email marketing our customers year in and year out and offered pre-sales. Eventually I bought that guy’s business PS2Rosters. I bought all of his websites out and kind of grew into the industry leader over the next four to seven years.

I maxed out at a little over $200,000 a year in sales one year and kind of had a little monopoly too. I was pretty much the only person out there doing it. That’s kind of that business. I was 22 when I started it and made enough money to where right out of college I’ve never worked for anyone. I’ve always been self-employed, and GameRosters was a big part of me being able to do that in my early days out of college.

Mark:      What I would say about that is, when people hear these stories I think a lot of times they say, “Yes, you were successful because you had a good idea. I don’t have a good idea like that. I don’t have that ‘Ah ha’ moment.” You did it again. Right? You’ve turned yourself into a serial entrepreneur.

Now your big thing is ProofreadingPal. Tell us about how ProofreadingPal came into being. Then let’s talk about where these great ideas come from. First tell me about your latest project, ProofreadingPal.

Brian:     First of all, neither of these businesses were my original idea. I think that might be a misconception that you have to come up with a really good idea. The proofreading industry, and there were already websites doing proofreading too, but what I’ve done is I find ways to differentiate enough to build a steal market share. In the GameRosters example, we were able to basically steal the whole market.

With ProofreadingPal, we’re an online proofreading and editing service. We have a staff of employees in our office and then we also have a network of 55 contract proofreaders who work from home. Basically, my wife originally got the idea in my head. It was back in 2007. We were living in St. Louis at the time.

That’s when I saw that GameRosters had plateaued. It still is doing very well, but it’s very seasonal. It’s only busy for two to three months out of the year. I knew it wasn’t going to grow much further. If anything it would start to decline with file sharing online and all that stuff.

My wife was getting her Master’s degree at the time and was just wrapping up her thesis. She wanted to have her thesis proofread. We went online through a service called oDesk. That’s where I had hired some web developers from overseas to do some web development for me.

We found a proofreader down in Tennessee. He was a professor who proofread on the side. He proofread her thesis for, I think, $150. Then, boom, that was the idea. I was looking for an idea that played into my skill sets, which was something that could be sold online, marketed online and made sense to be sold online. It was highly scalable and could be sold to the whole country, the whole world.

I thought, “Proofreading, people can outsource that over the internet now that the technology is there.” I started to do some research. Again, I didn’t come up with the idea myself, but I got in on an industry that was still pretty young. I still think these sorts of services over the internet are still young.

I found some other companies that were doing it already and did some research. They basically proved to me that the market was there. There is one company. We’re not the biggest. We’re probably not even in the top five right now of biggest proofreading companies, but there is a proofreading company that probably back then was doing $5,000,000 a year in sales.

All I needed was to find ways to do it different, or better, or differentiate. That’s kind of how the idea was born. I hired a consultant in the early going who helped me differentiate even more. Really, from that point on it’s been a lot of hard work. We’ve etched our name in the industry.

We’ve still got a long ways to go, but we’re making progress. We’re building a loyal customer base and we really have a unique offering that not freelancers who work at home by themselves, or proofreading companies can compete with.

Mark:      I have so many questions around this, but before I get to that I want to hit this point. Not everyone who is listening to this, in fact most people who are listening to this do not have a degree in marketing like you do, so I want to go back to something you said.

You looked at this market. You saw competition. Rather than seeing that as a threat, you saw that as validation of the market. Can you talk about that just a little bit more? One of the things I hear beginning entrepreneurs say all the time is, “Oh, I can’t do that. It’s already been done.”

Brian:     Basically, I like something that’s already been proven, that people are willing to purchase the product over the internet. It’s a big enough industry to support companies that have employees and are making a profit. I knew that there was competition. I wasn’t scared of that at all. In some regards, it actually comforted me.

Then, if you’re going to try to get into that industry. There are a lot of different ways you can try to get into an industry. We’ve had competition with the GameRosters industry too. People come and try and compete with us. There are a lot of different ways you can go in.

One thing I don’t really want to do is compete on price. That’s one of the ways you can try to go in. It’s also a way you can die pretty quickly. That’s one point though. Price is appoint of differentiation.

We looked at other things. How available is their customer service? We just kind of got a feel for the industry. My consultant that I hired, was a veteran proofreader who worked for an already established company. She let me in on some of the secrets.

Another big one was a lot of these companies only use one proofreader. She recommended that you really use two proofreaders. It’s a higher quality product. The chance of two sets of eyes are going to catch more errors than just one.

Also it’s a way for you to be able to hire new proofreaders and grow quickly without being so worried about if they can proofread or not. You’ll always have a more experienced proofreader as the second proofreader.

That two proofreader model is another way to really differentiate, not only on the quality side as far as the customer perceives, but also internally, the ability to sort through proofreaders and determine which proofreaders are talented and which proofreaders who aren’t.

Turnaround speed was another point.

Mark:      I notice you have your pricing tiers spaced. You can get turnarounds of three hours, I think. You offer all the way up to 48 hours. The price depends on that, as I recall.

Brian:     If you click and go into step one of checkout it will even show you all of our turnaround speeds. We actually have even now 90 minute, and then we go all the way out to seven day. Those turnaround speeds have word count stipulations. 90 minute will accept up to 800 words. Even right now, it’s very rare for many of our competitors to offer faster than 10 hour. A lot of our competitors don’t offer anything faster than 24 hour.

That’s another way we differentiated. Then we offer these 24/7. We’re almost four years old. When we first launched we weren’t able to deliver. We didn’t have the three hour or six hour out of the gate, nor were we able to deliver those 24/7. We’re trying to build in becoming further differentiated from our competitors and that’s my whole goal.

Mark:      I talk to my listeners a lot about understanding building an avatar for their ideal customer. I’m imagining one of your customer avatars is a college student publishing under a deadline where turnaround time is absolutely critical and they’re willing to pay for that differentiated service of fast turnaround time.

This opens up a part of the market to you, I guess, that your customers can’t even access because the paper is due tomorrow.

Brian:     Yes, the procrastinators will pay.

Mark:      Excellent. There’s a sound bite for this interview right there. “The procrastinators will pay.” That’s amazing, so you continue to grow this. It sounds like you have people potentially all over the world doing this proofreading, or are they mostly U.S. based?

Brian:     Another point of differentiation we really try to stress is all of our proofreaders are native English speaking. We’re not outsourcing any proofreading to people overseas just because they’ll do it for $3.00 an hour.

Yes, with offering these fast turnarounds 24/7, it does require us to find people who are in different time zones. Pacific to Eastern is a three hour difference. We need bigger differences than that.

Most of our proofreaders are here in the U.S. working from home, but we do have six or seven that are overseas. They really help us with our weak spots in the middle of the night. We’ve just had to find them. It’s harder to find the overseas people because they have to be native English speaking.

Mark:      Let me ask you a little bit of a different question. You said, “It’s a lot of hard work.” One of the things that I’m constantly amused by are people who are looking to make money on the internet and in online business and think for some reason, because of the relatively low barrier to entry, I think, that it’s just going to be really easy.

Can you talk a little bit about the importance of hard work and how that’s leveraged in your business? How do you stay motivated to work hard? What makes you go? Why do you get up in the morning to do this proofreading stuff every day?

Brian:     Well, for one, ProofreadingPal started kind of out of necessity knowing that my main source of income, GameRosters, might not be there forever, or it might start to decline. Number one, I didn’t have that comfort zone of a guaranteed income, but I also got an investor for ProofreadingPal to kind of help me get to grow faster enough so we could get to those points of differentiation really quick. That was motivation too. You don’t want to let your investor down.

Those two things motivated me. Also, the motivation to make money, that’s a motivating factor. I guess it’s just my style to religiously focus on customer satisfaction because I think every satisfied customer is worth so much more money than just how much they’re going to come back and do business with in the future. It’s who they’re speaking to and what words are coming out of their mouths when they speak about your business.

When we first launched a little less than four years ago, we had a limited amount of funds and it was just me out of the gates. I didn’t have any choice but to work really hard because it was just crazy. We were advertising that we had live customer service every day from 8:00 AM to 10:00 PM. Even though we were just launching, saying that on our website already made us different than half of our competitors, because they weren’t open nights and weekends.

The toll it took on me personally was, I couldn’t go on vacations. I was tied to my cell phone and tied to being able to get remote access in through my office computer or be in my office. That was what my life for the first two years of ProofreadingPal. It was 90 to 100 hour work weeks growing and building the business totally immersed in the business. That’s what it basically took to get to where we are today.

Mark:      I’m curious about one thing. I’m imagining that some huge percentage of your customer base is college students. You had mentioned that you had developed a loyal customer following, but I imagine one of the challenges that you face is that your customers refresh every four years as they matriculate through college and graduate.

I’m wondering, is that a problem because you lose that customer, or is it an opportunity because there are always fresh people who are required to go through English 101 in the pipeline?

Brian:     It’s both. It’s somewhat of a problem because we do have that drop-off where that person might not ever need to come back to us ever again. We do resumes and cover letters, so they could need that service. You are right, college students are our number one customer. It’s actually graduate level students are the number one customer. I think it is because they might have more money and they even have less time.

It’s slightly more competitive and more important, their Master’s or PhD. We certainly want them to tell their colleagues about us and tell other students. Then we hope they go into the business world or academia and they remember ProofreadingPal. We have things that we do to kind of light that fire in them every now and then so that we do get word-of-mouth marketing. We just hope that they’ll talk about us even if they go and work for a big company, maybe someday we could get business from that company.

Fortunately, they are our largest segment, but they’re not so large that when they graduate after four years it’s a big hit on us. Like you mentioned, there’s always a fresh batch coming in the next year.

Mark:      Let’s talk about advertising a little bit, organic search, pay-per-click, offline advertising. Do you go to Iowa State and stick up those 8.5 by 11 inch sheets with the little tear off things on it? You probably remember those from college. How are you getting people to the site?

Brian:     First and foremost, our number one advertising medium is Google Search advertising. People are searching for proofreading services on Google and our ad shows up. Number two would be Yahoo and Bing search advertising. Search advertising is very important to our business and also search engine optimization.

We actually were higher last year and even higher a year and a half ago in the natural Google results than we are now. It’s something that we’re focusing on getting back because that’s very valuable. Our search rankings are very valuable because that’s someone searching for our product and service.

We also do Facebook advertising. What we’ve been doing lately is we target people who like our competitors on Facebook. That’s been semi-successful.

Then we do some remarketing. If you come to our website and maybe start a checkout process, but don’t finish your checkout, you’ll go into our Google marketing group and then when you go to other sites on the internet, our ads will follow you around. You showed enough commercial intent, we’ll be willing to spend some advertising dollars on you to try to get you to come back and order.

We haven’t really done much grassroots local campus stuff, really none at all. One time we paid to be in one of those little coupon books and we didn’t get any business from that. I think there’s an opportunity there still, but that type of marketing is not one of my strengths, so we haven’t done it yet.

A lot of our other stuff is to try and facilitate a better relationship with our existing customers. If you’re a new customer with us, or you spend over $75 we actually mail you a little gift package in the mail. I call it moving in with your customer. It’s two branded pens and a branded notepad.

Anytime you’re a new customer, we call you. It’s a courtesy call to follow up, make sure you got your order and make sure you’re satisfied. We also re-stress our core points of differentiation. We want to make sure you that you understood that two proofreaders actually proofread your document.

We want you to understand that we’re available every day from 8:00 AM to 10:00 PM. We want you to understand that we accept and proofread documents 24/7. Then we ask those customers at the end if they have any comments or suggestions for us, or we ask how they found out about us.

We’ve learned a lot from that process just what our customers want. If we get the same response several times, that’s a good sign that there’s a lot of other customers out there who probably would like that same thing, so we’ll work to implement that feature into our website or into our service.

Mark:      The marketing strategy that occurs to me for this business is somehow recruiting these on-campus students as affiliates and having them drive traffic back to you site. Somehow you could incentivize them to send their friends to your business. Have you explored that at all?

Brian:     Yes, there’s actually a Greek newspaper. It’s in all of the University of Iowa. We’re in Iowa City now. It’s in all of the University of Iowa’s fraternities and sororities.

                 The newspaper is free, it just gets dropped off at the sororities and fraternities once a week. The way they’re making their money is they have a local person here in Iowa City who goes around and sells ads. They’ve got a network there at like 50 different campuses now.

They’re the model that we would try to mimic. It’s an idea we have. It’s a good idea, we just haven’t really implemented it yet. The affiliate rep would have to get a lot of people to make some money.

Mark:      Let’s clear something up here. You’re an Iowa State guy who went to school in Ames.

Brian:     Whoa. I did go to Iowa State, but I’ve never, ever been a Cyclone fan.

Mark:      Really? Oh wow, that’s a whole separate podcast episode. You hate the Cyclones?

Brian:     Yes, I’m a big Hawkeye fan.

Mark:      Is that because you grew up with the Hawkeyes and you went to State for whatever reason and then you got back to the Hawkeyes as fast as you could?

Brian:     Yes, born and raised Hawkeye fan.

Mark:      You must be hurting right now because the Hawkeyes are ranked five or six notches below State right now, right?

Brian:     Yes, we’re 24th. I saw the poll came out a couple of hours ago. We haven’t played our best basketball yet. We’ve still got a tournament coming up.

Mark:      You’re well inside the bubble for the tournament, so you should be great. I’ve got a question for you about your degree from Iowa State. On a scale of one to ten, how much help has your marketing education been in running your online businesses?

Brian:     You know what? I’d like to break it up. On a scale of one to ten, me going to college and just all of the courses that I took and how much that has helped me, I would say, three. On a scale of one to ten with just focusing on my marketing degree and my marketing classes, the other big value I see with that is it got me those internships.

Mark:      I noticed that you were talking about that, sure.

Brian:     I would say seven for that.

Mark:      Brian, I really appreciate your time here. One last question for you, sir.

                 Once upon a time, you were a guy without a website, without an online business and you started. There are certainly people who are listening to this podcast who are in that same situation. They’ve got an idea or they don’t, but either they have this entrepreneurial itch, or they’ve decided this is the way they want to move forward financially.

What’s your piece of advice for these people who are where you were six or seven years ago, or four or five years ago now? What is it?

Brian:     Nine or ten years ago.

Mark:      Nine or ten years ago. Four or five years with ProofreadingPal. GameRosters was almost ten years ago now. What would you tell the ten years ago you about moving forward online?

Brian:     I think Rome was not built in a day, so you’ve just got to start. Both GameRosters and ProofreadingPal, even if I just look back one year, they’re so much different than they were a year ago. You’ve just got to jump in and just work at it every day. Focus on customer satisfaction and then focus on what your customer would like to see or recommend next time.

If you focus on those two things, you’re always going to have a satisfied customer who will either tell others to come to you, or come back and do business with you themselves. Secondly, they’re going to give you the secrets of how to make your product better.

It’s not going to happen overnight. The people who make a million dollars in one or two years, that’s the same odds as winning the lottery. You’ve just got to work at it and in a couple of years, maybe not even that long, but in a year and a half or two years you should start seeing the fruits of you labor, and then you just keep at it.

If you do that, pretty soon you’re going to have a successful business and a loyal following. Don’t wait until all the lights are green before you go. You’ve just got to adapt as you go.

Mark:      That is awesome advice sir. I really do appreciate it. I hope you’re able to put down the Cyclones when the time comes.

Brian:     I hope so too.

Mark:      Thank you so much for your time today. I really do appreciate it. We wish you all the best with ProofreadingPal and all the work you do in the future.

Brian:     Thank you, Mark, for having me. It’s been a pleasure.

Wrapping Things Up…

That was totally awesome. Brian, thank you so much.

I hope that motivates you. I’m interested not just in teaching you about internet marketing, but getting your mind churning about what’s possible. On the internet, because you can aggregate people from all across the world in one place on your website, you don’t need that many customers in any particular local area to make a business viable.

Brian shows you that. He has a service that he offers that if he were on a college campus he would only be able to access at most tens of thousands of potential customers, but with his business online he’s able to scale that instantly by orders of magnitude, essentially accessing all of the people in the world that need that kind of service, instantly – or at least having the potential to access them.

Think about that next time you’re pondering what you might want to do online. I think Brian is a great example for all of us. I’m headed back to Dallas on airplane, flying out Oita Airport, through Narita, which is an airport just outside of Tokyo, through San Diego, which is dangerously close to Pat Flynn, and then back to Dallas.

I hope you guys are having a fantastic day and I hope to talk to you again soon.

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