Larry Kim founded WordStream, a keyword management tool for PPC & SEO campaigns, in 2007 while he bootstrapped search marketing consulting to pay for development. He secured funding in 2008 and soon after stepped down from the position of CEO to focus on marketing and product development (as VP of product development). WordStream recently released some new features including Google analytics integration and a free keyword tool, which we reviewed. Larry was kind enough to take a bit of time away from his busy schedule to answer a few questions…
Sazbean: WordStream was created in 2007, while you bootstrapped in order to provide funding. This is a particularly difficult phase for any startup. How did you get through it?
I caught my first big break in 2007 – I got to pitch my ideas to venture capital firms early on and got rejected by all of them! Rejections can be valuable if they include feedback. So, I worked for about 9 months, using revenues from my search marketing consulting business to grow my team, trying to address their concerns. When I met with them again the following year – demonstrating that I could listen, was committed to the business, and had made progress on my own, it went a long way with the investors.
Another huge break was finding awesome people early on. Every dollar being spent on an early-stage software company should be put towards advancing some kind of working prototype and trying to find customers to validate the design. I was fortunate to find a very highly skilled engineer early on in the process, who in turn, knew other very skilled engineers. And a friend referred me to a fantastic sales and marketing manager. Finding talented people is so hard – especially trying to convince people to join such a small business. I was very lucky in my recruiting efforts.
Finally, you have to be willing to forgo job stability and feel financially uncomfortable for a while. All in, I budgeted approximately 250k of my own money to fund just under a year of salaries, contractors, and capital expenses like hardware & software, to try to get past the bootstrapping phase and a successful funding event.
Sazbean: You acquired funding in 2008. How is the company different now?
It’s different (and better!) in a lot of ways:
- I have investors to whom I’m accountable for results. Goals are both a source of motivation and pressure for me. Luckily, I’ve found I work better under pressure.
- We have board meetings. This requires more formality in terms of business reporting and analytics. The exercise of pulling this data together allows us to better understand and react to our business challenges.
- I can staff positions and acquire capital ahead of revenues. We’re 20 people strong today and have a nice office. (We used to meet in Panera Bread!)
- We’ve hired a president and CEO. Rob challenges my ideas and assumptions and the product is always better as a result of it.
- I’m learning a lot from very experienced business professionals who have a track record of building and growing successful organizations.
- The most profound way the company is different for me personally is adapting to my new role as company founder. For example, I am learning that the most important contribution to advancing the goals of the company isn’t the work I produce, but rather the confidence and encouragement I can provide to the team.
I must say that Sigma Partners has been a great VC firm to partner with.
Sazbean: You recently announced some major upgrades, including integration with Google Analytics and a free keyword tool. Where do ideas for upgrades come from – in-house, customers, or both? Why these particular features?
Our engineering ticket list could be broken up into three sources of roughly equal size:
- New features requested by customers
- Experimental, innovative new stuff that nobody ever asked for
- Fixes and enhancements to existing features
Another way to break up the ticket list would be according to product objectives, for example:
- Stuff that makes life easier for our existing users
- Stuff that would broaden the appeal of the product to new customers
- Stuff that would enable our product to achieve specific business goals, like improving customer conversion rates, customer retention, etc.
I wrote a blog post that describes in detail why we think integration with Google Analytics is important for a Keyword Management Tool.
Sazbean: What other features are on the horizon?
In general we’re looking at the most painful, repetitive tasks in search marketing, and trying to provide innovative new solutions to help make search marketers more effective and productive. Sorry if that’s not the juicy answer you were looking for!
Sazbean: A lot of small business owners realize that pay-per-click advertising is important, but they usually turn to Google AdWords entirely. Why should they use your product?
WordStream takes a totally different approach to PPC campaign creation and management. We help you build better campaigns (by which I mean highly organized campaigns designed to earn high Quality Score) from the ground up, starting with more effective keyword discovery and providing tools to help you analyze and act on those keywords. The keyword grouping features of WordStream are especially powerful. They really make a huge difference in terms of how profitable your PPC advertising can be and how long it takes to organize a campaign. (And these features are incredibly useful for SEO as well.)
Sazbean: Electrical engineering to software to product management to marketing. Sounds a little like my own path. Why the change from software to the marketing side?
In college I did internships in various electrical engineering jobs – I worked in an industrial power plant and even a copper mine! The nice thing about software is you don’t have to work in noisy, dirty factories or dark underground mines, and wear helmets and safety boots to work.
But because I’m not a very good software developer, I decided to focus on software marketing and product management.
The best career advice I have for people is to specialize in something that they’re both good at and excited about. It seems pretty obvious, but I am always surprised by how many people don’t understand this.
Sazbean: You stepped down from the role of president and CEO in 2008 to go back to marketing and product management. What is the allure in marketing and product management?
I have a lot of respect for company founders who invent an innovative product and can turn it into a successful business as president and CEO. But I personally view the role as more of an organizer, whereas marketing and product management are more about idea generation. I think they take different breeds, and I’m definitely the latter.
Sazbean: Thanks, Larry!
- Review: WordStream’s Free Keyword Tool
- WordStream Adds Free Keyword Grouper & Keyword Niche Finder to SEO PPC Tools