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Erica teaches people how to build inspired and successful businesses ever since starting her side business, a web hosting company at age 20.

She went ahead to grow that business at over a million dollars per year in revenue with no investors and hardly any marketing.

Since then she sold that company and is growing another phenom Whoosh Traffic.

We’re going to hear Erica’s story.

We’ll find out how she was able to do so much in a such a short amount of time and perhaps we’ll be inspired to create our own successful business.

[buzzsprout episode="24985" player="true"]

Resources mentioned:

• Guest Post Secrets – Erica’s AMAZING resource on how Guest Blog Posting can shoot your blog from obscurity to the A-list.
• Whoosh Traffic – Whoosh Traffic helps you rank better on search engines for keywords people search for every day, so you can get leads and customers effortlessly.
• Erica.biz – Erica’s ESSENTIAL business blog about how to build an inspired business.

Transcript of the Erica Douglass interview (Erica.biz).

Bolaji: Erica thank you so much and welcome.

Erica Douglass: Thank you. I’m happy to be here.

Bolaji: I really appreciate your time. I love your blog. I’ve got to say first and foremost that not only do you give excellent business advice but your personality sort of shines through the blog. We get to feel basically what you’re feeling as you’re going through the ups and downs of creating a successful. Why is it that you chose to take that approach to be so open with your writing?

Erica Douglass: That’s a great question. I really enjoy showing both the good and bad pa rts of building a business because I think it’s important to be true and honest with everybody who reads my blog. It’s not all roses. It’s not the easiest thing in the world. It’s not something that you’re going to start and tomorrow you make a million dollars.

I feel like there are too many blogs and people out there who only want to showcase all of the really good stuff. As soon as something amazing happens then they talk about that but they don’t talk about the day to day where things can be rough. They can have employees that don’t work out or they can have frustrating customers. I like to show both sides. I like to show the good and the bad.

Bolaji: One thing that we’re sort of fascinated in our culture is the concept of overnight success and like you said a lot of people won’t talk about the struggles until they make it big and then all of sudden oh they just appeared on the scene and they’re awesome and all this type of stuff. You actually had phenomenal success with your first company, your hosting business. How was it that you were able to enter such a hyper competitive market, the hosting market and actually not only grow a profitable business but become a wild success?

Erica Douglass: I think it’s all about the people that you know and the relationships that you have and keeping in touch with people over long periods of time and finding the right people who are going to be your customers is really key. In my case a lot of my hosting business came from people I knew or people I had met at meetups, at tech meetups, conferences and also actually the other good part of our success was really good search engine optimization because I’ve been in the search engine optimization industry since 1997. I’ve been in paid SEO for a long time and that was about 33% of our business. Then of course once we had our customers we’ve kept them really, really happy and they refer more customers to us. That of course was the other piece of it.

Bolaji: I had an experience recently where I had a technical issue with my hosting company. I was trying to get in touch with them and they don’t provide phone support. As a matter of fact they don’t provide chat support either. It was madly frustrating that an issue that should have taken perhaps a few hours to resolve took over a week.

I can appreciate having a hosting company that has a human face behind it and human interaction. In fact on your site Erica, there’s a video clip of you talking about how you turned a one customer into a $7,000 a month client all from just sending them a single email. How did that happen?

Erica Douglass: That’s true. This was back when techcrunch was first getting started and was just a little tiny blog documenting things that are going on in and around silicon valley. I noticed on techcrunch that there was a post about their business. I was reading the post and I thought that name sounds really familiar. The person who’s the CEO of that company. I looked up in our customer database and sure enough he was a customer of ours but he had one server that was $79 a month.

It obviously wasn’t hosting that company. I sent him an email. I didn’t pitch him right away. I just said hey congratulations on being featured on techcrunch. That’s really amazing and should you need any hosting for your new company and I mentioned the company name that he had talked about on techcrunch. Let us know. We’re here to help and that is pretty much all I said.

Then he emailed back he said actually yes we’re hosted at this giant hosting company name you would recognize. It’s a terrible hosting company too and we’re not really satisfied with their level of support and service. We really could use a new hosting company. He wanted a quote on some services. We gave him a quote and it turned out he became a pretty large customer of ours.

That was one way to convert and that helps because it wasn’t a cold email. It was somebody I already had a relationship with. It was just the point of being able to say okay first of all recognize that this guy is a customer. A lot of people don’t even know who their customers are.

I think a lot of people run businesses and if they see their customer mentioned somewhere else I don’t even know if they’d know that that was their customer. They don’t really pay attention to that stuff. Then saying hey we’d like your business but not really pushing it so hard, just basically saying hey it was really cool to see you mentioned here. If you need something let us know. Of course a lot of times nothing is going to come out of that. People are going to say oh no I’m really happy with who I have now but in his case we already had the relationship.

I recognized his name and I complimented him on the techcrunch article which meant a lot to him because wow, somebody from the CEO of his hosting company. I mean can you imagine the CEO of the giant hosting company that he was with at that time doing that. No way.

Use your smallness as an advantage in your business. Make your business personal by sending your customers personal emails, giving them personal phonecalls, etc. I think a lot of people tend to shy away from that. I don’t. I embrace it.

Bolaji: That is definitely unusual. I like the fact that you pointed out that nothing may have come of that. I think often growing entrepreneurs want to only try the things that have a high likelihood of paying off. You just kind of did it whether or not you’re guaranteed getting business out of it.

Erica Douglass: Do you want to know a funny thing I am doing in that same vein right now? I know we all get these emails especially if you’re a blogger and you have a blog. You get these emails from people and they say things like I want to post a link on your site. I’ll pay you $20. I want to post an article on your site. I’ll pay you to host an article. I’m now writing all of them back every time I get one. I use to just delete them but I’m having fun with it now. I’m writing all of them back. I’m saying hey I bet your run an SEO company. Did you know that my company works just like yours and we do linkbuilding?

Bolaji: Oh my goodness.

Erica Douglass: I’m sending at least one of these a day and I haven’t gotten anybody to be a customer yet but it’s so fun for me to actually like have something to do with those emails instead of just deleting them. It’s really funny I did send one of those yesterday. Some guy said I want to pay you to guest post on your site. I said hey we’re an SEO company too. I totally just pitched him on our service. I said a lot of SEO companies use us. He said oh we’re really who we have.

Bolaji: Yes one for the good guys. I want to hear a little bit Erica about maybe some of the struggles that you had on the way to growing to a million dollars in revenue for your hosting company. Where did you sort of stumble and how were you able to keep on going?

Erica Douglass: I think first of all I should point out that it took six years to get there. Too many people want this to happen right away. Our society is so focused on instant gratification. It just amazes me. I’ve watched so many people say okay I’m going to start a business. I’m really going to do it. I’m really inspired by your story and I say to them great. People email me with this kind of stuff a lot and I say great. That’s awesome. I look forward to seeing your business and then nothing ever comes of it. I find out later that oh well I spend a month on it. I didn’t make any sales so I just quit. Wow 30 days that’s it.

It took six years for me to grow my business and it took about three years for us to have our first six figure revenue year. It wasn’t a money maker right away. In fact when I started the business I just wanted it to make a couple hundred of extra dollars a month so I could basically pay off some of my bills that I had. I used to joke with my friends that if it paid off my cable modem bill, my home internet access bill which was like $50 a month then I would be very happy. It took so many years of growing the business to get to that point. That’s the big thing that I want to emphasize to those people who are just starting out. Of course it seems like it would be a great fun to start your business but in a lot of cases it’s not going to make a lot of money for quite a while or you’re going to have one sale and then you’re not going to know how to repeat it.

That is actually kind of the point where we’re at with Whoosh Traffic right now. It’s actually making a lot of money. In its first full year it should do six figures which is amazing compared to my hosting company. I’m very excited about that. Now we’re in the point with Whoosh Traffic okay we’re profitable and we’re ready to grow and we’ve got to now figure out a consistent way to get customers time and time again. We’re in this very interesting phase where we’ve got a solid base of customers. We’re profitable on the money that we’re spending right now. Just barely but we’re profitable. That’s cool and how now do we get new customers.

That is a phase that probably every business goes through where you’ve got your first round of customers. They’re doing really well now how do you replicate that and scale it? That’s the kind of thing that you know you have a solid business because it’s making some money every month. It’s probably doing well enough but now how do you grow it? I think I’m going to be writing a lot about that on my blog this year because that’s a very important stage of your business. It’s also the stage that I’m in currently. I want to talk about a lot about what’s working and not working in that area.

Bolaji: Erica I noticed there was a post on your blog recently about a young man, a 16 year old entrepreneur who’d written some code. Unfortunately I can’t remember what his application was about but you had advised him or counselled him that he wasn’t thinking big enough with his idea. It was a good idea. He just wasn’t thinking big enough. Could you talk a little bit about entrepreneur sort of needing to plan a business that is going to support their lifestyle and their aspirations versus just wanting to do something intermediate. How do you and why do you even think big?

Erica Douglass: That’s a great question too. I think a lot of people think really small with their businesses. This guy is a great example, very, very intelligent. I mean 16 years old. The kid just blows my mind on a regular basis because he’s coming out with stuff. he’s shipping as Seth Godin would say. He’s making products. He’s selling them. He’s making money. He’s making gobs of money for a 16 year old.

Bolaji: Sounds good so far.

Erica Douglass: Yes but I wanted to encourage him to think a lot bigger because he’s selling stuff and he’s selling it for like $10. It’s something where it’s kind of a niche market to begin with. It was actually an editor for wordpress that puts your, I don’t know how to describe it. It puts like a black screen on your computer so that it’s just showing the editing window and not showing all your other windows in your computer. You don’t have this visual clutter to distract you from writing. Very cool idea, I like that idea but it is kind of a niche market because I think the people who would be interested in that are mostly professional bloggers and professional writers. People who are going to be writing in there a lot and people who don’t like word press’ default editor. You have to reach them somehow. You have to figure out how to find these people. Maybe on the problogger site, maybe on some forums about blogging and there’s a lot of work involved to reach out to this people and say hey try this product. Then all that for a $10.

Bolaji: Right. I see your point.

Erica Douglass: It’s a lot of work for very little return and its fine as a sort of proof of concept. It’s excellent if you want to get a job programming and you say hey here’s my concept that I really know what I’m doing. Then you’ve got this editor that you’ve built from scratch. I think that is a really cool thing as a resume builder. However as a business I think it will be very challenging because you’re just going to be doing a lot of work for a very little money. It going to be hard for you to attract sales people or affiliates because they’re going to want a percent of every sale. What are you going to do? Hand them a dollar for everything that you sell. Then you’ve got credit card fees on top of that which eat another 50 cents or so of your $10.

I encouraged him to look at businesses that you can charge more than $10 for a product where you can make an equal amount of work for the sale but then it’s a $200 sale or a $500 sale because then every hour that you put in to really working for your customers is really worth it. Now you’re saying okay I’m going to spend three hours going after this customer but if I do I get a thousand dollar sale out of it. I don’t have to do any additional work for that thousand dollar sale. Then it because profitable for you to pay sales people. Then the sales people get really motivated because let’s say instead of $1 for a $10 thing they make a $100 out of a thousand dollar sale. It’s the same percentage but they’re making a lot more money and they have to do a lot less work.

Bolaji: Erica I want to kind of get into the mindset though because one challenge I think a lot of entrepreneurs have especially if they haven’t had that first hit is that there’s this psychological barrier that says if I charge too much, if I charge a premium I’m going to be shutting out a lot of people who might otherwise have purchased. How do you get beyond that?

Erica Douglass: That’s a great question too because I think that is biggest fear that people have when it comes to charging more is oh well a lot of people are going to push back on me and say we can’t afford this. When we started Whoosh Traffic we created a beta test plan that was $79 a month and it was about a little more than half of what you get for our $200 a month on our service. It’s pretty much the same price per backlink but it was a $79 instead of a $200 thing.

We found that two things happened with that. First of all we couldn’t provide the service that we really wanted to provide because we just weren’t making that much money on every customer. Secondly our customers weren’t getting the results that we expected. We decided as a team to get rid of the $79 a month plan and make our minimum plan $197 a month and then do double the backlinks of the $79 a month plan. The $79 a month plan was basically to test out our service. It was a really, really good test for us because we got I think 25, 27 people to sign up at $79 a month. It was a pretty substantial amount of customers to just test out our service.

We noticed the $200 a month customers at $197 a month with double the amount of backlinks are getting much better results because they are putting more backlinks towards the same keyword toward their website and they’re getting amazing results for that. I think that is a huge thing that basically our customers are getting better results and yes they’re paying a little bit more but now we don’t need as many customers to survive. There are always going to be people for whom anything is too expensive. The fear is that you’re going to cut of people that you want to have as customers. People who are nice to you. People who are your friends and I hate to say it but every business that I’ve ever run my friends aren’t my customers. It’s not a slight against my friends and it’s not a slight against my businesses it’s just the fact is that most people who are your friends aren’t going to be your customers unless you’re apple or amazon.com.

I guess if you’re just bizzos and your friends don’t buy from amazon.com. You could kind of take that as a slap but in my case most of my friends didn’t want to buy premium $200, $500, a $1000 a month web hosting packages. Most of my friends don’t want to buy $200 to $1500 a month SEO packages but there are plenty of business out there who will buy those sorts of packages and not only that but you can prove the ROI with it. You can show them that this is very valuable for them. We have in fact have a lot of businesses that are spending $500 to $800 a month with us and they’re getting results in Google PPC would have cost them $3000 a month.

One of the things I want to do with my website is put up some case studies that show what are our ROI is versus Google pay per click. With our service what you do is you pay for it monthly then you get up to number one and then you start getting huge amounts of traffic and sales. So that’s the kind of thing that I just don’t think it’s worth worrying about. I think that if your friends or your customers, they’re probably not great customers anyway. Your friends tend to expect more and want to pay less than everybody else anyway. It’s no slight against anybody but it’s just the way it is.

Bolaji: That’s hilarious and so true. I never thought about it that way. Now Erica there was an interesting period in between selling your hosting company and actually starting Whoosh Traffic which looks to be like another success. People not looking that closely might think man Erica just has it all together. Everything she touches turns to gold. Every idea she picks makes money. What was it like for you selling that first company and how did you find the idea for Whoosh Traffic?

Erica Douglass: I feel like it’s been more than three years since I’ve sold my company. It’s been about three and those three and a half years I took a year off after I sold my company but I started my blog in that time period. It wasn’t really even a total year off. It was me writing a blog and trying to figure out what people wanted. Oh man I felt like I’ve been in six different businesses. I started this thing when I was interviewing successful entrepreneurs. Kind of like what you’re doing with me and I was selling those. That worked out pretty well but it was like the same kind of thing I am talking about with the 16 year old kid where it was a lot of work for very little money.

Then I did some info products. Last year was the whole thing where I wanted to launch ten products in a year. I got seven of them launched. I think I got six of them launched. Then Whoosh Traffic originally started out as Parnell. My co founder and I were building out a blogging social network, a social network for bloggers and that was called bestblogs.net. That actually got off the ground. We launched that a little over a year ago and what happened then was we realized it just wasn’t going to make money quickly. We had a monetization plan. We had a revenue plan. It just wasn’t going to make money that fast.

Then in June of last year I’ve heard of this product called profit instruments which teaches people how to make little niche websites and make money with them, very, very popular sort of product to sell online. I’ve been thinking about making my own products in that area actually. As part of profit instruments they showed this backlink building method, the same thing that we’re using for Whoosh Traffic and they said oh you can hire somebody on Odesk to do this and I ended up hiring somebody. It was kind of expensive and kind of tedious to hire it all out on Odesk but I was seeing amazing results.

I thought well if it’s tedious for me to do this it’s got to be tedious for everyone else. So I told Parnell I want to build something where people can hire this sort of thing out but they don’t have to manage people to do so. They just like type in a couple of links and keywords that they want and then they go from there. That became Whoosh Traffic and that took off like a rocket. We are making after month number four we were already at the $10,000 a month revenue level. That we realized that was going to make money quickly as opposed to make money slowly.

Now we’re rolling out more services. We’re about to launch, actually you probably don’t even know this so you get to be the first to know. We’re launching rank tracker. Our new service that shows you your Google rank over time and that’s a monthly service. That will be at ranktracker.us. That will be up within the next week. Hopefully it will up tomorrow we’ll see.

Bolaji: It’ll be up by the time this is live.

Erica Douglass: Ranktracker is awesome. We’ve been testing this since October of last year and we’re now ready to launch that live. Then we’re launching an article marketing service next month where we write articles for people and submit them to article directories, another popular thing that people wanted. That was based on feedback from our Whoosh Traffic customers as to what they wanted. Now we’re really rocking and I’m very, very excited about all of this stuff that we’re launching but it took a whole lot of time. I feel like it took forever. Three and a half years since I sold my business and I hadn’t really done much of anything. I hadn’t really made a whole lot of money online since I launched my business here. I was touting the fact that I had sold a million dollar business and I think made like about $45,000 from my blog in 2010, something like that $50,000. It wasn’t a lot.

It was good income for most people but for somebody who had recently sold a million dollar business I didn’t feel like it was good enough for me. That’s just me holding myself to ridiculously high standards but now this year I think we’re going to do amazing stuff and I feel that I am in the right place since I’m starting a company again instead of just writing a blog and selling info products which I found I’m going to do more infoproducts this year and I’m going to sell them but I found my passion was really around building another service business. I feel like this took me forever like this was this really long journey but for most people it probably looks like hey I sold my business, started this blog, made a bunch of money and then started a new business. For me that was three and a half years.

Bolaji: That’s funny though how many things you’ve tried and figured out very quickly that they didn’t work for you and then you moved on to try something else. I had the opportunity to work at a few software companies that were open source companies and there’s this saying in open source software fail early and fail often. I think on the one hand you epitomize with your hosting company the stick to it iveness. Being able to stick with an idea until it succeeds but then on the other hand when you pick ideas that didn’t match I guess your lifestyle goals and aspirations you very quickly realize that and shifted gears.

Erica Douglass: Very true. I think that it’s all about finding something that works for you. I’ve got to tell you so many people I see they’re like whoa I’m not going to start a business until I have the perfect idea. I’m like look at me. Everything is a ridiculous idea, the interviews. I did a blog. I did advertising on my blog. I did membership’s site. I did infoproducts. I did all those crazy stuff and absolutely none of it really took off until I started another service business which and I think it’s not that those were bad ideas or bad products or any of that stuff. I think it was just that this was where my passion is.

That is really big difference for me but I couldn’t have done this by sitting on my butt and waiting until I had the perfect idea and start my business. I went out and found a cofounder to what I thought was going to be a social networking company that turned out to be an amazing service business and Parnell, my cofounder and I get along so well. We’re great friends. He and his girlfriend and my boyfriend and I we hang out and it’s fun but I think that I couldn’t have done any of that had I still been sitting around at my desk going okay I’m just going to wait until the idea shows up at my door.

Bolaji: Yes. I’ve got to ask one more question and folks Erica has to get to another meeting. This is not as long my interviews typically are but it’s already been chock full of amazing insight. Erica I’d like to leave people with something actionable that they can do. For folks who are perhaps where you were before you started your hosting company or even before you started Whoosh Traffic.

They have an idea. What steps do they need to take to breathe life into this thing?

Erica Douglass: I would say stop waiting and take action. If you don’t know how to build a website and you’re waiting until you have the money to hire a developer try building something, try getting word press setup on your site. That’s pretty easy to do. Then setup a theme. Pay for $50 or a $100 for a premium theme if you want. Set a theme. Get a site up. Get an optin box in there and start asking people what they would pay and whether they would like that. I never like asking necessarily what would you pay for this. The answers are usually pretty low. Well I’d pay $10 for free meals for a year. For that diamond jewelry you have there, $5.

Be careful with taking that question too seriously but ask your potential customers questions and get out there and start selling something because once you get in that mode of having a successful business and selling something then the right things will start to happen for you but if you don’t take any effort and put any time into it. If you are waiting around for the perfect idea or you’re waiting for more money so that you can hire somebody to help you. I’d say just go for it. Learn the stuff as you go. If you don’t have any money use the time that you have. If you don’t have any time use your money to hire somebody. If you don’t have time or money then you’ve got to start looking at how you’re going to make some time in your life, getting rid of TV, stopping some of the TV that you watch. Even hiring out something like housecleaning so that you don’t have to deal with cleaning your house or mowing your lawn or shovelling snow. Get that time available there.

I recommended to a friend of mine recently, he was doing this really cool thing where he was working for a charity on the weekends and he wanted to start a business. I said give up your charity work and he said no that’s really difficult because these people need me and its charity. I said listen if you really want to start a business and this is the only time you have because he didn’t have any other time that he could give up. I said then you’re going to have to make that tough choice. I said you can always come back and do the charity later. Now I know that that answer will not necessarily resonate with everybody. They would say whoa it’s really noble that he’s doing the charity thing and it’s really noble that he’s giving back. I completely agree with that but if you realistically if you have no other time. This guy doesn’t watch TV. He’s not out there like sitting around watching American idol or anything like that.

If you really don’t have the time then you’ve got to make some tough decisions and those tough decisions may include giving up something that you love, that you’re passionate about, that helps other people in order to start your business. That will also be something that you love that helps other people that helps you improve your life. Those are the tough decisions that you may end up having to make but before you do that give up TV. What I did was, I didn’t want to give up TV completely so I gave up watching like 60% to 70% of the shows I was watching before. I just stop watching them. Now I watch very few shows and most of the shows I watch are entrepreneurial.

That’s the kind of thing that I would recommend. Start out with making some time in your life for your business. Make at least ten hours a week because if you don’t have ten hours a week you’re never going to create a successful business. It would be very difficult to create a successful business on less than ten hours a week of work especially in the beginning. So that’s what I got.

Bolaji: Don’t hold back now Erica. I want you to really let it out. Man this was a reality sandwich between two slices of inspiration.

Erica Douglass: I love that.

Bolaji: This was amazing. Erica thank you so much for your time. I really enjoyed this conversation.

Erica Douglass: Thank you so much and I really appreciate you for having me on.

Bolaji: Sure thing. Erica Douglas thrives on teaching others how to create and run inspired successful businesses. If you’re not inspired after this interview there is no hope for you. You can find Erica at erica.biz. Erica thank you again.

Erica Douglass: Thank you so much. Have a good one.

Bolaji: All right folks we’ll see you on the next one. This has been Bolaji on the day before overnight success podcast. Bye.

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