Ben chats with Seth Rosen about building membership and subscription-based businesses and finding members you are uniquely positioned to serve.
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- Intro Episode: Welcome to the Indie Media Club
- About the Indie Media Club podcast
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Ben Aston Welcome to the Indie Media Club Podcast, I'm Ben Aston, founder of the Indie Media Club. We're on a mission to help independent, bootstrapped media entrepreneurs succeed, to help people who create, promote, and monetize through content. Do it better. Check out IndieMedia.Club to find out more.
So today, I'm joined by Seth Rosen, and Seth is a real estate broker, turned investment banker, turned something else. We're going to talk about that right now. But Seth likes rocks especially sparkly gem kind of rocks. I'm going to find out why in a minute.
But he bought his first Web-Based business back in 2008. He managed to grow it to a couple of million, then raised 30 million of venture capital money, ended up selling it, buying it back again. All kinds of fun things happened. And he created this business called custommade.com that we're going to talk about. But on the site and as well. And we're going to talk about this, too, he managed to create two online communities and build a subscription-based membership business. So that's what I want to dig into today. So keep listening to today's podcast to learn about how to build a successful subscription-based membership business. But thank you Seth so much for joining us today.
Seth Rosen Hey, thanks for having me. I appreciate it.
Ben Aston And I want to go right back to the beginning because this is an interesting evolution, real estate to investment banking to get a raising venture capital to buy business and then sell it and buy it back.
What was going on back there and what kind of what was your inspiration, I guess, for getting into the world of rocks from real estate?
Seth Rosen Yeah, I mean, it was kind of an interesting journey. I, I started, I think, as you mentioned, I started my career as a real estate broker during college. I had a scholarship to go to BU here in Boston, an outside scholarship, and that paid for my school, but it didn't really pay for anything else. So I needed a job and I started renting apartments and after that stopped, it was sort of time for me to do something different, kind of time for me to go out on my own and sort of pursue this entrepreneurial dream that I had and that I ran across this website CustomMade.com. It was run by old Website really old crappy Website started in 1986 by this guy, Ted Weitenkraus in western Massachusetts, who basically built the Website to teach himself how to build websites.
And it kept coming up in search and had a few hundred fine furniture makers on it and we reached out to Ted, Mike and I were like, we'd like to buy your business. And so we bought it. And initially we turned it into a subscription business. For makers, our initial idea was, let's create a custommade.com Should be custom, any custom, everything. So that's why we don't write. We built a listing service for all kinds of makers. We expanded it from fine furniture to include other types of makers of jewelers, woodworkers, metal workers, glass workers, etc, built a pretty small but somewhat break-even business. And we had this idea that we needed to raise venture capital to build a big business. And that's what we did. And we turned it into what it is now, which is the world's largest online custom jeweler. So instead of standing between the jeweler and the customer, we became the jeweler.
And that's where we're an online jeweler.
Ben Aston And so, I mean, that decision to pivot into custom jewelry, is that because I mean, now you've launched these memberships for around jewelry and gems. Is that something that was always a passion for you or just something that, as you saw what was working within the original custommade site, like the margins were better for you on those? Or how did it how was it that you decided on sparkly rocks to be the focus of this?
Seth Rosen Yeah, yeah. So it's almost like an interesting side story, right? I mean, one of the key learnings from CustomMade Version one is we bought an old shitty Website. Can I say Website on here?
Ben Aston You just did.
Seth Rosen And what did we do? Right. I mean, we had the germ of something very interesting and we sort of built something else on top of it. And in 2013. So I was interested in gems for a while. I've been a gem collector since 2009-2010. And in 2013 I was a member of the International Gem Society, GemSociety.org. And I was on his email list and I think I paid like twelve dollars a year to be in the sting. And he emailed out the membership. It was like I'm retiring. This guy Don Clark who has unfortunately since passed away.
You know, the membership was like, look, I'm looking to get out of this thing. I'm looking to retire. Does anybody wanna buy it? And I suspect I don't know this for sure, but I suspect I was the only person, you know back.
And if you saw the website, you'd realize why. Right. You kind of needed. I don't know what the best way to put it is, you needed a lot of vision, but there was a lot there.
He had created a lot of content. It had been around for a long time. The content was very good.
And I had some experience, buying on Websites right? And especially authoritative websites where someone had spent a lot of time, put a lot of passion into making them cool. And I just want what he did was awesome. And I was like, I'd like to buy this from you. I think I can take it to whatever its next version is. I think I can do something with it. He was like, Yeah, great. And he's.
Ben Aston How much did he pay for it?
Seth Rosen Twenty-six thousand two hundred dollars. When I asked him, I was like, how much do you want for this? Of course when the first thing you ask. Right. And he's like twenty-six thousand dollars plus a two hundred dollars fee to wire them. And it's like the guy didn't have analytics installed like I knew the Website because I used it right. But there was no information. Like it's like one of those. You ever see that show storage wars. It's like you know, he's like twenty-six thousand dollars. I was like, yeah, Website own it. So that was the purchase price. You ask someone how much something costs and we have a number that's specific. You don't want to negotiate with that person. That's a mistake. I learned.
So I was like great souls and yeah, we've been building it ever since. It has grown tremendously but it's still my hobby. Like we spend money on stuff that objectively, if I tried to sell the business to someone else, it's proven very beneficial. But it was not a strategic decision. It was a passion decision. What we spend money on, we spend money writing about. We just wrote the world's largest article and treatments. And this guy, Jeffrey Berman, Clarizen, is right, I don't know how much we spent editing this publishing. Crazy about me. I will never get my money back from us ever in a million years, but it's just awesome. It's just amazing stuff. I love it. So and here's what's funny. It's been the same strategy since the beginning. But because I'm willing to spend more, I'm concerned because it's because I collect the content. People started citing us, the Guinness Book of World Records is calling it, and like, hey, this person says the world's largest movie is this whatever. Can you verify it? It's like, do you have the wrong number? Like the right? There's the international gem society. Right? We got your guy at Caltech said I should call you. It's like someone at Caltech knows who I am. Like what? But it's crazy, right? And so it's an example, I think, of where a lot of people follow your passion. I think this is a particular example of where what do we do. Right.
We proved is if you focus on being actually being authoritative and creating unbelievable content in your niche and making sure it's fantastic content.
It works, but it's not a two-week strategy. It's a 50-year strategy. Once you have it, it's very difficult to unseat.
Ben Aston So how long have you owned an international gem society for then?
Seth Rosen So he started it in ninety-nine. I started in 1998. I've owned it since 2012 or 2013. I think so it is 7 years.
Ben Aston And have you tell us about how it's evolved, obviously you've improved. You had a vision for the Website and improved it. And whats the impact being on the membership and the subscriptions?
Yeah, the subscriptions grow every year. I mean, it's amazing.
And so what I think is interesting is I've learned a few tactical lessons to you about membership sites, which I'm happy to share. It seems like it might be interesting to your listeners, but.
My theory is, how do we sell a membership? That's what I always like about it. Now I'm saying when I was a member, right, I liked that Don published a really good premium content. And it was so cheap, it was always so cheap, it was never like I never had to think about it, right? It was. And that's what we went for. So. 75 dollars for a year and we must publish a hundred top-tier articles updating price guides. I mean, there's so much value on the site for seventy-five dollars. And if you ever lose interest in gems you should just be a member of it like and that's exactly what we go for. If you have to think too much about it, like it's like that's not for us, not thirty dollars a month, just make it.
Seth Rosen I don't want to call it cheap. That's not the objective, but wanted to add a ludicrous offensive amount of value. I want you to feel like you're stealing from me because it's so cheap.
Ben Aston Yeah, I have. How can you tell us how many subscribers or members you have?
Seth Rosen Yeah. I think we posted the site like thirteen thousand or something. Something like that. Now it's a little skewed because we. At one time, we had three memberships, and so probably 4000 or 5000 of those for free membership. So what do we have, maybe six thousand members or. I don't know. I can probably tell you, but it's certainly.
Five five thousand members anyway, five, six thousand members anyway, retention's very, very high, and every year our budget for content just keeps going up and that makes it harder and harder to unseat us like no one else in this space is willing to spend hundreds of thousands of dollars a year on content.
Ben Aston I mean, you've got an e-comm business with custommade.com and you've got a subscription. You've got to because you actually have two membership sites. What you love and hate. When you kind of think of the two side by side, it seems like the membership sites are very much passion-driven. You love the content anyway. You love investing and producing content for it. But when you kind of assess them side by side and obviously you decided to get another membership site. So you clearly love the model. But tell me about what you love and hate about the model when you're comparing and thinking about an eComm business versus a subscription business. The very two very different things. One, you're holding lots of stock, you're thinking about SKUs and you know, you're selling. I mean, that's custom jewelry. That's a lot of yeah. There's a lot of moving parts with that, whereas a subscription business obviously producing lots of great content that people think is worthwhile. But what do you love and hate about both of them? And I'm intrigued that you're running two very different business models side by side. And how do you see them kind of complementing one another?
Seth Rosen Yeah, I mean, in some ways they do. They complement each other. It's different ownership structures. My wife and I just own the membership businesses. I mean, we bought them when they were microscopic and they've just grown as we've run them over the years. So they're really just personal investment of recent mine, whereas custommade is much, much larger business with candidly a lot more scale potential. It's there. They're very mutually beneficial solely because one gives me fantastic context on the market opportunity for the other. So, you know, it happens that custommade is extremely strong intelligence color gems because I know a lot of about color gems. I understand the market really well. We have lots of sources and things that other people have a very difficult time picking apart because it's quite a complex and opaque market. There's lots of little things like that. And they're more founder, they're more founder, fit oriented than they are like this business sense business to the other business. There's a little bit of that, but not that's not the primary motivator. It wasn't even really a motivator for me.
It's more it gives us a lot of context on different aspects of the market in terms of the model. It's not so much that I love like subscription or I love eComm like.
It's more about model like model and customer match, you know what it's about for me, right?
Like I think IGS is a membership model, not because I was like a membership model visionary. It was more like Don ran it as a membership is as he didn't do a particularly great job on the membership aspect of amazing job on other things. And I was like, wow, the membership is this is like the undiscovered value here. Like we should just be building out. We should be taking the germ of what he did and make it into something that works and how everybody gets it gets. Whereas with CustomMade, I mean, it's a very different business. We make everything for each customer fully from scratch every time, which on the face of it should actually be a very bad business.
But we've figured out some really interesting ways to do it. And it's that's been a lot of fun. But that's, again, much larger business, eight-figure business trying to get to be a nine-figure business, whereas gem society is like, you know, if we could get to be a seven-figure, seven-figure business, we'd be that's perfectly fine. Just if you can put more money into content, we're not I'm under no illusions that gem society will keep me in the lifestyle to which I've grown accustomed unless I was willing to kind of gut it out and stuff like that.
Ben Aston Yeah, and so, I mean, you mentioned a few tactics in terms of and I think what's really interesting is that, yeah, you've invested heavily in content and that has been and what the impact of that is that you've seen really high retention rates. You're trying to give people amazing amounts of value so that they'd be stupid not to keep their subscription going. But, yeah, tell us over the years, as you've seen or as you've evolved, that membership offering what's worked and what hasn't worked?
Seth Rosen I think. Monthly memberships for at least for my Website and never really worked that well, and even if I charge more like I just find monthly members for me at least, tend to be very, very transactional. They want one piece of information. They want to read one article. Yeah. And I'm OK with that. We do still offer monthly plans.
But, you know, it's interesting, like we if you look at my support costs and you look at the distribution of my support costs, annual and monthly memberships disproportionately monthly. If you look at the churn of members, insane relative to if you look at engagement level with the platform like yearly. So it's like I, I have often thought I might even eliminate monthly altogether. It's still profitable for us. It's just do I want it? Because really what I want is it's meant to be for people like me, love gems like if you want to pay nine dollars to get some pricing information on something you inherited, like initially that was my idea, right. That people would want to know what a sapphire's worth. They'd pay nine dollars just to get access to that page and then they would churn out. And that's fine. I made nine dollars that I wouldn't otherwise be. Now we have enough money where we've been successful enough that we can start to make decisions. I think about the people we're uniquely positioned to serve. And I think a lot of what I've been doing is starting to push myself to do that more. Right. Like, could I get that money? Yeah, but I don't want that. I want a community of enthusiasts and I want a year to show you that I can deliver you value. And if you're not willing to ante seventy-five bucks for that. And are you that enthusiastic about it, like maybe not. You know, it's not that much money. I mean, it is. I'm not I'm certainly not meaning to put it down, but. It's stuff like that, so I have found it if anyone takes one thing away from this podcast, huge fan of yearly subscriptions, I think that everyone's like, how do I mention the term for insurance? Like, I can guarantee you a 12-month subscription if you charge for a year and give them a discount, and then you have a year to prove your value. And the things that I've found are correlated with retention. You do not need a complicated model to understand. Retention is very there's. One thing that I found is heavily correlated units. Date of last login. How engaged are they with the platform and opening the emails, are they reading the articles or are you throwing a smorgasbord of stuff at them and then trying to figure out postmortem why they didn't renew so I've had a lot of luck with that. So that's one of the sort of things I discovered.
Ben Aston Yeah. And so, I mean, how do you transition someone? Because I think this is a really interesting piece where you're talking about the entry point for many people is a more transactional element where, you know, they want to find out the value of something or they discover you because they know think, OK, well, I can go there and I can get the information I need. But then you talk about a community of enthusiasts. How do you develop someone from being a transactional customer to becoming a community enthusiast? And is that something that your intent being intentional about and trying to facilitate, or is that more of a mindset thing on the side of the customer?
Seth Rosen So I actually concluded that you can't do it. I don't think it's an exercise of taking a person who wants to know, I mean, if you just think about a use case like you inherited your grandmother sapphire ring, you'd like to know what a sapphire is worth. You Google value of a sapphire. Turns out we rank number one for that in Google. You click through you land on our page like, oh, man, I can't see this table unless I pay nine dollars to click. You pay nine dollars. I personally do not believe there is an ascension campaign. There's a digital marketing strategy I can feel to get you to buy a subscription because I just don't think I think that's it. It's an exercise in segmentation and I think that's what a membership site is, like, figure out which segment you're uniquely positioned to serve and serve the crap out of that segment and understand that those customers needs, because I don't think our failure to convert that customer is indicative of anything other than that it's just not an offering that.
Ben Aston Not a good fit. Yeah, and so then if you're not seeing it as a funnel, then for those community enthusiasts, are there any particular tactics that you have found to be effective in encouraging that repeat log in encouraging that engagement? What are the things that how do you cultivate that enthusiasm and that passion for community with your members?
Seth Rosen Yeah. So take a step back at the top of the funnel. It's our ad. It's an attitude around segmentation and targeting. So we do weird's, I would say, weird and unique stuff with our content strategy. So we have the world's best article on Stalarite. Probably don't even know what Stalarite is either. But it's interesting, right? The volume of search around stalarite is basically nonexistent. Right. There are seven people who search for stalarite every week. Right. Or whatever. And some insanely small number of those people are by definition enthusiasts. And that's what's interesting to me, where I think we've been very successful at moving and gaining members and pushing members onto the platform is by investing in content that other people are simply unwilling to invest in, simply by virtue of the fact that the market for that content is incredibly small. But what I think they fail to see is that the segments of those customers are uniquely positioned to consume our particular product. So we invest heavily in this. So the start is we get those people onto the platform and then we onboard them simply by letting them know like this is the depth of thousands of articles, right. This the depth of content you have available, we're going to send you emails. We're going to remind you what type of things you do. We also have mini-courses. We have certification courses. If you really want to take it to the extreme, the mini-courses are all included with our we have a higher tier membership. The pro membership. There's many courses are included. We spend a tremendous amount of money and time making them. They're very good, good, good, good. Premium content.
We try to get people engaged with those courses, engage with our platform, and we try to start with customers predisposed to being an enthusiast. You know, our best customer, the customer we're really targeting is the enthusiast who wants to become a pro. Right, but not a program, not like someone who is like, I want to be a gemologist working in a store. But our target is a 50-year-old woman whose kids are out of the house in college or whatever, finally has some time to focus on herself, has always been interested in gems, wants to learn about gems, wants to go to pawnshops and try to buy gems for cheap or whatever the case may be. Right. That's the person we want to bear hug and get into our membership community and we finally stick around.
They really do.
Ben Aston And do you have a community component you've talked about within your membership? Or maybe you can just talk about your membership and the components you talked about at the pro level. You've got workshops for many courses. What are the kind of? Yeah, how are you delivering that value to increase that repeat log in beyond the creating these big guides? It seems like you produce?
Yeah, it's we've struggled with community on gem society. There's definitely a community. I don't know that people utilize it. It's not the cornerstone of our business community is not the cornerstone of our business, you know, whereas and I do think that's, by the way, the IGS business on Ganoksin and which is another membership, is we have our own manufacturing is the cornerstone of our business in many ways. We're trying to get that site to be from primarily community focused to being a lot more premium content focus and the opposite on IGS move to get from premium content over to community. I think the challenges that. It can be quite tough to develop these niche communities, as you hear, very nice way better than I do because there's this funky bias the people who are just starting out or really there to consume information from people who are quite experienced, people who are quite experienced, are there to only interact with other people, requite experience. They will certainly respond to folks who are less experienced. But, you know, if there is a big chicken and egg problem in a community, that makes it a uniquely difficult to scale. But it's happened organically. But I would not it would be disingenuous of me to suggest we are a fantastic gemology community. I don't think we are.
Yeah, but we're going to work on it.
It's an area of improvement.
Ben Aston Yeah. And so when you're I mean, you've got two membership sites, you've got gemsociety.org and ganoksin.com when you're kind of a big picture, kind of I guess bottom line. What's the most kind of important metric for you when assessing the health of those membership sites? Is there one particular metric? I mean, you talked about the importance of last login, but ultimately, what are you what's the number, all of the metric that's important to you?
Seth Rosen Yeah, I mean, if I have like I think the key metrics are I mean, obviously gross profit. We don't measure net profit because it's very difficult to use that profit is because so much goes into new content generation, etc. If you wanted to measure net profit, you would not be behaving the way they were behave. They would drive our discretion, whatever you want to call it, by not investing so heavily in the platform itself. So we gross profit churn. Obviously, we certainly measure what like what our retention is. Traffic is the secret to our success it's not a secret. We have thirty thousand sessions a day and climbing from organic search and our SEO strategy is stupidly, unbelievably simple.
It is expensive, but it's simple and it is I don't think I'm even a member anymore, like SEO Moz or Ahrefs like I think they're all great tools. But our strategy, we don't even need it. Right. It's super simple. Like there are we are in the lead for virtually all the terms that are shorter tail that we wanted to be in the lead for now. There's a whole suite of other terms that we just don't have the content for. And so we have because we're not willing to just spread out a bunch of crappy content like peanut butter. So we have to put out the world's best content on any given topic and we can't make mistakes, which means everything gets edited multiple times. So we can't do volume. But the stuff we push ranks really, really well. And when we're looking to evaluate what we might want to write for is my SEO strategy funded by Google. I spent years on SEO, it's really simple. If you want to know what is most relevant to a searcher for any given term, just look at what currently ranks. So that's true.
Is it a perfect proxy? No, but it's I think it's the best proxy, right? The best proxy is what Google, who's a better arbiter of relevancy than you or I will ever be, has said these are the three things that are most relevant to the person who's searching for this. And you can look at what those pages have in common and figure out how you can do something that's better than what's on all three of those things. And generally, it's pretty obvious what it is about those three pieces of content, this response of the court. If the person says, what's the birthstone for January? And you look at what, that's going to be very clear why that thing ranks number one. Right. And the thing that ranks page two is also pretty clear. So we have a privileged position in our domain. Authority is awesome. So whatever we publish will rank. But the way we maintain that is by publishing the very best thing that's more relevant than the four. None of this is new. I'm sure many of your listeners. But I think it could be instructive to hear that we've got our whole business on this premise now.
Ben Aston Yeah. And so you're focused primarily on content. Link building doesn't play a part in what you're doing.
Seth Rosen Never build a link in my life. Never asked for a link. Never asked you. I think maybe five years ago I was like, you should reach out to some of these rock and mineral associations. But now I wouldn't even know how to build a link. Like we don't do guest posting. We link out to people who provide us content. It is specifically useful to the topics we're covering. So if we need a picture of stalarite in its rough form and you have that picture, great news, you're going to get a link from a high authority Website. But if you reach out to us and you're like, I'll pay you three hundred dollars, put my leg on a page, five hundred dollars, thousand dollars, there's no amount of money you can pay to put your link on my side. You either are irrelevant or you're not relevant. It's free or it's not like that's always how we run it. Cool.
Ben Aston Yeah, it's great. You don't need to do it, and I think focusing on content on the quality of that content is a really strong future proof play of making sure that, yeah, you know, as long as you're producing content that meets that user intent and is really high quality, then I, I'm sure in the long run that's going to prevail over whatever short term tactics anyone else tries throwing at kind of fudging the results from Google.
Seth Rosen Yeah, I mean, it's I just don't think you're going to outsmart Google in the long run when their whole business is relevant. Yeah, yeah. Yeah. I like I'm sure you can win for three years and we did this custommade in the early days and we spun up permuted pages with new you spread out a million pages across like listen it works and so it doesn't work in.
Ben Aston Yeah, yeah, I mean, let's talk about your process, you invest a lot of time and money in producing really good content, can you talk through how you do that, whether or not you have a team internally to produce it or. Yeah. Who comes up with the ideas? How do you process it? Edit it, publish it. What's that. What's that process like?
Seth Rosen Yeah. Yeah. So, so it's contract writing but interestingly we've had the same I think my lead contract writer has worked for us for. God knows how long. I mean, I think he's worked for me in various capacities for 13 years, 14 years, you know. Shockingly, once people get used to working with my unique personality, they like it. Shockingly, it's not for everyone, but people tend to stick around. So a lot of my team has been around for a long time. We start off by saying, look, we don't pay the most, but we're extremely consistent, we're committed to investing in this for the long run. So if you deliver high-quality work, if you're fastidious, if you're really focused, you have to actually care about this content because you'll be bored out of your mind if you saw some of the stuff, if you don't think it's interesting. So who do I get? Right. So my lead writer is a PhD anthropologist who retired from teaching.
So who lives in Texas, he's fantastic. We had a woman for a long, long time who was a master's in geology at CalTech.
We've gotten some gemologist and gemology writers, but interestingly, we've had the best luck with geologists and other Earth scientists because they're technically oriented and people from top tier academic institutions, much more so than people with gemology credentials per se.
Obviously, nothing wrong with gemology credentials, but it's quite scientific. I mean, it's quite technical. There's a lot of chemistry. There's a lot of it is quite technical.
Ben Aston And so you do have like just a backlog of things that you want to have articles written about and then you distribute them. How does it work?
Seth Rosen Yeah, yeah. So we have we have a backlog of articles that need to be edited constantly because things are changing. An article hasn't been touched in a long time and it needs to be updated. New gem deposits have been found, other gem deposits have been extinguished. New treatments to gems, people are always trying to treat them and make them look better. New treatments have arisen. And to keep up with that and there's new topics we want to cover, so we need to keep up with that. So we sort of have our head contract writers sit on top of everything.
We have areas that we've expanded into, like diamond affiliate type content, where we're trying to help people, consumers who land on our site, who are interested in diamond oriented content, who might need some assistance figuring out what aspects they should care about. So we've written some content around that's monetize in a different way. They're not going to become members. Obviously, that's not what they were looking for. But we are able to leverage our domain authority to help some of those folks.
So there's a few different teams of writers that we're utilizing.
And as every year, hopefully the business keeps growing, I hope, and we write we spread out our footprint a little more. We can afford to spend more on content. So it's not I think, you know, another point, a thing that I think has made us successful is we really always invested any profit that we made from the Website. We just reinvested more content. So it's not like next year I'm going to make more money than this year. It's like, oh, great. We can afford to put we can finally afford to put a writer on this full time and we can really build out this area. And the irony of this is like this thing keeps growing and it keeps growing and it keeps growing because it's a simple strategy.
Ben Aston And then in terms of your tech stack for managing this, you are using Trello or is there any tools you're using or if it's over a Google Sheets, how do you manage that kind of backlog while everyone's writing it and where it's at the content? How is how are you managing all this?
Seth Rosen Yeah, I mean, the stack is I'm not a technologist business, but I did spend a bunch of years building these businesses. So the foundation of both sites is WordPress. So of course, it's managed hosting. So on Google Cloud for internal management, we use like Segmetrics, which is like a sequel overlay, basically kind of helps business people make decisions without any queries. Member Mouse, for member management, active campaign for email, you know, the smorgasbord of tools that probably a lot of membership site owners use. And then what I found is because we're such a heavy traffic site, at least, Gem society speed is obviously a big driver of rankings. Very difficult, unfortunately for us now, to use off the shelf plugins for almost anything, they're just too heavy. So usually we have a specific piece of functionality we implement for it.
I mean, I. And Ganoksin shares somewhat of that, I mean, the good news is it's largely static content. It's not it's becoming more apt like over time, but it's still like we're I think right now where we need to improve search. We're going to scan up and implement elastic search.
Yeah, we just want to just solve problems as they arise. On the customer side, the stack is more complicated. It's written in Python and the Genco framework. But my co-founder in the custommade business is a Princeton engineer working in back and forth. So it's Oracle like these you know.
Ben Aston He likes that stuff.
Seth Rosen Yeah.
I couldn't I mean, pretend to be able to manage this. I think one of the cool things that's happened in the 10 years or 12 years since I became a technology entrepreneur is I mean, the stuff you can get off the shelf is crazy. I used to build on the stuff from scratch. In 2008, I built a memory management system in 2009. It was a nightmare. Well, this person wants to broader subscription I, okay like I don't know what's the code like. How do we do it? You know Member Mouse handles it.
And there's 10 other plug-ins to do the same thing.
Ben Aston Yeah. Yeah for sure. It's definitely getting easier now I want to, I mean it sounds like you spend and invest a lot on content. You mean that's been a recurring theme. I invest in content. How much. I mean and how do you cost it out. I guess in terms of producing that content, you cost it out on a thousand words, cost us X or. Yeah. How much does how much content cost you to produce a fortune.
Seth Rosen The answer to your question is do a terrible job costing out. The appropriate way to do it is to say OK, I spend X dollars on this then six hundred dollars in this article. This article should generate X dollars of revenue over time. How long does it take me to get a return on my capital like that?
In a perfect world, that's how I would do it. How do I actually do it? Which piece of content is on fire has gone from smoldering to on fire because it's not dead? And which piece of content do I just feel like we just I can't believe we don't have something written on this. I want it. I just want it in our collection. Is that intelligent? Is that the most efficient way to do it? Like it's not. But you know.
Should you pay rises based on a per post or per word or how do you figure that out?
I've never paid for word. I just pay by the hour. OK, I've always paid by the hour. And here's our compensation structure works. We tend to start you and we change just a little bit over time. But I tend to start you pretty. What I think is a fair price. It tends to hover between 18 and 20 dollars an hour, maybe a little more. And if you're scientifically oriented, you're a good researcher, etc., you can usually get stuff done reasonably quickly. But I don't ride you to get stuff done quickly. I'd rather you get it done right than get it done fast. I've been doing it long enough to have a pretty good idea of how long it would take to get done. And I use this to use that as a barometer, but mostly I'm looking for people who are passionate about the content they care about the stuff they're putting out in the world, that it's accurate, they're excited about it, and I pay them accordingly.
And then at the end of the year, I have what I like to think of as our profit-sharing plan, which is not really a profit-sharing plan.
It's because we rarely turn a substantial profit.
But it's mostly like how effectively do we perform this year in terms of gross profit, gross profit? And I set aside money and I sent writers a check. Sometimes it can be substantial. Pay me 20 dollars an hour. You get a big check, it can be substantial. So and I think people know.
My pitch to writers, if you're trying to build a writing team I picture writers, is, listen, you can get 40 dollars an hour. The question is how many hours a person going to pay for before they move on another project and move on. Another thing like talk to my writers, even with us, everyone measures their tenure in years. They have 100 percent flexible gig. They can work a lot. They can work a little like I need them to work a certain amount, but they can work at night and work on the weekends. They can not work on the weekends. They can work from anywhere I like. And it's a super consistent gig and we take care of them. I think that if you position and merchandise your writing offering in that way, you get a team of believers that really wants to put out great stuff. I think if you're in the business of getting, you know, a guy in Ukraine to crank out a thousand words or two cents a word, I think you're going to get what you pay for. That could work maybe for some power tools, but that's not what we do.
Ben Aston Yeah, no, I think I think the idea of paying someone on an hourly basis is so much better than on a per article or word basis, because in my experience of paying on that per article basis, you find the. The sentences to start getting super fluffy, the values, not the repetition, is just insane, and because you're paying them the wrong way and it just doesn't it just encourages the wrong behavior. So why use one word when you could use 10? Because that's an extra dollar.
Seth Rosen Right now it's crazy, right? I mean, it's hard to imagine why people do what they do. It's like, oh, because the article I read on this blog says you need a two thousand word article, not a fifteen hundred. You know, we have ten thousand word articles and we have five hundred articles.
It's like, you know, it's like it needs the content needs to be.
Like a skirt, you know, it's short enough to be interesting, but long enough to cover the important stuff, you know.
Ben Aston Tell us what you're trying to get better at or what's on your roadmap as you're evolving this membership subscription business. Now, what's on your roadmap, and what are the challenges that you're dealing with that you're trying to overcome?
Seth Rosen Yeah, I think it's just segmentation is so hard. It's like you can't be everything to everybody. So who are we uniquely positioned to serve. It's like it's easy to ask the question, but answering it is it's tough. And then it's like, well, what model do redeploy for those customers? I think, as you've seen right, it's like just because you've been doing it doesn't mean it's the perfect model and it's just matching up segments of customers and business model and making sure that you're getting the right read on the stuff that's working. And, you know, most I'm just I'm looking for areas to double down in. And it's it gets tougher. And that's why I'm citing ongoing talks in.
You know, we inherited a community would be a little disingenuous to suggest we built a community, so. We don't have the same privilege, I would say, or cash in privilege, I think is the right thing, is like you guys do, right? You build your community, we border our community and we massage it into a community offering. We need to come up with something that we don't that value our customers. Right. And I think that's a challenge with Ganoksin in many ways Ganoksin a much larger addressable market in gems society, because people who are interested in joining the factory and creating jewelry, there's more people who are like, I'd love to learn to make jewelry than people are like, I'd love to learn about gems gemology.
Ben Aston Yeah.
Seth Rosen So what are those people looking for, you know, and what do we do about it?
Ben Aston Yeah.
Seth Rosen And yeah. So I think that's the challenge is just figuring this stuff out. But it's cool. I mean it's, it's fun.
Ben Aston Yeah. Yeah. I think, I think that product-market fit question is an eternal one where you're thinking, OK, well there's always going to be a better way to deliver a better product-market fit. And it just it really comes down to how much you're willing to segment and adapt your business model. So one of the things we're doing at the moment is actually trying to remove those transactional kinds of customers out of our membership completely, because if they're coming to us just for a resource, let's just sell them the resource they want rather than trying to force them into membership.
So we developed standalone products that simply deal with that transactional element and then we will try and sell them to membership. But that will be but we're trying to deliver on what they want. And I think the mistake that we made was trying to force people into a membership that they didn't want and that just results in a high level of churn. They got what they needed and they get in, they get what they need, get out. And that's not what ultimately we're trying to build. So I think it's really worth doubling down on that they're thinking through that product-market fit because if you can get it right, the business model works much more effectively.
Seth Rosen Yeah, I think there's this whole thing. I see this a lot, membership businesses that are membership businesses because they've called themselves the membership business and they sell a membership.
You have to ask yourself, like, I think you made a great point, like, are these people members or they shoppers are totally different things, like just because they bought something and in your packages, a membership that they're going to churn next year. So they just bought something for the price of their membership. They're not members. It's not recurring revenue. It's revenue.
And to be recurring revenue like they need to be recurring the interest and the value-added. Otherwise, they're shoppers. Just sell them something, let them go on their way. I think it's I honestly think that's a very simple conclusion, but it's really right. And it's exactly the right approach.
Ben Aston Yeah, well, let's wrap this up with a lightning round, I want to know what is the best advice you've ever received?
Seth Rosen I think that common wisdom is that diversification mitigates risk. And I have found in my life that focus mitigates risk. If you focus on one thing and you do it well, I think you will do better than if you try to do a bunch of stuff in case something fails.
Ben Aston Which of your personal habits do you think has contributed most to your success?
Seth Rosen My work reluctance, I am I love delegating, so it's and I like to be at a high level and so it's forced me to adapt and hire people that are better than me and more efficient than me who like doing all the things that I don't like to do.
Ben Aston You said you don't actually subscribe to many tools now, but I'm wondering if there's any Website you go to. You recently or tools that you do use that you find useful.
Seth Rosen Yeah, I'll tell you, a membership site is around the top of the membership sites that I think has done the most amazing job. I would argue it is the single I'm sure there's tons of great membership sites. So the best memberships I have ever seen is Chess.com
Unreal, my son is learning to play chess. He's become quite good. Seven is good as a seven-year-old can get a chess, I guess.
But the value that this thing adds is just amazing. The tools they have are unbelievable. Their premium content is amazing.
I never felt like I get more value than the value they deliver at this Website. It's worth subscribing honestly just to explore their offering. That's how it is. So we use it all the time.
Ben Aston So have you read any books recently that you recommend?
Seth Rosen Yeah, my buddy, Mike pushed me to read Traction, which everybody was talking about for the longest time. And I think it's on this whole US Implementor thing. And this is a good book. I mean, it's interesting.
I am less enthusiastic about the notion than other people are. I think it's one tool, one way to manage your business.
I think it's fantastic for folks who don't have a lot of structure and need a framework. I think it works amazingly, but it's worth reading. He was right to.
Ben Aston And to someone at the beginning of their digital media journey, what is one piece of advice that you give them as they're on their way to building, creating content building community was one bit of advice that you give to them.
Seth Rosen I think it's all I would boil it all down to the four P's. So this is what you need. Patience, number one, persistence.
Prudence, those used to be the only three, but I added this one recently, people. Right. So it takes a long time, longer than you think. You have to actually run it if you're willing to quit when things get hard, like, just don't bother, it's not going to work. You've got to do intelligent stuff. It's hard to do intelligent stuff. You've got to be analytical in your approach. You've got to really be prudent. You have to take risks, but they need to be prudent risks. And the last one is just surround yourself with really good people network to really get people learn from their experiences and share your own experiences with the people. That's awesome.
Ben Aston Awesome. Seth, where can people find out more about you and only that you've got going on?
Seth Rosen Yeah, I mean, I'm easy to find [email protected], [email protected]. If you want to explore our membership sites, I'd encourage you to buy a membership. If you don't want to, you could just email me and I will happily give you a trial, but I'd love to talk to anybody who is getting started. I love helping other people out. I never expect anything in return.
And yeah, I just appreciate the opportunity to talk about myself.
It doesn't look that.
Ben Aston Well Seth, Thank you so much for joining us today. It's been great having you with us.
Thanks for having me.
Ben Aston And if you want to find out more, head to Indie Media Club where you can subscribe and join our club, which is all about developing better content and better community businesses. So check it out, IndieMedia.Club. But until next time. Thanks for listening.