Ep02: Alex Melen, CEO of SmartSites on Scaling and Growing Business

SHOW NOTES:

In this episode, Alex Melen, founder of SmartSites, shares us some insights on scaling businesses, building company culture, and hiring and management processes. You also don’t want to miss his SEO tips on making your website rank better.

GUEST BIO:

Alex Melen is an award-winning entrepreneur best known for his first free web hosting company, T35 Hosting, founded in 1997. He has been featured in Business Week’s Top 25 Entrepreneurs Under 25, Bloomberg, Forbes, NPR, and more. Today, he is the Co-Founder of SmartSites, an advertising agency which was featured in the INC5000 as one of the fastest-growing agencies in the world. Alex's Speaking Engagement Calendar Connect with Alex: Website | Facebook | Twitter | Linkedin | Instagram

SKIP TO THE GOOD PARTS:

00:55 - 05:18 - Humble beginnings of Alex Melen in the Digital Space.

05:35 - 08:52 - SmartSitesin numbers: business model, employees, and revenue

09:03 - 11:00 - Monopolizing digital marketing services for almost every single auto brand.

11:00 - 14:20 - Secrets of scaling: Focus on small medium-sized business

17:55 - 20:05 - Cons of scaling too quick

20:35 - 23:18 - What’s managing and building a company culture like?

26:03 - 30:01 - Alex’s insights in hiring and management processes and challenges

33:08 - 37:34 - Three pillars of SEO: Optimizing your website to rank better.

37:34 - 43:11 - Thoughts on paying for backlinks and getting penalized by Google

43:32 - 45:29 - Dealing with the thought of ‘growing too fast and growing not fast enough’

SHOW TRANSCRIPT:

Michael Bereslavsky: Hi Alex, thanks for joining. So where are you calling from?

Alex Melen: I am calling from Paramus, New Jersey. So, we're right outside of New York City.

Michael Bereslavsky: Nice. So, we first met last year and we're both speaking at that conference and Spain. Had a really nice chat and turns out we have quite a few things in common. So, I'm really glad to finally catch up.

Alex Melen: Yeah definitely.

Michael Bereslavsky: And you've been actually involved in the digital space for much longer than I have. Could you give us a quick background story about how you got you started, how you start your first company and how it evolved to the current business?

Alex Melen: Yeah definitely. I started my first company way back in 1997. It was a web hosting company called T35 Hosting. For those who were involved back then in the space, there was around the same time GeoCitiesstarted Tripod, Hypermart, I think I actually started a couple of months before GeoCities.

So that was the space that was started and the original idea for T35 Hosting which actually rings even true today, was to allow people to freely and instantly post something on the internet, have the access all over the world. So right now, it seems silly to even say something like that because almost everything we do is like that. But back then it was a whole different world. So back then if you wanted to start a website you would have to go to your internet providers like AT&T, Horizons of the world. Horizon didn't even exist the way it does now back then. And they would have to provide it for you and you would have to wait six to nine months. Spend like 50 grand and that's how you would have a website accessible on the internet. So, the idea with T35 Hosting and similarly to a lot of the other free web hosts that cropped up at the time is to allow someone freely to publish content that's accessible all over the Internet and really allow anyone to do it not just the bigger company.

So that was started in 1997, a long time ago. Well if I try to come back many years of what it is now, it's a little scary. So, I started back in '97. I grew that to a little bit over a million customers before running.

So, a lot of roadblocks and challenges and funny enough the T35 Hosting still exists and no longer providing free web hosting and focusing more on the business side of what hosting but still same philosophy to allow anyone to host anything worldwide and make it affordable and stable and reliable. But at a certain point, it's just the free hosting model for web hosting stop working because of the amount of abuse that came up on a lot of other issues. So, all the competitors I had back then actually don't exist at all now.

GeoCities, Hypermarkets, Tripods of the world. So, it was definitely an interesting time. I sometimes say the internet's still the wild wild west back then it was like the real wild wild west like no one knew what they were doing. Everything was like all over the place, very experimental.

So, as the first company, after that, I worked in a lot of different roles, digital related. I work in a lot of the digital marketing roles and I wound up at places where I did digital for Samsung for almost a year and then Walmart for a couple of years after. And around that time my brother was graduating from Cornell and he also he was running a SEO company. So, he was running one of the first like the old school like link building SEO companies. Like the ones, like the companies, we gain trouble for. If you remember, if you Google late 2011 like JCPenney. J.C. Penney got in trouble for hiring an SEO company that had some sketchy fees.

That was the world he lived and he lives in all those like SEO consulting and everything. And he was graduating college and he really pushed me to, well I think he pushed himself not to get a corporate job. I think that was a point that was from his end but he pushed me to leave my role at Walmart and open SmartSites which we run today.

So, we opened 2011 and the idea was to bring together a lot of digital components that we had expertise in. The web hosting, SEO, the pay-per-click site which I spent a long time on and form really a 360 digital marketing agency that would provide the full 360 of services. And really focus on small businesses.

The roofers, the contractors, the guys out there that still don't have a website, still don't do marketing really, today I would call them the final holdouts right. But in 2011 there was almost everyone in this small business space really wasn't doing too much on the digital side so that was the idea. And we've been growing ever since. We're up to almost a hundred employees now and six offices.

Michael Bereslavsky: Right. So, you just hit one hundred employees and how big is SmartSites right now and in numbers like, revenue profits or any other figures that you mostly focus on.

Alex Melen:  So it's funny. A lot of companies are very shy about sharing these and not a lot, we're actually in a lot of lists like five thousand and everything where it gets published publicly so I don't necessarily have an issue sharing with it. In today's world, so many things are public a lot more than people realize.

So, the revenue that we work, so we work a little bit different than a lot of traditional media companies. So, the revenue might seem a little bit off but the way we work for managing media or marketing, well the traditional way is that a company would pay their entire marketing budget to us and then we would decide how to spend it.

That's the traditional way. The way we do adjust for transparency and to better work with small businesses, we only charge a management fee.

So, they're actually marketing they pay for themselves and we just charge management. So, because of that revenue and everything might seem out of whack. But last year our revenue was 5 million. This year will probably land that 7 forecasted for 10 for next year.

Michael Bereslavsky: And I know you provide a wide range of services. Design, development, SEO, PPC, what's the main one by revenue or you know a number of employees involved in?

Alex Melen:  Yes, so it's really a good question. So, I think it's pretty eve