Differentiating by understanding your uniqueness with Verblio's Steve Pockross
Differentiating by understanding your uniqueness with Verblio's Steve Pockross
Steve Pockross (00:02):
We bring in about a thousand new clients a year from our organic traffic. Until a year and a half ago, we only had one inbound salesperson to handle all of that. The flywheel worked and we invested everything else into the product, which was our core strategy: make the product better, make the writing better, and the customers will come.
Peep Laja (00:18):
I'm Peep Laja. I don't do fluff. I don't do filler. I don't do emojis. What I do is study winners and B2B SaaS because I want to know: how much is strategy? How much is luck? And how do they win?
Peep Laja (00:33):
This week, Steve Pockross, CEO at Verblio, the technology powered content creation platform with a network of over 3000 U.S. space writers. They serve over 1500 agencies in businesses every month, doing $12 million in annual recurring revenue.
Peep Laja (00:48):
In this episode, we talk about the power of playing in a fast growing market with a differentiated business model. And we discuss how Verblio or differentiates with a high volume, high quality content. Let's get into it.
Steve Pockross (01:02):
The business started as in a different way than most marketplace businesses did, which is actually from the supply side, which is the journalist CEO, his name is Scott Yates, was looking for opportunities for his fellow journalists to have opportunities in the freelance world. And where would those be? Well, SEO content would be one of them. And the Technical Co-Founder, Wade Green, was looking at new ways of making marketplace systems using true marketplace dynamics. A lot of the competitors out there are using more of an outsourcing model and extending that more towards using freelancers as outsourcers instead of employees. And how do you use more marketplace dynamics in order to deliver a true system?
Steve Pockross (01:41):
So it started in from the supply side in 2011, focused on the problem of SMBs need to compete in SEO. How do you give them the opportunity to do so? And at a time where just putting words on any page got Googled to find you very quickly, at the very early days of SEO, and so they had a monthly subscription product, which was $79 a month for four blogs, all delivered on Thursday. And I think the tagline of the company at the time was: working like a dog to fill your blog.
Peep Laja (02:11):
All right.
Steve Pockross (02:11):
We've come a little ways.
Peep Laja (02:13):
Okay. I mean, it's catchy.
Steve Pockross (02:16):
Thanks. And so I was in the really fortunate place where, when I moved back to Colorado, which is from Silicon Valley in 2010, that Wade and Scott were looking for someone to take over the business, who knew how to scale and marketplace SaaS businesses, was locally based, who loved marketing, and who loved finding new opportunities for freelancers.
Peep Laja (02:33):
Mm-hmm (affirmative) Was the business designed from the get-go to be kind of a tech enabled services marketplace or did it just slowly morph that way and started out as the more traditional agency?
Steve Pockross (02:48):
40% to 50% of the budget went into tech and products from the very beginning to build these out so that we were building something that was much more tech than services. And some of the core principles that they built in are kind of interesting on the market dynamic side, and so probably the most important principle of the Verblio platform is that writers choose the clients. And in doing so, you make much more of a marketplace system in almost all other services, kind of marketplaces.
Steve Pockross (03:14):
There's a command and control model where the freelancers get allocated projects based on what they qualify for, what their availability is. But if you invert that incentive structure, then the freelancer, the writer, is looking for opportunities where they're a fit. They only get paid if their piece of work is accepted by the end client, which means they take on more risk for this and in doing so, they deliver projects much more quickly. So our average turnaround time is two to three days for a project, which is very different than seven to 30 days for most companies. They have a higher quality level because they're more motivated, more excited, and need to be a good fit in order to keep going.
Steve Pockross (03:52):
And there's a lot of other intangibles, as well. One of them is the ability to have excess capacity in your system that you don't pay for. So we have the ability to go up 20% to 30% to 80% new capacity with our existing model because of the way these guys built it into the system.
Peep Laja (04:09):
The end value that you promised to the customer is still content?
Steve Pockross (04:13):
Yes.
Peep Laja (04:13):
The difference versus content agencies is just how you source it, how it gets produced?
Steve Pockross (04:20):
That's about right. One of the other differences, we don't do content strategy. We lean on the agencies to use that as their level of expertise. But the end product that we're producing is we are sending content directly to our clients in any format that they're looking for.
Peep Laja (04:33):
Who are you considering your competition?
Steve Pockross (04:35):
Our biggest competition, if the content marketing industry right now is $10 billion a year and it's moving towards $38 billion in the next decade, are internal writers. That is basically internal capacity that internal marketers don't feel comfortable in outsourcing as yet, or don't know that there's quality providers that can do it at scale and actually write for your content. I would say that is, by far our biggest, is winning over those clients, because it hasn't been proven that there's good players in the space who can deliver that yet and that's what we're laser focused on.
Steve Pockross (05:07):
The second one is concept of status quo for marketers. Content is still, while it's an old marketing channel, using content in an innovative way to really differentiate yourself or give your company a giant moat, is new. So, we have a client that does 1200 unique articles with us. We have another client that just signed up to do 17,000 articles in three months as a new company, newly funded by venture capital, in order to really set themselves apart.
Steve Pockross (05:36):
So I'd say our two big competitors are really kind of intangible. We're competing against the quality of in-house marketers and the status quo of not moving and the status quo of not doing more content, because you can do a lot more now at quality than you could before. And then there's this whole group of competitors that are playing with similar models and those include crowd content and writer access and text broker, and other companies that are trying to find a way. Those guys are delivering a similar type of value. And then you have the Upworks and the Fiverrs where you could go source an individual freelancer if you don't want to use our SaaS platform to deliver content and access to the broader pool of talent.
Peep Laja (06:11):
The content marketing space is extremely saturated. There are just so many content agencies out there and about a million content writers. To stand out in this massive sea of providers, that all pretty much look the same, companies need to define what makes them different.
Peep Laja (06:30):
We'll learn a few ways a CEO focused content marketing agency, Siege Media, is setting themselves apart from Founder and CEO Ross Hudgens on a previous episode of how to win.
Ross Hudgens (06:40):
Early days, we started as just another vanilla SEO agency. We've stayed ahead in terms of adding service lines that other people might not be willing to invest in yet, that have slowly also allowed us to move up market over time as well. And that's kind of a moat that we feel like we're establishing, in terms of we are large so we're reliable to bigger brands because of that.
Ross Hudgens (07:04):
We paid for a premium website that I think also reflects an upmarket message. We have good brands on roster that we continue to add over time, which again, kind of reinforces that from a compounding snowball point of view. And those kinds of things have moved us up.
Peep Laja (07:23):
What are you doing to stand out in this massive sea of providers that all look pretty much the same?
Steve Pockross (07:31):
Yeah. All services areas are a really hard place to compete. So first, we're trying to be the talent magnet for top freelancers, we're paying premium rates. Being a Verblio writer is really different. We accept about 4.5% of our applicants and it's an exclusive group and they have forums and opportunities to move forwards. And they get to pick their own work. So one of the areas of being a freelancer that's always kind of a grudge is, if you're an in-house writer and you have to write 200 blogs about waste management every single month, you've got about two months in you before you can't take it anymore. So one way we're trying to stand out is to attract the best talent and make this the best place for the writers to go.
Steve Pockross (08:08):
Another is the scalability of the platform. The concept of quality is a really hard one. It's super intangible and it really depends on your view of content quality. We need to be better than what you are expecting, so we need to be better than your alternate options. And that's different for different companies. But we put a lot of our technology platform and our business model into how to deliver higher premium content at scale, in a way that we think is unique and really can help us stand out.
Steve Pockross (08:37):
And the third is brand. We really focused on building this Verblio brand. We rebranded three years ago. Our content is fun and engaging. You should laugh at least a few times on every page of our website. We want to be the friendliest content creation platform and the people to work with. So some of that is part of brand and part of it is if you're in a services business, and part of our business is, you want to have the best people that all the other top people want to work with. And you want them to refer you to everybody else that you talk to. So brand reputation, too.
Peep Laja (09:07):
Mimi Turner has said that if B2C marketers thought like B2B marketers, Coca-Cola would market itself as brown, fizzy, and sweet. That's so true. And soon, a competitor would likely emerge with an all-in-one brown, fizzy, sweet drink.
Peep Laja (09:21):
Most B2B companies sell themselves by narrating a fact sheet. "We do this and that and a third thing." They tend to focus solely on product capabilities, features, rationale outcomes.
Peep Laja (09:33):
The problem with that approach is that most competing products are nearly identical. Pretty much every CRM marketing automation tool or project management software has every feature. They also say the same things about themselves. If the marketer's job is to get their product into the very limited consideration set of category buyers, then reading the fact sheet out loud is not going to do it.
Peep Laja (09:56):
Climate scientists thought that when they bring evidence and facts in front of the public, people will instantly get it and do what's needed. Boy, were they wrong. But here you are, trying to persuade your audience with facts.
Peep Laja (10:08):
What you need on top of the facts is a story, a point of view, a narrative to frame the context for your capabilities. David Phillips, author of How to Avoid Death by PowerPoint, shares an example of selling power of storytelling.
David Phillips (10:23):
In 2009, a journalist by the name Rob Walker, wanted to find out is: is storytelling really the most powerful tool of all?
David Phillips (10:34):
He went on his computer and he bought 200 objects from eBay. And the average price of the objects were about $1. He then called 200 authors and he asked them, "Hey, would you like to be part of the significant object study? Which means that I would like you to write a story to one of the objects." And 200 authors said, "Yes."
David Phillips (10:56):
So there he had 200 objects, he had 200 stories, and I assume that it was with nail biting anticipation that he went on eBay again, with all the 200 objects. Would there be a difference? Would there be a change?
David Phillips (11:11):
One of the objects was this beautiful horse's head. Now this beautiful horse head was bought for $0.99 and was sold, when the story was added, for $62.95. That is a slight increase of 6395%. So was this a one-off situation? Not really, because he bought the 200 objects for a total of $129, selling them for $8,000.
Steve Pockross (11:43):
Until last year, we're a content marketplace that is focused on how to drive customers to you through writing great content and that is our primary driver by far. We think it works. We bring in about a thousand new clients a year from our organic traffic. Until a year and a half ago, we only had one inbound salesperson to handle all of that. The flywheel worked and we invested everything else into the product, which was our core strategy: make the product better, make the writing better, and the customers will come.
Steve Pockross (12:11):
Our other channels that we're developing more now is really kind of our first level of lead gen. We hired our first SVP of Sales and Business Development just over a year ago, and we have two BDRs. And here's our hard part is: our ICP is digital marketers that want to go bigger with quality content. And that is a really hard thing to really target. And so we are going to kind of their watering holes, like the slack channels where they hang out, the sponsored events. And when they start talking about interest in content is when we reach out to them, as opposed to reaching out cold to a list. And that's been doing very well for us.
Peep Laja (12:45):
Would you say, then, SEO content marketing is number one channel?
Steve Pockross (12:49):
Like 95% number one channel.
Peep Laja (12:52):
95%. I just looked up your domain authority. Domain ranking in Ahrefs is like 65. So I mean, it's decent but it's not fantastic. Would it be fair to say that it's enough in your arena? And, you mentioned the size of the content marketing industry and as it's growing super rapidly that you are also fueled by just preexisting demand for content.
Steve Pockross (13:18):
It's really important how we rank versus kind of like the other competitors they'd be looking for, which is the critical factor for us. And then we are riding a great wave. We think we're growing faster than other players in our space by a lot by leaps and bounds. But, man, we're riding a great wave. The last stats that I read, it was growing from $11 billion to $38 billion in 10 years for content. And that's a great place to be.
Peep Laja (13:44):
Riding the wave. Like it or not, timing is crucial for company building. When you enter a market that is growing rapidly, it will pull you up. You don't even have to be that great. If there's a lot of demand out there for what you're offering, you'll grow fast. I see this again and again. As a key driver of growth for some of the fastest growing companies, I'm sure the marketers at those companies would often like to take credit for all that, and they do deserve some. But when you look closely to what they're doing, it's nothing special.
Peep Laja (14:11):
The category itself was typically growing at a rapid pace. You could be doing five times better, more creative marketing in an industry with low demand, and get nowhere. Timing. Sometimes you get lucky. Sometimes you can pay attention to macro trends and be deliberate about timing. Rapidly growing categories, of course, attract a lot of competition. In the early phases, all the pieces up in the air and there's a massive land grab happening. If you get the timing right, execute fast and well, you can become a top three name in the space. Get inside that consideration segment. But if you're a little late to the party, you need to focus on differentiation, radically reimagine a segment offset category.
Peep Laja (14:53):
What is the product strategy here? Are you trying to compete on best or are you also cheaper than some of the other players?
Steve Pockross (15:01):
So we are not cheaper, so the product strategy is not to compete on price but to compete on value and things that other companies can't do. There's a lot of it focused on what the content is and how we drive that through our writer community and so those will be algorithms of which writers get shown, which part of the product, the user experience of how to deliver, how to enhance content with SEO optimization, things like that. How to break down our subject matter expertise. So we have 40 verticals that we write to, and getting smarter and smarter about our matching algorithms. So there's a whole host of product initiatives that are there.
Steve Pockross (15:35):
Then we just have the user experience of managing that much content and editing back and forth. Imagine editing 1200 pieces of unit content for a digital marketing agency that is writing for a hundred clients. All of their clients have to be able to approve each piece of content on our white label platform before, afterwards has to be SEO optimized, has to be turned into videos, has to be posted directly on their CMS. So there's a lot to it. If you're going to grow from $11 billion industry to $38 billion, it means that everything is about to get even more competitive. That there's 6 million new blogs every day, they're going to have to get better, they're going to have to be more interesting, there's going to have to be unique growth in order to stand doubt in these channels.
Peep Laja (16:13):
Being uniquely good at something is what propels your company to success. Companies should ask themselves: what's the value only we can deliver? What's our only-ness?
Peep Laja (16:23):
95% of what a company does is not unique. The magic is only in the 5%. Businesses should get clear on what their 5% uniqueness actually is and double down on it.
Peep Laja (16:34):
If you're not clearly differentiated, that's a problem. And most aren't. But set a goal to be able to hold a fundamentally different position in the market. Build a vision of what a unique version of you could look like and start building toward that.
Peep Laja (16:49):
Andrew Grove, former CEO of Intel and author of "Only the Paranoid Survive", explain the benefit Intel saw from choosing to focus on a unique specialty, when they began to feel pressure from competitors.
Andrew Grove (17:01):
Back in the mid eighties, when we almost died and went through our strategy inflection point, and we came out of it with a very strong and very controversial decision that we will focus on microprocessors first, second, and third. And we got put best development of microprocessors and we going to invest in the best microprocessor factories and the best microprocessor design tools. And this worked for us. We have not merged with anyone. We have not bought a Hollywood studio. We have not done any of these things. We are a very, very maniacally focused company on microprocessors. That's all. No more to it.
Peep Laja (17:44):
How has your business strategy changed and evolved, let's say over the last five years?
Steve Pockross (17:52):
When I first took over the company, we are an SMB platform focused on these small, monthly subscriptions. One of the big strategic moves focuses that we did was to focus on digital marketing agencies and to really plant our flag. It's part of building up how we changed our product and also how we changed our brand.
Steve Pockross (18:09):
The key things that agencies are looking for are very similar to what brands are looking for, with the addition of how can they work with our account management team if they don't want to manage the self-service platform by themselves? So we have external professional services to really just integrate easily into our system.
Steve Pockross (18:24):
How can you manage content for all of the different types of verticals that they focus on? Can our subject matter expertise and quality of our writing outcompete anything that they're doing currently? And then the white label platform, which is really important piece of their puzzle. Most of them wanted to look like themselves and not like us and so we have to make that look tiptop, is the end part of our platform.
Steve Pockross (18:45):
Now we're at another wave of innovating in our strategy. So that example of the 17,000 article clients in three months feels like it's a new wave that we need to build our platform towards and still working our market on. So if it turns out that this is one of the top ways that new companies are going to try to stand out by building a ton of content, building a huge moat really quickly, we need to be able to deliver that, then we need to build our product around that as a next wave. And we need to build our sales and marketing strategy to target those companies, too.
Peep Laja (19:20):
It's highly likely that at some point in the future, what major company money in the past will stop making money. The world changes. The competition evolves. Technology enables new capabilities. New products replace old products. New services will replace old services. New channels emerge and old ones stop working as well. Your best fit customers change. New buyers will appear and old ones stop buying.
Peep Laja (19:43):
This has happened to a lot of companies you know, like IBM, Intel, Apple, Samsung, Nokia, et cetera. You need to figure out when to switch focus, disrupt yourself before others do, cook up your next competitive advantage, while milking your existing one. The age of sustainable competitive advantage is over. It's all transient.
Peep Laja (20:07):
So as you're thinking about growing your revenue year over year, let's assume looking at 20, 25, 30 years from now, what's the strategy to win here?
Steve Pockross (20:17):
So we're on a nice path of growing 50% per year, bootstrapped. The big part of our strategy is we're finally at the point of entertaining raising investments to move faster on our product. The big kicks to winning is really to make the flywheel work better and better at every phase.
Steve Pockross (20:33):
So for tech enabled services, you're still using people at each level in order to figure out the solutions and then you build the product around them to deliver it more efficiently, at scale, higher margins, and with more quality.
Steve Pockross (20:44):
The vision for me is to build a true marketplace dynamics system that delivers this high level quality with minimal human involvement, for higher quality that nobody else can do and we think we have that lead right now. But to build it into a next gen platform, I think is really exciting. And then the question is: if we build this right, will this work in other verticals outside of content as a ways to manage freelancer marketplace services? And I think it does. The second that we start looking at other verticals about how this may be exciting is really where we're making a big change, kind of society wise, in the freelancer economy.
Peep Laja (21:21):
Over time, as categories mature, everything becomes commoditized. Your business becomes a commodity. Commodity, in the sense that it's fungible, quite easily replaced by another competing business. Each brand draws on the same user needs and works to meet those needs. The more mature the category, the more homogenous it becomes.
Peep Laja (21:41):
All competitors will eventually look alike, talk the same, and in fact, be pretty much the same. The future will be like one of the science fiction movies where everybody wears the same uniform and has the same haircut. Very few can keep on winning on better for years on end. Make a deliberate effort to not be like others. Break the convention, bake differentiation into your DNA. The only strategies worth investing in are those that pass that can't, won't test.
Peep Laja (22:08):
If you think about the competitive landscape, ask yourself two questions: one, what is something you can do that your competitors can't do? Two, what is something you can do that your competitors won't do? If you think about it, there are very few things that world resource competitors won't be able to replicate if they want to. You need to build up some serious moats to succeed there.
Peep Laja (22:32):
But you can make brand choices that competitors won't have the guts to follow. You can be more radical. If your strategy doesn't pass the can't, won't test, you'll be finding a battle that is headed toward commoditization.
Peep Laja (22:45):
Here's the world's top strategy thinker, Roger Martin, explaining what makes a good strategy.
Roger Martin (22:50):
Well, I think about strategy as a set of choices that enables you to invest in a given place to win, whether that's geography or business or whatever. So it's that set of choices. And what do I mean by winning? I mean, in the field of play that you choose, you have a better value proposition for the customers in that space than anybody else. And a good strategy is one that has a logic that holds up. When you put it into action, you do get a better position where you've chosen to play than any competitor.
Peep Laja (23:29):
It's probably likely that commoditization is already happening and coming stronger at you. How are you preparing for it? Are you consciously building any moats?
Steve Pockross (23:40):
So we think we are building a moat. It's really hard. We need to have better quality, we need to have an easier to use platform, the most friction free platform possible, and the most scalability, plus the right amount of add-ons so we're kind of the one stop shop. There's a lot of pieces that you need in order to deliver good content, which we need to build out, as well.
Steve Pockross (23:58):
Don't test us on one dang piece of content. That is not a test. Test us on how do you write a hundred quality pieces of content in a month? Because that's the more place where we think we outcompete everybody else. That's our eyes on the prize and we are always living in fear of being compared to anybody else at the quality level we deliver.
Peep Laja (24:22):
So, what are the three key strategies Verblio has developed to guide through success? One, they honed in on a key high profit market segment.
Steve Pockross (24:30):
When I first took over the company, we are an SMB platform focused on these small, monthly subscriptions. One of the big strategic focuses that we did was to focus on digital marketing agencies and to really plant our flag. It's part of building up how we change our product and also how we changed our brand.
Peep Laja (24:46):
Two, they understand that only-ness. What is something only they can deliver?
Steve Pockross (24:51):
Don't test us in one piece of content. That is not a test. Test us on how do you write a hundred quality pieces of content in a month? Because that's the more place we think we outcompete everybody else.
Peep Laja (25:01):
Three, they know that in a space as saturated as content creation, their quality needs to be topnotch if they want to stay competitive.
Steve Pockross (25:09):
One way we're trying to stand out is to attract the best talent and make this the best place for the writers to go.
Peep Laja (25:14):
One last takeaway from Steve.
Steve Pockross (25:16):
The concept of quality is a really hard one. It's super intangible and it really depends on your view of content quality. We need to be better than what you are expecting, so we need to better than your alternate options.
Peep Laja (25:28):
And that's how you win.
Peep Laja (25:32):
I'm Peep Laja. For more tips on how to win, follow me on LinkedIn or Twitter. Thanks for listening.
