The Untold Story of Long Tail Pro: How I Built and Sold a Software Company for 7 Figures

The Untold Story of Long Tail Pro: How I Built and Sold a Software Company for 7 Figures

In 2010, I launched Long Tail Pro, a keyword research software tool.  Over the next 5 years, I grew the company from 0 to about $1 million in revenue per year. I sold that company in 2016.

Although I’ve shared some bits and pieces of the Long Tail Pro story over the years, I haven’t really shared anything that’s happened since 2016.

Building and selling Long Tail Pro is a monumental event in my life and so I hope you don’t mind if I talk a little bit more openly about it than I have in the past.

Today, I share the “untold” story of Long Tail Pro and what has happened since I sold the company, along with some of the valuable lessons learned along the way.

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Please watch the video to get all the details of how I build my software company, why I sold the company, and what has happened since.

Overall, I hope you enjoy some of the thoughts I share related to selling my software company.

Hey everyone: it’s spencer, here and today i want to take a trip down memory lane. I want to talk a little bit about my previous software company called longtail pro. I was recently on a podcast and the story of longtail pro came up and i felt like i’ve, never really shared the entire story.

I’ve shared that i built the software that i sold the software, but i haven’t shared a ton of the details and actually what has happened since, and so i want to dive into that today. It’s. Really just a story of long tail pro how it’s dramatically changed my life and how it ‘

S impacted how i’ve done business in the future as well. So let’s dive into that. I started long tail pro back in actually 2010 is when i started developing the software tool. It really didn’t launch until the very end of 2010 and really early 2011, and so i won’t dive into it too much uh.

Other than it was an idea that i had on my own so that i could do keyword research a lot faster. I was out building tons of niche websites and i wanted to input more than just one seed keyword tools like market samurai.

That was really the one i was aiming for. You could only input one seed keyword. It would spit out a couple hundred results and that’s great. But i wanted to input 10, 20 30 different seed keywords in different niches and have it just spit out thousands of keywords, check and tell me if the exact match domains were available and give me all the metrics that i needed to make a decision.

Whether or not i should start a website on those keywords, and so i did the analysis i’m, not a developer, so i hired somebody and i built the software, and i launched it to my very small list of maybe 1500 people.

I actually had a blog back in the day called niche adsense challenge.com. If you go there, i don’t think it’s working anymore, so i did have a small list and i went ahead and i launched it to that list.

I also did a warrior forum special offer if you remember the warrior forum, and i got some sales, i think in the first month i made about 2 500 bucks, which was huge for me. I still had a full-time job.

I was working as a business banker at wells, fargo bank. This is right before i decided to quit my job, and so it was well received. I thought and then the the months after that you know you have a launch that goes really well and then it sort of goes down and i was making maybe a few hundred dollars a month after that for a little while – and i was happy with that – I had never launched a software tool, and so it was doing pretty well, i thought, but, as would happen with software, there started to be some bugs, and so i needed to go back to my developer.

Have those bugs fixed and for a while. That was fine for a couple of months, but then the developer was overseas and he started getting less and less responsive and i decided you know what. If i really want to build a business here, i got to have somebody that’s responsive.

I got customers breathing down my neck, saying: hey the tool’s broken it’s, not working. I think at the time you know it’s, definitely less than 100 customers, but still i wanted to make them happy and i decided i needed to hire a different developer.

I needed to get somebody that was more responsive in my own time zone that had english as a first language that i could communicate better with and i asked the developer hey. Can you give me the source code, and this is a story i have shared before? Maybe you’ve heard it a few years ago, but basically he said, came back and said: whoa you, didn’t, buy the source code, i own the source code and if you actually want the source code, it’s.

Going to cost you an additional fifteen thousand dollars, i had already paid, i think, a little more than fifteen thousand well, maybe less than fifteen thousand dollars for the very first version, uh of long tail pro – and so here i am with this dilemma of.

Do i pay this guy 15 grand to get the source code that i thought i already owned? Do i close down shop completely or number three? Do i go out and hire a new developer and just start from scratch and i ‘

Ll be honest. I thought about shutting down completely. I remember having a very vivid discussion with my brother, and he said: no, you, you, probably shouldn’t continue on with this business. It’s only making a few hundred dollars a month.

Why spend fifteen thousand dollars just just close up shop? It was a really tough decision, but i decided i’m gonna go out. I’m gonna hire another developer and i’m, going to build the software tool from scratch and just make it even better than it was before so.

Fortunately, i did that. I built the second version of long tail pro. It took about six months. I had to give a lot of refunds. I had to keep customers at bay. It wasn’t a fun time, because the old software tool stopped working pretty much 100.

If i recall correctly – and i gave everyone that had paid the new version of long tail pro – i basically said hold on it’s, going to be a few months. If you want a refund, i’ll. Give it to you, if not if you can hold on, i promise i’ll, get you a better version and i did.

I gave them uh the new version for free and i relaunched the software tool and fortunately, it sold even better. By that time i had a bigger list. I did another launch on warrior form by this point. I had quit my full-time job because my niche sites were doing well is making a little over ten thousand dollars a month, uh 10 15 ish thousand dollars a month.

When i quit my job and it grew a little bit from there and um. I felt like i had something on my hands here. I’ve got a software company that i can build now, the first full year. Sorry, not the first full year, the first year that i launched it was 2011 really um.

I guess that was the first full year and i made maybe thirty thousand dollars in sales uh. It definitely picked up in the second half of the year uh and then in 2012. I think it just cracked a hundred thousand dollars in sales, and so i definitely had something that was growing now.

It was not easy, it was tons of development work and you have to remember at this time it was still a desktop application, so it was no recurring commission, i sold it anywhere in the beginning, it was like 47 bucks, one time you bought it and you Had a lifetime license uh, you got all the updates for free at some point i bumped up the price to 97 bucks and so then in early 2013 is when i did this huge launch.

I re i i brought in mark thompson. He did. He helped me. Do this affiliate launch, he was really good at recruiting affiliates and we did something like 250 000 in sales in about 10 days, and that just blew my mind up to this point.

I was doing all the support myself all the sales and marketing everything other than the development work, and i was absolutely overwhelmed after the first day. Luckily, i reached out to my facebook group and i found a support person that stayed with me for the life of the company and actually still helps uh with some support for link whisper.

Now his team does anyways. He’s, a different story, but he’s, built an entire team now of support staff anyways. I started hiring people to help out with the business after that launch and then shortly after that, we introduced the recurring commission structure of the keyword, competitiveness.

It was called long tail platinum, and that was a big move for the business, because now i was getting that recurring commission and so the company began to grow from 2013 to 2014. The recurring subscription uh was growing.

I was just doing a lot of hustling. I was blogging on niche pursuits. I was doing podcasts word of mouth was huge for longtail pro had an affiliate program, guys like pat flynn and empire flippers, and lots of other people were promoting uh long tail pro and then again in 2015.

I did another huge launch with mark thompson again and this time it crushed it even more. I think it was like 500 000 in total revenue and again that’s, top line revenue before i paid affiliates right so affiliates made 50, and then i had to pay mark thompson, something like 25 of what was left over.

So it still was like well over six figures that i put into my pocket um from like a one week launch. So it was. It was huge and that really put long tail pro on the map. Even more and so 2015 was a stellar uh huge year and then 2016 was just even bigger.

I kept doing promotions recruiting affiliates. I had jake kane at this point, a full-time employee, helping me run the operations of the business, recruiting affiliates, uh and doing a lot. I mean i there so many lessons learned that i could dive into.

But honestly i’m, not an expert at this stuff. I i you know i was a business banker by trade. I wasn’t a developer, but i was very open about updates and ideas that i had for the software tool. I tried to always be very honest with customers and do the right thing by customers.

Um always try to make it easy to get a refund or if they saw a bug, we’d, update it for them. I would hop on calls with customers in the early days and fix things and and the business grew, and it did really really well in 2016, and let me see if i can actually find some of those stats here.

I wrote a blog post where i shared a lot of the uh results, and so well. This only goes to um 2015, but basically, 2016 was was even bigger. We uh the company, basically just eclipsed a million dollars in sales, a million dollars in revenue and no, i’m.

Sorry, no 2015 is the correct year, so uh just shy of one million dollars in revenue in 2015 and just over six hundred thousand dollars in net profit uh. That is more money than i thought i would ever make.

You know i was working as a business banker making way less than that. You know making less than six figures a year at my old job in 2011 and then in 2015 to be, and again i was the 100 owner i owned all of the company, and so after paying all employees development everything to have over six hundred thousand dollars.

Put into my own pocket in just that one year, um it’s, huge it’s, it’s, life-changing amounts of money, and i do have a blog post. If you search for how i sold my software company on niche pursuits, you can see this graph.

You know you can see in 2014 that the net profit was closer to 300 000 and then basically doubled in 2015, and a big part of that was that one launch where you know like i said i put over a hundred thousand dollars within about a week Period uh in my pocket, so it was already life-changing amounts of money, even if i had just held on to the company, but there were definitely competitors coming in a lot of additional keyword.

Research companies were coming in, google was making it harder to access the data and longtail pro was still a desktop application, and i knew to take it to the next level. It needed to be an online tool, and so i had to decide.

Do i take this company and create a whole new version of the software going from a desktop application to an online tool is no easy task and takes a lot of investment. Do i make that shift? Do i feel like i can still compete with all these new keyword, research tools out there am i still comfortable with the fact that google is having a very tight grip on the data.

There was a lot of decisions at play and i decided i was ready to sell the company. I had grown it to the point where i felt i could grow it and i wanted to sell and it just worked out that i told a few people hey.

I’m thinking about selling and word kind of spread a little bit and i actually got three different people that were interested in buying just privately. I never had to list it publicly anywhere and um.

I ended up going with wired investors if you ‘ Ve listened to the podcast, you’re, familiar with those guys and um my history with them there. I had known them for many years and i felt like they could take the software to the next level.

So, after negotiating several different points, i signed an asset per purchase. Agreement with wired investors and i won’t get the exact price. It does feel a little bit awkward to share how much money um i sold long tail pro for the exact amount, but i shared the income numbers of the last full year in 2015 and if you know multiples of software, you can do some math and get Pretty close to to what i sold the company, for it was a life-changing amount of money.

You know over seven figures again, i i was the 100 owner at the time and uh being able to see that amount of money hit. My bank account all at once. I have no debt, you know never took on any debt with the company, it was.

It was a good day. I’m, not gonna lie uh, it was a good day. I still worked from home and i basically walked downstairs and talked to my wife and said: well, it’s done, i’ve sold it and i took her out to a nice dinner and that’s, how he celebrated Um, it was a hard decision.

I i will be honest that i struggled a lot. I talked to so many people, my dad, my brother, my wife business associates several sleepless nights because i had a couple of employees and i knew i might have to either let them go or they would have to go with a new company and they may or May not like working with the new company, so it was stressful, but i i believe that i made the right decision, and so now i want to talk a little bit about what happened.

Next, i won’t dive into the process of hiring lawyers and negotiating price and all of those details, but i will share one detail that i left out here is that i actually only sold eighty percent of the company and so up until now.

I have been still a twenty percent owner of long tail pro, but i have zero operational responsibilities. I am not involved in the day-to-day responsibilities. I don’t, make any decisions for the company um anything like that.

The reason i kept 20 because i felt like there was still a lot of upside and i wanted to take advantage of that upside and so after the company was sold, uh wired investors. They wanted to do some promotion on their their blog and, if you may have been following along, you may be familiar with this story.

If not, you can can google, it um just some short commentary here they did some things in the first. I don’t, remember what it was two or three months, because long tail pro was the first acquisition of wired investors.

They wrote up, you know they did some things of longtail pro that that increased conversion rates and they sort of extrapolated okay. We’ve increased the conversion rates here, and the value per subscriber has gone up this much.

Thus we can project. Over the next year we’ve increased the value of long tail pro by you know 2x or i don’t, remember the exact amount, but it was a little bit uh sensational and again extrapolating out and they wrote this big blog Post and i kind of felt bad because it it made me, look bad, it looked like hey.

These guys could come in and double my company after just a couple of months and uh, but i worked with them in in a way because i had just gotten a ton of money from them, and so i didn’t tell them to take That blog post uh down and um, but it i kind of felt like i’ll, be honest.

It damaged my reputation a little bit in terms of my own business savvy. It made me look not that great. But what did i care? I mean? I just had the hugest payday of my life um, but over the next um year or two, it became very apparent that the changes that they had made wired investors made did not you know, double the company um at all, and so they actually went back and Changed that blog post and so it’s, been an interesting ride.

Um. I will just say that long tail pro uh actually did continue to grow a little bit in the first couple years, but it ‘ S definitely stagnated uh, but it is still a very solid company. Like it’s, i can’t share the exact numbers, but it’s.

It’s, still a very healthy six figure a year revenue business. I mean it’s, you know doing really really well, and i’m impressed with a lot of the changes, because wired investors did have a difficult task of taking it from a desktop application to an online version, and they did that.

There was lots of things that happened um and it was so tough for me because i couldn’t answer to the customers and say you know hey. I got your back because i no longer had any operational control, but if we fast forward now until about a year ago, wired investors decided to sell longtail pro again, and so there actually is now a new owner of longtail pro and they took over.

In about january of 2020, so they’ve, had it uh roughly 10 to 11 months now, and what did that do for me? Well, not not a huge change other than you know. It’s, a change in ownership. Again, i still don’t have any operational responsibilities.

I still do currently own my 20, and so i should clarify that over the last four years since i originally sold long tail pro, i have been getting uh quarterly payments, which is pretty nice. I’m, not going to lie kind of get 20 uh bonus check or you know just the recurring earnings every month and but i do expect in the next 12 months to be paid off completely.

So i will no longer have any ownership percentage in long tail pro whatsoever. You know after the next 12 months or so so that essentially brings us up to date with where long tail pro is today uh. But where does that actually leave the company itself? So longtail pro is still actually a very strong company.

Uh it’s, doing well. It’s profitable. It’s, earning money and uh. The new team that just bought the tool i’m actually optimistic that they’re gonna make some really nice improvements to the software tool.

They’ve, already made uh some decent improvements. There just different things: the the rank tracker is improved, the core keyword, research functionality is improved and they’re. Tightening up some loose ends that have been um with the online version of longtail pro for a little while, and so i’m, really actually quite excited about the future of the software tool itself.

I likely won’t, have any ownership percentage going forward? I don’t really do anything with the tool other than every once in a while. I’ll, say maybe every three to four months. I do actually hop on a consulting call with the current team and i walk through and give my advice, my tips and any strategies that i might have, which i think they’re still appreciative of, and so it’s been a Long journey uh, when i look back it’s now, actually been 10 years since i started long tail pro it’s a long time ago that i came up with the idea back in 2010 and launched the software tool, and here We are now at the end of 2020.

I still have a very small ownership percentage and but it’s been sold twice. Now i sold it once and then wired investors sold it again and the current company that owns it. I don’t know how much of their plans i’m supposed to go into other than uh.

They are likely going to wrap it up. They they own other companies and software tools. They’re likely going to package. It all up – and i think the dream and hope someday is for them to be publicly a publicly traded company which would be cool if someday, i could say, hey longtail pro is part of a publicly traded company.

So we’ll, see it’s been an amazing journey, it’s been life-changing, and i’ll. Just say that, even though i’ve had a huge payday with longtail pro. I still am ambitious. I still have new ideas. I’m, still excited to go out and build new software tools.

In particular, i’m working on link whisper right now, which is done very well, and i actually do believe that link whisper has as much potential as long tail pro had as well. And so i’m, going to see where i can take it.

Link whisper has been in existence now for about a year and a half, and i’m, very excited to see what happens over the next two to three years and beyond, to see where i can grow it, and so that’s. Where i am in my current business, that’s, the full story of long tail pro there’s, a lot of little details.

Of course that have happened since i sold the company, but because i’m not involved directly with the day-to-day operations, i didn’t want to dive into those too much other than i’ll. Just say that there’s, certainly been some bumps along the way there’s been a lot of new competitors come along the way, but longtail pro is still after 10 years a great tool.

I use it personally for keyword research tool as a keyword, research tool. Still i use it as a rank tracker almost daily. I’m in there checking where my rankings are and much more it’s, a profitable company, and so i feel very good about that that i was able to start something uh that has employed lots of people.

Now at this point – and i see a good future as well for the company – so there you have it – that is the full story of longtail pro. I hope you have enjoyed this episode and kind of listening to me. Re hash, the history a little bit of the software idea that i had 10 years ago.

So if you have an idea for a software tool, i definitely think it’s, a great business, a great avenue that you can go down. You can make a life-changing amount of money, no guarantees, but certainly, if you put in the effort, if you stick with it and if you truly come up with a good idea, this solves a real problem.

You can be successful at it. So thanks again for listening.

5 Key Services of a Successful Fulfillment Company

5 Key Services of a Successful Fulfillment Company

As more entrepreneurs and affiliate marketers are realizing the real profits and success in the world of fulfillment and creating their own products, there is still a lack of knowledge on what it takes to make a successful leap. For the most part, this comes down to choosing the best fulfillment company out there and knowing that orders are successfully being paid for, shipped and processed accordingly. Without these key features in place, your profit margins and business can quickly take a turn for the worse.

Whether you are looking to dive into the world of product creation and fulfillment or simply looking to expand upon what you already have in place, implementing these five key services into your business will allow you to track, manage and scale your business effectively

5 Questions to Ask About Your Fulfillment Company

Does your fulfillment company make the grade? To See for Yourself, Assess Whether or Not They Provide These 5 Key Services.

Fulfillment Services

1. Dedicated Account Executive

Do you have a go-to person if you have questions about your business or does your call get routed to the “next available representative,” who may not know anything about your product? If the latter, you may want to re-think your fulfillment company. A dedicated account executive offers consistent customer service, someone familiar with your products, inventory locations, shipping methods, and someone whose sole job purpose is to look out for your best interests. You’ve worked hard to grow your business, why wouldn’t you reward yourself with this level of service?

2. Order Grouping

Does your fulfillment center offer order grouping? If you are selling multiple products, and a consumer selects one item, your CRM can suggest additional product offerings based on their initial selection. Grouping these types of orders together can save you on pick fees, fulfillment charges, packaging, and postage. For companies not offering this option, it’s a sneaky way to add fees to your account. If your current fulfillment company operates like that, it’s time to look into one that offers complimentary order grouping.

3. Detailed, Real-Time Reporting

Can you determine how much you paid per shipment for pick/pack/ship fees? Get a snapshot by day/week/month/year? If your account invoices provide any generalized fees rather than specific break-outs for your accounting needs, your fulfillment provider may again be tacking on additional, unspecified charges to your account. Take a look at your most recent statement and kick your provider to the curb if charges are not all clearly explained.

4. Address Validation

What happens if your customer mis-keys their address information when placing an order on your site? Without address validation, your package will ship to an undeliverable address, you’ll end up paying re-ship fees, and your initial shipment may or may not get returned to you. With address validation, the transaction can’t progress until the error is corrected. Does your current fulfillment house provide address validation? If they don’t, you can bet you are incurring unnecessary fees, chargebacks, and maybe even some negative customer reviews.

5. International Shipping

If you are looking to scale your e-commerce business, the easiest way is to expand into new, international markets. Your fulfillment partner may have rock bottom shipping rates domestically, but if they don’t have economical international rates, as well as strategically-located facilities from which to ship your product, you could be missing out on business or, worse yet, paying too much for newer market entries.

As an affiliate marketer, it’s easy to treat your leads simply as leads. When you are the owner of the product and have real customers, there is nothing more important than keeping them happy and having them come back for more. This all ties back into how you run your product fulfillment and making the ordering and tracking process as seamless as possible.

Thwart the Thieves: How to Protect Your Company Data from Hackers

Thwart the Thieves: How to Protect Your Company Data from Hackers

Running an online business where you are dealing with customer data and private information can be scary. It doesn’t matter if you are a sole affiliate marketer or a huge 500+ person company, a data hack or leak can happen at any time. Even scarier than the initial leak itself, is that if hackers find a way to access private company data, they may be able to bring down your business. If you’re worried about this potential threat, you might want to learn how you can protect yourself.

Luckily, there are specific tactics you can put into place to shield your company data from hackers.

Keep reading and you’ll learn what it takes to keep your data safe. When you’re done, you’ll understand how you can lower the odds of a hacker stealing precious company data.

Let’s begin!

Enable 2-Factor Authentication

2-Factor authentication means that a password is not the only thing a person needs to access a certain ‘account.’

This is helpful because if someone accidentally exposes their password, their data is still going to be safe.

Most of the time, 2-factor authentication means you need an authentication code whenever you want to login to a specific account. Or, you’ll need to login to an app, that is constantly generating new authentication codes.

When you sign up to something like this, you’re also given some ‘backup codes.’ These codes are ‘hard-copy’ codes you can use should you lose your phone. You can write down these codes on a piece of paper and put that paper somewhere safe. You’ll then have a way to login to your account even if you don’t have your phone nearby.

There’s also the option of using a ‘key.’

This method is growing in popularity because it’s a lot more secure than using a message sent to your phone. With this option, you buy a special USB key. You then need to insert the key into your computer before you can log in to your account.

If you want to keep things as secure as possible, security keys can be the best option. Just make sure you buy your keys from a reputable source.

Be sure to enable 2-factor authentication for all your digital business systems.

Teach Employees How to Keep Data Safe

Data breaches often happen due to human error. If you can train your staff on potential scenarios that might lead to a data breach, you can reduce the odds of an issue related to human error.

One thing you need to teach employees is the importance of verifying URLs before they enter information.

For instance, there are a lot of hackers that will use a method which involves creating a duplicate web page. When people reach this duplicate webpage, they’ll think it’s the original version. Following this, they’ll enter in their login information. The hacker will then have this login information and they can then use it to access your data.

It’s worth noting that using methods like 2-factor authentication can help reduce the odds of this becoming an issue. After all, even if someone has access to the password, they’ll still need the authentication code/security key to gain access to your systems.

Another thing you should teach employees is to be wary of how they carry/transport data.

You should also let them know that they’re not allowed to store data on their USB sticks. USB sticks are convenient, but they’re also an easy way to lose company data.

The alternative is to store everything on a cloud server. This will help prevent a scenario, wherein an employee accidentally leaves their USB lying around and someone then steals You should also tell employees that they should always make sure there is a password on their computer.

Make Use of Business Specific Cloud Services

If you’re using a cloud service, use one that’s designed specifically for business. Such a service can often provide a lot more security, than a normal cloud offering.

You’ll find certain options provide you with a lot of insight into who has access to certain files and folders. Using the administrator login, you can control who has access.

This is especially helpful if someone loses their laptop.

You can just log in to the dashboard and make it so that the computer in question no longer has access to the files. If someone steals the laptop, they’ll be unable to access the data and exploit it. If you’d like to know how access rights work, check out this post for more info.

Such services also provide you with logs.

This can be helpful if you’re trying to spot unusual data access patterns. If you notice a login from an unusual location, it could be the sign of someone trying to hack your system. You can shut down this login as soon as you’re aware of it.

Hire People to Check Your Systems

There’s also the option of hiring people known as ‘white hat’ hackers. Such individuals will look for ways to hack your systems and gain access to your data. These people can let you know what vulnerabilities exist in your system and how you should fix such issues.

According to HeimdalSecurity, the following cyber attacks and threats are the biggest risks to data companies of all sizes:

  • Getting their info compromised in massive data leaks
  • Smartphones shipping with malware and malicious apps
  • Ransomware attacks on cloud services
  • Cryptojacking that affects their hardware
  • Financial losses and data compromise due to cryptocurrency trading
  • Scams with advanced social engineering tactics
  • IoT devices like smart locks or smart assistants being hacked

This preemptive approach gives you the chance to address issues before they’re exploited in a way that can damage your business. Good white hat hackers can be expensive. But you need to compare this cost to what you might expect you lose if someone hacks your company data.

Do You Know How to Protect Company Data?

There’s really no way to escape the fact that your company will have sensitive data stored on electronic devices. This can be a problem because people who are looking to exploit your data can hack these devices.

In this post, we’ve reviewed how you can protect your company data from hackers. You need to focus on training your employees so that the odds of human error are low. You also want to make use of things like 2-factor authentication.

If you want to keep your data really secure, consider hiring some white hat hackers. They’ll be able to take a look at your setup and can provide qualified advice on how you can make things better.

No matter what type of business or brand you are running online, it’s extremely important to protect your own, and your customer data. This is also true for any bloggers and affiliate marketers that might want to further protect their ad campaigns, company marketing plans, and business models.