If you aren't familiar with Ranker.com, you probably live under an Internet-free rock. By allowing visitors to weigh in on subjects like the best movies of all time (with 2.6 million votes), the druggiest rock stars of all time (a competition no one wants to win), and the best websites to waste your time on (which is kinda meta), Ranker pulls in 45 million unique visitors and averages 10 million votes per month on topics ranging from sports, gaming, entertainment, politics... you name it.
And Ranker is profitable; revenues grew from $6 million in 2015 to $13.1 million in 2016, and site visits grew 86% over the same time frame.
The result is a business that is not just an eyeball gathering machine, but one that has attracted millions of dollars in funding while gathering an incredible amount of crowd-sourced psychographic data.
To find out more I talked with Clark Benson, the founder and CEO of Ranker. We talked about idea behind Ranker, how he built the site to be a Quantcast top-50 site in America, why he feels he's terrible at pitching VCs, and why Ranker is a lot more than just a traffic magnet.
Like every superhero, every great business has an origin story. What's yours?
I love lists, and while it might sound odd, I didn't think that there was a market served on the web.
Even before Buzzfeed, every blogger made lists. Magazines lived off of lists. There was no shortage of lists... but it drove me crazy that if you clicked on a "15 Best..." list, it would just be a 23 year-old's opinion.
That gnawed at me. I read the book The Wisdom of Crowds, and I firmly believe in the logic behind it. I wanted to create a platform, with a lot of content, that allows the crowd to weigh in on rankings. Someone working with me was really strong with data, before a "data scientist" was a thing, and we talked about the methodology behind it and decided to build Ranker as a platform: open ended, where people could express opinions, learn from other people... the key was to built it so participating was really, really easy. You wouldn't have to read a lot of instructions, sift through text-based user-generated info... just vote whether something was good or bad.
We launched in 2009, and frankly it took a few years to iterate on a user interface that would allow it to scale.
The importance of user interface is often overlooked; sometimes people feel the idea is so great, the user experience won't matter.
User interfaces can make or break a company. It took probably a good 18 months of testing before we hit on what worked at scale.
I was funding the company myself. Frankly, 2009 and through a lot of 2010 was a difficult time to raise money. So once we hit on a formula that worked and we reached a million monthly visitors, we raised angel money, then venture money... and have grown the platform and the business quite a bit.
Let's talk about funding. Sometimes a lack of funding can kill you, but other times it turns out to be an advantage.
We've raised $7.6 million to date, but it came in a bunch of different rounds. We've never had a huge pile of cash to play with. On the positive side, having less cash to play with means you apply a lot more discipline to your business. On the negative side, you just can't grow as quickly. If we had raised $10 million three or four years ago, we might have been able to hire some really strong people to help us grow a lot faster.
This is the fifth company I've started: I ran a record store, a music marketing company, ran regular businesses... I've always had a P & L based ability to run businesses. That's probably why we survived the lean years. If I had drank the VC Kool-Aid about growth, that would have been a real problem.
You get a significant amount of traffic from Facebook, but that wasn't always the case.
We did around 80 million worldwide visits last month. Up until a couple of years ago most of our traffic was Google and direct. Getting good at Facebook has really helped us grow.
Facebook started to be a significant player about 5 or 6 years ago but we missed the boat in the beginning, partly because I don't spend a lot of time on Facebook myself. I found somebody younger on the team to "figure out" Facebook, and frankly, they didn't.
What you learn as an entrepreneur, especially in tech, is that when a new thing comes out there is no playbook to help you work with that new thing. You can read all the articles you want, but what you really need is to find someone who is doing that thing really well and talk to and learn from them. I was forwarding interesting articles instead of taking it on myself. I wasn't using my contacts to figure out how to get to the right people to figure out how to get traffic from Facebook.
Everyone knows someone who knows someone who knows what you need to know.
Yes, and as a result we missed out on the click-bait era of Facebook. Three to four years ago, sites like Upworthy and ViralNova got tens of millions of monthly visits in month-10 of their existence because they figured out the click-baity articles that got tons of traffic.
We're very data oriented. The Ranker platform is built on the foundation of data. We have all these lists, and all these pieces of data, and we're able to take all the people voting and layer in the contextual data surrounding our content and export it into actionable ways to micro-targeted audiences on Facebook. We were great at that with Google, and I realized we could do the same thing with Facebook. Sites that focused on click bait have struggled, while our data-driven approach has been very successful.
That's the classic startup founder struggle: What technical aspects of the business to focus on.
You have to pick and choose your deep dives. When I give talks to entrepreneurs, I always say that unless you have piles of money to hire people, in order to survive you have to choose a piece of your business and learn it cold -- you can't trust that someone else will. But you have to choose the right thing.
The reason Ranker survived in the early years was that I learned SEO. I would work my 12-hour day, then go home and study and read SEO blogs, look at our logs, and figure out search engine optimization. After doing that for a year or so, I got really good at it. That initially drove our growth.
You may have 1,000 things weighing on you, but you still need to dive deeply into what will really drive your business.
At the same time, you can't turn let that approach lead to a temptation micro-manage everything.
I've been an entrepreneur for 20-odd years, and you always have this expectation that the amount of time you'll get to spend on the cool parts is a lot more rosey-eyed than reality. When it's your baby, you have to wake up every morning and say, "What are the mission- critical things I have to do today?" The last thing you want to do is fail, or stop growing, or whatever your particular "bad thing" may be.
I can't tell you how many times I've written down, "Work on hiring a music editor," because I love music and feel we could do even better with that category on our site... but it never happens. I have to let it go. When you're running a growth company -- we have 70 employees and a constantly growing head count -- some things you have to give up. Your company will suffer if you micro-manage those areas.
That's often the difference between someone who is good at running a small business and someone who can scale a business. It's like that movie, The Founder. The McDonald brothers were great at running their one store, but they would never be guys who could scale it.
I'm not saying I'm Ray Kroc, but the biggest difference between running a growth company and running a business well is the ability to understand when you can let go of things, and when you can't.
Speaking of growth, building a hugely popular website isn't the only thing you're doing.
Relatively recently we launched a portal called Ranker Insights. We have a lot of data, especially in the realms of things that people tend to be passionate about: Film, TV, celebrities, sports, comic books, video games, fast food, dining options, food options... we have a ton of data.
People get hooked on Ranker and start voting on lists. A significant percentage become hardcore users; we have hundreds of thousands of people in our hardcore audience. They come to the site, look at new content, and express their opinions. They might cast 100 votes every month.
So now we have all this data that says, "People who like X also like Y, to this degree. We have a massive amount of psychographic data and insight. Psychographics matter: Netflix, for example, has stopped paying attention to demographics in terms of marketing -- they only look at psychographics. It doesn't matter who you are; what matters are your tastes.
We have hip hop lists; it makes sense that people who vote on "best east coast rappers" might also vote on "best west coast rappers." But they will also vote on "funniest movies" and "best fast-food French fries."
When we got to scale, we saw we could have an interesting data business as well. So we launched Ranker Insights, licensing our data and providing a content recommendation engine.
One really smart play is in the entertainment industry. Fans of this actor like that actor, fans of this franchise like this but don't like that... and our data shows where to market on TV, or social, or can even help make casting decisions.
We're licensing that data in a number of different ways to different players in Internet advertising, entertainment, and would like to get into market research next. Our core business is the advertising to consumer publisher model, but now we're starting to ramp up the secondary business, which may become the main business: Licensing psychographic interest data.
The nice thing is you're not using data to target specific people.
Exactly. The data isn't personalized, there is no privacy issue -- it's more along the lines of, "If you are marketing to fans of Game of Thrones, you can find them by targeting these audiences." Or you can use the data to make broader strategic decisions.
But keep in mind that's the future. The real business value is in our existing model. We're profitable because we have a successful ad-based media model. But we always did work under the premise that proprietary rankings about tens of thousands of topics has a business value. Intellectual property was always part of the vision.
Say I'm an aspiring entrepreneur and you have five minutes to give me advice. What would you say?
I would start by asking about your goals. Do you want to be your own boss and have a business, or do you want to run a growth company that requires outside funding? The two are very different things.
If the answer is "run a growth startup," you have to learn how to pitch. You have to be able to pitch and sell.
The problem, is when you're running a growth company and you want to raise capital, it's all about out the sizzle. I've had successful small business people ask, "How do I get VC money to really get this thing off the ground?" The hardest thing to tell them is that the fact you are successful at running a small business is meaningless to 90 percent of the investors you meet. So, don't waste too much time talking about your business skills.
Of course they argue. I thought the same thing. The problem is, many venture people bet on the sizzle. Their economics mean they're looking for things that might make them 10x their investment.
For a successful businessperson, that's hard to internalize and say, "Okay, I need to turn on the hype machine.
I can't tell you how many venture capitalists, younger than me and with no tangible business success of their own, have told me, "I don't see that this is a billion dollar idea." How many businesses are billion dollar ideas?
If you're looking to do a tech startup, you have to be prepared to walk the talk of the sizzle, because that's what they're looking for. If you're not prepared to play that game, run a "real" business.
So you've been able to embrace the sizzle?
Actually, no. (Laughs.) I haven't been great at the sizzle. I've spent hundreds of hours raising capital, and I've had success without the sizzle, but I do have enough contacts and enough of a track record that I can get the meeting.
Almost everyone that invested in Ranker is someone who I met with, and who passed, but who also liked me and didn't pass in a huge, "No way," kind of way, but more of a, "Come back to me when you have a little more progress, because I like you and I like where you're going."
Do it enough and you'll develop a good radar for when people are being honest. I went back to the ones who I could tell meant what they said with proof points.
That's how you can get around the hype. If you can't hype, then at least come back with numbers that can't be ignored.
Coming back with numbers means you've grown your business. Where do you see Ranker expanding in the near future?
We're a Quantcast top-50 site in the U.S. While we have a lot of traffic, we can still grow that -- but we don't have quite the brand recognition some other publishers do. We're focusing on building our brand exposure, which obviously will lead to more visitors, which means more people will pay attention to our data.
Expanding the brand beyond Ranker.com is a big initiative; creating a brand that is not just a great website people go to but a website that builds data and extends to many other uses.
For example, we're talking to streaming services about being their recommendation engine, because there are many uses for not just the data but also the technology we've built.
Data plus infrastructure creates a very nice flywheel.
Millions of pieces of psychographic data sitting on a sophisticated technology foundation let's use use our IP and make the sum of the parts of much greater as a whole.
I can't remember who said this, but we've basically created a gigantic Nielsen panel in the wild -- without having to offer incentives to get people to participate. We're doing it in a way that is natural and unforced, and we're collecting information in a way that's fun for our users. Do that, and you unlock a lot of value.
We might decide to raise a big round to grow... but we don't have to, because we're cash flow positive and able to grow organically. I don't know if I want the distraction if raising more money because it's so time consuming.
Short answer, we're in a really good spot. We've definitely had lean times, and it's nice to be past them.