Yesterday, I posted the first part to the interview I conducted with Shoemoney. Now here’s part 2 to the interview:

—start of interview—

Stanley: When the dot-com crash came at around 2000, you went through a lot of problem. Can you tell us about that and how you overcame it?

Jeremy: It basically ruined everything that I was doing at the time. That was when I had MacQuake.com and a couple of other sites. We were doing great online revenues. People weren’t even asking for statistics at that time. They were just asking, “How much per month?” And you just shot them a price and they paid the bill.

That was awesome because I had no other money, other than just a few working here and there. But I was making more than everybody else – all my roommates combined. I thought I could do that for the rest of my life. Well, when the crash happened, it was really horrible. Companies not only wouldn’t pay going forward, they wouldn’t pay past bills. It really was a big, big problem.

I think some of the lessons learned from that were: You can’t put all your eggs in one basket. You need to diversify and do a lot of due diligence with people that you’re working with. Just little lessons like having advertisers pay ahead, things like that – big lessons learned from the crash.

After the crash, we were doing good revenues again, or at least what I thought at the time was good. It was definitely more than I was making at my previous day jobs. My wife was going to be a physician. The plan was basically that I was going to be the stay-at-home dad and work from home, and she was going to make the good money.

We basically created a company to make the personal and the business stuff separate, because I needed to protect her assets. With the Internet, you never know what’s going to happen. We’ve been sued a couple of times; we’ve sued people. There are a lot of crazy things that can happen on the Internet. So that was definitely a big thing: Incorporating ShoeMoney Media, so that it separated personal and business.

Stanley: What really inspired you to come up with the name ShoeMoney?

Jeremy: Actually, it’s kind of funny how ShoeMoney came about. The area I’m from is a very urban area and I always grew up listening to rap music and stuff like that. I was probably pretty influenced by it.

I was working one day at a pizza place, cutting pizzas, when I was 15 years old. After they came out of the oven, they would put them on this thing and I would cut them up. I was pretty efficient at it. So, they used to always put me on the cut table.

One Christmas, a guy who worked there   we had like a secret Santa swap   his name was Joe Ackerman. Basically, he gave me the nickname “ShoeMoney” and he gave me a T-shirt for Christmas that said, “ShoeMoney on the Cut” (Like ShoeMoney on the cut table). It was kind of a funny thing.

I had already been drawing the ShoeMoney logo since I was 12 years old. I thought it was cool. It looked like Superman but it was money. My original site was actually ShoeMoneyMedia.com, and my actual blog, when I first started, was GoogleNinja.com.

A friend of mine said, “You shouldn’t use Google because they’ll sue you.” And I was like, “OK.” What I did was I backordered ShoeMoney.com. One day, the person who had the domain name let it expire. I got a notice from GoDaddy saying that I was the new owner and I switched over from GoogleNinja.com to ShoeMoney.com. And that would have been a couple of years ago.

Stanley: On your blog, there’s a picture of you holding the famous $132,995 Google check. Can you tell us a bit about the story behind that?

Jeremy: Sure. That was on a site called NextPimp.com, which is a mobile community site. The most we had ever brought in from AdSense was about $60,000 to $70,000 a month. The traffic was purely organic using search engine optimization. There was no pay-per-click advertising. In fact, I didn’t even know what pay-per-click was back then.

Basically, it was a Nextel-geared site. At that time, Sprint had just merged with Nextel, and the cost-per-click for all Nextel terms just went through the roof. I don’t know if they were just dumping the budget or what happened, but we were constantly seeing $3 to $5 per click throughout that month. That was a pretty crazy month.

That was also the last time we ran AdSense because that was when all these companies realized the value of ringtones. That was really when they started, and so people were spending money like crazy to acquire users in their services. After that month, we signed a direct deal with Sprint and other carriers to only show their banners exclusively.

Stanley: Your blog ShoeMoney.com is in the top 100 on Technorati. How did you first get into blogging?

Jeremy: In 2005, I went to my first conference, to San Jose SES and, while I was there, this guy showed me his blog. Back then, I thought blogs were the stupidest thing in the world. I was like, “So, you put your thoughts on this?” And he was like, “Yeah.” And I’m like, “And people care about what you write?” And he was like, “Yeah.” And that just didn’t make sense to me.

But I did want to put up all my photos from things that I’ve done, like conferences I had attended and things like that. Then I thought, “Well, maybe there is a little value in a blog because my mom and other family members are always asking me what I’m doing. And I hate explaining it to all of them because it’s hard and stuff like that. Well, I’ll just start this blog for me, and it’ll be a place where I can vent and just talk about my theories on things from my experience.”

So, that’s how it started. I just put it up. My first post I ever made was about how I met Paris Hilton in Las Vegas   nothing to do with making money online. You know what I mean? A lot of the times, I don’t post about making money online and stuff like that, but just more my personal blog kind of thing. So, that’s how it started, anyway.

Stanley: What do you think was the biggest reason behind the success of your blog ShoeMoney.com?

Jeremy: I think the blog is successful. It’s difficult how you measure success. It depends if it’s because of advertising or just because of its popularity. I think the blog is successful because, for one, it’s a good story.

I basically chronicle how, if you look at my life before, I was 420 pounds plus, I smoked 10 packs of cigarettes a day and I was hundreds of thousands of dollars in debt. And I went from that. I lost weight and I’m now a very fit person and very health-conscious. We make great money. You know what I mean? I think it’s just kind of the dream. I don’t have a college degree – I barely graduated high school – I was probably voted “most likely to never amount to anything” if there was a poll on that from my high school.

It’s just everybody can relate to it, whether you’ve gone through that yourself or you’re looking to improve yourself. I think that I have a pretty interesting story and I’ve worked really hard to get where I’m at. People like success stories. So I think that’s one of them.

The other thing is, I started writing this blog back when I wasn’t making very much at all. I was just selling computers on eBay. There are people that have been reading the blog since the early days, so a lot of them actually grew with me over the years. We went not only from just discovering how to make money online, but to owning our own companies and competing with the biggest companies and then selling those companies.

There are a lot of people that write about making money online and I think one of the differences in that space, with my blog and a lot of others, is we actually not only do it, but we’re very transparent about exactly what we do   well, I am anyway, probably too much to the point. During the time I’ve had my blog, we went from just me as an employee to, now, we have five employees and two offices throughout the U.S.

Stanley: What are some of your ways to generate traffic to your blog?

Jeremy: I would say I don’t intend to but that’s probably a cheap way out. As far as generating traffic, I used to try to get on Digg every day. For a month, I was obsessed with Digg and I think we got on the homepage maybe 10 days out of the whole month. It was pretty crazy. But then you measure the quality of that traffic: It’s junk; it totally rapes your server; it ruins it for the people that are loyal.

Another key way for anyone who’s looking to write an educational kind of blog is that you have to find different ways to approach old subjects, because the information is always been out there. You just have to find a way to present it to people in a way that they’ve never heard it, or in a way they can now comprehend and understand it. It could be from a different angle or something like that.

I’m trying to directly answer the question of how I generate traffic, but I really don’t set out to like, “Oh! This will be awesome! This will generate a lot of traffic!” because the blog is a very small portion of our company and our company’s income. I really have to limit my time and spending. So generating traffic to the blog is not a huge priority.

Stanley: So you don’t use any search engine optimization?

Jeremy: No, I don’t. I’m a really bad SEO and I’ve actually stated that. We have companies approach us all the time to do their SEO and I don’t understand why. The SEO done on my blog is purely WordPress. I think I’ve done like one or two things that were recommended by my friends and that’s it. It’s just WordPress and it does a really good job out of the box. That’s it.

For a long time, my blog was not even found in Google. Until, just until about three or four months ago, it really started doing really well in Google. I think this was because I was under a penalty for just getting way too many links too fast, plus I did some stupid things.

I was definitely being penalized by Google. I filed for some reinclusion requests. Then all of a sudden, about a couple of months ago, I just started ranking really well for subjects.

Stanley: What are some of your ways to monetize that traffic, apart from AdSense?

Jeremy: Well, it depends on what we are talking about. For a blog, like I said, the blog is not my main thing, but I’ve definitely learned how to make money on it.

For a blog that gets attraction, the best way by far is direct sales. Everybody who has AdSense or anything should also have a page where people can buy directly from you for permanent placement, because usually you can sell it for more money and, if you get any readership at all, usually companies will want to be displayed there. So, direct ad sales for blog is probably the number-one best way to make money.

Stanley: What about for some of your other sites like NextPimp.com?

Jeremy: Sure. For NextPimp.com, the best way that we have made money on that site was through subscription revenue. We actually charge for forum subscriptions and we have about 60,000 paying subscribers.

People freaked out on the AdSense check and thought that was an amazing thing. And it is. I can definitely see why and it was to me at the time. It was huge. Now we have 60,000 paying members, which accounts for about $2.7 million a year in revenue, which is purely auto-reoccurring.

For community sites, subscription is by far the smartest form of making money. You really have to do your research on price points and times (how long is a subscription going to go for until it is renewed). We changed our price points and plans on NextPimp.com several times before we finally found the sweet spot.

Stanley: What do you think is the biggest key to the success of a community site?

Jeremy: You have to have a good niche or something else around. You can’t just put up a forum. For instance, if you look at the Digital Point forums, which are the most trafficked webmaster forums out there, that didn’t start out as a forum. That website provided all kinds of great tools. That’s how I started using it.

They have a keyword tracker and all these SEO tools that you can use. So, I started just by using some of their tools. Then you get sucked into the forums because they show recent posts and stuff like that. One of those will eventually spark your interest and you’ll sign up and give your two cents. That’s how I started on Digital Point and that’s what drew me in.

So, in the case of NextPimp.com, we had all the content of ring tones and wallpapers and mobile content and all this stuff. I threw up a forum with the same concept and through recent threads with the content. It kind of gets people sucked into the forum. People either need help with the content or they can’t get it to their phone or they want to sell their phone or whatever. You give them an outlet for that.

Now, with our most recent project, Fighters.com, we are going to build a huge mixed martial arts site; we are going to build a forum and a community around great content.

So, the key to having a successful forum is: You’ve got to give. You’ve got to have an edge or a niche which draws people other than just a place where people can chat because they can get that anywhere. You have to definitely have some sort of niche, focused, good content, and all that stuff around the forum.

Stanley: Moving on, you started a site called AuctionAds.com, which eventually got bought out. Can you tell us a bit about that?

Jeremy: Sure. Like we talked about previously, I did good AdSense revenues and realized the value of it. This is how AuctionAds got started:

You take AdSense. It works awesome. When you look at it, you think, “Why does it work so well?” Well, the text format and everything looks great. So, one day, I said to Dave, who is my programmer, “You know, let’s make our own AdSense system but let’s do affiliate offers instead because pretty much everybody who was advertising on our sites was all going to affiliate offers.”

“OK, these guys are making money advertising on our site. We think we are getting paid good money, but actually they are the ones making really good money. Let’s just cut out them, cut out Google and make our own thing.” And we did. We called it ShoeMoney Ads.

That was March of 2005. We actually created a company and we allowed people to use it themselves. So they could upload any affiliate code and write their own text. It was basically AdWords and AdSense for your own website. We really limited the amount of people that could use it. I think it was only open to about 250 people.

Shortly after that, November of 2005, at the WebmasterWorld PubCon Conference, there were some representatives from eBay there. They said to us, “We really like your ShoeMoney Ads platform. If you want to make one targeted more towards eBay – the people that are using it for eBay now are doing really well with it – we would work with you with that.” And we think it would work.

At the time, they were not allowing anyone really to do what they were going to allow us to do. I figure it was only because we had had a record of success with ShoeMoney Ads.

But there were a couple of problems. One, we are not good at customer support or service. We are kind of programmers and people like that. As social as I am, we just suck at that. So, that was a problem. The other one was, we had never done an advertisement system. We didn’t know how to send out mass payments or anything like that.

We could handle the programming side and the marketing side because I have Dave to do programming and myself to do marketing. But we didn’t know how to handle the financial aspects of it or the customer support.

So, I talked to a friend of mine, Patrick Gavin of TextLink Ads, whose company was bought by MediaWhiz, and said to him, “We have this idea. I think it’s going to be awesome.” So he was onboard with it. Then the company that had bought his company, MediaWhiz, entered into a partnership with us and started the company called AuctionAds, which basically was somewhat like AdSense but with eBay. For those that haven’t seen it, it shows how much time there’s left on auctions, what the current price is and stuff like that.

They owned a minority stake in it. We kicked them off. Within four months, we had 25,000 users doing revenues of millions per month. By July, only four months after we had launched it, MediaWhiz, who owned the minority, bought out my shares in the company. So I only owned it for four months.

But I think it was one of the most successful launches of an advertising company ever. And I think the reason was because the Internet is driven by the world economy. There are all these advertising platforms that only cater to the U.S. for the most part. Even though AuctionAds was single to just things on eBay, because eBay was located in 12 countries and we were able to geo-target that through our programming resources, we now had an advertising solution that had a huge amount of inventory. It was located in 12 countries that you could monetize it with.

As far as being a global option, it really had no competition, because there was really nothing else that offered that in a one-solution deal. Plus, we also saw the problems in the pay-out structure. We paid people net zero terms, which nobody has ever done that. On the first of the month, we would pay people for the previous month’s things. I think a lot of users really loved that. Then we incentivized some of the users.

I think a lot of our techniques are now being copied by new start-up advertising companies. We had a lot of calls from companies and stuff like that. But it was a really interesting company to start. I’m glad, obviously, that it was really successful.

—end of part 2—

Hope you enjoyed it. Click here for part 3.

Leave your comments and let me know what you think