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In this episode of Ecoffee with Experts, Matt Fraser interviewed Alex Melen, Co-Founder at SmartSites. Alex shares several useful strategies and tips to run a business successfully. Watch now.
You can’t just do an interview and send an offer. If you want long-term employees, You have to point out to them the reason your company is a good fit for them.
Thank you for the intro. Great to be here.
I guess so much more. Marketing is a big one, our company, Smart Sites is a big part of what I do. We’re always in growth mode, such as growing the company and concentrating on it. I’m big on travel, which I’ve been able to combine lately with my work. I started doing public speaking, which gave me a lot of travel opportunities. But those are the big ones.
Yeah, my favorite subject in high school. In High school, I did a lot of computer science stuff. I actually started my first business when I was still in high school in 1987. One of the first web hosting companies. I’ve been involved in space a little bit more than the ten years that you said in the intro. Then for college, I went to Babson for entrepreneurialism because I along with all the computer science stuff and all the tech stuff that was going on that I thought was very fascinating. I thought it’d be very important to get a foundation in building businesses and find absolutely accounting and everything else that goes along with running a company.
Yes. And I’ve noticed from personal experience. Now, not only is it completely different to run a business but it’s been interesting to see that it’s completely different to run a business of different business sizes. The company will double in size every 18 months or so. We’re at 300 employees now, months from now, we’ll be at 600 spreads. So, there are challenges with that. But what’s interesting is it’s a completely different skill set and things you need to do. Managing a company of 10-20 people versus 100 or 200 people or at the level we’re at now, 300 and moving up. So even those levels have been very different.
So, I think at the beginning where we were for lack of a better word, we were very scrappy, like a very small team. Everyone did everything and I literally had 20 different roles. I think at that size, it’s kind of all hands-on deck. From my experience, I found that there are a lot fewer processes. You’re a lot more focused on keeping the company in flow to generate a profit and bringing clients versus creating processes and systems and putting the right people in place. It’s literally figuring out at that company size; it’s figuring out where your value is as a company. Where do you fit in, and where do you bring value to clients, as opposed to the kind of growing thinking forward? It’s kind of still figuring yourself out. At that point, I directly would oversee everyone, or at least I might not even oversee everyone. I would talk to every single person in the company for at least 20 or 30 minutes each day. You have to have kind of full control of the company in terms of visibility to what’s happening to culture, to everything. I think the next step up is when you’re over 100 at that point to be able to sustain a company of 100 full-time employees, you at that point need to start developing very good processes. You have to be very strategic in the people you place in which positions, you need to start putting people in manager roles, you have to really define roles within your company, you can’t just have everyone doing everything, you really have to start specializing, you have to have department leads, you have to really have a lot more guidance placed from my level to all the way down there should be guidance training. It has to be a lot more deliberate. We’re at the 20-person level. It’s really all hands-on deck. Let’s see how everything works out. Once you’re at 100, you really have to be deliberate about everything you do. Every time you train a new employee or come up with a new process or whatever, you really have to be forward-thinking in terms of how this will work later on. How does this fit into the company? How does this fit into our value-add company? And then at the next level, which we’re at now, at least for me and for the executive team, the focus now becomes how do we scale the company? How do we put the right processes and training and procedures in place to be able to have the company grow without our direct touchpoints? The new people we hire in a lot of cases, I don’t have direct touchpoints with them yet. You need to actually have them trained to the same standard we had since we started the company 11 years ago. We need them to really be integrated with the teams, we need them to be supported by the teams. So, at this level, it becomes a lot more about creating strategic teams, putting strategic people in place, and really hiring supportive roles that we would never think of before. We just hired our H.R. Manager for the first time, a role that no other 20-person company will probably invest in, but know as you’re forward-looking, not only do we need to invest in the H.R Person, we need to invest in a H.R Department and what does that mean? Like, what are the responsibilities of that department? This Department is to support the directors in hiring. It becomes a lot of these supportive roles and departments and all of it has to be really strategic and deliberate. So, those are big differences and for me personally, it’s been tough, not only control but visibility. When you run a 20-person company, you know everything going on. You know, everything that’s going on, who the client is, literally right now, I don’t know some of the clients we have, which is a little scary to me but that’s part of sort of the process, it for sure requires a completely different mindset than when you’re 20 people and it’s like all hands-on deck. The SEO guy’s doing sales today. Right.
I run the company with my younger brother. We own a 50/50, we’ve always had that in place, and luckily even though we didn’t deliberately come up with distinct responsibilities, we’re just different enough that we naturally gravitated towards different things and don’t overlap much. So, it just worked out naturally. But I agree with you 100%. That even if you are at the smaller company level, if you have multiple owners, you really need concrete responsibilities and roles.
We don’t. That’s why as we’re growing now, we’re coming up with all these supportive roles, that’s going to be part of the H.R Department to do stuff like that. Right now, it’s really been very department specific. So, we have like the PPC guys, SEO, and website designers. Each department has really been doing their own thing, which is not great for growth, but there’s no right consistency and that’s what we’ve been working on because to get here we were okay with that. Somehow, we managed to get 300 employees, but let’s say we want to be 3000 employees, right? You can’t have consistent training and like everyone does different things and when a new person starts, they don’t know what they’re supposed to be doing. Like that you’ll fall apart very quickly. So that’s what we’re working on now, really creating supportive roles to facilitate the next step of growth.
So, we’re U.S. based and most of our employees are in the U.S., but we have six other offices overseas, not even overseas specific but like for actual work like design, coding, development we used time doctor and we pay based on that hourly. Time doctors track the screen activity. So, it tracks when you’re working and when you go for Lunch, so we pay based on that. But U.S. employees probably wouldn’t enjoy that too much and the rules here are different, it’s not hourly based. In the U.S., it’s really been instead of tracking how much people are working, it’s been about rewarding based on performance. A part of everyone’s salary in the company is tied to performance. So, if you want to go above and beyond and manage more clients and do more, you get rewarded for it. If you don’t want to do it, that’s also okay, we’re not going to fire you just because out of 60 people, you can’t have 60 overachievers or you can’t have like 60 type A’s, where everyone wants to be the captain of the like 60. Like they say, too many chefs and not enough cooks. You can’t have all chiefs and that’s okay. That’s the culture we foster, we don’t necessarily need to track work. We instead reward performance.
Correct. And as a growing company, what’s cool is we offer people a lot of opportunities and it’s a four-age level. So we always hire on the younger side out of college and a year or two out of college usually deal and train them. But we have people who became directors of departments in their twenties because it’s all it shouldn’t, it should all be merit-based. If you want to put in the work and you want to do the extra time and really invest in the company and put your time into the company, you should be rewarded for it. And as an absolute for a company who always has a difference, if we weren’t growing right if it was always the same and a lot of companies aren’t in growth. It’s always the same amount of people. The only way you get promoted is, if someone quits or gets fired or dies out and a lot of like an investment banking world, there was a little bit like that I worked in, I think for a little bit and it’s very popular in the legal world. Like when you have like partners of the law firm and like cases, the only way they’re going to allow the new partner is if one of the partners dies, right?
For us, it’s the opposite in growth. I would just offer so many opportunities that if you want to become a team lead, well then by next year, we’re gonna have to be more teams, and there’s your opportunity. It’s worked out fairly well. It’s just obviously always trying to push the company to grow, which is not easy, and really keeping up with that. Because you don’t overhire or you’ll run out of money and grab business. You overhire and your quality of work goes down, your reputation goes down and you go down as well. It’s a very fine line.
You never know. And it’s actually a complex project. You could wind up going in the hole. We’ve lost money on projects. It’s more complex for sure.
E-commerce as a whole has been okay out of all the platforms we have worked with, Magento projects and it’s ironic because I’m speaking at a Magento conference next week in New York City. But Magento projects as a whole, for whatever reason, just always come out more complicated than originally scoped. So, we’re trying to ride the ship a little bit on the Magento. There are just more moving parts of like eCommerce, like Shopify or WooCommerce. There are just fewer moving parts. A lot of Shopify is already prebuilt, you’re not reinventing the wheel. With Magento, someone wants a custom membership program to be able to send points to friends and stuff. We do our best to scope it out, but I don’t know, three months into clients go, I want a completely different now. So, for sure there’s, there are always challenges.
We don’t, for us our reputation is probably the more important thing. So, if you search smart sites, we probably are one of the best-reviewed agencies out there. We have 99% of five-star reviews. So, we, unfortunately, take the loss in those cases, and ultimately, to be fair, it is partially on us because that means we didn’t scope it out correctly or didn’t communicate with the plan correctly. But it’s a mixed bag. It’s like you get different kinds of customers.
It’s been challenging. You have to purchase from both ends. You want to retain people. There was a prospectus I was looking at recently. There’s a very big SEO agency that’s up for sale. I can’t mention their name but one of the bigger SEO agencies out there and they have their prospectus out. I’m looking through the prospectus and their growth and headcount, everything’s okay, but their retention rates are terrible. I think they lose 20% of their employees every year. So, hiring is like two from two ends, right? You want to have retention because if you don’t have retention, you’re going to have a much harder time with hiring and training. That’s number one, retention is very important, of course now the great resignation where everyone’s like, “oh, the grass is greener”. That is very tough so we’re working on a lot of initiatives which are building the culture. And we give our employees travel credits to travel anywhere and learn something new. So, we have a lot of these that kind of value adds to really invest in our employees. We invest in our employee’s training and certification, that’s one piece. Hiring has been very tough, I think, even in the last 20 years, it’s been the hardest hiring market I’ve ever seen and since I’ve been involved in hiring, especially in the US, it’s been very tough. We’re right outside the New York City metro. So, for us, It’s been even tougher. I think that the metro markets have been ultra-competitive. For us, it’s helped a little bit that because of COVID, we started hiring more outside the area. Before COVID, everyone was in our headquarters in New Jersey and we built a new huge headquarters or a penthouse overlooking a golf course. Right before COVID started, we opened on March 1st, and then we closed on March 15th for COVID. But we were very New Jersey-centric, New York City Metro-centric. And that was our talent pool and at that time, we were okay with it. In today’s world, we wouldn’t survive being able to just hire from that talent pool. We now hire nationally, which has really opened up the opportunities because there are pockets all over the US where there are a lot more applicants than jobs versus the New York City metro, where it’s the other way around. So, diversifying geographically has been super helpful. But it’s still very tough. You really have to offer good benefits, a good culture. More and more employees now especially in the digital space. It’s very in demand. You think about it, digital is very in demand. Companies that never needed a digital person now do like to think about it, restaurants that didn’t have a website were just on Yelp. All of a sudden, the restaurants need someone to make them a website, manage the website, send out offers, and manage the social media of the restaurants. A lot of restaurants only survive through good websites, social media, and grassroots. If they were just on Yelp and didn’t have those, they would have gone out of business.
That whole industry now needs digital people. I think about all the stores that were in the mall, like the random clothing stores in the mall. That never had a website, never had a brand or some need a website, SEO, and pay per click. There’s so much demand for digital people right now.
Yes, lack of experienced people for sure. And it’s the demand overstrip supply very quickly. Similar to what happened in the auto space where the demand for cars and travel this summer. That’s a good one too. If anyone traveled this summer, it’s like a prime example of how demand, overstrips supply, all the airlines, all the airports everyone thought that traveling would take five years to recover. And then like three months later, we’re like all records for travel. The airport in London had to limit how many people could come in. They don’t have the personnel, It’s not even the physical place. They didn’t have the staff, they had to start hiring a little staff to process all that and they made tons of money. They were paying any salary; they physically were nine people. So, I don’t think it’s a long-term thing. I think it’s a 1–2-year thing. But right now, hiring for sure is very tough and you just got to understand that the applicants you give an offer to usually are going to get a couple more offers. So, a lot of it is or if you think the applicant is a good fit for your company, is your company a good fit for the applicant? You really have to point out to them that this is why I think that we’re a good fit for you. That’s the only way to go, you can’t anymore just do like, one interview and send an offer and then expect them to decide.
For sure. No, I’m good with sharing anything, any that could share to help other people, I’m more than happy to. So, we don’t have it standardized and that’s, again, the reason for creating the H.R. department. So, the department head decides that I need two more PPC analysts. They come to me. “Alex, can we hire two more PPC analysts? We always try to hire for the future and then they start the interview process. They usually get people in the team involved to do a part of the round. Usually, we try to do three rounds, no more than three rounds. Someone on the team talks to them and it’s more of a conversation than an interview to make sure that’s a good fit for everyone on both sides. Like we want to make sure they’re a good fit, and we as a company are a good fit for them. If we hire someone three months later, they’re like, man, this company is not a good fit for me, right? So, it’s a conversation more of like a fit conversation, if that works, then they move on to another round of interviews, which are usually a little bit more technical. And then we do a third round where I try to be involved or for some of the positions my brother who runs a company for some other athletes, we have a touch point also, both for us to see who we’re hiring for a company, but also for the interviewed person to see the CEO of the company. I think that’s super important, too. Even if my schedule is usually packed, even if I can make it for 15 minutes. Sometimes I jump in to watch and at the end I’ll just do a quick intro, just to show that like, I’m putting in the time to go to meet the person. I think that that goes a long way as well.
When we just started our company, it was all New Jersey and then for any kind of extra development or extra work, we went to Upwork for the contract labor portals. It was tough, the quality was not consistent. Scaling was very difficult, let’s say you go and hire someone Upwork and you have a good experience with them. Now you’re going to hire another person, the chance or the quality, consistency, timelines, everything will be identical. It’ll be almost zero and ultimately when you are like making websites. For instance, I’m Alex Melen and I’ll make you some websites, it’s not as important as when you’re building a brand like we have a brand, smart sites. For us, quality and consistency are very important. If someone heard or read in a review or something that we make them the websites in three months and then they come to us and we take three years. That’s longer and well, no matter how good the website looks. It’s very hard to control quality and consistency. There are very good contract people out there, but ultimately, it’s hard to control reliability as well because they’re kind of like our freelancers. You’re paying them something, someone comes along, pays them something five times more that’s going to take priority over what you’re doing with them. So, it’s tricky, it definitely was a first step as we started before we brought out overseas teams and what not and we have physical offices overseas now.
It’s a good first step, but I don’t think it’s a solution, especially if you have a brand that you’re trying to stand behind.
We’re in the same place and outsourcers and contractors and whatever it might be. You have a team in India of your developers, but it should be your developers one way or the other, whether they work directly for your contract or what your contractual agreements with them shouldn’t be. I guess as important as that’s your team and then you control the quantity and quality that someone is in charge of, and someone’s in charge of timelines which processes everyone follows that becomes more important.
Yeah, it’s been interesting. We have a six-year age difference. So, I think that makes a little bit of a difference. My daughters are close in age and they fight all the time. So, I hear people saying it’s more difficult.
There you go. My kids are 11 months apart. But we’re good. I think we’re just very different. Like, I’m more of a financial person, like I do the financials, I handle the I.T. stuff just because I have a background in it. I have a lot of experience in all the going to business school, all the operational, financial, and bureaucratic stuff. He’s a lot better at sales, the creating processes for the future, he’s more of a people person. So, it’s funny, we don’t have predefined roles because we naturally gravitate to different things and between the two things that we do that cover a lot and then everything else, we have an executive team that covers the pieces. So, it worked out well. I could tell you that a lot of people were very concerned when we decided to start the company together, especially our parents. But it’s not knock-on-wood, it’s been okay. It just worked out very well.
The publicist that’s from my LinkedIn. That was all by a publicist which is obviously one of the biggest media agencies out there. So, before that, I jumped around jobs. I worked as an actuary, I worked as an investment banker, and I worked in finance for like six months, and I would be like, I can’t contribute any more value. I work at Toysrus in corporate finance and so all the things they were doing were wrong digitally.
They’re like owned by their own company. The new Toysrus isn’t what the old one used to be, but I still have the cup from it.
I love that it’s there, it’s the only place where I stayed for almost three years there. Yes, I learned a lot there. There was a lot of great learning, great opportunities and for me it was very eye-opening and I ran companies before that. I did a lot of stuff before but from a marketing standpoint, that was my really big realization that at the enterprise level there are really a lot of cool marketing things that were being done. And this is 12 years ago. Even then there were personalized ads, it was literally like women would get different ads and I worked on Samsung for a little bit and then Walmart for three years and Walmart at that time might still be the number one digital advertiser. Digital was the least important thing for them. It was all the way at the bottom of the totem pole, it was lower than billboards.
It was their lowest thing. Their marketing was $1,000,000,000 and a little bit under 10% was digital. They made me run banners. I remember that’s one of the holidays. I went to Yahoo!, we bought all their banner inventory and ran the Yahoo homepage for the holidays and the banner didn’t click anywhere. Because Walmart was like, right now our website is not a priority. Literally, the banners would not click anywhere. How crazy is that?
Yes. But the cool stuff was that it was super personalized ads like the different demographics, ages, and genders would get different ads. Like really cool things that small, medium-sized businesses just had no ability.
Not even budget. I don’t think they knew that kind of stuff existed.
Probably ten years ago. Let alone now, there are some big guys like the roofers and the plumbers. I tell them I could target different genders with a different color on the banner because they’ll have a propensity to click. I think that’ll blow their minds. So, we were doing all that really cool stuff and ultimately, I was like, I really see the opportunity in this SMB space, small, medium sized businesses to do this really cool enterprise-grade marketing for that segment. And that’s how we started smart sites.
My brother is doing some SEO stuff at the time. He had one of the first SEO agencies back then like15 years ago. And we kind of merged the businesses and we started it and we’ve been growing ever since. But yeah, I loved the Media best, it was one of my best experiences, and the amount of flexibility and control they gave me there over my day-to-day responsibilities and everything. There are a lot of those pieces I try to emulate at Smart Sites.
Yeah, it’s tough. My brother started the business as he was graduating, he’s in Cornell and we said that he could graduate in three years because I didn’t want to wait a long time for this. He’d graduate a year early and we started the company. So, my brother did not have to not go through that experience and I think it’s okay for him. For me, I think of all the different experiences I had, and again, I was an actuary, I was an investment banker at Citigroup. Yeah. All the different experiences I had I think, contributed small pieces here and there to help me run smart sites. Does everyone need it? I’m not sure. It definitely doesn’t hurt. You know, it’s one of those things and I think this is very similar to right before we started recording, you were telling me about you working in the car dealerships and at one point I think when I was in college in the summer, one of the summers I decided I wanted to get a little bit better at selling and interacting with customers and that stuff. So, I went to a RadioShack store locally in town and I said, I want to be like a manager in the store. And they’re like, well, we can’t make your manager. Number one, you’re still in college, number two, you’re going to go back to college. So, I told them like, never mind, I’m dropping out of college, I want to be a manager. They made me a manager. So, I was a manager of a RadioShack store for a while. I think it was very similar to the experience you were telling me about at the car dealership. It was very eye-opening for me because I’m not very good at the person-to-person interactions, sales staff, and customer service, and doing it in person is so much more challenging, at least for me, than I ever thought. For me, all these small experiences I think helped build up my skill set. But I also know tons of people who skipped all of that and are okay. So, I think everyone is all different.
Yeah. From your standpoint, do you think it helped that guess doing all that car dealership selling, being on the sales, or everything?
And I think it’s a good skill set; would you have been okay without it? Probably. But yeah, I think for people who already have agencies, I wouldn’t say, go put your agency and go work at RadioShack. Right?
But for people who are just starting out, I would not pass up on that car dealership sales position. You don’t have to do it for life, you could just go like you did and you’ll pick up very valuable skill sets.
As everyone does, starting something new. I started public speaking a couple of years ago. I’m a terrible public speaker, in all of high school and college, I avoided it like a plague. I’d be like you guys present; I’ll do all the work you guys presented. Eventually, you really have to step outside of the box and have to pick up skills. And, I was lucky enough to have a lot of experience in the tech space, from the mid-nineties I got invited to a lot of events. I just had to force myself to actually accept, like, I’m not going to speak and I find that I just accept that and I just record all of them and they’re all at my website. Alexmelen.com and I am afraid to even look at the old ones, but I was terrible. I’m sure I was terrible, I felt I was terrible and I’m sure I was terrible. So, it’s all about repetition. It’s all about improving yourself and now I’m a little bit better. I was just paid to speak in Prague last week, which was really cool and I can’t say I’m the best public speaker, but I’m definitely worth that.
Yes, there are some people who are natural salespeople and they could go into it and they’ll be fine. But for the majority of people, they’re not. And the only where you are going to get better is if you go and do it. If you did not go and like you didn’t work in that kind of role, you wouldn’t develop those skills. There’s just no other way around it.
Yeah. So, if you go to Alexmelen.com, at the bottom are all my social media handles. I’m very active on all of them. Probably LinkedIn and Twitter are best, but definitely reach out and connect. I’m more than happy to answer any questions or help with anything that could help.
Yeah, no problem. Thank you for having me
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