I Invited Andrew Slack, founder of MoreNiche onto YHP to share his story about his business. In this interview, Andrew talks about the early days of MoreNiche, growing the business and a time the company almost went bankrupt as the payment processor decided to hold back over $300,000 of their funds.
Hi Andrew, Thanks for doing this. How are you doing today?
I’ve just arrived back from Madrid where we held our annual affiliate gathering. So I’m a little tired but very excited. We get our top affiliates and top merchants together for a big networking session. This year we decided to hold it in Madrid and every person who attended seems to have had an amazing experience. We’ve had some fantastic feedback.
Can you give us some background information about yourself?
I completed a degree in Computer Science before going into business with my best friend. I’ve never had a ‘proper job’ and in fact this was only going to be a summer project. The plan was to move to London and find employment in IT - that was over 11 years ago. I am always working, so it’s more an addiction than an actual job.
Tell me how you initially got into business?
I consider myself very lucky to have been the right age when the Internet was starting to creep into the mainstream. My father was always working with computers - creating games on the spectrum, repairing PC’s and developing database systems - so computers and the Internet have been a big part of my life from an early age.
I was always very interested in how it all worked and remember playing with Dreamweaver and Flash from an early age and just enjoyed learning how it all works.
As I grew up my attention turned to how I could make money from doing what I loved. After trying a few short term models (e.g. building and selling websites) I soon realised that recurring revenue is the way to scale.
How did the idea for MoreNiche come about?
MoreNiche was certainly not the first online affiliate program. Businesses like CDNOW, Amazon and Ebay set the scene for the whole industry, rewarding someone for recommending their service.
Understanding how affiliate marketing worked fascinated me, earning a little commission from each sale. Just like credit card processors, where you earn a small commission in return for offering a service, fascinates me today.
When creating MoreNiche we knew that to be successful we needed to be the best in a particular industry. Health seemed to have a fairy low barrier to entry but also good margins where you could offer very competitive commissions.
In retail or electronics people are paying 3-5% commission. Merchants operating in the health and beauty market are able to pay between 30-50% commission per sale. The difference is enormous.
Understanding this and seeing how it was evolving made the decision to run an affiliate network specialising in health and beauty very appealing.
Tell me about the early days, what was the hardest part of starting the business?
When you start an affiliate network, the problem in the beginning is that you don’t have any affiliates or merchants. Neither can be successful without the other so it’s a real chicken and egg situation.
We decided to create our own brands in order to solve the problem. This enabled us to create a range of products we knew affiliates would want. We could ensure they converted and enable affiliates and customers to have a good experience from start to finish.
This was never our long term aim however, it was how we got our network off the ground. A year or so down the line we sold those brands and reinvested the capital into growing the network.
How have you been able to fund it so far?
We started by keeping our overheads to a minimum. I created websites and sold them to raise money to get us going. I did very well by actually designing a site, building it, getting it to rank and then selling the site. We reinvested the capital into the affiliate business.
I also made money from other affiliate programs. I would often receive $1000 cheques from this then struggle to cash them as the bank staff didn’t know how to do it!
I am very proud to say that 11 years on we have never needed to borrow from the bank to grow MoreNiche, It has all been from growing organically. We reinvest most of our profit to continue our aggressive expansion plans exploring new markets and new opportunities.
About the first few months, how excited were you, tell us about how those months felt, what happened?
Running your own business is, I believe, both an exciting and scary thing. In the first few months you worry about making enough money to cover your bills and as you grow you worry about paying your staff. I certainly feel the pressure to ensure we continue to grow as I know we have thousands of people who rely on the money they make from MoreNiche.
I believe the moment I stop being concerned about the business is the moment I stop caring and that’s when things start to fail. As long as the enjoyment outweighs the worry then you’re onto a winner. I really love what I do and actually believe I am unemployable now and would struggle to report to somebody else.
Running a business is filled with so many ups and downs, could you tell us about a down period and how you overcame it?
One of the worst moments since operating MoreNiche was when we owned our own products. Our payment processor at the time decided to hold back over $300,000 of our funds.
We had charged the customer and shipped the products and we had paid affiliates their commission which at the time was 50%. It left us around $500,000 in the red.
It was a pivotal time in our business; We could have taken the commission away from the affiliates or even shut up shop. We chose to push on and honour the commissions we paid to affiliates even though we did not have the money. Affiliate marketing is all about trust. If we had not paid the commissions our business would have been finished.
That was a real tough one. It tested our ethics and decision making. We did the right thing and 11 years later we’re still here and expanding.
How did you initially get traction?
It was hard work with many hours spent in front of the monitor speaking to potential affiliates, chipping away at competitor market share.
I am a big believer in the saying “easy come, easy go”. If it was easy everybody would be doing it. You do need to have a vision and you need to work extremely hard to get there.
What are the most crucial things that you have done to grow your business?
We do everything with the long term in mind, avoiding routes to short term profits. That includes not accepting ‘free trial’ offers on our network or designing client websites for free. It would be easy to add a ‘free trial’ to our network and make a lot of money. However, these agreements are in the main a scam and most of the companies operating this model are no longer running. Everything we do is created to ensure our clients and affiliates make long term sales. Building long term relationships with both is what has enabled us to be here today.
What would you say has been the highlight of your entrepreneurial journey so far?
Without a doubt, it’s seeing the people that I hired many years ago progressing and taking on their own challenges. I believe that people who work hard get rewarded. One member of the team who started at the company 5-6 years ago now is managing their own project and team of people. Business is a journey and you evolve every day. Evolving with a team of great, talented people really makes the journey a much more enjoyable one.
What should we be expecting from yourself and the MoreNiche in the next coming months?
Over the last 11 years we have never gone out to win business, we have grown organically. We gain clients from word or mouth or based on our past success. As a result we have a great product and solid foundation that enables us to move forward and build the business. My big project for the next 3-6 months is to find the right strategy for hiring a sales team who can help scale our business.
We are also diversifying into other markets and using the very successful business model we have fine-tuned over the years to replicate our business in other markets.
Lastly, what three pieces of advice would you offer entrepreneurs starting out today?
1. Try new things, don’t be afraid to make mistakes, if you try 10 ideas you only need 1 to be successful in order for the investment in time and resources to be worthwhile
2. Never stop evolving; the business model you are successful with today may not work tomorrow.
3. Love what you do (or do what you love), if you enjoy working you will work hard and you will get success. I would say that I am addicted to business, it’s the first thing I do when I wake up and the last thing I do before bed.