Like many entrepreneurs, Ted Murphy saw a tremendous opportunity in the everyday. For him, it was the influence of prominent bloggers with their audiences—a relationship that could be monetized.
Fourteen years later, this moment of insight is now the world’s largest influencer marketing platform.
But it hasn’t always been a smooth ride. From the loss of funding and staff to the current shift to fully remote teams, Ted’s team has had to overcome roadblocks to find their way to where they are today and where they will be tomorrow.
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What you need to know
- IZEA is a matchmaking service where buyers are marketers and sellers are online influencers. People get paid on a per-post basis to create great content for brands and share with their followers.
- Serial entrepreneur Ted Murphy started IZEA after a moment of insight: prominent bloggers impact what their followers purchase and this relationship could be monetized.
- During the last recession, with a significantly reduced team, IZEA stayed focused on their goal and even launched new platforms.
- Ted attributes the success and their ability to make it through the previous recession to a belief in never feeling like everything is okay, as that is when everything falls apart.
- Today, Ted’s team is fully remote and relies heavily on video conferencing for staying connected and on track.
“I started my first company when I was in high school. I started selling T-shirts to my classmates. And at the time, I didn’t actually have enough money to print the T-shirts, so I had this design that I had come up with, I brought it around on a piece of paper to my classmates. It was my version of Kickstarter.”
“When we created PayPerPost, there was nothing like it. I couldn’t point to something else to say like, ‘Oh, that’s working over there, so this should work.’”
“…the fact that we are still around here 14 years later is just because we have always believed in what we were doing, but there was no market indicator to tell me that, ‘Yeah, this is going to work and this is going to be successful.’”
“I think a key in getting people bought into a vision is having them participate in the vision and the creative process. I am just one guy, at the end of the day, who can have a big vision, but also recognizes that, without all of the people that build the product and market the product and sell the product, it’s not going to be successful.”
“If people aren’t passionate about what they’re doing and aren’t happy at work, they’re not going to do a good job and they’re not going to stay with you for a long time.”
“…the Kardashians get all of the attention, but the brand sponsorship deals that are happening on a daily basis tend to be more with people that are not quite so sensational, but are really passionate content creators that produce content that rivals many media companies and ad agencies.“
“It’s very easy, when you’re going through [a recession], to just feel like everything’s failing around you and there’s no hope. But we were able to keep the hope of what we were trying to accomplish.”
“I think that the second you feel like everything is okay is the second that everything falls apart.”
“When you’re green, you grow. When you’re ripe, you rot. I always just try to stay green. I always look at what we are doing here is always in its infancy.”
“[Speaking of COVID-19] I can’t imagine trying to do this 10 years ago when the technology wasn’t there to allow conversations to happen, and for people to see each other face to face. I think that video conferencing is such a huge asset, and I never realized how important it was until we couldn’t meet face to face.”
“I am very optimistic that our company is going to come out of this on the other side a better, stronger company. I am confident that I am going to come out the other side of this a better, strong entrepreneur and that my teammates are also going to come out stronger on the other side.”
Robert Murphy: Hi everyone, I’m Robert Murphy. Thanks for listening to That Changed Everything today. I’m excited to have Ted Murphy, a fellow Murphy. No relation, though we’re all brethren together here. Ted Murphy is the CEO of IZEA Worldwide. IZEA is the largest influencer marketing platform in the world. Ted, thanks so much for joining me today.
Ted Murphy: My pleasure.
Robert: Ted, I was reading up a little bit on you and some of your experiences in the past, and this is your sixth venture as a serial entrepreneur. That’s incredible. First of all, was this a life goal, or is this just randomly how this played out?
Ted: Well, I come from a family of entrepreneurs. That’s really all I’ve ever known. I watched my dad have everything from a furniture store to a radio station, to he developed special gear for cars, he took two companies public. He was just always doing something and trying something new, and as a result, that’s what I thought people did. I watched my dad go through lots of ups and downs over his career. There’s a story that my dad likes to tell me. He didn’t actually tell me this for the first time until I was almost in my 40s, but when he was going to take his first company public, he had so little money left, that he was literally burning our furniture to keep us warm in the fireplace.
Robert: That’s incredible.
Ted: It’s part of my DNA, I guess. I’ve been through lots of ups and downs over the years.
Robert: Was there a moment where it just became clear that this is what you were going to do as well?
Ted: I started my first company when I was in high school. I started selling T-shirts to my classmates. And at the time, I didn’t actually have enough money to print the T-shirts, so I had this design that I had come up with, I brought it around on a piece of paper to my classmates. It was my version of Kickstarter, I guess. I took preorders and took their money, and once I had enough money, I actually started printing the T-shirts. And then, I eventually wound up expanding to other schools in the other, other high schools in the area. And then, actually almost got expelled because of it.
Robert: Really? How did that happen? I have to know.
Ted: The school didn’t take too kindly to me selling me wares inside the school.
Robert: Look who’s laughing now.
Robert: Very interesting. So, you went from T-shirts to influencer marketing. Tell me, how did you get into influencer marketing in the first place?
Ted: Yeah. I mean, well, there were a couple jumps in between, but the reason that we started IZEA was that, prior to this, I had interactive agencies that I had started in 1999. This was at a time where the majority of the websites that were on the Internet were pretty basic HTML. A lot of people didn’t focus on the user experience, so I created a company that was all about creating high-end websites. At the time, people still had very slow Internet connections. Video streaming was not really a thing. We would build these really complex multimedia websites and online games for brands like Burger King and Coors. These brands would spend a lot of money to build out these huge experiences, but then, they didn’t really have a great way of spreading the word. So, I started a practice inside the company called eSeeding, where we would reach out to people on message boards, and very early bloggers, and people who were Myspace users, and we would get them to talk about the sites that we were launching. Sometimes we would give them nothing, and sometimes we would give them a $50 gift card to Red Lobster.
Ted: And what we found was that it was incredibly powerful. They could drive a huge amount of traffic. But it was a lot of manual effort, so I decided that I had all these resources, I had all these developers that were already working on client projects, and I said, “You know what? I’m going to actually take some of those resources and devote them internally to building a platform that can allow these transactions to happen online.” I was a big eBay user at the time, and I was like, “Look, I need to create a marketplace where the buyers are marketers and the sellers are,” at the time, it was primarily bloggers. In 2006, we launched PayPerPost.com, and that was the very first influencer marketplace.
Robert: So, a marketplace for bloggers, a marketplace for influencers.
Ted: The idea was we were providing matchmaking services, basically. And it’s basically our same model today. Our buyers are marketers, our sellers are online influencers, and people get paid on a per-post basis to create great content for brands, and then post it to their social accounts.
Robert: There’s a leap of faith, even though you’re a serial entrepreneur, and this being your sixth venture, there’s a leap of faith, I have to assume, in making a decision that you’re going to move forward. I’ve been on the phone with you for 10 minutes now, and it seems like you’re somebody who has a lot of ideas, who sees between the lines and how something could be profitable. How do you know if it’s the right decision to move forward with a venture, let’s say like IZEA?
Ted: You don’t.
Robert: That’s a great answer. Great answer.
Ted: I mean, you never really know. I mean, the best ideas, you don’t know. You can’t know, because they haven’t necessarily been done before. When we created PayPerPost, there was nothing like it. I couldn’t point to something else to say like, “Oh, that’s working over there, so this should work.” And when we first launched the platform, it was met with all sorts of criticism and just outrage. I mean, bloggers were going crazy, because, at that time, there wasn’t really any advertising in social media. People thought that it was going to be a peer. We were monetizing before Twitter. We monetized Twitter before Twitter monetized Twitter, and we introduced this idea of commercialization and sponsored content, and it really rubbed a lot of people the wrong way. And in the early days, we would get shut down by legal teams. They were concerned about if brands could do this if they were going to get fined by the FTC. So, we actually had to create all the regulatory framework. I actually worked with the FTC on the initial .com disclosures. But there was nothing to say that this was going to work.
Ted: If you talked to the team members that were around here in the early days, I mean, the fact that we are still around here 14 years later is just because we have always believed in what we were doing, but there was no market indicator to tell me that, “Yeah, this is going to work and this is going to be successful.
Robert: You have a group of people, you’re getting them excited. What’s the process for turning people into believers for your vision for what IZEA could be?
Ted: I think a key in getting people bought into a vision is having them participate in the vision and the creative process. I am just one guy, at the end of the day, who can have a big vision, but also recognizes that, without all of the people that build the product and market the product and sell the product, it’s not going to be successful. So, I think making people part of that collaborative process, giving people a voice in that process, and giving people recognition for their contributions is really, really important. I’m also a big believer that culture very much so matters for companies. If people aren’t passionate about what they’re doing and aren’t happy at work, they’re not going to do a good job and they’re not going to stay with you for a long time. I think that we’ve got a pretty good track record of attracting great talent and keeping that talent. We’ve had people that would have been working with us for over a decade, which is unheard of [crosstalk 00:10:22]. I have someone who’s working for me right now, who was an intern at my last company. He and I have been working together almost 20 years now. But I think that the reason that those types of relationships exist is because people feel empowered to contribute to the collective goal.
Robert: Influencer marketing, it’s a really interesting topic. I want to circle back to that for a minute. When I was researching this episode, I was looking at IZEA, I was looking at even just going to Twitter and looking up influencers. So, when I say influencer marketing, the first thing I think of is, just to be honest, 17-year-olds on cell phones filming TikTok dances to music tracks and broadcasting – like Hype House in L.A., or that recent documentary, Jawline, on Hulu, which was incredibly interesting. That’s just one piece of the pie, though. Help me understand and define what is influencer marketing, and why does it matter today?
Ted: Well, I think that what you’re seeing there is the part of influencer marketing that gets very sensationalized, or gets looked at in a way where people kind of write it off as people just messing around and having fun. This is not a serious career. I can tell you, from my chair, the people that are a part of our network, that I get most excited about working with, they’re stay-at-home moms, they are people that are mid-career, they are people that are passionate about any given subject. They take their craft very seriously. They invest a lot of time and resources in it, and they’re basically their own publisher. What we’re seeing now is a hyper-fragmentation of content creation and content consumption, and anybody that is passionate about something and has some creativity can build their own following. The challenge for those people is, how do you monetize it? With CPMs declining, and really not a lot of money in traditional display advertising anymore, sponsorships are how a lot of these people are able to make a living and continue to invest in making content.
Ted: So, yes, the Kardashians get all of the attention, but the brand sponsorship deals that are happening on a daily basis tend to be more with people that are not quite so sensational but are really passionate content creators that produce content that rivals many media companies and ad agencies. And that’s, frankly, why a lot of brands are investing in this now, is that it’s not just about the followers or the likes, it’s about outsourcing a lot of content creation. They get the benefit of high-quality assets being produced by somebody who’s passionate about the brand, as well as the distribution that comes from their social following.
Robert: Is there a layer of trust that’s built-in with that as well?
Ted: I think there’s definitely a layer of trust. There’s a layer of trust, there’s a layer of affinity with the people that are creating the content. I think that that’s why disclosure and transparency is important. That’s been something that I’ve been beating the drum on for well over a decade now. It’s still, in my opinion, one of the biggest challenges with the entire industry, is that a lot of these sponsorship deals are not properly disclosed. There hasn’t been a lot of enforcement by the FTC, so people feel like they can just put whatever they want out there and they’re not really going to be fined or have any sort of repercussions.
Ted: But it does have repercussions for the creator. If their audience doesn’t feel like they can trust them, if they don’t feel like they’re doing sponsorships and talking about products in a way that’s authentic, then ultimately, that creator will lose their audience and their ability to monetize.
Robert: You start a website, you have this idea. It’s this moment of brilliance where you see the potential here of basically an eBay-style marketplace for influencers. Originally it just sounded like, from what you said, there were a lot of bloggers early on, and that was really where some of the potentials existed more than anyplace else. Today, it’s a common term. You work with a tremendous number of influencers on your site. In my mind, I’m seeing this just amazing curve go up from early origins to where you are today. But from what you said earlier, too, there were a lot of ups and downs along the way. Could you tell me about maybe one of the most pivotal or challenging moments that you faced as a business?
Ted: Yeah. This company was born in June 2006. In December 2007, the recession hit.
Robert: Oh, yeah.
Ted: That would be the worst. I had taken out some venture funding at that point, and the VCs came into me and said, “We are going to cut off your arms and we’re going to cut off your legs, and we’re going to see if you can still swim.” I’ll never forget it.
Ted: We took the company from about 50 people to 25 people.
Robert: Oh man.
Ted: It was incredibly painful. I mean, a lot of these people had just been hired. The company was a year and a half old and it didn’t look so good at that time. It’s very weird right now to be going through the same cycle, now with coronavirus, and just looking at the economic devastation that’s happening everywhere. It feels like we’re going through the same cycle again. But we were able to make it through that because I think that we were smart in the way that we did our adjustments and cut back the staff, not just the quantity, but the types of people that we kept on board. And we didn’t lose sight of what we were trying to accomplish. It’s very easy, once you go through something like that, to just feel like everything’s failing around you and there’s no hope, but we were able to keep the hope of what we were trying to accomplish.
Ted: We actually launched some new platforms during the recession, which a lot of people don’t really think about launching new products when their current business is in trouble. We actually launched several products during that time, and that helped us pick up new types of customers that we didn’t have before and that’s what helped us get through. It made us move faster, it made us be more gritty in the way that we were managing our own expenses and the types of marketing that we were doing. And I think that a lot of those experiences that we had a decade ago are going to now help us get through this, which looks like it’s going to maybe even more challenging than the last time that we went through this cycle.
Robert: I want to touch a little more on the word hope that you used there. You mentioned some tactical business techniques that you were able to use to stay afloat as a business, and you mentioned launching some additional products, which is incredible you were able to do it through that period with limited staff, et cetera. How did you keep hope alive with a business going through the circumstances that you were?
Ted: One of the things I’ve always told my team is that you’ve got to celebrate the small wins. When you are building a product, or when you’re in sales, or when you’re running a marketing campaign, a lot of times, you are met with failure. Things don’t quite work the way you expected them to work. And a lot of times, people focus on those failures and they’ll invest, I think, too much time trying to dissect why things have failed.
Ted: But on the other side, when things succeed and things go right, they don’t celebrate enough. They don’t go through the same postmortem of, “Why did that go right?” Everybody always says postmortems of like, “Why did that go wrong?” And I think that, when you focus on why things went right, that is what can build hope. Even if it’s a small win, you’ve got to celebrate that small win. You’ve got to invest time figuring out what created that win, and then build on that win to ultimately get momentum and escape velocity. Otherwise, you’re just going to continue to focus on the things that are negatives, and it becomes kind of an echo chamber of you’re always hearing about the bad things because the bad things are usually great in magnitude and greater in frequency. You’ve got to switch the conversation so that you’re also celebrating on the same frequency of the wins that you’re having each day.
Robert: Having gone through this situation, what was that moment where you felt your head come above the water, where you knew everything was going to be okay for IZEA, and that your business was able to move forward?
Ted: I’m waiting for it.
Robert: Great answer, Ted. No, that’s a great answer.
Ted: Yeah. I think that the second you feel like everything is okay is the second that everything falls apart. That doesn’t mean that, again, I’m not celebrating those wins and saying like, “Oh man, I remember when we sold our first $1,000 deal, and our first $10,000 deal, and our first $1 million deals,” and those were great, but it’s like, “All right, we got the $1 million deal, now how do we use what we learned there to go get the $1.5 million deal, the $2 million deal?” But I don’t think that you get to a point where you feel that everything is okay. Not in today’s world. The second that you let off the gas is when your competitor starts to eat your lunch.
Ted: My dad actually has a great saying. He says, “When you’re green, you grow. When you’re ripe, you rot.” I always just try to stay green. I always look at what we are doing here is always in its infancy. It’s always changing. We don’t know what all the answers are, and we can’t ever stop pushing, because there’s another guy that’s sitting in his college dorm room who’s saying, “Ah, I’m looking at what those guys are doing. How am I going to beat them? How am I going to move faster? How am I going to approach the market differently?” That’s why I also believe that it’s important to constantly invest in technology and trying out new products, even though a lot of those products are destined to fail. We always have something that we are working on [inaudible 00:23:35] team. Like with PayPerPost, I couldn’t point to something to say, “This is how big this can be. This is what the market is,” because there wasn’t anything that existed for it, and a lot of the things that we’ve continued to roll out, there hasn’t necessarily been a market for when we rolled it out, but we’ve got to try, and if it doesn’t work, we also have to be willing to dismantle it as quick as possible, and emotionally attached.
Robert: You mentioned that, with some of the adjustments that moving forward with coronavirus and the situation that’s happening globally right now. My question for you is around your team now. You’re all working from home now, I believe. For a couple of weeks now you’ve adjusted to working from home. What has that experience been like? And have there been any learnings from the last couple of weeks alone?
Ted: It’s definitely been a surreal experience. I never thought that I would live through something like this. I think that our team has really taken this challenging situation and made the best that we can of it. I think a lot of that has to do with the foundation that we’ve laid over the past decade, of really building a resilient culture and creating an environment where people truly feel like this is their extended family. I couldn’t imagine trying to do this 10 years ago when the technology wasn’t there to allow conversations to happen, and for people to see each other face to face. I think that video conferencing is such a huge asset, and I never realized how important it as until we couldn’t meet face to face. Even though we had a distributed team before, it always kind of seemed like something that was novel in a way. It was like, “Oh, we’re going to go meet with the team that’s in India.” It was like, “Oh, that’s cool. They’re in India.” Now, it’s like, “No, this person’s literally in Orlando, but I can’t go see them. The only way we’re going to communicate is through video conferencing.”
Ted: I’d be lying if I said that it hasn’t been without its challenges, but I feel like we’re doing a pretty good job of adjusting, and I’m really proud of the extra effort that the team’s put forward to continue to make our culture a big part of the communication that’s happening between our team members. It’s not just work, we’re still trying to have fun and do the things that we used to do. Next week is actually our spirit week, and people are going to be dressed up all week, just like we used to in the office. I’m looking forward to that.
Robert: Excellent. Well, Ted, this has been a great conversation. It’s really interesting hearing how you approached these businesses, hearing how you went through the difficulty and difficult circumstances you did and came through on top here. Any final thoughts for those listening? Anything you would want people to know, especially given the circumstances that we’re under today?
Ted: I think that, whether you’re an entrepreneur listening to this on the other side, or you are somebody who’s working in a company led by an entrepreneur, it’s sometimes really difficult to see what the future holds and how an event like this can actually craft a better outcome at the end of the day. But I believe that events like this make you really focus on the things that are important, both in your professional life, as well as your personal life. I have spent more time with my wife and child in the last month than I probably have in the past six months, which has been awesome. And I also think that the time that I spend with my colleagues is just, it’s more productive and it’s more focused because we know that we are all under the gun and that every decision that we make right now is incredibly critical.
Ted: I am very optimistic that our company is going to come out of this on the other side a better, stronger company. I am confident that I am going to come out the other side of this a better, strong entrepreneur and that my teammates are also going to come out stronger on the other side. And I even think my child, while I would love to have my child in school right now, I think that he’s learning things at home that he would’ve never learned at school. So, I’m excited for him and how this experience shapes his life.
Robert: Great words there, Ted. Thank you so much for joining me today.
Ted: Thank you.