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My First MillionNeil Patel On Making +$100M/Year, Spending $180k/Month, and Donating Millions To Charity
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80 min read · 15,877 words- 0:00 – 2:05
Intro
- SPSam Parr
To say in your blog post that it, you go, "$15,000 a month is all I need. I'm happy." That was, like, 10 years ago, I think. But, uh-
- NPNeil Patel
[laughs] Correct
- SPSam Parr
... that's, but you used to say 15,000.
- NPNeil Patel
And the thing is, so single and no kids is easy. Right now, if I had to guess on my burn rate, 120 to 180 a month.
- SPSam Parr
What?
- SPShaan Puri
That's insane. So what is... How does that break down? So w- what's the, like, what's the bulk of it? Whether the... So house probably is the biggest one.
- NPNeil Patel
No, I have no mortgage.
- SPShaan Puri
Okay. You have... So you're spending 120 to 180K without spending anything on your home. [upbeat music]
- SPSam Parr
So Neil, I, I was telling you a little bit about what you're getting into. We record everything, by the way, so, like, we just hop into it. But I... Shaan kind of knows who you are. I've been a fan of yours for, like, 10 years. Can I tell Shaan and the audience who I think you are? And you could tell me if I'm wrong and, like, what I'm missing.
- NPNeil Patel
Sure. Go for it.
- SPSam Parr
All right, so you're Neil Patel. So I know you because you used to have this blog called Quick Sprout. I read it maybe 10 years ago. It's probably a 15-year-old blog, if I remember correctly. At first, it was mostly about, like, SEO, but eventually it kinda, like, morphed into being about SEO, about content, but just about business in general. And you would do, like, crazy stuff. Like, you would build a business that made $100,000 a month in revenue by... Like, you just picked, like, a random niche, uh, and I think it ended up being supplements, and you, like, blogged every month about how that was going. And you used to blog about all types of crazy stuff. But then eventually you also started a company called Crazy Egg, which I heard was doing many millions of dollars a year in revenue, and it was a bootstrap and you own the whole thing. Then you and, uh, Hiten started Kissmetrics and raised a bunch of money. It didn't end up working out wonderfully, but it was, like, uh, it could have been actually quite huge. Hiten wrote a great blog post about, like, where, uh, you know, where a couple errors were made. But now you've got, like, a 7 or 800-person agency that is also bootstrapped like the rest of your stuff, and you've just kind of been balling out, like, for, like, 15 years in the world of business, just killing it with agencies. Is that right? Did I, did I get everything mostly right?
- 2:05 – 6:00
Neil's business history
- NPNeil Patel
Mostly close. So Crazy Egg came first. Uh, Hiten's the co-founder on that. He has it all or, uh, you know, he owns, uh, Crazy Egg, um, as well, so it's not just me anymore. And then, uh, there's another guy named John Butler who was also part of Crazy Egg at the beginning. And then Quick Sprout came later. Uh, I started blogging on it about business and stuff like that. Uh, Kissmetrics then came. Kissmetrics didn't work out. Quick Sprout started to have a big audience related to marketing. We tried to create a SEO software on there. I did that with my co-founder, Hiten, at the time. He's like, "All right, how about we create a company out of this? I'll do the software end." That didn't work out. I didn't wanna be part of it anymore. He took it over and, um, he ended up making it a, you know, business site directory, you know, informational site, whatever you wanna call it. It has affiliate offers, which you already know about. And then the last one was the ad agency, which is correct. And then there's been a lot of stuff in between here and there. A lot didn't work out. But generally speaking, I tend to do one thing at once, focus, and currently I spend all my time on my ad agency.
- SPSam Parr
And that, you're, you're at 6, 700. Uh, how, how big is that at the moment? And it's only, like, five or six years old, right?
- NPNeil Patel
Yeah, so we're on our fifth year. End of this year will be end of year five. Uh, we're at roughly 700 people. I think maybe a little bit more. Maybe by end of year, 900-ish, if I had to guess.
- SPShaan Puri
Who, w- who are these people? Do you... Are these, are they, like, 700 anonymous Indians in India?
- NPNeil Patel
[laughs]
- SPShaan Puri
What's going on? Who are these people?
- NPNeil Patel
Uh, we do have some people in India. Uh, but what's funny is-
- SPShaan Puri
How many people do you employ in New York? That's what I wanna know. That's my agency test.
- NPNeil Patel
So majority-
- SPSam Parr
Well, you're in, you're in Brazil too, though, right?
- NPNeil Patel
Yeah, we're in Brazil. Majority of our people are in the United States. If I look at region-wise, the United States has the biggest head count. We also have offices in Australia, Canada, uh, UK, Brazil, India. Uh, I think we're opening up Germany soon. We're looking at Italy. We're looking at France and a few other regions as well. But our model is, is, like, our ad agency in India markets companies in India. It's not really used to outsource American work into India.
- SPSam Parr
And what work are people doing? Like, what's the service that you're providing?
- NPNeil Patel
All digital. So, like, SEO, pay per click, email marketing, conversion rate optimization, organic social, paid social. The list goes on and on.
- SPSam Parr
And do all the customers come from neilpatel.com?
- NPNeil Patel
It used to be that way. Then we started getting a lot through word of mouth. I would've never really guessed that word of mouth drives business.
- SPSam Parr
[laughs] Yeah.
- SPShaan Puri
[laughs] How, how many... Can you say how many... Uh, so most people, I would say, like, our audience, they'd be like, "Oh, yeah, it's cool to have, like, a personal brand," but me and Sam have figured out, oh, wow, this shit really does open up more doors than you would've expected. Uh, you've been doing this for a long time. So Neil Patel, which is kinda like a personal blog where you're talking about, like, you know, hacks and experiments and strategies that you've, you know, figured out. How many... Can you say how many millions that brought in in client bookings what, for the agency? Like, what... W- uh, how big did just the referrals from Neil Patel get you before other stuff kicked in, like word of mouth and being recognized in the industry and other things like that?
- NPNeil Patel
I think the Neil Patel brand got us to around, like, 30, 40 million in revenue, and then word of mouth started kicking in, and then other things started kicking in, and employees started bringing in their own deals, 'cause they worked in the space for so long. And then we saw more and more growth, got awards. That brought us deals. Um, being a minority-owned business, that helps, believe it or not. There's... If you're Indian and you live in the United States, you're considered a minority. And, uh-
- SPShaan Puri
I was about to say, are we a minority?
- SPSam Parr
Yeah, I think you guys are-
- SPShaan Puri
I feel like I never get minority prices. [laughs]
- SPSam Parr
I feel like you're m- you're the majority of CEOs out there, so I mean... [laughs]
- 6:00 – 8:20
Minority certification
- SPShaan Puri
[laughs]
- NPNeil Patel
It's funny because we go through RFPs, and some of them ask if you're, um, what is it, like, MBE certification? It's something like that. I forgot what it's called. Or Minority Business Enterprise. And I was like, "Well, I'm not a minority. There's like one plus billion of me in this world, right?" And they're like, "Oh, you're a minority." I'm like, "What are you talking about? There's like a billion plus Indians in this world. How are we a minority?" And they're like, "Oh, in America you're a minority." And in some of these RFPs, they're looking... It says in there, "We're looking for, um, LGBTQ..." I- I don't know what the-
- SPShaan Puri
Yeah. Yeah
- NPNeil Patel
... all four of the letters are. Um-
- SPShaan Puri
You have, you have the tattoo on your arm.
- NPNeil Patel
Yeah. [laughs]
- SPShaan Puri
What is it?
- SPSam Parr
Yeah, the Q's there.
- SPShaan Puri
[laughs]
- SPSam Parr
The Q's there.
- NPNeil Patel
That. Uh, and then, uh, women-owned businesses, veteran-owned businesses, and the other one was minority. And I was just like, "Wait, there's actually a quota that these big Fortune 500 companies have to hit?" And they're like, "Yeah." And I was like, "Well, I'm a minority." They're like, "Well, you need the certification." And I was like, "I gotta have a certification to tell you that I'm a minority?" And at first, I didn't realize I was a minority. They were telling me, "Oh, you're a minority. We reached out to you. We're hoping that you would be a good fit." And I'm like, "I'm a minority?" And they're like, "Yeah, you're a minority in the United States. You would help us meet our quota. Do you have the certification?" I'm like, "What are you talking about?" And then we went through the process and got the certification.
- SPSam Parr
You gotta get your papers, bro. You gotta get your papers right.
- SPShaan Puri
I, I would've been offended, and then as soon as I realized, wait, this is to my advantage, oh, hold on. Um-
- NPNeil Patel
[laughs]
- SPShaan Puri
... I also got solar panels on my house. Does that help? You know, like my, I'm a dog owner.
- SPSam Parr
Yeah, I wear glasses.
- SPShaan Puri
Uh, what else? Yeah, [laughs] exactly. I have, I have a vision impairment, uh, called [laughs] farsightedness. You know, so what else works in my favor here? You know, like w- was the certification just turn the webcam on and it looked at you and it was like, "Yep." [laughs] And that was it?
- NPNeil Patel
That's not enough. And what's funny is our COO or VP Operations, one of the titles, I forgot what Tracy's title is, she asked me for this like six months before we did it. She's like, "Hey, I need your birth certificate." I'm like, "Uh, why do you need my birth certificate?" She's like, "Oh, we need it for this certification." I'm like, "Whatever." And the moment someone ended up telling me how, uh, Magic Johnson generates a lot of his revenue because he's a minority and gets a lot of contracts, partners with other businesses, white labels it, and uses his name, becomes a quote, unquote, "owner" of that business, and then outsources-
- SPShaan Puri
Oh, wait. T- tell me about that. Uh, give me an example.
- 8:20 – 23:00
Magic Johnson theory
- SPShaan Puri
What's, what's, what's an example of the Magic Johnson formula?
- NPNeil Patel
Sure. So I don't know if this is true. This is just what someone in the minority space ended up telling me.
- SPShaan Puri
[laughs]
- NPNeil Patel
So that's the caveat. I don't know if this is true or real. And they were saying, let's say if someone has a food company and they have the contracts with a lot of the hospitals that are run by the government, like the VA. They're looking for minorities to provide it, but there's already a lot of big corporations that provide the food. So Magic Johnson may go create a business that's in that space, partner with the big supplier who already provides the food to these hospitals. He'll go get the contracts and then work with them to actually fulfill it.
- SPSam Parr
Yeah. Wait, Shaan.
- NPNeil Patel
I think-
- SPSam Parr
You never heard, you, you never heard of this? My, my, my in-laws-
- NPNeil Patel
No. [laughs]
- SPSam Parr
My in-laws own a, a moving company, and they're minorities. They're, uh, Black. They're Haitian immigrants. And th- they win deals partially because of that reason. 'Cause, like, Morgan Stanley or something like that, if they wanna move, they wanna... They have some type of policy in their company that says, "We, we wanna get RFPs for," or, "We wanna get bids from these types of companies."
- SPShaan Puri
I had no idea how... I obviously I knew this exists. I just didn't realize how significant it was. I definitely didn't know the Magic Johnson formula, which is frankly genius on his part if that's-
- NPNeil Patel
If it's true
- SPShaan Puri
... if that's actually what he does.
- NPNeil Patel
Right? We don't know that part-
- SPShaan Puri
Yeah
- NPNeil Patel
... but it, it is true. But think of it this way, right? It's a quota. So if I go and I get a RFP, let's say from Boeing, which funny enough, we lost the RFP 'cause we were over price for what they wanted. Um, and-
- SPSam Parr
Racist
- NPNeil Patel
... let's say my price is very similar to the competition.
- SPShaan Puri
[laughs]
- NPNeil Patel
I have awards showing that we were the agency of the year, so they're like, "All right. These guys are good at what they do. We have the case studies." And if we're similar pricing, they're like, "Oh, this minority helps us hit our quota. Let's give the business to you."
- SPShaan Puri
Right. Yeah, yeah, of course. You, you have some merit, uh, to go with it.
- SPSam Parr
For the first $30 million of business, you got that and you must have gotten that by year two or so if you're growing this fast. Um, what was the main-
- NPNeil Patel
Year three
- SPSam Parr
... year three, sorry.
- NPNeil Patel
Year three.
- SPSam Parr
What was the main service? Like, when I think of, like... 'Cause I went to your website and I actually submitted a lead to figure it out. There was the maximum... You, you ask what your website is and what your budget is, and it's like zero to 10,000, 10,000 to 20,000, and then just 50,000 plus. So were you serving, like, mostly small businesses? And what, like, what were you... Were you doing as simple stuff as, like, making their Yelp page good? Like, what were you doing?
- NPNeil Patel
Yeah, so it's not that small. We do have some SMBs like that, but we actually first started off in, uh, mid-market. Our clients would pay us, like, a minimum of 10 grand a month.
- SPSam Parr
And what would you do for 10,000 a month?
- NPNeil Patel
I- it, so nothing was cookie cutter. It was all custom. So, like, maybe they need SEO, maybe they needed help on paid management, maybe they needed some CRO or email marketing or a little bit of everything, right? But the plans would start at 120 a year, right? 10 a month. And scale up from there to 20 a month, 30 a month, whatever it may be.
- SPShaan Puri
What was most in vogue as the service when you started, like the, the trend everybody wanted, and then what's the in vogue thing today?
- NPNeil Patel
When we first started, it was mainly SEO, 'cause that's what I learned.
- 23:00 – 36:50
Monthly burn rate
- NPNeil Patel
Right now, if I had to guess on my burn rate, 120 to 180 a month.
- SPSam Parr
What?
- SPShaan Puri
That's insane. So what is, how does that break down? So w- what's the like, what's the bulk of it? Whether the, so house probably is the biggest one.
- NPNeil Patel
No, I have no mortgage.
- SPShaan Puri
Okay. Yep. So you're spending 120 to 180k without spending anything on your home.
- NPNeil Patel
Uh, property tax. Property tax, uh, for both my homes and HOA dues is probably close to 200 a year.
- SPShaan Puri
Okay, great.
- NPNeil Patel
So-
- SPSam Parr
What else? [laughs]
- NPNeil Patel
... a little less than 20 a month.
- SPShaan Puri
So we've got 12,000 of the way there. Where, what's-
- SPSam Parr
All right, yeah. [laughs]
- SPShaan Puri
[laughs]
- SPSam Parr
Yeah, yeah. So there's, there... [laughs] Okay.
- NPNeil Patel
Life insurance is 25 grand a month.
- SPShaan Puri
[laughs] What?
- NPNeil Patel
Um, my whole life policy, yeah, that's 25, so it's 300 a year. Uh-
- SPShaan Puri
No, no. Wait, what, what?
- SPSam Parr
Wait, I can-
- SPShaan Puri
What?
- SPSam Parr
What, what the hell is a $25,000 a month life insurance policy? What, can you explain that?
- NPNeil Patel
It's just a benefit. Like, if I die, my wife and kids get money. Like a life insurance policy.
- SPShaan Puri
Yeah, well, I get that. But is that normal? I've never heard, uh... Like, either I'm dumb or you're dumb. One of, who's dumb here? Uh, i- am I dumb because I've never heard of anybody spending that much on their life insurance policy?
- NPNeil Patel
It's, it's like an investment account. It builds over time. So it's not like it goes away, right? Most life insurance policies are for, call it 10 years, and then you buy another one. Mine just keep going, and you can borrow against it. Just think of it as like a investment vehicle. So that's 25 a month.
- SPShaan Puri
Oh, okay. I see.
- NPNeil Patel
Um-
- SPShaan Puri
I see, I see. Now I understand.
- NPNeil Patel
Staff Uh, cleaners, nannies, driver. We have a full-time driver. I think that ends up being around 57 a month. Um-
- SPSam Parr
5,700? 57,000?
- NPNeil Patel
Thousand.
- 36:50 – 39:10
Neil's philanthropy
- NPNeil Patel
my wife enjoys what she gets to do, right? She gets to donate the money, although we don't really consider it as donations. We look at it as investing. We're investing in people, although we really don't ever collect any money back. It's more so you're investing into making the world a better place or people's lives a better place or whatever it may be.
- SPSam Parr
What's, uh, who, who were, who were your first three clients at this, at this agency? Because y-
- NPNeil Patel
I don't know. They were small companies.
- SPSam Parr
And right now, who's an example client?
- NPNeil Patel
Like a Fortune 100 software company. Like, that is a typical company. A- think of any big, large corporation in B2B, that's a great example of one of our customers, or even B2C. Actually, think of any Fortune 500 company. That's a prime example of a customer.
- SPSam Parr
What's, uh, and who's the CEO of your agency? Are you?
- NPNeil Patel
No. I'm never the CEO. I'm a terrible manager. I'm one of the worst managers ever. Uh, his name is Mike Gullickson. He was the CEO, no, he was the president of iProspect, which is a ad agency owned by, uh, Dentsu. I believe in iProspect, maybe they had 4 or 5,000 people is my guess.
- SPSam Parr
And what, when you, how early into the business did you have a, a hired CEO or hired leader?
- NPNeil Patel
Day one. I won't start a business without a CEO from day one.
- SPSam Parr
And what did you pay them in the first year?
- NPNeil Patel
First year it was my co-founder, so like 100 grand.
- SPSam Parr
And that's because you basically went and drummed up 100 grand worth of business, and you're like, "Hey, Mike, uh, I got a, I got this client, so they give 100 grand. Do you wanna run this thing for me and, and help it get deployed?"
- NPNeil Patel
No. Uh, our business didn't start off that way. I probably put in total of five million bucks into the business of my own money. So it was bootstrapped, but not really bootstrapped, if that makes sense. It's kinda cheating. Um, and it gets easier and easier as you're entrepreneur, right? The more, the more successes you have, and I'm not saying I'm successful by any means, the more capital you have to deploy into the next thing, so it reduces chances of, uh, failure. And when it's your own money, this is just my thesis, and I could be wrong on this, I have no data points, when it's your own money, you're much more careful than when if you raise, like, $15, $20, $30 million of venture capital, right? You really look at every single dollar.
- 39:10 – 54:25
9-figure revenue
- NPNeil Patel
Uh, but Mike was the CEO from day one. He's a great operator, has no agency experience. Eventually we got in a president, and then eventually from there we got in a CEO.
- SPSam Parr
And have you guys crossed 100 million in revenue yet?
- NPNeil Patel
Yeah, we do nine figures.
- SPSam Parr
That's crazy, man. So w- I mean, that's just pretty wild that you're able to, like, parlay this blog that was alr- al- always kind of a juggernaut, but this blog into a nine figure a year business. I mean, that's amazing.
- NPNeil Patel
Yeah, it's, it's been a good run. I hope it, I'm knocking on wood, although you probably can't hear it cuz of Chris. But, uh, I, I hope it keeps going, and more so we're just having fun. Like, for me, what I enjoy doing is building a business. Um, I know I have a expensive lifestyle. I generally don't do stuff for the money. Like, I overpay, like, house staff, like nannies and stuff like that. When I say overpay, I drastically overpay. Not by, like, 10, 20, 30, 40%, like I really mean drastically overpay. 'Cause I look at people and I'm like, "If you're cleaning a house, how are you gonna live on this?" Like, I'll give someone six figures to do that. I know that sounds kinda crazy or stupid, but, like, I'm not giving my kids money, so might as well take care of other people in this world who need it more than, um, uh-
- SPSam Parr
But y-
- NPNeil Patel
... we do
- SPSam Parr
... did you just say you're not-
- SPShaan Puri
I think this-
- SPSam Parr
... you're not giving kids money?
- NPNeil Patel
Yeah, I'm not gonna give my kids money.
- SPShaan Puri
Nothing? Leave n- leave nothing?
- NPNeil Patel
We have a trust set up. What they'll get maximum is, like, if they're on the street [laughs] and they can't provide and they're gonna be suffering, like, I will help pay their bills, um, or put them in a normal home. Or, like, if my kid's like, "I wanna be a doctor and I wanna go spend all my time in Africa helping other people out, and I won't get paid for this, and I need, you know, X, $5,000 a month to live or $10,000 so I can just go volunteer all my time," I'd be like, "Sounds good. I'll pay for that." But, like, I won't give them money for the sake of it. Like, if they're like, "I wanna go travel to see Italy," or, "I want a, a Honda Accord," then, like, go buy your own Honda Accord or go travel on your own with your own dime. Like, you know, I don't believe in just giving people money, 'cause I think there's other people that need it more than we do.
- SPSam Parr
Shaan, are you gonna give your kids money?
- SPShaan Puri
I haven't really thought about it. Like, my oldest is two, so I think I got some time to figure that out. But I, I lean more tow- so I've kinda heard both arguments. Like, um, I know somebody who they... You know, some people are like, you know, uh, you know, I d- there's some people, uh, I, I'm definitely not in the camp of, "I do this for my kids. I wanna leave my kids with a whole bunch." So I'm like, uh, that may be the worst thing you could do for them. Um, not because it means that they'll be ruined, but like-
- SPSam Parr
Yeah, you just tell you have drug addicts
- SPShaan Puri
... yeah, you take away, you know, agency in a way, right? Like, you, you want people to, um... Like, it's j- it's not that it's good or bad, it's actually just, it's just way lower on the totem pole of priorities. It's like I just don't even focus on that. It's like if I'm gonna leave them something, it's gonna be a certain set of character, character traits and skills, and, like, uh, mentality. That's what I'm trying to leave. Money is, like, I don't know, 15th on the list of, like, I don't know, we haven't even gotten to think about that yet. But I've thought a lot about what are the character traits and mentality and, like, mindset and skills that I think I can help build, and, like, that's the focus. That's the one that matters. That's the, that's the gift. If, uh, whatever else comes from beyond that, I don't know, we can figure out. It's like the foot- it's like the footnotes.
- NPNeil Patel
So, like, y- you, we're, we're very similar. My k- my, I have a two-year-old and a less than one-year-old, right?
- SPShaan Puri
Yeah.
- NPNeil Patel
And I look at it as you want them to be, uh, productive units of society, right? You want them to be ambitious, hungry, uh, caring, thoughtful, happy. Like, whatever it is, there's a lot of characteristics that you may want children to be. But I look at it as, like, they don't need money. Even, like, with my wife and I, we go over our expenses, and we look at what we spend on travel. And we do some of this because it's easier, but, like, my wife and I are actually considering cutting out all private and just going commercial now. The main reason our expenses are high is due to COVID So if it wasn't for COVID, I would just be going in a normal airport. I didn't know how COVID was gonna impact. With young kids, could afford it, I was just like, "Yeah, let's just start flying private." And we haven't gone back to commercial yet, but we're thinking about going back. 'Cause like my wife and I look at the money as like, yeah, we spend all this money on travel and airfare and hotels. If we donated the money, people would have a better life. Do we really need it that much?
- SPShaan Puri
What do you do when you donate that like, what's a good way to donate in your opinion? So there's like, uh, you know, ranging from not donating to donating to one thing, to donate to a bunch of things, to like getting involved or seeing the impact or like, you know, I know people who if they donate to Africa, they'll actually, their family will go take a trip every year so that they're more connected to the people and they actually see the impact and they take their kids with them so that they see the impact. Like, what have you found that's a good way to give?
- NPNeil Patel
So w- we have a balance. It's my wife and I team up. Um, this is gonna sound bad, but I don't like volunteering my time. My wife loves volunteering her time. I think it's very inefficient for me to volunteer my time. I should make the money, uh, versus volunteering my time because the money or the hours spent, if we donated the money, it would have a much bigger impact to the cause than if I actually spent my time.
- SPShaan Puri
I don't think that sounds bad.
- NPNeil Patel
My wife ... Yeah, and my wife loves spending the time, and like from going to soup kitchens or whatever it may be. So she picks the causes. We have a few thesises. So like one thesis is, is we ... Or not really thesis, but rules. One rule is, is we don't like money going to organizations that have tons of high overhead. We actually want our money going to the causes. So if it doesn't go to the cause, then we tend to not pick that, um, organization. The second thing that we look for is, uh, organizations who are, um, uh, like, uh, self-sufficient, right? It's just like how can this continue going even if someone wasn't managing it? So like a great program, for example, is my wife likes donating to women's education. We used to donate also to men's education as well. So you find these people in these villages. You say, "Hey, you can't afford to go to school, get a degree. We'll pay for you to go to college. Go get a degree. Come back. Teach kids in your village for a few years." Whether it's under a tree or anything, people can learn anywhere, right? "And then, you know, go move on with your life and do whatever you want, but at least you're giving back to your own community." And what we found [laughs] is when we started giving, 'cause we've been doing this for so long now. Uh, well, actually not that long, but when I mean long I'm talking about like 10, 11 years where we've been donating, and it- it's picked up quite a bit over the last like five, six years. When we started giving the money to men, a lot of the men we saw very low conversion rate [laughs] from them actually coming back and teaching people in the village. While when we gave the money to women for their education, a lot of them came back and fulfilled on the promise. 'Cause it's not like you get a signed contract, right? It's just like, "Hey, we're gonna pay for everything. Come back. Help people out within your village." Um-
- SPShaan Puri
Which country?
- NPNeil Patel
Uh, we've done this in both India and Africa, so different parts of Africa and, uh, in India. And then another program that we've done is like growing gardens where a lot of people who have AIDS don't take the right, uh, don't take their medication and aren't doing well. They're getting, they're given the medication for free, but if your body doesn't have the right nutrients, it rejects it. So what we'll do is we'll do programs like growing gardens. We'll give them money. They grow food. And then not only do they, uh, eat nutritiously or well, they'll more likely take their medication, and you're also growing enough food so that way other people in the village can also, uh, eat. So it's like, but my wife picks all the causes. She vets them. She loves it. Like she'll go, this is Wednesday. In two days she'll end up going to a function, uh, scouting out more nonprofits and organizations. I won't go. Like I think it's a waste of time. I'm like if I go make more money, she can donate it. It's a better ROI than if I go spend three, four hours mingling when she could just do that and I can go make more so that way we can donate more.
- SPSam Parr
Other than your own private businesses, what have been your best financial investments that's allowed you to, to donate and, and make a lot to, to give away?
- NPNeil Patel
Stock market has done really well. Companies like Apple, Amazon, Google, Facebook. I know Facebook's down, but they still have been a terror if you just bought the stocks early enough. Um, 'cause some of these companies have grown 30, 40% a year in the public markets compounding, right? And it really adds up. Uh, angel investments have done really well for me. And I would say probably those are the two biggest. Um, stock market still has done well although in the last like months have taken a beating. 'Cause I'm in 100% tech companies. Like I don't diversify. Like everyone's like, "Oh, you need some oil, and you need this." And I'm like, "Eh, I'm just gonna go all tech." And people are like, "Oh, you're silly. Look how much you lost." But if you look at the whole time when I first got in, I've done well. And I invest in what I understand, and I'm 37, so who cares? You know, another 10 years everything should rebound assuming you pick the right companies.
- SPSam Parr
What's your portfolio look like in terms of percentages?
- NPNeil Patel
I probably don't have-
- 54:25 – 1:11:38
Photopea
- NPNeil Patel
to it. Um, a great example of this is Photopea. So there's this company called Photopea. It's, uh, uh-
- SPSam Parr
We love it
- NPNeil Patel
... Photoshop. And it's like they make very little to no money. So I hit up one of my buddies who, uh, is great at outreaching, and I told him, "I want Photopea." So I offered him 10 million. He said no. I offered him 20 million. He said no. I can take Photopea, make it a really good Canva competitor, undercut them on pricing, whatever it be worth, 10, 20, 40 billion, whatever they are, no. But I probably can cashflow that thing to, like, four or five million a month in EBITDA, right?
- SPShaan Puri
[laughs]
- NPNeil Patel
It's like who cares what it sells for or what it's worth, and then I can make-
- SPShaan Puri
But, but you're saying, you're saying make it free, and you're saying it cash flows like a motherfucker. So what... How do you take a free product and cash flow like a mother- How would you explain that?
- SPSam Parr
Well, he said, he said a Canva, a, a Canva knockoff
- NPNeil Patel
Canva knockoff. So you make, you make almost 99% of it for free. You charge for 1%, but that 1% is enough where you can drive in the revenue. So you don't ever make as much as like a Canva or like, um, a MailChimp or a HubSpot, but hey, if you can make millions a month in profit, it's still good. It's just how you-
- SPSam Parr
What's your math there? So when ... What's the calculus when you were thinking... So like, let's say Photopea, according to Similarweb, has 10 million uniques a month or something. What was your math ... Is that right?
- NPNeil Patel
[laughs] Yeah, it is right. Uh-
- SPSam Parr
Yeah. It's-
- NPNeil Patel
I don't know if it is-
- SPSam Parr
We researched it
- NPNeil Patel
... month, but yeah. So, so-
- SPSam Parr
But like what was your calculus to get to, uh, 4 million in EBITDA a month? Like, what would ... How many people would you need to run it, and what was the, what's the calculus there?
- NPNeil Patel
Sure. So I can probably get the thing from 10 million visitors. I can... So let's say I bought it for 20, right? He wouldn't sell it to me for 20. Um, I've never outreached to him, but I had a buddy outreach to him for me who just does all my outreach. So let's say I bought it for 20. I would put another 10 into it, so now I'm out $30 million. I'm really good at growing traffic, and I know I can grow the thing to roughly 40 million uniques a month. I just have a... I don't know how, but for some weird reason, I know traffic really well and how to calculate what I can get it to and all this kind of stuff, right? And I've done enough research of competitors of what features drive X amount of traffic, just looking at so many competitors in the space. So let's say if I get it to 40, um, what is it called? 40 million-
- SPSam Parr
And what, what, what are the one or two things that you'd get it to 40 million?
- SPShaan Puri
Like SEO, basically?
- NPNeil Patel
So, uh, more SEO, more virality, uh, increasing the quality of the templates, increasing features, uh, adding AI in there. Like click a button, we can automatically detect backgrounds, remove it, filters for social media, because a lot of people use them for social media. But the list goes-
- SPShaan Puri
Logo generator website as a lead gen, shit like that.
- NPNeil Patel
Right. So then, so let's say you got it to 40 million, right? At 40 million, I can easily monetize, let's call it like 1% of the traffic, but let's be even more conservative, like a half a percent, 200,000 people. If I have 200,000 people hypothetically paying $3 a month, okay, that's 600,000. The reason I give you on average $3, in certain countries you may wanna charge different pricing like India and stuff like that so it's more affordable. So $3 a month, and at $3 a month, if a customer stays for 10 months, that's $6 million. You can probably run the thing with less than a million, million and a half in burn each month.
- SPSam Parr
So then you think... Oh, so then for a million and a half burn, you would need, you-
- NPNeil Patel
The burn goes up once you have tons of revenue, right? When you don't have tons of revenue, your burn is much lower on a monthly basis.
- SPSam Parr
Yeah, but so then how many pe- then if it's you're looking at 30 people you would need to run that operation?
- NPNeil Patel
I, I don't even think 30, but let's say 30 total. So I think I can actually run the thing for under a million dollars a month.
- SPSam Parr
Right. So I'm just trying to do the math in my head, but I mean, you, you-
- SPShaan Puri
The revenue was like under, under a million too there. It was like 600,000 or something, right?
- NPNeil Patel
600,000 a month, but if a customer stays for 10 months, you're looking at $6 million. And there's-
- SPSam Parr
Because you charge up front?
- NPNeil Patel
No, no, no, no. I- okay, if they're paying $3 a month, i- if you have four- 40 million, not 4 million, but 40 million, you're converting a half a percent. That's 200,000 paying customers a month. If they pay you $3 a month, that's 600,000. They last for 10 months, that's $6 million a month in MRR. Over a year, you're making $72 million in revenue.
Episode duration: 1:11:38
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