Kristopher Jones has been involved with the web since the 1990s—starting with a family recipe and building a multi-million dollar empire with numerous programs, apps and marketing platforms. His affiliate marketing platform PepperJam was sold to eBay who is using it as their current platform.
Recently, Namecheap had the opportunity to talk with him about his online projects and insights into successful marketing.
What were you doing online before you started Pepperjam?
Kris: I founded Pepperjam back in 1999 while a graduate student studying Experimental Psychology at Villanova University. Prior to that I was an undergraduate student at Penn State University studying Psychology. I later went to law school and received a JD from Albany Law School.
What motivated you to start Pepperjam?
Kris: “Pepper Jam” was originally founded as a gourmet food company based on my late grandmother Marcia Jones’ product she called “Mississippi Mud.” Grandma Jones would make Mississippi Mud for the family when I was a kid. Every time she served it, we saw others respond to it. So my brother Rick, sister Jennifer and I took the recipe and launched the pepperjam.com website to sell my grandmother’s gourmet food product online.
In the process of learning how to build the original Pepperjam website and how to market the site online, I stumbled upon things like affiliate marketing, search engine optimization, and the early days of pay-per-click (via GoTo.com).
I was a big believer that the Internet was going to change so many things about how people do things (i.e. shopping, finding information, connecting with friends). Therefore, I really obsessed about how the Internet worked and how I could leverage it to build successful online businesses.
What were some of the major issues you had to deal with as it was being developed and scaled?
Kris: I think one of the more interesting challenges was around managing cash flow during a rapid period of company growth. Between 2004 and 2005 we grew over 1,000% Then from 2005 through 2007 we grew at a rate of about 250% compounded year over year. By mid 2007 our growth started to catch up with us as we were hiring staff, expanding office space, and ramping up marketing at a fast clip.
We added hundreds of new clients during this time and we also launched the Pepperjam Affiliate Network, which quickly grew to become one of the largest affiliate networks in the United States.
While by every benchmark we were totally crushing it, we didn’t properly project our cash flow needs. Turns out—if you grow your expenses quicker than your ability to deposit cash from new clients (because of net-30 terms) you can run out of money! Fortunately we were able to avert crisis (and I’m proud to say we never came close to missing a payroll) by putting a rather large line of credit in place in less than one week.
For those entrepreneurs reading this, banks don’t move quickly, and it’s almost unheard of to be able to move credit lines up (in the millions) within a one week period. However, miracles do happen, and we put in place a large enough line of credit to continuing growing the business.
Affiliate marketing has had an up and down perception—how do you see the affiliate marketing space now?
Kris: From I originally became an affiliate in the late 1990’s until today there has always been an 85/15 rule—85% of the revenue is generated by about 15% of affiliates (to this day they are still referred to as “Super Affiliates.”) Super Affiliates have always been sophisticated in terms of the tactics they have used to generate referrals for partners. However, in the last 5-10 years the overall level of sophistication has grown tremendously.
How were you approached to be acquired and was it your first offer?
Kris: Prior to being acquired by eBay Enterprise (GSI Commerce), in 2009 we were approached by several other businesses interested in Pepperjam. In fact, when we eventually said “yes” to eBay Enterprise it wasn’t our first meeting with them. A year or so prior we met with the CEO (Michael Rubin). At that meeting he questioned whether or not we’d be able to launch an affiliate network and compete against the big three at the time (Commission Junction, Linkshare, Google Affiliate Network / Performics). He watched us over the next 12 months and we crushed it, which led to the acquisition.
How do you choose what projects you take on?
Kris: After selling Pepperjam in 2009 I took a small portion of the proceeds and launched an angel investment company called KBJ Capital (KBJ stands for my name Kristopher Brian Jones). I’ve made about 20 investments since 2010.
While I pay very close attention to what is going on in tech and I speak at or attend most of the leading tech conferences, it’s not a particular “idea” that I’m looking to invest in. Instead, I tend to invest in people.
My thinking is not to disqualify making an investment based on an idea, but instead to look past the idea at the person or people behind the idea. I argue that if someone is going to be successful in tech with or without me, then my investment, mentorship, and willingness to open my network should have a compounding effect on the individual’s success.
In fact, there would be no “French Girls App” (an app to get photographs converted to paintings) or “APPEK Mobile Apps” without this philosophy since my cofounders originally approached me to invest in an unrelated transportation app. During the transportation app pitch I quickly came to the conclusion that I wasn’t interested in investing in that app, but instead to partner with the same founders and create a new company called APPEK. The idea of APPEK was mine—it was to build a boutique mobile app development agency for funded start-ups and enterprise businesses. Our goal was to leverage positive cash flow to invest in and build our own app ideas—that’s where French Girls App was born. If I hadn’t decided to invest in the people behind the transportation app I would have missed the opportunity to invest in the other companies!
You have moved into apps—what attracted you to the platform?
Kris: Much like how I felt the “Internet” would change how people shopped, retrieved information, and connected with people….I was an early adopter of mobile. Unlike a desktop computer, I was particularly intrigued that mobile followed the owner wherever she went and that it was more intimate for a user to connect with a business via mobile than web. I also paid close attention to the adoption rate of mobile usage—particularly as the App Store grew in popularity. All of these things led me to make some early investments in mobile.
How did FrenchGirls come about?
Kris: As I mentioned above—French Girls App was born out of APPEK Mobile Apps. As we grew the mobile app development business we would assign staff to build out our own internal projects and pay for the staff with profits from building apps for others.
How did you get involved with Special Guest App?
Kris: In 2015 I helped French Girls App close a $4.5 million round of venture capital. As part of the decision to raise capital for French Girls and also relocate the company to San Francisco (I stayed in Pennsylvania to run my other businesses) I decided to partner with a friend and acquire APPEK Mobile Apps from my other partners. I took over as the CEO of APPEK Mobile Apps and we’ve been building apps since.
I got involved in Special Guest App (the app that musicians, DJs and comedians can offer their services for social and business events to people using the app) when I was introduced to actor/comedian Damon Wayans Jr. via a mutual friend. At first Damon simply hired APPEK to build a first generation of the app, but Damon and I quickly developed a friendship and he eventually asked me to join as a co-founder and co-CEO.
The internet has changed a lot over the last 25 years—do you think there are as many opportunities today as there was back in the beginning?
Kris: Ah man—I’m not sure it will ever feel as “easy” as it felt in the early days of the Web. My buddy Jeremy “Shoemoney” Schoemaker and I refer to those “old days” as fishing with dynamite—in other words it feels like it’s a lot harder today! In my opinion the opportunities are still there and they are much, much bigger.
For instance, a once small affiliate called “RetailMeNot” started as a small company who leveraged SEO to rank well for discount related keywords—that company eventually went on to merge with several other coupon businesses and now has a value of several Billion (capital B on purpose) dollars. Similarly, eBates started as a cashback website with a small staff—they were recently acquired for over $1 Billion. So to build big businesses requires greater sophistication and polish than the old days, but the opportunities are huge.
What areas would you recommend new internet entrepreneurs look at today or in the near future?
Kris: I was on the fence for a while but most recently I’ve become convince that cryptocurrency is a game changer. Much like the biggest disruptors of the last 10+ years (Uber, Airbnb, Amazon) the idea of Bitcoin and the Blockchain has the ability to rewrite the way we store capital and value. There seems to be a global trend in leveraging technology to disrupt old, complex industries like transportation, lodging, and commerce (who goes to a store anymore). Similarly, the global financial markets have experienced massive setbacks recently that have almost taken down the world economy (US housing crisis, Greece’s debt, fall of the Euro) creating an opportunity for a new currency that is less likely to be influenced by situational crisis as much as its underlying value. So I’m bullish on Crypto! I also think there are HUGE opportunities in mobile—particularly as mobile relates to large industries that are still ripe for disruption.
You did most of your projects while living in PA—does location really matter anymore? Are there areas where it might be easier to succeed?
Kris: I had early success as an affiliate marketer (late 90’s/early 2000’s) so geography didn’t matter as much to my career. In many ways I got lucky, which allowed me to build my name and several successful businesses off my early success with Pepperjam. That said—I’ve traveled my ass off over the years. I think location does matter most of the time, but it’s only one of the factors that influence success. If I was a young entrepreneur again and didn’t have Pepperjam as a launch pad for a successful career in tech. I’d undoubtedly move to the Silicon Valley, Los Angeles (where tech is heating up big time), or New York City.
How have you seen SEO change over the past 20 years?
Kris: I don’t think it’s changed much. Yes—the Google algorithm has been updated hundreds of times and folks who were too aggressive with link building or content creation got hit (aka Penguin and Panda) and will continue to get hit by “fishing at the bottom.” At the end of the day SEO has always been about content and links—that’s where we focus our time and energy at LSEO.com and where I think others would be best served as well. However, your strategy needs to be long-term and you can’t or shouldn’t take short-term gains at the expense of success over time.
Kris also does an Ask Me Anything live stream on Facebook which is worth catching for more insights. Check out the video archive.