Tuesday, May 29, 2012

Lessons in Entrepreneurship: Emerson Spartz

Posted By: George Deeb - 5/29/2012


& Comment

I recently met one of the most interesting persons, let alone entrepreneurs, I have ever met:  Emerson Spartz, the founder and CEO of Spartz Media.    If you have not previously heard of Emerson, trust me, you surely will.  This guy is destined for continued success, and is driven by an infectious energy, a terrific intellect that runs at light speed and a real desire to "change the world". 

But, what makes Emerson's story particularly interesting, was the fact he started Spartz Media in 1999, at the ripe old age of 12.  Yes, I said 12, with Spartz Media the brainchild of a good student with an unparalleled sense of curiosity about the world, who decided to drop out of the 7th grade to follow his passion at the time: building the #1 fan site for Harry Potter fans, called MuggleNet.

With the support of his parents, two successful professionals of their own, they agreed to let Emerson start the business and continue his education as a home-schooler in their home town of La Porte, Indiana, where Emerson could customize his own curriculum.  His parents incentivized Emerson to read as many books as he could, including an economic reward of "a penny a page".  Emerson read 1000's of books about everything and anything that interested him, from fiction (books from Grisham, Cussler, Follett and Clancy) to non-fiction (the biographies of four famous people a day).  Emerson was a sponge for knowledge, and was driven by the mantra: "brains + money = smiles to infinity".

Without the help of any mentors, Emerson built MuggleNet into the dominant fan site in its space, generating over 9MM visitors per month, at its peak.  He did this by: (i) hustling for new users (via link trades with the other Harry Potter focused sites); (ii) accumulating over 120 volunteer content contributors for the site; and (iii) following the example of other fan sites as role models (e.g., The Simpsons, Lord of the Rings), which had built up professional businesses in their space.  Emerson was taught at an early age by his parents that "can't" was a four letter word in their house, and he was constantly looking for new ways to innovate and succeed (hiding his young age from potential partners).

Emerson's MuggleNet success turned him into a celebrity within the Harry Potter world.  He published three books, went on book signing tours in 35 cities across the country and even had the honor of being asked to fly to Scotland in 2006 (at the age of 18), to meet J.K. Rowling, the author of the Harry Potter books, who wanted Emerson's assistance in helping her promote her newest and sixth book in the series.   Like Harry Potter, Emerson had the magic touch, and had become the voice of Harry Potter fans worldwide via the MuggleNet website, podcasts, games and content.

But, Emerson was also craving the social experience of going to college, and handed off the day-to-day CEO job at MuggleNet to his team, and enrolled at Notre Dame in 2005.  But, Emerson was less concerned about getting good grades (which he did anyway), but again was driven by a desire to customize his own curriculum, trying to learn how people and business really behave and work.  Emerson studied an eclectic mix of subjects, including neuroscience, memory, business, politics, psychology, science, SEC filings and over 60 industry research reports from natural gas to drywall contracting.

Emerson was hunting for any patterns in commerce behavior, which he could practice and apply in real life.  He built frameworks around various topics, like persuasion, negotiation and innovation, and created scripts and tactics in the real business world.  He was trying to build a repetitious practice regime for business, very similar to the practice regime he applied as a sports athlete while playing golf or basketball, to sharpen his skills.  

After graduating from Notre Dame in 2009, he settled back in the CEO chair at Spartz Media, where he launched over 18 other website properties, the largest of which is OMG Facts, the #1 random facts website and video series (with over 33MM views on YouTube to date).  In the last two years, this collection of websites has grown to over 10MM unique visitors and 160MM page views per month.  And, the Spartz Media business has grown to millions of dollars in revenues and employs over 30 employees today.

In addition to his unique education, Emerson's success at Spartz Media is driven by the fact that he has figured out how to easily identify gaps in consumer content demand, build content/communities in those verticals and ignite the viral buzz.  He said the magic to making something go viral is to: (i) remove any barriers that impede virility (give users the tools they need); (ii) plant the seeds with the highest demanded "fat tail" content (tested ahead of time in small sample pools); and (iii) repeat the process in other like-minded communities. 

This model has led to an unbelievable 95% success rate for each site launched, with success defined as over 1MM page views per month.  And, going forward, Spartz Media is reapplying this process by launching one new site per month in new categories.  Not dissimilar to the strategy Zynga uses to launch new viral video games, or the strategies Demand Media employed to grow their content-centric business.  Emerson acknowledges that a "trends-based" content strategy may lead to user decay over time as the trend passes, but the rapid launch of new sites more than offsets any traffic losses from the old sites.  In addition, he looks for other out-of-the-box ideas that can generate "long term legs" of their own, and is currently working on two such sites, one for High School Memes and the other a World Records site. 

Emerson, may or may not raise outside capital to help him accelerate his efforts or make some acquisitions, but he has the luxury of deciding his own fate, as the current business is profitable based on his successful advertising sales model (which still has plenty of upside in front of it, by building an internal sales team instead of relying on third party resellers).  Emerson equates Spartz Media very much to a VC-backed startup incubator, funding and launching a bunch of "high odds of success" sites, to see what sticks.

So, there are a lot of interesting startup lessons for us all: (i) don't be bound by the current way of doing things (think out-of-the-box to customize your own solutions which you can be passionate about); (ii) if you don't have your own mentors or skills, look to similar case studies as role models of where to go and read up on those topics; (iii) once you have figured out your "magic sauce", look for new ways to apply those skills for new products and "hit the repeat button".

Honestly, Emerson Spartz is a case study that Arne Duncan, the Secretary of Education in the U.S., needs to learn about, so our country's broken education system can be retooled to actually produce entrepreneurs like Emerson, who are helping to create jobs and drive our economy at such a young age.  Hey Chicago, anybody we know that can help Emerson with that introduction??

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