Wednesday, April 9, 2008

Interview with Web Entrepreneur Michelle Madhok

When Michelle Madhok, founder of, pitched her idea for an online shopping site to AOL, Lucky and Shop Etc. back in 2004, she got shot down by all three of them. At the time she had just ended a 5 year stint at AOL, where she spent 5 years overseeing women’s content. “AOL was a great place to find out what women wanted, with 35 million subscribers, 52% of which are women, says Michelle, who is also founder of

For Michelle, the online shopping bug started out as a pastime, doing personal shopping for colleagues and co-workers when they didn’t have time, or didn’t know what to buy. Then she graduated on to sending links of shopping sites to her friends. That’s when she got the idea to do it on a larger scale. But none of the established internet sites she contacted seemed interested, so she decided to do it on her own.

“On Craigslist I found a crazy Ukrainian to build the site. I bought the domain name “” from a porn site that wasn’t using it anymore (love it). AOL had given me a severance so I was bootstrapping, working out of my home with one full-time person, putting together an email newsletter and a blog. It slowly started picking up steam. We got requests from people who wanted to write for us. The more money we'd make the more people I would hire (she now has 40 writers). I then hired an editor and a web designer to produce the newsletters.”

Michelle looked for sponsors right away. She joined affiliate programs like Linkshare and Then Bare Necessities offered to sponsor her newsletters and paid her $200 the first time - she was thrilled!

About three months later, smaller businesses like jewelry designers and handbag designers that couldn’t afford to advertise on sites with big female audiences like iVillage contacted her directly and asked to place ads.

When I asked how she promoted her site, Michelle said that she hired someone to help with SEO (search engine optimization), but word about her shopping site spread virally. Now they do weekly “ad swapping” with other sites, and they have deals with MSN, Yahoo!, Real Simple and Lifetime to syndicate their content.

Michelle started out by investing $20,000 of her own money in 2004, and last year made $400,000 in revenues. “I worked hard for it”, she says. “I wrote 600 invoices last year! But it’s nice to work for myself.”

Right now her margins are over 30% but her goal is to increase them to 55%. “We’re still ramping up to get there. I don’t go out trying to sell ads - people come to us, so I need to hire an ad sales person.”

I asked her what advice she had for others that are starting out and here’s what she had to say: “At the beginning I did everything really cheap. I didn’t touch my savings very much. Your first attempt should be a test. Try to find inexpensive legal advice. Always barter or negotiate on price – I got my head shots for free because I exchanged them for free ads.”

She also believes in making your mistakes on someone else’s time/dime. Michelle found consulting gigs through The Hired Guns at first (they place people in specialty positions). She worked on an email marketing campaign for Pfizer which really helped her with her own business.
In addition to her two sites, she's got more in the works. “We want one for brides and then one for the home, and one for food. We want to be the hip consumer reports for shopping online in different vertical markets,” explains Michelle.

That's me and Michelle chatting at a recent Forrester networking event for the new book, Groundswell (a great read for anyone interested in social media). More pictures in my Facebook page.

1 comment:

Tanya Middleton said...

Michelle is definitley an inspiration! I am constantly amazed by what women are able to do in this age, no matter what stands in their way! I actually work with Microsoft, and right now I’m really excited to spread the word about the “Vision to Venture” tour they’re having between April and May, which will consist of five live events. Featured speaker, John Jantsch is a marketing and digital technology coach, award-winning social media publisher, and author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide, as well as many other speakers offering industry tips. The tour is fully geared towards women entrepreneurs and savvy web gals.You can see more and register at so let me know what you think! And if you have any questions, I’d be more than happy to answer them !