Welcome back to another update on the Authority Site Project! The post below is another update from George Do and Hayden Miyamoto (recent buyers of the Authority Site Project site).
As discussed recently, I sold 66% of my authority site. George and Hayden on working on revamping the site and turning it into a bigger revenue source.
So, with that quick intro…I'll turn it over to George and Hayen!
The Authority Site Project was resurrected and has been going strong for about a month now. This post is meant to serve as a broad update about what we've done so far – and we'll also go over what we plan to do over the next month or so as well.
Here's a recap of what we discussed in the previous post to jog your memory.
We talked about why we think website investing makes more sense than building a site from scratch, especially for those who already have some experience with online business. We went over the exact terms of the deal (Spencer still owns 34%, and we collectively own 66%).
We also discussed how this case study will be fully transparent (we'd reveal the domain of the site and all the strategies/plans that we have for it), but only for those who choose to follow along via email. This was the best way we could come up with to balance the need to protect our asset with the utility that comes with doing a fully public case study.
If you aren't already following along with our email updates, you can do so by putting your email in at the bottom of this post. If you like reading about specific strategies with concrete real-world examples, you'll probably get a lot of value out of following along via email. However, If you're just interested in learning about the broad strokes of what we're doing, you can just stay tuned to NichePursuits – we plan to do a broad update post about once a month here (this is one of them).
What We've Done in the Past Month
So far, we've mailed 4 updates to the people who're following the case study.
Valuation & Due Diligence
In the first update, we briefly discussed website due diligence (although this was not as thorough as it might have been since we already know and trust Spencer). The main thrust of the post was about valuation – how we came up with what we thought was a fair price, and why we were willing to pay a slight premium.
In our valuation of the Authority Site project, we basically approached it as if it were two separate businesses – a reasonably profitable ebooks business (and the associated Amazon Author/Kindle accounts), and a minimally profitable website with a lot of growth potential.
The reason why we were comfortable separating the two and basically approaching the valuation with a sum-of-the-parts methodology is because the two actually don't have a lot to do with each other. The website did have ads for the ebooks business in the sidebar, but our prior experience with the Kindle program showed that very few of the sales we see in Amazon actually come from the website – most book sales happen organically in the Amazon ecosystem itself. Our due diligence on the authority site project confirmed this.
We came up with a low-mid 5 figure valuation that worked for both parties based on a X multiple for the ebooks business and a asset-valuation X for the site itself.
In our second update, we outlined our monetization strategies for the site (we're focusing on improving the site as that's where we specialize and where we feel there's a ton of room to grow). We discussed the two monetization models that we like the most when investing in a website.
Plan A was the Monetization Overhaul – this strategy involves using the site's traffic as a way to build an email list, then creating a product targeted at the audience of the site and building an appropriate funnel to sell to this list.
Plan B is something we call the Pareto Portfolio – basically, it means that don’t change the monetization, rather we apply the 80/20 rule to all aspects of the site. We'll try to find ‘quick wins' or obvious ways to improve the following: keyword research, content creation, adsense/affiliate conversions, on page SEO & site structure, and link building.
Plan A is the higher risk option because it requires a lot more work (probably 3 times the hours spent compared to Plan B), and it may not lead to any increase in profits at all. It's also considerably more difficult (and expensive) to outsource. Fortunately, we have a way to partially mitigate this risk – we're going to validate a couple of potential products before we create them.
While this costs a little bit of money upfront, it drastically reduces the chance that we'll create a product that nobody wants to buy, which would be a bigger waste of money, and more importantly, a huge time sink for pretty much no return (we go over product validation later in this post).
Also, note that Plan A and Plan B aren't exactly mutually exclusive – it's entirely possible to work on Plan B while we're verifying whether Plan A is worth pursuing or not, which is exactly what we’re doing.
Keyword Research & Content Creation
We also did an update about our keyword research and content creation process. This included two free Standard Operating Procedures that people really raved about. So rather than outlining the strategies we use vaguely, we decided to give these two SOPs away to you too. Here they are:
These two SOPs are… absurdly thorough. We highly recommend you go through them and save your own copies for future reference. The two SOPs probably give a clear enough idea of how we approach KW Research and Content Creation, so we'll be brief here and move on to the next thing.
We actually brought in a funnel design expert to help us with product validation (and down the line, he'll probably help us out with our email funnel as well). Our expert is Alex from ThinkFunnel.com and with his help, we pretty much went over product validation step-by-step in this update.
We strongly believe that creating a repeatable process is absolutely essential when it comes to product validation and creation. Instead of sitting around waiting for a ‘Eureka' moment, you should be testing the potential ideas, throwing out the ones that don't work, and working on the ones that do.
The reason why product validation (and by extension, product creation) is such a useful skill to have is because moving up the value chain is the most straightforward way of significantly improving site earnings.
Depending on your niche, there may also be a possibility for you to sell leads to other businesses – for example, if you're in a health-related niche and you can generate leads who're looking for solutions to chronic back pain, you might be able to sell leads to chiropractors.
This method is lower risk than full-on product creation and can still raise your visitor values pretty drastically. However, don’t just jump in – it’s still important to validate the lead generation model for your site, if only because it’s much easier reaching out to business owners or managers when you already have a few concrete leads on hand.
Broadly speaking, here are the steps you need to take to validate a product idea:
- Find out what your most visited/popular pages are
- If your site has enough visitors, set up a lead magnet (e.g PDF giveaway) on your most popular pages to gauge interest (and to get subscribers)
- If your site doesn't have enough visitors yet, use Ads (we like Facebook Ads for this) and set up a targeted Ad and see if people respond.
- Fine tune your testing by playing with the images and the copy, (and if you're using FB ads, hone in on the segment of your audience that responds the best)
- Try a couple of different lead magnets – for example, you could test giving away a PDF, a Quiz, a video webinar, and a free consultation – and see which one works best.
- Do the math – does your best performing lead magnet generate enough subscribers a month to make product creation worthwhile?
If you're not sure how to do the math, Alex put together a calculator just for this purpose:
So – that's more or less the stuff that we've covered so far in the Authority Site Overhaul case study. If you want to get access to our full transparent updates along with live examples, be sure to sign up to the case study newsletter to follow along.
This week (probably a couple of days after this post goes live), we'll be covering site structure as well as site UI And adsense optimizations. A lot of people know about KW density and meta descriptions, but surprisingly few people understand proper the effect that optimizing site structure can have.
We'll go over how you should set up your menu, your category pages, how you should make use of your sidebars, etc.
We'll also cover what adsense placements we feel perform the best, and some straightforward UI changes that we can make to the site to make it more user friendly.
We also plan to cover the following topics in the next few updates to the case study (not necessarily in this order):
Using Contributor Accounts to drive traffic (and boost SEO)
Social Media Strategy
If you want to get deep into the trenches with us on the Authority Site Overhaul, then make sure you sign up for the case study update newsletter below:
Thanks for your interest in the Authority Site Overhaul Case Study, and thanks to Spencer for allowing us to discuss it on NichePursuits.
If you don't care so much about the practical aspects of the case study and you're more interested in just the broad theory, You can look for our next broad update approximately a month from now.
Thanks for following along,
George and Hayden from WiredInvestors.com