Category: Interviews

Use interviews as lead magnets on your website

After interviewing some of the biggest domainers in the world, what can I share with you? Before I get to that I think there’s something else that is perhaps even more worth sharing, and that’s why I interviewed them in the first place. Why interviews?

1. Interviews are great link bait.

If you ask a good question, other blogs and websites might link to that content because the industry expert you interviewed might have said something smart (and there’s a good chance for it), maybe even visionary. Your task is to create an environment for him to shine!

A great example is my interview with one of the founders of DigitalOcean. This interview was later mentioned by countless websites, including Wikipedia. Have you ever tried to get a backlink from Wikipedia? Yeah, let me know how it goes. Heck, 7 years later, I am still linking to that interview!

2. Success stories are great content

Interviews are easier to read than the author monolog. Also, people rather read what industry expert has to say than what some newbie has to say. No offense to anyone, heck I consider myself a newbie.

Interviews are great content because industry experts have more than a few interesting stories to tell. The guy that went with a machete in the jungle has the most interesting stories. While the guy that 50 years later just drove by on the tarmac doesn’t have much to add.

3. Interviewing someone is better than guest posting

If you ask someone for a guest post, there’s a better chance they will refuse than an interview. Why? If you are interviewing someone, it means you are giving them certain credit and recognition (successful people love that, it’s their tap on the back). But don’t forget, what you are really after is creating quality content, and a great website! In return, this will increase the traffic to your website!

Whereas a guest post is the same, only a level below. With interviews, you kinda give people a template or a road map of what to write about, which is people’s biggest problem. Most of them don’t know what to write about, or how to start, and they have the writer’s block. If you add daily work, problems, busy schedule, it’s easy to say no to a guest post.

4. Want access to someone who is hard to reach?

Think of your absolute best and prosperous client in the world. Call him or send him an email if you can pitch him your product. You probably know his answer in advance. Ask that same person to do an interview. Do you think your chances of reaching him increased?

What do you think which stands a better chance? It’s all about building relationships with your leads! Soft sell. Catching the whale, that’s what it’s all about.

5. Interviews with big names give your company a great context

What do you think about how do your partners, potential customers, clients, media, industry experts perceive your company if all the big names are present on your company’s website? Good or bad? Positive or negative?

However, one thing has to be clear, it’s not only you that are getting the benefits. The person that is being interviewed gets the traction as well. You do all the hard work to get as many visitors as possible to read about this successful industry expert, you link to all the URL’s that person provides, and he can happily share the interview with his friends, clients, and partners. It’s a win-win situation.

6. Going viral

In some cases, you can include several industry experts in your article, and one of the influential people you interviewed may mention this in his social circle. This can be social media, email, or live event. This is where your article can especially pick up some traffic.

What I learned from interviewing 22 successful entrepreneurs

I believe it was back in 2012 when I started interviewing people for my blog. I did the first interview for my personal blog on duskic.com. Then on my business blog, over at whoapi.com/blog. After that, I started this website webmaster.ninja and posted a few interviews here as well. It was a humbling experience because some of these people are multimillionaires, some are true rock-stars in their industries, and some share that one simple piece of advice that magically doubles your income!

Since it’s been a few years, I thought it would be a good idea to create a condensed post with a list. If for no other reason, then so that I can reflect and see what advice I picked up over the years. I am sure you are going to be able to find a few tips yourself.

Joel Gascoigne

I first reached out to Joel via Twitter, and he was super nice about it. This was back in 2012 before I pitched 500 Startups and found out I would live in Silicon Valley for 4 months. Turns out Joel and Leo Widrich were also there at the time, and I ended up meeting Joel in person! If you read the interview with Joel, you can see right in the title that he is focused on customer happiness. After the interview Joel also became huge on transparency, so now (and for the last few years) Buffer’s numbers are public!

Focus on customer happiness! –Joel Gascoigne

Joel Gascoigne is the Founder and CEO of Buffer, a social media app that helps you with scheduling your posts. According to Baremetrics, they are making around $1.54M per month in revenue every month.

Sasa Sarunic

I met Sasa at a local meetup when he was with agency Five and startup Shoutem. Companies he co-founded and helped build together with Viktor Marohnic but left a few years later. What I learned from Sasa’s interview was that he had years of experience before making any success and that they started hiring people only when it started to hurt. (Meaning they couldn’t do the work themselves, and they could afford some help).

Hire for growth! –Sasa Sarunic

Sasa Sarunic is the CEO of Five by five since September 2013 (a company he started after leaving agency Five) and a co-founder at Agent Cash (now Floe). According to Crunchbase, Techstars is an investor with Agent Cash.

Jason Mendelson

I reached out to Mr. Mendelson when I was doing investor outreach and wanted to get in touch with Foundry Group. Among many high-profile investments like Moz, they invested in technical and API companies such as Full Contact (I interviewed their CEO Bart Lorang as well, check below). More importantly, their team venture partners (like Brad Feld) are very tech-savvy. Jason’s advice stood the testament of time.

Having the self-awareness to be able to constantly monitor one’s performance is key. Aside from that, have a maniacal focus on the product and customer is a must. Release product often and be deep into analytical thinking to gauge success.Click To Tweet

Jason Mendelson is a co-founder and a partner at Foundry Group an early-stage technology venture capital firm. They invested in Moz, Full Contact, Yesware, and others.

Ben Coe

Before Jason, I interviewed Ben Coe. I heard about his startup attachments.me from one of our clients’ domain registry .me. I reached out and the result was that interview. I am sad to report that his startup went under, (Foundry Group and Jason invested around $2M according to Ben’s LinkedIn profile), but these things do happen. Even successful startups miss several near-death situations.

Just like Sasa Sarunic, Ben told me that even if he had a successful exit, he would have fun a little bit, and then start another company. Ben is currently a systems analyst at Npm, Inc.

That’s about it, as far as interviews on duskic.com go. These were mostly startup related because I was trying to figure out how to reach out to investors and what it was like to run a VC backed startup. I haven’t mentioned it here, Sasa’s startup at the time (Shoutem) had 1 million euro backing from a local VC fund – RSG Capital (now operating under the name South Central Ventures).

Moving on to a bit different set of interviews. These were published on WhoAPI’s blog and were mostly around successful domain name investors and domain registrars.

Mike Mann

I interviewed Mike Mann back in May 2012, which was about a month after he became known to the world as a domain investor who registered 14,962 domain names in a single day. At the time of the interview, Mr. Mann said that he owned 300,000 domain names like seo.com, software.com, phone.com, DomainMarket.com, PRMarketing.com, PurePPC.com. His advice was to stay focused on the .com TLD and forget the new domain extensions.

.com is king, people will be disappointed with all other TLDs. Mike Mann

Mike Mann is the author of Make Millions and Make Change. Mike is also the founder of several successful, active, for-profit corporations. Three of these corporations were listed among the 2012 Inc 500 fastest-growing companies in America: Phone.com, DomainMarket.com, and SEO.com.

Frank Schilling

I met Frank Schilling in person at the ICANN 44 meeting in Prague. Very rarely have I had the opportunity to meet someone who has achieved so much, yet you have a feeling true greatness is yet to come. Like Mike Mann, he owns a ton of domain names and a patent in the domain industry. Regarding patents in the domain industry, Paul Stahura and Pinkard Brand also have them (check below). The second time we talked he gave a glimpse of the new domain extension wave. Pretty much the exact opposite of Mike Mann’s focus on the .com.

Frank Schilling is the founder of Uniregistry and DomainNameSales.com. The Namepros domaining community agrees that at one point he owned the largest domain name portfolio and don’t be surprised to see his company sold $12 million USD worth of domain names.

Rick Schwartz

If you think that 12 million dollars worth of domain names is a lot, check out Mr. Schwartz’s portfolio self-evaluation + past deal numbers. His biggest advice in an interview with me was not to quit your day job until it interferes with your domain investing earning capability. As far as domain investing goes, he said to buy domain names valued at $1,000, and sell those for $10,000. After that, you just rinse and repeat until you get better at it.

If you think buying a domain name for $1,000 only to sell the same domain name for $10,000 is easier said then done, you would probably be right. Hard, but not impossible.

Here’s how Rick Schwartz did it himself. He bought the domain name porno.com for $42,000 in 1997 and sold it in 2015 for $8.88 million. In the 18 years that he owned the domain name, it earned approximately $15 million. In 2003, he sold men.com for $1.3 million (purchased for $15,000). In 2008, he sold Candy.com for $3 million, plus a 12.5% equity stake, to a candy company that had been in business for 35 years. Lastly, in 2004, he sold iReport.com to CNN for $750,000, but then again, at the moment this domain name is not opening any website. Seems to me like someone wasted $750,000. HA! Unless they sell it at a 10X multiple, as Rick Schwartz advises.

Rob Grant

Mr. Grant’s story is a classic rags-to-riches story. Ok, maybe not exactly “rags”, since he had a nice paying job on Madison Avenue. But he wasn’t having anything near success with his domain names. He was one of the pioneers, and during his interview with me, he shared a few nuggets of wisdom. One thing, in particular, stood out. You should never think you are at the top. The moment you do, you are done. This is especially true in the internet space. No other industry changes as rapidly and without warning as technology.

You should never think you are at the top. The moment you do, you are done. This is especially true in the internet space. No other industry changes as rapidly and without warning as technology. -- Rob GrantClick To Tweet

Rob Grant currently owns more than 8000 domain names and has had some success with selling them and building websites. In his spare time, he attends his daughter’s (Lana Del Rey) concerts.

Paul Stahura

Mr. Stahura apart from being kind to do the interview helped me with business advice on several occasions. He is definitely a pioneer who had huge success in the domain industry on more than one occasion. As you can see from the interview, he has several patents and built one of the largest domain registrars at the time (eNom). Once eNom was making tens of millions of dollars, he sold it to Demand Media. Paul’s advice was focused on new gTLDs and how legitimate domain investors can make money by providing value to the marketplace. He confirmed how .com will still probably stay on top, but new domain extensions will have a place under the sun.

Paul Stahura is currently executive chairman and co-founder at Donuts Inc after leaving the CEO position in January 2017. In November 2017 Donuts Inc. ranked fastest-growing company in North America on Deloitte’s 2017 Technology Fast 500, followed by an acquisition in September 2018 by private equity group Abry Partners.

After Paul Stahura I took a little break from interviews, but then returned strong with some very high-profile interviews that I published in my ebook.

Mitch Wainer

Mr. John Ives (Managing director at Tahoma Ventures) introduced me to Ben Uretsky and Digital Ocean. The reason why I am saying this is because I ended up working with Digital Ocean on several occasions, and although I didn’t get to interview Ben Uretsky, I met Mitch and we spoke on several occasions! Side note, there’s a great lecture by Mitch on growing your startup. You should check it out. It’s very hard to single out one good advice Mitch gave me! But I think we can all learn from their stellar growth (from 2000 clients in January, to nearly 150 000 in December 2013) since they announced their $5 SSD VPS plans on Techcrunch. Great product, offered at an amazing price at the right time, and voila!

Mitch Wainer joined DigitalOcean as co-founder and Head of Marketing in 2012 and left after 6 years. He is currently Chief Marketing Officer at Clubhouse and advisor at Flybridge Capital Partners.

Bart Lorang

Bart was another perfect interview for my eBook since Full Contact, like DigitalOcean, fundraised a lot. Back in 2015 when I interviewed Bart, they were handling over a billion contacts, and they’ve raised around $20 million in funding. The thing that stood out most during the interview was his deep care for his employees! They call it the “Paid, Paid Vacation” and their blog post explaining the concept went viral.

Speaking of viral blog posts, the other one that Bart mentioned during the interview was his “The Story of 126 No’s and 1 Big Yes“. Hint, watch Bart’s video for Techstars application. As far as the blog post goes, I highly recommend it since it’s their entire journey from a basement (hint again, check the basement in the video) to getting an investment from Brad Feld (Foundry Group, the same person I mentioned earlier when I talk about interviewing Jason Mendelson).

Here’s the video before Bart decides to pull it off the Internet. https://www.youtube.com/embed/eKu70mCNLa0

Even after this video, Bart Lorang is still the Co-founder and CEO at Full Contact. According to Bart’s interview with Nathan Latka back in December 2016 Full Contact has 220 employees, revenues of $12M in 2016, 50K+ customers and have raised $50 million in funding.

Isaac Saldana

Isaac invested a little bit of money in my company WhoAPI back in 2013 when Dave McClure introduced us over email. I interview Isaac for my ebook, but after Sendgrid had an IPO I wanted to publish the interview and share the interview for free with everyone. After a short update, the interview went live. Isaac reveals how he was facing a challenge while working on something, and he decided to face it head-on! After having some initial success, he went on, and on. That translated into him becoming mission-driven. Other people noticed, clients, starting using this product, and investors started investing in the company. The rest is history.

Isaac is currently acting as the co-founder and CEO at Joy Labs. Sendgrid, the company he co-founded sends more than 37 billion transactional emails it was acquired by Twilio after going IPO. Earlier, Sendgrid raised more than $80 million in funding.

David S. Rose

In his TED talk, David S. Rose introduced himself as someone who both raised and supervised investments of tens of millions of dollars. In the interview (which is published in my ebook), I asked him if there was anything that stuck out as an obvious commonality among all those deals. Here’s what he had to say: “If there is a commonality among the various companies in which I’ve invested—aside from the founder having impeccable integrity, which for me is the number one criterion—I think it is a sense of entrepreneurial optimism, passion, and vision combined with a sense of reality.”

If there is a commonality among the various companies in which I’ve invested I think it is a sense of entrepreneurial optimism, passion, and vision combined with a sense of reality. David S. RoseClick To Tweet

David S. Rose has been described as “New York’s Archangel” by Forbes. He is a serial entrepreneur, Inc 500 CEO, active angel investor, and CEO of Gust, the SaaS platform powering over 600,000 startups and 75,000 early-stage investors. He’s the NYT bestselling author of “Angel Investing” and “The Startup Checklist.” https://embed.ted.com/talks/lang/en/david_s_rose_on_pitching_to_vcs

Patrick Ambron

I reached out to Patrick at the time when my fiance and I tried to start a project that would offer unique illustrations on a company mug. The project ended up to be a disaster, but the interview with Patrick turned out to be just fine. The biggest message I got from that interview, and the research I did before the interview, was that if you truly solve a big problem that people care about, they are going to come by the thousands. I know my vanity kicks in when my name appears on Google, and I want only good and respectable results. Patrick’s company BrandYourself helps non-techincal users achieve just that.

I interviewed Patrick back in 2013 before he pitched his startup on Shark Tank where Canadian-Croatian Robert Herjavec offered $ 2 million for 25%. Patrick turned down the offer. They now have more than 100 employees. Back in 2016 BrandYourself reported having raised $ 6 million so far and made $4.2 million in revenue for 2015. Nice progress since 60,000 signups in 60 hours (confirmed during my interview).

Daniel Greenberg

Riding the wave of branding (personal and corporate) I reached out to Daniel regarding the company mugs (yes, the same project that was a disaster). To this day, I still find myself drinking coffee from those mugs, and I am happy that we were able to create those mugs for them. As far as the interview goes, I still remember the shocking story where an African medical insurance company allowed a domain name linked to the management of its domain names to lapse and be deleted!

Daniel is the owner and managing director of Lexsynergy, a company that specializes in online brand protection and domain management. They have offices in London, Vienna, and Johannesburg, with clients from around the world.

Pinkard Alan “Pinky” Brand

I’ve interviewed Mr. Brand years after I met him during the World Hosting Days (now called Cloudfest). I finally decided to ask him to join me on a Skype call where we discussed: domain name extensions, China, Marc Ostrofsky. The information that just blew my mind was that: “Keep in mind that China’s 618 million Internet users are comprised of 28% rural users (177 million) with 81% of those users (500 million) going online via smartphones and tablets. And still, Internet penetration has reached only 46% of China’s 1.3 billion. Also, only 10 million of those 1.3 billion speak English! That’s less than 1%!“

Combining my thoughts from Daniel Greenberg’s interview (growth in Africa) and this interview (growth in China) you get the feeling the Internet will change a lot in the coming years! Pinkard Brand is currently acting as the Senior Vice President of Marketing and Sales at RegistryOffice.

Tomislav Bilic

Tomislav’s story could be very interesting to domain investors. His company (around $2 million in reported revenue for 2016 with 50 employees in 2018) has remained on its .net domain name since the beginning! Matter of fact, one of their clients (partners, or employees, I am not sure) bought and gave them the inchoo.com domain name as a gift! Obviously, Tomislav was obsessed about the right things, and the dreaded .net domain extension hasn’t stopped him on his path of success. On the contrary, it is still their main domain name!

Marko Kovac

Speaking of Croatians and successful .net domain names salespod.net comes to mind! I think I met Marko Kovac, CEO & Co-Founder of Repsly during the GOAP event in Zagreb. The reason why I reached out to him for an interview was that they had just finished a rebrand from salespod.net into Repsly.com. Although this wasn’t exactly a full-blown interview (I topped it off with “12 things to watch for when picking a new name.”) we did have a great talk, and I think one can learn a lot from their example and early mistake of choosing the domain name salespod.net.

Repsly made around $5 million in revenue back in 2017, and counts around 60 people in their team and raised more than $4.8 million to date.

After those interviews, I more or less took a break from interviewing and posting my findings. I eventually got around to it when I started posting content intensively on webmaster.ninja. My idea here is to get advice from experts in various fields on how to become a true Ninja Webmaster. You would then by definition need advice on web hosting, domain names, SEO, and so on. I started with advice from:

Glen Allsopp

Glen shared his favorite SEO tools, thoughts on the latest Google search algorithm update, and the reasons why he got into this industry in the first place. Money was the initial factor, but now when he is maybe even set for life, he is giving away super-duper SEO advice for free. These are so good it will make your head spin! Advice that stuck with me the most (during the interview, (if I put aside advice on his awesome website) is that I should relax if I get a negative comment.

I’ve had blog posts where I get 300+ comments of total praise, and then one or two which are just…harsh. Of course, being the slightly flawed humans that we are, it tends to be that those 300 positive comments quickly go out of the window and it must be the two negative ones which we believe to be true. I see this happen on a lot of blogs. Authors ignore a lot of the praise but always rush in to defend themselves against the critics.

–Glen Allsopp

Tim Soulo

Since I was using Ahrefs for years, (and Glen listed Ahrefs as one of his favorite SEO tools), I just had to interview someone from Ahrefs. I reached out to Tim Soulo a while back after taking a course he created, called Blogging For Business. It was absolutely free on the day of the launch, and it seemed too good of an opportunity to miss. Tim is their marketing director and he spends a lot of his time creating content.

His advice on how to create content that converts readers is just amazing, but also too long to fit here. Hop here to read the interview with Tim Soulo of Ahrefs!

According to our data, almost 75% of pages that rank in top10 for a given keyword doesn’t have even a single mention of that exact-match keyword anywhere on the page.Click To Tweet

Spencer Haws

My car is one of those “college on wheels” type of vehicles. My fiance and I mostly listen to audiobooks or podcasts. Niche Pursuits is one of them. Among many podcasts, some have the power to help you change your life. Again, Niche Pursuits fit the category. So who is Spencer and why should we listen to his podcast?

I think I am not far when I say that Spencer made his first million when he sold Long Tail Pro. A software that helps SEO experts find keywords that are high in traffic, but low in competition. An SEO tactic he practically invented. For some people, that’s where the story would start and end. However, Spencer made a lot of money with his Amazon FBA business, before he sold it for nearly half a million dollars.

Here’s the kicker, he did all that without any outside funding, and AFTER he created a small website empire. If you imagine a beast working in a cave 24/7, you will miss by a light year. Spencer is a loving father of four, and that’s the first thing he uses to describe himself on his about page.

His #1 advice from the interview, I keep repeating to others is:

The ideal niche can be found is at the intersection of these 3 things: low competition keywords, money in the niche, and your interests.Click To Tweet

Michael Cyger

Last but certainly not least, was the interview I did with Michael Cyger. We talked just a couple of months ago about picking the very best domain name for your new website. Michael started a very popular domaining blog and a podcast DomainSherpa.com back in 2010, and most people know him from there. Recently he started DNAcademy which I attended and was able to learn a few domain investing tricks myself!

These companies are trading the up-front cost of buying a premium domain name for years of hidden costs, not just from a lack of productivity in communications but also from being associated with a weak brand. Click To Tweet

For those of you who missed it, Michael is essentially talking about opportunity cost. And if we are to trust Alan Dunn, the world is running out of good domain names.

Conclusion

Wow! And we are done! I hope you found some good advice within those lines, and that you can implement them tomorrow at the latest. You have the night to think it over. Please share the post with someone who is currently struggling with their business.

Domain Magnate launches a new fund for content businesses

Michael Bereslavsky is the founder and CEO of Domain Magnate. He’s been involved in various internet-based businesses since 2004 and quickly graduated from building, promoting, and monetizing websites to buying and selling them. With over a decade of experience, Michael and Domain Magnate has managed 300+ successful deals.

Michael, thank you for doing this interview with me. Although I’ve mentioned you already on some of our earlier articles I can’t believe we haven’t done an interview! Totally my fault, and I hope to amend this failure today.

Let’s just get straight into it!

Q: You are a popular face on Flippa, so I think we don’t need a long introduction, but can you share briefly how you made your first $1000 online? 

A: Sure, I started back in 2004-2005 with building an affiliate website about how to make money online, which is what I was I learning about at the time. I wrote articles about different opportunities and monetized them through affiliate links and google ads. I think it took me about 4-5 months to get my first $1K online.

Q: If I am not mistaken, you were first trading domain names, and then made the transition to buying and selling websites. Can you explain how you made that transition? Did you find it beneficial to know more about domain names when you started trading websites?

A: I first started by building websites and then got into domain trading shortly after. There were periods when I was focusing more on domain trading around 2007-2008, when the domaining market was going up rapidly, so there was a lot of opportunity for profits by trading domains. However, around 2008-2009 the trends in domaining reversed, and prices plummeted, so I sold part of my portfolio and focused back on building, growing and buying websites. I found the skills are transferable, however, websites provided more opportunities and higher margins, while the market was still in its infancy. 

Q: How long have you been buying and selling? During that time, have you found any patterns that keep repeating over the years? For example trends with multiples, Google updates or any other trends that are making an impact on our industry?

A: It’s been over 15 years in the space for me now. There are several major trends in the industry, including growth, expansion, integration and consolidation, and the other for increasing multiples. Back in 2005-2010, you could have acquired content websites for less than 10 times the monthly earnings, while now it’s around 30-45 times. The market has grown and matured tremendously in the past decade and a half. All the marketplaces and brokerage companies didn’t exist back then, in 2005 all the deals were done via forums or privately.

In the past years the market for content websites has turned from a buyer to a seller market, whereby there are so many more buyers, than sellers, the prices keep rising and the marketplaces are full of low quality websites for sale due to high demand. 

The market is also very imbalanced, as most buyers lack the experience and expertise to understand how to measure risks posed by google updates, or amazon associates commission changes and similar risks. 

I expect in next few years, as buyers become more experienced and educated, the prices will normalize, with a large gap between lower and higher quality assets. Currently we are seeing low quality, newly built websites often selling for very similar multiples to well established, lower risk content businesses. 

Q: Yes, this is the thing that confuses me a lot, and I think it’s an advantage for more experienced investors. How in the world can a 2 year website have the same multiple as a 10 year old website? Actually, let me ask a better question; how do you find deals like that? On your website, you mention you do a lot of deals privately before they reach the marketplace? What’s your secret sauce?

A: The biggest risk to content sites is Google algorithm updates, and there is a lack of understanding among new buyers and investors on how this works. On our side we try to educate our investors and explain the risks with new sites, using aggressive SEO techniques. New buyers often make their choices based on the site’s niche, domain, or design, or operational requirements, without the proper risk analysis.

Over the years we’ve done a lot of deals, so we are known in the industry, we also run a popular podcast, network with business owners, and do outreach to find leads. Part of our team is involved in reviewing and looking for leads of businesses to buy. Here we can leverage our reputation and scale to get a solid private dealflow and that’s been one of our primary objectives and advantages all along. I firmly believe that more than 50% of your success in acquiring an online business is about getting a good deal. A good deal is not necessarily cheaper (although private deals are often below market prices), but it’s about the combination of limited risks, great growth opportunities and solid numbers. 

Q: On your website you published that “in the past 16 years you’ve acquired, operated and sold hundreds of websites and online businesses, with consistently high returns.” When you are buying websites, what are the top 3 things you look for?

A: Our diligence focuses on numbers, risks and opportunities, and we iterate upon those 3 when going deeper as we consider a deal further. Initially we review the revenue and traffic numbers and trends, assess main risks and opportunities for quick improvements. In further steps of our due diligence we look further into verifying numbers, analyzing trends and reviewing long term growth potential, and, most of all, looking further into risk analysis. Of all three I believe risk is the main factor to consider, and it’s unfortunately the one that’s most often overlooked or misunderstood.

Q: All right, in my opinion, you struck the nerve here. Let’s talk about risk-reward. When you are buying a website, do you get excited if you see a potential of 10X profits, or if the website has “guaranteed” same returns? (Explain why) 

A: For us it often depends on the investor’s or Fund’s objective, since we had investors who wanted to go for massive growth opportunities, and others who preferred lower risks. However, for me personally, and for our upcoming fund, the perfect deals are established businesses, with multiple sources of traffic and revenue, limited risks, and reasonable growth potential. 

Additionally, with a fund we take more of a portfolio approach, so out of 5-10 deals we may buy 1 or 2 which are 10x potential and higher risk, but we’d make sure the rest are “safe and steady” deals. 

The reason for low risk bias is based on the current market situation and analysis, I talk more about in episode 5 and 8 of our podcast. It’s also contrarian to the common approach among most buyers, who look for unlimited growth in high competition areas, while we prefer steady, boring websites about pets, or knitting and similar evergreen, long term niches.

Q: When you operating from websites about marijuana through technical SAAS websites to women’s health, you must learn a lot about everything on a personal level? Also, would you say that having a great team that can work in any niche is an advantage over other website investors?

A: We are generally niche agnostic, we have some criteria and preferences, but we focus more on the deal parameters, and risks and growth opportunities. We have an experienced management and tech team, and a network of writers, so we can generally cover most topics. As we develop more niche specific expertise, we are also developing more advantages in those spaces by having better affiliate relationships, higher CPA rates, direct advertisers, and more growth opportunities.

Q: As a fund, is that how you try to mitigate risk? 

A: Yes, absolutely, we’ll hunt for good deals, acquire solid businesses, with growth and improvement opportunities. Most 6-7 figure online businesses are mismanaged, with many unnecessary expenses, so the fastest and easiest way to increase profit is generally by reducing expenses, that’s what we often focus on first. 

Q: After your initial success with brokering and managing websites, what was your next step? Was it then you had an idea to do a private fund?

A: It took me a long time to accept that we need to start accepting investors and work with outside capital to grow further. We’ve only started working with investors in early 2019, after we had to let go several extremely attractive deals, due to not being able to get enough capital in time. We started with only one investor, and then he brought in several more who wanted to join, and it organically evolved into a fund. 

Q: Why is investing in a fund a good idea, and what can investors expect? Since the fund is only available to accredited investors with a minimum investment of above $120k, did you want to attract only a certain amount and type of investors?

A: There are several main reasons to invest via a fund, first the diversification, as we plan to acquire 5-10 businesses with the upcoming fund, so that will allow us to build a diverse portfolio to reduce risks associated with focusing on one business only. Secondly, this allows us to target bigger businesses in the range of mid 6 to low 7 figures, where I believe the best deals are currently. This is the ideal range for us, because it’s above the reach of most individual investors and small groups, and also below the target range of larger funds, PE firm and public companies. 

The downside of investing via a fund is that investors will not have control over what assets gets acquired, and then and how they get sold, compared to our individual buying services, where investors can review deals and choose what they like and also decide on the timeline for resale.

Q: I see, so you have several different options investors can take? What’s the main difference between “fund” and “buy manage” option? Would you say that the fund is for those who would like to diversify better, and “buy manage” is for investors who are interested in better upside with greater risk attached to it?

A: Good question, and indeed the fund is for longer term passive investors, looking for diversification, while buy-manage is intended for investors looking to own businesses directly, and have more impact on growth, operations and resale decisions, as well as a faster turn around. We find that investors with more experience in online business, who have specific preferences regarding the business they want to own, often go for the buy-manage option. We also had investors who started with one deal via buy-manage, and then gradually built a small private portfolio with our help.

Q: With your first fund you had some success, can you share what lead to that success?

A: With this fund we were mainly targeting content websites in mid 5 figure ranges, with average deal size of about $60K. The fund had a shorter term objective, so the sites acquired posed higher risk, and were acquired at lower multiples. We were able to grow many of the sites and resell at higher amounts.

Q: Is there anything specific you want to share about your latest fund? Official launch is on April 25th, anything else?

A: We invite investors to visit the official fund website on domainmagnatecapital.com for full details. With this fund we are targeting investors who run or operate successful internet businesses, so they understand the industry and the risks involved. This fund is going to be our main focus for some time, and builds upon our prior success, so I’m really excited about launching it and allowing a larger audience of investors to join us!

Q: In your presentation you explained that 65% of profit is shared with investors in quarterly returns. First of all, I highly recommend anyone interested, to watch that entire presentation, but just as a hook to entice people to watch the video, can you further explain how the returns are paid, and how does that look in practice?

We’ll pay quarterly returns and distribute 65% of profits to investors. We’ll also distribute profits from resale of businesses, as soon as they are sold, in the next quarterly payout. 

Also, as a disclaimer, I’d like to remind the readers that investment in online businesses carries high risk, and past returns shouldn’t be considered a guarantee of future profits. 

The “Berkshire Hathaway” model of website investing

Recently over LinkedIn I found out that a company called Onfolio is doing a public offering. I’ve decided to reach out to their CEO Dominic Wells, and ask about their interesting business model.

As you will see in the interview, Dominic is making a full circle with this business venture. He started out years ago when he built a website making money from affiliate commissions. Then he sold websites that were built to make money from affiliate commissions. Also known as starter sites, or turnkey websites.

From starter sites to a holding company

After a successful spell with Human Proof Designs and selling turnkey websites, Dominic turned to the next logical step. Building Onfolio and managing websites for other website investors. This means you could have bought a website from any of the available platforms, and then let Dominic’s team handle it for you.

However, this leads to one of the risks with website investing. Sooner or later, anyone can hit a dud! It happened to me as well. In this article, I wrote how I once bought a website for $6375 and proceeded to invest $3800 into various marketing activities for that website. This website is now making a whopping $10 per month! Good thing I bought several other websites.

Diversification for website investors

Where my personal strategy is to handle several small websites and handle them with the help of webmaster.ninja software, Onfolio’s strategy is handling several big websites. And that’s another reason why I was super excited to do this interview!

Onfolio’s offer is essentially this. Gives us the money, and we will pay you quarterly dividends. This sound perfect, but as you will see from the interview, we also talk about a company that tried a very similar path that ended in disaster. Last year this company ended up in bankruptcy with owners facing jail time.

As always, business and life is a mixture of opportunity mixed with difficulty. It depends on what stage of career you are in, what you are looking for, and what you are capable of. Let’s get down to the nitty-gritty.

Interview with Dominic Wells

Thank you for doing this interview Dominic, hopefully, we can show everybody several opportunities that are available in our industry of website investing, management, and so on. You certainly tried and succeeded in several, so let’s start at the beginning.

Q: How did you make your first $1000 online?

Dominic Wells: I had made a few hundred dollars from various affiliate websites, but the first $1,000 came when I sold a small website on Flippa for exactly $1,000. It wasn’t making a lot of money, but it had 1,000 visitors per day, so I listed it on the off-chance somebody else would see the potential to monetize that traffic, and they did.

Q: At what point did you decide to commit seriously to doing this?

Dominic Wells: I was pretty committed from the beginning, but I think the first time I made $500 in a month, which was about 6 months in,  was the first time I realized I could make a go of it. I think I said something along the lines of, “If I can make $500, I can make $1,000, and if I can make $1,000, I can make $10,000”.

Q: How has that grown into Human Proof Designs and can you tell us more about HPD?

Dominic Wells: HPD actually grew out of that first Flippa sale. After selling that site for $1,000, I wanted to do it again! So I spent a lot of time on Flippa trying to look for opportunities. One thing I noticed was a lot of people were buying low-quality “starter sites” that were effectively garbage. I realized that there was clearly demand for starter sites, and I should sell quality ones to compete with the garbage/scams that were already there.

Of course, it was hard for me to really demonstrate why my sites were better, when I was competing with people who were straight up lying. Instead, I started blogging at HumanProofDesigns.com so I could teach people the value of my sites and how to do internet marketing.

Over time, I grew HPD into a business offering many “done for you” services, such as done for you starter websites, articles, seo, some graphic design, some link building, and everything beginners would need to get their starter sites off the ground.

Q: How has that evolved into Onfolio?

Dominic Wells: After I grew HPD as far as I thought I could, I started looking for other opportunities, and I noticed my HPD audience were interested in buying bigger businesses that were already profitable. Some of them had a decent amount of money to invest, and they wanted my help to buy a business and run it for them.

This was actually something I’d considered offering as far back as 2016, but I had wanted to build more credibility first.

So I launched the service as a standalone brand via Onfolio.co as I felt the two businesses were similar, but needed to have different marketing and different styles of content. I also wanted to sell HPD, which I did in 2019, so I could focus solely on Onfolio. I felt I had grown and I was holding HPD back, and it was holding me back. By selling, both brands would thrive (which they did).

Onfolio started in 2019 and grew quickly, as more and more people realized what we were offering was something they’d been looking for for some time, and I already had credibility.

At Onfolio, we would work with individuals to help them find, vet, buy, and then operate an online business. Initially, if somebody had $50,000 USD or more, we would work with them, but that minimum soon increased to $100,000.

We had a good track record, and the vast majority of sites we operated performed well.

However, and I’ll go into this more in the next question, we wanted to be able to protect everybody from the downside, which we couldn’t do if we working with everyone as an individual.

Q: Why did you decide to do a fundraising event?

Dominic Wells: As I evolved Onfolio, I wanted to find a way for all our investors to share the same pie. That way, if one website underperformed, it would be offset by the gains from the other websites. Essentially, I wanted to find a way of eliminating the risk of this asset class, without destroying the benefits in the process.

I first looked at raising a fund, because that’s what everyone else in the space is doing and is the natural first port of call. 

However, a fund didn’t really match up with my worldview on the opportunity in the space. I wanted more of a permanent capital structure, without being forced to sell assets after a few years. I also wanted to be more aligned with investors and not have a hurdle or “2 and 20” management fee structure. Finally, I wanted investors to be liquid, which you can’t have in a fund.

This led me to consider a holding company, and taking it public, which would give all of the above. It would also allow us to raise significantly more capital and build a significantly higher valuation into the company, which would benefit both us, and investors. 

However, some investors still wanted cashflow, so as well as raising non-cash flowing equity, we also launched a preferred shares offering, which comes with a 12% dividend. This is a very attractive investment (12% is very high compared to other asset classes), but would allow us to buy all the businesses we needed. It would also take the downside away from investors, as their 12% wasn’t based on the specific performance of individual websites.

Q: Based on the Q&A video you recorded in December 2020, which you sent to potential investors, you disclosed that the minimum entry for non-US investors is $5000. And that the investors from the US had to be accredited investors. I would encourage anyone who is interested, to watch that video.

Based on that information, can we go through a typical scenario of how things might unfold in an ideal scenario? Let’s round it up, and say if someone would invest $10,000. They can expect a 12% annual return, paid quarterly? Does this mean $1200 would be paid in four $300 payments at the end of the quarter? Essentially, the investor could potentially expect to get the investment back in 8.333 years? From then, they would keep receiving the payments (12% annual return, paid quarterly) in perpetuity? But also, you do not guarantee that the payments will be made each quarter, and will disclose financials that explain why this might have occurred? In your own words, can you confirm this scenario from start to finish?

Dominic Wells: Yeah we’d pay 3% per quarter, so in that example you are correct. If someone is outside the US, there are withholding tax requirements depending on the country as well. Usually around 15%, so we might have to withhold $45 and pay the investor $255, but of course taxes can’t be avoided.

After five years, we have the right, but not obligation, to buy back the shares at the same $25 share price, so investors would most likely get their money back sooner. Why five years? From our perspective, we don’t want to be paying 12% into perpetuity, and will likely have access to cheaper capital by then, but at the same time, we don’t want investors worrying we’re going to buy their shares back as soon as we get cheaper capital, so we are promising not to buy them back for the first 5 years. 

That said, investors can also sell their shares to somebody else, either privately, or once the shares are listed on an exchange, so they can most likely get their money back sooner if they wish. We can’t guarantee that the payments will be made, but we’re confident that our profits and cashflow will be more than enough to make timely payments. 

It’s the nature of a preferred share that issuers have the option to defer payments until a later quarter if they hit a rough patch. This is not an ideal situation, but it’s actually a good thing. If we issued a bond for example, and then hit a rough patch, we wouldn’t have the option to defer payments, which could cause insolvency. Preferred shares give companies the flexibility to survive a worst case scenario. 

To emphasise though, I find it very unlikely that we’ll miss a payment, it’s just important to disclose the “what if” scenarios.

Q: Also in the video I mentioned in the question above, you talked about risk that’s involved in buying websites. Google updates, Amazon program changes. Instead of repeating the answer from the video here, can you share how you see the risk from an investor’s standpoint? Can you compare it to investing in other assets like stocks, real estate, cryptocurrency or in someone’s website portfolio? For example, buying a website at 40X, and getting a 30% annual return with some work involved with managing a website and risks with various industry updates.

Dominic Wells: Any single website’s revenue can drop by a significant amount without the operator being able to do anything about it. To assume this isn’t the case is suicide. As such, the best way to mitigate this is to diversify. 

In fact it’s really the only way to avoid losing money. Having your own portfolio is great, but you’ll either need to be a master operator with no time for anything else, or you’ll eat into your returns by hiring a team to help you. 

Either way, 30% is unlikely without substantial risk. On a long enough timeline, the penalty for risk is loss of capital.

With our offering, we make sure to protect the downside, while still giving better returns than you’d earn elsewhere for similar risk.

I try to avoid comparing it to stocks, real estate or cryptocurrency, because a lot of them aren’t cashflowing. Real estate is cashflowing of course, and many people make comparisons between websites and real estate (I even did so here), but it’s still not an easy answer, because real estate has things like leverage that can increase the yields.

Q: Speaking of risks in this space, not so long ago there was a ponzi scheme where returns were primarily funded by paying early investors with money raised from later investors until the Ponzi scheme became “unsustainable”. In the end, Income Store investors lost more than $100 million. What assurance do investors have that the same won’t happen with Onfolio? 

Dominic Wells: I don’t think Income Store started out with the intent of being a Ponzi scheme, I think they just ran into issues because of their guaranteed 15% returns, and then they started acting in Ponzi-like fashion, robbing Peter to pay Paul. 

We’re obviously different in a few key ways. The first is since we don’t guarantee our dividend, as talked about above, we aren’t going to run into that issue. The second is that we’re going to have audited financials and will be an SEC reporting issuer, in other words we’ll be a public company. 

We’re also better at executing our plan and won’t run into cash flow issues, but people shouldn’t have to rely on our promise of being good at what we do, because the audited financials and SEC filings will be all the assurance people need.

Q: In your Industry Report Choosing the Best Online Business Investment Vehicle — The Risks and Rewards of 5 Online Investment Models you talk about the 5 different investment models. Do you think it makes sense for a website investor who handles his own portfolio to also invest in a company that grows a bigger portfolio? Why yes or why not?

Dominic Wells: It really depends. Some investors may not want to invest in our shares, whether common or preferred, because they’re capable of getting higher returns by managing their own websites. That said, if an investor buys a website for $100k and triples the website’s income (which isn’t easy to do), the website will be worth $300k. 

In Onfolio common shares, $100k could become with $1,000,000 in a similar time period, simply because we’re buying more and more businesses and that is translating to a higher share price over time. Not only that, but we’ll probably be trading at 10x annual profit as a public company, so that $100,000 business will be worth more than $300,000 in our hands, without even tripling it.

Why would a website investor not want those returns? It all comes down to whether or not they believe we can execute our business plan.

Q: Who should ideally invest in such an investment model?

Dominic Wells: Anybody who is able to understand the investment and has the capital on hand to invest. 

Q: In the Onfolio Holdings deck, you posted your historical results from 2019, and 2020. You essentially 7,5 X-ed your profits from $18k to $135k. Can you share a little bit what has been the major factor in such outstanding growth?

Dominic Wells: The majority of our growth from 2019 to 2020 came from word of mouth as people learned about our services. We grew the assets under management considerably, and as we took on more websites and started growing them, we naturally grew our profit.

Q: When you are looking to buy a website what are your top 3 priorities?

Dominic Wells: 1. Don’t buy a business that will die later. 2. Don’t buy a business that will die later. 3. Then worry about growth.

Q: In several articles you published, you are making the connection between Onfolio and Berkshire Hathaway. Would you then agree that it is far better to buy a wonderful website at a fair price than a fair website at a wonderful price?

Dominic Wells: Yes, if you’ve listened to me on any podcast interview, I say this almost every single time. People worry too much about the price they pay for a business, rather than what they get for their money. Multiples and valuations are relative. Some of the best purchases we’ve made came from businesses where we paid above average.

Q: When you are growing your website, what are the first 3 things you do?

Dominic Wells: A lot of the work we do is done before we even have the keys to the castle. We analyze opportunities and things that need fixing during the due diligence stage. What those things are will differ per business, but it usually involves a thorough SEO audit, a user engagement audit, and then usually we build out other channels. Most sellers are only strong in one or two areas, whereas we have multi-channel expertise, and will add something to the business, whether that is email marketing or something else.

Q: In your interview with Authority Magazine you mentioned that people tend to overestimate how much they can achieve in a year, and massively underestimate how much they can achieve in 10 years. Do I sense a little bit of Tony Robbins in there? Are you a fan of personal development and kaizen?

Dominic Wells: I’m not exactly sure where I first heard that quote, but it stuck with me because it’s so true. I’ve been in online business about 10 years, so it’s quite pertinent. Where I am today compared to 2012 is beyond what I ever expected, but after a year I thought I would’ve been much further along. It’s important to zoom out.

I’m not into personal development per se, but I’m growth-minded, and that means I naturally look for ways to develop myself, regardless of what gurus are saying.

In closing

In the end, I would like to share Dominic’s comment he wrote in one of his articles.

It is too risky in 2021 to just buy one business and run it, unless you are highly experienced in both the business’ industry, internet marketing in general, and diversifying revenue and traffic. You either have to buy an ensemble of smaller businesses, which require a team that they can’t afford to pay, or you have to spend a significant sum of money buying larger businesses so that you can afford to hire a team to run them.

Dominic Wells

If you are wondering where do I fit, I am the guy with an ensemble of small websites which require a team that I can’t afford to pay. There’s certainly truth in that, which is why I am considering investing in Onfolio. Then again, that’s just a nicer way of saying, for full disclosure, that I don’t own any shares in Onfolio. With that, I would like to congratulate Dominic on paying the first dividend back on 31st March, and wish him the best of luck with Onfolio!

Interview with Spencer Haws

Spencer Haws shares his insights from his niche pursuits. As an online entrepreneur who built several successful online businesses, including a software company, a line of products fulfilled by Amazon, and Nichepursuits.com to name a few, Spencer knows how to make money online.

Read more

Interview with Michael Cyger

Another great interview in our series of expert interviews. After several SEO experts, we talked with Michael Cyger who has made a living buying and selling domain names. Since having a great domain name can jumpstart your online venture, or waste your startup funding, we highly recommend reading this interview.

Read more

Interview with Tim Soulo

If you were doing SEO sometimes in the past decade (since 2011 to be more precise), you must have heard of Ahrefs! And if you read some of fantastic articles and research created by Ahrefs, you must have heard of Tim Soulo! Who is Tim and how Ahrefs can help you rank your website, read in this interview.

Read more

Interview with Glen Allsopp

This is the interview with Glen Allsopp, one of the greatest SEO minds in the world. Read about his rise to greatness and his SEO tests that even Google isn’t taking lightly! Glen Allsopp is best known for his old blog Viperchill, as he now runs Detailed.com ang Gaps.com.

Read more