Challenges In Building A Website Empire: Any niche vs One niche

[ChrisGuthrie]

At the start of 2012 I made it a point to be much more focused on tracking my monthly revenue, expenses, acquisition costs (of websites) and charitable donations etc. This has proven to be very fruitful as I can look back on a monthly basis at what websites I bought, projects I worked on etc. to see my results. But now as I look towards the second half of the year I'm again trying to think about what areas to spend more time on and where to use my money.

Building a website empire through acquisition is what I've been most recently focused on in 2012, but it's of course more easily said than done so I thought I'd share the challenges I've faced and to hear what others think as well. Specifically I'd like to discuss the idea of buying any website or by focusing on just one area.

Challenges Faced In Building A Website Empire: Any niche (from monitor reviews to Cancun travel advice) vs One Niche (i.e. auto insurance)

What to buy? Any niche or one niche:

I've been buying more and more websites but one of the challenges I've run into as my portfolio grows larger is the decision to focus on one specific niche to buy in or not. As for now I've just been buying anything that I can see will be a solid investment regardless of niche. While this strategy can be employed for the purpose of diversifying income streams and to grow faster (by buying more websites faster) I've found it can also potentially lead to a lower overall potential income. What I've found is that the more websites I buy and the more markets I move into the more I feel pulled in too many directions. I like having little websites that make $1,000 a month with minimal input from me etc. but to truly grow when these smaller properties are in all different niches it can almost feel like more trouble than it's worth.

Who to hire? Contract writers or writer/editor for a bunch of related properties

Continuing with the previous challenge if you opt for buying websites in any niche the problem quickly becomes evident that it's not possible to hire writers that can write for multiple websites in the portfolio. There is a slim chance that you can find someone who can write for various websites where expertise really is required (if you want to keep the level of content quality high). So what I've found is that now I'm in a role focused on keeping content coming while sitting in the middle of everything.

Scaling relationships with advertisers

By focusing on buying websites in any niches yes I'm able to buy more sites and more quickly but there is very little (if any) advertiser cross over. If I had an empire of a few dozen sites in the same niche the power as a publisher is much greater when it comes to attracting advertisers. It's also worth mentioning that advertisers are likely more willing to work with a larger group of websites as it's less people they need to work with to reach X millions of people per month.

Overall:

I'm sure there are many more challenges I could list out, but it feels like the conclusion I've come to is that if you're trying to build a website empire and really grow yada yada yada it makes more sense to build a network of properties around one niche, but in practice it feels much more difficult to implement (especially for those of us easily bored of focusing on the same thing day in and day out). I've been buying anything but it feels like I'll eventually need to pick a specific area to focus on if I want to continue building the website empire.

What is your website buying strategy?

Do you try to buy anything that looks like a good investment or do you focus on only a specific niche, topic, area of interest etc?

Feel free to agree / disagree with any challenges I've shared here. I'm just curious to hear what others are doing in regards to the one niche vs any niche angle.

[Thomas]

When I first started, I would buy purely based on ROI, but as you rightly point out, that makes it hard to build a scalable and easy to manage portfolio. The way I see it, you can do one of the following:

- Focus on one particular niche (ideally a macro niche, rather than something small)
- Focus on one particular platform (blogs, forums, apps etc.)

My portfolio right now is quite diverse but I am trying to focus more in one niche this year. Outsourcing can be a nightmare if you don't have any consistency across a portfolio. The relationships with advertisers is definitely a big consideration, as is the fact you can generate synergies across a portfolio.

I also hear you on the "getting bored" part. I think that is common with any entrepreneur. I get round that by owning various sites in the same niche (e.g. a blog, a forum, an app, a software product, an e-course etc.) which means you're not working on the same thing day in day out.

My only exception to the rule is when I can see a quick flip potential. If it's not on my books for long, I don't mind buying something irrelevant to my portfolio, knowing it won't (hopefully) be around for long.

Would be interested to hear what the more experienced buyers have to say. I spend more time brokering than buying/building so it's not my main business, but I've easily bought 50 sites in the last 3 years, personally.

[ChrisGuthrie]

- Focus on one particular platform (blogs, forums, apps etc.)

Yah that is a good point as well. I have a buddy who just does forums specifically because with many topics it's just a matter of ensuring a solid moderation team is in place (which can be difficult of course but not impossible)

[akirk]

If you are being pulled in many directions, then you do not have enough time - putting in more time would reduce your $1k per month - so it is likely that the scatter gun approach is definitely reducing profitability...
you could either only buy on the basis that someone else can run it for you - and it can still make money - or you have to look for scale of operation - so several, but few niches

Alasdair

[Nidec]

Whilst spreading yourself across different niches will in all likelihood make it harder to earn as much as if you were focused on one only, it also offers a certain degree of risk reduction in that should one of your niches suffer a decline in sales/profits (due to changes in legislation, new competition, destructive innovation, new trends, etc) at least the other niches may continue unaffected.
Its a matter of personal choice how one wishes to balance risk against reward and this is something that is likely to change at different stages in our lives depending upon our circumstances.

[Clinton]

Great topic for discussion, Chris!

My post in the Is Buying Sites a Sustainable Long Term Business thread (VIP Lounge) did get a fair few ThankYous and DomainMagnate's thread Growing Your Business attracted several interesting replies.

I'm sure there are many more challenges I could list out, but it feels like the conclusion I've come to is that if you're trying to build a website empire and really grow yada yada yada it makes more sense to build a network of properties around one niche,

I would be tempted to agree with you, but there are examples like Borgos who've built empires mopping up any good opportunity that came along whatever the sector.

[TryBPO]

Interesting discussion, Chris.

Your point about a larger reader base in one particular niche being more attractive to advertisers is a good one, but it can be quite difficult to come across good acquisition targets if you're laser focused on one niche, as you've mentioned.

I'm not sure how much you've applied a system to your current process, but I'll give you an example of a process we might use in your situation:

KW Research VA - Sole responsibility for this VA would be to knock-out KW research across all of your niche/authority sites. No real concern for value, titles, content...strictly an SEO focus.

Content Manager - A VA with excellent English skills that's responsible for a larger category of sites. (i.e. Health, Insurance, Dating, etc.) This person would be responsible for ordering, receiving, and editing the content as it comes in from the more specific content writers for each niche. You could pay this person a fair rate ($20 per article), a low rate with upside ($10 + 10% of earnings above $X per month), or a limited partnership (X% of revenue above $Y per month).

Specialty outsourced writers - Your Content Manager would be responsible for finding and maintaining the relationships with these specialty writers. You'd have one for your "motorcycle insurance" site, a different writer for your "term life insurance" site, etc. They're paid a flat rate per article and does the specific research to really provide value to the end user/reader and knows their niche well.

The KW researcher is constantly knocking out potential topics for the Content Managers. The Content Managers have a general overview of their particular niche, but aren't as specialized. Their job is to take the KW research, turn it into a user-friendly topic, and order/receive/edit that content from the specialty writers. You might even give the CM's upside in the site's success. The Specialty Writers are simply subject specialists and turn the headline into useful articles.

You're definitely giving up some $$ here, but you can have them send you weekly (monthly) roll-ups on their progress and stick your nose in when you think you can add value.

[ChrisGuthrie]

Interesting discussion, Chris.

Your point about a larger reader base in one particular niche being more attractive to advertisers is a good one, but it can be quite difficult to come across good acquisition targets if you're laser focused on one niche, as you've mentioned.

I'm not sure how much you've applied a system to your current process, but I'll give you an example of a process we might use in your situation:

KW Research VA - Sole responsibility for this VA would be to knock-out KW research across all of your niche/authority sites. No real concern for value, titles, content...strictly an SEO focus.

Content Manager - A VA with excellent English skills that's responsible for a larger category of sites. (i.e. Health, Insurance, Dating, etc.) This person would be responsible for ordering, receiving, and editing the content as it comes in from the more specific content writers for each niche. You could pay this person a fair rate ($20 per article), a low rate with upside ($10 + 10% of earnings above $X per month), or a limited partnership (X% of revenue above $Y per month).

Specialty outsourced writers - Your Content Manager would be responsible for finding and maintaining the relationships with these specialty writers. You'd have one for your "motorcycle insurance" site, a different writer for your "term life insurance" site, etc. They're paid a flat rate per article and does the specific research to really provide value to the end user/reader and knows their niche well.

The KW researcher is constantly knocking out potential topics for the Content Managers. The Content Managers have a general overview of their particular niche, but aren't as specialized. Their job is to take the KW research, turn it into a user-friendly topic, and order/receive/edit that content from the specialty writers. You might even give the CM's upside in the site's success. The Specialty Writers are simply subject specialists and turn the headline into useful articles.

You're definitely giving up some $$ here, but you can have them send you weekly (monthly) roll-ups on their progress and stick your nose in when you think you can add value.

So far I've been buying any and every website I see that has value but I think the example in relation to the team of VA's helps. There are some other possibilities as well too - i.e. I've had plenty of people contact me offering money to invest (one guy had exited a couple start ups that sold for $X,XXX,XXX and $XX,XXX,XXX - his share being a percentage of that but I don't know how large)

In any case I'm checking out the thread that Clinton posted now as well.