Neil’s Blog Challenge

How to Make $100,000 a Month Within 1 Year

by NEIL PATEL on MARCH 16, 2015

What if I told you anyone could make $100,000 a month in income within a year? That’s right—after 12 months, you could be on track to making $1,200,000 a year.

I know what you are thinking. It’s easy for me to do so because I have money that I can use to generate more income and I already have an established brand.

To prove to you that anyone can create a business that generates $100,000 in monthly income within 12 months, I’m going to create a business from scratch and keep you up-to-date with the progress each and every month.

So before we get started, I’m going to let you pick which company I create. Here are a few options…

What company shall I create?

Here are a few options for you: 

  • Nutrition blog — I start a blog on health and fitness and grow it to $100,000 in monthly income. The income will be generated through affiliate programs and ads. Keep in mind that I am not known in this space, so my personal brand won’t help me here.
  • Mastermind group – sure I’m known as a popular blogger, but very few people come to me for business advice. If I created a mastermind group, I would generate all of the revenue through Facebook ads in order to make it a bit more challenging. That means I won’t useNeilPatel.com or Quick Sprout to help.
  • New software company – I’ll create a piece of software in the marketing space and get it to over $100,000 in new monthly income. If you pick this option, I will be leveraging my existing audience as it takes months to create something you would be willing to pay for. In essence, I would only have six months to hit $100,000 a month in income as the first six months would be used for software development.

Conclusion

What I want you to do is leave a comment telling me which company you want me to create. I’ll go with the majority and update you each month on my progress and what I learn.

So, what type of company do you want me to create?

CHAPTER 1: How to Make $100,000 a Month Within 1 Year

https://www.quicksprout.com/2015/03/25/how-to-generate-100000-a-month-from-a-brand-new-blog/

A week ago, I wrote a blog post stating that anyone can generate $100,000 a month in income. To prove it, I told you that I’m going to create a new company and grow it from scratch without leveraging my connections.

In the majority of your comments, you told me you wanted me to create a new company in a space that I had no ties to. So I’m now starting a nutrition blog.

The official start date will be April 1, 2015. And within 12 months, I have to get the blog to generate $100,000 in monthly revenue.

Download this checklist to learn how to generate $100,000 a month from a brand new blog.

So, how am I going to start?

Domain

In an ideal world, the older your domain name is, the easier it is to get rankings. From now till April 1, I’ll be looking for a website in the nutrition space that hasn’t been updated in years and buy it for $100.

Doing this will give me a head start and make it easier for me to generate traffic.

If I bought a brand new domain name, I could build up the domain, but it wouldn’t rank as high in the search engines. Going on my experience, I am estimating the difference in search traffic will be roughly seven-fold.

For that reason, I’ll be manually emailing people within the nutrition space with a message that looks like this:

Hey [insert their name],

I noticed that you haven’t updated [insert their URL] in over a year. Is there a reason why?

I am really passionate about the nutrition space, and I would hate to see your website die. If you want, I can take it over for you… Heck, I don’t even mind purchasing it.

Just as a heads up though, I don’t have a ton of money to spend, but if you are interested in keeping your website alive, shoot me a reply back.

Thanks,

Neil

P.S. The last thing I want is your hard work to go to waste.

Social media

The simplest way to generate more traffic to a blog is through Facebook. Why? Because once you build a loyal Facebook following, you can continually market your blog posts to those fans.

That means each of your blog posts will get more social shares, comments, and linkbacks.

As I build up my Facebook fan page, I’ll keep you in the loop on the strategies I’m using and show you how you can replicate what I’m doing.

Content creation

Whether I have a domain or not, I will start creating content on nutrition. Because I’m trying to show you that this can be done on a budget, I’ll have to research the space and write the content myself.

It looks like each post is going to take me 3 to 6 hours to write as I am not very familiar with the space. Each content piece should be over 2,000 words long to make my blog the most detailed nutrition blog on the web as detailed content tends to rank better on search engines.

In essence, I will be copying the same strategy I use on NeilPatel.com.

Design

As for the design, I am going to use a free WordPress theme. I may buy one from WooThemes if I can’t find a good one for free.

My overall goal is to not invest any money into web design until the site is generating at least 500,000 visitors a month and I can start monetizing the audience.

Conclusion

It’s still early, and most of this information is very high level. But the purpose of this post is to show you that I am moving forward.

And as I progress each month, I’ll write a blog post sharing my progress and showing you the specific steps I’m taking to reach the $100,000 a month in income. You too can follow along and copy me as it will help you generate more income as well.

So, are you excited to see how easy it is to make $100,000 a month?

http://www.quicksprout.com/2015/03/16/how-to-make-100000-a-month-within-1-year/

How to Make $100,000 a Month Within 1 Year

by Neil Patel on March 16, 2015

http://www.quicksprout.com/2015/05/04/a-setback-on-the-100k-a-month-challenge/

A few months ago, I wrote a blog post about how anyone can make $100,000 a month in revenue within 12 months. And to show you how it’s possible—and so you can achieve similar results—I decided to blog about my journey.

Launching the blog

On April 1st, I started a nutrition blog called NutritionalResource.com. It took me a couple of weeks to get started, but by April 15th, I was up and running.

During the last couple of weeks of the month, I published four blog posts and was able to drive a considerable amount of traffic.

I received 35,419 visitors in two weeks, which is really good considering that I only published four blog posts.

I also learned how easy it is to generate traffic in a B2C vertical since there’s a much larger audience than in most B2B verticals.

As you can see from the graph below, most of the traffic came from a single post.

I don’t know how or why this blog post went viral, but it got over 1,000 Facebook shares.

How I generated my traffic

Facebook has been the main source of traffic. I started a fan page, and within 30 days, I have gained over 50,000 fans. Every time I share a link, I get an instant boost of traffic.

First, I kicked off the page with some Facebook ads.

The image above shows the ad I ran. I targeted mainly an international audience as the cost per like is cheaper, and I made sure the countries I was targeting had English as one of their main languages.

On average, I ended up paying 3 cents a like during this campaign, which drove 3,282 likes.

However, as you can tell, the likes I received weren’t generating much engagement. Only about 6% of my fans actually liked the posts I was sharing, which is about a third of what it should be.

Once I got enough likes, I paused the campaign.

I then approached other Facebook fan pages that had 30,000 or fewer fans and offered a shout out for shout out deal: I told my fans to follow those other Facebook fan pages, and they told their fans to follow my page.

I only keep these messages live on my fan page for a few hours before I remove them as I don’t want my page to seem too promotional.

As my fan base grew, I started doing deals with larger fan pages. If you replicate this, you’ll quickly learn that most people will ignore your shout out for shout out requests, but about one in 10 pages will accept it.

Although this helped me skyrocket my fan page growth rate, I ended up growing my fan page at a much faster rate just by posting good content. I used Buzzsumo to help find this content.

I typed in keywords related to my space, and Buzzsumo showed me the posts that generated the most Facebook likes. I then shared those content pieces since Facebook users clearly like that content. This is the main reason why all of my social media postings did so well.

By only sharing content that people enjoyed, I helped my Facebook page to grow more quickly, and I gained new fans each day.

Link building

I linked to NutritionalResource from Quick Sprout, but one or two links won’t give me a huge edge over the competition.

Instead, what helps the most is my years of experience with link building.

To build links, first I Googled the phrase “resource page nutrition.” This helped me find some pages that were linking out to nutrition sites.

I then used Ahrefs to see who links to my competition. Once I created a master list, my intern Lisa started emailing each of those site owners from her email address, begging for a link.

The email template I used was pretty simple:

Subject: I think you are missing a link

Hey [insert their name],

I noticed you are linking to a handful of nutritional sites and blogs, but you aren’t linking out to NutritionalResource.com.

Have you seen it yet? It provides a ton of nutritional value to anyone who is looking to live a healthier life.

Hope you’re having a lovely day! Keep up the good work, I really enjoy [insert their site name].

Lisa

Overall, this has been a huge success, and I’ve generated a handful of links, including some educational links. Here’s an example.

Content issues

As of now, the blog has four blog posts. As many of you know, nutrition isn’t my background, so I have been learning a lot about it over the past few weeks.

I recruited a few writers from California State University of Fullerton to help with content creation. They gladly helped me out for free, but the quality of the content sucks. Sure, I should be writing my content on the nutrition blog, but I am still learning about the subject, and I don’t have the time. Even if I made $100,000 a month from it, I would lose money since spending that time on my other businesses would yield me more money.

Here are some of the issues I am having with the content writer:

  • Too much fluff – if you look at the posts, you’ll see they contain way too much fluff. Instead of getting to the point, the writer rambles a bit too much.
  • Very little data – each blog post makes claims about what is or isn’t healthy for you, but the writers haven’t been including stats and data to back up their main points.
  • Grammar errors – you would think people majoring in journalism would be great at grammar, but they aren’t. I need to either get an editor to review each post or find another intern to help them out.

It will take me a month or so to get the content fixed. I won’t be fixing the older content, but I will be fixing newer blog posts. This is actually one of the main reasons I stopped posting on the blog.

On the bright side, the images on the blog are extremely good. I have a corporate Fotolia account under one of my businesses, and I have been using it to find images for NutritionalResource.com. However, Fotolia isn’t the only factor that makes my images great.

I found a kid on Craigslist who is into photography and Photoshop. I gave him a $500 camera in exchange for his help. He not only takes pictures for me but he also takes the images from Fotolia and modifies them in Photoshop to make them look better.

The big misconception

Now that you know how I gained over 30,000 visitors in two weeks, let’s go over a big misconception. A lot of you have emailed me to tell me that I am cheating by using my name on this new blog.

Well, I tested having an apple as my blog image, having no bio, or having my photo.

The results did not differ. Why? Because no one knows me in the nutrition space.

It’s not my name that gives me the advantage—it’s my experience. I’m probably better than most marketers are at building links, running social media campaigns, and writing content. I know what works because I have been leveraging content marketing for over nine years, and I’m really good at growing blogs.

My big setback

The big mistake I made—which I shouldn’t have made, considering how long I’ve been working in the SEO space—is that I bought a premium domain name without doing any research on it.

I spent $1,889.62 on the domain name without doing a backlink check. If you run it through Ahrefs.com, you’ll notice that a ton of spam sites and reciprocal link pages link to it.

That’s likely the main reason the site is probably penalized and doesn’t rank for its own name. I only figured out something was wrong when, after two weeks, the site still didn’t rank for “nutritional resource” in Google.

I haven’t checked Webmaster Tools to see if there is a penalty, but I know something is off. So instead of wasting months trying to fix it, I’m going to switch everything over to Nutrition Secrets—a new domain name I bought.

This is a huge setback that will cost me more than a month’s time as April is now a write-off and I have to start all over again.

But because I have a fresh start, I think I can grow the new blog at a faster pace. Google traffic will eventually kick in because the new domain name doesn’t have any links pointing to it.

Conclusion

Many of you emailed me saying I am cheating by using my name or by writing about my new blog on Quick Sprout. While this does help out a bit, it’s not the main advantage I have, as I discussed above. It’s my experience that gives me a leg up.

As for using my name, I do it for branding. If I am going to create a blog that generates millions of visitors, I might as well use it to help me grow my personal brand.

Many of you also said that I shouldn’t be blogging about this experiment for another year and that by writing about it I am cheating. But I am writing because I hope these blog posts are helpful to you—even if I have a bit of an advantage over you.

What do you think of this experiment so far? Are these monthly blog posts helping you out?

Update

Based on your feedback I am making a few changes.

  1. A special thanks to Kim for letting me know I can get into legal trouble with this project as I am not a nutritionist.
  2. I don’t want to provide content that is false or inaccurate. So I fired all of the interns who were producing content for free. I too won’t be blogging as I don’t know enough knowledge about nutrition.
  3. I’ve partnered up with a nutritionist who’s photo is now on the Facebook page. I have known them for a while and they will be creating the content. I am going to have to teach them how to blog and help edit the posts. They will not be getting paid to write content or anything like that… I just have to partner with someone who understands nutrition as I can’t risk taking on a legal liability.
  4. I will break down on Monday on how I am going to teach Mike how to blog. You can copy my formula so you can produce content that sounds like me.
  5. The nutritionist isn’t going to get paid, instead they will be keeping 20% of the money generated from the project. 80% will be donated to charity. (Not sure which ones yet)
  6. This should please some of you as you didn’t want me to use my face or name on the blog.
  7. The content is being cleaned up. From the Facebook page to the blog, everything that the nutritionist doesn’t agree with is being changed or deleted. That way people won’t be misinformed.
  8. I will provide a much more detailed update on Monday.

 

http://www.quicksprout.com/2015/05/11/how-im-going-to-achieve-the-100k-a-month-challenge-without-using-my-name/

How I’m Going to Achieve the $100k a Month Challenge without Using My Name

by Neil Patel on May 11, 2015

Last week I posted about my setback on the $100,000 challenge. Some of you were happy with the results so far, while others were disappointed about how much money I was spending.

In addition, most of you didn’t want me to use my name as you felt it would be cheating. I’ve heard you loud and clear, and I am going to make changes.

Here’s how I will be moving forward to achieve my financial goal:

No more Neil Patel

If you go to Nutrition Secrets, you’ll see that there is little to no mention of Neil Patel. I did this for a few reasons:

  1. You guys didn’t want me to use my name.
  2. I don’t know nutrition well enough to be associated with the brand. It’s a legal liability for me to tell you what to do and how to eat when I am not a certified nutritionist.
  3. I feel like I am providing the world a disservice by creating content on a subject I am not an expert on. I don’t really believe in the “fake it till you make it” philosophy.
  4. I want to prove to you that a person’s name doesn’t impact how much traffic a website generates.

So I’ve enlisted my good friend Mike Kamo to be the face of the blog. He himself is a nutritionist and will be double-checking the content for facts and writing the content himself.

This means no more interns creating content for free. Instead, Mike will be doing all the writing. I myself have been teaching him how to blog. Look out for future nutrition posts as they will be similar to Quick Sprout’s writing style.

The deal I’ve worked out with Mike is that he will keep 20% of the revenue, and the rest will be donated to a non-profit organization. After the year is up and the financial milestone is hit, Mike will take full responsibility for the blog, and I will have no more involvement as nutrition isn’t a huge passion for me.

Over the next few days, the authorship of all the comments I wrote will change from my name to his name.

I only ask that you don’t post comments on the Nutrition blog addressing me by my name. You can post comments addressing Mike, but I don’t want people to think I am still using my name to grow the traffic.

Why Mike got into nutrition

When Mike was growing up, his dad was constantly working in order to make enough money to put food on the table. Eventually, his dad started doing well enough for his family to live a comfortable life.

Mike’s stepmom was taking care of Mike and his siblings. But instead of cooking each day, she got the kids fast food. From McDonalds to Pizza Hut, fast food was what Mike and his siblings ate for almost every meal.

As a kid, Mike didn’t know any better, but as he got older, he realized how unhealthy it was. It got so bad that his younger brother wouldn’t eat unless he was presented with French fries or hash browns.

Mike not only started to work out to become healthier, but he also started learning about nutrition. Eventually, he got certified as a nutritionist. He also helped out one of our mutual friends, Ajay, who is a partner in Kimberly Snyder’s business. He wasn’t really doing it for the money—he was doing it because he wanted Ajay’s family to live a healthier life.

This is why I thought Mike would be a great person not only to be the face of the nutrition blog but also to create the content and make sure it is factual. The last thing I want is someone reading bad advice, taking action based on it, and ending up unhealthy as a result.

For this reason, no new content has been posted in the last week or so. Mike has been cleaning up the blog as well as the Facebook page. He is also deleting any published information he doesn’t agree with.

Expenses

Many of you think I am spending $10,000 plus dollars a month. That is inaccurate. I didn’t want to address expenses in my last post as I wanted to do a separate blog post on my costs.

I know I had said I was going to try to find an old blog or a website for $100 that wasn’t being updated. If I kept searching, I feel I would have succeeded. And it would have given me a greater head start.

But because it was too time-consuming, I took a quick route of just buying a domain for $1,889.62. The domain was penalized, so I had to scrap it.

The new domain name, Nutrition Secrets, was listed for $3,788.00. Of course, I didn’t want to pay that much as I am on a budget. I ended up negotiating them down to $325. If you want to do something similar, make sure the email address you use to write to the domain owners can’t be traced back to someone who is well known.

For example, when I negotiate domain purchases, I present myself as a college student and throw out random amounts. I then negotiate, and if they keep coming back to me, I always say “let me get back to you; I have to see if I can borrow money from my parents.”

You can do the same with newly listed domains for sale, but the longer a domain has been for sale, the more flexible the owners will be with its price.

As for Facebook ads, the total I’ve spent is $112.07. Sure, the fans I have been getting are junk, but it has helped create leverage that I can use for the “shout out for shout out” tactic.

I’ve spent a total of $48.05 on boosting my Facebook posts. It didn’t work well, so I stopped doing it.

I also purchased Optin Monster for $99.

And I am also using Aweber, which is costing $19 a month.

The WordPress theme was $48. And as for hosting, I am using my existing server for NeilPatel.com to save some money.

So the total I have spent so far is: $2,540.74

You may feel there were other expenses such as content, images, etc. But I was using interns for the content creation (which I stopped, and now Mike is writing the content).

And for images, I use my Fotolia account as well as royalty-free images. Sites like Flickr have a ton of great royalty-free images.

How I achieved over 30,000 visitors in 15 days

When I shared my traffic stats, many of you were skeptical.

You shouldn’t be skeptical on the traffic. It’s not paid for… most of it came from Facebook, which isn’t sticky. And in future monthly update posts, I will show a breakdown of traffic stats, including referrer information and keywords.

The reason there is so much traffic is because it is a broad consumer niche. Just look at the number of people interested in nutrition.

That’s why I was willing to start a blog on it. Just look at the NeilPatel.com blog. I share my traffic stats each month. If it were on a broader subject, the blog would probably be at 800,000 to a million visitors by now.

Plus, the nutrition space isn’t as competitive. Sure, a lot of people are in that space, but very few of them are marketers. With Quick Sprout, KISSmetrics, Crazy Egg, and NeilPatel.com, I am competing with other knowledgeable marketers, which makes it much more difficult to succeed in the field.

If you want to grow your traffic at a fast pace, pick a big niche that isn’t filled with a ton of smart marketers.

Conclusion

Over the next week or so, you’ll see new posts coming up. They may be a bit rough at first, but they will get better over time.

I’m having Mike follow my blogging requirements that I’ve listed in this blog post. So far his rough drafts look pretty good, but he needs a few more rounds of revisions before his content is production quality.

At the moment, it is taking him 5 to 6 hours to write a blog post, but I expect that to speed up as he gets used to blogging.

As for monetization, once the site gets to a few hundred thousand visitors a month, I’ll start throwing up ads. I don’t expect that to generate $100,000 a month in income, but it will generate some cash flow so I can spend money on things like infographics.

Eventually, I’ll come up with some better monetization plans, but I don’t have any solid plans yet.

The $100,000 Challenge: May Update

http://www.quicksprout.com/2015/06/03/the-100000-challenge-may-update/

by Neil Patel on June 3, 2015

We’ve finally completed the second month of the $100,000 challenge. For the month of May, NutritionSecrets.com received a total of 33,216 visitors.

May wasn’t a bad month considering that Mike, who is the face of the site now, had to learn how to blog, drive traffic, build links, and update the Facebook page.

Here’s a rundown of what happened:

Traffic

Overall, the site received 33,216 visitors and 53,786 pageviews. Out of those 33,216 visitors, 22,819 were unique.

Out of those visitors, 7,882 came from Quick Sprout. For that reason, I have stopped linking to the site from Quick Sprout. All of those visitors mainly came from this one Quick Sprout post.

What’s actually funny is that we are getting referral traffic from random sites like Craigslist. The visitors, of course, aren’t sticking, but the traffic is coming from Quick Sprout readers who post jobs, looking for people to help them replicate NutritionSecrets.com so they can follow along the journey.

Although the site’s traffic is climbing, we only received 1,786 visitors from Google in May. That means our biggest opportunity is search traffic as in the nutrition space, most of the sites generate the majority of their traffic from Google (roughly 60-70% of their overall traffic).

Facebook

The growth of Facebook fans has been great. Facebook drove 9,563 visitors in the month of May, which isn’t too bad.

We also hit over 100,000 fans by posting good content and doing shout-out-for-shout-out deals: we promote other Facebook fan pages, and they promote us.

We keep these promo updates running for a few hours and then delete them. When the other fan page gives us the shout-out in return for ours, both pages get more fans.

Initially, I was getting fans through ads.

I targeted this ad, for example, to users in English-speaking countries in Asia. This allowed me to get fans for pennies. In general, many of these people didn’t engage, but it helped me boost my numbers high enough so I could start doing the shout-out-for-shout-out campaign. Otherwise, no one would want to participate in such an exchange if you only have 100 fans.

Since then, the Facebook page has grown, but the engagement has been declining. It has nothing to do with the fans. It has to do with the fact that Mike isn’t as good as I am when it comes to choosing social media updates. Other people’s content sometimes performs 30 times better than our own.

This was actually expected as there is a learning curve for him, and so far he is doing great. Now, he is browsing other Facebook pages within the nutrition niche to see what is working for them as well as using Buzzsumo to come up with more ideas.

The fact that Mike doesn’t have the same background as I do sometimes serves as an advantage. He’s actually come up with some interesting ideas. One that was great is the usage of custom hand-drawn images.

Mike’s enlisted the help of his girlfriend Caroline, who loves drawing for fun, to create the image above for $30. It received a total of 765 likes and 245 shares. Not bad for spending $30.

Mike is now having her create more images, and hopefully they’ll have the same success as the avocado image. We, of course, can’t keep getting images for $30, but we will gladly pay her $100 per image, assuming they keep doing well.

Eventually, I want to start having Caroline draw images like The Oatmeal’s as I think it will help drive hundreds of thousands of visitors.

Content

If you look at the content on NutritionSecrets.com, you’ll see that it has drastically improved. The information is much more accurate; there is a conversational tone within the posts; and people are engaging through comments.

What Mike hasn’t nailed down yet is creating viral content. Most of the topics he has written on are beaten to death, and everyone who is interested in nutrition has already read similar blog posts on other sites.

What’s helping maintain the traffic is that he is producing five blog posts a week, but once he starts writing on more unique topics such as why you should freeze lemons, we should see a drastic increase in traffic.

Overall, I am happy with the content quality. I just have to get Mike to stop creating me-too content, which shouldn’t be hard because he is a certified nutritionist and knows his field.

Once we nail the topics, we’ll start testing elements such as content length and post types. For example, a lot of people have been asking us to post recipes, but we are not ready yet to try it out until we figure out how to make our standard blog posts popular.

Conclusion

NutritionSecrets.com isn’t generating any income yet, and I don’t expect it to until we hit at least 100,000 monthly visitors. But the progress Mike has made so far has been great.

His content looks good; Caroline’s hand-drawn image performed well; and the Facebook group is growing. We aren’t focusing on shout-out-for-shout-outs anymore as Mike needs to focus on the content quality and picking the right topics, but once we nail that down, we will start growing our fan page again.

In total, we’ve spent $2,670.74. The expenses are the same as I listed last time. The only difference is we spent another $130 for two hand-drawn images.

The $100,000 Challenge: June Update

by Neil Patel on July 6, 2015

http://www.quicksprout.com/2015/07/06/the-100000-challenge-june-update/

I just wrapped up the third month of Nutrition Secrets, and I have to say, it turned out to be a great month.

When you look at the traffic stats of 33,562 visitors, however, you may think things are not progressing as the traffic only grew by 1,297 visitors. But all signals are pointing in the right direction.

Here’s what happened in the month of June…

Started to focus more on search traffic

Our search traffic hasn’t climbed by much, but the blog is only 3-months old. Technically speaking, you can even say it is 2-months old as the domain name was switched after the first month.

For the month of June, Nutrition Secrets received 3,675 search engine visitors, which is a 106% increase over the previous month.

Typically, whenever you start a new blog, you have to wait 5 to 6 months before you start seeing good growth in search traffic. Why? Because search engines don’t just look at on-page code and links. They look at factors such as bounce rate, time on site, etc.

As your metrics hold steady or improve, they reward you over time. This prevents new sites from popping up and spamming their way to the top of Google.

Big drop in Facebook traffic

On June 20th, all of my blogs had a drop in traffic from my Facebook fan pages. Nutrition Secret saw something similar, and I ended up taking a big hit as the majority of the traffic was coming from the social web.

In addition to that, the post titles and topics focused more on targeting SEO and not social media. For example, topics such as “13 Fatty Foods That Are Surprisingly Healthy” did really well on Facebook because they were on unique topics that evoked curiosity.

But when you look at the search volume for these phrases, you’ll notice that the volume is really low. So instead, I had Mike shift his focus toward writing on topics that were more mainstream and would pick up more search traffic in the long run.

I even created an Excel spreadsheet for him that helps him generate topic ideas based on search volume and popularity on the social web. (I’ll share it with you next month so you can use it for your own blog.)

Content production is up

If you look at the month of June, you’ll notice that we posted roughly 5 times a week. I taught Mike the exact process I have been using on Quick Sprout to write content at a rapid pace.

I even broke down the process on Quick Sprout in these 2 blog posts for you:

Mike is now able to write a blog post within 1.5 to 2 hours. Over the course of the next 30 days, I want him to be able to write a blog post in less than 1.5 hours so I can get him to write 2 posts a day. Sure, the content may be a bit shorter, but it should be doable since he isn’t writing 5,000-word posts like I am on Quick Sprout.

In the long run, this will help the site generate more comments, search traffic, and social shares.

Comments come from email

If you look at the comments on the Nutrition Secrets blog, you’ll notice that a lot of them are from the same people. Why? Because those people are subscribed to our email list.

Roughly 81% of all the comments on the blog are from people who are subscribed to the email list. Currently, the email list is only growing by a few subscribers a day, and every once in a while, we see a spike in opt-ins if a post does well on Facebook, but generally it’s not growing fast enough.

The traffic is there, but the opt-in offer isn’t too appealing. I will have Mike create some sort of a 30-day nutrition course, which we will use as an opt-in bribe. This should help increase the number of opt-ins to a few thousand a month.

Fixing mobile issues

The interesting thing about Nutrition Secrets is that over 54.4% of our traffic comes from mobile and tablet devices. But if you look at our mobile load time, you’ll see it could be improved.

I will have Mike focus on improving it. WordPress plugins that compress image sizes and cache the blog will help. As those metrics improve, search traffic will also start increasing at a faster rate.

Link building

The majority of the links we acquired are from other resource pages.

Here is how we get them. Mike searches the web with queries such as “nutrition resources” to find pages and sites that should be linking to our blog.

A good portion of the people we reached out to in June haven’t linked back, but that is mainly because we are going after EDU sites. It’s summer, which means most colleges are not in session.

So we are shifting our focus to building links from resource pages that aren’t on EDU sites.

In addition to that, we found that a couple of spammy sites linked to us. Here is one of the links. As you can see, the site isn’t the highest in quality, but there isn’t much we can do.

This happens to all websites, and you could disavow the link through Webmaster Tools, but there is no point if it’s only a small portion of your links.

Google is smart, and it knows it’s inevitable for you to have a few bad links. Because of that, it typically doesn’t penalize sites when this happens.

Mike’s also been building relationships with authors on sites like GQ, Vogue, and other magazine sites that have our ideal audience. We haven’t received any links from them yet, but we should once we start asking.

Currently, Mike is following these steps before he asks these people for a link. We’ll see how it goes in the next 30 days.

The one big issue we have been running into when building links is that people are removing links because they think Mike isn’t certified. His certification allows him to give advice on nutrition and fitness. I told him to update his bio to include this and create an about page to talk about the purpose of the blog as well as showcase his certifications.

Once he does this, we should be able to generate more links and hopefully keep them longer. In the meantime, he’s been emailing people who are removing the links and sending them a screenshot of his certificate. The only issue is, not everyone reads all of their emails, which means we are still losing links.

Strong signals

Although the traffic on the nutrition blog isn’t growing as fast as I would like it to, all the signals are pointing in the right direction. The content is great; people are commenting; and the rankings are climbing fast.

For example, the blog ranks on page 5 for the keyword “nutrition.” I know it is a vague search term and getting on page 1 will be hard…but we aren’t even trying to rank for that term.

We are also starting to rank for terms such as “lose lower belly fat.” We aren’t seeing a huge increase in traffic yet because moving up from page 4 to page 3 doesn’t do much. But once the site starts ranking on page 1, our search traffic will skyrocket.

Currently, we aren’t trying to rank for any specific term, and we aren’t building rich anchor text links. Instead, we are trying to write good educational content in hopes that people will want to link to us when we show them how great Nutrition Secrets is.

Conclusion

I still haven’t focused on monetizing the blog yet, but I will start within the next few months. The revenue will largely come from the email list, so I need to focus on growing it first, which will happen in July.

As for expenses, they have stayed more or less flat. Total expenses, since the start of the project, have been $2,889.74 dollars. In June, I spent $219, which went towards Aweber and hand-drawn images for Facebook.

https://www.quicksprout.com/2015/08/07/the-100000-challenge-july-update/

The $100,000 Challenge: July Update

by Neil Patel on August 7, 2015

I just wrapped up the fourth month of the $100,000 a month challenge. In July, NutritionSecrets.com received a total of 26,370 visitors, 6,931 of which came from search engine traffic.

Although the overall traffic has dipped from 33,562 visitors in June, the site is still progressing in a positive way.

Here’s what happened in the month of July, and here is how I am going to start making money from the blog…

Search traffic is up

The overall rankings for NutritionSecrets.com are up. We now rank for over 100 keywords in the top 20 positions in Google according to the data from Search Console.

In June, we received 3,675 search engine visitors. In July, this number increased by 93%. In the following few months, you should see this number climbing faster and faster. It’s because Mike has been doing manual outreach to grow the link count as well as publishing more content.

During July, he published one blog post a day—every day. As the links continually roll in from manual outreach, you’ll see the rankings for all of these content pieces increase.

I also tried to get Mike to write two blog posts a day, but I haven’t been successful as he hasn’t had enough time to pull it off. My goal was to get Mike to blog more frequently in July so we would have a backlog of content for August and hit the 2-a-day mark.

We may be able to do this during the month of September as he shifts his focus from link building to content creation, but we will find out in due time.

The overall search impressions are up as well. As that continually rises, you should start seeing the search traffic climbing at a much faster pace.

Income

Traffic isn’t growing as fast as I would like it to so I will have to think outside the box to generate income.

The first revenue channel concept I came up with is to try to white-label existing supplement products.

If you had a tangible product, wouldn’t you kill to have your product in Walmart? Well, why wouldn’t you kill to have your product listed on Amazon? Amazon is still in its infancy, and it’s bigger than Walmart from a worth/financial perspective.

I am planning on leveraging the NutritionSecrets community to help drive reviews. We know that once a product hits 400 to 500 solid reviews, it becomes easy to generate $70,000 to $150,000 a month in revenue, assuming you are picking products in a popular vertical.

From doing some searches on Google trends, using Google’s traffic estimator for keyword research, and browsing Amazon, I was able to figure out that product categories listed below are popular but aren’t very competitive:

  • CLA (weight loss product)
  • Ubiquinol
  • Vitamin D3
  • Probiotic
  • Biotin
  • Omega
  • Turmeric
  • 5-HTP
  • Colon care/cleanse
  • Fish oil
  • Psyllium husk caps
  • Glucosamine
  • Caffeine

Hopefully, I can find a great product to white-label. The key with Amazon is to make sure you invest heavily in a good product (or finding a good product to white-label) as products that have over 500 reviews and an average rating of 4.5 stars tend to generate a lot of sales.

Comments

The blog is generating a steady stream of comments. If you go there, you’ll notice that there are some posts that aren’t getting comments now, while in July every post received a comment, at least from what I can tell.

Why is this happening?

With blogging, comments are typically generated by email subscribers. And we haven’t been doing a good job of collecting emails. So what Mike did was browse the web and look for popular nutrition-related e-books that are selling like hotcakes on sites such as Clickbank.

Our plan is to release a popular e-book—that competitors are selling—free. This should help bring more industry-related traffic and emails, which will help future posts when it comes to generating comments.

Conclusion

As time goes on, you should see an update on NutritionSecrets.com traffic, but hopefully I will have updates on the Amazon process for you by next month’s update.

Overall, the traffic isn’t growing as fast as I want as Mike is having a hard time coming up with attractive headlines. I will have to help him craft better headlines that generate more clicks, and that should help the traffic.

Expenses update: expenses in July went up by $29 because of Aweber. So, the total now is $2,918.74 dollars.

What do you think about the progress so far?

https://www.quicksprout.com/2015/09/04/the-100000-challenge-august-update/

The $100,000 Challenge: August Update

by Neil Patel on September 4, 2015

We just wrapped up the fifth month of the $100,000-a-month challenge, and traffic-wise, it was a great month. In August, we had 40,870 visitors with 13,431 coming from search.

I know this is an August update, but from the beginning of September, we’ve already been averaging over 800 visitors a day from Google, which means September should be a big month for NutritionSecrets.com from a traffic perspective.

August showed an over 54% traffic increase compared to the previous month. Here’s what happened…

SEO takes time

I’m not a patient person, but SEO takes time, and there isn’t much you can do about it. It doesn’t matter how much content you write or how many links you build, search engines don’t just open the floodgates to your site.

They make sure that you are continually improving and that all the signals look good. If they do, you’ll see more search traffic. It’s been like this for years. Typically, every time I start a new blog, it usually takes 6 to 7 months for search traffic to really kick in. Within this period of time, you should see NutritionSecrets.com reach over 100,000 monthly visitors.

How can you increase your search traffic?

There is a formula I use with all my blogs to grow my search traffic. Here is the Excel Sheet I use for NutritionSecrets.com. There are a few things to keep in mind when going over the spreadsheet:

  1. It was originally created by Louder Online years ago. I took it with their permission and have been using it for my own projects ever since. That’s why you see their branding everywhere.
  2. Within the document, you will have to replace “nutrition” or other random keywords with those relevant to your blog. The sheet will pre-populate results based on that.
  3. The spreadsheet is a Google Doc and can only be viewed, not edited. To be able to modify it, you’ll have to create a duplicate by clicking on the navigation option “file” and then “make a copy.” Now, you can modify the spreadsheet.
  4. If you need more customized help, you can always hire Louder Online.
  5. Keep in mind that my version isn’t the neatest as I already know a lot about content marketing. That means you are looking at a very minimalistic version that isn’t as filled out as it should be.

Now that you have the sheet, there are a few things you need to know…

The content strategy document we use on Nutrition Secrets, along with a toolset, outlines a number of key elements that Mike follows to ensure consistency in his blogging. It also provides some amazing ways of being able to rapidly generate ideas for posts that have a high likelihood of being successful.

The strategy document includes the following sections:

  • Style guide
  • Strategic plan
  • Visitor personas and journey template
  • Idea generation tools
  • Headline generation tools
  • Idea scratch pad & validation
  • Editorial planner
  • Editorial calendar

Here is further explanation of the sections I listed above.

Style guide

This document records everything that should be followed from a style perspective to ensure a consistent feel to all of your created content. It covers elements such as:

  • Tone
  • Style
  • Voice
  • Language used
  • Formatting
  • Common categories
  • Meta data rules

Strategic plan

This spread sheet is put together directly from this chapter of the Advanced Guide to Content Marketing. It contains the following sections:

  • Channel plan
  • Core and secondary messaging
  • Business objectives
  • Competitive analysis
  • Differentiator

Visitor personas and journey template

This template provides the opportunity to outline a few of the key personas within your targeted traffic. It allows you to answer many questions that help define those personas so that when you create the content, each piece is written with the goal of targeting a specific persona or a specific stage in the visitor’s journey.

A number of sections in this template are pulled directly from this post on HubSpot by Aaron Agius.

Idea generation tools

This is where a lot of the magic happens for the blog. This is a suite of tools put together to pull in questions related to your topic from around the web.

The idea here is that if you are answering people’s questions and solving problems in your industry through great content, you will put yourself in a position of authority within the industry.

The tools developed here pull questions from the following websites:

In addition to developing a strategy around answering common questions and addressing problems people in your niche have, you can also benefit from staying on top of current trends, known as “newsjacking.” The content strategy sheet allows for a search to be performed on an entered keyword, which pulls relevant information from the following sources:

The combination of these two powerful sets of tools allows for endless high quality content ideas to be pulled into one central document. You can use the document to help you choose the topics you are most comfortable writing about and then build out those ideas.

Headline generation tools

Jon Morrow put together a fantastic document called Headline Hacks. It is a cheat sheet on how to write headlines that help posts go viral.

By combining this cheat sheet with Portent’s Idea Generator tool and HubSpot’s Topic Generator, you can produce a large number of possible headlines for each content idea you create with help of the above Idea Generation Tools.

Idea scratch pad & validation

This is a template that allows you to write down the ideas you have come up with using the idea and headline generation tools. The most important function of this section is to validate the ideas that have been generated to ensure they meet at least some the following criteria:

  • Topic has a high search volume
  • Similar topics have seen success on competitor sites
  • Topic is trending positively over time
  • Topic is an ego-bait piece for influencers within the industry

Editorial planner

This is a work sheet that allows you to create a more detailed outline of each post before you set out to write it. This editorial planner allows for specific language, tone, style, and content length variations to be indicated if they are needed for any particular piece.

Here are some of the items:

  • Status
  • Due date
  • Author (for a multi-author blog)
  • Content idea
  • Further description
  • Draft URL (for Google Docs)
  • Specific style notes
  • Content length
  • Must include items
  • Must exclude items
  • Reference links
  • Specific comments
  • Estimated hours for completion

Editorial calendar

An editorial calendar helps ensure the proper scheduling of content at the correct times. This includes incorporating changes to the schedule based on seasonal requirements, holidays, or anything else that requires content to be written or published on specific dates.

Now that you know our content strategy, let’s dive into Amazon.

How we will generate revenue

We will be monetizing the site through e-books and a course we are going to sell. We haven’t started creating any of those yet, but we eventually will.

The strategy will be somewhat similar to the one I use on NeilPatel.com. Maybe we’ll start with the homepage, which will have an opt-in for a webinar. Next, we will give you hours of useful information free, and eventually, we’ll pitch you a paid product.

I do this on the NeilPatel.com site, and on a bad day, at least 1% of all webinar registrants sign up for a $6,000 course. Which isn’t too bad… Eventually, I should be able to get it to 2% or 3%. And when you have 100,000 monthly visitors, you can typically collect 5,000 to 6,000 emails assuming you are leveraging pop-ups and content upgrades.

When it comes to Amazon, we’ve done a lot of research, but we haven’t found a company that will let us white-label a “fish oil” product (it’s going to be our first product) on our terms. We’d like to be able to get paid on every sale without having to pay upfront.

It’s kind of like an affiliate model, but the physical product will have a Nutrition Secrets label on it and will be drop-shipped from the manufacturer’s office.

The profit margins won’t be high, but at least I won’t have to put up any cash. I’ll then use the Nutrition Secrets audience to generate reviews for the product on Amazon.

It will take some time, but in general, the fish oil market is big enough to allow me to sell at least $50,000 worth of fish oil capsules each month if I hit 4.5 stars or higher with 500 plus reviews.

The key with Amazon is a high rating, large number of reviews, prime shipping, and offering more than the competition at a competitive price. It may sound like it might be hard to offer all this, but it really isn’t. You just can’t be greedy and have to be okay with lower margins.

We haven’t done much with Amazon yet as I have been traveling overseas a bit too much, but hopefully we get something up and running in the next 30 days.

Conclusion

Overall, it’s been a good month. Traffic shall continue to rise assuming we push out more high quality content and continue to build links. It’s just going to take time and patience.

In an ideal world, Mike would be producing two pieces of content each day, but with manual link-building outreach, he just doesn’t have the time. Hopefully, that will change in the next month or two.

What do you think of the progress so far?

https://www.quicksprout.com/2015/10/12/the-100000-challenge-september-update/

The $100,000 Challenge: September Update

by Neil Patel on October 12, 2015

I just wrapped up the sixth month of the $100,000 challenge. Traffic on NutritionSecrets.com has sharply gone up to 66,473—that’s a 62% increase from the previous month.

Most of the increase came from Facebook. In particular, it came from the post “What Happens to Your Body When You Quit Sugar,” which went viral. In addition to the Facebook traffic, search traffic has risen to 19,595—that’s a 45% increase over the previous month.

And although revenue is still at zero, there was a lot of progress made on that front. Let’s look at everything in detail…

Overall search traffic

The search traffic hasn’t gone up as much as I wanted, but it’s my fault. Mike hasn’t been focusing enough attention on building links because I’ve been trying to teach him how to write attractive headlines.

For the majority of the month, search traffic was pretty flat even though we published 30 articles in September.

To fix this, Mike will be focusing less on content creation and more on link building as the blog already has over 100 pieces of content, which is more than my personal blog has. And my personal blog is in a much narrower niche, receiving close to 60,000 search engine visitors a month.

Using Ahrefs, Mike will first find out who links to similar posts, and then he’ll use templates from this article to ask for links.

Social media traffic

One tactic that we started leveraging to increase our social media traffic is use Buzzsumo more heavily.

First, we type in keywords and phrases related to the articles we are writing:

Next, we click on the “View Sharers” button to see who is sharing the viral content on the social web:

Finally, we look up each of the users to see which website they own (some of them link to their websites in their Twitter profiles), and we send out each user an email that looks something like this:

Subject: have you seen this yet?

Hey [insert their name],

I noticed you shared [insert previous article they shared on Twitter], and I have to say, it’s an amazing article. I loved it so much that I decided to dig in, do a bit more research, and expand on the topic.

I’ve actually just published my findings here [insert link to your article].

If you find it useful, feel free to share it on your favorite social network.

Cheers,

[insert your name]

P.S. Thanks for sharing the original piece—it was eye-opening.

If you use the email template above, you’ll start noticing more social shares. You just have to be patient as it is hit-or-miss. It’s worked so well for NutrutionSecrets.com that in September the blog received 30,848 visitors a month from social media sites such as Twitter and Facebook.

Supplements

In October, we will be launching our fish oil supplement. Mike found a company willing to white-label their product, charging us only when we sell a bottle. That way we are not tying up our cash.

As you can see, they didn’t do the best job designing the bottle, but I can’t complain—after all, it was free.

All we have to do now is get the product on Amazon. The big holdup is getting a new account approved by Amazon. I am not leveraging my connections, so going through the standard channels can take weeks.

Once the product becomes available for sale on Amazon, I’ll share with you how I’m going to leverage the NutritionSecrets.com brand to grow the sales.

Conclusion

Overall, September was a fairly good month. Mike’s doing an excellent job producing content, but he needs to do more when it comes to building links.

He also needs to expand his social outreach efforts, which should help bring traction to the blog.

I hope that October picks up. I think search traffic will be up, but social media traffic may be down as we will be shifting our focus toward revenue generation.

In September, our only expense was for Aweber, which is $29 a month. It should, however, go up because an exit pop-up has been activated on the site, and more emails are being collected. This should help with long-term traffic as well.

What do you think—how are we doing so far?

https://www.quicksprout.com/2015/11/23/the-100000-challenge-october-update/

The $100,000 Challenge: October Update

by Neil Patel on November 23, 2015

The seventh month of the $100,000 challenge has wrapped up. In October, overall traffic on Nutrition Secrets was 42,822 visitors, down from 66,743 in the previous month.

The traffic drop was mainly due to social media. The blog posts didn’t do very well on Facebook in October compared to September. But the overall search traffic is continually rising. For example, October’s search traffic of 25,086 surpassed September’s number of 19,595.

The interesting aspect of October’s activities is that we finally started to monetize our product in hopes to bring in revenue.

Here’s how things are looking…

Traffic

As you already know, social media traffic is a bit unpredictable compared to search traffic. Although traffic from Facebook is down overall, the number of search engine visitors keeps increasing month over month.

Why?

Because Mike adds content each day. As long as he blogs once a day, there is more content, which increases our likelihood of being found in the search results.

The issue with the content he is writing is that a lot of it is basic. For example, he is writing posts such as “The health benefits of bananas.” Well, everyone already knows bananas are good for you, so posts like that (which are the majority) aren’t generating much traffic.

On the flip side, posts like “What happens to your body when you quit eating sugar” are unique, and those are the ones that are generating the majority of the search and social traffic.

I’ve been trying to teach Mike to blog only on unique topics instead of those that are beaten to death, but he is still struggling with it. Over time, he should get better at it, and I am sure our results a year from now will be great.

Monetization

We finally started to make money with Nutrition Secrets. We are now selling fish oil on Amazon (I’m not linking to the product as I am trying to avoiding cheating: I don’t want Quick Sprout readers to buy the product to help reach the revenue goal).

The key to generating sales on Amazon is reviews. The more you get, the better off you are. We are only at three reviews, and we need over 1,000 to see a real impact.

The tricky part is you can’t pay for reviews as that breaks Amazon’s terms of service. Nor do we have the financial ability to pay for reviews as we are trying to do this whole project on a budget.

So, what we are doing is giving away the bottles at cost. Mike is handing out coupons to anyone who is interested in fish oil supplements. They get a good price, and we potentially get a review (you can’t force people to write a review).

We were also given 28 bottles free when we did the white-labeling deal—selling someone else’s product under our label. So, Mike is also giving away 28 coupons for a free bottle…but that won’t last long.

We don’t know what percentage of the people who purchase a bottle at cost will leave a review, but we will know more in the next 30 days or so.

Once we get to 500-1,000 reviews, Mike and I will sit down and focus on adjusting the pitch (copy) on the fish oil supplement page to make it more attractive. If you look at most Amazon product pages, they aren’t written to be persuasive. We think that is a good competitive edge for us, and it should help drive sales in the long run.

Here is our game plan for the Amazon fish oil product:

  1. Analyze the competition to figure out what the ideal price point for this product should be. It’s currently too high.
  2. Focus on acquiring more positive reviews while following Amazon’s terms of service.
  3. Adjust the copy on the product page in order to maximize sales.
  4. Once the product generates more sales, focus on creating a more attractive label design.

Conclusion

Over the next 30 days, you’ll see us maintaining the current content levels and handing out more coupons to generate more Amazon sales.

Now, every time we hand out a coupon, we don’t make any money as we are just breaking even…so, of course, we still have a long way to go to hit the $100,000 a month income goal.

After a few months of doing this and fine-tuning the Amazon product listing page, we should start seeing natural sales, which will help with the $100,000 monthly goal.

The goal by the end of November is to generate 30 reviews. By the end of December, we want to have 300 reviews. And by the end of January, we want to have 600 reviews for our product on our Amazon page. If we can hit those numbers, there should be enough traction for the product to generate close to $100,000 in monthly sales.

So, what do you think of the progress so far?

https://www.quicksprout.com/2015/12/11/the-100000-challenge-november-update/

The $100,000 Challenge: November Update

by Neil Patel on December 11, 2015

We just wrapped up the eighth month of the Nutrition Secrets’ $100,000 challenge. Not only did we start generating revenue (kind of), but we also generated good traffic numbers because of the continual increase of our search traffic.

Traffic went up to 58,260 visitors, which is a nice increase from the 42,822 visitors in the previous month. That’s pretty good, considering that content production has slowed down. Mike currently blogs only two to three times a week instead of seven.

The main reason for this is to give him the chance to focus on promoting our fish oil supplement, which I’ll get into in a bit.

But first, let’s go over our traffic numbers.

November traffic stats

As I mentioned above, the traffic grew to 58,260 visitors. Of those visitors, 36,288 came from search engines (mainly Google).

Over time, that number should keep rising as the content continues to rank higher and we build more links. We have built a few EDU links and GOV links by just doing backlink checks on our competitors using Ahrefs and then begging those people to link to our site.

The model works, and over time, our search traffic should continually rise.

Overall, I am happy with our search traffic and growth, given the fact that Mike isn’t very creative when coming up with headlines. That really is the key to growing both your social and search traffic.

Just look at Quick Sprout. The reason it does so well is because I’m able to come up with headlines that hit hard. For example, when I blog on Quick Sprout or NeilPatel.com, I run a headline through an analyzer that estimates how well a headline will do…

One day, we’ll be releasing this free of charge to all the people who sign up to the Quick Sprout tool. But Mike didn’t have it, so it’s a bit harder for him to create headlines that do well.

Nonetheless, the numbers are good, and they keep rising (most months).

Revenue

We started selling fish oil supplements on Amazon like I discussed in my previous update.

As you can see from the screenshot above, we are starting to get more reviews and feedback from people. We collected most of the reviews by going to Amazon’s top reviewers and offering them the product at a discounted rate (break even) or free. When you do that, the reviewers will then place an honest review, which will help skyrocket your positioning on Amazon.

When you hit up the top reviewers, you’ll find that most will ignore you unless you give them the product for free. Our supplier provided a small batch that we were able to give away, but we can’t do that in quantity, or else we will lose money.

When you offer a discount, you’ll find that not as many top reviewers will accept your offer. So, you’ll have to go down the list and avoid hitting up anyone in the top 100. The lower you go on the list, the more likely you are to get people to accept your product at a discounted price.

When doing this, you’ll quickly learn that giving away your product or offering it at a discount doesn’t guarantee a review. But it’s a numbers game.

As you can see from the screenshot above, there is revenue, but the numbers are deceiving. Most of the sales are for the product at a discounted price, so you can’t really count that as “revenue.” Or at least I’m not counting that as revenue.

It’s a bit difficult to figure out whether a sale was at a full price, discounted, or a giveaway as Amazon’s backend is a bit archaic.

Over the next month or two, the number of discounted or free bottles will decrease as the product gets more popular and generates more organic sales.

Roadblock

Even though the product is doing well, we’ve encountered a few negative reviews.

Although we have a good deal with the company supplying us the fish oil, we need to make sure quality control is high. The current labels are arriving to customers a bit smeared, which has been hurting our reviews.

The design of the label isn’t very appealing either, which makes our product hard to stand out. Over the next month, I will be working on fixing this with the supplier.

Email list

The email list is continually growing, and we started to market the product to a small portion of the list. We are offering our fish oil to these subscribers at a reduced cost. So far, 61 people from the Nutrition Secrets blog redeemed the coupon for a discounted product.

This should help generate reviews, and in the long run, it should help boost the revenue numbers.

Fine-tuning

The other thing that will be adjusted as we generate more traction is our listing on Amazon. Making the headline more descriptive and answering more objections in the copy of the listing should help generate more sales.

One simple thing that we will be implementing over the next 30 days is answering general questions in the listing. For example, we will answer questions such as “Is the fish from Japan?” or “How is the oil being filtered?”

Answering these questions, as well as others, will help put our customers’ minds at ease and help increase sales.

Think of it as copywriting. If you can persuade people through text, which most people don’t do on Amazon, you should be able to increase your sales.

Conclusion

I’m happy with the progress so far. As we fine-tune the Amazon listing, we will be aggressively using the email list to generate more sales.

In addition to that, you’ll start seeing ads for the fish oil all over the blog. As the blog traffic grows, it should be easier to generate more and more sales.

Once the revenue starts kicking in, we will have more cash to spend on ads to grow the sales faster as we currently have a bit more than 40% margins.

How do you think the project is going so far?

https://www.quicksprout.com/2016/01/08/the-100000-challenge-december-update/

The $100,000 Challenge: December Update

by Neil Patel on January 8, 2016

We just wrapped up our ninth month of the NutritionSecrets.com $100,000 challenge. December was a decent month, considering that the holidays slowed down our sales and traffic.

In the month of December, traffic grew to 69,813 visitors. That’s not too shabby, taking into account that a large part of December was slow due to the holiday. The overall traffic grew by 19.8% over the previous month.

As for revenue, sales in December hit $22,702 dollars. The real number, however, is actually lower than that, which I will go into in a bit. But first, let’s discuss the traffic and what’s coming up.

Traffic

In December, the blog had 69,813 visitors, and 60,155 of those visitors were unique. Although the blog is receiving a decent number of visitors, the returning visitor count is low.

As you can see from the image above, only 16.2% of the visitors are returning. There are a few reasons for this…

The first reason is poor collection of emails. Typically, you will generate more returning visitors by sending out an email blast every time you write a new blog post. And to collect those emails, you have to leverage pop-ups and opt-ins.

The pop-up on the blog is an exit pop-up, but it doesn’t get triggered on mobile devices, which make up 66.8% of the total traffic.

In addition to that, the blog isn’t optimized for email collection. The offer isn’t very strong, so in the next week or so, it will be updated.

The homepage won’t be the blog; instead, it will be an email collection offer. In addition to that, the posts will have an email opt-in offer at the top. It will be something similar to what I use on NeilPatel.com:

As for January, traffic should be much better as we make these design changes. Plus, January is a hot time for health and nutrition. I’m already estimating that the blog will generate over 100,000 visitors for that month as the stats show that the blog is generating in excess of 4,000 visitors a day.

Content production

If you look at the content production, it’s slowed down. Mike went from posting 7 times a week to 3 times a week. He has been working on increasing the production back up to 7 posts a week, which you’ll see at some point in January.

If you look at the previous months, traffic grew faster, but we were also producing more content. It just goes to show that the higher quality content you create, the more search traffic you will receive.

As we generate more income, you’ll also see new types of content on the blog, e.g., infographics. They do really well in most spaces, but it costs money to create them.

Revenue

December was a decent month for fish oil sales. On Amazon, we generated $22,702 in sales.

Now, although that figure looks great, a lot of those sales came from coupons (we slowed down providing them now). Nonetheless, $11,516.16 came from sales that didn’t use the coupon code.

The overall number of sales should start going up in the upcoming months as we promote the product more aggressively to our email list as well as on the site.

In addition to that, you’ll see direct sales taking place on the site as we are adding e-commerce functionality and will start running paid ads. This should help boost the revenue. My overall goal for January is to hit at least $46,064 in sales…which is 4 times the amount of the previous month.

One of the things that should help with the sales is the bottle design. Now that we are generating income, I was able to use $500 of it for new designs.

Once the copy for the Amazon page is fine-tuned, it should also help boost the sales numbers.

Here is a list of our expenses:

  • Fish oil – $6,924.59 (including Amazon fees and shipping to Amazon for prime)
  • Aweber – $69
  • Designer – $500 (better bottle design)
  • Hosting – $249 (just switched to a bigger server to handle January’s growth)
  • Mike – free (Mike doesn’t get paid, but he owns a percentage of the blog for putting in time as I discussed earlier. I did this because you didn’t want me to use my name for the challenge, so I found someone else to be the face of the blog.)
  • Accounting – $185 (to help out with the books—we are now paying a bookkeeper)

Total expenses for the month were 7,927.59. Which means the total profit was $3,588.57.

Conclusion

The big focus over the next 30 days is going to be fine-tuning the site to be more like Quick Sprout and NeilPatel.com when it comes to optimizing for conversions and email collection.

It will take some time to run A/B tests, but I’m fairly confident that the numbers for January (on all fronts) will be improved because January is the most lucrative month of the year in the health and fitness space.

I know I could be doing more with NutritionSecrets.com and I am not following most of my own advice that I use on my personal blogs, but you have to keep in mind that I focus all my energy on my software companies as that’s what generates my income.

Mike is a newbie to the marketing world, so it takes some time to get him up to speed…especially with my hectic schedule. But overall, the progress isn’t too bad.

What do you think of the progress so far?

https://www.quicksprout.com/2016/02/15/the-100000-challenge-january-update/

The $100,000 Challenge: January Update

by Neil Patel on February 15, 2016

We just wrapped up our 10th month of the $100,000 a month challenge at NutritionSecrets.com, and it was a great month.

In January, traffic grew to 159,945 visitors—139,417 of which were unique. Those visitors generated a total of 195,665 pageviews and purchased $76,326.90 worth of fish oil supplements.

Although the numbers for January were great, I expect February to be slower because we ran out of inventory, which I’ll talk about in the next update.

So, let’s dive into the January numbers.

January’s traffic

As you can see from the screenshot above, traffic grew greatly in January. It was partly because of the season—everyone is trying to set health and weight goals in January—and partly because the rankings are just starting to climb.

SEO is a long-term game, and when you write great content and build links, you don’t always see results immediately. But when you wait patiently for 3 to 6 months, you start seeing the fruits of your labor.

Compared to December, which had a visitor count of 69,813, January saw a 129% increase in overall traffic.

As you can see from the screenshot above, the majority of the traffic growth came from search engines: 117,070 visitors came from Google, Bing, and Yahoo. The majority of those visitors came from Google.

I am new to the nutrition space, so I don’t know whether the traffic will die down in a few weeks, but I hope it keeps going up.

Content production

Because Mike knew that January was going to be a hot month, he prepared in advance. He wrote more content so that blog post production could go back to seven posts a week. But because Mike needed to produce so much content, the topics he wrote on were basic.

The increase in content production hasn’t been helping much with social traffic, but it has been helping with search engine traffic. Over the next few months, I’ll have Mike continually push out seven pieces of content a week as it will help us hit the revenue goal of $100,000.

Revenue

As you may already know, numbers can be deceiving. Although we are getting closer to the $100,000 revenue mark, more revenue doesn’t necessarily mean more profit.

As you can see in the screenshot above, revenue hit $76,326.90. We tested a few different price points, changing the price of our product by a few dollars up or down to see whether we could generate more sales, but we didn’t see a big difference.

Now, of course, if we dropped the price by $10.00, I do believe that the sales numbers would go up drastically, but that would eat away at our profit margin.

Here is the breakdown of the expenses for the month:

  • Fish oil – $56,401.91 (including Amazon fees, shipping to Amazon for Prime and any coupon-related expenses)
  • Aweber – $69
  • Designer – $750 (made changes to the website, including linking to the product)
  • Hosting – $249
  • Mike – free (Mike doesn’t get paid, but he owns a percentage of the blog)
  • Ads – $9,481.29 (We’ve been testing ads, and in the following updates, I will show you the screenshots and share the lessons we learned from running the ads. Overall, they haven’t been performing too well from a profit margin standpoint.)
  • Accounting – $185 (we are now paying a bookkeeper to help out with the books)
  • Lawyer fees – $2,000 (this is to get rid of people selling our product with our label on Amazon. We are sending them seize and desist orders.)

That brings the total of the expenses to $69,136.20. That means our profit was $7,190.70.

Conclusion

The big focus right now is on adjusting the listing copy on Amazon. If we adjust the text, it should help a lot with sales, but it’s hard because other people on Amazon are selling our product.

Once we get rid of all the other products, Amazon should update the text. I don’t know why it works this way, but it just does…

Escalating the promotion of the product on NutritionSecrets.com should help as well. We have already been doing a better job of this in January, and we will continue to push forward with the same strategy in February.

What do you think of the progress so far? I’ve been happy with the revenue growth, but I need to focus on improving profit margins.

https://www.quicksprout.com/2016/03/21/the-100000-challenge-february-update/

The $100,000 Challenge: February Update

by Neil Patel on March 21, 2016

Hey, everyone! We just wrapped up our 11th month of the $100,000 challenge for NutritionSecrets.com. As predicted, it was a down month.

Traffic was up overall, but because we were running short on fish oil inventory, revenue wasn’t as high as it was in the previous month.

For the month of February, traffic grew to 200,709 visits and 251,834 pageviews. That’s not too shabby, considering we had 159,945 visits in January, which had two more days.

As for income, revenue went down to $54,285.30… So, let’s dive right into the numbers…

Traffic

Shockingly, traffic was up significantly. It mainly came from search, but I never expected it to grow as January is an extremely popular month in the health and fitness space and February isn’t. As March rolled around, we noticed that the traffic growth started to slow down, but I’ll get into that in the next month’s update.

Mike posted about a post a day, which helped February’s traffic. As you can see from the screenshot below, there is a healthy mix in traffic. Google is our biggest driver of traffic, but that shouldn’t come as a surprise since it is for most blogs. The direct traffic includes email, and social media is starting to pick up.

If you are wondering how you can replicate similar results, you need to do two things:

  1. Write content using these guidelines.
  2. Use the templates in this post to find and build links. Make sure you use the “basic link request, PR pitch, and funny link request” templates. Although I wrote that post years ago, those tactics still work, and they are what Mike uses to generate links.

As you are building links, focus on getting them to all your internal pages. Don’t focus on anchor text; focus on relevancy and quantity. Over time, your rankings will naturally go up.

You saw it with the NutritionSecrets.com challenge, and you will see it with your own website: you build links, and your traffic doesn’t go up. But if you wait 3 to 6 months, you’ll see it all kick in, assuming your content is high in quality and people want to continually read your blog.

Revenue

In February, we generated $54,285.30 in revenue, which is less than January’s revenue of $76,326.90. The main reason…we ran out of fish oil. I estimate that our income would have been closer to $98,000 if we had enough inventory. But we should be good for the month of March in achieving our $100,000 goal.

In the meantime, to supplement the revenue, we tested out being an affiliate for Organifi. We signed up through Clickbank and tested to see whether we could generate some extra money.

After a few days, we turned it off as it didn’t generate any sales. The main reason I think it didn’t work was because of the email copy they provided.

It’s a great product that I have tried in the past, which is why I didn’t mind testing it out from an affiliate perspective, but I should have known that their email copy wasn’t maximized for conversions.

Companies that offer affiliate programs typically have incentives. If you are the best affiliate for a certain time period, you get bonuses like a free car…and yes, I meant to say free car. I’ve seen people like Russell from Clickfunnels give away a Ferrari.

Organifi didn’t have large prizes to give away to affiliates, which usually means they aren’t as large as some of the other companies. And if they aren’t that large, the main reason behind that is because the offer usually doesn’t convert as well as other companies’.

Again, they have a great product, so instead of using their copy, we should have written our own copy to promote their product.

Inventory

I’ve been getting a ton of questions over the last few months about how to find someone to help produce tangible products. Most of them require minimum orders and money upfront, but it is all a negotiation game.

The person we use is Austin Song, who has facilities in Cleveland, Ohio (or somewhere around Cleveland)… He has staff and had extra hours that weren’t being used in his warehouse, so he was more flexible on the deal terms as he was paying employees when they didn’t have anything to produce.

The way I found Austin was purely by spending days Googling for people who can manufacture products. Austin is busy these days and won’t do the same deal again (or else you would have seen 4 or 5 more products from NutritionSecrets.com).

Expenses

We didn’t make much profit in February because we had to produce more fish oil.

Here is the breakdown of the expenses:

  • Fish oil – $53,204.44 (including Amazon fees, shipping to Amazon for Prime, coupon-related expenses, and producing more inventory)
  • Aweber – $69
  • Designer – $250 (continually tweaking the homepage)
  • Hosting – $249
  • Mike – free (Mike doesn’t get paid, but he owns a percentage of the blog)
  • Accounting – $210 (we are now paying a bookkeeper to help out with the books)

Overall, we turned a profit of $302.86. It’s not a great number, but that’s what happens when you have to dump a lot of cash into producing more product.

Conclusion

Overall, the month wasn’t too bad, considering we ran out of inventory. March should be an interesting month. From a revenue perspective, it shouldn’t be hard to hit $100,000 because we are also working on utilizing other channels to generate income.

Next, I should have a detailed update with new revenue channels (hopefully, they work) and what we learned.

How do you think the challenge is working out so far?

 

https://www.quicksprout.com/2016/04/29/the-100000-challenge-march-update/

The $100,000 Challenge: March Update

by NEIL PATEL on APRIL 29, 2016

We finally finished the last month of the $100,000 challenge. March was an awesome month for Nutrition Secrets. Not only did the traffic grow to 218,811 visitors, but revenue did too—it went up to $121,492.65.

It wasn’t hard to hit the revenue goals as we had enough fish oil in stock, plus we started to generate money from affiliate sales.

So let’s dive right in…

Traffic

Compared to February, the traffic went up to 218,811 visitors and 269,814 pageviews. The increase was only 18,102, which isn’t much.

But considering that the popularity of nutrition and fitness sites is cyclical (January and February are most popular) and that Mike didn’t blog much on NutritionSecrets.com in March, it wasn’t too bad.

Overall, Mike has slowed down on the blogging front. Over the next few months, he wants to try a few fun content formats such as infographics and wants to see what happens if we were to dump a few hundred grand into the blog. It won’t be much of an experiment at that point, but we are just curious to see if we can get the blog to a million visitors a month.

Nonetheless, the traffic isn’t performing too badly. Even in April, the traffic has been on an upward trend while little to no effort has been put into the blog since the challenge has been over.

Revenue

The revenue is a bit more complicated to breakdown as it is coming from two sources now: Amazon and affiliates.

In March, revenue from Amazon hit $112,573.30.

There are a few key elements to growing Amazon sales:

  1. Reviews – the more people you can get to leave a review, the better off you are. Most people don’t even read the reviews, but if they are high in ratings and you have tons in quantity, you are in good shape. If you have a blog that’s driving sales, a great way to get more reviews is through marketing automation. You can promote the product to your email list, and then after a few weeks of promoting your product to those people, you would send an automated email asking them to leave a review. You won’t really know who bought the product, but you would still put the review email—applicable to a portion of your list—in your sequence.
  2. Keywords – with Amazon, you can add keywords. Most people add basic ones like “fish oil,” but as you know, it is all about the long tail. Amazon opened it up so you can stuff hundreds of keywords now, and with the use of Google Keyword Planner, you can come up with popular variations. You’ll then start ranking for tons of keywords on Amazon.
  3. Combating negative Amazon reviews – similarly to what happens when people employ negative SEO, competitors sabotage your Amazon listing by taking up your front page with terrible reviews. They do this to tank your sales so they can generate more income. You fight this by building up your email list on your blog and continually blasting out to your list when you have bad reviews, asking your readers to up-vote the positive ones.
  4. Ads – Amazon allows ads on its platform. Whether it is profitable or not, ads help you generate more sales. And if you can increase your sales velocity, you’ll find that your listing climbs up higher and starts to stick—it stays up there even after your ads stop showing. Sure, other people can do the same thing, but most don’t.

As for affiliate income, we started to push stuff by the Truth About Abs guys. We started doing email blasts to our list in order to generate the sales, and it has been working out well. The copy isn’t too bad, but there are two reasons it’s working out well.

  1. We collect a lot more emails – we are generating 300 to 400 email sign-ups a day. It’s much larger than our previous numbers for one reason: we turned off double opt-in. Aweber usually requires double opt-in when you use third-party software to collect emails, but Mike called Aweber and got them to disable double opt-ins.
  2. Good copy – our copy converts well. You can see an example email below. And we have many more emails like this in the sequence. So, we continually send you affiliate offers over time, which helps.

Here is the email copy we have been testing:

Email – This plant food HARMS your metabolism & heart

Hi {!firstname_fix}

Sometimes it’s not the enemy you know that’s the problem, but the friend you think you know.

In this case, I’m talking about nutrition in foods. It’s common knowledge that stuff like sugary drinks are just plain bad for you. The best you can say is that your body can absorb the bad effects if you only have them occasionally.

But what about foods you thought weren’t bad, and you heard were actually good for you?

I have some bad news, and some good news. The bad: some so-called “healthy” foods may be the cause of why you work so hard to eat healthy and haven’t seen the results you expected. The good news: There’s a solution I read about from best selling author Mike Geary.  Read on… (removed affiliate link)

Email – 2 Simple steps to REMOVE visceral belly fat (the DEADLIEST type)

Hi {!firstname_fix}

People often refer to past times as “the good old days” with a nostalgic tone. At least when it comes to many nutritional and health practices, I think of them more like the “bad old days.”

For example, people thought the wonders of science had delivered new, healthy products called “trans fats” that were featured in margarine, to replace that nasty butter. We now know that trans fats are about the worst thing you can coat your innards with.

People also thought they could do “spot reducing” of unattractive belly fat by using those jiggling-belt machines, or some other gimmick.

Well, belly fat certainly is still unattractive, and research says it’s also a danger sign. But research has also identified more-effective ways of getting rid of that spare tire. Here’s how. (removed affiliate link)

Email – 7 “fatty” foods for a flat stomach

Hi {!firstname_fix}

I spend full time on nutrition- and health-related activities. That’s the business I’m in.

I’m also an improvement junkie, always looking for the latest, best information. So you can imagine that I’ve pretty much seen it all: Every product, every supplement, every type of exercise.

Most of them are underwhelming. Yawn.

I’m writing you today because I recently came across something that made me sit up and pay attention. It’s a short-term blueprint for eating the right foods to burn substantial fat, and it’s all explained here… (removed affiliate link)

You can find high converting offers on sites such as Clickbank. They even sort the offers by popularity. I need to get a screenshot of our Clickbank revenue and our other affiliate income sources from Mike as he created the accounts and has the logins. Once I do, I will update the post with a screenshot (we use three networks).

The total affiliate revenue was $8,919.35.

Profit

As for monthly profit, it was high…but for a different reason than you might think. When you sell tangible products, you buy tons of inventory and then sell it over the following few months. We didn’t want to be out for our last month, so we spent a good chunk of money in the previous month, and, of course, we bought more in March.

Here is a breakdown of the expenses:

  • Fish oil – $68,492.52 (including Amazon fees, shipping to Amazon for Prime, coupon-related expenses, and producing more inventory)
  • Aweber – $149
  • Designer – $375 (continually tweaking the site)
  • Hosting – $249
  • Mike – free (Mike doesn’t get paid, but he owns a percentage of the blog)
  • Accounting – $290 (we are now paying a bookkeeper to help out with the books)

Total expenses came out to $69,555.52.

That brings the total profit to $51,937.13.

Of course, to maintain the growth, we would have to keep buying fish oil, but after awhile, we would cap out on sales, and our margins should be a healthy 30% plus. As for March, I didn’t spend much on buying tons more inventory as I wanted to show that selling supplements can be profitable.

Conclusion

Overall, the $100,000 challenge was fun, but I wouldn’t do it again. It’s just too much work with everything I have going on.

It was still a good learning experience. One thing I realized is how much harder it is to rank on Google today compared to 5 years ago. Almost all of my sites are old, so it is much easier for them to rank.

And although NutritionSecrets.com generated good traffic, if it were 5 years ago, the blog would have been at a million visitors a month with the same amount of effort.

So, what do you think of the $100,000 challenge?

100,000 Challenge (Patel) Recreated

Neil Patel is a digital marketer that I have a lot of respect for his marketing acumen. In fact, I pretty much read every blog post he sends out — and he sends out a lot. He is a rare professional that does two things normally never done: (1) H tells his trade secrets. My guess is that he realizes he can tell you them, but executing on them is fairly complex and most people would rather pay someone else and that’s where he comes in; (2) He puts his proverbial money where his mouth is i.e. he’ll tells you something that time will either prove out or not–usually he’s right.

In March 16, 2015, he let his rather lengthy distribution list know he was going to do something I simply could not believe. He was going to take a subject he knew nothing about and grow it into a business that generated $100,000 a month on a run-rate basis.  I read that initial post, which can be found here , with complete disbelief.

He ended up (after his distribution list voted) starting a business in the nutrition industry–something he knew little about. Every month I looked forward to his updates and each seemed very authentic or un-fabricated.  At the end of the challenge, which just recently concluded, he not only reached the goal of $100K but he surpassed it with over $120K a month.  Along the way I learned a lot.

I’ve decided to validate (or not) his challenge.  I mean the whole premise of his challenge was that he wouldn’t spend a lot of money and that anyone could do it.  Well he didn’t state that exactly, he did say his knowledge and ability would make the site grow to an amount where he could monetize it for that much a month, but underneath that he was implicitly stating — you can do this too with my direction. I want to test his premises and determine whether they work — and I’ll be you wouldn’t mind seeing whether someone else can do it too.  With a little luck, he’ll post to this blog to point us all in the right direction when I misinterpret what he wrote, which we know will happen.

Where I stand so far:

  1. I looked for a domain name that was created many years ago and untarnished. Neil actually had a bit of trouble with this but I learned from his mistakes and my new domain seems to be fine so far. My domain is NapaWineClub.com and it was originally created in 2003. I paid a little under $500.
  2. To create the site I used Word Press and Woo Themes as he suggested, but to completely replicate his theme I asked my developers which theme they thought he used and they stated Hooray, which can be found here.  This cost an additional $120–I’m not sure how he did this for free but I believe him. I also needed a developer to modify the theme appropriately, which cost about $400 using Upwork.  Again, I’m not sure how he could have created his site without these expenses but he may have expertise that I do not and I tend to believe him.  Also, my $400 development cost included a few things: (a) the Sumome plug-in that allows you to collect emails.  You’ll also need some kind of email repository, which I used MailChimp. They’re really good and affordable in my opinion — I use them for my other businesses too. (b) an automated post to Pinterest, Twitter, Facebook and Google Plus. (c) an automated email blast to those who sign-up to the site when I post a new blog (actually this cost me another $75). I really suggest getting developer to do all this because that way you know it will work properly rather than make a mistake.
  3. I have posted three blogs, so it doesn’t look like there is an empty page.
  4. I setup my Twitter, Facebook, Pinterest, and Google Plus accounts. I also want to add Buzz Feed because that really helps with the social media dissemination.
  5. I am paying $10 a month on Host-gator. I initially tried an AWS competitor that I won’t name since I don’t want this blog to be about negative marketing but they really stunk. I was hacked within 2 days!  When Neil did his site, he hosted it on his own servers. Not everyone can do this. His servers loads his sites extremely fast and I haven’t been able to replicate this yet using Host-gator. This could be a problem because I believe that is factored into Google’s search algorithm. Neil used his own servers to save money but the whole point I thought was to replicate what anyone can do and clearly that is not what everyone can do but that stated Neil was very honest and upfront about this.  Speaking of which:
  6. Neil uses Google Analytics to measure how his site is doing–and then provided that data in his monthly blog updates. Getting a new Google Analytics account is easy, it can be found here. After your done with that, you can go to the crown in the upper right corner, which is your SumoMe plugin.   — assuming you’re using SumoMe for capturing emails and what have you. The select the Google Analytics button and the rest is easy. I’m not trying to push that service, I’m just doing it the way that Neil did it, which makes sense and is super easy.

So that’s where we stand.  I’ll do exactly what Neil did (as best as I can) and post my progress once a month. If I’m nearly as successful as he was I’ll be doing back-flips and you’ll know you can do the same.  If not, you’ll know what’s possible from us near mortals.  My guess is that there were a lot of things behind the scenes that he didn’t share but that’s exactly why I think this blog can be valuable.  Also, Neil is an expert at writing content, so his content creation skills (despite the ideas he’s given are honed through experience so keep that in mind). To me this is a test of some of his techniques but to have the same success as him you’d probably need him to do the work.

 

Entrepreneurs who did not use VCs until a developed/proven product:

Examples of entrepreneurs who did not use VCs until a developed/proven product:

1)      Larry Page and Sergey Brin were two really smart mathematicians who knew they could write a better algorithm to find things than what had been written by Yahoo. After-all, that was not Yahoo’s focus.

Cost to the found Larry and Sergey: almost ZERO–because they were essentially the developers and the product designers.

2)      Mark Zuckerberg wrote the whole Facebook site himself.

Cost to Zuckerberg: ZERO. He was an application developer.

3)      Bill Gates and Paul Allen were application developers but Bill Gates’ mother had more to do with Microsoft’s success than did Gates and Allen’s software-development skills.

Mary Maxwell Gates came from a prominent Seattle family and was a successful business women herself (Bill’s dad was a lawyer). Ms. Gates was friends with John Opel, Chairman of IBM, through their work together on the Board of the United Way.

IBM was frustrated with the company that developed the pre-cursor product to DOS technology, which is called Digital Research. Digital Research developed the product called CP/M (Control Program for Microcomputers).  IBM broke off negotiations with Digital Research over that product because of the terms.

After breaking off negotiations, John Opel from IBM said he would buy a product from Bill Gates if he had it ready.  Bill’s mother, like many mothers, wanted the best for Bill. She precipitated the Bill Gates/John Opel deal during board talks.

What does Bill do? He goes out and buys the rights to a second generation product for $25,000 from another company. So the product known as DOS was actually developed by Seattle Computer Products.  Bill Gates and Paul Allen raised the $25,000 from Bill’s well-off parents. Then, Bill turns around and sells the product to IBM as IBM had promised.  With the money received from IBM, he buys the rest of the rights to DOS for $75,000.

Many people think that Bill Gates and Paul Allen invented DOS but that simply is not true.  They were simply very fortunate to have been the right kind of people, with the right kind of connections, at the right time.

Cost to Bill Gates and Paul Allen: ZERO, Bill’s parents lent him $25,000.

4)      In 1973 Bloomberg became a general partner at Salomon Brothers where he headed equity trading, and later, systems development. In 1981 he was fired from Salomon Brothers and was given a $10-million severance package. Using this money, Bloomberg went on to set up a company named Innovative Market Systems. In 1982, Merrill Lynch became the new company’s first customer, installing 22 of the company’s Market Master terminals and investing $30 million in the company. I think it is safe to say that when you have $10 million to build a product that you’ve specifically designed for customers who says they will pay you another $30 million to develop it, you’re chance of success is pretty darn good!

Cost to the Michael Bloomberg: a lot but mostly from an already secured source.

5)      Sheldon Adelson is another billionaire who owns Las Vegas Sands Corp. You would think that he made his fortune by raising VC money with a non-tech idea, but that is not true.

He started a trade show called COMDEX, that brought people who were interested in technology from all over the world. At the time, Las Vegas was an inexpensive place to hold conferences because casinos wanted traffic. He made millions from this conference.  To this day, it is one of the biggest in the world.

Adelson used the money he had to buy a casino and the rest is history.

Cost to Adelson: the cost of starting a trade show is not as great as you might think. The money the entrepreneur receives from participants is then used to pay for the event. In other words, there is a mechanism to make money without spending it.

6)   Jack Dorsey started Twitter who was trained as an application developer. Also, an ex Google millionaire joined the team

Cost to Dorsey: Zero

7)       Michael Dell founded Dell Inc. To start a computer company you would think that it takes millions of dollars, but actually it did not take Michael Dell much at all.

As many computer aficionados know, computers are made by buying parts from many manufacturers, usually based in China. Many computer aficionados built their own computers and Dell was no exception.

He had the entrepreneurial spirit so instead of building just a computer for himself, he built computers for people he knew. Each time, he made a little money.  Finally, he decided to sell computers full time.

Cost to Michael Dell: He didn’t have to spend a dime. He would get the money up front, then order the parts with the money he received, assemble the computer, then give it to the buyer.

If you review the Forbes 400 list of the wealthiest Americans, you will notice that:

1)      Inheritance,

2)      Luck through timing (for example Gates)

3)      Having a job that paid a lot that was then parlayed into a business

Are the only predominate exceptions to ideas that take little to no cash from the founders.

Customer iteration

Lean Start-up

Lately, most academics, including successful entrepreneur and my former professor Steve Blank, believe in a concept called lean start-up. Lean start-up is where you start a company without trying to have all the functionality completely designed i.e. it is the concept of creating a very simple prototype rather than a product with all the proverbial bells and whistles . This saves the entrepreneur from spending millions of dollars on a product launched in the far out future only to discover that the customer wanted something different, causing the entrepreneur to start all over again.

After a rough prototype is built, the entrepreneur is supposed to iterate with the customer to get the product to match what the customer is willing to pay for.

Lean start-up is a sound concept but iterating with customers is more suited to B-to-C (Business-to-Consumer) businesses. For example, imagine starting a military weapon company.  Iterating with the U.S. government on prodcut development is clearly more difficult.

Most ventures have one major iteration before becoming a viable business model.  In fact, I once met a VC who had turned me down for funding the year before. I liked her so I wanted to get her advice on a few things the following year  [VCs are well connected and know the technology landscape so well, it is always good to pick the brain of VC as much as they try to pick your brain].  Anyway, I told her that my company had undergone a major change and I needed her thoughts on a few things. Even though I was not actively seeking an investment from her company, she said that she was interested in doing so. I asked why now and she replied that her firm only invested in companies that had undergone a major iteration.

VC/Angel Groups vs. Keeping Your Day Job

Some things to think about when seeking outside financing

Many investors want to take an idea to a venture capitalist (VC), have the VC invest a boat load of money but only take a small fraction of the company in exchange, and then make billions of dollars after the idea takes off.   There are many reasons why there is a greater chance of getting hit by lightning than this scenario happening.  So I advise you, if possible, to keep your day job until you have proven your idea works.

One of the first realizations an entrepreneur makes when seeking capital is that VCs and angel investor groups usually invest in home run ideas.

DFJ Gotham’s website has a fairly typical quote:

“We invest in category leaders; companies that are positioned to both become large (with at least $100M of revenue) and blaze new trails in their markets. Category leading companies transform their marketplaces, creating fundamental shifts in their industries and leveraging unfair competitive advantages”1

1 http://www.dfjgotham.com/strategy.html

The problem with this “home run” screening of business ideas is that when you try to hit a home run—as in life—you often strike out. I mean how many companies do you think become category leaders? The answer is one for each category, right?

VCs that have DFJ Gotham’s strategy, want each of their many investments to be something only a handful of companies in the world can become.  They want the next Google, Facebook, or Yahoo.

Scott Shane, a professor at Case Western University and the of author of The Illusions of Entrepreneurship (BusinessWeek.com, 1/23/08) put it yet another way, “It’s incredibly rare for a company to hit the sales targets that venture capitalists have,”. He goes on to suggest that most VCs want businesses to hit $100 million in sales within six years (a goal only 200 companies each year reach).

http://www.businessweek.com/smallbiz/content/feb2008/sb2008021_536847.htm

How successful do you think VCs are at meeting their goals, given the lofty investment criteria?

VCs tend to keep their failure rates private, however a study by the National Venture Capital Association conducted with over 11,686 companies showed that nearly 57% of the companies failed. 3

3 National Venture Capital Association in its 2011 Yearbook, Page 8.

In fact, VCs acknowledge a general rule-of-thumb that states that one-third of investments go out of business, one-third under-perform, and the remaining one-third are considered big hits. 2

2 http://www.usv.com/2007/11/failure-rates-i.php

An article published by Business Week had the following excerpt from David Kirsch, director of the Business Plan Archive at the University of Maryland.  http://www.businessweek.com/smallbiz/content/feb2008/sb2008021_536847.htm

Kirsch and Goldfarb also found that 48% of the companies they sampled—mostly dot-coms founded between 1994 and 2000—survived the bursting of the tech bubble in 2004. The number, Kirsch says, is consistent with survival rates in other emerging industries. Getting venture funding did not improve a company’s chance of success. “What that tells us is that those firms didn’t need venture capital. What they needed was 10 grand for some servers and a few customers,” Kirsch says.

The conclusion should hearten entrepreneurs. Abandoning the chase for venture capital frees business owners to concentrate on bootstrapping or raising smaller amounts from informal investors or lenders. The average start-up is financed with $25,000, and that usually comes from the entrepreneur’s savings or from a personally guaranteed bank loan, according to Shane. While that’s less seductive than big checks from venture investors, it’s easier to find.

To further illustrate the point that VCs may not be the best route for entrepreneurs, look at statistics from the Small Business Association (SBA).

What do you think is the survival rate of just any new firm (not necessarily VC funded businesses with well thought-out business plans)?

According to the SBA, seven out of ten new employer firms lasted at least two years, and about half survived five years. More specifically, according to new Census data, 69 percent of new employer establishments born to new firms in 2000 survived at least two years, and 51 percent survived five or more years. Firms born in 1990 had very similar survival rates. With most firms starting small, 99.8 percent of the new employer establishments were started by small firms. Survival rates were similar across states and major industries.

http://www.sba.gov/advocacy/7495/8430

Doesn’t these statistics contradict what you’ve heard from other sources? I know I had always been told that only 1 in 10 businesses survive. By the way I heard the same statistic for companies that had been VC funded.

According to Michael Ames in his book Small Business Management,  the two biggest reasons why business fail are:

1)      Lack of Experience

2)      Insufficient Capital

Here’s what the SBA states:

http://www.sba.gov/content/what-are-major-reasons-small-business-failure

So VC funded companies and non-VC funded companies have around the survival rate despite the fact that VC Funded businesses have a lot more initial capital.

And the chances of being VC Funded is not great either

There is a 1 in 1,000 chance of getting funded by a VC– all things being equal. But all things are not equal.

People who have had success before (been part of the founding team for another successful VC backed company) are more likely to get funded then someone who has not.

Someone who graduated from Stanford or Harvard will get a much better look than someone who graduated from Chico State. This is partly due to people from Stanford and Harvard having strong network connections to VCs.  VCs tend to invite entrepreneurs who they have been referred to or know through networks. http://www.businessweek.com/smallbiz/content/nov2007/sb20071128_805700.htm   Most VC employees have graduated from the top two businesses schools in the country, so naturally many VCs have graduated from Stanford and Harvard.

Stanford has an additional advantage: The highest concentration of VCs are located in Menlo Park, Palo Alto area. This area, of course, is where Stanford University is located.  So it is easier for Stanford graduates to have network connections to VCs then most other graduates.

Someone with an engineering degree has a much better chance than a business major (perhaps ironically). This may be due to the fact that engineers can develop their own ideas without hiring someone else, where business majors tend to know how to run a business but not necessarily create the product.

Knowing how to pitch to VCs is really important too. As soon as an entrepreneur goes to a few VCs, other VCs know about that entrepreneur. So if an entrepreneur does not send a pitch book and deliver the kind of presentation that is expected, they have little chance of getting funded. The fact that VCs see hundreds of ideas a year and have the attention span of a nat, ensures that they are easily distracted by presentations which do not conform to the mode operandi.

A technology idea will have 1,000 time better odds than another type of idea of getting funded.

The definition of scalable for VCs is very narrowly defined and only scalable ideas are funded by VCs.

Ideas that, in the judgment of the VC, will make $100 million or more are usually the ones that VCs find interesting. (They want the next Google, which in itself is astronomically difficult. VCs tend to go after the same type of ideas each year. One year it is crowd-sourcing ideas, the next year it is social media ideas, the next year it is green technology ideas etc. etc. And after an idea gets hot, it becomes passé’. Well if they are all going for the same ideas each year, what do you think happens to the terms for those deals? Yep, the terms become favorable for the founders and unfavorable for the VCs. But if you have an idea outside of the hot area, you’re in trouble.

Furthermore, how many ideas do you think can be number one or number two in their space, which historically are the only ideas that become $100 million + ideas? Answer: one or two. It’s no wonder VCs are less successful at picking investments than the national average at successful companies!

So an entrepreneur may start out with a 1 in 1,000 chance but after factoring in the particulars of the case, may have one chance in H double hockey sticks of getting funded.

Further exacerbating the problem for the poor entrepreneur is the fact that it takes about 40 hours a week to pitch the idea to VCs. This is because the entrepreneur has to meet with a lot of VCs before she will get funded. Even Google and Facebook met with several VCs before they were funded. What happens when an entrepreneur spends all her time raising money? Answer: She has less time to spend on the company. And this is important because VCs want (especially now ) a concept that has been proven through the customer i.e. revenue has to be coming in already proving that people are willing buy the product before a typical VC will invest in the company.

This latter issue really frustrated me when I started Tailor Research. I thought to myself, if the idea was proven already I wouldn’t need you would I??

Big Idea: So the natural question is whether VCs are needed at all? They are of course. VCs should be used to grow a company, not to establish its viability. This is a really important point for most entrepreneurs because what it means is that an entrepreneur (and some seed investors) take on almost all the risk of proving the concept.  However, the advantage of this approach is it allows the entrepreneur to get better terms since he does not need the money to keep the business running but rather to leverage (speed-up) the growth of the business.

It is not all about hitting home runs

I wanted to share some statistics that may surprise you. I think the message in these statistics is that entrepreneurship is not only about hitting home runs and creating the next Google (as many VCs and Angel Groups would want), it is also about building more moderate businesses and still being plenty satisfied in what you created for yourself and others:

Small firms Represent 99.7 percent of all employer firms, Pay 44 percent of total U.S. private payroll, Have generated 64 percent of net new jobs over the past 15 years, Create more than half of the non-farm private gross domestic product (GDP), Are 52 percent home-based, produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.

http://www.sba.gov/advocacy/7495/8420

These statistics tell a great story but Martin “Buzzy” Schwartz in his book Pit Bull, told an even better one: When Buzzy was a new NYC taxi cab driver he would hear all the drivers talk about how well they had done at the end of each shift.  One particular driver was the hero of all others. That driver would talk about how he would get fairs from the airports to the city, one after another.

A few months after becoming a cab driver, at the end of another shift, Buzzy finally reported how well he had done to the rest of the drivers. The amount blew away the reining champion. When asked how he did it, Buzzy said he tried to get the shortest fair possible. “Why?”, the others asked. He replied that that was the best way to capture the flat fare at the beginning and standard tips.

Sometimes you can make more doing less, more often.

Practical Entrepreneurship

Entrepreneurship is a great way to make the world a better place. Entrepreneurship creates jobs, which lessens financial stress, creates better lifestyles, and quite literally puts food and goods on family tables.  Oh yah—it is a lot of fun too!

I love the subject of entrepreneurship! So after reading a lot on the subject, and being part of several ventures, I thought I would start a blog that shares some things. Hopefully, they are helpful to a budding entrepreneur.

The intention of this blog, and the information provided, is to exchange extremely practical and/or useful information. I don’t know about you, but I get tired of reading entrepreneurial books that are all about the psychological factors of whether you’re cut out to be an entrepreneur.  You know what I mean e.g. take this mini test, score the test, and if you don’t score XYZ then you’re probably not cut out to be an entrepreneur; or you have to be willing to sacrifice life and limb to be an entrepreneur; or my personal favorite — only one in a thousand are meant to be an entrepreneur.

I like to give budding entrepreneurs a little more credit.  They know that it isn’t easy to start a successful business. They don’t need motivation or discouragement.  They need practical “hands on” advice.

Focus on what is certain

If this book teaches you anything it should be to focus on what can be controlled in entrepreneurship rather than what cannot.

A methodical approach starts with a Top-Down approach to entrepreneurship rather than a bottom-up approach. That is to stay, instead of starting with an idea, an entrepreneur should start with a need. Analyze that need, then develop a technology or method that improves or solves that need.

Here is an example: When Jeff Bezos started Amazon he took a Top-Down methodical approach: knowing that the world wide web would transform the way people do business, something most people by 1994 started to understand, he looked at the top 20 mail order businesses, and asked himself which could be conducted more efficiently over the Internet than by traditional means. Books were the commodity for which no comprehensive mail order catalogue existed, because any such catalogue would be too big to mail — perfect for the Internet, which could share a vast database with a virtually limitless number of people.

He flew to Los Angeles the very next day to attend the American Booksellers’ Convention and learned everything he could about the book business. He found that the major book wholesalers had already compiled electronic lists of their inventory. All that was needed was a single location on the Internet, where the book-buying public could search the available stock and place orders directly. Bezos’s employers weren’t prepared to proceed with such a venture, and Bezos knew the only way to seize the opportunity was to go into business for himself. It would mean sacrificing a secure position in New York, but he and his wife, Mackenzie, decided to make the leap.

Jeff and Mackenize flew to Texas on Independence Day weekend and picked up a 1988 Chevy Blazer (a gift from Mike Bezos) to make the drive to Seattle, where they would have ready access to the book wholesaler Ingram, and to the pool of computer talent Jeff would need for his enterprise. Mackenzie drove while Jeff typed a business plan. The company was called Amazon, for the seemingly endless South American river with its numberless branches.

They set up shop in a two-bedroom house, with extension cords running to the garage. Jeff set up three Sun micro-stations on tables he’d made out of doors from Home Depot for less than $60 each. When the test site was up and running, Jeff asked 300 friends and acquaintances to test it. The code worked seamlessly across different computer platforms. On July 16, 1995, Bezos opened his site to the world, and told his 300 beta testers to spread the word. In 30 days, with no press, Amazon had sold books in all 50 states and 45 foreign countries. By September, it had sales of $20,000 a week. Bezos and his team continued improving the site, introducing such unheard-of features as one-click shopping, customer reviews, and e-mail order verification.

Jeff had told his original investors there was a 70 percent chance they would lose their entire investment, but his parents signed on for $300,000, a substantial portion of their life savings. “We weren’t betting on the Internet,” his mother has said. “We were betting on Jeff.”

1 http://www.achievement.org/autodoc/page/bez0bio-1