Forums and Community sites rarely make the list of top website sales, simply because they tend to be so difficult to get right.
This is an interview with Tyler Cruz, owner of Merendi Networks Inc, which operate a portfolio of approximately 15 community driven sites. Some of you may already know Tyler from tylercruz.com, where he goes quite in depth into how he makes money from the internet, but as someone who has successfully bought, sold and grew forums systematically over the last few years, this interview has a special focus on community driven sites and contains some juicy pointers and insights for making them work. Here’s the interview:
Thanks a million for doing this interview; I want to get straight down to finding those little gems to help people who buy, sell and operate community sites. Having never owned a forum myself I always question their merits. Why do you take a preference to community based sites as opposed to a blog for example?
Most of my forums were created around 2004-2005 mainly as a direct result from the success of my poker forum (which I sold a number of weeks back). I loved the idea of having users create their own content.
However, you are correct in that forums are infamously difficult to monetize unless it is in a very specific and high-profiting niche (such as poker, cellphones, etc.).
So if you didn’t have the option to buy a forum and had to start one from scratch, do you have any pointers on how to get to critical mass, so there’s enough content (and members) to get people coming and contributing organically?
I actually started all of my forums from scratch, save for DomainForums.com which was a quick flip (2 months). As with everything, my answer will vary depending on the exact situation, but there are two main methods you can do to grow a brand new forum.
First, you can hold a contest. These work, but the main problem is that you tend to see a mass exodus of contest contestants once the contest expires, so you need to have a bit of a budget for constant contests.
Secondly, you can use a paid forum posting service. I’ve used these in the past and they are actually not bad. You hire a team of real people (not bots) to post on your forum to give it the crucial seed posts that it so desperately needs. They will register under different usernames and post relevant posts and new threads, and are for the most post extremely affordable; somewhere along the lines of $0.10 a post.
Of the sites I shortlist for the A-List, very rarely do forums appear as they usually fail to break the revenue barrier to make the criteria. What advice do you have from your experience that people can take away to better monetise a forum they’ve bought or currently own?
My answer is pretty basic, but if you have a forum in a specific niche that is prime for pitching affiliate products and services to, such as web hosting (I actually own the domain HostingForums.org that I never developed if anyone wants to buy that off me *smile*) or dieting, then don’t be afraid to pitch that to your members through the inclusion in a newsletter or in a prominent advert above your main forums. You may be surprised just how many people will buy it if you endorse it, and since it’s a forum, if one member is happy with their purchase, you can be sure that they will post about it.
Alternatively, if you have a very large forum (and depending on the topic), don’t underestimate the potential of paid memberships, whether they be one-time (which I’ve never liked), or recurring. DNForum.com, the prominent domain name forum, made a lot of money by selling various paid memberships which gave its users access to exclusive forums on the site. So, if you have a PHP programming forum for example, why not offer a premium membership service at $9.99 a month which gives users access to an exclusive forum where they will receive expedited help with their programming code from more talented PHP members (which you can hire)? If only 75 people subscribe to this in the first 6-months, you’re already making $750 a month in recurring revenue.
As I say, it really depends on your forum. It’s hard to justify a paid membership to a forum on Hollywood gossip, for example.
I’m sure Perez Hilton would disagree! With so many projects ongoing, how do you manage (or outsource) each one and ensure that they are all getting the attention they need, both in terms of SEO and development?
Sadly, I’m the WRONG person to ask in this regard! I have so many projects (and I’m constantly getting myself into new ones) that I tend to completely neglect a good number of them for months (or even years!) on end. Instead of dividing my time equally to each site, I tend to focus on one or two of them at a time instead. I think there are pros and cons to each method.
With the forums, one of the things I do like about them is that you can always find a number of eager, hard-working moderators who will manage your site free of charge. You’d be surprised how many positions you can get people to do for free. For example, I have volunteer news posters and writers on my movie review and news site. Appointing volunteer members is one way I help handle the load of my various websites.
However, I do outsource a lot as you mention. I use online freelance sites such as Elance.com, Guru.com, and Freelancer.com frequently, and rehire a number of writers, designers, and programmers who I have long-established relationships with.
My main advice would be to tell people to not be afraid of paying a high price tag for something. In most cases, you get what you pay for. For example, I tend to spend $600 on logos and $3,000 on web designs. While you could get a logo for $60 and a web design for $300, you will probably be regretting that in the long run.
Being an entrepreneur means you need to be willing to take a risk here and there. Don’t be afraid to invest in your idea. Think of it this way – the more you put into your new project, the more you will have a reason to see it succeed.
That’s great advice. I think like everyone else at some stage I’ve experienced too little and too much caution myself. I think success comes with finding a balance that embraces fear but stops you from being reckless.
You recently did a webinar with some other well know bloggers on Buying and Selling Sites through Flippa. Having recently sold PokerForums can you give any specific pointers to someone wanting to sell their forum?
To be honest, I’d really recommend watching the replay of that webinar which you can watch at http://www.tylercruz.com/a-replay-of-last-nights-live-flippa-webinar/.
I discuss selling a website at around the 25-minute mark. The webinar had a lot of positive feedback and I think people really enjoyed it.
Are there any unexploited opportunities still out there that you would be happy to share, or can you see any potentially big trends coming throughout this year?
There are definitely a ton of opportunities on Flippa. While I still say that a lot of listings on Flippa are garbage, there are so many new listings added every day that it doesn’t take all that long to find that rare solid opportunity.
I just purchased a site on Flippa a month ago that I have big plans for. I have to fight myself to not check out Flippa to see what else I could buy because I need to focus on my current projects, so yeah – there are most definitely opportunities out there. Just remember to look for the diamonds in the rough. Don’t look for turn-key operations or sites that seem “flawless”. Look for sites with established traffic and/or huge potential instead. Look for websites that are being sold by people who don’t really know what they are doing
I’ll keep my eyes peeled for whitehouse.gov then. Thanks again Tyler. You’ve given some great practical insights that I’m sure will be well received.
To stay up to date with Tyler and his online achievements check out tylercruz.com.