While I get many questions from bloggers asking for advice on ‘how to blog‘ perhaps one of the biggest questions a new blogger needs to ask themselves before they move on to the HOW to blog question is ‘WHAT will I blog about?’

There is no real right or wrong answer to this question as blogs come in all shapes and sizes and focus upon all manner of topics. However thinking through the question before you start a blog will help you make some of the other decisions that you’ll want to make later on in this guide (for example the domain name and the name of your blog will probably come out of this decision).

Reasons to Focus Upon a Niche with Your Blog

Choosing a niche to blog about is important for a number of reasons. These include:

1. Niche Blogs Appeal to Readers

My first blog was a personal blog with no real niche focus. It did start with a main focus upon Spirituality, but over time began to cover a large range of topics including blogging, photography, culture, politics, personal stuff that I was doing etc. The more topics I covered the less I appealed to everyone.

Sure a certain group of people were interested in Spirituality and Blogging, but less of them were into photography, even less also liked my stuff about Australian Pop Culture….. each topic narrowed the chances of me writing something that would appeal to all of my readers. I started to get complaints from them – ’stop writing about XXXX’.

When I began to break topics out onto their own blogs my audience responded well – those who were into photography gathered around that topic, those that were into blogging gathered on that blog.

In the end this is about relevance – people seem to be drawn to niche focused blogs because they know that they’ll see content on them that focuses upon the things they are specifically interested in.

2. Niche Blogs Monetize Better

I tried to make money from my personal blog for a while but found the going really tough. At the time I mainly tried to make money from advertising and found that sponsors were simply not interested in promoting their product (which had a specific focus) to an audience who were there to read about a whole range of things.

What camera manufacturer wants to promote their latest camera on a blog about photography that also touches on spirituality, politics and what movie I saw on the weekend?

Niche blogs also tend to work better with contextual ad networks like AdSense. AdSense is getting better are providing ads that related strongly to what is on a specific page of content but I have seen instances where blogs covering lots of different topics attract ads that don’t always relate to content on a particular page.

The other thing about AdSense is that it is a system that gives advertisers the ability to target specific sites. These types of targeted campaigns can be quite profitable but they are less likely to happen if a blog covers a large range of topics, many of which don’t relate to that advertiser.

When I went niche I found monetizing with advertising a lot easier. In fact monetizing with a variety of methods seems to be easier on niche blogs. Affiliate promotions and selling your own products work better because your audience is there to get information on certain topics – so when you promote products on those topics…. they’re much more likely to buy.

3. Niche Blogs Do Better in Search Engines

It is possible to rank well for all kinds of topics on a generic/multi topic blog. It’s possible – but I find it is easier when you have a blog with a focus upon a niche topic. If your whole site is about the one topic Google treats it as more of an authority on that topic the more content you add, the more you interlink the posts, the more other sites in your niche link to it etc.

There are certainly exceptions (mega sites like Wikipedia are obvious ones) but unless you have the pulling power of a massive site like that a niche focused site could be the way to go.

4. Niche Blogs Build Credibility and Profile

One of the consequences of moving to more of a niche focus with my blogging was that I noticed I was starting to become known for that topic.

The first time this happened was after I started my first photography blog and 2 months later had a phone call from a city-wide newspaper asking for a quote on a photography related story. This had not happened to me before as a result of my personal/multi topic blog but having a site purely focused upon a single topic gave a perception that that topic was ‘my thing’.

For me having niche focuses has helped me to become known on different topics – which has led to all kinds of opportunities in those niches – including writing books, speaking opportunities around the world, main stream media appearances and all manner of partnership opportunities with wonderful people in my industries.

Not everyone wants to build their profile and become known in an industry – but if that’s part of your goal then a niche blog on those topics can be powerful.

Note: Niches Need Not Just be Topic Related

Before I conclude this post on niches I thought it might also be worth noting that a blogs niche need not only ever be focused upon a topic. I explored this more fully in a post titled – Does Your Blog Focus Upon a Niche Topic or a Niche Demographic? As the title of that post suggests – there are some successful blogs around that cover a variety of topics – that appeal to a similar type of person or demographic.

So instead of just writing about video games – a blog might choose to blog about topics that appeal to teenage boys – video games being one of the topics that they might have an interest in.

Worth noting though is that if you do decide to target a niche demographic rather than a niche topic – you could be opening yourself up for a lot of work. Covering a diverse range of topics can certainly work – but to cover them all comprehensively can take a lot of time and energy.

How to Choose a Niche for Your Blog

Now that we’ve looked at some of the reasons WHY a niche can be a powerful thing to think about before you start looking at HOW to blog – later this week I’m going to continue this post with a followup post exploring a number of factors that those looking to start a blog might consider when choosing a niche.

Post from: Blog Tips at ProBlogger.

How to Blog: Choose a Niche for Your Blog [Why Niches are Important]

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Many people go to websites everyday and fill out forms, but what happens after they fill out the form? At the Online Marketing Summit, WebProNews spoke with Lauren Vaccarello, the Global Head of Search at Salesforce, about how websites can make sure they are tracking these potential leads.

First of all, you need to know how people get to your form.  According to Vaccarello, Salesforce and others offer solutions that allow this information to be passed through a hidden field. It is an automated solution that not only sorts through the data, but also passes it through an application that builds dashboards, which reveals even more data.

With this information, you can find out important facts such as where your visitors are coming from, who is converting and who is not, where you are spending that is producing profits, and where you are losing money.

After you have gathered this data and analyzed it, you have a stronger knowledge of which leads are worth following up on and how you should approach them.

guest post by Kelly Diels

When I was wondering how to create an effective, money-making review site, I thought of Robb Sutton.

Robb Sutton’s review site, Mountain Biking by 198 “pulls in thousands in review product every month” and in the last 15 months has received over $100,000 dollars worth of review product. He’s also got several other sites, including a coffee review blog, and oh yes, makes a pretty decent living as a ProBlogger.

That is, when he’s not hanging out with the likes of me and telling me all his secrets.

Kelly Diels: Robb, tell me all the dirty details about review sites.

[looooooooooooong pause. Isn't it a little early in the conversation to have offended him?]

Kelly Diels: Robb?

Robb Sutton: I’m here. Sorry…was just closing up a few things. Now you have my 100% attention.

Kelly Diels: You know a girl likes that.

Robb Sutton: Yes, they do!

Kelly Diels: I mean, so I’ve heard. Tell me, dahlink, how you got started with review sites.

Robb Sutton: Well, it all started with an idea that had nothing to do with reviewing product, ironically.

Kelly Diels: Go on…

Robb Sutton: I had this idea that I was going to have a trail review site for mountain biking that was all user submitted content. About 5 minutes into the process, I realized that you can’t have user submitted content without traffic. So I started a blog where I reviewed parts, bikes and other related products and that took over what was the user submitted part. Basically, I used it as a traffic generator that became the model for Bike198.com.

Kelly Diels: So you’re inadvertently brilliant?

Robb Sutton: I fell into it…I like to think of it as a progression. I had some experience being on the other side of the fence in the corporate world, so I knew how to quickly adapt that to blogs.

Kelly Diels: How did you get your pretty mitts on things to review?

Robb Sutton: Well, back when the industry had no clue who I was, I relied on current contacts and cold contacting through emails and phone calls. Now it is a combination of them finding me and me finding them.

Kelly Diels: Do you work with PR companies, or companies directly?

Robb Sutton: I work with PR companies, directly with manufacturers, distributers and some retailers.

Kelly Diels: And for those of us who just got really scared, what does that process look like?

Robb Sutton: Typically, I send out an email explaining who the site is, what we do and what the process is. I then include examples with some simple search engine and site stats. If it is a smaller company, you pretty much get to the right person right away. A lot of times through that email and you are off and rolling. For larger companies and some smaller ones, a follow up call is required to get in touch with the right person. Phone calls always convert better than emails, but I always start with emails so they know who you are when they pick up the phone.

Kelly Diels: Gawd, it is almost like online dating.

Robb Sutton: Yeah, a little bit!

Kelly Diels: What sorts of strings get attached to the product and reviews?

Robb Sutton: No strings really. Sometimes you have to return the product if it is super expensive. But sometimes you don’t even have to do that. Most companies know what blogging and review blogging entails these days.

Kelly Diels: Which brings us to Disclosure, baby. Tell me how you handle Big Brother, the FTC.

Robb Sutton: I have a blanket disclosure on all of my sites that is linked up in the footer that explains links, products, etc. I am very up front with my readers on the process so there is nothing that is hidden that could be considered bad by the public or FTC. Everything is up front and honest.

Kelly Diels: And if you’re just not into her the product? What do you do?

Robb Sutton: I write the truth! Bottom line is that you are writing for your readers and not the companies. If you are just going to write glorified advertisements then no one is going to take you seriously. Back everything up with facts and everything turns out ok.

Kelly Diels: Sing it, sister.

Robb Sutton: Even companies I have given poor reviews to in the past still send me stuff. They want to reach the audience and you want to deliver the goods. Its a win/win.

Kelly Diels: All press is good press…

Robb Sutton: Actually…that is very true.

Kelly Diels: Seriously. The first time someone trashed me online (Allyn Hane, lover, I’m a-talking to you) I was delighted. But I digress. What kind of traffic are companies and agencies looking for?

Robb Sutton: They are looking for targeted traffic.

Kelly Diels: What does targeted traffic mean?

Robb Sutton: The specific number isn’t really important. 100 targeted eyes are better than 10,000 that aren’t targeted.

Kelly Diels: How do you demonstrate “targeted eyes”? I feel like we just took a sharp right turn into a gun range.

Robb Sutton: Targeted traffic is basically qualified leads. When someone subscribes to your blog, they are targeted because they want to digest that subject matter. And don’t shoot!

Kelly Diels: I can’t. I don’t even know the process for getting a gun permit in Canada but I know it takes forever. Also I’m a lover, not a shooter…Tell me about a review or a product that got you all hot ‘n bothered.

Robb Sutton: Hmmm…

Kelly Diels: I went to a sex toy party on Friday night and, given the subject of my blog, I’m pretty sure that I can review those products and claim them as a tax deduction. But again, I digress.

Robb Sutton: [laughs, possibly uncomfortably] Yes, you probably could…An example of an interesting product/review was when I got in a fork from a manufacturer because of comments I made about how I didn’t like the direction they were heading.

Kelly Diels: Umm… “got in a fork”? Dude. translation, please. I mean, it sounds naughty but even I’m drawing a blank.

Robb Sutton: Suspension fork. It is the thing on the front of the bike that is the suspension.

Kelly Diels: Oh it is a thing. Not a position. That clears everything up. So why was this fork so fabulous?

Robb Sutton: Because it was sent to me after I made the comments. I backed everything up with facts on why I didn’t agree. And they said…ok…try it out for yourself. I thought that was pretty cool.

Kelly Diels: That’s pretty smart marketing, actually. And..? How was the fork?

Robb Sutton: Great product. Still don’t agree with that one aspect.

Kelly Diels: I had no idea forks were so controversial.

Robb Sutton: They are a reputable company that produces a great product but I just didn’t agree with the “new standard” they were introducing.

Kelly Diels: Ok, Mr. Fancy Britches. I get it. YOU HAVE OPINIONS – which, I’m thinking, is probably why your review site works.

Robb Sutton: Doesn’t everyone?!

Kelly Diels: Yes, darling. That was a compliment in disguise. I think that is what reviews are about – good, solid, well-reasoned opinions…So. You get loads of free products, but how do you make money? You can’t eat forks.

Robb Sutton: Affiliate revenue, direct advertising, e-book sales like my Ramped Reviews (aff), pay-per-click…I like to diversify.

Kelly Diels: And what about all the companies kissing your…site? Do they ever buy advertising?

Robb Sutton: They do, and it is a lot easier to sell advertising space to people you already have a working relationship with.

Kelly Diels: And what does that do to the separation of church and state, editorial vs revenue? Do you feel awkward about reviewing your clients?

Robb Sutton: Not at all. Everything is explained up front. No surprises. Keep in mind that nothing is written that is pure emotion or inflammatory. It is all fact-based opinion.

Kelly Diels: That’s right. We all have niches. MINE is pure emotion and inflammatory prose. So stay outta that one, my love…Ok. Going general: do you think review sites of higher ticket items – like bikes, cameras etc – work better than other kinds of review sites, like say restaurants or experiences?

Robb Sutton: I think it is about equal. I also run a coffee review site (coffeeobsessed.net) that does really well and it is very young. I think the possibilities are wide open.

Kelly Diels: Now you’re speaking my language. The language of love/caffeine.

Robb Sutton: Yeah, I’ll leave that one to you! I’m obsessed…I’ll admit it.

Kelly Diels: With coffee? Or mountain bikes?

Robb Sutton: Nothing better than a great cup of coffee, but both. And blogging, of course.

KellyDiels: I ask because I like coffee and mountain bikers. I may have mentioned this before: THIGHS OF GRANITE.

Robb Sutton: Very true! And a strong grip.

Kelly Diels: If you do say so yourself. With whom can I verify this? I have to fact-check, you know.

Robb Sutton: Any cyclist…but especially mountain bikers because we have to ride technical terrain.

Kelly Diels: Well, there you have it. The secrets of review sites, hot coffee, and rock hard…thighs.

Kelly Diels writes for ProBlogger every week. She’s also a wildly hireable freelance writer and the creator of Cleavage, a blog about three things we all want more of: sex, money and meaning.

Post from: Blog Tips at ProBlogger.

Rock Hard Thighs and Cold Hard Cash: Robb Sutton Spills His Tawdry Review Site Secrets

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I started blogging in 2002.

Since that time the question I’m most frequently asked by strangers at parties who hear what I do has changed 3 times.

• what’s a blog? (2002-2004)
• how do you make money blogging? (2005-2008)
• you still blog – doesn’t everyone Tweet these days? (2009-2010)

I wonder what’ll be next?

Post from: Blog Tips at ProBlogger.

My Most Frequently Asked Questions at Parties (since 2002)

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A Guest Post by Johnny B Truant

I saw Gary Coleman on TV last night and thought, “That guy has to be rich. Everyone knows who he is.” But then I realized that Gary’s true paid celebrity ended over 20 years ago, and whether he’s rich or not today is really a matter of luck and investment.

But that’s not how most people are wired to think. We figure that if someone is or ever was in the public eye, they probably have a big fortune. But who knows how well Gary invests? It’s distinctly possible that most of us here have more money then he does.

This whole thing occurred to me after a few people asked me if I was loaded yet, since I made Problogger’s list of 30 bloggers to watch in 2010. They were asking tongue-in-cheek, but there was a grain of truth behind it. The simple fact is that people equate popularity with riches, and that’s not accurate at all.

I’ve gotten a fair number of new readers and Twitter followers since that list came out… but I had a couple of five-figure months under my belt already. And I did that with subscriber and reader numbers which were hardly stellar.

Do you want fame? Or do you want fortune?

If you say “neither,” then scale it back. A more moderate stopping point on the “fame” spectrum would be getting more readers and more followers. That’s probably the #1 stated goal among bloggers, in my experience. But a close second is along the “fortune” spectrum, and it’s simply to make some money from what you do.

I’m going to make a guess here. It isn’t backed by any scientific research, but I’ll just bet that it’s right.

I think that of the two, people actually want “fortune” goals more. But I think I hear “How do I get more readers/traffic/subscribers?” more often because people think that increased popularity will lead to increased income.

But… nope, sorry. Not always. If you want a “fame” goal, great. But if you want “fortune,” shoot directly for fortune instead of trying to make it happen via fame.

I know several people who are very, very popular online but who don’t really make much at all from their blogging. Large numbers of readers do not equal large amounts of income.

If you’d like to shift your goal to making a living online instead of just entertaining as many people as possible, I have tips. (Or rather, because what follows came out of a discussion I had with fellow Problogger list-mates Naomi Dunford and Charlie Gilkey, it’s more accurate to say that WE have tips.)

1. Your audience has to be willing to buy

I’m not saying they have to be willing to buy from you. I’m saying that they have to be willing to buy period.

I used to write a pure humor blog, and tried to make money via AdSense and selling a hard-copy book. What I discovered is that the humor audience is largely unwilling to buy. They want to read funny stuff and then move along. I made virtually nothing while doing pure humor, despite decent popularity.

Along the same lines, blogs centering on a small-budget hobby are going to have more trouble selling at high prices than those about a more expensive hobby. Charlie G, who I mentioned above, gives the example of a blog about crafting vs. a blog about photography. If both promote a $39 e-book, the photographers are less likely to hesitate at the price because they’re used to paying higher costs for products and services in their niche.

2. You have to be willing to sell

I’m always shocked by how many people seem to think selling is dirty. If you handle selling correctly, all you’re doing is referring something that you think is fantastic. It could be your own product or an affiliate product, but what you’re doing is seeing a need and saying, “I have a fantastic product or service that would really help you out.” It’s not about getting people to spend money on something they don’t want, or out of pity. It’s not like when the local grade school kids come to your door selling fruitcakes, and you buy one just to support them.

Establish early and gradually that when a cool product comes around that your people could honestly benefit from, you’ll let them know about it… with an affiliate link if it’s not your product. Your “true people” will understand such offers in the way they are intended, which is in the spirit of mutual benefit.

3. You have to build a reputation for being trustworthy

I’m able to generate good business off of a relatively small list because those people have grown to trust me. They know I won’t promote something I don’t believe in, and they know that I won’t put out a junky, half-effort product. They also know that I’ll tell them the shortcomings of a product or service before praising it (I think I should trademark my concept of the “anti-guarantee,” discussed a bit more in this Problogger post I wrote about building trust (http://www.problogger.net/archives/2009/08/30/how-to-boost-your-business-by-developing-bulletproof-trust/)… what do you think?) and that when I don’t know how to do something, I won’t pretend that I do.

When you’re operating online, you’re asking people to give you money in advance for something, usually without talking to you, seeing you in person, hearing your voice, or really knowing anything about you. If they don’t trust you impeccably, they’ll never pay you.

4. You have to generate goodwill

The best way to get great mileage out of even a small list is to have that list work for you. I swear, sometimes I think my readers and past clients are out there beating through the brush to find new people to send my way. And the reason this happens is that I try to provide great service to all of them. I’ve done small add-on jobs for free, answered questions and investigated issues for non-clients, and helped people out of tough jams. This creates happy folks.

At the end of last year, I did a free blog setup promotion. If a customer would simply purchase their hosting (which they’d need no matter who set up their blog) through my affiliate link, I’d set them up gratis. I did this largely because it’s a great win-win — a way for me to profit without the money coming directly from my clients. But what I didn’t see right away was that all of those people who were so grateful that I didn’t charge them anything would start sending their friends to me.

5. You have to have faith in yourself, as a real person

I’m a huge evangelist for what I think of as “personality marketing” over the more common ways to do business online. Personality marketing means using your own voice and own self and own talents to generate value rather than embarking on an anonymous system like niche websites or AdSense.

Now, I don’t want the niche sites or AdSense people getting all up in arms here. I’m not saying those things can’t work, but I am saying that they didn’t work for me and probably won’t work for anyone who’s at all like me. Or at least, they may not be your best use of time if you’re like me. I’ve been using AdSense for over a year now, and just recently got my first check. It was for $111, which I can now make in around a half hour by just “being Johnny.”

(Now, if you can’t make $111 in a half hour or an hour or a day or even a week by employing some personality marketing, could you make it in a month after a bit of practice? If you can, you’re still beating my AdSense earnings by a factor of twelve.)

Remember, it’s not always about numbers. If you want a huge list just so that you can have a huge list, great. If you want a hundred thousand RSS subscribers, great. If you want to be an internet celebrity, great.

But those things don’t automatically translate to income. If you want to pursue the cliche of “becoming rich and famous online,” you’ll need to pay attention to both sides of the equation.

—————
Johnny B. Truant is your source for business and technology coaching, building blogs and websites, and eating nachos. You can find him at his website, and you can find the full discussion between Johnny, Naomi Dunford, and Charlie Gilkey at The Charlie and Johnny Jam Sessions.

Post from: Blog Tips at ProBlogger.

The Blogger’s Guide to Becoming rich (Instead of Just Famous)

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Posted by randfish

Prelude: I’ve long promised blog readers a detailed accounting of my experiences raising capital over the course of last summer and into the fall. My apologies for the long delay, and to those seeking more SEO-focused content. This entry is lengthy, detailed and designed to share as much as possible, so hopefully you’ve got a good 20 minutes to read it We’ll be back to SEO tips & tricks tomorrow.

Sections in this post:

• Introduction & Venture Capital Primer
• Building the Pitch Deck
• The Pitch Itself
• Getting Introduced to Venture Capitalists
• The Meeting Process
• What VCs Liked and Didn’t
• The Final Outcome & the Future

Introduction to our Process & Venture Capital

In this post, my goal is to walk you through the process we used, the feedback we received and the final results and decisions. Fundraising is a demanding, lengthy, emotionally charged process and something that challenged me personally more so than any other single part of my life in the last 5 years. I hope that by sharing my experience I can help others who start down this road and give you an idea of what to expect. The more knowledge you have, the less fear can hold you up; that’s what this post is here to accomplish.

First, I’ll try to provide some context around why we went to raise money in the first place, how we constructed our "pitch deck," how we got introductions and meetings to a large number of VCs and the progress from initial meetings to partner meetings to final decisions.

SEOmoz started the VC process in June 2009, in possibly the worst climate for fundraising since 2001. You can see the stark contrast from our timing with the previous round in, arguably, the best environment since 2000.

Graph of Venture Capital Invested by Quarter (via NVCA)

Ventue capital is "expensive" money, not just in terms of the price paid in equity, but in the obligations and requirements that come with it. In our Series A, we took money more like a seed investment – Michelle & Kelly saw potential and wanted to see what could happen. Raising another round meant aiming to hit the "home run." For those who are unfamiliar, the startup world has built an entire lexicon around the "seriousness" and exit-size focus of a company that ranges from "lifestyle" businesses that don’t try to achieve multi-million dollar scale to "home runs" that exit for $1billion+.

Note that there’s plenty of criticism of this model from both the venture side and from entrepreneurs and operators. Lots of other blogs have talked about the imbalance in interests between founders and investors and current market conditions vs. expected VC portfolio returns. I won’t re-hash these, but as a broad overview, most venture funds have 100s of millions of dollars from their LPs (Limited Partners – folks like large endowment funds, pensions, government entities, extremely wealthy individuals, etc). In order to provide significant returns, they follow a model of investing in a few dozen startups, most of which will go bankrupt and, hopefully, 1-3 of which will provide most of the profits in billion dollar+ "exits" (an acquisition or IPO).

This somewhat odd scenario means that VCs are often investing in "long shots" to be huge, rather than low-risk bets for more reasonable exits (for example, an 80% chance of exiting for $150 million is not nearly as interesting as a 10% chance of exiting for $1 billion). As an entrepreneur, particularly a first-time startup guy who has $3,000 in his checking account, an orange scooter and a small apartment, the incentive is completely the reverse. Fred Wilson wrote a bit about this disparity in his post on Swinging for the Fences.

In order to be appealing to a venture investor, especially those with larger fund sizes ($300 million+), a company must be able to show a credible path to that $1 billion+ exit. Since the average VC-backed exit is actually something under $100 million, it’s a bit of a "wink, wink; nod, nod" game. Both parties recognize that a more likely outcome is something far lower, but the "sell" has to include the envision-able path to hundreds of millions in annual revenue that can yield those tremendous exits. Again, I’ll point to Fred, who wrote about the Venture Capital Math Problem (and a Part 2).

Building the Pitch

You can read a lot more about the catalysts for fundraising on my post – My Startup Experience: VC, Entrepreneurship, Self-Analysis & the Road Ahead – so I’m going to dive right into the process for creating a pitch deck.

We started with a lot of great advice and direction from entrepreneurs who’d been down this road before and also got terrific help from the partners at Ignition, for whom we delivered a "mock" pitch and collected feedback that helped push us in some smart directions. As a base, we used the model promoted by VentureHacks and sprinkled in bits liberally from Dave McClure’s excellent How to Pitch a VC deck and Guy Kawasaki’s – Perfecting Your Pitch (PDF).

The process itself involved sheets of paper affixed to a large wall, which we’d then swap around, tear up, mark up with pens and generally treat like a post-it-note fight. We started with blank paper that we’d draw on, then began creating real slides in Powerpoint. It was fun – exhilirating and stressful, yes, but also exciting. We were going to raise millions of dollars, put that money to work and build incredible product and an amazing revenue stream.

Before we did that, we had to get beaten up a bit first. I mentioned that we gave a test-run pitch of the deck to the board at Ignition Partners (our first-round investors). We also privately delivered the pitch to a handful of CEOs and angel investors, hoping to garner feedback and assistance (these weren’t serious attempts to raise money, as we weren’t seeking an angel-type deal). The great part is, we really did get beat up. I have pages and pages of notes from meetings where I showed the pitch to other entrepreneurs and got feedback ranging from "this is almost perfect, just tweak X" to "you need to start completely from scratch, and here’s the deck I used to raise $XY millions in my last round."

I’m going to come back to this again below, but the generosity of time, energy and prior work (even stuff that’s usually very private) from other startup CEOs and entrepreneurs was absolutely remarkable. I found none of the closed-door mentality or brash indifference I expected, especially in Silicon Valley. Founders and CEOs, who had multi-million dollar businesses to run would take hours out of their days to have lunch, walk through the deck, and introduce us to VCs they knew. I’ve rarely known so much goodwill from people who have so many demands on their time.

The Pitch Itself

Let’s get to the meat and potatoes, as I’m sure by now you’re hungry :-)

The "elevator pitch" sounded something like:

SEO is huge – every site on the web is doing it or wants to be. But the process is broken – it’s hard to learn, hard to measure, hard to know what’s working and far more art than science. We are going to build software that helps transform SEO into a mainstream marketing activity, the way analytics software (Urchin, Omniture, etc.) did for web visitor reporting or email software (iContact, ExactTarget) did for email marketing.

Unfortunately, I’m not going to share the exact deck we used, nor all the details from it. Transparent though I love to be, there’s a lot of information and data points that aren’t fit for public consumption. It’s less that I believe any of this data could be used to materially harm us and more that we’ve made promises to our investors and board to keep this stuff internal for now. I will say this – while I believed strongly in the deck when we first created it, that confidence was somewhat eroded by the end of the process. In late September, for example, I think I could have done a far better job crafting and delivering the pitch than when I gave my first one in July (only 60 days before).

Below, you’ll find a modified version of the original pitch deck (we later crafted many customized versions with slides particular VCs wanted to see). It doesn’t include things like a P&L statement or specific customer retention/churn/lifetime value metrics, but hopefully it will still be valuable and interesting.

Since I didn’t include revenue/profit numbers in this deck (and it’s hard to get a sense for how a potential investor might perceive this without it), I’ve included some non-specific growth charts below, illlustrating the top-line numbers in a profit-and-loss statement:

 

I’ve also left out some portions of our very large appendix. The appendix, in fact, was one of the most interesting parts of the deck. When we started the process, it was 5-6 slides with additional information about market size, importance, some detailed stats on membership, lifetime customer value calculations, etc. A month into the process, it was nearly 30 slides, attacking every question, problem or issue that had been raised in meetings where we didn’t have an immediate solid answer or data point. I really believe that the VC process is all backwards in this fashion. The pitching company should:

1. Have an introductory call to see if there’s interest
2. Attend a sit down meeting with a partner or two, some associates and a dilgent notetaker to get all the questions, concerns and issues on the table
3. Go back home, make a great deck that addresses the things the VCs care about
4. Come back and give the formal pitch

Instead, many pitch meetings at the beginning made us feel like amateurs and it was only at the end of the process that we felt more comfortable tackling any question thrown our way (mostly because we’d heard nearly all of them before). In my opinion, venture capital shouldn’t be about who has the most experience pitching, or who can deliver the best pitch, but about who has the most exciting, interesting company. In the current model, it feels like 80% sizzle (pitch) and 20% steak (company).

Then again, what do I know about the VC process? I got lucky in my mid-twenties, landed a bit of capital, and have never invested or even studied the venture model the way the professionals have. Perhaps ability to pitch and success of company are well correlated metrics or at least, indicative of company performance. I’ll leave that to those more knowledgable on the topic.

In any case, now that we had this story to tell (the pitch deck), we needed an audience.

Getting Introduced to Venture Capitalists

I initially presumed that our investors (Kelly & Michelle) would drive this process of introductions and networking, but in reality, this is apparently a suboptimal methodology. Michelle explained (and many others concurred) that entrepreneurs themselves provide the best introductions. Thus, it was my task to find other founders & CEOs who would provide positive connections to the investor community. Outside of Ignition, I knew virtually no one in that sphere, so this would be my first formidable challenge.

Thankfully, the entrepreneur community was incredibly kind – generous to a fault, actually. Busy CEOs of important startups took time away from their jobs to sit down for coffee with me, buy me lunch, take me to dinner, review the pitch deck we’d built, give advice and make introductions to a very impressive set of folks in the VC world. In exchange, I did the best I could to help them with SEO, and we hosted a number of great companies at our offices in Seattle for hour-long SEO reviews. It will be hard to thank everyone here, but I’ll do my best:

• Seth Besmertnik from Conductor
• Dion Lim & Gautam Godhwani from SimplyHired
• Jeremy Stoppleman from Yelp
• Dave Goldberg from SurveyMonkey
• Alex Schultz from Facebook
• Barnaby Dorfman from Foodista
• David Niu from BuddyTV
• Jonathan Sposato from Picnik
• Trevor Traina from Driverside
• T.A. McCann from Gist
• Merril Brown from Curious Office
• Nirav Tolia from Fanbase
• Mike Cassidy from Ruba
• Maria Thomas from Etsy
• Nathan Kaiser from nPost

I’m indebted to all of these great folks and I can only hope that the SEO help we provided to many of them has returned some of that.

However, this part of the process is also where we made our first big misstep. Explaining will take a bit of background.

SEOmoz’s business model is what’s generally called "self-service SaaS." Similar to most SaaS companies, we sell software in a subscription/licensing type of model and, as has become common in the last few years, do it "in the cloud" (meaning we don’t install software; everything’s run remotely over the web). However, we’re very different from traditional "SaaS" in that we have no sales team. There isn’t a single person at SEOmoz whose job title or description includes sales (though, technically, if Gillian and I had descriptions, "sales" might be part of that).

Our business model and margins might result in an acquisition price (sale of the company) of between 3-6X trailing revenue, depending on the market circumstances, growth rates, strategic importance, etc. This is massively favorable to consulting revenue, which typically garners 1-1.5X. Put another way:

• An SEO consulting business sale price (assuming $5 million in trailing revenue) = $5-7.5 million
• An SEO self-service SaaS business sale price (assuming $5 million in trailing revenue) = $15-30 million

It’s no surprise that investors are far more interested in these "scalable" business models that have higher exit multipliers. This is a big reason why you rarely ever see venture or angel capital flowing into consulting firms. The margins on a consulting business hover between 40-55%. Margins in software get closer to 80%+ and scale isn’t proportionally tied to cost (in most consulting businesses, the more you want to make, the more consultants you need to hire). 

In our situation, a VC in the B-round would be likely to get something between 15-20% ownership in the company (depending on valuation, amount in, etc). Let’s look at a chart that helps explain why we messed up from a strategic standpoint in the introductions process:

Doing the math, even at the high end of the revenue/exit numbers, the VC is making 15% x $450 million = $67.5 million. If you have a $300 million fund and invest in 20 companies, you need at least 6 and hopefully 7-8 of those to hit in that range. The odds say that 10 of those companies will go under, 8 will have much more modest outcomes and 1-2 will return the lion’s share. Thus, big fund VCs are going to be seeking portfolio investments that address multi-billion dollar markets and have a shot at that massive IPO/acquisition.

A smart entrepreneur would look at this ahead of time and specifically chase venture capital firms with small-moderate fund sizes. Unfortunately, we didn’t plan ahead intelligently on this, and thus talked to many folks with funds between $100-500million. At those levels, it’s the 1/20 or 1/50 billion dollar+ exits that bring all the returns for the VC. They’re not seeking a reasonable bet on a company that has an long-shot, outside chance at a $500 million exit. They want 20 or 30 companies with 1 in 20 or 1 in 30 chances to go all the way to that billion dollar acquisition or IPO.

Our introductions came streaming in very unstrategically. I met with lots of entreprenuers and people in the tech community, who put me in touch, usually via an email introduction, to a partner at a firm. We’d exchange a couple emails to set up a time to talk, chat for 15-45 minutes (sometimes longer) and then schedule an in-person meeting for the next time I was in their area. Those introductions didn’t come all at once – in the first 30 days of actively pursuing introductions, I had ~10 calls. Then, over the next 40 days, more and more introductions would roll in from people I’d connected with in the past couple months, and those would turn into calls and meetings.

I talked to entrepreneurs who were much more strategic and exacting about their introductions process (and plenty who followed a similar pattern to what I did). In hindsight, it wasn’t perfect, but I did get to meet a tremendous number of very impressive investors and get their feedback.

The Meeting Process

During our fundraising experience, we connected with a lot of VCs. I’ve taken a screenshot of the the firms we talked to below (from my Google spreadsheet file on the subject), though I won’t go into more detail about who from each firm we talked to or how far along we progressed with each of them. I think there’s an expectation of privacy most VCs have, and I want to respect that. BTW – I’m not listing every single firm we talked to, but this is a more-than-representative sample and hopefully fulfills our core value of transparency.

Initially, we were very excited and I’ll try to explain why. When starting out, our expectations (thanks to both advice from other entrepreneurs and via blog posts/articles the web) were that 10-20% of phone calls would lead to first meetings , a few of these might turn into partner meetings and we’d hopefully get a term sheet or two at the end. Instead, the funnel looked like this:

As you can see, we had phone calls with 40 firms, and had a surprisingly high conversion rate to first meetings, which had us initially enthusiastic. VCs are notoriously busy, and scheduling time with them is often a massive challenge. To have such a high percentage of firms interested in such a dour climate made us believe we could buck the trend. Unfortunately, it also meant lots of time we needed to invest in preparing for, and in most cases, flying out of Seattle for in-person meetings.

The entire process from the first call I had with a partner (on June 18th) to the time we stopped actively pursuing funding (September 30th) was 93 days. In that time I made 5 separate roundtrips to San Francisco, which adds up in hotel, airfare and car rentals. Raising money takes time, resources and a tremendous amount of energy, not just from the founder/CEO, but from the entire team. Adam & Matt were consistently pulled away from day-to-day and strategic work to create and refine the product demo. Sarah, Christine & our accountants labored to provide detailed financials. Jeff often had to postpone critical work items to make custom queries against our members database to pull an obscure metric about recitivism, churn or usage.

The meetings themselves are fascinating. I’ll be honest – the first few were completely intimidating and overwhelming. Like most times in life when you’re nervous, it wasn’t until I stopped worrying and (very nearly) stopped caring, that I got good at the process.

You arrive at a non-descript, but very well-adorned office building, almost all of them on Sand Hill Road in Menlo Park. An assistant, who is nearly always young, female, very attractive and somewhat cold (though there were a number of exceptions), greets you in the front room and will offer a beverage. I typically waited only 5-10 minutes, though a few times it was 20 minutes or more, after which I’d be escorted into a meeting room with a place to plug in my laptop to a projector or screen. VC offices provide free wifi (though I always brought my AT&T aircard just in case) and are designed to impress – expensive furnishings and artwork, placards showing the successful companies they’ve backed and the massive IPOs/exits those companies had.

The VCs themselves ran the gamut, from friendly, approachable and jovial to overly serious, harsh and distant. Intentionally or unintentionally, they all have some emotional walls up, which I believe are out of necessity and certainly don’t begrudge. If you’re meeting with dozens of entrepreneurs every week, you can’t get personally attached or build close relationships with even a fraction of them, especially if you’re not going to make an investment. It’s a very different experience from the many hundreds of other meetings I’ve had in my professional career, where establishing rapport and working in a mutually positive fashion is the norm. VCs need to drill down on specifics, call out your flaws, explain what they don’t like and gloss over a lot of positives in the process. A typical partner meeting lasts precisely one hour, and in my experience, that rarely deviated (a few times we ran over, and more than a few times things started late).

Second meetings are often pretty similar in format, though there’s typically more than one partner from the VC firm in attendance, as well as an associate or two. I also found that it was extremely helpful to bring Sarah Bird (SEOmoz’s COO and a guru when it comes to our financials) as well as Nick Gerner and/or Ben Hendrickson (who convincingly play the role of "way smarter about technology than anyone else in the room") to these meetings. They’d sometimes be a bit longer, and would almost always request a much greater degree of detail, as well as significant "objections" ot the investment, which were frequently presented as challenges we were intended to conquer using slides, data and verbal acuity.

Following both first and second meetings would be the impossible-to-parse "thanks, we’ll be in touch." We’d take guesses about which VCs were actually interested and would follow up vs. those who’d email to say "no thanks" or simply never communicate again (the latter bothered me at first, but once you realize it’s just part of the accepted cultural practice, it’s fine). Surprisingly, we were never good at this. We’d often mistakenly think one VC was interested when they weren’t and vice versa. They’re a notoriously hard-to-read bunch, perhaps intentionally.

I have a much tougher time presenting a representative partner meeting, as we only had two. They almost always take place on Monday, though, and you’re often back-to-back scheduled with pitches from other entrepreneurs. A larger, board-style meeting room will be filled with all of the firm’s partners and you’ll present the same pitch you made to the first partner to this group. Questions can get a bit strange if my experience is any guide – tangents and off-topic discussions come into play and it seems to be up to the entrepreneurs to keep things on track. I think this happens because in any given partner meeting, a good number of the partners won’t be familiar with your industry, company or technology, and may not even be interested. I imagine that if you specialize in clean-tech investments, listening to an SEOmoz pitch can get a bit boring, and you might, naturally, focus on the one or two areas you know something or have heard something about.

I will say that my experience with the vast majority of VCs we saw was not nearly as negative as what Fred Destin wrote about in his posts for VentureHacks – The Arrogant VC: Why VCs are Disliked by Entrepreneurs and Part 2. Certainly a few of these traits came out, but by and large, I felt these were responsible, talented, experienced individuals doing a hard job the best they could and putting forward both a serious effort and respect for me, my company and my time.

For a completely alternate perspective on what it was like for my wife, who accompanied me on 2 of my 5 fundraising trips, check out A little more than 24 Hours in Palo Alto and San Francisco. I do wholeheartedly recommend someone who loves you unconditionally and pretends to be unable to identify a single flaw in you, your company or your pitch, supporting you in the VC process. It can get very lonely and emotionally turbulent.

What Worked & What Didn’t

When it came time to analyze the results, we tried our best to aggregate feedback, both positive and negative, for our board meetings back in Seattle. Early on, we focused on refining the pitch, but we were (I think uncommonly) stubborn about changing our business plan or product roadmap significantly to suite investors’ opinions. We felt (and feel) strongly about the direction we want to pursue, and that may have been perceived negatively by some (though I know it was a positive to at least one investor who talked to us afterwards).

Following any "no" response, including a "no answer" within a couple weeks following the meeting, I’d email and ask for a phone call to discuss. 60%+ of the VCs we had met in person took those calls and explained to us some of their reasons for rejecting the investment.  I’d specifically ask what they liked, what they didn’t and what they recommended for us to improve. I was both impressed and grateful to receive a number of thoughtful, honest answers, and encountered only a couple of folks who clearly didn’t remember our pitch or company well enough to provide a cogent response.

Some of the things the VCs generally liked:

• The Self-Service SaaS Business Model – although there were a few dissenters who thought we should pursue a more classic SaaS business with tele-sales would be better, most were supportive of the self-service methodology.
• The Community & Userbase – that’s you! Great work, gang
• The Marketing/Sales Funnel – investors tended to like the freemium/content model that attracted potential customers at a low marketing cost
• The Technology Achievements – nearly all of the VCs with technical backgrounds were impressed by what we’d achieved with the Linkscape web index and ranking models work, particularly on such a small amount of capital.

Unfortunately, there wasn’t a clear winner in the reasons VCs didn’t want to make an investment. I did, however, make a quick chart noting which reasons were most frequently given by the investors for why chose against us:

It’s important to note that many of the VCs who said no that we followed up with gave multiple reasons for the decision. Some of these we found very reasonable and agreed with, others we struggled with. The most perturbing by far were the few folks who came back and said they didn’t like to back the consulting revenue model and would be more interested once we were more product-focused. When I’d explain that we had 80%+ of revenue for the past three years coming from the self-service SaaS product, awkward silences would follow. Still, these are investors who likely talk to hundreds of companies each year, so it must be incredibly challenging to keep things straight – and it speaks to our need to move away from consulting in our branding and perception.

The Final Outcome

It’s likely very obvious at this point that we didn’t receive term sheets or offers to fund. In actuality, that’s not technically the case – we did have firms interested, just not a the relatively high pre-money valuation numbers we sought. As you can see in the graphic above, there were a number of VCs who may have offered us terms at a lower valuation, though it’s hard to say for certain.

The reason we went in with a high valuation "ask" goes back to the very beginning of the post. From the founders’ perspective (and those of employee shareholders), an exit has to be judged through the lens of ownership percentages. If I or Gillian or Sarah owned, for example 50% of SEOmoz’s shares (none of us do - this is just an example), in a $20 million exit, we’d make $10 million. If venture capital comes in and dilutes that to 35% ownership, that number drops to $7 million in the same exit scenario. Hence, every owner of SEOmoz shares has a vested interest in seeing the final exit price reach the highest possible figure while maintaining the lowest possible level of dilution.

My understanding is that it’s very unorthodox to present a minimum pre-money valuation to investors prior to a term sheet. I believe this is because you’re potentially "laying too many cards on the table" and you may actually be hurting yourself if the VCs planned to offer a higher pre-money figure. We did it both because we like to be transparent and because we hoped to prevent ourselves from wasting time with investors who couldn’t meet our minimums. Our hope was that by giving that number in the first conversation (over the phone) and in the initial pitch deck, we’d achieve similar results as those we had in the past by publishing our prices for consulting – reduce the target market size and improve the quality.

I tell this story about our VC experience to a lot of people – it seems to be a subject that attracts great curiousity and I, of course, love to share. Most of the time, folks follow up by asking "are you disappointed?" and my answer has been the same since October. I’m not disappointed we didn’t get funded. In fact, the more time passes and the more I think about the pitfalls that could have come with another round of investment, additional board members and pressure to reach $75-$100 million in annual revenue, the more I’m glad we didn’t. However, I do regret the decision to seek funding – it cost our team countless days and weeks of productivity, took our eyes off our primary goal of delighting our members and customers and, in the end, was a learning experience with a shockingly high cost.

That said, I do think we learned a tremendous amount and really helped clarify the vision internally and to our existing board members and investors about where this company is going and what our roadmap looks like. We had dozens of smart, analytical, experienced investors reviewing our plans and ideas, and we received a lot of very positive feedback. Nearly everyone we encountered had positive things to say about the business’ future, regardless of investment, and I’m glad we were able to be in a situation where we could turn venture funding down. I have friends here in Seattle and in the Bay Area who didn’t have that luxury – who HAD to get funded, no matter the cost, because their company’s future and employees depended on it. That’s a burden I don’t wish on anyone, and I hope more and more startups are finding ways to live lean and do more with less.

So, it’s 3:45am and I’ve been working on this post on and off since before the holidays. There’s so much more I want to add, but I think I’ll leave that up to you. If you have questions I can answer, PLEASE post them in the comments and I’ll do my best to incorporate that material into the post as it makes sense. Thanks for all the support, kindness and patience – I hope this has been valuable.

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According to Bruce Clay, the current concept of search is that a user has to know what he is looking for in order to type it into a search engine. Although the user might not know the specifics of what he is looking for, he has already made the decision to go to a search engine and find information. Clay, however, believes search should be an extension of marketing since most searches are a direct result from other forms of media.

Mike McDonald of WebProNews pointed out that this new view of search could raise problems for businesses. He said if businesses pay money for ads that prompt searches, they could be driving traffic to their competitors if they are not number one in the search engines.

To do it the right way, Clay suggests planning a strategy. First of all, decide what you want to promote. Secondly, optimize your website so that you are number one, at least with PPC. Thirdly, decide to dominate and succeed. Lastly, get a billboard with a catch phrase or write an article with a catch phrase in it. These steps will prompt people to search based on the action phrase.

As you do this, make sure that you have fully optimized. The last thing you want to do is not be number one after you have taken the time to promote a product. Clay says the SEO needs to be ready to respond to the promotion. He also issues a warning in regards to the media promotions: “If you don’t do the offline right, nobody knows to go search for you.”

In summary, think about how the user would search and tie it into an action phrase to brand with your business.

What are your thoughts regarding search as an extension of marketing?

In the last few minutes Blogger.com has flipped the switch on a new way for Blogger blogs to be monetized from within their system – an integration with Amazon Associates program. Expect an official announcement from Blogger/Google shortly on this new partnership (update: here it is) – but in the mean time, here’s the scoop.

Previously the ‘monetize’ tab on the back end of Blogger blogs only had options to set up AdSense – but today you can now do the same with Amazon.

If you’re a Blogger.com blogger log into your blog – click the monetize tab and choose Amazon Associates. Here’s what you’ll see:

You can either set up a new Amazon Associates account if you don’t have one or login with your existing one.

WIth it enabled you can enable a product finder in your blog editor which will enable you to add Amazon links and/or images as you’re posting blog posts.

I’ve only just tested it but it all seems pretty seamless and I’m sure for those wanting to make money from a Blogger blog it’ll be an appreciated new feature – particularly in the hottest buying season of the year.

It’s also an interesting story on the front that two major online players – Google and Amazon – are working together on this. It makes sense for it but as far as I know it’s the first time the two have done anything on this scale. It’ll be interesting to see if the partnership leads to any other areas of their empires.

Post from: Blog Tips at ProBlogger.

Google and Amazon Partner Up to Integrate Amazon Associates Program into Blogger Blogs

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Have you ever intentionally ignored something only to find out that you’ve been a fool for doing so?

This weekend I discovered what a fool I’ve been for ignoring a resource that could have been helping me make my business a lot more profitable.

Many of you will have heard of Jeff Walker and his wildly successful ‘Product Launch Formula‘ before. Every time he’s opened the doors on this training a lot of people talk it up as being ‘the resource’ to get if you want to make money from selling your own products online.

I’ve seen all the promotions come and go and… shamefully… I’ve ignored them all.

You see I thought I knew better. I thought I knew what I was doing. I thought I didn’t have much more to learn about this business. I thought that all the hype about this product…. was just hype.

That was until this weekend.

The Best Invested Two Hours I’ve Had for Ages

On Friday I found myself with an hour to spare. I’d seen a number of bloggers that I know and respect talking about Product Launch Formula again and decided to check it out for myself by taking a look at some of the free case studies that Jeff Walker is about to stop using due to the new FTC regulations.

As I hit play on the first case study I smugly thought to myself that I was just going to hear the same old same old teaching from another internet marketer.

Two hours later…. and as my wife called me (for the 4th time) to come eat my dinner – I realised that I’d been a fool. In front of me on my desk was a pad and paper, full of notes. The notes contained things I needed to investigate and think more about as well as action items that I plan to take this week.

Already I was learning stuff that I wish I’d known when releasing my own products earlier in the year.

I particularly found the Product Launch Blueprint video VERY useful.

Keep in mind that these case studies are just part of what Jeff is offering as part of his Pre-Sales process – I’m yet to pay a cent (also note that the case studies are online online for another 2 days so you should view them now).

What I’m discovering is that I’ve got a lot more to learn about developing and launching a product. I also discovered that Jeff’s teaching is not full of hype, that he delivers real value, that he’s passionate about what he does and that his teaching has helped a lot of people.

Why I like Jeff’s Teaching

Note: as you’ll see in the case studies, Jeff really emphasizes a number of things that I think are well worth noting:

• Making money in this way takes work – if you’re not wanting to work, don’t get into the game
• Many of the techniques talked about are particularly powerful in normal everyday niches/topics. Some say it only works in the ‘make money online’ niche – but the reality is that they work better in other niches where the strategies have not been over used.
• Baby Steps are important – Jeff isn’t just into having a big launch and making a big payday all in one day – he’s into building momentum over time and building a sustainable business. His steps are baby steps, you don’t have to invent the wheel all at once – you need to take steps towards your goal. As you do you build your income towards the big pay day rather than just arrive at it.

These three things make what Jeff’s teaching a lot more credible and powerful in my mind. I’ve come away from what I’ve seen so far really liking his approach.

As a result I’m going to be getting into more of Jeff’s stuff for myself and am enrolling with the next class for myself.

Product Launch Formula Opens Its Doors Again Today

Product Launch Formula is opening its doors again to a new class. Last time they did this they only had the doors open for a single day. This time around it’s only available for 36 hours.

Check Out the Case Studies

Whether you buy the full course with me or not – I really think the free case studies are well worth working through (you can see the two videos that I mentioned above for free here and here).

If you do sign up for Product Launch Formula I look forward to working through the training program along side you – we’ll be class mates!

PS: I’m really sorry that I didn’t alert you to the case studies earlier but I only got into them myself for the first time on Friday.

Due to the new FTC regulations Jeff is about to pull them and they’re only available for the next couple of days. Put some time aside today, grab a pad and pen and get into them for yourself while they’re still around.

Post from: Blog Tips at ProBlogger.

You Need to See These Case Studies Before They’re Gone

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Over the last year, the search industry has seen a large rise in horizontal content sites. According to Lawrence Coburn, the President of RateItAll, Inc., these horizontal sites are trying to dominate the tail of search. At PubCon Las Vegas, Coburn spoke to WebProNews about the implications of these sites on independent webmasters.

According to Coburn, multiple businesses in the search space have struggled to find particular niches to make money, but now large businesses are coming in and trying to do everything.

To back up just a little bit, a horizontal content site is a site that is broad with no specific target market. One specific example of this type of site is Wikipedia. Instead of being a site that contains encyclopedia information about history, it is a site with past, present, and future information about everything.

Demand Media, a strong advocate of these sites, created an algorithm that reveals various long tail keywords. They take publicly available data and add in their own algorithm and keyword values, which allows them to construct priority lists for content they need to produce.

The rise of these horizontal content sites is scary for webmasters in the SEO community. In speaking of the implications on the search industry itself, Coburn said:

“I think the implications of this is that the tail of search is going to become more competitive as more of these big companies come in and that webmasters like us are going to have to find different sources of traffic where it starts to bring in things like social…”

What potential implications do you think these sites might bring for the industry?

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