#32 – What Spending Tens of Thousands of Dollars on a Failed SAAS Company Taught us About Running Authority Sites

What you will learn

  • Why we spent tens of thousands of dollars on a failed SAAS company
  • What BIG mistakes we made and what caused them
  • What we learned from the process
  • How these lessons apply to Authority Site businesses

Several years ago, we invested tens of thousands of dollars to build CopyCog, a content production workflow platform.

We made many mistakes along the way and in this episode we break down the biggest mistakes and learnings. We also apply these same lessons to the Authority Site model.

Time and time again, we see people making similar mistakes. So listen carefully to this episode if you want to avoid making the same mistakes in your business.

If you want to ask us a question that will be featured on a upcoming podcast episode, fill out the form here.

Full Transcript

Welcome to the Authority Hacker podcast, the place to learn field tested, no BS tactics to grow hack your online business, and finally, live life on your own terms. Now, your hosts, Gael and Mark.

Gael: Hey guys, welcome to the Authority Hacker podcast, I’m Gael and today I have Mark with me, Mark, how is it going?

Mark: Hey, it’s going good.

Gael: Cool. Before we get started, I just wanted to say that we are totally passing the 100 thousand downloads of the podcast, in June, early June, so I wanted to thank everyone for downloading all these podcasts, I had no idea it would get that big, especially given the fact that we are not really focusing on production level, we are more focusing on the content but it seems to be working with you guys, so thanks for everything. Let’s just jump into today’s topic which is the lessons that Mark and I learned from a failed software as a service company, and to be frank, that was a pretty bad failure, like we basically made almost no money out of that and it was pretty bad. Can you just explain what happened, Mark?

Mark: Yeah. So about three years ago, three and a half years ago I think it was, this was back when we were still running our agency and around that time we kind of knew we wanted to do other things but I guess we weren’t really too sure what. And we had, I think it was around the same time we started Health Ambition for the first time.

Gael: A little bit after.

Mark: Yeah, it was very much in sort of infancy back then, we had this idea to run a software company, few of our friends had started software companies and one or two have been quite successful with them, and we thought hey, we can do that too. And so, we had this idea, this actually came out of running the agency and all that kind of stuff, we were having to produce a lot of content, and it was quite-

Gael: At the time, to give some context, we were producing like a thousand guest posts per month, plus merging many clients’ blogs so like the amount of content we had to upload was crazy actually.

Mark: Yeah, it was insane. There wasn’t really any good, or at least, we weren’t using any good solutions, at the time, software solutions to manage this, it was a lot of Google docs and spreadsheets and that kind of stuff, which isn’t really ideal once you go beyond a few writers.

Gael: We had one full time person just to manage that process, not to write, to manage the process.

Mark: Yeah, and that wasn’t even enough, at some point. so…The idea then was okay, let’s build, there is a need here, clearly, we have this need, I am sure every other agency has this need, how do you get good content, at scale. And, we thought we had a good idea for how to solve that problem by building piece of software that could help you manage the whole process, recruit people into teams and basically just manage the end to end production of content for a website or blog, and there is various other idea within there like having a marketplace and all this kind of stuff. But, that was sort of the basic concept, and we started to try to build that, and two years later, we failed horribly.

Gael: We built the thing.

Mark: I wouldn’t say we built what we imagined, but we built a working prototype which did a lot of the functionality which we had in our heads, and that wasn’t necessarily a bad thing.

Gael: By the way, we should say the company was called CopyCog and some people might know it because we were advertising it at the beginning of the Authority Hacker.

Mark: And so, the product wasn’t terrible or it didn’t work- it did, actually few people actually even used it for their websites, but we just massively underestimated the sort of market and didn’t really do, I mean, there is a whole bunch of things similar to this.

Gael: Actually, let’s go onto that, so the rest of this podcast is going to be why we think we failed, and the lesson we learned that helped us in term make successful authority sites. Which are essentially the same thing, right, it’s just a website that sells products and convince people to spend money based on your content, right?

Mark: Yeah. I mean, they are not exactly the same thing, but they are very similar, there is so much overlap between this. It’s become very apparent to me recently, so yeah.

Gael: Yeah. So, the first lesson that we’re going to talk about is something that is counter intuitive to a lot of people, is starting from the angle and build your business reverse from that, so a lot of people, first try to think how they can get traffic, and then how they can get people to opt in their email list, and then start figuring out what they can sell to them. Once they get that, they are like okay, how much money can I make, and one thing that we’ve learned is that actually doing the opposite starting with like okay, what is the business goal, and you are going to tell us a story in a second, but I’ll go for us was to make a 100 k a month I think, and then try to go that way and when we figured it out, it didn’t work out so well, so can you tell the whole story?

Mark: Yes, so I guess the goal in our heads was yeah, we want to make 100 k or million a month or something like that, but we didn’t really have a concrete goal written on the wall, saying this is what we want to achieve in this amount of time, or anything like that. It was more we feel there is a need for this kind of product and again, I want to emphasize the word “feel” there, we didn’t really do too much research on this but we feel there was a need for this product here. Let’s build it and then let’s make some money by selling it; that was generally our approach to it, we kind of went for a good two years, we had a bit of issue with developers and stuff about a half way through, to a good two years between when we started working on it and then when we really sat down and we were like okay, so in order to make a 100K a month, how many pieces of content do we need to produce, or how many words that need to go through here. And then we started working backwards from that, it was like okay, so then how many customers does this entail and how many writers does that entail.

Gael: We need to explain that, we were like selling the content, it was writer selling the contents through the platform, so we would only take 10 to 15% of any transaction. So, to make a 100K if you only take 10% you need to make a million dollars of turnover on your platform.

Mark: And that’s not even taking into account development cost, all this kind of stuff, marketing costs, so when you kind of actually put down the numbers and work out the sort of projected profit and loss, and what do you need to do in order to make x amount of money, then it’s really like okay this is crazy, to do so much in order to make this amount of money, we were just not as if we needed to sort of 10X or a 100X of what we were doing, we needed to 10 000X.

Gael: Yeah, we were making like 1000 or 2000 a month, at that time and we had to make a 100K profit as a company, it was more like 1.3, 1,4 million dollars of turnover through the platform. It was the problem with the business model and honestly, we should have figured that out on week two not year two, so good job.

Mark: As you said at the start, it’s not always intuitive to kind of work backwards like that, I think most people when they are starting a business, any business, I mean, we made the same mistake with authority sites, it’s like I think there is an opportunity here or even this would be kind of cool to do, don’t you think? We could get a lot of traffic in this market, you are not really thinking beyond that, okay so what does that mean then, if we get this amount of traffic which products can we sell, how much can we sell those products for, what conversion rates ranges are we going to get, okay what is the minimum and maximum we can make off of this and, this sort of work backwards from the end goal, like what do you need to do in order to make 10 thousand dollars a month, or 100 thousand, or whatever it is.

Gael: Yeah, how many visits you need, etc.

Mark: Yeah, you work at bring it all backwards, and make sort of forecast, and again, you’re never going to be totally accurate with you know, you’re never going to know what your conversion rates are but it’s fine, you can have sort of-

Gael: Calculate 20% , it’s going to be more than 0.1% so I mean, usually, you can assume.

Mark: You can even have like a minimum and a maximum to make sure you cover the range and even then your projections will be like quite broad, but it’s going to give you a much clearer idea of is this feasible, or is this just monumental, unrealistic, challenge that’s never going to work.

Gael: I mean, to rational thinking Copy Cog, let’s assume it would take 10%, it was 15% but let’s assume we were taking 10% to make it simpler, it was like okay, to make a 100K a month we need a million dollars through the platform to make a million dollars, let’s assume like the average client buys five articles a month, at like 40 bucks, so it’s like 200 bucks spent, right, so 200 bucks, to get a million dollars it’s like 5000 clients, now imagine that we convert at like 3% so we need like, let’s say 5% so we need 20 times that, so 5,000 times 20 for the traffic, it means that we had to bring a copycog.com to over a 100 thousand very relevant visits, per month, or at least 100 thousand visits to actually get these clients and retain all of them which is not possible. Which is very hard for this kind of like, it’s a 100 thousand visits.

Mark: And then you factor things like burn rate and-

Gael: It’s like this is very inapproximative, but just gives you an idea, we’d probably get a burn rate of like 20% so you kind of need to make up for that etc, basically it was a very difficult task, to make this work and because you can’t expect 5% conversion rate on a blog post, you need 5% conversion rate on your sales, if you make a blog you need to calculate that maybe only 10% of that blog traffic goes to your sales page. So then that becomes like a million visits and so on. So, yeah, that made it actually really not worth in this market, and there are easier ways to make money in this market and that’s why we decided to stop it. So, how those we apply to authority sites?

Mark: I Think the same principle was, start yourself with the goal, so if you want to make a- a good one is 10 thousand dollars a month. And what do you actually need to do in order to make 10 thousand dollars per month from your site? So, think of the products you are going to sell, or the ways you are going to monetize, and it can be a mix of affiliate products, maybe your own products, advertising, that kind of stuff, but figure what how much you can make from each one of those per transaction, if it’s per transaction then you still work backwards from there, what would a good, reasonable conversion rate be, then what kind of traffic can you get, that’s when you start looking at keywords and competitors and this kind of stuff. And, really just bring it back from the end goal of how much money you make, in order, all the way back to the traffic, really. And look at how easy it is to get that level of traffic you are going to need. It’s going to be quite obvious, I mean, if one projection says oh you need 20 thousand and another projection says you need 22 thousand visitors per month, I mean, that’s not really what you’re looking at here for. Basically, looking to discount anything which is unrealistic, or going to be near impossible to achieve. So again, don’t worry about small inaccuracies in the data here, it’s just you are going to have to make some estimates, but yeah, by doing that you can quickly see whether you are about to enter into a market or a business which is just you don’t really have any realistic chance of making decent income from it in any reasonable amount of time.

Gael: Yep, alright, let’s jump onto point two, and point two is have a strategy beyond the next two weeks, and I think that it has to do with the fact that because we were a software company back then, we were working using all these cool like agile systems etc, and what happened Mark?

Mark: Okay, so we were very much into this like sprint way of working and two week sprints of just really pushing to develop a new feature, and new system, and we planned out the start and then really like worked quite hard and going back and forth to developer, developers and getting that made. That was great, and that definitely has a place in any business. It was quite nice to see that feature just come to life really quickly, just after we sort of imagined it. But, the issue here was that our business kind of kept operating in these two weeks cycles and at the end of these two weeks, you and I would sit down and look at at it and say okay, what’s our next move. What do we need to do next? What do we need to build next?

Gael: Honestly, I just think it was developing too fast for us to even plan properly.

Mark: And even then, it was, we never really updated our like long term plan, or a strategic plan. We were just always operating on this sort of tactical level, and because of that, and because obviously you have delays and development, and it’s never 100% accurate. All of the marketing stuff, which to be honest, we never really planned the marketing stuff at all until the development part was finished, like okay, people can now sign up, great, let’s start thinking about how to market them now. There were various reasons for this, it wasn’t just we were total idiots.

Gael: We had an agency as well, right.

Mark: But we were working on a lot of other projects at the same time, so that was a mistake itself I think. So yeah, we never really planned out how the business would run, or how we would grow it, until the time came when we were sort of ready to onboard clients. And had we done that correctly, or the other way around, we would have been able to think of what we, or plan of what we needed to do and get all the marketing and these kind of activities rolling in advance, so that it was ready we could just turn it on when the development finished.

Gael: Yeah, I mean, yeah, it’s like we were not very good at like launching products by then. We were good at doing that SEO thing that we know, etc, like that was okay but actually activity marketing to an audience, we were not very good at it. How does that help people building authority sites?

Mark: I feel a lot of people have similar approach, I call it the “build it and they will come” approach. And, they assume that okay, I am just going to build a website about health, or dating, or something , and then they get involved they start building the product, and they start making, even in some cases fairly good websites, fairly good content, information, even sometimes their own products and stuff, but they never really tie in the marketing side of things and they are constantly working on the next shiny thing which they heard someone did well, or made a lot of money from because they have read it somewhere in some forum. Basically, the approach they need to take here is kind of a little bit different, it’s more you need to first of all figure out what you are going to sell and how you are going to sell your product on your site, but also, whatever you’re working on, you need to always come back at some point, hopefully on a regular basis, and kind of have your overall strategy for what you are going to do.

Gael: You need to answer the question like how is that making money?

Mark: Yeah, how is what I am doing in the next two weeks contributing to my overall strategy of whatever that is, launching all these products and getting all these people through these funnels or whatever it is. Not just okay, I need to get on this Pinterest thing let’s spend couple of weeks doing that, but, okay so you are getting on this Pinterest thing you need to get traffic on Pinterest and then what?

Gael: It’s one thing I would see a lot with clients when we had the agency, and with account managers that were managing the accounts, so I was managing the account managers, and they would like start with their big plans etc, on what they want to do for that site, etc, and then they would need to get approved by me and then like every single point I would be like where’s the money, where’s the money, and literally, three quarters of the plans fell apart as I just kept asking that question for every single reply they gave me. So I was like, oh we’re going to do this Twitter thing- why, where’s the money; oh because it’s going to drive traffic to the blog- oh, where’s the money in the blog, actually we don’t have an opt in or something, I’m like, then there’s no money, don’t do that, fix the opt in.

Mark: Yeah, it’s not just like where is the money, because there will be some things you do for your business eventually, that don’t directly make money,

Gael: Not directly, but you need to explain how it ties back to it.

Mark: Exactly, and you need to always have that strategy for okay, so if you’re doing this parts of it then you need to at least do the part that generates the money next or preferably before.

Gael: And I would say that is the reason why so many people make so little money with their site, is because they are missing ground level foundation, and they are working on their roof. And it’s like, yeah, I’m good doing all these crazy tactics etc, but then as soon as the traffic gets on their site, there is literally no goal other than maybe signing up for their email list which is not monetized. And then you’re like well, you don’t need more traffic, you don’t need any of these shiny tactics you will read on this online marketing blogs because everyone talks about traffic and nothing else. You need to actually build a business behind that. It really is what I think is the problem for people.

Mark: Yeah, I think it’s just a lot more easy to execute on these strategies and if you see your traffic increase by 20% you say okay, that’s great, but if you’re still undermonetized or not monetized or you don’t have any proper funnels in place and all that kind of stuff, then it’s pointless.

Gael: Yeah. So, let’s jump onto next point, and the next point is make sure you share more than business goals with people you work with. And, that one was also a painful lesson that made us get into some partnerships and they felt pretty bad. So I’ll let you talk about it.

Mark: Yeah, so when we were initially, we hired a developer to work on this and that was great or so we thought, but then he actually got head hunted by another company so he went to work for them so we were, essentially without a developer for three months I think; we were actually debating do we even continue the project, what should we do, but we really wanted to keep going with that and but we still had this agency and we were still working on our authority sites, and both you and I we are not developers, we don’t really know the first thing about hiring a developer.

Gael: I struggle with css already, so yeah.

Mark: I had to access a developer, let alone, here in Hungary where neither of us peak Hungarian, so we were like okay, let’s bring in someone and he can take care of this problem for us. So, that’s exactly what we did, we brought in another essentially co founder, or someone at our level who spoke local language and we thought had a good history of building teams, building software products and stuff. And, everything was good, or we thought everything was good. But, that person just really didn’t have the same-

Gael: He found the next developer, we need to give him credit for that.

Mark: That’s true, I do credit him for that.

Gael: And he was really good.

Mark: I do credit that more to luck than anything, but, that wasn’t really the problem, the problem was having this person in sort of managerial level, making these decisions and influencing the project in such a way but who just was miles away from us in terms of-

Gael: Yeah, he had a different history, he was more like, like we were more like the internet marketing guys, and he is more like into the startup scene. I must say, there is kind of like a big cultural gap between these two worlds, and people view growth very differently, in the startup world, it’s usually very opulent, there is funding usually, like big rounds of funding for even if you don’t have a concept or anything, although that is changing these days, but like money was, if you knew people, in startups, money was never a problem at least when you were starting up , you just had like one, two years runway, pretty easy, whereas, in online marketing, people they would rarely get funding, they actually just fund themselves by making a profit, and so that makes us a lot more worry about our time, about the resources we spend on things and we want everything to really move the needle which I think is going to be one of the next points. And because of that, we had different attitudes towards things I guess.

Mark: Yes, I keep using this term like throwing money or throwing equity at the problem to fix it, like usually it doesn’t solve the problem. As a business owner, your main responsibility is to solve problems and bring in others to execute and scale on your ideas, and that’s not what we did in that situation, we brought in someone else to solve a problem which we didn’t want to, couldn’t probably a combination of both those two things, I’m sure if we really put our minds to it and put time and effort to it we could both solve that problem, no problem. But we didn’t. And, we were lazy, or tied up with other stuff, or probably lazy, yeah. if I’m being honest. So yeah, that resulted in us having another co-founder who wasn’t really committed to it in the same way that we were, he didn’t really have the same vision.

Gael: I think that one thing that I want I say as well is, because he was older, he had a family, he had a kid, he had everything, which is completely fine, but there was even if we were on the same wavelengths, the fact that we had such different lifestyles and I think that brings us back to the point of like share more than business goals with people, even if we agreed on everything, there is no way he could put in as much as you and I when we are both like without kids, without obligations and we can just work on Sunday if we need it, we can do all that stuff, and just when we brought him as an equal equity partner, I just felt like we were guiding a bad deal and we just didn’t feel so good about the whole thing and that killed a lot of motivation.

Mark: Yeah, but like, how this applies specifically to authority sites, it’s not quite the same, I mean, I am sure it happens, but it’s not so common to have equity partners and stuff, in authority sites, in the same way. But, the main point here was that we were throwing, in this case equity or it could just as easily have been money,if we paid a high salary, at a problem in order to fix or solve that problem that we didn’t want to solve ourselves. I see this all the time, with content. Many people start a site and they don’t really want to get into the nitty gritty of the details, the finer details.

Gael: They don’t want to learn their niche, first of all.

Mark: Yes, exactly, and so what they do instead of actually learning it and understanding it and figuring out, solving the problems themselves, is they throw money at it, by hiring a very expensive content writer. And when I am actually recruiting writers for Health Ambition, I come across these writers all the time, and they are honestly, they are average, to be fair, they are probably above average writers, but that doesn’t mean they are great writers, they just know their topic, and they have convinced some website owner that they are some kind of mega expert, but they are not, they are just a little bit above average in terms of writers in the topic, and they charge a fortune, hundreds of dollars in some cases for-

Gael: What’s the most ridiculous proposal you ever got?

Mark: I mean, someone said that they were going to charge 250 dollars for a 1000 word article, on Health Ambition. And, their samples and examples were no better than anything we had on the site, like there was nothing grand.

Gael: How much do we pay?

Mark: Well, I mean, they were saying 250 dollars for a 1000 word article, and we pay 60 something dollars for a 2500 word article. So, yeah, like a magnitude more, it was ridiculous. And it was just clear to me that these kind of site owners, they don’t know what they are doing and they are just throwing money at the problem of someone who they think is a good writer to solve it, but it’s not solving any problem, they are not getting good content; they are in some cases, but it’s poorly researched because the writers either can’t do keyword research or someone else is doing keyword research but they don’t know the topics, so that’s bad. It’s just like cycle of not knowing enough about your business, and taking these actions and thinking that throwing money at a specific area is just going to solve the whole problem when in fact it’s your fault and your problem for not knowing your business and your market well enough.

Gael: Yeah, it’s like, I’m going to go quickly, but there was someone in the Authority Hacker pro group asking me that like what kind of KPIs do you give your writers, and etc etc, the truth is, writers their only job is to write content, that gets approved by the editorial process. And, you are responsible for how well your content does, for how well your site does, even if you have an editor, it’s your job to actually manage him and tell him this is good, this is bad, and his only job is to essentially take your guidelines and reuse them for the next time he has to make a decision for you, but you are responsible ultimately. And so, that’s basically that, and that totally got of the point of like make sure you share the same business goals with people you work with.

Mark: That’s applied certainly if you are bringing in someone, like in the case of let’s say an editor or something, but really, for me, it’s more like throwing money at the problem, doesn’t solve it.

Gael: It’s solved sometimes but it’s kind of like solved with duct tape. And it won’t last very long. Anyway, let’s jump on the next point, and the next point is, forget cool startup stuff and focus on grinding. And I think that is going to like get back to the point that I was making of the difference between startup people and online marketing people, and once again, I’ll let you tell the story of how we learned that lesson.

Mark: Okay, so we got, I can’t even remember how they came about, I think they outreached to us, they found us on somewhere anyway, I don’t know where it was, the next web which is a startup events happened, they have one every year in Amsterdam, and I think they have a few others in different places I am not sure. But essentially, they approached us and they were like we really like your idea, we want you to come and pitch at our event. We were like, okay, sounds interesting, people were starting to take notice of our idea, that’s quite cool. And then like, okay but there is a application process, we had filled in this long application form, and we had to go through like two different interviews, on skype with people just to like present our idea, and then eventually, they were like, okay, you are in, you’ve made it through. And, at that point, they are like oh, by the way, it’s I can’t remember how much it was, like 600 euros a ticket, or something, we had to buy two. And we were like, oh, but, and then they were like oh but you could win 50 thousand euros in funding if you win the competition. And, it was, basically the whole thing was just a big-

Gael: It was a very well made sales funnel.

Mark: Yeah, it was a big sales funnel. When we got there, 90% of the other businesses were absolutely terrible, and there was a few-

Gael: Give us an example.

Mark: There was a guy who was literally walking around with like a tray around his neck, and he had this like lottery and I can’t remember the specifics of it, but basically it was just a lottery.

Gael: That’s revolutionary.

Mark: Yeah. That was his business idea. It was completely ridiculous. I must try and dig out the site if I can still find it for the show notes, but yeah, it was, there were plenty of other just stupid ideas and so we spent a few thousand euros on like traveling to go there, and preparing for it, and doing all this stuff, but it was just a massive distraction in time from what we were doing and-

Gael: We took a week away from two out of three people in the company.

Mark: Not even that, but we were developing, we finished developing this things which weren’t really that important, just so we could demo it. And it was bullshit.

Gael: And it was bullshit, because we even demoed to anyone.

Mark: Yeah, yeah, we spent a good solid day demo into a lot of people, but honestly, they were just there because the company sent them and they were there for the free alcohol and they were like oh that’s interesting, and then walking on what free swag can I get for the next one, because they were giving the t-shirts and pens and stuff.

Gael: So, yeah, I kind of feel the pain when you talk about it.

Mark: Yeah. It was one of these things like as soon as I got there, I was like okay, I then realized this was all like a massive scam, and like alright, well, I might as well make the most of it but-

Gael: So you got the free alcohol?

Mark: Yeah.

Gael: [laugh] Which wasn’t free but sure, yeah. So what’s the lesson?

Mark: The lesson there is focus at least 95% of your energy and your time on activities that are going to move the needle for your business, there is always going to be these mandatory things, taxes and legal things you have to do which you just have to do anyway, so grin and bear it, but anything which is not going to move the needle, going ot make you money, going to contribute towards making you money, in the short to medium or long term, then don’t do it, or wait until later, and really, this happens so often with authority site owners, I get questions all the time about- what do you think of this logo versus this logo, and I’m like dude, it doesn’t matter, just put a text logo up, you have zero visitors nobody is going to care, like work on that when you have visitors.

Gael: Also like working on the next blog post, working on your blog is kind of like trap, because eventually when you start getting some traffic to your site and you still don’t have any kind of sales funnel, have any kind of monetization in place other than maybe a few affiliate links here and there, which by the way shouldn’t be your only business model, it’s like you have the choice between working on figuring out how to do these infoproducts things, how to do these funnels etc, or working on the next blog post; and I see a lot of people focusing on the next blog post, the next blog post, the next blog post, and eventually, that doesn’t do much. And another point I wanted to make which is completely unrelated is a lot of people ask us why we don’t go to conferences a lot, and that is for that- it’s because to be frank, we have way enough tactics, we have easily two years of work in front of us, without needing any more tactic from anyone, and we’d rather spend our time working on our sites, working on our communities, working on our stuff, rather than going to events. The only case I would go to events probably is when I would be a speaker, so if you want us to show up, you are going to have to vote for us.

Mark: Yeah, and the other situation is, events are good for building relationships with people but you don’t really need to do that if you are building a website until really, you got to the point where you have all your own products and you want to recruit affiliates, and do that kind of stuff. That’s when it makes sense; spending thousands of dollars going to MozCon or any of these big ones, especially if you have to fly a long way to do it, it’s not worth it.

Gael: To be frank, a lot of that content is on the blog.

Mark: Most of them put all the videos online anyway, so yeah.

Gael: Yeah. Unless you need to network, to recruit affiliates, find affiliate offers, or whatever, otherwise, you might as well just read the blogs eventually, they reuse all of that content. But let’s jump on the next point because that podcast is getting really long; and the next one is hire help, for hiring. So, I am not going to say more, because that thing is pretty explicit, I’ll let you tell the story.

Mark: Okay. As I mentioned before, Gael and I we are not developers, we don’t know the first thing about hiring developers and we initially hired a developer who is a super nice guy, and is very talented in what he was doing, but he was not the right person for the job.

Gael: He was like an AI guy, he was like a very smart PhD guy that could do really amazing things, probably Google would love to hire that guy; but, we were building a pretty simple tool that didn’t use any of his skills.

Mark: Yeah, and he had to relearn or learn a bunch of things which he didn’t know, and that wasted a lot of time, and we essentially just spent a whole year getting to a point where the right developer could have got to maybe in month or two.

Gael: That’s exactly what happened, don’t you remember? Like, when this new guy came in-

Mark: There was about three months gap when nothing happened, then we got this new guy in, then, he looked at the code and he was like what the hell is going on here, and he was like okay, I am just going to rebuild this whole thing. We were like, wow, how long is that going take? Not long.

Gael: Like two weeks later he was done.

Mark: Wow, he got most of it in two weeks, but I think it was about a month before he rebuilt the whole thing.

Gael: The thing that took us over a year to build so far.

Mark: It worked much better. But, the point was, in order to get this new guy, we actually went through bit more of a robust process in hiring, like, one of our friends who is a developer, very talented one at that and we know that because he just worked for some pretty big companies and he is just one of those people you know is good.

Gael: You just don’t listen anything when he speaks, that’s when you know.

Mark: Yeah. [laugh] We just asked him for help, like hey can you interview this guy, tell us if he is any good. And yeah that basically solved that problem.

Gael: Yeah, and, what do you do if you don’t have a developer friend?

Mark: You pay someone good, and you pay someone even like very expensive, go on Upwork and find one of the, someone who is 200 dollars an hour, 500 dollars an hour, or something like that, but just hire them for half an hour, one hour, and they will be able to tell you very quickly if the person is good or not. This applies a lot as well for authority sites, if you are not a native English speaker, or you don’t know a lot about the niche you are going into, then you can hire like one of the top experts, usually for not that much money and again, you only need to hire them for an hour, maybe two hours tops to really screen good for you writers or whatever the role might be, and you’ll have a much better understanding and it’s usually worth spending a little bit of money to do that rather than taking a chance and hiring the wrong person because, if you just hire someone based on what their rate is or- even in many cases, unless they have a lot of it, like their feedback scores on some of these sites, they don’t really mean too much.

Gael: Yeah, one thing that’s cool as well, is there is a site called clarity.fm where you can hire really smart people like CEOs of companies and so on, depending on their skills, and you pay per minute. I would recommend you look at that, so I think you can hire like Devon [36:05] from ProBlog etc for your site, and, take your candidate and like basically talk to them for 15 minutes, preparing them, maybe giving them a list of questions or whatever that you are going to go through then basically take 15 minutes after the talk and have them give you their feedback on what they think about that person. I think that is a pretty cool way of doing it.

Mark: Yep.

Gael: Okay, let’s just jump on the next point actually. The next point is an interesting one and I think that will apply directly to authority sites, and that is be a user before being an actor. And, essentially what that means is don’t jump into an industry you know nothing about, like start subscribing to some blogs, start getting to know it, before you spend any kind of money especially significant money into actually becoming a provider in this niche. And, once again, we have a little story for you on how we failed super hard on CopyCog, I’ll give you the spotlight Mark.

Mark: Okay, so as I mentioned at the start, we were producing some months thousands of blog posts every month, and we had in the past used many of the tools, Text Broker, and iwriter and these kind of things, and we were not impressed, initially. But they did actually in the two years we were working on this, they had in many cases, especially Text Broker, they have gotten a lot better, both in quality and in features, and because we essentially wrote them off and we were like okay, that shit we are not going to-

Gael: There goes our pg writing.

Mark: What we have planned is much better than Text Broker, they suck let’s not give them any more attention. But, actually Text Broker had been building some pretty cool features, which we had planned to incorporate in our tool where, such as-

Gael: The WordPress integration.

Mark: The WordPress integration, and I think feature around building your own teams, out of marketplace.

Gael: Yeah, and copyscape as well.

Mark: Yeah. Because we weren’t monitoring this, because we weren’t really paying too much attention to our competitors, we ended up doing a lot of things which they had already done and solving problems which didn’t need to be solved. And that definitely set us back and pushed us in the wrong direction or contributed towards the overall failure of that company, so yeah.

Gael: Yeah, and the way it applies to authority sites is actually yeah, become a reader, become someone that actually is part of the industry, and knows it, and I’ll tell you, most of the breakthroughs I make on Health Ambition these days is because of identified something a competitor was doing right. And I am going to give you a very practical example, so you guys probably know that Neil Patel had this case study site on the same niche as Health Ambition. And, I am not going to say what he did, but Ii can tell that there are more than a few things that where he looked at our site to make really fast progress. But one thing he seemed to be doing better is we have this kind of like, we have different lead magnets that we offer through pop ups etc, but we basically have a category where we have that offers for these articles that don’t have any specific offer tied to them. And, he seem to be doing much better with opt ins than us despite the fact that he had only one opt in, so I started looking at his lead magnet concepts and I started testing some of them on our pop ups just to see like if his concepts were better. And one of them actually like literally perform twice better than the one we had in place and that’s just because I started looking at the competition. And because like I am actually reading his site, I am trying to learn as well and many of the sites in industry, not just Neil Patel but like being able to identify what your competitors do right and emulate that, is 90% of the success I would say, especially when you are in the industry, when you are not inventing anything new which is most people.

Mark: Yeah, and it’s also just this whole concept of getting involved in the niche and like, just being aware of everything that is going on, who is promoting which product,s who is promoting the content in which way and which chanels and it’s not just sort of reverse engineering of what they do but getting an idea from okay, I see such and such a person is promoting this juicing products on their email list. It’s not the oh I should just copy that but oh, why don’t I email them and say hey, our actually converts better, why don’t you become an affiliate for us and promote us. So just like having your finger in all the pots or pies or whatever the phrase is-

Gael: That’s disgusting.

Mark: I can’t remember that, I forgot my English here, seriously. Yeah, basically just being involved in everything that is going on, and having like a pretty good overview of who is doing what in your industry to get you to that point and it’s quite easy I think, especially when your site gets larger and you start oursourcing a lot of activities to kind of lose touch with this and just assume that all your competitors just can be doing the same thing over and over again and there is nothing to learn, there is always something to learn from competitors, even sites which you think are terrible. I guarantee you they are doing at least one thing better than you are.

Gael: Yeah, a lot of the things we do are inspired from other sites, it’s like we do invent some stuff, but we also look a lot at what people do. But, without transition, let’s just jump on the next and last point, which is actually going to be “be the best at one thing and not a jack of all trades”. And I think that is especially important when you are starting out and you don’t have the resources to do everything well, like we did, and despite that, we still tried to do everything with CopyCog, and Mark, I’ll let you tell the story.

Mark: Yeah, so what we tried to do with CopyCog was solve all of the world’s content production problems by building one single tool and do it all on day one. We had these very grand ideas, and I think that had execution and development been instantaneous we could have come up with something really awesome, but, that’s perhaps just in our perfectionist nature, and in trying to solve all these problems, we lost sight and we lost track of actually executing on this and actually being able to solve even any one piece of the puzzle, in a meaningful and efficient way. So, we built our platform trying to do everything, and what we ended up was a platform that could kind of do most things, but didn’t really do any of the things particularly well.

Gael: Yeah, it’s like, there was no advantage of using it over auto manage your content for example. So that’s the thing, it’s like if you do one thing well, you won’t get necessarily a big audience but the people that are having this one problem, they will stick with you, and then you can just do the next thing well and the next thing well, and eventually do like everything but like that is after ten years of development and a lot of money spent on it, not on day one. And that applies to authority sites as well, I think it’s important that it’s good to pick one topic and be really good at it, for us we did juicing on Health Ambition, on Authority Hacker, honestly we just were like will, we can’t just do really deep advance content so that’s what we focus on, we focus on advanced content not newbies content on Authority Hacker, and try to dominate that thing, and then that builds that kind of like audience that is looking for that after, and in terms of focusing, I would say we also focus on one traffic source, so if you are doing SEO then just focus on SEO, don’t worry about social media at the beginning, don’t worry about anything like that, if you are just doing Facebook ads, just focus on Facebook ads, and so on. And additionally, focus on one monetization method, and don’t stop until you make several thousand dollars a month from that one monetization method, and once you have that, then you can diversify.

Mark: I think it’s very important to, a lot of people look at Health Ambition and they just try and copy the site, don’t do that, it’s far too broad of a site to be starting off with. What you want to do is really like focus on a subtopic or a subniche that you can really go into detail about, and you can properly understand the needs of the users, you can focus on having one offer or one funnel rather. With Health Ambition we have all these different funnels, and it takes a lot of time to research them and build them and update them and all that, and just because the site is so broad, but if Health Ambition was just a juicing site, it would make so much more money because all of our traffic have one requirement, it has one need, and we would be able to really understand that much better and serve it well.

Gael: Yeah, if we had to do it again, we probably wouldn’t, we just deal with it because we have it now, it’s a profitable site still, so why not. But if we had to start form day one, and we could have all the money back, we might do it. I hope that you guys found this interesting and we try to like tie that back to authority sites, so a lot of these things talk about our software as a service company, but to be frank, a lot of these lesson have been used in our current projects and that’s why we are doing a lot better now actually. So, thank you for joining, Mark, thanks for joining as well.

Mark: Thanks.

Gael: And, we’ll see you guys on the next podcast. See you later.

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6 Comments

  1. As I am currently building a SaaS myself, this podcast hit home on a number of points. Authority or niche sites seem to be more straightforward because there is a shorter feedback loop, with every new piece of content you can mostly see whether it worked or not.

    Very interesting your observation that there was not much of a difference between the $250 for 1000 words article writer and your regular writers. I had the idea of recruiting some top level writers for one of my projects, and I was once quoted $1 per word. The craziest quote by far i have ever received.

  2. I remember trying this out, it was a pretty terrible service, no offence. I guess you live and learn!

  3. Hey, Mark!
    Yes, you are right. Before spending thousand of money on poor Saas company. One should need to do a little bit research about it. Prefer the best-suited system according to your business niche. It not only easy to operate but also be reliable and secure.
    Thank you for sharing the great content.

  4. Insightful podcast Mark. Planning, research and a test run should be done first for familiarization before going full-time into SaaS from an on-premise setup. Doing this will minimize SaaS integration failure and save you time, money and effort.

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