#102 – The Day Perrin Lost $120,000

What you will learn

  • The importance of having people you can ask simple questions
  • Focus on what’s important, don’t get sucked down the wormhole
  • What is a PBN
  • Why it’s important to understand risk
  • Why there are no shortcuts to a sustainable business

I don’t care who you are, $120k is a lot of money.

It’s especially a lot of money to lose in one day.

This is what happened to Perrin.

In today’s podcast, I’m joined by Gael and Perrin to tell the tale of how Perrin managed to lose $120k worth of online income in a single day.

Strap in; it’s a bumpy ride.

Getting Started in Site Building

The year is 2008 and America has just been hit by the great recession.

It’s not the best time for anyone to graduate and start looking for a job, but this was the hand Perrin had been dealt. He’d graduated, was in Chicago and had $8k in the bank.

After sending out 700+ resumes, having resorted to knocking on doors searching for a job, and with $35 left in his bank account, Perrin finally managed to land a job.

After six months, he quit that to start freelance writing.

He soon quit that to go to grad school. After graduation, he finally got what most people would consider a ‘good job’ at a consultancy firm.

They had nice offices; people wore suits, he was getting good money. He was living the American dream.

There was only one problem. He hated every minute of it. It was soul destroying.

But what could he do?

He didn’t want to be poor again. He had $100k debt from student loans. All he had was three months of experience and a poetry degree.

He wasn’t exactly beating off the offers with a stick.

The only thing he could do was become an entrepreneur.

Every opportunity he got, he started reading about different business models and how people are making money.

Eventually, he googled ‘make money online’.

While most of the results were sales pages promising the world, he eventually came across some blogs that looked more legit.

Things like Smart Passive Income and Moz Blog.

One such site was Niche Pursuits.

Spencer Haws built a site, documented his processes, linked to the site so that you could look at it and then published his earnings reports.

It was great. Perrin had never seen anything like it before.

So, he bought Spencer’s software, had a couple of email exchanges, and gave this niche site thing a go.

Niche Site Project 2

Soon after this, Spencer was looking to present a second case study. This was called Niche Site Project 2.

This time, he wanted to take someone who had never built a successful site before and taught them how to do it.

He ran a raffle for everyone who had bought his software to narrow the field to 10.

The ten finalists had to write an essay saying why they should get the chance to build a site under Spencer’s tutelage.

Perrin was a finalist, he wrote his essay, and the niche pursuit audience voted for him to be the apprentice.

He launched A Penny Shaved.

A Penny Shaved screenshot

At this point, he started to learn some essential skills, like:

  • Niche research
  • How to write review articles
  • How to get a site up quickly and cheaply

Perrin wrote 15 articles himself and did a bit of ‘link building’.

After three months, he made his first dollar.

After six months, he was earning $600 per month.

At eight months, he was earning $1,300 per month.

It was starting to make significant revenue.

Perrin was delighted it was working. He had a constant revenue stream. But, he just left it at that.

Spencer the suggested that Perrin add some more articles to see if he could rank for more keywords and make more money.

Perrin’s mind was blown. It was genius!!!

So, he did.

He published 40 articles. The revenue grew up to around $4k per month.

Perrin then quit his consultancy job to work full-time with Spencer building other sites, as well as building his own sites.

All was well with the world…

August 24th, 2014

Like every other day, Perrin woke up and checked the affiliate dashboard.

The commissions were zero. Even stranger, the clicks were zero as well.

He wrote it off as a reporting error and checked Google Analytics. There were about seven visits from organic traffic.

It was starting to get a bit freaky, but this could be written off as another error. He’d had problems with GA in the past. He’d probably messed something up again.

It was only when he logged into webmaster tools that s**t really began to hit the fan.

Right there, was a ‘thin content penalty’.

He really started freaking out at this point.

He logged into Skype. It was lit up. All of his friends who build sites in the same way had experienced the exact same thing.

It was devastating. It was like getting dumped and not knowing why. Not only had he lost his own site, but he had lost everything he had been working on in his job.

After the shock had worn off, it was time to start investigating. The one thing every site had in common was that it used PBNs.

It was a massive wake-up call not to use PBNs. It was like Google was sending a message to the community telling us to stamp it out.

Spencer even wrote an article saying he would never use PBNs again.

The problem for Perrin was he didn’t feel like he understood the risk at that time. He didn’t really understand this way of link building was against Google’s terms of service.

It was so devastating that Perrin realized he never wanted it to happen again. He decided to go straight.

He started seeking out people who were going about things in a white hat way.

Becoming Friends With Gael

This is where he started to connect with Gael.

He’d been on the Niche Pursuits podcast, and they’d stayed in touch.

They developed a friendship, Gael suggested he start a site in the dog niche, and that’s how HerePup.com was born.

This was eventually sold for around $250,000 by doing things the white hat way.

What do you say to people that say you just didn’t do PBNs properly?

There are three types of people who use PBNs. In Perrin’s mind, there is only a point in talking to one of those groups.

There are:

  • Boom and Bust – People who know the risks. They know they’re going to get penalized eventually, build multiple sites and work being penalized into their business models.
  • Zealots – They’ve decided PBNs are what they’re doing, they’re fine, and the want listen to any debate otherwise. These are the ones that will be sending us death threats after this episode is released.
  • Newbies – These are the people worth talking to. They want a long-term, sustainable business (usually). They’re invested financially, emotionally, and, often, in terms of lifestyle in the success of their site. They usually don’t understand the risks. It’s worth working to explain things to them properly so they at least know the score and can make an informed decision.

What Did Perrin Learn From The Collapse of A Penny Shaved?

It sucked so bad, but he’s now happy it happened (kind of).

If it didn’t happen then, it would’ve eventually. He would’ve been making more money, and it would’ve been an even bigger blow.

The real reason Perrin is happy is that it allowed him to become a real marketer than a niche site builder.

He’s learned how to build a brand, promote things, do it properly, and build a long-term, sustainable site.

He’s gained confidence, ‘testicular fortitude’ and knows how to build the kind of online business he wants to create.