How To Pick A Niche And Dominate: The DFHU Way Pt2

In the last post of this series we talked about the structure of a DFHU network.

Some people have come to the conclusion that the CAAR network structure is mostly based around the “quality” of links. Particularly, lower-quality/higher-volume links are farther from Disc0, while higher-quality/lower-volume links are closer. This is true for pretty much all sites you control directly, however its missing the bigger picture.

Link structure is, in large part, the angle Eli took on his, now famous, SEO Empire post. I don’t take this angle here for a few reasons.

First, I assumed pretty much everyone who is reading this blog and understanding it also reads BluehatSEO.com (its in my blogroll). Two, Eli already explained the concept of “linking up;” i.e. lower quality sites link to higher quality sites (and never the other way round), its harder for sub domains to hurt the main domains and once you get over link volume, SEO gets easier. Finally, i want to focus more on resource management instead of link theory.

His ideas on network structure are clearly compatible to my network, its just that he focuses on network linking structure and my main point of structure is how much time and resources you spend on each site given its particular level in the network.

For instance, the Pollinators may very well have your best links; paid links clearly fall into the category of Pollinators. You also note that it takes very little time to create these links and compared to keeping up a quality MarryMaker site, paid links are cheap.

Being Realistic about “The Math” is Rarely The Funnest Part of Your Day

The two most common mistakes i see people make is that replicating a site will increase the returns linearly or that pumping money into an OK site will make it into a great site fast.

For example, some think that if one LoLWut site makes 2000/month than two cloned LuLWut sites will make 4000/month. I have NEVER seen this happen personally, i have NEVER pulled it off and i don’t really hear about too many other people pulling it off either. Usually people who do this type of math are working on sites which are not Disc0, but really just some random niche they picked and think is hot.

In reality the sites tend to fight with each other, like two nagging lovers who try not to know about each-other. They are scrambling for your attention.

You try to keep of them both up equally, but slowly you get paranoid. You start seeing “footprints” in everything you are going to do. “I can’t get all the links from the same place or GY Bing search will know, i can’t interlink because GY Bing search will ban the whole network, I can’t mention LuLWot2 in my LulWot1 newsletter or else my customers will know,” etc.. etc.. Its starts to take more than twice as long to create a piece of content for both than it would for just one.

“Ha ha, thats for n00bs, i will use SYNERGY”. Will you? Are your two sites really cross-sales/comparables or up sales? Is it really a coin toss of which one makes the most money? No, its not is it. One has better numbers than the other. So play the game, give your sites a pecking order.

If one site is making more, then let it support the other site, not fight against it. In short spend more time and energy on the money maker. In respecting this you realize that having LuLWotSiteA and LuLWotSiteB doesn’t mean 2000 + 2000, but probably something more like 1000 + 2500, if you are really good and lucky it might be like 1500 + 3000, but expecting such success without plenty of forethought (instead of counting the money) is a bad idea.

Furthermore the farther from disc0 you go, the faster you reach the point where new site creation results in only minor increases in wealth.

If you are good you will start doing the math to see. I can replicate this site for $20/year and it will take me 20 minutes to do it. So even though the next site might only bring in $100/year directly, you are still making a tiny global profit (you must include the time and resources it took you to get to the point where you can create a site in 20 minutes, and for $20/year).

Thinking about the network in terms of this pecking order from Pollinators to Disc0 lends it self to proper link structure as a side effect. In short your just doing the math. Sites that bring in tiny profits, require tiny resources, sites that bring in good money (and personal fulfillment) get more of your time and resources.

Now the other kind of math i see people make goes something like this, i spent $1000 on the site and promotion, its making me $100/month, but if i spend another $1000 on site it will make $200/month.

The biggest problem with this kind of math (unlike the linear repeatability), is that this CAN be true. In fact when it comes to your customer list, it is almost always the case that there is more money in the list than any other place your going to be looking.

The problem is scaling your site/operation is almost never going to lead to a linear increase in returns, just like cloning the site, the returns tend to be sub-linear, because you start being torn about how to expend your resources.

If the site really is a Merrymaker or Disc0 than it CAN result in linear or super linear returns, if you invest your resources correctly.

So what are some pointers to spending that extra $1000.

- Spend it on customer acquisition. Note: i didn’t say TRAFFIC acquisition. Get buying customers on your buying list. Don’t mix up your lists, buyers are buyers are buyers, be cool to these people. Start a real dialogue with them, find out what they are feeling, their concerns, their viewpoints, so that you can tailor your products, services and especially your copy to their language (you ARE analyzing the language people use when they post on your forums and send you emails aren’t YOU?!?) .

The people who are just after the free junk might be cool, but you can’t spend that much time on them expecting them to become customers.

- Use that money to outlive your competition. If you can live in the red longer than your competition that is one of the purest most easily proven competitive advantages you can have. If you can give out three months of free samples and your competition can only give out One month of free samples, you become very hard to touch. If your door prize has Lakers tickets and Your Competition has Clippers tickets well it can’t hurt. In short, being ready, willing and able to spend more to get a paying customer then your competition is always a winning formula.

- Spend that money on testing cross sales and up-sales or *gasp* a copywriter.

- Spend that money on getting more information about your prospects, who are they, where are they coming from and what do they really want?

- Finally, spend that money on getting more traffic. Do this after you have done the rest. Traffic is ephemeral. If you had a visitor to your site a week ago, who didn’t buy, or contact you, or bookmark, then really thats just money gone, spent fuel, there is no more value in it. You need to do this get enough data, of course, so its the price you pay. When you do pay for traffic make sure you are showing it something that is working or being tested.