Profiting from the web – 5 of the internet’s best entrepreneurs (part 2)
by James Agate
Internet entrepreneurs sometimes get a bad rep, people see them as flip-flop wearing young bucks who roll out of bed at midday and make millions selling get rich quick schemes online.
The educated amongst us know that the internet is really just another market for you to tap into, and here at WeLoveBusiness.co.uk we wanted to quash any myths that internet entrepreneurs are just hucksters and show just how powerful the internet is and the scale of business that is achievable.
We will look in-depth at 5 of the UK’s best internet entrepreneurs and their businesses and in today’s post we will be looking at 3 of the 5. If you want to read part 1 of this post then click here
Tom Leathes
Age: 32
Estimated Wealth: Exact figure unknown but his main website Top10.com achieved revenue of £9million in 2009.
Main business: Top10.com
Business Model: Affiliate marketing
Background:
Tom has a much more mainstream entrepreneurial/business background compared with the other internet entrepreneurs on the list.
Previous to staring Top10.com, Tom started and ran a recruitment agency that specialised in the corporate social responsibility marketplace; he also gained a solid understanding of the online business world by developing and selling a number of websites in the finance and commercial property sectors.
Tom’s claim to fame (other than building a phenomenally successful affiliate business) is that he built the World’s first online carbon calculator. Tom also helped to coordinate the $1million purchase of the domain Top10.com from American tech firm Idealab.
Analysis of revenue techniques:
Understand your customers and develop accordingly
Tom realised fairly quickly that customers are put off new broadband deals (now his biggest earner) because they believe the switchover to be a hassle. Tom spent a great deal of time creating a guide which showed people how to switch broadband providers and he even went to the trouble to finding out the customer service numbers of all the individual broadband suppliers in the UK to share as part of his ‘Top10.com guide to switching broadband’ . This guide is one of his most viewed pieces of work and is still shared heavily around the net gaining him traffic, exposure and residual income. The point here is figuring out what is worth investing your time and effort in, Tom could see the long term financial gains and so set about creating something genuinely useful.
Create useful but commercially oriented content
The best content offers both you and the visitor something. It should be useful to your users but earn you money at the same time and often striking a balance can be tricky.
Developing the point above about the guide to switching broadband that Tom created, it really has become fundamental to his business model. It overcomes the first objection of most customers, a visitor might be looking to save some cash on their broadband but because they thought switching would be a hassle they haven’t bothered – Tom’s guide changes all that and is the difference between a commission and a walkaway.
It’s ok to put your eggs in similar baskets
Tom is almost doing the polar opposite of how Mark Pearson is building a business. Tom is adopting a brand building strategy whereby he has created a strong brand which can replicate itself across a number of vertical markets i.e. telephones, broadband, laptops and so on. Tom is evidence that on occasions you can put almost all your eggs in one basket and really focus on building a big website as opposed to a network of smaller revenue websites. That being said, it is important to recognise that Tom has diversified into a number of different markets but is just using the same brand.
Go mainstream
Affiliate networks are a great way to get your business up and running but there comes a point where you need to start building better relationships with the merchants you are selling for. Merchants that use affiliate networks are notorious for pausing programmes suddenly or closing programmes altogether leaving you up shit creek with no paddle if you don’t have an alternative merchant to promote or your business model revolves around making that sale. You are effectively at the mercy of someone else which is rarely a strong foundation for a successful business. Tom has overcome this by building direct relationships with the big merchants cutting out the middle men and ensuring better communication, stronger offers, better commissions and of course a greater chance of continuity. Tom’s lead is well worth following once your website reaches a certain size – as your business scales you practices and tactics have to evolve too.
Analysis of traffic building techniques:
If you’re not unique find another USP
Top10.com doesn’t offer an absolutely unique service but it does stand out from all the other comparison websites in that it has an excellent brand, a bright colour scheme and a simple and intelligent user interface. The expensive look of the site helps to ensure that a large majority of the 1.5 million users that hit Top10.com per month are converted into customers – consumers like to associate with strong brands particularly ones that have a feel of quality about that, Top10.com does just this.
Work in real-time
Top10.com could in theory be entirely automated apart from the occasional update but Tom instead chooses to incorporate Top10 Live into the website (i.e. he tweets broadband and Top10 related news regularly). This almost constant tweeting undoubtedly increases exposure that Tom’s website receives and it increases the likelihood of fellow Twitter users noticing his updates and sharing his news or snippet of information. This ‘live’ aspect of the site helps to bring it to life for customers who may have seen a number of other broadband comparison websites, they see that it is a real, functioning business and not just a site setup by some pirate looking to make a quick buck.
Expand your brand
Back in the heyday of print media; magazines would expand their brand into other areas most notably of course expanding into digital editions. Many internet entrepreneurs forget that there can be more to a business than just the website. Tom decided to create a series of awards from the Top10 brand; these have become recognised by most of the major providers who now willingly promote Tom’s website on their website by way of a Top10 badge, boasting of the award. That’s a very smart way to drive some serious traffic to your website. OK, so this might not be applicable to all internet entrepreneurs however there will always be opportunities to expand.
Key Takeaway: Focus on the business
The majority of us run websites to make a profit and there is nothing wrong with wanting to be rewarded for all your hard-work. Some run their website as a hobby which is fine too but never get the too mixed up, business is business and hobbies are a pastime. Try to focus on the business side of things as much as possible because without that you simply have a website that costs you time and money – let’s be honest, we all want our websites to be cash-cow!
Martin Lewis
Age: 38
Estimated Wealth: His website is believed to be worth in the region of £250million and he owns 100% of it
Main business: MoneySavingExpert.com
Business Model: Affiliate Marketing and Email marketing
Martin Lewis is known in the UK as the consumer champion. Martin and his team work tirelessly to help consumers save money on everything from food shopping to life insurance, mortgages, bank charges and credit cards. Naturally Martin slices a nice commission off the top of this but he says the affiliate relationships never affect his judgement.
He is notoriously secretive about his earnings and recently switched from being a limited company to have unlimited personal liability so that he doesn’t have to publicly disclose his accounts but estimates in many of the UK’s leading newspapers value his website at £250million.
Background:
Martin grew up in Cheshire before moving to London to study Government and Law at the London School of Economics. After a short stint as the general secretary of the LSE student union he moved to financial PR firm Brunswick whilst also doing stand-up comedy part-time.
Martin later worked at the BBC eventually becoming the Money Saving Expert on BBC Radio 4’s Today programme – from there the idea was born and after a few other positions in TV including a spot of FIVE TV’s Open House, Martin concentrated entirely on building his Money Saving Expert empire.
Analysis of revenue techniques:
Advertising is too cheap
Martin realised early on that carrying advertising cheapened the content. By having advertisers as your paymaster, it compromised your impartiality and ethical standards but it was also very difficult to make a full-time living from.
Martin switched to generating revenue from affiliate links and receiving a commission for each user that was referred and made a purchase.
Martin has always maintained that the commissions don’t come into the equation when they are writing features so the ethical standard of the website is never compromised.
Don’t be a whore
Most of us want to make a living from the internet but Martin is living proof that you don’t have to overtly be a mercenary. There is money to be made by helping people, opening up your website and your content and simply letting users do their own thing on the basis that they will like what you have to offer and make a purchase based on your recommendation.
Establish trust before revenue
Martin spent many years establishing a name for himself as a Money Saving Expert before he really saw commission rolling in. You should always attempt to build a authoritative voice in your niche before attempting to monetise your activities.
If Martin were to have simply dumped a load of affiliate links into a website, he wouldn’t have been half as successful as he is today. Despite many ‘run-ins’ with the media where he has been instigated as a shrewd internet entrepreneur rather than a consumer champion, many still believe him to be the god of saving money and continue to trust him – that’s the value of a personal brand!
Analysis of traffic building techniques:
Use your brand
Becoming your business is one that many entrepreneurs have successfully achieved, just look at Richard Branson (Virgin), Hugh Hefner (Playboy) and Stelios haji-ioannou (Easyjet). They live and breathe the brands that they have created and they use themselves as a promotional vehicle because you can’t help but think of aeroplanes, space travel or balloons when you see Richard Branson or Playboy when you hear about Hugh Hefner or even bright orange jumpsuits when you read about Stelios.
This kind of brand recognition is no mistake. Martin Lewis has successfully mastered the art of branding himself and his business as one, so whenever he is out on a promotional or PR appearance people immediately recognise him and think of his website.
Martin Lewis has helped to build his brand by not compromising his personality – he will openly criticise any products or services that rip people off, even if he has been offered a commission to sell them!
Know your market
Martin knows that the majority of his target readership probably aren’t using Twitter and in actual fact he needs to get them online.
TV, radio and newspaper appearances help him to capture users before they go online and find other sites that offer financial or money saving advice! That means they go to MoneySavingExpert.com and sign up to his email newsletter (which is believed to earn him £15million per year alone!) and buy financial products via his affiliate links.
He is grabbing people at the right point in the purchasing process – the information gathering stage.
Many of Martin’s users are individuals who otherwise don’t really use the internet for much but they still see the value of what Martin is offering – in other words they specifically log on to the web just to read content by Martin and his team!
Combine your activities for maximum success
Martin Lewis is an extremely shrewd marketer. Whenever he has a TV or mainstream media appearance planned, he will always have a plan of what he is going to talk about. This allows him and his team to create a cohesive marketing message across a number of channels. A classic example of this was when he appeared on numerous TV stations promoting Alliance and Leicester’s new bank account, simultaneously he initiated a paid search campaign to dominate these keywords and he also optimised landing pages on his website for individuals who were searching for more information on what he was talking about. He monetised all this with affiliate commissions and this little stunt alone was believed to have pulled in hundreds of thousands of pounds! You don’t get much slicker than that!
Top tip:
Build a relationship with your potential customers on their terms; allow them to sign up for email updates, interact with them within media they use (rather than solely living within your own website bubble!) A profitable relationship is one where both parties get something out of it.
Community is an important part of being an internet entrepreneur – there is nothing worse than a self-indulgent entrepreneur that isn’t interested in what others (and in particular their users) think. Martin has embraced an open culture with the implementation of a forum to allow users to share their tips – his forum is now the UK’s 6th largest social network and no doubt his affiliate revenue has risen appropriately!
Key takeaway: You don’t need a load of money to get started
Martin started MoneySavingExpert.com at a cost of just £100 in 2003, now it is believed to generate millions of pounds in revenue each year and provide full-time employment for over 20 individuals!
In actual fact, the site is still believed to be near enough the same design today as it was back in 2003 so in design terms the website has cost Martin Lewis little in extra investment. This is also testament to the fact that being an internet entrepreneur is about content rather than laying it out in a pretty way.
Don’t fuss about working out how you are going to do something, have a clear vision and then get on with doing it!
David Taylor
Estimated Wealth: Unknown
Main business: NakedLeader.com
Business Model: Digital products and consultancy
David really is the infopreneur. He is a well respected speaker, consultant, author and blogger but perhaps most crucially (and the reason he is on this list) is because he makes a lot of money selling his knowledge online in various different formats.
Background:
David Taylor is the Naked Leader. The internet has given birth to many ‘experts’ ‘gurus’ and ‘evangelists’ however David Taylor is different because he’s actually been there and done it.
He has over 25 years business experience working with some of the world’s leading organisations including BP, Procter & Gamble and Coca-Cola.
Analysis of revenue techniques:
Your blog is your vehicle
David knows the value of his blog. He rarely generates any direct revenue from his blogging but instead he uses it to build authority and trust for his expertise. Many, many people subscribe to his blog (myself included) simply for the value he offers. A few people may never purchase anything from David and he is fine with that because he is using it to build his professional brand and to get consulting work because he is recognised as a leader in his field.
Sales copy matters
David Taylor crafted one of the best pieces of sales copy I have seen to date. Firstly he sub-titles his website ‘the home of leadership’ which when you think about it is a really smart slogan because it encapsulates everything David does and perhaps more importantly makes the visitor aware just how important the website is (as in there is nowhere else you really need to visit!)
David explains very succinctly what ‘the home of leadership’ is:
“The best leadership ideas, actions and how-to’s in one place so that you save time, effort and money… Everything else is just noise, and too many wasted trees.”
Notice that he isn’t trying to sell a product or generate direct revenue but instead he is selling you his dream, his vision, his brand. I’m sold already on the website and David didn’t need to use flashing text, a squeeze page or text highlighted yellow!
This goes back to my point previously about establishing trust before revenue.
Package up your expertise
David quickly realised that there are only so many hours in the day and therefore only so much money he can make without increasing his prices. Instead what he has chosen to do is package up his knowledge, experience and expertise into a series of digital and physical products including books, courses, events and audio products.
This allows him to reach more people, sell more and generate more revenue without having to run himself ragged. He has created a residual income and he can earn money whilst he is sleeping and even if he goes on holiday on work he did previously!
This is something we can all learn from; an automated business sounds like such a dirty word but in reality it is what we all strive for. It’s not laziness but rather good business practice to make your operation as efficient as possible. If you are an expert in a field, why don’t you package up your expertise and knowledge for sale, I’ve known many consultants who switched their business model from working 5 days a week with a handful of clients earning them a few thousand pounds a month to working a day a week and reaching thousands of people and earning hundreds of thousands of pounds a year – it really can be done!
Analysis of traffic building techniques:
Build an email list
NakedLeader.com doesn’t have the most intelligent user interface but it is clear what is going on, you can find the latest blog posts, there is a link to the digital products shop and perhaps crucially the email newsletter signup.
I have been a subscriber for a number of years
Cross-promote everything in everything you do
This should be ingrained in your mind as an internet entrepreneur. If you have your fingers in a number of relevant pies then you should use each of these as an opportunity to promote the other because that means you will be getting multiple sales as opposed to just one – simple really.
From David’s point of view, he isn’t doing this for pure financial gain; it simply makes good business and marketing sense. David does this for traffic and user engagement because some individuals who have been browsing a bookshop might spot David’s book and then for whatever reason get distracted without purchasing it. David’s brand is consistent across all the media channels so that same bookshop browser can go to his or her computer and search for David online find him and interact with the Naked leader that way. This type of ‘catch all’ net means that even if David doesn’t make any immediate revenue, he is still building awareness and generating a relationship for potential sales in the future – again very powerful stuff!
Top tip:
Recognise that as an expert you are still a student. NakedLeader.com has become a community rather than just a mouthpiece for David to blow his own trumpet. David still uses it as a source of inspiration and education to influence the work he does.
Key takeaway: Be clear on your business model
If you are looking to make money from your website then you need a clear business model from the outset. David clearly recognises that the revenue and value from his website does not lie in advertising or affiliate partnerships but rather selling his knowledge and expertise.
David is always very careful not to give too much away. The successful consultants know that giving away a play-by-play rulebook for free doesn’t make business sense – how are you going to monetise your audience if they don’t even need you anymore?!
