In this session of the Smart Passive Income Podcast I’m super stoked to feature another success story interview, this time with someone who has built a very successful iPhone application business in a very tight niche.

His name is Mike Doonan from Speech With Milo, and what makes him and his apps special is that he’s building apps that are changing people’s lives, and he’s making a good living doing so – to the tune of 5-figures a month!

With how crowded the app market is today (and any market – not just the mobile app market), creating something unique and dominating a specific niche within a niche is a great way to go, just like Mike and his wife did.

I can honestly say that the information in this podcast is the best information I have on this blog about iPhone apps.

In this session you’ll learn about:

• How an iPad paved the way for Mike and his wife’s app business.
• How many apps they have how much income Mike’s apps are generating.
• The top questions you should ask yourself before you begin to build mobile applications.
• 3 important categories of app design that you need to think about.
• Finding developers and dealing with costs when building an application.
• How to post a job description to protect your idea and find the best developers and designers possible.
• Mike’s (simple but brilliant) strategies for getting his apps found in the app store.
• Plus a lot more!

Right click here to download the MP3

Items mentioned in this podcast include:

• Speech With Milo
• Elance
• 99Designs
• Sample NDA (non-disclosure agreement) from Elance
• App Annie (for tracking app data)

Mike graciously volunteered his story to share, educate and inspire people here in the podcast, and I could tell that he really wanted to make sure he was helpful and honest about the app business too.

He actually messaged me after our call saying that we forgot cover something extremely important that he thought everyone should do when getting into the app business, which was really nice of him.

You’ll hear that important “follow-up” tip at the end of the podcast.

Mike and his wife are getting paid by making the world a better place, and that’s awesome.

Mike, if you’re reading this – I know the entire SPI community here wishes you, your wife and your applications even more success, and I’m so happy that you’re being rewarded for your good deeds.

Thank you all for listening!

Please subscribe to the podcast using the links below and look out for another success story in the next episode that is “out of this world”.

Hint hint.

Cheers, and all the best!

Please subscribe below to the podcast to get automatic updates for your device:

• Click Here to Subscribe via iTunes
• Click Here to Subscribe via RSS (non-iTunes feed)

Click Here to Download the Transcript for Session 39 (PDF)

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SPI 039 : Changing Lives and Getting Paid with Niched iPhone Apps – Success Story Interview Series – 4
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In January, my good friend Adam Baker from Man vs Debt asked me if I was interested in helping him out with a new project he was working on.

In the online world, “project” could really mean anything – a new website, an info-product, a course, software, etc. – but this project was much different – and far different anything I’ve ever been a part of before.

It’s a full-length documentary called I’m Fine, Thanks - a project I not only agreed to participate in, but I fell so much in love with it that I decided to help partially fund the project too.

In short, the documentary is about the issue of complacency in everyday life.

When I asked Adam what the goal of the film was, he said, “We want I’m Fine, Thanks to give thousands of people inspiration to live their lives based on their own hopes and dreams – not someone elses vision or script for their life. We want to push people to take the first small action to reignite their passions.”

This resonated with me big-time, because personally I know that if I wasn’t laid off like I was back in 2008, I’d be living a life where I was happy with the way things were (remember, I never wanted to leave my job) – but I wouldn’t know what it would be like to be this happy.

Adam and his crew of 4 film makers took a 2 month, 10,000+ mile road trip across the country interviewing over 60 people who each share their unique stories and thoughts about this idea of complacency.

On March 15th, Adam and his crew – Grant Peelle (Director), John Cropper (Camera Op), Dustin Koester (Sound), and Bryan Olinger (Director of Photography) visited our home in San Diego and hung out with the Flynn family for the day.

They filmed daily life in our home and even joined my wife and I downtown for date night, since it was a Thursday.

Part of the day also included a very intimate interview, which brought out a ton of emotion as I told my story on camera.

Adam wrote a few blog posts during the trek and even included a snippet of his experience in San Diego with my family here, which was really kind of him.

Adam, his family and the entire crew are now living in Northern California to work on finishing the project in time for it’s world premiere at Chris Guillebeau’s World Domination Summit this July, and then hopefully at a number of premieres around the country after that.

I’m really proud to be a part of this, not only as someone who was interviewed but as someone who financially helped make this possible too.

Today, I’m Fine, Thanks starts it’s Kickstarter campaign, so I invite you to please watch the trailer below (which has some footage of my son and I!) and if the message resonates with you, then please consider backing the project. Even a pledge of $5.00 gets you a digital download of the full documentary (yes, the full thing!) once it’s finished.

(Click here to PLEDGE or watch the trailer on the Kickstarter Page)

And here’s a Facebook button to help share the campaign and spread the word.

Thank you again for taking the time to watch, and I’d love to hear what you think!

Lastly, big props to Adam for his vision. It’s been amazing watch the project progress since the start of the idea in January, all the way through execution and the upcmoing premiere in July! Talk about taking an idea and taking action with it!

Cheers, and look out for a new podcast episode coming and the end of the week!

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“I’m Fine, Thanks”
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It’s been a while since I last published a dedicated update about my niche site, securityguardtraininghq.com. A lot has happened in the world of search engine optimization since the last update and there’s a lot of interesting data to report and thoughts in my head that will determine where I go with this site in the future.

For those of you who are unfamiliar with this particular project, it’s a site that I created from scratch as part of a publicly documented challenge which later became known as the Niche Site Duel.

From keyword research to niche selection, all the way through building the site and earning from it – it’s all documented on the hub.

Today I’m going to share some interesting updates about the earnings and traffic on the site, and walk you through the process of trying to figure out my next steps.

Earnings: Have I Hit My Peak?

Since I started the site, it has earned a total of $23,543.79.

Earnings primarily come from Google Adsense (96%), with additional earnings coming from a job board, private advertising and Media.net.

$23.5k from a niche website in under 2 years is excellent, but looking at the trend of earnings-over-time, I can’t help but be a little concerned:

As you can see, since the beginning of 2012 the earnings have been on the downward slope, which is never good.

Although I’m still earning over $1,500 per month (and on pace to do nearly the same here in May), I’d rather turn things around and continue to climb upwards like what was happening all of last year.

In order to turn things around, we have to first examine what may have caused  this particular downward trend.

Traffic, Maybe?

The first and easiest thing to examine is the traffic that’s coming to the site.

If the traffic graph follows the same path, then we can determine that the earnings have decreased because the amount of traffic has decreased – in which case we would then have to dig deeper to see what’s causing the drop in traffic. For instance, it could be a drop in search engine rankings – possibly due to recent changes in Google’s search engine algorithm.

That would make sense, but let’s head to the graph:

Hmm..after January 1 2012 the traffic does decrease slightly, but the drop is not nearly as dramatic as it was with the earnings, and it starts to go back up again in April.

It’s good to know that Google is still liking this site.

Even after all of the algorithm changes, including the latest penguin update (which I talk about in my latest monthly income report, including what happened to a couple of my other niche sites), it’s still ranking #1 for it’s primary keyword and continues to pull in traffic from over 6,230 different keywords over the past month.

So if it’s not the traffic and rankings, what is it then?

The next logical thing to check would be the trends at the point at which money is earned – Google Adsense.

There are three main metrics of interest within Adsense:

• Click-Through Rates (CTR)
• Cost-Per-Click (CPC); and
• Revenue Per  1000 Impressions (RPM)

If click-through-rates follow the same path as the earnings graph, then we can determine that the earnings have decreased because the number of people clicking on ads has decreased – in which case we would then have to dig deeper to see what’s causing the drop in click-through-rates.

It’s hard to get an overall picture of the CTR with all of the different ads on the site, each with their own specific locations, and some not showing on each page. So instead, I’ve taken 3 specific kinds of top-performing ads on this site and put them each into one graph against each other. Those three ads include:

1. The set of Link Ad units across the top of all posts and pages, including the homepage.
2. The large rectangle ad unit on the homepage, justified to the right hand side within the first paragraph of text.
3. The large rectangle ad unit on all inner posts, justified to the right hand side within the first paragraph of text.

And here’s what we get over time:

*Note that before March 2011 I used a different set (sizes and placements) of Adsense ads, which is why the data here starts “late”. Also note that the actual Click-through Rates are hidden to comply with Google Adsense’s terms and conditions.

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Niche Site Duel – Investigating a Sudden Drop in Earnings
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I’m headed back home from Boston today (I was there for the premiere of Crooked Arrows, which was awesome! Pictures of the red carpet event to come soon!), but in the meantime I’m really happy to share a wonderful guest post by my good friend Tom from Leaving Work Behind.

It’s funny because I actually haven’t talked about Twitter very much here on the SPI blog – I talk about Facebook and YouTube much more – but I do use it to successfully drive a lot of traffic to the blog and engage even further with the SPI community

Everything I would want to say about Twitter is covered perfectly in this post, including some of the tools that I use to go along with it, so please enjoy and take it away Tom!

Do you ever feel like you’re wasting time on social media? Like your considerable efforts are not suitably rewarded?

Are you spending hours and hours on social media networks like Facebook and Twitter every week in an effort to promote your blog, and only getting a trickle of traffic in return?

If any of this sounds familiar, don’t worry – you’re not alone. I have wasted more hours than I would care to mention on social media. However, I recently learned something extremely valuable – that investing a small amount of quality time is by far the best way to get results.

And when it comes to getting a huge return on your time investment with Twitter, I have developed a highly effective strategy that takes just 10 minutes a day to maintain.

But What About [Insert Traffic Source Here]?

Let me make something clear up front – I am not claiming that Twitter is the undisputed champion of referral traffic. You only have to go back through Pat’s archives to see that he gets a lot more traffic from the likes of Facebook and YouTube than Twitter. Having said that, there are two things that I love about Twitter:

1. You can start to gain real traction from day one
2. Referral traffic from Twitter is extremely low maintenance

Pat is a huge exponent of both Facebook and YouTube as sources of traffic for your blog. But I’m sure he would agree that driving traffic from those sources is no piece of cake. Pat created a huge YouTube following by taking a great deal of time preparing quality videos, and his Facebook page is testament to the amount of work he puts into that particular social media network.

In my humble opinion, Twitter is the king of referral traffic for startup and intermediate bloggers, because you don’t need an established base, and you can automate a huge part of the process (without being spammy).

Why Should I Pay Any Attention To You?

I am no A-list blogger – far from it. I started my blog last June, and it has been a huge learning curve (I had no prior experience with blogging). Many blogs started at the same time (or after) are far bigger than mine, but I am still pretty happy with how my traffic and readership has increased:

I opened my Twitter account in June 2011 and spent the year scraping around for followers. By December I had painfully amassed a grand total of 552 followers. In the New Year I started testing all sorts of different strategies in an effort to boost my number of followers. I reached 1,000 followers on 16th February 2012, and 2,000 followers on 23rd April. My account is currently growing at an average rate of around 20 followers per day.

The jump in traffic to my blog from February onwards has been down in no small part to Twitter. In March 2012, referral traffic from Twitter accounted for over 10% of my traffic (1,208 visitors):

I am analytical by nature. I’ll always look to assess whether or not the time or money I invest in particular endeavor is giving me a suitable return. On average, I only spend about 10 minutes per day on Twitter. So approximately 5 hours invested on Twitter in March returned me 1,208 visitors. That’s about 15 seconds to get each visitor. And don’t forget – this is for a pretty low traffic blog with a pretty modest Twitter account. The returns should increase exponentially with better-established blogs.

By now you should be sold on the concept that Twitter can be an excellent source of traffic for your blog. Now it is time for me to show you how you can increase your follower base and drive more traffic to your site by investing just a few minutes a day.

Your Profile

I apologize for starting with something so prosaic, but the quality of your Twitter profile has a direct impact on the number of visitors you will attract, and extension, the amount of traffic that Twitter can drive to your site. Your profile is what most people check out when they choose whether or not to follow you, so it should be optimized to maximize your conversion from following to follower.

Work on the 140 characters you are allowed to describe yourself. It should set out your Unique Selling Proposition (USP) in a concise and compelling manner. It is also important to include your website’s URL in the bio itself.

If you have time, do something with your profile’s background. It doesn’t have to be anything particularly spectacular – just something that shows you are a person of substance. It took me about 15 minutes to make mine, but it makes more of an impact than any of Twitter’s default backgrounds.

Finally, and this should go without saying, but you must have a profile photo. Nothing screams “spammer” more than that little egg:

This is not your friend!

If it is a personal Twitter account (or one for your personal brand), it should be a photo of you. If it is an account for your blog, it should of course be your blog’s logo.

Tweeting for Engagement

There is just one more thing to cover before we delve into the process of increasing your followers.

Just like your profile, the quality of your tweeting has a direct impact on the percentage of people who will follow you. If you follow someone, they may well check out your most recent tweets to see if you are worth following back. If your tweets are sporadic, of a low quality, or even both, you may well lose a potential follower.

Engaging with your followers is where the vast majority of your time spent on Twitter will go. Optimizing your profile and setting up the automated process is an upfront time investment – interaction is an ongoing process.

As I alluded to above, if you want to maximize the success of your Twitter account, you need to have a USP. There needs to be a reason as to why people would want to follow you. It could be because you provide links to high quality articles, or you could tweet out entertaining rants. The what isn’t particularly important, but the effect is. Give people a compelling reason to follow you, and your conversion rate from following to follower will increase.

By its very nature, engaging with your followers will require some imagination, but here are some basic fundamentals and ideas to get you started:

• If someone reaches out to you, respond
• Ask questions – provoke conversation
• Reach out to new followers
• Be interesting!
• Use images
• Showcase milestone followers (e.g. “@tweeter just became my 2,000th follower! You rock!”)
• Do FollowFriday, but be imaginative (how about attaching a photo of a bouquet of flowers, and do a lady’s only #FF?)

Just treat the above ideas as starting points – don’t be afraid to try your own thing.

Increasing Your Followers

Alright – let’s get down to the nitty gritty.

When it comes to increasing your followers, you have two options – manual or automatic. The pros and cons of each are pretty self-explanatory – manual is free but time-intensive, whilst automated will set you back a few bucks but requires barely any time investment. It is ultimately up to you to decide how to proceed.

The key is to find likeminded people to follow. A certain percentage will follow you back – in my experience, between 10-30% (depending upon a variety of factors). When I first started doing this, I was surprised by the amount of messages and emails I received with something along the lines of “I found you because you followed me on Twitter”. Traffic numbers only tell you so much – if someone takes the time to email you as a result of finding you on Twitter, you know you’re onto something.

Finding likeminded people is simple – just find other Tweeters in your niche. Logic dictates that if you cover similar topics to John Doe, his followers will potentially be interested in following you too. You can of course do this manually, but if you want to save yourself some time, purchase TweetAdder. Tutorial videos can be found here, and the full instruction manual can be found here.

Once you have TweetAdder up and running, the following process is almost entirely automated – you only need to “top up” people to follow whenever the well is running dry.

There are two other strategies I recommend. Firstly, you can search for potential followers by keyword, again by using TweetAdder, or Twitter’s Advanced Search feature. You need to be careful about the context of keyword you use – try to be specific, so that you do not follow people who would have no interest in your account. Secondly, if your Twitter account is geographically relevant, you might try targeting people in a certain area. This can also be done with TweetAdder, and also via Twitter’s Advanced Search feature.

Filter Your Following

In my opinion, you need to be very careful about your following/follower ratio. If someone notices that you have followed them, and subsequently see that you have 100 followers but are following 1,000 people, the chances of them following you back are remote. Not only that, you risk being reported as a spammer. Furthermore, once you are following around 2,000 people, your ability to follow more people will be restricted by the number of followers you have.

So in short - don’t push it. I personally always make sure that I am following less people than the number of followers that I have – I think it looks far less spammy. It may not be the most aggressive or perhaps the most efficient way of building your follower base, but I am keen to keep things “natural”.

The key to keeping your following count under control, so that you can continue to follow new people, is to separate the wheat from the chaff. There are three types of Tweeter that you should look to unfollow:

1. Someone who hasn’t followed you after a certain period of time
2. Someone who hasn’t tweeted for a certain period of time (i.e. a dormant account)
3. Someone who has no profile picture (and is therefore highly unlikely to be a real person)

If you are doing this process manually, the first type is the most difficult to handle. With TweetAdder, you can simply set the software to automatically unfollow anyone who hasn’t followed you within a certain number of days (I have it set to 3 days). But I don’t believe that there is a free tool that calculates how long ago you followed someone.

Therefore, you have a choice – you can shorten your cycle to one day and unfollow anyone who hasn’t followed you from the previous day, or you can add people once every few days, and unfollow those who haven’t followed you at the end of every cycle.

The best free tool you can use to unfollow people manually that I have found is ManageFlitter. Just sign in and hit the “Not Following Back” tab:

On the resultant screen, hit “Quick Edit”, and you can then select all those that are not following you, one hundred at a time:

You can repeat the same process for accounts without profile pictures by selecting the “No Profile Image” tab.

I tend to carry out this process twice a week – it takes about 3 minutes in total, and ensures that the path is clear for you to follow people who will be more likely to follow you back.

How Many?

At this point you may be wondering about volume – namely how many people you should follow/unfollow per day. My @tomewer account follows 200 people and unfollows 200 people every single day and I have never encountered a problem – in fact, I could probably push it further if I felt the need to. However, I believe that there are various factors that control Twitter’s lenience in such matters.

For instance, I was developing a Twitter account for a small business and was following people at a rate of 100 per day. After a few weeks of this I received a warning from Twitter that was not to be taken lightly. The message was loud and clear – stop what you are doing, or we will delete your account.

I believe that there were two reasons for this particular account getting warned:

1. The account was young and didn’t have many followers
2. The account may not have been relevant to many of the people I was following

My theory is that growing a Twitter account is much like SEO. A well-established website is likely to be far more stable in its ability to handle large volumes of links than a brand new site.

So tread carefully – especially if your account is relatively new and/or small. Although you are likely to get a warning first rather than an outright ban, it is probably better not to attract Twitter’s attention at all.

Driving Traffic

Everything I have discussed above leads to one thing – how to use your Twitter account to drive traffic to your blog. That is of course the ultimate aim (although there are certainly other benefits to using Twitter). And doing so involves yet more easy automation.

I use the appropriately named Tweet Old Post WordPress plugin, which as you might expect, automatically tweets out your old posts at set intervals. However, I don’t want you to simply fire it up and get on with your day – in order to preserve the quality of your Twitter account and maximize referral traffic to your site, there are a few key changes you should make to the settings.

Firstly, I recommend that you tweet out your post title only. You shouldn’t include any additional text within the tweet – just the title of the post itself. “A post from the archives” or words to that effect will probably decrease your click through rate (people don’t like old content).

You also need to consider how often these tweets are sent out. It really depends on how often you are tweeting out manually – if all your followers are seeing are links to old posts on your blog, they won’t hang around for long. It isn’t an exact science – I would just go with what makes you comfortable. My settings are a minimum interval of six hours, and a random interval of eight. I also set a minimum post age of 28 days.

Finally, and perhaps most importantly, you want to make sure that you are only tweeting out your evergreen content. There is little point in tweeting out a link to a blog post that is no longer relevant. The easiest way to do this is to add a post category called “Tweetable” (or something similar), then exclude all other categories in the Tweet Old Post settings screen:

The alternative option is to exclude specific posts from being tweeted out, but I find the above option to be easier (you simply add a worthy post to the “Tweetable” category when you publish it).

As for new posts, I think it is sensible to tweet them out to your audience 2-3 times within the space of 24 hours or so. The key is to tweet out the post at different times, so that you (a) maximize the people you reach and (b) don’t irritate people by linking to the same post in quick succession. I would recommend that you tweet out something different every time. You can use the original post headline, an alternative headline, ask people a question, or something else altogether. Just keep it fresh.

Tweet Old Post truly is a set and forget plugin that will bring in consistent traffic for as long as you use it.

Conversion

By now you should be well on your way to setting up a largely automated system that will not only send highly targeted traffic to your site, but also increase in effectiveness over time.

But there is one more thing you should consider before you move on – the subject of optimizing your tweets to achieve the highest Click Through Rate (CTR), in addition to maximizing re-tweets and mentions.

It is good “twittiquette” to leave 25 characters spare in your tweets. People like to add their own thoughts and mentions, so give them space with which to do so. Beyond that, anything is fair game, but try to treat your tweets like any other key piece of text that you hope to convert people with. It is not the purpose of this article to explain how to write engaging copy, but the same kind of headline writing advice you can find over at Copyblogger applies perfectly to tweets.

Now to move onto timing. This is something that Pat has spoken about before, with his post on Tweriod and Buffer. If you haven’t already read that post, I recommend that you do so, and follow his advice. The key takeaways are as follows:

1. Find out when most of your followers are online with Tweriod
2. Use Buffer to to schedule your tweets to be sent at optimum times

But now there’s more. Buffer gives you analytics information on every single tweet you send out:

You can see how many times the link was clicked, how many Twitter accounts the tweet was sent out to (including re-tweets), in addition to the number of retweets, mentions and favorites. With this kind of information, it doesn’t take long to figure out what kind of tweets work in terms of attracting more clicks.

Improving your conversion rate in any scenario is a matter of trial and error, and Twitter is no exception. Over time you will gain a better understanding of what kind of tweets resonate best with your own unique group of followers. Keep any eye on the analytics provided by Buffer, and learn from it.

Wrapping Up

There is a lot of information to digest above, and you would probably be best served by bookmarking this post and coming back to it at regular intervals, whilst you are working on your Twitter strategy.

However, if you break the process down into its constituent parts, there is nothing to be intimidated by. The key is getting your systems in place. Once your following procedure is automated, you just need to spend time engaging with your followers – and to be honest with you, I find that a whole lot of fun!

I would like to finish by asking you a question – do you agree with my methods? If so, please share your success stories! If not, I would love to get your feedback and constructive criticism. Just let me know in the comments section!

You can find Tom Ewer over at Leaving Work Behind, where he blogs about quitting your job and living a fulfilling and successful life. He recently discovered a method you can use to boost blog post tweets by 27% or more – click here to check it out!

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What You Need to Know About Twitter
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Welcome to my April 2012 income report!

Every month I write a detailed report about my online businesses.

I do this not only to help me keep track of my progress, but also to show you what’s working for me, and what’s not.

In my monthly reports I always include an extremely detailed breakdown of the income I’ve earned online and I conclude with some of the more important things I’ve learned during the month.

I do this to motivate and to be transparent. Plus, I personally feel that if a person is publishing information about making money online he or she should show all sides of the equation so that the readers can make honest decisions based on honest information and common sense, not on hype.

If you’re just starting out online, please understand that making money via the Internet is definitely not an overnight thing, and it takes a lot of hard work and dedication to pull it off.

A lot of people will attempt it and many people will fail – but I absolutely know that it’s possible.

I struggle through trial and error every single day – but as long as you have a goal and constantly work towards it you’re giving yourself a chance.

Thanks again for your support, and I hope you enjoy this month’s report. 

Important Going-Ons in April

Most of April was dedicated to a passion project I’ve been working on, Crooked Arrows, a lacrosse movie that actually had it’s world premiere last night in Syracuse and had an amazing response from those in attendance (over 1400 people). It premiers in Baltimore today, and then in Boston on the 14th, which I’ll be attending myself!

I’m the Director of Web and Social Media for the independent Hollywood film and have been prepping a lot of the website and social media properties so that we can get some good numbers in the box office come May 18th.

I won’t get into too much more detail, but I’m proud to say that we just surpassed 100k likes on our Facebook Page and I used my experience in the iPhone app industry to help create a fun little application for the movie that has already been featured by Apple.

Although this definitely isn’t passive work, it’s work that I really enjoy – and it’s my other, more passive businesses that allow me to explore life a bit and try new things like this.

Going back to my primary businesses, I can say there was a lot of “movement” this past month – both good and bad.

Google’s Penguin Update 

Google has been pretty notorious lately.

In March, they de-indexed several private blog networks which killed the rankings of several niche websites that were relying heavily on these networks to boost backlink authority. All of my sites held up, which was nice.

Then last month, they seemed to be on an Adsense account banning spree.

I noticed a ton of chatter in different forums around the web from people who were recently banned from Adsense. Even a few people in the SPI community announced that their accounts were banned too, and many who are in the niche site arena have probably heard that Spencer from Niche Pursuits was also banned from Adsense - which is a shame.

I’m actually good friends with Spencer (who is also the creator of the popular keyword research tool, Long Tail Pro) and know that he wouldn’t put his business at risk by doing anything that would justifying a ban from the ad network, but it still happened anyways.

It’s hard to tell exactly why this going on (Google isn’t very communicative about these things) and that’s the scary part. It just seems like it could happen to anyone at anytime, so the best thing to do is make sure you’re not relying entirely on Adsense for an income because it can all be taken away in a flash – even if you seem to be doing everything right.

So far, my account is still alive and kickin’.

Then, in the later part of April, Google came out with Another Step to Reward High-Quality Sites, aka. the Penguin Update.

In short, the Penguin Update targets webspam – primarily sites that they feel are gaming the system in ways that are against their guidelines.

What’s interesting is that this update is not about improving search results, but rather penalizing manipulative sites.

For example, Google is willing to penalize and drop down a site that could be considered the best site about a specific topic simply because it’s involved with bad link practices. This is why many search engines results have what seems like poor quality sites ranking high up on the page, and why many people who have had sites just sitting there doing nothing for a long time may have suddenly seen a jump in the rankings.

Google is definitely sending a message here and is willing to have poor search results – maybe only temporarily – to make sure people follow the rules.

There are a lot of mixed feelings about this update and it has killed a lot of people’s rankings, even those who were not involved in any bad link building schemes – but at the same time many people’s sites are doing better than ever!

Traffic and rankings for my most profitable niche site, securityguardtraininghq.com, have not shifted at all, which is reassuring.

In fact – I got back the #1 spot for my primary keyword, security guard training, which I had lost for a couple of weeks and talked about in last month’s report, but even that drop didn’t effect my traffic much.

Here’s a snapshot of traffic for securityguardtraininghq.com from the past 2 months:

The graph is very steady and the site has been consistently earning about $45-50 per day for the past couple of months on Adsense.

This is opposed to one of my newer niche sites that was doing really well, until the Penguin update hit. You can see this happening at the tail end of the month in the graph below:

This particular site, which was ranking at #3 for it’s primary keyword, is now ranking at #60.

An obvious penalty.

Why did this happen?

Because of the very reason why Google said it would – a backlink profile that they didn’t approve of, and it’s funny that this happened when it did.

This was actually an experimental site that I had been working on along with one other experimental niche site that was targeting a keyword with similar search numbers and competition.

Here’s how the experiment started and how it all went down:

I was contacted by a link building company – one that apparently followed the same sort of methodology that I outlined in The Backlinking Strategy That Works - except they did it faster with more parts and more levels.

They wanted me to link to their site, but I said I would only consider doing so if their service worked for me and if I was confident that it would help my audience.

I know a lot of my audience dislikes the backlinking process when building a niche site, so I thought this might be a good solution if it worked out, although I had my doubts. I needed to see results first, and I wanted to test their results against my own.

Within 3 weeks I had two sites (Site A & Site B), each targeting a different keyword with similar search and competition numbers.

I filled each site with 10 pages of content, with a scheduled an additional 10 pages of content to go out every 3 days, and then started the backlinking process for each, the company on Site A and myself on Site B.

Site A definitely saw more movement, faster. In about 25 days I started to see the rankings climb in Google, at which point it seemed to plateau for a while. Then, about a month later, it shot up and eventually the primary keyword hit #4 in Google. It started to pull in a lot of long tail keyword traffic as well, and within about 2.5 months, the site was averaging about 250-300 visitors a day and eventually climbed a tick to #3 in Google.

Site B took a lot longer to see any sort of significant movement. I was actually expecting things to happen a lot faster since I saw more immediate results with the same strategy in the niche site duel, but I kept at it. After about 2 months I started to get some significant long tail traffic and was ranking #20 for my primary keyword. Then, at 3 months, I was in the top 10 and seeing about 100-150 visitors a day, which was pretty good.

Both sites were cruisin’, and then about 4 months into the experiment, the Penguin update hits.

I shared what happened to Site A above. Site B is below:

No huge drop or penalty.

As far as the experiment – I think it’s safe to say that Google didn’t really agree with what they were doing on Site A, or maybe just the frequency at which they were doing it.

I was happy to see that Site B did not take a hit, and since May it has actually has climbed a few spots in Google as well.

The major diference, I think, was that because I was doing the backlinking myself, it was more natural and I could make sure the direct links that were pointing to my site were made of truly authoritative links (like those from WordPress, Blogspot, Tumblr, and top article directories – which are more powerful now than ever, according to this forum post that I read), as opposed to sites in a network that may have been linking to several random sites in their system and were eventually considered spammy by Google, and possibly doing things too fast.

Now, if you’re wondering about monetization on these sites, I actually used this opportunity to also experiment with promoting CPA offers (cost-per-acquisition), which promote products and offers listed on sites like Commission Junction, instead of creating an Adsense site.

Everything is strictly on a pay-per-lead type of model and I just wanted to try something new and different, but apparently it’s obvious I still have a lot to learn, or maybe this just isn’t my cup of tea.

In total, over the past 4 months, both sites earned about $180.00 combined. A lot of people make a killing with CPA leads, which is why I was happy to experiment.

That said, the earnings were not my primary concern – it was the backlinking, traffic and rankings that mattered to me. Does this mean that all link building services are bad?

Definitely not, but I have no experience with any others so I can’t really come to any conclusions. The most important thing is to be cautious about how fast and what kind of links are pointing to your site.

And when I think about it, and the success of this blog, I never did any link building for it at all.

It took much longer to see any traction (over a year), but for the long-term, I think the  ”dominate the niche and become the ultimate resource for people looking for a solution” approach will always be better because you’ll always pull natural links – you just have to be patient.

SEO is still relevant though, and the tricky part is understanding what kind of off-site SEO is acceptable. It’s hard to say “never conduct any backlinking at all” because not only does some of it still work, some of it is actually accepted by Google.

For example, we all know how powerful guest posts are – but really that’s a form of backlink profile manipulation when you think about it. So where is the line drawn?

It’s hard to say, but there will always be one constant for a good long term, success site – a good quality site, which is what we should all strive for.

iPhone Application Updates

To keep this post at a reasonable length, I’ll cover just one more important thing that happened in my business that had an obvious effect on my earnings in April.

My iPhone app business partner and I haven’t released a new app in quite a while, but we’ve been updating some of our most successful applications and have seen great results.

Our income increased 47% for the month as a result of updating just a couple of our best applications. We did do a relatively small ad spend to increase our rankings and exposure in the app store, which helps us drive more downloads for a longer period of time.

For those of you in the App industry, if you don’t have an existing audience to sell to, that exposure in the top 100 lists is extremely important. Keyword research is a bit of a mystery on the platform, so up and front exposure is always something to shoot for.

Of course, if you can land “app of the week” like our good friend Benny Hsu did, then you’ve struck gold.

Look out for an upcoming podcast (session #39) next week which is a very inspiring success story about someone consistently generating 5 figures a month from iPhone apps in a very targeted niche.

It should be a good one!

Now, let’s get to the numbers for April…

Income Breakdown

Disclosure: many of the links below are affiliate links that will earn me a commission if you purchase through them. If you do, I absolutely appreciate it and if you have any questions about any of the products or services please contact me!

Also, please note that a lot of these are figures from reports from each individual company for the previous month. It does not necessarily reflect the actual payment which, for some of the companies listed below, come 30 to 60 days later and may change because of potential refunds or corrections.

• GreenExamAcademy.com Product Sales:
  • Total: $2,681.82
    • Last Month: $3,283.06
      
    • Difference: -$601.24
      

• SecurityGuardTrainingHQ.com:
  • Adsense: $1,163.02
  • Media.net: $144.05
  • Job Board: $20.69
  • Private Advertising: $273.25
  • Total: $1,571.01
    • Last Month: $1,810.90
    • Difference: -$239.89
      

• Purchased Website #1 (not revealed yet):
  • Adsense: $131.77
  • Last Month: $109.79
  • Difference: +$21.98

• Other Google Adsense (includes other mini niche sites & videos):
• Total: $276.82
• Last Month: $298.02
• Difference: -$35.20

• New Amazon Product Niche Site (not revealed yet):
• Total: $272.13
• Last Month: $323.23
• Difference: -$51.10

• Affiliate Earnings (includes other niche sites):
  • Market Samurai: $5,159.52 (market samurai free webinar replay)
  • Instant Article Factory: $274.00
  • The Best Spinner: $2,569.12
  • Blog Blueprint: $233.64
  • Unique Article Wizard: $3,229.40
    
  • Bluehost.com: $20,100 (Create a blog in less than 4 minutes with Bluehost)
  • iPhone Apps w/o Experience eBook: $132.76
  • Chris Guthrie’s Amazon Niche Profit Course: $69.64
  • EasyAzon Plugin: $84.30
  • Virtual Moguls Website Buying Course: $105.33
  • Affiliate Marketing for Beginners by Corbett Barr: $177.48
  • Joseph Archibald’s 40 Day Challenge: $149.28
  • Thesis Theme for WordPress: $965.50
  • Long Tail Pro Keyword Research Tool: $478.26
  • Aweber: $730.25 (email list strategies)
  • Elance.com: $114.00
  • Odesk.com: $150.50
  • 99Designs.com: $29.00
  • EasyPLR: $46.47
  • Screenflow: $19.80
  • Woothemes: $14.00
  • E-Junkie.com: $70.60
  • Virtual Staff Finder: $308.00 (outsourcing tutorial)
  • Build a Blog That Matters Course: $860.86
  • Traffic School with Corbett Barr: $3,601.00
  • OptinSkin by Glen Allsop: $1,821.73 (my review and bonus)
  • Blog World Expo Tickets: $45.21 (use discount code SPIBWE10 for 10% off)
  • Amazon.com from SPI: $249.24
  • Total: $41,788.89
    • Last Month:$42,905.88
      
    • Difference: -$1,116.99

• iPhone Applications:
  • Paid Apps: $5,468.25
  • Free Apps: $520.58
    
  • Total: $5,988.83
    • Last Month: $4,061.86
    • Difference: +$1,926.97

• Gross Total in April: $52,711.27
  • Last Month: $52,792.74
  • Difference: -$81.74

• Expenses: ~$4,315.91
  • Major expenses this month include virtual assistants (one full-time, one part-time), hosting account for SPI (dedicated server), hosting for other websites, recurring payments for various tools, CPA (Certified Public Accountant) fees and advertising costs for iPhone applciations.

• Net Total in April: $48,395.36

(Click here to read a typical monthly expense report which breaks down how my time and money is spent)

Another amazing month!

What’s crazy is that although a lot of the numbers shifted, the total gross amount was less than $100 off from last month.

And this isn’t the first time this has happened either. Different income sources have good months and bad months, but it’s the diversification of income streams that provide that overall stability.

I’m also happy to see that my non-SPI related earnings continue to hover at around $10,000 per month, which is great, but I wish there was more consistent growth. The recent changes with Google has definitely slowed a lot of my new developments, but it’s reassuring to see many of my web properties that I have owned for a while continue to hold up strong.

I’ll be the first to admit that a significant portion of my total online income comes as a result of The Smart Passive Income Blog – mostly from the products that I recommend as an affiliate, which are products I’ve used or am extremely familiar with and have helped me in one way, shape or form.

I’m extremely fortunate to have the support of an amazing community here who often makes purchases through my affiliate links. Some people even go out of their way to make sure they do that, which means the world to me.

With this comes a great responsibility to the community that I know I have and will never take for granted – and as such I never promote just for the potential income that can come from an offer, even though those opportunities are definitely there.

I’m incredibly grateful for everything and I will continue to give back with valuable content and my experience in return.

Things I Learned in April

First – relying 100% on Google for anything – income, traffic, or even search results – is not a good idea.

Second – people love and respond to stories. I’ve said this several times before, but stories are the most powerful form of marketing – they are what people remember and what inspire them to take action.

In April, I published the history of my first online business, in full detail, and it has garnered an amazing response. Since posting it, I’ve been getting several emails a day saying that it was that specific post that has given them the drive to either start something new on their own, or revisit an abandoned project, which is awesome.

I’ve never gotten a response like that from any sort of list post or how-to post, and when I think about my most successful posts on SPI – they are all wrapped around some kind of story.

Even the niche site duel series - although instructional, it’s really the story of how I did things on my own.

Third and finally, it’s the fact that as much as we always hear about the bad things and bad people out there, every once and a while a story crosses our path that shows there are good people in this world.

If you want to feel better about life 10 minutes from now, I recommend you watch Caine’s Arcade. Check it out below:

Coming Up!

In the beginning of June, I’ll be in New York for Blog World Expo!

If you’re going to the event, make sure to come find me (I’ll be wearing this backpack), and in case you haven’t bought your ticket yet, feel free to use discount code SPIBWE10 for 10% off your registration fee.

May is dedicated to making my (3) presentations as best as they can be.

Hope to see you there, and if you can’t make it, I’ll try to get a recording for you afterwards.

Cheers, and all the best!

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My Monthly Report – April 2012
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In this session of the Smart Passive Income Podcast I’m happy to welcome writer, traveler and fighter of the status quo, Chris Guillebeau.

Chris has a blog called The Art of Non Conformity, he holds an annual conference called the World Domination Summit and the first time I heard about him was when I was introduced to his manifesto entitled 279 Days to Overnight Success (written in 2009) - which goes along with a lot of the same things I’ve been talking about on SPI lately – the idea that success doesn’t happen overnight, and it’s all about providing a service to others.

For some reason it took us this long to finally connect, but it’s his philosophy of improving one’s own life while improving the lives of others at the same time that I’m really attracted to and believe in, which is why I didn’t hesitate to read his new book, The $100 Startup (amazon affiliate link), when he offered me a review copy to read before it was even released (it goes on sale tomorrow – Tuesday, May 8th, 2012).

I have an entire collection of books that different authors and publication companies have sent me, and I get a new one every couple of weeks it seems. Most of them are from authors I’ve never heard of before or about topics that aren’t really right for my audience here on SPI, so I don’t even bother to read them.

When I received Chris’ book, however, I was eager to dive right in – and I’m really glad I did. It’s a smart blend of The 4-Hour Work Week by Tim Ferriss (but more realistic) and Rework by Jason Fried and David Heinemeire (but more actionable) – so it’s definitely going up on my Resource Page.

I was happy to have Chris promote his book on the podcast a little, but that’s not all I wanted to talk about. We also talk about his backstory and his philosophy of doing business, and also about publishing books in general – traditional publishing vs. self publishing, and that whole debate.

To be more specific, in this session you’ll learn about:

• What all this “world domination” talk is really all about.
• The various business ventures that Chris is involved in.
• How Chris went from juvenile delinquent to successful entrepreneur.
• Chris’s response to people who feel they don’t have any special talents or skills that could be turned into a business.
• Why “teaching a man to fish” may not be a good thing after all.
• What Chris’s response is to “Is every passion profitable?” and his formula for success.
• How Chris found the success stories (and qualified them) for The $100 Startup.
• Chris’s answer to “why should people read your book when there are a lot of similar books out there…”
• Chris’s thoughts on traditional publishing vs. self publishing.
• Plus a lot more!

Right click here to download the MP3

Items mentioned in this podcast include:

• The $100 Startup
• The Art of Non Conformity
• A Brief Guide to World Domination
• Ramit’s Earn1k Program
• Delivering a Mattress by Bicycle (The Mattress Lot)

I hope you enjoy this session of the SPI podcast! Thank you for listening, and the transcript will be available later today!

Cheers, and all the best!

Please subscribe below to the podcast to get automatic updates for your device:

• Click Here to Subscribe via iTunes
• Click Here to Subscribe via RSS (non-iTunes feed)

Click Here to Download the Transcript for Session 38 (PDF)

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SPI 038 : World Domination and the $100 Startup with Chris Guillebeau
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In my last post, If I Had to Start Over…This is What I’d Do Differently, I shared a lot of things that I wish I knew when I first started doing business online. I made a lot of mistakes and although I can’t go back in time and redo things, I hope that my past experiences can somehow help you.

In today’s post, I’m going to flip the switch and share what I know I did right instead – things that I would make sure to do again if I had to start from scratch.

It’s interesting because in the beginning, at times, I wasn’t fully aware of why I was doing so well. Only now – almost 4 years into self-employment online – can I look back and fully understand why things transpired the way they did.

Here’s what I know I did right…

I Created an Online Resource That Was Actually Helpful

My first online business was a resource that I built with the primary objective of helping me (and a few co-workers) pass the LEED exam. In fact, when I started it, I was still working 9 to 5 and never actually had any intention of turning this site into a business, but I always had the intention of turning it into a resource.

Because I was studying for the exam myself, I was a perfect example of what eventually became my target audience. I understood everything that needed to be on that site and wrote content in a way that was easy to navigate and easy to understand.

Without me even knowing it (I’ll get to that point in a second) people eventually found exactly what they needed to pass the exam too, and word spread like crazy.

I feel that the long-term success of a website is directly proportional to it’s ability to become a resource - an aid to fulfill a certain need, want or desire.

Just because a website exists on the Internet doesn’t necessarily mean it’s going to be a good resource, and it’s the webmasters who actually create something that’s helpful who are going to see results.

In addition, a good resource is not only helpful, but also easily accessible, which is where the idea of how and why I was found comes into play…

I Published a Lot of Relevant, Search Engine Friendly Content

When I first added Google analytics to my site and saw that hundreds (and sometimes thousands) of people were already visiting my site every single day, how that happened was a total mystery to me.

I didn’t know what search engine optimization was or how keyword research worked – but now that I’ve been doing this for a while I know exactly what happened.

For over 6 months, I was publishing new content on the site every day – sometimes multiple times a day.

To me, I was posting a new section of the exam I needed to learn and memorize. In the titles of posts and through the content I included relevant terms that were important to me as a “resource builder” – it was just natural to do that.

To Google, however, I was publishing fresh material that deserved to rank extremely high for all of the keywords relevant to the exam, which no one else on the web was talking about in as much detail as I was. As I began to add more content, my site became even more of an authority.

My site was found, shared and linked to by several other websites – all without me knowing.

I Used My “Unfair Advantage”

The “unfair advantage” is a term I picked up from my recent interview with Lain Ehmann, and it’s the idea that in order to rise above the competition you have to find out what YOU have to offer that nobody else can, and milk it.

Again, I didn’t know it at the time, but my unfair advantage was the fact that my first business was not built like a business at all, and my personality was infused into every part of the site.

My notes, and then later, my exam tips and guides were directly from me – and I didn’t hide that behind any sort of company facade.

Everyone knew it as Pat’s site – sort of like here on SPI.

When people started to leave comments and email me, it was always “Hey Pat…” or “Thanks Pat”.

I wasn’t a faceless company like all of the other LEED sites out there at the time.

That’s why when the company that actually administers the exam came out with their own set of study guides, and I thought my business was dead for sure, I actually started to see an increase in sales and earnings.

My unfair advantage was that it was just me and my personality.

People could connect with me and were more than happy to pay me back for the information I gave them.

When I launched my eBook in October of 2008, people who already passed the exam paid for it anyways, just to thank me.

I can’t imagine that happening if I wasn’t so personal with people on my site.

This particular strategy may not be suited for all niches and industries, but it definitely worked with GreenExamAcademy.com, and now again on The Smart Passive Income Blog.

No matter what though, utilizing that “unfair advantage” is extremely important.

What’s yours?

I Established Relationships with My “Competitors”

When I first started monetizing my site, before I published my eBook, I gave Adsense and private advertising a shot.

When seeking potential advertisers, I went in with the mindset that although I could easily put these companies into the competitor category, these were companies I was trying to get to pay me money to advertise on my site, so I had to build a relationship with them first.

Cold emails aren’t very good for this, so I actually called various companies, told them who I was and that I’d like to advertise for them and their products.

I got a few “no thank you’s”, of course, but I kept calling because I knew I had the traffic to serve them and I eventually ended up with upwards of 6 companies advertising all at one time, each paying me $50 to $300 per month for a small banner ad.

Many of these companies eventually began linking to my site promoting my own material that was not in direct competition with their own.

One company in particular, for the last few years, has been an amazing partner site that always keeps me up to date on the latest going-ons in the industry and has allowed me to become one of the only affiliates for their products.

When I think about The Smart Passive Income Blog and the approach I have with my “competitors”  here, it’s the same thing – I don’t view them as competitors at all, but partners instead.

Together, we all help each other out, keep each other informed and just grow together.

I’ve even started to see interactions and potential long-term relationships with other companies for my security guard training niche site, which is pretty cool.

I Added More Products to My Product Line

I launched my eBook in October of 2008 (about 18 months after starting the site and building credibility) and the sales numbers looked like this:

• October 2008: $7,126.91
• November 2008: $8,598.51
• December 2008: $10,900.70

In mid-December, I went back to the same mastermind group that helped me realize I should write an eBook and was given another life-changing tip: add an audio guide to my product line.

The idea was simple: just record what I have written in my eBook, package it into mp3 files, and sell.

There was no hesitation this time – I wanted to get it done right away, so I went home and started recording.

Unfortunately, after 2 days of recording and editing, I deleted all of the files.

It was terrible!

The audio quality was atrocious, I sounded timid in all of the recordings, and I could not imagine anyone being happy after purchasing what I had created.

I needed some help.

Fortunately, I was given the tip to try out a site called Elance.

I actually went back into my account and found the exact job description I posted, which I thought was interesting (click to enlarge):

Note: I only wanted a female voice because to me it was easier on the ears and much easier to learn from – especially for long periods of time. 

I received 19 proposals with sample recordings and eventually found my perfect voice talent, who recorded everything and delivered it to me in about a week.

By the first week of January, I had the audio ready to sell on the site.

I included the audio guide as a separate product for the same price as the eBook ($29.99), but also sold a combo product that included both the eBook and audio for a discounted price ($44.95).

Here’s what the sales numbers looked like from that point forward:

• January 2009: $17,788.63
• February 2009: $20, 128.35
• March 2009: $25,787.65

And the coolest part was that more people were buying the combo product than individual products!

Adding more products to my product line was definitely a great move, and with an eBook – an audio version just seems like a natural, second product to introduce to a product lineup.

If you have a website and are already making sales – try thinking about what else you could add to your product line.

I Put My Readers First

I’ll keep this one short, sweet and to the point:

In any successful business venture I’ve been a part of, I’ve always put my readers first – not the money.

Don’t get me wrong, I’m not going to lie and say I don’t like to earn good money – but I will say that the more I help people, and the more I can put my readers first, the more I seem to get back in return.

That’s what I always try to do, and it’s a business model that I’m always happy to promote.

I hope you enjoyed this post, and look out for SPI Podcast Session #38 and my April Month Income Report coming up next.

Cheers!

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What I Know I Did Right
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This is a follow up to my last post, the history of my first online business. 

I’m often asked: if I had to start over again, knowing what I know now, what would I do differently?

And more importantly, why?

There’s a lot, so let’s get right into it…

I Should Have Been Proactive – Not Reactive

When I created a blog to help me keep track of my notes and pass the LEED exam, that was being proactive.

Starting my first online business only after getting laid off, when it was an opportunity I had all along – reactive.

It was my lay off that forced me to look at my other options and give internet business a shot, and it’s pretty sad to realize that without the layoff to push me forward, I guarantee I would have never ventured into the online space.

I wasn’t looking for opportunities, and was very close to missing this one.

I’m not saying that you should quit your job to start your own business – I never encourage anyone to straight up quit their jobs without a plan.

What I am saying is that we all have the option to either be on offense, or on defense.

• Those who are on offense are in control. It’s internal motive that create a customized output.
• Those who are on defense take action based on external factors. They react. And as such, a lot of that control is given up.

I should have seen the opportunity I created and run my LEED exam business on the side while I still had my 9 to 5 job, but because I wasn’t being proactive I let the site sit stagnant for months until I was finally laid off.

And when you consider that in the early days after I began monetizing the site it was generating $20,000 to $30,000 per month…it’s pretty crazy.

Are you on offense, or are you on defense?

I Should Have Been More Confident in Myself

There are a lot of instances during my online journey, especially in the beginning, when I did not take action because I wasn’t confident in myself and my abilities.

For example, when I was told by a successful colleague to write an eBook for my site, I thought of every excuse not do it:

• “I don’t know how to make an eBook.”
• “I don’t think it’s going to sell very well.”
• “People will be upset because most of the material can be found for free on the blog already.”
• “I’m not a good writer.”
• “There are probably other books that are way better out there already.”

This lack of self confidence delayed any sort of action on my eBook, and it was only after several other people begged me to write it,  including a couple of my own readers who heard I had thought about it and said they were already waiting to pay for it when it was finished, did I finally take action and do it.

As a result:

• I finished it in about two months.
• It sold VERY well.
• Over $250,000 in sales later, not one person has ever complained about the same content being on the website.
• I learned how to write well.
• Maybe there are other books that were better than mine, but that didn’t matter.

If there’s anything I’ve learned, it’s that “my inner world creates my outer world”, which is actually a quote from Secrets of the Millionaire Mind by T. Harv Eker (affiliate link), a great mindset type book that I recommend.

In other words, if you don’t think something is possible, then you’re probably right – it will never happen.

Nowadays, I try to instill confidence in everything I do – from blog posts that I write to public speaking, and I recommend you try to do the same.

I Should Have Priced My eBook Higher

When I launched my first eBook, I sold it for $19.99.

After the first month, it generated $7,126.91, which I was extremely happy with!

Halfway through the second month (November of 2008), I receive an email from a customer who purchased my eBook. He also happened to be a business owner and he gave me some amazing advice along with his email.

Paraphrasing, he said:

“Pat, your book is excellent, but you’re selling yourself wayyy too short. Your guide is definitely NOT a $20 book. Please raise the price, I promise you it’ll be better for everyone.”

To be honest, I really had no clue what I was doing. I was happy with $19.99 because it was way below the price of any other guide on the market, and my thinking was that the lower the cost, the better, because a low price is attractive.

What I eventually learned is that yes – a low price is attractive, but only to certain point.

It depends on the product, but if the price gets too low, it cheapens the value of the product in the eyes of the customer to a point where they won’t buy it anymore.

After that (amazing) email, I raised the price for the rest of November to $24.99 (probably should have done more). Then in December, to $29.99.

Here are the results:

• October of 2008: $7,126.91
• November of 2008: $8,598.51
• December of 2008: $10,900.70

Beyond the increase in earnings, I actually saw an increase in the number of units sold each month as well – which is amazing. A higher price seemed to yield a higher conversion rate!

That said, the price can only go up to a certain point before it’s viewed as “too expensive” – and after testing $34.95, $39.99 and $49.99 – the $29.99 price point turned out to be the sweet spot.

I’m glad I got that email – because even the smallest price change over a long period of time definitely add up.

It’s been 3 years since.

That $10.00 difference between $19.99 and $29.99, even at a rate of only 1 sale per day for the last three years, adds up to $10,950.00.

I Should Have Chosen a Better Domain Name (And Understood Trademark Infringement)

One of my  most interesting and stressful business experiences happened when I received a cease and desist notice asking me to immediately shut down my LEED exam site, or else legal action would be taken. They gave me a week to shut things down.

The reason for the letter was because I was using a trademark “LEED” in my domain name – which is a no-no. My domain was previously at intheleed.com before I switched to GreenExamAcademy.com.

Even though some companies don’t care about people using their trademark in domain names, many companies do – but either way if you do use a trademark in a domain name you take the risk of a company, at any time, nailing you for it.

I ended up hiring a lawyer the same day to fill me in on the details, and let me tell you – those fees adds up quickly!

I was basically told that I did have a slim chance of keeping the domain name if I wanted to fight for it – but it wasn’t worth the stress, price and hassle, so I was (er, my lawyer was) able to negotiate that I simply change the domain name – since the mark was the real issue.

I bought GreenExamAcademy.com and did a 301 permanent redirect to keep all of my link juice flowing and rankings up in Google, and anyone who went to an old link would be automatically redirected to the new page.

All seemed well, until I was contacted AGAIN with another letter saying that even the redirect was technically still a use of the trademark, so I had to get rid of the 301 redirect and close the domain.

Luckily, enough time went by that Google picked up on the new site so I maintained MOST of my rankings and traffic.

Definitely a learning experience…

Don’t use a trademark in a domain name unless you have the rights or license to do so.

I Should Have Started My Email List Right From the Start

One of the biggest mistakes I ever made (and I made it twice!) was not starting an email list right away.

With my LEED exam site, I waited an entire year after monetizing and selling my eBook before I started to get serious about collecting email addresses.

E-junkie (affiliate link), the shopping cart that I use, has basic email capabilities, but only those who opt-in during the billing process can receive emails, and even then there are not that many features that come with it.

Just think, a year’s worth of customers and I had no great way to contact any of them.

I had no way to tell them about the new audio guide that just came out, or that there was a coupon code that they could use or give to their friends during the holidays.

Big mistake. 

And you would think that I would have learned, but I didn’t even start building the email list for The Smart Passive Income Blog until January of 2010, nearly a year and a half later after this site was born.

Better late than never, but better now than tomorrow.

Here’s my beginner’s guide to starting a newsletter so you can start building your list right away if you haven’t already.

I Should Have Done More Video

Video has been amazing for the growth of the Smart Passive Income brand. At nearly 1.5 million video views and 8,200 subscribers (I’ve already reached my 2012 goal! Time to re-goal!), it’s definitely put my brand in front of more eyes, and I know it has helped with SEO and keyword rankings for posts on my blog as well.

With GreenExamAcademy.com, the only video I created is a screencast of some of the features within my eBook – and that’s it.

I definitely missed out on a lot of opportunity there, so if I could go back into time, in addition to studying by writing down my notes on the blog, I would create videos for it too.

I bet by recording myself  talk about the material, I would have learned and mastered the material even faster, and at the same time become an even bigger authority in the space.

I Should Have Built a Thriving, Long-Term Community

The biggest regret I have with my first online business is that I did not build a real, thriving community.

I had a small community of people, at times, in the comment section of the blog, but those people would always change as each person finished up studying for their exam.

There were a number of (dumb) reasons I didn’t create a community on my site:

1. I thought that an off-site forum, one which I was a part of and always referred to on my blog, was a good enough community solution for my audience. Now that I look back, I think everyone would have benefited much more by being part of a community on the same site they were studying from. Not very proactive of me.
2. I was so convinced that once people passed their LEED exam, they would be done with my site for good. Instead, I should have taken the opposite approach and thought that my site is not just for passing the exam, but for building relationships that can be useful even after people pass the exam. Not very confident of me.

An on-site community or forum would have been an amazing resource for testimonials, case studies, immediate feedback, a place to recruit affiliates, and a source for post-LEED exam related products I could have sold related to the field. When the traffic was up to 8k to 10k visitors a day that would have been amazing. Now, the traffic has died down, the industry is changing and it’s sort of in a transition period right now.

With Smart Passive Income, many of you know I have an active Facebook community of 21,000 people, which is awesome, but I am planning on something on-site sometime in the future

To Finish Up

A few key takeaways here are:

1. It’s obvious I’ve made a lot of mistakes along the way – but those will never stop me. Mistakes are good, failures will come, and as long as you learn from them and keep moving forward, you’ll eventually get to where you want to be.
2. I’m going to reiterate the importance of confidence in your business. Even though it’s just one section of this post, it actually pertains to many of the others – like pricing, being proactive, doing more video and building a community. Being confident will take you a long way, and if for some reason you’re around a lot of people who just seem to drain your confidence, don’t hang around them anymore – or find more ways to connect with people who will lift you up instead.
3. There are always things that you “should have done instead” – that’s just the way life is. Don’t dwell on it though, because you can’t change the past. You can only change your future, and the future of others – which is why I shared all of this with you today.

Thanks, and please enjoy the rest of your week!

Cheers!

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If I Had to Start Over…This is What I’d Do Differently
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I’ve told the story about how I started my first online business hundreds of times before – in conversation, in interviews and more recently, live on stage – but today I plan on getting into more detail than I ever have before.

Why?

Because the brevity of those conversations often blur the truth about how much time and effort was actually put into my business before I ever made a single penny.

My first monthly income report from October of 2008 reports $7,906.55 in earnings, however this was definitely not the first month my business was running – this was the first month I had monetized it with my own product - a year and a half after I started.

Let’s start from the beginning so we can see what really happened.

February 2007

I was working as a senior drafter in a Bay Area architecture firm – loving what I was doing and looking for ways to expand my resume, possibly get promoted and earn a raise.

At this time, I was earning about $38,000/year.

I really wanted to get my architecture license but the process, which is supposed to take 3 years, typically takes people 6-8 years to complete – sometimes longer.

Although working towards my license is something my boss would have taken notice to, the path to licensure is one that most of my peers would eventually follow too, so I wanted something else under my belt, something different (and faster) that would help me stand out.

That’s when I was introduced to LEED – Leadership in Energy and Environmental Design – a program introduced in 2005 by the US Green Building Council to systemize sustainable design and create incentive to build environmentally friendly buildings.

There’s an exam people can take to become a LEED Accredited Professional which allows one to manage projects under the LEED rating system, and because everything else was “going green” at this time, I figured it would be smart of me to “go green” as well and work towards my accreditation.

The office only had a few LEED APs (none in my department) and after asking them about the exam, I eventually found out that there was a ton of material to learn and the exam was very difficult to pass (with a 30-35% passing rate). Plus, there wasn’t nearly as many as classes or resources to help people pass the exam as there were for the architecture licensing exam, so a lot of the studying had to be self-driven.

I was up to the challenge, so I purchased the study material and went for it.

April 2007

And a challenge it was.

Studying for an exam after graduating college is not easy – especially when you’re in your mid-twenties and your friends are more excited about going out than focusing on their careers – or at least mine were.

I wasn’t making any progress, was studying at most just a few hours a week, and none of it was sticking.

I put the exam on hold, primarily because I was soon moving south (Irvine, CA) to join a team in our sister office for a project that needed more support.

It worked out though because I would be closer to my hometown of San Diego, live just minutes away from my girlfriend (now wife), and have a lot less distractions to pull me away from focusing on my career.

After getting settled in Irvine in June, I was ready to get back to studying.

June 2007

I quickly realized that even in the new environment, the way I was studying just wasn’t working out and I had absolutely no motivation.

Taking information from a 400+ page reference guide, jotting notes onto a legal pad and creating flash cards just wasn’t doing it for me.

That’s when I had the idea to start a blog to help me keep track of my notes and to hold me accountable.

Why a blog?

Because of the basic nature of the setup: creating categories, tagging important keywords, cross-linking between certain parts that were related to each other to understand relationships and linking out to external pages that were mentioned in the reference guide (and being able to easily navigate through all of that on any computer – at work, at home or while on travel) it just all made sense to create this framework about the exam on a website to help me wrap my brain around everything, without ever having to carry reams of paper. It sort of went along with the whole “green” thing too (which, fun fact, I used as a selling point when I launched my eBook, since eBooks weren’t as popular back then).

How did I know about blogging?

I started a Xanga blog in college at UC Berkeley to share random things that happened in my life, mainly just to keep friends and family up to date back home. That’s how I was familiar with the platform, beyond just reading a few blogs here and there while at work (on my lunch break, of course).

And no – you won’t be able to find it…I deleted it a long time ago.

So, I setup a WordPress blog and one of the first things I did, even before writing any content on the site, was register for the exam.

Boom.

March 3, 2008 was my test date.

I put that in the sidebar of my side so that I could see it every time I opened it.

August 2007 to March 2008

The first couple months of studying, on paper, seemed to go very well. I was religiously dedicating 2+ hours a night to the exam.

But, when you look at what I was really doing, it was:

• 20% Actual studying
• 80% Learning all about how to use WordPress

I was definitely enjoying the WordPress part a lot more than I was enjoying the studying, but I often gave myself the excuse that working on the site and making it look nice was a form of studying.

I even started to design things for the site on my own with Photoshop – like logos and fancy backgrounds – even though this was just a site for myself and any co-workers who might find the information useful too. It was fun, but I also thought that the site could become something cool to share with my boss to show how much extra work I was putting into my career, so I wanted it to look profesh.

The reality check came when a couple of co-workers and I took a practice test and I failed miserably. I don’t remember the exact percentage, but let’s just say I have more fingers and toes.

That’s when I started to get serious about the exam and serious about using the site I had just spent the last 2 months setting up, which hardly had any content on it.

For the next 6 months, for 4 hours a day (on average) I studied for the exam, which included adding content to the website – not just dolling it up. Making it look nice wasn’t going to get me to pass the exam.

During work (lunch hours only, of course ), at home and while on travel – I was studying. I was reading what I needed to know and consolidating that information and posting it online so I could easily come back to it later and remember everything to pass. I created tables and charts to organize things that I couldn’t understand otherwise (taking the occasional 3 or 4 hour stretch to figure out things like how to add a table to WordPress), I created acronyms to help myself remember things and posted that on the site too, I took pictures and added those and created my own sample questions based off the reference guide, and when it got to a point where there was nothing else to add (because there’s only a finite amount of information to talk about with this exam) I had everything I needed to pass the exam.

I would often participate in long discussions in forums related to the exam and help people on other blogs I found who were studying for the exam too. A lot of times I’d insert links back to different parts of my site that were relevant to the discussions, but I thought nothing of it. It wasn’t driven by search engine optimization or trying to rank higher in Google. I didn’t even know how all of that worked – and I didn’t care – I was just trying to help out and I found that the more I helped out, the more I felt like I knew the material.

When I took the exam on March 3, 2008, I passed with flying colors and became a LEED Accredited Professional.

After that, I was almost immediately promoted to Job Captain, and my pay increased to $60,000/year.

And on March 31st, I proposed to my girlfriend – and we were engaged.

Life was good and was going according to plan.

May 2008

Of course, things don’t always go according to plan.

With the slowing U.S. economy and many companies starting to focus on survival instead of expansion, the architecture industry took a huge hit.

If there are no buildings going up, nobody needs an architect to design them.

Even world famous architecture firms like Frank Gehry’s were laying off people by the truck load, so for a lesser-known company like ours – the outlook wasn’t good.

By the end of May our staff was cut in half, reduced hours were enforced, and we were often called in the early morning hours and told to stay home for the day.

I was “lucky” enough to still be on payroll but it just felt like a really sick reality TV show, where people were getting voted off the island and you always wondered if you were next.

Eventually, my time came and I was invited into my bosses office.

He gave me probably the best review I have ever received from anyone about my work, but it was obvious where it was headed – I was getting laid off.

Luckily (sort of) I didn’t have to pack my things that day, or even that month – or even for a few months. I still had to finish up some specific jobs that I was working on, but my boss was courteous enough to give me the heads up that after those projects reached the next stopping point, I was gone. He actually encouraged me to go out and find another firm quickly, because he saw something in me, which I thought was nice, but at that point I wasn’t in the right mindset to do anything really, except think.

Mild panic attacks, scenarios playing in my head about how my fiancee would react or what our future was going to be like, and I even freaked out and started calling all of the local architecture firms to see if there were any positions open – even entry-level drafting positions I was willing to take.

Nothing was available, of course.

When I told my wife, she took it well. She has always believed in me and I owe her everything for that.

Besides her, the only bright spots after the bad news were the notification emails from the LEED exam forum threads that I was subscribed to, most of them directed to me and saying “thanks for the help”, or asking questions to me like I was the expert who knew the answers – and most of the time, I did know the answers, and that’s when the entrepreneurial Pat Flynn you all know today was born.

June 2008

My body was still going into the office a few times a week, but my mind was all about online business and learning all about how it worked and what I could possibly do to begin to earn an income online.

In my mind, I was already laid off.

I had a few months left on payroll, plus a small severance package and some emergency savings if I needed to use it – so I figured I had maybe 6-8 months to make this online business thing work – whether it would be something I did with my LEED blog or something else. If not, then I would send out resumes like mad or go back to school to get a Masters and go from there.

As far as I was concerned, I had no other options but to make it work.

I took a couple online courses and read a few books to streamline the learning process, and across the board I learned that the one thing that all successful online businesses had (and desired) was targeted web traffic.

I knew a had a few visitors since there were some comments here and there, and I figured a couple of people on the forums may have clicked through the links that I posted up when answering people’s questions, so when I set myself up with Google Analytics to keep track and know for sure, I was blown away. 

Once the data started to collect, I could see that hundreds (often thousands, depending on the day) of people were already visiting my site every single day.

They were coming from all over the world and finding me somewhat evenly through Google Search, referral traffic, and direct traffic.

Word about my website had apparently spread, and I had no idea.

Google Search

7% of the search traffic came from people searching for my domain name at the time, intheleed, which I later changed due to legal reasons (LEED was a trademark I shouldn’t have used in my domain – hence the domain now GreenExamAcademy.com.)

A majority of the search traffic was for long tail keywords related to the exam. I guess Google loved my content and put it at #1 for an unbelievable number of those terms. Again, I wasn’t trying, it just happened naturally due to the SEO-friendly nature of blogs and the fact that the content was exactly what people were looking for.

Referral Traffic

My site was being linked to from a number of other sites around the web. The #1 traffic generator was the forum I was participating in, but other than that there were a lot of little blogs here and there where people were documenting their architecture journey, and many of them were studying for the LEED exam too and shared my site as a resource with their followers.

What was really cool was that some of the USGBC chapters used my site as a resource as well and linked to me from their chapter websites, which drove a lot of traffic and (now I know this…) created some very powerful, highly authoritative backlinks for me.

Direct Traffic

Direct traffic are things like people typing in the domain directly in a web browser, or visitors coming from bookmarks, desktop shortcuts and links in emails.

Since a third of my traffic was coming in directly through these avenues – it was a good sign I had started a powerful, authoritative brand.

The mind blowing statistic, across the board, is that an overwhelming number of visitors were spending hours on my site – obviously on the site to study, and this scared me a little at first.

What if my notes weren’t good enough? What if I’m forgetting something?

I knew the content was good through, and exactly what I needed to pass, so I internally began to become confident in what I had created and was determined to monetize this site somehow.

Adsense

Naturally, the first thing I did was put Google Adsense on the site, because I heard it was relatively simple to setup.

I didn’t know exactly how it all worked or what I was doing, but I signed up, created one image ad and put it on my homepage.

Within an hour I saw the first dollar I had ever made online – 3 clicks which added up to $1.08 – and although I could find that kind of money between the cushions of my apartment couch – it was an amazing feeling and one I will never forget.

The first day I had earned just over $5.00, and then next it turned into $7.00, and when I added more ad units and learned more about the best places to put ads, the income grew to $15-30 per day, and more.

July of 2008 to September 2008

My Adsense income at this point was a great start, but definitely not enough to live off of, especially with a wedding coming up in February.

To save money, my fiancee and I both decided it would be best for us both to move back home to our parent’s houses in San Diego and then I would take the train up to Irvine to still get to the office every day and stay on payroll as long as possible.

Every little bit helped and we wanted to save as much as we could for our wedding, and so living in San Diego and taking the train was much cheaper than living in the expensive Irvine area and driving. Gas was nearly $5.00 per gallon at this point, which didn’t help either.

The train ride was a couple of hours to and from work daily (that’s 4 hours total every day in transit, 3 to 4 times a week), but it definitely was not a waste of time. It was the perfect time to educate myself with podcasts and think about where I wanted to go with my site.

I eventually learned that private advertising could be a good solution for my site since there were a lot of third party companies who offered practice exams for the LEED exam and/or live training who, I figured, wanted to get in front of targeted traffic like mine.

A couple phone calls and a deal later, I had my first advertiser on a 3-month contract for $50.00/month. More phone calls and a couple emails later, I eventually had four 125×125 pixel banner ads embedded in the sidebar of my site, earning a total of about $600 per month.

Now we were getting somewhere.

With my Adsense income and advertiser income, I was earning about $1,500.00 per month, which equates to $18,000/year. Still not where I would like to be, but not bad considering. It was like working for minimum wage – but the cool part is that I wasn’t working at all, it was all hands-free income.

The Mastermind Meeting that Changed Everything

After listening to the Internet Business Mastery Podcast every day on the train and becoming a part of their Academy, I was excited when Sterling, one of the hosts of the show, decided to move to San Diego. After chatting with him in the members forum, a number of us decided to meet, in person, and have a little mastermind meeting here in SD.

This mastermind group started to meet regularly, and for a while included Dan Andrews, which many of you may know from the Lifestyle Business Podcast – but it was that first metting that changed everything.

When it was my turn to share my story, I told them about my crazy journey and the site I currently had up, and immediately Sterling turned to me and said:

“Pat, you have to write and sell an eBook on your site.”

The others agreed, but I didn’t even know really what that meant.

After some basic explanation, I was convinced to at least give it a shot.

I had nothing to lose, but an opportunity. 

So when I wasn’t sleeping or on the train (or sleeping on the train), I was in front of my computer writing a study guide for the LEED exam in Microsoft Word. 4 to 8 hours a day (on top of work and travel) were dedicated to making this guide amazing, organized, and beautiful. I slept more on the train than I did at home, but I was excited.

My goal was to create the guide that I wish I had when I was first studying for the exam back in early 2007.

By mid-September, my guide was complete. I turned it into a PDF, created a cover in Photoshop and boom. Product done.

Now the question was how to sell it.

Again, going back to the mastermind group, I learned about E-Junkie, a digital product delivery service which would automate the entire checkout and delivery process for me, so I set that up on a test page, ran a few transactions, and it seemed to be working – I was getting emails with a download link to the eBook after making a purchase.

(Later, I found out you can actually create coupons to test purchase your products for $0.00 with E-Junkie. I didn’t know that and bought my own eBook at least 4 times, full price, to make sure it was working correctly. LOL!)

October of 2008

After using the sample sales copy template from Yanik Silver’s Moonlighting on the Internet (affiliate link), I published my sales page at 2:00am on October 2nd and put a link to it in the header of my site and at the bottom of every single post.

I didn’t do any sort of launch or create any kind of buzz around it – I just simply released it, and then took the train to work a few hours later, which was ironically going to end, for reals, in just a couple of weeks.

When I got to work, the first thing I did was check to see if there were any sales.

There were ZERO, and that was pretty deflating.

All that work for nothing – it seemed, but it was only 8:00 in the morning so I had to be realistic and give it some more time.

Then, something amazing happened.

At 8:40am, I got an email from Paypal with the subject line “Notification of payment received”. My first sale!

I immediately signed into my Paypal account and sure enough, $19.99 (minus a small paypal fee) was in my account.

I could NOT believe it, and I literally had to go outside and walk around a little just to fathom exactly what had just happened.

When I got back to my desk 15 minutes later, I see another email from paypal: “Notification of payment received”.

Another sale! While I was outside! What?!

And throughout the rest of the day, I’d get emails from Paypal with the same subject line, and every time I’d sign in to Paypal to see if it was true.

That first day, I had sold 10 eBooks for a total of $199.90.

My life changed ever since that point.

I had earned more that day online than I ever have in any day working my architecture job, and when October finished up and I was officially laid off and didn’t have to take the train anymore, I had sold 309 copies of my eBook, and combined with my Adsense income and pro-rated private advertiser payments, I had grossed a total of $7,906.55. 

You can read more of my later income reports here for what happened next.

This same month, on October 17th of 2008, I bought the domain SmartPassiveIncome.com (which was, fun fact – first called Passive Aggressive Income Dude – or P.A.I.D., for short) where I would give away all of the information I learned through experience about how I was succeeding online – with GreenExamAcademy.com and any other passive income projects I experimented with in the future, and I’m happy to say I am still enjoying what I do here on SPI and I don’t plan on stopping anytime soon.

So as you can see, a lot of time and effort was put into the site before ever seeing a penny, and when the pennies started to roll in, it took bigger and bolder actions, and even more time, struggle and hard work to take things to the next level.

Sure, I was scared a lot of the time, but one phrase sums it all up for me:

I had nothing to lose, but an opportunity. 

Thank you for sharing your time with me today, and I hope this inspires you to take (bold) actions and keep moving forward.

Cheers, and all the best to you!

Click here to read the follow-up post, If I Had to Start Over, This is What I’d Do Differently

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The History of My First Online Business
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In this session of the Smart Passive Income Podcast I’m stoked to feature yet another success story from someone who has built a six-figure business online in a hobby niche that, to be honest, I never thought was possible to make a living from – at least online.

Lain Ehmann from LayoutaDay.com shares an amazing story about how she’s built an online business in the scrapbooking industry!

Beyond her story, she shares a ton of incredibly useful information that I look forward to putting into practice myself someday.

In this session you’ll learn about:

• How Lain turned her passion into profit after starting a blog.
• Her monetization strategies and how much she’s earning.
• How Lain used an “unfair advantage” to make great strides with her business and get ahead of the competition.
• The most important elements that contributed to her success in the scrapbooking industry, and it was not her artistic talent.
• The importance of diversification and multiple streams of income.
• How she’s created an online convention for the scrapbooking industry, and why it’s so successful.
• Examples of how Lain is putting my “Be Everywhere” marketing philosophy into practice.
• Plus a lot more…

Right click here to download the MP3

Items mentioned in this podcast include:

• Layout a Day
• Aweber
• Nanowrimo
• Yaro’s Starak’s Blogging Course
• True Scrap
• Layout a Day (on Facebook)
• Lain on Twitter

I hope you enjoy this session of the SPI podcast!

Lain has told me she would be happy to stop by every once and a while and answer any questions you may have. Thank you Lain!

Here’s to all of your success! Cheers, and all the best!

Please subscribe below to the podcast to get automatic updates for your device:

• Click Here to Subscribe via iTunes
• Click Here to Subscribe via RSS (non-iTunes feed)

Click Here to Download the Transcript for Session 37 (PDF)

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SPI 037 : Monetizing in a Hobby Niche – Success Story Interview Series – 3
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