Website Investor Interview: Hayden Miyamoto of NoHatDigital
A couple of weeks ago, I had the opportunity to have a chat with Hayden Miyamoto from NoHatDigital. Hayden is a well-known figure in the online business community, and is probably best known for his series of posts (and videos) about finding expired domains and building Private Blog Networks. What most of you probably don’t know is that Hayden isn’t really a SEO specialist – his main focus is growth hacking.
A few years ago, PBNs were one of the best ways to hack a site’s growth. These days, PBNs are less effective (although they do still work) and are riskier, and Hayden has consequently shifted his focus to the monetization side of things.
I found out that Hayden is an active website investor himself, and so I reached out to him to discuss his philosophies on buying (and selling) websites. He brought up some really insightful points about the website investing process, and shared a few tips and tricks that I hadn’t even considered.
I’ve outlined the broad strokes of our conversation below – hopefully, you find this conversation that I had with Hayden as useful and insightful as I did:
(Note: The answers from Hayden are summaries of his main point, not full quotes)
On What Types of Sites to Look For
Hayden stated that he’s primarily looking for sites in one of two categories. The first type of sites that he’s looking out for are undermonetized AdSense sites that have the potential to be turned into lead gen/digital product sites. One of Hayden’s specialties is improving visitor values, and so he’s on the lookout for sites that play to his strengths.
The other type of site that Hayden looks for is sites with really strong (e.g high DA, strong clean backlink profile) and underutilized domains. The guys over at NoHatDigital have done a few experiments on leveraging DA to rank quickly, and the results have been pretty positive. Also, Hayden has the infrastructure in place to be able to rapidly pump out high quality content, so he’s in a bit of a unique position in that he can put out content really quickly to take advantage of a domain’s power.
Takeaways: Look for sites that line up with your own expertise and experience. Look for sites that are underutilized in the same area where you have a strong skillset.
On What Due Diligence to Perform
Hayden told me that he definitely requires Google Analytics access – he has no interest in buying any site that he can’t check the analytics on. He also tries to engage sellers in a dialogue, and always looks to ask a few questions.
He also scopes out the competition using SEMRush and Ahrefs – he also uses Ahrefs to scout backlink profiles as well. Also, he always looks up a site on Archive.org to see if there’s anything odd or out of place about a site’s history.
Another factor that he takes into account is the technology behind a site. While sites on the lower end of the website market mostly use WordPress, you tend to see a larger variation of CMSs used in the higher end of the market (e.g Drupal, Joomla). In some cases, sites come with a custom CMS.
Hayden stresses the importance of fully investigating the technology behind a site before buying it – he recently made the mistake of picking up a site that has a subpar backend, and he now needs to revamp the entire site before he can start working on monetization. He also notes that this is even more important for him because he has a team of trained VAs who might be familiar with certain setups (e.g WordPress), but find it difficult to navigate unfamiliar tech (e.g a custom CMS).
Takeaways: Always get Analytics access, and do competitor analysis before you buy a site. Take note of what technology the site uses to avoid huge headaches.
On Finding Opportunities
Hayden shared a few tips on how he spots good opportunities when looking at website listings. One thing that he does for larger potential acquisitions is he’ll use Facebook Ads to test an offer before he makes an offer on a site – this is a good way to see if there is demand for a particular offer/product using the Minimum Viable Product methodology before you actually invest in a site. I found this tip extremely useful – I’d never thought about the possibility of MVPing an offer before bidding on a site.
Another useful method that Hayden uses prior to buying is he’ll use Google Trends or other sources of data to check if interest in a particular niche or area is growing. One example he gives is that he knows that PPC is relatively new to Mexico, and that PPC ads are rapidly growing in popularity – this means that if you buy a site that targets Mexican visitors, the RPMs should grow over time without any increase in traffic or conversions.
Hayden typically looks for sites priced at anywhere between 5K and 100K, and he notes that he prefers buying 1 large site over buying 5 or 6 smaller sites, because he finds that the workload that it takes to improve a large site is usually not all that different from the workload for a smaller site.
In terms of finding listings, FE International is his preferred broker. He’s tried cold emailing webmasters to see if they have interest in selling, but has found this strategy largely ineffective. He also states that he’s in a bit of a unique position because he sometimes gets to take part in off-market deals that aren’t available to others due because he’s a well-known figure in the online business community.
Takeaways: Test MVP offers before investing in a larger sites. Research and anticipate trends to stay one step ahead. Buying 6 small sites usually entails 6x the work of buying one large site. If you build a network of relationships in the online business world, you can get deals others can’t.
Hayden typically uses the traffic valuation method – this is he’s pretty confident that he can increase the visitor values on most of the sites that he ends up buying, and he’s generally not overly concerned about current earnings because he specifically targets sites that are undermonetized.
He believes that valuations are cheap if you know what you’re doing, and he thinks valuations are more or less fair if you don’t know what you’re doing due to the inherent risks involved with buying websites.
He stated that he’s not opposed in principle to buying sites that have benefited from grey hat SEO strategies like PBNs as long as they’ve been ranking for an extended period of time – but for sites that have used these tactics, the valuation multiple that he’s willing to pay is significantly lower (e.g 15x instead of 25x).
Takeaways: If a site is undermonetized, traffic valuation makes more sense than an earnings multiple. Websites are only undervalued if you know what you’re doing. Non White Hat SEO tactics can reduce the valuation on a site.
On Improving a Site Post-Purchase
One thing that Hayden stresses is that he tries to pinpoint exactly what a visitor is looking for when he buys a site. He also tries to segment visitors into different groups so that he can potentially create different offers for different segments. This is something that is pretty common in traditional marketing, but is sometimes overlooked in the online business world.
He notes that retargeting is an extremely useful tool that remains underutilized by most businesses.
Also, the first thing he’ll focus on immediately after buying a site is how to rapidly improve the asset value of the site. In some cases, this means doing a few things that will give a site a boost in rankings, and in other cases it means working on the email list/social following of a site – either way, for most sites, there are immediate actions you can take that will lead to increased resale value down the line.
Takeaways: Immediately start improving asset value once you take ownership. Segment visitors so you can target them better. Learn how to take advantage of retargeting.
Hayden’s Tips for Buyers/Sellers
Hayden says that sellers should always try to answer questions quickly and clearly – he says that this makes a big difference for him when prospecting investment opportunities.
He says that buyers should always seek to make immediate improvements on day 1 that can boost the asset value of the site – that way, even if the larger monetization plans don’t pan out, you can still resell the asset at a higher value that you bought it for.
Also, buyers should try to build up a base of assets that are helpful to all their sites. For example:
- Access to a network of people that you can outreach to for guest posts
- Access to useful tools/software
- Having a team of trained, knowledgeable VAs on hand
- Owning a strong, secure PBN
These assets can then be recycled/reused on all the sites that you own – this means that for each additional site that you buy, the cost (both in terms of time and money) of the improvement process is lowered since you already have these assets in your back pocket.
Takeaways: Sellers should answer questions quickly and clearly. Buyers should be looking to build a core of assets that can be reused/recycled on every single site.
On whether it’s better to Buy or Build Websites
Hayden believes that right now, it’s probably makes more sense for people to buy websites rather than build them from scratch – this is particularly true because of the sandbox. He thinks the math works out better. He says that it makes more sense to buy a site earning $100 a month for $3K and flip it for $5K in 6 months, as opposed to starting a brand new site and 6 months later it’s not going anywhere because of the Sandbox. He believes that buying is probably both more profitable and more of a learning experience (because there are not all that much you can learn from a site that gets no traffic). This is assuming of course that you have the spare capital to be buying sites.
He also urges that first time buyers start with something small (sub $5K) – he says that buyers should only start thinking about larger sites once they’re comfortable with all the aspects involved with managing and maintaining s website.
Takeaways: For people who can afford to invest some money into their online business ventures, the math works out in favor of buying sites due to the sandbox. First time buyers should start small to build their online business knowledge.
Really want to give Hayden a huge thank you for giving me the chance to talk to him. He also was gracious enough to allow me to guest post on NoHatDigital, so thanks for that as well. I hope you learned something from this conversation – I know I certainly did.