Looking for some inspiration before you make your next website acquisition? Then you can’t miss this interview with Hayden Miyamoto, the web entrepreneur who purchased SameID.net for $22,001 in December. Hayden was a high school dropout, but don’t let that fool you, he’s a shrewd businessman slowly creating an online empire. Sit back and enjoy as Hayden breaks down his path from high school dropout to $1m web acquisitions.
Tell us about your background as an internet entrepreneur
Like many successful entrepreneurs, I am a high school dropout. I realized early on that public education, at least in its current state, was not for me and I decided to start my own web design business. Six months in I partnered with a client that had an offline high-end Japanese furniture showroom, and was seeking to sell to US customers, online. For the next six years I was in charge of creating an online eCommerce store. Though I learned programming, graphic design, photography, and even 3D rendering, marketing is where I found my true strength and passion – specifically in email marketing, conversion rate optimization, and SEO.
You’ve got a popular marketing blog, NoHatDigital, what’s the story behind that?
I’ve worked on a wide range of sites from eCommerce, to digital products, to SaaS, to transactional marketplaces, you name it. I wanted to try them all. I am a big believer in testing and continuous iteration. There are always new splits to test, new ideas to try, and new techniques to use. That being said, each proved to be a learning experience, and each has helped me improve my online marketing skills. I wanted to share some of these skills with a wider audience, and that’s how I started NoHatDigital.com. I do this mainly through running remote internships, and hiring and partnering with the best interns to come down to Mexico for a few months and manage many of the businesses I buy. I’ve been lucky enough to scale this up lately and we are now purchasing websites in the $1m+ range.
Why do you use Flippa?
Flippa is the eBay of the web property world. There are many online brokers, and web listing sites, but none of them do as good of a job as Flippa in collecting, organizing, vetting, and presenting sites for sale. There’s simply nowhere else where you can find as many hidden gems, spend a few months improving them, and then flip them back for a nice profit. Or better yet, keep them in your portfolio as a passive earners.
What kinds of opportunities are you on the hunt for?
I prefer under-monetized sites. Because of my development and conversion optimization background, these are the easiest wins for me. Most sites have weaknesses in at least a few areas – for example, in many cases it might be a need for more traffic. The problem is many of these weaknesses are time consuming to fix – the great thing about monetization is that it’s often instant (as opposed to SEO improvements or improved list building, etc). My favorite sites are ones that are monetized via AdSense – these sites are often severely under-monetized and are low hanging fruit for me.
You recently acquired SameID.net on Flippa, what does it do and why should all Flippa users check it out?
With SameID.net you can find similar sites, or a network of sites, operated by the same owner via digital footprints. These footprints come in the form an AdSense ID, ClickBank ID, Google Analytics Id, Amazon Affiliate Code, IP Address, and more. SameID has many applications and uses including keyword research, competitive analysis, and site health checks, but people reading this post would probably be most interested in using this as a tool for due diligence before buying a website. The best way to do this is to run a potential acquisition through the tool to see if the seller owns competing sites in the same vertical.
Here’s a video example of how it works:
From a business perspective, why did this acquisition make sense?
I’ve personally been a SameID user for many years, so I already knew how powerful the tool was. Additionally, my team and I are always looking for sites to buy to add to our portfolio. We have a standard process we go through, but as soon as this one hit Flippa, all of us knew we wanted it. I did pay a hefty multiple (4.3x), but because it was a strategic acquisition that vertically integrates into my existing business, I’m confident it will pay dividends for years to come, especially after we implement our changes.
What changes have you already made, and what are your plans for SameID moving forward?
Our motto is always add value. The first thing we did was redesign the homepage, add demonstration videos, and pump out new new copy. We all knew how powerful the tool was, and these changes helped us better communicate the value proposition to potential customers. By improving the user on-boarding process, we’ve already seen a direct impact on the bottom line.
In terms of future plans, we are planning on making a large marketing push, testing new pricing models, and strategically partnering with existing Internet marketing tool companies. On the development front, the site is not yet mobile responsive so we’ll be tackling that challenge soon. We’ll also be adding new IDs to the list of footprints covered by the tool. Luckily, the seller of the site wants to see it continue to flourish and grow, and so he agreed to stay on and perform contract development work, which has been a huge added bonus of the acquisition.
What advice can you offer to other entrepreneurs seeking to buy a website on Flippa?
There are many tips and tools already online in regards to due diligence – and of course, I recommend buyers use SameID. That said, one thing that people might miss out on is due diligence on the seller as opposed to the site itself. Finding out more about the person behind a site is almost always helpful when evaluating an opportunity. Ask for the seller to Skype, or to add you to their Facebook. If it’s a regular seller on Flippa, get in touch with a previous buyer. Many people use the same username across different membership sites; try searching their Flippa username, you never know what you might uncover.
My other tip would be to know what kind of opportunities you’re looking for in advance. Pick sites that work to your strengths. For example, don’t pick a site where the biggest weakness is lack of organic traffic when you don’t know anything about SEO. If you think a site has room for improvement and you’re confident you can execute, don’t get too hung up on multiples. Multiples are a guideline – not a hard rule.