Digital Marketing Strategy: How to Build a Profitable Software Business Without Writing Any Code: A Case Study with Spencer Haws

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Do you have a great idea for a software but you don’t have any coding knowledge and experience to transform it into an actual product?

Are you looking for an effective means of marketing your software to your target market?

To discover how to create and market a software product without writing a single line of code, I interview Spencer Haws of Nichepursuits.com in this episode of the Bright Ideas Podcast.

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

In this episode, I interview Spencer Haws of NichePursuits.com.

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Transcript

An Interview with Spencer HawsTrent Dyrsmid: Hey there Bright Idea Hunters, thank you so much for joining me for the Bright Ideas Podcast. I’m your host, Trent Dyrsmid. And this is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively boost their business.And in this episode I am joined by Spencer Haws. Spencer is an online business owner, a blogger and a software developer from Richland, Washington. And back in 2009 he started off by building a portfolio of niche websites that made quite a bit of money with Google adsense. And that led to a successful blog called NichePursuits.com which then led to an even more successful software development business and that’s what we’re gonna be talking about in this particular episode of Bright Ideas.So Spencer thanks so much for making the time to talk about your product Long Tail Pro and how you’ve made it successful. Welcome to the show.

Spencer Haws: Hey thanks Trent. It’s great to be here. I know we’ve chatted quite a bit over the last year too so I’m more than happy to do an interview here to talk about Long Tail Pro.

T: We have indeed Spencer. I started off much like Spencer did. He was very generous with information for me back then. I’m no longer in that business but I definitely appreciate all that past advices. It was very helpful. So for the people who are in this audience which is predominantly small business owners and marketing agency owners they’re probably thinking who’s this guy, why do I wanna listen to this interview. So please just start off with who are you and what do you do?

S: Okay absolutely. Yeah you gave some brief information about what I’m doing now. Before I was a full time entrepreneur which I am now, I quit my corporate job about 2 years ago, it’ll be 2 years in just a few months. But I was involved in the financial services industry. I got my degree in Finance and worked for a large bank after that in business banking.

And so being involved in the internet and building websites was really nothing that I had a background in. It started as a hobby for me. Probably back in 2005-2006 I built my first site just to see if I could do it if I could get something online. And that led me over the next few years sort of moonlighting after my corporate job to building sites and learning and beginning to understand how Google works, how to get things ranking in Google and that led me then to finding niche sites. And that is a big part of my story.

I started building lots of small niche sites that could rank very quickly for small keywords because the big problem that a lot of people have is they see a really big keyword that gets tons of traffic and they try to build the site targeting that one keyword and the problem is they never rank for that keyword because it’s so extremely difficult. Everybody else is trying to rank for that keyword in Google and they’re nowhere to be found.

T: So this is probably that a lot of small business owners do. Let’s say there’s a guy with a plumber or a flower shop or whatever and they make this mistake of trying to rank for that keyword instead of maybe what we call the long tail phrase where if they were to attach a city name or a town name or something so that they’re drastically reducing the number of competitors that they’re against or are competing against rather and have a much easier time getting traffic to their site.

S: Right absolutely. I mean if you take a flower shop in Richland, Washington if they try to rank for the keyword flowers it’s just never gonna happen. There’s too many big corporations trying to rank for that. But if they try to rank for something like flowers in Richland, Washington they have a much better chance of doing that. So it was understanding the long tail keywords for me and I’m kinda going to why this will matter to everybody else as well but that’s what led me to quitting my corporate job. I did very very well with these niche sites. I built a couple of hundred of these, monetized them with Google adsense and that was in March of 2011 that I quit my job. And then I started a blog at almost exactly the same time NichePursuits.com where I blogged about how I was building these small niche sites and what was working for me, how others can rank those sites and all sorts of tactics that you could do to essentially do what I was doing.

And also around the same time I started building Long Tail Pro and so I continued to sell Long Tail Pro. It’s a keyword research tool that I built really for myself because I was frustrated with how long and how slow the keyword research process was using other tools. There’s lots of other great tools out there but for my needs where I wanted to find lots of keywords very quickly and be able to analyze if I could rank within Google quickly I decided to build my own tool and now I sell out Long Tail Pro. So we’ll dive into that a little bit more but that’s what I’m doing now.

T: Okay so for the folks who are listening there’s really kind of 2 main ideas that I’m hoping to get across this interview. One of them is for all those small flower shop owners and whatever type of business that you’re in local markets there’s a great benefit to be had by figuring out a plethora of long tail keywords that you can create content for and individually these keywords they don’t add a whole lot of traffic but they’re very easy to rank for and when you do them in aggregate you can actually translate into quite a substantial amount of traffic and it’s really not very difficult to do. However, you have to know which keywords that you’re going to go after because that’s where the science is. And that’s why you created Long Tail Pro.

The other audience is the folks who are thinking hey I might like to get into the software business. I’ve been thinking about creating an application for a long time so we’re gonna really focus in on that. So let’s give some results so that people who again don’t know you think oh yeah hey man, Spencer’s done really well. So how much revenue have you done with Long Tail Pro?

S: Yeah Long Tail Pro and it’s a long story as well because and maybe we can dig in to this with some of the mistakes I made early on and how I fixed those mistakes.

T: Yeah that would be good.

S: Yeah I created a first version of Long Tail Pro which is not the current version that you see today. That I guess quickly to answer your numbers to get the numbers out then we can maybe drill in to what happened. But I had a first version that I launched in right around January of 2011 and I only sold it for about 3 months from January to March. But it’s sold maybe $2,000 or $3,000 a month. I didn’t do much marketing at all. I didn’t have much of a blog or a list at that point but it was enough for me to know that there was interest.

T: Absolutely.

S: So that first version maybe did $10,000 or so. Then I went back and again I’ll explain why I did this but I hired a new programmer to develop an entirely new from the ground up, a new code, everything, new version of the software which I launched in beta form around July of 2011 and really didn’t launch until October publicly October 2011. So from about, with the new version I’ve done about a $150,000 in revenue. About a $100,000 of that this year 2012. So I get you a rough idea of what I’ve done and I’ve got big plans of course for the future as well.

T: I’m sure.

S: In the future there’s more marketing as well.

T: So we should take into account the cost of the first and the second version because it is part of the reality. What do you think that you spent, coz you’re not a software developer, you don’t write any code, correct? Coz I don’t want people to think I don’t know how to write codes so I can’t build an application coz that’s not true.

S: Yeah absolutely. I’m not a programmer by any way, shape or form like I said my background is business and finance. So I hired somebody else to do the code completely. I just had the idea, I paid somebody to do it for me.

T: And what did you spend to develop this application?

S: Yeah the first version was very cheap and this was my mistake. I hired the cheapest programmer that was overseas and he was able to produce something and I really think that he essentially used some code that he already had which was why he was able to do it so cheaply. But it was about $3,000 to $4,000 to just get that first version up and running. It was pretty bare bones at the beginning. But it quickly had lots of bugs and issues that made it stop working. And I guess maybe now is a good time to explain what happened but it needed lots of attention.

And so I would go back to my programmer and say hey this little parts stopped working, it’s got a bug, can you fix it and he would do the best he can but because he was overseas he didn’t speak english well it was difficult to work with him, to communicate and get things done in a timely fashion. And so I decided I think I just want to hire a different programmer to take the existing code that I can work with that speaks english that I know I can count on for the future. And so when I asked the original programmer for the code he said no, not gonna happen. He said pay me $15,000 and the code is yours. And I mean you have to understand I paid like $3,000 to $4,000 and I thought that was it originally. And also when I posted the job I did this on a freelance website I figured hey I was protected and that’s what I paid for was the source code originally or so I thought. And I probably could have gone through the dispute process on, it was Freelancer.com and perhaps gotten the original code but it would have been a huge headache probably taken months to go through.

And so I was essentially faced with the dilemma of hey I can pay this guy $15,000 and get the original code which I know is kind of buggy already. And then just hire somebody else to fix it. Or I can scrap the project completely, I can just hey I made a few thousand dollars, just tell people sorry you’ll refund them or whatever. But what I decided to do is fire the old programmer and completely start from scratch. Just hire a new programmer, have him create his code from the very beginning and that cost me about $15,000 to $20,000 to do anyways. So I figured I was about even whether I got the old code or the new source code and because I did it from scratch with the new guy the source code I knew was mine. I hired a very programmer who spoke english. Things have been much better since but that was some pretty trying times. I learned quite a bit in those early days. I made quite a few mistakes that made me dig in too deeper but yeah that’s sort of what happened there early on.

T: I think that that is not uncommon at all.

S: Unfortunately.

T: I know personally I never get anything right the first time. I should call myself Captain Do Over coz I always need another time to assess all the errors that I made and try and fix them on the next go around.

S: Yes. So the one point I will make just very quickly that one of the big things that I learned in software development is that hiring cheap usually is not the cheapest in the long run. I would advice what I do now whenever I hire a programmer is hire the absolute best. Even if they’re more expensive they’ll typically get the job done quicker so they’re spending less hours even though they have a higher hourly rate. They do it quicker. It’s done better and there’s less maintenance down the road. So absolutely I would hire the best from the get go.

T: And how did you find the second programmer? Did you go back to the same site and just pick a higher quality person or did you go to like a local meet up and meet someone face to face? What did that look like?

S: I probably could have gone back to freelancer. I actually went back to elance or over to elance. So it’s another freelance website. But I just did a lot more due diligence and paid a lot more attention to the higher quality high end developers whereas before I was just looking to get the job done. I posted a job and I figured hey if they get the job done I don’t have to release my money until I get my product so right, I’m covered but no. So the second time around I just looked at the higher end developers and hired them.

T: Quick side bar for the listeners I have interviewed another fellow by the name of Travis Ketchum who you can find it on the blog. He developed some software as well and his experience is very similar to Spencer’s and the version 1 was unsuccessful coz he hired the cheapest person. So if you’re thinking about doing software in addition to listening to this interview make sure that you go and do a search for Travis Ketchum on BrightIdeas.co and you’ll find his interview.

Now back to you Spencer, you just mentioned due diligence so let’s not skimp pass that because that’s an important part of how you selected your contractors so can you share with us what did you do to do due diligence?

S: Absolutely. And I recommend this whenever you hire any freelancer not just a software developer. Essentially I tried to communicate as much as possible before I hire anybody. The instant messaging, email and I would essentially ask them questions like do you understand the job, can you restate in your words what exactly I’m looking for. And so I would try to exchange at least a few emails so that a) I knew that I could communicate with them, that their english was good and they understood what I was saying.

I ended up hiring somebody here in the US so that’s not a problem but exchanging those emails helped me to know the depth of their knowledge of what I was looking for and you can really see the good freelancers or programmers when they bring up potential problems. They say hey I see your job but have you thought about this, this and this. And those are the people you want to key it out on. Key in on and say no, I didn’t think of that one, let’s discuss. And so that’s great when they can come up with potential problems before you ever hire them.

I actually spoke to a couple of different people on the phone and that’s a big plus to know if you could develop a good rapport and then basic things. I looked at their past jobs, what they were rated on those jobs, pluses and minuses from previous people that have hired them. I looked at resumes and things like that. But I would say the big thing is definitely pre-hiring interview questions and just getting to know them a little bit better and making sure they fully understand the entire project.

T: Did you check with any other references?

S: You know, I didn’t and that is certainly another step that I could have gone to ensure and that’s not a bad idea at all. But just after talking with the programmer that I hired I felt pretty comfortable.

T: And when you say talking did you have a voice conversation with him as well over Skype?

S: I did yes.

T: Especially if you’re hiring someone from another country it’s not to say that there aren’t any good programmers outside the United States but in my experience you really need to have a verbal conversation with them because when you’re trying to explain post production or after the fact issues chatting and skyping and emailing in a non-verbal form can only go so far.

S: Yeah and absolutely. And what I didn’t fully understand the first go around with Long Tail Pro is that I figured software development was a one time deal. I get my product, it’s a package that’s done I sell it forever, right? But I mean that’s not the way software usually works and particularly something as intricate as Long Tail Pro where we’re using lots of different resources any time there’s a small change we have to tweak our software. And so I understood fully the second go around that this was a long term relationship with this software developer. I needed to know that they would be there a year down the road to continually develop and fix bugs or changes that may come up. So that was very important.

T: So coming up over we’re gonna talk about how Spencer marketed and sold his software but I have one last question for him on how he got it developed and that is when you created the scope of the project, coz I’ve been involved now at 2 software development projects myself. One of them we’re just getting ready to release and it’s done and the other one we’re very early in the development phase. And in both of those projects we put a lot of time into screen shotting so that you could have a conversation with your developer that says when you click this button this is what’s supposed to happen. Did you go through a process like that or did you have a different way that you did it?

S: I would say it’s a similar process. I did a lot of referring to similar tools that are out there. So I say hey here’s some similar tools to what I’m looking to have created. Here’s what I like about them, here’s what I don’t like about them. And yes I did take some screen shots. But I wrote out a very detailed explanation of everything that the software needed to do, what was required of the programmer. And just really divided it up into each function of the software. Here is the keyword research function. Here’s what it needs to do and maybe here’s some examples of other tools that do this and here’s what they look like. So yes I did very detailed write up and even more so the second time around.

T: So the interface design that you ended up with, was that really the developer’s interpretation of your detailed instructions?

S: Yes. And it was something that he came up with that we really worked on together. And that was also part of, that’s one of those points where I posted my job and before I hired my programmer that was one of his points. About hey I see a problem here or this is something else we need to talk about is the overall interface. He asked do you want me to do that or do you want to hire somebody else to do that. I ended up hiring him because he also have a lot of experience doing user interfaces. But yeah that’s something that I worked with him to come up with the design and the look.

T: Okay. There’s a lot more we could talk about obviously with respect to how to build software more than we could cover in a short interview. So I’m gonna leave the development side alone now and let’s go on and talk about marketing. So you obviously, just walk us through your marketing plan and what executed and maybe highlight a couple of things that worked really well and maybe if there is things that didn’t work well maybe you could talk about those as well.

S: Okay. Yeah my primary marketing plan early on and a big part of the reason that it worked for me is because I am the target market. I was the target audience essentially. I created this software for me so I fully understood the needs, the problems, what was going through the head of the potential market. And also because of that I already started a blog at NichePursuits.com essentially my target audience is for people that are trying to build websites whether they were niche websites or large blogs or local businesses building websites that wanted to do keyword research more quickly and effectively.

And so I essentially started marketing the software to my blog audience. That’s from the get go I essentially emailed out that hey I’ve got this software that’s available and even before it was done I was very open about my developing a software. I made posts on my blog about this. And so that’s essentially how I marketed it from the get go is just to my blog audience. And that’s a big thing for anybody out there is that if they can have a blog that they’re building out and building an audience it makes launching any product so much easier to have the audience built in. And so that was my primary way of marketing was just to my blog that already existed.

I marketed a little bit on some forums like the warrior forum essentially putting up offers on these forums for people to purchase. And then I reached out to a few other bloggers that were in the same niche to do either webinars or get them on as affiliates to help me promote that.

T: So the percentage of your revenue that came from your own list versus affiliates, what would you guess that was?

S: Well early on I mean it was a 100% me starting probably the first several months was essentially just me. I didn’t go out and I probably could have done this better. I didn’t go out and try to do a big launch with other affiliates and all. It was essentially just me. I threw it up on my blog and emailed my lists and said hey it’s ready, go buy it. And that worked enough to know that people were interested. Now the breakdown this year I don’t know the exact number. It’s still the majority is coming from me and my blog but it’s maybe 60% is me, 65% is me and 30-35-40% is affiliates.

T: Okay so people listening to this are gonna know how popular your blog is or isn’t so is there any in terms of size of your list or daily traffic stats or anything that you feel like sharing?

S: Sure I’ve got about 10,000 subscribers to my email list and to my blog so that gives you kind of an idea of that. So it’s a decent amount.

T: Okay so a reasonable amount. And I think that the key take away that I’m hoping that the small business owner, coz I remember when I ran my technology services company prior to this business and this was from 2001 to 2008 when I sold the company, I didn’t blog. I didn’t know what blog was. In hindsight I just wish that I would have understood the power of blogging. You can create so much engagements, so much relationship, you can build that subscriber list and if you’re a small business owner and you’re listening to this and you haven’t started blogging yet you really need to.

And if you’re thinking gosh I don’t have time hopefully this story with Spencer here and the story of other guests and even my own story because the reason that I do Bright Ideas and the reason that I give all of this content away is to build a list for my software application that is in development currently. That’s my monetization strategy. So when you say I don’t have enough time to blog coz I’m doing all these other stuff it can be a really really valuable activity if you learn how to do it right. And there are lots of other guests and interviews here on Bright Ideas that have lots of success blogging. And in those interviews we go into some particular and I’ve got some how you can do that.

So sorry for hijacking a little bit there Spencer but I really wanted and so passionate about it.

S: Absolutely.

T: You wanna talk to so I’ll stop right now.

S: Yeah well I was just gonna say I can tell you 2 other stories very very briefly of people blogging that has really driven sales to their business. And these are both local business owners who own a small company so maybe it will resonate well with your audience. One is Marcus Sheridan who owned a small pool company in Virginia. And I’ve done an interview with him on my blog but he install pools, fiberglass pools and all they had was just a website. I’ll try to make this story short. But essentially they were about to go financially bankrupt. He finally discovered content marketing. He decided to blog about everything and about fiberglass pools. His website started ranking for every single question that the customers could ask about how much does a fiberglass pool cost or everything that his customers were asking. And within a year they completely turned their business around. They’re now doing millions of dollars in sales and it’s literally, and he contracted because he does this very well, that those sales have all come from his blog. And it’s because he’s targeted these long tail keywords, ranked in Google and so literally changed his business.

The other story I’ll tell briefly is actually my cousin. John Haws, who I also interviewed on my podcast, he decided he wanted to build niche sites. He has a background in landscaping so he built some websites about landscaping in his hometown. He was in Chicago, Illinois at that time going to nursing school. He built some niche sites targeting landscaping in Allen, Texas. Within a couple of months people started calling him saying I want you to come on my lawn. He wasn’t even there, didn’t have a landscaping company. He put them off until the summer until he was off school. He built up a customer base before he even had a business. He went home during the summer and he’s never gone back to school. His business now, he’s done like $70,000 in 6 months, his very first 6 months. The majority of it is online that people are typing and finding him because he blogs about landscaping. And he plans to never go back in his nursing degree just to build this landscaping company.

So that’s 2 small examples and I can tell you if I owned a small local company I would be blogging the heck out of it.

T: Yap coz if you’re not blogging you gotta be doing something. And the cold calling while it can be very effective, it’s not a lot of fun. It used to be a bit mind numbing and the direct mails takes and costs a lot of money. There’s a lot of other things that you can do but blogging you can do it from anywhere. You just flip your laptop open. And I’ll refer to another interview, his name is Peep Laja, it’s here on Bright Ideas there’s an interview. He got 50,000 visitors in his first month. He had no list, no affiliates and it’s a very interesting interview because he talks about how he adopted the reporter’s style of blogging. Then again I’m not gonna go down that rabbit hole, just go check out that interview if you wanna learn more about it.

Alright, so in our off camera talks, Spencer, you shared with me that you were getting quite a bit attraction with small business owners. Can you talk a little bit about that and how you think that happened?

S: Yeah absolutely. So you’re right. I’m starting to get a lot of my readers on NichePursuits.com are actually small companies. I don’t know the total variety of types of companies but at least that have emailed me recently have a pest control company and these are people that have purchased Long Tail Pro and are actually using it. Pest control company, lawyers, real estate agents, small printing company and I’m sure there’s dozens of others that I just am not aware that they’re using my software. But lots of them are starting to really understand the power of the internet, content marketing and ranking in Google just like we described those stories of people that are turning their business around. And the reason for that is because customers nowadays go online and they search everything on Google.

So I mean people used to go to the Yellow Pages now they go to Google. And so these small business owners are becoming savvy and so they found out about me probably from reading my blog, trying to figure out how to rank their business websites in Google because I talk about how I rank my niche sites. And those tactics apply directly. I mean it’s the same process, the same thing just different keywords. And so these small business owners are now definitely very interested in keyword research. And they should be because these are the companies that should be ranking for landscaping in Richland Washington and things like that because they provide the service. And so they’re very interested in doing the proper keyword research, analyzing whether or not they can rank in Google and then making it happen.

So definitely lots of small business owners are using Long Tail Pro and I see that definitely as the future for my own company that they are most certainly part of my target market where I may have not thought that originally when I created the software.

T: That’s one of the things that I really love about being in business and I’ve referred to this previously as I called my green dot theory. You have this idea we’ll call it we’re selling green dots. So you decide to start and a lot of people don’t do that. They let fear get in the way and hopefully this interview will help them to get over that cliff. But once you start to be in business you uncover all these other opportunities which you probably would never have discovered have you not first started to sell your green dots.

And those extra little nuggets that you find can often turn into phenomenal business opportunities and yours is a good story of that. You started off building a software product for internet marketers that wanted to build little itty bitty websites to make money with Google adsense or Amazon affiliates or whatever and now you’re tapping into this market of main stream business customers who have these needs and you’re starting to create brand awareness with them and recognition to the relationship there’s so much that you can do with that for the years ahead. That had you not started you probably wouldn’t be thinking about these things and you wouldn’t be exposed to those opportunities.

S: Absolutely.

T: Alright so we’re getting to the end of our time window for this interview so there’s a couple key things that I wanna cover off. No. 1 is I know that you have recently released, this interview will be published after the release but I think that your special would have ended, but you’ve recently released a very updated version of Long Tail Pro and you have for Bright Ideas listeners you can get the product for $77 instead of $97 if you go to LongTailPro.com/BrightIdeas.

And I guess the last thing, Spencer, if people wanna get a hold of you they know that they can do that on NichePursuits.com. Is that the best way to get a hold of you?

S: That’s probably the best way. I’ve got a contact page there. They can certainly use that, that will send me an email and we’ll communicate that way. Or leave a comment, I’m very responsive on comments. They can certainly follow me on twitter. It’s @NichePursuits. So yeah those are couple of ways they can definitely get a hold of me.

T: Okay. And I also noticed that you have a free webinar that you’re doing. I guess maybe you do it every week or something like that on how to get traffic. You can find more information about that on Niche Pursuits. So last question I have for you, what books are you reading these days? Maybe give us one or two if you’re reading any.

S: I am just about to finish The Lean Startup which is a good one. I’m sure you’ve maybe talked about.

T: I haven’t read that one yet actually.

S: Okay. Yeah it’s definitely a good one. Other than that I don’t have any books I’m reading. I enjoy reading my wired magazine. That keeps me up to date with some pretty interesting articles as well. But yeah that’s sort of what I’m reading now.

T: Okay. Spencer I wanna thank you very much for making some time to come here on the Bright Ideas podcast and share your experience with building software and turning it into a business. It’s been a pleasure to have you on the show.

S: Absolutely Trent. I appreciate it. It’s been good to be here. Thank you.

T: Alright, if you wanna check out the show notes for today’s episode go to BrightIdeas.co/17. And while you’re at Bright Ideas you may also wanna go and get the massive traffic tool kit. To do that just go to BrightIdeas.co/massivetraffic and enter your email address. When you do you’ll be given instant access to the tool kit. So what is the massive traffic tool kits? It’s a compilation of all the very best ideas that have been shared with me by my guests here on Bright Ideas and some of those guests or all of them in this case are absolute power houses at getting traffic to their sites. And the really cool thing about the tool kit is that you do not need to be an SEO guru to be able to execute the strategies that you’re gonna learn. Everyone can do all the things that are in the massive traffic tool kit.

So this brings us to the end of the podcast. I’m your host, Trent Dyrsmid. If you loved this episode or even if you just liked it please do me a huge favor and head over the itunes and give us a 5 star rating and leave a feedback of some kind. Whenever you do that it helps the show to go up of the rankings in the itunes and more people can learn about what we’re doing here at Bright Ideas. And the more people that learn, the more people that we can help to massively boost their business. So thank you very much. It’s been a privilege and I’ll see you in the next episode. Take care.

About Spencer Haws

spencer1-150x150Spencer Haws was a business banker with an MBA who quit his job as a Business Relationship Manager at Wells Fargo Bank to build websites full time. He has more than 200 small niche sites that he monetizes primarily with Google AdSense.

Spencer is the owner of the popular blog nichepursuits.com, where he details his methods as well as his results. He is also the creator of Long Tail Pro, a keyword research tool that niche website builders can utilize to create the right content that targets the right keywords.

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