Thursday, June 16, 2011

Story of an Entrepreneur making USD 10 K a day

I want to share a success story of a successful entrepreneur. I don’t really fully appreciate some of the business tactics being used by this individual (I will call him Patel), however he is successful and making 10,000 USD a day.

Patel was from Brick and Mortar business and was managing a Motel in a small town of Midwest US. During the dot com boom of 1999, he decided to try his hands at Dot Com business. To make money you have to take risk and that’s what he exactly did. He sold off his Motel at a premium price and arrived in New Delhi India with cash in his pocket. He opened up a web development factory (he uses term factory and indeed he operates the business in the similar way a factory is operated). He got in a few designers, a few content writers and a few programmers. He was a man with the mission. All his focus in life was building as many number of web-sites with good content. He was truly obsessed with numbers. In his first year he came out with more than 100 sites, most of them not making any money at all (that time advertising options were really limited for content sites).

So came time for some fresh thinking. He recruited a few good managers (his factory is manager driven instead of people driven). The managers came out with the idea of diversifying portfolio. They opened up a new division targeted just for Indian community. There they started offering services and products direct. Since they had huge number of content sites, they had traffic. These services included Travel Agent Services (now they have more than 500 travel sites), selling Indian handy craft items, selling chocolates, flowers etc and delivering them everywhere in India. Indeed at that time India was not ready for his vision, still since he played with numbers, he was able to start making 1$ a day from each of his service provider sites. So with volume by end of year 2001, he was making 500$ a day from his venture.

He kept on increasing his portfolio, even went on to extent of combining brick and mortar business to web business. He purchased a hotel at tourist destination Goa. With huge number of sites specifically targeted on Goa, his Hotel was always 100% full. Eventually he stared a full fletched brick and mortar Travel Agency and that was instant hit. Then he started diversifying his portfolio. You cant compete in US market, because its 10 year ahead of rest of the world. He found out a niche of identifying 20 hot tourist destinations (small nations) and started building 20 sites for each destination. At all those places his brick and mortar Travel Agency cut deals with local travel agencies and Hotels to provide them reservations (Outside US, rarely small Hotels are web Savvy). he started making a few dollars (1$ a day each site). So by end of 2003, his total revenue was 1000 USD a day.

Then came the adsense. Now he was a man with another mission. He really started building content sites in bulk and started making good money from adsense. His funda was very simple. If you have greater than 1000 sites and you link them properly, for sure you will make 1$ a day for each newly launched site.

At this point of time, he has a complete assembly line. He got 20 managers. They build the sites in batches of 1000. The top level come out with idea of building 1000 sites. Then each manager picks up 50 sites and do the research. They come out with project plan for each and very site. Now that they got good experience it takes less than a day to come out with plan for any new site. Then these plans are forwarded to Project Leaders in Assembly Line. They got a division of content writers with 50 writers in India and a few in US and UK as well. Project Leaders divide the work in 3 parts. Content writing, design and programming. All these activities happen at different places and left hand doesn’t know about right hand. Once all 3 modules of a site are ready, the product is being shifted to the Launching Assembly Lines. Here the system admins combine all the pieces together and launch the site on the net. Once the site is launched, it is forwarded to maintenance in assembly line. Maintenance guys put ad code. They keep a track on stats. They have a few content writers, a few SEO guys, a few sys admin and some low tech operators in maintenance assembly line. Their task is to maintain each and every web-site being manufactured by the company. It fully automated process and it takes 2 months from the start to end. After delivering the product each department moves on to prepare a new product. They don’t have to worry about the next step in line.

At this time they own 10,000 sites and with conventional calculation of 1 $ a day, he is making 10K a day by minimum. Indeed he got nice overheads, but the cost of overhead is close to 100 K a month. Also not all sites make 1$ a day. He has at least 20 sites making > 5 K a month. Overall he makes a profit of 300 K a month without raising an eyebrow. He never blogs, never writes on forums and for most of the time he is unknown to all webmasters active on all forums / blogs.

Now like most of you already might have guessed, his success is largely dependant upon google for most of the traffic and he had his own share of failures. Google keeps on changing algo and sites will stop ranking at all. Being a shrewd business man, he had started a branch in factory which exclusively deals in selling the web-sites. Their task is to make sure that they find a buyer for the site within 2 years it got started. So they make good money on each site for 2 years and then they sell it off at premium. Once they sell if off, it become responsibility of buyer. If google decreases ranking of the site, it is buyer who suffers. Also most of the time buyers do not have appropriate resources to manage the site. So they in turn even outsource the maintenance of site to Patel’s company. So he makes money even out of that.

So that is the success story of Mr Patel. It gives me lot of inspiration and I hope that it will give some inspiration to all of you as well.



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