Spirituality Property Update

Earlier this year, we purchased http://alittlesparkofjoy.com. While you may not see it by first glance, it’s one of the top spirituality websites in America and has over a million unique visitors per month.

If you don’t remember who I am, I’m Scott Oldford. I mentor, advise and invest in Online Businesses. I write this newsletter for Entrepreneurs who enjoy acquiring, building, buying and selling businesses and give you an inside look at my portfolio of internet-based businesses.

We purchased this property, on-market, which is one of the few properties we purchased through anywhere besides my audience or through friends. In doing so, it was one of the longest acquisitions to make, taking over 4 months.

My thesis in purchasing this website was simple and two-fold:

The first “bet” was on the spirituality niche which is one that I have a personal love for and on a business level, one that is continued to mature over the past 10 years.

The second “bet” was to take a website that was 100% reliant upon Mediavine advertising income and Google traffic and build a more sustainable and diversified business model using my background in building businesses.

It’s been 6 months since being in on this business and here’s what we’ve been doing. To start, this business was built by the founder, as a blog for their care for spirituality and then overtime became more and more of a business. The former owners decided to sell while having another child and we really connected as someone who could help bring this to the next level.

When we acquired the massive asset and revenue the website that was well ranked on Google— that has not changed and our traffic is trending upwards, as we continue to rank for new articles and sub-niches.

In total, when we took over the website was making on average $25,000 per month via Mediavine. There was some other small revenue, all that was under $1,000. When I saw this, I had two reactions.

1). We’re sitting on a gold mine.

2). We’ve got to move fast as if Google or Mediavine breaks, this business is done.

For me, when I decided to do this deal, I knew that we had less than 2 years to be able to transition the revenue and then grow it beyond where it was. While I believe that A.I won’t hurt the search terms as many other businesses, what I know about A.I is that I still don’t know how it’ll actually effect user behavior.

Will someone in 2 years still search for “What does 1111 mean?” Or will they use their AI assistant? I don’t know.

Based on this, here’s what I’ve done in 6 months (and what we’re working on now):

• We hired a killer operator who is extremely passionate about the subject matter and someone that I actually hired at a past company of mine. As an operator, she’s amazing and can run an entire team to bring things forward.

• We decided to go the route of taking spiritual teachers that have the expertise, following and low-ticket programs and partner with them. While this is still rolling out, we believe that by being able to direct traffic to proven experts, while using the expertise from those who are truly knowledgeable about the subject will build a brilliant brand. While this isn’t proven, so far, we’ve seen the signs that we’re going in the right direction.

• We completely re-did multiple funnels to allow for the daily visitors to turn into subscribers, we saw massive lift and we’re now receiving a massive number of daily subscribers to the newsletter.

• When we acquired the business it has about 57,000 subscribers on the email list, however, almost nothing was done with it. We re-activated the email list and deleted more than 60% of the subscribers. We started emailing 2-3 time per week a super valuable newsletter and now boast 70%+ open rates.

• We got super focused and while the former owners had physical products and an Etsy store, we closed that in lieu of being able to build digital products.

• We’ve started to diversify our traffic sources and specifically our email subscriber source and started testing Facebook Ads. On a subscriber side, we’re currently at scale generating subscribers for $0.20.

  

• We’ve recently launched multiple low-ticket offers that are doing extremely well and within our sites of being able to generate above 1X ROAS, while also producing email subscribers.

• While we are focused on Facebook and Instagram, we have tried other social platforms, however, decided to scratch that until 2024 in which we will further diversify into TikTok and YouTube as the main next platforms for both organic and paid advertising.

• We did, however, decide not to focus any attention on Facebook or Instagram organic, simply due to the amount and cost of traffic that we’re able to obtain.

• We redesigned the entire website, the logo and the brand and refreshed everything site-wide.

• While SEO is a whole game that I’m no expert, we’ve spent a lot of time optimizing every page on the website and expanding our topics to allow for us to range a greater expansion of what spirituality means.

• We have a whole team of contractors taking care of the business, allowing for it to grow and at the moment, the growth is mostly limited to the amount of capital we’re able to allocate.

• I’m missing lots of smaller things that my team could do a much better job explaining, than I can.

There’s a lot that we’ve done in the past 6 months, however, majority of it has been what I would consider stabilization and understanding our business model going forward.

For us, I believe our model as we continue in the future will be the combination of low ticket products, a low ticket membership, sponsorships and advertising revenue.

This would allow us to diversify away from the majority of advertising revenue of today. If it stays, or grows, that’s great. However, I don’t like banking on something that can occur with a Google update— it’s not a business model I enjoy and is more risky than my risk profile for a business.

At the moment, I would consider the business stable, however, it is going to require capital investment, mostly of advertising to grow.

It’s pretty simple, one of the problems with using financing in purchasing a business (which is what we did with this business) is that it limits your upward growth tracjatory. When you find something that works, it’s almost impossible to double-down because your P&L is eaten up with the cost of purchasing the business.

While the revenue has been stable…

The amount of low-ticket sales will come down to the number of products and the amount of traffic we can afford to buy. Then from there, it will come down to how expensive it is to sell sponsorships spots to our email newsletter and/or how our partnership offers perform.

In general— I see the growth curve on this business going two ways, as it is right now. If we don’t inject capital, it will take another year before this business will be able to generate much more than $40-45K/month.

Or if capital is injected, it’s easy that this business quadruples quickly, at first with low profit and then with much larger profit. The paradox of having multiple businesses and limited capital is that you have to chose which are going to grow more quickly than others.

In the case of this business, I’ve been patiently waiting and I still don’t have a clear answer, besides knowing that we’ve got a winner.

Speaking of… the numbers, here’s what it’s looking like:

The killer at the moment? That overhead expense should be going into growth instead of paying for the company.

I mean, of course, it should be getting paid for financing the company, however, each month it reinforces the incredible downside of using financing. While your able to buy a company that you might not be able too otherwise, the downside, is you can’t grow the company because majority of your money is tied up.

Further, as an item that created even more difficulty in the matter, which was my mistake in due-dilgance. When you transfer a business on mediavine the payments are Net-65. That means, while we were running, paying and taking care of things since April. We didn’t get paid anything until July.

Of course, this is what happens when you play with leverage. This is one of the few deals we’ve done this way in the portfolio— mostly as a trial to see how it works.

I can write something on that for a different day. For now, I’ve got an amazing business, that’s running even better than I expected and I’m just holding my breath and attempting to be a responsible “investor” and “business owner”.

But in reality…

I just want to open up the gates and get this into as many people’s hands as possible… and my ego wants to show just how much potential there is in underutilized SEO websites that you can build a real business from…

- Scott