In this episode, I interview my long time friend and business partner Steve McKnight. Steve made the leap into being a digital educator in 2001–wait till you hear how he bought his domain name–and has since made over $26 million with one single website: PropertyInvesting.com. Steve offers his tips on how to build a community website and how to build trust with your community, as well as offers a few words of wisdom to those of you just about ready to take the plunge into full-time entrepreneurship.
- Check Steve’s website out at PropertyInvesting.com
- Check out BB-Press to build forums on your WordPress website.
Transcript: How To Build A Community Website To Grow Your Business With Steve McKnight
Hi, welcome to the Entrepreneur Ignited podcast, this is your host Derek Gehl. Today, I’m outside of the studio, and am recording in an office here in Melbourne–which means we don’t have our regular recording setup, so that’s why this podcast may sound a little different from the others we’ve done.
I’m really excited because today’s guest is not only Australia’s number one bestselling business author, a leading authority in property investing in Australia, but he’s also a very successful online and digital entrepreneur, who’s used his website to allow him to build a platform to do some really incredible things.
Recently, for example, he built a commercial property investment fund that’s now worth over $100 million dollars. He exemplifies the power of what can be created with a digital business.
So today we’re going to dig into his successes and unearth some secrets that you can apply to your business. Without further ado, I’d like to welcome to the show my close, personal friend and business partner, Steve McKnight.
Thanks for being here, Steve.
Thanks, Derek. It’s my pleasure.
Okay, Steve. What’s the story? How did you get to be not only a property investing expert and bestselling author, on top of creating your digital business, from working as an accountant to being one of the Big Three?
I think this interview will go for a very short period of time if we’re going to be talking about me. I want to turn this around a little bit. Although I’ve been at this for a long time, the genesis of my beginning is very aligned with the vast majority of our listeners.
I was unhappy working as an accountant, and was working for a way of replacing my income, and finding something that I was excited about.
It was 1999, and I had attended a number of World Creation seminars, and they unusually had lead me to Vancouver, Canada. At that event, I watched your former business partner, Corey Rudl, speak, and you were there too. I bought your overpriced course, and came back to Australia, and thought, this could be what I’m looking for.
There were two things that happened that gave me a confidence that this was more than a fad. That was driving around Denver after that conference, I saw a billboard and then heard a radio ad that were both advertising websites.
It dawned on me that this internet thing was real, and it was in many ways the modern equivalent of the gold rush. Gold rushes are limited to where the gold is, but with the internet, there’s gold everywhere.
What came first for you? Digital business or real estate? Where you already doing real estate at that time?
Yeah, the start of 1999 saw me open an accounting practice with my business partner, David Bradley, and a few months after that I went to Dave and said, “I don’t want to be an accountant anymore.” He looked at me and said, “well, Steve, that’s all well and good, but we’ve just quit our jobs to open this accounting practice–what do you want to do?”
And perhaps listeners can empathize with this as well: I didn’t know what I wanted to do, but I knew I didn’t want to be an accountant. So for me, instead of doing accounting, I transitioned into real estate investment.
But in order to say goodbye to the accounting firm, we had to replace our incomes. So as the real estate investment ramped up, and people found us and liked us, we could gradually and then eventually let go of accounting altogether.
So you were in real estate, and people asked “hey, how are you doing this?” and then you went to the conference in Vancouver, and thought, hey, this internet thing is pretty cool, and one part of the story that I do know, is that you went out and tried to knock off one of my websites, if I’m correct.
You started Wealth Tips Online, which is an interesting story that a lot of people can learn from. Can you share that with us?
So we had the accounting practice which was generating income, and I was living with my wife off of her salary–we were investing everything we could into real estate. As we got more real estate, we realized that our accounting practice in itself wasn’t bringing in enough deposits, and couldn’t justify high borrowing.
After buying your course in 1999, we started this business called Wealth Tips Online, which was not a direct ripoff of your site, though there may have been similarities… We used that website to talk general wealth creation, and particularly building wealth using businesses, real estates, and stocks.
While it was profitable, we found that people were less interested in the stock side of it, and were more interested in the real estate part of it.
This might be a good tip: sometimes what we want to give and what the market wants to consume are two different things.
We can tell the market what it needs, but it won’t necessarily make us money. If we give it what it wants, it’s less work and more reward.
I remember telling the story, that what if you were working at McDonalds, and someone that weighed 30 stone rolled in and said, “I’ll have five big macs, and five milkshakes.” Is it our job to say, “no, you can’t have this, because it’s unhealthy?” Or do you just let the market have what it wants?
Here’s the first challenge: how much of what you do is listening to what the market wants, and how much of it is you telling the market what it needs. If you’re telling the market what it needs, it may be five times as much effort for one fifth the return.
Yeah. So that obviously evolved into people wanting real estate investing information, so you went down that path. Another take away that I see there is not trying to be everything to everyone, and specializing in a niche.
So Wealth Tips Online retired, and it segwayed into being one of the biggest real estate property investing firms in Australia. PropertyInvesting.com. I know this story, but I want you to tell the story of how you got this domain name, because there’s a lesson there. PropertyInvesting.com is an incredible domain name. How did you get it?
It does sound good nearly twenty years on, but you have to remember that good domain names were easier to get in the early days. That said, PropertyInvesting.com was taken. I spent a lot of time looking at websites that I wanted to acquire. I came to PropertyInvesting.com, and I found that it was for sale. So someone had registered it, and were now wanting to sell it.
I can’t remember exactly how much they were asking, but it was tens of thousands of dollars. I wrote to them and said look, “I know that domain is probably worth that amount, but I can’t pay that much. Are you negotiable?” and the person said, “we are, what are you willing to pay for it?” And I said, “look, not much. What’s the lowest amount you’d take?” And they came back and said somewhere around $5,000.
Nowadays, that’s a great deal. But back then, I didn’t have $5,000 to buy a domain. I replied back and said, “that’s probably an incredible deal, but it’s more than I can afford.”
Eventually push came to shove, and the number dropped to $500. This guy must have had a whole suite of domain names that he was hanging onto. I said, “look, I can’t even pay $500. If you’re willing to sell it for $250, please let me know.”
He came back and said, “that’s too low!” So it sat there for a little while, and after awhile, he got in touch with me again and said, “okay. I’ll take your $250.”
So I think that PropertyInvesting.com is probably the best purchase I’ve ever made.
To put this in perspective, most people go out and look at domain names–and let’s be clear, here, when did you buy PropertyInvesting.com?
Okay, so you’re 14 years on now. Back in 2001, domains had value and people knew what they were worth. One of the points I kind of want to emphasize there is that everything is negotiable. I love that story, because, A) it’s so you, and B) it’s such a huge price drop. But I’ll say, I’ve never purchased a domain name for full price.
Those big domain name websites, you can almost always get a domain at 50% off.
It may be worth talking about the value in a domain and whether it’s oversold or undersold. My own opinion is that a domain name is a bit like an address. If you’re going to buy an address, but it’s just an empty block of land, it’s not going to be worth very much. But if you buy an address and there’s something of substance there, then there could be some value there.
When people start businesses, online or offline, they tend to have pretty bullish expectations about what’s going to happen. There’s danger in spending a lot of your investment capital on a domain name when you don’t have a business behind it.
So a question for you, Derek, how important is a domain name? If you had very limited capital, would you be better of spending that buying a really good domain name, or going with something that isn’t as good and spending that money elsewhere?
Good question. The answer is, it depends. I wish I had a better answer, but an empty domain name is an empty block of land, like you said. But if you look at real estate, not all land is created equal. If we go down into Melbourne, on Elizabeth Street, and there was this empty block of land, flanked by two high-rises… You don’t need to develop that.
You could still sell it for a lot of money because there’s people already there.
Anything generating income will be worth more, right? But if you get a domain name that’s essentially just a word that people in your market are typing in, holy cow, I will invest in that. That’s like turning on the customer tap. If I sell shoes, and I can get Shoes.com, that would be amazing.
However, those domains are all either taken or incredibly expensive. We went through this phase where people are like, I want an exact match to my keywords. I bought HowToMakeSoap.com years ago, because I could rank really well for it, and Google gave you a boost if you had that exact match. But that’s kind of gone away.
So do we want to invest a ton of money in a domain? No.
I think there’s better ways to be spending that money today, unless you have a massive vision for owning a brand, but as a small business, save your money. You can always change domains later!
Perhaps, if I can offer some free advice here. If you have a limited budget, and we all do on some level, invest that money on generating income first and foremost. Then reinvest it somewhere else down the road, if you need to. Focus on generating that income before investing on something that may appreciate in value.
If I was starting again today, I’d build the business first, and as it grew and garnered more credibility, I’d look to trade out my domain name.
That’s sage advice. When you’re getting started, cashflow is king. Alright, let’s turn back to PropertyInvesting.com
It’s a fascinating website. Let me ask you a question, when you started this business and bought the domain, what was your vision of it?
I can hardly remember yesterday, let alone a decade ago. I believe the vision was to try to assist people by providing good quality information on property investing from someone that was first and foremost an active property investor.
Not to try to sell them real estate, or be everything to everyone, but just sharing the information that was helping me. I can remember when PropertyInvesting.com was hardly a website, and was more just a mail list that we’d send something out. It was very basic. I’d be so happy to get emails out of the blue asking to be added to the list.
We had offered a product on how to write a classified ad, which we sold for $20 a pop. We started running training classes too, and then brought on a graphic designer to redesign and automate a lot of the functionality on the site. Then he created a forum, and that forum became the lifeblood of the site. It was people swapping ideas.
One of the thing that’s fascinating about the site is the growth of that forum. It’s become the engine driving the site. So when you started with the forum, was there thought put into it? Or did the designer just suggest it?
Well when I brainstorm, I like to go to a whiteboard, and write all of my ideas on sticky-notes, and paste them to the board. I like to rearrange them into some kind of narrative.
Not every idea makes it in, but I had a vision of creating a forum board where people could swap ideas. Then, our designer had the coding and the graphic design vision to put it together.
The forum is so powerful because if you’re in a niche, and there’s a group of people that want to communicate and talk about that, there’s an inherent draw to start something up on socials. But I see so many business that build everything on Facebook by starting a group and building followings there, but the fact is, forums are one of the most undervalued tools in your toolkit.
Once you can create a certain amount of momentum, well, I’ll ask you–where do your opt-ins come from?
I believe it comes from people searching for real estate information. They find the forum, and see life, and interaction, and it draws them in. We give them a taste of the forum for free, but for unlimited access, you have to sign in.
The forum first of all drives your database growth, right? Because that’s your opt-in.
Well we’re kind of getting ahead of ourselves here. I always try to keep things simple here. I ask myself over and over, who is it that uses the internet? People. Then, I ask, why do people use the internet? Entertainment, or information.
I ask myself this question all the time, and it changes, because people change.
So in what way does my website provide entertainment and information? The mistake I see people make is some folks make their websites all about them, but if you make the websites about the people searching, it’ll be far more successful.
So with people that use the forum, it’s for people that want to talk. So the question the entrepreneur needs to ask is building momentum around those forums. That’s a longer conversation that you need to have, and it takes a lot of work and time.
How did your forum gain momentum?
At the time there were two forums in Australia talking about real estate. What made ours great, was that the other forum didn’t allow for advertising. We allowed people to advertise in their signatures, and it prompted people to want to start conversation.
The other thing that helped was a lot of posts! Plenty of questions, and I was on there regularly answering questions. Around then, my book came out, and I was doing a bit of TV work, so people started to reach out.
So there are plenty of forums out there with zero activity. If you want to have a successful forum, you need to put in the work. So now I’m gonna hit the techie, nerdy side and point out the value of the forum from a completely digital perspective.
So what’s great about forums is that the content is user generated. If they’re in the market, everything is going to be keyword rich. So PropertyInvesting.com, you’ve got an archive of over 100,000 pages of related content that you didn’t have to create, and Google loves that.
Google now loves this website, and I think in any niche, you’re always going to find forums in the top ranking. So now with that website, you’re generating 100,000 hits month to month from Google because there’s so much user interaction.
I want to go back to what you said about increasing your subscription rates. I see this with forums all the time: if you decide to start a forum, 80-90% of people on those forums are lurkers. There’ll just consume that content. They’d be good clients if you could get their email addresses, but they won’t give them to you, they just want to look.
So Steve solved that problem by using a really simple technology that says after you’ve been on the site long enough or seen so many pages, it locks you out, and says you need to create a membership. It’s a fine balance; you want to give some content away, but if you want to build a business, you need to get that email address so that you can now communicate with those people.
Where a lot of entrepreneurs shy away are the trolls. How do you deal with the jackasses that go into the forums and create chaos? So what are your policies for that?
I see it as graffiti, Derek. Virtual graffiti. It’s a delicate situation to take away someone’s voice but I have this philosophy: when I pay the bill, I decide what says. If you’re not paying the bill, you’re my guest, and I’m allowed to kick you out.
You can’t be friends with everyone. It’s more important to create a safe, hospitable environment on your website.
What you need to find are people that like what you’re doing and are able to monitor the forum boards. We have an abuse button on the forum, that consumers can click, but I also ensure that my moderators read every comment.
There are smart people now that have bots that can sign up and do all sorts of things, so this is a growing problem that takes a lot of time and sometimes money to address, but if you have a website where you want people to interact, maybe take those trolls as backhanded compliments; no troll is going to look at a website where nothing good is going on.
That’s true, I guess it’s a sign of success, hey? You’ve made it, so it’s a good problem to have in a way. I admire the way you’ve handled it. You can’t stifle opposing opinions, but there is a point where you must say, enough is enough.
What’s a bigger issue is, when you give people a voice, ensuring that they voice their opinions respectfully in accordance with defamation law. If I jump online and say, “I’ve been ripped off by Derek Gehl, beware,” the next thing I expect to get is a letter from your lawyer saying, take it down.
So as the website owner, you need to walk a fine line between upholding a person’s right to share their opinions, but also are risking being dragged into court for a quasi-defamation action.
Our own policy is that we read it and encourage debate, but we don’t allow any character assassinations at all–if it gets personal, we delete it. If it’s a personal account, about someone’s dealings, we leave it as it is.
That’s probably something that you could apply to any forum out there.
It takes guts, though, when you’re getting threatening letters from a lawyer’s office to say, okay, give it your best shot.
It definitely takes some confidence to do that.
It might also just be a fight you don’t need to have. A lawyer friend of mine once said to me, “Steve, is this really something you wanna go into bed for?” But at the end of the day, it’s the fabric of your forum. If you’re not going to stand for anything, why will anyone want to come to your website?
I did want to make a point from before, Derek, that I lost track on. I think the most valuable commodity on the web today is trust. It’s very downplayed because people are so busy developing their schism on the internet, but it’s a hard ask to get someone to come to your website and buy your product if they don’t trust you.
I’d encourage people to spend some time thinking about this question: why would someone that doesn’t know you, trust you? And if you can communicate that on your website, then all the better. The easiest way to communicate trust is testimonials.
So the use of appropriate testimonials that answer the question in the new visitors mind, can this person be trusted? If you can answer those questions, it removes one of the biggest stumbling blocks that people run into when they find your website for the first time.
And I think trust is something that is easy to lose sight of. As well as the human element behind it, especially in digital business. You’re taking someone’s money and offering value in return. All these years knowing you, I have a lot of respect for the connection you have for the people in your communities. To that point, let’s talk about the real estate niche.
Do we have to, really?!
It’s scorched earth! Over the past 15 years, it’s just become toxic. You’ve weathered the storm and come out the other end of it going strong; I think there’s a business lesson to be had there, but I also think there’s more to it… What’s your secret?
Over the past few years, the wealth creation industry has turned into a sewer. If you chose to be a participant in it, it’s a bit like swimming in the sewer. If you come out thinking you don’t stink, then you’ve misunderstood the nature of it.
Even though the nature of the industry is dodgy, it does allow people of character to step above the practices of the industry you’re in
You’re not always going to get it right. I’ve made mistakes, absolutely. Live and learn.
One of the secrets to my longevity is never selling real estate. Only training and educating. What’s happened in my case, with the benefit of hindsight, with this notion of trust–when you apply it long enough, people begin to trust the identity behind the community website. There’s nothing more powerful than being a trusted advisor.
Instead of just believing what you can do, people will believe you, and who you refer them to. Once you have that, you can move your income generating ability through further generations. Like I said, I never sell real estate. That said, I know that people can’t always invest like I can. They don’t have the time, money, skill, or risk threshold. So some years ago, I set up a managed fund to invest in commercial value in the United States.
I went back to my database and said, “for the last decade, you’ve asked me if you can invest with me, and I’ve said no. I’ve come across an incredible opportunity, and I’m willing to stake my entire reputation on this.
We’ve raised over $75 million, and we’re full. The idea is here that we invest together and make money together. So now I’ve shown people how to invest, and I’ve used my trusted advisor status to put together this fund, and now I’ve created this new level of trust with these people which adds big value to the website.
When you can morph into trading on trust, and that trust is demonstrable, it’ll smash the glass ceiling
Takes it to a new level.
I really don’t know if your listeners realize how important that is. PropertyInvesting.com, the community website you built, has done $26 million in sales since 2001. But PropertyInvesting.com has been more profitable in the past two years than ever before. It’s made the business far more valuable because now it’s got a demonstrable history of being able to raise money off that database.
For everyone listening, this fund, everything Steve’s talked about, it’s all wrapped up into this incredible outcome. The internet gave him the ability to reach all of these people. To that point, so many people fixate on the technology, but to truly create a business, you need to go beyond that.
That’s where the trust element comes into play.
I want to highlight one more thing here, there’s lots of people listening that are starting businesses–there’s something that you said, Steve, is that you only educated. You didn’t sell them real estate. Everything you were offering came from a completely unbiased place. There’s something to be taken from that, because if you’re listening to this podcast, you’re probably looking to improve your financial means. If there’s one piece of advice I can give you, if you ever find someone claiming to be an educator that is also offering to sell you the solution, the trust in that situation is flawed.
The answer is simple to me. Are you doing it? How much money are you making doing it? You may just be selling answers to a problem you haven’t solved yet.
Your first testimonial needs to be yourself. This is what I’m achieving, right now.
I’m the real estate guy that’s bought $100 million worth of Australian real estate in the last two years. That’s fact. There are people out there selling programs in the real estate program that have purchased very little real estate; they’ve gathered a lot of information but they don’t know how to use it.
Just be careful where you invest your money. That’s perhaps the most important takeaway there.
We’re running out of time here. To wrap things up, you’ve been through lots in your career as an entrepreneur. Lots of success. If you were sitting across the table from someone that’s thinking about making the leap, online or offline, what would you say to them?
Stick to your nice 9 to 5. Don’t quit your day job. [laughs]
That’s not what I was hoping for! [laughs]
Perhaps the advice that I gave to myself in the accounting profession fifteen years ago. You can always go back. If it doesn’t work, you can always go back to what you’re doing now. The opportunity to move forward only gets harder as you get older. There’s no better time to try something new than right now. And you can always go back to what you’re doing now.
What is the risk?
I think I’ve learned more about risk and quantifying risk from you than anyone else. Once you break the risk down, it’s never as big and scary as you thought it was.
So, Steve, thank you very much for those words of wisdom. Anyone who’s interested in real estate investing, go to PropertyInvesting.com, and also check out the structure of the website, see what Steve has done.
Thank you, Steve.
Thanks very much, Derek!
Okay everyone, if you enjoyed this podcast, you know where to find us on iTunes. Leave us a rating or a review, as usual. The transcript and show notes for this episode will be up on EntrepreneurIgnited.com/podcast! Have a prosperous and productive week, everyone, and we’ll see you in the next episode.