And why you can’t mention ‘escrow’ in France.
Kévin Jourdan is an entrepreneur and co-founder of DotMarket.
DotMarket is a French marketplace that guides buyers and sellers through their first website acquisition and facilitates their investment in online businesses.
Kévin’s transformation from an employee — working with affiliates — to an entrepreneur who co-founded a marketplace platform, is a fascinating story of determination, learning, and a little luck for good measure.
Dotmarket recently achieved a major milestone by completing their first seven-figure website sale.
Kévin reveals details about:
- Starting out in affiliate marketing
- Flipping his first website
- Finding a niche
- Challenges in the French market
- Predictions and trends in website investing
- The next big idea
Read on for Kévin’s insights.
As I prepared for this interview, I realized how much your life sounds like a case study from Tim Ferriss’ The 4-Hour Workweek. Have you read it?
I did read The 4-Hour Workweek. The first time I read it was after I quit my job in the Philippines and started building affiliate websites for a living. That was in 2014. I remember thinking, wow, this guy has something that I had not understood until then.
I recently read that book again. It made me realize that, in a span of six to seven years of entrepreneurship, I had completely forgotten how important it is to find the balance between your work and your lifestyle.
I saw how much my business had grown, but I also saw how I had neglected other parts of my life. I forgot about the value of a good work-life balance, like spending time in nature, meeting new people outside of work, and taking time off.
I read that DotMarket is a combination of your various experiences, skills, and work preferences. Tell us about that.
I started out as a website manager, and my role in that company was mostly to handle the affiliate marketing program. Because of that, I had a good understanding of what it’s like dealing with affiliates.
My main motivation for switching to affiliate marketing was the realization that some affiliates were making a lot more money than me.
Was it challenging for you to become a full-time affiliate marketer?
I kept it safe and simple. It took me about two years before I made the jump and started building my first website as a side project. I was lucky enough to be living with roommates that had an entrepreneurial mindset.
One of them even had some affiliate websites, and he gave me reading resources like Niche Pursuits, and Smart Passive Income.
Actually, I still read Spencer’s articles. But back then they had these super, well-done case studies where you could learn how to be an affiliate marketer. At first, I did it on the side. I would work on the site in between my work projects or during the weekend.
It took about a year to start generating good enough money to live in the Philippines, nothing crazy. After a while, I realized that if affiliate marketing could make this kind of money in a few hours per week, I could make much more if I was working on it full-time. The sad truth is that it didn’t work.
It wasn’t as simple or as quick as I wished. The reality is that the day I quit my job, I freaked out and got another one.
It probably took another year of learning how to work by myself, without any framework, having to learn SEO, CRO, and how to negotiate some partnerships before I got the hang of it.
In the end, I had to learn how to wake up in the morning and create a work routine when I just wanted to be a digital nomad and travel around. Learning SEO was a big deal because that was the one thing I didn’t do in my previous job.
At this stage, you had to figure out how to generate decent revenue from an affiliate website and then flip it for a 30X multiple — which was your next achievement.
Did you think it was possible to buy a website for €4,000 and then sell it a year later for €121,000? Help us understand how you got there?
No, I had never thought about website flipping. I wish I had, but I wasn’t reading the right information back then. Otherwise, I would probably have tried to sell some of my websites before 2018.
That year, I received a massive slap with a Google medic update as my first niche was the pharma industry. When I started, most of my affiliate sites were in the health industry, and, obviously, when Google medic hit, man, that hurt!
At the same time, I had already purchased the dating niche website you asked about for €4,000. I started reading about Empire Flippers and what they were doing. Although they were a big inspiration and I learned about buying websites, I didn’t really understand that I could do the same in the French market.
Was it hard for you to get that niche site deal? Do you think you bought it cheaply or did you sell it high?
It’s kind of a lucky story, to be honest. Since then, I’ve been learning how to reproduce that scenario.
In a way, it was a lucky purchase because I had originally built that website from scratch. On top of my affiliate marketing business, I was doing some online training for customers. After two years of online training, I started selling ready-made websites and starter sites.
I would have my team create a starter site, and then I would train the buyer on how to use it. I would teach them how to think, how to do keyword research, monetization, backlinking, and so on.
Then I would deliver the website so that they could start their journey to make money online. I didn’t believe I was helping anyone by simply selling the online training.
So I thought about stopping the training business and considered selling websites instead. It’s a bigger margin and greater revenue for me and the buyer gets something tangible. In the end, I felt more comfortable with that.
Around 2018, one of my clients asked me to build a few websites to help him get out of his Amazon affiliate programs. He wanted me to come up with ideas that were not related to Amazon, in various niches that could make good money.
We had weight loss, dating, VPN, finances, and many others that could generate income and we’d find a sub-niche and create a website for him. Then, after four or five months in the dating niche, he called me and said that he didn’t like it. He didn’t feel comfortable with it.
At this point, I thought, “I built that website. I know very well the work that was done.” I checked the stats. They were pretty good and I was surprised that he didn’t start monetizing.
I had originally sold him this site for about €2,000 and he wanted to get €4,000 because he’d bought backlinks and a little bit of content.
The website made €0 in revenue, but, in my opinion, it had good rankings and solid potential.
My bet was that, based on the rankings, it could make €200 per month at least. My investment would be based on a regular 20X multiple — which was an average multiple in France at the time.
That was my first strategic purchase.
Six months later, the tide turned and the website started ranking for even more keywords. It was now generating €4,000 a month. Although the growth was amazing, I did invest another €6,000 in content as soon as I purchased it.
I would reinvest all the revenue it generated, and sometimes even add more from my savings. I was very confident that it was growing very well. The moment it reached a plateau, I decided to sell it because I didn’t believe in the dating industry back then either.
At the time, I really wanted to sell our first six-figure website on DotMarket. It didn’t sell right away because I was asking for a high valuation that French buyers weren’t ready to pay. But along came a buyer who was used to paying various multiples and we agreed on €121,000, even though I had originally asked for €200,000.
That’s an amazing story. Some people might feel sorry for the seller, but I think he made a great deal.
Where was DotMarket at that point? Could you explain the particular challenges in the French market and why you decided to start a marketplace there?
There are other marketplaces in France.
We didn’t invent anything. The oldest one still active has been around since 2008.
The reality is that none of these platforms did what I believe Empire Flippers do well, which is educating the market, creating standards, and making it a real alternative investment asset.
In France, there was no marketplace doing the same job, and publicly showing how the process works. For example, how will the website’s value be calculated? How does the migration process work? How do the escrow and contract parts work? It was all a bit blurry.
And that was the tipping point for me.
If we build a low-quality marketplace (as some of our competitors around the world allow any “website” to get listed) we will just be another platform selling mostly sh**ty websites and offering no advice — let alone educating people about the assets. So we decided to be as transparent and as serious as possible.
My initial idea was to open a French franchise for Empire Flippers. I reached out to them asking if they would consider cooperating with me. That was my model.
I thought those guys have the brand; they have the process, and I could launch it on the French market. But they weren’t interested because the French market was too small for them. They wished me good luck and offered to recommend us to buyers and sellers with French websites.
I took that as great encouragement.
Aside from the transparency issues, due diligence and transferring funds should be streamlined.
But this doesn’t happen in France. You need a lawyer. They’re expensive and we don’t have any escrow solution that works well.
Plus, do you know what the word escrow means in French?
It’s not spelled the same way, but it sounds the same. If you use that word, you won’t do business with French people because all they hear is ‘scammer.’
That’s significant because it highlights the cultural differences at play here. How do you handle that?
We needed to have our own escrow system. In France, we call it a “séquestre”. This sounds like legalese, but at least people trust the word.
So, we began by listing our first very small websites, but I had a challenge. I’m skilled as a website manager. I’m good at making money with affiliate sites, but I have zero experience with e-commerce sites. I’m also very disorganized with regard to following processes. It’s complicated for me.
Then, I partnered with Mayane Guez, who is my co-founder. Mayane comes from a more technical and process-oriented background, so she built the platform.
I gave her everything I wanted us to include in our due diligence checks and she constructed all the processes behind due diligence, migration, sales, and so on.
Once we were done, we started fearing how we would grow the marketplace. Obviously, you need both a buyer and a seller.
Right, you are building a double-sided marketplace. So which side do you start with?
The incredible thing is that buyers came right away. And that was for one main reason; there was no other platform available to the French market that had a good reputation. That gave us a big advantage back then as the new guys. Also, we spent a lot of time picking up the phone and explaining what we wanted to do in the French market.
People started trusting us very early on, even though we didn’t have a single website for sale.
My background helped because we would talk about website management, and I knew what I was talking about.
So, even though we didn’t have a website to sell, we could talk about SEO, monetization, and affiliate marketing. That way, our readers and potential clients became convinced that we knew our stuff.
Once that was achieved, we would encourage people to call us when they had a good website for sale. But we also realized that, in this world, you need benchmarks and goals.
Your milestones can be your size and value at the end of the first year. or at the end of the second or third year.
You need to show that the gross value of the websites you’ve sold is increasing.
If it doesn’t, it means you’re stagnating.
That was a big deal for us from year one to year two — to actually increase the gross value of the websites sold. But, during the first year, we also realized that if you did not sell a six-figure website, owners would not trust you to do so. They would doubt that you have buyers for this kind of website.
That’s the reason I decided to put my own website up for sale. I wanted to make it happen. We would show people that we could sell a €100k-plus website.
The funny story is that the guy who bought that 6-figure site ended up selling his €1 million-plus website through us last year.
Thanks to one guy, we reached two milestones. That second milestone proved to our buyers that we could handle €1 million-plus business sales.
Congratulations on that success. How did you grow from that point? Do you keep growing vertically with even larger deals or do you pursue different avenues?
The biggest difference with the French market (and European markets in general) is that it’s structured at a lower level than in the US. For instance, it’s very exciting to see marketplaces focusing on €1 million to €10 million-plus deals in the US.
I believe they can do that because the amount of money circulating in that market is greater, and the level of educated website investors is higher, so you can find small buyers willing to pay $10 million in the US.
I see. You’re saying they’re small buyers in the big world of M&A, where $10 million is a small investment.
First of all, in France and the rest of Europe, the average budget is lower than in the US. And, a million euros over here buys more than a million dollars will buy in the US, even with near parity of the two currencies.
Secondly, I don’t want to compete with those guys. They have different processes and different businesses to sell. Our goal with DotMarket is to do the work that the big guys think is not profitable enough — like €3 million businesses and lower.
On the flip side, if we get a €5 to €20 million deal, we would do it, even if we have to partner up to ensure a smooth transition for both the buyer and seller. But these mega deals are not our target.
At the moment, we are more excited about consolidating the market for assets worth between €20,000 to €2-3MM — to stay below the market cap targeted by the classic M&A businesses.
We are building a dedicated marketplace, with fully automated processes for the French market. There’s a huge demand.
Since the French market is much smaller, you have to work with what it offers. 80% to 90% of the websites we receive for sale are worth less than €20,000.
We started rejecting them because they’re too small, and there’s no profit in auditing and selling these sites with our current business model.
Now we’re thinking about building a platform that makes sense for these kinds of deals. That’s one niche market we want to address in the future but in a much better way.
We also want to expand to different assets like newsletters. We bought Duuce to do that in the US, and we hope to extend that into Europe.
We expanded to e-commerce sites and we expanded to SaaS businesses. We remain focused on the same market because we do not wish to compete with M&A firms that have their own processes and clients.
We really want to consolidate the smaller part of the market to become one of — or maybe the biggest — fully-vetted marketplace for EU businesses. That’s our ambition.
With that ambition, how do you see the market evolving? What threats and opportunities do you foresee for online businesses?
There is good and bad ahead. I’m not 100% convinced that affiliate sites — the way we know them — are going to keep making good money.
The way Google focuses on brands, and big media, and how they keep suppressing comparison sites, combined with the increasing difficulty of building a highly-credible website will make it harder for lazy affiliates to make a living. This will force affiliates to become more professional.
There will always be websites that make money with mid-level quality work, but I believe that this industry is becoming more sophisticated. If you look at the training, the conferences, and the updates available, they all point (in my humble opinion) towards an increased professionalization among website managers.
So, we have to increase our skills and quality of work to stay in the game.
The good in all this is that buyers are hungry. Very hungry.
Media companies want to buy audiences; aggregators want to buy brands and businesses. You name it, they want it.
The French media is starting to get interested in buying e-commerce sites because they realize that Amazon is playing with them. At some point, they have to make a move or they’ll go out of business.
All the big buyers want to buy more. That’s the biggest trend. What’s interesting is that we’re also seeing smaller and smaller buyers considering website purchases as a valid investment.
Europe is still way behind the US, where website flipping is almost a religion or a full-time job. In France, we’re not there yet.
The most exciting trend is that the buyers are here. The less exciting part is that it’s going to become harder to find a great quality website for sale, and that’s already difficult in the French market.
Do you have any final insights or comments you’d like to share?
It’s been an extremely exciting journey for me to transition from working as a website operator to becoming a broker with my own marketplace. It reflects the 4-Hour Workweek reference from the start of this interview.
In the beginning, I just wanted to make money with my websites in the pharma industry. Now I am excited to get up in the morning and join my great team. I love what we are doing. It’s a perfect package at this point.
The market is giving us good signs that this is the place to be. It’s telling us that it’s cool to be a website investor. With that, I think we can really make a difference with our project, and I feel that this is the one where I have to nail it! After that, I don’t feel the need to reach any higher.