Rick P. Network owner who sold to Verticalscope & Internet Brands @ForuMediaInc

Tell us about ForuMedia Inc.

ForuMedia Inc was officially Incorporated in 2009 after operating as a sole proprietorship under my name since 2006. The main reason for the Incorporation was to protect personal assets from any lawsuits.
ForuMedia was created by myself and an investor. Over time it grew to 3 owners and then back down to 1, myself.
ForuMedia over time has owned and operated some amazing automotive communities such as MiataTurbo.net, TurboDodge.com, GMForum.com, Ranger-Forums.com and a few more.
ForuMedia still actively runs a small network and continues to expand.

Lawsuit threats? Give us an example of the type of threats you would get and how you would handle them.

As a business and personally we were often threatened with lawsuits to the tune of 15-25 times annually from members and businesses. There finally came a time when I felt some of the more looney members may follow up with a lawsuit over being banned, censored or because we did not remove their posts on their command.

Generally what would take place is a member would have their post(s) deleted, perhaps their url added to the censor list or even given a warning / infraction for their comments in a thread. Once punishment of the user commenced I would receive emails from those users with comments along the lines of “reinstate my account or my lawyer will be contacting you” or “you have refused me my freedom of speech, my lawyer has been contacted”. My favorite threat is usually the one where the person claims they will pretty much own me for the rest of their lives once their bulldog lawyers are done.

9 times out of 10 I would just file the emails in the trash bin and then further add the user to the firewall deny list. I would also make sure to continually & indefinitely ban them when they returned to the site(s). The banning would also be network wide. If they were a shop I would censor their URL, their contact number and any other pertinent information for contacting them.

If a friend of the banned made a thread regarding the missing store / vendor or the user I would always state that lawyers are involved and we cannot comment on their account due to our privacy policy. Threads would then be locked and almost always it would blow over with that lawyer threatening member still being banned. This was a sure fire way to keep people out of the loop and to not involve others. There is nothing worse than a “me too!” thread.

We see you had a business partner back in 2009, how did you guys meet & how did you manage roles within the company.

I had actually written my responses to the interview and then my legal adviser wife made me redact a whole bunch of commentary including the naming of certain people. **BORING NOW** But shes the boss of my life these days So let us begin.
When I say investor I mean a regular guy who had some money to invest into forums at the time.

The investor & I met during a period when a forum I moderated on was re-listed to be sold. The investor was considering buying the site with another one of his business acquaintances who ran a store that advertised on the website I moderated on. The investor & I spoke and he decided to jump ships from his current partner over to me. In hindsight, that should have thrown up red flags as his loyalty to his friend / current partnership was not a concern. Looking back his only concern was making money. I suppose at the time the Investor seen a more secure investment in me than with his current partner which made sense since his current partner had no experience with web forums.

The investor & I tried to split work evenly across the board but it never worked out that way. Initially the investor was nothing more than a bank and I was the builder.
All job duties were to be split after my initial build, including profits on a 50/50 split. Over time we both realized & agreed that their (investors) role was very limited and in some cases not active at all in the company. By 2010 the investor was no longer part of the company though we were still 2 people strong.

What did you learn from your experience of co-owning a successful forum business?

The one thing I learned is to listen to people more often. When someone with experience states a partnerships can be bad especially if things aren't in writing, I should and you should listen. That was my first mistake with doing business with 'the investor'. Our partnership, the demands and our obligations weren't in writing from day one and ultimately I was doing all the work. It wasn't until the incorporation and shareholder agreement did we know where we all stood legally. The shareholder agreement was something the investor could not escape and ultimately lead to him leaving the company.

While I always regarded the investor as a friend outside of business, I am not sure the feeling was mutual. There were times I felt he left me dealing with problems, situations, users, lawsuits all by myself. The investor didn't share the same stresses, concerns or wants that I had. I should note we became friends after the the company was founded, not before and knowing that it was just business initially I thought what could possibly go wrong.

The saddest part is that had the investor followed through with our business plan I believe we would have been far more successful. The investor had a great temperament and was great when dealing with people and diffusing situations, he just could not meet the companies expectations & obligations he agreed to.

Due to our difference the company sat fairly stagnant during late 2009 and early 2010. While still generating profit there was a lot of tension between everyone. When a third person invested into ForuMedia the company had a massive refocus on our duties, expectations and goals. It was one of the best changes the company went through. The addition of a new investor with good character, strong morals and goals helped kick-start my passion back into the company.

During the low times of 2009 & 2010, what were you thinking?

I did a lot of reflecting and thinking to myself. I wonder how could I motivate someone to see how good we got it with this special little company. I thought about how my partner was going to doom the business, how I would lose my house because we would fail, I thought about my wife, my child, my pride. I did a whole lot of thinking. I wasn't happy during that time. I blogged often before 2009 but during 2009 I rarely wrote. I just didn't know how to escape the dead weight of our amazing company. The companies lawyer who serves the company suggested we split assets and go our separate ways, that was how bad it got. It was truly an awful time in my life. I was ready to just walk away from the company with 50% and just do it on my own. I just didn't want to and couldn't fail so, I fought on and did what was right by the company and myself.

What do you think about everyone buying and selling forums.

In terms of buying with intention to keep? I certainly don't take any issues with the large corporations wanting to buy up all the forums, it makes sense from a business perspective. Not only will some of these larger corporations like Internet Brands & Verticalscope support the large sites with infrastructure and insure these sites legacies, they can help the sites evolve further.

If we are are referring to the forum flippers, the pump and dumpers, well, I believe they are part of a greater problem with forums. I can't tell you how many times I seen guys purchase a site, re-brand & re-skin a forum only to sell for a profit while destroying the community. Sadly, the members of the community feel used and sold out.

You mention VerticalScope & InternetBrands, who do you think is winning the war on forum acquisitions?

I think I have to give this one to Verticalscope. They have amassed a very impressive collection of Auto sites. It really is crazy what they have done. I attribute their success to their fast pace acquisition process and substantial capital. But, as for quality InternetBrands has some amazing sites as well.

What do you think of people buying forums and merging them into one.

I think there is a time and place for the merging of forums. There was a time when I owned Ptenthusiasts, a great PT Cruiser enthusiast vB forum. It was a dying site and was abandoned by the previous owner and really was in such a downward spiral I don't think it would have mattered if I had closed the site. I was able to merge the site into my TurboDodge forum I owned. That propelled TD to greater than 2 million posts and 30k users. Turbododge still thrives today under the ownership of Verticalscope.

Most mergers seem to fail if both communities being merged are active. Too many feelings are hurt, people feel as if a side has been picked, their efforts into their home forum are lost with the merger. People lose their forums identity and are expected to to carry over the same passion and feelings onto the new site. Merging active sites needs to be done slowly and with the input of the core group of active users & staff. If you don't consider peoples feelings during an active site merger, you will lose people which may cripple your sites traffic.
As for inactive sites, there isn't a whole lot to worry about. My concern when merging an inactive site is to ensure all the rewrites of the old links line up with the new URL. Then, let the users know you are back in business elsewhere

What are your thoughts on those that buy several forums, or start several forums in a "network"

I like the idea of buying sites, it has always worked for me. Buying is a good idea if people are willing to sell. Forum networks work well if you focus in on a target area and immerse yourself in that. Trying to generally capture a market can be tough. Buy / create sites that can feed off each-other seems like a good plan to me.

I've seen people get low balled or scammed on sales, have you worked with anyone that you would advise to stay away from?

Where do I begin? Almost all of my transactions have been outside of escrow and with dodgy forum sellers. It causes great stress knowing there are big risks and I assure you, some people will take advantage of your willingness to be honest.

I can say that half of the forums I have bought were full of drama and deception from the sellers. From sellers who wanted to try and sell the db's 2x over, pruned databases after I paid, tried to poach members and in some cases took what they sold and reestablished the same content under a new domain (only to be DMCAd and shut down).

I can't tell you how many times forum owners who were selling to me lied about revenue, traffic, licenses etc. It just seems as though that if the forum owner feels a certain aspect of the site & the terms of the agreement could derail the sale, they rather lie. I once purchased a Camaro forum knowing that the site was making $4,000+ a year on private vendors. I checked the paperwork, got screens caps etc. The reality was that the owner Chad was lying about the revenue from the beginning. Once Chad was paid he fell off from the forum and the net, had his right hand guy start poaching members for a new forum. The sponsors who were paying the supposed $4,000 combined a year were shocked at the claims. There was no revenue stream coming in. In the end I closed the site and merged its content into another. It was a $10,000 investment that was only worth its value in posts / threads.

Have you ever used a company to facilitate a sale of one of your websites?

I have worked with 1 company and 1 person while selling websites. I have never used anyone during the buying process. My experience differs slightly between the parties I used. For instance I was approached by a large firm that wanted to represent the sale of one of my domains to Time division of Time Warner. A contract was drafted for the sale of the domain and lawyers got involved and that was it. The email / phones went silent and the domain never sold.

When I used a broker / middle man to list and sell my forums the offers were ridiculous, border line insulting. I found that while directive was given it could not be followed by the 'consultant'. A site that he offered to move for a couple thousand (and was doing me a favour) I ended up selling for around $15,000 + incentives. Now, the broker is a decent guy but at the end of the day he is just a forum flipper, he is part of the problem.

If you have the time sell your sites yourself.

What made you get into the forum market?

In 2001 my career path changed abruptly. After spending the following years getting fixed up and trying to take care of myself I kind of fell into the auto forum scene.

I was hanging out at a performance shop when I met a guy named Mark P. who ran a local forum. As I got to know him I became a moderator, built up the site further with him, I sold advertising etc. One day I woke up and the site was sold and I was out of a mod spot and my e-home was gone. Everything I built albeit for him was now someone else's project, I no longer ran the show.

The site was bought by forum flippers who in turn relaunched under a new domain, re-skinned and restaffed the site. It was then sold for 4x their purchase price. The members were leaving in droves. The new owner brought me on to assist him, I bought half the site, 12 months later I bought the site outright. It was then that I was propelled into the forum market and started the business with an investor. This was the best mistake I ever made. I bought that site based off personal attachment, it was the wrong reason to buy it. The site had a shelf life, community was hurt and I was about to learn what a traffic nose dive could look like but it also sparked my interest in building a business.

Sadly for Mark, I think smoking dope took precedent over having a nice active forum that generated extra income. In the end our business relationship failed as he felt slighted that I returned back to the community he once owned.

Whats your most successful move you made, what would you suggest to others who may want to start up a forum network.

My most successful move was getting out of the auto network I owned. Selling my 18 sites (more if you count the ones I merged) was one of the best moments in my life and career. I wanted to be free of the sites to focus on my family and myself. I was tired of the drama and BS with dealing with so many of the staff , users and vendors from the sites.

To those wanting to start up a network, focus on one specific area or areas that work together. There is no point in having a DIY Reno website and a Punk Band website. There is nothing wrong with having those sites but leveraging each sites traffic to benefit the network isn't as easy as say having all DIY sites or an auto network.

Favourite site you sold & why?

Easily, without a question my favourite site was MiataTurbo.net followed by TurboDodge.com. The guys from MT were amazing. The staff, best I had in the auto network. The admin and mods were all great guys. As for the users. They easily were the funniest guys out of all my sites. Great sense of humor, loyalty to the site and took me in during the acquisition and thanked me while I was on my way out. They are crazy guys but they restored some faith in humanity for me. I honestly loved those guys **insert kitten pictures here for them... lol**

Do you have a preference on scripts your forums run on, why?

I still prefer my vBulletin 3 series. I am comfortable with vB3 and most of my development has been done on that platform. So, I am just most comfortable there. I also have over 20 licenses sitting around so they might as well get utilized in the future too.

In recent years with the Xenforo vs vBulletin lawsuit, I can say there is some comfort in being situated on the Internet Brands side. I do not for a moment believe vBulletin is going anywhere. While vB may not be my cup of tea with their recent releases, their product still works best for me.

What about development of your sites, where do you go for that? Any advice?

I have met most of my developers through vBulletin.org. All of my developer problems also came from that site. This whole notion of paying a developer 50% upfront is just silly. Don't do it! Use an escrow service if possible

Go and try out Odesk. It is a great service that I have used countless times.
Outsourcing outside of North American is way cheaper. I will say that I believe in supporting our economy but how can we compare the rates. Its not uncommon to have developers tell me they charge $150 hr. But on Odesk, $13-25 / hr. I have had some amazing scripts written from developers on Odesk.

Vbulletin.org is like a spawning pool of scammers. Even the best developer I have ever worked with went awol after being paid. To this day there is a guy who continues to scam people on vBulletin.org and the staff there are fully aware. Since 2007 Chris Candler, aka Mr. Popularity and now DivisionByZero continues to rip people off. There is a site dedicated to just him, www.cueblip-scammedme.com

Would you do it all again, is there a point in your career where you could of gone a different direction?

Would I do it all again, yes and I am doing it again. I have slowly been chipping away at a new network. Investing in new properties is not as easy as before as people aren't as willing to sell or team up and work together.

I really enjoy the challenge of building something up and making it work. I always try and look at the sites from a user stand point, what would I like to see? Then I create it and hope it works out

Do you think social networking sites have had any effects on the forum? What have you noticed?

People are on facebook because most everyone else is. I prefer my privacy so I don't utilize Facebook unless it is to market my forums. I believe Facebook is a very different product from a forum. I believe forum managers should utilize Facebook for what its worth but remain focused on growing their forums and adding unique content. Forums will be here long term providing not all evolve into blogs and social networks. People want to make new friends on forums but people still like being anonymous, Facebook doesn't allow interaction and anonymity.

Do you do any investing outside of the forum world? If yes, what do you do?

I have been investing in the real world. Mostly residential properties and rental income units now that I had some investment capital. People need homes, they don't need forums. That being said I do love the internet and forums still.

In all honestly, how did you learn to be a better forum owner? Was it natural to you, or did someone help/train you?

I like to believe most of it came naturally. I never ran my sites based on democracy. Those that invest into the sites as subscribers, staff or vendors have a say but ultimately it's my way or the internet highway. Staff and I discuss the future occasionally but ultimately I just do what needs to be done. The lack of democracy has bothered some people but really its been the best way to manage the communities. If I listened to everything everyone said nothing would ever be done and besides, you will never please everyone regardless of votes or not.

I also learnt a whole lot about development, project management and how to approach the business during my short time at Verticalscope. When I left there I felt as if I had taken a lot more than just a salary, I had come to understand what a team of people can do and how having money and investing it further can really make a difference. It was was good experience.

Any likes or dislikes about your time at Verticalscope?

I worked at VerticalScope during the time they sold off Modified Magazine and the other print titles they owned. Up until the selling of the magazines it was one of the best companies I had ever worked for. The staff & management were all pretty decent. I liked that I reported to Rob Laidlaw directly initially. Over time who I reported to changed as the companies focus changed and along with that I changed too.

The corporate world wasn't for me. The company I left was not the company I joined. My attitude towards the work place had changed, it was time for me to go, I was sick of it. Besides, there is nothing worse than reporting to senior manage (Ben M.) who seemed so disconnected from what we were doing. It's not to say I could have done a better job than Ben, its to say we didn't gel. And like most employees at most companies, I was expendable.

Forum Management at Verticalscope lacked the support of senior management. Often times we were stuck between the users and our bosses. Essentially the wheels turned so slow and most of us went from believing we actively played a roll into bettering forums to believing we were actively playing a roll in killing Forums. And we did kill forums, a whole lot! Members left faster than you could install PM workbench. With senior management apposed to banning poachers, spammers and trouble makers we forum managers were left to watch the communities implode.

Do you still stay incontact with anyone from VerticalScope?

Yea, I made one good friend, the system administrator from Verticalscope. The guy was level headed, smart and really knew what he was doing. People always said we are so different and couldn't understand how we got along so well.
To this day the sys admin and I still talk often though our discussions arent always based on the net.

Other than that the people I most communicated with were Rob & Jerry Orban during the negotiations of selling some of my assets. Again, great guys to deal with but they have 1 job and that is to make Verticalsope more money.

So you sold to both Internet Brands and Verticalscope. Without disclosing confidential information, what can you tell us about the process?

Well, there certainly was two very big differences in how Verticalscope & Internetbrands go from A of wanting a site to B, owning the site. Hands down Verticalscope moves faster than InternetBrands. InternetBrands lack of speed is the reason I sold 2 big boards to VS initially. The second time around to sell my remaining 16 auto sites InternetBrands did not make the same mistake. IB closed the deal at 2am, by phone and email.

My advice to any sellers (if there are any left. lol). Get an offer in writing and see a lawyer. Lawyers will need a retainer so make sure you are serious if you are shelling out cash. InternetBrands contract is substantially larger than Verticalscopes, you may feel overwhelmed but take your time.

I felt much more comfortable working with VS during the initial offer process than with IB. However once the offer was accepted and we moved to the second phase of migration of domains & content the lack of correspondence from VS became somewhat irritating. I had to remind myself that what I can do in a week takes months in the VS / IB corporate world. InternetBrands wasn't much different though their correspondence was far better, they communicated often and to most of their team.

Would you sell your forums again? Would you sell to InternetBrands & VerticalScope again?

Without a doubt I would sell all the forums again. It was time to move on and I needed to focus on myself.
Despite what I believe are both companies short comings, Both Verticalscope & InternetBrands treated me professionally and overall were good to work with. They also paid on time and as promised, they don't mess around. They are successful for a reason.

With Internet Brands & Verticalscope buying up all the forums, what do you think the end game is for these media companies?

For some reason I get the idea that Verticalscope will sell to Internet Brands down the road. Its a hunch but I can see it happening.

In terms of staff members, how many do you have on each one of your forums? How many hours per day do you spend on your communities?

Currently across my sites I have between 3-6 staff members per forum. In one instance there is 0 because the site is so stagnant, I would be lucky if I got some spam posts.

My time invested is up and down. There are days I spent 10 hours working and other days where I spend 2 hours. Most of my time is invested in staff correspondence or answering emails that come to our corporate inbox. I could afford to invest more time but since selling the network I really went on a hiatus and have been enjoying my time off.

Besides forums/blogs, what else have you jumped into? Affiliating networks, or other things?
Have you ever ran a link-bait campaign? What did you do?

No official form of Affiliate networking. As for link-bait campaigns, yes. In the past we had some interesting articles written which were shared around the net and did really well.
In one instance we created a post called “Top 10 auto 'epic fails' of 2009" and out of that top 10, 2 of the epic fails were links back to our auto network.
Other than that, most of our link campaigns consisted of genuine input on other forums with the odd link back to our forums.

What do you think of services like PostLoop or paid posting in general?

I think Postloop is a unique service, I like it. As a forum builder I think the service can go a long way if you take your time having your forum fed but PostLoops users. As a forum buyer you need to watch for forums that are using the service to pump and dump the site. I can see how the PostLoop service could be used for all the wrong reasons.

In terms of paid ads, what services do you recommend, Adsense, Chitika, Skimlinks?

Adsense and Vibrant. Everything else has not performed for me in the auto vertical. Vibrant offers great CPMs and are great to work with. Adsense is adsense, its reliable and will make you some money. Of course, private insertion orders can go a long way as well. In the past I would run 1 off campaigns for companies, highest CPM ever being $15 however generally CPMs are between $2-4 CPMs in the auto vertical.

Do you think that forums will out live social networking?

I am not sure outlive would be the correct term. I invision them coinsiding with eachother. Social Networks like FB will be around forever in some capacity, same with forums. In some cases forums have such a vast amount of information where could they go?

Are there any current forum projects you are working on?

Right now my attention is on ForuMedia Inc still and some of my RC websites, RCCanada.ca & LondonRC.com . Outside of development there isn't a whole lot going on. I have been working away on my blog, mostly for fun and have a few people I know writing articles there. Its really a blog about nothing, something and everything. I personally cover topics about my sleep apnea and the forum world.

I am always on the lookout for new ventures and partnerships. ​