Why a local directory can sell leads instead of ads

Frey Chu builds online directories, and he'll tell you up front that he isn't a local newsletter guy. That's why this one is useful. He sees local media from the outside, and he kept coming back to the same idea: give a local business something real, for free, before you ask for money. We talked about how that works for a media company that already has an audience and relationships with business owners.

A five-year business ends, and a playground begins

Frey had just closed a five-year e-commerce business. He'd sold shoes, then flipped items from garage sales. Next he went looking for a better business model. He wanted low startup cost, no trading time for money, remote work, high margins, and something he could sell for a good multiple.

He narrowed it to SaaS companies and websites. Then he spent 100-plus hours learning SEO on YouTube and used directories as his playground, starting in October 2022. He didn't expect to make money.

Six months later 1,000 people a day were visiting. He monetized it, and it started making about $1,200 to $1,500 a month around month eight. Two years on, it still does. In his words, it's an online asset that lives on the internet in a weird little niche.

What a directory actually is

Frey says a directory is just a curated list of data that helps people make decisions. It has to be more valuable than a plain list to survive on Google, but that's the core. You can build one for tens of thousands of niches where information is hard to find.

The big examples are care.com, which he says does $450 million as a directory for pet sitters and senior care, and TripAdvisor, which he calls the OG. Below them are plenty doing $500,000 to $1 million. Frey's own sits at the small end.

His process is five steps: vet the idea with Reddit and TikTok, do keyword research, scrape, clean and enrich the data, publish and optimize the site, then monetize.

The lead is worth what the project is worth

Frey's point is that the money depends on what your customer is about to spend. If someone is about to drop $20,000 on a kitchen or a driveway, he says you could probably sell that lead for $1,000. Ten of those and you've passed $10,000. In a niche where people spend $30, the opportunity is much smaller.

That is why Sam's List, which he calls the Yelp for accountants, got to $200k in revenue from just 30 financial professionals.

Local lets you go broad

Frey usually builds nationwide directories, which means going very narrow: not towing, but emergency 24-hour towing for Teslas. Local flips that.

A member of his community started a directory in a city of 50,000 people. He thinks it was in Australia or the UK but wasn't sure. She covers home care, dog-friendly restaurants, financial services, health care and salons and already ranks on the first and second page for some keywords. Frey's takeaway: the smaller the city, the broader you can go, because everyone searching is from that city.

I told him most of what I see is in markets of 100,000 to 500,000 people, so a 50,000 city working is a great sign.

Directories next to a media company

My question was how this fits a business that already has an audience. Frey gave two plays. Greg Isenberg once teased him for monetizing his first directory with display ads, and Frey now agrees ads are not the best route.

The first is top of the funnel for a business you already own. Picture care.com for your city, built by a senior care owner. You'd list competitors, do it ethically, and still give yourself the most visibility.

The second is a lead source for a SaaS or service. He points to carparts.com, which he guesses has 10-plus SaaS products on top of its directory. He also says newsletters are slept on: he's built lists of multiple thousands of subscribers within a few months, because the information was in demand.

Scrape first, launch full

You don't ask businesses to sign up. Frey doesn't reach out to any of them. He scrapes Google Maps once his research is done, cleans the data, and launches a directory that's already close to full.

That's also an SEO play. Many small businesses are searched one to 500 times a month in small cities. On a brand new domain with no backlinks, a listing can probably rank at the end of page one. Searchers come for the towing company, see the value, and click around.

Free first, $300 later

I raised the outreach problem: asking a local business "do you want to advertise" is a hard sell. My idea was to offer a free profile and traffic instead. Frey said he never thought about selling ads at all.

His version: put a lead form on the directory, like get a quote in 24 hours. When someone fills it out, you've shown your directory works. Then call a business and say here's a lead, no commitment, see if you can close it. If they want more, every lead is $300. If it doesn't work for them, they don't pay.

We agreed this fits high-value customers like roofers, med spas, custom home builders and attorneys, and not restaurants. On premium top spots, he said Tim Stoddart reportedly did well with them, but he'd first ask whether that visibility actually brings the advertiser business.

Will AI kill directories

Frey tests it himself. He types "haircuts near me" and AI often doesn't pull up all the Google Business Profiles in the area. It's good at informational queries, but he thinks high-trust niches will always need directories. Would you pick a senior home or daycare with a single ChatGPT prompt?

He gave three ways to hedge. Be everywhere: traditional SEO, LLM SEO, TikTok, Instagram, Facebook groups. Build community, since people want referrals for things like Botox. And collect specialized data, like calling every local contractor for a kitchen remodel and compiling what they say.

I think all three fit local media. We already talk to businesses and have a reputation, so getting unique information should be easier.

Where to start

Frey's answer was YouTube University, where he gives away the process for free. He also thinks his first mindset was right: he expected nothing and focused on skill development, to see whether the SEO advice worked.

His advice is to learn a little, then build something and not overthink it. The first project is about momentum, and the second is often far more promising because you have the confidence to take on harder niches.