Many times, you see a market that looks really promising and as such, you can see lots of young, inexperienced entrepreneurs rush in to try to make a buck. Often, in these cases, the only people who make any money are the ones selling these would-be business magnates the tools they need to get started or (theoretically) expand.
That was true in the gold rush – where the only folks raking in the dough were the merchants that sold the hapless miners picks and shovels. And it’s true today for bloggers.
Rather than selling dirt tools, today’s marketers sell their software, marketing schemes, master-mind memberships and seminar tickets that promise to help today’s newbie’s “mine” the riches of the internet. Of course, these sellers know full well that a vast majority of the people who buy their shlock will fail and won’t even be around in 6 months.
I didn’t understand that when I launched my blog in 2009 but slowly, with the help of my business partner, came to see how true this is – and how dangerous it can be to ignore this reality.
What I’d like to do – negative Neal that I am – is explain why most people don’t make it in the online world and what you should do instead if you need to make some extra cash.
At the same time, over the last almost-decade, I admit that I have seen a (very) few people crush it online. I’ll share my observations of what these people have that most people don’t.
My goal is to help save you years and years of wasted time and frustration and help steer you in perhaps a better direction where you have much higher odds of being a success.
Problem #1 – No Proven Business Vision
In order to be successful online, it’s not enough to just attract lots of readers. You need to grab the attention of readers who are willing to pay money to solve a problem they have that currently causes them pain.
You can’t invent this pain. They have to have it. And you’ve got to have a unique way to solve that problem plus you have to have a unique qualification to help them solve their problem.
In addition, you have to have a cost-effective way to grab these suffering people’s attention.
It took me years to build relationships with fellow bloggers and leverage that into writing for main stream media outlets like Forbes, Huffington Post, Yahoo! Etc.
Most online entrepreneurs would describe this as being wildly successful. But even when I did work my up to writing for these major league publications, I didn’t have a clear business vision so as “successful” as I was, I had no business vision and therefore, no success because I wasn’t able to leverage that visibility and traffic into meaningful profits.
In short, until I began marketing and promoting a targeted service to a targeted audience all my blogging efforts were a waste.
If you are committed to blogging, make sure you also know what you want to sell, who you want to sell it to and have a marketing plan that makes sense to get that done.
Problem #2 – A tribe is Not Enough
What most people do when they forge into the online world is figure they’ll create a blog, garner tons of readers and then, magically, turn that readership into cash. This isn’t the only approach of course but it’s by and large how most people do it.
I am here to tell you that even if you somehow capture the hearts and minds of a large group of people, it may not be enough.
One friend of mine was hugely successful right out of the gate. This guy wrote articles like other people put butter on toast. It just worked – every time. And his tribe just sprung up around him.
He had a natural gift. But he couldn’t synch up his popularity with a product or service that people wanted to buy. As a result, this talented man left the online world entirely within a year.
But a different person I know had a very different outcome. Bill was able to attract a growing crowd of true believers and then create a product they desperately wanted.
As a result, this person was and continues to be a huge success. (By the way, can you guess the kind of information product Bill sells? It’s how to make money online!)
I tried to build a tribe here at Wealth Pilgrim but I was not willing to do the work necessary to sustain it. And truth be told, I didn’t have the personality, temperament or (and I hate to admit it) the charisma to sustain a community.
My unique professional and personal experience gave me the perspective to write effectively in the personal finance space. But that alone is not enough.
As Dirty Harry famously said, “you have to know your limitations.” If you don’t have the personal commitment, desire and skills to build your community, please re-think your online business approach.
Problem #3 – No Math
In order to determine if a given business is worth the investment, you have to estimate your total input of time and money compared to what you hope to get out of it.
The dream of many who enter this business is to build a self-sustaining blog that magically attracts readers who either buy a product or click on an ad without you having to do anything after the launch. This rarely works.
If you plan on using search to get readers please keep in mind that Google changes its algorithm constantly. So do Facebook, Pinterest and other social media outlets.
That means you can work your “tush” to the bone, build up search traffic, and then lose it all overnight. At that point, you’ll have to decide if it’s worth it to start again or get out.
This happens all the time and it’s a major reason why there is so much turnover in the blogosphere.
When you do the math and figure out the amount of time you will have to put in and compare that to a reasonable estimate of what you might earn, your hourly rate is probably dismal unless you are extremely lucky.
Look at what market you are targeting, what the competition is and what you’ll need to do in order to be successful. In most cases, unless you have a certain “Je ne sais pas” that will immediately help you stand out, it’s probably not worth it.
Now, if you have certain built-in advantages this could still work. For example, if you happen to be a journalist with a wide following or already have a tribe of people with a problem they want to solve, you may have something.
But unless you already have this market (and most people don’t) I can tell you that the odds are highly stacked against you and your time is better spent elsewhere.
If blogging is such a terrible business, how can I still make money online?
Just because blogging is a waste of time from a commercial standpoint for most people, it doesn’t mean you can’t make a peso or two online.
You can use the web to support an offline business (like marketing your Airbnb space). You can also create a service business and use the web to market and deliver that service.
The cool thing about this idea is that there are several good business models that don’t require years of experience or a huge financial investment in order to get started. The transcription business might be a really good example of this but it’s one of many.
In order to make money online (or offline) you are going to have to work. You are going to have to trade hours for money.
If you really want to be successful, your first step is to get clear on that and acknowledge reality.
Next, assess the market objectively and thoroughly. Look for a market that isn’t swamped with competition. The last thing you want is to have to fight for paying customers. You want customers to be fighting for you.
Don’t believe the hype that you can throw up a site with evergreen content and spend the rest of your days in the Cayman Islands soaking up the sun while the checks roll in. Ain’t going to happen.
Look for a business that has great demand and (relatively) weak supply or one that you have a relative advantage over the competition.
In the blogging world, the equation is turned around; there is a huge supply and not much demand. Who wants to enter a contest with the odds so clearly stacked against them? Not me.
Assess your competitive advantage and leverage it. What are you really good at? Ask 5 other people who know you well and whom you respect professionally to tell you what they think your competitive advantages are.
Once you feel like you really know your strengths and weaknesses, try to find a business that will turn your business advantages into profits.
The online world is appealing – I get that. But the people who try to make it look good to you probably want to sell you something. Don’t get dragged into their net when they flash those dollar signs.
Instead, think about your own core competencies and how you can really add value to other people. It’s fine to use the web to market or deliver your product or service. But start off by thinking about which problem you can solve that others are willing to pay before you pursue any online business or blog.