Make Money Online With Snowboardjohn

I think the worst advice anyone could ever give someone with an online business is to suggest that they should go after a small market.

Small markets suck. Unless they’re super high end. Like $30m yachts or something.

But for the most part, big markets with a lot of money in them is where anyone should be headed.

IME a beginner (or an expert) should be focusing on a MEDIUM EXPLOIT - not a MARKET EXPLOIT.

What’s the difference?

A MEDIUM EXPLOIT is finding a new communication channel to reach the market.

A MARKET EXPLOIT is finding an under serviced market.

Market exploits always look so seductive, but they are usually an illusion. There’s always a reason no one is servicing the small (or empty) market which looks so seductively virgin and ripe for the picking. (Also keep in mind that when it comes time to sell, you want to sell in a mature market place - where market leaders grow by acquisition).

And remember that a market exploit can be copied by someone as soon as they know what your market is - a medium exploit can also be copied - but due to the complicated nature of website/traffic flow structures they are much more difficult to emulate.

If you’re discovering new ways to generate traffic through a new channel into a higly developed market place, then you’re where you should be.

If you’re spending time attempting to monetize small markets, you’re really going against the grain.

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What commonalities do: Permission Marketing, The Seven Habits Of Highly Effective People, Positioning: The Battle For You Mind, One Minute Manager, Think & Grow Rich, etc. etc. have with each other?

Answer: They were THE book that got the Author famous.

Everything written after the first book is written to monetize the perception the first book created.

It’s how experts get the largest return possible on the time and sacrifices they made to get as good as they are - and I don’t resent them for it one bit.

I just don’t waste my time or money (anymore) reading the brand leveraged books that come after the first one.

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This theory was something I discovered about 18 months ago.

I had just lost an enormous amount of money from a project that hadn’t worked out… and… I was trying to understand how I had allowed myself to lose so much money.

Because I didn’t lose it all in one day, in fact I lost a lot of money every day, for about 2 straight months. And by the time I eventually stopped the cash bleed, I was down, down BIG TIME. I just couldn’t understand how I had KNOWINGLY watched the money leave my bank account.

(I was fine by the way, I didn’t go bankrupt or anything like that, but I had to live fairly frugally for about 8 months until I rebuilt the bankroll I had lost).

It wasn’t until one afternoon when I was reading a book about the theory of Poker, that I began to understand what had happened to my decision making.

The guy who wrote the book was Mike Caro - a very successful gambler whose most famous work is called “Caros Book Of Poker Tells” - however, I think Caro’s most interesting work is his study of risk psychology.

One of the working theories that Mike Caro developed was the Theory of Maximum Negative Threshold (may not be his exact words but close enough). The theory is that a person has a Maximum Negative emotional threshold, and once that person passes the threshold, more negative experiences cannot make that person feel any worse. They are literally “Maxed out”… HOWEVER… that does not mean things cannot get any worse for them. It simply means they won’t FEEL any worse when more bad stuff happens.

A person affected by maximum negative threshold will stop trying to avoid further losses, because those losses do not bring them more pain than they are already in.

Business people who go through a nasty divorce and end up selling their business for $1 are a good example of people affected by maximum negative threshold. They compound a bad emotional experience by making decisions based on the feeling that life can’t get any worse. But it can.

Part of the challenge of being a good entrepreneur is learning how to deal with maximum negative threshold - because you WILL come into contact with it at some point. In those times, you will feel like what you do does not matter, but you must act like it DOES MATTER. There is a big difference between losing $1,000/day and $1,500/day even if it doesn’t feel like it at the time. You must figure out how to lose least, even when that still means losing a lot.

These days I am always aware of negative threshold, and when I feel myself crossing over it, I take a moment to remind myself that my decisions DO still matter, and do my best to make the correct decision no matter what the circumstance I face.

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My friend Woody from Woody Maxim.com just wrote a post about making $2k-$3k per month.

I think the post is a good one - accurate in strategy, if not in mindset.

Here’s how I see things:

The only people trying to make $3k per month are the people who are not particularly entrepreneurial - they are just small time people trying to make some money.

Which is fine as far as it goes.

But, to a large company like Google, these people are fish. As in, the fish who get shot in a barrel.

Here’s the dichotomy:

Whilst my company generates nice cash flow and profit from leads - it’s not my goal to make money.

HUH?

It’s true that several years ago, money was my goal. I wanted more of it, and fast.

These days, I want to be better at BUSINESS. I don’t focus on, nor do I THINK about money. The better my business skill set becomes, the more money I make. It’s an inevitable outcome of pursuing my goal: being the best entrepreneur in the world.

If you approached becoming a professional poker player with the goal of making $3k per month within a few months, you’d be broke in a few weeks. I guarantee it.

Not because Poker is harder than business, but simply because it’s a game which truly brings you into contact with the risk/reward reality you really operate in. And there’s no bottom to it, until you’re bankrupt.

People who focus on money, not skills, are the fish of life.

If I were to advise myself on how to think when I was starting out a few years ago, I would say:

“Figure out how you can afford to lose $300 per month on skills acquisition and learning. Get a second job maybe. But whatever you do, DON’T focus on making money and trying to be a full time entrepreneur… just focus on business skills, and forget about making money.”

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I’ll never forget Tom Cruise losing his mind on the various talk shows last year (or was it the year before?)

The site of a major star going completely bonkers on national television was more than a little sad.

Anyway, when I look at people who’ve made no progress on their business in the last two years, I can’t help but feel they’re making similar mistakes to Cruise.

Because ultimately the problem Business Owners (and Cruise) make is paying attention to a rigid set of Dogma - that make no sense in the real world.

Things like “slow and steady wins the race” or “sustainable businesses are best developed in traditional market places” or “the leading edge of innovation is a bloody edge” etc. etc.

It’s all COMPLETE CRAP.

Sure: innovation is risky. Sure: fast cash flow can be gone tomorrow. Sure: traditional market places have steady demand.

But so what?

If you’re using the internet medium to generate leads: NOTHING IS STABLE. EVERYTHING IS CHANGING ALL THE TIME.

Like it or not, REALIZE it or not: you are ALREADY in a fast changing, risky business environment.

I know people who have lost $30,000 NET/month PPC business OVERNIGHT in steady, traditional market places. And these weren’t affiliate marketers either, I’m talking about people who developed and sold their own QUALITY products going down the drain SUDDENLY.

OUCH!

But they were deluding themselves.

They thought because they had a quality product, because they had excellent customer support, because they had exceptional marketing: they had a stable business.

They didn’t.

Because they failed to understand they were REALLY in the business of GENERATING CHEAP LEADS.

Instead of spending that $30,000/month funding their LIFESTYLE, they should have been thinking bigger.

They should have been testing magazine ad placements. They should have been investing in type-in-traffic domains. They should have been doing EVERYTHING THEY COULD TO DESTROY THEIR RELIANCE ON SEARCH ENGINE TRAFFIC FROM THEIR LEAD GEN ACTIVITIES.

SEO, PPC => These are the HEROINE of our business model.

Use them to help kick start your business, but do not for a second believe that because you generate leads with these activities that you have a business.

You don’t. You just have a CASH FLOW HIT.

And that, to me, has no equity in it, and therefore there is  no value in spending time on it, unless it’s part of a bigger plan.

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A good friend just sent me an article written about Brad Fallon’s trouble with Google.

It’s an interesting read; not because I didn’t already understand about proxy hacking; but because it highlights the true nature of the internet.

Google has been aware of proxy hacking for over a year; but yet it does nothing to address it.

Why is this?

Basically it’s because Google is a commercial company motivated by profit; it’s not a Government regulating agency.

Google only plays up perceptions of the regulating agency role when it suits Google’s ends of increasing profit.

If Brad Fallon had some Adsense on his site, Google may very well take a different amount of interest in his problems - because helping him would mean helping THEM.

As it stands right now: there is almost NO CONTROLS on the internet.

And this is the internet’s biggest advantage and disadvantage.

Because all the red tape which will no doubt exist in 20 years time will make the internet inaccessible for most companies - the flip side of that is that right now, you have to be smart enough to fend for yourself.

By not understanding that the internet is still very much in the wild west, you are misunderstanding the opportunities and dangers that lie in front of you.

The “Sheriff” of the market you live in is not motivated by law, justice, or any of the controls normal businesses operate in; the “Sheriff” is motivated by his own self gain - and will continue to be so motivated until GOVERNMENT REGULATIONS force him to abide by common law.

This is not just true of Google - it’s true of EVERY SINGLE WEBSITE WHICH HAS SOME KIND OF POWER ON THE INTERNET TODAY.

I protect my business by understanding that it’s better to rely on the self interest of others than it is to rely on their kindness and willingness to act on their sense of fair play - which may never come.

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Seriously: Mind maps are the ABSOLUTE SHIT for project planning.

The mind maps I use for Traffic Generation are so detailed, and include so many strategies, I believe that they would be worth $1000 each if I were to sell them as an information product.

But because I’d have to give a away some strategies that would get worked to death and ultimately destroyed, I would never bother selling them: it wouldn’t be worth it for me or the end consumer.

Anyway, here’s why Mind Maps are killer for Risk Managment.

When you have your end goal in the middle, and the processes required for achieving that goal on the outside, you can add price points to all the processes - and get a very clear understanding of what the development costs for each process actually are.

It’s one thing to have those numbers in your head; it’s a totally different thing to have those numbers in the same place.

For example: I like to split my link building strategies into “Permanent” (links that will probably last for more than a year), and “Non Permanent” (obviously links with a probable life span of one year or less). So, on the one hand, free directory listings incur directory submission fee’s (because I outsource this task) but create permanent link value… whereas… paid-for-directories incur submission and review fee’s… and typically last one year before I have to pay to get re-listed - and thus are in the Non Permanent category.

When you are dealing with thousands of directories, and the costs involved in listing in the directories, you want to be very clear about the real costs/benefits ratio.

Initially you risk the most, because you have no cost/benefit ratio to work with: you must pay for everything because you need a base value spread to start with.

Once you get some understanding of the value spread of individual link directories, you are better able to assess its value in the future.

And while I’m using link directories as my example, this same process is something I apply to every strategy I use.

It works for everything.

The rule of thumb is figure out what you are prepared to lose, and then lose that money while trying to gather as much information as possible.

Sure, I’m not TRYING to lose the money, I prefer to make money than lose it; but ultimately I see that money as lost, and that allows me to focus on getting an informational return, rather than a financial return.

Informational returns have so much more value than financial ones in the long run.

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Hi - how are you enjoying my blog so far?

I hope you’re getting something out of it - I’ve received some very flattering email from people, but I’m not getting any comments - so feel free to leave some nice comments as well.

Incidentally, I don’t have any tracking of any kind installed on my blog, so I don’t know how many people read it: and for a very important reason that I’ll write about in a future post.

Anyway, I want to continue discussing an advanced marketing strategy that Eben Pagan called “Moving The Free Line”.

Now, moving the free line is much more difficult than most Marketers would have you believe, but I’m going to take it for granted that:

1. You already know that. And,

2. You have already successfully moved the free line.

(That’s because I’m only intersted in dicussing ADVANCED strategies for entrepreneurs who are already making good money. Business newbs are not a crowd I’m catering for.)

So you’ve moved the free line, you’re giving away lead gen content equivalent to a first sale for free, and you’re now focusing on your second sale; which is the first sale which brings you money.

This is a mistake.

If you are monetizing your second sale: you are assessing your market and your marketing INCORRECTLY.

You probably have not gone wide enough, or deep enough, into your market to really be your markets category leader.

A TRUE CATEGORY LEADER MONETIZES THE 3RD AND ALL SUBSEQUENT SALES

The second sale goes 100% to your affiliates. Without giving affiliates 100% of the first monetized sale revenue, you are not saturating potential affiliates.

It’s one of those “exponential” (but certainly not infinite) things I like to talk about.

The word of mouth and good will you generate by paying affiliates 100% of the first sale is not really measurable monetarily - because your affiliate become so loyal, you lock out any would-be future competitors, simply because your affiliates already trust YOU SO MUCH.

Additionally, monetizing the 3rd sale for yourself really FORCES you to look at markets correctly as well - if you’re not thinking in 3 product sequentials, and scalability structures, you’re not really playing the game.

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