There are a just a few insights into the nature of REAL businesses vs. BULL CRAP internet business ideas I’d like to share with you today…
1. REAL BUSINESSES SELL LOTS OF PRODUCTS (AND SERVICES) AND RUN VOLUME ON UNDER-OPTIMIZED FRONT ENDS. (While bullshit internet businesses spend all their resources waiting to perfectly optimize their front end, thinking it, and perhaps one back end, will eventually make the whole business work)
This one’s a little tough to grasp, because intuitively we all know in our hearts that optimization is a good thing. I mean, I’ve spent the last several years studying and teaching RESEARCH AND CONVERSION, all in the name of optimization, and I’ve been trying to hammer home the notion that there’s no such thing as a traffic problem, only a conversion problem…
It’s all true.
But what’s equally true is that it takes a lot of time, money, and labor to optimize your front end…
And once you’ve got a customer who trusts you, that customer is likely to be interested in buying A LOT of products and services from you. A LOT! (One of the most common complaints I get, for example, is “I wish you had more for me to buy Glenn”). But only IF they know where to find them and why they should buy them.
Once a REAL business has a semi-manageable front end, they focus their resources fast and hard on creating a multitude of back end products. A WHOLE CATALOG of things to sell. They say “good enough is good enough” (to quote someone we all know and love) and just run with the damn front end conversions…
SHOULD they keep optimizing the front end? Sure….
But it’s often easier and faster and more economical to add visitor value by pumping out back end products and services…
And the overall profits in the business get maximized not so much by the efficiency of front end acquisition, but by the VOLUME of customers acquired who then go on to buy lots of back ends.
Short story? Once you’ve got the ability to build a list of buyers, build baby, build! (And add LOTS of products and services). You can fix the front end ROI later.
Another way to look at this is, what if you had to make a business work with crappy front end conversions? It’s a good exercise to model out in a spreadsheet for yourself because a LOT of 8 figure businesses I’ve run into are built on really crappy front end conversion numbers! (Seriously… even some really famous ones you’d recognize in a heartbeat if confidentiality didn’t prevent me from revealing… doing millions of dollars on 0.5% conversion or worse)
2. REAL BUSINESSES HAVE LONGER TIME HORIZONS. (Bullshit internet marketing businesses start out with the question “how can I make money quickly without a lot of work”)
It’s become in vogue to make fun of the “Wall Street” business model. You know the one I mean… let’s go raise $50,000,000 and burn through it at a million a month while we talk about lots of ideas and make lots of spreadsheets. We’ll get profitable in 3 to 5 years…
So in many ways it’s only natural for the pendulum to have swung the other way…
We internet marketers HAD to say “this is silly, you should hold yourself to profitable results MUCH sooner, perhaps even right away”…
But you know what? Thinking you’ve got to be profitable immediately is probably the best way to fail…
- It prevents you from doing the 20 or 30 market tests you’ll probably need before you achieve escape velocity, because you’ll deem the business a failure way before then…
- It prevents you from seeking funding when necessary, so you really CAN have time to study the market, craft the best offer, and see it to fruition and profitability…
- It prevents you from recognizing your true successes, which prevents you from building upon and strengthening them..
- It creates an overall sense of panic and “unworthiness” in your organizational culture (which, if it’s just you, means throughout your own brain all day long!)…
So REAL businesses make a realistic plan for achieving profitability in a year or more…
And they figure out how to FUND this time horizon so that the members of the business are financially calm and focused.
Food for thought, right?
3. REAL BUSINESS PEOPLE WORK LIKE FUCKING MANIACS (AND THEY LOVE IT!). Bullshit internet marketing people work as little as they can get away with, and only do so in order to be able to not work later on.
My apologies… it’s pretty rare for me to curse, but I wanted to underscore the point!
If you’re in the right business, you’ll know it because you won’t really want to stop working…
Instead of looking at your workload and saying “I have to do this work today”, you look at it with a kind of perverse excitement and say “Oh good, I get to work on this today”…
Not every moment of every day…
But there’s a general feeling of passion, interest, and excitement for the business…
The essence of your being gets poured into it. You burn the ships at the shore and fully commit to conquering the territory…
You feel in your heart it’s not a matter of IF the business succeeds but WHEN it will…
And because of this you’d rather be working on the business than almost anything else…
In your “free” time your head is constantly running with thoughts, images, and feelings about the business…
You feel thrilled with the littlest successes, and heartbroken with the smallest defeats…
Much the way a mother might about their child. (The best description of having a child I’ve ever heard was ”It’s like having your heart outside of you and watching as it runs around taking risks in the world”)
What does this all mean for you?
1. Do the math. Set up a spreadsheet with at least a half dozen products and services in the mix, and see if you can make it work with a low front end conversion.
2. Once you’ve achieved escape velocity and you have a catalog of products, you should probably buy as many customers as you can as fast as you can (provided your business systems can withstand the load).
3. Keep developing your conversion and optimization skills, but recognize these are NOT the only skills required to build a real business, and that because they represent a resource intensive activity, you’ve really got to constantly be thinking about whether optimizing a particular front end (especially) is the “highest and best use” of that resource.
4. If you can’t see your way to becoming passionate about your business so you’ll actually WANT to work like a “fucking maniac” (there’s that word again), think about how the business would have to be transformed to make this possible, or how to safely transition to something where that motivation would exist for you. Because SOMEONE’s going to have to provide that driving force or else, in my experience, escape velocity eludes you.
Onwards!
Dr. G 
PS – In a mood today I guess!
PPS – If you haven’t been through the hyper-responsive club yet, you really don’t know what you’re missing. It’s different. It’s powerful. And if you think you might be a maniac like me, it’s something you really have to try.
