Thoughts of a digital marketer
Semmelweis made a breakthrough in early 1800s. He came up with what is known as the hand-washing technique today. Because of his discovery, the mortality rate in women giving birth went down from 18% to 0. Despite that, his discovery never was acknowledged. Instead he died in a mental asylum when he was 47 only.
Garry Tan did a vlog on how breakthroughs can break you and what you can do to avoid that from happening. I’ll leave you to it.
The tax law for majority of the world citizens is defined by the physical presence. If you spend more than 180 days in any country regardless of what citizenship you posses, you’re liable to pay taxes in that country.
However, if you don’t spend more than 180 days in any country in any given year, your legal tax liability is almost always going to be $0. So if you’re spending 4 months in Pakistan, 4 in Thailand and 4 in Turkey, you owe no income taxes to any of these countries.
If you work as a freelancer, in a tech company, in an e-commerce business or anything that can be done remotely, you can travel the world and legally owe $0 in taxes. If you’re feeling a little adventurous you could spend your potential tax liability on your travels, at no added cost really.
This applies to citizens of most countries in the world with a few exceptions such as citizens of US who are liable to pay taxes in US regardless of their residence.
Even the workers in US can take advantage of state taxes by moving to sunny states with 0% taxes. As Twitter, Shopify have already announced going fully remote, and Facebook planning to do so smoothly over the next 5 years, I see a lot of people taking advantage of this. The biggest loser, of course, would be California.
If you know anything about the crypto industry at all, you may have heard of this phrase before; not your keys, not your coins. If you haven’t heard of it, let me explain it to you. Crypto assets are stored in digital wallets that can be accessed via private keys (a long alphanumeric string). If you lose the key, you lose your coins.
Some people prefer storing their crypto-assets with exchanges for the ease of doing so. But when you store your assets with an exchange and access them using an email address and password, technically you don’t own the private keys to your wallet. The private keys are known only to the exchange and if they have the keys, they own the coins.
There are pros and cons of this design but it ensures that your money is yours. That you can’t be denied or questioned on your right to withdraw or transfer your funds which does happen all the time with traditional financial institutions.
This is a parallel internet that is being built and it isn’t just limited to finance. You could build any kind of app using the same design where there is no central authority dictating what can and can not be done.
The internet that we’re accustomed to was beautiful but I no longer feel that it still is. The power is getting concentrated in the hands of few mega trillion dollar companies and they set the rules for what can and can not be done.
In the good old days of the internet you could host content on your own sites. Now for better deliverability, it is preferred that you serve this content via instant articles on Facebook & AMP on Google. By not doing so, you may be ranked lower or get reduced visibility.
If you want to own an e-commerce store, you could create your own store using woo-commerce (self-hosted) or Shopify (hosted by Shopify). If you’re looking for visibility or discovery, it’s better that you go with Amazon.
However, if you go with Amazon you can only sell what they allow you to sell. There are many things that are legal to sell but can not be sold on Amazon. They will also use your data in knowing what sells best and then launch their own private label brands to beat you at their own game, which by the way they do all the time.
If you decide to setup your own store, as long as it’s on Shopify, they can suspend your store for whatever reason e.g one of our stores was suspended for listing face masks although we hadn’t listed any. This resulted in monetary losses that shouldn’t have happened. But even if we did list the face masks, our store shouldn’t have been suspended as long as we were not doing anything illegal.
The problem with the internet in its present state is that in order for your business to work, you rely on these mega trillion dollar companies despite knowing that they will practice more control than they should be allowed to. You will be stopped and banned from doing activities that are legal to conduct.
As long as your business is on Amazon, Facebook Shop or Shopify, your business’s fate depends on them. It’s not really your business in the true sense. This isn’t any different than “not your keys, not your coins”.
On the contrary, the parallel internet in its present form is slow, expensive and even allows illicit activities, so at the moment it’s much worse than the internet that we’re accustomed to.
These mega corporations including Facebook are already trying to maintain their control on the parallel internet e.g Libra by Facebook.
The parallel internet can solve everything that’s wrong with the present internet but comes with its own set of problems.
One is too centralized that it even prevents legal activities for private gains, the other one is too decentralized to even allow illicit activities.
Only 2 days ago I wrote this piece about e-commerce being the real fuel of the internet. I feel more confident about it today than I’ve before as Facebook diversifies away from ads and inches closer to the e-commerce space.
When we ran our network of content sites that leveraged Facebook’s influencer marketing, I realized that we were working against the force. That each day, Facebook would do something to cap, limit or control our business or business model in a certain way. I knew that they will take over the business model. So much out-bound traffic making tons of ad-revenue all outside the Facebook platform.
They let us run for a while, for a long while, because their users engaged very well with the content. But eventually they launched instant articles to get a piece of this pie. A native facebook article reading experience where Facebook serves the ads and also takes a cut.
They did the same with the videos. In the early days of Facebook, Youtube videos appeared as embedded content on the platform and not as links. As they started to prioritize their videos on the platform, they started treating Youtube videos as regular links. Eventually they launched in-stream ads, a video monetization program just like one for Youtube.
Now they are doing this for e-commerce. Every day 100s of new D2C brands are launched. Their primary source of customer acquisition has been Facebook. It is estimated that most indie e-commerce brands acquire over 50% of their customers through Facebook advertising. While Facebook already takes a massive chunk of the revenue generated (often 40-50%), having more control by hosting native e-commerce experience on the pages could mean more revenue for the company, better user experience & higher conversion rates.
Just like instant articles, each product would need to be approved by Facebook now when you import the catalog.
How do I perceive this news? troubling. I know this will improve user experience but Facebook already practices more control than I appreciate and the counter-party risks continues to increase.
While you practiced full autonomy over your woo-commerce and Shopify stores, now you’ll be on the mercy of Facebook. In the worst case scenario, which by the way is often the normal case scenario for me, no longer will I only lose ad accounts, I could also lose my “shop”, because of course my “shop” has to adhere to Facebook’s TOS. If the AI, which isn’t very fond of me, constantly throws ban hammers for allegedly violating advertising policies, why wouldn’t it do the same for the shops.
Here’s how Facebook’s Shops look like
I’m going to keep his identity confidential as my friend isn’t quite comfortable talking about his story right now.
Here are the facts of his story.
If I had to start this business, I would stay a thousand miles away from it just by looking at the sale price of $7. Because to me $7 doesn’t sound like a lot, and it probably doesn’t to you either. Especially after you look into costs of good, Amazon’s fee, ranking and PPC costs, you’re left with under $2 per sale. I would have never worked for $1-2 per order. If I think this way despite being in business, I can say with confidence that most other people would think the same.
The fact however is that he not only created $22,000 per month in income for himself, he has also created $650,000 in asset if he flips his store at any point.
All by selling $7 product and by taking a loan of $10K to pay for inventory and ranking costs. After I had a look at his financials, not only was I surprised, but I was also very proud of him. Had he done the same on a higher price product, I would still be proud of him but not as much as I’m right now. The reason for that is because he proved you can start small and go big. That you can bootstrap or start on a small funding. That you don’t need access to capital as much as you need access to skills and hard-work.
While I write this, and while you read this, he’ll walk away with $650,000 generated in under 3 years. A wildfire that started off a matchstick.
I started working in my early teens. I didn’t make any significant money for doing so but it’s been a while. I received my first pay-check in 2004. I am 30 years old now and I can say I’ve worked for more years than I have not.
Despite being in a career for this long, I have never had a day job. Not even for 1 day. So I don’t know how that works. To top this off, my own company is also a distributed one with a headcount of less than 5 and a couple of freelancers. So I’ve never seen the other side of the picture clearly. May be there’s something I’m missing out in a day job, I absolutely don’t know about that.
However, thinking on those lines something popped up in my head and I thought to lay it out here.
When you leave your job abruptly, what happens? If after 7 years of working, you have decided to leave your job today, you may be given some bonuses I suppose for staying around long enough. I don’t know what that number would be but I suppose it won’t be a lot or that it would depend a lot on case to case basis.
When you’re asked to leave your job unwillingly, severance may be offered? How much does that sum into? Internet suggests 2-4 weeks per year that you’ve worked. Let’s average that out to 3 weeks. Since you’ve worked for 7 years, this could be mean you’re getting 5 months of salary without working. That’s not too bad.
What happens though when you leave your business abruptly? If it’s a very very small internet business doing anything between $10K-$100K per year. You will easily flip it for 30x monthly multiple. If it’s slightly bigger than that, but still a small business doing $100k-$1MM per year, I suppose you’ll get over 40X monthly multiple. If your business is larger, solid, more consistent and has been around for 7 years, you can hope to get paid even more than that. If it’s an offline business, I suppose you will get paid a lot more than what you get paid for internet businesses today.
Assuming you have a steady job giving you 6 figures per year i-e $100,000 USD, for having a business of the same size you’re looking at an extra $300,000+ for abruptly leaving it. I don’t think any bonus or severance pays that much. Educate me if my understanding is incorrect.
As humans, we’re so focused on the short term, living in today and thinking everything in the terms of daily and monthly gains, that we forget about the value that is created outside of today. The value that is created outside of today can often be much larger than today. A reminder of that is necessary and I make every effort to constantly remind myself.
Thanks for reading.
The online courses industry collectively stands at 100s of billions of dollars per year. It is a fact that most of these courses are junk. The ‘fake gurus’ sell you a ‘dream lifestyle’ that can be seen in the backdrops of their videos. Of course, the gurus spent some money to lease that Lamborghini or to fly to the Fiji islands but the lifestyle that they have built is often coming out of your pockets.
My friend Faisal Khan, shared this video that you might find interesting.
Most of my working career, I haven’t touched a course with a 10 foot pole. Because there’s so much junk on the internet, it’s rather difficult to find real value from the junk.
The first course I bought was in 2013. It was a scam. The founder of the course has lost the case against the FTC and is paying $17 million dollars in fines. Hopefully I’ll get some of the funds back.
The second course I bought was in 2020. I found a lot of value in it. I recouped my investment within 10 days of buying it. One of the reasons why I chose that one was because it was for professional marketers, there was a long interview process and they didn’t accept everyone.
While there’s no hard and fast rule on what to buy and what not to buy, I wanted to write a bit about the red-flags you should always watch out for. There can be real value in the courses, but it is a bit like finding needle in the haystack. Read below.
Remember, vultures capitalize on your insecurities. Real coaches don’t do that.
I found a fun little thing that the Native deodorants are using to do increase their conversions. If you don’t know what Native is, it’s an organic deodorant D2C brand that recently was acquired by P&G for $100 million dollars in cash.
The gimmick here is that they are trying to build 3rd party social proof by using a page that is named after a person who apparently is a blogger but has no following. The 3rd party page is being used to advertise their brand with a 3rd person copy which gives it a review/testimonial feel.
Social proofs are big part of social media advertising as they can increase you conversion rate by a lot. Ads that have 1M+ views and 10K+ engagement have significantly lower cost per acquisition due to the social proof alone.
After visiting the page I found out the page has no following
And the ad library is burning fuel week after week
While you have to pay for most products or services in real life, most products and services that exist on the internet have continued to stay free. Since all internet companies have to make revenue, alternative options are looked into of which a large portion has been advertising.
As advertising became the main fuel of the internet, mega players jumped into the advertising industry to have power and control over the internet’s oil. To power effective advertising, data became even more valuable asset. But the internet advertising had and continue to have many many inefficiencies and over time, all markets try to remove inefficiencies to move towards higher profitability.
A major chunk of the advertising dollar has been going into the pockets of agencies, networks, exchanges, and other layers over layers of middle-men. I look at that as market inefficiency.
With influencer marketing, we saw the markets tried to get more efficient and remove the middle-men altogether. Everyone who explored this area, including us, saw over a 1000% higher ROAS compared to traditional advertising.
A large part of internet continues to stay free because one way or another commerce happens. Advertising is only the means. Facebook and Youtube videos continue to stay free because these companies make money with advertising and data.
However, advertising and data work because commerce happens. Everything else, including the advertising and data are also middle men. They are the inefficiencies that we need today, but hopefully the market will continue to find more efficient ways for higher profitability or cut-throat competition.
All websites and blogs that relied on advertising for years have been increasingly moving towards affiliate commissions to keep their businesses alive. As Amazon cuts affiliate rates, and others might follow, these content websites will need to find smarter ways to make their businesses work. What you could do before by just selling ads can only be done today by selling a product. Today, you can make it work by making a sale happen for someone else and getting an affiliate commission. Tomorrow, that may be seen as a market inefficiency and you may have to generate a sale for yourself either by selling products, or charging for your own product or service.
Youtubers today make up-to 80% of their income not by Youtube ads but by influencer marketing and brand deals. Youtubers and brands are cutting the very platform as the middleman that they host their content on.
We started Socialoholic with content and blogs. We relied on selling advertising in order monetize our network of websites. We drove traffic from the influencers to our content so we can sell ads and pocket the difference. We became content-arbitragers. So many middle-men while the true value was only created because someone somewhere bought something.
Years later, we found ourselves driving the same influencer traffic but instead of driving that to content we drove it to products. We removed the inefficiencies.
Over time, we have pivoted from content to focus on e-commerce as our core area of business because that is the real fuel of the internet. Everything else is only relevant because it assists e-commerce and when something more efficient pops up, it is replaced.
The textual content industry where I started from has been under a constant decline. Recent stats suggest that social, gaming and video streaming is taking up to 80% of the internet usage. There’s not much you can do to change consumer behaviors so if you want a larger piece of the pie you should adapt and move more to the video content.
That’s bad news because writing and reading need to continue to exist. There are many people who can best express their views over a blog post instead of a YouTube video or they just prefer to do so.
There are two major reasons why I think textual content is dying.
The first problem that I saw blogs face during my career was the shift of traffic from desktop to mobile resulting in lost estate for advertising. This was a major blow as far as revenues were concerned for most content websites.
The second event that I saw happen was ad blockers which are now used by a large majority of the population making the free publishing unviable. Youtube, Facebook, Instagram and all of video content are safe from this as none of the ad blockers block video ads or pre-rolls/mid-rolls.
Since free publishing is seen unviable today, whenever we visit any mainstream news or content websites we’re presented with content-blockers and payment walls.
The thing is that most people do not prefer reading wall street journal every day and so they don’t see paying $5 or $10 or $20 a month as a viable option to reading that one article that they were really interested in. Instead many people, including me, would much rather pay $5-10 a month and distribute it proportionally between the sites we read the most.
There are two solutions that are in the works.
The first one is Medium. You could move your publication to Medium that can be seen as a platform to host all textual content just as Youtube is a platform to host all video content. Medium will charge users reading medium a monthly subscription fee and proportionally distribute that subscription money to writers of the blogs that subscribers read the most. There are many downsides to this arrangement. You move to a platform so you adhere to their rules. You lose your freedom. They own your content and a ton of other platform risks. I wouldn’t do this unless it’s an existential crisis for my publication.
The second solution is Basic Attention Token & Brave. I will try to explain it as simply as I possibly can but forgive me if I fail to do so.
As a user or a reader you download the Brave browser which blocks 100% of the ads and trackers, auto upgrades HTTPS, saves you bandwidth, improves your browsing experience and allows you to continue to read everything without pay-walls. You have two options here. You can receive small notification ads (like push notifications) that come and disappear and get paid (in BAT) for seeing those ads. Or if you’re not interested in advertising at all, you can buy $5 worth of BATs and auto-contribute them over a period of time to the sites you visit the most via micro crypto-payments.
As a publisher, you don’t have to have pay-walls any longer. You don’t have to move to Medium to get a share of those $5 payments. You can continue to publish at your own platform with your own terms and get a share of the auto contribution from the users in the form of BAT and for the users that decline to pay, you can generate revenue through push notification attention ads.
Watch this video for better understanding of how the BAT/Brave model works.