Principle: a belief that guides behavior
Have you read the book “Principles”, by Ray Dalio?
It’s a classic. I highly recommend you check it out.
In that book, Dalio lays out the principles that he says have been the backbone of his immense success (Dalio built the world’s largest hedge fund and is one of the wealthiest people on earth).
But more crucially, Dalio also lays out the importance of having principles – of thinking through what our own individual principles are and making them clear to ourselves and others.
Principles provide the bedrock on which we make decisions, communicate with others, and live a life of purpose.
If you’ve found an online niche that you want to go after, before you jump to the next stage and start implementing, I suggest you take some time to ground your business by thinking through the principles that will guide you.My Principles
I’ve spent a lot of time reflecting recently on what factors lead to success in online business (and life in general). In this article I briefly describe the principles that I believe, if followed consistently, will help you be successful online. They’ve certainly helped me.
I elaborate on the 10 principles in the paragraphs that follow, but here’s a summary:
Stick with ONE proven business model
Noah Kagan has a simple formula for online business success
Have you been playing a frustrating game of “affiliate pinball”?
Affiliate pinball is when you bounce from online business model to online business model.
Just like taking punches to the head, being a human pinball might make you dizzy, nauseous, and frustrated...
Been there, done that!
In the past 10+ years I’ve tried to make money online by:
And a bunch of other “schemes” that I don’t care to dwell on!
I’ve only experienced success when I’ve focused on ONE THING long enough to make it successful.
The good thing is, there’s an antidote to the dreaded disease of affiliate pinballitis: choose one online business model and stick with it.
Have you heard the saying “Be like a postage stamp: stick to it until you get there”? It’s cheesy, but it’s sooooo true.
Or as successful online entrepreneur Noah Kagan puts it:
As in: do the work until you’re successful.
DON’T put in a little work, then get bored or frustrated and go chasing after the newest shiny object.
Learn more
Focus on things that don’t change
Online marketing has to be one of the worst industries for “shiny object syndrome”, because things change so often and so rapidly.
I think that’s one of the main reasons so many people who try to make money online ultimately give up. When they don’t see an immediate result, they move on to the next model/tactic/guru/course. That’s a recipe for continuous disappointment.
It’s much harder - but much more sensible - to stick with something.
But how do you know what to stick with?
Jeff Bezos has an excellent rule-of-thumb: choose things that don’t change, and stick with those things.
Here’s the Bezos quote that explains what he means (it’s worth reading the whole thing):
Jeff Bezos
Business god
I very frequently get the question: "What's going to change in the next 10 years?" And that is a very interesting question; it's a very common one.
I almost never get the question: "What's not going to change in the next 10 years?" And I submit to you that that second question is actually the more important of the two - because you can build a business strategy around the things that are stable in time...
In our retail business, we know that customers want low prices, and I know that's going to be true 10 years from now. They want fast delivery; they want vast selection.
It's impossible to imagine a future 10 years from now where a customer comes up and says, "Jeff, I love Amazon; I just wish the prices were a little higher." "I love Amazon; I just wish you'd deliver a little more slowly." Impossible.
And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now.
When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”
I’ve bolded two sentences because I think they’re so true and so powerful: when you know that certain things won’t change, you can take the time and effort to build a business around those things. Even if it takes a long time and doesn’t show results right away, you’ll still have the confidence that things will eventually work out.
It’s interesting to think about what won’t change in the online entrepreneurship space over the next 10 years. One way to think about that is in the context of the formula for how people make money online today:
Needs + Searches + Solutions = Revenue
Using that formula, here’s what I think will be the same in 10 years:
1
Needs
People will still have needs (duh). But I believe there are certain needs that are perennial, and specific “evergreen niches” will still be around 10 (possibly 100) years from now.
Want to build an online (or offline) business that will still exist in 10 years? Choose an evergreen niche.
2
Searches
People will still be using the internet to find solutions to their needs. But how people use the internet to find solutions will probably change.
Will they still use a search engine like Google, or will the majority of searches shift to product marketplaces (e.g. Amazon) or social networks (e.g. Facebook)? Will any searches be done on desktop computers (versus mobile devices)?
Will we have implants in our brain that simply allow us to think about the type of content we want and it pops into our brain? (Maybe that last one is a bit far out).
Regardless of what happens, I think we, as online biz people, will still need to know how to find people where they’re searching for solutions (put another way: we’ll still need to know how to “fish where the fish are”). And for the next few years at least, organic and paid traffic as it currently exists will still be around.
So: choose one method of getting traffic and become really good at it.
3
Solutions
Since there will always be needs, there’s always going to be demand for solutions. What will inevitably change are the solutions being offered for needs (even in - and maybe especially in - evergreen niches).
Want an example? Think about how solutions in the weight loss industry have changed over the years (and decades).
But one thing that won’t change about solutions: the marketers who achieve the best fit between needs and solutions (through excellent niche marketing) will win.
So: get good at knowing how to understand the needs of your audiences
Now try this thought experiment: what aspects of online business do you think are not going to change in the next 10 years? Identify those things and prepare to work on them for a long time.
Which brings me to the next principle...
Look at everything as a “system”
I often hear consultants and similar self-employed people talk about their “business”. But if they stop working, their income also stops – so they don’t really have a business, they have a job with a little more autonomy than working for someone else.
In the words of Sam Carpenter, who wrote the classic book Work The System: The Simple Mechanics of Making More & Working Less:
Sam Carpenter
Author, Work the System
Definition of a business: one does not have to show up in order to make money.
In fact, I would argue that if you have to show up to make money, you don’t have a business. A business is an entity that continues to make money whether you’re around or not.
But how do you create a business - something that will make money even if you don’t show up?
By looking at a business as a system – a set of processes that can be tracked, improved upon, and delegated to others.
In fact, most things in life (careers, relationships, businesses) are systems. When something in your life isn’t working, look at it like a dysfunctional system, and identity the components that need to be repaired.
As an example, I’ve broken down the process for building and growing niche sites into the following components (each of which is itself a sub-process):
My Niche Site Process
Once I’ve found a good niche, I start at the “Topics Research” stage and move counter-clockwise through the steps.
Then once a site is up and running, I track a site’s progress by monitoring a set of leading and lagging KPIs (key performance indicators)
Bottom line: once you’ve chosen the online business model that you’ll stick with, break the model down into its components, so you have an idea of the work required to implement the model (and the KPIs necessary to track progress).
Some components will be more important than others, however. Which leads to my next principle…
Think 80/20
The 80/20 principle is a concept popularized by the author and investor Richard Koch (but discovered in the early 1900s by the Italian economist Vilfredo Pareto).
Simply put, the 80/20 principle states that a small percentage of causes result in a large percentage of effects.
That's why it's important to focus your time and energy on the "vital few" things that are most important, not the "trivial many" that won't move you toward the life you want.
In plain English, this means that most things in life are unbalanced. For example:
Examples of the 80/20 Principle
There are literally thousands of other examples of this imbalance, in all areas of life.
In terms of online business, I’ve found that there are a handful of things that have contributed to my success (when I’ve experienced success. I’ve also had lots of failures alternative learning experiences).
Richard Koch would call these things “the vital few” (as opposed to “the trivial many”, which are the many irrelevant and inconsequential things that we waste our time on).
In my experience, there are a vital few routines that lead to success. Those routines satisfy two conditions:
- 1Routines that are valuable (i.e. that make money)
- 2Routines that allow you to get into a “flow” state (i.e. activities that you don't have to force yourself to do)
Let me explain both routines and why they’re so important:
Routines That are Valuable
Whatever online business model you choose to pursue (pursue like a postage stamp), you need to identify the routines that will eventually lead to your success in that business model. In other words, routines that are valuable.
The online business model I follow for my niche sites is this:
Affiliate marketing + organic traffic
So I build niche sites that are monetized with affiliate offers (primarily Amazon products) and get their traffic organically (primarily Google).
I’ve found that the routines that are most valuable for the affiliate marketing + organic traffic business model are:
When you add in consistency, those are really the only ingredients necessary to succeed with this business model: (1) consistently do research to find low-competition keywords and (2) consistently publish outstanding content.
Routines That Get You Into a "Flow" State
Of all the books I’ve read over the past ten years, Flow: The Psychology of Optimal Experience has probably had the biggest impact on me.
There are too many brilliant insights from that book for me to mention here, so I’ll just mention the biggest one: the concept of a “flow” state.
A person is in “flow” when they’re doing something that engages them so deeply that they lose track of time.
I personally believe that flow is the "secret" to a good life. On the days that I spend a lot of time on flow activities, I feel energized, engaged, and accomplished.
Here's an awesome quote from Positive Psychology Program summarizing the power of flow:
"The best moments in our lives are not the passive, receptive, relaxing times . . . The best moments usually occur if a person’s body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile” (Csikszentmihalyi, 1990)
But there’s a lot more to it than just stretching ourselves.
The author, Mihaly Csikszentmihalyi (try saying that fives times fast), states that a flow activity meets six specific criteria:
How to Get into "Flow"
Why do I think finding your flow is so important for online business?
Because when you match flow activities with the right business model, your work will be enjoyable and fulfilling, which might make your chances of success higher.
A Quick Case Study on the Importance of Finding Your Flow
I’ve done dozens of consultations over the years with people who are mildly successful online and could be massively successful online.
Most of those people operate offline services (coaching in various industries) and have nice- looking websites that are meant to capture leads for their service business. In most of in most of my consultations the coach was asking me how to increase their passive income (for example, by selling info products on their coaching site).
Here’s the interesting thing: in every consultation, I offered advice for easy changes that the coach could make to their site to increase their passive income.
One guy already has an ebook that makes steady sales - but he has no upsell in his sales process.
Unbelievable! It’s a fact that upsells are the quickest way to increase the average order size of any business. With my Clickbank products, every single time I’ve added an upsell to a product it increased my income - because a percentage of people who buy your first product are guaranteed to buy the upsell.
So my recommendation to that coaching client? Bundle up some PDF tutorials that he already has sitting on his hard drive and offer that bundle as an upsell.
Another coaching client I had wasn’t selling any info products, but he had dozens of original videos sitting on his hard drive. I recommended he bundle those videos and send an email to his list offering the bundle as a test sale.
These two recommendations would have been an easy, guaranteed increase in my clients’ income.
But can you guess what action they took after my recommendations?
Nothing.
And in speaking with them later, the reason became clear - they hated doing “computer work” and hiring a freelancer to do it was outside their comfort zone.
So here’s the point: by structuring your work around routines that consist of your flow activities, you won’t succumb to procrastination (or outright refusing to do things).
The two routines that I focus on for my own sites are keyword research and content creation. No one has to drag me to my desk to do those, because I enjoy both immensely. They're also crucial to making money from my niche websites.
But beyond being flow activities for me, those routines are also extremely important to the business model I’ve chosen (affiliate marketing + organic traffic).
Bottom line:
Think in experiments
Even after you’ve set up your online business as a system and identified your 80/20 activities, you’ll still find that your results will be not be entirely consistent.
Why?
Simply because a system doesn’t always produce the same results.
Even a factory line occasionally produces defective products...
That’s why you need to be constantly learning. You do that by looking at your business as a series of experiments, or as a continuous data-collection exercise.
Here’s an example from my own experience. I have several formulas for creating content that makes money most of the time:
Adsense Sites Formula
Low-competition informational keywords
+ Excellent informational content
+ Email autoresponder
+ Adsense (or Ezoic) ads
= Ad Revenue
Clickbank Sites Formula
Low-competition informational keywords
+ Excellent informational content
+ Email autoresponder
+ Info product offers
= Info Product Revenue
Amazon Affiliate Sites Formula
Low-competition product category keywords (e.g. "best stroller for twins")
+ Excellent product review content
+ Amazon links
= Amazon Affiliate Commissions
The operative words above are “most of the time”.
Because even with a proven formula, not everything you work on is going to be a success...
Which is why it’s crucial to have an experimental approach to, and mentality toward, your online business.
You need to regularly evaluate the results of your actions, to figure out what’s working well (so you can do more of that) and what needs tweaking (to get it to work better).Here’s an example from one of my Amazon sites:
Case Study: Finding Long-Tail Keywords to Earn 4X
After publishing ~20 product category (i.e. "best") articles on one of my sites, I noticed that a specific combination of keyword qualifiers earned the highest EPC (earnings-per-click).
I’ll quickly explain this using a fictitious product category:
Say the product category is “blenders”.
What I found was:
So the keyword combination of “best [product type] blender for [use]” earned 4 times more than the keyword “best [product type] blender”.
Which meant that even though the highest EPC keyword had lower search volume, it made more money overall because the EPC was so much higher.
Do you think after learning that, I ran to my laptop and started looking for more, similar keyword combinations?
I found three more keyword combinations that fit that combination.
And, even better, because they were such long-tail keywords (i.e. they had low search volume), there was hardly any competition.
So the three articles I had created to target each keyword were ranking on the first page of Google - and earning Amazon commissions – within one week!
To reiterate my original point: look at your online business as a series of experiments.
By doing so, you not only get in the habit of evaluating why something did or did not work (and learning from it), you also remove your emotions from outcomes.
Here’s a quote on one Thomas Edison’s habits that beautifully demonstrates this point:
“When an experiment failed, Edison would always ask what the failure revealed and would enthusiastically record what he had learned.
His notebooks contain pages of material on what he learned from his abortive ideas”
Following Edison’s logic, I would argue that an experiment (including everything we try in our online businesses) is never a “failure” - it simply disproves a hypothesis.
I think looking at everything as an experiment that we can learn and incrementally build success is a wonderful way to remove emotion (and stress) from life, and live in a perpetual sense of wonderment. (That last part made me throw up in my mouth a little bit, but you get the point.)
What’s equally important is that if you conduct many experiments, you’re bound to hit a home run some of the time:
Many failed experiments can lead to one big win (source)
To solidify this concept, here’s a really cool idea introduced by Michael Simmons in his outstanding Medium.com article. The title of his article sums it up:
Forget the 10,000-Hour Rule...Follow the 10,000-Experiment Rule
Bottom line: think of business as continuous experimentation.Focus on routines (not goals)
Scott Adams was right: goals are for losers, and systems are for winners.
The problem with goals is that achieving them relies on a lot of factors that are out of our control.
What if your goal is to make a million dollars investing in stocks by 2022 – and that year turns out to be another 2008? You can’t control the stock market (or the economy).
What if your goal is to become a professional football player – and you’re involved in a car crash that paralyzes you from the waist down? You can’t control how everyone around you drives.
That’s why it's much better to focus on routines (or what Scott Adams calls "systems"), because those are much more within our control.
The beauty of focusing on routines is that if you get good at the right routines, the outcomes you desire (your "goals") will take care of themselves.
That’s where 80/20 activities (covered in principle #5) come in: once you’ve identified the 80/20 principles for your online business, you need to establish a daily routine for implementing them – whether it’s you, or someone else, doing the implementation.
Outsource ruthlessly
In any online business there are a bunch of things that need to get done to make money.
I love doing keyword research and creating content, but there are a bunch of other things that need to get done - that I don't like to do - to make money from my niche sites:
But even though there are a lot of necessary things to do, not all of those things are equally valuable. Some are necessary but low-value.
In his excellent book 80/20 Sales & Marketing (highly recommended), Perry Marshall refers to these as “$10-per-hour-tasks”.
What you want to do is structure your business so you’re working on the $1,000-per-hour-tasks, and others are taking care of the lower-value activities.
But how do you figure out the exact things to outsource, once you have the money to do so? There are three steps I’ve followed:
- Map out the components of your online business (this will depend on the business model you’ve chosen)
- Identify which steps you’ll do (i.e. your 80/20 flow activities)
- Identify the remaining steps that you’ll hire other people to do (using freelance websites such as Upwork or Freelancer)
It’s hard to do this in reality. Over the years, I’ve hired and tested out literally hundreds of people from freelance websites. But it’s also reality that if I didn’t hire people to do the things I didn’t want to do, they wouldn’t have gotten done!
Find a mentor and/or successful peers
Making money online has lots of moving parts, which is why there are LOTS of potential obstacles and setbacks.
And on your way to becoming an online business master, you’re going to face many of those.
When you face an obstacle, or reach a plateau, going through the options in your head often isn’t enough – you need the help of others who have been in your shoes and successfully pushed forward.
An admission: I’m a pompous ass who often thinks I can figure out the best way forward by myself (just ask my old lady). In reflecting on my successes and failures online over the past ten years, I’m convinced that I would have succeeded MUCH quicker if I had ditched my ego and reached out for help sooner.
Tip:
Don't be a pompous ass like me who thinks he can figure everything out by himself.
In reflecting on my experience online over the past ten years, I would have achieved success much quicker if I had ditched my ego and reached out for help sooner.
A mentor can be (in the beginning) simply a handful of people whose blogs you follow.
But here’s the important part: the people you follow should have already accomplished what you want to accomplish, ideally using the same business model that you’ve chosen.
So finding a mentor and/or successful peers will depend on the online business model you choose.
And keep in mind that there are lots of charlatans online. There seems to be a lot of make-money-online bloggers who haven’t actually made any money online!If you’re interested in the affiliate marketing + organic traffic model, here are the best blogs to follow:
Best Blogs to Learn How to "Rank and Bank"
Play a long game
The journey to making money online
Did you know that a typical undergraduate degree at a public college in the U.S. costs $8,202 per year, and a private university will run you $34,470? At an average duration of four years, that totals between $32,808 and $137,880 just for tuition.
And yet many people seem to think (or hope) that they can be making money online with a snap of their fingers:
This is my favorite one: “make money online fast today”. Like making money online fast tomorrow isn’t quick enough!
My point: learning how to make money online, and actually implementing what you’re learning, needs to be treated like a college degree – it takes time and money to reach your destination.
And yet when I started online I also had dollars signs in my eyes and massively underestimated the time and perseverance it would take to make my first dollar.
Human Proof Designs ran a survey of their readers a couple of years ago to find out what separates successful niche site owners from unsuccessful ones. They found an interesting correlation between time spent on the business and earnings:
The numbers that stick out for me: people earning $500 - $1,000 per month are working between 20 – 40 hours per week.
Now, before you think, “That’s insane. Why would I work that hard for only $1,000 a month?”, keep in mind that the work you put into a niche site is up-front and cumulative. You put in a lot of work at the beginning to give a site a good foundation.
Then, once the site gains traction in the search engines, it’s largely a matter of maintenance – adding new content periodically, but certainly not with the time and effort required at the beginning of a site.
(By the way, can you guess the top two activities identified by successful site owners? Keyword research and content creation. Of course!)
Bottom line: it takes consistence and perseverance to make money online, so look at your online business like playing a long game.
Here’s an awesome quote from the actor Will Smith that sums up the mindset required to be successful (offline or online):
Will Smith
Rich Thespian
"The only thing that I see that is distinctly different about me is I'm not afraid to die on a treadmill.
I will not be out-worked, period.
You might have more talent than me, you might be smarter than me, you might be sexier than me, you might be all of those things...
But if we get on a treadmill together, there's two things: You're getting off first, or I'm going to die."
Become a master
Once you’ve worked on your online business for some time (especially if you’ve turned your 80/20 flow activities into routines), you’ll notice something interesting: you’ve become really good at a handful of things.
In the words of the comedian Steve Martin (and popularized by author Cal Newport), you’ve become “so good they can’t ignore you”.
At that point, certain activities will become even more engaging, even more “flow”. And if they’re 80/20 activities, you should see a big difference in the progression of your online business.Wrapping Up
An admission: I wrote this article as much to clarify the principles in my own mind as to help others. (What a selfish SOB…)
But I hope what I’ve laid out here is helpful to you in growing your own online business.
Are there any principles you would add (or subtract)?
Summary of My Principles
Stick with one proven business model
Focus on things that don't change
Look at everything as a system
Think 80/20
Think in experiments
Focus on routines
Become a master
Outsource ruthlessly
Find a mentor and/or successful peers
Play a long game
