Why I Failed To Make Money Online
Hey there,
Unlike most people, I took to the whole online marketing thing immediately.
I made money the very first day I started out, using Adwords of all things (way back in the glory days – remember those?).
Looking back, it was a little crazy, and I had no idea how lucky I was.
I’d literally picked an affiliate offer at random through Commission Junction on Friday morning, spent 2 minutes writing an ad, and then left the whole thing running while I went off to work (back when I had a J.O.B.)…
When I got to work though, the suspense of not knowing what was happening was almost killing me — so I finagled my way into an early lunch, and almost ran the half mile back to my apartment…
… and to my utter surprise, I’d made a $150 affiliate commission. From selling language software, through CJ, with a direct affiliate link.
The best part?
I’d only had 3 clicks on my Adwords ad too…
So I’d made $150 from 3 clicks that cost me the princely sum of 22 cents.
That was my first day as an affiliate. Not bad huh?
Unfortunately, my next foray into the world of online business didn’t do so well.
After seeing so many people making millions as product vendors (or at least claiming to), I decided I wanted to carve a piece of that big green pie for myself.
I mean, it sounds great doesn’t it? We see all those pictures of the guys posing in front of their 5 million dollar house with their Italian sports cars…
… who doesn’t want that?
Well, I found out pretty quickly that it’s not all popcorn and fizzy drinks.
In fact, I wasted about 6 months of my life creating a product that made me a grand total of something like $68.
It tanked… and I mean TANKED… we’re talking about making maybe 3 or 4 sales out of the first ten thousand or so visitors.
It was awful… watching all that wasted time and effort just slip away…
Do you know the scary part though?
I had no idea why it failed. I had literally no clue… in fact I put it all down to a case of bad luck…
But it wasn’t bad luck at all.
It was bad MARKETING.
Or, to be more specific, bad TARGETING.
You see, in my haste to be a product vendor (and become on of the guys that takes pictures of himself in front of his house), I’d gotten the whole order of things confused.
I’d created a product on a random subject, and expected to find an audience for it after I’d created it. Like the perfectionist I am, I created the SHIT out of the thing too – I spent months researching, literally months before I ever put pen to paper and started writing.
Was that time wasted?
Well… yes and no. Financially, and business-wise, it was a complete washout. Personally though, I learned a hard lesson, one that I’m not likely to forget.
Here’s what I would have done differently, if I knew then what I know now…
First, I’d hit Google, and start seeing what’s up. I’d look for popular trends, what niches are being widely advertised for, stuff like that.
Then I’d start diving into specific niches… think about things that give people pain – what makes people desperate?
(General rule of thumb – if you can create an info product that genuinely helps people that are desperate, you’re onto a winner…)
It’s up to you how deep you go from here – you could start with something broad (dog training), or even delve into a niche-within-a-niche (dog training for Irish Wolfhounds)
Next, it’s time to check out the competition. That’s the thing a lot of people miss. We WANT competition. It means there’s money being made. And don’t worry, even if there’s of people competing with you – we can always outmarket them. Most people (even in the world of info products) have no idea what they’re doing.
With all that stuffed into my trusty notepad (you have one, right?), I’d then start narrowing down the main product idea. Things to think about here are pricing, follow-up products, and potential JV partners…
And I’d only start on the product itself AFTER I put in all that groundwork.
Do you see how that’s different from starting at the product, and trying to fit everything else around it?
It’s been said many times, but all you need to do to make money in this business is find a hungry market, and feed them.
I failed because I was trying to feed a market that wasn’t hungry… or even a market that was non-existent.
The difference between embarrassing failure and massive success can sometimes be that simple.
Now, let’s try and get some interaction going… I’ve showed you mine, time to show me yours.
What was your first attempt at making money from marketing? Did it work? What lessons did you learn?
Lay it all out for me in the comments. I’ll chime in with some insights if I think I can help.
To the blank page,
-David
10 Comments
David Raybould
Teach Street Featured Blog
Hey, hey David,
Jeeze Louise, sounds like I’ve just stumbled on some saucy “carryin’ on ” posting going on here…”show me yours?” Lol.
Now that you ask…mine is quite a big one (not boasting of course). In fact it was a huge howler.
A lot like this Tommy Copper classic comedy line: “I was in bed with my new girlfriend last night and she said I’d got the biggest willy she’d ever laid her hands on”…I said…
you’re pulling my leg!!!
Anyway, here’s my howler. I had a couple of hairdresser friends who often belly ache about hemorrhaging money and for having very little action in their respective salons.
So trying to be a smart Alec, I thought the problem was low hanging fruits waiting for serious pillaging.
I wrote a report for hairdressers addressing these issues with paint by numbers action points of making the business work and hoping to catch in.
Did it work? The simple answer… no. I failed to do the serious leg work of talking to other hairdressers as well and actually find out whether this was a problem for them too. I found other eye opening howlers I could bend your ears for hours.
Cool post, D. It seriously gets the old brain percolating and soaking up the juice of learning and growing.
Tony
hey Tony,
How are ya man?
Looks like we both fell into the same trap
there dude.
I guess once we get a little marketing knowledge
under our belts, it’s easy to assume we can generate
money from any market, in any situation.
Sometimes life has to give us a good hard slap to wake
us back up and teach us a lesson.
But hey, congrats on taking action in the first place…
without that NOTHING can happen.
Thanks for posting Tony, enjoyed reading it. And I’m
glad to see I’m not the only guy who failed to find out
about the market before pulling the trigger
-David
PS- Love that Tommy Cooper gag too, he was a funny
guy.
David,
Economics 101 – Supply what people demand and you’ll make money.
I guess what you’re trying to do with Google keywords is see what people are demanding.
That’s good, but bear in mind that Google is only ONE WAY of finding out demand.
I see it like a lagging report. Something like in property, where after month’s end you get a report saying how many houses and apartments sold for that month.
But what OTHER WAYS can you get a feel for demand?
For me, when I want to know what’s happening in the property market, I go straight to the property developers to find out how many units are selling, talk to my real estate agent friends to find out if they’re busy or quiet, talk to the mortgage brokers to see if people are taking out loans…and quite often I don’t even bother reading what the stupid journalists are writing in the newspapers.
With my very first product I created http://www.chrishowardislandshopping.com , a video and ebook about island shopping with Chris Howard (a motivational speaker like Tony Robbins) in the Caribbean Islands, I actually did a google analysis on Chris Howard – wasn’t flash – about 10,000 global searches for him a month.
But from one of his week-long seminars that I atteneded (Billionaire Bootcamp in Fiji), Chris mentioned on stage that he went island shopping with me and after that, at every break, I was constatnly hounded by 5-6 people coming up to me asking me how was the island shopping trip with Chris? Did you buy an island? How much did it cost?
Then a few months later, at another Billionaire Bootcamp in Portugal (which I didn’t attend), I get people sending me emails from Portugal, the US, the UK, half way across the world asking me about this island shopping trip, because Chris had once again on stage, told the whole crowd of 300+ people that we went island shopping together.. (I’m sure it’s a super cool thing to boast about…I mean, how many people can say they go ‘island shopping’?)
My gut feeling told me – okay, there are a lot of people who want to know about this island shopping trip that I went on with Chris, can I make a product and sell it to them?
I know these Chris Howard fans are maniacs (most personal development fans are), even if Chris Howard pees into a bottle and puts a label on it calling it “Your Magic Transformation Potion” and sells it for $47, people would still buy it.
And Chris Howard fans pay Big Bucks to see him speak. His Billionaire Bootcamp costs $10,000 per ticket (there were easily over 300 people at the Bootcamp I attended), he has individual programs selling between $2,995-$4,995 each and if you want to do the full works of all his programs, it will burn a pretty hole of $22,000 in your pocket.
So, are Chris Howard fans willing to pay? Yes. Do they have the money? Yes.
Ok, let’s put together a product then.
At first, all I wanted to do was sell the entire private jet video which I filmed. Just sell it to the Chris Howard fans. I see it like, okay, if I went on a cruise with Britney Spears and I have all these awesome videos and pictures of her, I can compile them into a product and sell it to Britney Spears fans.
However, after talking to an internet marketer, he told me to “value-add” the product, so I came up with 2 ebooks.
The books tell the story about how the whole island shopping trip came about, what islands did we see, their prices, their sizes. It was initially purely entertainment.
Then, after talking to another internet marketer, he told me that “People pay for solutions, but want entertianment FOR FREE” and he said that my product would flop!
So, I changed the positioning of my product to include an “educational” element to it. Which made sense, because people in the personal development field are in it to “educate” themselves, to “grow”, to “expand their thinking” etc.
Right now, my product has been selling for little over a week since I launched it, and even though I’m only using ONE source of traffic – facebook ads – and I’m bidding on only ONE keyword – I’m tracking a steady conversion of 4% in sales! Hmm…not bad…
And I haven’t even got onto youtube or ezine articles or any other traffic sources YET… which seems quite promising to me. I’m waiting for my web designer to create a trailer video for youtube for me, do up a new opt-in page, put in my new autoresponder series for me etc…because I’m so F@#$ing hopeless when it comes to technology and I can’t do it myself.
I’m still not convinced with what my internet marketing friend said, that “People only pay for solutions to problems, NOT entertainment”.
I think there’s HUGE money to be made in entertainment.
But because he comes from the old skool info product marketing, he’s trained like the traditional big gurus, selling “information” to desperate, proven buyers, so he sticks to what he knows.
But personally, I’m really into this whole internet thing for the entertainment! I have absolutely no interest in selling cat piss to dog-owners with Irish Wolfhounds…I just can’t be bothered. It doesn’t even excite me, I have no desire and it’s B.O.R.I.N.G.
What I’m more interested in, is entertaining people! Personally, I spend about an hour each day watching videos on youtube – I watch EVERYTHING – music videos, someone’s shoe collection, funny parodies, holiday destinations, furry pets, Hollywood gossip…
And I don’t think I’m the only one. The traffic on youtube is staggering!
Check out this video of two baby boys which got 227 MILLION views:
http://www.youtube.com/watch?v=_OBlgSz8sSM
Tell me, do you find people typing into Google looking for “Baby boy bites finger of brother”?
No. So, obviously it’s not reflected in Google keywords.
But yet, people (a LOT of people) want to see this video (They’ve clicked on it).
They’re not actively searching for this video, they didn’t even know it existed! But they stumbled upon it, liked it so much, and it just went viral!
It’s a whole different ball game. Entertainment marketing, that is.
Even if you do a Google Anlaysis for Ferrari. You’ll see it turns up 5 million searches. I don’t think there are 5 million people in the world who have a problem of “Oh I have a million dollars, and I’m really looking for a solution to buy a Ferrari.” I think they’re looking for someting else.
What are they looking for?
How can you monetize it?
Whoever figures out how to do this effectively can possibly make a lot of money.
I don’t think anybody (not the traditional big dog marketers for sure) has found a system to monetize entertainment. Most traditional marketers wouldn’t even go down that route.
And I can see why. It’s a big risk, and you don’t know if it’ll pay off. Just like movies, you can spend a few hundred million dollars shooting it, but it could still tank at the box office. The people decide whether they like it or not, which is very subjective,
I guess you need to know yourself very well. There are 2 kinds of people in this world – artists and businessmen.
- A true artist: will create a work of art (or product) without regard to any commercial viability or profitability. He remains true to his intentions of expressing himself and getting his message across.
- A true businessman – will only create a work of art (or product) if he can sell it at a profit. He will even develop a system and mass produce it if he can!
So, David, I guess with your first product, you were like an artist, creating a magficient piece of work, spending months perfecting it being the perfectionist you are, a labour of love….which nobody else appreciated.
I guess my 2 cents worth of creating any product would be;
1. Make sure there is a demand for it FIRST
2. Know very clearly what your product is (it’s positioning) – educational/entertainment/or both
3. Knowing the positioning of your product will affect WHERE you get traffic for it (where will people be looking for it)- For me, because mine is an entertainment product, I won’t even bother doing things like PPC, I’m just going to play in the entertainment zone
Other things that I have learnt from developing my very first product:
1. A lot of people don’t feel comfortable working for a younger boss
2. When working with other people, you need to establish rules on what needs your tick of approval, what can be done and what can’t – very important for me because I rely on my website guy for ALL MY TECHNICAL STUFF. He gave me a bloody heart attack when one morning he sent me a message saying “My product is launched, I have already emailed your list.” WITHOUT MY APPROVAL…WTF…..
3. Not every one works pyscho like me (when I want something done, I want it done NOW). If I’m willing to stay up till 2am to make sure my product is spanking perfect, you can jolly well stay up too! My heart really went out to him one night when I was demanding some graphics to be changed at 11pm at night and he said “Sorry, I need to put my son to sleep first…” Some people have a family you know… (unlike me)…
So, if you’re down to your last $10,000 and have absolutely no idea how to go about doing internet marketing, please follow David’s system of doing information marketing the “traditional way”. It’s safe, it’s tried, it’s tested, it works.
But, if you have some spare cash to play around with and want to have some fun and be adventurous (and you think you’re smart enough and you know what you’re doing), you can be creative and do something totally wacky and out of the norm, like what I did.
“Risk comes from not knowing what you’re doing” – Warren Buffett, Billionaire investor
Hopefully you know what you’re doing.
Cheers,
Vanya
Wow Vanya, what a post.
Great to see you here, and thank you for
taking the time to get all this down on “paper”.
It’s appreciated.
There’s about a million lessons inside your
note, but the one that really sings out to me
is the whole keyword research thing.
You’re completely right. So many people see
keywords as the biggest and most final indicator
of the demand or marketability of a product.
But it’s a risky proposition, because of the human
element. Like you said, just because somebody
searches for a given keyword, doesn’t mean they’re
about to spend some money on it. And if they’re
NOT spending money, well, we need to find some
people who will.
I mean, we like to make money, right?
Let’s look at the ACNE market… let’s say we’re
about to put out some kind of acne cure product.
According to Google (as of today) the phrase
“acne cure” gets 90,000+ searches a month.
Sounds great initially, but let’s look at it sensibly.
How many of those people are actively looking
to buy something, and how many are freebie
seekers? How many are excluded because they
don’t have a credit card, or are searching this
term for something completely irrelevant to
our product?
The amount of people willing to buy in that number
is probably miniscule.
So, as you said, you need to be smarter about
finding the buyers.
Great point indeed.
Congrats on getting your first product up and
running by the way, and even more congrats
on seeing success with it.
It’s addictive, so keep me posted with your
next success, okay?
-David
Great post, David. Nice to know you are mortal, after all.
Important lesson here about planning. Do too much and you might never get started, do none and you’re bound to get caught with your pants around your ankles.
I guess it’s like Halbert said: “I want to fail early and often.” The difficult part though, is carrying on when you’ve no promise (or evidence) of WHY you should.
That fluke commission was likely the greatest thing could have happened. Far beyond $150 in it’s overall value, I suppose.
Keep ‘em coming!
Kev
Hey Kev,
Great to see you here buddy.
You’re totally right about the early profit being
the best thing that could have happened.
If I hadn’t made money so soon, I would have
probably fallen into the trap of assuming all this
online stuff is some kind of scam – and who knows
where I’d be today if that had happened?
Thankfully, when I DID fail, I’d already succeeded
just enough to show me what was possible.
Thanks again for the comment. More posts soon,
promise.
-David
The first month I started marketing online I did $3.5k+ profit off of like ~$200 adspend.
This was probably 4 years ago. I quit my job that month, thinking “hey, if I can do this stuff full time I’ll easily clear $10k+ next month!”
That never happened. The offer I was promoting dried up, and I couldn’t get anything good going again before I ran out of money.
It was definitely a hard yet valuable lesson at the time.
I also agree with Kevin, it’s nice to get a taste of WHY you should keep going. I can only imagine if I’d lost a few grand in PPC before turning a profit, I would have concluded that the “internet” is a waste of time and I’d probably be selling vacations over the phone or something.
Nice post!
-Scott
Hey Scott,
Great to see you here man, thanks for
stopping by.
I can totally relate – if I hadn’t made that
initial $150 (almost on a whim), then I can’t
honestly say I’d be in this business today.
I’d probably still be working some kind of
slacker job and wishing I could break free
from the tyranny of “the man”.
I can relate to the quitting part too, I quit
my last job a scant few months after making
that first commission, with no clear idea of
how I’d support myself. I just knew I was
done working, and it was time to make
something happen.
The funny thing is, that kind of desperation
is great motivation, and within a month I was
making 3 times what I’d been making at the
job – and it was all coming from the internets.
I guess necessity really is the mother of
invention.
Thanks for sharing Scott, hope to see you
back again.
-David
My first attempt at making serious money online involved building a business around selling 406 mHz emergency locator beacons for aircraft. We assumed that since the older models were soon to be phased out that there would be a massive market for people getting these newer beacons.
Well, we were wrong.
In fact, if any one of us had known how to use a keyword research tool back then, we’d have known that there is practically no market for it whatsoever!
Well, needless to say, a few thousand dollars later we eventually did understand it! And fortunately now I’m working into more profitable markets and seeing some real dollars walk through, but that first failure was really remarkable!
Hey Eric,
Thanks for stopping by.
Looks like you and I both suffered from the
same thing at first – assuming that there
must be a market for whatever
we were trying to sell.
It’s a hard lesson to learn, but if you’re
anything like me I bet you didn’t need to
learn it twice.
Thanks for your input Eric, hope to see
you here again.
-David