The Two Types of Businesses (The Benefiting from Bangkok Manifesto)

I went to architecture school, where pretty much everyone talks about Robert Venturi who is a dude that co-wrote a manifesto called Learning from Las Vegas. In Learning from Las Vegas, Venturi argues that there are two types of buildings: Ducks and Decorated Sheds.

Now, I’m not here to comment on architectural theory.

This post is meant to be my online adaptation of Learning from Las Vegas for business building. I’m calling it the Benefiting from Bangkok Manifesto (OMG! I’m actually writing a manifesto!).

A few weeks ago I wrote a blog post on some observations I made while in Thailand last year.

And from that, I’ve come to the conclusion that there are really only two types of businesses.

Food Carts and Elephants.

(Yes, there are going to be metaphors in this. I hope that doesn’t scare you off.)

There’s nothing wrong with either type of business. But there are very different consequences to each model.

The Food Cart

Food cart in Bangkok! Yum :)

A Food Cart is a business that’s like a simple affiliate site. You have some articles and try to pass people off to your affiliate link, adsense ad, or increase your page views so you can earn more on those CPM advertising networks.

The Food Cart runs the risk of falling prey to commoditization. This is a fancy college word that means that something is so readily available that you can pretty much get it anywhere.

In Bangkok, there are food carts on every street selling you all sorts of food from rice, meat on a stick, squid, and anything else you might consider Thai food. Each of these food carts is pretty much the same. There really isn’t anything to differentiate one from the next.

What does this mean for your business?

Well, if you have an affiliate mini-site, I’d venture to say that you’re essentially operating on the same business model.

You see, there really is no reason to buy anything in particular from a food cart. Every food cart offers pretty much the same things. The only reason someone would buy something from a food cart is because they happened to be hungry and the food cart happened to be the closest thing to them at that point in time.

Which of course means that the sole strategy for the food cart is to find a location where there are a lot of people who may potentially be hungry and hang out near them.

For a Food Cart (aka an affiliate mini-site), this means that the only reason someone would buy some kind of weight loss ebook through your affiliate link is because they happened to want to lose weight and you happened to be right there.

So then the game becomes ranking for high traffic keywords on Google and doing a bunch of SEO stuff.

Now, it’s not easy running a Food Cart. Some vendors in Bangkok have caught on and they’ve decided to sell other sorts of things. Maybe they’ll move into the crude T-Shirt market, the knock-off designer purse market, or the local handicraft market.

This would be akin to affiliates hunting down the ever-elusive “untapped niche.” You know, someone whose out there trying to set up a website about the “super hot and fast growing” home surgery niche so they can sell an “underground” product like “Home Surgery Academy – Why Pay Expensive Doctor Bills When You Can Get the Same Result with a Dull Butter Knife and an Ice Pack?”

But if you’re profitable in an untapped market, it won’t be long before others move in and start crowding that market as well.

That’s not to say that running a Food Cart business isn’t a good idea. What’s great about these types of businesses is that they are quick and easy to set up (the metaphorical Food Cart anyway–I really have no idea what sorts of requirements there are, if any, for opening up an actual food cart in Bangkok).

You really only need to pay for a domain name and hosting. Everything else is optional. There are other expenses if you don’t want to write your own content or build your own links, but these are optional.

Because they are so quick and easy to set up, they present a low-barrier of entry. You can learn the ropes and get started making money with little hassle. When you are getting started, it’s easy to get overwhelmed and the simplicity of the Food Cart model is a great place to start.

The Elephant

This photo was a mistake, but it kind of looks cool, so let's just say that I meant to do that :)

The name for this model comes from an elephant I saw walking down the street. It drew a huge crowd of people, who weren’t used to seeing an elephant walk through the city streets!

The Elephant business model is the opposite of the Food Cart model.

The Elephant business creates a crowd around it rather than following the Food Cart model of trying to hunt down the crowds and position itself within the crowd.

To put it simply, the Elephant creates it’s own following.

How can you tell when you have an Elephant business? When you log in and check your analytics, look at the search traffic. You have an Elephant business if a significant amount of the traffic is coming from people actively searching for the specific name of your website.

This means that they like your site, and they are specifically (at the exclusion of all of your competitors) searching out you, and only you.

This is a very good position to be in.

There are lots of examples of Elephant businesses ranging anywhere from how to quit your job, personal development, home automation, housing in Singapore, or any other strange niche you can think of.

Although, you may still want to engage in Food Cart marketing tactics (and you probably should), once you attain the “Elephant Effect”, you can operate independent of Google or other traffic sources that have been pesky and fickle lately.

Now a lot of Awesome Bloggers have this notion that “content is king” and that marketing is only for mediocre businesses (which are not “awesome”). They try to jump right to the Elephant business model.

There is absolutely nothing wrong with trying to attain the Elephant Effect, but there is something that you cannot afford to overlook:

All businesses must market themselves when they are first getting started–especially online!

I don’t care how amazing your content is, if you refuse to market yourself, no one will ever discover you. It doesn’t matter if you publish the f–king cure to cancer on your blog, no one will know about it unless you engage in marketing activities.

That means, link building, guest posting, advertising, JV’ing, schmoozing, and otherwise turning tricks for attention. This is marketing and it must be done, much to the chagrin of pretty much everyone. “Awesome” doesn’t just happen by accident. Even the most diehard of successful Awesome Bloggers engage in marketing (sometimes while talking out the other side of their mouth about how you shouldn’t “waste time” marketing).

But, if your business is set up as an Elephant, it will eventually find escape velocity where you can ease off the heavy promotion and let your “tribe” (as many call it) do all the hard work of spreading the word

Personally, I believe that creating Food Carts like mini-sites, affiliate sites, adsense sites, etc. are a great way to test the waters of a market and to get some (relatively) easy money coming in.

But that is not the whole picture.

If your online empire vanished when Google twitched with every Panda update over the past year (after some over-stressed and over-worked Google Quality Rater decided your website wasn’t good enough after looking at it for, at most, about 30 seconds), then you are relying too much on Food Cart tactics.

To have the real staying power to last in this age of constant change online, you must build a following. You must strive for the Elephant model. You must get people to follow you and seek you out at all costs, rather than struggling to shout over everyone else in a marketplace that is becoming ever more crowded.

Again, I’m not dissing the mini-site, the affiliate site, the adsense site or anything like that. They absolutely have their place. They are excellent for getting your feet wet, testing a market, and learning the basics of marketing. Do not overlook the value in Food Cart business marketing.

But they are not the end destination, that I recommend you strive toward. The goal should not be to have an empire of 100 niche sites that all vanish when Google decides to stop playing coy and flat out deindexes every website that has an affiliate link, after Anonymous destroys Google on Guy Fawkes Day 2012, or after you cut off Matt Cutts in rush hour traffic and he personally decides to manually rewrite the Google algorithm to exclude all your websites as a form of revenge.

I recommend the goal to be having one or two separate businesses that you can focus on and scale to an immense level. Go for deep and focused, rather than broad and shallow.

This is the Benefiting from Bangkok manifesto. This is not the complete manifesto. In the weeks to come, I’ll be putting out more thoughts on the tactics and approaches to operating a Food Cart and an Elephant business, what it takes to be successful at each, and how to transfer from one to the other.

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Comments

  1. Kian says:

    Hey Clayton,

    This post was really eye opening. I love the way you split up the elephant and the food cart stand and how they go about attracting customers. I never thought about it but it’s so true how there are so many cart stands selling the same thing and how you only go to it if you are there in the moment.

    Great stuff!

    • Clayton says:

      @Kian, Thanks. I’m glad that this made sense. Sometimes writing posts like this causes me a lot of anxiety because I tend to think about some things too much and I worry if what I write will make sense or make people angry.

  2. Joe says:

    This is a great post – I’ve just come to this realization myself, but it’s so crystal clear and intelligently discussed here. Using the marketing tactics from the food cart business is a definite plus when considering which elephant business you want to become.

    • Clayton says:

      @Joe, Yeah, I was talking to a friend of mine a few weeks ago whose mother is a piano instructor. He said that she always considers which way the energy is flowing. Is the energy flowing away from her (is she working like crazy trying to get people’s attention and going out of her way to go to them?) or is it flowing toward her (where she can sit back and let them find her?).

      It may not be easy to attain, but getting people to come to you is ultimately easier than constantly chasing them. I mean, do you think Anthony Robbins worries about if he ranks for the term “self help” or anything like that? No way! He just is Anthony Robbins and people come to him because he IS self help.

      It’s a difficult thing to do, but I’m convinced that this is much more effective than worrying about search engine rankings, etc. That’s not to say that search rankings aren’t important, because, that’s more exposure and besides everyone has to get a start somewhere and somehow. But for long-lasting success you need to get that following. That’s one of the topics I really hope to answer in this blog over the next few months.

  3. Rach72 says:

    Food carts also get blown over in the wind, crushed by elephants and can run away to cause traffic jams – like the one that’s gonna involve Matt Cutts and probably gonna get you de-indexed :)

    Those who think that Content is King and do not think beyond it need to take a trip into the nether regions of cyber space and see how much fantastic content there is just floating around being ignored.

    Even though you are online, you actually need to be MORE aggressive and pro-active with your campaigning. Networking with others also counts just as much as in the offline world – something that it has taken me a couple of years to come to terms with!

    Great post again C – looking forward to the next one!

    Rach

    • Clayton says:

      @Rach, Thanks, I’m glad that I’m not the only one realizing this. Maybe I’ve just been around long enough to see a few things more clearly, but it seems like a lot of people are starting to see things the same way.

      Yeah, meeting people offline is huge! Something I’ve just started to do this past year. If we’re ever at a conference or something together, we should grab a pin and talkt :)

  4. nkgari says:

    Hi thank you for the thoughtful business model I wish I could get into your head ad know exactly what do you imply but nevertheless everything you say makes perfect sense it is very innovative I really like the elephant model when are you going to share the tact looking forward to it thanks?

    • Clayton says:

      @nkgari, Thanks for the comment. I’ll probably be posting a few articles about the Elephant model in the coming weeks. In many ways it’s something I’m still trying to wrap my head around myself.

  5. [...] this back to the Benefiting from Bangkok Manifesto, stories are what helps to create the Elephant Effect that attracts people to [...]

  6. Jon says:

    I love the analogies in this article. I am working on becoming an elephant but it’s not an overnight success. At Ez Office Suites http://www.ezosuites.com we look to help up and coming new businesses, lean business with a way to build their brand. Co-working spaces I feel will take over the old way of doing business. Remote, off site, low maintenance tech start ups are in. High overhead luxuries are the thing of the past.

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