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
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 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.
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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