I couldn’t believe my Gmail inbox.
I had just received an email from an old friend Bradley. For as long as I’ve known him he’s been pulling a healthy 6 figures a year working in the international finance division of a major commercial bank. After nearly 15 years pushing a desk they cut him a month before Christmas 2011.
Bradley had been speaking with a mutual friend who had mentioned that I had been making a lot of money online for about the same length of time as Bradley did working at the bank. Let me paraphrase his message for you. (profanity changed to protect the sensitive).
“Hi David it’s Bradley. Those bast*()ds finally f(*ked me. I heard you’re making out like a gangsta on the world-wide web. I need to make at least $150K a year, got anything you can send my way? I needs to make it rain paper up in here yo! I got about 6 months to make it, otherwise I have to get another shi&^ty job. Let me know, peace homie!”
I always chuckle when middle-aged white guys channel their inner rapper. I can only imagine what kind of language investment bankers actually use. Loved it when he called it the world-wide web, so 1995. I was hoping for “information super highway”.
He needs to make $150K within 6 months. What should I tell him?
What would you have told Bradley if you were me?
I phoned him. How non-internet. I asked him to read a book by Harvey McKay called “Dig Your Well Before You’re Thirsty Dumbass“.
Things got a little heated. He’s my age, and has made over $2 million in salary in 18 years of gainful employment. He has a $800,000 mortgage, 2 car payments, a kid in private school, and a monthly nut nearly in the 5 figures. I told him to get a job, any job as soon as possible. Either that or embrace the minimalist lifestyle and make some drastic, humongous changes.
Of course he asked me about the web. He had heard people were making crazy money online. He had heard that you could outsource to India to ghost write a book for you, then outsource someone to write your ads and run your operations and send you a check once a month. He heard it only took a couple of hours a week.
I was tempted to run the scene from Vegas Vacation with Chevy Chase and the little guy from Princess Bride on him. “You give me ten grand, we’ll go out back, I’ll kick you in the nuts, and you’ll say thanks.” I’ve been to a few internet marketing conferences like that, how about you?
The entire discussion, while mildly entertaining was frankly, terrifying. How can there still be middle-aged guys running around as if it’s still the shiny happy days where the stock market and house prices went only up and jobs were plentiful?
I’ve been making money online since 1994. I’ve ridden out the dark days of the late nineties where everything was theoretical, the Dotcom Bust of 2000, the web 2.0 revolution of the past 5 or 6 years, and now the impending Second Internet Bust. I cobbled together for you 12 predictions for next year based on my observations and belief of what’s really going on out there.
1. The Facebook Fade
Find me 10 guys that are making ads on Facebook convert profitably. No, Shoemoney doesn’t count. He’s a genius. Find the solopreneur that’s cracked Facebook and I’ll show you a guy selling stuff that he won’t be selling a year from now. Ringtones? Acai skinny pills? Seriously, that’s your long term viable business model?
I was in a conference room about 8 months ago with an angel investor that plays in the invite-only dark pools with other stock holders in Facebook. I asked him if he was worried about the MySpace phenomenon repeating with Facebook. He had never heard of Myspace. He had money in a game that he didn’t understand. I was gobsmacked. This guy was driving towards the edge of the Grand Canyon in a convertible Mustang with Van Halen cranking.
I predict by the end of 2012 Facebook will begin to twitch and smell a bit like Blockbuster Video did in 2006.
Do you make any money with Facebook, or is it just a schnozzle of crapola?
2. The Impending Google – Apple War
Apple loves to give clues if we just pay attention. As network television collapses, will the model slowly become private, paid subscription services? Apple does something elegant, Google copies clumsily. Google Books, Google Music, Google Movies. Isn’t their core competency serving ads?
When I turn on my AppleTV, Vimeo appears. It’s better than YouTube. No ads. Better quality. Less videos of dogs farting. Apple is giving us a big clue to the future of online video. If you look closely you see subscriptions to watch baseball, football and hockey. The battle over TV will be waged with battle-axe and crossbow.
In 2012 I predict things get heated between the two behemoths, with small skirmishes as a prelude to all-out war.
3. Massive Deflationary Disruptions Accelerate
Music is pricing itself at near zero. An artist gets paid 75 cents from iTunes on a download, and yet has to endure 3500 streams on Pandora or Spotify for the same meagre pennies. My 24-year-old niece’s boyfriend stared in horror when I asked for an iTunes gift card for Christmas. He whispered to her, “does he need help learning how to use a torrent?”
Movies, music, TV, and publishing are all upside down. But so is accounting, payroll, book-keeping and graphic design. The popularity of micro-outsourcing sites like Fiverr.com continue to accelerate. The outsourcing of projects will continue to flow to the lowest possible price point that still gets the job done. Helicopter Ben can print greenbacks as fast as he wants, I still won’t pay more than $5 for a 9 hub link wheel for SEO.
4. Geo Arbitrage Accelerates
Tim Ferriss fan boys who sold all their stuff and grabbed a bag with 50 things and headed overseas a few years ago look like geniuses. While their domestic counterparts get sprayed in the face with orange food products and beaten with billy clubs, the smart ones are sitting on a beach with their Macbook Airs earning in dollars, pounds and euros and eating out in pesos and dinars and whatever the heck they spend doing Ashtanga in MySore India.
With most western democracies struggling with unemployment, corruption, fascism, bankruptcy and social chaos, small towns in emerging markets look like smart choices for extended working holidays in 2012.
If you are smart, and willing to travel, the world is your playground.
5. People Will Buy Solutions to Problems
My in-laws live in Greece. My father-in-law has had a backyard garden for 52 years. Guess how many of the nephews that live in Athens have gardens? Zero. It’s not cool. The youth wanted to forget the hard days after fascism fell after the war. Getting dirty was part of that. Olives rot on the trees because no one will pick them.
Now that Greece is bankrupt and the nephews are paying tax for the first time since Socrates wore a toga, gardening is entering the discussion again. Except they don’t know how.
Enter an e-book based on relevant keyword analysis. How To Build A Raised Garden Bed. My wife is building raised garden beds in our backyard. So will tens of thousands of people in 2012. Gardening will be very popular in 2012.
People will buy solutions to real problems online this year. Videos showing how to fix things, do home repairs, car repairs, and tips on saving money will all be hot.
6. A 500 Year Old Career Model
When Leonardo Da Vinci was painting and sculpting and inventing, he didn’t cash royalty checks from a publisher or from his rich parents. He had a Benefactor. In the old days, rich people would personally sponsor artists. Apprentices would learn shipbuilding and barrel making and fishing net weaving from masters as well as painting and music. They would work for room and board learning a craft, then head out into the big bad world to make a living.
With the university student debt pyramid scam unraveling, smart young people will begin to seek out internet marketing masters to apprentice with. Paid coaching and tuition models will adapt accordingly. There are already informal campuses in Bali, Thailand and Philippines experimenting with this model.
I have three 20-somethings that I have adopted as apprentices for 10% of anything they make for 10 years. I trade my experience in leveraged blocks of time for future royalties. It’s a win-win for both parties.
7. Obesity Will Still Be A Hot Market
This is a no brainer. It’s a huge playground (no pun intended). The winners will be those that advertise locally and combine service businesses like menu planning and coaching with the latest hot workout. Over half of everyone that lives within 100 miles of you is overweight or obese. Over 90% have failed at a diet. They need hand-holding and encouragement.
8. Seniors Will Be A Hot Market
Seniors are either broke and want stuff done for them, or have money and want stuff done for them. Every 8 seconds someone turns 60 in North America. What do you think this means for driving on roads in the next decade? Think local, think service business. The silver-haired generation is more web savvy than you or I think.
9. Translating E-books in Amazon Will Be A Hot Market
If you or a partner have language and translation skills, then you have a recipe to print money. Amazon has operational stores in German, French, Italian and Spanish, with more to come. What about Asia? I personally am working on this in a big way in 2012. I’m constantly looking to joint venture with partners to get my books to a wider audience. My partners translate and sell for the lion’s share of the royalties. I’m not greedy.
10. Google Redefines Spam
Google’s tolerance for spam is approaching zero. Their patience for spammy niches is shrinking faster than Obama’s approval rating. Goodbye business opportunity marketers, pharma, “Pron”, gambling, and duplicate content. So long thin affiliates, and fluffy article sites. I have seen guys selling bizops with 6-figure monthly purchases of Adwords getting kicked out like a card counter in Vegas. Can your business survive without Google? It’s a great planning exercise and an excellent way to give yourself nightmares.
11. Big or Small. You Choose. The Middle Ground is a Killing Field.
Go big or go home when it comes to your start-up. Scale fast for a takeover play, or stay small. The supply of dumb investors with buckets of cash will vanish this year. When big names like Wikipedia and Twitter are whispered about nervously, you know that a high burn rate is not a good idea. I predict that a major house hold Web 2.0 name will sink by the end of 2012 beneath the waves, shocking many.
12. People With Good Credit Will Be Highly Desirable
Smart companies are building in-house lists of their best customers and are treating them well. Amazon Prime is an example. How many million customers does Amazon have a relationship with that can order with a single click? How about Apple? I bought an app yesterday with 2 clicks and never even thought about the $1.99. Over 100 million Americans have bad credit. But 50 million Americans have wonderful credit. Who do you think smart companies are searching for?
I’m still perplexed about my pal Bradley. He needs to make $150,000 a year within 6 months and has zero internet experience.
What would you tell him to do if he was YOUR friend?
David Ledoux is the author of half a dozen books including How I Went From Welfare To Millionaire Without Winning The Lottery. He coaches entrepreneurs, owns several businesses and writes a witty and irreverent blog at http://davidledoux.com. His newest book, 10 Quick & Easy Strategies For Successful Living is available for free at his website.
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