I recently reviewed 1000+ internet businesses. About 500 of them make $1-5M/ year of profits and 25 of them make $10M+/year of profits.
And I distilled a playbook of how to build your business to be like the top 0.01% of these businesses.
This might be the most important post I've written in a while...
1) Create a content machine
A content machine is your own personal media arm. Your own version of Jeff Bezos’ acquisition of The Washington Post.
To fuel your content machine, you need to feed it interesting stories.
A content machine only works when people share the stories you feed it.
This is what makes a content machine fire on all cylinders:
1) Pick an underserved niche
2) Find a format that stands out and is shareable in your niche
3) Wrap format in an entertaining way
4) Create content system to scale content production
5) Automate to create content daily
Most people say you should be on every platform. I don’t agree.
You really need to just pick 1 format, 1 major platform.
They all have hundreds of millions if not billions of active users. That’s more customers
Note: when you’re creating content. Try "newsjacking". See below how to do it.
2. Create a referral machine
If a content machine is using your audience to generate more audience, a referral machine is using your customers to generate more customers.
I’m astonished to see how many businesses don’t have a tight referral engine. Basically, you give up gross margin direct to your customers in exchange for more customers. Instead of margin to Zuckerberg, it's margin to your customers. Seems like a fair trade.
Think of your favorite creator saying "use promocode xyz" to get 10% off. This is affiliate marketing at its core.
We think of Adobe ($279B market cap) as a creative company. They probably get customers via beautiful ad campaigns and product-led growth.
It might surprise you that they have one of the most killer affiliate programs in the game. It surprised me.
The other day they announced increasing their affiliate cut from 85% to 100% (not forever of course). They're doubling down.
So why do we think Adobe is betting big on affiliate marketing to create a referral machine?
Customers that come from referrals have a 37% higher retention rate (source: Harvard Business Review).
Not only will you get more customers, you will get better customers.
Prediction: software business will be upping their affiliate cuts over the next 18 months.
3. Create an events machine
I used to think this was a waste of time. I was wrong, it's a secret weapon.
Events are a way to bring people together and an excuse for you to give them massive value in exchange for their email address or phone number.
The beauty? On the internet, the cost of hosting most events is free.
It requires a Luma for virtual events, Partiful for IRL events.
Your seeing more and more businesses (b2c or b2b) add events to drive awareness and more importantly, to earn trust.
When you're the host of the party, good things happen. You're at the focal point.
4. Create a recycling machine
The only reason to go on TV nowadays is to get the clip to recycle on social media.
And the reason to get press today, is so you can recycle the press pieces (if they are good) via paid Meta ads.
This is called recycling content.
So, to create a recycle machine you want to be systematically reaching out to journalists to cover what you're up to.
How to do it:
Create a list of journalists who'd likely cover your story. Come up with an interesting spin about you business or product. Put yourself in their shoes. They need something that will drive clicks. DM them on Twitter with a 1 minute or less Loom (a good chunk have DMs open for pitches).
Try this every 6-12 weeks with new "scoops".
So, you get these pieces of content created by trusted third parties (ie: press) and then you boost it with ads and social.
People trust these big outlets more than they do when a stranger sells them something.
The future of marketing is recycling.
5. Create a paid machine
Businesses that rely on paid are built shaky ground. If your cost of acquisition rises 30% (which could easily happen), there goes your margin and there goes your business.
But if you have an offer that's working and you want to supplement with more customers, have a dialed-in paid machine is pure gravy.
I think of it like a vending machine.
Would you pay $1 to get out $2? All day long.
If you can make that work, there isn't enough money in the world that you'd want to pump into that vending machine.
The best internet businesses use paid to supercharge, they don't have paid be in charge.
6. Create a hiring machine
Your business is only as good as your talent. So, how do you attract the brightest?
Well, you’ve got a content machine already. So folks interested in your business will reach out.
But, that’s not good enough.
Seeing who likes your brands posts (or personal brand), and systemizing reaching out to these people.
“I see you already have a job, but wondering if you’d be interested in a conversation with us?”.
The insight here is the people that follow your brand already love your brand already and often make wonderful employees and partners.
Building this outreach muscle builds better teams so you can outcompete in the long term.
And it's another reason why you should build a content machine (to hire).
7. Search machine
The power of Google continues to astonish me. It's boring to do SEO and rank on keywords, but it works.
Some of the best businesses wake up every morning and just have lines of customers because of search. And they don't pay for it. Beautiful.
I think we'll look back at this timeframe and realize how much AI basically put us back to 2005 in terms of search engine opportunities.
Having a search machine and letting that compound is such an advantage. Reddit is a search company. Mailchimp is a search company Your most used websites and apps often have high rankings.
Note: for those looking to scale organic search, I was a customer of BoringMarketing.com who use an AI-assisted approach to getting ranked before I invested. If you're looking for organic visits, you can use them as a partner or learn it yourself via their free course here.Enjoy.
8. Create an innovation machine
The best businesses are constantly doing zero-to-one new bets, not just iterating on the existing product. They are moving to adjacent categories and leveraging systems, technologies, processes and customer base.
The ones that are confident they'll be leaders forever are the ones that get displaced.
This starts with culture. A culture of experimentation and iteration.
Note: if you're a Fortune 500 and businesses with $50M/year in revenue looking to build new digital products that drive revenue and word-of-mouth, reply to this email or get in touch to work with us.
9. Create a community machine
I define a community by what I call the TRIBE framework.
T = Togetherness (are people together?)
R = Rituals (are there rituals that bring people back?)
I = Member's Identity (is there a member identity?
B = Belonging (is there a sense of belonging)
E = Engagement (do they have space to engage with one another)
Basically, you need all those to make a community. An Instagram account isn’t a community, it’s broadcast. If you stop posting, you'll stop getting likes/comments.
Having a private community with your top advocates is worth its weight in gold.
Note: I recommend Skool as a community platform of choice for probably 80% of communities. It comes free with my private membership at Community Empire
To summarize, here are the machines you need to master to build a profit machine
I hope this got your creative juices flowing. I wonder what machine got you most excited.
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Next up, bookmarks I saved this week worth reading
A collection of 1 person businesses making 8-10 figures. I too am obsessed with learning about these. Also, I had no idea Stardew Valley was made by 1 person and generated $300M in revenue. View tweet
"I went 6 months with a fliphone and my productivity and happiness went way up". I kinda want try this, but also don't want to try this. How about you? View tweet
I had no idea that Celsius energy drinks ($13B company) grew by targeting non-energy drinkers and women. Interesting marketing case study. "Something old (proven product - energy drink), something new (untapped segment of market)". View tweet
Companies that started as spreadsheets (ie: Nerdwallet $360M ARR). Your minimum viable product probably can be launched on Airtable. View tweet
”This is the real secret of life: to be completely engaged with what you are doing in the here and now. And instead of calling it work, realize it’s play.” — Alan Watts