The Unified Theory Of Making Money Online
March 10th, 2010
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What does physics have to do with making money online? Maybe nothing. Maybe everything.
Our scientific understanding has advanced greatly over the centuries. But while our knowledge has brought plenty of complications, in a way it has also made things simpler. We can now explain the workings of the universe with just four fundamental forces:
- Gravity
- Electromagnetism
- Strong nuclear force
- Weak nuclear force
The number of fundamental forces has come down over time. For example, electricity, magnetism, chemical bonds, friction, etc., once thought to be separate forces, are now known to just be different aspects of an electromagnetic field.
If we’ve now reduced physics to four fundamental forces, might we someday get it down to just one? This is the search for a unified field theory.
Physicists disagree about whether one is possible. There have been proposals for how to combine electromagnetism with the weak force, but incorporating the strong force is problematic, and gravity really throws a wrench in the works.
There have been different unification theories, but so far they’ve all had holes. Maybe there really are four fundamental forces that can’t be put under a bigger umbrella.
Making money online
Much has been written about how to make money online, but when you look at the big picture, what are the principles at work? How many truly different ways are there to make money online? Does it all come down to just one?
People say that to make money online, you need to write for people, not search engines. Well, no, you don’t. Nor do you have to solve an urgent problem, or be authentic, or target a lucrative niche, or any of the other things that people say you have to do.
Yes, these are all good ideas, but each one has plenty of counterexamples. For any “must do” principle, there are success stories from people who violated it.
Why is this? Because there’s not just one way to do things. Here are four fundamental forces, if you will, for making money online:
- Being cool
- Being spammy
- Satisfying a want
- Satisfying a need
Maybe there are more, but these are the ones that came to mind. They appear to be independent, in that while you can certainly combine them, you can also succeed with one while ignoring the others. But are they really independent, or is there a larger force that unifies them?
Let’s first look at them separately.
Being cool
“Cool” here includes likeable, funny, entertaining, etc. People in this category make money by leveraging their personality.
Johnny B. Truant went from making practically nothing online to five figures a month in nine months, once he started being cool. Officially, he sets up websites and such. I’m sure he’s good at it, but the reason people want to buy from him isn’t because he’s better at websites than everyone else. He gets fans because he swears, he tells clients he doesn’t care if they work with him, he blogs about stuff that has nothing to do with what he sells (like why Christmas is gay), and he confesses to crimes he didn’t commit. In short, because he’s cool.
Gary Vaynerchuk is the face behind another personality-driven business. Today he has the whole “crush it” and branding expert thing, but he didn’t have that when everyone first started talking about him. I watched his videos trying to see what he was all about, and he was very entertaining, but I couldn’t for the life of me figure out what he actually does (other than screaming about wine). And then I realized that was it – screaming about wine; i.e., being cool.
Stuff White People Like became an instant hit on humor value alone. Sometimes sites like this get a lot of traffic that can’t be monetized, but Christian Lander reportedly received a $300,000 advance for his book based on the blog.
Being spammy
I don’t necessarily mean actual spam, or doing anything unethical or illegal. I’m just talking about focusing on tactics for converting visitors into cash as opposed to providing value.
The guy known as Grizzly has a number of sites, but I only know one of them. And he was nice enough to spill his money-making secrets for this site in How to Increase Your AdSense CTR.
His blog is about making money online, and filled with content containing relevant keywords. It happens to be very good content, but that doesn’t matter, because he doesn’t make his money from regular readers. He just needs relevant content so Google will send him search traffic.
He deliberately went with a blogspot blog because it’s ugly. When visitors see this ugly blog, they want to get out of there, and 7% of them leave by clicking the huge ad in their face (at the very top, above the post title). I’d guess that most of his other sites use this same approach, but minus the good content.
(Actually, I just checked out his site for the first time in a long while. It now looks much less ugly, and the big AdSense ad is gone. Not sure what happened.)
Satisfying a want
This is the category for professional problem solvers: copywriters, blog consultants, marketing consultants, and so forth. They don’t create stuff first and then try to find people who want to buy it. They start by identifying their ideal customer and getting to know them.
When they understand the problem that is keeping their ideal customer up at night, they’re in a position to give the customer exactly what they want. They show this by listening, establishing trust, telling stories, highlighting benefits over features, giving a call to action, etc.
Satisfying a need
You’ll have a hard time selling something to someone who truly doesn’t want it. However, you don’t need to sell to their wants per se.
Steve Pavlina has done quite well by ignoring what his readers want, and just telling them what they need to hear. He positions himself as an expert with advice to give, a position that would only be weakened by asking for permission. He makes enemies by calling his readers Nazis for eating eggs or selfish for being underpaid teachers, but he also makes tens of thousands of dollars a month.
Is there a unified theory of making money online?
In practice, people don’t necessarily restrict themselves to just one of these. Naomi Dunford is cool in addition to being a problem solver, Grizzly quite possibly parlayed his reputation for AdSense success into an additional income stream, Steve Pavlina asked his workshop attendees for detailed feedback so he could improve, etc.
Still, these methods appear to be different. Is there some higher thing that ties them all together, or are they really independent? Albert Einstein failed to unlock all the secrets of the universe, leaving questions that may never be answered. But maybe we can unlock the secrets of making money online, which would be almost as good.
Photo by Victorrjr
March 10th, 2010 at 4:08 am
Well, as ridiculous as this might sound, all four of these are just different ways of doing only one thing: selling something. Maybe we could argue it doesn’t really matter what you sell, how you sell it, who you sell it to, why you sell it, why they buy it, how they buy it, or what they do with it.
One of the reasons why some people don’t make money online is that they’re simply not selling anything. They either have nothing to sell or they do but they’re not selling it.
Even with advertising, you’re selling. You’re selling clicks or impressions or actions. Or you could say you’re selling your audience to the advertiser. You’re still selling something to someone.
So perhaps the transaction is the unifying force, animated by the attraction of opposites (buyer and seller).
It’s a thought, anyway.
March 10th, 2010 at 7:53 am
Awesome post, Hunter! Aside from making me want to dust off the old TI and play with physics again, it reminded me that there are many ways to get to that enticing goal of making a living online. I bought lots of domains last year such as UnnecessaryCrap, then thought – how on earth would I monetize that? Well, a huge book advance would be one way!
March 10th, 2010 at 12:34 pm
Cool post. Im thinking Tucker Max is another guy who made it ‘being cool’ lol
March 10th, 2010 at 12:45 pm
Well, to me it sounds like there are basically three activities that make people money – selling stuff, selling leads (who might buy stuff) and recommending people stuff (so they might, based on your recommendation, buy stuff).
I think a lot of the “cool” and bigger bloggers have reputations and audiences that make it easy to monetize by any of the above methods. Leo for example can sell his own ebooks and his audience will buy them, he can sell ads and has enough page views that it’s worth his time, and recently he basically just linked to 5 ebooks and told his audiences here I like these, pick one and buy it. I’m sure that blog post made him more money than any other this month.
So, I agree with Michael – you’re either selling people stuff, or you’re sending the people elsewhere to buy stuff
March 10th, 2010 at 2:28 pm
There is only one way to make money, online and offline: Business.
From there, there are two approaches: Make money from your own business or make money off of other people’s business (such as ads, affiliates, money lenders, etc)
The latter is a way to take a cut on other businesses. Naturally, the cut has to be smaller than the whole profit. So the latter has narrower profit, requiring larger volume to make substantial money. But it looks easier.
Building your own business is a lot of work, but when it works, it works well.
March 10th, 2010 at 2:39 pm
Interesting thoughts Hunter. It seems to me that a lot of these forces are just remnants of how to make money off-line.
Just as the universe is an astonishingly big place, so is the internet. Over time, we might see more interesting, more effective forces driving the flow of money as we learn to use the power of communication and connection on the web. Could there be some mysterious, powerful ‘dark matter’ that could revolutionise the way we transform attention into cash?
March 11th, 2010 at 2:35 am
@ Michael, agreed, selling is at the heart of making money online (or off), though I see that as just a restatement of the original problem. That is, if making money online = selling, then what’s the unified theory of selling?
I find it interesting when people say they want to make money without selling. It’s fine not to want to make unsolicited cold calls, if that’s what they think selling is, but nobody ever gives you money unless some form of selling has occurred.
@ Christie, LOL at UnnecessaryCrap.com! Yes, book deals can make money out of just about anything, though getting a book deal for a nontraditional topic generally requires getting tons of traffic first.
@ Vinay, yeah, Tucker Max is a great example of that!
@ Sid, I definitely think a lot has to do with reputation. Two bloggers might do the same thing, and one person might get results while the other doesn’t. The difference is that one has built up a reputation with all his previous work, so his audience is easier to convince by that point. It’s easy to overlook this.
@ Akemi, agreed, everything is a business. Different types, and some more effective than others, but they’re all businesses.
@ Beniaminus, yes, making money online and off aren’t all that different, when you really get down to it. I’m not sure what the dark matter will be, though.
March 12th, 2010 at 7:33 pm
Thanks for the fun article Hunter! I think that the biggest thing that all of these people have done to make money online is to do it differently. Don’t just copy, but really bring your own personality into it.
There is also the feeling that they do it without apologizing. Steve Pavlina really makes me think of this in his pursuit of his own optimal life style. The need he fills through doing so is really just providing a model for people. He’s actively practicing what he preaches, and people are attracted to that level of authenticity.
March 14th, 2010 at 3:08 pm
That’s a great picture up at the top Hunter, and I love how you stitched together some scientific facts into this one. I’m pretty new in the online sphere, but everything I’ve read seems to boil down to one pseudo-mathematical formula for doing well online:
provide good value = receive good money
March 13th, 2011 at 12:35 pm
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