In the world of business, lots of figures are thrown around. There’s a whole school of thought in the world of investing that only looks at a company’s financial statements and decides whether or not to buy their stock based on those numbers. The most important factor of all, imho, is growth. Growth photo by Artful Life
1. Two brothers lived in a city once. The first married rich, and got a dowry of $1M. The second worked so that he quickly saw his annual income growing by $100,000 annually. The former gentleman, not having much idea of the difficulty in building up an income, began spending the fortune without having an income.
Two other brothers lived in another city. The older inherited the family business, which took in $100,000 annually. His brother, envious, built up his own competing business, and scaled so that his enterprise grew at a rate of $100,000 annually.
Two more brothers lived in a third city. Each built up a business. The older brother’s grew at a rate of $1M annually, and the younger’s grew at a rate of $2M annually.
Which brother was better off, in either situation?
In the first situation, the older brother ends up being in debt by $100K more each year, starting in year 11.
In the second situation, the younger brother’s business becomes increasingly successful while his brother stagnates. Eventually, the younger brother’s business begins chipping away at the older brother’s market share, due to having a bigger brand, broader selection, cheaper prices … you name it.
In the third situation, despite the older brother’s business showing positive growth, he was not keeping pace with the younger brother’s efforts. In the Fortune Bigger Brothers rankings, the older brother was slipping slowly back in the rankings behind his brother. Eventually, he might even end up in situation 2.
There are a few takeaways.
- First, if you are just sitting on your money, you’re actually showing negative growth. In the bigger economic picture, this is known as inflation. In the world of independent webmasters, this is neglecting a site in the name of a so-called ‘passive income’ that is really just a short-sighted dwindling away of assets. This is buying a site and then omitting to flip the site.
- Second, it’s merely a matter of time before others overtake your brand, top you in the SERPs, replicate or even steal your link sources.SEO books existed before Aaron Wall wrote his. Frederick Marckini, CEO of iProspect, wrote one of the earliest ones. How many of you are aware of that? How many of you have bought the book, or would buy it today from a used book seller?
- Finally, in the general economy, if your revenue isn’t growing the fastest, you face diminishing purchasing power. In turn, this can lead to others overtaking you, as in 2, above. This carries through to your industry.
Recently, Aaron and Giovanna Wall launched PPC Blog, featuring such quality content as Why Google AdWords Site Targeting Usually Fails. Their focus has been on growing distribution (see also Lee’s excellent piece on developing your network), and here’s how you can tell.
1) They paid a premium for the domain name PPCBlog.com, which allows them to brand the site as PPC Blog, and thus get lots of links featuring that phrase. Between that, and the fact (per Matt Cutts) that Google favours exact match domains, they should easily rank for PPC blog. That phrase will convert visitors into RSS subscribers.
2) The site is unmonetized, meaning that it’s going to attract many more links than if it were. It’s a short term loss (e.g. they could put on AdSense, affiliate ads, or SEO Book banners) of revenue traded off for a boost in links and traffic that will turn into additional distribution. They’re growing readership first and foremost.
3) Obvious, prominent links from SEO Book aimed at sharing the readership over.
If you liked this post on the economics of growth and how to launch a site for growth, get my rss feed.Case Studies, Domains, Ideas, People, ppc