It all started when Leo told Lis that there’s no such thing as passive income.
On the one hand, we have Leo with a fairly woolly view of what passive means, an unresearched view on what advertising revenue is, and a slightly silly conclusion that slightly passive is the way to go. Followed up by a non-existent debate with his mates (or Twitter alter-egos).
On the other hand, we have Lis, with a clear view of what passive means to her, concrete examples of what advertising revenues, and other passive income streams really mean, and a clear (but wrong) conclusion about the type of people who suit passive income. Followed up by a lively and interesting debate focusing mainly on what passive income means to different people.
(The debates on both sites may have moved on by the time you read this)
Now, it’s clear to me that there are a whole range of degrees of passiveness (passivity?). There’s the Lis strategy: build a site and leave it to earn through advertising revenue from one-time visitors (though I suspect she does a lot more than that). There’s the Leo strategy: build and market a brand with income streams from returning visitors. Other marketeers speak of membership building, product promotion, networking and other strategies. There’s an active strategy of working online for direct income, but arranging your working hours to suit yourself. But my approach encompasses all these, and more.
Follow your purpose, then find ways to make money.
On this web business management site, I show you how to define the purpose of your enterprise, plan resources and rewards, build your business, and appreciate the returns. The strategies are entirely up to you – choose your own level of passivity.
The main problem, as I’ve recently discussed, is that I’m so busy following my other passions, that this project is not getting the attention it deserves. However, you’ll be pleased to learn that I will be explaining the techniques I’m refining to build solid income streams for myself and a client. However, it will take a few months to free-up time for this project.
In the meantime, I’d urge you to think deeply about the purpose of your web business. Clearly define the time and other resources available to you, and the level of rewards you expect. These plans will show you how passive you can be in your approach to income building. If your purpose is to build a brand, follow Leo – but also look here to give your plans the focused definition they need. If your purpose is to tap a well of fluctuating market opportunities, follow Lis, but also look for more opportunities and advice here.
Remember, unless someone hands it to you on a plate, you must take action to build passive income streams. Those income streams will be richer, and serve you better, if you plan that action properly, in the light of your passion and your purpose.
Hi – thanks for the link – but a small point of clarification – I don’t just build sites and leave them alone – I build them and promote them heavily to make sure they rank in the search engines. My enterprises have always had a simple purpose – to make me enough money to enjoy time on the beach with the gin!
Just as I suspected (“though I suspect she does a lot more than that”).
It’s a noble purpose, and something I could easily fall in love with, though wine rather than gin for me. For some reason, beach life has lost it’s allure for me. But Prosecco on the patio works well, and we can laugh at the lemmings returning wearily from their 3 hour daily commute.
Hey Keith,
If I appeared “wooly” in my explanation about passive income, then perhaps I didn’t explain it well enough.
When people imply “passive income online” what they are really saying is “passive income online by ranking in search.” There is nothing wrong with that. But it is what it is. You are making money relying (or hoping) that the current search algorithms don’t change and other competitors don’t enter your market so you can continue to rank in search.
I make money “passively” from search engine rankings, as well. I call it starbucks money.
However, the problem is that when your “passive income” is largely reliant on a single third party (in this case Google), without trying other marketing methods to capture and engage your traffic, you are walking a fine line.
Call search rankings what they are. They are just another form of advertising. Businesses, unlike individuals, understand and take it for what it is. You shouldn’t build an entire plan online that will succeed or fail based on the whim’s of a third party. It’s just not a good long term business plan.
I have been doing this for a long time. I have seen what SE adjustments can do to people who have grown dependent on it for income. That’s all I am saying.
I have heard arguments for passive income that suggest because someone has consistently ranked for a term for three years passively (without doing anything at all), it works and I would argue that the reason why that is the case is because there isn’t any competition. There are no marketers in that space yet. When that day comes, expect to work.
Passive Income, to me, is a social security check or government pension. It isn’t relying on algorithms to stay where they are at for the years to come. It isn’t relying on the fact that no other marketer will enter and compete in that space.
Is there a such thing as passive income? Not in business. Not for things that actually matter. Re-curring income is close but even that requires a bit of work. Newsletters? Nope. You still have to engage. Dropshipping? Well, work is minimal if you have the marketing campaign up.
Now, I have a lot of respect with Lis and her clan. And I think she has a lot of respect for me. Please don’t take my criticism too literally as a non-endorsement of her.
We simply come from different schools of thought. She runs her business ranking in search and does well at it. She has been groomed by the Keyword Academy and Grizzly (who I respect as well) and plays largely in search.
I originally came from forum marketing 10+ years ago and have since moved into other things, which incidentally also include search (which is why we are friends). I consult for businesses regarding online marketing plans that go far and beyond ranking in search….long term. So our vision for marketing isn’t necessarily a right or wrong thing…it is just a different perspective.
As far as the non-debate on Twitter, well, I am barely on twitter and many who debate with me do so in emails. My vanity blog is just that…a way for me to sort through my own views.
I appreciate your spot on the debate though.
Ah Leo, I can’t thank you enough for responding here. I used a little too much license when I painted you the bad guy, and thought long and hard before hitting the publish button (you should have seen the first draft).
I agree with you on the weakness of relying solely on Google. I’ve tried building sites that rely solely on advertising revenue from one-off visitors. It works, but for me it is rather boring, unless the sites give me some professional satisfaction.
I’ve seen at first hand what happens when you get dropped from the search engines. Advertising revenue drops to zero. Lis’s answer is diversification, and this is an excellent business strategy.
In fact, you also promote diversification, but that is diverse income streams on a single site.
Getting back to the passive income debate, I mentioned that you have to take action to earn passive income. Therefore, whichever way you look at it, we are all working for our dollars.
In the multi-site advertising targeted empire, Lis works at maintaining the empire. Growing into new areas, and reworking, or abandoning those that are failing.
In the single, market dominating site, you are working at all those items you list in your Internet Marketing Musings, to build a recurring customer base. It is a strategy nicely promoted by Seth Godin in his work on tribes.
I’m working on a small number of tribes, because it suits my purpose.
The good part, is we only have to work when we want to.
When it boils down to it, there are only 2 things we do as web business builders – publish pages (including, possibly, sourcing products), and market them. Both you and Lis do this, just with different strategies. I agree with you totally when you say “So our vision for marketing isn’t necessarily a right or wrong thing…it is just a different perspective.”
My Twitter jibe was unnecessary, and I apologise. Perhaps I should have read more of your blog before I wrote the above – I’ll rectify that ommission today.