Kevin Espiritu

Hey, I'm Kevin. I write about building online and offline businesses that you can be proud of owning. I previously ran marketing and growth at Book in a Box, where we went from $200k in revenue to $4mm+ in the 18 months I was there.

Webs of Fragility

Back again.

As promised in my article on copycats, I won’t be talking about in-depth strategies for any specific business that I own. And that’s not a ranty piece, BTW. It’s something I wrote almost to my younger self, who was incapable of thinking on his own and constantly looked to the external for “what to do” and “how to do it.”

Today we’re talking about the fragility of the authority website business model, and what to do about it. But these principles are universal, and can be applied both to other business models as well as to your own life.

The two sources of fragility in an authority website are:

  1. Traffic
  2. Revenue

If you have a basic understanding of the Pareto Principle, you’ll know that one source will dominate both 1 and 2 above. That is, most of your traffic will come from one source, and most of your revenue will come from one stream.

If you allow this to happen, you’ve basically put yourself back in the scenario that someone working a classic 9-5 job lives in 24/7.

One income stream, one source of opportunity.

Not good.

The solution is to ‘explode’ these out into their constituent parts and look at which you can strengthen.

Take traffic, for example. It might look something like this:

  1. Organic traffic
  2. Social
  3. Referral
  4. Direct

Organic traffic is the end-all-be-all king of traffic. No questions asked. Consider it the permaculture version of traffic. You put in work upfront to set it up, and it pays you for a lifetime.

But, that doesn’t mean it’s OK for it to be 80%+ of your traffic. That’s fragile. One weird issue with your SEO and you’re in dire straits.

The solution is simple: use your strongest sources to develop your weakest sources.

For example:

  1. You use your organic traffic to build social channels, say Pinterest.
  2. Within the Pinterest ecosystem, this increased growth leads to increased reach.
  3. The increased reach pays you back by sending more traffic back to your site.
  4. You’ve increased the % social traffic you get and decreased the % organic traffic you get.
  5. You are in a more balanced state of traffic sources and therefore less fragile to major losses.

The same thing applies to revenue, and I would argue it’s exponentially more important.

Most authority sites run on this model, in this order:

  1. Affiliate income
  2. Advertising income
  3. Product / service sales
  4. Brand partnerships

If you’re a “blogger” first, it probably looks like this:

  1. Advertising income
  2. Brand partnerships
  3. Product / service sales
  4. Affiliate income

Either way, #1 will make up 50%+ of most people’s revenue. Not a bad thing, but also not good, ESPECIALLY if #1 is advertising or affiliate income.

Why?

Because you do not have ultimate control over those sources.

One change in an affiliate program’s commission tiers can cut income by five figures a month.

One slow month of traffic means a drastic swing in your monthly income.

The solution is similar to the traffic solution. Use the revenue you generate from your dominant streams to either build new streams, or further develop existing streams.

This could mean:

  1. Acquiring other websites
  2. Bolting on an ecommerce arm to the business
  3. Developing your own products and services
  4. Creating a media kit and brand sponsorship package
  5. Writing a book
  6. Being on TV
  7. Doing speaking

The list really is endless, and the permutations of ways you can combine all of these things are even more endless.

In short, if you do not use the assets (traffic and revenue) you’ve worked so hard to gain to protect and build a robust future for your business, you’re delusional.

Everything can and will come to an end at some point. Business models crumble due to changing times, and times are changing faster than they ever have in human history.

Don’t be dumb.