There are two main types of business plays:
- Long-term sustainable growth (e.g., a home-services business in a bustling city where it takes 5+ years to gain significant market share)
- Short-term arbitrage (e.g., mask manufacturing combined with skilled media buying during early days of COVID)
Both are viable ways to make money.
But in the creator economy, you can take advantage of both.
The long-term sustainable growth comes from:
- Consistently publishing content
- Building your brand and audience
- Developing solid relationships with other entrepreneurs, partners, and companies
- Iterating on service & product to improve word-of-mouth marketing
And then you can use arbitrage opportunities to boost revenue & marketing:
- New social media platforms (e.g., TikTok’s algorithm vs. Facebook organic which is shit)
- Paid ads economics (like if you were running FB ads in 2012).
- High ticket sales 5 years ago.
If you run an audience-first business, then you shouldn’t see long-term sustainable growth and arbitrage as competing forces. They are complementary UNLESS you engage in destructive arbitrage opportunities that ruin your brand (i.e., scammy messaging that converts well but leave a bad taste in one’s mouth).
You want both.
If you just focus on audience-building over the long-term without taking advantage of any arbitrage, then:
- Your audience-building will be slow because part of arbitrage is figuring out how to “hack” audience building (hacking the algorithm).
- It will take you longer to make money
If you just focus on arbitrage without consistent audience building, then you will forever be in “feast or famine” mode because you won’t have consistent organic lead flow to sell to.
How I’d leverage this if I were building an audience-first business
If I was starting from scratch but had expertise in a certain area (a marketable skill), this is the approach I’d take.
Step 1: 3-month sprint to build initial audience
I wouldn’t focus on anything other than audience-building for the first 90 days. I’d pick one platform, probably Twitter, and go BEAST MODE on it.
I’d connect personally with as many high value followers as I could. Build relationships. Get shoutouts. Start gaining clout and credibility.
Target: 5,000 Twitter followers.
Step 2: Continue building audience + make first sale
Once the initial audience has been built, I’d make a service-based offering. Highly exclusive and limited. Maybe 5-10 people inside a coaching group.
The goal here isn’t to make a ton of $, but rather to validate.
I’d work as hard as possible to overdeliver with these clients so they become ambassadors.
Step 3: Refine offer + seek arbitrage
At this point, I’d refine the offer and make it more scalable.
And then I’d seek arbitrage.
Maybe that arbitrage is just finding a faster/better way to build my Twitter following.
Or maybe it’s a different marketing channel that’s untapped.
I’d then rinse and repeat this step: refining the offer, continuing to consistently build the audience, and experiment with arbitrage to add fuel to the fire.
Obviously this is an oversimplified approach, but I think it’s one of the best ways to build an online business in 2022 and beyond where most people are trying to find arbitrage opportunities or just build an audience with no strategy.
What do you think? Reply to this email and let me know.