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Affiliate Marketing - The Gold Mine Comparison (11)

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This is from the last slide from my presentation which I gave in Dubai at the AdSimilis meetup - many thought it was an interesting comparison so I thought I'd expand on it and share it here.

I like to think of finding a profitable vertical in affiliate marketing as a gold mine that you've discovered. Now, when you find a gold mine you’d want to extract max value from it while keeping it a secret, right?

• Don’t throw a stick of dynamite in it to make a quick buck, it’ll collapse and people will notice.
  
• Think big, get some heavy machinery and hire some people to help you extract that gold in a sustainable yet scalable and systematic fashion.
  
• Automate it; use tools to make your life easier, do you want to go at it with a pickaxe alone or you do you want the heavy machinery to come in operated by you and the people you hire?
  
• Spend all of your time on what you do best, mining that gold. In economic terms your time is an opportunity cost! Don’t waste it servicing the mining equipment. i.e. Don’t do bullshit like managing your own servers.
  
• Be smart about the tools you choose, don’t get the cheaper antiquated tools which will cause you to lose some of the gold during the extraction process (click-loss). Also notice how gold-mines run around the clock, day and night, even an hour of downtime can be catastrophic.
  
• Don’t think this gold mine will be around forever, someone might also discover it, or you may just mine the shit out of it and it’ll be gone. Once you automate extraction start to look for another vein, another vertical.
  
• Always negotiate! Imagine you've discovered your AM gold mine in Brazil and you need to lease the right to mine there. Margins might be low and cashflow weak, always negotiate your terms aiming for that postpay.
  
• The gold you work hard to mine, be smart about selling it! Dictate the price you get for it (your payouts) don’t settle for street. Increase your margins and use that profit to scale further.
  
• To sum up, think and act long-term - If you really want to stay in the AM business, you’ll simply have too.

If you're interested in the whole presentation of how and why I moved from AM to running a scalable business you can check it out here with notes: http://bit.ly/1t6fDFQ

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Good analogy Robert, thanks for sharing.

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Good stuff.

The industry overall is definitely evolving and maturing away from the stereotypical image of "lone wolf" affiliates working by themselves to affiliates forming global teams and companies and putting into place cutting edge management practices, processes and technologies.

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Your presentation was cool in dubai bro. See you in london

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thanks for sharing the presentation.

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My pleasure! I very much enjoy helping affiliates move to the next level, as I firmly believe most of you have everything that it takes to start a real business. If you have any questions feel free to ask here.

Furthermore, for those of you seriously interested in starting your own company, I gave a presentation last weekend at a TechCrunch event about going from being a Wantrepreneur to becoming an Entrepreneur. The legend himself, Angry Russian, saw it live and said it was quite good

I have the presentation publicly available here with my notes, and I should have a link to the video soon:

Wantrepreneur to Entrepreneur

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Thanks for these, lots of excellent points in them, particularly the Wantrepreneur one resonate a lot....classic the spreadsheet with domains, sure I have one somewhere too..

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thanks for this, really insightful and motivating to getting my company's shit in order and bring out the 'heavy machinery' so-to-speak

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Great analogy and holds very true to the affiliate marketers that take a new path to find their own campaign.. instead of copying whats working.

A lot of the campaigns I've found over the years I've been able to milk for 6months - 18months due to a lot of the reasons you mentioned.

If i had to choose a few top ones:
- Hustle hard testing 100's of new sources/offers/niches
- Keep my mouth shut when i find something decent
- Negotiate deals
- Stay away from the most popular verticals (sometimes)

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Thanks for this share! Much appreciated and looking forward for the video!

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I've always loved the Gold Mine analogy to affiliate/information marketing, because it is very relevant. A few months ago I saw a show that aired originally on the Discovery Channel called Gold Fever, that was all about how the California Gold Rush got started, and how one man, Samuel Brannan got very, very rich (and turned San Francisco from a small town of 500 to a major city) without mining one speck of gold himself.

When he heard gold had been discovered at Sutter's Mill, instead of rushing own to mine some for himself, and keep it quiet, he asked himself the question that literally changed the world: "How can I get other people to mine the gold FOR me and bring it ALL to me?" So, he bought up all the mining tools for 1,000 miles around, printed an article in the small newspaper he owned that said "GOLD Found In CA" then ran out into the street waving a small vial of gold and yelling madly that gold had been found. The gold rush was on, and Samuel Brannan became the first millionaire in the American west, all because he asked himself that one, simple, entrepreneurial question. Instead of mining gold, he sold mining tools to gold miners, and controlled virtually every other transaction in San Francisco (eventually getting into the Brothel Business).

Definitely worth reading up on, and the evidence of his lasting legacy is this: in September of this year (2014), the San Francisco 49er's opened the brand new Levi's stadium, a billion and a half dollar arena, and the direct result of Samuel Brannan thinking strategically instead of rushing out to mine gold with the masses.

Oh, he was also one of the first men to get a California divorce and give his wife half (perhaps she was the smarter gold miner?), but that's a whole different story....

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