You hear a lot of stories about people making it big in the world of online marketing. Today, I’m looking forward to sharing my own story about how I made it really big. The great part: I did it all in a nontraditional way, one which has higher leverage than any other in my opinion.
The Typical Online Marketing Fortune
I’m always hearing about online marketing fortunes. It seems like every blog I read is boasting of tremendous profits. Typically, these fortunes are coming via affiliate marketing, blogging, or even starting a small company that takes off. I have a tremendous amount of respect for anyone that makes big money on the Internet. Why? It’s not easy, period. It takes a lot of hard work, hustle, and intelligence. However, I’m here to say that I think the three methods just mentioned are lower leverage these days than the corporate route (the route that produced my success). I’d like to start out by talking about some of the difficulties with affiliate marketing, blogging, and starting your own business. Later, I’ll transition and discuss my personal success and leverage via corporate marketing (in addition to my secret money-making strategy).
Let’s talk about affiliate marketing and blogging. Most obviously, everyone is trying to do it! We live in a global economy, which is currently in a recession. Basically, you have everyone in the world trying to make some extra cash online. What does all of this competition mean? Less upside and thinner margins. Now, let’s think about corporate marketing. The corporate world requires a certain mindset, you’ve got to have that professional swagger and the degrees to back it up. Moreover, while most corporations are global, those with huge budgets want someone on call in their hometown.
Start Your Own Business, Delay Your Payout By 10 Years
Now, let’s quickly talk about starting your own business. I have huge respect for anyone that starts their own business, it’s a lot of work and a very respectable route. However, as I see it, there are only two real small business routes within online marketing. The first is the small affiliate marketing shop. I love this route because it involves zero investors and is pure profit for the owner. I even went this route myself and started IJL Productions. However, affiliate marketing margins are getting thinner and competition is getting more fierce (not only from other affiliate marketers but also from large corporations which have a lot of money to throw at their campaigns because of their high margins).
The second route: Get some funding and start a small business that may get bought out or go public one day. One problem with this route: Investors will dilute your ownership tremendously. My bigger problem with this route: The payoff is WAY in the future. You often have to wait five to ten years to be able to sell. Moreover, when it comes time to sell there are so many restrictions that you may not be able to dump all of your shares at once. You hear about all these Internet millionaires who started their own business, but I wonder how much of their fortune is liquid versus stock that can’t easily be sold. If the money isn’t in the bank (or in very liquid assets), it’s not real in my opinion.
How I Made It Really Big
Now, I’d like to talk about my personal career path and how I made it really big. You may be thinking, Ian’s going to talk all about working your way up the ladder and earning a big salary. Well, that certainly is a great thing and I do highly recommend it, but it’s not the point of today’s post. Today, I’d like to talk about stock options in high growth private (and public) companies.
Invest Like a Venture Capitalist and Get Rich
Who are some of the richest people you know? The richest people I know tend to be venture capitalists. Why? Easy! They got in on the ground floor of amazing companies. They own a diversified portfolio of private companies that later got bought out or go public. They own the leverage because they simply need to pick the right companies and then sit back and profit as the companies take off (leverage in its purest form). So, why not just become a venture capitalist? Again, an easy answer! The only people making money at the VCs are the partners (requires many, many years of tenure) or the folks wealthy enough to invest in the VC funds.
However, there is another way! Why not join the best companies in an online marketing capacity and accumulate stock options? That’s exactly what I did. I own stock in NexTag, QuinStreet, and Inflection.com (the first two had major liquidity events which I’ll discuss below)! When I started, there were haters for sure (and there still are). People were telling me I should discount stock options because they’re rarely worth anything. People told me stories of friends that worked at companies, but their options expired worthless. Well, what these haters didn’t know is that I was co-president of the investment club at Stanford and that I’ve been picking stocks my entire life. I intentionally picked the top companies in Silicon Valley. I intentionally negotiated a large portion of my pay via company stock. And, I intentionally worked hard and received additional stock option grants. Now, I’m one of the rare individuals in the world that owns stock in both NexTag and QuinStreet, two of the largest success stories of recent years.
Stock In NexTag and QuinStreet, PPC Ian’s Secret Leverage
I was one of the earlier employees at NexTag back in 2004. Because of the power of the pay per click career path, I eventually ended up running the entire PPC team and having a lot of clout at the organization. In 2007, 2/3 of NexTag got bought out for $830 million! I profited handsomely, not only from my own work, but through the leverage of everyone working hard at this great company. I also got in early at QuinStreet, well before their finance business took off. Earlier this year, QuinStreet went public and the company is currently valued at nearly $500 million (even in this bad economy). I’m confident that I picked my other companies correctly as well and that there is more great stuff to look forward to!
So there you have it, my leverage strategy: Accumulate stock in privately traded companies and profit like the big VCs. You may be thinking: Couldn’t I do the same thing even outside of PPC? My honest response: Not really! PPC is very well regarded because we’re dealing with huge multi-million dollar budgets. It’s an exclusive club and a skill (on a multi-million dollar level) that is very rare. As such, PPC professionals are truly in the driver’s seat when it comes to choosing the ideal companies and getting as much stock as possible. There’s only so much time in the day. Do you want to accumulate stock and enjoy the leverage of everyone’s hard work (not only your own), or stay internally focused on your own affiliate campaigns or business? My take: The corporate world offers an unparalleled amount of leverage! Want to learn even more PPC career strategies? Make sure to check out my free PPC eBook.
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