What’s the value of expert predictions?
In 2006, psychologist Philip E. Tetlock published an evaluation of forecasts made by 284 experts who are paid to make financial and political predictions in the book, Expert Political Judgment: How Good Is It? How Can We Know?.
The verdict: The experts were less accurate than simple statistical algorithms and ordinary human beings like you and me, and they fared worse than “dart-throwing chimps.”
“There is no reason for supposing that contributors to top journals—distinguished political scientists, area study specialists, economists, and so on—are any better than journalists or attentive readers of the New York Times in ‘reading’ emerging situations,” Tetlock wrote.
At the risk of embarrassing myself like the subjects of Tetlock’s study did, here’s my take on what’s on its way out and what’s emerging in the year ahead. 😉
1. Online Education Is Going Mainstream.
We’re seeing a re-invigoration of excitement around online courses, both as a business model and as a mechanism for transformation.
The last time we did a big enrollment of the Course Builder’s Laboratory in September 2015, we weren’t the only players in the market. Other people were promising to teach how to build and sell online courses, but it wasn’t a crowded landscape by any means. Since then, there’s been a proliferation of people making that claim and promise.
That’s because more and more entrepreneurs are recognizing online courses as a good way of making an income, so they want to cash in and vendors want to teach them how to do it. We saw this as early as late 2015, when we did a survey of online entrepreneurs. Almost 92% of respondents were either interested in online courses or had already created them.
We’ve also seen an explosion in the number of learning management systems, online learning marketplaces, and WordPress plugins available—the tools that online course creators need.
These are all signs that the landscape has gotten much more crowded.
What Goes Up Must Come Down, With a Twist
As with fashion, business trends tend to go in cycles. If you’ve been in the online business industry for a long time, you’ll remember that information products were very hot 7 or so years ago. They were the number one way to make money online. People made fortunes by becoming “infopreneurs.”As with fashion, business trends tend to go in cycles. Click To Tweet
But eventually, interest in infoproducts dropped off, because digital information products simply became too expensive for the results they provided, which tended to be very little. People spent a lot of money on information, and they didn’t get much by way of results in their lives. And so information is on its way out, because it doesn’t create the transformation.
The second coming of digital products is through education through online courses.
The first incarnation of “courses” was in the form of membership sites. Online entrepreneurs liked the idea of membership sites, because of the continuity. Members were going to pay them every month, ad infinitum.
But that turned out to be a fantasy. In real life, whether you’re selling books, courses, or memberships, the customer lifetime value is fixed. Soon, it was clear that most people don’t stick very long in a membership site. The average lifespan was more like three to five months. Eventually, the enthusiasm around this concept of lifetime passive income started to wane.
In addition, it’s harder to sell somebody to a subscription. It’s more difficult to get people to commit to a monthly recurring charge. The end result is that membership sites stopped being hot.
But now they’re making a comeback in the form of “micro-continuity.” That refers to fixed-term memberships with a monthly recurring cost, but for a finite period of time. This is essentially the drip-feeding of a course.
What This Means for You
If you’re thinking about getting into online education, whether to replace a single salaried income or to earn millions of dollars, 2017 is an excellent time to do it. That’s because the market is still reaching a point of maturity. The infrastructure and the training are there, but it’s not yet crowded or saturated. It will be in a few years, and by then it will be more difficult to succeed.If you’re thinking about getting into online education, 2017 is an excellent time to do it.Click To Tweet
2. The Discourse About How to Make Money Online Is Changing
Relevant to the mainstreaming of education is the change in the language, the discourse, around how to make money online. In the beginning, the dialogue was very much about get-rich-quick schemes—tricks and hacks—to sell more stuff fast on the web. Nobody was talking much about what was good for the customer or getting results for your market or audience. It simply wasn’t cool.
But that has changed.
We’ve come to a place where being conscious, being value-driven, and caring about your audience is the cool thing. There is now an awareness that that’s important. Building a business is not sustainable without those things. It’s a very positive movement.Building a business is not sustainable without these things:Click To Tweet
And it continues to evolve. Just two years ago, caring for your audience and caring about the outcomes you deliver for them was a differentiating factor. It was a reason for people to buy from you instead of from your competitor.
But today it has become more of a hygiene factor. Everybody’s doing it—or at least claiming to! Everybody’s saying it, so it won’t make you different anymore. Of course, you still stand to differentiate yourself by actually delivering on that promise. But it’s becoming much more of a minimum requirement to succeed in business than something that distinguishes you.
This is good news for customers, because it’s that level of caring and support that produces the transformation they’re seeking. That’s the level of support required to educate people and not just give them information (read more about the information vs. education paradigms in Teach and Grow Rich.)
Entrepreneurs Need to Take Better Care of Their Prospects and Customers
As the market matures and becomes more sophisticated, entrepreneurs have to better quantify how they care for their customers. They have to show how that caring comes to bear in real life.
For example, in the world of online education and training, we at Mirasee were one of the first—if not the first—to provide real, meaningful coaching support to all our students. All of a sudden, a lot of people are claiming to offer coaching also.
The thing is, not all coaching is true coaching. For some, it may mean that they have a help desk in India who responds to their students’ questions.
Entrepreneurs have to, not just deliver more, but also be able to quantify and communicate that what they’re doing is different from what everybody else is doing. We’re not quite there yet, but we’re fast heading towards the direction of differentiating by way of a mechanism.
That means going beyond the claim that we offer coaching. We also have to quantify what that means in terms of access, calls, support, and even the qualifications of the coach. Eventually, we may get to the point where we offer a unique coaching methodology. That will become increasingly relevant for market differentiation in the coming year.
Providing Real Online Education Is Still Scalable
All this talk of caring for customers, delivering transformation, and providing true online education (as opposed to mere information) raises the question: how practical is it to offer effective coaching and support? Is it feasible for small business owners?
I believe it’s practical and affordable at both small scales and large scales. However, it’s hard at intermediate scales.
If you’re giving a class with up to 30 students and you’re going to coach them yourself, it’s still doable. You can effectively support them through group calls, email support, and even one-on-one calls.
On the other end of the spectrum, if you have 5,000 students, then chances are you will have the resources to map out and build an effective coaching infrastructure.
The challenge is when you have a few hundred students, say, over the course of a year. Your student intake volumes are uneven, so sometimes you have a lot more students, and sometimes you have a lot less. Either way, you still have to staff up an infrastructure of support.
Fortunately, the market hasn’t yet evolved to the point where that’s a problem. People who are just getting into course building can still feasibly figure out how to deliver support in a way that scales gradually as their businesses grow.
But I see that changing over the next few years, as more and more course builders create their courses and scale up to where there’s a baseline of meaningful coaching support. Once we get to that point, it will be harder for new players to enter the market and scale in a meaningful way.
What This Means for You
When you design your products, include a plan for how you will support and care for your customers. And when you promote your products, quantify customer care for your prospects. What support, exactly, can they expect from you? The extent that you care for your customers will differentiate you from your competitors, who will be hard-pressed to keep up with you if they haven’t been paying attention.
3. Online Marketing Is Maturing, For Better and Worse.
The golden age of funnels fed through paid ads has passed. Over the past year, it was hot to build up funnels and run paid traffic to those funnels. Facebook, in particular, was all the rage.
Any paid media has a lifecycle as the platform grows their audience. When a platform is introduced, early birds jump in and start using it. Because not a lot of people are using it yet, the audience hasn’t seen much by way of advertising, and marketers do well. That’s the golden age.
But then more and more people catch on. The market gets more saturated. Costs for click and costs per lead go up. At the same time, the interest and engagement of users who are seeing more and more ads start to drop. It becomes a much more competitive and less effective landscape.
This is where Facebook is heading.
The added challenge is that, as platforms mature, they start optimizing for their best users. These are advertisers who are spending $1,000, even more, per day. Platforms want you to spend hundreds of thousands of dollars a month, and they’ll reward you for doing so. When you do, you’ll get better rates, better ad costs, and better returns. Obviously, people who are just getting started, those who are experimenting with a $1,000 per month ad spend or less, can’t afford to compete.
As ad costs go up and people become more jaded, your conversion goes down. Your payback and break-even period get pushed further out. We’ve seen this happening over the past year. Many people who have been talking about funnels are finding it more and more challenging.
What’s working better is something like my friend Scott Oldford’s SSF method (SSF stands for Sidewalk, Slow, and Fast. You can read more about it here). However, it’s a very elaborate and sophisticated funnel to set up. It’s a great strategy, but it’s out of reach of marketers who don’t have a lot of expertise, marketing savvy, technical ability, or money.
In 2017, paid media will still be a great way to scale your business and diversify where your leads and customers come from. But it’s going to be a much more challenging place for small businesses to get initial traction. It’s not going to be a good place to begin.In 2017, paid media is going to be much more challenging for small businesses to get initial traction.Click To Tweet
This is why….
Organic Audience-Building Is Back in Style
The pendulum is swinging back from paid media towards the direction of free, organic audience-building strategies.
When I was starting out, Google AdWords had just gotten past its golden age, so the shift was towards free strategies. Something similar is happening. All the things I did to build my business—guest posting, social media—are coming back in style.
Free strategies just take a little more time but a little less money. That’s attractive to people who don’t have money. But when ad platforms like Facebook are cheap yet effective, most people don’t want to spend all that time when just a little bit of money can bring great results. And so audience-building has been less popular this past year.
However, since that well is drying up, or rather the water in that well is becoming as expensive as its weight in gold, then we will see a resurgence of free audience-building strategies. I see them coming to full force in 2017.
What This Means for You
Keep working on your pyramid of warm traffic.
Traffic ultimately comes from one of two sources: either a referral by an algorithm (e.g., an ad, a search engine result, etc.), or a referral by a person, either directly or indirectly. Between those, we prefer the referral from a person, both because it can be easier and less expensive to get, and also because it’s a warmer endorsement. We tend to trust people a lot more than we trust algorithms 🙂
And so you begin by being active and engaged in communities where people are already aggregated around the things you want to talk to them about. You build a name for yourself there; you start getting recognized.
When that happens, you start contributing content. If it’s a blog, then you do guest posting. You can do something similar on other platforms, whether it’s a Facebook group, a podcast, or even a YouTube channel.
Once you’ve grown enough of a following by doing that—and it doesn’t have to take more than a few months typically if you do it right—the next step is to raise the bar of your game and look at joint-venture type activities with the owners of those platforms.
In broad strokes, that’s the process we’ve taught that has worked very well and continues to work well. It will have a resurgence in 2017.
Don’t Be Too Cool for the Classics
As much as we enjoy watching out for what new craze is coming, we have to keep our eye on things that never change. They’re the timeless classics that will serve you well, no matter what the current fad is. There are two:
One is the need to always be attentive to what’s changing in the landscape and the environment around you. Reading this post and other similar articles is a good start. But as Tetlock discovered in his study, you can make even better predictions than so-called experts.
So keep listening to your market, keep observing your competitors, and venture to make a few forecasts of your own.
The other thing that never goes out of style is the fundamentals of business: If you pay attention to your market and align what you’re doing with what they want, then you’ll do well.
It’s going to be an exciting year. Overall, some things are getting easier, some things are getting harder, but most things are getting better: better for the market, better for the customers, and better for the people who care about providing a great experience to them.
It’s a good time to be an online entrepreneur.
What are your observations of online business? What changes are you preparing for? Do you agree with my fearless forecast, or is yours vastly different? I’d love to hear them!
Get the critical mass you need to have a sustainable and impactful online business.
Attract Your First 1,000 True Fans!
Get the critical mass you need to have a sustainable and impactful online business.