Shane Melaugh: Hello, I'm Shane Melaugh.
Hanne Vervaeck: And I'm Hanne Vervaeck.
Shane Melaugh: And today we're going to talk about one of the principles of active growth, which is building your own platform. Let's talk about what that actually means. What does it mean to build your own platform? So for a lot of people this starts by signing up for a hosting account and installing WordPress. That is an example of building your own platform as compared to signing up for some monthly service, where you build your website and you put your content, but it's basically, it's not on your domain, it's not on your host.
This is something we'll come back to, because one of the things that happens if you build your website on such a service, and all of your content is on their servers and so on, well, one of the consequences of that is that when you stop paying them, when you stop paying the monthly fee or whatever, you lose all of your content. So that is an example of not owning your own content and not building your own platform.
So the obvious thing here is, of course it's better to have your business assets, such as your content, to have ownership over those than to have them depend on third parties.
Hanne Vervaeck: I think a good comparison for this is like, imagine when you're building a house, because basically your business is your house, right? And you want to do that on land that you actually own. You don't want to rent land that then can disappear when you're building your house on it.
Shane Melaugh: Yes, exactly. We also need to clarify that when we talk about building your own platform, we are not talking about complete ownership, because you probably know that guy, right? You probably know the guy who's like that, who's basically ... he uses Linux, of course, not Windows or Mac or anything like that. He uses Linux and he has his own server that he build himself, and it's sitting in his garage that is in his house on his land, and he has his own power generator. He can go off the grid, right? And he has his own security system, and everything he uses is open source, and he's built everything himself, right? There's absolutely no thing there that is not 100% owned by him.
That is true ownership, right? That is true ownership, and in principle that's a good thing, because there it's really very, very independent, and basically no one can take that away from you. But that's not what we're talking about. We don't advocate being that everything open source, Linux in my garage guy, and the reason is because it's just super impractical. So even though that's maximum ownership, it's also minimum convenience. If you're a solopreneur or a small company, even assuming that you have the technical skills necessary to create something like this, you'd be spending most of your time just building and maintaining your own system, right? Maintaining your own servers, updating your own stuff, figure out why it's not working and trying to hunt down whatever broke in your own system there. You'd be spending most of your time doing that instead of running your business and creating stuff that you can sell, and things like that.
That's why we don't advocate total ownership like that. We respect it from a distance, but we don't advocate it. So let's talk about how, if that's not what we're talking about, what do we mean by owning your own platform? Your business is inevitably going to be dependent on third parties, but the way it is dependent on third parties is very important. I can give you two examples, or two principles, of what we mean here. The first is what I call don't be a YouTuber, and the second is what I call don't put all your eggs in one basket.
The first is don't be a YouTuber, and YouTube is just one example. It's easy to pick on YouTubers because they suffer so much. As you probably know, a possible business model is that you create a YouTube channel and if you get enough subscribers, and you get enough viewers, you can join the YouTube partner program, which means that you get a revenue share of the ads shown on your video. So the idea is that you just keep cranking out videos, you publish them on YouTube, and the more people watch them, the more people watch the ads, the more clicks you get on the ads and the more you earn.
If you get millions upon millions of people to watch your YouTube videos, you could actually make a decent living. You can make a decent living simply creating lots and lots of YouTube content. However, this is obviously an example of not owning your platform, because all of your business is sitting on YouTube, and YouTube is a great example of why this is a bad idea. Because almost like clockwork, every four to six months, what will happen on YouTube is that all of the YouTube channels, all of the bigger channels will be ranting about some new change that YouTube made. There's going to be some change to whatever the search algorithm, some change to how the subscriptions work. Some change that negatively affects YouTube creators, where they're like, "Oh my god, people aren't seeing my videos anymore, my ad revenue is way down, all of my videos are being demonetized because of a stupid copyright law." Some such thing, this is happening all the time.
And so all the YouTubers complain about it. All of them are like, "Oh my god, this is the worst. I can't keep going like this." And then nothing happens, because what can they do, right? YouTube is going to make their changes, their going to try and please the large advertisers, and the content creators just have to put up with it.
Hanne Vervaeck: Yeah, I think like you said, YouTube is the perfect example, because they are really dependent on the platform for all of their money, right? But we can even take an example that's a little less extreme but that still follows the exact same principles. If you look at Facebook, in the very beginning of Facebook some people invested a lot of time to get people to their Facebook page, and to get people to like their Facebook page, because it was an easy way to communicate with people.
I know that there's one French company, it's a clothing brand, and they had hundreds of thousands of fans, and they had like a super good engagement on their page and whatever, and then their page got shut down because they ran a contest on Facebook that wasn't according to the Facebook laws, and so they just got their page shut down, and they couldn't contact all of their customers or their fans anymore. So even if it wasn't direct revenue that was shut off, it was like this communication channel where they invested so much time and money in building it up, and they just lost that. So they lost a big part of their business, right? Like an important part of their business.
If we go into Facebook again, now it's with natural reach is almost non-existent anymore, so they will ask you to pay all the time to contact the people. So that's another way of being captive of a platform, because if you can't reach the people that are interested in your brand because you built that whole communication channel only on Facebook, that's a huge problem for your business.
Shane Melaugh: Yes, so both of those things are added possible catastrophes, right? The first one we mentioned is that rule changes affect your business negatively. The second one is, your thing can just be shut down, and this happens on YouTube as well, right? With copyright stuff people have gotten their entire channels shut down, or all of their videos taken down or demonetized because they used some background music somewhere, and because of some copyright thing their whole thing just disappears.
What also can happen, and this happened to me a few years ago, it's quite a long time ago but clearly I haven't gotten over it yet, right? My YouTube channel just got canned. No reason, no prior warnings, just from one moment to the next my YouTube channel didn't exist anymore, no chance for recourse. Probably this was just like an error or someone reported my channel for no reason or whatever, but as far as I know I didn't violate any of the rules, it's just for some reason a channel with like 115 original videos just disappeared from one moment to the next, no chance to get it back.
This can happen, this can happen on all of these platforms, right? Another thing that happens, that's the slow creep, is this organic reach going down. This happens on all platforms. This happens on YouTube and on Facebook and on Twitter, it happens everywhere, and it has to happen because the more people pile onto this platform, and the more people create content on this platform, the more the platform has to start making decisions about who sees what. They have to reduce organic reach because there's simply too much content to show everything to everyone.
So this is simply a natural consequence of a platform growing, and of course everybody's complaining about it and moaning about it, and it's not going to change. So these are examples of how you can suffer if you are simply tied to a single platform.
Hanne Vervaeck: Oh, and there's one more, Shane. Do you remember Periscope?
Shane Melaugh: Yes.
Hanne Vervaeck: It's not even that long ago, like I could give Myspace as an example, but that's a boring example. But if you think of Periscope, not that long ago everybody was like, "Yeah, you have to start doing live videos every day on Periscope, because then people can watch and then whatever." It disappeared, just like that. Nobody talks about it anymore, it's not even really existing anymore, and the people who invested all the time to make those videos on Periscope to do the live Periscopes, they just lost all their content and all the effort that they did.
Shane Melaugh: Yeah, and this happens all the time, right? These new things pop up, they become super popular, everybody jumps on board and then they just fizzle out or disappear, or whatever, Microsoft buys it and cans it, or Google buys it and cans it, or whatever. This happens all the time, and I think one of the important distinctions here is whether your entire business is sitting on that platform that you don't control, or whether you're using that platform as a tool for your business.
To quickly go back to YouTube creators, if you look at t successful YouTube creators, the bigger ones, the smarter ones, you'll see that all of them do things to hedge against being dependent on just YouTube. Whatever it is, like they have a pay tree on where people pay them directly, they sell some T-shirts or some other stuff, right? They have their own brand where their revenue is no longer totally dependent on YouTube. For most of them, that's because they have learned the hard way that making their livelihood dependent on YouTube is very, very dangerous. So that is the example of don't be a YouTuber. Don't make that mistake.
The second principle is don't put all your eggs in one basket. Well, that's an age old saying so I'm not really saying anything really special here, but let's look at how that relates to building your business and building your website. An example here would be payment processing. Obviously payment processing is going to happen through a third party, so you can't really avoid being dependent there. Obviously, if your payment processor kicks you out or goes bankrupt or whatever, then that's a problem for your business, but the important thing is that you can switch out your payment processor against a different one.
If you have, let's say you've got your online course or something, and you sell your online course, you've got it on your website, you've got your sales page on your website, you've got your content, your actual course on your website and so on, and you're using a payment processor and for some reason you can no longer use that payment processor, or maybe they changed their rules or they changed their fees or something, and it just doesn't make any sense anymore. Well, there's a lot of other payment processors out there, and so you can simply switch that part out against someone else, and your business keeps running. So the actual interruption to your business, it's not like this catastrophe or it's like, "Well, I'm stuck with this now, I can't do anything."
It might interrupt your business for a few days when you make the technical changes to switch one payment provider for another, but that's it. The rest of your business keeps running, right? All of the work you've done to build your audience, build your brand, and so on, it's ll still there, and that is a super important component here. It's also important because the payment providers you use know this. They know that you can switch, and that's important, because with something like YouTube they know that you're captive. If you are a YouTube creator, they know that there's not really any other place you can go, so they can do whatever they want, and they do.
Whereas if you use a payment processor, if you use Stripe because they're good and competent and their fees are good, they know that if they just crank up their feels, you'll just switch to something else, because there's a bunch of ... you know, there's Braintree and PAYMILL and a bunch of other payment providers that basically have the same features as Stripe, and they know that if they do something to piss off their customers, their customers just going to leave and go somewhere else. So that's also very important, because it also reduces the chance of this kind of stuff happening in the first place.
Another example of something similar is what we use on Thrive Themes. So on Thrive Themes right now we're using MemberMouse to manage our membership and access. MemberMouse is actually a recurring payment, right? So we pay a monthly fee and that is an example of, if we stop paying that monthly fee, then our membership component on Thrive Themes would stop working. However, again, even though it would be more work, we can simply switch MemberMouse for something else. That's a difference between ... because all of our content is still on our own website, so even though we're paying a monthly fee to keep this going, all it is is one component that basically determines who gets to see what.
Even though that's technically more difficult it can be replaced with a different membership solution, so again we're not actually fully dependent on that, it's just an interchangeable part, and that's really, really, important. So I think it's fine to pay a monthly fee, and kind of a keep alive fee for something like your membership system. What's not okay is to do that for your content. So for me it's fine to pay a monthly fee for a membership system, as long as I still own my content and my courses and my everything, right?
What I wouldn't want is use a system where my content is on their system, my content is on their platform, and if I stop paying then I lose not only the way people buy my stuff and access my stuff, I actually lose all of my stuff as well. That is where I draw the line between owning your platform and being dependent.
Hanne Vervaeck: One of the examples for course creators, I think, is for example if you create courses on Udemy. Typically, Udemy it's very easy to create a course. It's even like it's free and they do all the technical stuff, and so basically in one afternoon you can put a course up on there, and you will start selling because they are doing all the marketing, but the problem is that they own everything. Like, you basically just make the content and give it to them, and then they use it to make revenue from it, and they will give you a little bit of money for it, but at that point it's not really yours anymore. You can't really do anything with it anymore.
When I'm saying they are doing all the marketing, that also means that they own the contact information for your students, for example, because those people become students of Udemy. They don't become students of your course, and this becomes a big problem if you're making a second or a third or a fourth course, because at that point, one of the easiest things to do is to sell again to existing students, and everybody who's making online courses know this, and knows that your student base is what's going to help you to sell the second and the third course.
The thing is, on Udemy, it's like they own that contact information, so you can't even send a message saying like, "Hey guys, I have a second course. I'm sure you will like it," because that's not a thing, because you don't own that information. That's a huge problem for building a business. It's okay if you just want to test something out, maybe, but if you're serious about your business it's not okay to give somebody else all the control over that kind of information and your content.
Shane Melaugh: Email lists are a great example of ownership, where I think it's super important that the thing you own there, that's something that I think is maybe not clearly communicated often, but the thing you own is, you own the right to communicate with people who have opted in or bought something from you. Even though, again, you're using a third party tool, you're using your email marketing tool for this, the important thing there is that you own the right to contact those people, which means that, again, you can switch out that component. You can move your mailing list from one email marketing provider to another, because that's not what matters. The system you use to send emails to people is not what matters, what matters is that they have agreed that they want to receive emails from you, right?
Yeah, this is any platform that takes this away from you, that doesn't let you export your list and doesn't let you directly communicate with your own students, your own customers, and your own fans. That's a huge, huge problem. This is also the problem, like we talked about before, with organic reach going down in places like YouTube and Facebook. That's basically the same problem. Even though these people agree that, yes, I want to get updates from this page, or yes, I want to get updates from this channel, you don't own the right to reach out to them and tell them, "Hey, I've got a new thing."
It's Facebook that basically says, "Okay, I see this person indicated some interest here, and then I'm going to decide whether or not they see what you do in the future." That's a huge, huge problem. One of the most valuable things you can own online is the right to contact people.
Hanne Vervaeck: So for some online businesses, this is actually almost their entire business. I remember when Pat Flynn, his website got hacked, for example, and the only way that ... his website, which is an affiliate business, was offline for multiple days, and the way he was able to tell people, like, "Hey, I'm not going away, or please stay with me," was through his email list. At that point, even if you have to rebuild your website or whatever, which would be horrible and a big setback in your business, but if you still have that audience that you can contact and tell them, "Hey, I moved shop. I went to another place," then you don't have to start from square one again. You don't have to start from zero, whereas if you don't own the right to contact the people, then you don't have anything anymore.
Shane Melaugh: To finish the idea of not putting all your eggs in one basket, a final example there is, everything we just talked about is why you also shouldn't have a system, like an all in one system. Don't sign up for a system where it's like, okay this is ... you build your website here, it does your shopping cart, it does your payment processing, it does your email marketing, it's hosted, all in one. At first glance, that's a very attractive proposition, right? It's like, oh, I sign up for one thing, I pay one price, I get everything I need.
But exactly for all the reasons we just talked about, this is a really bad idea, because that means, that is basically the perfect example of putting all your eggs in one basket. It means that you no longer have these interchangeable components. So those are the two ideas. Don't be a YouTuber and don't put all your eggs in one basket.
So in summary, or in conclusion is, you definitely want to own your content. I think that's one of the most important things, right? Your content, that's your asset. You want to be in control of your content, and you don't want to have your content on a keep alive, $99 a month, otherwise my entire blog disappears kind of thing. Then, as we talked about, own the right to contact your audience. Own the right to send messages whenever you want, to people who have agreed to get messages from you, and this is really important: use third parties as interchangeable tools. Make sure that any third party that you're dependent on can be replaced with something else.
This is how you end up owning the platform, even if it's not totally third party independent, and that's what we advocate on Active Growth. Now, what you mentioned, Hanne, about Pat Flynn's example when his site got hacked, is another factor that comes in here, which is the branding factor. So building your own brand is something that creates ownership almost unlike anything else, and what I mean as a contrasting example, and this is why we don't advocate these kind of passive, hands on, anonymous, automated kinds of ways of making money.
If you're anonymously drop-shipping some white label product through Amazon FBA, and you've found some system to game the Amazon rankings to show up for search terms and so people buy your product and you make some money, that might be a legitimate way to make money, but the problem is that people are buying whatever it is you're selling not because it's a uniquely good product, right? It's just some white label product. Not because they know or like you or your brand. It's just the first thing that shows up for that search result, it's the cheapest one, they buy it, that's it.
The problem with this is that, again, if Amazon changes something about their algorithm and your product doesn't show up in the first spot anymore, then people will stop buying it and nobody will go looking for it, because nobody knows your brand, nobody bought your thing because they like you. You can't contact people and your entire business just disappears from one moment to the next. Building your own brand, so Pat Flynn obviously is a great example, right? He has a personal brand, people recognize his face, they recognize his voice from his podcasts and so on. People go to his website because they like him, because they trust him, because they know this is a place I can go for good content.
If his website disappears, people are going to look for and ask what happened to Pat Flynn? Where can I get the Pat Flynn stuff that I like so much? They're actively looking to reconnect.
Hanne Vervaeck: Yeah, it's not just another affiliate blog with reviews or whatever that you can find anywhere online, and where you don't really care who's behind those reviews. Like you said, people have a connection to the person or to the brand, and they will go looking to it because they trust it. I think that's one very important thing that you said about the white labeling product and the Amazon, where it's like, people just take the first one and the cheapest one, and inevitably if you don't have a strong brand you will be in a pricing war. There will be somebody coming along having a cheaper solution than you have. Maybe it's Amazon itself that decides to make the product, and so you're just ... bummer for you. You can't fight Amazon anymore. Or maybe, like it can happen everywhere, and if you don't have that brand, if you don't have that recognition, if you don't have that trust from the people who follow you, then you're just gone.
Shane Melaugh: A personal brand is kind of almost a shortcut to do that, I think, because the great thing about a personal brand is that you are ... a personal brand is automatically unique, right? Because there's only one of you, so if you make you part of your brand, you're automatically unique and that can be really good. But it's not the only way to build a brand.
Hanne Vervaeck: Yeah, I love the expression, "You're unique just like everybody else."
Shane Melaugh: Exactly. And it doesn't have to be a personal brand. You can also ... and it also doesn't have to be a giant brand, right? You don't have to be Coca Cola or McDonald's, or whatever. You can do branding, and you can even do non-personal branding on a much, much smaller scale as well, but what's important is that there's something that people recognize where it's like, okay, this is the brand I trust, the logo I trust or whatever, and again to give you this effect where if you go missing, people come looking for you.
In all this, just as a reminder we're not saying not to use things like YouTube or even Periscope or Facebook or whatever, because those can be valuable tools, but what's important is that you use them as tools in your business, and you want to be in a position where basically anything you use, you always want to look at, especially if something becomes really important, right? If you start using Facebook a lot, and you get a lot of traffic from Facebook, it becomes an important part of your business, you want to be looking at that and saying, "Okay, if this goes away overnight, what does that do to my business, and how can I recover?" If there's no way for you to recover, if you're just like, "Oh, well I'll just lose my business, too bad," then you need to do something to get more ownership over what's happening there.
A typical example of that is if you get a lot of traffic from a specific source, for example, is make sure to get that traffic on your mailing list, right? Make sure to send that traffic to somewhere where they can opt in, go on your mailing list, and that means that even if that traffic source dies you still have this audience you can reach. So those are our thoughts on what it means to own your own platform.
Hanne Vervaeck: Thank you very much for taking the time to listening to this episode, and we hope you'll tune in for the next one.