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Place all your eggs in one basket
hdpt00



 
Msg#: 13906 posted 9:58 pm on May 6, 2006 (gmt 0)

Haven't started a thread here in a while, but still read some messageboards here and there and ever since I began running websites, I hear people saying "Don't put all your eggs in one basket."

History tells us otherwise that if you want to super succeed, you should put all your eggs in one basket. The richets people put all their eggs in one basket, ie: Bill Gates.

Anyone else putting all their eggs in one basket?

I, however, diversify a little, but still depend a lot on AS. I liken it to MS expanding to hardware ;-).

 

BigDave

WebmasterWorld Senior Member bigdave us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 13906 posted 10:43 pm on May 6, 2006 (gmt 0)

You might want to double check your facts on the richest people, including your example.

The richest people might make their fortune from one place, but they diversify to protect the money that they make. MSFT is still Bill Gates biggest holding, but he is invested in other areas to the tune of several billion dollars. You might also consider that while billg makes most of his money from microsoft, MS is constantly trying to diversify as well.

Then you might want to consider #2 on the list, Warren Buffet. Are you aware of how he made his fortune? He is the poster boy for diversification.

graeme_p

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 10:54 pm on May 6, 2006 (gmt 0)

And Bill Gates was fairly rich before he started MS - his family trust had enough in it that he has a million or two to fall back on if MS flopped. That sort of situation makes taking risks a lot easier.

vivalasvegas

5+ Year Member



 
Msg#: 13906 posted 11:12 pm on May 6, 2006 (gmt 0)

In tend to agree that in order to reach the most success you must focus on one business. But once you're successful it makes sense to diversify. Also I think it's equally important to avoid putting your eggs in too many baskets.

david_uk

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 13906 posted 11:22 pm on May 6, 2006 (gmt 0)

Bill Gates might be rich, but would The Queen want to meet him? Behead him maybe. ;) Appalling chav.

Anyway, should you put all your eggs in one basket? Probably not. But the situation many of us here are in is that the Google basket pays a lot more than other baskets do, so there is a tendancy to favour Google over other ad providors. I'd rather rely on a bunch of suppliers plus ads I sell myself, but the reality is that Google ads work better and pay better than anything else does.

andrea99



 
Msg#: 13906 posted 11:24 pm on May 6, 2006 (gmt 0)

The old proverb about eggs in one basket applies well in some situations and not in others.

As for AdSense I've been on several sides of that basket. For years I did not depend on any revenue from my web site and was able to do anything I wanted with it.

But AdSense became the golden goose, to invoke another proverb. I want to diversify but everything else fails, AdSense continues to produce. I'd be much better off had I ignored everything else and paid attention to the AdSense egg basket which is the only one not full of rancid yolks and broken shells...

Now my AdSense egg basket continues on with bountiful egg harvests and other things I try continue to fail...

Well, the stock market is another nice egg basket.

andrea99



 
Msg#: 13906 posted 11:30 pm on May 6, 2006 (gmt 0)

Oh BTW, Bill Gates' experience is much like mine, if he had only ignored everything but Windows and Office and stayed away from those other less successful ventures his fortune might be mega-giganto-humongous instead of just really, really big.

21_blue

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 11:52 pm on May 6, 2006 (gmt 0)

Hmmm... the only reason history doesn't tell us about poor people, people who put all their eggs in one basket and then went bankrupt, is because you don't become famous for not making a fortune. Also, if you mention Gates, then think about Branson, Trump, or Sugar - they all spread their eggs around a bit.

hdpt00



 
Msg#: 13906 posted 12:07 am on May 7, 2006 (gmt 0)

Please don't ever mention Trump as knowing anything about business. All he does is self promote and took daddy's companies down. His ego is bigger than the fortune his dad left him with.

Jane_Doe

WebmasterWorld Senior Member jane_doe us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 13906 posted 12:56 am on May 7, 2006 (gmt 0)

History tells us otherwise that if you want to super succeed, you should put all your eggs in one basket.

I suspect that having a lot of different web sites is like owning stocks in an index mutual fund. There is less risk, but also less potential for reward than if you owned one stock (or one web site) that really took off. But then again it prevents you from having all of your money in one place, like the people who lost all of their savings when Enron collapsed.

I use Adsense a lot on my sites because I'm too lazy to test a lot of other programs. But if Adsense stopped working out I try to have sites where I could put other types of ads or affiliate programs on them, if needed.

PowerUp

5+ Year Member



 
Msg#: 13906 posted 1:54 am on May 7, 2006 (gmt 0)

History tells us otherwise that if you want to super succeed, you should put all your eggs in one basket

Different people at different stages of development will have different views regarding putting all eggs in one basket.

From a newbie's perspective, it's better to do so. We should focus on getting that gear rolling towards the $100 mark. Had the newbies juggle different projects at the same time, tendency is to side track and lose motivation.

From an established publisher's perspective, it's better to diversify. This is to prevent his/her source of income from short or long term fluctuation. So that his/her lifestyle will not be affected. This is because human by nature prefers stability and security.

moTi

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 5:57 am on May 7, 2006 (gmt 0)

putting all my eggs in the adsense basket early on has definitely helped in getting a comparative advantage.
while other webmasters were late with adsense and still trying out all the super-low paying affiliate networks and amazon, i already had finished experimenting with this crap.
after a few days, i realized, that all other baskets reached only about 1/100(!) of google payout, so the decision was more than easy. with my content sites, i'm completely dependent on selling ad space with adsense, wish it were otherwise, but since the two most promising competitors after 3(!) years still don't get their act together (at least in non u.s. market) it can't be helped.

jetteroheller

WebmasterWorld Senior Member jetteroheller us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 13906 posted 6:57 am on May 7, 2006 (gmt 0)

still trying out all the super-low paying affiliate networks and amazon

At last after terminating Amazon and Chitika as an PSA replacement, I have now an affiliate ad as PSA replacement which brings at last
6% eCPM of AdSense

That's at last more than 10 times better than all the other tested PSA replacements.

21_blue

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 8:46 am on May 7, 2006 (gmt 0)

Please don't ever mention Trump as knowing anything about business. All he does is self promote and took daddy's companies down. His ego is bigger than the fortune his dad left him with.

That illustrates the point. If he or his ancestors had had all their eggs in one basket then Trump would have gone bankrupt long ago. There is a safety factor in diversity, in that you are more likely to be able to recover from mistakes.

andrea99



 
Msg#: 13906 posted 2:14 pm on May 7, 2006 (gmt 0)

There is a safety factor in diversity, in that you are more likely to be able to recover from mistakes.

Or in other words, if you're not diversified you had better be lucky. This is not reassuring to those of us whose efforts to diversify have met with limited success. You might say we've been lucky.

Having more than one source of income or a large accumulated savings is prudent. This is something to ponder if you live from paycheck to paycheck. If diversity eludes you, as it has me, I think a lesson could be learned from the cactus plant which hoards its water in anticipation of the inevitable dry spell.

Kid_A

5+ Year Member



 
Msg#: 13906 posted 2:31 pm on May 7, 2006 (gmt 0)

I'm always looking for more efficiency. Our primary site is powered by AdSense, like others here we've found it out performs everything else. And while it is providing a good income for the work put into it, I'm always on the hunt for projects that will generate even more revenue with the same amount of work or less. Or those that will generate enough revenue in a short enough time period to hire another employee to cover it, etc.

Last year I spent a LOT of time researching new projects, none of which were ultimately viable. I am a little miffed because although there are lessons learned which are worthwhile, I think I could have been 25-50% ahead in revenue right now if I hadn't done so. I'm making sure this year that I spend no more than 20% of my time on diversification projects. And I'm being more careful evaluating the projects before diving in...

Even Gates has diversified within his own company - he used to be just operating systems! And that's the type of diversification we're looking at, rather than buying or investing in another company.

flobaby

10+ Year Member



 
Msg#: 13906 posted 2:45 pm on May 7, 2006 (gmt 0)

This is the first year I have several sites instead of "the one" and I can tell you...it's wonderful! All those threads about BigDaddy's fallout, and while my original site has been affected adversely by BigDaddy, my new sites are doing great.

Last year I would be quite depressed by Google's fickle ways, but today, I count my lucky stars that I've diversified.

danimal



 
Msg#: 13906 posted 4:10 pm on May 7, 2006 (gmt 0)

all i can say is thank goodness for ypn, i would not want to depend strictly on google.

beyond that, i have a rich media advertiser running a short campaign this month, and even after the agency split, it is still the best-paying advertising that i've ever had.

you have to keep working all the angles.

jomaxx

WebmasterWorld Senior Member jomaxx us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 13906 posted 4:22 pm on May 7, 2006 (gmt 0)

I tend to agree with Mark Twain.
Behold, the fool saith, "Put not all thine eggs in the one basket" -- which is but a manner of saying, "Scatter your money and your attention"; but the wise man saith, "Put all your eggs in the one basket and -- watch that basket!"

Of course Twain went bankrupt at one point, so take his advice with a grain of salt :-) But for me, diversification for the sake of diversification seems like an unnecessary distraction.

roycerus

5+ Year Member



 
Msg#: 13906 posted 5:55 pm on May 7, 2006 (gmt 0)

I think you need to worry about what kind of eggs you have rather than the basket.

hunderdown

10+ Year Member



 
Msg#: 13906 posted 7:14 pm on May 7, 2006 (gmt 0)

I think there's no harm in putting all your eggs in one basket, provided that you have spare baskets to use if your basket breaks! For me, there is simply no other revenue source that works as well as Google.

But I do have a back-up plan if the Google basket breaks.

minnapple

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 13906 posted 4:07 am on May 8, 2006 (gmt 0)

I have an affilate site that I put up over two years ago, and I haven't spent a dime on it since.

It still brings in enough to pay for 10% of my dedicated server costs.

The more stuff you can have going on the better.

dibbern2

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 6:15 am on May 8, 2006 (gmt 0)

What's diversification in the context of this thread: more than one website (which could be limited to AS) OR more than one revenue chain (from one website)?

It seems we're discussing both topics.

arubicus

10+ Year Member



 
Msg#: 13906 posted 7:07 am on May 8, 2006 (gmt 0)

For the most part publishing on the internet your highest risk is in time and energy and leveraging those forces.

But risk isn't managed just by earning power. It is also managed by CONTROLLING expenditure of those earnings as well as the reliance of future earnings.

Those who have a mortgage have borrowed against future earnings. This is a major risk in that you don't know what your future earnings will be - especially in this business. Tack on auto loans, credit card debt, second mortgages etc. One way to reduce your risk is to get rid of debt and any unnecessary reliance of future earnings. THIS IS MOST IMPORTANT. You should manage your life's expenses to where you reduce the possibility of bankruptcy in a worse case scenerio. It does not take much money to live off of if you OWN your house, car, etc.

Another way to reduce risk is to manage any profit you have. Keep a year or two worth of income for those just in case times. (I can tell you a story about our largest site going to crap, 6 digit loss over the last year, and me having a year worth of income to sit on in which I haven't yet touched! - I will go back to work even before that gets touched so I am still safe) Again THIS IS VERY IMPORTANT.

When dealing in this business you can diversify several ways:

1) Create more websites that cover your personal expenses or to equal your top earning site. If your top earner should fail your other sites can pick up the tab. NEVER BORROW AGAINST OR USE CONSUME ANY INCOME from your backup sites. Just invest the total amount of profit in safe funds and whatnot. This is extra savings for your future and the income produced from those sites is immediately available to you as well as profits and icome from those funds (only if needs be). Be sure to diversify industry and or market segments if you can.

2) If you decide to put all your eggs in one basket you can diversify your traffic. Always find alternative traffic sources that will total your top 3 traffic sources. In other words if MSN Google and Yahoo bring in a total of 10,000 visitors a week then you should have multiple traffic sources that can equal that. This will reduce the traffic risk. Even if you DON'T put all your eggs in once basket this is advised action to take anyway since traffic is your life blood.

3) If you decide to put all your eggs in one basket you can diversify your income sources. Experiment with other income generating sources. Have them ready to go at a moment's notice. They may not replace that of Google but you will not be at a total loss or waste time (when you need the income) trying to find one that works for you. Again this goes back to managing your need for the income. Live off of a small percentage of income and you should be fine. Even if you have multiple sites this is still advised.

4) Take a LARGE portion of your profit and invest in mutual funds, stocks, real estate to supply you with an alternative income stream.

A good rule of thumb is 1/3 invest - 1/3 living expenses - and 1/3 spend and give. I like 1/2 reinvest 1/4 spend and 1/4 living. This depends on your income and this in no way means you need to raise your standard of living to the 1/3 mark. Adjust when necessary and also MANAGE your spending and reliance on income.

Most individuals who get a raise in a job setting will immedialy go out and raise their standard of living and consume their extra earnings where they could have leveraged those earning through investments. Keep in mind that this keeps them slave to their income and job. To find financial freedom is to manage your finances to where you are less dependant on income created through time and energy and more dependant on income through financial growth (making your money work for you). BE SMART and control the GREED. INVEST.

------- Other thoughts -------

If you are new to Adsense or just getting started I would advise you to take at least 1 hour a day and set up 5 websites within the year. Get them all started at once and slowly build on them to at least 10-50 pages. Let them age as you continue to build your primary. This way they are ready to go when you decide to really work on them and promote them (sandbox effect).

Above all have a backup plan ready to go an any time and never fall in love with your business to where you make bad decisions. Your business can be a joy but keep in mind it is merely a tool. If the tool breaks don't let it break you. Find a new tool to replace it if and when the time comes. Be prepared for when it happens.

Bless you all and I hope this helps.

JuniorOptimizer

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 13906 posted 10:15 am on May 8, 2006 (gmt 0)

It only takes one heinous event, like Google dumping your entire site, in order for you to get the ridiculous thought of Google as your sole income provider.

Once that's happened, you'll never even consider leaving your eggs in that basket again.

gregbo

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 13906 posted 9:30 pm on May 8, 2006 (gmt 0)

Most individuals who get a raise in a job setting will immedialy go out and raise their standard of living and consume their extra earnings where they could have leveraged those earning through investments.

True. Some other suggestions I'd make are to buy goods in bulk, use coupons, shop at discount clothing stores, buy a fuel-efficient car if you need to drive, and learn to reuse old things instead of buying new ones.

Actually, there are some books that describe how the rich become and stay rich. I recall one talking about how the people drove old trucks.

bobothecat



 
Msg#: 13906 posted 9:42 pm on May 8, 2006 (gmt 0)

Diversity is your friend for many reasons... if you've been in business for yourself long enough - you'll understand why.

Please don't ever mention Trump as knowing anything about business. All he does is self promote and took daddy's companies down. His ego is bigger than the fortune his dad left him with.

Fred Trump (Donald's father) built his multi-million dollar fortune on tenements... Donald built his on branding and marketing... Fred was never worth a billion or more... Donald is :)

[forbes.com...]

Jane_Doe

WebmasterWorld Senior Member jane_doe us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 13906 posted 3:44 am on May 9, 2006 (gmt 0)

Actually, there are some books that describe how the rich become and stay rich.

The Millionaire Next Door is a good read. The authors studied the background and habits of actual millionaires. Many live quite frugally - that's how they got to be rich.

andrea99



 
Msg#: 13906 posted 6:12 am on May 9, 2006 (gmt 0)

Live beneath your means, invest wisely.

MediaSpree

5+ Year Member



 
Msg#: 13906 posted 12:42 pm on May 9, 2006 (gmt 0)

Eggs eventually break, hatch, or get eaten. Not only should they not be in one basket but you should keep reinventing your eggs!

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