The .01% Solution

Freedom of the press is limited to those who own one. A. J. Liebling (1904 – 1963)

The world of the media used to be a rich man’s playground.

It cost a lot of money to buy a television network, or a magazine, or a newspaper.

You know, Mr. Thatcher, at the rate of a million dollars a year, I’ll have to close this place in, 60 years.  – Charles Foster Kane

But that was the only way to get your message, or your product, in front of millions of people.

Even today, the Koch Brothers seem to be angling to buy a few newspapers for exactly the same purpose.

And if you didn’t have the money that a Charles Foster Kane or a Murdoch or the Koch Brothers had (or have), then you could rent a few pages in the form of ads to get your stuff before a few million people. But that was also expensive.

The Internet, however, continues on its disruptive course, and one of the greatest disruptive elements is that the cost of accessing all those people has fallen, from billions of dollars, to nothing.

That’s a big drop.

Today, simply by going online you can get your message (or your ad) in front of a potential audience of 2.4 billion people… with more to come.

Let’s put this in perspective. The New York Times has a circulation of about 1 million people per day.  Murdoch’s SKY is in about 10 million homes in the UK.  NBC is in 114 million homes in America.  But the web is in 2.4 billion homes worldwide, and you don’t have to pay NBC or The NY Times or Murdoch a dime to get on it.

You can see what this means, in the long run, for The New York Times or NBC or Murdoch. That is old news.  But what does this mean for you?

Here’s a fun mind game.

Do you have something that you are good at?  Say, cooking or tennis or golf or writing?

Suppose I put you in a room with 100 people in it. Could you convince one out of those 100 people to pay you, say, $1 in exchange for your teaching them how to cook a meal or improve their tennis game or put on makeup that looks good. It can be anything you like.  Come up with something. Could you convince 1 person out of those 100 to pay you a single dollar?

No.

OK. Let’s make it easier.  Let’s say there are a thousand people in the room. Could you convince just one out of one thousand people to pay you a single dollar to teach them how to do something?  (Or maybe you could sell them your watch?)

Nope.

OK

Let’s make it 10,000 people.

Ten Thousand People in a room. Could you convince just one of them to part with just one dollar?

I bet you could.

And so do you.

Now, here’s the truly amazing part of this.  If you were to take that skill set (or watch) to the web and get that rate of return, that is, one out of every 10,000 people to part with a single dollar in exchange for teaching them how to organize their lives or make an omelette or do their hair or whatever it is you can offer, you could net $240,000.

That’s right.

A quarter of a million dollars.

Get them to do it with you once a month and you are netting $3 million a year.

And at no cost.

Is this really possible, that anyone could become an online global merchant?

I think so.

This is a very radical idea, but perhaps no less radical than the idea that first surfaced a thousand years ago that as a peasant you could take some of your crops to a local market and sell them yourself. Rather a revolutionary idea for medieval serfs, but the foundations of the capitalist revolution.

Today, thanks to the web and its obliterating the barrier to entry to a global marketplace, you (and anyone else) can in fact now take your ‘wares’ (whatever they are) into the ‘market’ and sell them, just the same – only this time with a lot more customers!

A few people are doing this already.

Michelle Phan is the daughter of a single-parent mom who emigrated to the US from Vietnam.

Instead of going to art school, in 2006 she began creating videos at home about beauty and makeup and posting them online.

Today she has over 3 million subscribers to her website and more than 700 million views. She has signed deals with Lancome and Bride’s Magazine and has netted millions. And she is just getting started.

She got in early, but there is plenty of room for anyone who has the drive and determination and a video camera and an internet connection.

Phan (and others) have until now depended upon advertising to pay them. But that is all about to change.

It is far better to go directly to transactions.

This too used to be complex, but no more.

A German company called Clickandbuy.com (a subsidiary of Deutsche Telekom, so you know they know what they are doing) now makes it possible for anyone with a website to embed a ‘click and buy’ transactional app into your website, whether you own a store or just want to sell your services from home online.

It’s a remarkable opportunity to migrate from a ‘social’ website to turning your ‘likes’ into real income.

After all, you may have spent a lot of time and effort getting your 3,000 ‘friends’ or 10,000 ‘likes’ but you can’t pay the rent with those.

Copyright Michael Rosenblum 2013