The Diagram Explained - The Golden Cycle
Starting The Golden Cycle
There are two concurrent cycles required to make money. The topmost is the golden cycle and this is the one that contains the "actual cash". It is the most obvious of the two and the part most clearly recognised is the money itself.
It is this "money" that is required to start the golden cycle of earning but it would be wrong to think of it in terms of just cold hard cash. Everything of value should be counted as part of this element. Your time, your knowledge, your attention - all of these things have value and can therefore be invested. Obviously money is and should be a part of the cycle but it is possible to start things going without it.
Remember that at the end of the golden cycle you are aiming to have a greater collection of resources than at the start. This is the key to understanding the diagram on how to make money. You invest in attraction - which sells the product - so that whatever you take in exchange for your product (or service) you have more investable resource than when you started.
The attraction process has a number of stages the initial attraction, the increase, the sustain and the decay. A good process of attraction has a long sustain and a long decay feeding back sales of product in small amounts many years later. However, we shall consider the attraction process to be over during the decay stage.
The reason being that we need a point where we can draw a line and say the return on investment was this much. Your aim in the golden cycle is singular - to increase the resources available at the top of the golden cycle so that you can invest in better methods of attraction.
This is the secret that most make money sites refuse to tell you about. They don't want you to know it because they have something to sell you.
Take for example a product such as a card game made by a husband and wife team (Let us call them Mr and Mrs Smith). Most or all of the money they have available has gone into researching, developing and making the game. Now they have to sell it.
For the purposes of our illustration we shall assume that no money is coming back into "the pot" of resources until the cost of the games have been covered on a per pack basis. So what do they do?
Mr Smith starts a blog and Mrs Smith starts promoting the blog to everyone she knows. They host it on a cheap hosting solution with the last of their money. Mr Smith starts writing about topics related to card games and Mrs is getting attention for the writing.
You can probably imagine the Mr and Mrs Smith are not going to get a huge return on their investment. You would be right but they manage to attract 219 subscribers and they sell 19 packs of the cards.
Now they have 219 subscribers, a good placement in the search engines and $25 in profits. The cycle can be considered to be over (although the "long tail" will probably still produce the odd sale. They can now iterate - that is repeat the cycle using the money, the subscriber base and building on the search engine placement.
Mr Smith invests creates two landing pages for his product (the card game) and spends the $25 on a Pay Per Click campaign with a smaller advert network. This keeps the cost per click down at the cost that there is probably more click fraud going on. He also uses the subscriber base to encourage people to review him for a chance to win a set of cards.
Mr Smith has now sold 28 cards when the advert credits run out. With this he repeats the cycle a few times (PPC and competitions). Eventually he is able to afford to target different (and more expensive) keywords and pay for a few high profile reviews (at the added cost of giving a few more packs away).
This brings in more sales and enables Mr and Mrs Smith to advertise on the websites of niche leaders. From there they move on to bigger and better things. Each cycle enables them to have more to invest in the next cycle.
Eventually Mr and Mrs Smith are able to draw a wage from "the pot" without stopping themselves from having more to invest on the next cycle.
Use time and attention to make money
The first resource you should consider is time and attention. They are hard to separate and so we shall deal with them as if they were a single resource. Your time can be invested into the attraction process that draws customers towards your product.
This can be done by networking with potential clients, giving out leaflets, writing letters, blogging or anything else that might result in a drawing of clients towards your product. A common way that bloggers get attention (the "custom" they require for their blog "product") is to give their attention and time to other bloggers. By spending time giving good quality comments they trigger some reciprocation and earn back a comparable flow of attention.
The return on investment from this resource is variable but on the whole is not necessarily going to be very high unless it is supported by other investments. Yet when you have nothing else available to invest you will always have yourself as a starting "capital" for growth.
The product as an investment resource
Never overlook the value of the product itself as an investment in the attraction process. Toshiba and other companies will often give away a number of high end laptops and other expensive luxury goods as part of a launch. That initial investment can be more valuable than the shelf (cash) value the item otherwise represented.
When your product is a service it is just as easy to use it (along with time and attention) to demonstrate and prove your offering. Look for opportunities for high profile (within your niche) demonstrations what is on offer. The return on such an investment would be far greater than the profit from charging full price for the product.
Use other items to make money
Another option is to create a buzz by offering a prize of an unrelated but desirable item such as an iPod or Holiday Package. If this is something you already have (in mint or near mint condition) then you can invest it without it costing you anything.
It does not even have to be new. Some small enterprises have done very well on offering used items (the second-hand book trade springs to mind). Celebrities often give away personal items to raise money for charities or to get attention to their new venture. While this would not apply to everyone a few people might be able to do this.
Other ideas
Variations on "Underground Marketing" are able to invest nothing else other than very creative ideas to create publicity for a product. While these are not your traditional forms of investment and not your traditional attraction process they do work and can be extremely effective. All it takes is a good idea.