100 Naked Words
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100 Naked Words

There Are Only 2 Business Models.

Pursuit of Happyness

Choosing a business model is where every entrepreneur starts.
There’s only two to choose from.

Business Model #1: Selling products or services
Doesn’t matter if you’re the product creator or a middle man. Wholesale, retail, drop ship, affiliates — they all sell something to the consumer. If you make money when a product or service is purchased, that’s the sales model.

Business Model #2: Selling eyeballs
If you’re building an audience so you can sell their eyeballs to someone else, that’s the advertising model. Doesn’t matter if it’s glossy ads in a magazine or advertising on the Internet, it’s still selling ads. Doesn’t matter if it’s sponsored posts, blinking banners, or native advertising — they’re still advertising.

The difference is real simple: You’re either selling something to your audience, or your audience IS the product you’re selling.

Every business you can think of falls under one of those.

The advertising model is more complicated than the sales model.

Sales are simple compared to advertising. That’s not to say the sales model is “easy” — but it’s simpler. Fewer complexities. Advertising is the more complex model because you need to keep your audience interested enough to keep coming back for more despite the fact that they are what you’re selling.

What if you do both? Isn’t that a 3rd type? No.
One scoop of chocolate ice cream and one scoop of strawberry is still chocolate and strawberry.

Doing both takes more mental gymnastics. Because the people who might buy your products or services aren’t necessarily the same people that would respond to the ads. Unless the ads compete with your products, of course. Doing both is possible, just far more complex.

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Est. May 2016. 100 vulnerable words, one day at a time. Every day.

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Linda Caroll

Linda Caroll

Featured in NYT, Forbes. https://lindac.substack.com/

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