I’ve been known to launch a few projects. And one of the questions I get the most when launching something new is, “how do you plan to monetize it?”.
Here’s the thing: most of the time, I didn’t have a clue. So I’d mumble something about ad revenue, and quickly change the subject.
This used to keep me up at night. Was I working on the right things? Shouldn’t I have some kind of plan for revenue? How would I support myself when my savings ran out?
It all changed the day I got bit by a radioactive spider who also happened to be particularly good at marketing. This is when I came up with the Spiderweb Strategy.
Note: if you want to read more about product strategy, be sure to also check out my previous piece, The Product Spectrum.
The Product Network
Let’s say you have a bunch of different projects.
Some make a little money, some make more. Here’s what your project portfolio might look like (bigger circles mean more revenue):
Having a diversified product portfolio has its advantages. It means you’re covering all your bases, and potentially have multiple hit products on your hands.
But in practice it can also be quite stressful and hurt your focus. Making money — even a little bit — costs time. You have to set up payment providers, deal with refunds, manage support…
So there’s a certain amount of fixed costs and stresses involved in charging people, even when dealing with small amounts.
The Product Spiderweb
Instead, let’s consider a different strategy. A core money-making product, sitting at the center of a web of secondary side-projects:
Now this doesn’t mean your secondary products can’t make money. It just means making money is not their primary goal anymore.
Why This Works
When you don’t care about profitability, a lot of new doors open up. For example, you can start thinking about making some of your products free.
Giving away freebies to drive sales to your main product isn’t a new approach by any means. It’s the principle behind loss leaders such as free samples and cheap printers (but expensive ink!)
Yet while traditional companies incur costs on every product they give away, the magic of digital products is that they have no fixed production costs; thus removing the “loss” part from the equation altogether (beyond the initial investment, of course).
Managing Your Mind
And there are also psychological benefits.
We tend to notice the negative much more than the positive. So when you have multiple focuses, it’s easy to worry disproportionately about the failures and forget your successes:
It can be much more gratifying to have a single product doing great than an array of hits and misses, even for the same overall revenue.
Money Isn’t Everything
But what use is a product that doesn’t make money?
Well for starters, that product can help your core product make more money, by driving traffic to it or raising your profile in your field. Or if you want to get trickier, you can use this a way of commoditizing your product’s complements.
Your side projects can also be ways of learning new skills, which you can then reinvest in your core focus.
Or how about doing side projects just for fun? Sometimes you just need a distraction. After all, treating everything you do as work is a great recipe for burning out.
Applying the Spiderweb Strategy
I have to confess that as far as applying this strategy goes, I’m not quite there myself. My revenue stream is still split across a variety of projects that don’t necessarily work together that well.
But I try. For example, I’ve decided to forego any thoughts of monetizing Telescope, at least for the foreseeable future.
Webs Within Webs
In fact, we can go deeper.
Telescope itself is at the center of its own little web, surrounded by Telescope-based sites like Sidebar, Crater.io (which isn’t my project but, in a way, still part of my web by virtue of using Telescope!), and an as-yet-unannounced other new project.
So this means I can sleep at night knowing it’s OK if Telescope isn’t making any money. It’s not supposed to.
So here’s the spiderweb strategy in a nutshell: instead of worrying about earning more from all your products, just focus on the profitability of one core project, and treat the rest as loss leaders.
This strategy is not foolproof by any means. But maybe it can help alleviate some of the stress of having under-performing products. And hey, it does have a pretty cool name!
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Photo Credit: Alejo