The Next Big Bubble – Internet and Affiliate Marketing, and Location Indepedent Living?

by Paul Goodchild on February 14, 2011

Affiliate Marketing Pyramid

It’s 2011 and depending on who you ask, the Western world is either just having a quiet period or is mired in a recession and headed for a depression.  They’ll tell you it’s a global depression to make you feel better, but I don’t believe it is.  Go to Asia and check out the difference!

But what caused all this?


Our financial systems rewarded risk to the point where our banks condoned gambling with the pensions and savings of clients and citizens in favour of making a quick buck – ‘money really does grow on trees’ was the guiding principle.

How does that differ from other market bubbles that have popped in the past?

It doesn’t.

From tulip bulbs to dot-coms to real estate, the principle is the same.  It’s a huge fan-fare of hype and promise that leads to huge expectations.  Eventually word gets out and soon everyone is talking about it.  Then comes the market saturation, followed by a crash when sound reason finally replaces the fantasy.

I’ve spent the last few months giving serious time over to creating an online IT service that would form the foundation of a location-independent business – one that I can perform from anywhere in the world.  The service is as good, if not better than paying a local service, I just don’t have to wear a tie to the office.

I’ve read a million and one blogs here, there and everywhere, subscribed to countless mailing lists, downloaded e-books and generally learned a whole heck of a lot.  But I’m hitting an invisible brick wall of sorts, and I’m not sure if it’s:

  1. my naivety and ignorance of the capacity to make money online, or
  2. that there’s a huge skew in opinion regarding the capacity of online entrepreneurship and I’m helping to inflate a bubble that’s gonna burst my brain open when it pops.

Don’t get me wrong.  I have no doubt that you can earn a living from solely online entrepreneurship.  No doubt in my mind whatsoever!

My issue comes from the seriously copious amounts of resources and materials, blogs and websites, e-books and video courses, that deal specifically for this market.  Not the quality of the material per-se.  It just feels like (while I can’t quite justify it yet and probably wont be able to fully articulate it in this article) another giant bubble in the making.

The Internet Marketing Pyramid(?) Scheme

I could look back on this article in a couple of years (weeks?) time and cringe – how could I get it so wrong?!

Well I’m not here to predict, and I care not a bit if my feeling is wrong.  But something isn’t right and I can’t quite put my finger on it.

Let’s have a look at an illustration of affiliate marketing…

Take Mr. E-book Evan, he makes a product – let’s say it’s an e-book called “How to grow apples in 3 easy steps”.  It’s a fantastic guide and he sells it online.  Super – he provides a service, adds value, and gets money for it.

To improve sales, he decides to create an affiliate marketing program.  And what’s that you ask?  It means that if Mr. Marketing Michael comes along and signs up to be an affiliate partner, does a bit of marketing of the product and leads directly to a sale of Evan’s product, he gets a cut.  They agree beforehand to share the profits so Evan makes money by reaching customers he wouldn’t otherwise have found, and Michael earns money for his efforts.

Brilliant.  2 people making money online.

Mr. Marketing Michael is a smart little cookie and realises that with his influence (copious mailing lists and/or websites) he not only can sell Mr. E-book Evan’s book, but he can sell also lots of other affiliate items too.  That means more money for Michael because of the diversity of his marketed products.  He doesn’t actually create anything himself, he just helps sell the products other people are making.

Fair enough.

But Marketing Michael has become so successful, he decides to create his own product and writes an e-book entitled “How to become successful/rich with affiliate marketing”

He sells this, and not only that, he creates an affiliate marketing program too so other people can market and help sell his book to get a piece of the action.

So now you have affiliate marketeers marketing products on affiliate marketing.

The more people that jump on the affiliate marketing bandwagon, the more experienced affiliate marketeers there are.  The hype builds!  Affiliate marketing becomes a huge money making sector.

And naturally another huge sector grows out of the demand for learning materials on how to become affiliate marketeers.

Imagine this scenario on a global scale.  Thousands and thousands of people out there running affiliate marketing campaigns, collecting email address, building tailored websites, refining the process over and over, all the while hawking products about how to become an affiliate marketeer so that you can hawk products.

My head spins when I think this through and all I can picture is a hug snake eating its own tail.

Surely this market has its limits?  I think it does: saturation is where there are excessive marketeers compared with actual high-value products and services.

Another slant on a similar principle is Location Independent Living “market”.

Selling the Location Independent Lifestyle

This whole conversation of creating a location independent lifestyle is massive right now, and growing.  And for good reason.

Possibly one of the most inspiring books in this market is Tim Ferriss‘: “The four hour work week”.

It was one of the first, if not the first, mainstream publications giving proper air to the smart living lifestyle.  It’s not about how much money you make, but how much time you allow yourself to follow the dreams and aspirations you have.  No more deferred life-plans.

I read it shortly after it was published in 2006 and it took a couple of years before I could break out of my 9~5 drudgery.  I had already mentally subscribed to the principles it espoused and was actively creating a much better lifestyle for myself long before I quit my job in 2009.  But the act of making the shift was still a huge undertaking for me.

I could write, if I had the time, heaps about my lifestyle changes over the past 2 years.  And perhaps I will.  (Or perhaps I should?)

Now, it’s difficult to read anything online anymore (or perhaps it’s because of my particular focus) without coming across another person who has made a break for freedom, in terms of the location independent lifestyle.  And for a price, you can find out how they did it.

Now, don’t get me wrong, I’m ALL FOR IT!

But… and here is where this opinion piece get opinionated, it seems a little like ‘building castles in the air’.

It’s not making false promises, but just… everyone is making big promises.  Practically everyone who’s “living it” has an ebook about how you can do it too, an e-book about how you can get all minimalist on your ass, an e-book with 7 good tips about how I made it and you can too, an e-book about location independent travel, etc.

But many of them don’t tell you, or least they haven’t told me, anything really new or radical.  Some definitely have good content, but I got the biggest kick in the ass from “The Four Hour Work Week”.

It’s tapping in to a psyche that is growing rapidly from a combination of factors:

  • a “global” recession
  • dissatisfaction in our work
  • work-life imbalances
  • improvements in availability of cheap and fast technologies
  • speed and potential diversity of internet communication

It’s a fast growing market of I-wanna-be-a-location-independent-entrepreneur.  Shit… there’s just so much material out there now about how it can be done.  There is no shortage of people ready to take your $20 for an e-book to show you just how it can be done either.  No harm in that!

Here’s just some of the topics they cover:

  • Breaking free of the 9-5
  • Minimalism and selling your stuff
  • Personal finance and becoming debt free
  • Planning and goal setting
  • Travel planning – where to travel to, how to travel, how to get cheap flights/accommodation
  • Building a website and marketing

But I don’t believe everyone can do it.  Sure, anyone can do it, but that’s not the same.

It’s an idealistic view of the world if we think everyone can live the location-independent lifestyle, and since there’s no-one out there to prove us wrong, we can argue the case in our favour with ease.

The Internet Marketing Circle Jerk

Much of the success, it seems, comes down to highly effective marketing, and selling either your marketing knowledge/services directly or e-books on how you can improve your skillz.  Lord knows, I need to improve my networking/marketing skills if I am to have any hope in my future business and career.  Nothing new there.  But I’m constantly overwhelmed by the amount of materials out there ready to relieve me of my $40 where I can learn all I need to.

Here are just some of the topics about which you can buy copious spins of the same material:

  • How to get more subscribers
  • How to grow your email lists
  • How to increase sales and conversion rates
  • How to maximise Twitter
  • How to leverage Facebook
  • How to get on the front page of Digg
  • How to …

Then there’s the circle jerk.

I’ll give you a real example.  I was considering hiring someone to help me with my ideas.  So I examined the site of someone who offered consulting services, and looked through some of the past client testimonials.  I then had a look through some of the clients’ sites to see the results, and low and behold there was a testimonial on that site from the original consultant who been hired to do work on the site.

It was a little sickening, and reminded me of the classic “circle jerk” analogy, deepening my concerns even further.  Once I became aware of it, I see it more and more in links, tweets and recommendations I see.

There really are fantastic books out there, some brilliant websites and resources, and there are a great many great e-books you can purchase/download on the topics of internet marketing and location independent living.  But I’m feeling increasingly uneasy, that there’s a club forming that many of us, location independent or otherwise, are just not a part of.

And when you’re part of the gang, only then does the mutual product promotion circle-jerk happen.

What I’m not saying

I’m not saying marketing is bad, or that you shouldn’t use Social Media (Facebook/Twitter) or email lists to maximise conversion rates.

I’m not saying money cannot be made off the internet.

I’m not saying you can’t break free of your shitty 9-5 job and pursue your passions.

I’m not saying you can’t live a location-independent lifestyle.

I’m not saying that people that sell courses, e-books, and videos etc. on either affiliate marketing or crafting a location-independent lifestyle aren’t perfectly legitimate and lovely people. Absolutely not!

I’m simply advising to be careful not to get caught up in the hype.  If you’re hoping to make money out of affiliate marketing, or just marketing your buddies’ products, fair enough, but you need to remember that the only real sustainable method of doing so is by creating a viable product – something that adds value.

Some will argue that creating a website where you write articles with embedded affiliate marketing links (which I use too!) is a viable product.  Fair enough.

Create value and add it to someone’s life and their business.  That’s how you make money.  When you’re circle jerking your friends, promoting their products where they in-turn are promoting yours and creating one huge happy marketing family, you have to wonder at yourself.

Sure, maybe you’re living an location independent lifestyle.  But if the only way to supported this is to sell or hawk e-books and other products espousing how amazing the freedom is and that if only we will do what you did we can have it too, then forget it.  I don’t want to know.

To keep me sane and level headed, I like a bit of Bill Hicks.  Guaranteed to keep you on an even keel.  He perhaps goes a bit far the other way, but it all balances out 😉


It’s entirely possible I’m feeling a little frustrated with the progress I’m making at the moment.  Sure.  Perhaps I’m jealous even?  Perhaps I don’t understand how all this internet marketing shenanigans works.  Fair enough.

Tell me I’m wrong.  What do I not understand?  What am I missing?  What do you recommend?  Perhaps you’re frustrated too and felt it’s all a bit of a con.  Are there any resources that you used to pick up the pace and get you to the next stage?  Please feel free to comment below agreeing or disagreeing with me – I want to be entirely wrong and lose my growing cynicism.  (No affiliate links or product names please, just your name/website ;))

{ 1 comment… read it below or add one }

David Scott Lynn February 25, 2013 at 02:02

Agree with all of what you say, Paul. I remember years ago talking to leaders of prosperity seminars who drove old beat up Toyotas. They were not very prosperous, as far as I could tell.

One widely famous marketer admits (or at least says) to having his car repossessed out front of the place he was holding a business success seminar. (He went outside and gave the guy 100 bucks, pretending he was tipping the guy for “detailing” his car! — Hutzpah!) Another of the very top rated internet gurus says he saw Tim Ferris at a big get-together, and Tim was the hardest working of the whole group!

That guru says most people are pursuing the “internet opportunity seeking” market, with a “shiny object” syndrome. The Secret, he says, is you have to
NOT follow what everyone else is doing, you have to be very different. And not afraid to tell people that you are.

He’s one of the few that comes right and says what I think the “gurus” all know but most do not say: what really works in internet marketing is using existing tools and good business strategy, but you have to have commitment NOT to just do what the other people are doing. You can no longer get away with bing Me Too! That might have worked until the saturation point got reached several years ago. Now, however, it is the people with some truly unique product, or new twist on an existing product, or an ability to do certain things so much better than others, and NOT be afraid to highlight that they are The Best Choice for what they are offering (USP, although I call it UIVO: Unique, Irresistible Value Offer). Otherwise, the Me Too Gang is just going to get the breadcrumbs of the Me Too market.

Now, there is one affiliate marketer I’m thinking of who has just gone WAY over-the-top on WAY over-delivering. He just does so much value-added, more than I’ve seen elsewhere in affiliate marketing, he is probably doing pretty darn well. … But if he was just doing what all the other affiliate marketers were doing? … NO WAY! … Even if you try to copy what The Best are doing, unless you’re lucky, people will stick with the tried and true people.

So, now, we probably have a boat load of people whom are affiliate marketers, selling products on how to be an affiliate marketer, with products on how to have the so-called Internet Lifestyle, who’ve probably NOT made any money as affiliate marketers, and do NOT live the Internet Lifestyle.

Anyway, Paul, another element is, I think, to a great degree, about Personality. And I know the post you made here is from Feb of 2011, so maybe you’re beyond all that, yet it appears from what I’ve seen, from your LinkedIn profile on to what I’ve seen on your websites, you are putting a very strong, Relationship Oriented, value-added element into your marketing, on top of whatever else you’re doing.

And it looks to me like you’re doing a great job! You got ME to click over and spend a couple of hours here! And I am REALLY burned out on all the Me-Too marketers out there. You are not one of them, or so I think.

So, what you said here seems to be right on: “I could write, if I had the time, heaps about my lifestyle changes over the past 2 years. And perhaps I will. (Or perhaps I should?)”

The Unique Personality Element for Relationship Building seems to be the next wave of success, but it’s got to be authentic, and YOU certainly seem like you are doing it well.

Okay, gotta run now, but nice getting to know more about you. I will certainly be looking at your products more closely.

Many Thanks & Take Care,


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