Sunday, April 20, 2008

Catch 22: No product, no networking; no network, no product development

There are only two ways to get wealthy: do a lot of innovation, or do a lot of marketing.

Of course, the really wealthy people (like Steve Jobs) do both innovation and marketing. In fact, Apple's marketing comes FROM its highly developed innovation capability.

In contrast, Microsoft's innovation comes from its highly developed marketing clout. Indeed, since the very beginning when Bill Gates struck a deal with IBM to develop DOS, he has sought to saturate the market by using and leveraging more established players.

Okay, enough about those multibillionaires, let's talk about ordinary folks like you and me.

The situation faced by most people (and by myself prior to August 2005) is a Catch 22 situation: without a product that you can sell, you don't really have any incentive to network extensively as an Linkedin Open Networker (also called "LION"). So you are likely to have only 2 to 50 connections or, at best, 150. These connections are usually people that you've met in real life, and they come from your personal network or your professional network (coworkers, colleagues, clients, suppliers, etc.).

Since your network of 2 to 150 is relatively small, you don't feel any incentive to develop a product that can be sold and shipped to them. Since you have no product to sell, you have no incentive to develop your network, and so on and so forth.

This is the Catch 22 problem, and the overwhelming majority of Linkedin users are facing that big challenge.

Only a small minority of users on Linkedin make significant money, and that's because they have a liquid product (the job offers or opportunities sold by headhunters and placement counselors are considered as a "liquid product" also because it can be sold "as is.")

How can you, as a hard-working professional, manager or executive, get in on the action and make money too by using Linkedin?

The best way is to liquefy yourself, and then liquidate yourself.

I know it sounds a bit horrible, but here's what I mean by "liquefy yourself": capture your tacit knowledge and expertise into EXPLICIT knowledge and expertise. That is, write a short eBook of 20 pages containing the best of what you know which could be useful to other people.

"Liquidate yourself" means sell that document, via Payloadz, etc. to people that you think might benefit from it. At this point, don't be greedy; just set a price that allows for market penetration.

For example, charge $10-20 for your document. Then, from the feedback you receive from readers/buyers, improve your little eBook. Also, write a second eBook and sell especially to your current customers.

Alternatively, you can also buy many eBooks on the Internet that are sold along with reseller rights, meaning that you can resell the eBook and keep 100% of the profits.

I will write more in detail about those reseller ebooks, but my point for now is that the Catch 22 challenge afflicts perhaps 95% of the 18 million Linkedin users.

A person must honestly and bluntly confront this challenge if she is to overcome it, and be able to leverage Linkedin as an economic platform for creating significant wealth.