Building Long Term Value from your Blog

in #steem8 years ago

There are many blogs that attempt to teach bloggers how to generate long-term value. Most bloggers start out hoping to "get rich quick" and then flame out when they realize how difficult it is to monetize their efforts. Successful bloggers, on the other hand, take a slow and steady approach over many years.

Making money blogging is no different than any other startup. At first you must invest time and money building a business. It often takes years before you generate enough profit to cover the cost of your initial investment. Those who give up on their business before getting through the valley of death never see a return on their investment.

The partners in a startup are not paid salaries (because there is often little money), instead they are paid in shares. These shares represent the future value of the business after years of effort. If the partners attempt to cash out early they will receive next to nothing for their efforts. This is because their early effort only has value if they see their investment through to completion.

Solo Blogging Long Term Rewards the Traditional Way

As many of you are aware we have proposed simplifying payout period on posts to a single 7 day window. Some people have expressed concern that bloggers only get paid "once" and that makes Steem a sub-optimal place to blog compared more traditional systems that generate a ad revenue stream. So lets take a closer look at the traditional model.

A blogger, expecting to make it big, starts a limited liability company that owns his blog. He then spends money buying a domain name and pays monthly hosting costs. He deploys some free software (like Wordpress) and starts writing. Initially he has no audience, so he spends time and money to promote his blog and gain readers. It takes years to start making money.

If we take a best case scenario and consider an extraordinary blogger like, Steve Pavilina, who wrote a great article on "How to Make Money From Your Blog" then we can get a realistic "best case".

StevePavlina.com was launched on Oct 1st, 2004. By April 2005 (7 months later) it was averaging $4.12/day in income. After two years he was generating $1000/day in revenue.

That extraordinary success did not come easy, this man worked more than 40 hours per week for two years, spending 10 to 15 hours per blog post. He also invested a ton of time promoting his blog, learning technology, and optimizing for Google.

I usually aim for about 3-5 posts per week, but my posts are much longer (typically 1000-2000 words, sometimes longer than 5000 words).

That is a lot of work and it took him years with no income (or negative income) before it started really paying off. Lets be honest, most of us are not prepared to invest that heavily in earning money from our blog. We do not write frequently enough to generate recurring traffic or large organic SEO traffic. The revenue streams that worked for Steve in 2006 have long since dried up due to competition.

How much was each of Steve's posts actually worth? Individually they are worth next to nothing. Taken as a collection they are worth far more than the sum of their parts. If we assume he maintained revenue of $360,000 year for 10 years and posted 4 times per week then his average pay-per-post was about $1,400. He didn't get $1400 for each of his original posts, but those posts were what enabled him to build an audience that helped him monetize his later posts.

Cooperative Blogging Long Term Rewards via Traditional Means

Our own individual efforts rarely compound into the revenue stream that Steve Pavlina was able to achieve, but what if we didn't have to do it alone? What if we partnered with 100 people who each wrote one article per week spending 10 hours on it. Assuming all 100 people produced content of equal quality to what Steve was producing then they would generate 20 times the content of Steve Pavlina and in turn would achieve in 6 months what it took Steve 10 years to produce. Each of these people would own an equal share in a business generating $360,000 per year in revenue. At an obscene 20x future earnings, this business would be worth less than $10 million dollars and each blogger would have shares worth $100,000. Their average income per post would have been $3000.

The reality for the 100 bloggers is that their shares are only worth $100,000 if they keep producing the content necessary to sustain the $10 million dollar valuation. If they attempted to sell their shares and walk away then the market would greatly discount future earnings and a $100,000 valuation would drop to $10,000 and each blogger would be lucky to earn $300 per post.

You see, the value of your effort today is highly connected to your future effort and it relies heavily on compounding effects. If you stop producing content then your audience will dry up and fewer people will discover your old content.

Steem - The Ultimate Cooperative Blogging Platform

When you are paid STEEM in exchange for your post it is like receiving shares in a new blog. Early on those shares may be next to worthless, but if you see it through they can grow to be worth while. Imagine Steve Pavlina sold shares in his blog the first year of operation. He would have had some income, but it would hardly make him rich. Later, when his blog is generating $1000 per day he will find that most of that revenue is owed to his investors and that he would be lucky to bring home a basic wage. At any time the investors could hire someone else to produce similar content.

The only way to make a lot of money in this world is to spend your time building something you own. That can either be through starting your own business or partnering with others who are willing to share equity. If you are looking at the current value of the equity you are paid then you are doing it wrong. Your real pay day comes years later after your efforts compound to produce something of much greater value. Cashing out early denies you the benefit of this compounded return.

Those of you who earn $100 worth of STEEM today may see that STEEM worth $10,000 in the future after everyone's collective efforts compound. Sure, Steve Pavlina could have sold his articles for $100 each to some other self-improvement blog and brought home a minimal wage, but he didn't. He declined $100 dollars up front so he could realize $1400 in the future and bring home a $360,000 salary.

Conclusion

STEEM is its own long-term reward and there is no need to generate a revenue stream. Those that hold on to their STEEM naturally receive the long-term value that accumulates to the platform due to their post and everyone else's continuing efforts. It is far better to take your long-term gains as capital gains on STEEM than as regular income from ad revenue. This is even more true when you realize that STEEM has many sources of value that are far more lucrative than Google Ad Sense.

We could simulate the "long term" revenue model by paying everyone in STEEM POWER with a 10-year divesting period. You would post today and maybe earn $4.16 per day in liquid assets. If you keep posting for 10 years then eventually you will be claiming $1000 per day. Instead, we give everyone relatively liquid tokens. Those who sell today earn some money, but forgo the long-term revenue stream their content could earn them.

When someone buys the $1 of STEEM you earned today, they are buying the future revenue stream too. In other words, all STEEM payments are approximations for the net-present-value of all future revenue your post would earn discounted for risk and the fact that you are selling out and may stop producing content.

When you run your own blog you face significant risk, only 1 out of 20 full-time bloggers earn a middle class income. This means that the chances that you will achieve long-term return on your efforts must be discounted. When you join a cooperative effort like Steem, you diversify your risk at the expense of a lower maximum return on investment. This diversification still gives you compounding effects, but with a significantly lower chance of complete failure. Unlike solo-blogging, blogging as a team as the added advantage of network effect. This network effect means that the chance of community success is greater than the sum of the individuals.

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i used to post once a month here and twice a month on my blog.
now i post here daily and once a month on my blog since i got so much love, votes and followers here i just cant let them hanging !

and people on my blog are with me since years so they know i sometimes post once a month and sometimes 3 times but never more.

This is why it's important for people to understand that the quality of posts matters on the platform for it's current and future success, as well as what content is posted to generate future value or utility in people's lives. Think about valuing timeless content that serves people now and in the future.

I can appreciate that, and I'm not trying to start an argument, even though I'm in the "content quality is completely subjective" camp.

But how would you measure the quality of content? If not for their popularity. The way I see it, quality is subjective, popularity is objective. I'm sure everyone can agree that Steemit needs content that works as a "draw" for people to join Steemit.

But is a post on the latest phases of microbiology objectively high quality content as opposed to something else?

Top 5 Best Selling Books of All Time:

#1 – Don Quixote (500 million copies sold)
#2 – A Tale of Two Cities (200 million copies sold)
#3 – The Lord of the Rings (150 million copies sold)
#4 – The Little Prince (142 million copies sold)
#5 – Harry Potter and the Sorcerer's Stone (107 million copies sold)

My point being that it's all fiction. Entertainment.

Also, on Facebook light and fun content seems to get more likes than posts on microbiology. The big masses don't seem to join Facebook to discuss microbiology.

What say you?

Don't take this antagonistic, it's a sincere conversation opener.

Approximately 5 Billion bibles have been sold and that makes it far and away the biggest selling book in history - http://www.guinnessworldrecords.com/world-records/best-selling-book-of-non-fiction/

Be careful which blogs you read - the author of that blog used Wikipedia as his source and we should never trust Wikipedia. The blogger pulled his data from a fiction only book sales page so the only result one could expect to receive are fictional - https://en.wikipedia.org/wiki/List_of_best-selling_books#More_than_100_million_copies

Always check your sources and trust no-one - truth!

I would estimate that over 30 billion bibles (or versions of it) have been produced since its creation.

Wikipedia is trust-able if and only if the fact has its references to good sources.

Any person can edit any article, and it could be the case that when someone reads the article, it has just been modified with any false statement. Very often people revert those changes. But it could be the case when someone is reading when anybody had reverted them.

Content does have mostly subjective qualitative assessment, yet there is also content that has objective quality to it. Utility of content is one such measure. Knowledge about certain things has utility, and has more objective value than something that doesn't. Quality is measured in people work in many areas, even in creative, writing, and other areas you might apply as subjective. There are many degrees of quality measures to apply to different contexts. It's not about an absolute measure.

You're also conflating the issue of being able to objectively determine a valuation of something, with whether that's possible at all, by your argument with Facebook and other popular content. Popularity doesn't determine objective quality. Popularity doesn't determine truth. It's just a perception of what is trending and plays on emotional preferences of the most part.

Popularity is subjectively determined by peoples whims, wants and desires, not necessarily measured on actual meaningful quality motivations to improve their lives or the lives of others. Being led by basic emotional feel-good motivations is a non-reflective process, not a reflective, contemplative, thoughtful understanding of what to do and why to do. Populism, jumping on the bandwagon, is more in the herd group mind that individualist authentic thinking.

Anything happening is objectively happening, so yes "popularity is objective" but your conflating the issue here with what is meant. As I said, quality has subjective measure, and objective, depending on what your talking about.

Microbiology might have some utility for certain things, but there is other knowledge that is more useful in people lives if they could understand why. What is the utility of microbiology in someone's life? Will it help them improve the quality and condition of their lives on their own? Because the quality of important truths, principles and values for living, will help improve the quality and condition of our lives.

I would have thought popularity is subjective since it is subject to what people collectively think - similar to value

What people determine to be popular, is usually subjectively determind, but objective vauations can be used to favor something and everyone recognizeds that which makes it popular.

The objective part of popularity, or anything that is currently expressed in reality, is that it is currently in reality, as a certain quantity of whatever it is, hence it has an objective aspect to it due to it existing as a reference in reality.

People like apples but no oranges is subjective for the most part, but those people, and their liking something, is objectively true that they do or don't like something. So then, you could add up all the people who don't like something, and represent a certain popularity level against something. This is not looking at the subjective judgment of why people like something, but merely at the objective action that is part of reality: the choice to not eat the food they don't like.

I hope that clears it up. I was not saying popularity itself, is objective.

opposing and radically different viewpoints are welcome. Echo chambers are what kills growth.

The greatest concern with respect to this argument and long term value is objective quality. Whilst I have faith in Steem and Steemit as a revolutionary use of blockchain technology and platform for communal value - there seems to be a large percentage of what one might call "hyperventilating" in terms of content - that is, one has to scan to find carefully considered and well constructed posts - and to that end, regardless of subject, quality is not subjective imho ;)

"quality of posts matters"
shall be written
in sharpie
across the bow
of the laptop vessel

I am still part of the "we need to produce quality content" camp, but I do agree with @schattenjaeger that quality is highly subjective. News items, funny content, and other "easy to produce" posts can still add a lot of value to the platform. I think looking at it from the perspective of what is going to attract users to the site and keep them actively engaged should really be the goal. Whatever it is that makes that happen is good.

Your perception of quality is subjective. Not quality. Either realistically assessed quality will bring value to the steem ecosystem, or if a subjective perception of quality deters users who disagree with the assessment then we devalue the system from the loss.

That's fair.

I partially agree with you. However, more than anything, I think it's important to build autonomous micro communities within steemit. By us constantly defining 'what is good' we will not be adopted by the many diverse micro communities that make social media vibrant and worth exploring.

Yes, limitations to interaction need to be understood and micro communities are good. Sub tokens or sub pools for different types is an idea too.

Agree. For that, some construct like private groups or hidden friends is needed.

This was a really interesting read @dantheman. Thanks for writing this. I am personally really enjoying writing, but I have never looked at posts here or on other platforms in the way you described, so this was indeed a new perspective for me.

In addition to getting the long-term value from Steem, we must also not forget that good posts usually increase our following numbers. Once people get several hundred or even thousands of followers, I bet their earnings from each post would increase a lot, and is in my opinion also a nice bonus for future profit.

Brilliant article. This was my reasoning when I joined, it was a great idea that earned my long term commitment. I didn't care that I bought some steem at 4$ or that it took time to get traction. I saw each and every post as a chance to engage people and my constant goal was to get comments and conversation going.

If one day Steem goes to the moon, great! If it goes to the grave, I'd be sad but not for one moment would I feel that my btc or, much more importantly, my time and attention were wasted. Steemit (the people on Steemit) has made a blogger out of me!

This is the start of something amazing, and good things take time

I love this reply. I have ridiculously fallen into the defeatist attitude that gets spread around sometimes, but then I realize that it is indeed ridiculous (with some chagrin). What it stems from is the new instant gratification disease that is running rampant. I use the term disease as dis-ease. Mostly here it's because people tend to compare themselves to the bloggers making what appears to be large payoff on a daily basis. There are all kinds of arguments about the quality of the content and whether or not it is deserving. Opinions are subjective so ultimately it's an argument that can't be won. That's what I've come to.
The way I feel? Do what you love for the love of it. If money comes great, if not, can you call doing what you love a waste of time? I sure can't. And when you add to it meeting all kinds of amazing people, (like you @prufarchy ;) it's really an incredible place. A brilliant idea that I have faith in.

Thanks @dreemit :) imagine what it was like in July haha, people regularly had these crazy payouts, it was amazing and confusing and intimidating. Just gotta stay the course and, like you said, do it cause you love to.

Moon or doom, I don't care. I met many wonderful people here and have a great time. But let's be honest to ourselves, there is only one way for STEEM. Moon!

Wow, this is awesome. I saw it in my feed and was like this, this right here is why I want to be a part of this great community and help boost the numbers in users, as well as the ranks in Quality, thank you for giving us encouragement, insight, and knowledge.

You are a good leader my friend, Keep Steeming on!

~ @Timbo

This is probably the most well reasoned explanation I've come across for why people should take a long-term view to their involvement with Steemit. Every quality post we write adds value to the platform and helps with the compounding effect. My overall attitude is that we should write to write well, not to make money. Focus on quality content, and money will come as a natural consequence, as long as you don't make it a primary focus. And let's not forget that the journey is its own reward! I was lured into Steemit by tales of $1000+ post payouts, but I stayed for the community and the sheer joy of writing. It's been a great adventure so far, and I'm looking forward to seeing where we go from here!

That's a very interesting post, I hope the majority of users will find it!
In my opinion a blogger has to act if he was building up a brand - from the very beginning. "Who am I and who do I wanna be?" It's like in every customer-driven market segment: you give promises you'll have to fulfill. Quality promises, aligned with your brand values, and loyalty promises alined with your positioning inside the respective community. You have to perfectly come to know your target group to then produce your content according to your own brand values and their expectations.
steemit works like every other start up business model - you need patience and consistency to succeed in the long term.
I am convinced that the ones who are here and keep working hard on their aims will not regret.

You're one of my favourite authors and commenters here! And I think that is to do with the clear brand you are building. With every post and comment I feel like I know you better.

Oh wow - thank you so much for your kind words @beanz, I feel very honored!!! :)

Dan, I did not realize this was an avenue for writers to generate income. I feel really humbled right now by the welcoming love of the community given my post have been using the site more as a social media platform where the value was based on friendship and a community idea of sharing thoughts and theories to bring about a mixture of cultures ideas and opinions. In my haste and excitement I jumped straight in and did not realize I am a doggy paddler among Olympic swimmers! I write as an escape from the psychosis that comes with my illness but in no way have I pursued it more than an escape from my own mind for a brief second when psychosis seems to be ticking by slower than the longest second. I want to thank everyone who has welcomed me with open arms. And to say that as a community as a whole Steem It is good people! Means they are friends or would offer a stranger the shirt off their back if needed. Bless you guys for being a kind community!!!

This is exactly why, in spite of very low payouts for work I spent a lot of time on, I am still committed to producing as much content as I can for Steemit.

While the price of STEEM is so heavily undervalued, I aim to acquire as much of it as I can. When looking at my profile, I pay no attention to the dollar value of my account. If I did, I would probably have given up by now.

I focus only on the amount STEEM that I have acquired and what I believe the potential value of it will be in the future. Approaching things from this perspective keeps me motivated and eager to produce as much great content as I possibly can before the price shoots up again.

You have a point! In comparision, other blockchains out there are doing good based on their future use and the value of their coins, but they do not have anything to involve the user as steemit does. As an example, Ether did well because most were excited about the potential of a smart contract and the coin prospered.

But here on steemit I can see the interactivity and engagement it has the potential to bring, which should be the singular reason for valuation to rise in the future.

We have the potential to grow but we also must pause and figure out why present statistics paint a dismal picture as to user on-boarding and retention.

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