Why we Build Media Companies

Why we Build Media Companies

Preface

“Niche sites” are the biggest piece of shit out there. Yes I finally said it.

While I don’t want to generalize this statement, I concluded that the typical niche site, provides zero value and often misleads readers.

It’s a shame that Google is still not able to distinguish legit sites from shady affiliate sites. In a lot of niches, SEOs are still able to rank low quality sites that do harm.

Always remember that people somehow blindly believe what’s on the internet. If it ranks high on Google, it must be a trustworthy source, right?

We all should realize that we play a huge role in consumer protection. Affiliate sites are the main reason why unethical companies make money and still are in business: Affiliate sites are “reputation management” for them.

If people “recommend” other companies (btw it’s even worse if affiliate links are not marked as such) then that’s a sign of trust. Even the shadiest, most harmful products can stay alive if they offer a high commission for affiliates.

While it’s cool to make 2–3k per month with an affiliate site (I know it myself), these types of ventures don’t bother me anymore. Additionally they are not sustainable and probably will extinct in the next decade.

Growing affiliate sites has become a rat’s race of making more money with no real purpose behind it. I could make 100k a month, growing niche sites is not what excites me anymore.

Our ambitions are bigger than growing the biggest dick pill site in Germany.

So on November 11th 2019 we have decided that within the following 12 months we will exit all our current “niche sites” and only work on legit media companies after that.

Our Future: Marketinghope

Marketinghope will become a

  1. Branding (Brand identity-, Logo- and Graphic design, etc..)
  2. Media production (Video content-, Articles- and Podcast production)
  3. Marketing (SEO, Paid Advertising, Community creation and Local events)

Powerhouse.

Marketinghope (Hope & Go LTD) will hold equity in various companies, “outsourcing” the branding, media and marketing part.

Either for our own media companies — where we are majority shareholders — or outsourcing it in an addition to the main business model of other companies (I will talk more on this later in the chapter “Every company is a media company now”).

Right now the only company that we are working on is investfirst.de (Investment property brokerage), our “first legit company”.

We own 40% equity in the Invest First GmbH.

Later this year we plan to incorporate two more companies: Bitcoin-news.one (A spam niche site turned into legit Crypto publication) and Finanzenonline.org (A finance niche site turned into a legit personal finance media company).

What happens to Marketinghope? Marketinghope will become the digital showcase for our projects:

So far we only published content about SEO. Search engine optimization remains my love and passion, but I must admit that it is just one traffic source out of many.

Now we will document the journey of building legit companies on our Youtube channel.

Everything that we will learn along the way, we will share with you. This will be the next step for Marketinghope: Becoming the go-to resource for holistic marketing. Teaching everything from branding to media production to advertising.

It’s the only thing that we can do

We tried SaaS (hopeandgo.net), eCommerce (soulcbd.de), everything. We realized that we are no software engineers and have no clue about retail.

We came to the conclusion that creating media (and building communities) is the only thing we are good at.

If you want to create a valuable company (be competitive in your market), you have to be the best at what you do.

Creating niche sites requires no “actual skills or expertise”. But building legit companies does require expertise, — having the best possible product is the most important aspect of a company.

We certainly never would succeed in SaaS or eCommerce, because we are just not good at it, have no experience and most importantly: Are not interested in these business models.

We realized, that creating media also is one thing we always have been fascinated in.

I started my first Youtube channel 10 years ago when I was 10 years old. Since then I probably already had a dozen “half-successful, super-cringy” Youtube channels.

Roman, Ricardo and I always created media, so it came naturally to us to build media companies.

Antifragile

Media companies have a somewhat “antifragile” sentiment to them.

Antifragile: When you have more to gain than lose in the presence of uncertainty (positive asymmetric payoff)

With the current Corona situation a lot of companies are going through rough times. When the whole economy is down, almost all industries take a hit.

Over the past couple of months I realized that media companies are relatively resilient and typically perform anti-proportional to the rest of the economy.

Business Model of media companies: Creating and distributing media. Typically exchanging attention for money to advertisers.

Therefore, traffic (attention) = revenue.

There are two risks that media companies face:

  1. Not producing the best content

If your company doesn’t produce the best content (most educational, most entertaining, latest news, etc..) then people will not consume your content.

Content is your product.

What I like about media is that it is a positive-sum game: People typically don’t just read one single newspaper and radically ignore the rest. Everyone can have a share of the pie, consumption is happening despite competition.

Also let’s face it: Media has become one of the biggest “drugs” in the 21st century. Probably everyone consumes media in some way.

I believe that the consumption of media will only increase in the future.

2. Publishing content on the wrong platforms

This is the biggest risk that threatens media companies to go out of business: Losing attention, because content is published on the wrong platforms.

Legacy media companies (e.g. local news magazines) are not the platform anymore. With Social Media Platforms like Facebook, Youtube or Instagram, the eyeballs of society have moved from legacy media companies to social platforms.

All media companies have to adapt. Those who don’t adapt (or adapt too slow) loose market share.

It’s the job of every media company to not only produce the best content, but also figure out how to distribute it best.

Every company is a media company now

What is the best way to generate traffic for your company nowadays? If you ask me, it is creating media and then distributing it.

Let’s take our newest venture Invest First GmbH as an example:

Obviously Invest First is not a media company. The business model is providing investment properties for capital investors. For every sale we get a commission.

However in addition to the main business model, we also add the media aspect to Invest First – we generate organic traffic through content marketing.

Every company should have a blog, Youtube channel, Podcast and Facebook Community. Everyone should produce content about their topic and use the attention they get to promote their products.

Marketinghope (Hope & Go LTD) will hold equity in various companies, “outsourcing” the media creation and marketing part. Every company needs it, and we provide it.

Network Effect

The “network effect” makes media companies and technology products the sexiest business models that are out there (in my opinion). Let me quote Naval Ravikant from his “How to Get Rich” series:

“In a network effect, each new user adds value to the existing users”

“What is a network effect? Let’s just define it precisely. A network effect is when each additional user adds value to the existing user base. Your users themselves are creating some value for the existing users.”

[…] “Zero marginal cost of reproduction: producing more is free”

“Another one is, and this is along the same lines, but technology products especially, and media products, have this great quality where they have zero marginal cost of reproduction. Creating another copy of what you just created is free.

When somebody listens to this podcast or watches a YouTube video about this, it doesn’t cost me anything for the next person who shows up. Those zero marginal cost things, they take a while to get going because you make very little money per user, but over time they can really, really add up.

Joe Rogan is working no harder on his current podcast than he was on Podcast number 1, but on Podcast number 1,100 he’s making a million dollars from the podcast whereas for the previous one he probably lost money; for the first one. That’s an example of zero marginal cost.”

Meaningful media

As you can tell, this entire transition had to do with the search of meaning in our work.

At the end of last year we were miserable: Yes, we made good amounts of money, but we lost joy in the work we did.

In one of my latest posts “The importance of storytelling” I talk about how impactful media can be.

Shallow media (typically what you see on Instagram or Tik-Tok) destroys brain cells and is the opposite of “meaningful”.

But qualitative media can be thought-provoking, important and impactful. There are so many beautiful documentaries and series like AbstractChef’s tableDirty Money or Icarus (my Netflix favorites).

Independent, qualitative journalism (media) plays an important role in our society. It can be meaningful for an entire lifetime and beyond.

Written by
Richard Hopp
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