Small Bet Models

12 Different approaches to small bets

As part of this years experimental entrepreneurship process I thought I’d explore a range of models rather than relying on my ‘known’ entrepreneurial mode (Freemium SaaS/WordPress plugin based business).

Below I’ve collected together the different approaches I’m going to explore as small bets.

These are well documented in the entrepreneurship ether, but I couldn’t find a decent no-bullshit overview. Here’s hoping this list helps you find a small bet model which suits you. (To see which I’m working on right now, check the updates on my 2024 entrepreneur experiments page.)

1. Affiliate Marketing – Using SEO, pSEO, and social traffic to promote a WordPress site which lists others products where we can take an affiliate cut of the sale.
   • Distribution: Search engine traffic.
   • Timescale to profit: Long-term
   • Pro’s: Easy & quick setup, you get to express a special interest
   • Con’s: Google may die to AI, Affiliate rates can be low, SEO on new domains can take a long time to take effect
2. Online Education – Digitally delivered course, range of outlets, often driven by social traffic.
   • Distribution: Social traffic, ads, perhaps some SEO
   • Alternative distribution: Established course networks (e.g. udemy)
   • Timescale to profit: Short-mid term
   • Pro’s: Quick to make product, leverage existing knowledge, minimal support, high potential ticket-price / ROI
   • Con’s: Works best when established audience
3. WordPress plugin – Freemium, Listed on WordPress.org, with SEO/social traffic to bolster distribution. This is my comfort zone.
   • Distribution: Established network (WordPress.org), some external traffic
   • Timescale to profit: Mid-term
   • Pro’s: My comfort zone, huge established market, established sales flow
   • Con’s: Slightly longer lead time to product, price conscious market, support load, reliant on WordPress.org/WP
4. AI Tool – Could be a thin layer of logic laid over existing AI services, or larger IP. AI is currently under a lollapalooza effect (Charlie Munger).
   • Distribution: AI directories, social traffic, ads
   • Timescale to profit: Short-term
   • Pro’s: Booming industry, easily accessible powerful tools not yet fully tapped, lollapalooza
   • Con’s: Busy marketplace with lots of powerful examples taking limelight easily, unstable market, hard to build a moat around offerings, vulnerable to provider platform changes
5. AI Tool generated product – A spin on the previous, AI can assist in product generation in many ways. Rather than sell the AI tool, get the AI to make the product/service.
   • Distribution: Service directories, social traffic, SEO, ads
   • Timescale to profit: Short-mid term
   • Pro’s: Fast to market, imagination-first
   • Con’s: Potentially lacks originality/specialist input into product, potentially hard to build a moat around offerings, vulnerable to provider platform changes
6. Consultancy / Microsites as a service – Provide consultancy or small service-products (like in my case, WordPress plugins as a service).
   • Distribution: Your network, service directories, in the long term: SEO
   • Timescale to profit: Short-term
   • Pro’s: Leverage existing network/skillset, learn about your existing audience, hours = £, authenticity
   • Con’s: Depends on network readiness, ties hours to £ (initially)
7. Platform Arbitrage (Ethical Cloning) – Take a product/service which is doing okay (e.g. search Acquired.com for $200k+ ARR) and create an improved version with your own insight.
   • Distribution: SEO, ads, social
   • Timescale to profit: Depends on product
   • Pro’s: Market validation somewhat proven already, requires less imagination, can explore existing marketing for inspiration
   • Con’s: May already be a busy market, may not be a fit for personal authenticity
8. IRL Business – I often wonder how a real life business would feel after running software start-ups for so many years. Applied learning to IRL product/service. Lots of examples of ‘boring businesses’ flying around. e.g. Vending machines/laundrettes.
   • Distribution: Local IRL advertising, ads, SEO, word-of-mouth
   • Timescale to profit: Mid-long term
   • Pro’s: Bricks and mortar could have more longevity than digital, could get you out of the house, local connection building, local SEO is much easier than consumer product SEO
   • Con’s: CapEx, risk profile
9. Joint Ventures – For those who can build it can be useful to partner up with someone who can really market, and vice versa.
   • Distribution: One of the JV partners (audience/marketing prowess)
   • Timescale to profit: Depends on JV, typically short to mid-term
   • Pro’s: Play to each others strengths, established audiences can be satisfied
   • Con’s: Splitting the profits, working with new connections introduces an unknown
10. iOS/Android App – I’ve only ever dabbled with mobile apps, but it’s still a massive revenue market. With the benefit of distribution being built-in.
    • Distribution: App stores, social traffic
    • Timescale to profit: Short to mid-term
    • Pro’s: Huge established paying market, easy to charge
    • Con’s: Busy marketplace, requires some developer skill, reliant on Apple/Goog
11. Newsletter – Writing a regular email newsletter is an established business in of itself, if not simply as a funnel.
    • Distribution: Social traffic, SEO, ads
    • Timescale to profit: Long-term (probably)
    • Pro’s: Deplatformed email list is a huge business asset, connection to readers, builds trust & audience, coherent multiple revenue streams (ads, sponsorships, sell your own products), authenticity
    • Con’s: Requires consistent commitment to writing
12. Podcast – Another way to become an authority in your niche, as newsletter it can be a business in its own right (through sponsorship), if not simply a funnel.
    • Distribution: Podcast providers (Spotify, YouTube, etc.), Social traffic
    • Timescale to profit: Long-term (probably)
    • cale to profit: Long-term (probably)
    • Pro’s: Connection to listeners, builds trust & audience, coherent multiple revenue streams (ads, sponsorships, sell your own products), authenticity

I’m on an entrepreneurial odyssey this year, leveraging small bets to experiment with everything I took for granted in my last businesses. I’m charting new territory and it feels great. If you want to read more you can the posts on my year of experiments, my year of entrepreneurial experiments, or join my newsletter for highly compressed practical tips on making profitable products online in 2024.