I’ve talked alot this year about the practice of “opportunity hopping” in online business: The way people’s chances of being able to make money online get killed by the compulsive urge to jump from one method to the next, one opportunity to the next, without ever focusing on one method long enough to see it through to success.
Amazingly, there’s a scientific psychological reason for this phenomenon, and a new study has revealed something about this “hopping” pattern of behaviour and how it affects your chances of success, that even I couldn’t believe…
I just finished a fascinating new book called “Predictably Irrational” by researcher Dan Ariely.
The book discusses many patterns that humans use in their decision making, often by default, that while seeming rational and helpful, when taken and examined, are completely irrational and unhelpful.
One such behaviour pattern (and tell me if you recognized it) involved an experiment that went something like this…
The participant sat down at a computer screen that displayed 3 doors. Red, blue and green.
Once inside, he had a button that could be clicked, earning him a small amount of money with each click. He’d click on the button once and it earned 3c, the next time he clicked 5c and so on, but the value of each click wasn’t known to him until he clicked.
He was also told that each of the doors contained buttons with varying values, and he had to use all the clicks he was assigned (he could only make something like 30 total clicks) to try and make as much money as possible. Also, as his clicks progressed, the value of all clicks, increased. So if he clicked a button 3 times, it’s monetary gain would increase by a random amount each time.
The final stipulation was that each time he chose to enter or leave a room, he had to click out then back in and those clicks cost a fee – say 10c. (much the same as to start a new online biz method it costs money, you have to purchase the course, set yourself up, etc)
The results were very telling, and had massive implications for all “opportunity hoppers” out there.
The average participant started out like this…
They entered one of the doors and began clicking…
They saw the value of their clicks increasing slightly and initially, chose to stick with the same room, because it was producing results…
Part way through however, as their clicks remaining became less and less, the notion that they might be missing out on something better in another room took over.
They left their first room and entered a different room (remember you don’t earn any money when you make the clicks to leave one room and enter another room – they decrease your click count but you don’t make any money) to see what was there…
After learning that the values in that room were close to the same, some entered a final room, while others returned to their first room to stick with what they knew.
The big question is…
What group of people made the most money? Which pattern of behaviour with regard to the various opportunities resulted in the greatest financial gain?
Prepare yourself…
First note that the total value of clicks available in each room (assuming you stayed there the whole time), WAS different. There was more money to be made in one room than another. Some rooms WERE more profitable than others.
HOWEVER…
The results showed that staying in ANY ROOM… for the whole game… even if it was the least profitable room, would have left you with more money than if you made even one change to another room (another opportunity) through the course of the game…
Changing to a different room to see if it was more profitable NEVER ended up in the participant making more money – NEVER.
Do you understand the analogy?
What this means effectively is this…
You’re trying to what method you’re going to use to make money online…
As each instructional product is launched, you change back and forth between your methods, chasing what you think is the more profitable method.
What this study means is that sticking with ANY (decent, non scam) method, even if it’s not the most profitable, will make you more money than changing back and forth between methods as a more exciting opportunity arises.
Because here’s the thing…
There’s a little something in economics called “Opportunity Cost”
It means that when you change from one path to another, one method to another, you don’t just gain the good stuff of the new method… you also LOSE the opportunity you had to use that time making money or at least progressing, with the first method…
Each time you change methods you’re effectively LOSING money and you don’t even realize it.
I found these results AMAZING.
It means that the hunt for the most “profitable” method of online business is totally worthless. There isn’t one!
Not only is there not one… but the time you spend looking for one is time you’re NOT spending MAKING money with the method you’re already working on!
Is that doesn’t make you sit up and think “Yikes I’m going to stop changing opportunities so frequently” then I don’t know what will.
Focus is the name of the game.
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This temptation is very hard to resist — especially for new people. I think this is especially deadly for people with a day job that have precious little time to spare. Mark
Greeat. Now there’s scientific proof.
I will willingly admit to suffering from this some time ago. Once I acted, I created and launched a product that’s rewarding me quite well.
Btw. NMOC was one of the 1st products I bought. Glad it was. Recently rediscovered you through ProBlogger’s article marketing post. Good work there!
Curious : how relevant is NMOC.I’m this day and age? Or has firepow taken over?
I have to admit I was an opportunity hopper when I began chasing the “Internet Dream”. Fact is there is a lot of temptation out there as well as a lot of false promises wrapped in nice presentations.
As time went by, I got tired of all of this and sticked to 1 method and it did bring me results. Perseverance and focus are the key ingredients indeed.
Predictably Irrational is a phenomenal book. It should be required reading for anyone in any type of business.
Jesus,
NMOC is still extremely relevant, with the exclusion of some of the wordpress tips, since wordpress has made many updates. But the strategies are to this day the most powerful I’ve created.
Kevin,
I agree – I’ve been telling everyone about it
Andrew
Wow…That was the coolest post I’ve read in a LONG time!
I’m definitely going to pick up that book soon. I completely agree with the notion of Opportunity Cost and its affects on aspiring entrepreneurs, and I’ve noticed that since I went on my IM opt-in list purge in November that my income has more than doubled.
Hmmm…wonder why that is? =)
Thanks for the post Andrew. Take it easy,
Kyle
As a general rule, this approach is important.
However, what if there is a path that is significantly more profitable than others. How does one find this path without some experimentation?
I would venture to guess, that you yourself tried a few models before you settled on the profitable model that you finally adopted.
Great post. I’ll have to pick up that book. The title is just toooo intriguing for me to pass up
Like Kyle, I have purged my email subscriptions down to a mere handful. It cuts distractions down tremendously.
The only danger here, as David points out, is that there is a big difference between something that pays $10 per day vs. $1000 per day. It is difficult – for beginners especially – to separate the wheat from the chaff without a bit of threshing about.
David,
Think of it this way. Imagine we’re samurai warriors.
If I had 5 swords, and you asked me, which is the most powerful sword…
I would say, no sword is the most powerful, because even though they are different, it depends who’s wielding them..
The least skilled and least dedicated swordsman will hold the most powerful sword and not get it’s full benefit. But the most committed samurai will make even an average sword into a dangerous weapon.
It’s the user that makes the method profitable.
With the exception of methods that are scams (which you can discern through thorough research), any method CAN work but it’s up to the person to make it work.
Hope that helps.
Andrew
And Wally,
You’re right, I tried alot of methods too before I understood this principle and in fact, ALL of them were profitable. I made money with all of them, at least initially – but the ones that ended up being the most profitable were only the ones I did for the longest, the most consistently.
Andrew
P.S. Last note.
It’s also not just the method but HOW the method is implemented.
When I think back, I tried alot of methods that COULD have been profitable but weren’t because I wasn’t doing something right. If I had’ve stuck with them longer and learned more about them and what I was doing wrong rather than changing to a new opp, I would have progressed alot faster.
Andrew
That last point is gold. I remember my first attempt very well. I picked a fantastic product, created a nice pre-sell page, submitted it to a handful of directories… and nothing happened. Had I known a fraction then of what I know now…
Funny, that product is still a good one. Maybe another shot at it with a nice SEO optimized blog and a couple articles would be fun…
BTW, enjoyed your 3 part series over at Warrior Forum. Got me looking at a couple of the article “spinners”. I found a nice free one at http://simply-free-article-spinner.com/free-article-content-spinner. Interesting to note – it uses the WP platform. It’s not my product, though I wish it was!
I love the term “opportunity cost” , makes so much sense and good to use that phrase again as a finance and economics degree major . . . lol….I was guilty of hopping too, well i think every newbie does that…..
Andrew,
Thanks for the thoughtful answer.
Now to apply it…
Hi Andrew,
That is an interesting experiment but though I agree with you 100% on the opportunity hopping thing being a mistake, the conclusion from the experiment would be that it is better to stay in a boring job than it is to ‘hop’ into internet marketing.
If you never take a chance or try new things, things will always stay the same but hopping from one thing to another to another will never give you time to achieve anything either.
Steve
WOW!! That was an awesome post! And one I MUST take to heart as I am often tempted to change directions (and many times do) – which only puts me further from my goals! Boy oh boy the time I’ve wasted and the money not made! Now let’s see what a little focus will do…
That is ecxactly what’s been happening to me. I’ve been jumping from one program to another system, making small amount of money in each one… This article has been an eye opener, now I’, going back to the system which has made the most money and stick with it. By the way, your greay Andrew; someone refers me to this blog and now I see why…
Erika Wiefield.
Haha thats sooooo true and I hopped all around over a year before noticing it…
((