Bill Bonner's Big Idea

by Gary North
by Gary North
Recently by Gary North: Pink Slip Nation

I am fortunate. I am a small cog in Bill Bonner's immense publishing machine. I became part of his big idea. If things go well for you, you will identify your own big idea and implement it. Cheap.

The nice thing is that his partner has written a great essay on how he did it. I only found out about it recently.

Bill Bonner co-owns Agora Financial, which publishes this eletter. He was a pioneer in email publishing a decade ago. Agora is generally regarded in the industry as the most successful of the email financial publishers.

He got there when the getting was good: before the Internet was clogged with sites. (The Internet isn't clogged, but we are. The average person visits about a dozen sites. To get onto his list, you must displace another site. This is not easy.) There was no working model for an Internet-based publishing firm when he launched his. He discovered the model. It was the first eletter model to generate large revenues.

"MICHAEL MASTERSON" SPEAKS

The name is a pseudonym. You know, like Mark Twain. The odd thing is that his real name sounds suspiciously like a pseudonym. His fake name sounds real.

He reveals for the first time that Bonner has sold a billion dollars worth of publications. That is not chump change.

Masterson became a partner 15 years ago. Before this, he had experienced his share of successes – successes bigger than most people ever dream about, let alone achieve. Yet he admits that he did not know what Bonner knew.

Bonner got it from David Ogilvy. Ogilvy seems to have discovered it on his own. He revealed it in his book, Ogilvy on Advertising.

Note: Ogilvy put the book into a trust for his son. It was worth nothing at the time, so it was a free gift – no gift tax. The royalties went to the son. That was one of Ogilvy's small ideas. The IRS paid the price for that small idea. The book generated a fortune.

Here is Ogilvy's secret.

"You will never win fame and fortune unless you invent big ideas. It takes a big idea to attract the attention of consumers and get them to buy your product. Unless your advertising contains a big idea, it will pass like a ship in the night.

"Big ideas come from the unconscious. This is true in art, in science, and in advertising. But your unconscious has to be well informed, or your idea will be irrelevant. Stuff your conscious mind with information, then unhook your rational thought process."

I don't think a big idea comes from the unconscious, because I don't know if there is an unconscious, or how it communicates with the conscious mind if there is an unconscious. But I do know that the strategy is correct. When a big idea comes, it comes after lots of careful thought about a topic.

Unless it just comes out of nowhere.

Detailed conscious thought may or may not trigger the Big Idea. I don't know. I do know this: conscious thought lets me recognize the magnitude of the thought. I have a framework for evaluating it.

The trouble is, I tend to overestimate it. So, I keep it in check. I apply John Schaub's principle, which is:

MAKING IT BIG ON LITTLE DEALS

That is the name of the seminar he gives twice a year. He makes his money on houses, not seminars.

Schaub is a successful investor in real estate. I have watched him work since about 1975. I never heard John come up with a big idea. He just shuffles along, buying at a 20% to 30% discount per deal. This is small potatoes for John. It's big for the rest of us. It's a cookie-cutter operation: deal after deal, year after year. It adds up. So do the houses that his tenants have paid off for him.

If he ever loses, he doesn't talk about it. He has enough successes so that when he dies, his heirs will have a potful of money. His heirs will not be his children. He agrees with Warren Buffett: "I want my kids to have enough money to do anything, but not enough to do nothing."

So, I see both strategies at work. The big idea is the biggest idea that a person can have. Schaub's big idea was making it big on little deals.

MARKS OF A BIG IDEA

How do you spot one? Here is Ogilvy's list of big idea sensors.

1. Did it make me gasp when I first saw it?
2. Do I wish I had thought of it myself?
3. Is it unique?
4. Does it fit the strategy to perfection?
5. Could it be used for 30 years?

Masterson tells of the first big idea that came across his desk at Agora. It was a manuscript for a cheap, mass-produced paperback book. Those little books were called book-a-logues. They briefly replaced ads that looked like magazines, called – you guessed it – mag-a-logues.

The strategy had first come from mailing out free books that led to donations. It was a non-profit strategy. The first one I recall was one by Jeremiah Denton, a former POW in North Vietnam. It was a reprint of a book, When Hell Was in Session. It raised a lot of money.

The book-a-logue Masterson saw was The Plague of the Black Debt. The title was a take-off on the plague of the black death (1347–50). The book was mailed 14 million times. It made the copywriter a pile of money at a nickel a piece (which is what the going rate was back then).

Bonner had written another spectacular package years before for Agora's newsletter, International Living. It began:

"You look out your window, past your gardener, who is busily pruning the lemon, cherry, and fig trees ... amidst the splendor of gardenias, hibiscus, and hollyhocks.

"The sky is clear blue. The sea is a deeper blue, sparkling with sunlight.

"A gentle breeze comes drifting in from the ocean, clean and refreshing, as your maid brings you breakfast in bed.

"For a moment, you think you have died and gone to heaven.

"But this paradise is real. And affordable. In fact, it costs only half as much to live this dream lifestyle ... as it would to stay in your own home!"

This is called selling the sizzle. It is a way of verbally drawing a picture, a picture of a dream. Now, if you can just find a mailing list that is made up of people with this dream. . . .

Masterson talked with a copywriter who could translate Bonner's cryptic observations into ad copy. Here is what the secret is.

"When you have a 'great' conversation ... read a 'great' book ... or see a 'great' documentary ... what grabs you? Is it the litany of small details? Or the golden thread that unites them?

"More often, for most of us, it's the latter.

"And the more you 'get' the core idea behind a story, a speech, a revelation ... the more memorable that one core message becomes.

"This is just as true in sales copy.

"One message, well developed, just has more impact than ads – short or long – that are overloaded with competing ideas."

This is great stuff. This idea can be used by anyone who can spot the core idea of a story, and then translate into copy that paints an emotionally compelling verbal picture on paper. If you develop this skill, you will always put food on your table.

I wrote an ad like this in 1979. It generated net revenue of $500,000 (1979 money) in less than a year. It was tied to an obscure government directive handed down in 1961, in the final month of Eisenhower's administration. It was long forgotten. But I remembered it.

Masterson says that one of the in-house ad writers came up with the biggest success in Agora's history. Here was its big idea: the Internet would be huge. The ad began:

"Imagine yourself wearing a top hat and tails, on the balcony of a private rail car, the wind whistling past as you sip the finest French champagne ...

"It's 1850; the railroad is growing like a vine towards the west. And, although you don't know it yet, the same rail that you are riding on today will soon more than triple your wealth, making you and your family into one of the great American dynasties ...

As it turned out, this sales copy was accurate. The Internet led to Bonner's biggest idea: to sell newsletters by using free daily eletters to attract readers.

Yet he stumbled into this. He did not read the ad and think: "I know how to make this work for me." Neither did I when I started Gary North's Reality Check. I just started it. By merging it into Bonner's growing list of eletters, it soon replaced my original letter, Remnant Review, in terms of income. Yet I had been writing it since 1974, and Agora had been publishing it since 1996.

A BIG CONCEPT IS NOT ALWAYS A BIG IDEA

This is what the average copywriter does not understand, say Bonner and Masterson.

It's hard to come up with the big idea. I don't think there is any formula. Neither did Ogilvy. He said the unconscious is the source. That was a pop-Freudian way of saying, "I don't know where these ideas come from."

One thing is sure: you need to test any ad based on the big idea. Most big ideas are flops.

When you find one that works, run with it. Make hay while the sun shines. It will soon be copied.

To read all of Masterson's article, click here.

COMBINING BONNER AND SCHAUB

I am after a big idea that isn't so big that it gets noticed. I want an idea that generates passive income, without tinkering, year after year. It sells something that is useful. The product line is age-specific. There are always new buyers coming along. Millions of them.

I have come up with the idea for the product line. I have a number of possible marketing strategies. I have one idea that could be the big idea. If I'm right, it will be below everyone's radar.

I have several other ideas on the marketing. Any could work.

The cost of getting the entire product line developed is low: maybe one month's income. Two months at the most. That's cheap.

It will cost 5% to deliver. Cheap.

If it works, the product line will require minor updates only every two or three years.

The key is my offer: a double-your-money-back guarantee. No one in this field offers it. I can therefore charge twice as much for the items. There is no way that I will get more than 5% asking for refunds on these items. Why not? Because my marketing strategy pre-screens the buyers. They won't know this. Neither will my competitors. I build the 5% refund fees into the pricing.

So, it's not a big idea. It's a series of little ideas. The markeking strategy will be a big idea. I just don't know which one will work.

If the plan fails, I will have spent maybe one month's income (tax deductible). If it works, I will roll out the barrel – a money barrel. I'll have a barrel of fun.

CONCLUSION

As you read, keep this in the back of your mind (if there is such a thing as the back of a mind): "Is there a big idea here?"

Read on the assumption that an idea will pop up. If it does, test it. If it works, expand it.

After you have a few successes, you will become more alert to a really big idea. Your income from the little ideas will provide the funding for your big idea.

Test it. Assume it won't work.

The strategy here is a lifetime strategy. You can keep doing it after you retire. You can retire into a really big idea. But I think a portfolio of little ideas will do just fine.

Think of the big idea as the brass ring. Enjoy riding the merry-go-round until you grab the brass ring.

August 13, 2009

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

Copyright © 2009 Gary North

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