The fatal flaw I made with my business, and how you can avoid it

Earlier this week, I announced that I am launching a new business.

To many people this came as a shock when I told them. They said "If things are going so well with Lead Cookie, why would you divert your attention to launch something new?"

And the truth is, things are going well with Lead Cookie. In 18 months, we have grown from Zero to $60k in MRR. 

This is by far the most stable and profitable business I have ever had, and I've learned a ton.

BUT... there is a fatal flaw in Lead Cookie as a business.
It's one that I didn't see when we started. 
And someday, it will cripple the business.

Today, I am going to share with you what that fatal flaw is, so you can avoid it when building your business.

What Lead Cookie does:

For anyone who doesn't know, here is the quick overview of Lead Cookie.

Lead Cookie is a done-for-you Linkedin Lead Generation service. We manage our clients Linkedin profiles and start warm conversations between them and their ideal customers. 

First we optimize our clients Linkedin profiles. Then we begin sending up to 100 outbound connection requests per day on Linkedin. When someone accepts our connection requests, we will send a drip sequence to that prospect aiming to start a conversation. 

Our team handles all of the strategy, scripting and operations of the Linkedin outreach campaigns.
You as a customer get a daily digest of new conversations and leads.

So you avoid 95% of the work and only spend time focusing on warm conversations on Linkedin. 

Sounds pretty great right? 

And the truth is that it is. 
We generate results and have tons of happy customers.

So what is the big flaw?

Simply put: We built our business on top of Linkedin.

While Linkedin is a great and growing platform, it also presents a few challenges. 

We build on a moving foundation
First, we are built on a moving foundation. Anytime Linkedin changes something, our entire business has to change to adjust. That is hard operationally, but even more importantly, it is an existential threat we cannot control. 

Think about it this way... Linkedin could change their platform in the future and render our entire service irrelevant... That's a pretty scary thing to think about as a business owner.

Sure, we could adjust our tactics to change with the platform. But that sounds pretty exhausting and like a huge painful backwards step.

Alternatively, look at a service like WPCurve or DesignPickle. While WPCurve is built on Wordpress, that is an old enough and stable enough platform that is unlikely to change so drastically to make WPCurve irrelevant.

Or Design Pickle, they offer design. Sure Adobe could change things up and make an impact on their business, but it's unlikely that Adobe could do anything that could literally cripple their business overnight. 

We are black hat
This sucks to say, but Lead Cookie is technically against Linkedin's terms of service. The main piece we violate is "You will not let someone else use your profile." 

They also have lots of other terms of service about using bots on your profile. And early on we decided to remove those bots from being a part of our Linkedin outreach service. 

Our goal has been to try and remain as white hat as possible while working with Linkedin, but the truth is that we still violate that one key term of operating someone elses profile.

Once again, we built our business on top of Linkedin and did not fully understand these risks when we started. 


Those two fatal flaws are pretty freaking huge. 

The moving foundation presents a massive existential threat that could cripple our business overnight which would create insane pain and agony.

And the black hat aspect of our service means that we will never be a sellable company... 

Ultimately, this means that Lead Cookie has a life-span. 

It is great now, and we are generating results for our clients. 
And we are making good money along the way. 
BUT it will not last forever. 

It is not a long term asset.

The horror story of another black hat marketer

When I tell a lot of what I just said to other people, they doubt me or think I am over cautious... But I beg to differ.

A few months back, I was at a conference where Nick Long of MediaMix365 spoke. Nick runs a massively successful lead generation business, and so I was very interested in what he had to say.

After his presentation, I stuck around and waited until almost 1 am to get a few minutes to talk with Nick and share him the situation I was facing with Lead Cookie.

I described the situation we have, and here is a rough paraphrase of what he told me.

So you are running a black hat marketing tactic. That’s great in your 20’s when you want to make some quick cash, but it’s not going to last forever. 

Early in my 20’s I built my first lead gen business and it was black hat. I made a lot of cash and then I lost everything...

And you know what is worth than not having money?
Actually making money, and then losing it all... 

Your business is going to die someday.
It’s not a matter of if, it is a matter of when.

So use what you have built today as a catapult to launch your next venture before time runs out.

That hit me like a sack of freaking bricks. 

I knew this on the inside, but everyone I told before doubted me.

And then I met this man who had been in my shoes and lost it all... 

Nick eventually rebuilt, and MediaMix 365 is a completely white hat and legal business. He has been audited and passed and everything his company does is 100% legit.

But he got that point out of the pain of losing it all first.

How to avoid making a fatal mistake in the design of your business

Before you even start your business, or as early in it as you can, ask yourself some of these questions.

Am I building on someone else's foundation? 
Are you trying to build a business based on someone else's technology or algorithm that could change and cripple you overnight? 

While you might be able to make some quick cash on someone else's foundation, you won't build a long term asset unless you are building on a well established foundation. 

Am I in violation of any laws or terms of service?
Seriously, if you are working closely with any other platforms or companies as a crucial key to your business, then read their terms of service. Pull up all of their legal pages and read them. 

It's not sexy. It's not fun but you need to do it. 

If after reading them, you are in question, then hire an attorney to help you. I did at Lead Cookie and it validated my concerns. 

Once it is built, are there any external factors that could cripple this business overnight?
Try to really zoom out for a bit and think through anything that could impact your business overnight. What risks could you face, or what challenges could you hit along the way. Could the technical trends we are seeing make you irrelevant in several years? 

It's worth thinking through your risks

The key here is to put some thought into the risks your business may face BEFORE you get too deep into it.

While Lead Cookie is great, and is generating amazing cash flow, I know that this opportunity won't last forever.

And that is a scary thing to realize, especially when you have a team of 25 people who count your business for their livelihood and income. 

So I share all of this as a warning sign to all of you. Think through the risks of your business before you launch and scale. 

And as an example, here is how I have thought through the risks for my newest venture, Content Allies.

An example of thinking through risks with my new venture

Earlier this week I announced that I am launching a new venture. Well here is an overview of what we do and the risks we could face. 

Content Allies helps content marketers 10x their content output and impact through virtual assistants. 

Simply put, we work with content marketers to document their processes and then have virtual assistants implement those content processes. This helps free up their time and increase the impact of their content.

What risks does Content Allies face

Offshore team - Our model is built on using offshore team members. With the current political climate, there is always the possibility that hiring offshore teams could become more complex and costly. But it is unlikely that this will ever become a crushing change. 

We are white hat - Nothing in our service is against any terms of service or in violation of any known laws. We simply offer process creation and virtual assistants to content marketers. 

We are building our own foundation - There is no single platform or technology that is the foundation of our business. Our foundation is simply the team and virtual assistants that we put together. While there will be technology tools we rely on. None will be so crucial to the delivery of our service that it can completely change things for us.

Once built, it would be hard to cripple us overnight - Once we have 500 customers on our service, we will have a steady and strong monthly revenue. As far as I can think and brainstorm, I see no external factor that could totally disrupt and kill our business overnight. Technology may develop, or laws may change. Those could hurt us, but they couldn't totally cripple us overnight.


As far as I can see, Content Allies faces no major existential threats other than changing laws around offshore teams. 

That gets me excited because as I start building this, I know this is a long term asset. I know this is something I can build and work on for years to come and keep scaling and growing to something bigger and better.

Lead Cookie is still alive and active. But I know it won't last forever. 

The Bottom Line

Think through your risks before you launch or scale your business. It's worth it so you know what you are up against and can be prepared for the worst.

Here are 3 questions to ask yourself to evaluate risk:

  • Am I building on someone else's foundation?

  • Am I in violation of any laws or terms of service?

  • Once built, are there any external factors that could cripple this business overnight?

Think through those questions. It's worth doing to evaluate your risk. 

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