June 9, 2016

Personal branding is a dead-sexy topic in entrepreneurial circles.

You either have a good personal brand, you’re trying to build your personal brand, or you’re deciding if you should use your personal brand.

Though the term seems relatively new in the business world (it appears to first be used and discussed in a 1997 article by Tom Peters in Forbes magazine), the concept has been around for centuries, if not millennia.

People used to love naming their companies after themselves. McDonald’s, Johnson & Johnson, Taco Bell (started by Glen Bell), Trump anything, CoNotti KOU (Cooke-Magnotti, Kings of the Universe).

Ok, Justin and Joe haven’t gone THAT far down the personal branding rabbithole. But there’s no doubt that when folks think of Empire Flippers, they immediately hear the guys’ voices in their heads, introducing a new podcast topic or guest.

Everyone has a personal brand.

If you’re an entrepreneur, you’ve at least entertained, if not acted on, the desire to develop a personal brand.

But is building a personal brand business a bad idea? Or a brilliant one?

What Exactly IS a Personal Brand?

There isn’t really a universal definition for the term “personal brand”.

Even though the Oxford Dictionary is modern enough to make an emoji their 2015 Word of the Year, they barely acknowledge the concept of personal branding as anything more than a current word trend.

In general, personal branding is the practice of marketing yourself and your expertise as a “brand”.

More specifically, a personal brand is one in which the company, services, and/or products are marketed and sold with the personal name of the business’ owner(s).

This isn’t always the case, especially for folks who develop a personal brand after they have been widely noted for the success of their entrepreneurial pursuits.

Some More Recognizable Personal Brands

We all know someone who has built a stream of income using their own name and personality, but that doesn’t mean we know exactly how the creation of a personal brand equates to a successful business.

Mark Cuban founded his first company, MicroSolutions in the 1980’s, but didn’t really start doing business as Mark Cuban Companies until the late 1990’s. Since then, he’s either created, bought, or invested in hundreds of companies, leading to an estimated net worth of about $3.2 billion dollars. Of course, now his name is synonymous with capital investing and angel funding, after the success of his show Shark Tank.

Gary Vaynerchuk was once a dude from New Jersey, trying to figure out how to get more business into his family’s struggling wine shop. So he took to the internet, and some newfangled marketing opportunity called “streaming video”, to offer tutorials on the different things people needed to know about different wines. He called it Wine Library TV. Now, a published author and sought-after (like six-to-seven figure retainer) speaker, he owns a media agency named VaynerMedia.

Pat Flynn began his career as an architect. When he found himself laid off in 2008, he started a website catering to students taking the LEED exam and eventually sold an info product around the LEED exam. Though he is best known for Smart Passive Income, Pat now owns several businesses under his larger umbrella brand, Flynndustries LLC and markets his own books and thoughts under a personal site.

Of course, not everyone goes the route of building a business first then making a name for themselves. Ever heard of a lady named Oprah?

Why Isn’t Everyone Building a Personal Brand Business?

Well, to be honest, building a personal brand isn’t all New York Times best-seller parties and television show residuals.

While there are some very real and valid reasons to build your business under your personal name, there are also some very real and valid drawbacks to such a strategy.

As we’ve been reviewing the different business models we see most people pursue when they are buying and selling websites in our marketplace, and we’ve noticed some serious upsides and downsides to the personal brand business.

The truth is, it’s often easier to start a website or a business under a personal brand.

Aside from the simple fact that coming up with a business name or spiffy URL can be a challenging task itself, there are other more tangible reasons that there is a relatively low level of friction to starting your empire and portfolio under your own name.

Immediate Likeability and Credibility

Think about it.

How often have you happened upon a site, via Google search or some other old-school method of discovery, only to be greeted with a random unknown entity.

You don’t recognize their company name, hipster logo, or affiliated clients. A quick look at their About and Team pages don’t get you any further in your quest to determine who you are dealing with, as it is filled with multiple “we” and “us” references, an anonymous and random company address, and clip art that makes you think of the Ha Ha! Business guy.

personal brand

Doesn’t exactly instill confidence in you to hand over your credit card information, does it?

With a personal brand, you immediately give your customer a reason to believe that they know who they are doing business with. Of course, most of us don’t personally know Bill Gates, but we know his brand is associated with Microsoft. If we don’t know better (I sadly didn’t), we might download Windows 10 and not realize the hellfire we are about to unleash on our systems.

But that’s the beautiful thing about closely associating, or building your entire business off a person rather than a faceless icon on a webpage.

Be More Authentically Yourself

Sure, you can blog and update your social media accounts under your business name.

But XYZCorporationURL.com will never be a real boy, no matter how much your magic cricket and blue fairy attempt to make it happen.

We all know what’s up with the world of public relations and spin, even if we don’t actually know what’s up with the world of public relations and spin.

When a business declares bankruptcy or announces a recall, you immediately question their motivations. What really happened behind the scenes? Is this the whole story? Who is really to blame?

When you as a personal brand announce a shortcoming or struggle, your customers may actually empathize with you. They’re more willing to rally behind a person they know who is just trying to make it out there.

Of course, this can backfire on you in a major way.

With great power comes great responsibility, and the more you build your business around your personal brand, the more you will be held accountable for the actions of your company.

The good ones, the bad ones, and the downright nasty and ugly ones.

To be fair, if you are engaging in downright nasty and ugly actions on behalf of your brand and company, you damn well should be held accountable.

The rest? Well, business ain’t easy.

It’s a lot easier to bounce back from an attack when it is against your company, not against you personally. Both from a strategic and a mental-emotional way.

Last summer, the internet startup company Zirtual fell flat on their face with a series of bad announcements and poor company decisions that led to the temporary shutting of their doors.

Though the company, and founder Maren Kate Donovan, claimed to be transparent and authentic in their communications, Donovan had withheld the fact from clients and employees that more money was going out than was coming in. On the Monday after Donovan appeared on This Week in Startups talking about the success of her company, which Calcanis had invested in, she laid off 400 of her staff in a middle-of-the-night email. Previously, she had appeared on a real estate show featuring her purchase of an expensive San Francisco condo. Understandably, Donovan/Zirtual was quickly assaulted by the lynch-mob of the internet.

Donovan and other investors had actually started to make the preparations to have another funding source come in and acquire the company, to get them out of the precarious situation they had found themselves in, but it did nothing to pull up public perception of the company. Or Maren Kate herself.

Claim Your Expertise by Establishing Yourself as an Expert

Similar to the faceless website presence, the scams of the internet are more quickly building a healthy level of skepticism in most consumers.

“Our team of experts” is practically jargon-speak for “My mom once told me an old wive’s tale about black pepper” or “Our custodian Jim looked at the analytics screenshot and said he agreed”.

If customers aren’t buying your stuff, it is very hard to make money in your business. And even harder to convince someone else that they should buy that business if it isn’t making any money.

But when you build a business based on your own personal background, experiences, and expertise, your customers can connect the dots more easily. If you have a decade of experience as a competitive marathon runner, it makes a lot more sense to buy a pair of running shoes from your online store. You likely know the equipment and runners’ needs, so you are an authority whose opinion they can trust.

Of course, you don’t always need to have your own expertise. One popular solution for an unknowledgable owner or founder is getting a spokesperson on board.

Not many people knew about the restorative (read: weight-loss) powers of the green coffee bean extract, though there were supposedly decades of research on the topic. Just ask Texas company, Applied Food Sciences, the company attempting to manufacture and sell the capsules.

Enter Dr. Mehmet Oz.

Though his field of specialty (cardiovascular surgery, heart replacement procedures, and complementary medicine) seemingly had nothing to do with the weight loss benefits of an OTC capsule, his personal brand endorsement made the purchase of green coffee bean extract a no brainer for a number of otherwise very intelligent people.

He’s an expert — a doctor — he must know what he’s talking about.

Though this reads like a cautionary tale on personal branding, it’s actually the opposite.

Applied Food Sciences couldn’t give away their product. No one believed their claims, even though they had numerous “studies” claiming their expertise.

Turns out the public was the wiser creature here, for a time. Thanks to a Senate hearing on consumer protection in 2014, we now know that Dr. Oz offered his expertise (and television audience) to a number of companies for a cost. He was making a lot of money by marketing himself as an expert on all products related to health and medicine.

You may be able to finagle a deal like this for your own products, but a Dr. Oz isn’t born every day.


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A Personal Brand Business Isn’t Always Best

Look, we get why entrepreneurs love personal branding.

You get to develop a strategy, build a business, and make money — all while stroking your ego. One thing that is definitely true for most of the entrepreneurs I’ve met is that they have huge egos, whether they like to admit it or not.

There’s an alluring thrill to the idea that people will associate your name with success and expertise. Who doesn’t want to be the next Richard Branson?

But there are two major drawbacks that those selling personal branding and email building webinar courses through Facebook ads will never tell you.

A Personal Brand is Exhausting

The thing with a personal brand, whether it is built on your name or just your reputation, is that it takes a lot of work.

A personal brand is easy to build in the beginning, because you can do all the work, and people don’t think you are just some blogger living in their mom’s basement. You are a solopreneur, amassing your empire.

But the funny thing with a business based on you is that you are extremely difficult to scale.

We see this a lot at Empire Flippers.

Way back when (you know, five years ago) Justin and Joe were the young fresh faces behind AdSense Flippers, they made a lot of guarantees of overseeing everything that happened in the business. You could reach out to them for anything.

Now, half a decade later, to be able to serve all the customers in the marketplace, and readers of the blog, and listeners to the podcast, they need help. So they’ve trained sales reps, customer services folks, technicians, and various other people to do the work that keeps Empire Flippers chugging along.

But because some folks associate Justin and Joe with being the brand for Empire Flippers, they want to (and I mean really want to) deal with Justin and Joe direct.

Frankly, there are times that Justin and Joe try to get involved in business processes that they have been out of for so long, and it just mucks everything up. They can be the worst bottlenecks in the whole darn company at times!

It isn’t because they don’t know how to do these things, and wouldn’t if someone desperately needed them to — but they’ve scaled themselves out of the day-to-day operations of the company. In order for Empire Flippers to grow and do cool new things, they have to focus their attentions elsewhere.

Now imagine you are someone who actually built their entire brand on yourself.

You create all the content. You research all the products and advertisements. You communicate with all the customers. You oversee all the orders and refunds. You conduct all the webinars and sales calls. You analyze the metrics to determine the best advertising fit. You You You You You…

See how quickly that can wear on a person?

And it’s not like you can just pass things off. It will take time for your audience to accept and understand that your team is well vetted, often with more expertise and skill in their responsibilities than you ever had as a Jack/Jill-of-all-Positions.

It’s Difficult to Sell a Personal Brand for Serious Cash

Unless you are willing to stay on as a consultant or advisor to the company (and sometimes not even then), most personal brands are near impossible to sell for any sort of serious returns.

The entire source of revenue is dependent on a particular company feature that no longer is associated with the company.

It would be like a bicycle company selling all its bicycle stock, and then attempting to sell to customers again with unicycles, which are kinda like bicycles. Sure, some customers may be intrigued and stay. But let’s be real, unless the previous bicycle base was filled with carnies and 5th graders, the new company is probably not going to be able to maintain the same level of sales.

Most website buyers will quickly see this conundrum, and slowly back away from the transaction. Others will figure it out eventually — usually at some point during the vetting process — when they really dig into sales stats and details.

The few who manage to squeeze through…well…they’re usually quite pissed that they bought a business that will never again hold the same potential that it did under the original branded owner’s name.

Would You Ever Build a Personal Brand Business?

Most savvy entrepreneurs opt for the opposite order when they are considering a personal brand.

They build a business that may rely at times on their personality for marketing, but can either be passed off to an internal team (i.e. it can scale without them) or sold to another organization or website owner without repercussion (i.e. the business can continue without the affiliation of the previous owner).

That’s why so many of those entrepreneurs we listed at the beginning of the article built a business first, then established a personal brand business for themselves. They showed, by example, that they were people who should be listened to — worthy of a platform that thousands (if not millions) would be loyal to.

The most important thing a personal brand will get you “in the industry” is name recognition. This becomes way more important as you try to do things like make money as an author, speaker, vlogger, or other “personality”.

The reason there aren’t hundreds of Oprah’s running around is because there is only one Oprah.

It may seem easier in the beginning, when you can rely on your expertise and are able to dig in and do the majority of work yourself. If that’s what you are ready to sign on for, and you are ready for the hard work and ego-in-a-blender day-to-day, then by all means, go for it.

Building a personal brand business only makes sense if you are prepared to erect an empire you would never walk away from.


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Discussion
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  1. Aaron Koral says:

    Great article Elisa! Very informative!

  2. Scott says:

    Great article.. I’m going through this myself in selling my business although in my case it’s thankfully a lot easier since the business is promoting an entire country and not just me personally…

    • Greg Elfrink says:

      Yes, selling a personality branded business can be tough stuff. It is always a good idea to migrate towards a brand over a personality if you plan on growing a lot, especially if you plan on eventually selling the business. (This isn’t always the case, but I would say it is usually better)

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