In 2015, an e-commerce business made 90% of its revenue from Facebook ads. When Apple's iOS 14 privacy update killed Facebook's tracking, revenue halved overnight. The lesson: even during growth, diversify your channels or face collapse when conditions shift.
One of my favorite sayings is that a calm sea never makes a strong captain. E-commerce in 2015 was booming. You put a dollar into Facebook and you get 8 out, and people think the good times are never going to end. And all of a sudden they pushed the iOS 14 update, and there was a lot of businesses that didn't have diversified marketing channels that completely cratered after the iOS 14 update. I happened to acquire one of those businesses. 90% of my revenue was coming from Facebook ads, and I happened to be married to an expert on Facebook ads, and so that seemed like a really safe thing to do. But once they pushed that update, all of a sudden our revenues were cut in half overnight and we had to scramble to diversify our marketing. When times are good, we tend to have the idea that those times are never gonna end. But the fact is, the only thing that we can count on in the market is that it's gonna change. If you're not doing the things that you need to be doing, anticipating a market downturn, you're leaving your business vulnerable and you have the opportunity to lose a whole lot of money. So even when times are really, really good and the money's rolling in, you need to be thinking about how can I defend this business if the market turned and the things that are working are no longer working in the future.
