Ali Abdaal's $2million 'disaster'

This has taught me a big lesson (which, I think I already knew)

Yesterday, Ali Abdaal revealed his YouTube earnings for 2022.

In the video, he seemed a bit deflated. Uncomfortable, even.

Although, he still made a profit of just over $2 MILLION.

I'm a huge fan of Ali's. He's one of several YouTubers who gave me the inspiration, impetus, and kick up the backside I needed to start my own content business.

Despite this, I have admittedly fallen off the Ali Bandwagon. His content over the last year or so has transitioned from productivity tips (his area of expertise) to finance, tech reviews, YouTube tips, and self-help. It is, to be honest, all over the shop.

Some context is required at this juncture. Ali has 3.7 million subscribers on YouTube. I have nearly 90,000. He is astronomically more successful than I am and far more experienced in this field.

None of this is a dig. It's just an honest assessment of someone I admire - and someone who I've genuinely worried about for the last 12 months.

Ali's business grew incredibly quickly between 2020 and 2021. As a result of the pandemic, the content and online courses he published exploded and resulted in his revenue jumping from $130K in 2019 to a mind-boggling £4m in 2021.

Last year, however, his revenue increased by 'just' $600K. More worryingly, his profit took a hit - falling around $450K shy of 2021's total.

The candid video which reveals these numbers is a must-watch. This is a young guy who has experienced stratospheric growth both with his audience and the money entering his bank account.

But something went wrong. And, without wanting to sound too much like an old fart commenting from the safety of his armchair (remember, I am NOWHERE NEAR AS SUCCESSFUL AS ALI), I could see this coming.

Last year he lavished huge sums on a central London base for his team, and that team ballooned to well over 20 people.

The London studio was typically small for the rent he was paying (I recall him quoting around £11K per month) and I could never quite work out what all those people were doing. It felt very much like a case of emptying the bank account on rent and team members simply because it was possible. To further illustrate this, there’s a video where Ali details his costs for 2021, and it is eye-watering.

Twelve-hundred quid on takeaways each month, anyone?

Ali was forcing his once highly profitable solopreneur-based business into a realm in which he had zero experience.

Many of you will know that, as teams grow, the business itself takes on a whole new form. If you haven't got the experience within your ranks to deal with that, things can unwind pretty quickly.

I think that's what happened to Ali. This, combined with a reduced thirst for expensive cohort courses in 2022 (his Part-Time YouTuber Academy was a massive driver of revenue during 2021 but also incredibly pricey) has resulted in a business that has hit its profit ceiling very quickly and, potentially, started to decline.

I hope that doesn't happen. I genuinely hope Ali and his team figure out a way to get back on the growth gravy train or, at least, maintain a steady, reliable bottom line.

What can we all learn from this? I think it's pretty simple; don't grow too fast. And, if you do, make sure you find the experience either within yourself or someone else to grab hold of that growth and make it manageable.

Applying this to my business

Mark Ellis Reviews has grown faster than I could ever have imagined. As I write, I’m sat on a train heading to Birmingham Airport for a secret overseas trip at the expense of a sponsor.

If you’d told me I’d be doing that just one year after going full-time as a content creator, I wouldn’t have believed you. I’d have had a hard time believing the ‘full-time’ bit, to be honest.

However, I class myself firmly as a solopreneur. While I’ve identified the need for external assistance in a few areas of the business, I have no desire to build a team and add to my PAYE.

Ali, clearly, did. Or, possibly, he was driven in that direction by one of the many business leaders and mentors he’s worked with along the way. And it worked, for a time, but last year, he saw a decline in profit due to poor decision-making (he admits this in the video) and overheads that quickly spiralled out of control.

I’d much rather have a profitable, manageable business with as few HR overheads as possible. Wouldn’t you?

If you fancy watching Ali’s video, here it is:

Before I go…

I want to say a massive THANK YOU to everyone who has joined this newsletter for the first edition. Some of you have even shown unimaginable amounts of faith in me by paying for full membership. Bearing in mind that, until today, Solo Club hasn’t uttered a word, that is utterly mindboggling.

I’m flattered and humbled. You are all utterly wonderful and I promise your faith in me will be repaid with lots of awesome insight and commentary in the months to come.