The "Passive Income" trap ate a generation of entrepreneurs

I had coffee last year with a guy - I won't use his real name - who told me he was "building a business." I asked what it did. Dropshipping jade face rollers.

I made him say it twice.

Jade face rollers.

He'd found them on Alibaba for $1.20 each, and started selling them through Shopify for $29.99. Never used one himself. Didn't really know what they were for - something about lymphatic drainage? Reducing puffiness? He said "lymphatic" the way you say a word you've only ever read and never heard out loud.

Some guy on YouTube said jade rollers were "trending," the margins looked insane on paper, so he'd "built" a website with stock photos of a dewy-skinned woman rolling a green rock across her cheekbone and started running Facebook ads at $50 a day. Customers would email asking where their stuff was - shipping from Guangzhou, three to six weeks, sometimes way longer - and he'd copy-paste a response he found on a dropshipping subreddit. He had a Google Doc full of pre-written customer service replies.

Never talked to a single customer.

I swear to god.

Five months in, he was $800 in the hole.

He told me all this like he'd invented the wheel.

I bought him another coffee. I genuinely had no idea what else to do.

Jade Roller Guy has become my go-to example of something that went drastically, terribly wrong with how a whole generation of would-be entrepreneurs thought about work and money. A specific ideology - I've been calling it Passive Income Brain - grabbed a huge chunk of the people who were, by temperament and ability, most likely to start real businesses, and it gave them a completely fucked set of priorities.

Somewhere between 2015 and 2022, "passive income" stopped being a boring financial planning term and became, I don't know how else to put this, a salvation narrative. I mean that literally. There was an eschatology if you want to get nerdy about it. The Rapture was the day your "passive income" exceeded your monthly expenses and you could quit your job forever. People talked about it with that exact energy.

But, of course, the folks making any actual income, of any kind, were the ones selling courses about making passive income. It was an ouroboros. It was an ouroboros that had incorporated in Delaware and was running Facebook ads.

The pitch went something like: you, a sucker, currently trade your time for money. This is what employees do, and employees are suckers. (I'm paraphrasing, but not by much.) Smart people build SYSTEMS. A system is anything that generates revenue without your ongoing involvement. Write an ebook. Build a dropshipping store. Create an online course. Set up affiliate websites.

The specific vehicle doesn't matter because the important thing isn't what you build, it's the structure. You want a machine that generates cash while you sleep, and once you have that machine, you are free.

Free to do what? Sit on a beach, apparently. Every single one of these people wanted to sit on a beach. I've never understood this. Have they been to a beach? There's sand. It gets everywhere. You can sit there for maybe three hours before you want to do literally anything else.

But I digress.

The allure is real. Who doesn't want money that shows up while you sleep?

I'd fucking love that. I'd love it very much indeed. But "passive income" as an organizing philosophy for your entire business life, for how you think about work, is almost perfectly designed to produce garbage.

When you make "passivity" the thing you're optimizing for, you stop caring about anything a customer might actually want. Caring is active. Caring takes time. Caring is work.

Giving a shit is, by definition, not passive.

Between 2019 and 2021, roughly 700,000 new Shopify stores opened. The platform went from about a million merchants to 1.7 million in two years. About 90% of those stores failed within their first year. That's not a business model. That's a meat grinder with a landing page.

We started drowning in a million businesses nobody was actually running. Dropshipping stores with six-week shipping times and customer service that was just copy-pasted templates. Guys who'd put their "brand name" - usually something like ZENITHPRO or AXELVIBE, always in all caps, always vaguely aggressive - on a garlic press identical to four hundred other garlic presses on the same Amazon page. AXELVIBE! For a garlic press!

And the affiliate blogs! Hundreds of thousands of them, pumped full of SEO-optimized reviews of products the authors had never touched, never even seen in person. A fractal of bullshit that technically qualifies as commerce but puts zero dollars of actual value into the world.

Leverage is real; I'm not disputing that. There is a difference between trading hours for dollars and building something that scales. Software does this. Publishing does this. You write a book once, sell it many times, nobody calls that a scam. Fine! That part they got right!

Where it went wrong is that the whole movement confused "build a good product that scales" with "build any mechanism that extracts money without you being involved." I don't think that confusion was accidental. I think the confusion was the point. Because if you're teaching people to build real businesses, you have to sit with hard, boring questions about whether anyone actually wants what you're selling. But if you're teaching people to build "passive income streams" you can skip all of that and go straight to the fun tactical shit. How to run Facebook ads, how to set up a Shopify store in a weekend, how to write email sequences that manipulate people into buying things they don't need.

Nobody talks enough about what the passive income movement did to the content quality of the entire internet. If you've tried to google "best [anything]" in the last five years and gotten a wall of nearly identical listicles, all with the same structure ("We tested 47 blenders so you don't have to!"), all making the same recommendations, all linking to the same Amazon products, you've experienced the results.

Those articles weren't written by people who cared whether you bought a good blender. They were written by people who cared whether you clicked their affiliate link, because that's what generated passive income, and the incentives made honesty actively counterproductive.

The honest review of blenders is: "most blenders are fine, just get whatever's on sale, the differences below $100 are basically meaningless." That review generates zero affiliate revenue. So nobody wrote it.

Instead you got "The Vitamix A3500 is our #1 pick!" with a nice affiliate link, written by someone who has never blended anything in their life. Multiply this across every product category and you start to understand the informational desert we've been living in. We broke Google results, at least partly, because an army of passive income seekers had an incentive to flood the internet with plausible-sounding garbage.

(Someone is going to object that Google should have filtered this stuff out, and yes, sure, but also, "the people creating the pollution aren't at fault because the EPA should have caught it" has never been a great argument.)

I've met dozens of smart, capable people who had actual energy, and who spent their entire twenties bouncing between passive income schemes instead of building real skills // real businesses // real careers. The pattern was always the same: six months on a dropshipping store, it fails, pivot to Amazon FBA, that fails, pivot to creating a course about dropshipping (because of course), and then the course doesn't sell either because by 2021 there were approximately forty thousand courses about dropshipping and the market had been saturated since before they started.

And the whole time they were getting further and further from the thing that actually creates economic value, which is: find a real problem, solve it for real people, care enough to stick around and keep improving. The boring thing. The thing that takes years. The thing that is, to be absolutely clear about this, not passive.

I once saw a guy ask whether he should start a dog walking business and the top response was something like "dog walking isn't scalable, you should build a dog walking platform instead." This person liked dogs! He liked walking! He lived in a neighborhood full of busy professionals with dogs!

But the Passive Income Brain thing had gotten so deep into how people talked about business online that "do the simple obvious thing that works for you" was considered naive, and "build a technology platform for an activity you've never actually done as a business" was considered smart.

The dog walking guy could have been profitable in a week.

The app guy would have burned through his savings in six months and ended up with a landing page and no users.

By 2020 the passive income world was absolutely crawling with grift: guys posing with rented Lamborghinis in YouTube thumbnails, "digital nomads" whose actual income came entirely from selling the dream of being a digital nomad to other aspiring digital nomads, podcast hosts interviewing each other in an endless circle of mutual promotion where everyone claimed to make $30K/month and nobody could explain what they actually produced. By 2021 or so it started to look like a distributed, socially acceptable MLM. The product was the dream of not working. The customers were people desperate enough to pay for it.

Not everyone in this world was cynical. I genuinely believe that. A lot of the people selling passive income content believed their own pitch. They'd had some real success with a niche site - pulled $3,000/month for a while, it does happen - read the same books everyone else read, figured okay, I'll teach other people my system. Why not. I would have done the same thing at 24. I'm almost sure of it.

But zoom out and what you had was just an enormous machine converting human ambition into noise. Affiliate spam // dropshipped junk // ebooks about passive income // courses about courses. An entire layer of the internet that was nothing but confident-sounding bullshit produced by people who had optimized for everything except making something worth buying.

The people near the top made money. Everyone else spent months or years chasing a mirage and came out with nothing but a Shopify subscription they forgot to cancel. They thought they'd failed. They hadn't failed. The system, every system, failed them.

What actually makes money hasn't changed. You find something people need. You get good at providing it. You charge a fair price and you keep showing up even when it's tedious and even when you don't want to. You build relationships over years. You build reputation over years. None of it is passive, and none of it has ever been passive! All of it revolves around giving a shit, day after day, about something specific. I don't think anyone has ever found a way around that and I don't think anyone will.

The passive income thing was a fantasy about not having to give a shit.

This is a terrible foundation for pretty much anything.

The affiliate SEO blogs are being slaughtered right now by AI-generated content. The people who spent years producing algorithmically optimized content of no value to humans are getting outcompeted by software that does the exact same thing, faster and cheaper. Facebook ad costs went through the roof and took the dropshipping gold rush with them. The biggest passive income gurus have already pivoted to selling AI courses. The machine keeps running. It just swaps out the brochure.

But I've noticed more people talking about what I'd call "give a shit" businesses - people who make furniture, run plumbing companies, write software they actually use themselves. Stuff where the answer to "why does your business exist?" isn't "to generate passive income for me." This works a lot better than the laptop-on-the-beach grind.

Jade Roller Guy, if you're out there: I hope you found something real.

I hope it keeps you busy.