How I make my money
My friend Suzanne Nguyen asks:
“How do you make your money? Do you offer many products for different markets? What’s the breakdown of revenue between the various projects you do?”
Suzie has developed a reputation as the “go-to” person for Snapchat. Plus, she’s built a sizeable audience there. Now she’s looking for a sustainable revenue stream. She is considering a few models (membership platform, online events, etc…)
Below is my advice for Suzie. I’ve based this information on my experience, which means “these are the things that I did that worked.” These tips might not work for you, or for Suzie, but they’ll at least give you some tangible things to consider.
How I’ve made my money
Starting in 2012, I’ve been gradually building up product revenue. After years of side-hustle, I finally made the jump to full-time in 2016.
I’m a company of one person, so as long as I keep my expenses down, I get to keep most of what I make.
In 2016, my revenue breakdown looked like this:
- Marketing for Developers — 55% (Online course)
- Product People Club — 20% (Membership site)
- Jolt — 9% (eBook)
This year, I’m aiming to make $200,000 in gross revenue.
We’re only three months into the year, but here is what my revenue breakdown looks like so far:
- Tiny Marketing Wins — 71% (Membership site)
- Product People Club — 18% (Membership site)
- Marketing for Devs, Teach & Earn, Jolt — 11% (Online courses and ebook)
As you can see, my membership sites are now my biggest income earners.
I built Tiny Wins on top of WordPress but designed it to feel like SaaS. The core offering is video content, but I purposefully didn’t want it to feel like a traditional course. Users get a progress dashboard, a Reddit-style forum, and I can send them notifications based on conditional logic. Customers pay on a subscription basis (the annual plan is the most popular).
Product People Club is built on top of Discourse, which is open source forum software. It’s a full-stack Ruby on Rails application that can be modified based on your needs. Members currently pay once for lifetime access.
Marketing for Developers is a course that I host on Coach. Online courses are also starting to feel more like “software.” You log in, you track your progress, and fill out workbooks. Students pay once for lifetime access.
Jolt is an ebook. I published it through Reedsy but sell it through Coach. Customers pay $14.99 and download the files.
Suzie asks: out of the four platforms, which is the most time / labor intensive?
Writing a book is definitely the most up-front work. Writing and editing is an enormous task.
A membership platform requires quite a bit of ongoing work and engagement; but I also find it the most fulfilling.
A video course is a good mix between the two. For me, creating video is not as much work as writing. Video also has a higher perceived value with customers.
What I’ve learned
Here are some lessons I’ve learned that might help you.
Online courses > books
First, online courses have better unit economics than books.
Books require an incredible amount of research, writing, editing, formatting, refining. They’re also put under a microscope (critically). A few 1 star reviews and your credibility is ruined. (I talk about this more in this video)
Books are incredibly underpriced for the amount of value they deliver.
On the other hand, with a video course, I can easily add new video lessons on the fly. Since I re-launched Marketing for Developers, I’ve already added 5–8 new ones. I’m also able to interact with students (via OfCourseBooks). I can’t afford to give a $9, $15, or, $39 customer that kind of support, but at $295 I can.
Membership sites > online courses
Membership sites, when done right, can be even more lucrative. You can customize your web application to meet the needs of your users.
These web applications don’t need to be super complex, or even built from scratch. Open source projects like Discourse, Telescope, and Zenbership make it easier for solopreneurs to get started. If you’re a developer, you can easily customize these yourself. Not technical? Hiring a developer to do these customizations isn’t incredibly expensive.
That being said, building and maintaining a standalone membership site is considerably harder than using a platform like Coach.
But… don’t start with a book, course, or membership site
In Teach & Earn, I recommend this progression:
- Figure out who your target audience is. If you don’t know which niche you’re serving, it’s going to be difficult to find what they need.
- Determine where your audience is struggling. Hang out in their world, observe where they struggle. Where do they want to make progress in their lives?
- Create your MVP (a workshop). After you’ve chosen your audience, you need to create something small that helps them. The best way to do this? A single day workshop. You can run it online or locally.
I recommend starting with a workshop. It helps you figure out the answers to these questions:
- Do people want what you’re offering?
- How hard is it to get attendees?
- Do you like teaching on this topic?
- How excited are you to come up with material and lessons?
- What marketing resonated with them?
- What kind of people showed up?
- How did they resonate with the material?
- What could you improve?
Before you invest a bunch of work building a web app, a course, a membership site, or writing a book, you want answers to those questions!
“Start with a workshop.” — Brennan Dunn
For more information on this, watch this tutorial video.
Final thoughts (you likely won’t do this)
My big advice here is: don’t start with building a web app, don’t start writing a book, don’t start creating a course.
Instead, do a workshop. See if you can attract a few folks to a one day event. Focus on giving attendees a good outcome.
Whenever I give this advice to aspiring entrepreneurs, they usually ignore it. Why? Because putting on a little event at your local library or coffee shop isn’t sexy. It’s not as exciting as buying a domain name, creating a logo, or making a product.
But if you can’t get five people to show up at a workshop, how are you going to get hundreds to sign up for your product?
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Your next steps
Originally published at justinjackson.ca on April 6, 2017.