Well I’ve completed a full lap around the gamut of emotions in the last 24 hours.
To start, my new VA paid for himself this weekend. During the trial week his mission was simple: free me from having to think about how much money I was making day-to-day. And it worked. Had I known this weekend what I learned today I would have had far less fun. And what good would that worry have done me?
Still, I have to face my profit and loss soberly at least once a week. And today was sobering. Here’s the bad news: I’m spending so much on ads that I’m only barely making a profit, even as sales, on a long timeline, continue to trend upward. The other unfortunate fact is I still have extremely little idea what’s going on behind the scenes.
But I’m happy now, and I don’t want to relive the mood I was in earlier today by reliving the events.
Here’s what’s good: PPC (pay per click, or Internet ads you pay for) Chasing is not the business I want to be in long term, and this week’s sales have hastened that realization. Tweaking and optimizing and re tweaking and re optimizing ads to stay ahead of the cash flow with razor thin margins is no way to do business.
The good news of the week, which ironically heightened my anxiety today, is the mastermind network I joined. Here’s the back story: there’s an entrepreneur I just hired to teach me how to Travel Hack, or use rewards credit cards to get flights at pennies on the dollar. (I mentioned my aspiration to do this in my New Years resolution post.) Since I’m one of the first batch of customers, my package included a Skype chat with the founder. I’d been listening to the guy’s podcast and studying his business model enough to know it was one I wanted to emulate: sell a premium product through the Seth Godin permission marketing model. He earned my trust because another podcaster I trust vouched for him, then I checked out his own podcast for a few months before finally purchasing his product. I digress. Anyway, at the end of the call I asked the dude if I could take one minute of his time to ask him about masterminds.
What are masterminds? Perfect moment to back up.
The internet’s biggest booster of masterminds is probably Pat Flynn. Put simply, masterminds are small groups of entrepreneurs that meet and function something like support groups or AA. Sounding out problems for each other. Offering solutions. Holding each other’s feet to the fire – accountability. Great. Where can I get that?
Turns out that’s more difficult than it looks. After I hit up just everybody I know for mastermind advice – from Pat himself to random strangers at Blue Bottle (who turned out, serendipitously just one year and two months late, to be shoe designers) – I was still at square one. The problem was one familiar to any musician, and mirrors the quote often attributed to the Marx Brothers – “I wouldn’t want to be a part of any club that would have me as a member.” There were places with easy access – like Meetup groups – and no quality control, and places with high performers getting hit up all the time by prospective new members and not interested in them at all.
The solution – to join a paid, by application, service – is one I would have been suspicious of, had not the proprietor of Abroaders, whose product I was buying, been a member himself, and been recommending it heartily. I wrote down the web address on a notepad, and went to the site, prepared to pay a small premium in order to join. (I had earmarked some funds to take Noah Kagan’s course before Noah told me if I already had a startup I shouldn’t spend my money on that!) The price was lower than I expected, so I pulled the trigger. There were two ways this could go – it could be culty and a ripoff, in which case I could cancel and not be out too much, or it could be perfect. In theory, the small admission fee might screen out unserious applicants. Oh yea – you have to apply. That’s actually a brilliant sales tactic I’ve seen used elsewhere – one I’m thinking of using myself.
Anyway, once into this private mastermind network, I started checking out the podcast of the founders, and it was like the scene at the end of Season 2 of Game of Thrones, when John Snow first lays eyes on Mance Rayder’s kingdom “beyond the wall.” When I started this blog, I naively wondered if someone could make Tim Ferriss’ lifestyle design work in real life. I assumed the “muse” case studies on his blog were kind of the apex – a woman who invented beach shoes, a dude who made an oversized yoga mat. There were a few dozen “B to C” folks making a go of it, then there was a gaggle of “gurus” – some like Pat Flynn who mostly gave away teaching for free and made (obscene) money from affiliate marketing and others like Ramit Sethi selling outrageously-priced products purporting to teach buyers how to make money online, leveraging, as his expertise based on which he’d teach you, his experience teaching others to make money online. (Yes, my head is also spinning.) Anyway, the first thing I saw, poking my head into masterminds, was a phalanx of pros, many of them in business for a decade-or-more, for whom entrepreneurship and geo-arbitrage were as natural as breathing.
As I started to explore the forums and introduce myself, one thing was clear above all else. This was a Big Pond, and I, the year-in “entrepreneur” selling drum videos and barely eking out a profit, was the Small Fish.
So much the better. With few apparent services to offer the more experienced members (an assumption I don’t accept unchallenged), I would live and die by my social skills. Start conversations. Tell a joke. Be the easy guy to get along with. Be the guy you wouldn’t mind getting stranded in a blizzard in Duluth with. (Poor Duluth, always being the butt of that illustration – wonder if somebody’s leveraged that for the tourism board – “Duluth: the spot it actually doesn’t suck to get stranded as long as it’s in July or August.”) Luckily, a lot of the other members seem to dig helping newbies, and though I wasn’t party to any of the deals I watched cut in the chat rooms (“oh I have a [coding language] guy in the Phillipines. Want to buy a SAAS company?”), people seemed glad to meet me.
Determined to learn from my friends who are social butterflies, I set out to be the most positive, most game guy in the chat room. I messaged anybody with whom I had even the most minor thing in common. In short order I’d hooked up with the New York contingent and been invited to a dinner (that I had to skip).
Then, pay dirt.
A successful entrepreneur from the UK, who was in the “productized music education space” (yes, I had to learn the lingo in a hurry, and yes, I too hate lingo, but it’s useful at times), messaged me back, dug the 8020 Drummer site, and wanted to Skype. Skype meeting set. This was what I wanted. An OG to look at my business, tear me apart, and offer me advice.
Anyway, to return to the story of my chagrin, it was after this Skype meeting with the varsity player was inked that I turned to my sales… Uggh. And the fact that I was now a part of this community made it even worse. I’ll admit the “I’m a fraud” thought crossed my mind before I banished it.
“I am NOT going to practice until I come up with some kind of solution to this,” I told myself. I stayed in the office redoing for the umpteenth time my conversion tunnels – now every ad has its own tunnel, and the main page isn’t connected to anything so I can measure organic traffic, and I put the Facebook conversion code only on the checkout pages, etc – until I had satisfied my need to do Something. Anything.
But in the practice room a really positive thing happened. I remembered Seth Godin’s words from The Dip. Commit to a Market. Be Flexible about your product. With the Friday Skype meeting looming, ideas started to come.
Obviously I don’t have to be locked into this single product, but first and foremost, I need to raise prices. When Chapter Five is released, prices are going up. How will I determine to what figure? Interview my customers. That’s right. I’m going to get on the phone and talk to my customers. Ask them what THEY want.
What’s the biggest Pain Point for drummers, or musicians? Maybe it’s not even drum instruction (though I’ll continue to offer that product because I believe in it). What about a service that hooks musicians up with end-to-end digital portfolios? Sure, I’d have to be careful of what I was promising to avoid the conundrum music schools find themselves in – “selling the dream” – that I want no part of. That would be an appropriate use for an application process, to screen for clients whose abilities would excite potential viewers of their media.
At any rate, I’m excited for what’s going to happen. Just like my approach to the drums, I’m committed to do this for real. As I say in chapter 5 (that I’m currently working on), if there’s a process that’s too messy, inconvenient, or scary for your competition, that’s your in. To reprise a Seneca quote I’ve used in too many places, The Obstacle is The Way.