I just titled a post “it’s real”. And already I’m feeling mildly like a fraud. We’ll get into that in a minute.
Anyway, my business made a modest $1735 in revenue last month. That, I can’t talk myself out of. It’s right there on the spreadsheet.
Three months ago, before Christmas, I was in debt, fretting about how to pay every bill. It was then that I told my Business Cult Comrade I’d be happy with an extra thousand-a-month. Well, last month I had it. And January too.
So there are two things I want to touch on. The first is the shift in mindset this “proof of concept” enabled. The second is why I still feel fraudulent writing about this. Let’s talk about the second first.
I live with the day-to-day anxiety that my recent “successes” were a flash-in-the-pan, and everybody’s going to come to their senses and stop buying things from me. In January I launched my course to a list of existing customers and grossed around 2k. Then I promptly started worrying about how I would duplicate that success. Would new arrivals to my list buy as well, or would the “speed limit” on my sales be the need to round up 500 new subscribers every 3 months then sell 2k worth of courses to them?
In February I lived with the very real possibility that the answer to the question “can I create a recurring revenue engine that sells this product on an ongoing basis” was No, and I’d be back to the drawing board. All month long I wrung my hands, adjusting the text in my sales letters, making sure my landing pages were sending buyers to the right place, making sure Google de-indexed my private payment pages, lest people end-run my sales flow.
Finally, on March 1, the funnel (a word referring to the automated sales flow that a customer opts into when she joins your list) roared to life. For the first two weeks, I sold nearly a course-a-day. Then things regressed to the mean, and I’ve been averaging a sobering 3-a-week.
So I’ll speak about tactics and “what it all means” from a business standpoint in a minute, but do you see the Maslowian (hope that’s a word – after Abraham Maslow obviously) goal-creep, right? Put another way, Nate from December would admonish April Nate to get a fucking grip and appreciate what he had.
And April Nate would remind December Nate that the ultimate goal was never stasis at 1k monthly profit. And again, tactical reasons why to come, I promise, but just for a second let’s delve into the Proof of Concept.
If it’s an exaggeration to say that on January 3rd (which I think is the day before launch) I was still considering taking on extra “house call” drum students at $40/hour before taxes, commute-time-not-included, and still tweaking my resume trying to get hired as some kind of social media marketer, trying to convince a boss who’d never himself created a successful brand (otherwise he wouldn’t be working 9-8 everyday at somebody else’s company) that I was worthy of “being picked” even though I didn’t have an SEM Credential, and that by January 10th or 11th I was no longer considering those options, it’s not much of an exaggeration.
And now I have the blessing/curse of being on the “other side” of that proof-of-concept. If you can find a product-market fit (more on that phrase below) in one niche, earn the trust of one audience, build a list then sell to it in one modality, you can probably do it in another. If you can do things in 6 months completely DIY you can probably do it in 3 using the leverage of people working for you.
It is possible.
If anybody was going to fail at it, it was I, with no Princeton degree, no biology background that gave me a leg up into nutraceuticals like Body Quick or Alpha Brain, no Ruby on Rails expertise, and no fancy SEM certification. And from the perspective of people I talk to with money problems, an extra 1k per month without trading any time servicing existing customers (though, as I’ll discuss in a minute, you do trade time growing your business) would basically solve most of those money problems. I’m slowly-but-steadily climbing out of debt (full disclosure, a lot of which was incurred making stupid decisions getting into business and investing up-front on things like Adwords – mistakes I wouldn’t repeat), and while I worry I’m spending too much on freelancers like video editors and web developers as they help me scale my business, I no longer worry day-to-day how I’m going to pay the bills.
But now back to the other side of the coin. Because you have to keep two things in your brain at once. Just as when you practice the drums, you have to remember to thank Allah for the opportunity to make music and for the relative virtuosity and facility your years of hard work have afforded you, at the same time as comparing yourself unfavorably to the best players out there and working doggedly to narrow that gap, so in business you have to feel gratitude for your successes at the same time as projecting yourself into a future in which you’re now responsible for supporting a family on the back of this business and asking tough questions about whether it’s up to the task.
So now let’s segue into the tactical side. Because business income is not steady like a paycheck. And if you ask anybody who’s been in the black for at least a month, they’ll likely tell you a self-evident truth about averages. In order to average 6 or 7k a month without worrying, you have to have some months far in excess of that, because God knows you’ll have plenty of months below it. You have to keep an eye on your numbers, asking yourself if a spike is good luck, a shift of an algorithm in YouTube that’s suddenly allowed far more visitors to see your videos that you can influence – for instance by creating more videos about a certain popular topic that dovetails with your expertise, an algorithm shift you can’t influence – such as a Panda or Penguin update, or a New Normal, meaning you’re growing. Conversely, is a dip in sales Regression to The Mean after some uncommonly good luck, an algorithm change of either variety, or have you reached your market’s “carrying capacity” and are you sunsetting.
And here’s what well-wishers and encouraging folks from the outside lose sight of – Yes, I’m remembering to appreciate my successes and Enjoy The Process, but now you’re in my shoes, and you have to support a family. You’d do well to ask the above questions as well.
And that’s why it’s also self-evident that meditation or some appropriate substitute is not nice-to-have, it’s crucial. It’s the difference between living in the amygdala, running lizard-brain fight-or-flight scripts from the Precambrian and living in the prefrontal cortex, not escaping those scripts but recognizing them. It’s basic self-awareness. It’s waking up and asking “what am I thinking and how am I feeling” instead of just thinking and feeling.
But I thought you were going to talk about tactics…
That is a tactic.
So, building any business, it turns out, involves answering 3 questions.
1) Can I find something valuable enough to an audience that they’ll spend enough money on it to make it worth my while?
That’s called product-market fit.
2) Can I reach them at all or will I be drowned out by competition?
That’s marketing. How much does it cost you to make one sale, and how much do you net from that sale.
3) Will people willing to buy said product to solve said abstract problem trust me to sell it to them?
That’s brand. That’s what Tony Toyster and JP Bouvet wake up with in the morning and most of us have to work for.
Underneath these antiseptic, Godinian (after Seth Godin) criteria are the more slippery ones I outlined above – the “do these sales mean I’ll succeed long-term or did I just get lucky” type questions that you don’t read about in the business literature.
But, applying the mindfulness framework, it’s possible to interrogate those questions, and make educated guesses that help to quiet that lizard brain.
1) Product-market fit’s the easy one. If you do a launch and you make more from the launch than you spent acquiring the customers, you have product market fit.
2) Marketing is also pretty easy. If you can build a funnel that sells at a profit (i.e. you make more revenue per customer than you spend acquiring him) on an ongoing basis, you’ve got that nailed.
3) Branding is necessary, but if the answer to the first 2 questions is “yes” you’ve also nailed your branding, because people don’t buy unless they trust you.
But it turns out there’s a fourth necessary ingredient. It’s true, product-market fit, marketing, and brand are all that’s necessary to make a profit. But a profit could be a dollar-a-day. As long as you’re only spending 99 cents to make that dollar, you’re theoretically profitable (though with some pretty rubbish margins;).
What’s necessary to turn a profit into a living is scale.
Scale asks the question “if I sold 10 widgets to 100 people, could I sell 1,000 widgets to 10,000 people for something approaching the same margin”? And baked into that question are details like market capitalization, which introduces the squishy logic of diminishing returns. Because in some niches, with some products, scaling is a lot more like reaching 150 miles-an-hour in a Civic than turning up the faucet in the bath: the faster you go, the more energy it takes to get just one more MPH, and there’s a limit to your engine power.
So, if you’re astute, you’ve put together that scale is the question my current business faces.
And I’ll give you one 80/20 tactical tip: stress-test your scalability before you diversify. Meaning, don’t introduce umpteen products before you’ve determined for sure that your niche scales. Maybe there aren’t enough drummers with the specific problem my course solves to make a living. Maybe… no – actually the first maybe is the only one that matters.
I’m at 1693 words, so I’m going to leave it here, but I want to “announce” that I’ll be back to write for this blog on a far more regular basis from now on. Dan Andrews says a professional goes away for a year and builds something, and then writes about it, and I feel I’ve done that to enough of a degree that it’s again worth everybody’s time for me to write more regularly.
I’ve crested the first ridge. It’s possible, and it will solve your acute money and time problems if you’re able to duplicate my “success”. It’s not the end, though. To paraphrase Winston, it’s only the end of the beginning.