TMBA 242: How 1,000 True Fans Can Work in Practice

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We got a lot of great feedback from last week’s episode, but a lot of people were confused about how the 1,000 True Fans model works in the real world. On this week’s episode, we are answering some listener questions about how to build your business to create “passive income” and what the equivalent of the 1,000 True Fans model is in the context of an information product.

Listen to this week’s show and learn:

  • The story of the Dynamite Circle and how that business relates to these business models.
  • What internet marketers really mean when they talk about “passive income”.
  • Building a good business isn’t something that you can usually do in a few months.
  • A few exceptions to the rule, and how they were able to skip some crucial steps.
  • How a lot of market intelligence can come from your true client phase.

People on this episode:

Mentioned in the episode:

Listening options:

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST. Cheers, Dan & Ian PS, there is also Tropical MBA content on Instagram, Facebook, and Twitter. PPS, if you’d like to receive emails from us occasionally, you can put your email address into the form below:

Published on 05.01.14
  • http://www.adventurous-soul.com/ Shayna

    I don’t think info products are dead/dying at all. Books are info products. Courses/education are info products. The markets for both are healthy and thriving. So why should the digital versions of them be dying?

    Not only that, but info products may be old hat in the IM space, but they are “younger” in other areas/markets (international, for example – in Brazil online education is just starting to boom and consumers are beginning to get used to the idea of buying online) and this offers opportunities to get in early.

    What has changed, though, is that now they need to actually be GOOD. No hiring non-native English speakers to slap together a mediocre generic e-book and hoping to sell it through PPC to a hypey sales page. Yes, people do still make this model work, but I think less and less – and it’s not really building a solid asset, nor providing much value.

    Basically I’m agreeing with what you guys said about a quality business :-p

    Also, two ways to command higher prices for info products are:

    – Emphasizing the fact that your product cuts down the info overload – in other words, it will save people time. Rather than reading 100 articles on Google and getting confused, they can take your course/buy your e-book and get a real result. Your info product becomes the only resource they will need.

    – Using your personality and writing/presenting style to make people enjoy learning from YOU, specifically. Even if people know they can technically find the info elsewhere, they’ll want to hear the way YOU present it. I teach English, for goodness’ sake. I don’t say anything original; it can all be found in the dictionary or in typical textbooks. But people like the way I explain it :-)

  • http://www.EntrepreneurOnFire.com/ John Lee Dumas

    A. I love your Podcast and listen EVERY week as I run around Mission Bay here in San Diego. (Ian..let’s hang out again soon)

    B. Dan, I love JLD as a nickname…keep it coming.

    C. You guys nailed it on every level…I had 100k in the bank from my tour of duty in Iraq as an Army Officer.

    D. I used those monies as my runway to invest in myself (mentor, mastermind, conferences) that allowed me to hit the fastforward button in A LOT of areas I would have gotten bogged down in.

    E. I FOCUSED. I adhered to my favorite mantra: Follow One Course Until Success. It was freaking hard work and A LOT of it, but I had my priorities straight: 1 goal in mind (to publish a value bomb podcast every day, 365 days a year) and REFUSED to let the weapons of mass distraction take over.

    F. I executed.

    G. The result? http://www.EntrepreneurOnFire.com/income

    Love you guys and the inspiration you spread!

    JLD

  • http://RileysLife.com/ Matthew Riley

    For me passive income is an asset that has the potential to make while I am asleep. Whether it is an affiliate link from my site or an actual product someone purchases, if I am not giving you a sales pitch face to face, over email, or over the phone that income is passive to me. But we have to remember like you mentioned the amount of work you put into getting to that point.

    For Chiara, who I know is a fellow Location Rebeler, I would say look at marketing your services as more than a book a flight service. Think along the lines of concierge. Maybe you also handle and keep track of all of their miles they generate from flying on these airlines. Many people don’t know that airlines and flights are affiliated and you can generate points or miles with certain carriers even when not flying with them but booking through a different website.

  • http://www.adventurous-soul.com/ Shayna

    LOL @ “weapons of mass distraction”!

    Serious focus and relentless execution on a single course of action is definitely key. I sometimes see people hopping from nascent business to nascent business every couple months, and I’m like dude… my ONE business didn’t start to get traction until about six months in!

  • http://tradlands.com/ Jeremy

    I come for the rap music. Great selections recently, Ian. I’d love to drink a beer and talk golden age hip-hop.
    PS
    Diggin’ In The Crates. New York’s finest rapping.

  • Charles Hall

    I think that people often use the words passive income when they are discussing something that scales well. What I mean is that a book, for example, is only written once but has value every time you sell it. Yes there are still other costs, marketing for example. But those costs are also present when a service is sold, and the service has to be rendered every time it is sold. A service, consequently, does not scale as well. I think that you guys hit on this obliquely when you discussed building your own product.

    This has been my dilemma. I have a lot of experience in IT, but IT is a service and does not scale well. I would love to build my own product, but have yet to find one that I am passionate about.

  • http://www.buildmyonlinestore.com/ Terry Lin
  • David Shirkey

    Another super podcast fellas. I so appreciate your straight forward and real world insight. It’s valuable for people to hear that building a business is NOT easy…it’s worthwhile, but not necessarily easy. Also…Thanks for the shout out to PitProducts.com! The team here really appreciates that!

  • Bettina

    Hello Charles, similar situation here, we’re in IT looking for ways to build a business using our skills.

    You’re right – IT services don’t scale well, unless you build a productised service like Dan Norris from wpcurve.com. He wrote a very interesting piece about why he thinks productised services are his preferred business model (see this TMBA podcast and Dan’s article: wpcurve.com/service-as-a-service/) Thanks to both Dan’s and Damian by the way, that podcast was very helpful.

    I also think that you don’t need to be passionate just willing to learn, then you will become passionate. Ok, there might be some areas that are just horrible to work on but I do think that it really doesn’t matter that much what you are selling as long as you enjoy delivering value and building a business. See this interesting talk by Cal Newport on passion: https://www.youtube.com/watch?v=LUQjAAwsKR8

    Good luck and keep me updated please. Btw: Where do you hang out to discuss your ideas? I recently joined this forum and have found it very helpful: http://discuss.bootstrapped.fm

    Bettina

  • http://www.tropicalmba.com/ Dan Andrews

    Cheers David I very much appreciate that! Thanks for listening and Ian has been saying great things about what you guys are up to !

  • http://www.tropicalmba.com/ Dan Andrews

    Hey Charles I like the idea of “scalability” as part of what makes something passive. Often its by doing things that don’t scale well that we find products that do scale. Have you read the article “Do Things that Don’t Scale” http://paulgraham.com/ds.html It’s tough to come up with things in a vaccuum…. I like jumping into the business ring, if you are smart about what you are doing you’ll always be looking for process/scale etc… so it couldn’t hurt to do the things that are ready at hand and see what comes of it.

  • http://www.tropicalmba.com/ Dan Andrews

    Love this talk Bettina great share!
    Cal’s entire blog is a great mediation on issues of passion effort and motivation. If often find that determining the structure of the type of work you are intrinsically motivated to do is more important that what precisely your product is … it’s the classic example of the dive instructor who got into it because they were passionate about scuba diving only to find out that being a dive instructor is a job for people who are passionate about guiding people through experiences.

  • http://www.tropicalmba.com/ Dan Andrews

    hahaha that’s a good a reason as any sir! Looking forward to seeing what the bossman cooks up next.

  • http://www.tropicalmba.com/ Dan Andrews

    WOW

  • http://locationasia.net/ Chiara Cokieng

    hey, thanks again for answering my questions. always amazing to see you answer in the podcast within just a day or two!

    ok, i get it now: hustle to 100 customers = cashflowing and getting market feedback

    i guess i just needed to hear again that it takes a long time. i am at the “wondering what the fuck i am doing” phase :D

  • http://locationasia.net/ Chiara Cokieng

    matthew, thanks for looking out for me. right on, i do act as a concierge for my clients, even going as far as squaring off with bad agents they’ve had in the past…

    the thing is in terms of marketing, concierge is too general and i only get 1 second to tell people what i do and concierge just doesn’t cut it. see this post on task flow problems, not market problems: http://www.tropicalmba.com/nologo/

  • http://locationasia.net/ Chiara Cokieng

    shayna, that’s really good advice those last 2 statements. thank you!

    also a good way to cashflow while figuring out how to cut down the info overload is to actually provide a DFY service, then package the process into an e-book…

  • Will

    Thanks for another awesome podcast guys :)

  • http://www.tropicalmba.com/ Dan Andrews

    you got it!!! :D happy to do it.

  • http://www.tropicalmba.com/ Dan Andrews

    ah yes, what the fuck am I doing has been known to last a while! :D

  • http://www.tropicalmba.com/ Dan Andrews

    yeah I dig that “earn while you sleep” business model distinction.

  • http://www.tropicalmba.com/ Dan Andrews

    we demand updates in the near future! :D

  • http://www.tropicalmba.com/ Dan Andrews

    Damn JLD your story is so business-delicious, very happy to follow along and quite proud you are tuning in. Keep crushin good sir!!!!!

  • http://www.tropicalmba.com/ Dan Andrews

    I know it I need to take notes!!!

  • http://www.tropicalmba.com/ Dan Andrews

    RE: cuts down the info overload – totally agree here and I’m thinking it’s part of the trend in the online business space to move from training to done for you… this might be related to 1) info clutter and 2) the rise of a huge market of legit online business owners, whereas even 5 years ago that market was much smaller (speaking off cuff, of course).

    RE: YOU. ABSOLUTELY! That’s a real competitive advantage in any info space. Oprah comes to mind!

    You are right about information products. I’m curious about the mechanics behind the pricing of information and how that’ll evolve this decade. Even if we take the example of books, it’ll be interesting to see how much we’ll be paying for them in 2020.

    With info it seems velocity is a huge factor as well, people will pay for info that is relevant and useful NOW… in finance niche obv that’s huge but I see it in the IM space as well, the marketers who charge a ton often do so for products that outline “now” opportunities.

  • http://locationasia.net/ Chiara Cokieng

    yessir, you’ll get it for sure!

  • http://www.TropicalMBA.com/ Ian

    Thanks Jeremy! Happy to be giving you that thump to get over the business hump.

  • http://www.TropicalMBA.com/ Ian

    JLD! Let’s do it!! You have a mountain bike?

  • http://the8020drummer.com Nate

    Hey guys I’ve been thinking deeply about this episode, and think this and the original Ten True Clients episode are maybe the two most valuable “101” resources for anyone thinking about entrepreneurship. I’ve recommended them to many people who are thinking about/testing the waters for entrepreneurship. It may be even deeper than you guys intended, because I think you can extrapolate that “turning the funnel upside down” concept to an even larger frame – choosing your niche. The Funnel Upside Down thing, as I understand it, is instead of starting with 1,000 people buying an inexpensive product, Kevin Kelly-style, and redounding eventually to 10 people paying premium prices after multiple upsells, can you start with the 10 people – maybe by offering services for free to “influencers”, get some capital for your “runway” then introduce the ebook Later On. If you Turn the Funnel Upside Down when choosing a niche, you start with the question “what problem can I solve for which I can quickly find ten people to pay me x amount (1000? start high maybe then come down) per month?” Then you get into efficiency gaps, establish spending behavior patterns, etc. Maybe you don’t have any skill that’s worth that much. But I think it’s a good “heuristic”, as you like to say, and encourages you to go right to the highest link of the value chain when assessing a niche, and disqualify niches early for which there’s no obvious Ten True Clients honeypot. Part of the reason I’m thinking so deeply about this is I DID NOT do this for my first business;)

  • http://www.tropicalmba.com/ Dan Andrews

    Nate thanks so much for your kind and inspiring comment! I think it might make sense for me to follow up on these ideas in a blog post, I just copied your ideas into my writing folder. Appreciate you recommending these to your friends that’s really cool to hear!

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