Why Your Information Product Will Probably Fail : The Cambodia Cash Paradox

Why Your Information Product Will Probably Fail : The Cambodia Cash Paradox post image

“Information products” are the bread and butter of 1st and 2nd wave internet marketers.

You know– ebooks, video series’, pamphlets, newsletters, high pressure sales pages, step-by-step membership sites, all that.

For all the talk of how great info-only business models are, I don’t see a lot of success in-person. I know my sample size is limited, but it got me thinking– maybe making the entrepreneurial leap with an info product is harder than we think.

I get it– info-ambitions are sexy. Did you hear the one about that guy who sells a hundred $97 ebooks a month? Wouldn’t you love to have a business like that? All you gotta do is record a few interviews and put up a sales letter and…

We’ll yeah, and I would love to have this car:

The problem? They’re difficult to get. I’ve done the research.

Same thing with a $100,000 ebook business. Good luck with that.

And I know what you are thinking: what about all those folks with $100,000 ebook businesses? Well, that’s true, there are a bunch of people doing that stuff. But I’m most concerned with identifying strategic approaches to success for bootstrapping entrepreneurs.

If you came to me and told me you were going to quit your job and start selling ebooks, I’d say, sure, you can. But my guess is that you are making it hard on yourself.

Having a successful information product is like dunking an alley-oop. 

It’s an easy shot– if you can jump high enough. It’s not just that info products are the first thing to roll off of the tongue of anyone fresh off the Four Hour Work Week, it’s that they are structurally difficult to sell– and that’s not only because information wants to be free, man (although that’s a huge issue worth of a post itself… it’s reasonable to believe the value of your ebook or DVD series could dramatically drop from year to year).

Here’s two structural problems I’ve seen with bootstrappers starting with information products:

1. Spitballing with results oriented language.

Don’t use “results” language when you should be using “process” language. I often say it in conversation, “you’re confusing the result with the process.” By focusing on the process, you’ll get a better feel for the real costs involved.

Here are some examples:

  • Results (not always useful): Information products are a great way to monetize an audience.
  • Process (more likely to be useful): If you build a huge audience that trusts you over many years of work, they’ll want to buy a broad range of products and solutions from you.
  • Results: Ranking #1 for x key term with a hypothetical 2% opt-in rate will lead to a business with x in sales.
  • Process: Based on our research, SEO seems to be a viable distribution channel for our product line.
  • Results: I’ll build up a group of people who follow me then survey them to see what they want to buy, the product will build itself.
  • Process: If you solve important problems for people over the course of a few years, they’ll eventually start to pay you.
  • Results: I’ll build expert status in this niche buy interviewing other experts and then sell and info product that’ll be gangbusters.
  • Process: Become an expert.

2. Underestimating the effort required : The Cambodia Cash Principle (and Paradox)

  • PRINCIPLE : “Generally, the more appealing the source of income, the more resources you need to expend to get it.”
  • PARADOX: We are attracted to business models with highly leveraged income because we want to free up our time, but we have to spend an extraordinary amont of time (relative to other approaches) in order to develop the type of income that we see as “freeing.” Hopefuls often end up under-estimating the cash runway required to create those cash flows, and fail to make the entrepreneurial switch.

CORRELATE  #1: The more appealing and scalable your product, the more resources it takes to create. 

As a worker, the product you are creating is yourself as an employable person. That might start as you as a cubicle cowboy. That doesn’t take a lot of resources. You’ll probably make a resume, dress up nice, and show up.

As you move up the value chain, your evolution could look like this:–> freelancer –> consultant –> service provider –> creates products –> creates tools –> creates platforms.

The type of of income you create would evolve accordingly:  salary –> contracts –> products –> recurring contracts –> Cambodia cash –> equity or shareholder value –> passive income.

CORRELATE #2: The more hands off your sales process, the more difficult it is to convert leads into sales.

This is a dead horse I love returning to. Most of the conversation in our circles revolves around stuff like SEO, PPC, and creating expert resources. That’s because those are the domain of our beloved passive income businesses. They are, however, not as effective at converting leads into paying customers.

What’s the best way to convert a lead into a sale? Having a personal relationship with them. It evolves from there: personal relationships –> sales meetings –> phone –> Skype –> email –> interviews –> social media –> SEO –> ads –> expert resources.

Ultimately blogging is a better way to reach your target market. What most of us don’t realize at the outset is how resource intensive scalable marketing practices are.

Implications of the Cambodia Cash principle:

  • If you never want to have a job again, you potentially hurt your chances by focusing on “passive income” style businesses at the start.
  • If you aren’t making a living from your website, the most explosive thing you can do is to start talking directly with your visitors.
  • The biggest barrier to developing more appealing types of income from products with scalable marketing is your immediate cash needs. The more time you spend putting food on the table, the less time you spend planting seeds that will take years to come up.
  • If you don’t have a huge and trusting audience of fans or affiliates, give away all your information, including whatever you were planning on hiding behind an opt-in.
  • An info product that provides the majority of the income for a business is much more likely to happen in businesses with developed cash flows, not a bootstrapped start-up situation.

It’s not unlike real life– Cambodia is the last stop on the train. And even when you get there, you’ll probably only want to stay a few weeks.




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Published on 04.23.12
  • absolutely!

  • Yeah that sounds about right. Most ebooks are just junk really, and even as free resources, they’re not that helpful.

    I’m really getting sick of the “Free Report” opt-ins or “Free Ebook about How To Build A Lifestyle Business” it’s just obnoxious now.

    I really think that going the opposite direction, starting off creating the high ticket backend products FIRST is the way to go. Then later on, once you have a decent amount of people paying $1,000 or $2,500 then you can create other products in the funnel that lead up to that. Info products in general are just a hard thing to get into, unless you combine ALL the information delivery systems. (Video, audio, text and software tools)

    I’m about to release my first book, I’ve been working on it for months and I plan to give it away FREE on Kindle, get a bunch of downloads and reviews, then raise the price to $0.99, then $2.99 and leave it there.

    Really it’s more of a credibility thing, to talk about and also drive qualified leads into my marketing strategy and copywriting business. It’s also just fun for me, because I love writing.

    Another interesting strategy to check out, is Ryan Biddulph of BloggingFromParadise.com he writes an ebook every week and puts them on Kindle. He has about 21 out there now, and he basically looks at it as another way to create blog posts, for people who prefer to pay for them. They all lead into his website, which also sells coaching and other high-ticket stuff.

    Great post! Definitely something a lot of beginners should hear before they start creating ebooks and expecting riches.

  • agree it makes sense to come with something fresh to get people’s attention and trust… thanks for the link

  • Steve

    Before I begin I want to mention that I bought Dan’s book “The 7 Day Startup” – I enjoyed it and I put most of what I learned to work immediately.

    But this is Bad Advice. You talk about not spending a lot of money to earn passive income/be an owner – but what about the time cost of your plan?

    The plan –> freelancer –> consultant –> service provider –> creates products –> creates tools –> creates platforms is an awful recommendation. If you follow that plan it will kill your drive. You’ll be halfway through and wonder when you’ll actually begin doing what you want to do. If you want to do something – do it. Don’t think you need to be an apprentice for 5 years and pay your dues. Learn from other successful people and copy them. There are things you can do to shorten the learning curve. Work smarter – not harder.

    You’ve created a monster of a sales funnel with your – personal relationships –> sales meetings –> phone –> Skype –> email –> interviews –> social media –> SEO –> ads –> expert resources. This is extremely inefficient. Each of these actions are a field in themselves and need months/years to perfect. 10 actions at 6 months each = 60 months or 5 years to perfect.

    I would pick 1 channel to master and own it. At a higher level of thinking – focus on your strengths and build on them – 1 at a time. If your are a strong writer and a weak talker – focus on email, social, SEO and ads – ignore the rest.

    In terms of your results vs. process – you need both. You can’t have an objective but not know how to achieve it and you can’t have a process that doesn’t achieve an objective. You’ve applied new wording to the old strategy vs execution debate.

    What you are lacking in the article is ROI. You can’t talk about value and not talk about cost, you can’t talk about cost and not talk about value. Do I think more people need to think about the risks/costs of their actions? Yes. Do I think something shouldn’t be done because it is expensive in terms of time/money/energy? No – because you’re ignoring the value of achieving it.

  • KC

    Requires the right audience and the right sales pitch

  • Excellent post

  • Gary


    Needing an audience before you build an info product? – You can simply leverage off other affiliate’s audiences/existing lists for them to market to them. WHILE building your audience via paid traffic/blogging/affilites.

    Regarding needing to have “massively lengthy sales processes” like you mentioned to get an info product sale – Then explain all the Infopreneurs that have made a killing online? There’s a thing called impulsive buyers. If your customers take months to 5 years to buy from you, you’re doing the sales funnel + follow up game wrong.

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