“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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