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I spent most of the day yesterday on planning work, mapping out the path for growing this web site into a profitable and sustainable business. I created five 1-page documents: a business development plan, a marketing plan, a sales plan, a product development plan, and a web site development plan — all with a one-year timespan. I’m not a fan of hugely complicated business plans (those are reserved for impressing people who favor volume over substance). And while setting 5-year goals can be helpful, I think we’re in an age of such rapid change that detailed 5-year plans are a waste of time too (at least in the info products business). I find one year much better for overall business planning, since beyond that horizon, so much will have changed by the time you arrive that the 2-5 year portion of the plan will be obsolete. And 90 days is a great period for driving plans down into more detailed projects and actions. Longer term goals are helpful, but I see them more as a compass (giving direction) rather than a map (specifying the path).
In the process of creating these plans, I read and reviewed a number of books. Developing info products and selling them is straightforward for me since I’ve been selling online for 10 years now, but the tricky part of this new business will be the marketing.
Consequently, most of my reading and research was focused on ideas for the marketing plan. In the past two days I read three books by Seth Godin: Permission Marketing, Purple Cow, and Free Prize Inside. I like Godin’s direct writing style, although I feel his books are really articles padded out to the length of a book, including The Big Red Fez. He must write for an audience of very closed-minded or traditional people, since 80-90% of his words appear to be aimed at persuading the reader to believe him. But if you’re open-minded about marketing and are focused on learning new ideas you can actually apply, then I’d say you only need to read the first couple chapters of any Seth Godin book to get the value you seek — at least for me, the reasoning behind the recommendations seems obvious. And in any case, the only way to know if Godin’s ideas are truly practical is to try them. If I’m going to read a book on marketing, all I care about are the ideas I can actually go out and apply for myself. Theories and opinions are worthless (even if a marketing idea works, the theories behind it are often wrong).
I also reviewed some of my Jay Abraham literature, including his book Getting Everything You Can Out of All You’ve Got. This is one of my favorite books on marketing/selling. I like Abraham’s audio content better, but this book contains a solid collection of his ideas. I’m looking forward to building a new business from scratch where I can apply all of these concepts from the ground up. The hard part for me is patience, since many of these ideas can’t be applied for a few years (I have to lay the foundation first).
One of the key business development decisions I had to make involved a chicken-egg problem. Since I want to do professional speaking as well as build an info products business, which comes first? Focus on speaking first, and then build an info products business later? Or build an info products business, and then leverage that to get into paid speaking? There are advantages and disadvantages to each approach. If I focus on paid speaking first, that could potentially be very lucrative, but then I only get paid while speaking — no getting paid while I sleep. In the beginning there would be no BOR sales (BOR = back of room) for books, CDs, etc, since I wouldn’t have any info products yet. No royalties either. Some top speakers earn around $25,000 just in product sales for each appearance, not counting the speaking fee.
On the other hand, if I focus on building an info products business first (books, audio content, etc), that revenue stream will likely take longer to get going, but then I can leverage the content to get into paid speaking, probably starting out with a higher fee than I’d be able to get otherwise, especially if I have a book published. Top speakers who have their own info products back end have successfully used both approaches. So there’s no right or wrong answer — the destination is similar whichever path you take. My ultimate decision was to focus first on building an info products business, at least through the end of 2005. After that becomes profitable, I’ll aim to expand into paid speaking in 2006 or 2007. Of course, if a huge opportunity comes along that makes plan B seem better, I’ll certainly be free to jump on it.
I’ve also had a few people inquire about having me do some kind of personal coaching. Interesting idea…. I’ve had two personal/professional coaches at different times, each one for six months. The first was in 1993, and the second was in 2001. And I had a personal trainer for 2002-2003. I’m a big fan of the concept of coaching. In fact, this would be a great time for me to hire a professional coach again. But I’m hesitant to get into that type of work myself. I prefer the one-to-many path of speaking and writing, since I feel like I get to help a lot more people for the same investment of time. But more significantly I don’t feel that I’d be a good coach, since the main point of having a coach is to help you achieve your goals. However, the kind of topics I most want to write and speak about go a step beyond that — to considering whether or not you’ve set the right goals in the first place, beginning from the starting point of identifying your purpose. This requires a very holistic approach. I wouldn’t be happy coaching a Pepsi regional sales manager to sell more sugar water. If someone like that came to me for coaching, I’d have to challenge him/her to consider the negative impact of such a career and to get back in touch with his/her conscience and passion, leading from there into a discussion about purpose and summoning the courage to make big changes. I’d enjoy coaching someone through that kind of change, but that isn’t really what most people want from coaching (or are willing to pay for). A personal coach typically costs at least $50/hour, some going more than 10x that amount. If I did this kind of work, I’d probably have to charge at least $100/hour to justify the opportunity cost. But I don’t think I’d be a very good coach, since I’d be more interested in helping people get themselves onto the right path for them (one that’s in tune with their best talents, passion, and conscience) as opposed to helping people achieve the goals they’ve already set for themselves. Are people willing to pay $100/hour for that? I honestly don’t know. And it’s not the kind of work you can really back up with concrete guarantees and such. Imagine hiring a football coach who sends half the players off to engage in other sports. 🙂
Aside from continuing to build up the free content on this site (I intend to have 10 free articles posted by the end of the year… 8 more to go), I’ll be spending a lot of time this year creating information products on various aspects of personal growth. Initially I’d like to focus on downloadable content like ebooks and audio. Once that gets going, I’ll write a book and either self-publish it or go through a publisher. Either way, I want to get a book into retail stores so it has the potential to reach a larger market (and generate more traffic for this web site). My wife has already done this with her self-published book, so that’s a pretty straightforward process for me to follow. She’s already working on book #2.
Again, the only tricky part of this kind of business for me is the marketing, since I’ve never marketed such a business before. Personal development is a very broad field (it can cover anything from weight loss to spirituality), so I need to find a way to cut through the clutter. Search engine placement isn’t a significant part of my strategy, since search volume on relevant terms is so diluted that even if I can capture top spots for a lot of them, the traffic won’t be high enough to matter. In the long run, I know my best marketing will be to create content of the highest possible quality, which is something I’m confident I can do. Already the free content on this site is generating new links (and new traffic sources) every week. This month the site will see about 17,000 visitors. Not bad for month #4 with not a dime spent on marketing, but not quite enough yet. I’d like to see at least 10x that number. I’ll eventually get there if I just follow my current marketing plan, and word of mouth will continue to be a strong factor, but I’m certain there are better ways to leap ahead faster. My marketing cow is still more brown than purple. I’ll be spending more time next week working on the marketing plan to change that.
The key limiting factor for me to succeed in building this business is attracting a sufficient quantity of visitors who are willing to invest in high-quality info products that will help them grow. I already know how to do the whole e-commerce thing with instant electronic delivery… been doing that for years. I already know how to handle the selling part. Plus I have abundant ideas for new info products and plenty of material for content. Most of all, I’m passionately fired up to do this, especially since I feel it will greatly benefit a lot of people. All of this will require hard work, but it’s all highly doable. In the long run, it all comes down to marketing.
Given the millions of copies of personal development books and audio programs sold each year, it’s very clear that my future customers are already out there. My greatest business challenge this year will be cutting through the clutter to reach them.
Since the basis of my strategy this year is to build a slice of market share, I’ll be largely focused on gaining first-time customers. Obviously I need some products first, but my main strategy will be to provide far more value than would be reasonably expected. In other words the initial info products will be significantly underpriced compared to the value they provide. It will be hard to justify not buying them. This is the same basic strategy I used in shareware games — the original version of Dweep I released in 1999 had 30 levels and was only $9.95. Game reviewers noted what a great value the game was, comparable to other games that sold for 2-3x the price. Consequently, it brought in a lot of customers and quickly grabbed some market share among fans of creative logic puzzles. Within a few months, I then sold those same customers their first expansion pack of 20 new levels, also for $9.95. And then a second expansion pack followed a few months later. And then a Gold version of the game with even more levels. Now the Gold version of the game is $24.95 and contains 152 levels, so although the price has increased, the value has increased even faster (the cost per game level has dropped by half). But it all started with providing great value at an extremely reasonable price to quickly build up a base of customers. Many of those initial $9.95 customers went on to purchase over $200 worth of games in the years ahead.
Of course, many internet businesses have applied a similar strategy — offer incredible initial value at low cost or for free to bring in hordes of customers quickly. But many of these businesses fail because they don’t ultimately keep in touch with their customers and continue to give them new value year after year in a way that’s profitable and sustainable. I know I can successfully manage the latter. I just need to figure out how to get all those prospects here in the first place.
It’s going to be a fun year!