Conscious Mind Workshop - Save $100
At the Conscious Mind Workshop (August 19-21, 2016 in Las Vegas), you'll spend three stimulating days sculpting your mind into a stronger, sharper, and more intelligent ally on your path of growth. Build your self-discipline, overcome procrastination, and put an end to self-sabotage. From now through August 2nd, take advantage of the early bird discount and save $100.
Starting a blog is very easy these days. You can start your own blog in a matter of minutes if you want. Many web hosts will even install a blog for you or provide an easy installation process. And of course you can always use a hosted service like WordPress.com to get started.
Some people start blogs with the intention of generating income from them. There’s nothing wrong with that. The problem, however, is that most people approach blogging for income with the wrong mindset.
By itself a blog is not a business. A blog is merely a self-publishing tool. If you want to blog for income, then you’re really starting an online business, and that’s a whole different beast. A business is a for-profit venture, and if that’s what you’re looking to create, then you must learn to think like an entrepreneur, not just a blogger.
Learning to sell – the hard way
Let me share with you a somewhat long-winded story about how I learned the difference between being a guy that creates good content and being an entrepreneur. I think you’ll find it interesting.
Several years ago when I ran a game publishing business called Dexterity Software, I hosted a popular forum for indie game developers. Indie games are to mainstream games like indie films are to mainstream movies. Generally speaking, these are small games created by small teams, often just 1-3 people. They have a passion for game development and are inspired by the idea of creating cool games for a living.
A common problem these indie developers suffered from was that they thought like game creators, not like business owners. Many of them were able to create games, but they couldn’t sell them effectively. To be a game developer, you just need to learn how to create games. To run a game development business, you have to learn how to market and sell games. If you have no sales, you have no income, which means you have no business.
One of the roles I enjoyed playing in that industry was helping indie developers learn to think like entrepreneurs. I was qualified to help them because I’d navigated that same treacherous transition myself.
In the early 1990s, I started out as a programmer, and I developed a suite of four Windows games for another company as an independent contractor. I had the skills to develop a commercial product. But when I started my own business, I lost money for five years straight and sank into debt. I completed some games during this time, but they weren’t bringing in enough income to cover my expenses. It seems dumb in retrospect, but I had no clue that running a game development business required a strong focus on selling, not development.
In early 1999, my games business was earning only $300/month. There were sporadic cash infusions in the prior years, but after 5 years in business, I only had a trickle of consistent income. Erin and I had been kicked out of our apartment because we couldn’t pay the rent, and we moved to a cheaper place and were just barely getting by. I was doing C++ tutoring on the side, and Erin and I were doing web consulting too, which was barely bringing in enough money to make ends meet. Often we’d end the month with less than $100 total, but somehow we managed.
Eventually I figured out that if I wanted to run a business, I needed to learn how to generate income. This meant I had to focus on income-generating activities, and game development wasn’t one of them. I made the decision to become active in the Association of Shareware Professionals, a trade association for independent software developers like me. That was an incredibly eye-opening experience for me. I met people (online) who were making $50K, $100K, $250K a year selling their own software. In many cases when I saw their products, I felt I had much better technical skills, but they had customers, and I didn’t. I made some good friends and picked their brains as much as possible, and they were happy to share what they knew. What I learned really surprised me. Most of the people who were doing well financially spent less than half their work time developing software, often much less. But they invariably spent a lot of time working on marketing and promoting their businesses. By comparison I’d been spending about 80-90% of my work time on product development.
Many of those people didn’t like marketing and didn’t feel strong about selling, but they knew they had to attend to these areas if they wanted to run a successful business. They put in the time to read books about marketing and sales in order to build their skills, and they gradually applied what they learned.
Based on what I learned from the ASP, I spent the next six solid months marketing my latest game and working on my sales system. It was a good game for its niche (highly mental puzzle games), but I really put a ton of effort into getting the word out. I sent out press releases, submitted it to game reviewers, uploaded demos to hundreds of software download sites, collected testimonials, sent out newsletters with extra game tips, released extra levels, and encouraged people who created fan sites. I even did a couple of radio interviews. It took a lot of work, but within six months after the game’s release, I was earning a stable $3K/month, 10x what I was earning from my previous 4 games combined. Later the game went on to win some awards, sales continued to build, and I released a gold edition with 5x as many levels as the original. I started publishing more games from other developers, sales grew to five figures a month, and I even got a write-up and my photo in the New York Times business section (in 2001 I think). That business was profitable every year from 1999 onward until I willingly decided to retire from the whole field of game development after StevePavlina.com started taking off.
It took a major shift in mindset for me to go from game developer to entrepreneur. It was not an easy transition for me at all, but it made all the difference in the world. Developing games was not a business, since that activity generates no income. In order to have a business, I had to learn to sell games.
I didn’t have to make that transition. I could have developed games without building a business. I really wanted to have a successful business though, so I was willing to adopt the mindset that would make that possible.
Now back to blogging
So what does this have to do with blogging? I see essentially the same pattern in the blogosphere. There are lots of people trying to blog for income, but they’re stuck thinking like bloggers instead of entrepreneurs. The activity of blogging is not income-generating; hence a blog is not a business. If you think like a blogger, your blog won’t generate much money. In order to generate income from blogging, you have to learn to think like an entrepreneur.
In running my blogging business, I spend only a small fraction of my work time writing content for this web site. In a typical week it’s usually no more than 20% of my total work time.
So what am I doing with the rest of my time? It varies from week to week, but here are some of the activities I attend to:
Communication – I attend to email, phone calls, letters, and the forums on this site. This includes keeping in touch with business contacts and forming new connections. I connect with new people every single day, including weekends. While most of this communication isn’t income generating, much of it does lead to new income-generating opportunities. Most of the income I currently earn results from deals I made with contacts who came to me during the past two years. It wouldn’t surprise me if most of the money I earn in 2010 comes from people I don’t yet know.
Evaluating products – I read books, listen to audio programs, watch DVDs, go through home-study courses, and test new services for potential review/recommendation on this site as well as to keep gaining new knowledge in my field. I estimate I’ve read about 1,000 books on personal development topics by now. For every product I recommend on StevePavlina.com, there are countless others I’ll never mention because they don’t meet my standards. Most of these products I don’t have to pay for. Authors and publishers send me new stuff every week, sometimes in pretty large boxes. At any given time, my review queue contains about 6 months worth of material. Currently there are about 60 books in my queue and several programs on various other media. Often times when people ask to mail me something, if the initial description doesn’t wow me, I tell them not to bother. I get a lot of pressure from people to review their products on my site, but I only do so if I’m genuinely impressed and think the product will really help people. In practice I reject almost everything for one reason or another.
Figuring out which articles to write next. This is a biggie. I don’t merely pick topics out of thin air. I aim to write articles that will be impactful and beneficial to those who read them but also income-generating. I often look for personal development related search terms I think I can dominate by writing an article or two. I do basic keyword research to find out how to title and position my articles to give them a good shot of generating substantial search traffic as well as attracting interested readers. Last month StevePavlina.com received hits from 82,130 search terms (that’s unique terms, not individual searches), with the top term bringing in more than 10K visits. That’s a good bit of free traffic I don’t have to pay for, and it keeps on growing. I rank highly on many good search terms, and that’s no accident. I carefully selected and targeted many juicy terms where I felt I could achieve a strong position. This is something I wouldn’t need to bother with if I was blogging just to blog, but it’s an important part of my business strategy. If I’m going to invest the time to write a substantial article, I want that article to perform well from a business standpoint. In truth I don’t worry about picking topics that will generate a lot of advertising income by themselves, since when people visit the site, they often bounce around a lot and read many different articles on their first visit. If I worried about that, I’d never write anything about diet or health, since I know from experience those topics always show suboptimal ad performance. But I do write with the intention of building traffic.
Human visitor optimization. This is a corollary to the previous item. While I often aim to get high search engine rankings for my blog posts, search engines aren’t my single biggest source of traffic. My biggest general traffic source is actually human referrals, especially referrals from other blogs and web sites. My traffic is extremely decentralized. So it’s actually much more important that I optimize my articles for human beings vs. optimizing them for search engines. This means writing impactful, useful content that people care about. That is very challenging to do correctly. I spend a lot of time trying to get inside people’s heads in order to better understand their hopes and dreams. I read every piece of feedback email I get, and I pore through the forums each day. I can’t possibly reply to everyone who asks, but I soak up as much as I can. I read people’s heart-warming stories about the articles that really changed their lives. I learn about their biggest concerns, and I maintain a massive list of reader suggestions for future topics. I study human beings and think long and hard about the best ways to help them grow, including how to motivate them, inspire them, and educate them. I write articles in different styles to test different ways of presenting info. Some people prefer a very encouraging style, others like a straightforward no-nonsense style, and still others enjoy a confrontational style that challenges them. I’m often surprised by the reaction to my articles. Sometimes when I write an article I think will really hit home, the feedback shows it was only a fizzle. Other times I write something I’m almost certain will backfire, and people write to tell me how deeply it affected them. A good example of an article that surprised me was 10 Reasons You Should Never Get a Job. I was in a very silly mood when I wrote it, intending to write a fun humor piece that would push people’s buttons. Yet hundreds of people told me it really impacted them in a positive way and helped them raise their standards. Many people told me it’s their favorite article on the whole site. Go figure! I have to experiment with ideas I often suspect will backfire. Risking negative criticism is worth the chance I’ll gain new insights into how to be a better communicator.
Setting up joint-venture arrangements. Last year I made more money from JV deals than from advertising. When I recommend a product or service on my web site, it’s a safe bet I generate substantial income from it. I always look for win-win-win deals. This means that the product publisher wins by gaining new customers and sales with virtually no risk (zero advertising costs). My visitors win because I negotiate a special discount or bonus for them, at least for a certain period of time, and they get introduced to something that’s been personally filtered by me according to extremely selective standards of quality and value. And lastly, I win by earning a performance-based commission from sales and from hearing the positive feedback from my visitors who benefit from the product. In an average week, I probably get at least 5 people asking to joint-venture with me on some product or another. Most of those offers I have to reject with snap decisions because I simply don’t have time to evaluate everything. I’m unwilling to recommend something unless I take the time to do my homework on it. I also make a point of talking directly to the President/CEO/Founder of the business to feel them out. I need to make sure they’re really dedicated to serving their customers. It isn’t easy to separate the diamonds from the lumps of coal. Some products I’ve recommended required 20-40 hours of work on my part just to reach the point where I felt I could confidently green-light it without reservations. A recent example of a JV promotion was my recommendation for Site-Build It! — this is one of those win-win-win deals I’m very pleased with, and the early feedback I’ve received from those who’ve taken advantage of it tells me it was worth the effort. I started researching this service in November, so it’s been a long time coming.
Working on speeches/presentations. I do some speaking on the side. It’s not a lot, but I booked a paid speech last month, for instance. Speaking definitely isn’t my main focus right now, but it’s another source of income I want to continue to develop. The cool thing about professional speaking is that it pays really well if you’re good. A top speaker can earn $20K+ for a 45-minute keynote. I’m not at that level, but I can see myself getting there eventually, especially if my book becomes a bestseller. Over the past few years, I did a lot of free speaking to prepare for this, including competing in speech contests. I currently belong to two Toastmasters clubs and have been a member since 2004. Many of my friends are pro speakers, and I soak up their advice and attend many speakers’ workshops. I’ve been semi-active in the National Speakers Association, including delivering two workshops for them. It took a lot of time to build these relationships and learn how the speaking industry works, but it was time well-spent. I expect to do a lot more speaking after my book comes out, so this will likely be a bigger part of my business in 2009. When I started this business in 2004, I planted a lot of seeds to give myself many different income-generating options. If my blog were to somehow fail, I could probably transition to full-time speaking within a few months. Same message, different medium, still a viable business.
Accounting and taxes. I have an accountant who prepares my income taxes for me. I really don’t like accounting at all, but I find it fairly easy to manage everything in QuickBooks, so I always know the financial pulse of my business. There are a lot of government agencies who have a hand in the cookie jar, including the IRS, the State of Nevada, the City of Las Vegas, and so on. The paperwork is easy and doesn’t take much time, but it was time-consuming to figure everything out the first time. I feel pretty comfortable with it now. At least I have enough cash coming in that I don’t need to worry about paying my bills. Legally my business is an LLC, which is a fairly simple structure, but the IRS treats it as C-class corporation because I made a special election for that. I’m an employee of my own LLC, so I draw a salary, which means I also have to do payroll. The advantage is that I save thousands of dollars in taxes each year. In the first few tax brackets, the corporate tax rate is lower than the individual tax rate. For example, the first $50K of corporate profits is currently taxed at 15%. If I let that income flow through to me personally, which would happen by default with an S-corp or sole proprietorship, I’d be paying a lot more in taxes. Last year I left over $100K in profit in my business instead of paying it to myself as salary or dividends because I didn’t want it to flow through to my personal income, where it would be taxed at a much higher rate. I still drew a substantial six-figure salary for my personal income and had more than enough to live on. This may seem like a screwy structure, but it’s pretty common. For additional savings I could create multiple corporations, but that’s more complexity than I need right now, and that seems a bit deceptive to me anyway. My current structure took a good bit of work to set up, but maintaining it is pretty easy. Nevada is probably the most pro-business state there is. It costs much less to run my business here than it would if I set it up in California.
Writing my book. This is an income-generating activity, since I’m receiving a substantial advance plus royalties. The book will be titled Personal Development for Smart People: The Conscious Pursuit of Personal Growth. It’s still many months from release due to lead times in brick-and-mortar publishing. I’d probably make more money if I self-published the book, but I think it will sell significantly more copies by working with a publisher. In this case I’d rather see these ideas spread as far and wide as possible and not worry about extracting every dollar. When the book is done, I intend to develop other info products as well.
Miscellaneous activities. There are lots of other miscellaneous activities, but most don’t take a substantial amount of time.
Early in my business I also spent a lot of time tweaking the site and optimizing my ad layout. It may not be a beautiful site, but that’s because it’s designed to meet my business goals and to work efficiently, not to win a design contest. I can always hire someone to improve the design later when it fits with my plans.
While it’s true that I’m a blogger, it would be much more accurate to label me an entrepreneur who runs an income-generating personal development business. My blog isn’t my only source of income. Almost half of the income I’ve received so far this year has come from non-blogging activities. I even continue to receive a small trickle of game royalties from a deal I did many years ago, as well as a few other odd sources of passive income.
When blogging as a business, content creation is only one piece of the puzzle.
Blogger vs. entrepreneur
People start up new blogs all the time with the intention of generating income. Many have really good content, but after 6-12 months of work, they linger around a few dozen visitors per day. Many of these people are pretty intelligent, can write well, and have good ideas to share. Some are already experts in their fields with decades of experience.
But they still don’t get it. They don’t understand that a blog or a website is not a business. A blog is merely a self-publishing tool. Blogging by itself won’t pay your bills.
A business requires tactical and strategic decisions that blogging technology won’t help you with. You have to consider how to generate consistent profits from your business, and that isn’t the same as generating content.
What I do may look deceptively simple from the outside. I just write articles about stuff I know, right? But people don’t see what happens in the background that I do to build the business, not merely maintain the blog.
Countless people who think they know what they’re doing fall short of their goals because they fail to successfully handle the hidden complexity that is required for substantial income generation. There are many details to attend to if you want to do it right, so most people settle for doing it only half right. Unfortunately, in most cases half-right isn’t good enough. Those who are doing it right will simply out-compete you. People don’t want to put their money in something that’s only half right, whether they’re consumers or advertisers.
Most bloggers don’t know how to think strategically about their businesses. They think it’s all about writing great content. Quality content is an important element, but it’s not enough by itself. Content is only one piece to the puzzle. Content by itself generates no income at all, just as a computer game generates no sales.
Dealing with cynics
When you commit to blogging for income instead of merely blogging as a hobby, you’ll surely have to deal with cynics who whine and complain that you’ve somehow joined the dark side, as if you’ve done them serious personal harm by deciding to get paid for your work instead of bending over backwards to serve their needs for free. Understand that cynics aren’t offering you a fair exchange — they’re asking you to commit to an abusive relationship.
Cynics hold the nonsensical belief that they’re entitled to something for nothing. They want you to serve them, while they offer you nothing in return.
One of the downsides of blogging is that its very nature tends to reinforce the belief that it’s OK to get something for nothing, that it’s fair and reasonable to soak up value that people work hard to create without providing fair value in return. It puts people in a state of receiving without giving. I’d need a whole other article to explore this situation in enough depth to do it justice, but in the context of blogging for income, cynicism is an infection you need to watch out for.
It’s easy to fall into the trap of listening to the cynics and adopting the incredibly lame belief that your purpose in life is to bend over backwards to serve them. But that isn’t a sustainable long-term model, and it’s one of the reasons many bloggers get totally burnt out and give up within a year or two. Serving the ungrateful doesn’t make for an enjoyable long-term business. It doesn’t even amount to much of a hobby.
Financial cynicism is very unproductive, and it runs contrary to the natural law of sowing and reaping. The something-for-nothing mindset simply can’t hold a candle to the fair-exchange-of-value mindset.
While I love that I can run a sustainable, profitable business by giving away my best ideas for free, this is only made possible by leveraging technology and generating income from indirect sources. This model certainly has its advantages, but I’ll definitely be exploring other models down the road as well. For example, by writing my book, I’ll be testing the book publishing model, whereby people pay a fairly small price for a lot of well-developed, well-organized, coherent content. And by developing other info products, I’ll be selling some of my content directly. I’m sure the cynics will balk at that, but those are precisely the kinds of people I want to weed out over time.
Financial cynics don’t make up a significant percentage of my audience, but I try to discourage them from frequenting this site when possible, sometimes suggesting alternative sites that may be better suited to their dispositions, other times telling them point blank to stop whining and grow up. While I’m very dedicated to helping people, it’s not a productive use of my time to try to assist those who want to see my business fail financially. I’d rather focus on helping people that have the common sense to realize we’re in this together and that for any such operation to be sustainable, goodwill and the exchange of value must run both ways. There are way too many people who are genuinely receptive to this kind of work that I’ll simply deal with them first and leave the cynics to fend for themselves. I’m sure the cynics can find other ways to explore their personal growth challenges, or they can continue to read this site without the complaining.
Cynicism and scarcity go hand-in-hand. People who provide real value in a sustainable manner don’t suffer from financial cynicism. They understand the importance of exchanging value for value, and they see it as fair that they get paid for their work. It’s great to focus your energy on the giving side, but you also need to make sure you don’t become overwhelmed by leeches and parasites, since that’s only going to reduce your ability to contribute.
In terms of fairness, we all judge ourselves. We know when we’re being fair and when we aren’t. We know that when we receive value, it’s reasonable to offer something in return. This is nothing more than social common sense.
Cynics punish people for giving to them, and that leads to two possible outcomes. Either the cynic will successfully convince the other person to enter into an abusive relationship, or the cynic will find they’ve been dumped for being unreasonable. The former outcome reinforces the cynical behavior; the latter has a better shot of breaking the pattern.
The money decision
Deciding to blog for income is a big decision. If you opt to go forward with it, make sure you’re congruent. Be sure you aren’t suffering from financial cynicism yourself, worrying that you’re doing something wrong by deciding to get paid for your work. If you do well financially, it means you can provide a much better service and help a lot more people. The cynics will tell you that such statements are justifications for greed and selfishness and suggest that you’ve turned evil or corporate or some nonsense like that. Do yourself a favor, and recognize the total idiocy in the cynic’s line of thinking. The sooner you do that, the better off you’ll be. Focus your time and energy on serving those who really appreciate what you do. Those people are golden. They’re a pleasure to work with, and they’ll refer like-minded people to you as well.
When I couldn’t pay my rent, I could barely help anyone. I was stuck in survival mode. Working to pay my bills was difficult and demotivating, and at the end of the day, I had nothing left to give. Eventually I made the common sense realization that helping other people required that I take care of my own needs. It wasn’t either-or. It was and.
You are the vehicle for service to others. There’s nothing selfish about taking care of that vehicle. You won’t be much good to others if you can’t take care of your own needs. Giving from a place where your own needs are secure is a state from which you can do an awful lot of good.
A sustainable, contributing business is a profitable business. I had to learn that lesson the hard way. It’s my hope that you’ll learn this lesson more easily instead of having to struggle for so many years like I did.
This lesson applies even if you’re an employee working for someone else. Remember that no matter who you work for, You Are Self-Employed. Are you fairly compensated and well-appreciated for your efforts, or are you suffering in an abusive relationship, working for a cynically minded employer who expects you to give, give, give without rewarding you in kind? Remember that it’s always your decision. The only one who can really abuse you is you… by failing to honor and love yourself fully. No one else will value your gifts and talents unless you value them yourself.