Download: MP3 (75 MB)

There are many different ways to be in business. But you do have to sell something.

What you sell, who you sell it to, and how it helps them are all important things to think about.

There’s no right, or wrong, or even necessarily better business model—it’s all going to depend. Some business models work better for different businesses.

I find that a lot of people don’t have a good grasp on their own business model, so I feel it’s an important conversation to have. A lot of people need clarity on this topic.

We talk about examples of different business models and go over the pros and cons of half a dozen of them.

Highlights, Takeaways, Quick Wins
  • Your business model is the way in which you make your money.
  • Think about the customer/client pain you’re relieving and how your solution is going to work better than others.
  • Client services build up your expertise, your process, and your credibility.
  • Client work is all about serving someone else’s problems. Think about whether that’s something you enjoy doing.
  • If you’re selling stickers, you’ll make pennies.
  • If you want people to pay attention to something, focus only on that one thing.
  • Don’t start a membership site for the money—only do it if you’re passionate about the people.
  • When you use advertisements, you’re selling your audience’s attention.
  • Be intentional about your business model.
  • Start projecting the thing you want to be known for, and over time, people will start to know you for it.
  • Successful people focus on one of their passions at a time.
  • Everything you say “yes” to is a “no” to a million other things.
Show Notes
  • 07:55 Sean: There is such a thing as a business model and a business plan, and I think people were getting those mixed up.

What is a Business Model?

  • 08:10 Sean: A business model is the way in which you make your money. You could sell services, products, subscriptions or memberships, or productized services. That’s something pre-packaged, where we do this thing for you and there isn’t any kind of personalization. There’s selling software as a service, where people pay ongoing for software—things like Creative Cloud from Adobe or Photoshop. You could also sell advertisements. That’s a business model. You could sell sponsorships. That could be for your own content, or maybe you do that for others. Maybe you’re providing that as a service.
  • 08:47 You could even sell other people’s products, and this would be an affiliate business model. A lot of people use various forms of these or different ones. That’s essentially what a business model is and those are some examples.

A business plan encompasses a business model, but it’s also a lot more.

  • 09:08 It builds on it. You start with the business model, but then you build out from that and you develop a business plan. How will we market to people? How will we distinguish ourselves? Things like, what customer pain do you relieve? How does your solution work better than others? What are your profit margins going to be? What is the cost of doing business vs. the price of the products or services that you put out there?
  • 09:40 Ben: Accepting donations, if you’re a nonprofit for example, is that also a form of a business model?
  • 09:49 Sean: That’s a nonprofit business model.
  • 09:52 Ben: I know of a business that provides services for nonprofits, but they also help them write grants so they can get secure funds to pay for those services. They kind of partner with the other business or organization that they’re going to provide services for and help them get their own money.
  • 10:17 Sean: You can be a for-profit business and work with nonprofits, and they pay you with money they get as donations.

What About My “Nice-to-Have”?

  • 10:25 Sean: Some people were asking, “What about my nice-to-have thing? I have something that doesn’t solve a hard core problem for people or a house on fire problem. It’s more of a nice-to-have. What about my thing?” You still have a business model. I was showing Kyle this nice little box here, it’s custom wood… It’s four inches square, maybe three inches tall. It’s got a hinge. What is this? Inlaid wood?
  • 11:05 Ben: It’s very well made. A lot of attention to detail, felt on the inside, or maybe suede.
  • 11:06 Sean: It’s beautiful. This part where you put your thumb in to lift up the lid on the hinge, it has this groove that’s sanded and smooth. It feels really nice. When you get down to it, it’s a box. You could put your keys in it, some thumb tacks or paperclips, but when you get down to it, it’s a box. Do you need a box? Maybe, but you could probably get a lot cheaper one than that one. That would be considered a nice-to-have. That wooden Grovemade iPhone dock there that has a really heavy weight at the bottom so you can lift your phone out and it doesn’t move the dock because it’s really heavy, that looks nice on the desk because there’s wood on it, that would be considered a nice-to-have.
  • 11:59 Most people wouldn’t want to spend $100 on an iPhone dock just for the function. That’s something that looks nice. Even if you have a nice-to-have product, you still have a business model of selling products. I’ve seen a lot of people, especially in the Community, talking with members, who seem to not have a lot of clarity on their business model. They’re kind of throwing things at the wall, seeing what sticks, and trying to make money a bunch of different ways. It’s not a super purposeful way to go about it, and I wanted to give people some clarity today.

Who Is Your Target Audience?

  • 12:35 Ben: This sounds like a show I need to listen to. This is a little bit embarrassing, but it was a good clarification for me. I was listening to and participating somewhat in the previous live event Sean did where he talked about the Expansion Framework. He asked the question in the chat, “Does anybody have a $100 product?” I said, “Yes,” because I was confusing a service that I’ve “productized” with an actual product. Sean called me out.
  • 13:24 Sean: I was surprised. I said, “Does anyone here on this event have a product priced over $100?” Yes or no in the chat. I saw all these yeses and nos going by. I was looking for the yeses, because they were more rare, and I saw a yes from Ben Toalson. I thought, “I don’t know what this product is!”
  • 13:49 Ben: Sean was like, “Really, Ben? You have a product that I can go pay $100 for sitting on your shelf?” It was something like that. I realized then what he was talking about, and it clarified for me what I’m offering. It also called into question whether I’m positioning my service the right way if I’m putting a fixed price on it, thinking in terms of the Value-Based Pricing model. I’m doing these things called Elevator Pitch videos for a local shared workspace. I’m part of a local working community. I’m doing free elevator pitch videos, a few a month, for members there.
  • 14:43 I’m also offering that as a service. Ideally, I would like to be consulting with the client, finding out what their business is, who they’re trying to reach, what they do, and who their target audience is. I want to find an environment and a feel for the video that fits what they do instead of just having it in my “studio space.” I put this thing that I’ve been doing for the members on the lowest tier. It’s something where you come to me, you have your script all ready to go, and you just deliver it to the camera. It looks and sounds great.
  • 15:28 It may not be precisely what you need for your specific audience, but it’s something that can work. I put a price tag on that and said, “This is what it is.” Now, I’m wrestling with that a little bit. Do I offer that as a service, or do I say, “That doesn’t meet their needs as well as something more custom would.” Should I just focus on that?
  • 16:00 Sean: The good part, and there are a lot of good parts, is that Ben’s got a good idea the “who” he wants to serve, who this person is.

A lot of people don’t know who they’re trying to serve with their product or service.

  • 16:17 They find themselves in a place of saying, “I think I have an idea of the problem I want to solve,” but they have trouble marketing and selling it. My question is, do you have a good idea of the “who”? Who is this person? Start with the “who,” with the person your product or service is for. Make sure you’re interested and willing to help and serve these people. Once you go down this route, those are the people you’re going to be working with. Does that interest you? Do you really want to help them? That’s the first thing you want to figure out. The other thing is what they’re actually needing and how your service or product makes them better.

When it comes to a business model, think about the customer or client pain you’re relieving and how your solution is going to work better than others.

  • 17:12 Also consider things like your profit margin and costs. That starts to bleed into a business plan, which encompasses a business model. I want to go into some examples of business models, and maybe we end up comparing them, but really exploring them. I want people to get their minds around what a business model will actually look like and if they even want to live that life. Different business models are going to require different things of you, and it’s important that you know what those are before you go into it. A lot of us have the idea of something. We think, “A membership site sounds fun,” or, “Selling ads, getting to do my thing, and just getting views sounds fun,” but the reality of it is often not so much.
  • 18:01 Ben: The big lesson I learned was that I can’t call something a product that I have to be actively involved in creating every single time. There’s a whole process I have to follow. A product that’s sitting on my shelf, I make that beforehand. It’s already finished. There’s no additional work that goes into that besides shipping and sending. That’s an important distinction, because the way I think about that is going to affect how I approach selling that service and my expectations for the kind of time and effort it’s going to cost me to have that as an ongoing service.

Look at Your Business Model Realistically

  • 18:48 Kyle: I see a lot of people trip up on this when they start a business or they want to do this thing where they stay home and work. It’s a great thought, a great effort on their part, but they don’t really think about what’s involved with that.
  • 19:08 Sean: I don’t know if this is a quote or anything, but I like the expression, “The great thing about quitting the nine to five job is you can pick any sixteen hours of the day you want to work.”
  • 19:21 Kyle: There’s this glamour around it, that you can quit your job, start this thing, and everything’s going to be wonderful. You can just make money by doing all these different things, and I’ve been guilty of this in the past, but you start something and don’t think about how you’re going to do this. I thought, “I’m going to make money. I’m going to sell things,” but there wasn’t a business model in place. There was a very flimsy plan, this idea of starting, and this great goal of saying, “I want to be home for my family in the future. I want to be able to have time with them, be in control of my time, and be in control of what I’m earning.” There wasn’t a business model in place, and without that, you can’t make it work.
  • 20:07 Sean: There was a question in the chat that was, “Do I need to decide on a business model before starting a business or is it a thing that gradually evolves?” I said, “Do you need to decide where you’re going before you get in a car and drive? No, but you probably won’t end up where you want to be unless you do.” Sure, a lot of people get in cars, start driving, and only afterward figure out where they want to go, and that’s fine, but you are going to burn a lot of gas getting nowhere fast.

Client Work

  • 20:52 Sean: Let’s look at a couple of examples here and go into how to avoid choosing the wrong business model for you. It’s not that there is a wrong business model, that this is wrong and no one should ever use it. There isn’t really a right or wrong or even a better, but some just work well for you or for some businesses and not for all businesses. You need to figure that out for yourself.
  • 21:16 Client work or services; one business model is that you perform a service for clients. You do a job that someone else doesn’t want to do, they don’t know how to do, or they believe you can do better for them. You’re performing some kind of work for clients. Yes, that can be lucrative. We teach a course on how to do client work and actually enjoy it and have it go well at ValueBasedPricing.com. You can make good money at client work but you’re going to be working with people and you’re going to be solving someone else’s problem. That’s fine. We’re just being objective here.
  • 22:01 These are the facts, but think about that. Some people are cool with that. They like solving problems. They like seeing the results they can create for others. It makes a cool story. It’s a testimonial. Maybe you have a warm and fuzzy feeling about how you changed someone’s life or improved their business. That’s awesome. There’s no right or wrong. Maybe this is you, listener. You have to figure this out for yourself. Do you want to solve other people’s problems? Or, maybe, do you want to solve your own? People who have the same problem as you might resonate with that.
  • 22:37 You might have a little bit of trouble marketing it, but you get to decide how you spend your time. You get to solve the problems that interest you, which could be your own problems or someone else’s.

Client work is all about serving their best interest, so consider if you really want to solve their problem.

  • 22:59 Am I passionate about the problem? That’s a question a lot of people don’t ask themselves. We like the idea of success and the solution, but most of the time is going to be spent in the problem.
  • 23:15 Ben: When Sean talked about whether you want to solve someone else’s problem or your own, I think a great place to start is to look outward at what problems exist. If there’s not a market for your solution, if that problem isn’t as pervasive as it needs to be to support your business, like Sean said, you might have a really hard time. Some people find a problem they want to solve and they get lucky, but that’s a real toss of the dice. If you look out into the market and you can find problems you want to solve, that exist and are pervasive, that’s a better approach. I wanted to create that distinction.
  • 24:09 Sean: Kyle, you were nodding during that. Do you have any thoughts on the client work thing?
  • 24:14 Kyle: I’m in the design industry and Sean’s been in the design industry, so I’ve seen a lot of people who assume when you start a business that you have to have client work. That is the way to start a business. But that’s not the right path for everybody. You don’t necessarily have to do client work. There are all these other things. You could still solve problems for people, which is what design strives to do, but you could do it for peers and show them how to design things or do it even for clients. Do consultations, one-on-one things where it’s not like you’re doing your work for them, but you’re consulting them and talking about the future direction of their business.
  • 24:53 Sean: I like recommending client work as a way to get quick capital, but Kyle’s right. You don’t have to do client work. If you don’t enjoy client work and you’re in it, make some money right now and save it up. You don’t have to do that forever. That can be your capital for investing in something else—investing in products, doing courses, subscription revenue, software, or something like that.

Client services build up your expertise, your process, and your credibility.

  • 25:31 You create stories and case studies that make you look good. People assume you know what you’re doing, and it also helps you develop your processes, which are things that can be sold. We had an episode recently about creating products quickly, getting more products on the shelf, and one of those was selling your process (Related: e275 Creative Ideas to Help You Quickly Get More Products on the Shelf). When you work with clients, you figure out what your process is, and you can turn that into a product.

Products

  • 25:59 Ben: Sean, would you say, in terms of the amount of time spent vs. the return on that time, client services is probably the lowest on the totem pole? Compared to products or something else?
  • 26:14 Sean: Honestly, I think client services is probably the most lucrative for most people—if you learn Value-Based Pricing. The potential upside is great, and it’s also the most accessible and the most achievable for most people. All you need is one good client to make money. Products can be tremendously lucrative, but for most people, it’s not. Most people sell a few or only enough to recoup their costs, because you have all of these large minimums.
  • 26:52 You can get to a point where you make more money with products, and it’s great. It’s coming in consistently, and you don’t have to spend the time working with clients to make money, but it’s also a very long term investment. I wouldn’t even say “easier,” “harder,” “best,” or “better.” It’s really about what works for you, what kind of problems you want to solve, and how long of a game you’re playing here.
  • 27:21 Ben: I was thinking in terms of, if you do client work, you get paid for that work, and then you don’t get paid again unless you continue to do client work. The work and the money follow each other more there.
  • 27:40 Sean: It’s just different. It’s so different. You do work and you make $10,000. That sounds like a lot to some people. It sounds like a little to other people. My point is, you can get there. You can make thousands with client work easily, relatively, compared to products. With products, to make thousands—I’m talking about money in your bank that’s just yours, you have the thousands of dollars, you did the work, you’re done, you’re paid, it’s over—it takes a long time. We did some basic math with the Expansion Framework.
  • 28:16 If you’re not following me on Snapchat or seanwes tv, you’re missing out big time. I took people behind the scenes, even those who missed my live event. I broke down the Expansion Framework, and I’ll tell you a little bit of it. If you’re selling $5 products, or as I like to put it, if you’re selling stickers, you’ll make pennies. If you’re selling cheap products, you’re not going to make a lot of money. You want to make $100,000 in a year? You’ve got to make $8,333 a month, or $277 a day. That means something like 55.5 products sold a day. The average eCommerce conversion rate is 2%. If you’re doing 2%, you’re doing pretty good. That’s the average.

You need to have approximately 80,000 monthly visitors converting at 2% buying a $5 product in order to make $100,000 in a year.

  • 29:40 You can make $100,000 in a year as a freelancer doing client work, consulting, or whatever, so much more easily than you can make $100,000 selling products. People with product businesses say, “Yeah, my business does a million a year.” They don’t tell you what the profit margin is. 70% of that is probably inventory and overhead. It’s insane. Did we turn everyone off? Are they all bummed? Kyle, are you watching the chat?
  • 30:12 Kyle: Yeah. I feel a need to clarify what I was talking about earlier, because I think I went down a wrong path there. My point was, don’t pigeonhole yourself into one thing because you see everyone in the industry doing a specific thing. If you’re doing client work and you’re a designer, for example, if you see everyone doing that and you get to a point where you’ve had a bunch of clients, you’ve done a bunch of client work, and you think that’s just life forever, it’s not. You can do other things.
  • 30:44 You don’t have to put yourself in one box and make that the only thing you ever do. I see so many people drop off of even trying to do a business, because they think, “I’ve been doing this for a year and a half, and I don’t want to take on clients anymore. I don’t want this to be my life forever.” It doesn’t have to be.
  • 31:04 Sean: We’re seeing more of that right now in the chat, “I’m so tired of client work. I feel like I’m constantly under someone else’s timetable.” Cory Miller says he lost several thousand dollars selling products. Eric says, “Sort of bummed, but this is gold.” Teela says, “Digital products all the way. I wholeheartedly agree, and I sell physical products, too.” Here’s the thing. Eric, you’re bummed, but we’re going down the line and I’m telling you the realities of all of these business models, what you’re actually going to experience. Maybe, at the end, we’ll do a quick recap and talk about the positives.
  • 31:39 Ben: I think that’s good, though. I’d rather be sad at the reality of something than waste a bunch of time and money doing something that goes against what comes naturally to me.
  • 31:51 Sean: The point is, they’re all hard. All business models take work. You’re tired of client work? Someone else is tired of paying $2,000 to do a run of t-shirts that don’t sell for two years. One of my t-shirts didn’t sell out for three years. The other one has sold out of big batches half a dozen to a dozen times.

Membership Sites

  • 32:19 Sean: Another one that people think is the golden one, that if they can only get this right, they’ve arrived and they can go sit on the beach and sip coconuts and everything will be great, and that’s membership sites. People think it’s awesome. I say: don’t start a membership site for the money. It’s just hard. I’m not saying that because I’ve done it for three years, which I have, but I also know other people. It is not passive income.

Everything requires maintenance.

A membership site is not a “set it and forget it” thing.

  • 33:49 It just isn’t. You have to keep adding value. It’s the opposite of passive income. You have to prove your worth to these people over again every single month. You have to say, “I am worth paying for this month.” Netflix has a big, huge library so it takes a lot of people to go through things, so they retain them longer. After they go through the archive and they feel like they’ve exhausted the material, the only way they’re going to stay is if there’s new material. Netflix knows this, so they come out with their own originals, they pay exorbitant licensing fees to get different franchises and stuff just to keep people. You have to keep adding value and invest in your members.
  • 34:34 Ben: And their membership, mind you, is $9 a month.
  • 34:41 Sean: Didn’t they increase their price? I feel like it was going up to $12 or $15.
  • 34:48 Ben: It’s definitely under $20 a month.
  • 34:54 Sean: Oh, like they have it easier, because people think, “What’s a few bucks?”
  • 34:59 Ben: Yeah. They’re doing all of this work to keep people at this rate that’s relatively low, if you think about what one might charge for membership.
  • 35:09 Sean: That’s true. With a membership site, do it if you’re passionate about the people. If you love the topic of photography and you love helping photographers, start a membership site about photographers. Have another business model for some other aspect of what you do. Have a way that you make your money, or as we say it at seanwes, how do you make your bread? You have to have bread for the family.

Advertisements

  • 36:05 Sean: We’ll come back with the positives. We’re going to hit them with the harsh realities first, and then we’ll come back with the positives. Don’t get totally scared off. I’m going to touch on this last one because it’s a common one. If you’ve been listening to this podcast for any length of time, you know my position on it. The last one is advertisements. You’ve done a thing you enjoy, you’ve put it online, and you’re getting attention. It just kind of happened. Who knows? Maybe you make piano videos. Maybe you make little animations or cartoons. Maybe you make silly videos. Maybe you vlog yourself.
  • 36:40 Something got you attention and you have an audience. Wherever there’s attention, advertisers are attracted. They want that attention because they can monetize it. They know what their customer acquisition costs are. They know the customer lifetime value. They know how much they can afford to spend to make an impression. Advertisements are probably the most common business model of people who didn’t start with a business model. We had the question, “Do you have to start with a business model before you make a business?” No, you don’t, just like you don’t have to start with a destination when you get in a car, it’s just a good idea. If you end up driving your car around and picking a destination while you’re out, it might end up being Taco Bell.
  • 37:52 Sean: Taco bell ‘food’ is like 80% food. If you start without a destination in mind, you may not end up where you want to be. You may not end up in the best place. A lot of people find themselves with a lot of attention and they slap advertisements on it, because they know it works and they know they can make money.

Using advertisements looks like a glamorous life, but it’s not.

  • 38:11 “Oh, you just vlog and you’re a millionaire?” A few people are. About 0.1%… it’s very small. Most people on something like YouTube don’t make a living from YouTube. Very few are something like millionaires. When it comes to advertisers, this is the reality of living in this business model. You’re going to always be looking for sponsorships. Sometimes, you can get lucky, and they’ll do an ongoing deal with you, but they’re only going to do it as long as it works. You’re not guaranteed anything.
  • 38:47 You’ve always got to be looking to fill in those sponsorships, get the advertisers. You’re opening yourself to price bidding, because you’re essentially a commodity. There are going rates for advertisements. There’s always someone else who as attention, and if it’s just about attention, you’ll have to play by their rules and their rates. They’ll just go wherever they can get something the cheapest. Then you have to try and maintain a balance of authenticity with your audience while still making money off of their attention.
  • 39:18 When you use advertisements, you’re selling your audiences’ attention. That’s your product. In a sense, it’s similar to the product business model, and the product is your audiences’ attention. It’s their eyes, their ears, and their time. You’re selling that to the advertiser. The advertiser is your customer. The audience is the product.
  • 39:40 Ben: There are two things that drive the value of that attention, and one is the amount of it. If you have tons and tons of peoples’ attention, you have to do something in order to get that attention. You have to provide something of value to that specific group of people. Then there’s the quality of that attention, how targeted that attention is.
  • 40:06 It seems to me that if you’re going to do all of that work to get that much attention or to target so well that you have really high quality attention, you have people who are already primed to purchase something that’s in line with what you’re talking about, the reward for going the extra step and making your product to sell vs. trying to pass off someone else’s product is totally worth it. What you’re getting from advertisements is such a tiny percentage of what they’re making from the products they’re selling.

Get Clear on Your Model

  • 40:48 Sean: There are layers to this. If you’re in a business, if you sell stuff, those go together. If you don’t sell stuff, I have news for you. You’re not in business. You have to sell stuff. If you’re in business, you sell stuff. You could sell stuff to customers, to clients, you could do a bunch of different things. If you’re already in business, I want you to think about the model that you have. What model do you use, primarily? Is that the model you want to use?
  • 41:22 I don’t mean to plant a seed of doubt. Maybe it is. Hopefully is is! It’s okay if it is. If it is, go all out on that. Don’t get Shiny Object Syndrome on me. Get this to bonfire status (Related: e121 Seriously, Am I Screwed if I Have Multiple Passions?). We talk about making bonfires, how everyone’s got these little fire pits. They’re running around chasing and stoking the embers. It’s not an asset. It doesn’t roar on its own. It’s not big enough for people to see from miles around, to attract them. Get it to bonfire status!
  • 41:50 Then you can diversify. I’m not saying that you can only have one business model ever. I’m saying, get one business model solid and then diversify. Get some products that are selling. You’ve got the marketing and the sales funnel down. You know who you’re attracting, you know who they are, you know how to get their attention, and you’re making sales. You’ve got people doing fulfillment? Awesome. Now start a membership site. Don’t spread yourself thin. I see this all the time, so I’ll use this one example, and that’s podcasters.
  • 42:25 Podcasters, and it’s the same with bloggers, or people who do video, vloggers, and it’s okay. I’m not trying to call you out or anything. We all started just trying to figure this stuff out. I started the same way. I did things because everyone else did them and I didn’t question them until years later. We all started here, but I want you to think about this and approach it purposefully.

Don’t throw a bunch of business models at what you’re doing and hope that you get money out of it.

  • 43:00 It’s not a purposeful way to make money. Be really intentional about your business model. What you don’t want to do is have a show and then put advertisements on it, put sponsorships on it, and then say, “If you’re enjoying the show, please donate to me on my Patreon, and also, go join my membership, because it’s going to support the show. If you get anything out of this, we have mugs and hats!” They throw all of the business models at their show, and it’s not purposeful.
  • 43:32 What you’re doing is you’re wasting the reciprocity credit. According to the Rule of Reciprocity, give value and then ask, what is your ask? Singular. What is that ask? What is your model? You do a show? You provide value? How do people pay you back? If you’re doing relationship marketing, it’s still marketing. You’re promoting some form of product or service that makes you money. You have to figure this out.
  • 44:00 You have to get clarity on it. If you’re slapping all these business models on your show or whatever, you are causing someone to be confused and clouded in their judgement. Okay, I want to support, but do buy a mug? Do I donate? Do I not skip the sponsors and the advertisers? I’m busy. I’ve got something going on. Someone’s calling me now. It’s already done. If you give people too many choices, they’re not going to choose anything.
  • 44:32 Ben: If you think about it in terms of the value of currency, you have one ask. It’s worth one ask. If you’ve got five asks, they’re not each worth one fifth of an ask. They’re each worth one 50th or one 100th. The value diminishes so quickly. It’s like Sean has talked about in emails before. When you’re putting links in emails, if you have too many things for people to do, they’re not going to do any of them.
  • 45:02 Sean: You think, “But I have so many things I want to promote!” I struggle with this all the time. We sent out an update to our members to tell them about the new improvements to the Community that are coming. We’ve got recordings of live training events. There are so many things! We’ve launched the Vault. If we tell them everything and we say, “Check out all of the things,” they’ll just feel overwhelmed.

If you want someone to pay attention to anything, focus on one thing.

If you want someone to buy a product, focus on that product.

  • 45:34 If you want someone to hire you, focus on getting them to hire you. Go all in on the business model that you choose. Get it solid and then start to diversify.

The Positives of Different Business Models

  • 46:29 Sean: Let’s recap the different models. It’s not exhaustive, but just a few. Let’s talk about the positives of client work. Don’t get discouraged about client work. If it’s not what you want to do forever, I have good news! You don’t have to do it forever. You can get to a point where you’re not in a place where you have to do it, and I promise you can get there. To encourage you, I’d like to talk about the upsides of it. Client work is something that, in a lot of cases, maybe you do an onsite service so it’s a little bit more limited, but for a lot of us who work on the internet, you can do work wherever you want. It’s pretty great.
  • 47:05 You have a laptop. Go to a coffee shop! Travel! Ride around. I know Aaron Dowd wants to do a bunch of traveling, and you can do that. It’s pretty great. The other thing is, if you learn how to do client work well, position yourself well, charge what you’re worth, and work with the right clients, client work can be very lucrative, and depending on your level of discipline, you could work a few months out of the year and make enough money for the entire year. That’s if you plan that way. You’d have to avoid lifestyle creep, because if you worked the whole year, you could make more and increase your lifestyle. What do you want to do? Do you want freedom, things, or money? The nice thing about client work is that it’s pretty flexible.
  • 47:51 Ben: One of my favorite things about client work is, and I’m a people person so I mostly enjoy working with people, the better I get with client work, the higher the quality of my work and the easier it’s going to be for me to be picky about who I work with. I really enjoy hearing about what other people are passionate about and, when it’s contagious, catching that passion for whatever it is. I approach that project with that same kind of passion. That’s how I get over the feeling that I’m just solving someone else’s problem. I get to internalize their passion for it, and that’s a lot of fun for me.
  • 48:42 Sean: I forget about that. That’s a good benefit. You can also feel fulfilled in helping someone else, solving their problem, and seeing the results. They say, “We make more money now,” or, “We enjoy our work again,” and that’s fulfilling. Products can be wonderful after you put in the upfront effort it takes for them to be sustainable. Some people enjoy doing packaging and enjoy writing a handwritten note. That’s fun. Other people just want to scale, reach as many people as possible, and hire people to do fulfillment, and that’s okay, too. You’ve got quite a bit of freedom.
  • 49:19 As long as you keep those products selling and you either continue reaching more of the same people or making products for your core audience that they’ll continue to buy, you’ll be in good shape. You can get to a point with products where you’re primarily focusing on designing new products for your existing customers. You could even not worry about reaching new audiences or hiring a marketing consultant to reach new audiences, and you just focus down on serving the people who are buying from you.
  • 49:51 Ben: I haven’t done much product selling. Sean and I used to be in a band together. We sold music. That was one of the products. We also sold t-shirts and some other things. There’s a feeling of, “I made something. I poured my heart and soul into this, and now it’s done. We’ll see what happens.” For somebody to put their money down and say, “I want this. I want to take this with me. I want to wear that shirt. I want to listen to that music,” that’s a fantastic feeling.
  • 50:31 Sean: I love this show, because I’m so like, “Yeah, you can make money, it’s good—systems, processes, fulfillment!” And Ben’s like, “It just feels great when someone wears your shirt.” That’s so true for me, too. I’m just in a different head space. It’s not even like, “Gary Vee is wearing my Hustle shirt.” If I see anyone, if they send me a Snapchat picture and they have their Hustle shirt on, I think, “That’s awesome.”
  • 51:09 It’s such a good feeling. We’ve been focusing on physical products, but my goodness. I used to think this was a dream or something people said as an expression, but is there anything better than making money while you sleep? It’s the coolest thing to wake up in the morning and see a bunch of orders. It’s absolutely amazing. Have you ever had that, Kyle? Have you ever woken up and seen orders?
  • 51:34 Kyle: Yeah, I have. It’s really awesome. Recently, I started selling physical products, and I had some of those. People bought something that night, and I wake up and I see it. It’s really cool. It’s a fun experience.
  • 51:47 Sean: I love that feeling. Of course, membership sites. There are so many good things! Maybe it won’t be profitable for a long time, but if you’re passionate about the people, it can be an awesome thing. You bring those people together. You create community. Those people start working together, they collaborate on projects. It’s synergistic. It’s great. People get together and there’s magic. That’s where the magic happens. When you have community, launching things in the future gets easier. They’ll get behind you with your future projects. It’s all around good stuff.

Membership sites can provide your core customer base—a lot of those people will buy your products.

  • 52:59 Ben: This is what I love about communities. Instead of having a conversation with a person and then another person, which is how you interact with your clients and your customers—it’s just you and them, one-on-one—now you’re creating a scenario where these people can talk to each other and you get to be part of that conversation. It’s kind of like the idea of having a popular show. You created a popular show, and people created a fan club around that show. They talk about it. I imagine the creators sneaking into the fan club thinking, “What are they talking about?”
  • 53:46 How much cooler is it if you become part of the conversation? You get to hear from them what’s working, what’s not working, depending on what you’re selling. I love that aspect of it. It really expands the conversation beyond what’s possible with one-on-one.
  • 54:22 Sean: I’m trying to find something positive about advertising. Ben! Help me out!
  • 54:29 Ben: If you don’t have a product, you have nothing to sell, but you’re passionate about a topic, you’re passionate about someone else’s product, or you’re passionate about a grouping of products that serve the same industry, I can see where it would be beneficial to create value, attract an audience, be sponsored by something you believe in that you can speak about and feel like you’re still providing value to your audience. That’s where I think advertisements could be okay.
  • 55:14 Sean: I think you put it well. We’re going to leave it at that.
  • 55:17 Ben: A good example of this might be something like Back to Work. I’m not a huge fan of the delivery style, but I like the idea that, most of the time, who they choose to advertise are companies that serve the kind of people that listen to their show. It’s not just some random thing where they’re talking about productivity and their sponsor that week is a toothpaste company. What does brushing your teeth have to do with productivity?

Marketing to Both Buyers & Users

  • 56:14 Sean: Robin asks, “How should you position your product when the user and the buyer are two different people? For example, the product solves a problem for teens, but the parents are the ones who buy it.” That is a great question. I asked if this is from personal experience or curiosity, and they said, “The future.”
  • 56:42 Ben: Rachel writes for middle grade, which is the 9 to 12 year old range.
  • 56:48 Sean: They’re not going around slinging $20s, buying books.
  • 56:52 Ben: Correct. That’s why I like this question so much, because it’s something we’re still trying to figure out, honestly.
  • 57:01 Sean: It’s the classic, “Give people what they need in a package of what they want.”

If you’re selling a product to someone other than the person who will end up using it, the package has to appeal to what the person buying the product wants.

  • 57:15 Ben: Can I tell you about an idea that I had? I think this kind of falls into the spirit of what we’re talking about. This book is called Fairendale, and it’s kind of a fantasy series for middle grade, like I said, between the ages of 9 and 12. We released it right at the beginning of summer, and I had this idea for an advertisement. There’s a child sitting down, reading the book, and the advertisement says something about, “Fill your child’s summer reading queue.” The image was of the child and it looked kind of magical, and you could see the book cover.
  • 57:56 It would be appealing to a child who happened to see it, but parents who want to encourage their children to read are always looking for something to keep their children occupied during the summer that’s going to help them reach their reading goals. That was the way we focused it on the parents rather than on the person who’s actually going to be consuming the content.
  • 58:21 Kyle: I think it also depends on whether this product is to help kids do something they want to do or whether it’s for parents to help their kids do something the parents want to help their kids to do. Recently, I heard this great quote from Grant Cardone that kids are the ultimate sales people. If you’re making a product and they want it really bad, they’re going to sell it to their parents, who ultimately buy it. There’s no doubt about it.
  • 58:51 Ben: It’s good to be aware of that, too, and not to discount the power of children to sell. It would be super powerful if you were selling to the kids, knowing the power they have to sell something to the parents, but you did it kind of like Inception. You somehow created verbiage the kids would catch onto so they could sell it to the parents using your words. Do you know what I’m saying?
  • 59:27 Sean: I do. It’s very true. It happens. The messages in your marketing aren’t just what you have to say that you want people to hear.

In your marketing, you’re giving people the language to speak about your product.

  • 59:42 I’ve noticed this. When we repositioned our brand and redesigned the site, we started saying, “seanwes is the place to build and grow a sustainable business.” I started noticing that people started saying, “Build and grow a sustainable business.” They didn’t just say, “seanwes is the place to go to build and grow a sustainable business,” but they would infuse it into their own language, like, “If you want to build and grow a sustainable business, this is a good resource for you.” I’m seeing it pop up more and more.
  • 1:00:20 Remember that the language you use in your marketing is not just about the message you want to communicate to people, but also the words they will use to communicate your message to others.

Changing Business Models

  • 1:00:34 Sean: Emily Carlton says, “I’d love to hear discussion about changing business models, specifically from service based to product based. What would that transition look like? How do you communicate to your audience or your customers?” Service based to product based.
  • 1:00:57 Ben: That seems to serve two different audiences.
  • 1:01:02 Sean: Yeah, that was my first thought.
  • 1:01:10 Ben: I remember us talking before about teaching, because courses are a product, essentially. It depends on what you’re trying to do. If there’s some product component out there that can do the same thing as a service you provide, I can see how you could switch to that and say, “Instead of being involved in this the way I have been, I’m going to sell this product, and it’s going to do the same job.”
  • 1:01:55 Sean: Going from service to product, if I’m understanding her correctly, it seems like her focus is on audience and customers. Neither of those are clients. It sounds like she has an audience and she has customers or potential customers who follow her and look at her stuff, but she’s currently doing services.

For the most part, percentage-wise, the people in your audience are potential customers, but they’re not your clients.

  • 1:02:29 They could be clients, but for the most part, they aren’t consistently following you because they have a project for you. They’re just interested in what you do. Maybe they would buy a product.
  • 1:02:42 Ben: She does client services, something design-related, for example, and she posts her designs publicly. There are people who admire her work, and those would be her audience members, but she has clients for whom she actually makes the designs.
  • 1:02:59 Sean: That’s what I understand. In that case, if it’s an audience-related positioning thing, you just have to start projecting what you want to be known for. You have to start projecting what you want people to care about. If you’re available for services, make people aware of that. Say, “Here’s a project I did for someone. Here’s how the project went. Here’s the result, their success. You can hire me. This is where you should go.” Do all of that stuff.
  • 1:03:29 If you’re switching to products, start projecting products. There’s no perfect sales letter or email you can send to people where they say, “Oh, I get what you’re about now.” It’s the Magic of 7. People don’t notice announcements, they notice consistency. It’s going to be a gradient.

You have to start projecting the thing you want to be known for, and over time, people will start to know.

  • 1:03:52 I just had a feature in an article on Buffer.com. They do social media, scheduling, management stuff. They have a great blog there. They featured me, and they’re the first people to feature me who didn’t ask me beforehand and still got my bio right. It was amazing. So many people still think I’m a letterer, even though I haven’t done lettering stuff for clients for three years or more. I had a course more recently than that, but I’ve shifted to teaching business. It takes years for people to notice.
  • 1:04:27 I had an Instagram account and I still do—@seanwes. I post Instagram Stories on there. You should follow me. It was mostly my lettering phrases. It’s things I say on this podcast, the quotable stuff, but I would hand draw it because that’s what I used to do. I stopped doing lettering. That wasn’t my focus anymore. I had pivoted, but the account was just sitting there. I had nearly 100,000 followers, and it was sitting there unused. I was scared to post something else because I was afraid I would turn people off who followed for the hand drawn stuff.
  • 1:04:59 I worried that if I started posting new things, like quotes of mine that I made as a graphic with a font or other kinds of content, that people would leave. Of course they would leave, but isn’t it silly not to use a 100,000 follower account because some people would leave? Okay, 20,000 people leave. Now you have an 80,000 person account that you can build up from. It’s a no-brainer, so I started posting. More recently, if you go to my Instagram, you’ll see quotes from me, graphics I made with the font that we use, the branded font for seanwes. It’s just quote graphics.
  • 1:05:35 I’ve been losing 300 followers a day. I’ve also been getting 1,000 likes on the photos and people saying, “I love this. Keep doing this. Love the new direction of your account.”

You just have to start putting out what you’re about, and the people who resonate with it will care.

  • 1:05:51 Ben: When it comes to shifting to a product, though, would you recommend sharing your intentions consistently before you actually have a product to sell? I’m thinking of a person who, maybe like you, has an Instagram account, and maybe they have a lot of great client work to show, they have an audience who enjoys their work, but they don’t have any products yet. They want to get into doing products. Should they let people know, consistently, before they even have a product, that they intend to create a store?
  • 1:06:28 Sean: 100%. You have to let people know (Related: e217 Backwards Building). They’re never going to notice. Don’t say, “I’m going to make a product behind the scenes! I don’t want anyone to know.” Those are two competing goals. “Secret project. Don’t want anyone to know… Okay, it’s done. EVERYBODY NEEDS TO KNOW!” If a firework went off right outside the window, what would you do? We would probably go, “Aaron, cut that out,” and we would go back to our show.
  • 1:06:56 If you had a firework show, if someone started doing a 20 minute firework show in the middle of our podcast, you can bet we’re going to notice that. You’ve got to be relentless and consistent. Eventually, people will know. The most interesting thing about a product is the creation process leading up to it. How did you get your product idea? Where did the inspiration come from? Who is it for? What does the design look like? Take me behind the scenes, share the story of vetting the manufacturers. Bring me on board. Kyle, you know this. Who needs a sticker? What else do you have now?
  • 1:07:33 Kyle: Prints. Also, I’ve been promoting a course I’m coming up with daily, and people still don’t know. It’s been like 12, 13 days or more, every single day promoting that course, and people still don’t know. I got emails this morning saying, “Oh, that’s really cool that you’re coming out with a course! I didn’t even know this.”

Sell With Stories

  • 1:07:55 Sean: Describe a couple of your prints for me. You’re an illustrator, icon designer.
  • 1:08:05 Kyle: Yeah, icon designer. I should have clarified that. I do icon design.
  • 1:08:08 Sean: Do you see how I still said illustrator? It’s still gradual. Kyle is an icon designer.
  • 1:08:18 Kyle: One of them’s called Keep Moving. Essentially, it looks like a bike print, but there’s so much more to it. You’re going to fail. You’re going to have struggles. You’re going to fall off your bike when you’re a kid, and you’re going to have to get back up on the bike and keep going. There’s this whole story behind that. Another print I have is called Galactic Exploration, and it’s space themed. It’s talking about the fact that you’re never done learning. There are so many things you need to keep learning.
  • 1:08:50 Sean: This is my first time hearing that story, by the way. I follow you, Kyle, I read your newsletter, and this is my first time hearing about that story. Automatically, I resonate with it. I like that galactic theme, always learning. I like always learning, that there’s always more to learn. The story is what sells the thing. When you take people behind the scenes and they feel part of the story, they associate it with that product and they think, “I want that print because it’s going to remind me of the story.”
  • 1:09:21 Kyle: Daniella in the Community bought a Galactic Exploration print solely based on the story. She said, “If I had just seen the print, it would have been kind of cool,” but she even ruined her entire curation of her art wall—she was doing black and white prints only—and she bought a purple print. I was thankful that she bought it.

Take people behind the scenes of your product and tell them its story.

  • 1:09:50 Ben: If you can do all that as a part of your building up to the release of the product, too, that’s a way you can be consistent in letting people know that it’s coming. Also, give them the thing that’s really going to sell it, instead of letting that be something that comes after the fact.

Advertise Your Own Products & Services

  • 1:10:17 Sean: “Would advertising be bad if you were advertising your own products or services within your content?” No, that’s just cross-promotion. You have to sell your own stuff. You should promote your own stuff. If you blog and you provide value to people, tell them about a related product. You should do that. I should tell you about my conference. I should tell you about seanwes membership, where you can get access to all of the hundreds of episodes of not only this show, but all of the shows on the network, like Kyle’s show, Invisible Details, with Cory Miller.
  • 1:10:52 You get access to the Community. You can listen live. You can tune in to the broadcast with audio and video. You’ve got access to the Vault, with the Learning Paths and the mini courses, live training recordings… It’s incredibly valuable, and I’m promoting it right now in my podcast. You should be doing this. That is an example of what you should be doing.
  • 1:11:13 Ben: We talk a lot about how sales is not a bad word, but it’s so much more than that. You believe so much in the value of these products to the people who would actually get value out of them. There’s going to be some portion of your “audience” who are listening, watching, or whatever, who don’t want or need your products, but there are some people to whom those products or services are very, very valuable.

You’re doing your audience a disservice if you don’t make them aware of the fact that the things you’re selling exist and how they can get that value from you.

Publicly Curate One Thing at a Time

  • 1:11:57 Sean: Joy asked, “If your main service is X but you’re also really good at Y, another service which is related, and an opportunity to do it pops up, should you do it or stay focused on X only?” Everything is related if you want it to be. The point is, you used X and Y. They’re different enough to be different letters. My thought is, what is your focus? What is your pursuit? I use the example of imagining holding three foxes by the tail in a field and letting them all go, and having someone say, “Alright, now, pursue all three.” You can’t.
  • 1:12:14 You won’t catch any of them. You have a chance of catching one if you pursue one. The word “pursuit” is to go after something. You can’t pursue multiple things. What is your focus? What are you about and where do you want to go? What is your goal? These are very important questions. You have to figure this out, because it informs what you do on a day to day basis. There will always be opportunities. There will always be other things you can do with different skills. None of us are good at only one thing.
  • 1:13:13 You’re not tormented, you’re not punished by being good at multiple things and having multiple passions. We all do! The people who are successful focus on one of their passions at a time. That doesn’t mean that you can’t do other things eventually. Eventually, you can, but one at a time, successful people focus. You have to exercise that “no” muscle. Where do you want to go? Where do you want to get to? What are you about?

Everything you say “yes” to is a “no” to a million other things.

  • 1:14:14 Ben: I’m publicly saying that I do one specific thing. I’m not advertising that I do anything else. One of the things that happens is that I’ll be hired or talking to a customer about that specific thing that I’m public about, but then, in conversation, maybe they’ll ask me if I do some other thing, or they’ll mention that they need this other thing first. What I hear you saying is that even in that scenario, you’re publicly curating this one specific thing you’re trying to be known for.
  • 1:14:55 Doing something else, taking advantage of some other opportunity, costs you the effectiveness of that single thing that you’re trying to project right now. I don’t think it’s as simple an answer as, “No, you shouldn’t, absolutely don’t do that other thing,” but are you at a place where you can afford to divert and do this other thing? Maybe it’s a strategic thing where you’re trying to deepen the relationship with that specific client, but that’s also something you can’t put on your portfolio.

Intentionality

  • 1:15:28 Sean: It just comes back to, where do you want to go? What season are you in? I get requests for consulting, Ben, and the money would be great, and I truly do want to help people but where I’m at in this season and the scale at which I want to help people means that I can’t do that if I want to accomplish what I want to accomplish. Right now, I want to build this membership. I want to build our platform. I want to help the members.
  • 1:16:01 Rather than charge a few thousand dollars for consulting, I’d rather give it to the members for free. They’ve invested in themselves, and I want to invest in them. I want to make myself available to them, and if I’m taking on consulting on the side, that’s less time that I have to give to them. You could argue that I don’t have to give it to them. It’s true. I don’t. I could be a little more passive, but I don’t want to be. This is not about the money for me. It’s about the people, and I really am passionate about helping the people. You just have to know where you’re going.
  • 1:16:49 Kyle: I think that speaks to the message of this entire episode—intentionality. That is the encompassing concept of everything we’ve been talking about. What do you want to offer? What do you want to do? There will always be somebody saying, “You can do this other thing.” For example, let’s say you have a YouTube channel. You’re using that YouTube channel in your business model as acquisition to bring people in to some other product. You want them to buy a course or a print from you, whatever it is. There are plenty of people who will come to you and say, “You could monetize that. You could put ads on it. You could get revenue from it. You’re just putting that out there for free right now.”
  • 1:17:48 If you don’t have a business model, you don’t know which things you should have as free and which things you should have as paid. For example, this podcast. You could have plenty of advertisers. You turn down people asking you to advertise on here all the time, I’m sure, or do interviews on here all the time, I’m sure. There’s a reason. There’s a purposeful intention to direct people to something greater, something that works better in your business model. There are some people that will monetize a podcast, and that works for their business model. If you don’t have this down, there’s no direction.