Notes from Tom Myer's August Presentation: "Being Creative and Creating Cash Flow"
First of all, I'd like to say THANK YOU to everyone who came out to hear my little spiel on creating
products. I really appreciated all the great questions and the give-and-take. Here are some of my
thoughts on products, as promised.
What were my motivations for creating products? Put simply enough, I didn't feel that as a freelancer I
had a real business. A real business makes money and operates beyond the owner. If the owner decides
to go on vacation, or needs a day off, or falls ill, a real business will continue to make sales and make
money.
Not so much for freelancing. What we have instead of a business is a JOB, and in some cases, the very
worst job in the world. As self-employed folks, we often work for a workaholic. One that expects us to
not only do the work, but also do the marketing, customer relations, and lots more besides. There are
no benefits, no paid holiday or vacation days, nothing like that.
So I knew I had to do something. I thought, how could I increase my cash flow, or at least, smooth it out?
Well, I tried getting bigger contracts, and that worked out pretty well until I had to hire a bunch of
people. Then I found myself in a very unpleasant situation: not doing what I love to do, but managing
people who do what I love to do. It wasn't a good fit, let's just say.
Another option for building business is to create retainer opportunities. String together enough anchor
clients who pay you $1000 a month and you've got something, right? Well, that worked for many years,
until our economy bottomed out and virtually every single retainer client evaporated.
So my third option was building products. The idea was planted in my head by a friend, and at first I
thought the whole notion was just pure madness. I didn't know anything about products--how to build
them, test them, roll them out, market them, support them, and on and on. The very idea of "product"
to me was about building something really unique and complex and then selling it like gangbusters, then
retiring to count my money.
My friend, who is a lot smarter than me, just smiled and told me that I needed to rethink my whole idea
of what a product is. What if a product were something simple you could create in just a few days, put in
front of the right people, and then just have it sell day-in, day-out for months or even years without
much upkeep or maintenance?
So that's how I got started. I saw a need for a web site backup solution for the ExpressionEngine
community. ExpressionEngine is a blogging platform similar to WordPress in some respects. I created
the first iteration of the product in about 8 hours of coding, had some friends test it out over several
days, then offered it for sale on the Devot-ee store (which is where the vast majority of EE modules are
sold). It retails for $23 dollars and sells a few copies every day. Occasionally, I get about 6 or 7 sales in a
single day, but I don't really keep track that closely.
Why? Because I've also created some smaller modules for MojoMotor (another content management
system), a few ebook products here and there, and even have electronic copies of my 7 books for sale.
My goal for each product is simple: can I get a $100 worth of sales per month? If I can't do that, then
there really isn't a market there. Think about that number: $100 a month isn't going to change your life,
not by a long shot. But its a start. Anyone can create something that will bring in $100 a month, if you do
enough homework and create something that solves a problem.
From $100 a month I try to grow my sales to $100 a week within the first 3 months. $100 a week starts
getting into the "interesting" category, particularly if I can get 5-6 products into that range at the same
time. This kind of action starts feeling more like a business, and I have to tell you that I don't mind
getting those kinds of emails (those who know me know that I hate email with a passion).
From $100 a week I then try to move to $100 a day. I've only gotten there sporadically on a few
products, but it sure feels good to hit that mark. A consistent $100 a day seller equals $2500 or $3000 a
month, and that is good money, possibly even life-changing money. Maybe not enough for you to quit
all other freelancing work, but it's certainly enough to carry you between dry spells or maybe enough to
tell a scary prospect to go away.
So what exactly can be a product? Let's enumerate the possibilities:
* An obvious choice is an ebook. Take something that you know really well and write it up in an ebook
format. Publish it through ClickBank.com or Lulu.com and then create a marketing program around it.
Don't forget to involve affiliates too, as they can resell your material for a cut of the action.
* An even better idea, and a quicker road to market is to create a series of how to videos or audio
programs. We've all seen the Video Professor product lines, and for some buyers its easier for them to
follow that format then a written book. Where it may take you several weeks to create an ebook, it may
only take several hours to put together a how-to video of the same material.
* Software can also be a great product. Consider my modules and plugins for existing publishing
platforms. You could also create a site like Basecamp.com that offers some kind of service for business
owners. Or you could create educational games, or smartphone apps, or just about anything that you
can think of. In the old days we had to ship software out on disks, but now we can distribute over the
Web, which gives us terrific access to niche audiences (more on this in a bit).
* If you've got lots of material to share, consider a membership site. You can set these up pretty quickly
with Forum software like phpBB or by using WordPress. Charge a monthly or annual subscription and
then get people to sign up. At $5 or $10 a month, how long before your life is forever changed? 1000
members? 5000 members? 20,000 members?
* If you're skilled in design or illustration, why not try to sell web site templates, themes for WordPress,
or even logo templates? Think of all the small business and nonprofit sites that might benefit from
something you sell for $75 or $100, sites that normally wouldn't be able to afford your skill level or
talent otherwise.
* Never ever discount the power of reference material or "evergreen" topics. Putting together reference
material that you keep up to date will prolong your product's shelf life. The same is true for beginner or
101 type material. Also, another gold mine is review material, such as reviews of products in a niche.
Just the other day I was trying to compare different socks used by marathoners. You may not know this
but regular socks just won't do if you are running past the 12-15 mile point -- they fill with moisture and
just cut your feet up as they move around inside the shoe. It would have been nice to find a concise
guide to my options.
A note here about the power of the Web. It gives you lots of power. For one thing, it gives you access to
all kinds of competitors. You can do oodles of research on an idea before you even start putting
anything together. How many folks have an ebook just like yours? None? Okay, well, why is that? If
some exist, how can you make yours stand out?
For another, the Web gives you access to all kinds of niche audiences. In the old days, it may have been
really difficult to get in front of single moms who are looking for freelance income opportunities, but the
web provides you with all kinds of opportunities to connect with these people. You've got forums, blogs,
twitter streams, marketplaces, email newsletters, ezines, and more just waiting to be discovered.
When I target an audience, I look for a niche that is narrow but deep. Having both is key. You don't want
a niche that is too wide, because then you won't be able to focus. At the same time, if the niche is
shallow you won't be able to offer any depth to future product lines. Let me give you an example of this
narrow/deep dichotomy.
Let's take runners. As an audience, "runners" is way too wide. You've got recreational/weekend
runners, casual runners who enjoy giving their time and money to charity 5Ks, moms and dads looking
to lose weight, competitive runners, track runners, marathoners, ultramarathoners, those who run as
part of a triathlon or biathlon, and those who run to cross-train from another sport or activity.
There are so many products available to this market that you would literally just freeze trying to narrow
things down enough. You could build GPS tools for iPhones or iPods, offer up reviews of great music
tracks that are great for running, nutritional guides, inspirational stories, how-to guides for your first
marathon, etc etc etc.
So the first rule is to narrow the niche. Let's pick a niche that has some potential: marathoners.
Marathoners as a niche is narrow enough but yet deep too, because the people who are in this category
are motivated people. They get up early to log their miles. They have to buy special gear like socks and
water bottles and goo and such. They are going to be training for a long time (16 weeks minimum). They
have to watch what they eat. They have lots of questions regarding many things like injuries and alcohol
intake and stretching and what are the best ways to get electrolytes in your body.
We not only could create a great product for marathoners but there's ample opportunity to create
several products for them. So where to start? Who knows, really, that's not the point of this article, but
rest assured that if you targeted this niche, you could spend some time doing your research. If you
yourself were in marathon training, you'd notice something missing from the current products out there
(for example, what if there was a comprehensive guide that reviewed water packs, water belts, shoes,
technical shirts, protein goo and all that?) and then fulfill that need?
What if you were musically inclined and were able to compose tracks for runners? That way they'd have
music without lyrics at their running tempos? What if you had all kinds of tracks at different tempos that
marathoners could download? I'm sure someone has done just that, but you get the idea. Selling 50-100
tracks a day at $1 each is certainly doable, and would fill a need in that niche.
In fact, a few someones have implemented this idea. Check out mp3running.com and see what you
think. Just because someone has done it doesn't mean you shouldn't do it (in fact, this proves to you
that a market exists), but maybe you can turn the idea on its head. Maybe this stuff sounds too New
Agey or Jazzy or Electronica. Maybe what you want to target is marathoners who want heavy metal
tracks for their running! Your research says that a lot of folks would enjoy having this option.
I'll leave it at that. I hope you enjoyed the presentation and this follow on article. Again, if you want to
chat, feel free to look me up on Twitter, I'm @myerman.