THE MOST PROFITABLE BUSINESS MODEL?? (with Pat Flynn)

people often start with which business model should i start with and i think that's the wrong question to start with i think the first question we need to understand is who are you targeting what target market are you interested in helping and then how might you best serve them the business model should stem from the pains the problems the concerns the inconveniences the challenges that a particular target audience has and so when you start there you actually remove the guesswork because they will help guide you and that business model then combined with the problems and pains that your target audience is having is where true business success happens [Music] pat flynn welcome to work less earn more it's so good to have you here i'm so grateful to be here killian thank you so much so i know that you've labeled yourself as the crash test dummy of online business and i think that is such an apt description and you've really proven it out because in these past years you have tested out so many different business models and there's so much that can be learned from your experience with how these different business models actually played out because it's really easy to watch a video or read a blog post about different ways to make money online and they just give you such a tiny snapshot they don't give you any sort of real world experience uh and show you how those things actually play out in the real world so i would love to in this episode just dive deep into each of these different business models that you have experimented with and talk about the pros and the cons of each one and also how time-consuming and how much effort they took from you and how profitable they really ended up being yeah it's interesting because a lot of people when they know that i've sort of run the gamut across all the different kinds of ways to generate an income and all of them have in some way shape or form worked i'm not saying it was perfect the whole time and in fact i've had a lot of failures too you do have to fail in order to succeed so you can learn and get direction however people often start with which business model should i start with and i think that's the wrong question to start with i think the first question we need to understand is who are you targeting what target market are you interested in helping and then how might you best serve them the business model should stem from the pains the problems the concerns the inconveniences the challenges that a particular target audience has and so when you start there you actually remove the guesswork because they will help guide you and that business model then combined with the problems and pains that your target audience is having is where true business success happens absolutely well i couldn't agree more but i do have a question for you and that is did you take your own advice with your first business model that you tried out did you jump into a business model first or did you start with an audience and what was that business model i i started with an audience in fact this audience was made up of people who were studying for a very very specific exam in the architecture industry i actually was an architect i had gotten laid off and my first four into internet business was helping people pass an architectural exam called the lead exam l-e-e-d which stands for leadership and energy and environmental design and i knew that i wanted to just connect with people first right so i had built a website it was at inthelead.com later changed because i later found out that you're not supposed to use a trademark in a domain name again i didn't know what i was doing i was just doing what i could to help this audience but most of my audience in fact came from getting involved in forums so there were a lot of architecture forums where people were asking questions about this exam and i just showed up daily sometimes three to four hours a day to connect and and provide value and in a relatively short period of time i started noticing that people started to come to me for help and people started actually recommending that they wait till i sign on to get questions answered and such and then with a little signature at the bottom of my name people would always come back to my website to learn more and so the cool thing was that that audience in fact told me that they wanted to go deeper and that's when i discovered that i could just write a pdf guide and sell my own information that is structured in a way that could best serve this audience and that was my first business model was actually building a physical product or excuse me a digital product just a word document that was exported as a pdf and then selling it online and it did it did extremely well but it was definitely audience driven and i think that's the best way to approach it even though it takes a little bit longer and it's not the only way to do it you remove the guesswork when you listen to your audience and build something for them so that first business model was essentially just selling a really simple digital product and i'm curious to know what were some of the biggest pros with that business model what worked really well about it so the nice thing about a digital product is definitely the fact that it's digital right so after it's created it could essentially be copied and sold again again and again and again i purposefully did not actually print out this book so it's just like a study guide right this is what it was it had practice exams in it it had information and charts and other things that could help people study and memorize certain things about this really difficult exam and i had the choice to also print this out as a physical guide and then i thought about it and i said you know what and i was very much inspired by tim ferriss back in the day this was 2008 he had just written the four hour work week and it was like be smart with your business you don't have to trade your time for money and i was like okay well if i have it as digital only my store online essentially on my website is open 24 hours a day 7 days a week 365 days a year it can deliver that book automatically via email as soon as a person purchases it and i knew that this audience in particular wanted information fast and they didn't have the ability to get this information quickly anywhere else so that was the big selling point was get this information right now so you could study and pass this exam and save money if i had created a physical product i'd have to figure out where to get it printed i'd have to then collate all those pages i then would have to sell it and then go to the post office and what if people wanted returns it just was like okay let me just start with minimum viable uh value right what's the minimum amount of things that i have to do to provide the most value right now boom information product digital sold it on my website and again i didn't know what i was doing i just put a link on my website and a link in the sidebar of my website and just said hey go get the guide here and thankfully because i had spent a little bit of time building a reputation in this space that day that i put it up for sale for 19.99 in fact and how was it sold it was sold through a company called e-junkie and i think they're still around but there's better solutions now there's gum road and definitely sam cart that allow you to sell these digital products and essentially you upload your product there you get the button to put on your website and people click on that button they purchase it and then they get it automatically delivered to them and then you get money in your paypal account and all along the way because this is my first time i didn't i didn't believe it was going to work but i was driven by the fact that i had gotten laid off and needed it to work and i had a lot of inspiration from people on the outside anyway it worked easy to sell easy to to put on a website easy to deliver value and uh that first month i had made seven thousand nine hundred and eight dollars and fifty five cents from a 19.99 ebook and then here's the other thing there were things that needed improvements so instead of having to reprint the whole thing i just updated the ebook and boom it's already updated like that's the cool thing about digital products as well you could change them overnight so was it all unicorns and rainbows or were there any challenges there were definitely a lot of challenges you know mostly mental challenges getting over the fact that actually i was building something that people were buying and i started to question whether or not it was good enough that maybe i was going to get a whole bunch of people asking for refunds that maybe it just wasn't going to work and people were going to be upset a lot of these sort of self-inflicted demons were going through my head and and i think that's just natural for anybody trying something new right these self-doubts and this resistance as steven pressfield talks about in the war of art so i had to just learn to get over that and what helped me get over that was realizing that i was actually getting results for people that's what helped me over those mental blockages was those first few emails from people who said pat you helped me pass this exam and just thank you i'm going to tell you i'm going to spread the word about your stuff because it's just so helpful and that was like wow okay this stuff actually works another thing that was hard was in fact the marketing you know when i started to dive deeper into online business it was like wow there's a whole plethora of things i could do to potentially make more sales i could run ads i could you know do some retargeting i could you know there's a whole bunch of things uh and and i actually avoided a lot of that because it just was too scary for me so i just kind of kept it simple and although i may have uh lost some potential income i think i kept my sanity so as far as a business model goes what were some of the cons that this business model had clearly had a lot of pros right it was simple it was streamlined easy to scale and it was being fairly profitable you probably had pretty low expenses at that point in time but were there any cons perhaps related to the low price point yeah the profit margins were huge right i mean i it's a digital product once you create it it's kind of on autopilot at that point which is really neat uh one of the big cons was the fact that because it was digital people started just sharing it with everybody they knew and so piracy and that kind of stuff is very very much still around uh even for online courses and ebooks and this kind of stuff happens but it happens with movies it happens with all this stuff and the the what somebody once told me was you know what like those people wouldn't have become customers anyway uh typically so focus on those who you can connect with and serve and and you will get rewarded for for providing value so you know when it comes down to it the digital products fairly simple but the the you can only charge so much for an ebook right and and i think that's where you limit yourself in terms of what's possible because there are ways to provide a lot more value and get a lot more money back so let's move on and talk about one of the next business models that you experimented with what was the next one the next one was affiliate marketing and affiliate marketing is the idea that you can recommend a product to your audience and if you recommend it through a specific link called an affiliate link which you get from the company that you're providing uh some help for um you get a commission essentially you know this is different than sponsorships and advertising which i'm sure we'll talk about later which is they're gonna give you a flat fee upfront and then you just promote it and hopefully traffic comes in this is rather a beautiful strategy because companies aren't losing anything they only pay you when they get new customers and that's the beauty of it from a company's perspective and the beauty of it for you and the pro the huge pro is that you don't have to spend the time to create your own products right that that's another con of creating your own stuff is just it takes time to do that right and there are businesses there are companies there are products out there that you could probably promote today that already exists that are already of service to your audience that you can just get behind and if you make a connection or partner with that company uh it can be pretty prosperous for you as it's been for me and the first product that i promoted as an affiliate was for this architecture audience that i had built and so i was selling my own my own study guide but there was also another company out there that created a online practice exam simulator and this test when you took it it was actually on a computer so they had the advantage of having a very lifelike exam experience for this particular exam so i actually used that to help myself study and uh i reached out to them and i said hey you know i'd love to help promote your stuff and they were like sure you could you know you could run advertising and i was like okay cool that sounds interesting and actually that's that's what we did first i made 25 a month posting a 150 by 150 pixel image on my website and i was like yo this is like free money 25 bucks a month but here's the thing i discovered affiliate marketing and i said hey do you have an affiliate program and they said yeah we sure do would you like to sign up and i said yes and they said okay here are the terms you know our product is 99 we'll give you 21 for every person you sign you sign up and i was like wow if i just get one person to sign up that's like the same as what we were doing with the advertising thing the first month that i did affiliate marketing for this company i had a hundred people come through a hundred people came through at twenty one dollars so i made twenty one hundred dollars that month from promoting a little more than 25 right yeah a little a little bit more than 25 and not only was i making additional income on top of the product that i already had because it was a perfect complementary product i was getting people sending me emails thanking me for introducing them to a product that actually was of service to them like they were like wow this was like gold that you shared this for me thank you and of course i had an affiliate link and i disclosed that there was an affiliate relationship so people were going out of their way to make sure they were clicking my affiliate link and that's something you have to do with affiliate marketing you have to disclose that affiliate relationship that's ftc regulations yeah so clearly some huge advantages to this business model you get to share valuable products with your audience you don't have to take the time to create the product you don't have to have the infrastructure in your business to deliver the product which i think is huge but were there any challenges what are some of the cons of this affiliate marketing business model yeah and this stems to why affiliate marketing has a little bit of a negative connotation and it's because people take advantage of how easy this business model is meaning many people will choose a product just because it has a really high commission and then kind of ram it down their audience's throat they're going to send email after email they're going to put it all over the place because they know they're going to get a good commission but the trouble is because it's not your own product you have to be very very careful because if that company doesn't do justice if that company uh doesn't serve that person sure that person that is your audience member is going to be upset at that company but guess who's recommendation they're never going to take again guess whose product they're never going to buy yours so you have to spend some time making sure that you promote the right products and there were moments uh in the later years where i was promoting things that i probably shouldn't have promoted and as a result of that people you know i lost their trust uh for a little bit and and that was a big eye opener because your reputation is everything online of course so affiliate marketing can be absolutely amazing but another con is it can be difficult to wrap your head around the fact that you still have to sell this product right i think affiliate marketing again because it's so simple we often go oh i'll just send an email and put a link on my web website or resource page and that'll be it but if you just do that again because it's not your product people aren't going to trust that recommendation right off the bat often i mean some people will because they trust you but you have to perhaps work a little bit harder to get people to understand why this product is something they need and how it's going to serve and help them the best way to do that would be to show your own experience using that product don't just share the product or post a link for it tell the story about how you used this product and how it's helped you and and what you like about it what you don't like about it like just be honest and up front with it and this is where i think people who are on youtube for example have a huge advantage because you can show video of yourself using this and that's what people want they just want security in their mind that okay when they purchase this product that it's actually going to benefit them uh and actually be useful and so uh it can take a little bit more work to promote an affiliate product than your own product if you have an audience because it's not yours but even as a podcaster per se you have the idea of maybe bringing on the founder of that company owner onto your show and interviewing them i did this with convertkit which is an email service provider that i am an affiliate for i brought the founder nathan berry onto the show and we didn't talk about how awesome the product was we didn't talk about why people should get convertkit we told a story of convertkit and how it bootstrapped and how it came to be and why it's built in in the way it is and that episode even though it was created six seven years ago still continues to bring new affiliate sales every single day and in fact this is an uh a holy grail type of affiliate sale because it is a recurring income for every customer that comes through so that's like you can promote a product one off and get paid at one time or you can promote something like software typically software has this where you can get paid a recurring income every single month from the customers that you bring through so i get a five figure check from convertkit every single month from people that i've uh recommended it to years ago and then next month i'll have more people next month i have more people and it just can continue to stack uh and that's that's like the best kind of affiliate marketing yeah absolutely and i listened to that episode when it came out actually and it got me and i signed up for convertkit no way and i've been a a loyal convertkit member ever since that's awesome well thank you yeah yeah well thank you it's been a huge asset to my business as well so talk to me a little bit about with affiliate marketing the relationship between how much time you've personally had to invest into affiliate marketing and how profitable it's been for you yeah it's a very very har high roi for sure but the roi comes from you doing a service for your audience and you have to think about it that way your service to your audience with affiliate marketing affiliate marketing can seem very oh i'm just doing this for me i'm making the commission for me it doesn't really you know i'm just trying to make more money sure you're going to make money but when you approach affiliate marketing with i'm going to help filter all the noise out there i'm going to help find just the best products and the right products to recommend to my audience then you're actually doing them a service you're helping save them time and you're helping them understand what is actually going to work for them or not you know i have a lot of people come to me and go pat i have like three different options i could offer for people for this challenge they have should i offer all three or should i just pick one and i always say pick the one because your job is to help make decision making easier for your audience and if you go hey there are three things that you can get and they're all great well you're not actually helping your audience you might actually give them you know analysis paralysis at that point so step up make the decision and the cool thing about this is you can take this even one step further when you make that decision to promote a singular product and you share that product with your audience and then it provides some volume for them likely they're going to reach out to you or if not you reach out to them and say hey what else can we do together you might get early access to things because you've been an affiliate you might be able to command a higher commission than what normal people get you might even be able to come on board as an advisor to the company which is what's happened to me because of the work that you're doing to help and serve them i'm an advisor now to convertkit and sam cart and teachable and so many other amazing businesses circle because of first that affiliate relationship that happened and and that's really cool because now i have a uh you know part ownership of the company as a result of this like it can go really really far that's awesome okay so to the next business model that you tried out which i believe was writing and selling books explain to me how that works as a business model yeah so books are interesting because you might go oh wasn't that the same as selling like a digital product um and and no the only difference is not just the fact that it can also be a physical product and also an audio book but a book in my opinion is an amazing first step that people can take with your entire business journey or the journey that you want to take people on right so for example i wrote a book called will it fly and will it fly was written in 2015 to help answer that question of how do i validate this business idea i have how do i make sure i'm not wasting my time and money but it's not just the book the book leads people into an email list through a free companion course and that email list then drives people into sales for some of the other courses that i have so not only am i helping people understand what business model works for them through my book will it fly i can help with their next steps after that and so if you have a book or you're thinking about writing a book think about okay well what's next after the book what comes after that and when you can create the book with that in mind it can really help a person get into your ecosystem because books people consume lots of books in all different kinds of ways then they can get introduced to your style and you and what you have to offer and then push them into another business model so books yes are making money in fact the audiobook is making more money than the physical and the kindle versions combined which is really interesting but that's just the first step in the process and can lead people into the other business models too the hard thing about a book though is it's a book it's it feels very heavy in terms of the production of it but once it's there i mean this book is still selling off the shelves and is still introducing people in a more automated fashion so it's a lot of time investment up front but for some amazing things if you integrate it into the rest of your business later yeah i experienced this myself as well when i wrote a book a few years ago that wasn't related to the topic of my business or the audience i was building with my business and i didn't even intend for this book to have anything to do with a business venture it's just a personal project but it almost accidentally launched a business without me even trying in that i launched the book it took off got a lot of sales in the first few months especially and grew an email list overnight just from the book and then immediately these people started wanting a product and i started creating a product and then i was like wait wait no this isn't the business i want to build and i backed up i love how you pointed out um that it's not about like that 15 or 20 book sale that's not the end of how this business model works out you can end up selling much you know products at higher price points products that will help your audience a lot more down the road and this can just be kind of like the beginning of your funnel essentially exactly exactly so clearly there are some really interesting benefits of this business model um let's talk about any cons i guess you touched on one that writing a book can be hard right it could feel overwhelming were there any other major cons to the business model of writing and selling books you know i got lucky in in the fact that the books that i wrote are pretty evergreen in terms of nature and how they work uh there are many books out there that if you imagine a facebook advertising book you publish that next month it's going to be out of date and so you got to you got to be careful about the topics that you write about because you can have a book that's out of date very very quickly and have wasted that time and so that that can be a potential con that people can run into it's uh you know if it's if it's an ebook only then it's a little bit easier but uh i think people still prefer many in many cases the physical book and then also the audiobook to go along with it um the other con is that you know it's just not going to make a ton of money you know i think a lot of people hype up the book idea and say you can make a lot of money with books i think there's more money to be made by connecting your book to like we've been talking about these other business models for sure so um and then you know the book marketplace is very crowded it can be very difficult to compete with the other books that are out there so this is why obviously it benefits if you have an audience already but if you uh nail your keywords if you have a really good amazon sales page and if you you know even get a little bit lucky uh maybe you go on a podcasting guest podcasting you know run or something like that to get the word out there but um you know amazon can help you for sure or it could just bury you like it you just are not going to exist on the platform um so that those are some in that platform amazon learning about that is is is hard it's it's it's its own language if you will um so that could be a con or a difficulty for sure yeah yeah so just standing out in the crowd of all the books i think it can be a little bit more difficult to differentiate a book as a product than something that is a physical product or just a more expensive product perhaps a book looks the same as all the other books very true and how has this played out for you in terms of the time spent versus the profitability you know it's hard because i'm actually in the middle of writing another one right now and it's just like oh my gosh it's like i forgot how hard this was so you know maybe if you ask me again after this book is done i'll say something different but uh it's definitely a lot of work up front to create a really outstanding book one that uh you know hopefully people will spread out for you um that's that's kind of the approach that i take i want these books to be read and then have people share what they're learning with others to have them get interested in the book too but you know your book doesn't have to be very long it doesn't have to be a 300 400 page book it could be a small little guide and it could perfectly insert itself into your business and do a lot and and i think that you know looking back the roi is definitely there uh but it takes time for it to catch up with with the amount of time that you put in up front yeah it's a more big picture strategy especially how you were talking about how you could uh tie it into other products that you're selling so can you give us any spoilers any hints about what the new book is about or is this top secret information uh i can give you spoiler yeah it's it's about learning uh and learning efficiently i think a lot of us suffer from content bloat these days and don't allow us ourselves a lot of time to actually execute so it's going to be about that and different strategies i used to as you could tell i do a lot of things and a lot of people ask me how are you able to manage and find the time to do all these things this book essentially answers that question yeah is this related to your i think you call it your just in time philosophy yes just in time learning which is only allowing yourself to learn about and consume information about the next step on your roadmap and it just puts the blinders on it helps you stay in your lane and it helps you feel more accomplished awesome well i'll look forward to seeing that on shelves in bookstores well at least on amazon very soon yeah we'll see it might be my first traditionally published book and that's sort of the second side of this model right we like i think what we were talking about was maybe more of a self-published model which is something you have a little bit more control over you actually keep more of the royalties that way but traditional uh working with a publisher can be interesting you know you can make a lot of money up front through a advance potentially and you know you get some distribution so you can actually get into bookstores but that essentially is mainly for clout uh versus income yeah again no matter what though think about your book as a part of your business not the business yes so let's move on and talk about how speaking has worked for you as a business model i'm really curious to know what your experience with this has been and whether this has been very profitable especially in terms of the time spent on it so tell me about speaking yeah there's a lot of people that are full-time speakers i'm not a full-time speaker but their business model is presenting at various conferences or in front of various businesses and i wanted to get on stage early on to just experiment with it to see if i could do it number one more of a personal thing but number two i knew it was going to be a great way to force myself to craft my positioning and my messages in a way that could affect people and especially in person there's no better way to make a difference or make an impact than in person so there were a lot of conferences in the internet business space that i knew i had a lot of value to share on or at and so i started speaking in 2011 for free and it was more of a way similar to the book to get in front of audiences and then have them understand who i was and then drive them into other things that i have in my business so capturing leads on stage is a very important thing and you know i don't do any selling on stage although i have done that once and it was very successful it's just not something i want to do uh the the kind of ones where you sell something and people rush to the back and they fill out their forms like that's just not my cup of tea uh however over time after i have gotten really excited about speaking and honing in on my craft and finding mentors in that space uh i've gotten to the point where now i can get paid for it and at first it was a couple thousand dollars to speak and then it became five thousand dollars and now i'm at a point where i can command 25 to 30 thousand dollars for 60 minutes of my time on stage that's really cool which is really amazing right like i had never thought that anybody would pay me to be on stage you wouldn't have been able to pay me to get on stage because i was very scared and that was another thing just it forced me to get out of my comfort zone and i always look to where my comfort zone is and i try to get one step outside of it when i want to grow in my business so this was one way of doing that back in 2011 and since then i've spoken on hundreds of stages all around the world i've gotten to travel you know it's kind of cool because they'll sometimes if you're a keynote especially pay for your travel i i was even able to negotiate one time a trip to australia for my family as a result of the sort of payment fee uh and and so we took a family vacation to australia because i was speaking at a keynote there problogger anyways it's been super fun uh and so yeah good money coming in but at the same time i will say that even though it's for 60 minutes of stage time it's definitely way more than 60 minutes of time that's required because there's time leading up to the event to craft that speech and that talk that for me at least provides a lot of anxiety and weight and pressure uh and then it's the day of travel there which takes out a lot of you and it takes a lot out of you and then when you're at these conferences you have to be on it which for me as an introvert is very draining and then there's all the talking and then sometimes you know you come back and need a couple days to recover so if i was a full-time speaker and i didn't have a family and i didn't have anything to worry about at home i can imagine doing that and having that be a very viable business model it's really fun too and you get to meet so many people that's one of the benefits of speaking is you get to meet other speakers in the green room i got to meet people like casey neistat and other people in in spaces like that uh however um it definitely is very draining and i think that i'm i know that i'm actually slowing down my speaking um i used to do it like once or twice a month and now it's going to be once or twice a year it's just it just takes a a a lot out of you so something that i know you've done a whole lot of is podcasting and also youtube and the primary way you're making money with those things is going to be sponsorships and then of course with youtube we've also got this ad revenue but let's talk about the sponsorship business model and how that relates to podcasting and youtube and the pros and cons of that sure when you have an audience there are likely going to be companies who will pay you to get in front of that audience and have you share something about it or talk about it for a little bit and that could be done in many ways on the podcast especially it is going to be perhaps a pre-roll which is a little bit of about that company right before the show starts a mid-roll which is in the middle and then a post roll at the end and the cool thing about a podcast is it's you can structure it in any way you want you can create a contract with that company and typically you can get paid anywhere between 15 to 50 dollars cpm and that's cost per milli or cost per thousand uh downloads so if you get 10 000 downloads a month and you get paid 25 000 uh if if excuse me if you get 10 000 a month and you get 25 dollars per thousand you know you have 250 bucks which is pretty cool for episodes that you do for a little bit of a mention about about that product on the show uh and this has been something that's become very profitable especially as the audience on the podcast has grown to the uh hundreds of thousands and you know we can get paid anywhere between three to sometimes upwards of ten to twelve thousand dollars per episode which is pretty amazing now it's not consistent because sometimes these contracts end sometimes people just want one episode sometimes people want longer and and we often give them deals if it's longer we are now working with an agency to help us sell these spots which makes it a lot easier although we now have to share some of those profits now we don't have to worry about actually finding the people to advertise on our show so there's a lot of different ways to go about it and and the the pro is you're going to create these episodes anyway and your audience especially if you only promote products that really serve your audience it could be a win for them too i've had people thank me for some of the advertisements on my podcast which is pretty cool so you have to kind of draw that line where you want to draw it because you could promote dog food on a cat podcast if you wanted to just to make money but maybe you might not want to do that right and then you know you have to be careful because many people will go oh here's another ad and you know as long as you're coming from a place of service and as long as your episodes are are worth it that's great and i think that that income can help you lean into serving your audience even more right the con about this is it's not always steady it is something that requires a lot of work to go and find and create these deals and and oftentimes for sponsorships and advertising you need a certain number of subscribers that number is not a specific number but it's you need a sizeable audience that a a tar an advertiser would be interested in um that's not to say you only if you only have a thousand dollars per month you can't do this because you can maybe you have a great relationship with the product and you have just in general a small audience that that's possible but you own that audience right like you are the go-to podcast for those people well then you can command a higher price point and then you can also combine it with things like your email list or um a link or an image on your website right to add more to the to the to the overall package for people but yeah that's that's how it works on the podcasting front and on youtube of course uh you know you can do sponsorships and brand deals as well very similarly but then you also get the benefit of having some ad revenue come in as well which which i've seen grow over time but both of those things like as soon as you stop doing those things you're gonna you're gonna see lower revenue right it's not necessarily as uh evergreen if you will as some of the other business models potentially what are your thoughts on getting paid to promote other people's products versus using that space to promote your own products i think that you could do both uh but you have to be very careful about how you do that we we do both you know we have our own products that could serve our audience but we also share products from others that could also serve our audience and again as long as you have that audience solution driven uh perspective in mind then you should be okay uh but you know be aware that you can talk a lot about other people's stuff and forget to talk about your own stuff or you could talk too much about products that are advertising stuff that you don't even get to the meat of your content and on youtube especially you got to be careful because people's attention spans are very very short on youtube as as you know um so yeah i think you could do both uh or you can flip-flop maybe one episode you promote your own stuff in another episode you promote somebody else's stuff uh and that's totally fine too um mixing it up in fact is is a great strategy so people aren't just oblivious to the same old message each time so clearly this is another case where at the beginning it's not going to be very profitable it's going to be a lot of time spent for example creating the content and very little profit coming in and then later as your audience grows it can be quite profitable so now i know that you've done a lot with selling courses online both with evergreen self-paced type courses and also now you've been focusing more on live cohort based courses what has been your experience with each of these business models and maybe you could compare and contrast them sure so the evergreen or diy course is something that we're all very familiar with right whether this isn't anything new but i was new to it in 2017 and the reason it took so long for me to actually create a course even though people wanted more information from me right and that information wasn't really right for a book and it wasn't really something that i wanted to do one-on-one so uh i i had thought i was just like you know what affiliate marketing is good i'm gonna promote other people's stuff you know i'm gonna uh people wanted a podcasting course for me and i said you know what go check out john lee dumas's podcast course or go check out cliff raven's craft podcast course because they already have one like i don't i don't need to create another one but people kept asking no we want it from you pat we want it from you and your style and we know that you can make it even more efficient and and and i knew that was true but i was just maybe a little bit reluctant or scared until finally in 2017 we launched a course called power up podcasting and the cool thing about this and the way that we launch all of our courses is we run it through a beta group first where the course isn't even fully made yet we are making it with those people and this is what makes this very simple to understand so number one if you understand that there's a pain or a problem or something that you could transform your audience with a transformation that they want then you can go okay instead of building the course and then selling it and then hoping let's run a little beta group and you can actually have similarly a cohort based style to start so that you can actually connect with those people make sure that all the holes are filled you can actually coach them along the way and get some results and then you're creating these videos to help them along the way and so that by the end of six eight weeks however long it might take they now have finished the course you now have finished recording the course it's already created now and not only that now you have a proven results that give you the confidence to finally then sell this thing because you know it works and that's absolutely key but number two you have now testimonials of people who have gone through the course and so this is the business model i teach in will it fly is to number one understand what the pains problems are of your audience really chat with them understand the language they use understand that fully and then if the solution is something like an online course don't just create the online course first build it out with a select group of people even if it's like two or three people have them actually pay for it if possible because then that is true validation right but they get special treatment they get all of you they get access to you they get accountability and you're going to help walk them through the however many weeks it takes and you just have to deliver a video or a set of videos once a week as they go through it they do the homework you chat with them maybe they're in a facebook group or something so a lot of work up front to make sure that what you're building is something that's going to be amazing and last and also be able to be repeatedly sold over time and so the beauty of having an evergreen course is once it's done it's done and then all you need to do is focus on top of funnel so let's get people into our email list whether it's from a book or a podcast or a website and then from that funnel you can let people know that this course exists and you can even evergreen the whole thing where they get put into an email list where they then get pitched this two weeks later after you provided them some value the way that we launch our courses however is not in an evergreen fashion with email but our evergreen courses are sold a few times a year so we'll run for example a high level training webinar where we bring people on which is high touch high value really demonstrating uh the the kind of teaching that i do and then lead people into the course after that should they be interested in it and that has worked and that has provided 4.4 million dollars of sales since 2017 and online courses have been the the backbone of our business since then it's it's been really amazing uh lately though we've been noticing that a lot of people who are taking our courses um prefer to get some help along the way so they want access to instructors or coaches which yes you can command a higher price point for that which is really amazing but it takes a lot more work because it's a little bit more manual with that particular group of people so instead of coaching one person through it we'll coach several people through it our latest uh cohort was for our course power up podcasting which there is a digital version of that so we're not creating anything new we're just creating a curriculum around the pre-existing diy course and that was an eight-week program we ran 50 people through it and it has like a 95 completion rate which is really amazing this is this just shows you the difference because digital courses typically have a much much lower completion rate and half of the students who came into the cohort were people who purchased the digital course and were like yeah i just never had time to do it now i'm going to do it and and you've given me structure now you've given me accountability and not only that people in the group help and and uh serve each other right they get into their little breakout groups and the zoom calls every thursday and they're providing feedback and getting feedback uh all at once and then we have yesterday was our graduation actually we had people show up and share their artwork share their show title share like their first episodes and it was just such a huge celebration and now they want to stay in the ecosystem or they're joining our membership program and they want to stick around and so um the cohort based stuff even though it is a lot more work it's definitely a lot more successful in terms of the students and you can charge a lot more for it but it's definitely not an automated thing yeah well that's really interesting and really cool and i've been experiencing something really similar with my courses in the past i would create these courses ahead of time and then i would sell them as self-paced courses and then i merged i switched to instead doing that sort of live first run of the course like you're talking about a beta run where i was creating the course and at the same time having people go through it and coaching them along the way because i wanted to make sure i was creating the thing that would really serve the people the best and was really what they needed and what they wanted and then through doing that i loved that experience so much and i loved especially like you were talking about how so many more of the students actually finished the course and actually got results and so now i've been doing that on repeat with so many of the courses that were originally intended to be self-paced so i've experienced something really similar myself and you mentioned that it's earned over four million dollars i'm curious is online are online courses the thing that have generated the most revenue for your business or is there any other business model that's generated more uh online courses and affiliate sales are pretty comparable but that's mostly because affiliate sales were the only thing providing an income for years i mean remember the information product for my architecture exam site um i actually stopped updating that i removed my own product from the website and i just replaced it with the practice exam company's stuff because they created their own guides too and they're more likely to keep it up to date than i am so that's just driving affiliate sales now so most of my sales in the beginning were coming through affiliate sales for six seven years then i created online courses and that has been uh doing amazing uh and then now the cohort based stuff on top of that which is which is really cool um the the other interesting thing about the latest cohort those 50 people i wasn't involved my team led the whole thing and um they're just kind of using my curriculum from the diy course to support that and that was the first time we did one where i was removed from the teaching and it worked out well there was no like well where's pat i signed up for pat no people buy courses to buy the transformation right they they want the transformation and if like honestly my team did such an amazing job and it just it's pretty cool because now i can scale it maybe we want to run multiple cohorts at the same time okay let's just get more amazing coaches that can help hold people accountable because the information is all there in the course but the person and the guidance and the the space to collaborate is is is really what the the big idea is behind the cohort stuff and it truly makes amazing results yeah now obviously that reduces the time and effort that you have to put into it if you're not doing the coaching yourself but i imagine there's still more effort required on your part than if it was a self-paced course because you still have to manage the people for sure and and i'd still show up in the beginning to welcome people and i show up at the at the end and then i pop it in the middle at some point but yeah it's it's not all it's not completely hands-off uh yeah no matter what i mean nothing is i mean you still have to upkeep everything but uh the doi course especially if you can get an evergreen funnel going is probably the they're going to be the highest roi once that thing is set mm-hmm yeah i mean as with all of these different business models we've been discussing there are pros and cons of each of them and with the cohort based courses obviously you have this huge pro of higher student success that the students love it more that they are going to send more people back to you via word of mouth you'll have more amazing testimonials you can like you said command a higher price point but then you have the con of it does take more time and more effort on your part so i think there are two more business models that we're gonna get through here and so the next one is coaching i know you've done some coaching what has been your experience with this business model yeah so i did group coaching for a while and this was what was called the spi accelerator program i noticed that there were certain segments of my audience that just were not being served it was the higher level business owner the six-figure business owner who just wasn't really getting value from the content that i was publishing on my podcast and website anymore because they've sort of graduated from that level but i wanted to continue to serve them and i knew that at that level because i'm at that level myself it's like well there's there's different kinds of problems that show up and different things that maybe you know aren't going to be useful to write on the blog but i'd much rather work with you through that so we created a group coaching program called the spi accelerator program where i charged twenty thousand dollars for an entire year of group coaching and what that meant was two or three times a year we were gonna all meet together in san diego like mastermind we rented out this house in in la jolla california like a giant home everybody had their own room but then we come together all day every person would have time in their hot seat to show something they were doing we could break it down and build it back up and it was just such an amazing thing because these people all became family right and we had group calls every week and individual coaching calls once every quarter to help people go in the right direction but it was really about the group serving the group and myself facilitating that and also helping with the guidance and it was truly amazing it was it was epic for two years um and we were going to continue to do it but then covet hit right and so in terms of size like this is like 10 people so 10 people times 20 i mean that's 200 000 for coaching 10 people uh and and having really fun experiences with them and really seeing some amazing breakthroughs because a lot of like a lot of this was like mental stuff actually it was it felt very therapeutic i think and and and so coveted it was like oh well the group thing isn't going to work because a big play in this was meeting together in person and creating that family aspect and you know we were all getting tired of zoom calls so i stopped doing the accelerator program in that way however a lot of those students were like well we still want help from you pat like is there anything you can do to help help us still and so i decided to create a much more simple coaching style program where it was now one-on-one so one-on-one coaching which is definitely not scalable but it's also i can get a lot deeper with every individual so i had eight of those students still continue to want to work with me in a way where i chat with them for 30 minutes every week they pay me a set amount of money every single month to just get on a phone call with me 30 minutes every single week and that's it uh that's it there's no group group calls there's no in-person meetings promised or anything like that it's just 30 minutes a week whatever you want to bring to the table let's talk about it and it's my job at that point to have them walk away from those calls with like yes or finally or yes that's exactly what i need like the roi hopefully is there for them and it is or else they would have gone already uh but i've been doing that for about a year now and it's been very rewarding although it's definitely you know that's like that's like 30 minutes in my calendar for a single person every single week times eight and so there is a day of the week where it's just like a call after call after call and i enjoy it but it's definitely you know i feel like you know that time could be potentially used elsewhere i'm i'm i'm dedicated to my students i'm not going to change it right now and that was the whole idea of the group coaching thing in the first place was i could take care of more people in less time um but then of course coveted like i said the pandemic stopped that so i enjoy the one-on-one and many many people thrive on that and love it and many people that's their primary and only business model they go from book to one-on-one coaching right uh and that's really amazing but it's it's definitely um i have to be on it that's the other thing like when i show up to a call it would be a disservice if i wasn't fully there or if my head was elsewhere yeah so on the one hand it sounds like even though you do have to be engaged the whole time it is a lot less effort than something like creating a course or writing a book right it's it's easier but you have to keep showing up every single week and being engaged unlike with the book or with a course where you get to kind of do this big effort and then sit back and get a break exactly exactly so i think that probably comes down you know which of those business models is quote better would come down more to someone's personality than anything and the type of work that they thrive on exactly like what's what's your style and and that's really important to understand like who are you and which type of business models would you best thrive in so let's talk about one last business model before we wrap that up and that is memberships what has been your experience with memberships and tell me the pros and the cons the the membership model is really amazing in 2019 i held a conference in san diego and it it was absolutely incredible and the most incredible thing was not the stage talks and things like that it was actually the conversations that people were talking about in the hallways and that's what i love about conferences the most i mean you could probably relate to this too the connections that are made the conversations the the just like it's amazing um and then 2020 hit and the conference was supposed to happen again and of course it wasn't able to and then it was delayed again and it's sort of basically canceled now but i really miss those that ability to give people space to meet each other in that way to communicate with each other and so my team and i we actually had an idea for this that was going to be more of a 2022-2023 thing but we pulled it forward into 2020 because of this need to connect and everybody was feeling very lonely in their homes and wanting to connect nobody was going to conferences anymore at all so we created spi pro which is our premium membership program you do have to apply to it but everybody who's in there is a business owner and has the same kind of needs wants and and desire to help bring better things to the internet and and better the world in that way and we launched in july of 2020 and we had 500 people come in and this is a recurring income business model it's 49 a month or 499 dollars a year and every single quarter we let a new set of students and or or a new cohort in if you will and it's really taken off it's become an incredible thriving community outside of facebook outside of linkedin outside of those places it's a community membership platform that we own and it feels good because it's its own entity now and it of itself is very profitable right we spend money on staffing it and and and the systems but we make way more money back from that if you were like just segment out just the spi pro membership community alone it's profitable and it's going to be more profitable even down the road so we're using a platform called circle to manage that circle.so i'm an advisor to that company now because i've loved it so much and it allows us to have this really beautiful facebook group like experience with the conversational organization of slack all in one spot and what's cool about this is we're connecting people with each other this is not a content play people are not coming in here to get more content in fact we ran a survey it was like what do you want out of spi pro content was the last thing people wanted what they wanted was network what they wanted was connection what they wanted was some guidance and accountability and we're able to serve them through spi pro and what happens in there is they are placed into a mastermind they are also uh participants in events challenges we have a cotm or a challenge of the month where we expand their horizons a little bit with some some things that test them uh there's amas with experts and myself in there and just it's just like we've never had such incredible testimonials ever than the people we get in there and i think it's because it people want to feel like they belong to something and they can connect with people just like them and this is the space to do that how much of your time would you say you're spending on this program every month a couple hours a week in there to just participate and once a month doing a two-hour ama and just having direct messages with people in there so i would say on average two to three hours a week is all again very similar to all the all these other business models some upfront work really important some investment but we're getting paid back uh by the load um and we get a direct connection to our audience now and it's people and that's the cool thing because a lot of these other business models right creating an online course it's diy writing a book advertising and sponsorships like sure you can make money with it but you don't really have a direct connection to who it is that you're serving in that moment or with that transaction but here we are we have a member who comes in and they share a bit about themselves and we can connect them with somebody who can help them and they see results and they share the wins and they get spot lit in the the membership spot light every single week and it's just like this is like a like a like a 24 7 conference hallway that's happening all the time now and it's just it's just beautiful so the con is that if if it's not a populated community up front it's gonna it's gonna feel like a ghost town you need to have some sort of audience already and maybe you build that audience and community on facebook first or linkedin or something and then bring them over but if you just create a community and try to sell people into it even if you get a couple people in there it's going to be like okay well there's nobody here so that so so so you have to start from an audience first uh if you're going to build a community for sure but it's it's been one of the most fulfilling things ever yeah yeah that was my experience as well i knew i wanted to start a membership but i didn't want it to be a ghost town and so i waited for me i think i waited until my youtube channel was at about 50 000 subscribers and my email list probably had maybe 10 000 subscribers and then i launched it and we were able to get even with my audience being for some people that would sound like a huge audience and for other people that sounds like well that's tiny compared to where i am now or where you are right um but even so we were able to get 300 members when i initially launched it a few years ago which was incredible that's awesome in retrospect i find it incredible too so how did that happen but um and that having that initial group of members and of course it doesn't have to be 300 i would say if you and depending on how you structure the program it could be just a couple dozen if you're having a more intimate experience exactly with them and you're facilitating the conversations effectively i've got just a couple kind of wrap-up questions for you you shared that um the courses and that affiliate marketing had been some of the most profitable things i assumed that was in terms of gross revenue which of these things that you've done have had the highest profit margin would you say uh affiliate marketing because there is no there is no money to be spent to do that right um it's it's 100 profit margin on what you earn uh obviously the products that you promote you're going to share that revenue with the company obviously um but it it's it's probably if you're listening to this and you're watching it and you're like wow what's what what can i get started with right now that's going to make me the most money in the soonest amount of time which is like i don't like that question but i always get it affiliate marketing would be the one and an affiliate marketing done right where you select the right product focus on that you talk about it and you know in all different angles and all different ways you create multiple videos about the same product and you really inject it into who you are and what you do and you almost treat it as if it was your own product um the profit margins on that are absolutely huge the online courses have been amazing as well uh when you can spend a little bit of time up front creating and maybe you do invest a little bit on a production team or a camera or audio equipment or something to make it great if i mean that thing just continues to i mean i've made a sale while we were on a call today right now for an online course one of my online courses so that's 699 dollars and how much of that is profit well all of it essentially uh now of course there's i have a business and a team and you know we'd have to look at the overall charts but yeah any like we talked about of these business models would work we need to find out what works for you and combine that with what would work for your audience and um it's going to take some trial and error but there is a lot of money to be made it's not like a poker table where if somebody's making poker chips come their way that means somebody else is losing poker chips we live in this world and it's a very abundant place there's enough for all of us but you have to believe it and you have to try it so it's not a zero-sum game okay and then a final question here this might be asking you to pick your favorite child because i know you said all these business models work and they've all you know blessed you in different ways but i'm curious do you have a personal favorite and why i mean the cohort based model is right now my favorite because and maybe it's just because we had graduation yesterday and there were tears had and i mean real emotion comes out from people who were struggling so hard and had been waiting to build a podcast for example i mean we've done cohorts on other things even email people cry over the fact that they finally have an email list it's pretty cool um but to see in real time a person go from oh my gosh i'm struggling this is hard to then you help them get the result that they wanted like that's not just transformation for them or to to get a podcast that's like a mental transformation for life and what's possible for them and it's just it's just a really amazing thing that's very inspirational makes me want to lean more into serving my audience in that way well thank you again pat so much for everything that you've shared about us about all these different business models and just being willing to put yourself on the line and do the work to test all these things out and thank you so much for being on work less earn more today thank you for having me [Applause] [Music] [Music]

Channel: Gillian Perkins

Views: 9,922

Keywords: Which business model is MOST PROFITABLE, pat flynn, profitable business, profitable business model, how to build a profitable business, business model

Id: 102a6H3NrR0

Length: 57min 27sec (3447 seconds)

Published: Tue Nov 02 2021