When you find a new tactic that works for your business, something really, really good and effective, is your first impulse to:
1. Create a course, membership site, video series or other product and sell the idea?
or
2. Use it for yourself and just crank on it for all it’s worth?
And another question to keep in mind: Which will make you more money?
I’d say that a good number of us have a hard time not choosing #1. And for years I never thought of what I’d be LOSING by teaching the tactics I learn. I only thought of the positives. “This course will sell like gangbusters!” “We’re gonna make bank on this one!”
But there is something you lose in that bargain. Specifically, the time you’d spend perfecting your tactics and growing them into something even bigger, more effective, and more profitable for yourself. It is a tangible loss to your business and no one can avoid it.
When you have to turn around and teach the methods, systems, processes, and strategies you’ve discovered, you are on the hook for time. Time is something none of us has figured out a way to manufacture. It is the great equalizer, above all else.
Let’s think about choice #2
Here you decide to take what you’ve learned at conferences, from associates, mentors and coaches, (or on your own), and apply that intel 100% to your business. No sharing. No training. No mass control launches, product creation, or members and customers demanding all your time. Just you and some killer money-making, traffic-driving, cutting-edge stuff that enhances your business the more you apply it.
There is a downside to being the guru trapped in a business based upon never-ending cycles of launches. A huge one. It is something no one ever talks about publicly – ever. But it is there like a dark cloud overhead or a large anchor around every single launch guru’s neck.
Every launch has to be bigger. They are extremely hard to pull off and quite expensive, which is another thing they don’t talk about. Having months of planning, a huge staff to support, and a big investment in materials ready to be shipped is one thing. But the success of the program is also a bummer. Now they have hundreds or thousands of customers to support, train, and do all the things with they promised in their offers.
Believe me, the stories I’ve heard over the years from insiders leads me to believe I might not even want a big launch now. Choice #2, which many former high-profiles guru have chosen, like Jonathan Mizel and many others, is to DO and not TEACH.
I’ve seen so many wildly popular guys go off the radar. One day they are there selling huge coaching programs and courses. The next – poof! They are gone.
Where did those gurus go? Jail? Retirement?
They found the real money online. The very very serious money. The stuff that makes million dollar launches look like someone just dropped a penny on a 4-lane highway. They went from teaching to DOING. They went from talking about it to doing it full-time. They started building offices of assistants and outsourcers. They found things they could do to make $2000 per month and created 100 or more of them. In short, they stopped listening to themselves at conferences and started listening to each other’s great ideas.
And then they tried them. And then they realized that teaching and creating courses is vastly less money than doing things like opening PayDotCom.com. Or site building on a grand scale. Or niche marketing or all the other things we’ve all taught or been taught but never had the time to DO because of all the teaching.
By the Numbers
Let’s say you get a killer course together on something no one in a niche has heard of before and you know you’re going to do well with it. You put it together (massive work, time, and expense) and you plan to sell it for $997, hoping for at least 1000 customers.
You get the product ready and the JVs lined up, all very intensive tasks leading up to launch day, and if everything goes as planned, you make 1000 sales.
1000 x $997 = $997,000
Minus merchant fees = $39,880 or so at 4%
Minus affiliate commissions = $450,000 or so
Minus expenses like staff, outsourcing, admin = Let’s say $50,000 minimum on this (some bootstrap this stuff but most do not – they get a lot of help these days)
So roughly speaking you’re looking at something around $450,000.00 profit. Nice huh?
It can be far less depending on deals you cut with big, heavy hitters who get overrides of 10% or more to bring their buddies in to mail for launch too.
From the money alone, this looks and seems fantastic. Like you’d do anything to make that kind of dough. But hold on a second.
Now you have hundreds of clients to work with. You might even have some upsells if you’re smart so you’re still making money off this product launch long after launch is over. Let’s add $100k in consulting, coaching or other upsells to the figure above and make your take $550,000.00.
Finally, let’s not forget continuity. A good guru will have some monthy membership attached to their offer where a portion of sales will bring in people who pay them monthly. Let’s say this is $100,000 per month which starts declining mere days and weeks after the launch due to web-wide average retention rates.
Here’s the stuff they don’t tell you in guru school…
Now let’s start taking away. I’m being overly generous with the numbers above. I know a lot of people have far lower profits than that from similar launches, but it doesn’t matter. There really is a dark side here.
- Staff: Fulfillment, administrative tasks, and all the other things you will have to do to keep clients happy with their purchases is a really big, expensive deal.
- Overhead: Servers and everything it takes to run one of these launch operations is no small expenditure over time.
- Time lost: During all this you haven’t been able to spend any time, not one iota, on learning and keeping up with your skills and staying ahead of the pack. This is why almost every sophomore release from a new guru is far weaker in every way than the first. They just haven’t been able to stay cutting-edge. They’ve been creating a product and then fulfilling it for months and months. And if they have a lot of that outsourced, they still have to manage their staff and make sure they are repesenting them properly and protecting their reputation through proper fulfillment.
- Profits lost: The entire time spent building a product, pulling off a monumental launch, coordinating the millions of things that go into this operation, you haven’t been able to DO any of the things you teach. If what you teach is a way to make money or otherwise grow your business, you’ve thrown it all out in favor of this one cash-in. At the end of the launch, you NEED the money you made to live off of until you can get back to the front lines and get ahead of all the people who passed you up while you were engaged in the prep, launch and fulfillment of your offer.
The money you were making with the system you’ve now sold is all but dried up if the business model requires your regular care and feeding to stay viable long-term. Now comes a choice: I have to come up with another product fast and have another launch, starting everything over again from scratch. Or I have to get back to work on what it is that makes real money around here!
How much can be lost by being a teacher?
Let’s say you know how to build sites that make $1000-$2000 or so per month. Once they are done with one site, they keep building. Niche marketing or whatever you want to call it. This is what you were doing before becoming the guru and being known as a teacher.
In the time you put together a product, a launch, and do the fulfillment of coaching, webinars, videos…whatever, you could have overseen the building of 100 of these sites. That’s $100,000-$200,000 per MONTH in revenue you don’t have coming in now.
In one year that’s $1.2 million to $24 million in revenue, free and clear. Because these sites don’t require manual fulfillment, tons of staff, and there are no affiliate payouts, you keep almost all the money and just pay your low overhead.
These are just examples…
Any guru out there can come up with ways to shoot holes in my examples above. They can say they have everything outsourced and that they can take the time to do a product launch or even pay someone to do it for them too! That’s fine for the guys and gals who are already big enough to do that. I still have to question why they’d do all that work to earn the equivalent of a couple months income from the other thing: the DOING thing.
You are not one of those gurus. They aren’t reading this. They are working like dogs on a launch coming up sometime this year. They don’t read blogs. So you aren’t going to have all these staff members and launch managers to do your launch. It’s going to be you and maybe a partner or two you will have to split everything with.
Pot – Kettle – Black
Sound like I have some things on my mind? I do!
I know some of you are going “Dude, you teach people how to blog. You have courses and all the stuff you’re talking about! How can you say all this and not feel hypocritical?”
Well for one, I truly do like to teach. And not just for the sake of my clients and customers. It is an ego thing. It is for every teacher on the planet. Bar none, being the one who knows that teaches those who don’t is an ego booster. Anyone being honest about it would have to say the same thing. Ego plays a part. It’s not a bad thing. Call it pride if it makes you feel better. But it’s all the same. People like me get a “buzz” from helping others and getting positive feedback for doing so. I don’t know anyone who doesn’t enjoy that on some level if they’ve had a chance to experience it.
I’ve heard of gurus who were DOING the thing they did and made millions at it who all of the sudden wanted to break into selling courses about it. For less money, as demonstrated above. What other factor could possibly account for such a choice outside of ego? They want to be known for the things they’ve acomplished and mastered. Plain and simple. I’m no different. No one really is at the end of the day.
The people who fly under the radar, making millions online DOING the business of marketing, have the same impulses. They are just more capable of supressing them and staying focused on building and doing rather than giving in to the temptation of teaching and becoming a 15 minute rockstar in their niche.
My goal for the rest of this year is to re-balance and split my teaching and doing right down the middle. I’ve gotten off course. This post is a note to the world that I want to change that as much as it is for anyone reading to get something out of it.
You can feed the ego-centric part of you and still stay on the front-lines of making money online. It’s a matter of balance. But I would still say the biggest money of all is generated by the pure-doers who don’t teach at all. They learn. They implement. And they quadruple their efforts behind successful tests and methods they discover along the way.
A person like that is going to die with more money in the bank than the rest of us almost every time. At that point it’s really a matter of dying with a feeling of accomlishment and with few regrets. And that is an individual thing.
Disagree? Agree? That’s what comments are for…!
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Used to be you had to buy terribly expensive software and shopping carts to do this. Today things are much easier and far cheaper. In fact, today there is a new kid on the block when it comes to sales funnels called “Tornado.”
Video chat made easy.
