3 essential systems for starting an online business
I’m going to do something unusual in this post.
You’ve never heard me talk about how much revenue my business generates. But today, I’ll share some of those numbers with you. And I’ll reveal even more to my private list for Zero To Launch (sign up free now).
Which reminds me of a funny story.
When a major magazine was writing an article about me, they asked me to reveal revenue numbers. When I refused, they told me they’d cut the article if I didn’t. (Why, I asked? “We have to know if you’re important enough.”)
So I said, “Is $1mm important enough?” They hemmed and hawed and finally said yes, so I carefully adjusted my shopping cart to show the dates that revealed exactly $1,000,001/year. I know, I’m petty, but these are my small joys in life.
Suddenly they noticed the date range I’d selected. “How much in total?” they asked. I laughed in their faces. I’ve been trained by a lifetime of prying Indian parents to be expert at NOT revealing things. Thank you, mom and dad.
And there’s a simple reason I don’t talk about revenue: I prefer to focus on your success, not mine. Not because I’m running a non-profit, but because if my students do well, my business grows. The way I’ve structured my business, your success comes first.
That’s why I give away 98% of my material free. And why I spend hundreds of hours sharing success stories about students building online businesses, finding Dream Jobs, paying off debt, etc. When you win, I win. And if you don’t, you ask for a refund and I don’t put food on the table or pay my team. Simply put, your success is a better measure of how I’m doing than revenue. That’s why it’s in my interest to build the world’s best material.
I recently showed you the first sale I ever received at IWT years ago.
Now check out this email I just recently received a couple weeks ago:
What do you notice? 8 years after launching this product, I’m STILL generating income from it. Do you know how great it feels to get this email….over…and over…and over?
I know, it’s less than $5, but think of the $200 products, the $497 products, the $997 ones, and on and on…
Here, take a look:
Both of those sales happened automatically. I was not involved whatsoever — but my systems were.
Now forget about the $1,997 product and even the $197 product.
Just pretend you had an entry-level $50 product. (I’ll show you how to build an amazing product soon, even if you don’t have an idea yet.)
Just run this quick calculation in your head:
$50 product x 10 sales/month x 24 months = _____
$12,000 you could make, JUST from:
- An introductory ($50) product
- Making only one sale every 3 days
- And completely stopping after 2 years
Do you see how powerful your online business could be? What if you actually improved each of those numbers (say you created a more valuable product, or used my systems to increase purchase frequency, or continued growing for more than 2 years)? Soon the numbers become incredibly powerful.
But it’s not just the numbers. I think it will be useful to share how I think about online business differently than a lot of people trying to launch something.
The Sushi Restaurant That DGAF
Years ago, I ran across a sushi restaurant in SF. It does things differently, and they became one of the inspirations for my business:
- Not only is their sushi delicious, they focus their attention on serving a small number of customers, and serving them extraordinarily well
- They always have a line out the door
- If you get there past 7:30pm, you can forget about getting a table
- They could easily add 30% more tables (and therefore 30% more revenue), but they just don’t care!
I LOVE THIS.
I LOVE a business that runs on its own terms.
What would it mean to be able to run yours the way YOU want to?
I actually learned, YES, I can run my business the way I want. That means:
- No office. If I want to work from my NYC apartment today, cool. Next week, might be my place in SF. Or maybe a coffee shop. I love the flexibility
- I can choose to “work hard / play hard” since I have the systems that let me grow even while I’m traveling, like when I took a 3-week vacation to Asia
- I can choose exactly who I want to serve. I don’t tolerate whiners, so I kick their asses out. I offer 98% of my material free, so I don’t allow people with CC debt to join my highest-end courses — a strategic decision that’s cost me millions of dollars. For me, it’s the right thing to do (since they should prioritize their debt #1), and since it’s my business, I get to decide what I allow/don’t allow
So, how did I build a win-win online business that went from selling $4.95 ebooks to $12,000 courses that my students live rich lives and let me craft the lifestyle I wanted?
How did I set it up so that it would continue working even when I was out having fun with my friends…or watching Online Rituals of the American Male…or traveling?
How did I double revenue in 2012? Was it working 2x the time?
Of course not.
The answer is something different. The answer is SYSTEMS.
Notice this isn’t what you’ll hear from experts, who mostly talk about passion alone. The truth?
PASSION ISN’T ENOUGH. You need business systems.
TRUTH: If passion was enough, there wouldn’t be any starving artists.
TRUTH2: If passion was all you need, then the vast majority of online businesses wouldn’t fail.
The truth is that many unscrupulous marketers sell you on passion because it’s a push-button “burning pain” — see, most people believe they truly have something inside of them that they need to get out (if only somebody would listen). Waa waa etc.
Here’s the brutal truth.
Your passion matters, of course. But passion alone isn’t enough.
You need SYSTEMS. I’m talking about repeatable, reliable, automated (or nearly automated) ways of completing key business processes. I emphasize this because I invented my own systems, then spent years tweaking and perfecting them.
Few others do, because it’s easier to focus on tactical minutiae like “You must get on Twitter!” and “Use this life hack to optimize your opt-in form.” But systems are what allow you go from an idea to a scalable, repeatable business that lets you help others — automatically — while living the life you want.
The 3 systems you need for a successful online business
Don’t overcomplicate things, you weirdos. IWT has thousands of systems now, but if you took it all away tomorrow, all you really need are 3:
- System for getting people’s attention
- System for getting them to subscribe to your list
- System for selling them your product
If you build these three systems, you have the foundation of a real online business. Everything you do after that will be built on top of these three systems.
I know I said 3 steps…sorry.
This graphic just breaks it down into a few more variables you can control (advanced)
Insights about System #1: Getting People’s Attention
From the 15 million emails I’m getting asking, “RAMIT, WILL YOU TEACH ME HOW TO FIND AN IDEA??” the answer is YES. I’ll show you exactly how to do it (and how we do it at IWT).
For now, just pretend you have the perfect business idea.
How do you get it in front of the right people? More importantly, how do you get traffic?
Unlike most delusional engineers, who believe if you “build it, they will come,” traffic almost never happens by accident. In the beginning, I spent 50% of my time creating material and 50% PROMOTING IT.
Think about that! If I wrote a couple blog posts for 4 hours/week, I would spend another 4 hours promoting it.
Interestingly, that number changes over time: I don’t spend nearly 50% of my time promoting my material any more because my systems handle a lot of that promotion. As Paul Graham wrote, “Do things that don’t scale” (especially at first).
(Note: The things you do on Day 1 of your online business are very different than what you do on Day 500. In ZTL, I’ll show you the right benchmarks at each step of the game.)
Most people get really nervous about promoting themselves. And when my heart used to have emotions in it, I too felt nervous. I would say things like, “I don’t want to be one of those people who are constantly promoting themselves.”
KEY INSIGHT: Reframe your fear. If your material is good and you know it can help people, it’s your OBLIGATION to share it with the world. You’re doing this in service to the people who can benefit from your help (and actively repelling the people who it’s not right for). When examined that way, any success you have is simply the result of helping others FIRST.
That is what gets you to stand the test of time while most online businesses come and go, time and time again. I have covered how to focus on others first extensively.
In Zero to Launch, we call this The Art of Authentic Self-Promotion. I have a bunch of specific techniques we share, but two critical things to ask yourself are:
DEMAND: Does anyone care? (Don’t delude yourself. A classic mistake is to assume everybody cares about your idea, then ask leading questions. By contrast, when we’re trying to validate our idea, we actually ask DISCONFIRMING questions since we’re so skeptical anyone cares about us. This comes from a lifetime of being a skinny Indian with extremely awkward clothes. Thank god it got me something 25 years later.)
QUALITY: How good is your material? If you’re starting a personal-finance blog and your best tips are to cut back on lattes and save 10% of your income, why do you exist? Why do you consume oxygen on this planet? TMSNOGTFO: TELL ME SOMETHING NEW OR GTFO.
If there is a demand and your material is good, then people WANT to hear from you. They WANT you to help them solve their problems. Promoting your material becomes a win-win situation.
Insights about System #2: Getting subscribers to your email list
Can you guess my #1 business mistake with IWT?
Answers that will not be accepted:
- Your headshot is ugly
- Your blog needs bigger social media buttons (pls leave this site and never return)
- You should change your blog color to blue because it drives more conversions
THE MILLION-DOLLAR MISTAKE WAS TO LAUNCH MY BUSINESS WITHOUT AN EMAIL LIST! That mistake has actually cost me many millions of dollars.
Why? I’ll demonstrate.
You’ll notice I do a few things differently than others, and one of those is that I don’t allow anyone to buy one of my products directly from my site. (The only exception is if we’re testing something and you happen to fall into a test cell.)
The main reason for this is I value the RELATIONSHIP over the SALE. I’d rather have you join my email list and get to know me — and then choose whether you want to continue, or unsubscribe — than try to sell you on day 1.
This is VERY different than most online businesses.
There’s a lot of technology and psychology behind this decision, but the major point we learned is this: Drive-by traffic is largely useless. People who take the initiative to take action (e.g., by signing up for an email list) are serious prospects. THEY are worth your time. Other, less serious looky-loos, are not.
So we take our time to nurture the people that come in. I can afford to do free events, or even host open bars in different cities. Put another way, just like the sushi place in SF, I can lavish attention on the customers that are serious by giving them world-class service …with the negligible cost of repelling a few people who would have never bought, or gotten value from my material any way.
For instance, people who pay for one of my premium programs open their emails at a rate 3-5x higher than my free subscribers.
And I make 95% of my revenue from a small group of loyal buyers. Of COURSE I love them. Of COURSE I’m going to treat them like royalty.
As an example, a few months ago, when I spoke at Google in SF, I invited about 10 of my top students to attend the talk, then I treated them to a private lunch at Hakkasan. You can choose how you want to treat your very best customers, and if you have the business systems to support it, you can do whatever you want! Or you can donate to charity. Or pay off student loans, or treat your parents to a vacation, or whatever you want.
KEY INSIGHT: Optimize for the relationship, not the sale. That means delaying revenue until you earn their trust. You might lose $100, but if you show them you’re the right person for them, you can earn $1,000, $10,000, or even more. More details on this later.
Insights about System #3: Selling your product
A lot of people make really classic mistakes here.
They see THIS:
And say, “HEY RAMIT. COOL. I WANT TO MAKE THAT MUCH IN A SINGLE DAY TOO!! LOL!”
Yes indeed. I LOL at the verbal evisceration about to occur.
Are you kidding me? Do you look at someone who’s been working on their craft every day for years and years and say, “HEY DAT SOUNDS GOOD, GIMME!”
No. You put in the work and pray your Surrogate Asian Father doesn’t call you an ingrate and throw you out on your ass.
Will you make that much in a single day? Probably not. I promised to always tell you the truth, and that number is difficult to reach in a SINGLE DAY. Can you earn it in a month? Yes. I have students who are making tens of thousands of dollars a month:
And for a lot of us, just $500 or $2,000/month is life-changing!
Whatever your number is, to get there, you have to sell. I can show you how.
This is one of the many lessons in Zero to Launch
Note that the most common, crippling mistake people make is spending 6 months creating a product BEFORE they have any way to sell it. It’s like authors who write and write, then one day wake up and say, “Time to do marketing!” You have already lost. Marketing (not selling, but marketing) starts on day 1.
Here’s how I think about it. Once you have an email list, which you saw in SYSTEM #2, you have a relationship with dozens, then hundreds, then thousands of people who WANT to share their problems with you. And if you serve them right, they’ll WANT to pay you. You’ve built this list to have a relationship with them, and now it’s time to find out how you can help them. I shared some basic validation scripts earlier. Be sure to check out the impressive results in the comments.
Notice how selling comes WAY, WAY at the end of this process. In fact, we call this “front-loading the work,” because if you do it correctly, you virtually guarantee your product will sell by the time you ever offer it.
Since you already know their pain points from asking them, you know their “burning problems”, and you’ve already tested your solution, the selling part is surprisingly simple.
Remember, for your first online business product, you’re not going to sell the fanciest product — it’s going to be simple (just like my first one was, and second, and even third), which means your marketing can be simple, too.
In short, consider 5-7 emails leading people to a sales page, where you describe your offer and ask them to pay.
You can do this — and quickly.
Sometimes it’s even faster and easier than this. Take James, one of my Zero to Launch students. He asked a few of his readers if they were interested in a product idea he had:
“I had 9 hard yes answers so I decided to go forward. Made 19 videos (over 2 h total), put them on Wistia, embedded the videos on a single page. Went back to 5 of the people who were firm yesses, offered them the chance to be a beta tester at a discounted price…Fifteen minutes later I have a sale.” – James A., Zero to Launch graduate
KEY INSIGHT: When you front-load the work, you can virtually guarantee your product will sell.
This is one of the greatest opportunities in history
Once I began digging into starting an online business, and I started to understand how this really works, I realized we’re standing at the greatest opportunity in our lifetimes.
For the first time, we don’t have to wait for some gatekeeper in Manhattan or at some fancy company to choose us and give us a shot.
We don’t have to toil for 30 years, chasing a meaningless credential or kissing up to the right person, and wait for a lucky day.
We can actually MAKE OUR OWN LUCK.
We can go direct to the millions of people online — a virtually unlimited number of prospects! — and find the right ones who want what we have to offer. No need for distastefully aggressive selling. You can simply filter out the wrong people and stick with the people who LOVE you and are ready to hear what you have to say…and sometimes, buy.
And the best part?
You can do this on your own. For the first time ever (and especially in the last couple of years), you can implement systems so powerful, they let you find the right idea, build traffic, convert visitors to subscribers, and sell — all automatically, and all on your own.
You can be out with friends and watch sales roll in. You can do it from any country you live in (even Slovenia, like one of my Zero to Launch students). Your success or failure is in your own hands.
At IWT, we’ve journeyed through personal finance. We’ve mastered careers. We’ve even tackled our inner psychology. Now, the ability to have a flexible schedule and location, control over your time, and a truly scalable business — this is the next step to a Rich Life.
FREE: Case studies and other never-before-seen information on creating your first online business
I want to make sure you learn how to pick the right idea for an online business, then grow it so you can live a rich life and enjoy greater freedom.
That’s why I’m going to give you some of my juiciest case studies and other information on creating your first online business. Just join my exclusive Zero to Launch waitlist for this information, along with your invitation to the course.
UPDATE – New Zero to Launch course reviews!
Check this out, several Zero to Launch beta students have posted detailed reviews of the Zero to Launch course on their own blogs. You can hear all about their experiences — including pros and cons, and who the course is right for — in their own words. I’ll keep updating this list as more reviews come out:
- Read the review of Zero to Launch from student, Maria
- “I didn’t have a lot of time to make mistakes or go down the wrong path.” How Nagina started Zero to Launch with a family and a busy job.
- Read student Amos’ review of Zero to Launch
- ZTL student, Alec, asks, “Is Zero to Launch worth it?”
- Selena shares her Zero to Launch review
- Read Chris C.’s review of Zero to Launch
- And lastly, read Primoz’s review of the Zero to Launch course
All right, weirdos. I’m feeling in an unusually good mood this week. Maybe it’s cuz I got my ...Read More