A few months ago, when I asked if you’d be interested in learning more about the business side of “I Will Teach You To Be Rich,” over 400 people left a comment saying yes. So here’s a little inside scoop on what’s been going on behind the scenes on the business side.
Even though they sound dark and ominous, “post-mortems” are some of the most useful things you can do when launching a new project. A post-mortems is simply an analysis of what worked, what didn’t, and what you can learn to improve next time. Doing this helps keep you sharp and stay ahead of 99% of people who never do this (the Craigslist Penis Effect in action).
Here are some things we learned that might help as you try to earn more money or launch your own project.
Measuring is important, but pick your battles. I like to measure myself in a lot of areas. But it came down to deciding to measure something — or just make it better based on our intuition. We chose to improve the launch rather than measure everything. The downside is I don’t know exactly what caused some of our results. I hope to figure it out in future launches.
Lots of communication problems. Once you get above 2 people, communication starts getting very complicated. We used PBworks, Google Docs, Etherpad, email, and phone, and we still weren’t all on the same page. This is why there are so many collaboration tools. This is also why it’s such a hard problem.
Have ridiculously detailed backups. After a technical snafu that cost me over $10,000 in 10 minutes, we created an insanely detailed checklist, including…
POTENTIAL PROBLEM — SOLUTION
…with every conceivable technical problem that we could encounter. This was detailed down to the level that, if my home internet failed, my shoes were already on so I could run to a friend’s house, who was standing by so I could jump back on a webcast.
Again, I never cared about this in my early days, and you shouldn’t if you’re launching something for the first time. But now, after growing for years, even a few minutes of launch downtime can cost me a lot. (And I’m just a teeny tiny player. Imagine the resources a company like Amazon dedicates to this.)
There are red flags for users who will never become customers. At my last company, our head sales guy told me an interesting thing: He said, “When prospects call up and ask for XXX [specific word], they will never buy.” In other words, non-buyers identify themselves with certain phrases, and you need to learn to identify them. For Earn1k, whenever someone’s FIRST question was, “How much does this cost?” I knew they would likely never buy. That’s because they focused on cost, not value. The people who asked, “How much can this help me make — and how do I know it’s worth it?” were much more likely to buy.
People will pay for content if you demonstrate enough value. We sold out of our $2,997 tier in 1 hour because we spent a month showing people to focus on value, not cost. I never expected to sell out. Yet I now know I under-priced that tier. So next time it will go up — dramatically.
Blogs have extreme variability in the quality of users. Most blogs have 90%+ freeloaders, aka people who never want to pay for anything and get mad when a blogger charges for anything. I love driving these people away from iwillteachyoutoberich as fast as possible. While the blog will remain free, I’ve consistently showed you guys why paying for value is important, and we now have an audience of people who are willing to invest in themselves — and don’t believe in fixed-pie syndrome.
People like when you turn away business for genuine reasons. I turned down over $100,000 of customers. I screamed at people who asked if they should join while they still had credit card debt, and told them to get their debt under control before going back. We refunded a $1,500 customer who treated iwillteach staff poorly and sent her packing. And we didn’t serve a $75,000+ segment on purpose (see below).
We were surprised: People LOVED this. It caused them to sign up more. Why? Because they knew the focal point wasn’t to gouge everyone and make as much money as possible. As I told them, “I don’t want everyone. I want the right people.” People respond when they know something is tailored for them, not everyone.
Measure your projections to see where you were wrong. At the beginning of each project, I create a simple table/spreadsheet of the results I project. The first 5 times you do this, you will be terrible. (Once, I did a projection and forgot to include one conversion #…which meant my results were 90% off…in the “bad” direction. Oops.) But each successive time, you’ll learn small ways to get better. In this case, we created 3 projections — Low, Middle, High — and then compared the projections to the “actual” results. We learned some fascinating things, including areas that we totally forgot to factor in. Next time, we’ll be better.
The $75,000 problem: As I said, we sold out of our top ($2,997) tier. Here’s an interesting thing: I could have sold at least double the number of seats over the remainder of the launch. But I intentionally turned down $75,000 in revenue. Can anybody guess why?
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