The real guide to being a successful online entrepreneur
I see you clicked. You’re probably looking for an overnight, travel-the-world, rags-to-riches story.
This is not that.
Sorry. I don’t own a Ferrari, I work way more than 40 hours a week, and I’ve actually gained weight since going out on my own.
Before I was an online entrepreneur, I looked up to people who owned their own businesses and I thought they had it made. Whenever I heard of someone who sold their business and was retired at 30 years old, I always got a bit jealous. I always knew that old-school entrepreneurs (doctors, veterinarians, and the like) worked really hard, but something about the new class of founders and online entrepreneurs made it seem faster.
But the internet tries to write you checks that it can’t cash.
The more I dug, the more I realized that people on the internet are telling you lies all the time about what being an online entrepreneur really means.
This is a lie:
The entrepreneurship world sells you on “the laptop lifestyle.” That you can start a business easily: “Make $1,000 online! Anyone can do it! Just buy my $299 course!”
If someone tells you that you can build a “six-figure business” with minimal investment, they are lying to you. (Bubble burster: After taxes and expenses and reinvesting some into growth, you’ll make about $40,000 a year from a six-figure business revenue.) Building a business that successful IS possible. I’ve done it.
But what actually happens is a bit more complicated.
Here’s more of a reality (all of these have happened to me):
- You land the day before Thanksgiving fresh off a cross-country flight and have a cease-and-desist letter from a lawyer in your email inbox telling you that you violated their client’s trademark, and they’re right. You spend a lot of Thanksgiving figuring things out and rebrand two months later.
- You ship a huge bug in your system and lose 15% of your customers in 10 days. You rebuild it.
- You get severely depressed and end up seeing a therapist every week for about 10 months. You end up feeling better than you ever have.
Today I run a company called Credo that helps businesses find and hire the right digital marketing/SEO consultant for them. We do around $300k a year in revenue after 18 months in business.
Despite the topline revenue, I don’t feel like I’ve “made it” or that I’m “done” or that my life “is a bunch of beaches,” though I have worked from the beach multiple times. The entrepreneurship route is hard and lonely, and no amount of motivational posts or Instagrams of Porsches makes up for that. But what CAN help is having realistic expectations of what building a business means, which includes both the hard AND the fun parts.
So if all the six-figure online entrepreneurs aren’t all on the beach with a laptop in some secret club, what IS it like? Like anything worth doing, the answer is: incredibly difficult, but incredibly rewarding.
The “4-Hour Workweek” Myth
Let me get this out of the way from the beginning:
You can’t start a business on four hours a week.
The 4-Hour Workweek by Tim Ferriss is the online entrepreneur’s Bible. That book has had a bigger effect on my life and career, and that of many other entrepreneurs I know, than pretty much any other business book. It inspired me to leave my job in 2009 and move to Europe for a while. I also re-read it right before I hit some career turbulence in September 2015 and decided to work for myself.
The book is not about building a business with four hours a week. That incorrect interpretation has given an entire generation of ambitious people a deceiving target to aim for.
When you step back from the “four hour workweek dream” and look at what Tim actually did, the narrative reads differently:
- Tim was working 80-hour weeks and incredibly stressed out.
- By working a ton of hours and keeping with the business through sheer grit, he built a very successful lean business.
- He eventually decided that this wasn’t the life he wanted to live so he…
- Figured out how to outsource a lot of the work (aka, he learned to delegate), which freed him up to do other things.
I would argue that this is what every *real* online entrepreneur should strive for. But as I have learned, you necessarily have to complete steps one through three before you can get to step number four. Remember: This is all incredibly difficult, but extremely rewarding.
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The real truth about online entrepreneurship
If you work for yourself online, you’ll (yes) be able to more easily travel to amazing locations whenever you want. But you won’t be sitting on a beach. You’ll often be in your condo or at a coffee shop working on your laptop. Working online doesn’t LESSEN the work. It just gives you a bit more say over when and where it happens. You’ll have more control, but it doesn’t get easier. In fact, it’s usually the opposite.
I’ve been self-employed since September 2015. During that time, I’ve traveled to and worked from Mexico (multiple times), Canada, Prague, Vienna, Budapest, and Japan. I’ve worked from California, Oregon, Washington State, New York City, Virginia, Colorado, and Austin, Texas.
Just because you are somewhere awesome doesn’t mean every minute is spent in vacation mode. In all those places, I’ve had to block off hours to get work done while:
- My friends went to the beach and swam in the ocean.
- My wife toured amazing museums and castles.
- My wife went hiking/trail running with our dog.
- Friends went out for drinks in New York City.
- My mother-in-law wanted to chat.
- And many more.
Sick and working in Vienna last November while my wife went to museums and drank mulled wine at Christmas markets
Truth is, while I’ve gotten better about spending time with others as I’ve settled into the solo entrepreneur lifestyle and workload, my business also needs time dedicated to it in order for it to operate well and grow.
By setting up the right type of business for the lifestyle I want, I’ve been able to have a better work-life balance that DOES let me have more free time and go do the things my friends are doing that I also want to do.
But it’s not just the traveling life that can be deceiving. It’s the general perception of the effort required. And that requires resetting YOUR expectations and the expectations of your friends.
Prepare yourself for the following exchanges:
Friend: That’s awesome, that means you get to set your own hours!
You: Well, kind of. I can work whatever 60-80 hours I want in a week.
Friend: It must be so freeing, working for yourself instead of someone else.
You: Well, yes and no. I have no upper limit on how well my company can do but I also have a ton more stress.
Friend: Your company makes how much per month? Why are you still working/why aren’t you driving a Porsche/can you pay for dinner?
You: That’s revenue, not profit. And sure, I’m happy to pay for dinner sometimes.
Friend: Six figures in seven months? You’re some kind of genius!
You: Well no. I’ve been blogging about and working in this space for seven years.
You have to remind people that you’re putting in the work, and a lot of it. You’re paid on results, not efforts.
Some more “normal” examples
One of my biggest fears about building my company one painstaking mistake at a time is that I’m not public enough with the hard parts and the mistakes, and that others will think it’s easy to build a business that supports your lifestyle.
And even if you do build a business that does well, you can’t just leave it and forget it and work four hours a week. Every business takes time and effort from someone, even if it’s not you. So if it’s not all beaches and laptops, what is it like?
There are stories of people who had “six-figure product” businesses who let it go in order to start something else. This is Nathan Barry of ConvertKit’s story. He had a lucrative info product business, but decided to focus hard on ConvertKit, an email marketing tool — moving from info product to complicated software business is usually the opposite of what most people aspire to. So why did he do it? In his own words:
I know […] that some people reading this […] are either thinking:
“But you’re leaving so much money on the table!??!”
“Let me help you out. I’ll run everything for you for a percentage of sales and then we’ll both make plenty of money.”
But here’s why I say no every time: not every dollar is equal.
If I make $50,000 with book sales that’s good, but the next month I have to start over. But making even $2,500 with ConvertKit that money will come in the next month, and the month after, etc.
I can build a massive business off of the recurring revenue. It’s predictable. And more importantly if we ever were to decide to sell, we can. There’s no easy way to sell a training business tied to a personal brand.
But not only would ConvertKit be easy to sell (settle down, we’re not selling), but the valuations on software companies are at least 5x higher on the same amount of revenue.
Taking all that into account I’d take $1 in ConvertKit revenue over $20 in one-time book/course revenue any day.
Nathan let one thing go to focus on another. You can tell yourself that you’d do it differently and find someone to run the other business for you, but let’s be honest. You probably would make the same choice that Nathan did.
And then you get people like Pieter Levels of NomadList.com and RemoteOK.io, who has built a profitable product business around the digital nomad lifestyle. Himself a nomad (a Dutchman living in Asia) and a software developer, Pieter has built his business while traveling the world. He doesn’t teach others how to be a nomad, but rather builds tools for people who are or who are starting.
He posts photos from Taipei, but I see him online all the time. His business does very well, but he works a ton.
That’s normal online entrepreneur life, not what you see on Instagram.
Before you quit your job…
More than anything, I want new entrepreneurs or those of you thinking about leaving your job to pursue the “laptop lifestyle” to have a clear and honest view of what you’re getting yourself into. This is the only way to make sure you happily last a long time as an entrepreneur and build a profitable business that allows you the freedom you want.
Before you head out on your own, let me give you some practical advice, advice I recently told to someone who is about to make “the leap” to working for themselves.
Have a stream of income and customers paying you. Regardless of whether you want to build a product or be a consultant, having paying customers makes it infinitely easier to quit the cubicle and go work for yourself. Do this first.
Prioritize getting paid. I learned this years ago from Dan Martell who told me “Before anything, get paid.” If it’s customers for a product, get them to commit and maybe even offer some “consulting” while their subscription funds your software development. Getting paid ahead of time and consistently will ensure that you feel fewer cash crunches and then the temptation to get another fulltime job.
Be prepared to use your network. I’ve been fortunate that I started blogging seven years ago and get a lot of my consulting clients that way. Most of my consultant friends get their best clients through referrals, so work on growing your network now. Which also means, if you’ve been head down at work or are just getting out of school, you may need to do some legwork first.
Be prepared for looks and words of envy from your friends while you know that you are more stressed out than you have ever been before. You’ll feel like a fraud. You aren’t.
Have a core support group around you that can help you through the hard times. The hard times will come, and you will appreciate having a friend or two who you can call up at any time who can pick you up, dust you off, and get you going again.
And who knows? They might become your travel buddies since you have that freedom now! Just make sure you tell them to meet you in the coffee shop.