How we turned a failed product business into a $34,000/month service business
I remember our first attempt at monetization clearly.
It was May 2016, seven months after we had started our content marketing business Grow and Convert. I called my business partner Devesh because I was having a nervous breakdown.
I was having an episode of imposter syndrome and didn’t know if we were going to be able to pull off our first product launch. I voiced to Devesh:
“What if this doesn’t work?”
“What if no one wants our product?”
“What if it all fails?”
This first product, a phone course, was an attempt at validating something larger: our vision of building a high-end online content marketing course.
Why the focus on building an online course? We thought an online course would be the best way to fill this market gap, because we were convinced — at the time — that a service business would be too hard to execute and too time consuming, and a software business would take too long to reach meaningful revenues.
We saw others making six figures or more in a few launches with “online courses,” so we thought that could easily be us. But boy were we wrong. And we weren’t just wrong once. We failed building three different training products over our first year and a half in business.
Now, however, we book $34,000 a month in monthly recurring revenue with a service business. We don’t quite have the “easy” lifestyle business that the online course world often boasts: we have something better. A business and a product that actually solves a real problem.
But it only happened after we stopped building products that we thought the market wanted (like that phone course) and instead listened to what our audience was telling us — they wanted us to provide a service.
This is the story about how Devesh and I went from dreaming about a business, to actually having one.
The path to $34k/month
Four months before that call, I quit my full-time job as Director of Growth at a VC-backed startup in San Francisco and moved to Bali. At the time, my then side-project Grow and Convert was nothing more than a content marketing blog that had grown a mini-following thanks to the in-depth case studies we wrote on how we grew businesses with content marketing.
By “mini-following,” I mean our blog had only 4,300 unique monthly visitors when I decided to make the leap.
I started the blog with my partner Devesh Khanal in November 2015. Back then I was writing and promoting Grow and Convert blog posts on the nights and weekends when I wasn’t at my full-time job. Devesh was running a successful conversion rate optimization (CRO) agency called GrowthRock and somehow I convinced him to start a new business with me — even though we had only met once in person, and it was through an argument at a marketing dinner.
The argument? Whether content marketing could drive leads for his agency. He was writing content consistently but not getting any leads and he was convinced that he would never get in front of high-level executives and bring in those $3,000 – $7,000 monthly deals.
I remember telling him, “Content marketing definitely works to attract executives and bring in large deals. I know because I just left a company where I did just that.”
After trying to convince him, I told him that I was also thinking about quitting my job to travel, and that I wanted to write a book on content marketing. Or something. I was burned out, in a job that I hated, and was ready to head out on my own.
He responded, “If you can really grow traffic and generate leads for companies, why don’t you prove it by starting a blog and doing it for yourself.”
I countered. “That’s a great idea. Why don’t you do it with me?”
I pitched him, “We have opposite skill sets. You know how to convert site traffic to paying customers and measure ROI, and I know content strategy and how to grow traffic. Between the both of us, we could write how to solve the content marketing challenge for other businesses.”
It took a little convincing as he expressed concern that he already had another business, and this would take time away from it. But nonetheless, he relented a couple weeks later and we started our site, Grow and Convert.
We launched in November 2015 with a live challenge. We publicly set a goal to grow our site to 40,000 monthly unique visitors in six months. We wanted to prove that we knew what we were doing.
But after a couple of months working on this project on the side, it became clear that if we were going to hit our goal of 40,000 monthly visitors, I needed to go all-in. So I decided to quit my job and move to Bali with only $10,000 in savings, and about five months of runway, to take a crack at turning this audience-first business into a real one. Grow and Convert was my full-time job now.
Monetization attempt #1: The phone course
Back to the beginning of the story. May 2016 (seven months after we started and three months after going full time), I was slowly running out of money.
Meanwhile, Devesh was also growing frustrated with having worked on Grow and Convert for seven months, with no money to show for it. It was taking away from time he could have spent on his main agency.
It was time to start monetizing.
We decided to pivot away from our goal of going after 40,000 monthly unique visitors. The goal was more of an ego thing and we both felt like we were close enough to the goal to have proven that we knew what we were doing.
It was really tough to write the post that told our fans we were no longer going to hit the goal we set publicly, but we decided to do it anyways and launch our first attempt at monetization at the same time.
Our first try at monetization was a phone course that consisted of bi-weekly calls over an eight-week period where we taught our content marketing system. The long-term vision at this point was to build an online course. Why? Because we were trying to build a lifestyle business. The idea of a course that you make once and sell over and over again sounded nice.
Remember: I had just come from working 10-12–hour long stressful days at a startup in San Francisco. I was looking for the easiest way to make a lot of money doing what I loved.
Here was the page we launched with:
Our launch plan was a simple test-and-adjust system to “ensure” we didn’t fail.
First, we took the top 10% most engaged subscribers on our list and pitched them on the course at a price of $750.
The course contained four modules and pre-work that people had to complete. And after personally emailing our top 185 subscribers, we landed nine customers.
Woo hoo! Our first success: $6,750 in revenue.
Now that we validated we could make money with our site, we felt fairly confident that we had a business. Little did we know this confidence was a bit premature.
Over eight weeks, we worked with these companies to teach them our content marketing process. We enjoyed the experience, but slowly the “phone” in “phone course” began burning us out.
I was in Bali (GMT +8) and Devesh was in San Jose (GMT -8). But our customers were all over the world, so we coordinated phone calls across eight time zones. I was waking up at 2 a.m. and 3 a.m. in the morning to take calls, and we were exhausted.
But, the goal was never to scale this phone course. It was to get feedback.
So after the course was completed, we excitedly asked every customer what they thought.
Frustratingly, we had multiple customers tell us that they had just bought the course because they wanted to talk to us on the phone and $750 seemed like a great price for four phone calls. In other words, they felt the price “was a no-brainer.” Not because of the content of the course, but because of the custom advice we gave them on these private calls.
This was demoralizing. Obviously we couldn’t sell hundreds of these courses if they all involved four hour phone calls. We decided the validation of this course based on this initial phone course failed, and it was back to the drawing board.
Monetization attempt #2: The workshop
I returned to the U.S. in September 2016. We then embarked on our second monetization idea: a content marketing workshop.
The thinking behind it was: “Since people want our time, what better way to give it to them than at an in-person workshop?” We could spend a full day with them and teach them our content marketing process. They get even more time with us, which is what they seemed to want based on the feedback we got so far.
We were obviously going to charge more for the in-person workshop, so we enlisted the help of a design team in Croatia that I had worked with previously to design a professional landing page for it. Devesh and I wrote the copy for it (read it here if you’re curious) and made an announcement to our list.
We decided to launch the workshop in San Francisco because I had a lot of connections in the SF area and Devesh was living in San Jose.
We chose a date for the workshop, located an event space, and targeted 20 ticket sales for the workshop. The tickets were $1,500 a piece, and we projected $30,000 in revenue.
To launch it, we emailed our list about the workshop. I also used LinkedIn to find 100 content marketers in San Francisco and wrote cold emails to them. And we then tested Facebook ads targeted at content marketers and CMOs.
Three weeks before the workshop, we only had three signups. Again, we were disappointed. But instead of canceling, we decided that we would change the format and do 1-on-1 consultations with the companies that had signed up. We felt like the value was higher to switch the model and we reached out to the three companies that had signed up to ask them if they’d be okay with a switch in format. They said “yes.”
With our new format, we came into the customer’s office for a private workshops for a full day and work with their marketing team on auditing and rebuilding their content strategy. All three workshops went well, and we got great feedback.
But after going through it three times, we thought $1,500 was really low for an in-person workshop, so we figured there was room to charge a lot more. If we charged several thousand and did a few every month, we’d have a nice little business.
The challenge: How do we get more of them?
We continued doing cold outreach to companies in San Francisco and ended up landing two more in SF. While talking to someone on my email list, I also ended up closing a workshop in LA.
However, we were slowly noticing an issue… not a ton of people were biting on this format. We weren’t sure that there was enough demand.
The most we were able to charge for a workshop was $3,000, so to make this a viable business model, we needed to be doing three to four of these workshops each week, and at the time, we were doing between one and two each month.
Back to the drawing board.
Monetization attempt #3: The online course
- We tried the phone course and people gave us feedback that they signed up because they wanted personal time with us.
- We tried the workshop because people wanted our personal time, but there wasn’t enough demand and it didn’t scale well.
Our end goal was still to create an online course because it was scalable and we thought there was more demand for it, so we decided to just start building one.
We had validated our course material in two separate formats, and our customers were giving us nothing but positive feedback. We even had clients throwing around terms like “I’d give you an NPS score of 10/10.”
We were confident that we were onto something, but we just hadn’t found the right way to package our training into a product. This time, we didn’t need to validate our offering before launching, because we had already proven that we could sell training productized services to our list in the form of a phone course and a workshop.
The plan was to base our online course around our proven content marketing process and launch it to our list that was now 5,000 people.
By now, it was January 2017. I was splitting time between living with my mom in San Diego and Devesh’s house in Northern California while we worked on building the online course.
I remember it was towards the end of February and I was in Devesh’s office editing video when I just watched one of the videos and thought to myself, “This is horrible.” We kept rambling in the video and it just wasn’t good.
At this point we were on the last legs of finishing the course. We had already filmed five modules when we decided to scrap the whole thing and start over.
I called Devesh into the room to watch one of the videos and told him that there was no way we could put the course out in the current state. After watching it, he agreed… and nearly lost it.
After putting two months of work into something, we were both incredibly frustrated and about to give up on the whole idea. We decided, after much reflection, that the best way to move forward was to create slides of every module and refilm it. This way, the material would be more structured and easier to follow than our rambling videos.
We already had all of the material outlined at this point and it wasn’t that much more work to create slides of the material and refilm it. We also knew what we had gotten wrong the first time, and we estimated it would take about a month to complete.
When I wasn’t in San Jose working on the course, we were working on the launch materials for the course, the sales page, the emails, etc. We were talking to people like Bryan Harris and Brian Dean to get launch pointers.
After we completed the final round of filming and editing, we were super happy with the result. It felt like we had created the best content marketing course, by far, on the market, and it was going to be a huge success.
Our goal was pretty conservative: 40 sales. With our 5,000-person list, that was less than 1% conversion rate. I remember planning my next moves: moving out of my mom’s house, buying a car, and resettling back in San Diego — I thought this was going to be a home run.
On the Monday of launch week, I got the opportunity to do a fireside chat at Google teaching people how I had grown the ThinkApps blog to 35,000 unique monthly visitors in six months. At the end of the presentation, I pitched the course to my 150-person audience. The talk went great, I had tons of people come up to me and ask me questions, and saying they were interested in the product.
I remember going back to my friend’s house in San Francisco, logging onto the computer and thinking we’d have a ton of sales. But when I logged into the backend of the sales page … we only had one.
Devesh was stressing but I was still really confident in our course sales, as everyone we had talked to said a majority of sales came at the end of your launch week.
By Friday (the last day), we had booked only $9,000 in revenue. $31,000 short of our goal.
We were crushed.
We couldn’t figure out why it had failed so badly and both of us were about to throw in the towel.
It had been 16 months of working at making this a legitimate business and we were both running out of patience, and I was running out of cash.
I remember calling Devesh, and him saying that he couldn’t afford to work on this anymore. He was sacrificing revenue for his core business, he had already lost customers and he needed to fill the pipeline. He hadn’t been focusing on sales for the last six months because he was so focused on Grow and Convert.
He told me, “You can just buy me out for my stake in the company… I don’t think I can work on this anymore.” But I tried to convince him that we were still onto something. Even though I didn’t know what that was at the time.
In a year, we grew our site to 100,000 readers, we built an audience of 5,000 email subscribers, and we were featured in Entrepreneur, Problogger, and The Huffington Post. There was no way we could’ve accomplished that if people didn’t truly love what we had started.
I told Devesh not to give up yet, we would figure it out. I told him to take some time and not to worry about Grow and Convert. “Just focus on GrowthRock,” I said. “I’ll continue publishing and running the site.”
About a week later, Devesh called me. “Benji, I have kind of a crazy idea.”
Monetization attempt #4: The service business
“What if we offered a content marketing service?” he said.
“Are you crazy?” I responded. “You already have an agency that you’re stressed out about, you’re telling me you want to do another one?”
It was also antithetical to the very reason we started the business in the first place. We wanted that passive income. To make six figures on a launch.
When the course launch had failed, we tried to figure out what went wrong. We talked to customers who purchased the course, people who had clicked through to the sales page and didn’t purchase, and people who had taken our original phone course.
Everyone had a common sentiment: “Your sales page didn’t feel like it was for me.”
We couldn’t figure out what they had meant by that, but upon deeper conversations with a customer of ours, who had taken our phone course and seen our new sales page, he dissected exactly where we went wrong.
“Your sales page felt like it was for a business, not me,” the customer said.
He pointed out that the messaging spoke to the value a business would get from our course: “Get higher ROI from your content marketing” instead of the value a marketer would get from the course: “Become a top 1% content marketer.”
That’s when we had our big aha moment.
Remember when I said we didn’t do research because we “knew” our customers from our workshop and phone course?
The audience that wanted to purchase our course was freelancers, marketers inside of companies, and people that wanted to start their own site and build an audience for a side business, like we had.
The target market for the workshop, though, was CMOs and VPs of marketing at fast growth venture-backed startups who hired us to improve their bottom line when it came to their content marketing channel. Those were different audiences.
The individuals on our list wanted a course just like we had created — that’s what many of them told us in our follow up conversations, but we positioned the entire product as helping the company, not the individual. We made the classic mistake of building the right product and positioning it to the wrong audience.
After having that realization, I remembered responding to emails from launch week and handling our chat on our sales page, and noticing a trend in the questions I received from businesses.
“This course looks great, but do you have a service?” That was the common theme from the managers and founders inside businesses. Unlike individuals who were looking to buy a course to improve their skill set and career, the founders, startup CEOs, and manager-level folks just wanted to pay to have us solve this problem, they didn’t want courses or training.
It was right under our nose the entire time.
This was something that people had been asking for from the beginning of G&C. We just ignored it because both of us, from the beginning, were dead set on not starting another agency. We wanted to build a product company, not a service company.
But now having found this trend, Devesh came to me asking me if we should give one last shot at Grow and Convert with an agency.
“Hear me out,” he said. “What if we just create a simple landing page describing a content marketing service and see if people will buy it? The price would have to be high enough so that it would be worth it, but if people paid that, it would solve both of our problems. You would have income, and I could start focusing more time on Grow and Convert.”
So that’s what we did.
We created a simple landing page sharing the details of our new $6,000 service (now $7,000), and a month after our course launch, we launched the new service to our list. We wrote a post to accompany the announcement, sharing the details of our failed course launch and introducing our new service.
Within two weeks, we closed our first two clients and we now had a six-figure ($12K Monthly Recurring Revenue or “MRR”) service business — something that we had never intended at the beginning. In fact, we tried to actively avoid it. During the next month and a half, we managed to generate 29 leads for our service and ended up closing our first three clients.
This is what a product/market fit feels like.
Four months after launching our service, we now have a team of five writers, two account managers and $34,000 in monthly revenue. Our focus is now on continuing to scale this business.
The big lesson for us: we were trying to force a product on the market because we were selfish and we wanted to be a product company. The market kept telling us that it’s not what they wanted but we never listened.
People had been telling us that they had wanted us to offer services all along, but we never gave in until we almost lost the business. Had we only listened to what the market was telling us earlier, it wouldn’t have taken us 1.5 years total and four pivots to figure out how to turn our skills into a stable, profitable business.
Pivoting to a service business model was the best decision we ever made. Our reservations about a service business stemmed from us thinking it would be a ton of work, we’d be location dependent and that we’d never be able to remove ourselves from the day-to-day operations.
However, because we knew what we wanted from our business, we built our agency so that those reservations never became issue.
We started hiring employees in month one, so the business wasn’t reliant on us. We used our online course to help train our employees and now both of our account managers I’d argue are as good, if not better than Devesh and I, at content marketing.
We also decided that our agency would be fully remote. Many agency owners told us that it wouldn’t be possible, but Devesh and I run the business from different cities, and our employees are located across the U.S., and one is even living in Medellin, Colombia.
Now we have a lot of what we wanted from a product business, but in a service business model. We have a growing business, the lifestyle we wanted, and endless amounts of opportunity.
Better late than never.