There is a ton of information available about how different online creators have found their success. In his article The Billion Dollar Blog, Nathan Barry details the success stories of Mark Sisson, Emily Weiss, and many others who were able to build their billion dollar businesses from creating content online. Unicorns aside, bloggers like Sophia Lee share how to make over $9K in a month, showing how attainable success is.
These “How I Made It” articles are immensely valuable. However, the insights in them always seem obvious in retrospect. Most online creators are not at that point in their careers yet. They are still trying to figure out how to differentiate themselves online and financially sustain their venture.
There are not many articles about how people are thinking about monetizing their work before they’ve experienced some success. Knowing the approach successful creators had before making it not only gives color to what ideas worked, but also to what ideas didn’t.
This article is meant to give some insight into how I’m thinking about monetizing my work, before I’ve had any success in doing so.
Avoid Paywalling Content
This is one of the most popular ways to directly make money on the internet. Paywalled content includes paid newsletters, premium podcast episodes, books on Gumroad, etc.
There’s nothing wrong with selling content. The approach is very effective for various online creators, so much so that Jack Butcher has created an online course around the idea of divorcing your time from products. I just find that the approach doesn’t resonate well with me.
Once content is created, the marginal cost to reproduce it is near zero. The price you set on a piece of content has to compete with copy+paste. My goal is for my work to have an impact on as many people as possible. Putting a paywall on these pieces of content limits their potential. Societally speaking, it also adds more overall friction to a process that the internet is making frictionless.
The content I’m outputting right now primarily focuses on open source tools. Sharing the output with one additional person comes at no additional cost to me. Because of this, I want to shift incentives to rewarding the process of doing work instead of the output, an idea I’ve previously written about. For now this means leaving places for users of my content to sponsor my work if they feel they are getting value out of what I’m doing. Doing so gives me more runway to build revenue streams through service and time.
Chetan Puttagunta and Jeremiah Lowin were on a recent episode of Invest Like The Best called Open Source Crash Course. In it, they talked about the approach several open source companies took to generating revenue. One such example, MongoDB, sells services to their clients on top of their open source software. These services include customizing solutions to fit client needs and hosting client data.
These companies exemplify how I want to start monetizing my work. Unlike reproducing content, there is a cost incurred when you provide a service to someone else. Because of this, I find myself far more aligned with the approach of paywalling services instead of content.
Most services I anticipate in offering will involve cloud resources I manage. I am building the first few automations on roamjs.com that users will be able to sign up for a monthly subscription. The code that runs these automations will still be open source and I plan to also have directions for anyone who wants to run it on their own resources for free.
The first example from RoamJS will be a way to automatically template your daily note page every morning, which will require cloud resources I manage in order to work. I want to take this example and apply it more generally. Build tools that are open source to empower a community. Offer services on top of those tools that take people using these tools to the next level.
Paywalling services is a subcategory of the more general approach of paywalling time.
We live finite lives. So unlike reproducing content, there is an opportunity cost incurred any time we decide to work on something. If I’m spending time building one Roam extension, it means there’s another I can’t be working on.
Up until now, I have been relying on directly messaging users and Twitter polls to decide what to work on. These tools help give me a sense of what users value. But as my mentor Jonathan Hillis once told me, there’s no more definitive gesture that someone values what you’ve created than giving you money.
I plan to start building ways for users to directly sponsor projects from my backlog that they’d like to see come to life. Projects with the most funding will roughly map to the project ideas with the most potential value, so it will help prioritize what to work on.
I also see this as a way of entering a different type of job market. Instead of the traditional job market where companies bid for my time to fulfill a role, this is one where users bid for my time to fulfill a project. Where the former often suffers from ambiguity, the latter will have tangible results on whether users’ needs are answered.
This past October, I made $236.57. But the goal for 2020 was not to start making money yet. It was to start outputting as many tools as possible to and build a following. I’m starting to see some positive momentum along this vein, with my Twitter following doubling over the last month.
I will be focused on generating revenue throughout 2021. By the end of December 2021, I want to be earning $10K per month. This would be enough to start paying back my mentor exactly what he’s currently investing in me every month, as per our income share agreement ($1,667.67). It would also be enough to start paying myself a $3000 per month salary, while saving the rest for potential business expenses, taxes, and 401K.
I’d like to strive for an exponential growth curve. Using a simplified model of
y = b(a^x) model, we could say:
x = 0, y = 236.57, based on what I made in October
x = 14, y = 10,000, based on where I want to be by the end of December 2021
b = 236.57and
a = 1.3066
This means, I will be targeting a 30.66 percent growth month to month. This is how this maps out over the next 14 months:
As Shane Parrish said in a recent episode of the Knowledge Project, business plans are often useless but the process of making one is incredibly valuable. Going through this exercise has helped frame an ambitious revenue goal to be far more achievable. I don’t expect reality to match anywhere close to this projection. But with rough revenue targets month to month, I have a backdrop for which to guide daily decision making. The benchmarks are also useful for both myself and my mentor to hold me accountable.
I’m excited to see where I am a year from now, when I start writing my version of the “How I Made It” article 😉.