How Two Guys Generated $200K in Revenue in 18 Months
“Think hard about what you do. Look closely at everything you do. There are probably by-product opportunities everywhere.” -Jason Fried, 37 Signals
Hi, I’m Chris Salvato and this is the story of how my partner and I generated a significant sum of money from our side business, starting in 2011. This article is quite long (4000+ words), and filled with practical advice and our first hand experiences in the trenches. From these experiences, I created a simple formula that I am now reusing for my next product with confidence, and I want to share that process with you.
If you are entrepreneur looking to create a new product, then this article is for you, particularly if you are interested in creating info products. There are also some great practical tips if you are interested in starting a company, looking to generate your first evangelists in your market, and to be considered an expert in your field.
A lot of this writing comes from my frustration in reading about Customer Development and how to generate the initial sales of new products. Despite my experience selling non-existent and new products for the better half of a decade, the advice still wasn’t clicking. I felt like there was some code to unlock that I was missing. Everything I read felt nebulous and difficult to understand.
How do you know what products are worth selling, for example?
Even with years of sales experience, I felt like I had a huge checklist, with no strategies.
The funny thing is, I took a look back at the accomplishments of my small blog, Eat. Move. Improve., and realized I already had a very successful stint through the customer development cycle — without even trying.
If you are interested in how two guys and a $60/year hosting plan turned into $200K and want practical advice on reaching that point, then read on. I did my best to analyze our experiences and break it down our formula for success.
Our biggest accomplishment is Overcoming Gravity, a bodyweight fitness book published on Amazon’s self-publishing service, CreateSpace.
We started our website a few years back. Originally we planned to generate revenue through advertising. After several months, we saw that we were maxing out at $50/month of AdSense revenue – and the advertisements were embarrassing (“Lose 10 Pounds in 2 Days!”). We experimented using Amazon Affiliations, which were a bit better, but still only generated about $200/month. Taking home $100 (before taxes) was a nice side-income, but not really interesting.
Then we released a book, and revenues skyrocketed.
We never set out to release a book or any product at all. Over time, however, it become an almost obvious step to take.
We launched the book in November 2011, and have cultivated sales into thousands of units sold.
I examined what we did systematically, and was able to break it down into 4 key actions that enabled us to release a well respected book, with impressive revenue. Here is the formula that I derived from our experience.
- Answer Questions
- Identify a Profitable Topic
- Create a Top Notch Product
- Increase Profits
1. Answer Questions
“Either write something worth reading or do something worth writing.” - Benjamin Franklin
In 2009, my partner and I were posting on a lot of the same internet forums, which is how we met and forged a relationship. (Interestingly, to this date, our relationship is conducted almost entirely online. We only met in person twice.)
We were answering hard questions for people in fitness forums (our area of expertise). We helped them improve their health and wellness by hitting impressive fitness goals (like a one-armed chin-up, and their first 300-400+ lbs. squat).
We loved doing it – and still do. If you go this route, you should love the information you are providing, too.
Do you love providing advice that can be generalized to help many people?
We saw some inefficiency in answering the same questions all of the time. It didn’t take long for us to see patterns. Certain questions (“How do I start eating right?” and “How can I hit my first muscle up?”) cropped up all the time, and we made copy/paste answers for these posts.
We didn’t realize it, but we had an audience and we were getting deep into their heads.
We decided to streamline this advice-giving process a bit. Our plan wasn’t well defined, but it was just a side hobby, anyway.
This is where we created our blog, Eat. Move. Improve. We wrote articles that directly answered the questions we saw repeatedly on the forums.
Are you answering the same questions over and over again? Are you willing to turn these questions into a blog?
Sidenote: If you are trying to recreate our success, then you should also consider setting up an email newsletter when you set up your web site. It is incredibly effective at keeping people informed of new articles and product releases. We never did this, and I regret it.
2. Identify a Profitable Topic
“Creating demand is hard. Filling demand is easier. Don’t create a product, then seek someone to sell it to. Find a market – define your customers – then find or develop a product for them.” - Timothy Ferris, Author of The 4-Hour Workweek
Some articles were getting a disproportionate amount of traffic. No surprise here if you have read the 80/20 Principle by Robert Koch, but we realized this almost accidentally.
It turns out that most readers prefer longer and more detailed posts. This is corroborated by Neil Patel, who recently stated in a webcast that 2000+ words is the target length for a useful blog post.
If you don’t believe me (or Neil), Google any interesting topic and look at the top hit. Chances are, the first page is filled with 2000+ word articles. Look at the post you are reading right now. I am presuming you’re intrigued and engaged if you read this far through. This post is huge.
Are your blog posts long enough to be noteworthy?
We continued using our posts to answer questions on the forums where we had become so valuable. For example, a typical exchange may look something like this:
Q: “Can you critique my workout routine?”
A: “<provide critique> … but you may also want to read this article for more info <URL here>”
Our posts weren’t deleted or moderated because we were actually answering questions and providing value – not just spamming our latest articles.
Once we knew what people enjoyed, traffic had taken off in positive a feedback loop. We looked over the most popular posts on our site. One post in particular attracted nearly 80% of our readers and time-on-site: The Fundamentals of Bodyweight Strength Training.
Are you actively promoting your most popular material?
We continued launching other articles, but very few of them took off in the same way as The Fundamentals of Bodyweight Strength Training.
Sustained traffic is a serious indicator of an engaged and profitable audience. Another good indicator is getting to page 1 on Google for a generally vague term like, “Bodyweight Strength”, “1-Minute Handstand” or “Tendonitis”, (of which we are #1 for each without any attention to SEO).
We satisfied both of these criteria. Now we had a profitable topic.
But what about the competition? And why should people trust us, anyway?
To put it bluntly, the competition doesn’t matter.
We took into account that the other materials that were out there on the same topic were horribly made, but, again, it didn’t really matter. We had our own audience, who respect what we have to say. We were answering questions for years, so we already had their trust. People wanted to hear the opinions in our book. Chances are, they would be reading the competitions’ books, anyway.
In a nutshell, people liked what they were reading and wanted more information…from us.
This is the same strategy applied by Alan Weiss, the Million Dollar Consultant, and how he turns general advice into high priced courses and info products. Alan charges $495 just to join his forum! People will pay once you have their respect – and usually pay a premium.
Is there any information that you are giving away for free that can be turned into a book? Do your readers love and trust you? If not, answer their questions better. Get them results.
3. Create a Top Notch Product
“Don’t worry about being a star, worry about doing good work, and all that will come to you. ” – Ice Cube
The Fundamentals of Bodyweight Strength Training article was originally launched in March 2010, and the book, Overcoming Gravity, took 18+ months to create. Looking back, 18+ months was probably too long, but it shipped. And shipping is always better than not shipping.
The Two Parts of Making a Top Notch Product
From this experience, and a metric ton of reading material, I postulate that there are only two main components of creating a Top Notch product:
- Solve a problem
- Validate that people will pay for your solution
A. Solve a problem
This is what some people call the value proposition. My partner was always incredibly passionate about releasing the book with as high of a quality as possible.
This is the only part that truly matters.
I would say that the book was done at about the 6 month mark, though we waited a total of 18 months before the product was released. There was a lot of “clean up” that wound up not being worth the time invested. After the “clean up” period (where friends read through the book for editing mistakes), we still had a pretty badly edited book – and it was a success anyway.
So, how could we have been just as successful releasing a book riddled with errors and editing mistakes that is still considered a Top Notch product?
That’s because, generally speaking, your customers won’t give a crap about editing mistakes.
Let me repeat that: Your customers won’t give a crap about mistakes.
This is the same if you are releasing a software product. If there are bugs or bad design, people just don’t care so long as you solve their problem.
Some people will complain, but people are more concerned that you are solving their problem, and answering their questions. Customers are extremely tolerant of bad spelling and grammar because you are actively solving their problem. (I suppose you are tolerating my bad spelling and grammar, as well?)
If you sell software, you have probably been shocked at the amount of bugs a user will tolerate so long as it is solving their problem.
Are you focusing too much on the details? Or are you simply solving their problem?
Top Notch doesn’t mean well designed, well edited or pretty. It means that you solve their problem when no-one else could, you get them on the right track, they love you for helping them and they respect you.
Your value proposition is hard for them to ignore. In our case, the value proposition is that we will make you an expert on training bodyweight strength skills. If people didn’t like this value prop, they wouldn’t have purchased at all to see all of the editing mistakes.
B. Validate that people will pay for your solution
The simplest way to validate your product is to release it, and see if people buy it. Asking people if they will buy something is generally pretty useless, so to put this to the test. Release, announce and check for a sale.
In retrospect, we should have set a clear goal for initial sales. I think we thought it would fail, so we didn’t plan too far ahead. But, it was hard to ignore hundreds of sales within the first 6 weeks. In the future, on new products, we will always have a goal.
For what it’s worth, it was only recently that I read an article about book sales, where it was stated that 7500 to 8500 units sold was considered a successful niche book. If an info product is your goal, I would suggest a sales target of 50-500 sales within the first six weeks, depending on the unit price.
If you hit on the right topic, pain point and quality level, you will see at least some sales within the first 6 weeks. If not, you’re doing something wrong.
As a small side note, if you don’t have the drive to figure out what you have done wrong, then that product is not for you or your company. I know, that sounds obvious, but if you or your salespeople don’t have the passion to fix the problem with poor sales, then just forget the product all together.
I have worked for a few companies as a salesperson and helped dozens of others and that is the first sign that a product is not a good fit for you – when you just have no desire to sell it.
Are you passionate enough about the product you are creating to figure out why sales are abysmal if things don’t go according to plan?
4. Increase Profits
“What matters is having forward momentum and a tight fact-based data/metrics feedback loop …” - Steve Blank, Author of 4 Steps to the Epiphany
After the product starts bringing in some cash its gets a lot more fun for business-minded people like me. If you’re the kind of person who just likes to solve the problem, and not care about sales, this can turn into a major roadblock/headache.
The headache is caused because the focus shifts to sales, not solving the original problems you love. This can make identifying the next steps difficult, and sales may stagnate.
But, there are really only two ways you can go from here: (1) increase sales and (2) decrease cost per sale.
You shouldn’t even think about increasing sales until you are generating sales. Your value proposition – the problem you are solving – should speak for itself and generating respectable revenues on its own.
Once you are generating sales, though, you can aggressively tackle optimizing your sales process.
Make Sure You’re Ready for Sales Optimization (aka A/B Testing isn’t for everybody)
For small companies, sales optimization may not even be necessary. In our case, we haven’t yet optimized our sales, though I have prepared myself for this undertaking once we are ready to take on the challenge.
To reiterate, you shouldn’t even think about optimizing your sales until your product is already valuable and interesting. Some misguided souls jump right into optimizing sales head first. Contrary to popular opinion, where everyone seems gaga for metrics funnels and A/B testing, optimizing sales is NOT the biggest priority until you are already generating sales.
If you A/B test too soon because you read that A/B tests can increase conversions by 5%, then you will be working to increase a small number by 5%, which is just another small number. You will likely be spending more on your analytics tools than you are generating in sales.
Instead, focus on getting your first ten 5-star reviews/testimonials; reviews and testimonials are great indicator that people find your work valuable. You should only look to increase significant sales numbers, generated by an awesome value proposition.
Be honest, have you recently thought about A/B testing something before you even know what you were selling?
I know this sounds self-evident, but I fell into this trap myself.
I recently released a product called Search Word Creator, when I fell into the A/B Testing and metrics analysis hype. It’s remarkably similar to another successful product, Bingo Card Creator, where I originally got the idea.
Even with 160K+ Google searches for “Search Word Creator”, and an awesome funnel tracking setup, I was already thinking about my tenth A/B test. Then I realized, even when I was buying my traffic, I was only getting about 70 hits a day, and my users weren’t coming back.
My value proposition wasn’t very good, and I was still wasting a ton of time thinking about the best way to implement A/B tests.
Advanced metrics, funnels, A/B tests and SEO are just not necessary for new products. Get interest and sales first, then worry about your A/B testing and metrics analysis.
Are you still wasting your time thinking about how to A/B test a product that people don’t even care about?
Setting up your first sales process
Since I have done this a few times now, I could write a whole volume on setting up an initial sales process, but I won’t delve into that here. At this stage, its not really relevant, since you likely still need to find the product that is validated.
Simply put, you cannot formally focus on increasing sales without having a well defined sales process. You can perform sales-related tasks like social media marketing, material promotion and even call people directly. Sure, these activities may increase sales…but they may not. To get a big win, you need to set goals and take measurements – you need a process.
Low Touch Sales Process
For most info-products that are under $1000 (or $1000/year), you can focus entirely on what’s called a low-touch sales process. This means that you don’t interact with the customer very heavily. Rather, you passively analyze how they are interacting with your site/promotional material, and make sure that you are properly setting the stage for them to give you their money with very little interaction.
To keep it short and sweet (the juicy details are outside of the scope of this article), a low-touch sales process involves identifying a consumer’s current state of mind and catering to that state of mind with the right information and calls to action. You want to set up a series of small “yesses”, “sounds goods” and “that’s interestings”. You do that by setting goals and systematically achieving them one by one.
For example, if you want more new eyes on the product, you can first set up what is called an Acquisition Funnel, where you look at all new/unique visitors and see how your landing pages and websites ultimately result in more reading and repeat visits. You may set a goal to increase unique visitors by 10% when compared to the baseline through increased SEO efforts, social media and advertising campaigns.
To track and optimize these funnels with minimal effort and maximal results, you will need to invest in some tools. If you are already generating sales, these services will easily pay for themselves as they drive up the total number of units sold. They include:
- Metrics/Funnel Tracking - use KISSMetrics or Mixpanel
- A/B Testing - Visual Website Optimizer or Optimizely
- Content Consumption Heat Maps - CrazyEgg
Are you considering A/B testing, advertising, metrics analysis and SEO at this stage, just in time, and not too early?
Remember, the whole point of using these tools and creating these processes is so that you can optimally turn interest into sales. Interest should already be generated and validated (i.e. generating significant sales) before you even start thinking about sales optimization strategies.
High Touch Sales Process
If your product costs over $1000 (or $1000/year), you may need to consider a high-touch sales approach. High-touch is also sometimes called “Direct Sales” where you interact regularly with the customer (and potential leads). This normally entails generating a relationship, phone contacts, and answering unique questions.
Most info-products don’t fall into this sort of sales process, so the details here fall slightly outside of the scope of this article.
Decrease Cost Per Sale
To decrease the cost per sale, you must reduce the amount of money you lose from every sale. For example, we used Amazon exclusively for the first 18 months of sales. Because of the nature of Amazon and CreateSpace, we took home only a fraction of gross revenue for each sale.
As such, launching on Amazon, as opposed to launching a PDF meant that we had a very high cost per sale. Despite these costs, using Amazon is a great way to validate your first info product. You can always maximize profits later, once you know that the product is a hit, and that your value proposition is valid and worthwhile.
To be more specific, Amazon presents some distinct advantages…
Easy to Create Print-Only Books
Launching a print-only book on Amazon makes it unavailable to any sort of digital format. In our case, Overcoming Gravity is over 500 pages long did not lend itself to piracy. We enjoyed a pirate-free launch for well over a year before a master copy of the files were somehow illegally obtained from CreateSpace.
Piracy is inevitable in a wildly successful info product. Be warned. To avoid piracy, you need to either plan to stay very small or take strong pro-active steps to avoid it, like flooding torrent sites and FilesTube with fake uploads to deter users, but that is a topic for a different post all together.
Is your product at risk for fast piracy?
Amazon gives you instant credibility, which may or may not apply to your market. For a fitness product, credibility is crucial.
For many people, when they see you on Amazon, they just get the feeling that this is a real product that was made by a team of professionals, even though many products on Amazon are far from it.
Because of our self-promotion, we were able to stay at the top of the list for best-selling Gymnastics books on Amazon, which means that we potentially increased sales organically by being exposed to consumers interested in gymnastics books.
My partner personally advised several of our customers after their purchases, which helped to seed the pot with dozens of 5-star reviews, bolstering our credibility. People really trust Amazon reviews – much more than testimonials you plaster all over your own self-serving sales pages.
Does your audience love and trust you unconditionally?
Amazon takes care of a lot of the distribution for you. You just sit back and let sales roll in, and not worry about setting up shipping/fulfillment systems or processing orders yourself.
Don’t underestimate how awesome it is not to worry about distribution at all for a product that is undergoing validation. You don’t want to be thinking about distribution, order processing, optimizing sales pages, fulfillment and shipping (if applicable), when you are just getting the feelers out on if a product is even viable.
Do you have the patience/time to figure out how to set up distribution and fulfillment of print or digital books?
Fourthly, there was literally no risk. You write the book and upload it to Amazon. If it sells one copy, you are immediately profitable, even if your margin is sub-optimal.
If the book doesn’t sell, you aren’t in debt since you didn’t invest any money into an online store. Don’t forget, an online store can cost hundreds to thousands depending on your initial conditions and expectations. Working with Amazon eliminates the pressure of feeling like you need a sale just to keep afloat.
If you enjoy many sales over time, you can always sell the book outside of Amazon later, or remove it totally. The low risk makes it ideal for product and market validation.
Are you on a real shoestring budget? Are you willing to risk cash if your product idea is a complete flop?
Moving Away from Amazon
Once the product is validated, its a perfectly viable option to move away from Amazon if you want to increase margins. After nearly 1.5 years selling exclusively through Amazon, we recently decided to experiment with decreasing the cost per sale by selling a digital copy of the book through our Shopify store, which doubled our margins overnight for all sales made through our online store.
Selling outside of Amazon also opens up the option for metrics tracking, and A/B testing, which is just not possible when you use Amazon’s store.
Are you able to decrease cost per sale by making one small change, like opening an online store or removing failing ads?
All we did was sell something we enjoyed doing every day, regardless of whether or not we were paid to do it.
If this inspires you, then take action on my choice of the best product development platform - reddit. Find a subreddit that has a growing community. There is one for every crazy thing you can imagine. I have had the best luck with subreddits where the community has 0-250K subscribers. There is /r/fitness, /r/travel, /r/selfhelp, /r/personalfinance, /r/pens and thousands more.
Find one relates to your area of expertise and start answering questions. Turn the questions into a blog, the blog into products, and the products into freedom.
If this analysis of the success of Overcoming Gravity has helped or will help you in launching your first/next info product, reach out to me. I would love to hear your story.
I sure wish I had been able to read something like this in 2009.
Byline: Hi, I’m Chris Salvato. I wrote this article based on my experiences at Eat. Move. Improve. selling bodyweight fitness products, and helping people online. I also apply this knowledge for savvy clients who need consulting on their sales process. If you want to talk more about selling products, send me an email.