When Ethan and I started recording our podcast, we did an episode about the newsletter industry.
In the episode, Ethan showed me the step by step framework that almost every newsletter brand uses to grow profits and scale.
When he taught me the model, it completely changed the way I am growing my personal brand business. Suddenly, all the answers became so clear.
It was one of the most enlightening moments I’ve had as an entrepreneur. My entire path was laid out in front of me, and it’s been the catalyst of much success.
In this week’s issue, I want to pass on to you what Ethan passed on to me.
This is the million dollar model. I hope you learn it, embrace it, and apply it to your own business.
What’s the Model?
I don’t want to spend too much time explaining the model to you, because Ethan has done all the research and done all the work in documenting this process.
So let’s make sure Ethan gets the credit.
The Twitter thread below breaks down the entire framework. You should read it and study it at length.
For the sake of this article, I will break down the basic concepts
First, you start with a free newsletter. Your free newsletter monetizes through ads and it also creates distribution for you to sell your “front end product to.
Your front end product usually comes in the form of a digital product. It’s an affordable product that generates revenue and profits with volume. This could be a membership site, courses, eBooks, or even access to reports and valuable insights. The front end product qualifies people who will then be sent an offer for your back end product.
Lastly, your back end product is expensive and exclusive. It will generate much of your net profits because the high price point creates scale.
Now lets get into the details. This is how I am creating my own million dollar brand.
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Step 1 – Create an Ad Supported Newsletter
I started working on my newsletter 4 years ago.
In that time, I’ve built a list of 8200 people.
Out of those subscribers, I’d say 7000 of them have all signed up in the last two years.
That’s how it works. Your growth will be very slow and then it will happen all at once.
How I Get My Subscribers
All of the content I create is made with the intention of driving people to my newsletter.
Twitter has been the most effective social media tool for me, but that’s also because I have been working on my Twitter the longest. Out of all the social platforms, it’s definitely the one I enjoy using the most, so that helps.
LinkedIn has also been effective.
I’ve only started taking LinkedIn seriously this year. In the past, I have always thought of LinkedIn as annoying and cringy, but since giving it an honest effort, I can say that the community on LinkedIn is great.
One of my biggest regrets in this process is that I didn’t start LinkedIn sooner.
I am also working every day to create content on Instagram, YouTube, and even TikTok. However, the most valuable platforms have been Twitter and LinkedIn.
Monetizing my Newsletters
I started selling ads on my newsletter in August and I’m thrilled that I’ve sold ads for the last 6 weeks in a row.
I admit, I had a bit of a mental block when it came to selling ads.
What if no one wants to buy them?
What if my ads don’t perform?
All my negative thoughts disappeared once I committed to the process and committed to focusing on a structure that provided maximum value for my advertisers.
I sell my ads for $250. For $250, my advertisers get two placements on the newsletter.
One slot goes on the top of the newsletter…
and a second slot fills up section 4 of the newsletter, since my newsletter is always 10 sections.
In addition, I offer a Tuesday promotion where I’ll send a promotional email directly to my email list. I sell that for $250 as well.
So far, I’ve made $1750.
For now, I’m not making much money, but it’s enough money to know that I am creating something of value and my newsletter is growing so fast that I know I will only keep charging more and more for my ads.
These numbers get much different once I have 50,000 subscribers.
Once I have 50,000 subscribers, I’ll be making an additional $12,000 a month without doing any more work than I am already doing.
Factoring in expenses, let’s call that $120,000 a year in gross profit.
Step 2 – Create a “Front End” Product
In reality, the newsletter serves two functions.
It’s a self sustaining revenue generator within itself, but it’s also a distribution channel. Now, I am building an audience to whom I can also sell products to.
This is where the front end product comes into play.
Introducing The Bootstrapper
What was my product going to be?
I thought about it for weeks and I kept asking myself the same question.
“What is it that I have to offer?”
Eventually, I realized that the answers were in front of me all along.
What sets me apart from other business brands is that I have worked from the beginning to build a portfolio of assets that make money for me. This has all come from the philosophy of Rich Dad, Poor Dad, which is a book that introduced me to these concepts.
I want to help people create multiple streams of income!
The Bootstrapper is an extension of my existing brand.
What I decided to do is create an education platform that takes it one level up, and teaches people exactly HOW to build multiple income streams.
We do this through examples, documentation, and workshops.
My newsletter teaches the “WHAT”, and The Bootstrapper teaches the “HOW.”
How much am I selling it for?
As I said, I want membership for The Bootstrapper to be very affordable. I am still in the beginning stages and will increase the price drastically once I finish creating and publishing other features and benefits.
The Bootstrapper sells for $99 for a year.
Members get a weekly lesson emailed to them each Monday. In addition, they get access to a community forum, access to the entire archive, and get to participate in a monthly mastermind call.
It’s a fair price.
Total sales and projections
I sell about two memberships a day.
The automation that sells The Bootstrapper goes out to people who sign up for the free newsletter, so the product essentially sells itself.
Right now, we have 189 members.
Within the last 5 months, I’ve added an addition $1800 a month of revenue and that number is increasing every month.
Again, these numbers are small, but that’s because I am keeping the price low.
My goal is to get to a point where I am charging $449 for the entire year. In addition, I want to have at least 1000 members.
That will back out to around $400,000 a year in gross profit, considering transaction fees and other expenses.
I’m really happy with it so far. I feel like I am building a true premier front end product.
Step 3 – Create a “Back End” Product
I think by now you see the progression.
Social media generates free email signups. ➡️➡️ Free email signups generate ad revenue and create a distribution channel to the front end product. ➡️➡️ The front end product creates subscription based revenue. ➡️➡️ These sales create a funnel for an upsell opportunity to the back end product.
My backend product is expensive and exclusive. It’s not meant for everyone and that’s the point.
Your back end product should be a commitment. It should be for people who have the means and the commitment to go all in.
What are some examples of a backend product?
I’ve always thought Chris Ducker does an excellent job.
His front end product is called YouPreneur academy, which is a membership site designed to help entrepreneurs build their personal brands.
But once a quarter, he opens up his “incubator program” which is much more exclusive and expensive. I don’t even know how much it costs because you have to apply to get into the program, but my guess is that it costs around $3000.
What is my back end product?
I don’t have a true backend product yet. However, that doesn’t mean I haven’t created an upsell.
I’m taking on a bit of a different approach in this regard.
Ideally, I would love to have a scalable product one day. However, my company infrastructure is already designed for service work. I have the perfect production line method already in place, this allows me to easily take on new clients.
So instead of selling a high end product on the back end, I decided to sell high end services.
Over the last 4 months, I’ve created a new department of my company which offers consulting services to entrepreneurs who want to build a business, or who want to take their current business and scale with digital services.
I took on my first client in April. Since then, I have sold about $37,000 a month in revenue.
Accounting for expenses, that’s about $14,000 a month in net profits. That money goes right into my pocket.
Here’s a screen shot from my personal QuickBooks account.
How do I get the leads?
The leads come from three places.
First, every article I write has a call to action on the top of the post. This call to action leads to my consulting page which sends the leads to my inbox. After I get the lead, I call them and see if it’s a good fit and potentially close the deal.
You’ve already seen this call to action at the top of this article, but here’s a screenshot to remind you.
I’ve closed 1 deal from this method so far.
Second, my email automation also generates people to this page. However, the emails come very few and far between. I don’t want the emails that promote my consulting firm to get in the way of the emails that promote The Bootstrapper.
If someone signs up for my email list, they will automatically receive a promotional email for my consulting services about a month after they have first signed up.
I’ve gotten a few leads from this method and it’s probably been the highest converting lead gen method I’ve created.
Lastly, I generate business through referrals. One of the reasons I love service businesses is because of the referrals.
The trick is to be really fucking good at what you do. If you’re really good at what you do, then your clients will refer their friends. The conversion rate on a referral phone call is almost 100%.
I’ve yet to find another business model that self generates revenue quite in the same way that service businesses do.
I don’t yet have a back end product built, and I may never build one.
For now, my back end product is my consulting business. The consulting business is generating the vast majority of my revenues and profits. It probably always will.
The Million Dollar Model, Really?
My goal with my content is two fold. I want to give actionable examples to show you how to increase your income, and I want to give you a behind the scenes look at my own projects to show you what I am doing.
It’s not uncommon for me to get people replying to my tweets who are trying to call bullshit.
Here’s a great example of me roasting a hater.
Before Ethan showed me this model, I had absolutely no idea how companies like Motley Fool, and The Hustle monetized their subscribers so well. I couldn’t figure it out.
Now that I have seen the light, I am never going back.
As of October 7, 2022, I am now generating an additional $40,000 a month in revenue. I only started this process in February of this year. It was during my terrible ear infection in Miami that I made the choice to truly start investing in my personal brand.
My entire journey is well documented. You can follow along.
Simple, but not easy.
It’s not easy. I’m not trying to make it seem like this is a walk in the park. But the process is simple.
What you lack is execution. What makes me different than you is that I ruthlessly execute.
For example, I had someone ask me how I find the time to send out my weekly blog and my newsletter every Friday, on top of all the other work I do.
The answer is that I set my alarm for 4:10 every Friday morning and I sit here in the dark and write.
Currently, it’s 5:54 am. I’m tired, but my dreams require me to execute. So that’s what I’m doing.
You can do it too, simply follow these steps.
- Start a newsletter. Work on it for 4 years. Don’t skip an issue and eventually start selling ads.
- Create a front end product that sells itself through an automation. Partner with someone if you need to.
- Create a back end product and sell it to high end buyers who can afford the exclusivity.
Everything is laid out in front of you. The differentiating factor that will determine your success or failure will be your ability and willingness to execute across time while working through delayed gratification.
Read that last sentence again.
If you can execute, you will succeed.
Like I said, it’s simple, but not easy.