Bonus Episode with Nicolas Cole

0:01One of the mistakes that people make is thinking, well, I'm going to put together a text and video course, but it's always one or the other. It's either I don't think I can charge more. So they're like afraid to even price it at$50. It's a self-belief issue. Or they think if I price it less, I'm going to, quote unquote, undercut the competition and then more people will buy it. And the reality is neither one of those is true.

0:32I am so excited to have this conversation because you just announced your landmark$10 million. In lifetime sales, yep. That's incredible. And what I loved about what you wrote is that you had the seven principles, which I'm hoping you'll take us through. And they are really provocative. Some, I think, are completely consistent with the things that I've seen and what we've seen in the data at Mighty. And there's one area that I think will be super fun to tackle together because I think you have a very valid point of view specifically around memberships. And we're seeing some other things that I'm really curious, you know, like how you react to them.

1:21So maybe with that, you can like take us from the top, how you guys like how you put together these seven principles and what they are. So, all right, let's start at the beginning. So first of all, I actually wrote out 10, only seven, only seven fit on Twitter. So I don't know if you saw, but at the end, there's a read the full post. So there's three more after that. Okay. Well, I didn't get that I only got to, I was like, this might be the longest tweet I've ever read. Yeah, we had to cut it off because we ran out of characters. Well, then we're going to get all 10 of them here. This is going to be great.

1:57Perfect. Okay, so a little context. So I like to clarify because I notice entrepreneurs have a tendency to round up and call lifetime revenue like yearly revenue. This brand has done a$10 million ARR business. Yeah. Yeah. So I will say our goal, I hope that this year is actually we cross that milestone. By the end of the year, I hope that we cross 10 million ARR. But this post was based on over the past three and a half years, we recently crossed over$10 million in lifetime sales for specifically for digital products. So this includes things like cohort based courses, which for us was Ship 30 for 30, higher ticket training programs.

2:39We have our premium ghost training academy, paid newsletter. So we have Right With AI. and also like sporadic one-off things like for Black Friday or for other periods, like we might do a three-day quick launch, like a live paid webinar or something like that. And so I basically wrote up this post just going, I've played with just about every business model, you know, even books. I've self-published 10 books. We also have a SaaS platform called TypeShare. So we've also monetized with SaaS. And just after doing all these different business models and selling a meaningful amount of these products, here are the high level conclusions that we've come to.

3:17And so as we have this conversation, I do want to add the asterisk like you will always find success stories that contradict the things that I share. So I'm not saying this is the only way. These are just a lot of the things that we've found. Oh, absolutely. And in fact, actually, I think the one place that I would offer a different point of view has everything to do with changing software and not that the way that you structured it and the way that you are thinking about it is in like it is is wrong with what we have today yeah yeah so um i mean we could yeah i'll take it from the top if you want to um and then i'd i'd love to hear your pov on each of these two for sure so i'll chime in as you get as you as you finish each one okay so the i These start very high level and simple, and then they get more advanced as we go.

4:11The first one is really I just open with people drastically underestimate how much work these types of products take. And in the post, I sort of laid it out. I've created probably 10 different curriculums at this point. During while we've been building all of these, I've also self-published probably another five books. I've rewritten these curriculums who knows how many times. I've written, you know, for the first two and a half years, I wrote all the emails, I wrote all the funnels, I wrote all the social media copy. Like when you add all of that up, you're looking at millions of words. This isn't like I did it on a weekend and now I have quote unquote passive revenue forever.

4:49Like this is millions of words. And in the beginning, I didn't know that. I didn't know that's what I was getting myself into. And so I, the reason that I sort of wanted to open with that is I see this trend of other creators that are like, especially on YouTube, where it's like, I make 800 grand a month working two hours a day. Like that, you know, that is a not true. B, I know all those people. I know that's not true. See, those people are stressed out of their mind. Like they are not working two hours a day. And the reason I take issue with it is because I think it sets this faulty belief or faulty expectation for the next generation of entrepreneurs who are like, I worked 90 minutes today and I'm not making a million a month.

5:30What's going on? Right. And then do I quit because maybe I'm not good at this or what am I doing wrong that all these other people are doing right? I thought that was... So first of all, I was nodding vigorously at this point because I was like, yeah, that's about right. Oh, yep. I've done that. Yeah. I've written a lot of content at this point, especially for me, it's content to try to convince people to not actually spend so much time writing content. What I thought was actually so interesting is, and I'm curious to get your reaction to this, is for me at least, the way that I feel comfortable rewriting things when I rewrite them is because I'm learning.

6:17Sometimes I really find that like, okay, wait a second, I'm going to just like tear it off, start over again, hit the reset button, because it gives me those moments to be able to take and absorb that input that I'm getting and make it even better. And so I saw that a number of times in your writing where you're like, and I did it again because I saw this opportunity to improve. So for me, it's been less about I want to rewrite it for rewriting its sake or that I feel like it has to be rewritten and much more about, I like actually doing that work because it gets me that high that I have of, I want people to have aha moments.

7:05I want people to be able to see something and just be like, holy shit, that is awesome. I don't know if that resonates with you. Yeah. I mean, I have the same point of view. I like saying it maybe a little more overtly, which is I actually believe that the first draft of anything shouldn't be edited. Because part of the realization, and I only understood this after years and years of doing it, but the first time you write something, if you sit there and you start going, okay, I wrote it, now time to edit it. Well, the problem is you don't know what you're editing for. It might already be super clear.

7:43So why would you need to go back and start cleaning it up? And so a big aha for me is as we build these products and programs or even as I write books or whatever, the first time I write it, I don't edit anything. And I literally just put it out there and then go, I need 100 people to go through this because I need some signal to where are you confused? Where do you have questions? Where are you stuck? And then the customers tell you all of the things that need to be edited and then you go edit. Yeah. Yeah. I've done that through live stream. So the first course I launched, which has, you know, continued to evolve, I launched live in live streams that I had never done before.

8:25But what was so great about doing it in a live stream, and it still is what I love doing, is I know immediately if something resonates or if people are confused. And that instant feedback from a live stream has made it so much easier to produce that volume of content that certainly on the marketing and on the course side is absolutely, absolutely needed. Yeah, this is an awesome segue into the second point, which is this idea of there's no such thing as passive revenue. This is a painful lesson everyone in every industry has to learn in some different way. But for example, if you have any interest in building digital products or building courses or programs, you don't start with the product.

9:14You start with, let me write a tweet about it, or let me write a short piece about it. Let me get it in front of people. Let me see if that answers their question. Let me see if it's helpful. Let me do a live stream with 20 people and just what do they ask? Do they appreciate it? And so there's all these steps that come before you actually go, all right, now I know what to create. And I think the faulty belief, especially in this world, is a lot of people will sit at home and then they watch a YouTube video about how some person makes 800 grand a month working two hours a day. And then they go, oh, I just need to build a digital product and then money will rain from the sky.

9:53And so they don't start with any of the learning. They just start straight with, I need to build the product. And then the faulty belief is compounded by going, well, once I build the product, it sells itself. I don't have to deploy any more energy. And I think it was really important for me to demystify that in the beginning and go, you know, an example that I would use is I wrote this book called The Art and Business of Online Writing, self-published it. And that book probably makes three to seven grand a month in royalties. on the surface, someone looks at that and goes, that's passive revenue.

10:27But it's not passive because the reason that book sells is because it's in all of our funnels and it's in all of our programs. And there's all of this active energy being deployed that continues to bring people to it. So this idea that you make something and it sells itself is just completely faulty. Yeah. So I would take and tweak that one of a degree because the reality is that content does not sell itself. And that if this idea of passive income from content does not work. So if we think about what a membership, for example, I know you get there, what a membership has meant over the last, call it five to 10 years, it has meant setting up a website for a specific niche and charging access to the content on that website.

11:23And that is what a paid membership is, or obviously a paid course. Now, the reality is that there are ways of taking and extending digital products into networks that actually do run themselves and therefore do create passive income. But it doesn't start there and it doesn't come from watching a YouTube video going for even just the basic what everybody says to do, which is number one, find your niche. It's like, no, actually, you do this so well in your essay, which is figure out what people want. And from where I'm sitting with the things that we've seen over and over and over again, it's like you want to create passive income.

12:15Bring together a group of people who are going through a transition. You bring together a group of people going through a transition. They want to go from point A to point B. that is going to be so much less work for you than anything you can do in content and with content alone. But again, all of these things are sort of evolving right now in some really interesting ways. Yeah, I think you're saying it. Maybe we should give a name to it, which is I don't think that passive income is the accurate word for what's happening. I think the accurate word is leveraged income. There's a big difference between Tim Ferriss, four-hour workweek, I sit on a beach and money rolls into my bank account versus building things that get stronger over time or get more lucrative over time or get easier over time.

13:15And so I think that should be the goal. But I think a lot of times people are deterred because they're like, well, where's the passive part? It's like, well, you're always going to do something. It's just going to - It's like, where's the leverage part? I love that. That's well said. Okay. Principle three. Lesson three, not all digital products are created at equal. So what I mean here is that a lot of times people lump all these different products and business models into one term. So they think selling an ebook is the same as selling a course, or they think selling a 300 $100 course is the same as selling a$3 ,000 course, or they think a book is the same as a paid newsletter.

13:54And what's hard, there's a nuance here, which is what's hard is from a creation standpoint or from a writing standpoint, a lot of them are extremely similar. The way that you would write a course module is actually the same way you would write a nonfiction book chapter. So that is true. The problem, though, is each of these have very different contexts wrapped around them. and there's very different purchase decisions that go into them. And there's very different business models associated with each one. So this lesson was sort of me priming and going, okay, no, they're not all the same. Now let's get more specific and understand what makes each of these different.

14:33So lesson four goes into these three different tiers of selling an online course. Now, I think this was not only so well articulated, but it is absolutely backed up by the data we have at Mighty Networks. That's awesome. How you set this, I got to that point, I stopped what I was doing. I sent it to everybody I know, and especially the people who work at Mighty. I was like, this is the best articulation for what we are actually seeing in the data related to what people are doing at different points. And I'll share with you the way that we've seen it. And you used the term, what was it? Price-anchored outcomes.

15:24Yeah. I think about it as like results. What are you replacing? And how do you price for respect? Your respect for the program that you're building and their respect for what it is they're taking and investing in. and I just, I thought you got to go through it, but man, this was fantastic. Okay. Well, that makes me really happy that this is backed up by data because this, I mean, yeah, we have our internal data, but a lot of this is just our hunch. So that's cool. Yeah. Totally spot on. Okay. So to, to preface, right. So the three tiers that we sort of came up with are tier one would be a text and video course priced 350 or below.

16:08And the way I like thinking about this tier is we would call this an impulse buy. So the same way that you're on Amazon and you're like, I need a new blender. It's$1.99. Sure, I'm going to get a new blender. That is how most people view info products at this tier. And as long as your text and video course helps a specific person solve a specific problem or unlock a specific outcome, really all they're looking for is information in that price point, in that tier. One of the mistakes that people make is thinking, well, I'm going to put together a text and video course, and it's always one or the other.

16:43It's either I don't think I can charge more, so they're afraid to even price it at$50. It's a self-belief issue. or they think if I price it less, I'm gonna quote unquote undercut the competition and then more people will buy it. And the reality is neither one of those is true because$150 course is the same purchase decision as 250, which is the same purchase decision as 350. And so when you price yours lower, all you're really doing is saying, I actually don't wanna make as much money because the person would buy at 350 or 250 or 150. Well, especially if the result that they're going to get for it is tied to value.

17:29Like it's tied to, oh, well, if I'm going to get$1 ,000 worth of value or$5 ,000 worth of value, and again, not from the content of what the, quote unquote, the content is worth, but rather, what will you be able to do after you have this knowledge that you can't do today? then you're absolutely spot on in terms of what and how you can charge. And the other thing I would say is we see this all the time where somebody believes that they can't charge before a certain number of people have gone through it or validated it. And my reframe of that is, well, except why are you putting that in a different bucket than, for example, consulting, where you're working with one person and you're charging, you're going through it the first time with them, but you're charging them a lot of money.

18:26So the idea that you wouldn't charge actually at a premium the very first time you go through something, whether it's at that 350 or below, or whether it's in the other tiers, is something that I'm not trying to get ahead of ourselves in terms of the other tiers. But that to me is one of the most, that's where I start to see light bulbs go off for people. Yep. We could have a whole separate conversation on all the faulty beliefs that are under all of this. I mean, and again, I'm not sharing that as like, I'm this guru and I have all the answers. Like I've lived that, that I was that same person with that same faulty belief.

19:06So I understand where it comes from. But yeah, a lot of, and we'll get into it as we go on, but a lot of this game is about, it's funny, people associate quote unquote copywriting with almost like you have to sell people or you have to trick people or you're using some mechanism to get them to buy. And really the whole art of copywriting is showing and proving your level of empathy for the other person. And when you successfully empathize with the other person and you truly understand what their problem is and where they're trying to go, that is what rationalizes the price. And it doesn't matter if it's$100 or$1 ,000 or$10 ,000.

19:46It's the same mechanism. So with text and video, tier one,$350 or below. Tier two, once you start getting above around$350, You have about$350 to around$1 ,000, we'll say. And what changes between tier one and tier two is it goes from being a product to being an experience. So what the person is buying, yes, they are buying the information, but really how they rationalize that different purchase decision is there's some other element. There might be a community element. There might be a live component. There might be a, like, I do it with my friends. We sign up together. Like, for Ship 30, this was a cohort-based experience.

20:30And it was really interesting to look back at our data because Ship 30 started at$100. We learned that that was way too low. We were providing an experience. We were in the wrong tier, right? And then Ship 30 notched all the way up to, I think the most we ever charged was$899 for a cohort. And that is right about where we started to see the metrics start to fall, where the opt-in rate was lower, the purchase decision was starting to change. And so we learned there's this kind of weird ceiling around$800,$900, $1 ,000, where if you go above that, the expectations, which go into tier three, We'll talk about it in a second.

21:12And then if you go too far below that, you're like over delivering for not enough money. Like you shouldn't charge$100 for a cohort based experience because you're providing something so much more than what one does. People pay attention to what they pay for. And with digital products or digital experiences, the price point, again, this is why I think about it as respect, the price point tells you how valuable something is. Yes. And this is true for us as a SaaS company as well. There was a period of time that we really thought we were like, we thought we were like doing the right thing by charging lower, charging a price that was lower than what they were getting elsewhere.

21:58And it's how I learned the lesson of replacement, which in hindsight is super obvious. So I'm sort of embarrassed to say like, yeah, I kind of learned that one the hard way that I should have totally known. But when you price too low, people just don't think it's valuable. They think you as the host or you as the instructor are mailing it in. Yep. Yeah, exactly. I mean, the price in many ways, assuming that the content is great and the product is great, the price is the differentiator. Oftentimes, people don't realize that if you're looking at two competing products or programs, if one is priced at$800 and the other one's priced at$80, the customer immediately and very intuitively comes to the conclusion that the$800 one is better or more valuable.

22:49So that's another thing that you don't really understand in the beginning. And so then tier two has this sort of hypothetical ceiling. And then what's interesting is between a thousand bucks and 2000 and about 3000 is this really weird no man's land where it's too overpriced to be tier two. You know, very few people like it's hard to sort of rationalize spending two grand on a cohort based experience that maybe isn't as like one on one, for example. That is not what our data shows. Really? Even close. OK, I would love I would love to know more. No, totally. Sorry, I didn't mean to interrupt, but I was like, wait, hold on.

23:31That's actually not, that's not been our experience or what our data shows. And I think, so yeah, on stuff like that, what's so cool about this game is like, I do believe that there are ways to make just about any combination work. And I also like taking the POV of if something's not working, I don't think it's like a blame the market, blame the niche, blame the customer. I think it's always like, we're clearly missing something. So this might fall in the bucket of like, we've missed an opportunity there. But broadly, I would say what makes tier three, whether it's two grand, three grand, five grand, eight grand, whatever, as soon as you get into multiple thousands of dollars, the expectation goes from not just product and not just experience, but actually some sort of skill-based training program.

24:20So someone wants to acquire a skill to unlock some sort of specific outcome. Yeah. So I think what is shifting is that - Tell me, educate me, please. Yeah, yeah, yeah. No. And one of the things that we are seeing work extraordinarily well is a six-month experience where for$997, you're getting a scaffolding or a structure of monthly themes, a weekly calendar, and daily polls and questions that are all automated. And the whole goal is for you to meet other people in the program or in the membership community and build relationships with them towards those goals. So at the core of all of this is still, and this is why I think it's just so much easier instead of, again, picking a niche to focus on a transition.

25:25People in a transition are the most motivated. They are the most excited to meet other people. and when you can structure something for those people to much more easily meet each other, build relationships, share their stories, their ideas and experiences, not advice. Advice shuts a conversation down. And whereas people sharing their stories totally expands it and just contributions and engagement just explode. So that has been a model we're seeing work extremely well. And if anything, the hardest thing we have to get people's minds shifted is if you come out of content is king and queen and prince and princess, then you do not believe what I'm saying right now.

26:22And you're like, oh, well, if it's I've got to offer more and the community is yeah, yeah, yeah, whatever. That's just the thing over here. And there's some reasons I believe that is true for a lot of people in terms of that false belief. But fundamentally, if you can create the conditions by which people meet each other, you can absolutely charge more money without having to offer yourself or going live or consulting or one-on-one coaching at all. Yeah, I would definitely agree. We've learned a lot of the same thing. I do think that it sort of goes back to the passive revenue faulty belief is like people think that this game of info products or education is about the education.

27:11And it's actually not. It's like a lot of the people who are most successful in this space either get really, really good at building community or they get really, really good at building coaching, one-on-one, like true in-depth support. They get really, really good at facilitating some sort of like, not just relationship, but we almost think about it like recruiting now where one of the benefits of being in our premium ghostwriting academy is, well, when someone starts to be successful, they want to find another ghostwriter. Well, now you're in a community of 800 other ghostwriters. You can pull another person.

27:48So all of those little compounding benefits are really what the game is about. And the quote unquote content is one of the most subjective parts. It's like 50 % of people might go, this is the best curriculum I've ever gone through. And 50 % might go, yeah, the content's okay, but I'm staying for the relationships. So it's almost, I think of it like - Or both. Or both. Yeah, yeah, or both. That's what so many of us are trying to get to is that combination of both. Yeah. So I almost think of the curriculum as like, don't obsess over it. It's good enough, but a lot of your effort does end up getting better deployed in the community building, the relationship building, the serendipitous opportunity building, right?

28:32For sure. For sure. These are great. I love these side rabbit holes too. So lesson five, and this is a very painful one for me because my dream as a kid was I want to be an author. I want to be a serial author. I want to write 100 books in my lifetime. I love the craft of writing books. But a very painful conclusion for me as I've built all these different products and programs is that books are probably the most inefficient vehicle for monetizing your knowledge. And what I mean by that is if you have domain expertise, If you have what I like to call an information advantage, and especially when that information advantage is anchored to, I can explain to someone else how to do something.

29:12So how to. That information monetized in a book. Okay, so you're price capped because you picked a book. How much can you charge for a book? $20,$30, right? You can't charge$200. But what's really fascinating is if you take the exact same content, you literally don't change a single word, but you drip it out into a paid newsletter or you put it into a digital product where you add videos to each chapter, people will spend 200 bucks for a year for a paid newsletter like it's nothing. Right. You put yourself and your content in a different line item or a different budget. Yes, exactly. And people rationalize that purchase decision totally differently.