MBA2399 Q&A Wednesday: Is being an influencer a good business model?

0:09Heyo! Welcome to the$100 MBA show, helping you work smarter, not just harder, with practical practical business lessons. I'm your host, your coach, your teacher, Omar Zinhome. And today's episode is Q &A Wednesday, where we answer a question from one of you, one of our listeners. If you've got a question you want to ask, go ahead and email me over at omar at 100mba.net. Today's question is from James and James asks, is being an influencer, a good business model? I'm thinking about becoming a fitness influencer and wanted to ask you if this is a good business? Or is it just a pipe dream? I'm so happy that James asked this question because we hear these words like influencer and we don't really understand what it means.

0:54We don't understand how it works. How do these people actually make money? Well, I'm going to break it down in today's episode and show you how an influencer is not really a business model. It's a role that one will play inside a type of business. And I'm going to break it down, explain all the details, show you how the money is made, show you if it's a viable business and what it takes to become successful at it. The rise of social media and apps like TikTok and YouTube. We're seeing more and more of these influencers, and I'm doing air quotes here, and many of us are thinking, hey, there's money to be made here.

1:27There's money on the table to be grabbed and to take advantage of this situation. Is that really true? Let's find out. Let's get into it, let's get down to business. So like I mentioned at the top of the episode, being an influencer is not really a business model. But what do influencers actually do? Well, they create content. Like James, who's thinking about being a fitness influencer, influencers focus on a topic, a niche, and create content, create a following around that content. And as their following grows, as their audience grows, what they say, what they do actually has value to the marketplace because they can influence what people think, what people buy.

2:07And therefore, advertisers are going to want to get in front of that audience. But being an influencer is not like a job. It's not like something that you clock in and clock out. Really, what influencers are, are media companies. They're in the content marketing game or content business. In a way, actors were influencers before the internet. They created content like movies or TV shows. And advertisers wanted to attach themselves to those influential people. So they would run ads in the commercial breaks or there'd be product placement in the movies. And it wasn't just actors, musicians, sports stars, way before the internet, they were influencers.

2:47Whether it was Britney Spears or Michael Jackson being the spokesperson of Pepsi or Michael Jordan selling sneakers for Nike. At the end of the day, these people are delivering some sort of content, whether on the basketball court or on the stage. And advertisers want to kind of attach themselves to their magic. We totally understand this in the context of entertainers. So influencers are basically a micro version of that. So it only works if the content's great, if they're great. And this is why I always say influencers are really small media companies are creating media that people watch for free.

3:24so that they're growing an audience and advertisers wanna be a part of that. So creating a media company, great business model. And the reason why this actually makes a difference, the language makes a difference because it changes your mindset. If you're thinking about yourself like an influencer, you're thinking of yourself as like some individual just talking about random things, hoping that people will like it. But if you're thinking of yourself as a media company, you're thinking about how do I produce great content? How do I create great episodes on my YouTube channel or on my TikTok? It doesn't matter if it's 30 minutes or three minutes or 30 seconds.

3:56Then you're going to start looking at your profession, your business totally different. You're going to start investing in becoming better as a speaker, as a presenter. You're going to invest in equipment in your studio. You're going to start thinking about yourself like a mini Netflix. And I'm here to tell you that content is one of the most booming economies right now. It's one of the best businesses you could start because people love consuming content on the internet now on all kinds of channels or mediums, whether it's podcasting or YouTube or Instagram reels or blog posts, the written form or newsletters.

4:30Okay. There is a lot of money in newsletters, but again, they're a media company. The media they're providing is text. There was a newsletter called the hustle that had sponsored content in the newsletter, huge mailing list is sold to HubSpot at a value of between 25 and$30 million. There is money in media, but just like TV, just like movies, just like any kind of media, music, even becoming a star athlete and displaying your skills to the world, it takes time. It's a long road. It's a long-term investment. But the good news is that because it takes time, not many people do it. less competition.

5:11Because it takes time, you stay on top longer, meaning you're successful for longer because all your investments compound and are beneficial for years to come. For example, Al Pacino, right? When he was first acting, when he was a young man, took him a while to get good, took him years to get roles, finally started to become the leading man in the movies. By the time he was in his 30s, he became a movie star. Now he's in his 80s and he's still reaping the benefits of that investment. So if you see yourself doing this for some time, this is worth doing. Think about the best influencers out there on the internet.

5:51Let's take Mr. Beast, highly successful YouTuber, is doing a lot of interesting things with his media, even with his commercials, like he's running commercials for Shopify and other brands. But think about how much he invests time, money, effort to get to this point. We're talking about hundreds and thousands of hours, dedication, slow growth. We're only seeing the results of all that work right now. He's invested millions upon millions of dollars. He now spends multiple millions of dollars per video. He will continue to grow because of these investments, but he's doing it right. He's trying to create something amazing.

6:31He's doing more than just being a talking head. He's producing incredible content, incredible shows that rival TV shows on TV. Now, he may not be your cup of tea. It doesn't matter. He's somebody else's cup of tea and you can't doubt that his production value is through the roof. Now, you might be thinking, oh, I have to do that to be successful. No, No, this is after many years, almost a decade of work for him. So look at Mr. Beast's videos five years ago, six years ago, seven years ago. See how long it took him to get to this point. Look at the quality of the videos. Look at the dedication he's done.

7:08Start from there. As long as you're dedicated to the craft, dedicated to creating amazing content for your audience and understanding what your audience needs and wants, you're going to be great. Secondly, as long as you dedicate at getting better every time you create a piece of content. So for example, when I record this podcast, every time I record an episode, I think about how can I make this episode that I'm recording right now better than the last episode? Even if it's just 1 % better, it will compound over time. Third, it needs focus. The thing about media is that it's going to take you some time before you build an audience, which means it's going to take you some time to make money.

7:44A lot of people don't want to wait. They just want to make the money, but it doesn't work that way. Successful content makes money and it takes time to be successful. This myth of you're just going to go viral overnight, it's just not going to happen. Most success stories look like I first got 500 views, then I got a thousand views, and then 5 ,000, 10 ,000, 20 ,000. Now I'm making 100 ,000 views. I just launched a video. It hit half a million views like that. And often it's two step forward, one step back. And that's okay. But you gotta be dedicated. You gotta be consistent. You gotta be willing to grind it out before you see the rewards.

8:27And again, this is good news for you because most people don't want to do this and most people won't grind it out and be consistent. There's this crazy statistic out there that's almost hard to believe, but it's true. Most podcasts just can't be consistent. and that if a podcast publishes 21 episodes, just 21 episodes, they're in the top 1 % of podcasts. That means everybody else, 99%, couldn't even make it to episode 21. So if you love the content, if you love what you talk about, that's why it's important for you to really love what you are into. So in James's example, where he wants to be a fitness influencer, he's gotta love fitness.

9:07He's gotta love nutrition. He's gotta love the whole genre. He's got to be dedicated to it, not just now, but five years from now, 10 years from now, 30 years from now. This is going to be his thing for a very long time. So you've got to be able to eat, breathe, sleep, everything, this content. You know, I know this firsthand because I've published over 2300 episodes of this podcast. And if I didn't love business, if I didn't love the challenge of entrepreneurship, if I didn't love the journey and the lessons learned and love sharing it, I wouldn't be able to keep doing it. The reason why I'm able to publish 2300 episodes is because my favorite thing to do in life is to learn and to teach.

9:44And that's what I have to do to produce this podcast. This is what I have to do to be successful. I have to learn new things through experiences, through books, through courses, through videos, through whatever it might be and share with other people. So if you love the topic, if you love the thing you're about to embark in, then this is a great business model. Thanks so much for listening to the$100 RBA show. If you love what you hear, hit subscribe, hit follow on your favorite podcast app, whether it's Apple Podcasts or Spotify. Hit that little check button so that you get our next episode automatically.

10:16Before I go, I want to leave you with this. It's always better to think big when it comes to your business. Don't think about just being an influencer. Think about being a media machine. An example that comes to mind is Ramit Sethi, who is a New York Times bestselling author, famous for his book, I Will Teach You To Be Rich. He wrote this book and it was highly successful over and over again. He created amazing content around it, amazing courses, a blog, spoke on stages, has a very successful podcast with the same name. And because his content and his following became so strong, Netflix reached out to him and he created a Netflix show.

10:53So that whole thing I talked about, about having a show and being on TV, it's real, even for people like you and I. Thanks so much for listening, and I'll check you in Friday's episode. I'll see you then. Take care.