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Attention is power and creators harness it better than anyone else.
But they’re not using that attention to create the biggest impact possible and are vastly under monetized.
Host’s Rachel Rodgers and Nathan Barry believe you can be a Billion Dollar Creator.
Sounds impossible?
Over the last 10 years they’ve followed each other on their quests to build billion dollar companies. They’ve studied creators and seen how entrepreneurs build traditional audiences and use them as a launching pad for a massive business.
And it got them thinking – if it can happen for them, it can happen for us. And if it can happen for us, then why not you?
Billion Dollar Creator is a show teaching creators how to capture attention and turn it into real wealth. They'll deep dive into brands, celebrities, and entrepreneurs who have done it before and show you how you can apply it to your business as an everyday creator.
Join them weekly as they learn from both the wild successes and the missed opportunities, the grand gestures and the integral mistakes, and through that help you become an expert at building your audience on your journey as a Billion Dollar Creator.
Nathan: Brands are literally spending hundreds of thousands, millions of dollars to reach the people that just subscribe and follow you that you don't even pay anything for. So I just encourage you to think about okay, I have this incredibly valuable resource. It's going to keep growing over time. Where is it going to be three years from now? Where is it going to be five years from now? What could I do with that? What's my idea as a billion dollar creator?
Attention is power, and creators harness it better than anyone else, but they're not using that attention to create the biggest impact possible and are vastly under monetized. Hi, I'm Rachel Rogers, my cohost, Nathan Barry, and I believe you can be a billion dollar creator. Sound impossible?
Over the last ten years, we followed each other on our own quest to build billion dollar companies. We've studied creators and seen how entrepreneurs build traditional audiences, and use them as a launching pad for a massive business. It got us thinking, if it can happen for them, it can happen for us. If it can happen for us, then why not you?
Billion Dollar Creator is a show teaching creators how to capture attention and turn it into real wealth. We will deep dive into brands, celebrities, and entrepreneurs who have done it before and show you how you can apply it to your business as an everyday creator.
Join us weekly as we learn from both the wild successes and the missed opportunities, the grand gestures and the integral mistakes. Through that, help you become an expert at building your audience on your journey as a billion dollar creator.
Nathan: All right. Well, hello FinCon.
Rachel: Hello, everybody.
Nathan: I hope everyone's okay backstage.
Rachel: That was nerve racking.
Nathan: So something that has come up a lot. It's even come up just earlier today in the talk earlier is why a billion? We have this podcast name of a Billion Dollar Creator, and people say like, “We're just trying to get to 100,000 or a million.” But a billion, that's insanely larger, and here we are naming a podcast Billion Dollar Creator. A question we get all the time, and I'll put it to you to start is why a billion?
Rachel: Yes. Well, when we first talked about different ideas, and Nathan mentioned this concept that came from an essay that he wrote called Billion Dollar Creator. I was like that's it. That's the name of the podcast. He was like, “Well, don't people hate billionaires?” I'm like yes. I was like well, let's reframe it. I actually love that it makes people uncomfortable. Because if we're uncomfortable, we're growing.
So let's talk about the things that make us uncomfortable. Let's confront why does it make us uncomfortable and actually consider some of the messages that we get and find out if it's really true. So with my book, We Should All Be Millionaires, my goal was to make a million dollars more accessible to people. I see that. Obviously, it's not just me doing it. But I see that there are more seven figure businesses out there. There are more people becoming millionaires, more people who look like me becoming millionaires. That's important to me.
So the same is true for a billion. The million dollar business that you might build can also become valued at a billion dollars. Someone is going to do it. Why not you? I think these billion dollar companies are also shaping our society. So the Ubers of the world and the different large companies of the world, they shape our lifestyle.
So why shouldn't you be creating something where your voice gets to be heard, especially if you are a woman or a person of color? I think a billion is a conversation we need to be having. I think it's something that we can all do if we want to.
Nathan: Yeah, it's not saying there's a requirement that it has to be a billion.
Rachel: Yes. Well when you name a podcast Billion Dollar Creator, you're saying everyone has to otherwise they're doing it wrong.
Nathan: Are you saying there's not subtlety and nuance on the internet?
Rachel: That's exactly what I'm saying.
Nathan: So I think we've noticed something in the world that creators are the absolute best in the world at getting attention. Like there's no one better out there than creators are getting attention. On one hand, creators monetize it really, really well. There's so many people in this room who are earning $100,000 a year from the business, $500,000, a million dollar. Like that is an incredible amount of money.
Like the number of my friends who say I'm a writer, and they make more money than my uncle who's a doctor who's been working in medicine for 25 years. I mean, it's wild.
But we have this hypothesis that creators are actually terrible at monetization. That attention is worth something insanely more valuable than what they're getting for it. What they should be getting is something, building a business that has real equity. So we're going to talk about that and break that down. But we also have three chairs up here and just the two of us.
Rachel: Yes.
Nathan: So Rachel, do you want to introduce our next guest?
Rachel: Yes. Our next guest is somebody that y'all are completely unfamiliar with.
Nathan: Yep, never met or seen before.
Rachel: She has an amazing business called Afford Anything. Our guest is Paula Pant.
Nathan: All right Paula, please join us on stage. So we want, first Paula, it's great to have you back out here. I'm hoping that wasn't you that crashed backstage.
Paula: That was not me. Everybody is fine by the way.
Rachel: Okay good.
Paula: No humans were harmed in the making of this production.
Rachel: Excellent.
Nathan: It’s good to have the report from stage left. Everything's good. So in this concept of a billion dollar creator, we want to riff on it and share some examples of what we're talking about. What does it mean to take an audience and monetize it in a way that could be worth not $100,000 or a million dollars a year, but hundreds of millions, potentially, or even billions of dollars, and try to bring that back to this community? So I'm curious just if we go through some examples, who comes to mind as even a content creator that has gone down this path?
Rachel: Yeah, but one of my least favorite people, and he might be some of your favorites. So that's okay. We can just agree to disagree. That has done this is actually Dave Ramsey. That is a content creator. He had a podcast. I'm sure he's created content in many other formats. But he's taken his curriculum.
So if you think about it, like we all every single one of us here on the stage has online courses. And he's taken a curriculum out of let's say, it could be an online course. Maybe it is. I don't know. But it's also a curriculum that is now installed in churches around the world where that same curriculum is going far beyond just selling it online individually, but selling it now through organizations. So that is what we're talking about, about having scale.
So you could take the exact same thing that you have, but how could you make it have an impact in a much bigger way and have way more people? So who here sells an online course? Raise your hand. Okay, awesome. Who here has a testimonial from someone who has benefited from that online course? Raise your hand? Okay, awesome.
So if your course has the ability to impact someone and change their life for the better, why wouldn't you want hundreds more, thousands more people to be able to get that transformation as well? So Dave Ramsey is an example, though I don't really like his content, to be clear. But I do think that he has done something bigger than even just write a book or just have an online course but saying how can I take this same curriculum and distributed in the world in a bigger way where I can reach a lot more people?
Paula: I just thought of this, another person in the personal finance space who has done this is Robert Kiyosaki.
Rachel: Yes.
Paula: So Robert Kiyosaki first became quite well known through the publication of his book Rich Dad, Poor Dad. But after, well, really alongside publishing that book, he also created a board game, the Cashflow Quadrant board game. That game, I bought it many years ago. It cost at the time $150. That was in like 2010 dollars.
So I think that's another example of really using that springboard of the audience that he built through Rich Dad, Poor Dad to sell a board game that also taught people more about money yeah.
Rachel: Yeah. It introduces the concept, and now it’s a physical product that's getting distributed.
Paula: Exactly.
Rachel: Yes.
Nathan: Yeah. There's all kinds of examples that we've seen from across the creator industry, from everything from maybe creators that we've met at conferences. I'll give you a quick example. There's a blog called Mark’s Daily Apple run by Mark Sisson. He was making probably one to $2 million dollars year after this blog, wildly successful back in 2014/2015.
He ended up taking the content that people really wanted of health and wellness content, and he was talking about Paleo recipes. He ended up building that into a company called the Primal Kitchen selling paleo friendly condiment, salad dressings, all of that. He sold that business in two years using the audience that he's had. He sold that business for $200 million to Kraft Foods.
So we're really obsessed with this question of if you have this attention, 10,000 people, 100,000 people, what is the highest ROI place that you can direct it? Looking at his business, I knew him back in 2013/2014. I thought he was doing a really good job of monetizing his audience, of selling courses, advertising, any of these things.
But it turns out, there was an opportunity that was 100 times bigger, and there's a bunch of finance nerds in here. Some of you probably obsess over taxes like I do. If you think about this, he was making one to $2 million a year, which is amazing, but he was paying ordinary income on that. Then he goes and makes his other business off that same attention, sells it two years later. So he literally creates 100 years’ worth of value in two years. Of course, he pays long term capital gains on that. So not only did he make a way bigger business, but he also kept far, far more money in that.
Rachel: Yes. Then also if you think about it, it's adding value to his client's life on a daily basis. Because one of the things about Paleo is that condiments have a lot of sugar in them. They don't work well if you eat that kind of diet. So like beyond just educating them on how to, you could publish a recipe on how to make your own condiments. But what's the next level of that?
The next level of that is to take that same recipe, make it yourself, and make it available to your audience at their local grocery store. So it's not only 200Xing his value that he's receiving, but the value that he's adding to his clients lives as well.
Nathan: Yeah. What are a couple other examples that come to mind that we want to share?
Rachel: Well, I love the one of Hala.
Nathan: Oh, yep. Awesome, the podcasting space.
Rachel: Yes So she has a podcast. Anybody here heard of Hala? She has a podcast called Young and Profiting. Yes. Okay.
Nathan: A couple people.
Rachel: So Hala is amazing because she has this very popular podcast, as do you, Paula. You have a very popular podcast. She's taken this podcast. The way that she's scaling it is she's created a podcast network. I don't know all of the details of exactly how this works, but I do know very big podcasters are moving over to her network from HubSpot. HubSpot has a podcast network.
All I know is recently I've seen announcements where Amy Porterfield’s podcast that used to be on the HubSpot network is now on Hala’s network. Jenna Kutcher’s podcast that used to be on the HubSpot network is now on Hala’s network. So she is competing with a much larger company. She must be providing more value to these podcasters as to why they're moving over to her network. It's very scalable through selling advertising that you then place on all of these different podcasts within the network. So that's the business model there.
Nathan: So that's an interesting example of thinking much bigger. Like who here in the room runs a podcast? We've got a good number of people. I would not, my natural instinct is not to say okay from a podcast, let me scale that. Let me do a podcast network. Let me go compete with some of the biggest companies in the world. I don't know HubSpot’s market cap, but it's many, many billions of dollars.
So she's able, being close to the problem, to find. I don't have inside information, but something that gets people to want to switch and be served better in her network. So she's thinking on this much bigger scale. That's the thing where she's building something, taking the attention that she has and the relationships, and building something that she has a huge amount of equity in and can scale it in a really, really big way.
Rachel: Yes, I agree. It's like taking the creator economy and growing it up. We've all come up with ideas for selling courses, selling coaching, creating YouTube channels, selling advertising, getting sponsorships. How else do we make money Paula?
Paula: I mean, so many ways. There's affiliate marketing. There's all of it,
Rachel: Yes. So we're taking all of these things that we've created. Now we're very comfortable building businesses with a couple $100,000, which 13 years ago when I started was a lot. Or we're comfortable creating businesses that get to maybe seven figures or low seven figures. But now what is the opportunity there to take that audience and that attention and create a physical product or create a different style of product that can be valued much higher, that can reach a lot more people?
The thing that I think a lot of people don't understand is I have a couple of friends that have television shows. One of the things that both of them have repeated to me is that content creators like all of you are better at creating content than TV executives. Than the people that they are working with at these major television production companies. Because we have that experience of having to figure out what does our audience respond to? What is causing them to be engaged? We get better at it.
So I think we actually, everybody in this room, us included. We're all undervaluing what we're actually contributing and how we can actually contribute so much more value to the world and extract value for ourselves as well. You're producing, if you're posting, like Steve was saying. Somebody posts 21 times a day, oh my god kill me now. I struggle with one time a day.
But producing that much content, that much value, why shouldn't you be paid at that level of value as well that you are providing in the world? So it's about us sort of growing up as a business world, as a creator economy and saying how can I contribute at an even higher level with the audience that I built?
Paula: In the in the context of the attention economy, as it's called, if you think about celebrities, big A list celebrities. A lot of celebrities, they have attention. They will parlay that attention into some type of product or some type of service. So you've got Gwyneth Paltrow with Goop. You've got George Clooney with Casamigos. You've got Ryan Reynolds with Mint Mobile, right?
What we do as creators, is we are niche celebrities. I'll be walking down the hallways at FinCon and be that's the social security guy. We are niche celebrities inside of our own spaces. We have that same level of attention. It's not at the George Clooney level, but it's within the communities that we serve. So the opportunity to take a page from that same playbook and build some type of product that serves that community is just as there for us as it is for Gwyneth Paltrow with Goop.
Rachel: I love that. It's so true.
Nathan: Yes, you said something there of the playbook. So as part of doing this podcast, we've been studying who is actually doing this. Who's taking attention and building it into something that has long lasting value?. In that, study and research, we really found that there's basically three rules or three laws of building like a billion dollar creator business.
So the first one is that we found you have to build more than a personal brand. Everyone who has done this has created something, even if they have a personal brand to start, or it's really built around them. Nine times out of 10, the business that they start, that they're building equity and enterprise value in is something separate from that. It is something sellable. Even an example like Kylie Cosmetics, right, that uses her name, but it's separate. It's something that she can take investment into. So what are some other examples of more than a personal brand?
Paula: Well, so Meghan Markle, before she met Prince Harry, because there was an era in her life in which she hadn't met him yet. At that time in her life, she was famous for being an actress on Suits. She was best known for being an actress.
Nathan: Suits is such a good show.
Paula: I've never seen it. I've heard it.
Nathan: Okay, you have to watch it. It’s so good. We all need more Harvey Specter.
Paula: So before she met Prince Harry, when she was known for being on Suits, she started a blog and a brand of her own. It was called The Tig. The whole idea behind The Tig, she named it after her favorite wine. The wine is called Tignanello. She wrote on her blog that every time that she had drank wine, it tasted like red, or it tasted like white. People were like don't you feel the top notes of licorice and apple and orange zest? She's like no, it tastes like red.
So one day, she took a sip of this particular wine called Tignanello. At that moment, boom, everything made sense. All of those things that wine people write about wine suddenly made sense. So for her, it was an aha-moment, an inflection point. She called it her Tig moment. Then she built an entire brand, called The Tig around how to create more of those moments in your life. Right.
So that was a business that she was building. That was what she was working on, kind of the business that she thought was going to be her Goop, right? Her sustainable business. She ended up cutting it when she met Prince Harry, but that's a perfect example of someone who was in the beginning stages of using her audience relationships from being on Suits to build this brand that wasn't the Meghan Markle brand. It was The Tig.
Rachel: Yes. I love that. That was true for me when I started Hello Seven. I didn't call it, intentionally, Rachel Rodgers. First of all, I couldn't get the domain name for Rachel Rodgers. It’s a very common name.
Nathan: How many business names actually come about by what dot com is available?
Rachel: I know, literally. So let's start there. I did finally just get it recently. But I had been trying, let me tell you, for the better part of a decade. But the reason why I wanted to give my company a brand name is as a former IP lawyer, I understand that like a personal name does not have value outside of you personally, right? But a brand name is something that you can sell.
So for all of you who are thinking about changing the name of your company, or if you haven't started yet, definitely go with a brand name. Build a brand that people can connect with. Because if my company was named Rachel Rodgers then I have 25 team members that are, it's harder to connect with Rachel Rodgers as a brand, but it's easier to say the Hello Seven brand is all of us. So my audience connects with it more. My team connects with it more. It is more scalable, and it is also more sellable.
So that is my advice to you is build a brand name right that people can connect with that is outside of you because even if you are doing all the things, which I used to do every single job in my business. Now, I don't. Now, I have a team. But even if you're doing it in the beginning, you won't want to do it forever. It won't make sense for you to do it forever.
To address something that Steve was saying earlier is Nathan and I both have eight figure businesses. We have teams. Our goal is to scale to 100 million in annual revenue, which is a business that can be valued at a billion dollars. So that's where the billion comes from. It's the valuation of the business. Do you see your children ever Nathan?
Nathan: I spend a lot of time with my children.
Rachel: Just curious. I have four kids, and I spend a lot of time with my children too because when you are a CEO of a larger business, you actually work less, not more. You actually are in the way often of your team getting the work done with your new ideas and all of that, right. So your job is to be thinking about the future of the company and not be in the day to day.
So there are definitely moments where you might be working more, and you might be having a busier time because you're building a system, or you're hiring the right team member, or you're just at an inflection point in the business where it needs your attention. But those are usually short seasons. The goal is to build a process in place, hire a team member in place that can continue to run that. Then you go back to zoomed out so you can be the visionary for the company.
Nathan: Yeah, I mean there's so many things. I was talking to another CEO earlier this week at an event. He talks about how at every stage of the business as CEO, you actually have to do less. That's what makes the business operate. So one thing I think we, as individuals, often self-sabotage because we realize or we think if I were to push for this bigger goal then it would mean that if my stress levels are here at this revenue, I don't want my stress levels that.
Rachel: They think to grow your revenue, you have to 10x your stress level and your work efforts as well. It's actually the opposite.
Nathan: Yeah, which is counterintuitive. But in this idea of building more than a personal brand, like just like that's what you did with Hello Seven. That's what I've done with ConvertKit. My audience, my site that I started with is nathanbarry.com. I built a personal brand because nathanbarry.com was available when I wanted it.
But on that, that's where I started. I still have that that blog and that newsletter, and I still write it on a weekly basis. But I realized the thing that I was building long term needed to be separate from that. It needed to be able to have a team. It needed to be the type of business that could take investors. Now we've never raised capital, but that's the thing that it is sellable. It can take on investors. The reason that's important is because it speaks to the quality of the business, right? So that's the sort of thing that's building up this enterprise value.
So now the second rule or law is that you need to sell products and not attention. That's a bit of a weird thing when you think about an audience of creators. We're really good at attention. We're really good at selling attention, right? Sponsorships. If you get a sponsor for your YouTube channel or a sponsor for your newsletter, you are selling attention. So I'm here to tell you that anyone building a business at this different scale is not selling attention. They are selling their own products.
Rachel: Yeah, you were saying earlier, Paula, that you sell like advertising on your podcast. You have some affiliate things that you've done, or maybe some sponsorship things that you've done. Is that the larger part of your business, or is it the product that you sell?
Paula: It's the product that I sell. Absolutely. The overwhelming source of revenue, probably between 70 to 80% of the revenue at Afford Anything, comes from the course that we sell, Your First Rental Property.
Nathan: Advancing the course. I like it. So as you're thinking about another example would be Ryan Reynolds. He was getting paid to do commercials for other products. Who knows? Maybe make up the numbers. If he's getting paid a million dollars per commercial, as he does that he's thinking someone the back of his mind, well hold on.
If you're paying me a million dollars for this, which amazing deal, that sounds great. But it has to be worth more than that to you as the brand. It invites the question, how much more is that worth? How much more is his endorsement worth? Is it worth 1.1 million or 10 million or 100? Like how much?
So something that he did is he just said okay, I'm going to buy companies or buy substantial shares of companies and use my own, this attention that I have to grow something that I have equity in. As we know from Aviation Gin, exiting for I think 700 million and Mint Mobile exiting for 1.3 billion, it turns out that attention that he had was worth way more money than he was getting in sponsorship and endorsement deals.
So when we think about the types of businesses that we're building, it has to be something where the equity value can truly compound. Now another thing with creators is that they think about, it's usually pretty common to ask say okay, this value that I'm providing is worth more than cash. So give me equity.
Has anyone tried to negotiate an equity sponsorship deal before? Nobody has? A couple. It almost never works, almost never. The reason is because you correctly identify that your endorsement is worth really a lot. The brand says our equity is also worth a lot, and so we're not going to pay you, we're not going to give that to you. They're going to go find some other creator who doesn't understand the value of the attention that they have.
The answer is not my attention is worth more. My audience's attention is worth more so pay me in equity. The answer is my audience's attention is worth so much that I'm going to pay myself in equity by starting my business. So we want to think a lot about the types of businesses that you can build along with that.
Rachel: For sure. You can think about if you approach somebody like that, if you're supplying a lot of the attention and customers that they are getting and they don't want to do a deal with you, okay, we can either be partners, or we can be competitors.
That's what we want you to recognize. You are in a position to be a competitor to some of these larger companies. You have the customers already. They don't. They may have the product, but they don't have the customers. You do, right. So you could pre-launch a product like a company recently did called SwitchPod, and then you can be a competitor for a much larger company.
Paula: I have a SwitchPod in my purse right over there.
Rachel: Do you want to tell us a little bit about the story of SwitchPod?
Paula: Sure. So it was started by Pat Flynn. Many of you know him. He's a blogger and a podcaster as well. Smart Passive Income. A lot of people were using tripods that were just not that good.
Nathan: The GorillaPod where you can like bend it and stuff like that.
Paula: Yeah, exactly.
Nathan: It was cool and not actually practical.
Paula: Yeah, exactly. Exactly. So he realized that there was a need for a tripod that was actually, you know what? Can somebody hand it? Can somebody bring it up? All right, well, you're going to see it in a second.
Rachel: Yes. But it's like you can handle it with one hand too.
Paula: Yeah, exactly. So he realized, thank you, that there was a need for a tripod that was easy to open. Look at this, I'm doing this with one hand. Easy to open, easy. This is not a paid endorsement, by the way.
Rachel: Now we need SwitchPod to pay us.
Paula: But just very, very easy, lightweight. You can throw it in your bag. He realized there was demand. Because he had an audience of content creators, there was demand from his audience, from other content creators. Plus he wanted to use it himself for his own personal use.
Nathan: Yeah, I think what's so interesting about this because I had a front row seat to this developing and being built out. The SwitchPod is a fantastic product. It was a need that the creators, Caleb and Pat, had themselves. Then it competes with a big market and a big industry where people are spending a good amount of money.
But I think, on one hand, it was wildly successful. I still see them around in the wild. I see lots of some of my favorite YouTubers and vloggers using them. On the other hand, it frustrates me because I see a trap that I think so many creators fall into where they say I have this problem. I have a really elegant solution. I'm going to design and manufacture it. Here we go. That went really well. We had our launch. We had our Kickstarter, whatever else. What's next?
Rachel: It drives me nuts.
Nathan: Because the thing is most people say what's next, and they're going to the next product. Okay, we made the SwitchPod, what else should we make? They move on to other things. Both Pat and Caleb have done some incredible things that are very, very successful after that. But when I see this, I'm like I'll tell you what's next, the SwitchPod. Right?
JOBY with the GorillaPod is tens of millions a year in revenue, if not hundreds of millions. The opportunity for this product is absolutely huge. So when you make that switch and say okay, I'm going to sell products rather than attention, you have to stick with it for a long time and build. Like that could be a juggernaut of a company. I think it's not because they moved on to other things that were more exciting at the time. So you have to stick with this for much longer than you think you need to.
Rachel: Exactly, I agree. They launched it with a Kickstarter, and I think they delivered it to everybody who contributed to the Kickstarter. Then that was all she wrote. I'm like wait, what happened? You did all the hard work.
Now we need distribution. We need all these other things. So there's plenty of examples that went really well or didn't go well. But one of the other things, one of the last rule that we see for billion dollar creator companies, is that almost all of them sell a product that is either recurring, or it sparks repeat purchases.
So when you think about this going to Primal Kitchen with a salad dressing. Something that if you enjoy it, you're going to be buying it every single month. ConvertKit, software, it's a recurring purchase. The reason is, you don't want to be continually finding new customers. You don't want to have to have a customer buy from you once. You want it where they can buy from you, and if they like it, they buy it again and again and again.
This is why I think you see a lot of celebrities promoting alcohol products, whether it's the Rock with his tequila or Casamigos or some of these other ones is because it's something that can be purchased multiple times. So the customer lifetime value can be much higher.
Rachel: Yes. It's also true with like makeup, Glossier. What is it? Skims, the undergarments. Those are like all things that become part of your life.
Nathan: You don't buy just one.
Rachel: Yeah. You're a repeat purchaser.
Paula: Right. Right. If you think about something like a yearly planner, for example. Yearly planners, if somebody really likes your planner, they're going to buy it every year. In fact, there's one company, Silk and Sonder, they took that to the next level. They sell planners on a monthly basis. So once a month, you get - January's planner.
You sit down, and you fill out here are my goals for January. It's like many. Here are some recipes that are really perfect for cozy January weather. It's got a whole thing. Then February, you get the next one in the mail, and March, you get the next one in the mail. I have a stack of them at home, some of which I filled out and some of which I'm like oh, I never got around to March 2021.
Rachel: Right. You didn't cancel your subscription.
Paula: Exactly, exactly. You can subscribe on either a monthly or quarterly or annual basis. They've got three different price points.
Rachel: Yes. It's another great option. So thinking through how can you come up with an offer in your company that is not a personal brand, right, has its own company brand, that is selling products and not attention. That is subscription based because we all know recurring revenue is where it's at.
So that's the criteria for being a billion dollar creator. You don't actually have to make a billion dollars. No one's going to come get you if you don't. But if you want to build a company that could be valued at a billion with that criteria, you can make 100,000. You can make a million, and then eventually you can make a billion and have it be a billion dollar business, if that's what you choose.
Nathan: I think in that there's actually a lot more examples when you start to look for it of businesses at this million, 10 million, billion scale using these principles that came from the blogging and content creator world. If you look at BiggerPockets, we all know BiggerPockets in this world. It came from starting out a podcast at the simplest levels and then scales much, much bigger than that.
On that note, Paula, one thing I'm curious about is as we look at your business you've, you have built a really, really successful business using a lot of the traditional creator playbooks. I'm curious if you'd be up for us riffing on your business and what it would look like if we were to try to build something that had significantly more revenue.
Paula: Absolutely. Absolutely.
Nathan: Maybe give us the quick rundown of where's your business after the last few years?
Paula: All right, so we have a 78,000, 79,000 newsletter subscribers on ConvertKit with over 50% open rate. We have 28 million total lifetime total podcast downloads.
Rachel: Amazing.
Paula: We’re averaging somewhere around 450,000 downloads a month. We have, the newsletter and the podcast are our two strongest channels. Social media is, I've got around 60,000 on Instagram. 28,000 on Twitter. So social media, we're not super strong on social. Part of that is by design. Like Steve Chu was saying. If I create a blog post or a podcast episode, it lives forever. I can create something 10 years ago, and people will still be finding it. If I create an Instagram post, it's ephemeral. It's gone in one week maximum.
Rachel: It's an hour.
Paula: Yeah, exactly. Exactly.
Rachel: It gets attention for an hour and then it's forgotten.
Paula: Exactly. It's gone in a few days. So building things that really live in your library of content. That's YouTube, that's podcasting, that's blog posts. Then it's the newsletter because the newsletters how you nurture. A, you can have an autoresponder sequence, but then B, even for more kind of timely posts, non-evergreen posts, you nurture that relationship, and that's what really pays dividends.
Rachel: So how have you monetized that audience that you have today?
Paula: So as I mentioned, the single biggest source of revenue is the course that we sell. It's called Your First Rental Property. It sells for just shy of $1,300, $1,297. Typically, we will do two launches per year. Generally we will get around 300 to 400 people, new students who enroll in every launch. So we will enroll, in a normal year, between 600 to 800 students at now $1,300 a pop. It used to be $1,000.
The last academic year I took a sabbatical from the company for one academic year so I could go do a fellowship in Business and Economics Journalism. So by design, that meant that we had to go down to releasing the course only once a year rather than twice a year. So for 2022 and 2023, we've done only one launch instead of two. By the way, I was curious to see if going down to only one launch rather than two might boost the enrollment numbers. It doesn't. All it does is it cut our revenue in half.
Nathan: So in that, we were talking backstage. Depending on the year and how you focus on it, you're between $500,000 and a million a year in revenue from that. For a thought exercise. If you had to, you know in three years, for whatever reason, you have to be at $10 million a year in revenue, what changes would you make? Then a little spoiler, I'm going to ask the question again at 50. I want to see what some of the differences are.
Paula: So if I had to reach 10 million a year in revenue, I would do so by building more courses. I would do so, the way I think of FIRE. My spin on the FIRE acronym is to me it stands for financial psychology, investing, real estate, and entrepreneurship. So right now we have a course for the letter R, but we have nothing for F, I, and E. That's like three-fourths of the alphabet that we’re missing.
So I would be building courses for financial psychology, for investing, and for entrepreneurship because we talk about all of those topics. I think we should be serving our audience better. This is not just a cash grab. This is something that benefits people's lives. So we're harming their lives by not doing it.
Rachel: Correct. So okay, I have a tweak for you though because I think that if you created more courses, which is an obvious next move. I'm sure there's folks here who have thought of doing the same thing. You would create more courses. Let's say you're making about a million dollars a year right now with your courses. So if you release three more courses, then maybe you'd be doing 4 million but still not 10.
So here's my tweak for you. I think you should make those other courses, fill out that F, I, and E in FIRE. I like creating an Afford Anything Academy and make it a membership model. Now you have recurring revenue. So rather than getting paid once for $1,200, get paid, maybe it's $1,200 annually or $3,600 annually.
Then with a similar amount of customers, because you're serving them consistently, not only are they getting the education but you can also give them accountability and help them actually take the action that they're learning in the course on a consistent basis. Therefore, I think you could get to 10 million with a membership that you have fully filled out.
Paula: Right, yeah. I agree with you there. Exactly.
Rachel: Exactly.
Nathan: Okay, so going to the second half. I see a path for your audience to 10 million a year. I've seen plenty of creators. By the way, that's the advantage of running an email marketing company used by all the creators is I get to see like what's actually working.
Rachel: He knows who's lying about their list size.
Nathan: I do know that. It's fewer people than you would think but sometimes surprising who actually, anyway. It’s a whole thing. I see that path. I know there's definitely a path to four or 5 million a year. Maybe even 10. It's definitely been done. But if we said like you have to build a business to 50 million a year in revenue, I think you have to throw that out. You have to do something different.
Rachel: I don't know if you have to throw it out, but I'm interested to hear what you think.
Paula: So I think if I had to reach 50 million a year in revenue, I would still build out the courses to reach and the membership.
Nathan: Because one quick thing, that funds and gives you time for everything else. It's not that cashflow businesses are bad or anything else. It's that that's actually what gives you the freedom to shoot for something way bigger. So I love that model.
Paula: So yeah. I think that would still be the path to get to the first 10 million in revenue. But I think from that point forward to bridge that gap, to get that next 40 million in revenue, I honestly I don't think that would come from something digital. I think it would have to be something physical because people put a higher premium on physical experience. We're all here because being here physically is so much more fun than being on Zoom.
Rachel: Yes, so true.
Paula: No offense to Zoom, but this is way better. So I think that something physical, whether it's physical events, whether it's physical products. We were talking about planners earlier. A physical planner, there's a woman named Hilary Rushford Collyer who sells this Elegant Excellence Journal. It's thick, beautifully designed, really well bound. It's $100. I buy it every year, and it's amazing. So having a suite of products like that, it's scalable because it's tangible and visceral and people can hold it. It's higher value. I think that's how you really bridge that next 40.
Rachel: I don't disagree with you. I have two ideas for you that could maybe hit 50 million or more. So one idea that I have is Mint for FIRE. Because Mint.com, like the finance software where like all your credit cards and all your bank accounts are connected. Then you can see everything in one place. What if there was a version for that specifically for people who are trying to achieve FIRE.
So it could have maybe it's your FIRE numbers front and center when you log in. It even calculates every day how much closer you are or how much time you have left before you hit FIRE with every move that your investments or your money makes. So that could be something you could build. So maybe you build the membership. The membership gets you to 10 million.
Now you have extra capital. You take that capital, hire a developer team, use your genius and everything that you have learned about FIRE to create the version of this that maybe helps them manage their rental properties and helps them look at their business revenue. Like all those different pieces of their FIRE journey. So that's one idea that I think as a software company, first you sell it to your audience, and then you go beyond that to scale it to 50 million.
The other idea that I had was let's take like the Afford Anything Academy, that's your new membership that you will be launching soon. Could we take that curriculum and sell it at colleges, for example, and have colleges installing this Afford Anything teaching personal finance to young people? Or in high schools. Or similar to the Dave Ramsey model. How can you take this curriculum and install it at corporations? So those are my two $50 million ideas.
Nathan: Do you want to react to those or do you want to hear mine?
Paula: Oh, I'd like to hear yours.
Nathan: Okay, I have two more. One. I think that attention is really interesting for fundraising. The finance industry lends itself well either through Wealth Management or real estate investing for raising funds. So I think about someone like Nick Huber who invests a lot in self-storage. He's been able to use his Twitter account and his email list to get a lot of new limited partners in for each fund that he's raising. That's made that much, much easier. He's also been able to spin off some really interesting businesses from there.
So I think that with your audience, you have a lot of people who want to invest alongside you. That could give you the opportunity to have the Afford Anything investment fund, and that could scale really well. But the second thing is I like to think why not me? So when I see these other businesses, especially ones that maybe have someone's name closely tied to it. Like okay everyone's doing that, but why couldn't I do that? Why is it that I'm logging into Schwab and making a certain trade? Who's this Charles Schwab guy? Why am I not logging into?
Rachel: Why is he making all the money?
Nathan: Yeah. Why not logging into Paul Pant’s to make that trade? Why don't you have that next fund or in this next platform? So I think some of these things, some of these huge businesses that have become this years, years later, these all have a cold start problem. They're all really, really hard to grow initially. So as a creator, it's not solved for you, but you have, what was it, 78,000 people that can help you get past that cold start problem.
Rachel: And millions and millions of people listening to the podcast.
Nathan: Exactly. So there are these problems that seem absolutely huge, like to build a firm to compete with Schwab. That sounds absolutely incredible. But what if something was run by people of the current generation and wasn't a 100 year old company? What would it look like to create the next version of that?
So to know that you can build something on that scale, and you could get a new angle, and you get passed on that. It’s an insanely hard problem, but the hardest thing is the attention and the demand. As a creator, you have that.
Rachel: Yes. So which one are you launching?
Paula: You know, I like the idea, Rachel, your idea of taking Afford Anything Academy and bringing it to colleges, to high schools, and specifically to corporations. When you're addressing individuals, it's one on one times 1,000. It's one on one times 10,000.
But when you are going to a company and saying hey yes, you offer a 401k, but how many of your employees actually know what that stands for? How many of your employees know what that is? Here we've got this curriculum that you can offer to your employees as just a standard part of their onboarding and benefits package. Right?
Rachel: I'm already sold. I'm going to buy it right now.
Nathan: I mean, corporate training is a huge business.
Rachel: Yes.
Paula: Right. Exactly. So I think I see a lot of potential there. I'm intrigued. As I'm thinking about what does it take to start a competitor to Schwab. I mean John Bogle did it. Right? John Bogle is a founder of Vanguard. So what did he do? That would be my next question. How did he do it?
Rachel: Exactly. I mean, he found an angle for disruption, which in this case was price and fees and said that's the angle that we're going to have. I don't believe that that's the only angle for disruption in the space. So if we want to tackle a problem that big, there's a lot of things in it.
Okay. So as we wrap up, the thing that I want all of you to think about is the attention that you've been able to capture in your business. It might just be 100 people, it might be 1,000, it might be 500,000 on social media or any of these things, but think about that attention and just ask the question what is the highest return on investment place I could direct that attention? Both today and three years from now, five years from now, and on from there.
Because it might be that today, the highest return on investment place for you is to direct it at something like a book, like coaching, like courses, some of those things that are going to have a big impact in your cash flow right now. That's going to give you the time to think longer term.
So then what I encourage you to do, if any of this is like building a much bigger business or spreading your ideas to far more people sounds compelling to you then I would really think about the asset that you have and the value that you have in that attention. Brands are literally spending hundreds of thousands millions of dollars to reach the people that just subscribe and follow you that you don't even have to pay anything for.
You have one of the most valuable assets in the world that all of these giant businesses, Schwab and Fidelity and everyone else, they're paying to get in front of your people. They're paying for the thing that you already have.
So I just encourage you to think about okay, I have this incredibly valuable resource. It's going to keep growing over time. Where is it going to be three years from now? Where's going to be five years from now? What could I do with that? What's my idea as a billion dollar creator? So thank you so much for having us. That's the podcast. We'd love it if you'd like and subscribe and all that, but thank you.
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