Episode 24:Passive Income: Fallacies and Truths
In this episode, we talk about the idea of passive income – which a lot of people find to be the holy grail of a durable freelancing practice. What is passive income? What forms does it typically come in? How passive really is passive income, anyway?
Summary
Nick and Kai record together from Nick’s Chicago office and spend most of the episode pulling apart the idea that passive income is low-effort. What actually sits underneath a selling product: market research, audience building, a drip email sequence, and ongoing iteration on the sales funnel, none of which stops once the product is live. Just Fucking Ship by Amy Hoy and Alex Hillman is the episode’s sponsor, and both hosts recommend it as the practical fix for stalling on a product idea.
Highlights
- Nick’s book Cadence and Slang, which he started in 2008 and published in 2010, only crossed the minimum-wage threshold for hours invested about six months before this recording. Illinois raised its minimum wage at least once during that stretch, so the target kept moving.
- Kai’s launch sequence for Podcast Outreach is running during the episode: pre-sales in September brought in roughly $4,000; the current launch has generated about $300. He frames it as the first iteration of an evergreen sequence, not a verdict on the product.
- Nick says every coaching client he has worked with has been disappointed by their launch. One client earned $4,000 in day-one revenue and was let down.
- The ‘passive’ in passive income covers fulfillment, not sales. You still build marketing systems, get on calls with qualified leads, and iterate on email sequences. Nick is explicit: ‘You get me. You don’t get NickD-Bot3000.’
- Nick says most educational products spike at launch and then hit what he calls a ‘fallow and shitty long tail.’ A friend with a book consistently in the top 2,000 on all of Amazon is, in his words, ‘the exception.’
- Kai recommends shipping the smallest version of a product first. He sat on Podcast Outreach for four months he didn’t need to because he kept saying he needed to polish it more. Launching earlier would have given him four months more data.
- Nick walks through the baseline marketing system: a free five-part drip course that gives away some of your expertise, mentions the paid product or a consultation slot in installment three or five, and closes with a direct ask at the end. It can run at 2 a.m. without you.
Read the transcript
Can I tell you about something I like? There’s a book, Just Fucking Ship, that I recommend to every consultant, product creator, and business owner that I know. Amy Hoy and Alex Hillman wrote Just Fucking Ship to give you, dear listener, a step-by-step path to get your side project into the hands of people who want it. Value it and are happy to see it. You see, shipping things is hard. I probably have more than 30 half-started projects just littering my desktop in mind. Projects that I started, got stuck on, and just gave up on. The problem? Old habits. The ways I was used to working. Things that my day job taught me, things that consulting taught me, they just don’t quite work right when it comes to shipping a product or a project. The good news? Just Fucking Ship gives new skills and habits and techniques that you could use to achieve what you want. Since I’ve read Just Fucking Ship, I finally shipped three, no, four, projects of my own. The Outreach Blueprint, my first book. The Independent Consulting Manual, a 13-person book on consulting that we co-authored. Podcast Outreach, my book on how to get on a podcast as a guest. And this very podcast you’re listening to, Make Money Online. I’d had aspirations to watch all of these things, write a book, start a podcast for years, and I just kept getting in my own way. What changed between last year and this year? The honest truth is I read just fucking ship. I learned how to become self-powered. I learned how to not wait for a third party to tell me what to do or give me permission. And I learned to just fucking ship. In Just Fucking Ship, Amy and Alex teach you 21 principles for getting off your butt and finally shipping your side project. Whether that side project is a book, an app, an open source project, actually writing on your blog for once. Teaching a class, learning something new, getting a better job, whatever it is, the rules to achieve it are the same, and the rules are learnable. And all that stands between yourself and shipping that damn thing is your old habits. So, why not invest in learning some new habits? Why not invest in just fucking ship? You can buy your copy of just fucking ship at justfuckingship. com, and just fucking ship is available in two forms. There’s the premium package, which includes a PDF of just fucking ship, a PDF of just effing ship, the bleeped version. How to build a product biz on the side, a one-hour discussion with Amy and Alex with gritty details and personal stories from their own experience. Five awesome bonus lessons exclusive to the premium package that will help you design and execute your launch, create and implement the world’s best and cheapest marketing strategy. Overcome the procrastination using neither the carrot nor the stick, and kick ass at planning and executing your plan. You’ll also get an assumption-busting 12-step product design workbook, more detailed than you’ll find anywhere else. A handy-dandy weekly check-in worksheet to help you keep yourself on track. Amy’s personal Kanban and Trello board templates. I use these all the time and they’re really, really, really good. How to ship your side projects, a one-hour recording of the workshop and QA with Brennan Dunn. And all of this, everything in the premium package, is available for just $39 at justfuckingship. com. That’s just Fucking ship. com. Or you could buy the basic version. It’s $19. You’ll get the PDF, both the bleeped and the non-bleeped version. And that’s totally cool if you want to go that route, but I highly personally pro tip, recommend, and encourage you to order the premium package of Just Fucking Ship at justfuckingship. com. And hey, we can make a book club of it. Once you buy your copy of Just Fucking Ship, send an email to me, kai at w youraudience. com With your receipt. And we’ll schedule a time for all of you listeners and us to get together and talk about Just Fucking Ship, the 21 principles that Amy and Alex teach, and the side project that you’re going to launch. And I’m excited for us all to get together and talk about it. So, call to action time. I want you to, right now, open up a new browser and go to justfuckingship. com and order yourself a copy of Just Fucking Ship. I highly recommend ordering the premium package. I think it’s the better of the two, but if you’d prefer, no harm, no foul, you could order the basic version just as well. You could order either one of them at justfuckingship. com. And if you want to ship your side project in 2016, you owe it to yourself to invest in a copy of Just Fucking Ship.
I turned the microphone on. We’re recording an episode right now. We’re just. We have to do this. We wanted to do like a lighthearted episode. It’s been a rough day, Kai, right?
It’s been a rough day.
It’s been a rough day. We. We’re in person still. Kai is in Chicago for the next two weeks, which is amazing, and I’m very grateful for it.
We’re here at the International Make Money Online headquarters located in Chicago.
Yeah. It’s just my office. It’s fine. It’s a crappy room somewhere.
And yeah. And for the episode, I thought it’d be interesting to talk about passive income fallacies and truths. There’s like as soon as you get into consulting, making money online, writing e-books. You quickly verge into, for lack of a better phrase, make money online territory. With The four-hour work week, a make money while you’re sleeping. And Nick’s written a number of books. I’ve written two books. We both have things that make us income, but I thought it’d be fun if we talked through the truths of selling products online, creating products online, and the amount of work it takes to really sell something and have passive income, and how passive income really is. Passive products, it’s you’re still selling, you’re still marketing, you’re still convincing people to buy the thing that you’re selling. It’s just that you’ve already created the thing, and somebody might show up and sign up for your email course and end up buying the thing, but you’re still putting time and attention and care into Making sure that thing sells. And it might be an e-book, it might be coaching, it might be consulting services, it might be a SaaS. But just talking a bit about the fallacies that surround Passive income and the realities of what passive income really is for an entrepreneur.
I don’t know a single consultant that I talk to that is not like, I want to get more passive income. I would love, if you’re out there, please ping us to meet a consultant who’s like, actually, I don’t want more passive income. I don’t want. To go to dinner, and then I get a Stripe notification that I made $50. Like, would anyone out there find that undesirable or like not aligned with their business goals or their lifestyle goals? Like, I think part and parcel with being a lifestyle business allows you to make money while you’re sipping my ties on the beach. And I ain’t on a beach right now. I’m working my ass off. And My book is selling, and Revised Weekly is selling, and I’m very grateful for those things. But there’s something else missing to it, right? And I think we need to demystify it a little bit.
Yeah, the the when it comes to any online product or course, you yourself, dear listener, might have Showing up at a website, signed up for an email list and bought a thing and gone, Jesus, I want, I want this, I want this for my business. But the truth is, From the customer side of things, you’re exposed to a tiny, tiny, tiny slice of the entire machine. You are just seeing. The surface level marketing that has moved somebody, moved you perhaps, through that funnel to buy a product, buy a thing.
Yeah, and you only see the end result of it. You don’t see what all the work was to go into it. So I’ll give you an example from a personal level. You may know me as a designer who wrote a book called Cadence and Slaying in 2010. It’s really great. I started that book in 2008. You know, like I started it and I worked my ass off on it, and then all of a sudden a book came, and I didn’t publish, I actually don’t really show unfinished works, so all you see is the book. But I shredded every one of the hundred odd drafts that went into the book. And it took, just guess when it took for me to get above the minimum wage level for the amount of hours that I worked to the amount of profit, not just revenue, profit that came out of the book. Just guess. Two years. It took until six months ago. Six months ago. I finally got above the minimum wage in Illinois. And to be fair, Illinois hiked the minimum wage once or twice during that period. So, like, you know. It was a moving target.
The state is fighting against you.
The state is fighting against you. Inflation is fighting against you. I haven’t really hiked the price of my book that much, right? But uh the amount of money I’ve made directly on physical sales of Keynes and Slang has been pretty negligible given how much ass busting occurred to actually get to it. And so yeah, I have you know sales coming in and it feels great to know like, oh wow. I sold a book to the CEO of Hulu. Oh, wow. Hulu bought 21 copies of the book, etc. , etc. , etc. That’s a theoretical. I think that people look at passive income, and all they do is they look at the result of it. And they look at the person like pumping themselves up on the internet and being this really cool big shot consultant. And they’re like, wow, I really envy that because, you know. Kai Davis is making money online and he’s able to fly to Stockholm and hang out. Nick D is able to fly to Australia and drink his body weight and espresso. It’s not You still have to work. And actually, it’s riskier because you don’t know if the thing is going to sell.
Yeah, I’m not sure if it’s the current headline on the page, but Amy Hoyce 30x500 used to have the headline. What if you made a product and no one showed up? And that’s sort of the fear that you have when it comes to Creating a product or having passive income. And I think, like taking a step to a higher level, when we think about passive income, well, the idea is people show up and give you money for something, but let’s deconstruct that. Okay, you need a product, you need a thing they’re going to buy, you need marketing, so you need be it an email course, webinars, ads, something. To bring those people in, you need an audience, people that you’re continuing to pitch and present to to get them to buy the thing. And once you create, and you need a research process to understand, well, what exactly is it that the target market you want to sell to. Actually, it needs and wants to buy. And so it’s easy to look at somebody who’s throwing an e-book up online or put their time and energy into creating a type of product and say, oh, that’s easy. They just made a thing and people buy it. But Once you create, well, first you have to go through the labor of understanding what your target market wants to buy. Then you need to make the thing, and then you need to invest your heart and soul into developing marketing and sales channels to actually sell the thing. It’s not as easy as I made an e-book and I put it on Amazon for $9. 99. And look, I’m number one on Amazon. I’m a bestseller. I’m a millionaire now. It’s In a sense, creating the product is the first step in a very, very, very long marathon of continually iterating on and building up marketing channels so you’re able to sell. And I mean, echoing off of Nick’s point. For any product out there that you buy, you might have been the product creator might have invested a hundred hours or a thousand hours in iterating on that product to get it to a point where it’s able to sell. There’s the wonderful metaphor that I overuse where It’s common for us to compare our current chapter of life to somebody else’s, not understand what the difference really is. Somebody else might be on chapter 20 of their story of product creation. And you yourself, or I myself, am on chapter two. And it can be discouraging to look at them and say, like, well, they’re making, you know, $20,000 a month or $5,000 a month. Why am I not there yet? Well, It’s because you need to make the thing, you need to build the thing, and then you need to iterate on marketing the thing to get there.
I think that it’s easy to get into this field after you see all the people that are operating like level 600 special topics and doing all the really crazy stuff. and they’re famous, and they have thousands of followers on Twitter, and you end up respecting them tremendously, but then you end up envying them, and you wonder how to get to that point. You don’t really see the people that are kind of laboring in the trenches and they’ve only stacked two of the bricks in the wall that is necessary to actually build your business. And so I think that it’s important to just kind of have this Eight-minute disquisition a little bit about how, like, you want passive income, and what you’re going to do to get to passive income, you’re probably not going to like. And it’s probably going to look a lot like the same kind of work and stress that everybody else puts into making a program. Product. And it doesn’t look a whole lot different than the things that I actually cast out there and launch pretty quickly. Like Revise Weekly took two weeks, but it also took three and a half years of experience. So it’s weird. It’s this you spend a lot of time authority building and hacking through things, and then when it’s actually time to launch the thing, it’s A little bit anticlimactic, right?
Yeah, there’s another phrase I love and overuse: just another Tuesday. And you could think about: well, any product launch, anything you create, It’s not the final chapter of the book. It’s, you know, just one step in it. I mean, like, right now, as we’re recording this. I’m in the middle of a launch sequence for my book, Podcast Outreach, and the sequence is not going as well as I wanted it to. I announced the book for pre-sales in September of last year. And brought in around $4,000 in revenue over it. And my launch sequence is going on right now, and it’s brought in about $300 of revenue. And that’s, in one sense, disappointing. But in another sense, I’m reframing it as like, okay, I have an asset that I know people like and enjoy. The book. I have the first part of an Evergreen launch sequence. That I could iterate and improve on. And now I could say, like, okay, great. What are the things that went well? What are the things I could do better? And how do I continually iterate on this? Because it’s not just about the singular launch, it’s not about The launch of podcast outreach being the pinnacle-defining chapter in the narrative of Kai Davis and Passive Income. It’s okay, this is the first thing I created. This is the first real launch I’ve done for it. What lessons can I take away and apply to the next launch I do and the launch after that and the launch after that? Because nobody’s going to be sitting there keeping scores saying, Well, Kai, you know, three years ago you failed on this launch and it didn’t go as well as you expected. People just see from the outside, like, oh, he launched a thing, and now he’s launching another thing, and he created this thing, and he must be doing well. Well, passive income happens, and you grow when you. Invest the time in iterating on it. And I’m excited to say, okay, I made this much from it. What do I need to put in place so it’s consistently making me $500 a month? Whenever I’ve thought about passive income and building assets like a book or online courses, I’ve always set milestones of like, okay, great, how do I get this to the point where it’s covering my car insurance? How do I get this to the point where it’s covering my car payment? How do I get this to the point where it’s covering my rent check every month? And slowly stacking up small wins that way. It’s not. I launched and hit $10,000 in revenue. I have friends who are like, hey, you know, I launched my product and it’s doing $1,500 a month, and I’m really disappointed in that. And I’m like, holy shit, that’s paying for your rent, and that’s paying for like your groceries. That’s amazing. You made a thing enough people want to buy that often.
I watched a coaching client launch to $4,000 of day one revenue and be really disappointed about it. You know, like that, that absolutely happens. And Actually, I haven’t had a single coaching client come in and launch something and not be disappointed by it. And everyone has launched over zero things. Everyone. And I’m looking at it. You validated your market by launching the one thing. There’s something wrong with your sales funnel, fix it. So with that in mind, what are the kind of forms of passive income that we’re talking about? I think we’ve kind of danced around the problem. And for those who don’t know, it could be a book, right? You sell the book. At 3 a. m. and you wake up and you realize you’ve sold the book. That’s great. I would actually lump like retainer-based productized consulting services under passive income as well, where you get the client signed in and you deliver a lot of value and it works out really well. And then every month you get X dollars put in your bank account, and you continue to like have to do a manual fulfillment process, but there’s something to that. Any sort of subscription-based like course content or something like that, like a private mailing list like what I’ve put together with Revised Weekly, or what like you would get out of like a giant course like W Freelancing Academy from Brennan Donne or any of the Alan Weiss things. That is that’s all different types of passive income that allow you to fulfill the work pretty easily. Anything that has like like an open-ended launch window or like a rolling launch, right? So you can have a book or a course or something like that. Pretty much anything educational, I would say, falls under that, right? Anything that’s like an educational product. If you’re selling like a page teardown or something like that, like a one-off productized consulting service, and it has a buy button, like a clarity call or something like that, I don’t use clarity, but I know a lot of people who do, and that sort of stuff. Those are all different forms of passive income. The thing that unites most of those. is it’s either low involvement, like it’s a clarity call or it’s a consulting call or something like that, or it’s educational. And you can have $10,000 educational products that sell via passive income. It’s uncommon. You would usually create like a big discrete launch for it. and we’d ladder people up so they’re eventually used to paying you $10,000. Very rarely do people come in the door and want to give you $10,000 for something. I think those are the biggest types. Am I missing anything, Kai? Nothing that I could think of. What I’d add is, in all the examples we’re talking about, as I mentioned earlier, There’s still the need for a marketing system. So let’s say you have a $10,000 course that you have a launch event for. Well,
You’re iterating on the marketing that drives people towards it, and maybe you have an application process for the course, and you’re getting on a phone call with everybody who applies and screening them and making sure they’re a good fit. you’re still doing work. You’re just making money without needing to invest a lot of time in the fulfillment of the product or the course. So I think passive income is less about I’m making money while I sleep, and more about, hey, I’ve created a thing that people are able to buy without me needing to be Heavily involved in the fulfillment process. And through that, I could focus on marketing automation to drive people towards it, or elements of sales automation to drive people towards it. But the dream of I long and I keep going back to this example just because it stuck in my mind, but the dream of, hey, I tossed my book up on Amazon and now I’m in passive income land. It’s not entirely true, or the dream of, hey, I put up my Shopify story and I’m drop shipping things. Well, you’ve eliminated the need to do Fulfillment, but you still need to do the marketing and the audience building and the sales around that. So people show up excited to buy your thing.
Most educational products have a giant spike at launch and then a very fallow and shitty long tail, which you will not enjoy and you will find to be very painful. I mean, you’ll see a lot of Amazon books that have like a long, sustained long tail. I was actually talking with somebody who has a book in the top 2,000 on all of Amazon. com consistently forever. And must be nice. You know, he made some evergreen content and was insanely valuable for his audience, and that audience is pretty standard and unlikely to change over a long period of time. As people enjoy the book and get value out of it, there’s kind of a knock-on effect with that. That is thrilling and wonderful, and a thing to work towards, and the exception. It is not something that happens with most titles and especially most niche titles. You will probably exhaust your addressable market, or you will have to market more aggressively to those who might actually be good customers. We’ll talk a little bit about some techniques to do that in a moment. But just to set the table, you’re not going to be like a Derek Sivers or a Tim Ferriss or whatever have you overnight, or like a Malcolm Gladwell, where, you know, you’re putting out books and there’s always going to be an audience of like ultra fans and they’re all going to be really successful no matter what you do. And you already have this like entrenched system to get on the New York Times bestseller list. Temper your expectations and then gain a clear sense of when something is going wrong. Try and figure out why and try and fix it. The best business owners are very, very calm and rational in their dealings and their negotiations, and you You cannot think that people are crapping all over your baby because somebody didn’t buy your book.
Entirely. Entirely. I think people often discount how much of a win. $500 a month in recurring revenue through product sales or coaching call sales or a low touch retainer-based engagement can be. I mean, if you think about it for an average consultant, let’s say you’re earning $10,000 a month and you have $500 or $1,000 in recurring income, that might be a client slot that you’ve been able to replace. And you could slowly scale that up and buy yourself out of consulting or buy yourself out of some consulting engagements. I think It’s important, like Nick’s saying, temper the expectations and say, this is going to be a series of small victories. It’s not one huge launch event that gets me there or one huge spike. Putting a system in place that could repeatedly execute on selling a thing for you, and then investing that same amount of time you would have spent doing the work. Doing the work on your business instead, iterating on that launch sequence, iterating on your sales sequence, iterating on your understanding of your audience. So you could better serve them or launch new products to serve them. There’s no truly successful entrepreneur I’ve known of or met. Who is living the passive income dream and spending their time not working? They’re living the passive income dream and spending 20 to 40 hours a week working on their business and their systems and improving it. And I think across the board, that’s true. When it comes to passive income, what you’re doing is building yourself a business that you own and run and control yourself where you aren’t answering to somebody other than yourself. And that means you could take a Friday off if you want. but it also means you’re accountable to yourself.
Building a passive income product is not unlike you have a store. You have stocked the store with products. Those products are your passive income products. Okay, if I walk into a store, or if you walk into a store and there’s nobody at the cash register And it’s just an iPad that says, you know, check out here. And assuming everyone is a good actor and they’re not going to steal. There’s no customer service process. There’s no education process. Unless it’s a highly durable good, like I need toilet paper today, and there’s a box that says toilet paper. you’re probably not going to sell the product. And you’re not in the toilet paper business if you’re listening to this podcast. You’re in the business of educational probably technologically focused or at least thinky products, right? So your sales process needs to be a little bit more high touch because you need to convince people about why they are feeling the pain. they have, what they want out of a solution, and that you’re able to provide a practical and sensible solution that generates more value than you’re asking for. This sounds difficult. It’s really a process of understanding customer needs, shutting up and listening, and delivering something that actually matters. So it’s easy to say The key to having a successful product is to have a product that somebody wants to buy, but you need to have a product that somebody wants to buy, right? Like there’s no substitute for that. And the best way that you do that is by asking potential customers what their needs are, shutting up and listening and synthesizing that information and taking action on it to solve valuable and expensive problems that they’re feeling.
Yeah, I completely agree. And Nick and I to switch to the consulting track for a second. Nick and I both practice the productized consulting methodology, which boils down to Instead of going through a proposal-based process to sell consulting services, we have buy buttons up on our website. And we have a sales page that talks about what you can buy as a customer. And well, the outcome of that isn’t people magically show up and pay money for what we’re selling. The outcome of that is we’ve eliminated one small portion of the sales process so we could focus on Marketing and selling the thing. And it’s the same way with a product. You get to that point by understanding what the customer is looking to buy, what the customer is looking to purchase, who you really want to serve. I wrote an article about this, the triumvirate of positioning, where it’s the overlap of the expensive problem your audience is experiencing, who your target market and audience actually is. And the discipline that you’re using to solve that problem for them. And it’s the same when you’re creating a product that you want to be evergreen passive income. You are addressing those exact things. Who am I making this for? What is the problem they’re experiencing that causes them pain that I could help them solve? And what tools, what methodologies, what techniques am I sharing with them to solve that problem themselves? It comes down to answering those three questions when you create a product. And then, well, you’ve got the product, but then you need the marketing and the sales to continually sell that product.
Having the product is not enough. You need to have a system of effectively meta-education around the product. And it does two things. It convinces people that the product is worthwhile and that you know what you’re talking about, but it also kind of provides a little bit of value for free, right? Like you need to provide some lessons or You know, if it’s a book, maybe a free chapter out of the book later on in the sequence, or that sort of thing. The most basic 101 way you do that is by creating what’s called a drip campaign, where you create maybe a five-part course. You have a button to subscribe to that course on your website, and it says, you know, subscribe to my free course on Let’s say you do Rails integrations for Stripe. I’m going to get way technical and wonky here for no good reason. And you are the grand vizier of getting Stripe to work on a Rails installation, which is not uncommon for like SaaS businesses, that sort of thing Thing. So just take those nouns and adapt it to your own business. All right, well, hey there, I’m Nick D. I’m I do Rails integrations for Stripe for a living. If you’re interested in hearing what I do and maybe it might be a good fit for you, you can download my five-part course on getting Rails integration to work on Stripe. And that five-part course gives away a little bit of your secret sauce, right? It teaches you, here’s how you do it. Here’s some things to watch out for. Here’s what would happen if you tried to do it yourself. Here are some people that have done it effectively, and here’s some people that have done it wrong, and what the good and bad might be about it. You’re kind of providing the lay of the landscape in the process of doing this. You’re also showing, hey, this is kind of hard, and there are a lot of experts out there that might actually take care of it. Maybe on the third or the fifth installment of the course, you say, By the way, I have this book about it. If you’re interested, you can grab it here. And here’s a coupon code for a 10% discount. At the end of the course, just be like, you know what? You’ve learned all of these things, and it’s hard. And Stripe is a credit card processor, which means if you’re messing up the code on your credit card processor, you might end up taking like an extra order of magnitude more money from the customer. You might end up doing something really damaging to them or to you. You might end up not charging them at all and then not making any money that month and having to wind that back. Is that worth the risk? Or do you want to hire somebody who’s actually really capable of doing this? Grab my book, and I can show you everything about how. Or here’s a button to schedule a one-hour consultation with me. You’ve done a little bit to promote your authority and also sell the product. This can happen at two o’clock in the morning. You know, like anybody can sign up for it. But it’s not just the product at that point, it’s also a system of education and small acts of generosity around it that actually flag you as a qualified and competent human being around it.
Yeah, this is why in my consulting work and my writing work, I’m so focused on audience building. Because to effectively sell a thing, a product, a consulting service, whatever, You need to have new people coming in who you’re able to talk to and build that relationship with, and educate and teach. I love podcasts because, like this, it’s an opportunity to teach people. And at the end of a podcast, you’re able to say, Well, hey, if you want to learn more about this. Sign up for my course on Badanka Donk, and you’ll learn how to be a better Badanka Donk specialist. And it moves them forward. It shows them that you’re an expert about Badanka Donk. And then when you pitch them on your book about Badanka Donk, I’m going to say Badanka Donk a lot now. It feels natural and it feels normal. You’ve demonstrated authority. You’ve demonstrated expertise. You’re demonstrated you’re somebody who has a large knowledge of this subject and can teach them. And so it’s not a cold pitch out of anywhere. And that’s really what I think a passive income system looks like. It’s not, Somebody magically showed up and the money came from heaven. It’s hey, I built an automated system to turn strangers into friends, into trusted colleagues. and then tell them about a thing I put a hundred hours into building that they could buy for forty nine dollars. It is so much more valuable to build a
automated system for nurturing and developing professional relationships than it is to say, here’s my book, buy it. And to put it on Amazon, which is a disastrous idea, and to charge $10 for it, which is an even more disastrous idea. You need to make sure that your considering the customer’s actual genuine needs, figuring out what you can do to deliver to those needs, and then executing on it. And the best way to do that is to be generous and be a good educator and Help people before you start asking for their money. I know everybody wants to rush to the money bit, and you probably might have done that because you’re listening to a podcast called Make Money Online. Sorry. Yeah. Sorry about that. Where you listened to 27 minutes of this podcast and we kind of like kind of threw that in there. You’re going to have to do the work. There is no substitute for the work. The people that are doing those They’re working 20 or 40 hours a week on their passive income. They’re building and nurturing those systems and answering people’s questions and continuing to grow those relationships. And that is in many ways a manual process. If somebody comes in the door for a productized consulting engagement and it turns out that they’re a good fit, You get me. You don’t get NickD-Bot3000 coming in and asking a bunch of questions about it. You get a real person who is going to probably haul you on Skype and then ask you a bunch of questions about what you’re doing. And I don’t think that I’ve ever regretted getting on a Skype call with a qualified lead. You know, like. There’s definite I’ve learned something out of every single lead that I’ve gotten, even the ones that don’t pan out. And it’s in many ways a manual process. Don’t look very passive, does it? Everybody wants to talk about it being passive. They want that four hour workweek stuff. No. No.
You have to do the work. Even Tim Ferriss himself, on an episode of his podcast, said, you know, people always, and I’m paraphrasing from memory here, but people are always like. Why, why? I just want to work four hours a week. And he’s like, the book isn’t about just working a four-hour work week. The book is about work smarter, not harder. Figure out the shit you don’t need to do. Cut it out. Ruthlessly delegate. Ruthlessly Eliminate the things you don’t need to work on and don’t need to focus on, so you could focus on the important things and work a 30 or 40-hour work week where you’re more efficient than you would be otherwise. It’s not about I’m on the beach drinking a Mai Thai. It’s well, hey, how could I process less email? Well, I could make it harder to find my email address. I could use a service like Sandbox. I could hire an assistant to act as a gatekeeper. Well, now you’ve just reclaimed maybe three to five hours of a week that you could focus on building new systems and improving your business. I mean, he did name it four-hour work week, though.
Yeah. Kai is shrugging. It’s a good title. It is a good title. It’s a powerful notion. And I believe the next one is like. Escape the shackles of your nine-to-five job. Now, that I agree with. I don’t have any shackles of a nine-to-five job, and I fucking love it. Oh my God. Basically unemployable at the moment. But it. You can’t just go, you can do passive income today. This is not something that I would recommend you hold off on because anything that you can do to develop your authority is going to be really solid. I feel like we’re dancing around it and kind of outlining the contours without stabbing it dead. What things can somebody do today that will help them generate passive income in an effective and responsible fashion?
I think it comes down to being willing to create something shitty and getting it out there and not being stuck on perfection. The first step to, okay, like we’ve outlined: like, you need a product, you need a thing, you need a sequence to tell people about the thing, you need to build an audience. Doing these things imperfectly will get you so much further than waiting to do it perfectly. So. If you have an idea in your head for a book or a course or a product, well, what’s the smallest version of that thing you can make that solves the pain for the customer? What’s the smallest, quickest version you could ship? Is it, I’ve written 10,000 words in Markdown and I’m going to export it and sell it as a book? Cool. You made a thing. Now let’s see if people buy it. Ideally, you’ve done some research first and validated, either through doing consulting engagements or studying your audience online that This is a pain they’re experiencing that you could teach them how to solve. But the important thing is doing shipping that first shitty version as soon as you can and getting it out in the wild. And starting to collect feedback from people on, like, would you buy this thing? You won’t buy this thing. What would need to change for you to buy this thing? And then iterating on it. It’s never too soon to just get that first crappy version out there. And have people exposed to it and able to buy it. Same thing with an email course. Like looking back on it, there are a hundred different things I could have done with this launch sequence that could have improved it. Great, I am happy that I shipped it as it is and as it was because now I’m able to say, okay, I shipped it. I know to improve about it. Let me do version two of it. Let me make it more evergreen. Let me improve on these spots where it fell down. I wouldn’t have had those lessons. I wouldn’t have acquired that knowledge. Unless I had done step one of just shipping it and getting it out there. I sat on my ass for probably four months that I didn’t need to to launch podcast outreach as a book. Because I kept saying, I need to polish this a little more. I need to get more value in there. Because I honestly was afraid that it wouldn’t deliver enough value. When the truth is, had I shipped it four months earlier, I would be four months further along the curve, have four months more data. Have four months more information to create a better product. The longer you wait to ship something, the harder it is to improve it. There’s a book we’re going to recommend called Just Fucking Ship by Amy Hoy.
It is about just fucking shipping and getting over the issues that you have that delay it by four months. Because you know what’s going to happen? You’re going to kick yourself and say, I wish I had done this sooner. I wish I hadn’t just, you know, racked my brain about it and tried to figure it out. Just fucking ship gives you an actionable and solid plan for Actually, completing the product that will lead you eventually to passive income. You can’t have passive income without a passive income product, right? You want to create products. You’re here listening to minute 33 of this podcast because you want to create products. And that is the best opportunity that you have to try and figure that out. She makes a connection to a dinner party. I threw a dinner party with Kai Davis in it last night, and it worked out great. I had a wonderful time. And if you’ve ever thrown a dinner party or you’ve been to a dinner party, you know that they are pretty achievable things. It’s not you’re not the first person in the history of Western civilization to do this. But there’s no blueprint to it. And there really should be. I think so. I think Kai is nodding. So, um. If you go to, I believe the website is justfuckingship. com. Let’s take a look. Just fuck. Yeah, autocompleted. JustfuckingShip. com. It is a very small book that is written by our friends Amy Hoy and Alex Hillman, who are just killing it. They are very, very good at just fucking shipping. To the point where this book they wrote in like 24 hours or something like that. And they’ve been updating it and continuing to provide wonderful value. And it starts at $19 of just the PDF, but then you get all these workbooks and insane amounts of value for just double that money. And yeah, they this is the first time we have somebody sponsoring this podcast, which I guess I should have mentioned before I did this giant hard sell on this book. But we educated you for half an hour about just fucking shipping. And you can do this too. This is an achievable thing. We talked at the very beginning of this podcast, in the first like two episodes of it, about how we’re just dueibazoids from Chicago and Oregon, and we’re not that special or important. But we do the work and we crank on it and we do something that’s that’s great about it. Kai, do you have anything else to add about this?
I’d say, yeah, but step one is understanding the target market and the expensive problem you solve. And step two is creating the smallest possible thing you can. That solves that problem for that target market. And whatever idea you have in your mind right now, well, first ask yourself: is this an actual pain and problem that I’ve seen in this target audience? Or am I imagining this pain? Do I have a solution that’s in search of a problem? Or have I found a problem that I could now create a solution for? Second, create the smallest possible version of it possible. Is it You want to create like a twelve chapter book? Well, can you write a three-chapter book and sell it for a quarter of the price and see if people will buy it? You want to create a huge epic video course? Well, can you ship like A small weekly video thing where you’re recording a five to ten minute video where you’re teaching them some small facet of a thing instead of a 15-hour video course. Whatever your idea is. Chop it down to the smallest idea possible and make that and get it in front of your target market and see, will they buy it? That’s the quickest way to validate whether the product is worth it.
And then profit. That’s basically it. So we’re going to ship this podcast. You’re going to get off and you’re going to think about what you can do to actually address a customer’s need. And hopefully, you have an awesome rest of your day doing so. Thanks so much.