These are the notes and highlight of the Salon about Earning on Jan 6, 2021.
A window of opportunity for individuals
Traditionally only organizations were able to organize value exchange at scale. It was complex to organize the processes to create a product, distribute to a large audience, and collect the value in form of earnings. We are currently living at a time where a window of opportunity opens up. Individuals have access to equal - or in some cases even more powerful - tools for almost all parts of this value exchange.
- It has never been easier to create, given the vast amount of technology and software available to most of us.
- Blogs, website builders, and social media platforms make it very easy to distribute knowledge to huge numbers of people.
- Payment providers and platforms allow individuals to collect one-time payments and subscriptions. Indy shared from someone in his environment that in the last 1-2 years it became much more frictionless to collect payments for individual services, e.g. via Stripe or Paypal.
Marketing as the hardest part
We wondered what part of this value exchange could be missing and talked about sales and marketing. Companies invest huge resources to market their products. So we drilled down into two aspects.
- Raising awareness for a product or service is often done by large scale advertising. This is where social media opened up equal reach for individuals. It still requires work and maybe a little luck but the potential to reach thousands or even millions of people with your messages is unprecedented.
- Another important part is to inform and sell to those people who indicated an interest in a product. On-demand information from web sites and social media profiles easily provide additional information at scale. We touched on the Amazon affiliate model which most likely already inspired software companies to provide similar solutions for individuals (track conversions and pay out a share).
But the best part is that individuals don't even have to engage in high effort selling activities when they focus on earning instead.
The difference between selling and earning
Selling an earning happens at different points of value creation. Selling happens before the value is delivered. This used to be a requirement for physical products that took substantial resources to produce. So the seller had to make a promise, do the sale, and then deliver the goods or services.
Earning on the other hand happens after the value is delivered. We know this from earning a salary. The work gets done and at the end of the month, you earned the payout. As digital goods have no marginal costs to duplicate, there is no inherent requirement to sell them. Instead, financial remuneration can be earned.
This difference in timing could explain why many people perceive to sell as uncomfortable and to earn as great. When making a sale it creates an obligation on the side of the seller to deliver on the promise. This can feel awkward especially for people that are generally modest or insecure about the nature of a value transfer. Earning on the other hand happens at a point in time where the value is already delivered. This will typically create an obligation on the side of the receiver to now share a part of the value. This feels great for the side of the person earning.
The point of value creation
Haider mentioned a distinction drawn by the Personal MBA between value creation (writing a book) and value-delivery (people reading the book). Tom replied from his experience as software developer that coding software alone is not enough as value creation. The value is only created if a person is actually using the software.
This aligns with the knowledge entrepreneur definition of creation where experiences determine the value of your creations. It's also why physical products that can't be sold anymore, quickly lose their value, up to the point that people pay money to get rid of them.
Earning is to capture part of the value in return
It can be hard to overcome the barrier to ask for part of the value you are creating in return. Looking at it with the right mindset may help. Earning is to capture a small part of the value you create in return. Done the right way it is a modest ask that makes a big difference to everyone involved.
I shared from my own experience that some books have significantly changed my life and I would love to give more to the author. I frequently do this by buying more books from them but I never put money in the mail. However, if these authors would ask, I would happily provide them with more value in return. They earned it!
To earn, don't forget to ask
The most important advice I give to creators is to implement at least some system to be able to receive financial contributions and then ask. Many creators deliver tons of value but have no system in place to ask. Ideally it should be done after the value is created. An ask doesn't have to be financial. It can also be the ask to connect on Twitter or subscribe to a newsletter.
Tom shared the story from a creator he knows who creates a blog about history (thehistoryblog.com), writing hundreds of articles without any form of remuneration. She is enthusiastic about the topic. It can be hard for an expert - especially a good one - to see the value in their work because they love what they do and maybe it is even easy for them.
Earning makes an entrepreneur sustainable
Haider shared the story of a project that provided a space to commit to writing 200 words per day to build up the habit. Unfortunately, they didn't find a way to earn and so stopped their services. A slightly different variant of it 30by30 framed the same goal differently. They succeeded to capture enough of the value they create so that they continue to stay in business.
We used the opportunity to point out the importance of the right framing for your product. Maybe 30by30 gave their audience a clearer picture of what they will have achieved after 30 days while 200 words focused on the daily "chore" of writing the words. Even though it described the same amount of writing, the framing might have made a difference.
How to start earning
Yina asked about concrete next steps for how to start earning. She took the example of a productivity product that is currently in development.
Judging from my own experience, Yina is a productivity expert with plenty of possibilities to start delivering value to an audience. We emphasized the importance of working in public to give more signals of expertise. Tom pointed out that access to an expert is often something that can be marketed early. Even without a finished product Yina could already offer access to her skills in the form of workshops or consulting. This would also allow her to get quick feedback from people interested in her expertise.