Hey, would you look at the time? It’s getting late. Just two months until the deeply introspective blog posts start comin’ hot & heavy.
It’s still only mid-October, I know. Halloween decorations: in. Pensive rumination: out.
But hey, I caught myself thinking last night, I’ve finally caught up with the bookkeeping (thanks, Jess!), and I’m, you know, in the middle of a product launch… so why can’t New Year’s deep thoughts come early this year?
I’ve got a lot of deep thought, but mostly I’m interested in the numbers. Yes, the money. Money money money!
First, a Teensy Bit of Not-too-boring Background
In 2008, my income from products was $0.
Then 2009 was… well, let’s not go there.
But this year! The income from products (sorta) made it possible for me to quit consulting in January 2010.
I say “sorta,” because my products weren’t making enough to support me by January 2010. On the other hand, consulting was driving me batshit insane. So I took a look at my extra savings (a megapayment from a contract from hell), looked at my flagging products, and decided that dammit, I’ll make it work.
I decided that, come hell, high water, or income tax audit, I would figure out how to earn enough from products alone… enough that I’d never have to pour my creative heart out for a client ever again.
The Results are In
So… did it work?
From Jan 1, 2010 to Today (Oct 20, 2010)
I know you’re skimming past all those annoying words and going straight for the digits. Hi. Hello. They’re right here.
Here’s all the product-based income I can claim from 2010 so far:
|JS Performance Rocks!||$14,225|
|JS Workshops – Public||$57,483|
|JS Workshops – Corporate||$29,028|
|Year of Hustle Launch Class||$13,850|
|30×500 Launch Class (to date)||$31,150|
Hot diggity, that’s not too bad: $216,688. Actually, that’s a bigger number than I even thought.
It’s not all mine
That money’s not all mine – happily. I’m not a lone wolf. I’m a very sociable wolf who loves to hang out and hunt with a pack. (Okay… backing away from wildlife metaphors now.) That is, I don’t like working all by myself, even when I could do everything on my own. I like to work with other people because it’s fun, because it results in a better product, and because, honestly, I like sharing the wealth.
The new, improved reincarnation of that class, the 30x500 Launch Class does have material in it that Alex created, but is being run almost entirely by me.
Other number-y details
Also, as an FYI, these numbers…
- Do not include costs. All numbers are gross – that means I haven’t deducted operating costs, including transaction fees, server upkeep, freelance help, advertising, affiliate/partner shares, etc., etc.
- Do not count discounts as costs. I’ve only included money we received, so all discounts we’ve offered were deducted before payment aren’t being counted as revenue. (And for the Year of Hustle class, that was only my share – Alex received the money, and paid me my part.)
- May be a bit odd because of conversion rates. Some, but not all, of our training courses were paid for in Euros. I converted them to USD with a rate of $1.30, a reasonable average.
In fact, I’m trying to roll most of the Freckle income back into making Freckle awesome-r, but that’s another post entirely.
Earnings Are Sooo Not Static
Just the year-to-date numbers don’t tell anything like the whole story.
A business is like a living thing: over time some things grow, others shrink.
Following that slightly squicky metaphor, if my business were a body, Freckle would be the nose and ears (growing with age) and JSPR! would be, uh, something that shrinks over time. Height? Dignity? Neuroplasticity?
Err, anyway. Tossing that one in the discarded metaphor pile, along with my wolf pack…
JSPR! earned about $30,000 in 2009 (when it was new). It’s only earned half of that this year. We haven’t done many updates to it, and we haven’t pushed it much, either. This decline is natural, expected, and nothing to mourn.
Freckle, on the other hand, was earning about $3,300 a month in January. If constant, that would have added up to, let’s see… $29,700 in earnings to date, instead of the $70,952 that actually happened.
But when I quit consulting, I started spending a whole lot more time on it, and it’s grown quite nicely since. This month I expect we’ll just barely miss squeaking into the $12,000’s.
I’m still experimenting with what will help Freckle keep growing at this pace, or even faster. (And, like I said, rolling much of the Freckle money into that!)
Since you’re clever, you probably noticed that there are three types of income at work here:
- subscriptions (Freckle)
- ongoing trickle of one-off sales (JSPR!), and…
- windfalls (workshops & classes)
This is a beautiful mix, and one I’ll talk about in much more detail in another essay, but in short:
For all the training income above, there were 3 corporate workshops and 11 open-to-the-public ones. The windfall income from these is fairly small but the reusability is very high!
The Year of Hustle class was a slightly bigger windfall – in total, Alex and I took in about $22,000, which we split. (I only reported my part of it, since Alex paid me.)
The new 30×500 Launch Class — starting Nov 1, 2010 — should be about $50,000 all told. (Again, that doesn’t include costs, or revenue sharing for someone who will probably be helping me out.)
As you can tell, windfall income actually has made up the lion’s share of that large, tantalizing number.
I wouldn’t want to live off windfall income alone. But it’s really kickass for helping fund our lives while we work on growing Freckle (and building our next SaaS subscription product, Charm).
I’d like to grow the subscription income. A lot.
Almost all of my work on Freckle lately is either promotion (by myself and working with freelancers), or expanding features (designing features/improvements; finding, onboarding, coordinating with freelancers). Delegating is hard.
In Nov or Dec-ish, we’ll be shipping the private beta for our next SaaS, Charm. Charm is a bigger piece of software than Freckle, with more that could go wrong, but it will also be able to command a higher price.
I’m going to create more self-guided learning products, and do less live training.
I really enjoy live, 4-to-7-hours-a-day teaching. A lot. But it takes a lot outta me, and at some point, it’s not possible to charge enough for the tickets to make it worthwhile. (I gotta say, we haven’t reached that point yet! But we will.)
The on-going trickle of product sales (like ebooks) is sooo much less work… and Freckle & Charm are going to require a lot more attention soon.
So, Act I is to finish pimping & run my Launch Class. It’s almost 70% sold out so that’s good.
Once I can stop fretting about those last few seats, I’m going to spend a few days brainstorming on what kind of self-guided learning products I could create. I’m going to take a long hard look at what tech/biz things I know, am learning, or have been teaching, & figure out which ones would distill well and sell well. Then I’m going to make one or two of ’em for the new year.
Am I never satisfied? Why earn more?
Money is a tool for me — I want more money to hire people full-time, to pay for some boutique development work I want done, to do a few personal things I want to do. I want to be able to work with my dream team (and they don’t come cheap). That sorta thing.
Other than that, it’s all about the joy of the chase. I want to make a difference in the way that software is designed, and the way people work. Money is a fun way of keeping score, and a way to fund the things that can make those goals happen.
(And the money doesn’t go as far as you’d think, considering I spend in Euros and live in Vienna, which is not the cheapest place. And, um, there’s the little issue of (cringe) taxes. Paperwork is my kryptonite.)
The Story in 3 Bullets
So, yeah. In short:
- 2008: $0 from products (building)
- 2009: $85,102 from products
- 2010 YTD: $216,688 from products (projected $261,000)
(What happened in 2009 is another story — a story I’m working on telling.)
Considering I originally thought of making my own products almost 8 years ago, I’m glad I finally got off my ass 2 years ago and did something about it. (I’m glad, particularly, that I learned the life lessons that made it possible for me to begin, and the ways of working that made it possible to finish.)
How About You? Are you on your way to product-based income replacement? Do you want to be? Why or why not?