Here’s what you should do if you want to start a business but are stuck in a job

A lot of people have a job but would rather start a business. Problem is, they feel stuck.

… They feel stuck in their job because it pays them a predictable paycheck every week and they need to pay the mortgage and put food on the table rather than risk starting a business and not knowing whether they’ll be able to pay their mortgage during the early start-up days.

Friends, former coworkers, potential clients — many of the folks I know are in the same boat. Just recently someone reached out because they were facing exactly this scenario: They want to start a business, they have entrepreneurial aspirations, but they weren’t ready yet to give up the predictability and assurance of a paycheck.

HERE’S THE ADVICE I GIVE TO EVERYONE WHO IS STUCK IN A JOB AND WANTS TO QUIT

(The good news: It’s easy and fun to do, and there’s ZERO risk).

First, decide what problem you want to solve and determine what target market you want to serve. (Check out this blog post about how to research niche markets).

As well, start thinking about how you’ll solve this problem and serve this target market. You do not need to nail down a specific product or service that you’ll offer, although you should start thinking about it. However, you do not need to have a product or service yet, nor do you need to figure out price, etc.

Second, build a website about that problem and the solution. You can create a free website on a site like blogger.com or wordpress.com, although it doesn’t cost very much (and it looks way more professional) if you build a website that you pay for (i.e. buy a URL and get it hosted on a server). It’s simple and affordable (maybe $100 a year) and it gives you a ton more credibility.

Once you’ve built the site, just start writing about the problem and solution. I recommend a blog, although you don’t have to use a blog. But I do recommend that you blog about the problem and the solution regularly. At least twice a month, although you should probably blog about it a little more frequently than that. (Once a week is great).

Blog. Blog. Blog. Just keep blogging. Keep it simple, have fun, and most important, be helpful! Don’t worry about giving away your secret sauce too early; just add value to your audience and get them reading your site and listening to you.

The reality is, you probably won’t get much traction in the early weeks or months. That’s okay. There’s a few things going on here:

  1. You’re building a great foundation of content that will benefit you later
  2. You’re positioning yourself as an expert
  3. You’re testing the water to make sure you enjoy it and can sustain talking about it

… and of course you’re doing all that without quitting your job; you can do it about half an hour a week, in an evening. Easy!

Third, start sharing your content on other sites. Slowly start building marketing accounts at sites like Twitter, Facebook, YouTube, and start participating on industry forums. Don’t aggressively market, just start building content and interacting with people who find you there. Expect this to take a few weeks or months. That’s okay. Just keep working and having fun building this foundational component.

Fourth, assuming you’ve done the first three steps correctly, and a few months have passed and you’re now starting to get some traffic and some people listening to you, then you can decide what to do. I would consider building an email list at this point using a service like Aweber. Sign up for Aweber and add a contact form to your website. Then website visitors will add their email address to the contact form and you can start emailing them to connect with them on a deeper level. Again, expect to take a few weeks or even months to do this. There’s no rush.

Fifth, at this point, you should start thinking about something to sell. If at all possible, start with a content-based product that you can create and sell for passive income (such as an ebook or video training). That’s the best option, because it allows you to do this all while you’re still working.

If it’s impossible to start with a content-based product (for example, if you want to start a service-based business) then you need to make a decision:

  • Are you able to provide the service in the evenings and weekends? If so, you might consider starting that way. Lots of businesses start that way and it doesn’t take long to ramp up from there.
  • Are you able to outsource your customer leads to someone who can run the business? If you can sell your leads to someone else, or hire someone to perform the service for you, then you’re good. No need to quit your job if you don’t want to.
  • Or, you might have enough work to quit… then go ahead.

The easiest way to do assess whether or not you have enough potential business to quit your job is to do this: Send out an email to the list of contacts you built in the previous step and say, “Hey, I have some availability in about two weeks. You can hire me to (… do whatever service you’re selling). If you’re interested, just reply back.” If no one replies, there’s your answer. If people do reply, give them a small discount if they pay in advance so you have some cash flow during the transition. Then march into your boss’ office and hand in your two week’s notice.

QUESTIONS PEOPLE ASK ME ABOUT THIS METHOD

How long does it take to get this going? It takes only a few minutes to set it up and only about 30 minutes to an hour each week to keep it going. But the time to get to the point where you can quit your job, that part depends on you: You could be looking at weeks, months, or even years, depending on the target market you chose, the problem they feel and the solution you offer, how much you charge, and how much you position yourself. But I’ve seen this work over and over, and I’ve seen it take as little as 2-3 weeks. If you want, you can do this over a period of years; there’s no rush.

How much does it cost (or, can I use free services?) You CAN do this entirely for free. Actually, this is exactly what I did way back when I first started (using a blogger-based blog and a yahoo email address!) However, I wouldn’t recommend it. Setting this up doesn’t cost much — maybe $250 a year, max — but the level of professionalism that you achieve with that investment is priceless. Plus, if your business grows really big, you’ll need to eventually switch over to a regular (paid) site and that switch can be challenging after all the marketing you built up to your original free site in the first place. So seriously consider a paid site.

What happens if someone contacts me to buy from me but I’m still working and can’t serve them? If you can, see if you can help them on an evening or weekend, if appropriate. Or, sell them as a lead to another company who can help them. Or, if neither of those two things are possible, just tell them that you’re fully booked and can’t serve them at this time.

What happens if it doesn’t work out? Great! You’ve lost nothing but some time. Consider selling the website to someone else or just shut it down and consider it an investment into an education.

NOW GET STARTED

This is a simple, painless, and even FUN way to build the foundation of a business with no risk. I would advise anyone with a job to start doing this right away, even if you love your job and don’t want to quit. This creates options for you down the road but doesn’t expose you to any downside today. You may be able to build up a business that will replace your income (or just augment it)… and it’s easy to do.

Artists: Selling your art is NOT selling out

A few years ago, my wife and I had just met another couple and we invited them over to our house. Since we were just getting to know each other, our conversation was marked with all those getting-to-know-you topics. Here’s a funny part of that conversation that I had with the wife of the couple visiting…

She: “So what do you do for a living?”

Me: “I’m a writer.”

She: “Wow. That’s awesome. What kind of writing do you do?”

Me: “I write sales and marketing copy for businesses.”

She: “Oh, so you’re not a real writer.”

That’s always a nice thing to say to someone. We’ve become friends with that other couple but I won’t let her live that comment down.

Then even more recently I had a similar conversation with someone else…

Them: “What do you do?”

Me: “I’m a writer.”

Them: “What kind of writing do you do?”

Me: “I write sales and marketing copy for businesses.”

Them: “Oh, so not the kind of writing that takes any creativity.”

Uhhh, yeah. Sure.

We tend to form these ideas about what art is and what it isn’t, and in both examples above, the person I had the conversation with was quite interested in what I do for a living for the short time that they thought I was an artist… and when they found out that my writing has a marketing and sales purpose, they quickly dismissed it as “not-art”.

I do not consider myself an artist. I write for a commercial purpose and I love it and I have no hidden desire to be the next great novelist or poet. The work I do takes an immense amount of creativity but the goal is to sell and to promote, and I’m totally cool with that.

But I mention these conversations because they illustrate something I’ve noticed pretty widely: People believe that art and commerce cannot coexist. You’re an artist or you’re someone who sells something.

I have a number of friends who are artists of some kind — painters, musicians, writers, etc. And, I sometimes hear from most of them that the life of an artist is a financial struggle. They are just getting by or they have other jobs to fund their art. But when I suggest that they could market and sell their art more effectively, they tell me that it feels like they’d be selling out.

I disagree. I think art can and should be sold, and I don’t think that becoming a great marketer and salesperson trades a piece of your soul or sells out your work. In this blog post I’m going to try to convince artists to fearlessly, boldly, and confidently sell their art without feeling like they’re giving up a piece of their soul.

WHO ARE ARTISTS AND WHAT IS THEIR ART?

We should probably first start with some definitions, partly for practical reasons to keep this blog post from becoming even longer than it’s going to be but also to address an interesting situation:

Let’s divide art into two different kinds…

  • There’s the type you might call “fine arts” or “visual arts/performance arts”, which are things like painting, sculpting, music, poetry, writing, acting.
  • There’s also the type you might call “practical arts“, which can still be very artistic but often have an obviously practical application, like cabinet-making, cooking, architecture, etc.

This isn’t a perfect distinction but I think that it’s clear enough. In broad terms, fine arts look and sound wonderful and/or provocative and they bring beauty and meaning into our lives when we encounter them; they connect us to a deeper humanity. Practical arts provide us with things we can use but can also be beautiful and/or provocative. That’s not a perfect distinction but good enough for the purposes of this blog post.

Interestingly, the fine arts people tend to be the ones who struggle with striking a balance between art and commerce while the practical arts people can make a living (perhaps even a very good living) by doing their work.

So the focus of this blog is on the fine arts or the visual/performance artists — to keep this blog post from getting longer but also because I think that’s the group that struggles most with the idea of marketing and selling their work.

Make sense? This might seem somewhat arbitrary but I need to draw a line somewhere.

Okay, with that somewhat arbitrary definition assisting us, let’s look at why artists resist selling.

MISCONCEPTIONS ABOUT ART AND COMMERCE

Let’s start with some misconceptions about art and commerce/sales. I see a few. These aren’t always articulated in this way by artists but I see the common patterns of these ideas among many fine art artists:

1. The poor artist creates the purest art.

I believe this is the one ring that rules them all — the most potent, pervasive idea about the relationship between art and sales and the one idea that influences the misconceptions that follow. It’s believed that the struggling artist creates the purest form of art.

It’s easy to see how this idea has taken root: Poor artists seem to be the best artists because all the trappings of life have been stripped away and all they are left with is their raw, unfettered emotion, which puts them in touch with that part of life that most of us cover up with money and possessions. In that way, their poverty is the key to allow them to access that emotional center.

Compounding this misconception is our love of the underdog: Who doesn’t love the story of an artist who struggled their entire lives against an unappreciative world and only after their death was their work recognized for its brilliance and meaning, and gained worldwide recognition? For some reason, that appeals to us: The artist was able to deny themselves the financial pleasures of the world in order to create provocative art and then the world finally recognized the value of the artwork, but not until the artist died… leaving their artistic purity unsullied.

I’m reminded of a book I read recently about the search for the Northwest Passage: In spite of seeing Inuit people living comfortably in lightweight fur clothes and traversing the water in hide-covered kayaks, British explorers continued to explore the Arctic with the worst possible equipment: heavy woolen clothes that did little to protect from the biting Arctic cold, and massive wooden ships that were often crushed by ice. Some asserted that British explorers would be more successful if they adopted the ways of the Inuit but these voices of reason were drowned out because the British social psyche was built around the explorer enduring hardship while maintaining their Britishness against all odds.

When I think about artists I think about those explorers. Artists, rather than accepting and embracing a sales and marketing practice that could help them earn a living, seem to prefer to be defined by their struggle against all odds.

This mindset, I believe, colors everything — from how artists portray themselves to their goals with each piece of art, and even to their career goals.

2. Art and sales are diametrically opposed.

When I said “career” goals in the previous paragraph, did that bother you? Artist is a career but I think we can pretty broadly paint artist as a lifestyle while careers are reserved for those who work for someone else.

This illustrates the idea that art and sales are diametrically opposed: The more sales an artist makes, the less it’s art. (Consider the painter who struggles through life without the deserved recognition of his or her work, versus the financial juggernaut of Thomas Kinkade — someone that most painters would disdain). If we were to apply the label “artist” and “seller” to those two extremes, it’s easy to apply the artist label to the unrecognized person who doesn’t bow to sales pressure and apply the seller label to the one who gives up artistic credibility to make a buck.

It’s as if art is about what is true and selling is about what is false; as if art is an expression of the thing that makes us human while selling is the dirty task of foisting an unwanted thing on someone else. It’s as if art and sales are part of a zero-sum game and the more you get of one, the more you give up of the other.

That leads to the third misconception…

3. Art shouldn’t need to be sold.

The third misconception I want to talk about is that art doesn’t need to be sold; that if people saw it and were moved by it, they would buy it… because they were so changed by it. (And if they don’t buy it then the art didn’t move them sufficiently or they simply didn’t realize how potent the art really was).

We tend to believe that art’s value transcends financial value, and by applying any financial value to art, it lessens the quality of the art. And I’m not just talking about putting a pricetag on it but also the very act of promoting art as something that can be transacted in a financial exchange. Good art, we think, shouldn’t have to be promoted. The truest and purest of arts should naturally draw people to itself… or so we can lead ourselves to believe.

 

The blunt bottom line of these misconceptions: I think artists end up with the idea that they create the most meaningful art in an impoverished state, and then they need to whore themselves out to sell their art to make enough money to live and to create more art.

I believe these ideas are wrong. Starving artists do not necessarily create the purest art, art and sales can coexist, and art should be sold. I believe that these misconceptions are hurting artists — and society at large. I think there’s a better approach to art and commerce.

ARTISTIC BUSINESS MODELS — HISTORICAL AND MODERN

Artists have been making a living — sometimes even a good living — since there has been art. In fact, I believe there are four main business models artists use to earn a living:

  • Patronage: In this model, the artist is hired by a specific person or group to perform their art. We tend to think of this business model as a longer-term one, so the artist might be hired by a king or a count or some other wealthy nobleperson to paint or play music or whatever they do. Today, we still have some patronage business models in the form of grants or performance contracts (such as a band might have to work at a specific venue).
  • Performance/Experience: In this model, the artist gets paid to perform. That pay could come from donations (as with a performer in an ancient marketplace who earns a few gold coins while they play) or it could come from ticket sales (as with a modern band on a tour). Actually, this model is very similar to the patronage model above, except it’s shorter term and a wider paying audience.
  • Packaging: In this model, the artist sells a complete piece of artwork to someone else. This is the one that painters or writers might use, but musicians also do this, too, with albums and with other branded products (band t-shirts, etc.)
  • Self-funded: In this model, the artist creates art and releases it to the world without remuneration, perhaps because they have some other source of income.

There are variations to these models, of course, and blurry lines between each one. A portrait artist is, in some ways, serving a Patron for a very short time, although they are also Packaging their work and selling a single unit. And grants are somewhat of a Patronage in that they are (or often are) hands-off while some Patronage is a little more demanding and hands-on.

Even with today’s ability to conduct business online, artists follow some variation of these models: An artist might use Kickstarter to fund an album, which is basically the Patronage model. And even if iTunes pays notoriously little back to musicians for their music, it’s still the Packaging model.

We see these models present throughout history. Each of these models requires some aspect of selling or commerce: The Patronage model requires that the artist sell their ability to create art that the patron will like; the Performance model requires that the artist sell art that attracts people to view the performance; the Packaging model requires that the artist create packages of art that people will want; the Self-funded model requires that the artist give their time in some commercial organization in order to fund their art.

REVISING THESE IDEAS

Since we see that business models have existed for artists throughout history, we know that business and art can mix. So let’s revisit those misconceptions I mentioned earlier and see if there is a better way to understand them to help alleviate the concerns of artists who are reluctant to sell.

1. The poor artist creates the purest art.
1. Artists who go deep create the purest form of art.

The purest forms of art are created when artists go deep and connect with that emotional core. It is emotion and the truth within that emotion, not financials, that create create pure art.

Would you say that Mozart was an artist? Or Hemingway? What about Picasso? Or Rodin? These artists achieved modest-to-substantial success in their lifetime and yet we don’t shortchange their work or its impact because of the money they made.

2. Art and sales are diametrically opposed.
2. Art needs to be seen by others to have an impact, and sales can be an honorable way to share it.

Art that is hidden because the artist does not want to sell it won’t be enjoyed by the right people. I listed Mozart and Hemingway and Picasso and Rodin above. These artists achieved fame in their lifetime and that fame grew after their deaths. But how many other artists have created works that have not been seen and yet could potentially be equal to or greater in quality and meaning than the works of the artists I listed?

Art has some value when it is expressed by the artist but I believe it has greater value when it is experienced by others. This requires a certain amount of effort to share that art with others, and that effort is the activity of marketing and sales.

Marketing and sales do not need to be thought of as inauthentic or false or forceful. Yes, some marketing and selling turns out that way but good marketing and selling should be authentic and honorable. Good marketing and selling should help people see how their problems can be solved and their life can be better; it’s about discovering a truth and sharing it with people who need to hear it.

3. Art shouldn’t need to be sold.
3. Audiences don’t understand the value of art and need to be told.

Money is the thing of value in our society and although we have other things we value (time, relationships), money has the greatest amount of immediate perceived value to people. So valuing art by money may not be perfect but it’s one of the only ways to show people what at is worth. (Curious side note: What if you valued a piece of artwork by the amount of time it takes to appreciate it? Van Gogh’s Starry Night might be valued at 100 hours while my highschool art project might be valued at 30 seconds? haha)

So money is the easiest way to attribute value to something, especially if you intend to sell it anyway.

And, most importantly, audiences need to be told why a particular piece of work has a specific monetary value. People don’t understand why one piece is worth one amount while another piece is worth a different amount. They don’t understand what art can do for them. And they don’t understand or appreciate all the work that went into that piece of art to create it. Think of a car: To someone who knows how to drive and who needs a car, a car is a valuable machine. To someone who doesn’t need a car or even know what a car does, it’s a worthless scrap of steel. The value of your art needs to be shown to others for them to appreciate its value.

I like the illustration of the person who hires a live band for a wedding and when they get the price quote, they say, “that’s too much for three hours of music.” And the band replies: “You’re not just paying for three hours of music; you’re playing for the decades of lessons, rehearsals, and equipment… the years of preparation leading up to the event.”

Why do we pay hundreds of dollars to see The Rolling Stones but only a few dollars to see someone play in a small club somewhere? Because The Rolling Stones have spent years promoting the value of their music and the entire concert experience — it’s a value that people understand and appreciate and they don’t yet understand and appreciate the artist in the smaller value to the same degree.

A DIFFERENT APPROACH TO ART AND SALES

So you’re an artist but you don’t want to sell because selling feels like selling out. It’s commendable that you want to remain true to your art but what doesn’t help the situation is a lack of a clear definition of art and artists. You’ve chosen your own context and the art you perform as art and you’re defining other artists and their work around yours. This makes it more challenging to understand how sales can impact your art… and your soul.

Would you define an artist as someone who is in a stage play? Probably you would. What about if they were in a Broadway musical? What about if they performed in Vegas? What about if they performed in a film? What if they performed in a pornographic film? Or an art house film? Or an action film?

The same is true with music, poetry, painting, sculpting, and every other art. We have certain definitions of art and artists and these influence our idea of marketing and selling.

Think about a long horizontal line that will represent a spectrum: At the extreme left is a painter who doesn’t make any sales. They’re good; their art is high quality and provocative but nothing sells. At the extreme right is Thomas Kinkade.(Yeah, I’m using him again). He churns out work in an almost assembly-line fashion and although many people like what he does (me excluded) he’s more of a sales machine than a painter.

In between these extremes are degrees of sales. Closer to the left: “Barely scraping by” to “Making a decent living”. Closer to the right are “Making a good living” and then “Rolling in cash”.

This applies to any art, not just painting:

  • For music: On the far left is the garage band that makes tapes on their older brother’s ghetto blaster (old school!) and on the right is Justin Bieber.
  • For writing: On the far left is the unappreciated, unpublished writer and on the right is James Patterson.
  • For film: On the far left is the under-appreciated YouTube-only-release “art school” film and on the right is the creators of the American Pie franchise.

See where I’m going with this?

Regardless of the type of art you create, in between each of these extremes are the four degrees: “Barely scraping by” to “Making a decent living” to “Making a good living” to “Rolling in cash”.

If you’re an artist, where are you on that spectrum? Where do you want to be? And what is the point at which you feel like you’re selling out?

I’m using this spectrum to make an important point: It’s not the act of selling that sells you out. Historically there have been successful artists using different business models who have lived comfortable and even very financially successful lives who didn’t sell out. So it’s not the act of selling that sells out, it’s a certain point on the spectrum.

What does your art look like at each point? How do people discover your art and enjoy it? What do you do and how do you share it with the world? Each of the points along that spectrum represent parts of your potential artistic career. How far to the right do you go until you feel like you’re selling out and no longer living as an authentic artist?

No matter where you are on that spectrum, and no matter where you want to go to the right on that spectrum, it takes sales and marketing effort to move yourself there. And the act of marketing and sales doesn’t sell you out, it just moves you right. Selling out is when you reach a point on the spectrum when it’s more about the money than the art. You need to find that point and avoid it, but you can move to the right without reaching that point.

HOW CAN YOU SELL WITHOUT SELLING OUT?

First, I think the concept of sales and selling needs to be redefined. This is not an issue of transaction (exchanging art for money) since that happens a lot. The issue seems to be one of promotion. So if the words “sales” or “marketing” offend you and I haven’t convinced you that selling is an essential part of art then reframe the term: Maybe words like “promote” or “share” or “evangelize” or “convince” or “persuade” or “position”. Can you do these things? Maybe one of these words can stand as a more palatable synonym to selling.

Second, the artist needs to determine how they can promote themselves authentically and legitimately. Marketing and sales can be a positive force when used appropriately. You need to decide for yourself what is a good and honorable persuasion effort for you (and what isn’t) and follow those standards.

Third, the artist should promote/share/convince others about their art with the purpose of (1) letting the world know that there is meaningful art to be enjoyed, and, (2) ascribing value to the art and educating the world why that value has been applied. Marketing and sales do these things — they tell the world and they help the world understand value.

All good sales efforts should do this:

Good sellers should find someone with a need and show them how their need can be solved. (Read more about that in this blog post about how to sell anything).

What does this mean for artists? If you’re an artist, you need to figure out what need your art fulfills and then help other people see it. Whether you intended it to or not, your art fulfills a need. That need might be entertainment or escape or challenge or inspiration (and the need is probably more specific than those few high level examples). You need to figure out what need your art fulfills and then you need to help other people discover that your art fulfills that need.

You do that by selling.

FINAL THOUGHTS

Artists have an important contribution to make and for years they’ve been doing it by selling. Even some of the greatest artists in history who we respect and admire have been selling through one business model or another. But artists face pressure to remain connected to the deepest part of themselves and it seems that the ideas of money and selling have somehow become perceived obstacles to that connection. As a result, artists draw more self-definition from the struggle than from successfully sharing their art.

I believe this needs to change. Our world needs art even though it may not realize or appreciate it. And artists need to find a way to share the message that they have a valuable contribution of work to offer to the world. And whether you want to call it “sales” or something else, that’s fine by me. But the act of marketing, selling, and promoting your work is essential… it’s not selling out.

Starting a business is the intersection between a solved problem and a business model

A relative was passing through town recently and he stopped in to chat. We had a great time catching up (since we haven’t seen each other in years). Eventually, the conversation turned to business — the businesses I run and some business ideas he had.

He presented a couple of ideas and although they had merit, they were missing something. He asked for my opinion and I shared it with him but decided to write about it here as well.

He had some basic business ideas but they weren’t fully cooked. They could probably more accurately be described as topics rather than businesses. There was nothing wrong with the topics themselves but if you want a business, this is what you need:

A business is the intersection between a solved problem and a business model.

A real business has both. If it’s missing one or both, it will fail. I can’t think of a business that doesn’t have both (although some businesses like Twitter seemed to start with neither so maybe my relative had the next Twitter).

  • The solved problem: The longer I am in business, the more adamant I am that people buy solutions. Even if the problem is not immediately apparent or permanently solved, people buy solutions. Yes, even the impulse purchase of winterfresh gum is a solution. And the more important and painful the problem, the more they are willing to spend. Solving problems is the easiest way to sell something.
  • The business model: This is how the solution is offered, transacted, and delivered. It’s how the business is structured. If you’re not sure what a business model is, just start by building a sales funnel. I write a lot about business models and I write even more about sales funnels.

YOU NEED BOTH

You need to solve a problem and you need a business model. Both. If you’re missing both, you only have a vague topic.

If you have a business model but you don’t solve a problem or if you solve a problem but don’t have a business model then your business will struggle and you might sell a couple of units but you won’t sell very much.

Solve a problem and build a sales funnel around it… and that’s your business.

4 monetization models for video

In a post I wrote yesterday about the impending death of television and the rise of online video, I suggested that one of the overlooked reasons that we’re moving to online video is that the content is shorter. It fits into our day. Yes, the other arguments are valid (we can watch what we want, when we want, on whichever device we want) but we can’t ignore the fact that a 30 or 60 minute show doesn’t necessarily fit with our schedule… but we still want to be entertained. Shorter videos are attracting us away from television and filling our downtime with entertainment opportunities.

There is HUGE, HUGE opportunity in video, both now and into the future. If you are looking to create content — regardless of whether this is information or entertainment — video is a place you can carve out a space for yourself.

But how do you monetize your video content? Here are the two standard monetization models for video that are well-known and frequently used, plus a third model and fourth model that I think are still in the early stages and we’ll see more of in the future. (And I should point out here that I’m talking primarily about entertainment-type videos rather than informational videos, although I realize that the line is pretty blurry).

So here are the four video monetization models that are pretty popular right now:

1. Place ads in your videos

I think this is the default model for new video producers because YouTube makes it so easy to do this. Just create a video, allow advertisements to display, and earn money from the ad. There are YouTube success stories that make this an attractive model for anyone.

Actually, it’s not that different from traditional television monetization models — either a commercial precedes the video or a clickable ad overlays over the video for part of the video. In fact, the networks that post their full episodes to their websites also use commercials, in the traditional sense, inside their videos.

2. Use your entertaining videos to sell something

If you have a product or service to sell, you can create an entertaining video that people will watch — which subtly (or not so subtly) promotes your brand as people watch.

I have two examples. The first example is a little more overt — Super Bowl commercials. They are high quality productions that people intentionally watch to be entertained and good ones are talked about for years to come. (I still hear people talking about Apple’s 1984 commercial). I just recently posted about Radio Shack’s surprisingly excellent Super Bowl commercial. Those are overt because they ARE commercials.

But there’s also the slightly more subtle (and perhaps more powerful) videos that are true “television shows” in their own right, and yet are created for a commercial purpose. The best example I know of are the BMW commercials. (Search for them on YouTube if you’ve never seen them). The entire series is excellent.

And here are the other two models that were inevitable but are still in the early stages and offer a lot of promise to producers that can use them well.

3. Sell your videos

If you create video content, you can put it behind a paywall and sell access to it. Infomarketers do this already but now we’re seeing entertainment companies do this as well. The best example I’ve seen is Netflix, which has resurrected itself from the ashes to become more than just a paid aggregator of video… they are actually producing their own video entertainment now!

4. Get promotional support and include product placements

This one is the newest and most untried of the four models (at least in online video). I think this is partly because companies just don’t know what kind of ROI they can get from this.

But I recently saw one series (produced right here in Winnipeg — awesome!!!) that is very well done. The show is entertaining, there’s a decent storyline, and the brand placement is present but not silly or overwhelming. The series is called Wind City and it’s a 6-part series of videos that have a storyline but also integrate brand advertising into the show. I think it’s actually a pretty cutting-edge attempt at this business model. Even if you don’t love the show or Winnipeg, you should check out Wind City on YouTube for a bit of entertainment and to see their business model at work.

SOME FINAL THOUGHTS

Some of the monetization models above are being used well already for informational videos. But as entertainment videos increase in number and variety and quality, we’ll see more of those become monetized in these ways.

Starting a business? Start with a service.

I’m going to get into trouble writing this post. I think people might comment (in this post or privately by email) who will chastise me for suggesting this. I can predict the emails now.

But I’m here to tell you that they are wrong.

Regardless of what the experts tell you, start a business that offers a service.

Years ago, I started my business as a freelance writer. Although different aspects of my business changed (including what I wrote and who I wrote for), I always came back to the one key element: I provided a writing service for other people. It was my default position.

Later, I branched out into other things — selling infoproducts, writing ad-based or affiliate-based content, and more. But writing was always there, always funding that expansion and always putting food on the table.

I’m a big fan of starting a business by providing a service to other people. That service could include something you do (as in my case — writing — or perhaps it’s something else, like renovating houses or consulting on social media or being a plumber, etc.). If you find a group of people who want what you sell, and you market to that group effectively, you’ll always have work… and you’ll always have income. And if you ever want to make more money as a service provider, you can always increase how much you pitch and how much you charge. That’s true security as a business owner. There’s a very simple link between the work you do and the success you enjoy.

A service also makes you relevant and keeps you sharp. It keeps you in the game. It helps you establish and strengthen your position in the industry. It gives you a “laboratory” that you can experiment — see what works; see what doesn’t.

And no matter what happens, you can wake up and make money… and you’ll always have the confidence that more money is just a few phone calls away. (If you have the right service to the right group of people, of course).

Once you have a service established and in place, then you can extend to other monetization opportunities: Products, information, etc. These are awesome because they are “do-them-once-and-profit-continuously” opportunities. Often, they require a lot of work up-front but then can become serious profit generators in the future because the hard work is done initially and all you need to do after is market them.

And eventually, product sales might even outstrip your service sales so you get to the point where you don’t earn much money at all from services. And a lot of the gurus will tell you that starting with a product is the way to go because they can generate a lot of profit.

But I think you should start with a service. Find something you do well and provide it to a well-chosen market.

Products (whether physical products or infoproducts) are good to sell and can boost your income considerably. And products are often heavily promoted by the gurus as THE way to monetize your business. But here’s what they don’t tell you:

  • Cost and effort: Products take a lot of work up-front to do well. Physical products may require that you pay for them to be imported or manufactured. Digital products require time spent in writing and design.
  • Risk: Along with the effort, there’s a considerable amount of risk offering a product that is designed and created… but then turns out to be a dud.
  • Income and timeline: Products are (often) not a windfall. They trickle money in — and sometimes it’s not a lot of money at all. Yes, you could eventually get to a point where your product business is bringing in decent cash from product sales but in the very beginning, you won’t be lighting cigars with $100 bills.

Now let’s compare those same factors with a services offering:

  • Cost and effort: Services don’t need to be “created” so they take zero dollars to do. (You might point out that some services require costly tools or training. That’s a good point but I cover it in my next point)…
  • Risk: If you offer a service and no one buys, you haven’t lost much. You can adjust your service to offer it to a group of people who do want it. Or if you want to make more money, you can offer different services. In other words, services are much more agile. (And as for the point about expensive tools, here’s what I think: If you have the tools required to do the job then you probably have the experience and skills necessary. If you don’t have the tools then find something else that you can do).
  • Income and timeline: With services, you can potentially earn a good living right from day one. The more you sell your services, the more the money comes in. It’s fast and it’s relatively substantial (compared to the profit you earn from most products).

Once you start selling your services, don’t stop there. If services are the only thing you sell from now until you die then you run the risk of capping your income and burning yourself out. However, if you start with services and then start adding products or other “passive” monetization opportunities, you can grow your business further while always having that income from services.

The naysayers of this idea will point out that services limit you by taking your time and capping the amount of income you earn in an hour. It’s true that services pose that risk. However, I’ve seen enough people who dreamed of starting a business but couldn’t earn enough money from products to earn enough income when they needed it.

What I’m suggesting is not a popular recommendation, and it’s not surprising that products are hailed as the best business choice over services. But I think a lot of aspiring entrepreneurs could become actual entrepreneurs right now if they stopped trying to find the perfect product to sell and instead focused on the service they could offer.

If you aspire to start a business, think about what services you could provide. What could you do well that other people might be able to hire you for. Use that as your starting point, enjoy the fast income you can earn from it, and use that income to fund expansion into other monetization opportunities.