A new breed of web-savvy “infopreneurs” are leveraging their skills to build their own brand and make money on the web. Let’s look at a few ways how they do it.
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Today I’m going to throw out a term that I’ve been hearing a lot lately, even though Wikipedia says it was trademarked back in 1984 – Infopreneur.Â It’s obviously a combination of the words information and entrepreneur, and the modern use refers to people that are making money using the internet to market, distribute, and sell information. Today we’re going to look at some examples.
As the internet continues to evolve, these web-savvy infopreneurs are leveraging their skills to build their own brand.Â These “hyperinfluencers” create digital products, and then spread the word of their personal projects through various forms of social media.
While popular names in the media industry include varied personalities such as Gary Vaynerchuk, Julia Allison, Robert Scoble, Kevin Rose and iJustine, with tough economic times, more and more people are looking into starting an online presence and it’s easier and more enticing than ever:
– Low barrier to entry
– Work from anywhere with an internet connection
– Better tools to get started faster
Inspired by popular books such as Lifehacker, Getting Things Done, and the 4-Hour Workweek, people are looking to make passive income not only to generate a little spending money, but to have a fallback should they lose their jobs.
In the traditional model many years ago, the wealth of this country was made in mega industries such as railroads, steel, oil, and land. But what many of these infopreneurs are after is passive income… making money 24×7, even if you’re not there.
The way this was done traditionally was deriving this passive income from areas such as:
Stocks … you’re making money on companies that pay dividends, or think how much money Bill Gates makes while he’s sleeping, just on the interest alone.
Royalties … picture a singer that gets paid every time their song is used in a TV commercial
Real Estate … if you own an apartment and rent it out to someone else, as long as the rent covers your mortgage, you’re in the black and making money
But I don’t have to tell you how well Wall Street, the music industry, or the real estate market if fairing recently.
That’s why there’s been a boom in trying to generate income from information and online products. The cost of producing it is nearly free, in other words, you certainly don’t have to build a steel plant or work on an offshore oil rig, anyone can call themselves an expert, and with a little help from Google, some of the business will actually find you.
Let me paraphrase a case study from The 4-Hour Workweek:
Let’s say you’re a yoga teacher living in Denver, and you tend to gear your class toward individuals that are into rock climbing.
– Teacher in Denver has a class of 20
– Students pay $10 per class
– Teacher makes $200 per class, but is continually working, and has to pay for studio space, etc
– Teacher films her instruction with friend’s video camera
– Edits and adds effects on free software that comes with her Macbook
– Creates a PDF instructional eBook with various poses
– Sets up a webpage with Yahoo store and Paypal to process orders
– Uses Google adwords to drive to this niche
– Outsources to fulfillment house
– Mass produces DVDs at $5 each, sells for $80
– Sell just 10 DVDs/week = $750 per week, or $3000 per month profit
You might ask… Well, how many “yoga rock climbers” could there possibly be?
– So if 99.9% percent of people don’t buy your product = Still have overall market of 1,000,000
But let’s take it one step further.
– If 99.999% percent of people don’t buy = Niche market of 10,000
– 10,000 x $75 = $750,000
Or, you can go to Google AdWords for free, and see that there were approximately:
– 6,000,000 searches per month for yoga
– 400,000 searches for rock climbing
– 100,000 searches for Yoga DVDs
Start Blog, Make Money
The natural launching point of many infopreneurs is the blog. They’re free to set up and they’re great for building search-friendly content. What most people probably don’t know is that only a very small percentage of bloggers will actually make any money.
In fact, Technorati’s State of the Blogosphere report shows that while nearly half (46%) of bloggers have advertising on their site, the median annual income is just $200. However, it certainly doesn’t stop them from trying.
In a March 2008 study by Universal McCann reports that 184 million people worldwide (PDF) have started a blog, and that 77% of active internet users read blogs.
So how are people trying to monetize their blogs?
1)Â Â Â Advertising
This is best done by major brands, blogs with significant traffic, or highly focused niche markets. However, ad revenue is down and in a KPMG survey of 200 marketing and advertising execs, 49% of respondents indicated that declining ad spend is the most disruptive force in media today
2)Â Â Â Google Adsense
This remains the most popular form of advertising, with 38% of bloggers, but there’s worry that this market is declining as well. Photo below of Jeremy Schoemaker, displaying a monthly check from Google Adsense from August 2005.
3)Â Â Â Affiliates
Affiliate marketing is taking a percentage of revenue from sales of products on other sites. For example, with a major retailer like Amazon.com, users get paid 4% if someone clicks on a link on your blog and then buys the product. Companies are getting more advanced in their offerings, providing tools for bloggers such as embeddable widgets, and realtime reporting of their revenues.
4)Â Â Â Merchandising
Americans spend $40 billion a year on apparel, and at sites such as CafÃ© Press, they sold $100 million worth of products in 2007, with users taking a cut of $20 million. Whereas the traditional model forced a blogger (or band member, or graphic artist) to design and purchase dozens of t-shirts up front, including expensive setup fees, and potentially get stuck with the inventory, sites like Cafepress orÂ Spreadshirt.com allow you to:
-Â Â Â Take your digital logo
-Â Â Â Upload it to the web to see how it will look on a model
-Â Â Â Choose from a range of shirt types and colors
-Â Â Â Create a store to sell your product
-Â Â Â Determine your own price, taking a cut of the profits beyond the web’s base price
All without spending a dime!
5) Digital products such as eBooks, a growing market which I covered in my Amazon Kindle 2 podcast/blog post. Additional forms of digital assets include:
– Membership sites
– Online videos
– Audio and video podcasts
– Digital music files
– Converting from digital assets to real books on sites such as Lulu.com
6) Offline sources
So while many infopreneurs offer digital assets, sometimes all their social media marketing is done for free to drive users to more profitable offline ventures:
-Â Â Â Consulting gigs
-Â Â Â Guest speaking
And if all else fails, there’s always the fallback of getting a real job.
But here’s a funny scenario
I bet right now there’s someone working for a big ad agency, and they’ve got a blog, an idea, and every night they’re saying, “Oh man, I really hope my idea takes off one day, so I can quit this 9 to 5 job and just be able to blog all day.”
And at the same time, there’s a blogger toiling away saying, “Oh man, I really hope the great ideas in my blog get noticed one day, so I can finally stop this freelance writing, catch the eye of a big ad agency, and really hit the big time.”
So I guess it’s all just a matter of perspective.
Bringing it all together
The key takeaway here is that with social media, all of these elements can work together, and what might be the darling of the web one day is the so 2002 the next, and you need to be able to jump quickly when that happens.
Appropriately, I’ll end with a profile of blogger Darren Rowse, whose Problogger.net site was started in 2002 to specifically help people add income streams to their blog. The site consistently generates amazing, high quality, actionable posts that millions of bloggers can put to use.
1) He starts by getting noticed in his niche by creating an immensely popular blog, doing speaking engagements, and guest blogging on other sites.
3) He then has the framework in place to generate significant income:
-Â Â Â Advertising and affiliate links on his main site
-Â Â Â A targeted job board that charges $50 per post
-Â Â Â He’s written a book about making money blogging that he can promote through traditional means and through his site
-Â Â Â Taking his learnings and applying it to his other blog, Digital Photography School, and launching a new blog based on the newest trend, TwiTip.
Like a lot of new media professionals, I still care about real estate, I still have money in the stock market, and take the railroad (subway more specifically) to work every day, but for the infopreneur, the digital age certainly offers a wealth of opportunity.
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