Welcome to February’s business breakdown.
Today, we're going to look under the hood of my business. This is my first breakdown and I hope these emails help you see how a creator business evolves.
I'll cover 3 areas:
- The Freedom Metre (leverage)
- Revenue (income and expenses)
- Growth (social media and newsletter)
I'll also share what I'm working on and my thoughts about current projects.
This one’s a 5-minute read - hopefully you find it useful.
Let’s dive in.
A Quick Note...
One of the best decisions for my online success was to invest in coaching.
I spent my first year 'trying to figure it out' and never made any money. When I paid for help, my business took off.
My friend Connor recently launched the Impact Accelerator Call to help creators build an engaged audience and monetize through high-ticket coaching, consulting, or freelancing. He gives you a personalised plan to hit your online goals - and he's a great guy, so I wholeheartedly recommend it.
There're 7 calls left at the current price, and these are getting snapped up quick.
The Freedom Metre
If you’re new to Digital Freedom, welcome.
It's a pleasure to have you here - let me catch you up.
Like a lot of people online, I don't want to sell my time. So last month, I set a target to move the business into a higher leverage position.
To track the process, revenue is split into 3 areas:
- Low leverage: 1-1. Ghostwriting, coaching and consulting
- Mid leverage: 1-few. Group coaching and community
- High leverage: 1-many. Products, affiliating, and advertising
At the end of January, 43% of my total revenue was ‘low leverage’. Naughty naughty. The goal is 10% by the end of 2023.
February is already looking much better:
Unfortunately, I took a big hit in revenue this month because I stopped coaching and consulting. With expenses, this is my worst month yet.
But it's also my best.
Let's dive into the numbers and I'll explain why.
February net income: $3,092
Whilst February revenue was nearly half that of January, I'm pleased that it's still almost $10k per month.
Although I didn't fully stop my 1-1 work.
A few people asked to buy calls after my announcement, and my girlfriend is now full time in the business so I figured a little extra income wouldn't hurt during the transition =)
Here's the revenue broken down:
A couple of remarks here.
1. Product sales dropped dramatically
This is by design.
Now that I'm less busy with client work, I had time to look at my back end (easy tiger). I'm finally doing what every entrepreneur should:
Study my numbers.
Not just income, but everything.
What I found with newsletter growth wasn't pretty.
3000-5000 new subscribers join per month, but my churn is crazy high. I'll explain more about that in the growth section of this email, but my product was a problem.
Inside my welcome sequence, I had two emails pitching the Viral Inspiration Lab.
I thought it was a smart business move, but I was wrong.
Those emails caused 1,881 unsubscribes so far.
Sure, most of those who left wouldn't have become buyers.
But according to research from marketer Dean Jackson, 85% of people don't purchase until after 90 days of becoming a 'lead'.
By pushing for early sales, I'm preventing later ones.
A constraint I'm operating under is to optimize for long-term relationships over short-term revenue, so I removed these 2 emails. Later in the year I may add automated product pitches based on subscriber behaviour (e.g. they click a related link and so indicate their interest).
2. Newsletter sponsorship should’ve been much higher
When I stopped coaching, the plan was newsletter advertising to become a primary source of income.
But then Tim Ferris gave me reason to pause.
He didn’t ask for sponsors until he hit 100,000 downloads per episode. I respect any entrepreneur who delays gratification. Especially now I’m at a phase where gratification could be… very gratifying =)
Here’s the truth Reader,
You can’t optimize for both growth and revenue.
I'm happy to push back monetization because ultimately, the longer you wait - the better the result. So instead of just selling ad slots, I'm partnering up with other creators to cross promo each other's lists. This improves my network, and hopefully accelerates the growth.
Let's take a look at expenses.
These figures don't include my girlfriend's wage (hell, I gotta keep some stuff private, right?) - but I can assure you, Kieran burned money this month.
But I'm pretty chuffed.
It felt great to lose money.
Let me explain.
I’m on a personal vendetta with scarcity, and the lack of fear doing my numbers shows I’m winning the war. Money is just a resource to create more energy.
Instead of hoarding it, my aim this year is to invest heavily into improving the business and buying back time.
Hiring my girlfriend has been incredible. She's much happier outside of her 9-5, I have much more time to write, and it's lovely having a relationship where we're both pursuing one purpose.
The financial impact of this decision will be measured in years, not months.
I also made two notable investments this month.
I want to maximise code and media leverage for my business. So I spent:
- $1,000 on automations and a Notion overhaul
- $2,500 on a new website
The site will be a 'digital home' for my writing, building better relationships with my audience.
And now my business runs entirely on Notion and has some crazy cool automations - everything is running reeaaal smooth.
P.S. If you’re a busy entrepreneur, speak to Jayson. Guy knows his stuff and you’ll be surprised how much friction you can remove.
Finally, some people had purchased 1-1 calls but hadn't spoken to me yet. When I announced I would stop coaching, a couple asked for refunds.
Overall, February is one of my most important months.
Sure we lost money. But you gotta be willing to knock down a few walls if you want to rebuild the house.
Now my systems are in place.
I'm writing much more.
And if I keep making a loss, there’s always OnlyFans.
Newsletter growth dropped for 3 reasons:
1) I made a conscious decision to ‘fuck Twitter growth’ in February
I’ve been so busy on the content hamster wheel I couldn’t think straight.
Last year, I'd never have time to do emails like these. My goal now is to stop playing number games. Quantity is important for early momentum, but there's zero point in an audience if you don't have anything interesting to say.
Quality is now the aim of the game.
2) Twitter’s algorithm changed
I don’t stress about algorithm changes, but I was hitting consistent 1k+ tweets around the new year. Engagement has dropped by around 50%, but stupidly - I didn't adjust my autoplug for the newsletter to reflect it. So I promoted my newsletter much less.
I remove cold subscribers from my list often (people who haven't opened for a month). On average, 250 subscribers go ‘cold’ every week.
That mattered less when I was growing at 1,000 per week. Now I average 600, it's unacceptable.
Know. Thy. Numbers.
I’ve been blindly pressing on for 12 months creating a ridiculous amount of content. Sure, the growth's been great. But it should've been much better.
It's like I'm trying to fill up a bucket with holes in the bottom.
Aside from the product changes mentioned above, I'm testing a couple of things. I'll report back in 6-8 weeks with the result.
Considering Twitter growth isn't a priority, 12k isn't bad at all.
But the newsletter problem hit home a harsh reality.
I need to de-risk.
I don't like being on social media any more than necessary. But if Elon can reduce the growth of my newsletter business by 50%, I'm being a terrible entrepreneur.
To build anti-fragility, I'm beginning to diversify.
I’m starting on Linkedin this week and have joined Jack and Taylin inside the Content Cartel because those guys know what they’re doing.
I’m also learning about Instagram.
But last week, I had to ask my girlfriend what a reel was - so it’s safe to say, it ain’t gonna be my forté.
Final thought: the big problem
I want to use this report to give you a look at more than just numbers. So each month, I’ll finish with a problem I'm facing.
February is the same as most months.
I preach a lot about optimizing for one goal.
It's why I quit coaching to grow the newsletter. But a few weeks later, I announced I'd release my flagship writing product in April.
The problem is I'm itching to build it. I've got a lot to share and it's my aim to build one of the best products on Twitter.
But that takes a lot of time and energy.
It's a tough pill to swallow when you realise you're making the same mistakes you made 6 months ago, just with different decisions.
So for now, I've put High Impact Writing on the back-burner.
I'm not sure when I'll build it, but I want at least 3 months of focus on improving Digital Freedom first.
In the mean time, you can join the 450+ people on the waiting list by clicking this link.
I promise it'll be worth the wait.
I've written up the strategy I've used to scale my audience and business to where I am now. It's not for everyone because it requires patience and a change of focus. But if you're interested in working with less clients and enjoying more freedom, it's definitely for you.
Keep writing your way to freedom,
If you’d like more help, I’ve got your back:
If you’d like more help, I’ve got your back:
And if you've got a moment, I'd love to hear what you thought of this edition of Digital Freedom.
Send me a quick message - I reply to every email!