This is a rather long title but it I have to confess it is influenced by a podcast I listened to.
The podcast was a recording of a conversation between Pat Flynn and Clay Collins where Clay shared his origin story of how he built a great company...
....and he shares a path to building a business from the ground up to first $7k per month and then scaling up to a 7 Figure business.
He compares the idea of Laddering up to the growth of a company we all know and love...Netflix.
Netflix started off by purchasing DVDs and shipping them to clients. Their business model was successful enough to have them compete and upstage Blockbuster.
That was the first rung of Netflix's ladder. Their success gave them enough leverage to implement their second rung and that was to add to their services.
They did so by adding a streaming service. Consumers naturally took this move as a progression towards the service they were already providing.
If you look underneath the hood you'll realize that the company went through a major transformation. They had to hire developers, learn new technologies and add more assets to the company.
They effectively grew their audience by offering their shipping and streaming services.
The third rung was to leverage their second rung by adding their streaming service and becoming a production studio.
I've personally enjoyed watching some of their original series such as Luke Cage and Stranger Things.
In a matter of a few years, Netflix has evolved from mailing DVDs to a company that now competes with HBO and private movie Studios.
It's an amazing story and we shouldn't be surprised if they have another rung to add to their portfolio.
Clay goes on to share that Apple took a similar path. Do you remember SoundJam!?...
Apparently, it was purchased by Apple which turned it into iTunes. From their success, they came out with the iPod, a product that was widely successful.
After that success came the iPhone and the rest is history. We all know how popular the Apple brand is.
Clay's roots started with a self-help blog, and its success led to a venture in SEO and freelance consulting.
The results helped him leverage his success into creating a WordPress plugin called Welcome Gate. A few updates later he came up with the wildly successful company we all know as LeadPages.
Might I say it's a service that I am proud to say I use heavily in my business?
How To Start the Ladder of Your Business
If you want to build a business today, in a way that you become successful, he recommends you start by building a minimum viable audience.
Most people start with a product first and I can relate to that because I happen to also have my own product.
When I started my list building journey I was taught that I should first have something to sell and that is exactly what I did.
I think that the best way to tackle this process is as Clay says and to really study your market before offering anything to sell.
The suggestion he shares here is to learn how to build an audience and then use your interactions with your audience to organically find out what product you should create.
There are three rungs of the ladder to a 7 figure business.
Rung one is to build a minimum viable audience. Rung two is to sell your first product and get to six figures.
The last rung focuses on optimizing and growing your business to 7 figures.
Ladder Rung 1
I would say this rung requires patience.
Over a period of three to six months, you should focus on getting an audience of around 2,000 email subscribers.
I use Aweber to collect and store my email subscribers but you can use Drip, Convert Kit or a service like Mail Chimp.
Building an audience is one of the best marketing and business education you can get.
Your results vary depending on what kind of post you publish on your blog. You should start identifying the different responses you get from your audience when you share ideas, calls to actions etc...
Having said that engagement on blogs have lowered so if it is possible add little breadcrumbs to improve engagement. You could do that by having a social media community, adding videos or audio to your blog.
Times are changing and people like to have a more personal experience with the information they want. In my case I prefer listening to a podcast then reading a blog post, but when I'm looking for more detailed information, that's when blog posts become very attractive.
Conceptually if you're unable to get 2,000 people to follow your blog, the odds of you getting people to buy your products are quite slim.
Contrary to what the majority believes, it is, in fact, a lot easier to get subscribers than it is to get people to buy from you.
People usually buy from people they like and trust. In that sense establishing a relationship with an audience will likely increase the chances of them liking you...
...and therefore buying what you have to offer.
How Do You Choose an Audience to Target?
One of the most recommended ways to choose your target audience is to follow your passion.
Chances are that if you are passionate about something other people could also share the same enthusiasm.
Unless you are passionate about the topic you're writing, you would have a hard time getting fans or an audience.
You should also keep in mind that you would eventually have to sell them a product or at the very least recommend one.
It is important to know that when you have a product you believe in you should be passionate about selling it to your audience.
Your focus should be to change your audience's world through your passion. You must be fully confident that your product will serve your audience.
Clay explains that you should aim to have a list of 2,000 subscribers because he sees that in average people earn about $2 a month per subscriber.
My own experience has shown this number is a bit high. The average saying is that you should aim to make $1 per subscriber.
I can say from experience that when I built a list of 50,000 subscribers, I earned that much.
So although he claims the average is $2 per subscriber I would lower my expectations to $1 per subscriber at first.
I do however understand what he meant and the results he shared are based on the quality of the audience.
The number of subscribers really does not matter but it's the quality in addition to the relationship you have with your audience that does.
He does, however, say that you achieve the level of $2 per subscriber on ladder rung two.
The first rung does not have a monetization plan. So if you're following this plan you should not expect to earn much during the first 3 - 6 months.
I think this is a good buffer because my experience has taught me that people who turn to the internet, looking to earn an additional income expect to earn it right away.
If you tell them they would have to work and build an audience first for a period of three to six months most of them would immediately get discouraged.
The truth of the matter is that it's not hard to build an email list of 2,000 subscribers.
You really need about 2 subscribers per day to achieve this goal. The purpose of rung one is to create an obsession with the ideas and the concepts...
...in a way that gets your audience to comment and subscribe.
Think of it as a right of passage into the world of online entrepreneurship.
As you communicate with your audience, you could provide a consulting service at a low fee somewhere between $50 to $100.
This will help you learn more about them. You can ask questions that would reveal people's roadblocks, fears, and objections.
Ladder Rung 2
You start at the level of ladder rung two once you've successfully acquired an audience of about 2,000 subscribers.
The end goal of this ladder rung is that within a 12 month period, you should arrive at a place where you are earning about $8,000 on the 12th month.
So, in other words, you have 12 months to achieve the goal of earning between $8k and $9k.
You achieve it by implementing a certain rule.
The Rule of Five Ones
The rule of five ones dictates that you should limit yourself to selling one product...
...and sell it with one conversion mechanism.
A conversion mechanism is a method you use to move a person from being a prospect to becoming a buyer.
In other words, a sales page, webinar, video sales letter, telephone etc...
You also get one form of traffic source, it could be SEO, Email drops, Facebook Advertising, etc...
It would take an estimated time of about a year to find the right combination and one year to get to one million in revenue.
The second rung of the ladder contains the rule of five ones:
- One product to sell
- One conversion mechanism
- One traffic source
- One year to find the right combination
- One more year after that to get to $1,000,000 in revenue.
This process should not be complicated by any means, you should just focus on taking it one step at a time.
If you don't focus on one thing at the time you're creating a situation where you end up working with different combinations.
If you have two products to sell, a webinar, a sales page, maybe you have three different traffic sources, it becomes hard to focus.
The goal you have set becomes harder for you to achieve because you have 12 different combinations to handle.
Being focused and following the rule of 5 ones will help you ensure that you reach your goal 12 months after you completed the first rung of the ladder.
Staying focused will also naturally help you make sure that you're hitting your goal for the following 12 months.
The path to the completion of the second rung will lead you to earn between $8,000 to $9,000 within your first 15 months.
Remember the first 3-6 months are used to grow the audience of 2,000 subscribers.
You have 12 months after that to reach $8k in a month.
The Five Commandments of Ladder Rung 2
When you're in Ladder Rung 2 there are five commandments that you should obey.
Commandment #1: You should only have one business. If you are planning on starting a second business you need to shut down the first one. At this stage, you should only focus on one business.
Commandment #2: You should only have one offer. I explained earlier how having more than one offer creates an additional combination of things that pull you away from your focus. So one offer is all you need at this point.
Commandment #3: You will not spend more than one day per month creating products after launching your offer. Once you have your product ready to sell, your focus should not be on making your current offer better, instead, you should focus on selling your offer.
Commandment #4: You should not spend more than one day per month on content marketing unless it is your main traffic source. My main traffic source is email marketing, I recommend you choose what works for you.
Commandment #5: Go deep but not wide. When you find a topic that interests you, try to learn more from it and not jump in different directions. If you think you need to improve your traffic generation efforts, you should only invest in the one method that makes sense for you, and focus on it until you make it work for you.
There is no need to buy different courses on different channels at this time.
Ladder Rung 3
Ladder rung 3 is all about doubling down on what is currently working for you.
On this third level, called ladder rung 3 you add to your product and now have two products to sell. Usually, you have your first product and then an upsell on your first product.
You're adding one more step to your funnel. When it comes to monetizing your upsell or second product, the price should be within the range of 5 to 10 times more expensive than the first product.
As you add an additional product, you can also add one more traffic source.
If your main traffic source was content marketing, you might want to add maybe Facebook advertising, Pay Per Click advertising or other forms of social media advertising.
Now you can also add a conversion mechanism. If your primary way of making sales was through a sales page, you can add webinars as a sales conversion mechanism, so that your audience has two ways to convert into buyers.
The goal of ladder rung three is to get to 7 figures within 12 months after passing ladder rung 2.
To summarize you have 3 to 6 months to build a minimum viable audience. From there you have 12 months to complete rung 2 which is getting to six figures by selling an offer to your audience.
Rung 3 takes an additional year for you to double down on what works, adding a new product and a new conversion mechanism.
So to conclude focus on creating your minimum viable audience, an audience that is interested in what you have to share.
Once you have collected an audience of about 2,000 you should shift your focus to one conversion mechanism, one traffic source.
After getting the results where you are earning $8,000 or $9,000 a month, you have completed ladder rung 2. You can then ascend to ladder rung 3 where your objective becomes to double down on what is working for you.