I recently listened to an intriguing podcast featuring Clay Collins on Smart Passive Income, and I was utterly captivated by his account of how he built a successful company. One concept that really stood out for me was the idea of “laddering”, which he used to illustrate the growth of businesses.

Hearing him use Netflix and Apple as prime examples to demonstrate this concept was fascinating. His insights into the progression of these companies were genuinely eye-opening and provided a unique perspective on their success.

Netflix’s transformation from a DVD rental service to a significant content production studio. What began as a mail-order DVD rental service evolved into a pioneering streaming platform, and eventually, Netflix emerged as a dominant force in content creation, challenging traditional movie studios.

Similarly, Apple’s triumph with iTunes and the iPod laid the foundation for the revolutionary iPhone, establishing the company as a powerhouse and pioneering brand in the tech industry.

The evolution and success of these companies serve as inspiring examples of innovation and adaptability in the ever-changing landscape of technology and entertainment.

Clay‘s entrepreneurial journey is a testament to the potential for growth through strategic laddering. It started with a self-help blog, where Clay began sharing his insights and knowledge.

Over time, this evolved into the development of LeadPages, a highly successful company. His path from humble beginnings to creating a thriving business is inspiring and a great example of the power of perseverance and strategic planning in the world of entrepreneurship.

How To Start the Ladder of Your Business

When considering building a successful business in today’s world, it is highly recommended to start by building a minimum viable audience. While many individuals typically begin by developing a product first, I can relate to this approach as I have also ventured into creating my own product.

During my entrepreneurial journey to build a list of potential customers, I received valuable advice emphasizing the importance of having a product ready for sale before focusing on audience-building.

This approach involved thoroughly comprehending my target market before even considering selling any product. Clay, a seasoned entrepreneur, advised me that the most effective approach is to learn how to engage with an audience and then use these interactions to organically understand the kind of product they need.

During the initial stages of my entrepreneurial journey, I received valuable advice stressing the importance of having a viable product before focusing on building an audience.

This strategic approach entailed thoroughly understanding my target market before introducing any product for sale. Clay, a seasoned entrepreneur, emphasized the significance of learning how to cultivate an audience and using these interactions to discern the type of product that would resonate with them.

Understanding and connecting with the audience in this way has become a foundational principle, guiding my efforts to create a business that prioritizes meeting the needs of its customers.

Ladder Rung 1

When working towards this goal, it’s crucial to acknowledge the importance of patience in building a loyal audience. Attaining around 2,000 email subscribers over a three to six-month period marks a significant achievement to strive for. Email marketing platforms like Aweber, Drip, ConvertKit, or MailChimp can be crucial in efficiently gathering and managing email subscribers.

Additionally, adopting best practices for email list growth, segmentation, and engagement can further enhance the effectiveness of these platforms in cultivating a thriving subscriber base.

Building an audience is a valuable learning experience in marketing and business. The success of your efforts will be influenced by the type of content you publish on your blog. It’s crucial to closely assess your audience’s reactions to different ideas and calls to action.

In light of the decrease in blog engagement, it’s advisable to incorporate minor enhancements to boost interaction. This may involve creating a social media community or incorporating multimedia elements such as videos or audio into your blog posts.

With the evolving content consumption landscape, audiences seek a more personalized experience. While some individuals, like myself, prefer the convenience of podcasts, others are drawn to the in-depth insights offered by blog posts. Recognizing these preferences and catering to your audience’s varied needs is essential.

In marketing, amassing 2,000 followers for your blog significantly increases the likelihood of converting them into paying customers. Contrary to common perception, attracting subscribers is markedly easier than converting them into customers.

Establishing a sense of trust and connection with your audience is pivotal; it greatly enhances the prospects of them appreciating and eventually purchasing your offerings.

How Do You Choose an Audience to Target?

When defining your target audience, it is crucial to pursue a niche that aligns with your passions. Focusing on a subject you feel strongly about will likely attract like-minded individuals who share your enthusiasm.

Having a genuine passion for the content you create is essential, as this facilitates the process of captivating fans and building an audience. Additionally, it’s important to remember that you will eventually need to promote or sell a product to your audience.

Therefore, it’s vital that you genuinely believe in the product or service you are endorsing and maintain a passionate disposition toward it. Your ultimate objective should be to positively impact your audience through your passion and create an unwavering belief in its value.

As Clay stated, having a subscriber list of 2,000 people is particularly significant, given that, on average, individuals earn around $2 per month per subscriber.

However, based on personal experiences, it’s more realistic to aim for $1 per subscriber. Interestingly, even with a list of 50,000 subscribers, the average earnings were lower than $2 per subscriber.

This underscores the fact that the quality of the audience and the relationships you establish with them are more critical than the quantity of subscribers.

Furthermore, Clay mentions that achieving $2 per subscriber signifies reaching the second rung of the ladder, with the first rung without a monetization plan. In light of this, those following this plan shouldn’t anticipate substantial earnings in the initial 3-6 months.

The initial period is crucial for building an audience and generating substantial income, and it’s important to remember that establishing a meaningful and lucrative online presence takes time. Many individuals embarking on an online business tend to expect immediate profitability, making this time frame potentially discouraging.

Nonetheless, accumulating an email list of 2,000 subscribers is not as daunting as it might seem – it merely entails gaining approximately 2 subscribers daily. The primary objective of the first rung is to kindle interest and engagement from your audience. You can think of it as a rite of passage into online entrepreneurship.

Communicating with your audience is key, and one way to do this is by offering consulting services at a reasonable fee of $50 to $100. This allows you to understand their needs, impediments, concerns, and objections better and helps establish a stronger rapport with them.

Ladder Rung 2

To progress to the second level of the ladder, you must have successfully built an audience of approximately 2,000 subscribers. The objective at this stage is to generate an income of about $8,000 within the 12th month.

This equates to a goal of earning between $8,000 and $9,000 monthly within a year. Implementing a specific strategy to achieve this aim is crucial. This could involve optimizing your content by creating high-quality, engaging videos or articles that resonate with your audience.

Additionally, consider diversifying your revenue streams by exploring affiliate marketing, sponsored content, or merchandise sales opportunities.

Engaging with your audience to increase loyalty and support is also essential. This could involve actively responding to comments, seeking feedback, and creating a sense of community through live Q&A sessions or exclusive content for loyal subscribers.

By employing this targeted approach, you can work towards reaching and surpassing the income goal within the specified timeframe. Remember, consistency and dedication are key to achieving sustainable audience growth and income growth.

The Rule of Five Ones

Remember the following principles known as the rule of five ones:

1. Sell only one product.

2. Use only one conversion mechanism, which is a method to turn a prospect into a buyer, such as a sales page, webinar, video sales letter, phone call, etc.

3. Utilize only one traffic source, such as SEO, email drops, or Facebook advertising.

4. Spend about a year to find the right combination.

5. Then, invest one more year to reach a revenue of $1,000,000.

Adhering to these principles ensures that the process is straightforward. It’s essential to focus on one step at a time and avoid getting entangled with multiple combinations, which can complicate the process.

By focusing on the rule of five, you can channel your efforts effectively and reach your goal within twelve months. Staying attentive to these principles will also help you achieve your targets consistently in the subsequent twelve months.

Following this path will likely lead to earning between $8,000 to $9,000 within the first 15 months. Remember, the first 3-6 months will be utilized to grow an audience of 2,000 subscribers, and then you aim to reach $8k in a month within 12 months after that.

These principles allow for a clear and systematic approach to achieving success. Focusing on a single product, conversion mechanism, and traffic source minimizes complexity and maximizes efficiency in your business strategy.

Remember to stay committed to the process and be patient while working towards your financial goals. Consistent effort and dedication to these principles will help you achieve steady and substantial income growth over time.

The Five Commandments of Ladder Rung 2

In Ladder Rung 2, there are five key commandments to abide by for optimal focus and efficiency in your business ventures:

Commandment #1:

Dedicate your efforts to a single business. If the thought of initiating a second business arises, suspending the first one is essential. The stage you’re in requires undivided attention towards a solitary business.

Commandment #2:

Concentrate on promoting a singular offer. It’s crucial to comprehend that diversifying into multiple offers can dissipate your energy and focus. Hence, it’s prudent to stick to just one offer.

Commandment #3:

After launching your offer, limit the time spent on product creation to no more than one day per month. Post-launch, the priority shifts to sales rather than continual product refinement. This ensures that your focus remains on driving sales for your existing offer.

Commandment #4:

Allocate no more than one day per month to content marketing unless it serves as your primary traffic source. While my primary traffic source is email marketing, I recommend selecting a suitable approach that aligns with your business goals.

Commandment #5:

Delve deep without spreading yourself too thin. Once you find a topic of interest, the focus should be on in-depth learning rather than veering off in different directions. When enhancing your traffic generation strategies, it’s prudent to invest in a single method that resonates with you and persistently work on gaining mastery in it.

Furthermore, refrain from the temptation of purchasing myriad courses across different channels at this stage.

Ladder Rung 3 

In ladder rung 3, the focus is on expanding and optimizing your business by doubling down on what already works for you. At this stage, you introduce a second product to sell, typically as an upsell to your first product. The price of this second product should be 5 to 10 times more expensive than the initial product, which allows for increased monetization.

Additionally, consider incorporating a new traffic source as you add another product. If content marketing was your primary traffic driver, you might want to explore additional avenues such as Facebook advertising, Pay-per-click advertising, or other forms of social media advertising.

It’s also the right time to introduce a new conversion mechanism. For example, if your primary method of making sales was through a sales page, adding webinars as a sales conversion mechanism provides your audience with an alternative way to convert into buyers.

The objective of ladder rung three is to reach seven figures within 12 months after moving past ladder rung 2. Success in this stage involves building a minimum viable audience within 3 to 6 months. Once you’ve achieved this, you have the subsequent 12 months to accomplish ladder rung 2, which involves reaching six figures through selling an offer to your audience.

Upon earning $8,000 to $9,000 a month, you have completed ladder rung two and can progress to ladder rung 3. In ladder rung 3, the focus is on capitalizing on what already works for you by introducing a new product and a fresh conversion mechanism.

In conclusion, your attention should be directed toward developing a minimum viable audience genuinely interested in what you offer. Once you have amassed an audience of around 2,000 individuals, the emphasis shifts to optimizing one conversion mechanism and one traffic source, ultimately guiding you toward doubling down on what is adequate for your business.