What does it actually take to build a six-figure business?
A once in a lifetime idea?
Millions and millions of fans to sell your products to?
Maybe a “Rich” uncle to give you a start-up loan?
No, no, and double no, at least, according to Kevin Kelly, who wrote an article on the
subject back in 2008 and we’re going to go over some of the implications of his ideas
today.
Today we’re talking about why having 1,000 true fans is really the only thing you need
to be a six-figure entrepreneur.
We’re going to be discussing what a true fan is and is not as well as going over various
ways that you, as a solo entrepreneur could turn 1,000 true fans into a six-figure a year
income, if not more!
Hey everyone Daniel here and welcome to Next Level Life a channel where you can learn about
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So I recently read, “The Millionaire Fastlane” by M.J. DeMarco and one of the major ideas
from the book was one that many of us in the financial and entrepreneurial communities
have heard at one point or another in our lives: STOP trading time for money!
Why?
Because our time is limited as I’ve covered in previous videos and our ability to trade
our time for money is even more limited than that (not to mention the fact that we rarely
hold much control over what kind of pay raises, or heck even the pay rates we get at our jobs).
But we aren’t going to be able to work at a job for 24 hours a day, 365 days a year,
it’s just not physically possible.
At some point, we’re going to need to sleep and eat, but by taking advantage of technological
advancements and setting up systems to work for us we can be earning money 24 hours a
day, 365 days a year.
This brings me to Kevin Kelly’s article, which I consider a must-read for any aspiring
entrepreneur because when you get right down to it the one thing you really need in order
to make it as an entrepreneur whether you’re a content creator like me or your selling
your products or services to others is 1,000 true fans.
But what exactly makes a fan a “true fan?”
To quote Kelly’s article (which I’ve linked in the description if you want to read the
full thing for yourself), a true fan is defined as, “a fan that will buy anything you produce.
These diehard fans will drive 200 miles to see you sing; they will buy the hardback and
paperback and audible versions of your book; they will purchase your next figurine sight
unseen; they will pay for the “best-of” DVD version of your free YouTube channel;
they will come to your chef’s table once a month.
If you have roughly a thousand true fans like this (also known as super fans), you can make
a living.”
Whether you’re a content creator, photographer, teacher, musician, craftsman, entrepreneur
or something else entirely you need only 1,000 true, raving, fans to make it.
1,000 people who basically say “Quit talking and take my money” whenever you go to try
and sell something either because you’ve managed to gain their trust through over-delivering
on value in the past or because the fan just truly supports your message and wants to do
whatever they can to help you continue to spread it.
Whatever the case may be, 1,000 true fans, is usually a good goal to shoot for.
Now you may say that 1,000 fans seems like a pretty big number, but when you look at
it closely, it isn’t as difficult to achieve as you might think at first.
This is especially true nowadays with modern technology and near-universal access to the
internet.
There are over 7.5 billion people on Earth and you would be hard-pressed to find any
interest, desire, or hobby that doesn’t have a following somewhere on the internet.
And when you crunch the numbers you begin to realize just how possible, or more accurately
downright probable, it is that you’ll be able to find an interest that you have and
can share with others that will pique the interest of at least 1 in 7.5 million people
(which is, of course, the ratio you’d need to gain 1,000 true fans).
The trick then becomes finding a way to connect with that 1 person out of a crowd of 7.5 million
people and how to set up a system that will allow you to start generating an income off
of your passions.
As far as connecting with the fans goes, it’s usually just a simple matter of finding out
where those fans talk about the topic your looking at sharing (which ideally is a topic
your passionate about yourself so you likely already know where those places are) and finding
a way to bring some value to the conversation whether in the form of education, comedy,
entertainment, or even just an opinion.
As far as the system for making money on the passion goes there are countless options;
mostly only limited by one’s imagination.
And once you do figure out which system or systems will work best for you the results
can be astounding.
Here are some examples.
A lot of vloggers sell merchandise like T-shirts on their websites or videos.
If a creator with 1,000 true fans released a new $20 shirt that cost them about $10 to
make every month they would generate about $120,000 in profits for the year and almost
a quarter million in sales.
Educators can do a very similar thing through selling online courses.
Say a math teacher takes a full year to design and create a really in-depth and helpful course
that walks you through everything from basic mathematics, to algebra, and even calculus
and sells it for $100 a pop.
He would generate a six-figure income thanks to his true fans.
But maybe that teacher wasn’t comfortable being on camera.
Say, instead of a video course, he wrote books on various subjects like math, history, and
science.
On average he writes four books every single year and sells them for $25 each.
Assuming he’d managed to gather 1,000 true super fans, they would buy each book he published,
meaning each of those fans would be effectively paying $100 a year or about $8.33 a month
to support you.
The teacher would still be taking in about $100,000 per year thanks to their true fans’
support.
And if we’re being realistic, not every single fan of yours is going to be what Kelly
would call a “True Fan.”
Which means that most of the time in order to build up 1,000 true fans you’ll generally
have more than 1,000 fans in total.
The more casual fans may not buy everything you try to sell but may buy one of your items
once in a while which just adds to your revenue.
For example, say that our teacher friend had 25,000 followers which include his 1000 true
fans from the previous example.
That would mean that of the 25,000 followers 24,000 of them were regular fans.
In the previous example, his true fans bought all four of his books for $25 each and thus
he had raked in $100,000.
His regular fans would not by all of his books but they some might buy one or two of them.
Let's say that he manages to convince one in 50 of his regular fans to buy one of his
books each.
That means that for each of the four books he would have convinced 480 people who are
not considered true fans to buy the book.
480 * $25 a pop * 4 books is $48,000 a year from his regular fans which increases his
total income from $100,000 through the support of his true fans to $148,000 in total through
the support of all his followers.
That's a pretty good bonus income if you ask me.
And you may not have to actually sell anything at all.
Maybe you just don’t feel right about selling products to your fans even if you know that
they would gladly buy it from you.
There are some who do feel that way and that’s fine, you still have options.
For example, many creators have turned to various crowdfunding platforms to make their
living.
Patreon is one example that’s popular among YouTube creators.
Through donations from their true fans, the creators are able to fund their video producing
career as well as give their patrons access to exclusive content or services.
The rewards vary from creator to creator and some have nothing more than a special shout
out at the end of videos of course but remember with 1,000 true fans it only takes $100 a
year, or $8.33 a month from each fan to make a six-figure income.
Now for most people, a six-figure income would be enough to live on, however, some people
don’t need quite so much.
Take those in the LeanFIRE community for example.
They generally lead a lifestyle wherein their goal is to spend no more than $40,000 a year
(and some spend significantly less than that).
If that’s the case then they may not even need the full 1,000 true fans to support that
lifestyle.
If you created an online course and sold it for $100 a pop like our hypothetical teacher
friend did then you would only need 400 true fans to support your lifestyle if you were
releasing one course per year.
Or perhaps instead of having the $100 course that you need to try and convince people to
buy you instead go the patreon route and have your true fans donate on average $5 a month
to your cause.
$5 a month x 1000 true fans is $5,000 per month or $60,000 per year which is more than
enough to cover the lifestyle of someone on the lean fire path who lives on $40,000 or
less.
Of course, this does go the other way as well.
say if your entrepreneurial ventures lead you to having a team around you that all needs
to make a living as well then you will either need to have more true fans, larger profit
margins that your true fans are willing to continue supporting, or more regular fans
to boost your income up to a level that will support not only you but your team as well.
And there’s nothing saying that you can’t combine a few of these revenue stream ideas
of course, in fact, it’s highly recommended.
Not only does this diversification of revenue streams protect you as an entrepreneur in
case one of your revenue streams has a down month, but it also allows you to provide more
value in different ways to your audience (and probably gain some new true fans in the process).
That’s one of the nice things about being an entrepreneur, your revenues may start out
lower than a typical 9-5 job would pay, but unlike a typical 9-5 job you can grow that
salary exponentially over time.
But that'll do it for me today once again if you enjoyed this video be sure to subscribe
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