Determine The Size Of Your Minimum Viable Audience
If you’re an author selling books and you make $5 per sale, to make $10,000 a month for your business you need to sell 2,000 books a month.
Pretty straightforward. But here's where a lot of creators get stuck:
If 20% of your audience will buy your book, then you need 10,000 people for your first month, and you’ll need to add 10,000 more people per month to continue selling 2,000 books per month.
(And we wonder why writers struggle to make enough money. They never take the time to learn and accept these realities, nor do they charge enough for their books.)
If you’re a graphic designer who charges $2,500 per project, you need four projects a month.
Maybe 2% of your audience will buy.
4 projects ÷ 2% = 200 people per month.
That can be traffic to your website, new followers on social media, or new subscribers to your newsletter, but the metrics are the reality that will determine your minimum viable audience. Not just your current audience, but the size of the audience you need to attract each and every month.
You may be able to start with 200 people, but if you’re not adding 200 more people per month, you won’t get 4 projects or $10,000 until you either grow your audience or get better at selling a larger percentage of people, which we’ll discuss in the section on selling.
This is why marketing is so important. For you to succeed, you need to either have a way for the same customers to purchase from you more often (annually, monthly, bi-annually, etc), and/or find new people every month to purchase from you.
This is why SaaS - or Software As A Service - businesses like Netflix are so successful. You pay a monthly amount to keep your subscription and access active.
Every month, Netflix knows that 100M or so people are going to pay them on average $12. That’s $1.2 BILLION dollars every month that they can more or less count on.
At that point, they have two goals - keep current subscribers happy so they don’t cancel their subscription and add new customers to grow their business.
You can do the same on a smaller scale.
What are jobs to be done that you can do for $5-$100 per month? Can you start a paid newsletter, a paid community, a monthly zoom call where you teach your craft, release an exclusive-to-subscribers product?
Patreon capitalized on this success and created a platform to help artists and creators build this model into their business. You can create tiers for different levels of access or content that automatically charges your audience every month.
Plenty of creators have built audiences of thousands of patrons who want that very specific job to be done every month, and now make tens or even hundreds of thousands of dollars per month through that platform.
Even platforms like YouTube use this similar model. You grow an audience of subscribers and then monetize your videos, and you know that some percentage of your audience is going to watch your video every week within the first few days it’s released. Anything beyond that from people sharing it or the algorithm putting it in front of new audiences is a bonus.
If you know you’re going to get 100,000 views every week from your audience, and that represents $1,000 of ad revenue, then you know that growing your audience to where 250,000 people view your video every week means you’re making $10,000 per month from weekly videos. ($2,500 per week x 4 weeks).
To tie it all together, here's what the process looks like:
- Understand the job to be done
- Seek out the audience who is willing and able to pay for that job to be done
- Become the person that the audience goes to to get that job done
- Rinse and repeat by growing the audience or expanding the jobs you can do for people.
To quote The Mandalorian: this is the way.