I just got finished listening to a podcast that I had to pass along. I am a fan of Pat Flynn and his Smart Passive Income website and podcasts. Last week he had Clay Collins, the founder of LeadPages, on his podcast “Laddering Up: How to Build a 7-Figure Business by Building a $7K per Month Business”. Clay shared his insights into building a business from the ground up and had some really great nuggets of information. While the information may apply more to online businesses, I don’t see why this could not apply to many businesses and industries. Here are my takeaways.
Many entrepreneurs start with the end in mind. While this is often quoted by motivational speakers as a way to motivate yourself, it may not necessarily be the best tactic. For example, entrepreneurs often start off thinking of a specific product or service they may be offering in 2-3 years when, in reality, that may not be what the market is looking for or what their business eventually looks like. Clay gives several examples. Netflix started out renting used DVD and progressed to streaming and eventually producing their own shows. Leadpages (Clay’s own company) started out from a blog, to selling a product, to consulting to, his now highly-successful company, Leadpages.
Clay refers to the stages of building your 7-figure business as ladders. The first rung of the ladder is to create a minimum viable audience of 2,000 subscribers and he allows 3-6 months for this to happen. This, in my opinion, is the most important stage because in Rung One you are not selling or monetizing your ideas, you are listening to your audience. You want to understand what makes the market tick and look for ideas as to how to monetize the audience. It could end up being a member site, an app, a piece of software, a service, anything. But he believes it is the best business and marketing education you will ever get. And this is where the market will either confirm your thoughts on your original product idea, or move you into a direction you never thought of.
Once you have that minimum viable audience, Rung Two is creating the product and start selling. The purpose is to leverage the market knowledge you gained in Rung One to monetize your audience while continuing to serve them. In Rung Two, Clay provides ideas to hit your goals (follow “The Rule of Five Ones”) and to maintain your focus( with “The Five Commandments”). The end target after 12 months of starting Rung Two is to be selling $8-9,000 per month.
Then, Rung Three is building that business to a 7-figure business. I won’t go into details because Clay offers so much in the podcast. I highly recommend listening to the podcast, even if you don’t have an online business, it could generate some thoughts for your own industry. It is packed with great ideas and inspiration to get your business started or pushed along to the next level.