I’m sure you’ve heard the hype about how you can create an information product or program that you can sell online. That you can create something once and poof – the money will start rolling in (even while you sleep)!
The myth of passive income is that you create something once and then sell it many, many times over. The “passive” part is that you can set things up once and then let it make money for you.
I see so many business owners – many of them my clients when they first come to me – thinking they’re doing something wrong because they’re putting their heart and soul into creating their flagship online offering and it’s falling short of what they’d been promised would happen.
This breaks my heart. Because while people are struggling to create passive income, they’re missing out on opportunities to bring much-needed money in the door today while not serving people that need them right this second.
In online business circles, passive income is the proverbial brass ring. And the hype about creating passive income has reached epic proportions. Like any myth, things get twisted or lost along the way.
Here are a few of the most common myths of passive income and what we should realistically expect instead:
Myth #1 – You Can Set it And Forget It
2016 marks the 5th year of offering my signature online mastermind, Conscious Business Design. You’d think that after running this program over 16 times with hundreds of students I could put it on autopilot, but nothing could be further from the truth.
Every time we go to launch the program, many, many hours are invested, and then countless more when the program is running. Why? Because we know that for us to continue having successful launches and happy students, we need to provide a high level of value and support.
[clickToTweet tweet=”Truthbomb: The information age is over! People don’t just want info – they want real support!” quote=”Truthbomb: The information age is over! People don’t just want info – they want real support!” theme=”style2″]
The days of being able to sell an information product for hundreds or thousands of dollars and not providing any real support are limited. People are done spending their money on programs where they feel like a number and can’t get actual support from someone who knows about their life or business.
The refund rate alone in the online information product market backs my thinking here. For many high-end programs, refund rates run as high as 10-12% because people are sold one thing and then realize they don’t just need the information – they need real support to implement what they are learning!
10-12% is an astronomical number. Think about it in the context of how many things per year you actually return – maybe 1, at the max 2? Why are people essentially dropping out of these programs?
And what about all the ones that aren’t happy but stick it out anyway? The completion rate for online programs is abysmal – for many massive online courses, it’s as low as 2%. Even for smaller group programs, it’s only about 40-50%.
Many people start a program with excitement – but within a few weeks, the reality of the work required to implement sets it. Without personalized support and accountability, many students hit overwhelm and never get the promised results.
If you’re running a big ticket program the message you send can’t be, “Well, I might show up in the Facebook group” or “We have a couple calls, but I have NO idea what you actually do so let me give you super generic advice that may or may not apply.” That’s simply not good enough – and your students deserve better.
At the end of the day, creating a successful online program isn’t about how much money you make, but how much impact you create. You’re only going to be able to create that impact if you skip being passive and make it personal instead.
Myth #2 – All You Need is a Couple Days to Put Your Product Together
This is hands down my favorite of the myths because you really should be able to throw together your signature thing in a weekend, right?
Oh so wrong. Not to be negative, but creating something quality takes time – months or even years – not just a couple of days. Because there’s so much more to it than just putting together a PowerPoint or Keynote and then creating a video.
The first time I launched Conscious Business Design in 2011, I spent 200 hours actually creating the program content (and I completely underestimated how long it would take to create, record, and edit an entire comprehensive business program). And to get to that point, I had taught the material for nearly 5 years in live workshops and trainings, not to mention consulting hundreds of businesses and completing my MBA.
If you’re going to create something that your community really wants, you need to start by laying the groundwork months or years ahead of time. You need to do the research to find out what they actually need and to figure out how you can best serve them.
Then you need to make sure what you’re teaching and sharing actually works – as in, it helps your students get real results. Having a successful program means constant improvement and refinements so you can improve your teaching and help your students achieve their dreams.
Conscious Business Design has been revised every year as we’ve graduated hundreds of students. With each class, we get feedback and insight into what is working, where people are getting stuck, where we can simplify the training, and where we need to add more support. It’s a perpetual work in progress.
Between the time that it took me to create Conscious Business Design the first time, then run and revise the program every year to improve the results of my students, I’d estimate that I continue to invest over 200 hours a year on improving this program.
And as the program has grown, I’ve also added a support team to ensure that our students have an impeccable experience. When I consider the time invested by our team behind the scenes (designers, editors, project managers, customer service, tech + development) and our Conscious Business Design Success Coaches supporting all of our students… now we’re talking hundreds of hours each time we run the program.
That said – I started out Conscious Business Design without all the extra support team. But it did require a LOT of upfront investment of time, energy, and money just to launch the program the first time!
And even my latest program, Get More Clients, came from years of running and teaching this system before I decided to sit down and spend dozens of hours putting it all into single training. In fact, the only reason it took me less than 100 hours to put the entire training together is because I already had the entire system documented!
Before you start investing this kind of time, energy, and money into an online program, consider:
- How many hours will it take to create the content? What is that time worth (use your hourly rate)?
- How much time will you invest while the program is running, and what is that time worth?
- What are your technology and other costs?
- Where will you need support from your team or contractors?
With that budget, then figure out how many people you realistically can enroll the first, second, and third time you run it. (Keeping in mind that a typical conversion rate for an online program is only 1% of your email list)
Then you can easily see how this is not a one and done, but a long-term project for your business, as it may take a couple of rounds of running the program to get it to really become a fair exchange of your time/energy/knowledge for the financial reward. It will take a few rounds to hone the delivery of your program. It will take a few rounds to deliver the best results for your students.
[clickToTweet tweet=”Successful online programs aren’t set it and forget it!” quote=”Successful online programs aren’t set it and forget it!” theme=”style2″]
And the final element of running a successful online program? Consistently delivering amazing free content to grow and nurture your community. The first couple of times you launch your online program, you’ll likely get your biggest raving fans ready to sign up… but after that? You’ve got to commit to reaching and serving new people or you’ll burn out your existing community.
So yes – you might actually receive payment notifications while you sleep – remember that a successful online program will require a huge investment of your time and energy on creating a high-quality offering that truly delivers the experience, support, and results your students are looking for.
Myth #3 – Anyone Can Be a Teacher
Who doesn’t love a rags to riches story? They’re so fascinating because it’s incredibly inspiring to hear that someone completely changed their life! But when it comes to people teaching about businesses, I personally find them a bit on the dangerous side.
They’re inspiring, but many times they’re also misleading. They paint a glossy picture of how awesome things are going right now in their life and business – complete with the brand new house and completely upgraded lifestyle. They show the dramatic before picture of being completely broke and not having two nickels to rub together.
But where is the messy middle to these stories? The part where they share the true story, the struggle when they traveled down this journey of entrepreneurship, the starter business that failed, the first online program that didn’t sell, the breakthrough when a mentor shared their work with an established audience?
These rags to riches stories are the exception, not the rule.
These carefully crafted stories are misleading because they are designed to have people believe that they found a magic bullet that instantly transformed their lives overnight (and they are ready to teach you how you can do it too!). And when you’re hyped up on the myth of passive income… when you’ve been hustling in your business to make things happen, who doesn’t want a shortcut?
But they are leaving out the messy middle – including the hard work and lucky breaks that helped them move forward.
When it comes to running a successful online program or service – the only success story that truly matters is your students!
[clickToTweet tweet=”The only success story that truly matters is your students!” quote=”The only success story that truly matters is your students!” theme=”style2″]
For your program or passive income product to actually be successful for the long haul, it needs to be outstanding. You can’t just learn something, do it once, and then turn around and teach it. You’ve gotta get results for your students.
This is a huge red flag for me because while it’s awesome that someone changed their life, I hear horror stories from people who’ve signed up for a program based on these big promises only to realize that the teacher didn’t really have the experience to help their students navigate the ups and downs of entrepreneurship. They didn’t have the business acumen to give advice for different business or life situations. All they had was the exact step-by-step they followed… and anything off the path? You’re on your own.
Eventually, that does catch up as people start to figure out that you’re all sizzle and no substance.
To be a great teacher, you don’t need to have all the answers, but you do need to be absolutely outstanding at what you do. It comes down to mastery.
The key to mastery is having done something time and time again with real people. You’ve worked with dozens of 1×1 clients. You’ve taught multiple workshops. You really understand the challenges that your clients will experience and how to help them move through it. You need to have worked the content seven ways to Sunday before you expect to roll it out with big ticket pricing.
Passive income can be an amazing addition to your business, but you need to go in with your eyes wide open and know exactly what’s involved. Understanding all the steps that go into it now will save you time and heartache later, as you can put a realistic, long-term plan in place to make passive income work for you and your business.