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February 9, 2023

Your 3-step Creator Business Model

Kevon Cheung

Founder & Head Teacher

I was on a podcast interview with David Elikwu for his show, The Knowledge, and he asked a critical question:

“What’s the biggest challenge in your creator journey in the last 2 years?”

Honestly, I have so many and I’ve been sprinkling my reflections and lessons learned in my annual reviews, my reflective YouTube videos, and more.

But there’s one that is so critical: understanding and building the creator education business model.

It took me 18 months to have a grasp.

And I see so many new creator educators struggling to monetize and grow despite having some initial traction, so let’s talk about this!

What do most creator educators spend time on?

First, it has to be creating content. You try to give value, build trust, and get traffic.

Then, it is building products to sell. You see a problem. You build a solution. You get traction and sales.

You could easily be creating content daily for the sake of it and building and launching products for that new spike in sales. Initially, it is quite hard to escape this cycle.

I’m not saying this is a bad approach. If you’re still searching for your WHY (purpose) and WHAT (topic), this iterative process is actually very helpful to help you gain clarity.

The problem for most creators is that there’s no educatiobusiness model to make your daily inputs worthwhile.

There’s no growth and sustainability in all the work you do. And this might lead to waving the white flag one day. You don’t want that to happen, right?

So instead of creating more and more products to sell to a growing audience, I’ve made an early decision to stay relentlessly focused instead of hustling to do more. Well, this is also partly because of my life constraints, e.g. having a young family.

Since then, my goal has been clear - I want one product so good that it blows people away, continuously.

I’ve learned a ton about the creator’s business model from great minds like Jay Clouse (Creator Science - the only community I'm active in), Amy Hoy (Stacking the Bricks), and Justin Moore (Creator Wizard).

If you also want to get to your $10k month, you need to nail down 3 steps to be successful:

  1. Lead Magnet - having a “blow people away” free resource to bring people in
  2. Initial Offer - having a “trust building” low-ticket product to showcase you and connect
  3. Signature Offer - having an “everyone is talking” high-ticket product to drive growth

I can’t say I’m a super expert in this, but I want to share my thoughts with you using Public Lab as an example!

Lead Magnet

First thing first, some people call this a freebie. I don’t  like the term because it sounds cheap.

I’m a big fan of community-driven growth. Whenever I talk about it, people's mind jump to social media first. But the truth is … we cannot rely on the algorithm to reach people. It is too unpredictable and exhausting at the same time.

There is a saying that less than 1% of your followers see your social posts. Bummer!

So a lead magnet, essentially a free resource, acts as “the thing” to attract people into your world outside of the social media algorithm.

My favorite tactic here is - don’t create it unless you’re making the best resource out there.

You want to have at least one signature lead magnet that's the go-to resourcefor a topic. You want to blow people away so that they cannot help but recommend it to friends. If you can help people achieve results with a free thing, guess what, they’re going to have so much confidence in you when they pay you.

But, I often see new creators making these 2 mistakes:

Mistake #1 - Creating a mediocre lead magnet

You don’t want to create an average free resource. Sadly, many people only spend a few hours creating a checklist, cheatsheet, or any PDFs.

I took a very different approach.

When I started, I spent 8 full weeks writing the Build in Public guide. And after 2 years, it is still being shared! Thank you Trends.VC!

Hard work does pay off.

After that project, I spent another 6 weeks creating Making Twitter Friends, a free email course, and it has brought in 2,800 students in 18 months mainly based on students’ word of mouth.

You want to create a product that you should charge for $100 but you make it a freebie.

Mistake #2 - Falling into the Notion trap

Lead magnets can come in many forms, e.g. an old-school PDF, that one email. These days, many creators use a Notion document or template because they love Notion themselves.

But to me, I don’t understand these Notion resources.

They’re not easy to read or use. They don’t have SEO benefits. They don’t create a learning experience.

My favorite signature lead magnet is a free text-based email course.

Let me tell you why.

1. Taking your time to educate

Let me ask you: how much time did you spend on the last PDF or Notion doc you downloaded?

1 minute? 3 minutes? Maybe 5 minutes?

While some people love these formats, I’d say most people skim and throw them away.

My friend, Brian To, recently tweeted about this:

It is so hard to establish a sense of connection through a PDF or Notion doc.

A 5-7 day email course is different. You’re showing up daily to share something new.

Even though you won’t connect with everyone taking your course, you can bet that some people are enjoying hearing from you.

I still hear from my new students all the time:

2. Reaching people 100% of the time

For a PDF or Notion doc, people read it and move on. You don’t really get to create a conversation from there.

If you want people to go from reading a PDF to receiving emails from you, there’s a bit of friction because of the difference in the experience.

A free email course can flow to future emails that feel natural to people. And you now have an email channel that you can reach them all the time.

3. I love writing

This has to do with doing what you’re best at.

I love writing (you can probably tell from this essay). So when I use a text-based email course as a starting point for people to learn from me, I can continue to use my words to connect with them.

I also notice people have their preferred medium. There are text-oriented people, audio-oriented people, and video-oriented people.

If your thing is video, then I’d probably suggest a video-based email course follow by more videos regularly.

You want to use your best medium and start that form of communication early.

Initial Offer

If you’ve created a powerful lead magnet and you’ve blended into the right communities based on your target audience, at this point, you should be offering a ton of free value to people. They should love you. They should be talking to you.

If this is not happening, it means that your value is not significant enough. Maybe your point of view is not unique. Or maybe the lead magnet is not actionable.

But once you have that, you want to present your Initial Offer as the next step. It is a paid product that kickstarts a value exchange between you and the buyer.

If you're in your early days, I’d likely price it under $30 to make it high enough to attract serious buyers but low enough that people would buy it impulsively without evaluating your credibility.

If the Lead Magnet is to introduce you to people, then the Initial Offer is your chance to shine.

One of my Initial Offers is Easy Content Magic.

I want a short video course to introduce one of the key topics of telling your own stories: how to quickly create content with your day-to-day work & stories. And I chose to deliver it via a video course because buyers can learn about my teaching style and personality.

So far for each of my cohort, a few students sign up because they've taken Easy Content Magic!

Here are the 3 most important things about your Initial Offer:

1. Be strategic in the design

I already said it up there. A lot of creators tend to come up with an idea and pick their favorite way to share it, e.g. “I love Notion so I’ll use it to sell this new course I’m building”

That’s a big NO NO.

Even if you have no idea what your Signature Offer (coming up next) is, you want to use your hypothesis to decide.

If your Signature Offer is a live cohort or coaching program, it is important that you can showcase your ability to speak, present, and facilitate.

In this case, an eBook would be a total mismatch. Because buyers won’t get a sense of who you are.

You should create a mini video course that buyers can not just learn from you, but can also get a sense of your styles and personality.

Think about what is going to convince buyers for your Signature Offer, then reverse to showcase it in Initial Offer.

2. It doesn’t have to be a book or course

You are heavily influenced by other people’s popular products online. You think you want to write a book or create a course. That’s a big trap.

There are so many ways to deliver values that you have to be creative about it. Sometimes, it can even be a hybrid!

If your goal is to create a high-ticket membership, instead of a book or a course, you will learn so much by running an Initial Offer challenge with a community aspect to get a taste.

You can charge $50 or $100 for the challenge, and now that you have a group of people around you. You observe, understand, and work with them to level up yourself.

One day, you’ll have the skills needed to run the high-ticket membership.

3. Remember to talk to people & buyers

I notice that a lot of people selling digitally never talk to their customers. I don’t understand why. Maybe it is the curse of “passive income”?

Talking to people doesn’t make you money, but it unlocks the most valuable data points to help you create better products and experiences.

More importantly, it draws you closer to a sustainable creator business.

I know it is hard to get people to talk to you. I usually create my own chance:

  1. Offer free office hours
  2. Offer a free 20-min chat
  3. Send emails to say hello

I offer and do these time-consuming things for free, but I achieve my goal of opening up an active communication channel between my people and me.

Signature Offer

Both the Lead Magnet and Initial Offer are not designed to build you a profitable business. This is where the finale comes in.

Your Signature Offer can finally give you the cash, freedom, and sustainability in running your creator business.

I know there is a popular saying online “Build Once, Sell Forever”. To me, if it works this way, that product is not a Signature Offer.

The best signature offers are like startups. They evolve and grow over time.

Here are some examples:

Marie Poulin’s Notion Mastery
Jay Clouse’s Creator Science
My Signature Offer course Build in Public Mastery

There are so many things happening inside these products (content, events, accountability, support, and more) and they become more influential in their particular space over time.

Buyers get so much value from it that they keep telling their friends. Boom! Now you’ve got your creator’s flywheel started.

But if you’re super early days, I wouldn’t worry about what your Signature Offer is just yet. It will become clear if you create the Lead Magnet and Initial Offer right and spend time talking to people.

After learning these 3 steps, it became so clear to me where I should spend time.

When I see another creator building product after product to get those spikes in sales, I’m always a little worried about when they would get burned out.

Take a few minutes now and take out a piece of paper. Can you come up with the “one thing” for Lead Magnet, Initial Offer, and Signature Offer?

What are you going to work on next?

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What does it take to teach & EARN online?

Here's a case study of how I built a $100K education business.

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What does it take to teach & EARN online?

Here's a case study of how I built a $100K education business.

Read for free