If I Wanted to Build a $5M Creator Business in 2024, I’d Do This | 033

Okay, so Ricky, you're talking about going from 1.3 million and the milestone we were kind of talking about is 5 million. Is that right? What would have to be true for us to 10x that number?

Some of these other products that we've got, our membership consulting, travel agency, concierge.

What percentage of your audience do you think knows that this service exists?

Less than 1%.

I had 10 products that I launched as a creator before I had a single product break $50,000 in revenue. As creators, we're the best in the world at capturing attention. What's the highest ROI place that I could direct that attention.

The real revenue growth comes from shit that you can sell to the audience.

Hundreds of billions of dollars a year are being spent to pay for that attention, and we as creators get it effectively for free. Okay, so Ricky, you're talking about going from 1.3 million right now, and the milestone we were kind of talking about is 5 million. I got the sense from the, the talk, it sounds like you have bigger ambitions than than $5 million. Is that right?

I mean, to get to any big ambitions, we'd have to get to the $5 million mark and beyond. So I don't like to put a specific number on it. But the idea is to grow this thing. I just want to be able to make the type of grand impact that I kind of have in my mind in terms of taking what travel has meant to me and enabling that for so many more.

OK. So as we're talking about scaling revenue, give me the breakdown of where revenue is at from different sources right now. And then we'll talk about what that could look like going forward.

We have about 30% of advertising from various sources. So website is our primary driver. Google SEO, that's a big piece. It's kind of where we started, too. We started building our authority on Google. And a portion of that is on YouTube as well. 35% from affiliates. That's a predominant, very, very popular way to monetize in the credit card and points and miles space. You recommend a credit card for a given reason. Reader or viewer, and if they find value in it and sign up, you get compensated from the banks, and the banks have big marketing budgets.

Yeah, so maybe with this, how do you imagine it changing as you— at that 5 million mark?

You talking about the overall pie or these two?

The overall pie, or what, uh, what section of it do you think is going to be contributing the most revenue?

Yeah, so advertising is gonna get small. Um, Traditionally—

I think most creators would assume that advertising is going to be the bigger option. So talk about why advertising is going to shrink. Not as a total number, but it's going to shrink as a percentage.

As a percentage, yeah. Traditionally, my understanding is advertising AdSense on YouTube, on SEO, it's a baseline. But then the real revenue growth comes from products that you can sell, whether it's directing to credit cards or partner products in the case of credit card affiliates, or products that you yourself build and sell to the audience. And so, yeah, for me, as we grow, this credit card affiliate space, it's obviously going to continue to be key just because of the space that we're in. We've mostly been operating on the Canadian side. So growing into the US is going to be big for us on that piece. And then some of these other products that we've got showing up here are membership consulting, but especially our higher-end ones, travel agency and concierge, geared towards the higher-end segment of the market. More luxury travelers, more founders and entrepreneurs type. That's gonna be a big piece that we look to grow the product revenue from that. So I imagine the pie more shifting into these travel agency concierge product side, and the affiliates remaining large, and the advertising one getting squeezed over time.

[Speaker] Yeah, so I think most people would assume that as certain channels grow, well, I think you'd actually assume that the biggest buckets are going to continue to drive the most growth. But what you're saying is actually this little 13% slice, that's what's going to have the biggest growth from here. Is that right?

Yeah, that's our projections. Because for us, the advertising got us this much, this far along the way. And it's been pivotal for us in those early stages, 2017 till now. But ultimately, its growth trajectory is capped.

Right. So one thing that I've learned studying the creator economy, right? So I run ConvertKit, which is an email marketing platform for creators. We power about 500,000 creators, businesses, newsletters, and all of that, including some of the biggest creators out there from like Andrew Huberman to Tim Ferriss, James Clear, um, so many others. And so we get to see this like behind the scenes look into the biggest creator businesses. And one thing that I've noticed is that the creators that really scale beyond this 1 million mark, they all figure out something different to direct the attention to. If we think about a creator business, really what we're doing is as creators, we're the best in the world at capturing attention and getting people to pay attention to us, whether it's through an Instagram Reel, a blog post, or something else. But you actually have a lot of control over where you direct that attention from there. And attention is insanely valuable. Like if you think, you know, hundreds of billions of dollars a year are being spent to pay for that attention and we as creators get it effectively for free. And so then you think, where are we directing that? And what you're doing here in that breakdown of revenue is going, okay, what's the highest ROI place that I could direct that attention? And I think what you're finding is your own products and services. And this is what I found across hundreds of creator businesses at this scale is that always it's some version of your own products and services. So what does it look like to go from, you know, your products and services that are making, is it about $200,000 a year in that concierge service business? Like what would have to be true for that to be $2 million a year, for us to 10x that number?

Well, it's time to dial up the marketing and sales engine basically.

Okay.

It's time to, really get the messaging out there in terms of the fact that this product exists, which I'd say we've been weak at thus far, right? We've kind of launched it and spread it around within our circle of, like, my circle of founder friends, and there's some word of mouth, but we haven't really given it our best shot.

What percentage of your current audience do you think knows that this service exists?

Less than 1%. Like, it's not on the website, and just to be very transparent here, we just hired our full first full-time—

I mean, this is an amazing opportunity, right?

Exactly.

Hey, this area that has the biggest channel of growth is not well known. This is something that I've run into with ConvertKit where, you know, as we're building new functionality or rolling it out to creators, they'll actually look like, oh, this is, you know, my favorite thing, but how many people in our own audience are using it? And it's often things like that where you're like, I run the numbers, it's like 6.5% or something. You're like, okay, we have so much room to grow from here just promoting to our existing audience.

I feel like it's a common story I've heard among creator entrepreneurs, right? As they discover the fact that products can scale, but it just— there's a time delay between knowing that and then acting on it and letting the audience know and increasing that level of awareness.

Yeah. So who in your company is directly responsible for growing this number?

That's a good question. Probably Peter. Our new director of product that we hired in start of April.

That's awesome. Yeah. So that's something, as you're scaling a team as a creator, like, I love that you have an answer for that, right? And I love that it's a recent hire because this is— I can see you ramping up to this next stage. But as, you know, as content creators and then creator entrepreneurs, we really— at least what I did is I stayed in control of many of these numbers and initiatives and all of that. And it wasn't until I hired people and gave them the clarity of this is what you're in charge of, this is the metric that you need to move, and you tell me what resources you need to do it, that we started to have real traction. And so in this case, right, you have a head of product who is going to be building this out. They're responsible for that growth. And so now you have some nice, probably some healthy tension coming in. Because they're going to come to you and say, hey, I need all of this promotion to happen in order to hit goals. And you're going to be able to say, OK, well, are we hitting our customer satisfaction goals? I don't want to ratchet up the promotion until the quality is exactly where we want it. So you have a little bit of attention there. And he's like, oh, I'll nail the quality. I'm ready for the promotion.

Yeah, except it's tension between him and the director of content, not— —Oh, that's even better. So that's, yeah, that's, I mean, that's the move, right? It's bringing on team members who are accountable for specific things within the business. I had in the slides there, I never got around to it, but one of the big transformations was, you know, instead of me obsessing over everything in the business and making sure it's looking good, instead my only task these days is finding the right people who are accountable and held to the standard of making sure everything's looking good themselves. And then they have those conversations within them to make the various pieces of the business work together.

Yeah, I like that a lot. One other thing that I've noticed is in a lot of these creator businesses, they usually have one product, sometimes two, but often it's one that turns into this monolith or this skyscraper that's built up. And it's very different from what a lot of, I would say, intermediate to professional creators do. If you imagine an analogy of you're going down the street in a city and you see a strip mall, right? There's a Radio Shack, there's a Subway, I don't know, a bunch of businesses in that one place. And they all, you know, the buildings are all about the same size, right? One story. Most creators build businesses like that where they're saying, I'm going to make affiliate revenue over here. I've got a handful of products, right? I've got a book, a couple different courses, and they're building this strip mall of a bunch of different things. And it ends up building a really successful business. I've watched people scale that to hundreds of thousands a year and even into $1, maybe $2 million if they do it really well. But everyone that I've seen scale to probably $5 million and beyond picks one of those things. Sometimes it's a course, sometimes it's a productized service, or something else. And they say that is going to be the skyscraper that we build. And they build the funnels and the systems and processes around that one thing as tall as possible rather than what you would commonly expect, which is hey, I've got a whole bunch of one-story buildings, let's build them all into two-story buildings and that's how we'll double the business.

Yeah, that's been a big lesson from lately, right? Because we have on that chart there was like 4 products and we have treated it in a strip mall fashion. For a while, and we've come to find that that may have been to our detriment, or at the very least not positioned us for that type of growth.

I think it was the right thing for the phase. Yeah. Because if you imagine coming in, you don't know anything about— you don't know what's going to work. You don't know— if you're anything like me, I think I had 10 products that I launched as a creator before I had a single product break $50,000 in revenue. And so if I had picked product number 4 in that and said, ah, this is going to be the skyscraper, I'm gonna go all in on building this, and dug a giant foundation, and I don't know how far we can take this analogy, but you know, and built that up, and then people were like, oh, that has no value to us, we have no interest in buying that, that would have been a total waste. And so I think building the strip mall to begin with is the right way to go. But then when you want to scale, you have to choose the one or two things to scale. 100%. So that's the plan. I like it. Talk to me a little bit about— and everyone— about some of the skills early on as a creator, maybe that you had to learn that you didn't expect that you had to learn. And then we'll get into some of the skills much more recently.

Sure. Well, it— to me, it kind of mirrors the, the path that I've been on since the start, right? Like, at the start, the types of skills I was really looking to to build were in the very much the creator mold. So how to write, how to edit, how to use WordPress, how to edit CSS to make a website look nice. And I consider myself like pretty accomplished at that, right? Because you just have to like Google stuff and figure it out and test it and try it until it works. Filming videos, you know, filming videos on airplanes, if you guys fly and film, that's a real deal. Editing, right? I used to spend 10 hours a day editing a video just to get those first few videos out on the channel. So that whole range of creative skills and then toss in customer success and hosting a meetup and event logistics. So a whole wide range of skills that kind of go into the overall mix of having a creator business. And then after that, the next switch that was flipped was Instead of me doing all of those actions myself, starting to think about people, right? Communication and identifying talent and attracting the right type of person into the company. For me, communication is the key skill that I really have to really pick up on that maybe I didn't expect at the start, which is once you get to the phase of looking for the right people to bring in, having them work together, having them feel good about their work, right? Having them feel— like they've, like when they've accomplished something, that they're recognized for it, that they're valued for it. When I need to give them some feedback, that it's done so in the right way. I've really had to hone that skill over time in order to build the foundations for a company that can scale to a team of 30.

Yeah, that's amazing. A team of 30 is entirely different than running a team of 5 or even 10. Like exactly as you said in your talk, right? 10 to 12, you can rely on some of these Hey, we're all here for the same reason. We have similar goals. Let's just do good work. And 30, you get into a whole bunch of other things of leadership and systems and all of that. But I have this idea that has really been defining for my life that making money is a skill. And it's really the collection of 1,000 small skills. But if we think about, there's a lot of things in life that we that we totally accept our skills, and there's other things that we're like, "Oh no, that's just natural talent," or "That was luck." Like, "Oh, Ricky, you're just lucky that you built the business to this size," or that someone else built a level of wealth, which I don't believe at all, by the way. But who in here plays a musical instrument? We've got a decent group. I don't. If I were to sit down at the piano and assume that by default I could just play something amazing that would wow all of you. That would be a pipe dream. That's not going to happen without a huge amount of deliberate practice. And I think business is the same thing. It's a huge amount of deliberate practice and a lot of skills that you're going to have to learn over time. And so if we think in to play the piano, I need to learn timing and music theory and so many other things. Well, in business, you've got sales and all of this. Sales, copywriting, you list it out, video editing. There's so many things in a creator business that you have to do. And so I wanna put up this graphic that I have around the ladders of wealth creation, which it's an essay if you just search my name and ladders of wealth creation, you can read it. And it has the graphic and everything on there. But the way that I've broken it down is really these 4 different ladders and the skills that you learn along the way. Those are time for money, your own services business, productized services, and then selling products. If you've ever had that friend who was like, "Hey, I'm gonna build the next Uber for this or the next Facebook for that," and you've been like, "I don't think that's gonna work, but I can't really tell you why." The reason is they probably have skills from the very bottom ladder, right? Time for money. They're good at showing up consistently and, you know, maybe they have skills in an industry and they're trying to tackle a problem that is all the way at the very top of the most difficult ladder, right? Of taking on a marketplace or a social network. What's really important to understand as a creator is that there's a series of skills that you have to learn as you go. And if you want to skip way ahead, Let's say that you wanna go from having a full-time job at a company to taking on launching a software company. There's a huge amount of skills that you have to learn along the way, and you can choose to learn them all in one giant jump across ladders, or you can work your way up over time. And so in this, if you were to work on your own, you learn how to show up consistently, You do a good job, but as you go into your own services business, you're going to have to do things like know how to bill clients, how to close clients face-to-face, right? How to, maybe as we move up the ladder, you need to hire your first employees. How do you do that? These are all things that in hindsight are easy, but when you're doing it for the first time, they're very daunting. I remember the first time that I filed paperwork with the Secretary of State in order to form a limited liability company. You're like, how do you even do this? And they're, I don't know what it is in Canada, but in the US, you have to have a registered agent. And that sounded so official. I see a few head nods. Like, how do you even do that? It just means an address that they can send notices. But as you work up these ladders and you build these skills, then you can earn more and more along the way. And so, like Ricky, I wanna, what are the skills that you think you most need to learn from where you are right now to 5x the business?

So as CEO now, I'm no longer grinding. I'm no longer doing the granular day-to-day things in the business, or trying my best not to, right? Trying my best to allow the team to step up and take ownership of their responsibilities. My core duties these days are ideation, so big picture ideas, coming up with ideas that'll serve the business, and clearing and creating the space to have those ideas. In addition to a few other duties like maintaining our key relationships and steering the strategy of the company. So for me, I really do wanna grow into this big picture thinking ideation skill. Like the ability to avoid being sucked into the day-to-day as much as possible and just remain at the very, very highest levels, thinking about what are the biggest levers we can pull to move the business forward? What are the biggest opportunities out there? What are the biggest unsolved problems where we're well positioned to move in and solve and increase our revenue from there? That's kind of been my focus for the past year or so as we've really brought in a higher caliber of people to take ownership of the day-to-day things in the business and where I look forward to having room to grow and flourish into further.

Was there a leap that you had to make, you know, as a creator, maybe a little earlier on that was a difficult skill to build? Or a skill that you wish you had gotten, you know, maybe you learned it 2 years ago and it would have been better 4 years ago. You know, one of those things you had to focus on early.

I think the hardest one is probably like team management and being comfortable with that transition. And I kind of, I'd say looking back, stumbled and eventually found some level of success there, but I can't say that it was done with the greatest intentionality along the process. So going back to the phases, right, the transition from a solopreneur to a small lean team, even that was, it was just a little bit flying by the seat of our pants, right? It was a little bit, hey, who do we know in the community or within our circle of friends would be, would have raw ability and would be willing to help us do this one cool idea that we had and isn't doing something else and just would be cool to work with. And then Josh and I would have a list of like 3 or 4 people and then we'd reach out to them and then they're like, yeah, I'm in. So that to me is like an example of, I also don't think it could have transpired any other way because I had to go through that in my first instance of building a team, but looking back now I certainly wish I had gotten better at that faster.

Yeah, the team leadership is such an interesting thing. I'm very naturally an introvert. I'm the person that would go to a conference, talk to no one. By the way, one helpful thing about building an audience is that then people want to talk to you, and it makes it way easier.

Yes. Fellow introvert. It's totally underrated.

Right? It's great. Other people will do the work to start the conversation. I'm thrilled. But I remember our first team retreat for ConvertKit. We had 21 people on the team. This was in 2016 maybe. And I remember us all sitting around in this giant living room in a cabin and thinking like, "Wow, it's so great that we're here all together. Someone should probably kick off something. It looks like we're all waiting. Oh, me! Oh, they're waiting for me to lead this thing." Oh, shoot. OK. All right. And it was a total skill— like, first a mindset shift and then a skill to realize, oh, wait, I actually am not just a coder or a designer behind the scenes anymore. I need to actually lead a team. And that was a skill that I had to really build. Yeah.

Yeah, I totally echo that. Maybe not so like that stark moment at the team retreat, but there was a moment when I— or a process, a phase when I really had to— come to grips with the reality that, okay, I'm now responsible for the livelihoods of 8, 10, 15, 20, 30 people, and that's a big responsibility. That's a big weight, and I really had to do the mental work, do the personal work, do the inner work to rise to the occasion. Yep, that's important.

Okay, so I promised that we'd get into some big thinking and start to build that muscle and skill. One thing that helps me is to think about other people, other businesses that have done something in a similar space and think, could I copy that? And sometimes that will get me into a different area. So if we think about the services that you're bringing to the market and scaling up, who are the absolute biggest players in the space doing something similar?

So the points guy is probably like The big name in points and miles. Well, they're pretty much just on an affiliate model. So they monetize on affiliate programs.

Do you know what their revenue is?

I don't know about revenue. But it's up there. It's up there probably in the 9 figures.

Yeah, $100 million plus, I believe. They exited to private equity at some point and have scaled. They did the double exit.

Oh, nice. Yeah, so I think they exited pretty early on and then just scaled under that.

So you look at that, we're talking about $5 million, $10 million, and here you have an example right in front of you in travel of $100 million plus. Like, we don't actually know. The other thing that we know from our business models and the experience that you've had so far is that they're primarily on affiliates. And that's a relatively low revenue per impression compared to selling your own products.

So that's been the big thesis that I've really come into this space with, right? That was one of the big ideas I had in that decision point of, do I want to build something bigger? It's this idea that coming into the late 2010s with the whole creator economy becoming more of a thing, I thought that there was room to do different, do stuff differently where we do have our affiliate model and we do kind of, you know, continue to compete in the affiliate space, but obviously there's there's been bigger players ahead of us who've walked that path, who've really done a good job of dominating the market. And so the room to do something differently was to build our brand, build our products, build our product ecosystem, right? Our series of products for travelers along different stages of their journey to come into, all powered by world-class content production.

And the thing about the world-class content production is it gives you a CAC advantage. Now that's a weird term. CAC is customer acquisition cost. And so all of these businesses are spending many dollars per lead, tens of dollars or more for every lead. And these are leads that you can get, I was gonna say for free, it's not for free 'cause you're spending a lot of money to produce the content. And so you have to amortize that across the leads that you get. But that gives you this customer acquisition cost advantage over other competitors, other travel businesses in the space that maybe aren't content businesses. Maybe they're software or services businesses or something else. So as we think about The Points Guy or some of these other businesses, one of my favorite questions is what would have to be true? If we said, okay, we're gonna build the next The Points Guy. It's like, oh, we couldn't do that because this, that, or the other thing. Or we're going to launch this new program, community membership for our creators in the next 60 days. It's like, well, we can't do that because of all these reasons. And it's easy to fall into that negative thinking. That's why I love the question, what would have to be true? 'Cause it flips it around. Okay, what would have to be true to build a business the size of The Points Guy in the next 3 years? The next 5 years? Like, pick a timeframe. Does anything come to mind of like, okay, here, and start starting to list out what would have to be true for that?

Well, that's, that's some of the work we've done internally is to, is to ask questions of that ilk, right? Um, we'd need to serve more Americans is what we need to do.

Um, so you need to significantly— you need to go from almost entirely a Canadian market to 50/50 Canada-US?

I mean, 70/30? Y'all, y'all live here in numbers, so, you know, like, there's, there's more Americans. So whilst we take a lot of pride in serving Canadians to to a world-class degree, and we will continue to do that, right? For us, it's about also scaling that to bringing that same experience to Americans who are looking to travel aspirationally and maximize their points, and bringing that, bringing the credit card affiliate opportunity, but also the products that we build. Because ultimately, travel is something global, right? And we're able to deliver those solutions and travel success for people no matter where they live, because we understand fundamentally how the points in credit cards work and how to maximize. So that's one of the biggest levers actually for us. It's one of the biggest things that will need to be true in order to get to where we need to be.

Yeah, so then if we take it one step further, let's say that the next iteration of this business is actually going to be 70% US, 30% in Canada. And of course, we're growing the absolute numbers in Canada substantially. While maintaining that ratio. What would have to be true to achieve, you know, 70% of the business being in the US?

Well, we'd need to hire a bunch of US writers. We'd need a website with a different browsing experience to, you know, create the right type of visitor experience no matter where you live. We would probably need to— I mean, we'd need to sharpen up. You know, I think I'd say we're pretty strong, but we need to sharpen up and dial in 100% our knowledge base when it comes to US. So a lot of that type of internal work and getting the right resources in place, assembling the team to make it happen. And then it's just a matter of kind of scaling both the organic— yeah, scaling our content machine.

Yeah, a lot of blocking and tackling. So that makes sense. The thing that I would really encourage, and we talked about early on, is metrics. I would clearly define the right metric for that. And then I would put people directly in charge of making that metric happen. Yeah. Yeah, do you have that already?

Big realization as of late. That's a big pillar of professionalization that's on our agenda for the quarter.

Yeah, and then in your weekly meetings, you're reporting on each of those metrics. All right, this has been a lot of fun. As we wrap up, you've got an audience full both here in the room and then watching virtually of professional creators, soon-to-be professional creators, is there anything that you'd leave them with of advice as you go back a few years in your journey for someone who wants to follow in your footsteps?

[Speaker] For me, it just comes back down to clarity of what it is you're looking to do, right? I didn't have that for a long time, and therefore I just kind of meandered and flew by the seat of my pants for a while. And as soon as I have more clarity, I'm able to know exactly what actions need to be taken to get to my desired end goal. And that even continues to this day because, Yes, I wanted to build something big and something that makes a big impact, but what exactly does that mean? I'm still continuing to find more and more clarity over time there. So the sooner that you can, yes, it's important to grind, but it's also going to be important to carve out some time for clarity breaks, right? Time to think, time to really think about yourself and what the thing you're doing, your relationship with it, and what it is that you want it to kind of bring into your life. What's the level that you'll want to get to? Because that's just gonna determine your goal setting and thereby all of the actions you take. Yeah, I love that.

I think the thing that I'd leave you all with is to really think about the skills that you're learning in the process, right? The creator business can absolutely be a grind. It has been for me, has been for Ricky. And in those times when you're like, should I keep going? Is this worth doing? I would just think about a problem that you faced a year ago. Just rewind the clock a year and think about some of the stressful things you encountered. And then think about your abilities today to deal with that versus a year ago. I was thinking through, and I was going back a year, and like the things that were stressing me out so much, and I was like, I wish that my problems today are that simple. Like, me today can absolutely crush those problems that that were devastating to me a year ago. And so I think about that of the skills and the resilience that you're building as you tackle these problems and as you grind it out and give yourself that perspective that you realize like, oh, you're a different person. You're so much more capable now because of this grind that you've gone through. We just tackle harder and harder problems as we go and that's why it feels like it never gets easier. So really pay attention to those skills, that you're deliberate about learning, and then just notice and be grateful for the resilience that you've built along the way. Because you're in an industry that is just absolutely phenomenal. We have a better opportunity than ever to provide great value to the people who pay attention to us and earn a great living. And so keep at it. It's one of those things that show up consistently, create every day, and you're gonna build an incredible business. If you enjoyed this episode, go to the YouTube channel, just search Billion Dollar Creator, and go ahead and subscribe. Make sure to like the video and drop a comment. I'd love to hear what some of your favorite parts of the video were and also who else we should have on the show.