MBA1440 Q&A Wednesday: What’s the biggest difference between a content business and a software business?

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Visit Dell.com deals. Hey oh. Welcome to the $100 MBA show, the business podcast that never lets you down every day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online and today's episode is a Q and a Wednesday episode. On our Q and a Wednesday episodes, I answer a question from one of you, one of our listeners. If you have a question you want to ask, just email me over@omar100mba.net Today's question is from Charles and Charles asks what's the biggest difference between a content business and a software business? Good question, Charles. We touched on this topic in previous episodes, but I will share what the biggest difference between the two different business models. When we say content business, we're talking about selling online courses, books, even having a blog, and making money off the traffic or the ads. If you're making money with your podcast, that's a content business versus building and maintaining and growing a software and selling that to customers. I'll be highlighting the major difference and touching on a few other things you may want to consider when you're evaluating either business. So let's get into it. Let's get down to business in Today's Q and A Wednesday. Charles asks, I notice you have both a content business and a software business. I currently sell online courses and I'm considering getting into software. Can you tell me what the biggest difference between the two business models are? Happy to, Charles. Yes, you are right. We sell content via our courses. We have a podcast that earns revenue, but we also have a large software business called Webinar Ninja. And the best way I could describe as the biggest difference between running a content business and a software business is is results and responsibilities. Let me explain. People buy a software to get an immediate result. I might buy something like Squarespace so I can build a website. I want to be able to build a website by myself and that's the result I want. I want a completed website that looks great. Now. Say, for example, I wanted to learn how to play the violin and I took a online course on how to learn the violin.

Right.

I want to be able to be proficient to play some songs, some of my favorites. Right. The result I'm looking for here is to be able to, you know, play a few songs for my friends at parties. Right. That's why I'm taking this course. So we outlined the results of both products, right? Why the customer buys. Now, let's talk about responsibilities. When it comes to a software, a lot of the responsibility comes on the shoulders of the company, of the product. If somebody can't create a website with Squarespace, they're not going to blame the person, they're going to blame the software. Right. And they're not going to blame the customer. The software should be able to fulfill this actual promise, this result, I would say about 80%, you know, 80% of the way the software has to actually help them attain that result. The rest of the 20% is really the effort that the customer has to put in. The customer has to put some effort, right. They actually have to move the mouse and build the pages. But I would say about a 2080 split between the software has responsibility over the result versus the customer. It's the other way around with content. With content, most of the responsibility on the result is on the actual customer. The customer actually perceives it that way. Like if you take a course, or let's say you buy a course on how to play the violin and you don't even watch the videos, you don't do the practice, you don't actually work on it. As you can see, 80% of the reason why you're not playing the violin and playing songs for your friends at parties is because of you, the customer, the person that bought the course. 20% is the course itself. When I say 20%, most courses get you to a proficient level unless it's horribly delivered and is flat out a scam. But for most of us, we should be able to deliver a course that can get a result. Meaning if somebody actually took the violin course, watched every single video, did all the exercises, put into practice, put in the time, and they still can't do it, then, okay, maybe we can question the course. But very few people get to that result. They actually, you know, if they put in the work, put in the time, do the lessons, they get there. So as you can see, a lot of the ownership of the result is on the product, on the company. Now, you might be thinking, oh, wow, in that case, let me go with content. Well, not exactly. Now, you do have a lot of the responsibility as a software company to deliver the result, but the good news is, is that because you have so much control over getting them a result, you're going to get more results. You're going to get people getting wins, and this allows you to grow organically a lot faster because people are going to be like, hey, look at my cool website. I was able to easily build it with the software.

So cool.

And the amount of testimonials and, you know, success stories you can share of your software are a lot more, and it's a lot more impactful than with a content business. Trust me, I know. I've run both businesses. And it's a whole lot easier to get a win for a customer if you have control over the result. And therefore, you can get a testimonial a whole lot easier. In order for you to get a really good testimonial from a customer with a content business or content product about the result. I'm talking about testimonial about the result, not about the course itself. They actually have to complete the course, do the work, and, and actually follow through and share their results. So that's the major difference between the two responsibilities and results. If I had to add, another point of difference is the amount of other talent you're gonna need to run a business that's successful as it grows with software versus content. So when it comes to our team, we have about 20 people on our team. Sixteen of those people fully are dedicated to webinar Ninja. The other four people work on the podcast, work on some of the course materials, work on the content, and they still contribute to webinar Ninjas. So you could say they're 50. 50. So the amount of manpower you're going to need, especially as your product or your business grows, is definitely exponential with software. Why? Because you need many disciplines to build a solid software business. You need somebody who's really good at customer support, you need support agents, you need developers, you need engineers. Right. You need management, you need marketing, you need copywriting. When it comes to a content business, quite honestly, a lot of solopreneurs are able to run successful content businesses because there are so many tools now that take care of all the technical aspects of running that type of business. It's really just the content. You need to be able to shoot or write or record or whatever it is. You need to be able to just pull off the content and then the delivery of that product or the sale of that product is, is pretty easy with the tools available. And you can outsource and get some help with freelancers or EAs, but you really don't need to grow your business to hundreds of employees. The exception is of course, if you are going massively big. Like if you're a Tony Robbins for example, or Oprah Winfrey where she's a media company, right? She's a content company, but she's a media company. And you know, Tony does live events and he does books and DVDs and all that kind of stuff and he's got huge teams around him and. But I've seen solid six figure businesses run by a team of 1, 2, 3. High profitability, but again, all the accountability is on you. One more difference I would add is it's a lot easier to sell a software business as an asset versus a content business. Especially if you're the person behind the content. If you're the one teaching the courses, if you're the one who's delivering the content, you're the teacher, you're the, you know, sort of the face of the business. Selling that business is hard because you'd have to go with that business and somebody can't just take over that business because hey, you are the secret sauce versus a software. It's a separate entity, it's an asset. You can sell it to another company and somebody else can run it. Yeah, maybe you'd be part of the marketing and things like that, but they can actually put in other people in place. It's a lot easier of an asset to sell once it's built. But again, there's a price to building that asset takes time, it takes a lot of effort. It takes a big team, or I should say a bigger team.

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