Building in Public September 14, 2020

How I made $210,822 selling a pdf and a video on the internet

Daniel Vassallo @dvassallo

I have two info products on the market:

These two products made $237,207 in sales so far, and $210,822 in profit, for an average profit of $24,802/month. The AWS product took about 160 hours to produce, while the Twitter product only took 16 hours. But in this business, creating the content is generally the easy part. Finding customers is the bigger challenge. I've seen many creators succeed with various approaches, but I'm only familiar with one. And it goes like this: You find something you know really well, and you give everything you know about it for free. You do it on social networks, forums, and wherever people interested in your topic hang around. If you manage to get some attention, you will inevitably start getting questions, and these questions become your market research. You start answering the best way you can, and whatever doesn't fit in a short response becomes an opportunity for an info product. Then, if you choose to do the product, you'll have an audience to promote it to — an audience who already told you it wants to learn more about the topic, and that it wants to learn from you specifically.

But how big should your audience be for this to be viable? I don't know unfortunately. The fate of your products will depend on many things, but if you have an audience that's asking you questions, I'd say the odds are in your favor.

So, let's dig into what happened since I put my first info product on the market. First, let's take a look at my audience size:

Audience

I had a bit over 12,000 Twitter followers when my first product went on the market. Directly or indirectly, every dollar I made in this business can be attributed to this initial audience. I could have created the same two products before I had an audience, and I'm almost certain I wouldn't have sold any. The initial success brought with it all the future success through testimonials and word of mouth.

So, let's take a look at how the business grew since that launch:

Income - All Products

There seems to be a correlation between my audience size and revenue, but this relationship is more complex than it seems. New followers seem to bring new sales, but new sales also seem to bring new followers. I don't try to read too much into this relationship, but I can confidently say that having attention is good for this business. And it's not the follower count that matters most — it's how many people know about you, and want your perspective. This is not easy to measure, but you'll know when it happens (you keep getting lots of questions).

So, let's jump into the performance of each product to see if we can learn something useful about how they were marketed. First, the AWS product:

Income - The Good Parts of AWS

We can see how there was an initial boost from the launch that lasted for about a month, and then sales stabilized at a steady rate. Then, there was another boost mid-March, partly because of a reduction in price, and partly from a new ad campaign (more on these later). That momentum has slowed down since, but it's still chugging along at a reasonable rate.

Now, let's look at the Twitter product:

Income - Everyone Can Build a Twitter Audience

This launch was very similar to the other product (about $40K in two weeks), despite having an audience twice as large (24K vs 12K followers). However, the Twitter product took off much better after the third week, and it settled at a much stronger steady rate.

Here's how both products compare on top of each other:

Profit - Days on Market

I had expected the Twitter product to have a bigger initial spike considering my larger audience at launch. Instead, the launch was almost identical, but its momentum has been significantly stronger compared to my first product.

I have some thoughts about what contributed to this dynamic. First, the Twitter product was sold at almost twice the price of the AWS product. Second, in hindsight, I think I set the launch price a bit too high for the Twitter product, which likely dampened the launch spike. In fact, after 3 weeks I reduced the base price by $10, and that appears to have untapped a large pool of demand that was likely reluctant to purchase at the original price.

Take a look at how the average sale price changed over time (below), and how it affected the sales volume (above):

Avg Sale Price - Days on Market

For now, ignore those two big drops (we'll analyze that experiment later on). This chart shows my attempts at tweaking prices over time to try to find new demand. With the AWS product I started low and went high, then went low again. With the Twitter product I started high and kept going lower. My general takeaway from all this experimentation is that optimal pricing for consumer products is almost all about psychology, and what seems rational might not be very effective. Let me explain.

In theory, the best way to maximize profits from a digital product is to start with a high price and lower it over time. This is very common with movies. Disney just released Mulan last week for $30. After a few months, it will likely be on Amazon Video for $15, then a few months later you'll be able to rent it for $5, and then a year or two later you'll likely find it for free on Netflix. I tried to follow a similar approach with my second product, but I misjudged the psychological aspect. Basically, it's tough to get $100 from your most loyal fans, and then go promote the same product at $50 a few weeks later. If I were to start all over again, I would price the Twitter product between $35 and $45, and I suspect it would have done much better in that range. But even with this knowledge, now I'm reluctant to drop the price drastically because I'd have to promote the price change to the same audience that includes thousands of my most supportive customers who paid the original price, and I think that could be a short-term gain, long-term loss. (PS. Steve Jobs faced this exact problem when he dropped the price of the original iPhone after just 2 months.)

With my first product, I went the other direction. I took pre-orders at $24, then launched it at $28, and then increased it to $38 after a month. However, the $38 price appeared to meet some resistance, and the product lost some momentum. Then, the COVID pandemic hit in mid-March and I took that as an opportunity (and an excuse) to reduce the price to $15. This resulted in a significant second boost, which helped generate momentum from new word of mouth that has carried on until now.

I have no specific advice on pricing, and I only have experience with consumer products. (Info products sold to businesses can likely command different prices.) However, after 261 days in this business, my inclination is to err on a lower price at launch, and make it up in volume. Selling more units at a lower price has highly beneficial side-effects, including being easier to do, better reviews, better customer satisfaction, fewer refunds, and most importantly the multiplicative effects of increased worth of mouth. In this business, selling 100 products for $1 each is a lot better than selling one product for $100, because in the first case you'll potentially get 100 people promoting your product for free.

The chart below shows what I think is the opportunity I missed with my Twitter product:

Units Sold - Days on Market

Note how the AWS product sold significantly more units throughout its lifetime (excluding the recent spike), despite my audience being about half the size. Also, based on the engagement I get, I'm convinced that my audience is more interested in Twitter than AWS. My conclusion is that the Twitter product could have sold significantly more units than my first product if I priced it lower, and it would have likely made more profit through larger volumes and increased word of mouth.

Okay, now let's look at that extreme spike from last month. This was the result of a tweet where I announced a 1 hour promotion where anyone could get my products for any price they wanted, with a $1 minimum. The tweet was seen over 150,000 times, and it generated almost $8,000 in revenue from 2,559 sales. This is obviously not something I can do again any time soon, but it seems like it worked as a one-off promotion. My concern was that this would eat revenue from customers that would have likely bought at full price in the future (and I'm sure there was a bit of that), but the benefits from getting the product in the hands of thousands of new people appears to have countered that downside. Both products continue to sell at their regular rate since that promotion ended.

Also, note how the Twitter product sold twice as many units as the AWS product through this promotion, despite both getting equal treatment from me. I think this is more evidence that there's significantly more interest in the Twitter topic within my organic reach.

Next, we're going to look at another marketing experiment I tried with the AWS product:

Profit from Ads - The Good Parts of AWS

I started experimenting with paid ads back in January, but I gave up very quickly. First, I couldn't find a reasonable cost-per-click rate amongst the popular advertising platforms, except for Reddit. On Reddit, I was able to show an ad in the r/aws sub for about $0.50/click. It started quite promising, but after a few days it was barely breaking even so I decided to stop. Then when the COVID pandemic hit, I heard that advertising rates were plummeting so I decided to give it another go. This time I was able to show my ads for just $0.10/click and the initial results were excellent. I kept tweaking things to try to find more availability at higher CPC bids, but eventually the rates became competitive again around mid-June and I was struggling to break even. If I had more time to invest in paid ads, there's likely more opportunity there, but for now I chose to invest my time elsewhere and I stopped the campaign.

The following is the chart I was watching on a daily basis to assess my ad performance:

Daily Profit from Ads - The Good Parts of AWS

Finally, I want to show you some of my top performing sources of direct sales.

Thank you for reading, and I hope you found this useful. If you have any questions, ask me anything and I'll try to give you my best answer. 🙏

  1. 4

    Really interesting. I'm doing similar analysis with my current product (ZeroToUsers).

    One question: You've mentioned the Reddit ads were too expensive for you. Have you tried just increasing the price of that book? I've read so many founder interviews and one of the things they always say is how increasing prices had little to no effect on their conversion rate.

    It makes me think...some acquisition channels that are "out of reach" because they're too expensive can be made available if you increase the price (you could test that price only for that acquisition channel, like putting that audience in another email segment).

    P.S. I wouldn't say your product is B2C, but rather B2P (business-to-profession), which is closer to B2B (these people that work with AWS, a decent % of them work for companies and salaries).

    1. 1

      I did, and it significantly reduced conversions. In fact, during my most successful period with ads between late March and late June I had to include a coupon in the URL to discount the book to just $15-$18 (while the full price was $35). I tried $15, $18, $25, $28, and $38, and they above $18 they all performed badly. With $28 I was just breaking even, and with $38 I was losing money.

      About the B2C/B2B category, the challenge is that people seem to be anchored to consumer prices for ebooks. Where is B2B you can often price based on value, it's hard to do that in this business and you have to price based on what people think is the appropriate price. There's less anchoring in video courses and I think that's the main reason I could get away with a a higher price for that product.

      1. 1

        I think that's a great point re the format.

        I deliberately chose to make my newsletter course on video as most people won't pay $50 for an ebook.

  2. 2

    It's great to see this all laid out in the open!

    I'm looking forward to asking you lots of questions on Zoom two weeks today and other indiehackers can too - https://gum.co/ICuKS

  3. 2

    First of all, thank for sharing this valuable information!

    I'm curious about the "Pay what you want" promotion. Did you make any prediction on how this would turn out? It scored 2559 sales at an average price of $3.13. I understand what you say about happy costumers talking and recommending the product but, would you do it anyway knowing the $3 and 2559 sales figures? Also, did you notice any spikes in refunds during the following hours (maybe customers that bought your product one hour before the promotion)?

    Thank you again!

    1. 2

      It went way better than expected tbh. I thought the average sale would be closer to $1 and I didn't think I'd do so many sales. Yes, I would do it again, and probably I'd leave it up for longer. It was a bit disappointing when I stopped it. I was getting multiple sales per second, and then I simply turned that firehose off :)

      I waited until I had a very slow day to do this promotion because I wanted to be careful about what you mentioned. IIRC, I only had 4 sales that day and they all came from outside Twitter. One person complained on Twitter that they bought one the day before, and I gave them a partial refund to get it down to $1.

  4. 1

    My Takeaways:

    • stop trying to find the perfect product. Start building in public the audience will find you.
    • give give give give with the end product in mind. Otherwise you'll run out of energy.
    • ebook best sells under $28 dollars
    • video course best sells under $48 dollars
    • flash sells are great for exposure and distribution
    • paid ads end up as a wash but they are still sales you wouldn't of made otherwise. Perhaps view them as increased distribution vs profit boosts

    Daniel inspired me to write my first book and his work keeps on pushing me forward.

    Thanks for sharing Daniel!

  5. 1

    Very interesting information and detailed data, thanks for sharing!

  6. 1

    Won't you drop the price of your twitter ebook? I would buy it with pleasure for $10

  7. 1

    Daniel,

    what did your process look like for creating the video? Did you have a structure in mind from the start?

    1. 1

      I prepared the slides on day 1 and thought about what I wanted to say. On the next day I recorded myself talking over the slides. Used ScreenFlow for recording (really easy to use). I wanted it to be like a recorded talk without a lot of structure, so it's just one long presentation of 100 minutes.

  8. 1

    Thanks for doing a dive into your numbers! @dvassallo What have you been doing in the meantime?

  9. 1

    Very in-depth on how to GTM for a simpler business. Thanks for sharing man! What's next?

    1. 1

      Nothing planned yet. I'm exploring a couple of ideas but still waiting for inspiration and opportunity to meet!

  10. 1

    Awesome write up Daniel. I love how thorough and actionable your content is.

    Curious if you've run into issues catering to multiple kinds of audiences? For instance, people who want to learn more about AWS probably don't care about building a twitter audience, and vice versa. How do you balance multiple niches?

    1. 3

      This is a common question, but I don't think it's a significant problem. On Twitter, people accept that not every tweet is going to be 100% relevant to them. On mailing lists, less so — so I try to be much more careful there. But on Twitter, people seem to like following a story as it happens even if the content type changes over time. There's a limit obviously, and I try to play it by ear. If I sense there's not enough interest from the audience about something, I try to do less of it (and vice versa).

      A bigger challenge I face is catering to both recent followers and people who have been following me for a long time. It's hard to know how much context I should put whenever I say something. I tend to err on catering to old followers, and then fill in any missing context in comments/questions. It seems to work, but I'm still trying to improve this. (One downside is that I get about 100 comments a day on Twitter, and it takes me a lot of time to read & answer all of them.)

      1. 1

        Cool, very interesting. Thank you!

  11. 1

    Nice work Daniel. Where did you sold AWS pdf and how did you collect payment?

      1. 1

        Awesome.
        a) Do you get a sense of what kind of audience is on the gumroad? for example twitter is more millennial audience.
        b) Any promotion you had to do on gumroad?

        1. 2

          Gumroad is just a payment processor and a host for your files. It doesn't come with an audience. It's a tool to help you sell to your audience.

  12. 1

    Hey Daniel, how do you balance giving away everything you know about a topic for free with creating paid content?

    This is a question I've asked myself a few times and so far my answer has been convenience: people pay not because they want access to some secret information I've never revealed in public, but because their time is precious and can't spend days scrolling through my past emails, blog posts, tweets etc.

    1. 2

      Yeah ,I have this problem as well - it can be hard to know how much to give away free as then no-one will buy your course.

    2. 2

      My rule of thumb is that if it fits in a tweet or in a short blog post I'd give it away for free. If it's something that's going to take considerable preparation I consider it a candidate for an info product. Not every candidate is necessarily a good opportunity, but this is my first filter. The main signal I use to determine if there's enough interest is the number of questions I get. For example, the months before I did my Twitter product I was getting questions daily about building an audience.

      In fact this article is an example of something that I usually wouldn't do for free (it took me almost two days to prepare), but I didn't feel there was enough content and interest to make it an info product. Maybe eventually I could reuse it in another info product on a broader topic, but right now I thought it'd be best to just give it out and explore the feedback.

    3. 2

      also don't underestimate reciprocity!

  13. 1

    Hey Daniel, fascinating analysis to read. Thanks for sharing!

    Loved your AWS book. I'm reluctant to buy the Twitter one because I don't know if I'm that phase yet. I might go for it just out of curiosity.

  14. 1

    your twitter course sounds interesting, that's what I'd need most at the moment :)
    congrats for the success!

  15. 1

    Hey thanks for sharing with us!

    One thing I'm not sure is how did refunds go for you? And since this a digital product, I'm sure many might have abused your "No questions asked" refund policy. Most digital products (not SaaS/service) don't have such policy. What's your idea behind this?

    1. 2

      I processed 226 refunds out of 9,066 sales so about 2.4% overall. The higher the sale price, the higher the refund rate.

      It’s an honor system, but it works. I get about 1 refund request per day, which is never fun but it’s part of the game.

  16. 1

    Awesome write up. Thanks for sharing!

    What’s next? Presumably there’s still mileage in both products. Do you continue to focus on create and launch something new?

    1. 1

      Nothing planned yet, but I'd like to do another one this year. Right now, just waiting for inspiration to meet opportunity :)

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