"Donations" Is Not A Business Model - Part 3 - Ep #77
Donations is not a business model. And welcome to episode number. Seventy seven of subscribe me fem where I talk about how to create sell and deliver digital content create membership sites and online courses subscription based products. What press creating audio video reports and podcasts and tools, techniques and tips that you can use to create a long-term profitable online business. I'm your host Raby, jiggle Paul and his absorb is one of the most exciting of sorts because I have some awesome audio clips, and the topic of today's show is something very close to my heart because I've been talking about this for a long time now trying to get all content creators to kind of open their eyes and see what I'm about to tell you today, and this is part three of the series. Adra of a new model is dead. Sponsors are unreliable and donations is not a business model. All right. So in today's part three of the series. I'm going to be talking about how. Building your business on the generosity of strangers aka donations is not a business model. I would recommend that you start with the part one and part two of the series as to halting will make a lot more sense. So check out episodes seventy five and seventy six I if possible if not that's fine. All of them were pretty much meant to stand alone by themselves. Donations is not a business model, maybe for nonprofit, but not for a business one of the common mitt that a lot of content creators have in this day and age of crowdfunding is that if you have a large enough audience, then you can earn a decent income using donations from your listeners. So let's define decent income for a second. Is it ten to fifty dollars per month or purpose owed, maybe a few hundred dollars a month. Sure. If that's your idea of a decent income, then maybe you can get into the small percentage of creators who are. A few hundred dollars per month with your show, but for the most part ninety percent of creators will not be able to make a few hundred dollars per month from their show, and I'm going to show you why I am going to play. You a clip from the podcast called radio lab. A super popular radio show and podcast with millions of listeners and on the clip you'll hear a really shocking revelation about the ability are should I say inability to raise funds through donations, even when you have a super successful podcast, which according to their media kit. They get one point six million weekly radio listeners per week. So listen to this clip that was played at the beginning of the episode that came out on September twenty first two thousand seventeen. Only point seven two percent of the people who listed actually give money actually raise their hand and say I'm in point seven two we're not even at one whole cookie. So that's what I want to change right now. My challenge to you. Guys listening is can we get this to one percent? Just one percent with that means what that means is eight dollars a month. Eight dollars a month that amount will keep this thing that we're all part of healthy and growing are you in are you down. I'm talking to you listening right now are you in if you are good radio lab dot org slash donate. Did you get that a rabid fan base of one point six million listeners fifty seven million annual streaming sessions seven point seven million annual YouTube views five and a half million weekly listeners on four nationally broadcast programs, and they can't even get one percent of their listeners to donate. You know, why because the donation model is not all that some people make it out to be with donations. You are literally at the mercy of your audience, you can hear the absolute pleading and almost begging tone in the announcer's voice. Sorry to say that that word, but that's how I feel please. Can we get it to one percent help us, right? That's the kind of model that makes me uncomfortable. Because I would rather come from a place of authority and subject matter expertise and say, hey, here's this product. I've created. Our? Here's the service. I'm offering. And here's what it's worth. Here's how my knowledge and expertise and experience can help you and how package it all into this, online course or membership side. And when you buy it, you'll get this benefit and that benefit and you'll save time money energy, be entertained, whatever. Right. So I would rather exchange value for money with my audience rather than ask them to help support me in what I'm doing. And you cannot rely on the nation's consistently to support a long-term profitable online business that I need to be able to count on to pay my bills fund my lifestyle, my pay for my children's education, and who knows maybe even pay for retirement, and I've been seeing more and more results of those who accept donations, and you could say that a very tiny sliver of a percentage of people can actually get their listeners and fans to donate enough to make it something that can. Make them a living, and the majority that meaning majority get close to nothing, and I'm finding out at the average co creator gets contributions from less than one percent of the audience something that you saw that even radio lab is experiencing, but guess what? For them one percent of five million listeners is fifty thousand listeners and if each person donates eight dollars a month that's four hundred thousand dollars a month. Now, even for them that may not be enough because you know, their company that a lot of employees and a whole bunch of people working on the show because it's not just a podcast, right? They have a radio show. So there's a lot of fixed costs that come with that. So maybe four hundred thousand dollars not enough for them. Just like, you know, four hundred dollars or four thousand dollars may not be enough for you and me to make a fulltime living. So for the average podcast or crowdfunding won't work because guess what? There's no crowd for most of us. And if. Listen to the feed podcast from Lipson Lipson dot com is the the podcast hosting company that I use and you check out there the best podcast host. And that's why I use them for both my podcast this one subscribing FM as well as cut to the chase fem, which is my other daily show about business tech and marketing hacks for entrepreneurs check it out at at cut to the chase start FM. And if you use the coupon code subscribe me as one word, you'll can get almost up to two months free the rest of the month that you join and the next full month. So on their official company podcast called the feed. They say that the average podcast gets about one hundred and forty downloads per episode now, even if you're doing pretty okay, you can say maybe two thousand downloads per episode. And if you take one percent of two thousand that's twenty listeners and if twenty. Listeners donate five dollars a month. That's hundred dollars a month. Now for a lot of people hundred dollars is still hundred dollars. Right. You pay get to pay for hosting and some software and some t shirts and Josh Keyes. Maybe a night out in downtown, whatever. Right. It's hundred dollars. It's not nothing. However, the amount of work it would take to get to two thousand dollars per episode. And then repeatedly having to keep hammering on every episode asking your listeners to donate money to help you support the show to say, please help me and you'll pay my bills to tell them that if they want you to keep going, then they're going to have to raise their hand on help you if you have to do that then that is not something I can rely on to fund my lifestyle. So if you want real consistent income and not just some side income hobby money pocket change. Then you've got to sell products and services. That's just how it is. You've got to be able to build a. Business behind your podcast from day one. You can just sit around waiting to build a large enough audience. So that one day, you know, you'll you'll get a whole bunch of your listeners to donate to your cause. And here's something to consider if you're accepting donations by a third party platform, like patriots dot com. For example, with pitchy on all of the one time donations as well. As the recurring monthly or episode based on nations from your patriots. They're all going into their payments systems. So pitchy on doesn't allow you an and I don't think any other system. Also, like third party platform. Like pitchy on I don't think any of them allow you to use your own pay pal or stripe account. So all of the payment data from all of your patients is in their proprietary system. So they get the money first. And then they pay you the take a small cut, and then they pay you. Neither have a problem with them taking a cut, but I do have a problem with everything going into their payment system because. Ause if you ever decide to leave patriot for so many reasons, maybe they changed their terms, and you didn't appreciate that. Or maybe something to do with their politics or their positioning. Are they got bought out from, you know, by a big company like Google, and then that company decided to shut them down which happens all the time. They call it Akwa higher. They acquire companies for the talent and patience and all kinds of stuff. So maybe they got bought out and the company shutting them down or maybe they're an art venture capital, and they had had to shut down. So whatever the case may be if you want to leave patriots are similar company than you will lose all of your recurring donations, which means you have to basically, go go to your patrons, Email all of them and ask them to cancel their subscription over at patriot. And then come follow you to your new platform, and then sign up again at this new platform, which could be your. On what precise and you may use a membership plug in like digital access pass and the shopping cart, like smart, Picart dot com. Guess what? Anytime you ask people to cancel at one location and rejoin you at another location. You're probably going to lose a majority of your patriots like eighty percent because guess what people are busy. They may change their mind because TIMMY, no longer want to continue supporting your show, they may have joined a long time ago when they were really feeling it, and you know, donations are emotional thing. Right. You may not have the same emotions, you know, if sought episode, maybe you one of the episodes really hit home, and and it really helped them, and they signed up at that point and a year later, they're like, oh, I'm I really paying for this. Maybe they had forgotten donating to you and the notification might actually serve as reminder for them to cancel it. So basically if you ask them to leave over there and come over here. Here. Then you're a lot of people will leave and practically overnight your income could go from. I don't know if you hundred or few thousand dollars to practically zero just because you could not take your patrons payment profiles with you to your new platform. Now, don't get me wrong. I have nothing against pitchy on. So if a coaching client came to me today and said Ravi, I have zero technical skills. I don't wanna website. I don't want to my name. I don't want the headache of building on Iran, the hassle of managing it. I just want an easy way to take minutes from my fans, I don't even have a pay pal account. I don't know what stripe is I just want to take payments from my fans want support me, and some sent some donations my way if they said that then guess what I'm probably telling them to go to pitcher dot com, which is easily the best fan funding platform there is so as a business coach my job is to educate you about the potential flaws and pitfalls of building your business. On a third party platform. And I would warn you about how your best option for building a long-term profitable online. Business is two O Y P as colored own your platform. But if you're still tell me that you have limitations because of which you're okay with taking the risk of not heeding, my advice than sure I'm still going to help you do whatever is right right for you. Because I know that I would already tied try to educate and enlighten you so. Yeah, pitchy on is a fantastic platform. But if I could I would discourage and dissuade all of my clients and followers from building their business on a party platform where you don't even own the payment profiles. So it's not about the name. It's about the business model that I have a problem with. And finally, here's another fascinating true story that shows how donations are not a business model. So on a cold more. Warning in January two thousand seven a violinist wearing a baseball cap must playing some beautiful music in Washington. DC subway train station. One thousand nine hundred ninety seven people passed him by but only seven of them stopped to listen to him. Now, he had a mat spread out in front of him to collect donations and for his forty three minute performance. He collected. A whopping thirty two dollars and seventeen cents from total of twenty seven passersby. He had started the morning at the station playing box fourteen minute Shackleton, generally, considered to be the greatest solo violin work and one of the greatest musical compositions ever created. And he had laid it on one of the finest instruments. The world has ever known a three hundred year old. Gibson ex Heuberger strategy virus are weights tried various made in seventeen thirteen which this. Colonist had purchased. Forget how much just under four million dollars and just three this earlier that day the same violinist had performed at a completely sold out Boston symphony hall where even a half decent seat cost about one hundred dollars, and the musician was none other than internationally acclaimed violinist Joshua bell. And this is a true story. Think about that. For a second the same artist the same four million dollar violin the same enchanting music yet when he said, oh, please give me whatever you can at the subway station when he came from a position of asking he earned a pathetic thirty two dollars yet when his positioning changed very came from possession of a tardy. And he said, hey, guess what I'm playing a fancy prestigious theater and tickets are in short supply and you'll have. To pay premium ticket prices to even get in and expensive, parking and overprice popcorn and beer. And you get to see me come on stage. Very nice clothes, and I'll play you the exact same music and you'll give me a standing ovation. Guess what? Most people were entirely thrilled to do. So. So sometimes your fans may not know your true worth until unfortunately, you forcefully announce it and make them aware of it. And the value of what they're getting and the only way to do that is by charging them for it and not just by saying police support the show, so simply putting your best content out there and putting your heart and soul into craft and hoping for the generosity of strangers. And hoping that your audience will notice, you know, all the blood certain tiers of your put into your work and all the sacrifice and hoping that they'll help you make a living because of their appreciation is a business model that is destined to. Fail. They're not just going to show up one day and drop money in your paper L account. And even if they do it will not our new in more than enough to maybe pair pay for some gear and some ties and at dinner and movie. So if you want to do what you love and you'll love it enough to do it all the time and not just on nights and weekends on not just if and when you find time, and if you wanted to pay your bills and your lifestyle, maybe a few vacations, and if you have your grand, visions, like I did when I first started my business, then maybe you wanted to pay your mortgage, and your children's college education and fund your retirement too. So if you want to make any meaningful money with your craft and your knowledge and your skills and your experience, you have got to create value. And then don't just ask for donations build an audience and the community and charge them for the value that you're providing all you need is one thousand. Through fans like Kevin Kelly made famous you don't need hundreds of thousands of anything. Not hundreds of thousands of customers. Not hundreds of thousands of video views are downloads or Email subscribers. Just find your one thousand true fans, and you can create a great business behind your craft that can support you and your family for a long time to come. So what's the bottom line here until nations, quote, unquote, donations is not a business model? And if you want to build a profitable online business, I'm here to help. So check out my coaching program at subscribe, me dot FM slash coaching where I offer to programs that no other business coach has ever offered. And I'm willing to put my money where my mouth is with these two programs. So the first one I call this my guaranteed results program where basically guarantee you that I will get you results. And I'm going to work with you until you have earned back the coaching fees. You'll pay me and the second. One is I call this my royalties based coaching program where you don't pay me anything to coach you I basically caught you for free. And I'll help you grow your business for free and you pay me in royalties on future sales. So I'll help you for no cost, and I only get paid after you get paid. And I just don't think there are two better deals on the planet when it comes to business coaching because who who guarantees their work these days, and who says I'll take money after you get paid not many people nobody in fact that I know. So that's how confident I am that I can help you. So if you sign up for my guarantee results coaching program, I have a special coupon code for you just because you're a listener of the show us the coupon code subscribe me one word to get a whopping five hundred dollar discount on my guaranteed results coaching program. And if you're applying for the royalty based coaching program, then of course, there's no cost you. Anyway. So there's no coupon code there. So check out both options at subscribe, me dot FM slash coaching. All right. That's it for today. Thank you so much for listening. I appreciate your time chairs and toxin.