Editor’s Note: I am pleased to feature this interview with Josh Kaufman as part of the Winning Edits Expert Interview Series.
Kaufman specializes in teaching professionals in all industries and disciplines how to master practical business knowledge and skills. His first book, The Personal MBA: Master the Art of Business, is an international best-seller.
Learn more about Kaufman at his website, PersonalMBA.com.
Matt Gartland: Your first book, The Personal MBA, teaches how to master the fundamentals of business without the enormous expenses and time of business school. Such methods, instincts and knowledge are well suited for authors looking to control their own financial destiny. What are the business fundamentals that authors must master, and where should they start?
Josh Kaufman: The best place to start is by learning the fundamentals of business: concepts and relationships that are present in every business, from the smallest garage startup to the largest company in the world. It’s not difficult, and it doesn’t take long.
At the core, every business is simply a collection of five interdependent processes, each of which flows into the next:
- Value Creation: discovering what people need or want, then creating it.
- Marketing: attracting attention and building demand for what you’ve created.
- Sales: turning prospective customers into paying customers.
- Value Delivery: giving your customers what you’ve promised and ensuring that they’re satisfied.
- Finance: bringing in enough money to keep going and make your effort worthwhile.
Within each of these five core topics, there are only 20-30 core ideas that carry most of the value. Learn those ideas first, and you’ll find it much easier to build a sustainable business. Learn a few more ideas in human psychology and systems theory, and you’re a force to be reckoned with.
Business is not (and has never been) rocket science — it’s simply a process of identifying a problem and finding a way to solve it that benefits both parties. Anyone who tries to make business matters sound more complicated than this is either trying to impress you or sell you something you don’t need.
For authors, it’s amazing what you can do when you stop thinking like a literary critic and start thinking like an entrepreneur. It’s much better to think of yourself as the CEO of your own publishing company.
Sometimes it makes sense to subcontract your printing and distribution to another company (like a large publisher), and sometimes it makes sense to keep certain projects or capabilities in-house. Regardless, considering all of the available options will help you make better decisions, particularly when those decisions affect your to-do list today and your bank account for decades.
It’s easier to make a very good living as an author or creative person today than at any time in history. All it takes is the willingness to learn a little bit about how businesses actually work, and spending your work time completing high-value activities that build your publishing business over time. You can’t hand over everything but writing to a publisher and expect to do well.
MG: You’ve built a powerful author platform at PersonalMBA.com, complete with over 35,000 active readers via your email newsletter. Where did you invest the most time and energy when initially growing that base? And where are you focusing your efforts these days?
JK: For the first few years of The Personal MBA as a project, I spent the majority of my time creating and refining a list of the best books available for business self-education. (You can find it here: http://personalmba.com/best-business-books/) That single resource is responsible for over 60% of new visitors to PersonalMBA.com, and new websites link to it every day.
I update my reading list annually, which gives people a good reason to opt-in to my email newsletter, which I use to notify my readers when new information is available on PersonalMBA.com. I’ve spent a lot of time making the site easy to use, as well as testing various designs that make it easier for readers to find what they’re looking for.
Once PersonalMBA.com had a stable readership, I began focusing more on creating useful evergreen resources for my readers. My audience keeps growing day after day with little active effort on my part, so I can spend most of my time researching and creating high-value training my readers will find useful, like books, guides, book summaries, courses, etc.
MG: What key lessons about book writing and community building have you learned since your first book that you’re now applying as you develop your second book about rapid skill acquisition?
JK: I seriously underestimated the importance of defining the book’s structure before you spend a lot of time drafting. Writing a book is very different from writing shorter pieces like blog posts. If the book’s overall structure isn’t solid, you confuse your readers very quickly. Once you nail the structure, writing the book is much easier.
I went through nine major iterations of the structure for PERSONAL MBA. Each iteration was painful: the book wasn’t working, and I couldn’t figure out why. Each time I changed the structure, I had to scrap or rewrite a ton of material.
For the second book, I had the structure largely defined before I signed on with Penguin/Portfolio. I’m making minor changes along the way, but the structure is working, and the book is coming together nicely.
In terms of community, I’ve experimented with every type of format: forums, Meetup groups, chats, conference calls, wikis, you name it. In the end, day-to-day moderation and administration becomes a huge low-value time sink. It’s far more effective to focus on creating really cool things for your readers, then making them aware when new resources are available.
An author’s most valuable asset in community building is a simple email list. No one cares about your work as much as you do, but there are tons of people out there who want to know when you post new material or publish a new book. It’s in your interest to make it easy for your readers to stay in touch with you.
Your email list serves dual purposes: it’s your primary method of reaching your readers, but it’s also your clearest signal to a publisher that you have a large enough audience for a commercially successful book. The larger your active readership, the more effectively you’re able to negotiate with a publisher. If you’re not collecting email addresses from your readers and sending them a note at least every month, you’re really missing out.
I’ve learned a lot about website design, resource creation, email lists, and marketing measurement via the process of launching PERSONAL MBA. I’m planning to use everything I’ve learned to launch the next book. (For details about the new book, https://first20hours.com/). My entire book launch strategy revolves around building evergreen resources that will market the book in perpetuity without active day-to-day promotion.
If you spend most of your energy building resources that will promote your book after the initial burst of easy publicity dries up, you’ll do quite well.
MG: With so much of your expertise anchored in business systems and strategies, could you share a bit about how your business operates? What are your primary revenue streams? How are you leveraging publishing to advance your business objectives? And what business concepts have you experimented with in the past that didn’t work?
JK: My revenue comes from five primary sources: (1) book advances/royalties, (2) direct course/training sales, (3) royalties from training material sales, (4) business advising, and (5) affiliate commissions.
When I started working on the Personal MBA full-time, most of my revenue came from business advising and consulting. Now, royalties and training sales are the lion’s share. Affiliate commissions, like the referral fees I receive from Amazon when readers purchase books from my reading list, cover 100% of my non-salary business overhead.
In general, if I don’t think a project will be just as important and relevant twenty years from now as it is today, I don’t do it. That’s been a great filter for me so far. PERSONAL MBA has been selling consistently well since it was published, and appears to be growing every month via word of mouth. I expect it will remain on bookstore shelves for quite a while as a solid backlist title.
Publishing is great in that your audience can snowball if you create good material and pay attention to marketing. Every project I complete turns into an asset that keeps selling without my direct attention. Each project also attracts more people who are interested in what I do, so each new project reaches a larger audience than the previous project.
I’m a one-man army by choice: I have no employees or contractors on retainer. Everything you see on PersonalMBA.com comes directly from me. I’ve experimented with assistants and contractors several times, but most of what I do can be considered experimentation or R&D, so it’s tough to delegate. My assistants would have to read my mind to work effectively, which isn’t fair to them or efficient for me.
Working by myself has its share of drawbacks and tradeoffs, but I enjoy the flexibility and control. Instead of spending most of my time managing and delegating (which I emphatically do not enjoy), I’m learning how to program so I can automate a good chunk of my day-to-day work. I’ve coded everything on PersonalMBA.com, from the website design to my email newsletter management software. I know how everything works, and I can make changes to any part of the system in minutes.
Now, I can experiment with business models of any type: courses, membership programs, subscriptions, etc. Automating routine tasks helps me serve more readers without stretching myself too thin. Becoming more comfortable with the technical aspects of publishing has increased my options considerably, and I plan on exploring what’s possible in in the months and years ahead.
MG: What do you see as the #1 business opportunity for authors today, and what do you advise as the first step in seizing that opportunity?
JK: For fiction authors, there’s never been a better time to self-publish. You don’t have to wait years and suffer hundreds (or thousands) of rejection before readers can enjoy your work. Editors and artists can be hired at very reasonable fees, and services like Amazon Kindle Direct Publishing and Lightning Source make it easy to produce a professional product in weeks instead of years. The profits roll directly into your bank account, and you don’t need anyone’s permission to get started. Start researching your options now: they’re more attractive than you may think.
For non-fiction authors, it’s a very short leap from publishing a useful book to offering courses, training materials, seminars, consulting, etc. Think of your book as marketing you get paid to produce, then decide what you want your readers to do after they’ve picked up your book. If your material is solid, a book is a very important trust signal that makes it easier to offer your readers higher-value, higher-priced, higher-profit options.
If I focused on fiction, self-publishing would be a no-brainer. Advance levels for non-fiction books are still high enough that trade publishing makes sense, but the gap is getting narrower every day. Every new project deserves a lot of thought, and it’s in your best interest to explore all of your options and avoid signing away the rights to your work without substantial compensation.