Pat Flynn is an entrepreneur, blogger, podcaster and the owner of Smart Passive Income. He’s been widely recognized for his accomplishments, but most recently, Forbes named him one of the top 25 marketing influencers to watch in 2017.
Pat’s entrepreneurial journey started in 2008 after being laid off from his job at an architectural firm. After starting his blog, he found a way to generate $7,000 in passive income each month. Fast forward to 2017 and he’s now averaging over $160,000. Per month!!!
In this interview, Pat shares the important lessons he learned when starting an online business, how he scaled by serving his audience, and the philosophy he lives by to help him balance life and work. You’ll learn that it’s not all about the money for him, which seems to be a common theme in this podcast.
What You’ll Learn:
- How Pat balances it all as a father and a businessman, and how he knows when he needs to work less.
- Pat’s humble journey into entrepreneurship from being a laid-off engineer to inspiring millions around the world.
- What Pat believes has been the key to his success when figuring out how to serve his audience.
- How Pat became an expert in the online marketing space and why he waited so long to create his own products.
- Why handwritten thank you notes are Pat’s benchmark for success.
- What Pat believes is the most important aspect of starting an online business and what he would do differently if he were to start all over again.
Resources for this Episode:
- Smart Passive Income
- Keoni’s (Pat’s son) Youtube channel
- Pat Flynn Youtube channel
- Will It Fly by Pat Flynn
- Internet Business Mastery
- The Cork & Craft
Thanks for Listening!
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Full Transcript: Pat Flynn – Smart Passive Income – Becoming an Expert in Online Business By Serving Your Audience
Taylor: Welcome to the Stay Wealthy San Diego podcast.
My guest on today’s show is Pat Flynn. Pat is an entrepreneur, blogger, podcaster and the owner of smartpassiveincome.com. Pat has been widely recognized around the world for his accomplishments, but most recently Forbes named him one of the top 25 marketing influencers to watch in 2017.
When he first started his blog in 2008, he found a way to generate just over $7000 in one month in passive income. Now, he’s averaging over $160,000 per month, but it’s not all about the money for him, which is a common theme on this podcast. He has a much larger mission in life, and I’m really excited to have them on today. Pat, welcome to the show. Thank you very much for joining me.
Pat: Hey, thank you for having me.
Taylor Schulte: You’ve been interviewed thousands of times, so I want to start off with a question that I know you’ve never been asked before.
Pat: I like how this is being set up.
Taylor: How long until your son, Keoni, has more YouTube subscribers than you do?
Pat: At this rate, knowing him and just how crazy he is, probably not very long. I also know I need some work on my YouTube channel. This is really interesting to share. Actually, I haven’t shared this with anybody yet, but he and I are actually starting a podcast together.
Taylor: Oh, you’re kidding me?
Pat: Yeah, which is really cool. He’s been coming home from school every day and he always comes home with these crazy thoughts and business ideas. I thought it would be fun to capture those things and help him and the listeners through that. We’ve recorded three episodes. It’s called, “All of your beeswax.” It’s a lot of fun, I mean let alone just an amazing bonding experience to teach him how to edit the show and just getting him involved. It’s going to be a lot of fun I think.
Taylor: Is it live on iTunes?
Pat: Not yet. No. We are literally creating the first season first and then we’re going to Netflix style, put it out there at some point.
Taylor: Very cool. Is it targeted at kids or everybody?
Pat: It’s targeted at kids and their parents. My vision is that parents and their kids will listen together and then after the episode’s end, they would continue to talk about those things and then we would help them start that conversation together.
Taylor: Wow, very cool. All right. I guess while everyone waits for that to go live, they can check out Keoni’s YouTube channel. We’ll definitely link to that in the show notes. Okay. On to the real interview here. You own multiple online businesses. You speak all over the world. You write a blog. You host a podcast. Now two podcasts, maybe more. You engage with your massive social media following. On top of all this, you’re a husband and a father of two. I know how important family is to you. I want to know. How do you balance all these things?
Balancing Work and Family as a Business Owner
Pat: The first thing to know about balance is that there’s no such thing as perfect balance. I think I tried to do that for a while, but then I realize that if you look at a scale, and you imagine that one moment when it’s perfectly balanced, it’s just like one frame in the entire swing of back and forth. To attempt to just be at that one frame all the time is you’re setting yourself up for success. That’s the first thing I had to realize that it’s never going to be perfectly balanced, but the big idea is let’s just not have it teeter too far to one side. Balance to me is like give and go, like give and receive, like those kinds of things. Creating a yin and yang on both sides. Also, another thing is trying to combine these two things is much as I can.
A lot of people try to separate personal and business, which you should on an LLC and accounting level. For me, business is something that in our family at least is bringing us all together. I’m inviting my kids into the office. Yes, they’re touching the buttons and turning the knobs and all that stuff in there. Getting behind the microphone and they’re on the camera acting silly, but I want business at home to be something that brings us together. Not like, “Oh, I don’t like daddy’s business or entrepreneurship, because every time he’s doing that, he’s not with me kind of thing.” That was based on how I grew up. Work took my dad away for me in terms of just he was always gone, and he’d always go travel, and he just wouldn’t be there. He was there for me. He was there at every recital and every game and stuff, but throughout the day he wasn’t there.
I want to be there with my kids as much as possible. In terms of scheduling, it’s a little bit easier now that both of the kids are in school, so I can get some actual work done in the afternoons now.Before the kids were in school, my work was done before they woke up or after they went to bed for nap time. That was the role because every time I tried to mix the two like, “Okay, I’m going to try to work while the kids are in the house.” They’d interrupt and vice versa. It would just not work out, so I stop trying to fight it. Even though there are less hours in that setup, I was able to have more productive hours, which just made sense for me to 100% devote myself to work in the mornings, get up early, do my miracle morning routine at night, a little bit more as well. When the kids are up, and I’m with them to be 100% with them as well. That’s just what I felt was fair, and it worked out, but like I said now that the kids are in school, I’m getting all this extra time it seems to do even more.
Taylor: Yeah it’s nice to hear that it gets a little easier. I’ve got a newborn at home and it’s completely impossible to get any work done at home.
Pat: It’s crazy, right? You also realize what the important work is like, “Hey, I only have an hour. Let me choose the best hour I can have or choose the right thing to do within this hour.” You become super efficient when you have a baby. Congrats on the newborn by the way.
Taylor: Thank you very much. How do you know when that scale is maybe teetering too far to one side? What does that feel like? What does that look like?
Pat: On the relationship level, it could be little quarrels here and there, misunderstandings that sort of thing on the work side of things maybe. Things start to fall behind. You start to lose momentum, those kinds of things. It takes a little bit of internal processing of how things are and checking in with yourself. I think that’s the big problem with many people and this was for me too is just you go through the motions, and you don’t really pay attention to, “Well, where am I on that scale right now?” I’ve learned to really check in with myself.
One thing that’s been really helpful for me is journaling every day. I use a journal thing called the five-minute journal that every day asks me what do I want to accomplish today, what am I grateful for, what’s one thing I wish I could do to improve. That just allows me to mentally just, “Okay, let me think about what’s going on right now in my life. Okay, this is what I’m thankful for. This is what needs work. This is what I can do better.” That exercise alone, which is only five minutes a day has been really helpful to having me realize that, “Okay, I may be shifting more to one side than the other.” Something that’s also helped is I go through these up and downs in terms of workload in online business at least. You come out courses, and you have launches, and you have products and other things.
It’s never just a steady pace. I try to balance it out by whenever there’s a big launch or something, I make sure I tell my wife ahead of time so that there’s no surprise that I’m in my office all day for a while, and I’m working 9, 10 hours a day at that point. Then after that, it’s like, “Okay, things are on autopilot now. Things are good.” Let’s reverse it now and bring it back to the other side by, “Okay, let’s only work one hour a day, but then spend the rest of the time doing some really fun stuff together.” Rewarding the family for just being there and being awesome and rewarding myself for the great hard work that I, hopefully, will have done. That’s how I keep things you “balanced” if you will or at least not too far on one side or the other.
Taylor: Yeah, I know, that’s really helpful. Communication in a relationship is key.
How Pat Went From Generating $7,000/month in Passive Income to $160,000 and Beyond
Taylor: If we back up a few years, you were laid off from an architectural position in 2008, and you stumbled into this world of online blogging and marketing. You actually developed and sold a PDF guide for a popular architecture exam. In the first month, you made just over $7000 from selling that. I have a couple questions around this. First, how did you stay grounded and focused after being laid off from a job that maybe you felt was going to be a lifelong career?
Pat: Yeah. That’s exactly what I thought it was going to be. It was a crushing blow when I told I wasn’t going to be working at this firm that I loved and doing a job that I love anymore.
My first reaction actually when I got laid off was to call every single architecture firm and engineering firm I ever worked with and just beg and plead for a job. I didn’t really know anything else. I got a lot of inspiration from a few places and things that kept me grounded were, one, the very first podcast that I listen to, which was Internet Business Mastery was a show still around hosted by two guys, Jeremy and Jason. I heard an episode where they were interviewing a guy who was talking about his journey in creating his business is making six figures helping people pass the project management exams. Very similar, not similar in content, but just similar in, “Hey, there’s a test out there that people in this world have to take, and it’s hard.” This person was helping them and that’s what gave me the inspiration to try that. Of course, along the way, it wasn’t all just like unicorns and rainbows.
I had no idea what I was doing. Getting involved in that community, the Internet Business Mastery Community, they had a little course that you could get access to with the community. Connecting with those people and seeing there are other people like me in my same situation who were trying to figure things out, and we’re all kind of banding together to try and help each other out and sharing new ideas and discoveries with each other. That was really helpful. Having a support system at home too, my wife, she didn’t sign up for that. I had proposed to her three months before I was told I was going to be — actually, two and a half months.
To have her still be there and support me and tell me everything was going to be okay and that she believed in me was huge because she could have easily said, “No, you’re going to get another architecture job. That’s what you went to school for, do that.” Of course, I would have done that, but having her be there to believe in me, and because I was just so distraught from the fact that I had done everything right up to that point. I had gotten straight A’s in school. I had gotten to an amazing school and graduated the top of my class for architecture school and got this amazing job. I was contributing to my 401(k). Everything was going the way it was supposed to, and I still got kicked out.
That’s when I told myself, “I can’t do this anymore. I have to have more control. I have to make it so that if I fail, I want it to be because I failed, not because somebody else told me that it just wasn’t going to work out anymore. Those things were really inspiring to me. Then also really appreciating the small wins too. There were many, many moments where I wanted to give up, but then I was often just trained throughout this process of building a business to appreciate the small wins. It’s such a big grand idea to launch a business and to create something and sell it.
There are a lot of many steps along the way in order to get to that big goal at the top of the stairs. You take one step at a time, and you celebrate. If you’re just walking, yes, you’re just taking it slow, but one step at a time you’re always moving forward. Yeah, sometimes you might fall but as long as you’re falling forward, you’re still making progress. These are mindset things that were taught to me in this course and by these other people. I would go to mastermind groups. I would meet people in person, which was totally outside of my comfort zone.
I did it for a couple of reasons. One, I knew it would be helpful, and I knew I was nervous for a reason because I was just brand new to this space. I also knew that was the sign that there might be something great on the other end. I went there, and I learned I asked questions.
Again, totally outside of my comfort zone, but I’ve since learned that’s what I’m looking for now. I’m looking for ways to get outside of my comfort zone because that means it’s something amazing on the other end. If I’m attempting to do something, and I’m not a little bit nervous, I’m probably not going big enough.
Taylor: Yes. That’s about how I felt when I was launching this podcast, which told me it’s something I should put myself out there and do.
Pat: I love it.
Taylor: What are some examples of some of those small wins early on when you’re starting this up?
Pat: Getting my website up was one. Having my first comment or my first email. My first thank you email was great. I got really involved. Part of the reason why this website took off so fast was because I was getting very involved in forums outside of this website where I knew these people who were studying for this exam existed. I had the mindset of going in there and just being the guy that could help them. I was in there three, four, five hours a day. This was right as I was getting laid off. I was still at work on my last few days before getting terminated, and I was in those forums. I wasn’t doing any work. Why would I continue to do work if I knew I was going to get let go? I was in those forums. I was interacting. I was being there to support people, never being too pushy with the fact that I had my own website.
Then I eventually became known as this expert in this space, which is really interesting to me. People called me the expert in those forums, which I didn’t think I was because I barely passed that exam, but it was because I was the guy who was there supporting people, helping people. That is what made me seem like an expert to them. All of those little thank yous and those little, “Oh, man that was really helpful.” Those kinds of things were really encouraging to me. Those were small wins. Getting this idea to write an e-book was in a mastermind group, and I didn’t even know what an e-book was at that point. I didn’t know how I was going to sell it. I didn’t know how to sell it or put it up on my website. All I knew is that I needed to write this thing and that I knew if I wrote this thing, I’d figure it out. That’s what I did. I spent a month and a half writing that e-book PDF file to help people pass.
Then I was like, “Guys, I got the e-book done. Okay, great. Here are the tools that you need.” If I tried to figure that all out beforehand, it would have been pointless. I would have gotten too overwhelmed. I knew that I just need to start with that book. When I finished that first guide, that was a huge thing for me, because I’m like, “I did it. I got this thing.” Even then, I was like, “What if people don’t like it? What if nobody buys it?” My first sale was huge. I remember checking my email like a bunch of times and just being so discouraged that I didn’t get a sale. I remember getting my first sale around like 3:40 AM from a random person who had never heard it before. The email came in. It’s a notification of payment received from PayPal. It was like $18.09, like 19.99 minus the free or whatever. I was overwhelmed. I couldn’t believe it like fist pumps.
Then it was weird, because of that first sale, the same resistance came in. After I felt excited, I started to feel scared like, “What if they don’t like it?” I started thinking ridiculously. “What if they report me to the FBI and the police come and get me.” All this stuff it sounds stupid now, but in the moment you’re like, “I have no idea what I’m doing.” I had to go outside for a walk because I was hyperventilating from that first sale. When I got back to my desk, there was another sale in my inbox right there. I was like, “Dude, this is …” That day was like, “Wow.” That was huge. I always recommend when people are starting out especially in online business, just go for that one sale. That first sale changes everything.
Taylor: That’s really good advice. In the first month, that first sale felt great and then that first month you see $7000 come in. That must really felt good. I’m sure you didn’t feel like it was sustainable either. At what point did you know, “Okay, this is sustainable. I’m never going back to the corporate world ever again. I can make this work.”
Pat: Even months after that first month, I was making $10,000, $15,000, $20,000 a month because I was figuring out new strategies to get this in front of people. I figured out where to put the links on my website. I had a lot more traffic coming to my website. People word-of-mouth. The guide was really good apparently, so people talked about it and shared it with their coworkers, etc.
Even then, I was like, “How long is this going to last?” Even my dad was like, “Yeah, this is so cool that you have this to give yourself a buffer. You’d get your grad degree and stuff.” I was like, “Oh, man, I know you’re right, but I couldn’t make that decision to do that.” I was still always like, “That was just like a one-time thing, a flash in the pan.”
I got a call. I think it was April or May of 2009. I can’t remember the exact month, but I got a call on my phone and it was for my boss. The same one who wouldn’t let me go in the architecture firm. It was really funny because he called and you could tell in his voice, he was like, “Hey Pat. How are you doing? Are you okay? How are things?” I’m like, “Dude, things are great. Things are great.” He’s like, “It’s okay. I know it’s a tough time and people are still struggling, but I’m here for you.” I’m like, “I’m doing okay.” Yeah, “I’m doing just fine.” Then he was like, “Here’s what I want to do Pat. He left the same firm. He didn’t get laid off, but he left to start his own.
He took some of his clients with him. He took a lot of my best friends who were there with me in that same architecture firm with him to work under him too, and he offered me a job captain position, which is the same position I had, but he offered me a raise. He offered me my own office, and he offered me a year’s rent for free to move back up to Irvine, California.
I didn’t think about the answer. I knew that the answer was, “Thanks, but no thanks.” That was the moment. I didn’t just hang up like, “Thanks. No thanks.” Click. I was more respectful, but I was like, “Thank you for this offer, but I think I’m good.” Click. Then I thought about it and I was worried I was going to be like, “Oh my gosh. Let me call you back. Yes, I’ll take you up,” but I didn’t have any of that at all. I knew at that moment when that conversation came in and that’s how I reacted to it that I knew that this was the path that was now my new path.
This was going to become the start of my new story. That’s really what motivated me to really just go all in with it mentally. I was all in with it physically and with the work I was doing already, but mentally I wasn’t all the way there until that moment.
Taylor: Sure. Today, your online business is averaging over $160,000 a month. Some months are even higher. How has the business evolved since then? What does it look like today and what do you attribute to all that growth?
Pat: The original architecture site is still there. It’s called greenexamacademy.com. Actually, it was originally intheleed.com, L-E-E-D because of the play on the name of the exam. I got a nice cease and desist letter from the organization that puts on that exam because that was a trademark. Again, I had no idea what I was doing, but I was able to remedy that and just change the domain name. It’s like greenexamacademy.com. That was an interesting moment actually that story because I got that and I freaked out. I was like, “All right. I’m done. I shouldn’t be doing this. I’m way in over my head.” I wanted to quit. I had no idea what I was getting into. I thought I was going to lose all my money, all this stuff. I hired a lawyer and he’s like, “They just want you to change the domain name.” I was like, “Oh, that’s it? Okay, I can do that.” Again, just freaked myself out.
The business continued to grow and it’s still doing very well. I started another website at the time and it’s called smartpassiveincome.com. This is where most people know me from now. My goal with that site was just share anything and everything that I did to make that LEED exam site happen. To make that story happen because it absolutely changed my life. I didn’t know the stuff existed until I finally was deep into it myself. There was nobody really that I could turn to that. I just shared all the bits and pieces of it, so I wanted to become that person and just share everything. I had no intention of it ever making a dollar. No intention of it ever helping me in my career at all, but, of course, it’s what most people know me for now.
As I began to share everything about that other business I created, I started to gain a lot of notoriety in the space, because, A, I was teaching these online business tactics and things I was learning from a real case study point of view. A lot of people were teaching the same stuff but had no business experience. They were just regurgitating stuff from other people they learned and whatnot. Here I was with a real case study of my own and new tactics added to that, that I could share.
People found me because of that and I started sharing my income report, because I figured, “Hey, I’m just going to show people everything and all that’s possible.” I shared with people how many books I sold, how much I sold it for, what happened when I increased the price and how much money I was making every month. That’s how Taylor knows how much money I made because I post that stuff every single month, and I’ve been doing that since 2008.
That put me on the map. Then I started to recommend a lot of the other products that I was using such as, “Hey, you know what, if you want to build a website, this is the tool I will recommend.” Okay, if you want to do keyword research on Google, here’s the fancy tool you can use that I use. I was never pushy about it. What’s interesting was that I started to earn all this trust from people from the relationships I was building and all the information I was giving and the value that I was offering that people started to take my recommendations.
Then I learned about this thing called affiliate marketing, which is where you can recommend the product and share it with your own audience for your own email list or whoever. If people go through that link and they buy, you will get a little bit of a kickback from that company at no extra cost to that person. The company rewards you for bringing a new customer in.
That started to just explode on Smart Passive Income because I had built a few more businesses and I decide to do those publicly on Smart Passive Income from just the conception of that idea, to the niche I was targeting, to how I determined that niche, to creating the content, creating the website, how I made money from those websites eventually. People started to share these case studies and to talk about them and I became well-known for this thing called the niche site tool, because it was actually a buddy of mine who challenged me.
He’s like, “Hey, why don’t we do like a live challenge where I’ll challenge you to a duel where we both build a website from scratch and we just see how well we can do and see who does better?” I picked mine and it was in the security guard training niche. I built this website and it became number one in security guard training. To this day, this is now seven years later, it’s continuing to make at least $2000 a month and people saw that and they’re like, “Dude, this is legit for real. He shared every single step along the way. He’s given us the blueprint. Okay, I’m going to try the same thing. I’m going to use his link because he’s the one who shared me all the stuff and his link for this, his link for that.”
Then my income just started to grow and grow and grow from the affiliate commissions. That’s how on Smart Passive Income, the income was coming in was through these recommendations. I had never sold any of my own products, which is really interesting.
Then you fast forward to today, now I have, because many people have been asking for it, not just those affiliate recommendations. I only recommend products that people that will help people that I’ve used before. That’s a very touchy thing, affiliate marketing. A lot of people abuse the power of affiliate marketing and share things just because it’s going to make them a lot of money. When you do that, you risk losing that trust with your audience, which I know is the most important thing in the world. I only recommend products, but now people have been asking me for courses. More high-level training. More access to me to help teach them and specifically them with their situation. I’ve come out with some courses recently.
The first one I came out with was actually October of last year. Actually, we’re almost at a year anniversary of that. Imagine like I’ve been teaching online business for eight years now or almost eight years. No, actually, more than eight years. Yet, I had yet to even launch my own product. That was actually my own branded product. The thing about affiliate marketing is you’re sending people off elsewhere. Now, I’m finally able to better serve my audience and keep them in the way that I teach and in my ecosystem.
Why Starting an Online Course Is About the Audience and Not the Money
Taylor: Do you think you waited too long to do that?
Pat: Absolutely, 100%. The reason why I waited so long was a couple reasons. One, the affiliate marketing was doing really well and I felt like I didn’t want to have my audience feel like I was just creating the courses just to make more money because I was money hungry. I wasn’t and I was worried that if I were to create courses, people would be like, “Oh, you’re just creating these courses because you’re just trying to make more money. You already give all this information out for free and you’re already making over $100,000 a month. Why are you trying to squeeze more out of us?”
I was worried about that. Two, I was worried about doing it in a not so great way. I suffer a little bit from perfectionism, but it was mainly that first one. It wasn’t until a friend of mine said, “Dude, Pat, you need to create courses.” I was like, “No, I’m good. The money is okay. I don’t need to make courses. The money is good.” He’s like, “It’s not about your money. It’s about your audience. You need to create these courses. You’re letting your people down.” I said, “Can you explain? I don’t understand.” He said, “By not offering courses, you’re not giving people who want to work deeper with you a way to invest money to get results from you because you have this great way of teaching that can help them and you’re not giving it to them.” I said, “Well, I’m already doing the stuff for free. They can learn from that.” They’re like, “Yes, but people will get more results if they invest in you and you offer just a little bit more access to you and a little deeper information than what you give out for free.” He said, “You’re not taking anything away from people by adding a course.”
That was the big moment for me because I thought by adding a course, I’d be actually taking stuff away from people, but that’s not the case. My free stuff is still there. However, that free stuff now is so good that people are now like, “Wow, the paid stuff must be amazing,” and it is and I’ve built them to be as such. Also, what has helped is launching those courses.
Each course that I launch goes through a beta period where I actually build the course with students as I go along and I do it because that’s how you should do it. First of all, if you don’t get any customers, well then good, because you hadn’t built that thing yet. You know that’s not something you should build. Also, I’m able to build it in the right way. I’m not creating a universal remote with a billion buttons on it that nobody is going to use. I’m going to build this course with only the buttons that they need and nothing more because I don’t want to waste their time. That has worked out really, really well. Yeah, absolutely. Going back to your question. I wish I had done it sooner. I was in my own way. I didn’t understand the system of what a course on top of the free content that you could offer already actually means.
Now that I have these courses helping people start their business, find ideas in different niches, helping them start their podcast. I have an affiliate marketing course coming out later this year. These things now, people are getting results that they would have never gotten even with my free stuff. I’m getting emails every day from my student saying this amazing thing happened and I wanted to thank you for it. I only wish I started sooner because that’s what I live for. I live for the thank you’s. I have in my office — you can’t see it right now but behind me, I have this giant 5 x 5 acoustical panel that allows me to pin things to it. I pin the handwritten thank you note that people give me. That’s my barometer for success.
Yes, people talk about email subscribers and dollars and things like that, but I feel like if I can get more handwritten thank you notes, the email subscribers and the dollar value will climb. My goal is to see how many thank yous can I get. How well can I actually serve my audience, because people don’t just give you thank you notes for no reason. That’s my barometer for success.
San Diego and Why It’s Home to Smart Passive Income
Taylor: Very cool. You work, as you mentioned with a virtual audience. People are all over the world. Your team is virtual as well I’m assuming. You could literally live anywhere in the world without your business being interrupted. What’s kept you in San Diego?
Pat: This is where I grew up. This is where our friends are. We have two kids. Both sets of grandparents are here too. Come on, it’s seven degrees 99% of the year. This is perfect. I’m a beach guy. I love the water. The weather is great and it has an international airport. I couldn’t be happier with where I’m at. I’m always going to be here in San Diego, although I do love to travel and I’ve been traveling a little bit more now with my speaking. It’s cool because the kids are old enough that even when I’m invited to speak, I can bring them along, which is really cool and let them experience the world. That’s why I love San Diego. It’s just amazing place.
Plus, for entrepreneurs and podcasters, there seems to be a growing group of us here. I mean there’s a lot of entrepreneurs that are well-known and San Diego being one of the hubs for entrepreneurship and social media. It’s where social media marketing world happens every single year. A lot of events come here specifically because of the weather, but because they also know there’s a lot of us here. It’s almost like Austin and Nashville and Denver. These are places in the US that seemed to be growing because of the groups of entrepreneurs here in San Diego. I’m just happy to say it’s one of them.
Taylor: Yeah, I know. It is a rapidly growing startup community here. I know you do some work over at WeWork downtown and there’s a number of businesses in there. We’ve had some of them on the podcast. It’s been really, really fun to watch that develop here in San Diego.
Pat: Yeah, it’s been cool.
The Viability of Selling an E-Book in 2017
Taylor: When you started back in 2008, you are selling this e-book you mentioned and it worked really well at that time. If you are launching the same business today, would you do anything different? Is creating and selling an e-book online still a viable model?
Pat: It is. In those industries specifically, where people are looking for just information, and they want it now, that can work really well. A lot of people are selling e-books nowadays on Amazon. That’s a different model than what I did. A lot of people are using Amazon not to make money but to gain exposure and actually not to make money directly, but a lot of people are using it to build an audience, get exposure, take advantage of the Amazon algorithm and search engine to get in front of new audiences. To then bring them to a place where they can potentially offer them something else.
With me in the book that I had, it made sense because these people were looking for study guides and study guides can be a lot more expensive. On a website, you can control the price much better and also offer other things to go along with it. Yeah, an e-book would be great, but if I could go back, what I would do differently is I would add different kinds of media to go along with that.
The one thing that I did that was cool was I added a secondary product with my e-book and it was an audio guide and that did very well. This was even before I knew how to really do it. I zip filed all the MP3 files for each chapter and I just sold that. People downloaded the zip file. It wasn’t like an access to some login thing that you can get into. If I could do it over again, I would probably do all those things in one package that is a higher price but better experience course set up. An online coaching platform. I know I wouldn’t have done this back then, but now knowing who I am now, if I could be mean now back then, I would do the only course but then I would also offer for the people who want to go even deeper beyond that some personal coaching or some one-on-one time to get questions answered that sort of things. Sort of like in a webinar live video sort of platform situation. Even maybe host local events or travel around if I wanted to do that. Those kinds of additions would make sense for people who just want the content and to go through all that stuff in like a day or two. Those people did those things. I could have offered those things, but I didn’t because I didn’t know I could do that for one and, B, even if I did, I probably wouldn’t have had the guts or the knowledge or just the push or motivation to do that.
The nice thing about doing an e-book was I was still very much behind the scenes with everything.
Pat Flynn’s Advice For Starting an Online Business Today
Taylor: Those are really good ideas. What advice would you give to somebody who’s looking to follow in your footsteps and start an online business?
Pat: The most important thing is to make sure that you select a specific target market and do a ton of research to find out exactly what that target market needs help with. That’s what I teach in my book, Will It Fly? This whole idea of creating what I like to call your market map. That is when you pick a niche, you want to find out a bunch of things about it first.
You want to find out, for example, who are the top players in that niche. Who has already built an amazing — these are the three Ps. The people. Who are the people in that space who already have earned trust. How do they get there? What is it that people love about them? How do they earn that trust? That’s the first thing. Making a list of all those things.
The second P would be all the places. What are all the websites and the forums and the groups on Facebook, the groups on LinkedIn, etc., conferences online, off-line, where do those people go?
That’s people and then places and then the final one is products. What are the products that are already being offered to those people in that target niche? What solutions are they being given? What problems are they solving?
That will give you a good map and layout of what’s happening in that space because the most important thing is the fourth and final P, which is your position. If you were to choose to go down that space, what position would you have? What unique offering would you give? What’s your unique selling proposition? Then once you figure that out, it’s still not about building something and then trying to force people into it.
A lot of people spend time building a business because they think it’s a good idea. Even though they did research, they think it’s a good idea and then they go build it and then they sell it. Shouting at the rooftops like, “Hey, buy my thing.” Then nobody buys their thing and then you’re left wondering why. Doing a pre-sell strategy to make sure that, yes, this is something that people want is the ultimate form of validation.
Tim Ferris said, “One of the best ways to know if people want to buy something is not just to ask them if they want to buy it. Literally, ask them to buy it even before you make it.” That might sound a little weird to some of you but think about it. It’s almost like an event. You buy a ticket to an event knowing what’s going to happen when you get there or Kickstarter or you buy these ideas ,and these concepts in these products that are going to be manufactured and given out, but you just believe in them because you’ve seen the video and you’ve connected with their story, and you need that thing.
It’s not so far-fetched anymore. Of course, beyond that just going into that space having real-life conversations with real people who are experiencing those different problems and trying to determine, “Okay, what could you do for them? How might that actually look? What might that actually feel like? Is this something people would actually pay for?”
Then you take it from there. That’s the foundational stuff that you need to do that most people skip because research is the word that doesn’t sound very fun, but if you choose to make it fun, if you choose to make it sort of like a treasure hunt, it can be fun and really interesting to dive deep into a space and just search around until you find that thing, that missing link that you could become known for.
Taylor: Yeah. No, really good tips. We’ll definitely link to your book, Will It Fly? Because I know there’s a ton of information and templates and things in there for people to follow if they’re interested. I couldn’t find it but I’m pretty sure there is a social media post or something a while back about you speaking on entrepreneurship at a grade school or maybe a high school here in San Diego. Is that an initiative that you’re pursuing? Are you involved at some level with helping San Diego schools integrate entrepreneurship into their curriculum?
San Diego Entrepreneurship and Giving Back
Pat: I’m involved with — now that I have the platform that I have and I’m known for certain things and I have these kids who are in school and are doing amazing, I am very much devoted to using the later part of my life to help make a change in education worldwide or at least United States wide. That’s become a very, very big passion of mine.
Part of that passion stems from being involved with organizations like Pencils of Promise. I’ve helped build schools in Ghana and have contributed to that organization for quite a while now. Here locally, my kids are in a school where it’s a STEM school, science, tech, engineering, and math. They also teach in a very entrepreneurial way. They really, really love what they do there and how they teach. That’s the kind of school that I wish was available for everybody, because it’s teaching kids life skills, not just how to write well or do math. It’s real life stuff.
They do journaling in the morning. They do meditation. They do real-life problem-solving. They teach empathy. All the stuff that I wish I knew that I didn’t figure out until I figured it out on my own in college. An example of why this school is really cool is the second and third graders last year — my son was in first grade, so the second and third graders last year, their teacher is well known in the Etsy space. She decided that she was going to challenge our kids to create a product that they were going to then sell later, so creating their own little business with a name and a product. They had all the second and third graders create something and then pitch it in front of a panel such as like a shark tank type thing. It was really interesting. They invited my son to be one of the judges, which was really cool, so I got to see what they were like rating. I have a relationship with some of the people at school, so maybe they just knew. I don’t know.
Anyway, they narrowed it down to 39. That in and of itself is an amazing exercise. Building something, sharing what you built with people who you don’t know. That is an extremely important life skill that you don’t learn until you’re in that moment in real life. To teach these second and third graders how to do that. It’s the stuff that I was very challenged with in college when I had to build a model and create plans and then present it to real architects in Berkeley. That scared the crap out of me. If I only had that experience beforehand, I could probably do much better. Anyway, they narrowed down to 39 and then the 39 business owners then selected from the pool of non-selected people as like employees. There were groups of three that we’re working. One was the CEO. Another one was the marketing person and another one was like a production person. There are these 39 little businesses around. Then what the teacher said was they invited people who they knew or who they knew their parents of these kids knew that were into marketing and business.
They invited a designer to come in to talk about logo design and like what makes a great logo and what kinds of things it supposed to convey and just teaching the kids about that. I came in to speak to the second and third graders about marketing. My task was to teach them what marketing was in a very basic level, but then encourage them to create a commercial on YouTube or a YouTube type commercial that was going to be 30 seconds to promote their product. I got them to think about like what that commercial might be, their target audiences, all these kinds of things. That’s that story. That was the toughest crowd I think I’ve ever spoken in front of.
Taylor: Is that right?
Pat: There was one funny thing that happened. Know your audience, right? I knew this was going to be my audience. I wore a shirt that said, “Pokémon trainer,” with a big giant Pokémon ball. Immediately, I’m liked. Then the teacher, when she introduces me, she goes, “This is Pat Flynn, he is master at marketing and also a Pokémon master.” Everybody was like …
Taylor: All the questions were about Pokémon?
Pat: I did my presentation. “All right, are there any questions?” The first question, “What’s your favorite Pokémon?” Second question, “What’s your second favorite Pokémon?” All the way to the fourth favorite. It was really fun though, but then they were put into groups to work together to create their script and outline for their commercial, their storyboard. It was just so cool to see them all lit up about running their thing.
I remember when they announced the cut from 108 to 39. They shot a video of that and they revealed the company’s names on a slideshow one by one. Every time a new comedy was shown of like the ones that were selected, you’d see a kid just light up on fire and they was just so stoked for that. I think that’s also teaching the people who didn’t get selected that, that’s okay. It’s not like a participation trophy. You get rewarded for great ideas but it’s okay to not have a great idea sometimes but you can still contribute. This is the kind of thing that I’m all about and I love it.
I’m getting more involved in the school in particular and in other schools like it. I’m also looking into what might need to happen on a school district wide thing, on a statewide thing, on a nationwide thing to potentially make change in that arena.
Taylor: I appreciate you sharing that. I do a lot with my local high school here in San Diego and I love to collaborate at some point because not enough of the stuff is taught at that level or even before the grade school level. Yeah, keep us updated for sure. I appreciate you sharing all that.
Pat: Yeah, cool. No worries.
Pat Flynn’s Favorite San Diego Business
Taylor: We are running out of time and I’ve got a few more questions for you. The first is a question that I ask every guest and that is what is your favorite up-and-coming company here in San Diego that nobody knows about or maybe a hidden gem that you frequent that’s maybe just a little behind the scenes and unheard of?
Pat: I like this. The one that I can think of right … there’s a lot of companies coming up in San Diego, which is really cool, but I just recently heard that there is a company called TubeBuddy that is stationed here in San Diego. TubeBuddy is a tool that I’m getting very involved with. It’s an online chrome extension, Safari extension, just a browser extension for YouTubers to learn about the analytics of what’s going on, on YouTube. It also just really makes it easy to streamline a lot of things that happen in terms of optimizing your YouTube channel.
My favorite thing is I’ve gone in to all my top videos. Just right there within YouTube, this TubeBuddy icon appears and you tap it and then it says, “Suggested tags.” Then it will just pull from all of the information in Google based on all the related videos and suggested tags. It will offer you the best tags that you can add with your video, so you can get found higher in the Google search algorithm. That’s really exciting, TubeBuddy.
Then the other one I would mention, which is the complete opposite, this is a brick-and-mortar place. It’s a restaurant actually that’s right by my new studio where I go to film and it’s called Cork & Craft. It’s in Rancho Bernardo. It’s this hole in the wall. You go here and you’re like, “What am I doing in this business park?” Then you see this thing called Cork & Craft and it says, “The abnormal beer company.” It’s a brewery in a small winery thing, but it has the most amazing food. It’s just really nice, higher-end food in a random place that’s unknown, so Cork & Craft. If you want to go there for date night, I would suggest it.
Pat on What Living a Wealthy Life Means to Him
Taylor: I love it. Those are both really good ideas. I’ll check them both out. I will definitely link to those in the show notes as well.
All right, my last question, the name is podcast is Stay Wealthy San Diego. Wealth means different things to different people. To some it’s about money, but for most, it’s something way more than that. What is living a wealthy life mean to you?
Pat: Wealthy life to me means a life full of amazing relationships. That’s with the people who are close to you, your colleagues, your employees, your friends, your family.
If I had a DeLorean and I can go back into time and tell my younger self something, I would tell myself to try and befriend and meet as many people as possible because honestly you never know that next relationship that you build, next person that you meet and hang out with could be a game changer to help you reach your goals. There’s obviously always the possibility of a mutual beneficial relationship that you can help them out too and you can change each other’s lives.
Really, when you think about it, it’s like how are people getting jobs these days. It’s not really with just submitting a resume anymore. It’s who knows who. The more people you know, the richer your life is. If rich to you is money, fine that’s cool, but that will come as a result of the relationships that you built too. It always stems down to the relationships and who you know.
I know for some that’s kind of scary and I’m an introvert as well, so it’s not easy for me, but I’ve seen the direct benefits of going out there, putting myself out there in a situation that I’m a little uncomfortable in to meet people who just had a massive change in my life, and I know we could all do more of that.
Taylor: I love it. I couldn’t agree more. Where can people find you?
Pat: You can find me at smartpassiveincome.com. That’s my website and @patflynn on most major social media channels.
Taylor: Awesome. Well, you’re a busy guy Pat. I really, really appreciate you carving out some time for this. I learned some new stuff myself and I look forward to sharing this with our community.
Pat: Awesome. Thank you so much. I appreciate it.