I’ve Made $216,688 From Products This Year
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Amy is well regarded in the web community (notably the Rails/JavaScript/Design communities), and she has several different types of products here (information products, subscription services and seminars). I'd bet they each serve as a marketing vehicle for one another, and I can only guess she'll continue to do better and better each year.
Congrats Amy, and thanks for such an honest behind-the-scenes post!
That said, like Kyle said, and my article said, it's not where I want to be forever. But training is still a product.
A product (as defined by me) is something you build once and sell. That could be an ebook, an SaaS web app, or some kind of widget. It could even be access to workshops you've recorded. But training people in person or live online is not a product.
You might say it's simply a matter of semantics, but I think it's an important distinction. Services don't scale like products because you are limited by the amount of time you're available to perform said service.
Keep in mind I'm not trying to take away from your success. It's a good blog post–I simply find the title and use of the word "product" inaccurate.
Specifically:
* A huge portion of the expense of training is in courseware development, which is a one-time expense.
* With solid courseware, the cost of a someone to deliver training is substantially less than the cost of a consulting domain expert for the problem domain of the course.
* The daily rate on a training course is substantially higher, worked back to $/billable-hour, than for consulting --- despite the fact that trainers are often cheaper than consultants.
* Sophisticated training operations (eg, pure-play training firms) can front-load and back-load training engagements with self-service courseware and with automated skills assessments tests, which drive billable time without an on-site consultant.
* Without a retention agreement from a single trainer, a package of courseware, self-service web applications, and skills assessment has value that can be sold to another training company.
In some sense, you can take any application that you yourself host and call it a "service". There isn't a bright-light dividing line between the two, or, at least, not a useful one. Regardless, it is not fair to lump training in with straight-up consulting.
I decide when and where to put on workshops. Then people pay me to show up. It's a product.
But only Amy Hoy can teach a seminar by Amy Hoy. People are paying for your specific knowledge/reputation. You have a fixed amount of time every month and cannot be in two places at once.
Still don't agree. Not a product :)
Of course, Mrs. Hoy can do a lot of things to make it even easier to disintermediate herself from the course. But she doesn't really even need to.
I really don't know much about Amy Hoy. Nice hat. But I've watched a fair bit of training get sold (software security training is a fairly hot item, and we've built courseware and delivered training to some pretty large companies), and I think you're off base here.
The training is, actually, more product-like than Freckle in terms of how tight the ties are and the ROI on time.
And to those saying workshops aren't "products" well I'd argue they straddle the product/service line. Since you're creating a content package and then presenting it. Lots of the material from workshops can be re-sold or re-presented over and over. Vs pure services which you are creating on demand each time.
Love that. More money can equal hiring more money, commissioning more art, hiring better trainers so you can learn faster, buying better tools, funding science and research, traveling more and easier, doing more and greater charity, and otherwise good things. I always thought it's silly when people go out of their way to say, "I'd never need more than $xx,xxx." Okay, you wouldn't need it, but with the least little bit of creativity, there's a lot of good and cool things you could do with it. Money's a terrible master, but a pretty good servant.
Lesson learned from experience - when you've got a tiger by the tail like that drop everything, hyper focus on marketing, experiment with paid promotion, partnerships, affiliates, a/b testing, etc.
If you maintain your revenue growth rate for another year you can do anything else you want, and it's a great product that's got the ability to scale.
That being said, very nice.
And yes, it was a great article.
-- Edited per Amy's feedback to not include her friend. Sorry for the mistake.
If I sold 10k widgets for $10 a piece and said my business made a 100k last year, ignoring rent, cost of widget and labor, that would definitely be misleading.
Besides, there are still taxes paid on top of whatever they did bring in, so it really doesn't fit your cute analogy. They paid free lancers, etc.
I mean I don't care, but "How much do you make" has built into the question the idea that everyone who gets a salary pays taxes, etc. When you are talking about a business 'making money' it is built into the question that there are costs associated with it.
That said, I have $60k just sitting in my bank account right now - and it feels goooood.
Plus, I understand 'products' like these have a much much higher margin than most other businesses.
I was just saying cash flow != income.
Although in Amy's case, she may not have to pay any living in Vienna. But I'm sure the US Gov't get it's share.
It seems like FICA should only be for selling your labor.
I think the 120k figure is wrong too but I'm on an olden first gen iPhone so I can look it up.