How can you build an author business for the long term, and not just for the launch of one book? How do you ensure secure cash flow and profits, instead of focusing on short-term spike sales? Joe Solari discusses key aspects of your author business.
In the intro, Kobo Plus expands to audiobooks in Australia & New Zealand; Thoughts on the changing publishing environment based on Thrillerfest Audios (well worth buying!), and you can book for Thrillerfest 2024 here; Letter to the FTC from The Authors Guild, American Booksellers Association and the Open Markets Institute on Amazon dominance in the industry.
Plus, my next book for authors Writing the Shadow: Turn Your Inner Darkness Into Words will be out on Kickstarter in October, sign up for the pre-launch here; Great examples of creative extras in Sara Rosett's campaign Murder in the Alps; and I'm on the Travelling Through Podcast on a walk and talk along the canal.
Today's show is sponsored by ProWritingAid, writing and editing software that goes way beyond just grammar and typo checking. With its detailed reports on how to improve your writing and integration with Scrivener, ProWritingAid will help you improve your book before you send it to an editor, agent or publisher. Check it out for free or get 25% off the premium edition at www.ProWritingAid.com/joanna
Joe Solari helps authors build great businesses through books, courses, podcasting, as well as strategy and operations consulting. He is the author of Advantage: Harnessing Cumulative Advantage in the Winner Takes All Publishing Market and May I Have a Moment of Your Attention: How to Be Heard in a Noisy Market.
You can listen above or on your favorite podcast app or read the notes and links below. Here are the highlights and the full transcript is below.
- Can every author learn to be a business person?
- Budgeting as an author and solving cashflow issues
- Business models for fiction vs nonfiction authors
- Managing the problem of scale as your audience grows
- Thinking longer term with asset creation
- Using reader data to make more direct sales
- The future of 50Booksto50k
Transcript of Interview with Joe Solari
Joanna: Joe Solari helps authors build great businesses through books, courses, podcasting, as well as strategy and operations consulting. He is the author of Advantage: Harnessing Cumulative Advantage in the Winner Takes All Publishing Market and May I Have a Moment of Your Attention: How to Be Heard in a Noisy Market. So welcome to the show, Joe.
Joe: Thanks for having me on, Joanna. This is great.
Joanna: I'm excited to talk to you. As I mentioned before we started recording, we've kind of circled around each other online for years, and I'm so glad to finally talk to you.
Joe: Yeah, there's been some near misses. Like, oh, we may be at the same event, and then COVID comes or who knows.
Joanna: Absolutely. For those people who might not have heard of you—
Tell us a bit more about how you got into writing and business for authors.
Joe: Sure, sure. The funny thing is, there's nothing you could have ever done to prepare yourself for what I do today, like this didn't exist 10 years ago. So it's funny to kind of look back and understand the process.
My background, I've got an undergrad in art from the Art Institute of Chicago. So I've got a creative background. I've got a master's in business administration from University of Chicago. So I have this strange mix of creative and analytical, and I've been entrepreneurial my whole life. So I've owned and operated multiple businesses.
What specifically got me into publishing, was my wife decided to write some books, some nonfiction books about styling. At the time, I was really busy with a startup business in the oil and gas industry, so I was like completely not even thinking about books, and she was having issues. This was like 2013/2014, so you remember how fun it was to try and get a book uploaded or do anything on these platforms.
She had some technical issues, I came in to help, and when I looked in her KDP account, there was $4,000. I was like, oh, this is interesting for a book about t-shirt and jeans to make $4,000 in a month. I need to know more about this.
I started listening to your podcast and I started listening to Mark's. It's interesting thinking back then, there wasn't a lot of stuff that I could find, most of the good stuff was actually coming out of the UK, people that were really kind of the leaders in the self-publishing piece. So that was where I was learning.
Then when I sold that business, I decided to write a book, because if my wife could, why couldn't I? It was a book about business for creatives.
And like most nonfiction books, it didn't sell a whole lot. Of the copies I did sell, it seemed like most of them were to this group called 20Booksto50k, and I had authors reaching out to me asking me questions.
So I went into this group, and at the time I think they were about 7000 people, which was huge, right? They're 10 times that now, and I started helping them answer business questions.
Where the real magic of what I do today happened was at that first 20Books.
So I went to that conference, I was asked to speak there, and I saw this opportunity of there were authors that were making a lot of money—I had no idea that a fiction author could make that kind of money—but they didn't even have the basics of business strategies or structure set up.
So they were very tax inefficient, there was liability exposure, there was all kinds of things that me as a business person just made my skin crawl.
So I picked up the phone, and I was standing in Sam's Town, and I called my business partner Lisa, who's a CPA, and I said, “I'm at this conference, and this is what's going on. There's this amazing opportunity. I feel like I'm sitting on courtside for this amazing thing, this golden age of content unfolding in front of me. I think we could help these people by helping them organize their businesses.” And she's like, “Well, I'm up for it.” And I came away with three clients.
So today what I'm doing, the bulk of the work is Lisa and I are helping authors that are very successful to be better in how they operate their business and understand why—this is a big part of this—is why are they doing what they're doing today.
Not just like their love for writing, but like once you get successful, really understanding what your goals are in your life. Not using the goals of the industry, but like —
What's going to get you up every morning to really work on that business and write those books?
Joanna: Oh, that's fantastic. I love that. I also was actually in oil and gas, but my last consulting job was with a mining company, but I also worked at gas companies in Australia. So It's kind of funny that we had that little intersection.
But I also came out of business of 13 years IT consulting, and I arrived as well, in sort of 2008 I started, but you know, really when indie started taking off.
I was really quite shocked by how little business information and knowledge there was in the industry. What's so funny is I also published a book called Business for Authors, and nobody bought it. Nobody. Like maybe 10 people bought that book. So it's funny that you also wrote the same book.
Joe: Yeah, and I sold it to the other six.
Joanna: Exactly. Maybe they bought both of our books.
Joe: They probably bought both. We probably duplicated the market.
Joanna: I'm sure we did because mine also covers things, you know, just covers things that you would get in like an MBA. Then what I realized is that many authors don't want to run a business.
So I actually repackaged some of that information and rewrote it as How To Make A Living With Your Writing, which is one of my top selling nonfiction books.
So what's so interesting was reframing things from running a business to making money. You and I would think, okay, that that seems quite similar, but so this is where my question is, which is, I have found that most authors they want to write, they want to make money, but they don't want to run a business. So I wondered—
Are some people just not suited to business? Or is this something that you think every single person can learn?
Joe: So what I've observed being around this, I think one thing is there's this kind of mythology that like, oh, well, if you're a creative, you can't be good at business. And actually, that's completely wrong.
Creativity is a huge part of entrepreneurship. You're taking something that doesn't exist, it's ideas in your head, and you're turning it into some type of solution or entertainment for people that they're prepared to give you cash for.
You're manifesting physical things into the real world from your creativity. And you're doing it because one of the things is you want to get paid.
So that's a very creative process.
So I think one thing is just a mindset change of like, no, actually, the best entrepreneurs are people that are creative.
Then there's, well, I just don't like all this numbers stuff and these thing. Well, you have to look at that stuff as just kind of tools in a toolbox, that even if you're weak in, if you get some level of strength, you're going to be a lot stronger. You have to do this if you want to make money from your writing.
If you just want to write a book because it's in your soul, and it needs to get out in the world, and you don't care about selling it, you don't have to worry about the commercial aspects of your business.
But once you set that framework of, I want to make money, I want to make a living from this, whatever amount that is, then you have to start doing this. You've made a decision. You've started a business. You can't deny that fact, because you're expecting to bring money in, you're gonna have expenses and things you're gonna have to pay, and have a profit. So you can't not do it. It's inherent to the whole thing.
When you start to think about some of the stuff that I talk about, how those tools help you, then you become more successful. Maybe I should put it a different way, not that you're going to be more successful, you're eliminating a lot of the risks and the things that wipe out businesses.
The number one reason that most businesses fail — and this isn't just author businesses, this is across the board — is they run out of money.
So what if you solve that problem?
What if you thought through budgeting and making sure that you had the money to publish the books you want to publish?
It may require you to save more money or take money out of your 401K or superannuation, whatever it might be that you have to do to do that. Those become business decisions that make your chance of being successful in publishing higher.
Joanna: I totally agree. And as you were talking, I was like, he's gonna say cash flow.
And, I mean, just earlier today, I paid some taxes, and I was working with my accountant for last month's accounts. It's like these are just things you do, and if you don't do them, then it is a hobby, basically.
Even if you're traditionally published, you still need to know these things because there's still money involved, and you don't want to end up out of pocket and essentially going bankrupt because you can't pay your bills.
It kind of drives me nuts when I hear people who say they just don't want to do any of that stuff because, like you said, it's kind of elimination of risk, but also, once you've set a lot of these processes up, it's not that big a deal.
It just seems like there's this big hump of knowledge that you need to know in order to set it all up, and then you can just get back to writing your books and kind of plugging it into the system.
Joe: Absolutely, and the other part of this thing is sometimes authors will think, well, this is kind of an author thing. No, it's a small business thing.
If you and I decided we were going to start an insurance company selling insurance together, and we might be the two best insurance salespeople in a company we are working in, and we then decide, well, we're gonna go start our own company because we're better than these other people. Like we may still be the best salespeople, but now we're also business owners, and we have to think about, oh, well, we got a secretary we have to pay, we have rent for our office, and we're not good in those things.
We can sit down with somebody and sell them insurance, but if one of us doesn't have those strengths to manage that stuff, then that's constantly going to be a distraction to what we're good at. Those things don't go away.
Like, the landlord will lock us out of our building if we don't pay his rent. The tax man will come and take our house if we don't pay. You can't deny these things have to be done.
Joanna: Like you said, we are just small businesses, we're not that special.
Let's get into some of the mistakes that authors make, and this is probably the one I would say is that we think we're special somehow and that the rules of business don't apply to us.
And yes, we need the mindset of creativity, and I do my affirmations like other people, but when it comes to accounting, and tax and business setup, I do all of that in a very practical way.
What are some of the other big mistakes you see authors making in terms of business?
Joe: I think the big one we kind of touched on. I look at this as, okay, if I know that 50% of all businesses fail in their first five years, and I want to go through and identify all the high-risk items and reduce them, and the single biggest one is running out of money.
So do you make a budget for what it's going to take you, not just to get your first book published, but to get through seven to twelve books?
Because the reality of it is for your author career to get through to its breakeven phase, and to start making profit that can support you, that's really how long it takes.
I've got clients that are netting over a million dollars every year, but when you go back and look, they went through that same period of, they wrote their first book, and then they wrote another seven to twenty, maybe even more than that, before they found their voice and found their audience.
So like, if you're not thinking that you're going to have to go through that, then you're just unrealistic because everybody has to.
You have to get your product right, which is the book. Then you have to find the audience that's going to commit to that.
The other thing you touched on with the cash flow is that it's an incredibly difficult business when you think about how the payment structures work, especially if you're a big advertiser.
You have to pay that advertising immediately. You know, in some cases, they're charging your credit card every couple of days, and then you have to wait 60 days for that money to come in. You have to be able to get through those periods and continue to service your whole business, including paying you, the employee.
I think that gets to another layer of this thing, and that is letting go of some of the ideas of success in the industry.
Like we throw around the idea—and I'm guilty of this as well—like talking about being a six or seven-figure author. I mean, it's part of our language that helps us understand success. But you could sell a million dollars’ worth of books and be on poverty wages in this industry.
You could be spending all your money on marketing and advertising and promotion and barely take anything home.
But still people are like, “Wow, look at how many books you're selling. Look at where you're ranking.”
Well, our model is how profitable your business is.
We have this thing we call Author Royalties Kept, so it's the idea of how much you take home out of every dollar. So most author businesses that I've looked at, and I've looked at a lot of big authors, they'll be somewhere around single digits to maybe 15 cents on the dollar, so 15% profit. Our average in our group is 44 cents.
You don't need to sell as many books and you make a lot more money when you start to design a business around the idea of profitability.
So maybe I don't sell as many books, but I'm not just exchanging dollars for advertising dollars. I'm really focused on different metrics in my business around profitability versus top-line sales. That's a big one for me.
Joanna: Yeah, me too. I mean, I've always been more interested in the profit. We're gonna come back on that.
But I just want to circle back to when you talked about the seven to twelve books, to write those, and that people have this unrealistic view, and I still hear it all the time. You know, write the book and get a book deal and hit the charts and make a million and retire.
I remember thinking that myself when I wrote my first book, that's what I thought would happen. But I mean, the seven to twelve books model, I think you're talking more about fiction. The nonfiction model can be fewer books, but adding on other services or speaking or courses.
The models are quite different for fiction to nonfiction.
Joe: Oh, absolutely. Yeah, I think it's funny because I'll get people that are writing a nonfiction book, and they'll come to me because they know the business I'm in and what I can do, and they'll be like, well, how can I make this book like a number one bestseller?
And I'm like, well, let's change the premise of this whole thing.
What do you want? What is the objective of getting this book out?
Because if it's trying to get to be number one in the Amazon store, that's going to be really tough. Like, maybe you can pull it off in a category, but when you think about nonfiction versus fiction.
I explain to them, like, my clients have lists with 100,000 names on them. They sell hundreds of books, they've got a massive audience, and they're going to be launching on the same day you do.
So if you think you're going to beat them in the store on that day, you're crazy. But what do you want to do to get busy?
And then they'll say, well, really, what I want to do is I want to show that I'm an expert, and I really want to get speaking engagements, or about people see that I think about financial services in a different way and I want to manage their money.
Then it's like, oh, well see now, that's what we want to do.
We want to use the book as a funnel to bring those people into your world because Amazon really is just a search engine.
It's the third largest search engine. We just happen to think about it like a store, but it's actually really a super archaic search engine that we have our credit card information in and we tend to buy stuff there.
So now you have a new platform where people can find you, and your book, if it's done right, is going to show you that you have this expertise in the space, and that you have a solution.
In my case, I always say that you should give them the DIY solution there. It's like, here's how you do it yourself, and then it becomes a funnel for the people that are like, yeah, well, you told me how to do it, but I want you to do it for me because you really know what you're doing, and I have the money to pay you to do it right the first time. So that's kind of my model.
I think there's things, you know, especially if we start talking about direct stuff, there's things that fiction authors can look into the nonfiction world and see, oh, yeah, there is other revenue streams here that I can tap into than just selling a book.
Joanna: Yes, and let's talk about the direct stuff and come back on what you said earlier around the cashflow problem with ads.
So let's say you spend your money on Amazon ads or Facebook ads, and then you don't get paid until Amazon sends you the money at the end of the 60-day cycle or whatever, but you have to pay for those ads earlier.
Whereas if you sell direct — so I'm using Shopify now — then you get paid immediately in a lot of cases, or within minutes, which I just find quite magical.
So thus your cash flow is much, much easier, plus your profit margin can be a lot higher on things like print books, plus you can do bundles, you can do merchandise, all these things.
So this is one of the big trends in the author space right now is selling direct. Now, I've been selling direct since I started, but in a small way. It seems like many authors are now starting to sort of pick this as a more primary method.
What are your thoughts on selling direct? How are you advising clients about that?
Joe: Sure, and most of my clients, if they're not already selling direct, they have really active direct strategies.
I'm going to take a little bit of a detour here because I think it's even more important. Well, it's equally as important as the cashflow piece, the cashflow piece is really significant.
I'll give you some hardcore examples of data that we've seen with people shifting over to direct, but there's another thing that I think is even more significant in the world that we're in in publishing. That is by going direct, you get a one-to-one relationship with your audience.
This whole economy is built on what I call the reader-writer relationship.
If there aren't writers writing stories and readers that are prepared to exchange money for those stories, none of this stuff exists. There is no publishing, there's no Amazon, there's no ads, there's none of that stuff.
That's the symbiotic relationship that the entire ecosystem is built on. We're the honey bees that pollinate all the flowers and keep the environment going.
The more we cut out middlemen, two things happen.
One is the profit piece, but the other thing is you can deliver the experience that you want to deliver.
And in the end, like books are a medium for an experience, right? Whether you listen to a book or you read a book, you know, you're telling a story, and somebody's experiencing that story.
The more that you have control over the things around that experience, so like when they come to your website, you can do things that you can't do on anybody else's sales platform.
It can be on-brand for you. Like, it can be all about your characters and story world, whatever you want it to be, you have 100% control over that.
And that, for me, becomes the most important thing to differentiate yourself going into this marketplace in the future is— How are people seeing you versus other people?
Oh, you write epic fantasy, and when I go to your website, there's all these cool pictures, and things about your characters. Your emails come to me, they're written by this old wizard that sees the whole world, and I feel like I'm more and more immersed in that world. Because for fiction people, that's an entertainment thing.
On the flip side, and you're doing both with what you have set up, but on your nonfiction side, people can come there and you can really clearly articulate to them what your brand promises around where you're gonna help them write.
Like, hey, I've been doing this for a long time writing books, these are the things that I can help you learn how to do to be a better business person and think of things creatively. or some of your other stuff like, hey, I went on this trip, it was really cool, here's pictures.
Some people just like reading about those trips. Other people buy that book because they're like, oh, I was thinking about this, let me read this book and understand, like, what do I need to do to be prepared? Like, all these things make that relationship better, and that's what your money comes from is your relationship with that audience.
Your creative content is worthless without people prepared to pay for it.
Joanna: So interesting. I was thinking there back to when I first learned about the whole internet business side of things. And back in 2007/2008, there were a lot of sucky, scammy things. I mean, there still are, there always are.
Joe: That won't stop.
Joanna: Yeah, exactly. There will always be that.
But I was just really happy to be attracted to a group of people in the blogosphere, as it was known back then, which was all about people and the relationship. I remember being taught that traffic, you know, stop talking about traffic, it's people.
That's something that sometimes perhaps we forget, and you're exactly right.
I'll tell you what a problem is then for many of us, including myself, being an introvert, I know I find ‘peopling' quite difficult.
Let's just take one example, when you send an email to a bigger list who are engaged with you, you get a lot of email back. Now I'm saying this, and to people listening, I love getting emails that are wonderful. There's a lot of other email that is not wonderful.
But this is a problem, it's almost the problem of scale. One of the reasons I hear people say, “Oh, well, I'm just gonna use Amazon. It's just easier. I don't have to deal with customers. I don't have to deal with the relationship.”
So what are your thoughts on that? Because I definitely have this fear, which is if I scale, if I have more people who buy my book, say my fiction, particularly—
Then how do I deal with the problem of scale when selling direct?
Joe: Yeah, I hear this a lot, and I'll come at this a couple of different ways.
So let's take email because I think that's one of the most powerful tools you can have for your marketing. And you think about it, what are we trying to do? We're trying to find people like to read stuff.
Well, emails are words, and you're an author, you're in the business of writing words. Why do you break out in hives when you have to write this email? Well, it's because you're trying to be a digital marketer. You're probably trying to get your someplace that you shouldn't be, like trying to sell stuff. And nobody likes to be sold, right?
We buy all the time. In fact, there's not a buying decision that I've ever made that I haven't completely rationalized no matter how insane it is, prior to me spending the money.
I think that's true especially for fiction, people that are avid readers, is once they read your book, and the book is what sells future books, they're most likely sitting around, like, just go write another book, Joanna. I'll buy it, and you just keep writing, and I'll keep buying.
It's that part up front where it's like we're trying to get people to try that book, and we're trying to get people to understand our brand promise.
If you instead come from that, from the perspective of, listen, I'm not going to be very personal in this, I'm going to make this about my story experience. So maybe you create an avatar or a special character that becomes your marketing person. That could be an actual character that's in your books.
Make it fun and make it part of your storytelling because if those emails just ooze with your creative style and your narrative voice, then every one of those emails gets people to buy in more.
Joanna: So for me personally, sending emails is not a problem. It's the amount I get in return that is the problem.
The problem of scale, as authors, you know, if you have a goal to sell millions of books, and you also have the “problem” of dealing personally, unless you then employ people.
But what you're talking about is the personal relationship side of things. So that's the bit that becomes unmanageable. Other people do it through Facebook or social media or TikTok, and—
What I feel is unmanageable for a lot of authors, is the need to interact with readers.
Joe: Yeah, well, I always go to the quote from Godfather Two, you know, “This is the business we've chosen.”
Like, there's some things you're going to have to do if you want that goal. It's like, hey, I want to make whatever it is that I need to make a living as an author. Well, then you need to have an audience and you have to keep those people around.
Now, to your point, if you have the high-class problem that you have a massive list and mass amount of people, then you can hire somebody, even if it's on a virtual assistant kind of contract basis, and focus really on the idea of, how do I build a process that gets this person to respond in my voice? You have to think about this, like, okay, I'm not going to do this, and I need to help this person who is going to do it, do it in the way that is on brand.
What is my brand promise? What do people expect from my books when they read them?
And if you can't articulate that, then how would you expect a virtual assistant to articulate that or execute it? So I think there's some things you can do, because that there's two parts of this, right? It's what happens with scale, right? So the other choice is don't scale.
Joanna: Exactly. Yeah.
Joe: And I think that that's an okay choice for some people. The other thing—this is a little bit of a tangent, but it's super, super important—is thinking that an author business just goes up and to the right in growth is insane.
It's just a fallacy. It's just a cyclical business. You were in oil and gas or mining, those are very cyclical businesses. It's driven by the commodity price.
In the publishing market, it's driven by multiple things. It's like people's interest in certain genres, pop culture shifts, your creative well filling up and drying out, where you are in series. All these things contribute to ups and downs in your business.
The idea is quit focusing on the highest high, and look at where you establish your plateaus. So after a launch, where do things settle out in your business? Is it higher than it was before? Your business is growing.
I think, and this comes from a lot of the marketing people out there, is like, well, there's gonna be this one launch where things just go and take off and go forever.
No, because I've got authors that have had those seminal moments where they write that book that brings in a 10x audience, but now the scales just changed, right? Their base is bigger, their highs are bigger, but there's still highs and lows.
If you build a business around the highs, then you're gonna go back to the earlier problems we're talking about.
You're gonna have personal cashflow issues because there are always lows.
We look at the pendulum swing that we've seen with COVID, when COVID was coming, I looked at all my author's businesses and designed budgets of if they lost 20% of their sales. Because usually when you have something like that there's a business loss. Ironically, or strangely, author businesses, because they shut down, shot up.
Joanna: Yeah, we had a really good year. But then, of course, it leveled out again, right?
Joe: Well, the pendulum swung, right?
And now it's like, I can't sell books, what's going on? It's like, well, everybody's out of their house. They're sick of being in their house reading. So they're out. They may just be standing in the backyard staring at the sun. I don't know, but there are other things they want to do right now.
You have no control over that. You could spend as much as you want on advertising, you can try and white knuckle this thing, and you'll just burn up money. Understand that there are ups and downs.
Like you mentioned, you were in mining, the companies that tend to be the most successful are the ones that are really disciplined during the downturns.
Or I should say, that are really disciplined during the boom times and prepared to take advantage of the downturns. I think authors need to think the same way.
We're going through a period right now, and we were kind of talking a little bit about it before we got on the recording, is —
There's kind of one of these big shifts in the market that's occurring now. The people that are going to get through this may not be the ones that are at the top of the market right now.
That's just how industry works.
I live in Chicago. Sears Roebuck was the biggest retailer, and everybody, in some respect, in and around Chicago had some affiliation with Sears. Amazon eliminated them. They're gone.
One time, the world's tallest building was the Sears Tower. It's the Willis Tower now. They may even change its name again.
To think that that's not going to happen to Amazon's business or your business, if you're not very deliberate in what you do, in my view, is a little foolish.
Joanna: Yes, so interestingly, a few years back now, Jeff Bezos was on the Charlie Rose US Show, whatever that is, and talked about how Amazon would be disrupted.
And it's so interesting, I mean, we're not necessarily there yet, but it does kind of feel with a lot of the pressures in the US with the antitrust side of things, the AI generated content.
And there, I'm not talking about real authors who use AI, but there's a lot of content flooding the stores, so it's even harder to be noticed in that big store.
The control of the experiences you mentioned, so you're not just advertising other people's books all the time. I mean, there's definitely disruption ahead. It's so funny, maybe we need to do a show on lessons learned from the mining business.
The other thing I was thinking as you were talking is this long-term thinking.
So when I worked in mining, they were looking at mining sites that wouldn't come on board for decades because it takes so long to generate an asset that will bring you money in the future, or that you hope will bring you money in the future.
I feel like this is another issue, perhaps more so, in the indie author space because people expect immediate results. Whereas actually —
To have a long-term business that works, you need to have that long-term thinking.
How do you think authors can be like that and think longer term around asset creation and business rules?
Joe: Sure, sure. So I'll give you a really good example of this, and it's something that I talk about in my books, is the majority of marketing that you hear for authors today is focused on the one-click voracious buyer.
My best estimate is that that's somewhere between 5% and 15% of the marketplace. So most people are not the kind of person that's going to see an ad on Facebook and go right to Amazon and click and buy and then read through your whole series, right?
So just the idea that, let's say it's 15%, that means that 85% of the market, so what's that, like four times larger, you're not addressing unless you build a marketing system that addresses those people.
So that long-term thinking, is like, oh, yeah, when you look at all the studies, most of those people that do show intent to buy, buy something in 90 days or longer. Whether it's a car or house or a coffee pot or a book, whatever it is, and I don't have any way to address that because my whole marketing system is about me showing you an ad and you buying that book now, and I don't do anything else.
So if I build a marketing system for those other people, and I automate that where they're self-nurturing, and they're retaining, and they're doing things on their timeframe, that compounds in the background. And all of a sudden, my business takes off.
Then they're like, well, how did you do it? It's like, well, because I did all this background work to build this system and write all these emails and do these things that help people to understand my brand promise.
I spent a lot of time just getting to read a free book. I then nurtured them through my first series with emails, and I did all this stuff that then turned them into a customer for life.
So I think that that, you know, how often do you hear anybody talking about that? You've been around longer than me.
Joanna: Well, not much in the author space. But of course, the customer journey is much more commonly talked about in other industries.
I mean, even I think course creators, which many listeners do create courses, I think there's more of it there. It's possibly because of the higher profit margin, I think maybe this has something to do with it.
Let's say, you sell a course for $300, right, even if you're running ads on that, maybe you're making $250 after you take your costs out. With books, I mean, the profit margin might be higher, especially if you sell direct, but the actual amount is pretty low.
So I think maybe that accounts for some of the issues with authors thinking short term is that it's a volume game.
So you think I need to sell a lot of volume, so I need to do this, click, click, click, click, click, as opposed to think longer term.
I mean, one of the things I've become more aware of with Shopify direct sales is this customer value idea, which we haven't been able to measure really before.
I think that's part of the problem, this ownership of the data, the ownership of the relationship, is something that we've only had sort of one step removed through email, if someone signs up to email.
But otherwise, that's all belonged to Amazon, and Apple, and Kobo and all those other sites. So I think that kind of explains it. But obviously—
We need to shift our perspective in order to be more successful.
Joe: Yeah, I'll give you an example of that.
So one of my clients, I work with JN Chaney, who's a wildly successful science fiction writer, very heavy in KU.
We're pivoting his business into direct sales, and an even bigger focus on audio. The conclusion we came to is we're going to do a direct audio store, audio only. We built that from scratch, had a massive list of superfans, and we did not touch that list.
We started from scratch because what we did as a design was, hey, we're looking for a completely different customer. We're looking for people that listen to science fiction and are going to spend a lot of money on audio.
These are the kinds of people that have no problem spending. And we know now from the data, because we're doing this on a direct site, they're spending up to $1,000 a year on audio, because we've targeted the right people.
That cost a lot of money and time to do that. We probably could have gotten a quicker result that would have looked cool and we could have been talking about it at shows if we just took his list and said, “Come over here and by direct audio.” But what we did is we designed an experience for people that said, “Hey, if you're into science fiction, and you're comfortable doing things direct, here's this solution for you.”
We know after the first book how many books is going to be written in that series, Jeff co-writes with a lot of authors.
So let's say we determined after book one, we're going to have a nine book series. When we launch book two, we launch also a bundle of books two through nine, even though those books haven't been written or recorded. And we give that as our best bundle discount.
So we're kind of like pre-selling the whole series. Our biggest customers will one-click buy that. Like that's what they want, and because of the technology, we know how to target those people. We can see those that buying behavior me and say, “Hey, new series, space opera. It's gonna be nine books, you interested? Here you go.”
Now look at how we just changed the economics of that business.
Now we're getting hundreds of dollars up front before we've even written the books. We're creating our own advances, and our customers are excited because they know they're going to have this series that's going to go for a while.
Most of these people are doing a lot of commuting or have a lot of time to listen, so like, this is the experience they want, and they're loving it.
I think that gets to the heart of what you were talking about of like thinking long term. Like—
What is it that you can bring to the market and to your customers?
Amazon's not thinking about that, they've got their own problems.
Joanna: Yeah, and I mean, their business could be AWS and Ads. That could be where they are. Or could just be AWS or who knows what it's going to be.
Joe: Let's be real about this. So you're talking about what's broken, like the only thing that's making them money right now is ads. I should say it differently. The only thing that's growing right now is ads.
AWS is a mature business. They're slugging it out with Microsoft, and Oracle, and Google, like, that is not a fun business to be in now. They've lost some big contracts.
So and then there's their sales piece, they never made money selling product. I mean, I've been watching their results since its inception.
The only money that they've made selling stuff they've reinvested in China and India and lost it. So that makes a couple of things really hard for us as authors, is like, they're going to be very focused on getting more and more people advertising.
There's only so much space on that platform for them to sell ads. So are they going to consume more of your sales page? Probably. Is that the experience you want for your customer?
Joanna: Just for people listening, I have been talking about this for a few years now, but I feel like things have become almost more urgent as the change starts to speed up.
When I started this, which is why I've always sold direct, even of a small amount of my books, is independence.
We're independent authors. We should have always been building something that was ours.
So what's happened now is that over the last 15 years that I've been doing this, the technology's got better and better and better and better. There was no way you could have built a direct audio store 15 years ago.
Joe: Not even 10 years ago. Five years ago you could if you wanted to throw a lot of money at it.
And also, it is getting easier—I'd say it's not easy, as in, if you're going to do it yourself, you need to learn new skills.
But this is what's so interesting, I really feel right now that I'm almost learning an entirely new business, in terms of the products are the same, and I've got my backlist, I've got the product, but the way I'm now thinking about the direct sales first, it's really challenging to shift away from some of the things that have been ingrained in us for the last 15 years of being indie.
So I just want to encourage people listening, if the penny hasn't dropped yet, it might take a while. But I feel like what you're saying and what I'm saying what a lot of people are saying—
The ship is starting to turn.
I mean, you must be seeing a lot more clients who are thinking this way as well.
Joe: Yeah. Oh, absolutely. So my approach to this is like, you know, you talk to any author, it's like, well, you want like all the readers, right? And they're like, yeah, of course. I want all the readers I can get.
It's like, okay, well, you've done a really good job in Kindle Unlimited. You're making more money than you could ever imagine there.
Those people have a value proposition that's working for them. They pay a subscription, they get the books they want to read, everything's working there. They are not the ones you're looking to bring on to your direct sales platform.
It's not just about moving people off, it's thinking about who are the customers that you don't have today that you could serve there better, and then build it that way. Build it to serve those people.
Then the other part of this thing, I think, where we get wrapped around the axle in the industry, it's like, well, it's an either or. It's like, no, it's —
It's not an either/or. How do you extract the value from the audience in sequence?
So maybe the strategy is, for example, the first thing I do is I launch on Kickstarter, and I sell my books there, and there's a product there, then I move them to direct for a period of time, then I go wide.
Then the last place I go, is I put those books into KU and take them off my other platforms.
I like that strategy because what it's doing is it's saying, hey, I think my books are worth let's say, $9.99. That's when I'm going to sell them on Kickstarter, and I'm going to sell them for $8.99 on my website to give people a deal, and then I'm going to sell them at $9.99 over at these other places.
Then when I've kind of worn this series out or this book out, and I want to discount it, well, I'll go put it over in KU because hey, you know, Amazon's decided what I'm getting paid over there. And they say my book is worth $1.54. So they're not going to get it until I feel it's worth $1.54.
Joanna: Also, I think part of the setting things up for the longer term is, like you mentioned email, but I've got so many books now, it's having these funnels and the various links, so I want things to be on my store for the longer term.
But I think the point is what you just said, and I did that earlier this year. So with Pilgrimage, I did a Kickstarter, then I did direct only for my Shopify store for another two months or something, and then I put it out wide.
So I kind of did it in that order, which is the first time I've ever done it entirely that way. And yeah, I made far more money than I would have done if I just had released it the way I usually release things.
So I guess we need to be coming to a close soon, but just tell people what they can find on your sites. We'll come back to a conference thing in a minute. I don't want people to think that you're going to necessarily solve all these problems for people.
Tell people what they can find on your website and in your books.
Joe: Sure, sure. So if you go to JoeSolari.com, that's my website.
There's a couple of things that I think would be interesting. First off, if they go to JoeSolari.com/AMA, they'll go to my Author Marketing Audit, which is a free 20 question audit that you rate yourself in these different areas.
These are 20 elements that I think are vital to an author's marketing. When they go through that, and you'll get a score, then if you want, you can sign up for an email, and I'll help you improve that score. What I know is, is if you work on these areas, these elements, and improve them, you will sell more books. And you'll build systems that are sustainable and address a lot of the stuff we've talked about.
That comes out of these books that I've written. So there's Advantage, which is pretty theoretical. It was like me understanding how the publishing market really works, and the dynamics of a winner take all market.
And then Attention is really like, well, how do you apply that stuff? So there's those kinds of things book wise, there's some core stuff there to help you do that.
One of the things that I offer is you can sign up for office hours with me. I do those on Thursday mornings, I have a couple hours. Even if you haven't written a book, if you want to set up a call with me, you can do that. I bring this up for two reasons. One, I've always offered that. Two is, this is an example for nonfiction people of a way of thinking about marketing differently.
So I'm on a podcast, and I offer people to set up calls with me. And you'd be like, well, why would you want to talk to somebody that's never written a book? It's like, because if I can help them solve problems and succeed, they have a higher probability of becoming the type of big-ticket client that I'm looking for.
I know this because it's actually happened where I've met with people at conferences, or through these calls, and they're just getting started, and I help them.
I charge a lot per hour, so these calls are not cheap for me as part of the business. And then a year and a half later, two years later, they come in and they hire me to work on their business, and now I'm charging that big rate.
And how I came to that conclusion is like, if I took that same money and gave it to Facebook to find clients, I would not get the same quality client. I would not get the same prospect, right?
So it's thinking about how maybe it costs more, but I get a better possibility of getting what I want in the future. So I think that's something also for your listeners, is like, you know, there's hours there to just connect with me and talk about their business.
Joanna: You have podcasts as well, don't you? You have a different audio option?
Joe: I do, I do. I've got two podcasts. One where I talk to different people in the industry, then I'll put it out.
But I have another one that I do. I've got a newsletter that starts out as a paid subscription. So I do them in seasons, so I write 45 emails, it's all on a big kind of story-based topic thing talking about author business stuff. Those eventually, after they are done with the paid subscription, those get moved out onto the podcast.
My assistant takes that and uses a voice-to-text with my voice and turns it into a podcast. So I'm reusing that content over and over again in different ways so people can find it the way that they want.
Joanna: Are those all linked on your site? Or tell people where they can find those.
Joe: Just go to the site and start playing around. Yeah, it's all there. It's the easiest place to kind of figure out where you're at in your career and how I can help you. There's a lot of free stuff. There's also paid stuff.
My biggest caveat is if you're wondering what to spend money on as a new author, it should go to the product. It needs to go into the cover, the editing, to make sure that you put out a high quality product.
That needs to be before you spend money on anybody like me, or advertising, that's where your money needs to be.
Joanna: Absolutely. So I listened to some of your conversations with Craig Martelle. You've been doing stuff with him. That brings us to the very interesting news that—
You'll be taking over the Las Vegas author conference, rebranding away from 20Booksto50k eventually.
So tell us about that and what you hope to achieve?
Joe: Sure, sure. So what Michael and Craig created is really special to me, because if you remember how we started this, I shared how I created this whole business out of an opportunity set that I saw at that show.
And I still believe this to this day, is like I'm sitting courtside for this amazing event of this golden age of content creation. We're just getting started, right?
You and I have been a little, hey, this is hard, that's hard, but in the grand scheme, like there's never been a time like this where people can actually find an audience and sell their daydreams and turn it into cold hard cash. So I'm still like pro get into this business.
So I've been friends with Craig since 2015 when I got involved with the group. Then I've always been at that show. Every year it's been on, I've been there.
And all the important relationships in this industry really developed out of that show. I've met my clients there, and then my clients have also met people there that had become either their co-writing partners, or maybe it was helping them get some information early in their career to give them that step up. It really has served an amazing service to the industry.
Michael's running a multimillion-dollar business that's unique in how it's set up. He's got only so much bandwidth. Craig, same thing. I've said this to him for years is if he quit doing that show, he would be making a lot more money as an author, but he's had this obligation to do that for the audience of authors.
So we've been talking about this for quite some time, and his health situation has escalated to the point where this makes a lot of sense. So that's why I'm doing this, is to make sure that what I got in 2017, that somebody can come to in 2024/25/26 and beyond and get that same thing.
So it's all in play now. I've set up a company, and we've signed the contract. So we now have the contracts for those future shows. This year, we're going to be doing the transition, and then in 2024, it'll be a new name. So if you want to know the new name, that's another thing. If you go to AuthorVenturesLLC.com, you can actually vote for the new name. We're running a survey.
Joe: Yeah because that's a big part of this for me, is well I'm really well suited for the show management and taking the financial responsibility and optimization and all that business stuff that I love to do, the part that I want to make sure is in its DNA is the community, and the community being able to have the input so the show is what they want the show to be.
Like you've said multiple times here, this industry is changing so fast. And if this show doesn't keep up with that, then you know, it's adapt or die, in my view.
Joanna: Absolutely. Well, I think it's an exciting change.
You've got different skills, and there'll be different people coming, as well as the established community. So I think this is a really positive shift.
And obviously, who knows what the next few years are going to be like. But as you said, I've been doing this so long, and we've seen things come and go and change. So I'm really happy that this is shifting, as opposed to disappearing. I think that's a great result for the community. So thank you. I also know how much hard work these things are. I think you're bonkers, to be honest, but well done.
Joe: You're not the first person to say that to me. I've had that said to me in my house, on dog walks, I've had my clients say that.
One thing that anybody that knows me or has spent time around me, I love digging into stuff. I don't want to call it a problem, that's the wrong thing. It's not that it needs to be fixed, but it needs to be to that next generation of what it's going to be. I feel I'm really good at it, I have the capacity to lead people, and to get input and to do that, and that stuff jazzes me.
The cool thing about what I do today—I can write nonfiction, I can't write fiction—but I get to be working with some of the best people in the industry to create businesses.
There's no blueprint to follow, like we're building it as we go to take it to that next level. That gets me up every morning. That's what I love to do.
So this is kind of a much bigger version of it. I think that when you see some of the stuff that Craig and I have cooked up, and stuff that I've thought of, and the team that's already there, the volunteers are going to be doing now, 2024 is going to be crazy. It's going to be everything that you're used to with some stuff that's like, oh, of course, this is where we're going.
Joanna: Fantastic. So just one more time—
Tell people where they can find you online.
Joe: Sure. So for kind of your personal author stuff, you want to learn more about me and how I can help you, go to JoeSolari.com.
If you're interested in learning more about what's going to happen with the new show, and there's all kinds of ways to express your interest if you want to volunteer, if you want to be on the list to know when the tickets open, you want to speak, you want to be at the reader event, you want to help us with the name of the show, go to AuthorVenturesLLC.com. And there are links there to go to all those things.
Joanna: Brilliant. Well, thanks so much for your time, Joe. That was great.
Joe: Great to be here, Joanna. It's wonderful to finally get to hang out and talk shop.