Writer Business Models: How Writers, Creators, And Thought Leaders Monetize
Are you an Obvious creator or a Non-Obvious creator?
Dear Friend, Subscriber, and Category Pirate,
The big question every writer, creator, and thought leader (at some point) asks themselves is, “OK I’m building an audience, I’m making a difference with my work, I’m becoming known for a niche I own—but how do I make money?”
Some writers don’t want to think about the money side. They would rather defer responsibility to someone else and not learn about business models and “contaminate” their art (society calls these writers & creators “starving artists”). Other writers & creators over-rotate on the business side and spend more time trying to figure out how to market and monetize their work than they do creating (and making sure it’s valuable). Both are unfortunate outcomes.
The question of how to monetize as a writer, creator, and thought leader is a bit loaded—because it requires you to address a deeper question, first.
2 questions, actually…
The 2 Most Important Money Questions: What Does The Party Cost? And Who Is The Party For?
There are 2 “life” questions you need to ask yourself as you begin down the path to monetization.
Question #1: What does the party cost?
Question #2: And who is the party for?
What Does The Party Cost?
“What does the party cost?” is your “burn rate” (but we think “pay for the party” is a more fun way to think about it). Your “burn rate” is the amount of money it costs to sustain your lifestyle of happy living. For example, what’s your rent or mortgage? How much do you spend on groceries each month? How often do you eat out? Do you eat at fancy restaurants and order bottles of Châteauxneuf dula-ding-dong? Or is ordering Chipotle on Friday nights considered “treating yourself?” What’s your car payment? How often do you go shopping? What do you spend on a typical afternoon date with your significant other? How much does your dog’s health insurance cost? All of these questions (everywhere there is money flowing out of your pocket each month) is how much it costs you to live your happy lifestyle.
Once you have total clarity around your monthly spending, consider how much money you have in savings/liquid investments and how many months you would be able to sustain your current style of living if your income was reduced to $0.
That’s your burn rate—and what your “party” costs (the party being: living and enjoying life at your current level).
The reason this question is so important is because the cost of your party is going to drastically influence the decisions you make (and feel comfortable making) as you begin to think about monetizing your creations. For example: if your monthly “party” costs $10,000, and you have $5,000 in savings, then choosing to quit your job and go all-in on being a writer or creator (with no income streams in place) basically means you have less than 30 days to “figure it out.” Whereas if your monthly party costs $10,000 but you have $120,000 in savings and liquid investments, then you have an entire year to try things, fall on your face, pick yourself back up again, and keep going without ever needing to adjust your style of living (and not needing to worry about paying rent is crucial to keeping your head clear, your mind sharp, and your goals firmly in focus).
Who Is The Party For?
“Who is the party for?” is a deeper, more complicated question—and usually the root issue that keeps so many people from pursuing their passions.
If your “party costs” are high, why are they high? Do you feel like you need to “keep up with the Joneses?” Is your identity and self-worth wrapped up in your nice house and fancy car? Or, if you are thinking of quitting your job to go all-in on being a writer and creator but are afraid of downsizing and reducing your “party costs” in the meantime? What’s the fear? That your parents won’t be proud of you anymore? That your friends will call you crazy for giving up your cushy corporate job? That you’ll feel like a failure before you’ve even started?
A quick personal pirate story:
Pirate Eddie is a child of blue-collar immigrants from Korea. His mom was a scheduling clerk at a hospital. His dad was a prosecutor in Korea but ended up driving a taxi then buying a limo to become a solopreneur. When Pirate Eddie graduated from college and got his first consulting job, he made $42,000 per year—which was more than what his parents had ever made in a single year combined. He and his parents were excited and amazed that the “American Dream” was coming true.
Yet, when his parents came to visit him in Chicago, his mom started to cry after seeing his post-college apartment. It was spartan with two mismatched chairs, a beaten-up recliner stuck in recline (after being bought and sold too many times in college), with a TV and a mattress on the floor. Pirate Eddie’s mom’s perception of what her son’s “party” would be was 180 degrees different from what she had expected—or what Pirate Eddie wanted or needed. In his mind, why throw a big and expensive party in a place you weren’t in half the time because of the travel required to live a consultant’s life? (Had Pirate Eddie made different choices, he might have made his mother much happier, sooner—but compromised his long-term freedom and happiness as a result.)
The reality is, most people make financial decisions based on what they want other people to think about them—opposed to what they truly want for themselves. And so we emphasize the importance of this question, FIRST, because in order to effectively monetize your writing and other creations, you may need to make decisions that look foolish in the short-term but set you up for massive success in the long run. And these decisions are nearly impossible to make if you have your parents, siblings, neighbors, or coworkers sitting on both shoulders, whispering into your ears, “That’s a stupid decision. We love your house! It’s so nice. We love your job! It’s so ‘professional.’ You don’t want to risk that, do you? What will everyone think?”
The Ultimate Goal
Your “ultimate goal” is not to make money as a writer or creator.
It’s also not even to make “a lot” of money as a writer or creator.
Your ultimate goal is to make a difference by building a portfolio of intellectual capital that “pays for the party” without you doing anything. (This is sometimes called “horizontal income” because it rolls into your bank even when you’re laying down.) Those assets could be directly related to your craft: books and courses, eBooks and paid newsletters. Or those assets could be indirectly related and purchased from your craft: stocks and bonds, real estate and cryptocurrencies. The point is: what you want is to create assets that pay you dividends regardless of whether or not you show up to the office. (This is what breaks the cycle of selling your time for money.)
For example, in 2020, Pirate Cole self-published a book called The Art & Business of Online Writing. That “asset” pays Pirate Cole approximately $2,500 per month, every month, as long as he continues to write online and the “digital writing” category remains relevant. Now imagine having 10 of those in your portfolio. Or 100 of them. Your party would be paid for, forever!
Unfortunately, most writers and creators (or frankly most people) do not think about the game of “building wealth” this way. Ask any writer or creator what their financial goal is, and most will either admit to not having one or simply say, “To make a lot of money.” The problem with a vague goal like this, however, is it does not take into account your burn rate—how much does your party cost? If you make $1 million but spend $1 million on “your party,” you are “making a lot of money” and still poor. But if you make $1 million but only spend $100,000 and use the other $900,000 to build, buy, or invest in assets that will pay you forever, you’ve just gained 9+ years of runway.
Which is what unlocks more time.
Which is what unlocks more creative freedom.
Which is what allows you to build more assets in your portfolio of intellectual capital (which is the most valuable asset of all).
And your flywheel just spins faster and faster…
(We know a mercenary entrepreneur who had $200 million in cash in 2000 and is bankrupt now. He liked to buy very dumb, very expensive things. Don’t be that guy.)
How To Leap
Once you’ve come to terms with the above 2 questions (How much does the party cost? And who is the party for?), there are 3 different ways to “take the leap” as a writer and creator.
The first is to save up a bunch of money (enough to “pay for your party” for 6-12 months), push all your chips into the center of the table, quit your full-time job, and hope that you “figure it out” before the money runs out. Some people thrive off this sense of urgency, and believe they will take more productive action if they feel like their “feet are to the fire.” However, it’s worth remembering that when money isn’t coming in, then every time you pay your rent, fill your car up with gas, or go out to dinner, you’re going to feel like the floor is falling out from under you. (This is a feeling we know well and can tell you that it doesn’t get better with time!)
The second is to get fired. This is a “forced leap” situation. But as Pirate Christopher likes to say, “For many, entrepreneurship isn’t just a way up. It’s a way out.” Sometimes, getting fired can be a blessing in disguise. It’s one of those moments where you are forced to make a decision: do you spend the next few months dusting off your resumé trying to replace what you had before? Or do you push forward and risk it all for the biscuit? We know many people who got fired at the start of the COVID-19 pandemic in 2020 and decided to become digital writers & creators, start writing on Twitter, launch a newsletter, or start ghostwriting—and ended up unlocking a career transformation as a result.
The third is to start building momentum while still working full-time, and then “take the leap” once your side-hustle income begins to replace your 9-5 salary. This is what Pirate Cole did back in 2016, as he was preparing to leave his job and go all-in on being a writer & ghostwriter. Once his after-hours writing revenue was approximately 50% of his monthly salary, he felt confident quitting his job knowing that with 8 more hours in the day, he’d find a way to cover the other 50%. (As the story goes, not only did he replace his full-time salary shortly after quitting, but ended up tripling his monthly earnings as a writer before going on to build a 7-figure ghostwriting agency).
Depending on which of the 3 leap paths you take, you can see how important it is to have clarity around your burn rate (What Does The Party Cost?) as well as the underlying reasons why your lifestyle is the way it is (Who Is The Party For?). Because the answers to these questions are going to dramatically change how you leap, when you leap, and/or if you ever have the confidence to take the leap at all.
Writer Business Goals: What Outcome Are You Solving For?
The next big question you need to ask yourself is what outcome you are solving for in monetizing your writing:
Are you solving for money?
Are you solving for time?
Are you solving for status?
Are you solving for contribution/impact?
Here’s a quick breakdown: