023: Tiago Forte – Building a Second Brain & Lessons From a $1M/yr Newsletter

Tiago: [00:00:00]
In the short term, picking one theme and just hammering on that theme week after week after week after week, I’m sure is good for the early days.

People know what you’re writing about. They know what to expect, they know what problem you’re going to solve. But I really think that’s short-sighted because in the long term they’re going to not have that problem anymore, or they’re going to develop more sophisticated problems or they’re just going to move their attention to some other part of their lives.

And if you are this one-dimensional caricature of a person, you pretend you’re this person who thinks about SEO 24/7—which none of us are—they’re going to move on from you.

Nathan: [00:00:41]
In this episode, I talked to Tiago Forte about building an online course, growing his newsletter and so much more. There is a lot of great stuff in there. One: he’s earning over a million dollars a year off of his newsletter. He’s got 40,000 subscribers. We get into monetization, book launches, course launches, cohort based courses, so much stuff.

And then actually, if you stick around to the end, we dive into, actually tiny houses and container homes and taking online revenue and bringing it offline, which I think is one of my favorite things. I’ve always seen me talk about that some on Twitter, but I haven’t talked about it a lot on the podcast or anything like that.

So I love the idea of doing that, of getting family involved and really using it to teach business lessons to kids. So it’s a longer episode, but I think you’re going to love it.

Let’s dive in.

Tiago. Welcome to the show.

Tiago: [00:01:32]
Thanks, Nathan, really, really excited to be here.

Nathan: [00:01:34]
So you’ve done a crazy amount of stuff for the email,sover the last few years. And I think a lot of people look to you for successful strategies and all of that.sone thing that you did before we started recording this is you asked on Twitter,syou know, what should we talk about? You know,swhat your audience would like to hear.

And one thing that that would be a fun place to start, w we’ll get into how to grow the audience and, and monetization and so much other stuff. I just love to hear it starting from zero. What are the first three things that you would do to grow your audience? So, you know, you’re giving advice to someone who’s has nothing going.

All they know is I was told I should have an email newsletter and growing at I growing audiences. The thing I want to do this year,

Tiago: [00:02:19]
Yeah. Okay. Let’s see. Three top things. I think first one is manually add people.sin the early days, I don’t know if you want stories behind these, but if I had coffee with someone, last thing I asked, can I add you to my email list?

If I met them on the subway, can I tell you it was one name and email address at a time? Because I knew there wasn’t much traffic to my website. People weren’t going to sign up just because I was really religious about getting people on there.

Nathan: [00:02:50]
but I’m just diving into that one for a second.sit’s so many people don’t ask right where they just say,sI’m doing all of these things. And over here, I’m trying to grow a newsletter and you can really grow an audience just by saying, Hey, will you join the list? And especially when you’re looking at a point where you’re say at the first.

One two or three subscribers a day coming in you’re at that point, you’re going to wait. This is going to turn into 50 subscribers this month. Something, additional send an additional two to three texts, a day, emails, coffee meetings, any of that, like you could increase your growth rate by 50% by adding an extra couple of people.

And so you could cut the time to a hundred subscribers in half just by asking. So I love that point.

Tiago: [00:03:38]
Exactly. I would add something else too, which is, it’s not just, it’s especially not about quantity in the early days, but quality too. Like when you have coffee with someone, you have such a deeper and closer connection to them.

Which means, you know, maybe from a, like a numbers point of view at the time it takes for you to write down their email address, go home, open up the website, put it in, isn’t worth it. But that person is so much more likely to be someone who reads it, opens it and reads it. Who recommends others who engages with you?
sin the early days, I really think quality matters more than quantity because you just don’t have the quantity.

Nathan: [00:04:12]
Right. Well, and actually we’ve talked to a few people like burn Hobart comes to mind who writes the which diff,swhich is a popular publication on subs deck. He doesn’t have the biggest audience out there, but he’s read by, by brothers Collison brothers Collison so many influential people in tech where they’re like, he’s, he’s just of right at the intersection of the things that they care so deeply about.

And so. He has an incredibly high quality list. I also think about,sJim’s Clara and Ryan holiday, where they are getting replies to their email newsletter. It’s like, Hey man, we come out and talk to my team. What’s your team. You look, and it’s a professional NFL team, you know, and that’s the head coach, you know?

And so you’re like, Oh right. Of course so-and-so is on my newsletter.sand so that point that you’re making about quality over quantity, I think is really good. And when you’re getting those first few subscribers from Twitter from wherever else, yes. You have some control of the quality based on the content you’re putting out there.

But a lot of it, you know, it’s just, the average is going to be so much lower unless you actively recruit for your email list. Working in tech, you know, I’m actively recruiting employees. And the inbound that I get into workable is one level of quality. And the ones that I directly reach out to and say, Hey, we have a conversation about joining my company.

The quality is higher. And so I’m driving the average up. So I love that point.

That’s

Tiago: [00:05:35]
that’s really, it that’s really it. In fact, there’s things you can do with a small, you know, I think people that there’s so much focus on growth and I get that growth is awesome, but instead of thinking small list bad, big list, good. It’s, it’s really much more subtle than that, which is every single level, right?

Like every single, point on that graph going up has pros and cons. But like maybe equal number of pros and cons. I’m starting to get into things now with a five-digit number list that are such a pain in the butt. Are such a headache that I didn’t have to worry about when it was small. Right. And one of the benefits of the small list is you can know most of the people by name on your list.

If it’s, a few hundred people, that’s, that’s a unique, a unique window of time that is going to go away. I promise. So like, I feel like my message is Savor the small days, savor those first few hundred people. Cause they’re, you know, they’re, they’re true. Believers they’re following you because they like you, or they know you or they’re really into your ideas for their own merits.

Whereas later on you get a lot of people that are following you, just because a lot of other people are following you.

Nathan: [00:06:43]
Right. Okay. So on this quality idea, I had a conversation with, Oh, Malik, the other day who,suh, is famous for creating giga home. And he’s been an investor for a long time, all of that. And he recently moved his newsletter over to convert kit. And so we were talking and he said that he’s going to. Trim his list down and make a rule where it’s only the 10,000 most engaged people.

And if you don’t engage, he’s going to boot you out and make room for, you another hundred more highly engaged people who have replied and all of that.swhat’s your take on making somewhat an exclusive list or saying I’m actually going to go for quality over quantity so much that I’m gonna make a rule about it.

Tiago: [00:07:25]
I think it’s smart. It’s smart.sit depends as always right on your goals. Like for me, my email is more top of funnel. It’s like the big megaphone,swhich I can do that for free and be very kind of all-inclusive and talk to everyone because I have my online course, which is most of our revenue. It’s it’s our business.

So I know that I have another way to make money and make a living. Whereas I think if you, if I had to have just a paid newsletter, I think it would be better to make it premium. I’d make it expensive, make it really in-depth and detailed and nerdy and niche and, and possibly li it’s. It’s an interesting idea that the psychology of limitation we’re trying this actually with, with David’s course, Rite of passage is going to be 350 spots.

That’s it? And it changes all sorts of things about the marketing, about the people we’re hiring for the team. It’s like limited enrollment things have a different essential nature than things that are just open for everyone. And that I, myself am just beginning to kind of explore that

Nathan: [00:08:31]
Which I want to dive into there, but the first thing that we’re talking about is adding people to your list directly.swhat are the next two that, that you do if you’re just getting started?

Tiago: [00:08:40]
Yeah, I think the second one,swhich is it’s totally,scommon, almost universal advice, but it took me them the number of years, it took me to really put my trust in this, which is an exact send time every single week. I resisted this. Like I heard it on podcasts on things that I would read for years, probably from 2013, when I first started collecting email subscribers to 2000, I only started doing it actually, when I moved to convert kid about a year and a half ago.

And it’s, it’s funny because in my situation I’m a productivity guy, right? So there’s this fundamental paradox where my whole life mission is to have you spend less time on email. And I think that’s why I resisted this idea I’m going to be sending, tens of thousands of emails, hundreds of thousands of emails a month it felt totally paradoxical.

Like I was being a spammer or something.sbut I think it really comes down on the value you’re providing the density of insight. You know, the value provided per minute of reading time, which I think is higher for what I send out than almost anything else.sbecause if you are crowding out lower sources of information, lower-value sources of information and making the average amount of value they get per email rise, then you’re, you’re benefiting them.

Nathan: [00:10:00]
Yeah, that makes sense. you’re talking about like, not just saying I send my newsletter every Tuesday, but saying every Tuesday at 10:00 AM, it will be in your inbox.

Tiago: [00:10:10]
That that is only about a month old. So I went through through,sthere’s a whole arc. I went through from sending once every quarter. And, and only when I had a really important announcement, something really huge had happened then about a year after that, it was maybe once a month, but approximately once a month, I would only send an email out when I had something to announce.

Right. Something big or small, then eventually it became, a little more regular, like every two weeks and then eventually every week. And just about a month ago,sI started seeing some interesting observations online a time I can’t tell you how much I resisted this. Nathan like the idea of being almost like a.

Like a TV show it’s coming on, 5:00 PM central. I I got into this business so I could have freedom and flexibility and work whenever I wanted. And the idea of of tying myself to this time, I just hated, but the results speak for themselves. It’s just predictability. It’s like this catalyst that you just add a little vial into your potion and it massively increases the effectiveness of everything else you’re doing.

Nathan: [00:11:18]
Nice. I love it. What’s the third thing that you’d recommend.

Tiago: [00:11:21]
I think the third thing would be, which is kind of counter to a lot of advice out there is to talk about all parts of your life.sthis is something I think, I think is a, it’s definitely a strategy. Like you have to choose it for yourself, but in the short term picking one theme and just hammering on that theme week after week after week after week, I’m sure is good for the early days.

people know what you’re writing about. They know what to expect, they know what problem you’re going to solve. But I really think that that’s, that’s short-sightedsbecause in the long term they’re going to not have that problem anymore, or they’re going to develop,smore sophisticated problems or they’re just going to move their attention to some other part of, their lives.

And if you are this one-dimensional caricature of a person, you know, like you, you, you pretend you’re this, this person who thinks about SEO 24/7 which none of us are, they’re going to move on from you. And so I talk about, and I have marketer, friends read my newsletters, and they’re just like, you’re crazy, man.

Like I tell, I’m talking about my family, I’m talking about my container home business I’m starting with my, with my brother, which I’m sure we’ll talk about. I know you’re into tiny homes.
sthis, this Tuesday, tomorrow morning, I’ll talk about my first angel investment I just made,sthings that are very far from the topic of my newsletter, which is productivity.

But what that means is people grow along with me. You know, people that started following me in their late twenties when I was in my late twenties can still follow me in my mid thirties because we’ve evolved and we’ve grown together and they’re interested in me as a person, not just as a thought.

leader

Nathan: [00:12:59]
I’ve done specifically in, in billionaires that are under my own name rather than on a very specific topic. And we get into a ton of details. I don’t know if that’s the conversation we want to have today, but on the pros and cons of it.

But I started my audience around,show to design web applications and iOS.

I don’t talk about that at all anymore. And so if it was a, you know, if, if iOS design, well, actually my first newsletter was the iOS design weekly. And so that was what everything was themed around rather than Nathan Barry, it would be really hard. Like I would have shut down an audience and moved on and then I would have done another one around book marketing and I would have done another one around SAS grit, you know, and what you’re talking about of just living your life,swith whatever you’re interested in, then people self, self, select, self filter for that.

And then as my interest change, people come and go or their interests changed with me.

So that makes sense.

Is there a time you’ve shared things or, you know, or brought your personal life,sopened that up to the newsletter that you think you thought later, Maybe that was a bit more than I wanted to do, or maybe that was a big stretch.

Tiago: [00:14:12]
never. I haven’t even approached the boundary of what would be inappropriate.

Yeah. I’m not sure there is one. I had a blog post. I sent out about my own personal, healing process through trauma. I had one, I’ve had things talking about things I’ve worked through with my family,sabout my health problems.sI think we’re in this age where. People want to follow real humans that have real problems and that aren’t ashamed or afraid to talk about those problems.

And then trying to pretend otherwise, maybe in the short term makes you look impressive or something, but in the long termsI even think has, it has other weird side effects. Like people don’t treat you as fully human. Like they’ll, there’ll be harsher or more demanding or less fair or less,skind if you present this unrealistic image, whereas if you’re a little more vulnerable and open, they, they treat you like a human—who would have guessed

Nathan: [00:15:15]
That’s interesting. I’m realizing a lot of people have talked about when once their newsletters reached a certain size, the audience. Maybe turning it against them

a little bit, or are you getting people who are not sure that you’re like a human and I have not had that experience. And I’m wondering if that’s, because I’ve always had this approach that you described.

Thing of this is my whole life, you know, I write a year in review, post it’s as much about how ConvertKit has drone, how my book sales, whenever this has grown as it is about my personal travel and an angel investment in buying a farm and building a tiny house house and any of that stuff. And so I bet.

You know, it sort of self-selects for like kinder people who are more interested in, in me rather than just being like, you know, where’s my productivity advice. Where’s my design advice or

whatever else

Tiago: [00:16:02]
Exactly. Yeah. I think part of it too, is the subject matter. my business partner, David Perell who you’ve had on the show,swe compare notes and we have similar audiences writing, about similar things in a similar style. He gets way more hate mail. And I think it’s because. He’s making his essays that he writes are these grand theories about how the world works, how culture works, how society works, how friendship works.
swhereas mine, I, I’m more nerdy and almost technical about productivity. I, so I sort of, I, I,sit’s just harder to attack really niche, subject matter, whereas any grand theory, half the people love it and half, absolutely hate it because you violate their beliefs.

Nathan: [00:16:46]
Yeah,

that makes sense. The more surface area that, you know, you have to step on and someone’s going to be reading along. They’re like, Oh, I love this. This makes sense. No, that part I totally disagree with. And then the hate mail starts.swell, take us back. What did it look like when you were getting into building the newsletter and,smaybe what was the path of the first thousand subscribers and then,suh, to 5,000 beyond

that

Tiago: [00:17:13]
Yeah, good.slet me see how I can summarize this. I started around 2013, which is the year I became self-employed. I had a MailChimp account, like so many others, and I just said, who well, what do people use as MailChimp? And,sthat was the year I’d had my first project, which was an online course on productivity.

And I just kept an email list initially of my customers. It was just people who’d taken my course. I thought, Hey, let me just keep in touch with these people. And I didn’t really didn’t emphasis size it.sfor several years after that, I slowly grew slowly, maybe into the few hundreds over the first two or three years.

Nathan: [00:17:51]
How are you selling the course without the email

list

Tiago: [00:17:54]
through Skillshare. It was discovered. Sure. Of course, but then like so many of my kind of generation,swe were burned. Right. If you don’t control your customer list, it’s not a question of if you’re going to get burned, it’s just when there’s, there’s no avoiding it.

Right? Cause I think something happens Skillshare needed to be profitable. And the easiest way to do that was to,sI think they switched their model from a,sfrom a. It was a Allah cart model where you just purchased a course. I think I would make like $30 per sale to a, like an all you can eat model kind of like Spotify, where suddenly I was making 30 cents, like overnight from one day to the next.

And that was also the night that I realized I couldn’t actually message my customers

Nathan: [00:18:41]sno. Yeah. That that’s painful.

Tiago: [00:18:46]
really painful. And actually, now that I’m thinking about it, I had to learn it again. Because I first started my blog on medium. Right. It was just easier. I didn’t want to deal with hosting and WordPress and all that stuff. And they would have these things called letters, which seem like just a very easy to use convenient newsletter.

You could go in and message all your, you know, your, your followers on medium, but then have some time after that, I think I had something like 5,000 followers on medium. They changed the settings. And now if someone opted out of notifications from any medium publication, They also didn’t get your letters.

Ouch.

Nathan: [00:19:22]
Okay. So that’s the painful lesson learned twice. I really sinks in at that point. And so then, then at that point, you’re going okay. I have to control my audience.sso I imagine is that when you move selling courses

over to teachable,

Tiago: [00:19:39]
it is yeah, maybe around 2015.sthis was when I got serious about controlling my infrastructure. Right. I moved to,sa stolen MailChimp,sbut started taking it more seriously. Like I said, adding people manually really paying attention to that.smoved to teachable, which is sort of a build your own school,splatform because of the key feature that you control.

You had the email addresses

Nathan: [00:20:04]
Which I just want to point out,slike now that might seem, well, of course you’re selling the course, you should control it, but with Skillshare and you, to me and these other platforms and Amazon for eBooks and, and all of that, that was a big debate at the time of, you know, this sort of bring your own an audience, get all the benefits from it.

Instead of everyone was looking at the marketplace model. Okay. Of,syou know, they, I will create the content. They will

bring the demand.

And I guess they’ll get all the long-term benefits, but I’m getting money. So maybe that’s okay. And teachable,steachable Gumroad,syou know, a few of those platforms were really at the front of saying like, no, you should, you got to do way more work, but you should get all the longterm benefit from.

Tiago: [00:20:48]
exactly it was. I think that that first early, maybe not first, but those early ways of creators, we were just willing to take whatever terms. I mean, the idea of making a living online was still so novel, you know, six, seven years ago. It was like, yeah, we’ll just we’ll sign anything.

We’ll agree to anything. And then after a few years you go, wait a minute, I’m working like a dog and I better be building some sort of asset to hear

Nathan: [00:21:14]
Right. That makes sense. So what works,sto scale the audience, you know, as you, you got into the 5,000 subscribers

and beyond

Tiago: [00:21:23]
yeah. So from, from 2015 to about 2000,

Nathan: [00:21:27]s

Tiago: [00:21:29]
eight, let me think. Now, in 2018, 2000. I actually switched to convert kit August, 2019. So I guess about three, four years, I was still in MailChimp, but just,sblogging blogging was really how I continue to get the vast majority of my subscribers. I love writing.

Writing is easy for me. That’s like the thing that I know how to do that is. Is relatively easy for me and not for others is, is not just writing, but super in depth, sometimes called long form essays where you do the ultimate guide to something, or really dive deep into an idea. Often I’ll spend months and months researching and writing and editing a post there.

They’re kind of more like small books than blog posts.sand then I was still for, for all that time and still to this day in many ways. So timid. You know, still to this day, there’s no pop-up of any kind. There’s a form at the very bottom. You make it down, this thousands of words, and maybe you’ll find my form in most of my posts,

Nathan: [00:22:24]
But really quick, that lens to quality over quantity again, because do you want, you know, people who click to your site to be on your newsletter, many people, the answer to that would be yes. In your case. You’re saying I want everyone who reads a post who clicks in

and reads a full post. You’re my people.

I want you to be on my newsletter. And that’s a

different bar that you’re setting

Tiago: [00:22:48]
Exactly. Yeah. Yeah. So by around mid 2019, I had about 5,500 subscribers.sand that was when I started working closely with David Parell,swho we mentioned before.

And he was just so fanatical about email. So convinced it was the future. That he kind of convinced me or influenced me, especially since we were becoming business partners to just go all in on email. And as soon as I decided to do that, it was became so clear that MailChimp couldn’t do it. Just wasn’t, you know, made MailChimp has made for like a, you know, a cupcake shop on the corner in one city in Ohio or some, some specific place it’s not made for creators.

And that’s what I loved about that. You were, you were, you took the risk and it was a risk back then to say that we’re for, for creators, it wasn’t clear that was going to be such a, a great, a great audience.

Nathan: [00:23:42]
Yeah. And that’s actually kind of crazy to think about, because I remember probably 20, 15, 2016,sactually being in San Francisco and trying to raise venture capital, which I’m very thankful that I failed at.sbut having those conversations and everyone brought up that the blogger market, the creative market is not big enough.

You can’t build a business there. And, you know, we said like, okay, but that’s fine. We’re going to anyway. And now, as everyone talks about the creator economy and all this stuff, like no one is saying that it’s not a big enough market, which is just kind of wild, how that changes over time.

Tiago: [00:24:21]
Exactly it’s changed so much.sso yeah, just to kind of complete the history from August, 2019, with 5,500 subscribers that I imported into convert kit.sit’s now about a year and a half later and we just passed this week. 40 F 40,000 subscribers.

Nathan: [00:24:40]
That’s pretty fantastic growth. What are,sso I noticed on your site, you know, you have a. You’re promoting your newsletter. Of course, as you talked about,sand then you’ve got your top 10 productivity tips,sthat you’re, you’re promoting, have you done other like content upgrades or, you know, opt-in incentives that have

driven growth

Tiago: [00:25:01]
have definitely not as much as I probably should have there. There’s so much value low-hanging fruit with lead magnets and content upgrades.sbut I’ve tried, I think I have about. 30 or 40 different forms that I’ve tried.sthe one that, that converts the best and it converts around 3%, which is that’s okay.

But it’s kind of average,sis my top 10, most popular articles. It’s like, there’s, you know, 500 posts on this blog, which you can only see six at a time. If you want to just know the 10 most popular things I’ve written, put your email address and I’ll just send them to you

Nathan: [00:25:36]
You know, what’s interesting about that is. It’s really simple. I think a lot of people are like, I’m going to create this elaborate ebook. I’m going to film this whole free course or I’m, you know, any of this stuff. And you’re just saying like, no, I’ve been at this for seven years now. And here are the 10 most popular things that I’ve written. And, and so anyone who’s probably been doing it for at least six months to a year, has those 10 pieces of content that they’re most proud of. And then you, when you write something later that you’re even more proud of, you just slide it in and replace something else. And. And that’s pretty straight forward.

So that’s awesome to hear that that’s converting really

well

Tiago: [00:26:11]
Yeah. Yeah, it is.sthat’s really the main mechanism and it, we, we created an in our website template so that every blog post has the form at the bottom. And then for certain posts, usually ones that are more popular that are designed for an external audience. I’ll add a form in the middle of the post.
sbut no, pop-ups no heavy incentives. No, no paid. We don’t, we don’t do paid acquisition for subscribers or even our products at all. Everything is a hundred percent organic.sand that, that list is our biggest asset. I mean, we sell multiple products over multiple timescales with this list of now 40,000 people.

Nathan: [00:26:50]
Yeah, that makes sense.slet’s talk about courses for a second then I want to get into, you know, a business partner,sin that relationship with David.sbut talk through a couple, a couple of the courses, and then if you have for sharing some of the revenue or ballpark figures that you’ve made.

Tiago: [00:27:05]
Yeah, of course, I’m, I’m a huge evangelist of online courses. I think they’re just, just beginning we’re in the earliest days of this, especially the kind of course that I, that I teach and my me and my business partner, which has cohort based courses. I don’t know if you’ve seen this, but they’re called CBCs.

And the whole idea is people don’t want to sit, spend even more hours sitting in front of a computer, watching a video of you talking and taking notes by themselves. They want to learn together. They want to learn in community. They want interaction and feedback and coaching and zoom. Which, you know, has only been around the past few years and uniquely enables that.

And now we’re in this kind of incredible moment that, you know, a year ago I would have to promote zoom almost as much as I marketed my course, because that was the barrier

entry You know

Nathan: [00:27:55]
Well, it had to be downloaded. People were like, wait, what do I do? What is this? And so much stuff. And now everyone knows what zoom

is

Tiago: [00:28:02]
It’s honestly a huge change. Like we’d have to train, people, teach them how to use zoom. Now that’s a given.sand what that, I think what that allows is of course, like bigger impact on, on,son students,shigher retention, much higher completion, all these things, but since this is a podcast for creators,sthe interesting implication there is you can charge way more money, way more.

You can charge way more, charge, a lot more money,swhich means you don’t need nearly the audience size. No, this was, this was the big shift for earlier creators. They had to build enormous audiences because they were monetizing a few bucks at a time, you know, an ebook, a hundred dollar course, these kind of low dollar amounts.

But now it’s, it’s very reasonable and kind of become, becoming expected to charge 500, 1,015 hundred, 2000. If, and this is the thing they have direct contact and exposure and they get to work with you as the expert instead of just watching a prerecorded video.sso I think so I think that’s the big opportunity is to it’s it’s kind of like structured consulting.

Nathan: [00:29:13]
Yeah, that makes sense. And a lot of people, you know, the productized consulting movement had a big,swave maybe two or three years ago, and this is the course equivalent of it. I’d probably make the equivalent or the very acquainted, a lot more to a university class, like a really good university class rather than,syou know, the video version of the textbook, which I think is what a lot of people were making is here’s here’s the content good luck.

And then they’d be like, yeah, I make sales, but only about 10% of people who buy, actually go through the material or 20% or something like that. And. And then exactly what you’re talking about. People want that interaction, they want the engagement, they want to meet other students. Like that’s a big thing of showing up and saying, Oh wow, I could buy this and end up with a community as well.

If people trying to accomplish the same thing. And then I think most of all, I’m curious for your take. I think people want the accountability. They want someone that’s saying like,syou said you were going to do this by Friday. Wait, why isn’t it done yet?

You know, in that peer pressure.

Tiago: [00:30:14]
Exactly. That is a, that is a beautiful metaphor. Self-paced courses are like the textbook, which like it’s a hundred bucks and you’re like, Oh, this is our rip off. Where can I photocopy this? Or Dell hit it online. Right. And cohort-based courses or anything that involves interaction is like the class where, you know, I don’t know how much, I wonder how, what, what is the individual.

Average college class costs probably at least a few thousand, right. With, with the way that college, up

Nathan: [00:30:45]
Yeah, let’s say, I mean, $500 a credit has to be the minimum. I mean, college, when I was going to college,s13 years ago at a state university, it was $300 a credit. So it’s gotta be way more expensive than that now.sso yeah, you’re looking at 1500 to 2,500 per college class.sand I’m just going to guess that, you know, a professor at Boise state university is not, they’re going to be great.

That’s the school that I went to, but they’re not going to be world-class. They’re not going to be, you know, at the top of their game where as a lot of these,syou know, creators that you can buy courses from now,
sreally are.

Tiago: [00:31:27]
Absolutely. They’re not going to be the best necessarily.seven if they are the best they might not. I think it’s, it’s different skills to be very, to have expertise and to know how to teach it. I think we’re starting to learn are very different things. There’s some edgy know entertainers out there that are better.

Teachers listen to Dave Chappelle, you know, he’s a better teacher and storyteller than most people who are like, it’s a, it’s a completely separate skill. So there’s that, I mean, in college you don’t get access to every student who’s ever taken that class and every student who will ever take that class, which is trivial to do with an online course.

Right. You just put them into the same community or the same discussion forum. It’s a complete, I love that metaphor. And it’s a complete kind of,srevolution in how people think about paying for education.

Nathan: [00:32:16]
That makes sense. What are, so you talked about the difference between having the skillset and the knowledge versus teaching it. those gaps of those gaps when you come across someone where you’re like, wow, you’re an incredibly, I don’t know how you’d say this.syou’re incredibly knowledgeable and the why you keep yourself and not a very good teacher.

What are those gaps that usually see and what, you know, what are, what are some of the advice or resources that you would refer to them to

become a better teacher?

Tiago: [00:32:43]
Yeah, so this, this is,sthis it’s, it’s funny. If you just think about your experiences, it’s obvious, this is true. Like we all know the person who’s, you know, PhD in theoretical physics and they’re clearly brilliant. You don’t get to that point, you know, without having brilliance, but in a way, the more expertise you have and the deeper zoomed in you are to that topic, the less you can relate to anyone else, the less you can see outside your little box.
umbrellasand so I think in, in a way, a lot of expertise can actually reduce your communication abilities. Cause you just forget, you forget what it was like to not know all the stuff that you know,swhereas the skill of teaching it’s, it’s more like, you know, it’s, it’s charisma, it’s being able to use metaphors.

It’s having a lot of energy on camera. And, you know, communicating enthusiasm and, and, and insight and all these things. It’s empathy, it’s coaching. It’s a whole nother skill. We haven’t even touched on it’s this whole package of other skills that, that are becoming more important online, where the quality and the way and the style and the personality of how it’s presented are just as important as, as the content.sand, and what I would refer people to is. It’s really funny actually, because that, that mental of teaching people are really reluctant to take on. I’ve noticed, you know, I’ve had people, a guy who has a million followers on YouTube, tell me, Oh, but I’m not a good teacher. I’m like, what. What are you talking about?

We put teachers on this pedestal, like there’s some magical power that they have when it’s really just, it’s, it’s a bundle of facilitation, communication, speaking,scoaching kind of all mixed in together.sand so my advice would just be, find venues for it. You know, back in the day used to be local meetups.

I kind of cut my teeth on public speaking at free, you know, local meetups these days, I guess that would be like, You know, zoom events, Crowdcast calls,swherever you can find, even just a few people willing to, to hear what you have to say. You can practice those.

Nathan: [00:34:48]
Yeah, that makes sense. I, I think just articulating that they’re different skills like being great at design and being great at teaching design are two different things. And when you label it as such, then you can go, Oh, I spent a lot of time honing my design skills. I should probably spend some time learning my teaching skills.

If I want to do this course, someone that I always look up to,sI’m really enjoying reading his material is Richard Fineman of taking these complex concepts in physics and one making them really entertaining because he knows that if he can hold your attention, you know, then he like, that’s the first gateway to teaching you all kinds of stuff, because if you close the book and walk away, then you know, he had no hope.
sso just in telling these incredible stories, but then also just the, the continued focus that he always had of. Bringing things down to the most, the simplest concepts and saying like, yes, this is wildly complicated, but

here’s how you can understand it really well. And so I think he’s a great example.

Tiago: [00:35:48]
Yeah. That’s that’s the secret, the, the rare thing about him, there were many things, but that he happened to have deep. Theoretical, you know, knowledge of the subject matter better than almost anyone. He won a Nobel prize. He was on the two ends of the extreme spectrum. He was so good at the subject matter and he was so good at teaching.

And that is what’s really great.

Nathan: [00:36:10]
Yeah, that makes sense. You touched on storytelling and David Paul, your business partner mentioned this on Twitter as well, that he wants you to talk about more.show do you think about telling stories and then from there, how do you think about telling stories as it was into a course launch or

something that you’re trying to promote?

Tiago: [00:36:30]
Yeah, let’s storytelling. The way you think of storytelling is just letting people in behind the, like, behind the curtain, into the, in, onto the backstage. So much of what we do as creators is a stage. You know, the, the, the, you know, how it is behind the scenes, it’s just a total mess. Things are flying.

There’s, you know, it’s just a disaster. Also. You can get that performance, whether it’s a piece of writing or a webinar, or a course looking all polished and perfect. And this kind of goes back to what we were saying before, where, where I think people want to see behind the scenes, they need to see behind the scenes behind the scenes is actually where the most interesting stuff is happening.

It’s what makes people actually actually understand what you’re doing. Instead of being kind of faked out by this, this, you know, polished image. So I think,sI mean, from a, from a practical point of view, what really enabled this, what was actually a very specific,sconvert kit feature, which is link triggers, link triggers.

I don’t think people understand link triggers along with tags. When I, when I was going through your guys’s,shelp documentation and I got linked triggers, I just had to like stand up and go for a walk. I seriously did. I just like walked around the block because I realized how constrained I had been in my thinking and my strategy and my business by this idea that my audience is one giant group, like in a stadium.

And there’s only one way to talk to them, which is a giant megaphone. Which has so many limitations, right? With, with link triggers, which, for anyone who doesn’t know is, is couldn’t be simpler as the link that says, click here to learn more or click here to find out more or click here to get updates. Okay.

And instead of the person having to enter their email address or fill out a form or anything, or even go to a preference, you know, contact preferences page, and try to decipher all the different preferences. They just do one click. That is it’s a world changing thing because suddenly my business went from a stadium to like a conference where there were dozens and dozens, hundreds of little breakout rooms, each group having their own conversation and their own interests and their own activities.

If you look at my ConvertKit there’s, you know, maybe 30 to 50 tags. And what’s, what’s so remarkable about that too, is it’s bottom up. Right? I didn’t start my strategy and say, okay, these are the 50 things I’m going to talk about. Let me create all these tags and then just force people into those groups.

It was in the moment, right? Sometimes I’m actually writing the email and I go, Hey, this thing I’m talking about, maybe people want to hear about this into the future. Let me just right there. You know, link, trigger a tag subscriber, create the tag right there in the dialogue. And suddenly I have a whole new interest group.
sand so, so what that allowed me to do is everyone’s in the stadium. And I mentioned sometimes in a PS, I’m going to be selling this product and that’s from a $10 ebook to a $75,000 home. Like, this is the same strategy I used to sell actual homes, which is if you want to hear about this click here, and sometimes I’ll do that over time.

So that, that, that tag, that, that smaller group of people gets bigger. I kind of add people to it over time. Once it reaches a critical mass, which could be 50 people, a hundred people, 500 people, then I can write a whole sequence. Right, which is another feature. It’s just a series of emails, but this is the thing.

Sequences are so hard to write, take so much effort, but I’m willing to do it because the group is already there. I’m not writing the sequence like speculatively. I know the people and their names and their whole click history of the people who will be receiving this. It’s a, it’s a different thing.

Nathan: [00:40:20]
Yeah. Yeah, that makes sense. And so you’re talking about with stories, taking people behind the scenes. So I think people look at it and, and say like, Oh, this there’s this elaborate lead-up that you have, or that kind of thing. And you’re just, maybe I’m projecting a little bit because this is what I did.

I’ve just like saying, Hey, this is what I’m working on.

Let me tell you more about why built it. Let me tell you more about why I think you’ll better benefit from it. Hey, here’s how the launch is coming together. You know, I’ve got about half the book written, working on editing, you know, like a lot of details like that.

And people were like, wow, it’s masterful. And I’m like, or it’s a real update of what’s going on in the progress on the product that I’m hoping you buy in,sfour weeks.

Tiago: [00:41:03]
No, that’s, that’s exactly it. It’s, it’s, it’s the same. I write about what I’m obsessed with. If people respond to what I’m obsessed with, I write about it more. If they still respond to it, then I create a tag and start adding people to the tag.

And if they’re still really into it, I’ll think about creating something and selling it. But it’s all bottom-up It’s all reacting to people’s behavior.sand the, the monetization is mostly just a way to fund my hobby. It’s just a way to fund my learning and it makes use of the learning I’ve already done.

It’s not that I’m going off into this whole new thing. I’m just packaging up what I’ve already created and letting the people who are most engaged, which is not everyone,spurchase a shortcut, right. A shortcut to the same outcome.

Nathan: [00:41:48]
Right. Just say that you phrased it as funding. Your hobby is to be clear. This is a course businesses earning over a million dollars a year.suh, So I don’t want to downplay things by just saying like, Oh, it’s a hobby, but at the same time, I think that phrasing gets into some of your, your thinking around it, of like, you’re not approaching this as the most perfectly refined business where everything has to be figured out in advance.

You’re saying these are my interests. This is what I care about. And if I pursue that and do it with excellence, then the money will follow with it. I don’t get the feeling that you were setting out with the. The money or the income being the primary goal. Is that right?

Tiago: [00:42:34]
it, it really isn’t. I’d say that the core stuff is the stuff that I try to be most businesslike. And try to be most professional and strategic, but then there’s this long tail of, of increasingly random things that I’ve been to, that that are more like the hobbies. But,syeah, you know, I don’t really know another way of operating.

I’m obsessed with things almost in voluntarily. I don’t really have another choice. And once I get into them, I want to make things because that’s just the fastest way to learn. There’s just nothing like getting your hands dirty. And once I’ve made things, it’s so easy with digital, the digital world to just duplicate it endlessly and sell it.
sit’s, it’s kind of a, a natural outlet kind of flow based on my kind of obsessive personnel

Nathan: [00:43:21]
Yeah. Yep. That makes sense. I wanted to ask about,sjoining forces with David Perell and, and what made you to come together and say, Hey, we should do a course together.sand what would you say to other creators who are thinking about partnering up on a business venture?

Tiago: [00:43:38]
You know, we just recorded a podcast where we talked about this. I think partnerships are really under utilized a format for creators. Which kind of makes sense, like, right. Like we get into this for radical, totally unfettered independence from time and space. And now suddenly we’re going to link up with this person.
sbut you know, you know where that came from. I mean, first it was just the fact that,sI had a course on note-taking and one of the most natural audiences for that was writers, but I didn’t really have time or bandwidth to make a whole separate course on writing, even though I was a writer. So David took my course.

He was kind of like my star student, you know, straight a student. And he said, let me build that course. Let me do the follow on the part too. And you’ll benefit because people will want note taking skills in order to become better writers and I’ll benefit because the people finishing, building a second brain, which is my course will have kind of a step two to go onto.

Okay.sand initially we were just gonna kind of do a little collaboration. I think that’s how the best partnership start is. Just let’s try this thing, but over time we just had highly compatible ways of thinking highly related, but kind of different strengths and weaknesses.sand then the key thing that really took it to a real partnership was which I think a lot of people who have launches will relate to.

Launches are incredible. Whether it’s for a course or anything that whole buildup of energy and enthusiasm, and then the thing drops, but it results in a business that is so insanely cyclical. That it’s really stressful, right? Like, like our company, we make 90% of our revenue in one week in April and one week.

Nathan: [00:45:21]
Wow, Wow because you’re building up to this massive launch and, and

everything that comes down to a single week.

Tiago: [00:45:30]
Exactly. It’s a lot of pressure and it’s, it feels risky because there’s just variables you can control, you know?sand so, so, Oh, so what happened is I wanted to hire an employee and so did David.sbut this is another challenge. Creators face is, you know, you’re making, you know, a hundred, 200, even $300,000 a year.

You’re doing awesome as an individual. You’re so happy, but to go from that, to hiring an employee, especially one that’s really talented and skilled and that you want to pay well is a giant chasm.

Nathan: [00:46:03]
When the paycheck should show up every two weeks and the launch revenue

shows up twice a

year

Tiago: [00:46:11]
Exactly right, exactly. It was too risky.snot to mention the fact that not only is the revenue cyclical, but the work is, you know, we, we do pretty much all the work for the cohort in the four or five weeks before launches, then there’s five weeks of cohort, but then once the cohort ends there’s it goes almost to zero there’s very little work in between.

So, you know, if I’m going to be paying that, that, that,ssalary all year, I don’t want to be paying for these big gaps when there’s not much going on. And so we combined forces and it’s kind of a Tik TOK model. I do my cohort and it’s this big ramp up. And the employee that we work with, his name is Willman and he’s amazing.

He works almost exclusively with me. And then as my course ramps down David’s course ramps up and will goes and works for David. Right. So we share the costs. We each pay 50% of his salary. We share the risk and a really unexpected benefit. We share the learnings, right? Like each cohort, we come out with a whole new set of features and innovations, but then we’ll, who’s across both gets all those learnings and transfers them directly over to the next court and back.

So instead of learn, having that learning cycle twice a year, we have it four times.

Nathan: [00:47:26]
So you’re launching each course twice a year and you have them spaced out so that.

He stays busy full-time all year round.

Tiago: [00:47:37]
Exactly. He stays busy and we just

Nathan: [00:47:43]
Yeah. Sounds well. Let’s dive into a little bit, as we start to wrap up,stalking about the different methods of monetization, we talked about courses,syou, you and I actually have the same book agent and you just signed a book deal.

And so,sLisa Dimona for anyone, who’s curious, just a, represents a second and James clear and for meet safety and so many other people.
sI’d love to hear, well, let’s talk about the book for a second. What, what’s the reasoning behind doing a traditionally-published book?sit’s clearly not revenue because you’ve got the revenue side covered pretty well. It’s clearly not. Knowing your customer or getting their email address because that’s not an option.
stake me through it. Why go traditionally published?

Tiago: [00:48:32]
Yeah, this is, this is something I thought about for a really long time.sit has to do with, with my goals, which is, you know, after building a sustainable business and having an audience and a customer base. These days, the thing that’s most important to me is to get this idea, which is this idea of a second brain.
sthe possibility you could have a system of knowledge management, you can actually have a software program not just, write my grocery lists and some, ideas from a book, but it’s like a, it’s a, it’s a brain you put into it, all your learnings, your assets, your, your knowledge, your expertise, your meeting notes, your book notes, your quotes, all the stuff we’re surrounded with surrounded by goes into this system.

And then from that point on you just reap the rewards. It’s like this constant, you know,suh, source of,svalue for whatever work you’re doing.sI just really think that this idea, which I didn’t come up with, by the way, it goes back to like, you know, whenever Bush and even further back, Paul Otlet goes back at least a century or more it’s it’s time has come.

It’s time has come. It’s been these really nerdy Silicon Valley circles for decades.sthe early internet pioneers were super into this stuff. You know, this, this is what they thought the internet was going to look like a system of knowledge management.sI just think we’re at this point, this tipping point of information overload,snot to mention, you know, confirmation bias and everything going on with filter bubbles that people want to and need to cultivate their knowledge in a really concrete way.

Rather than just thinking of knowledge as like this free floating, mystical thing out there.sand that’s, that’s my work, but what a book does is it can just reach so much further. So-so-so much further to an extent I think internet creators don’t appreciate, you know, we think, Oh, everyone is online.

Everyone, has a computer or at least a smartphone. Most of the humans on on the planet have access to the internet in some way. But. If you really look at who were the, nerds and the people in this niche, it’s so tiny, you have to have such a specific background.sI’m, excited about translating the book and getting it into, I just have these images in mind of a student in Brazil, which is where my family is from in a small-town bookstore, picking up a book in Portuguese.

You know, where the, even the terminology and the metaphors and different things are written in a way they can relate to. And them thinking, Oh, maybe I could build a second brain. I could have a system of knowledge management.syou know, these sorts of little images and stories is what really inspires me.

as powerful and widespread as the internet has become books are still the most universally-accessible medium of information there is

Nathan: [00:51:29]
Yeah, I think that,sI’ve come to a very similar place and that’s, you know, that’s why we both have,sbook agents and are working on, on books in that way, because. Even if you look at an audience of 40,000 people, or like I have 25,000 people on my email newsletter,sthat’s such a tiny group and I’ve been friends with James clear for a long time.

Since before he started James clear.com and even just watching the breakout success of like before publishing atomic habits and after publishing atomic habits. And the email newsletter was huge. It was hundreds of thousands of people when he published atomic habits. And it’s just the breakout. Well, beyond that,ssince publishing the book, because it’s a format that people understand, let’s say I read and absolutely love your newsletter, and I’ve gotten so much out of it.

I’ve got so much out of your course and Christmas time comes up. There’s not an approachable way for me to get that information to friends and family that I care about. You know, you come out with the book though, and guess what? Three or four friends are getting it for Christmas. You know, any of those things, it’s such a well-known pattern.

The other thing is, let’s say that,syou as a newsletter author, you’re like, you know what? I want to be on TV. Good morning, America, whatever else, like today’s show, I should do a series of things and be on TV. It’s not going to happen. You just let our creators it’s, you know, no one’s looking for them, but new author going on book tour that falls into a preset pattern where

they’re saying like, Oh, okay,syeah, let’s get him on.

Let’s have, you know, let’s have Jagger on CBS. And that is something that falls into an existing pattern because you switched media types from a newsletter to a book and they feed each other in such an incredible way.

Tiago: [00:53:18]
Exactly. Yeah, I I’m totally of the same mind, you know, it, it depends on your goals. Like you can build a great business, just talking to, you know, the people you can reach through your newsletter and there’s absolutely nothing wrong with that. That’s why I think it’s a personal choice.sI also know James has kind of been advising me on this whole book strategy and, you know, and he just asked me, what was the question?

He said something like, you can be the coolest. The coolest kid on the block in your little internet niche, nothing wrong with that. In fact, there’s some wonderful things about that, but you just have to decide for yourself, do you want to go and, and, and influence people beyond that bubble? If you do,

Nathan: [00:54:02]
Yeah, that makes sense.sone of the things I want to touch on a little bit is metrics. And someone asked this,sI think Austin asked it on Twitter.sknowing what you know now, what numbers,seither for your newsletter or Twitter following or whatever. Would you be comfortable launching your first course at which you went the other way, you’ve launched courses before, you know, you necessarily had an audience.
sbut how would you answer that? And then maybe follow up would be what metrics do.

Tiago: [00:54:30]
Yeah. And you know, I’ve, I’ve tweeted a number of times that, so that earlier ways of online courses, there were these courses on how to create courses. It was kind of like a whole genre, you know, like Pat Flynn, I think maybe as something like this, like Amy Porterfield, there was a whole generation of, of people that had the comprehensive guide to creating your own course.

I really don’t think that as, as much of a fan as I am, of those people that doesn’t work anymore because the market has matured and it’d be kind of like, like, would you take a course or read a book called let’s just say courses, would you take a course on like how to run every aspect of the business?

You know, in 10 hours you will learn sales and marketing and HR and operations. And like all this, it wouldn’t be credible. It wouldn’t make any sense. Yeah.

Nathan: [00:55:17]
That’s awesome

Tiago: [00:55:19]
Right. It just doesn’t work.sso I think we’re entering, we’re entering a more mature market where horses are starting to specialize like on an online course marketing online course, you know, logistics and operations, online course

Nathan: [00:55:34]
Unity.

Tiago: [00:55:35]
exactly.

Nathan: [00:55:36]
just how to do cohort based courses specifically, you know, so many

of those things

Tiago: [00:55:44]
What was, what was the question again?

Nathan: [00:55:46]
Yeah. Well, so the first question was,sat what stage,

Tiago: [00:55:50]
Oh yeah, yeah, yeah,

Nathan: [00:55:51]
would you become for watching a course?

Tiago: [00:55:52]
yeah. So here’s what I realized, you know, I’m constantly promoting the general concept of online courses and then people say, well, what do you recommend?

Where’s the book or the course on how, on how to do this. And then just realized you just focus on building an audience. Building an audience is the way to launch a course or X, whatever it might be in the future, because an audience, it gives you more at-bats It’s kind of like you can, I think of it.

Like you can stockpile early adopters. you have a big warehouse and you just put them in cold storage. So that the day you come out with a product, you just hit the red button and they all come to life and they’re ready to go, for whatever it is that you’re doing. And so I think I I’ve used the number 5,000.

Have 5,000 people on an email list. So 5,000 people you can directly contact before I feel it’s worth the risk

of putting out something that takes as much work as an online course

Nathan: [00:56:47]
Yep. That makes sense. And I think. I think I would quote the same number though. Something that you said about like the number of times at bat stood out to me that if you know, this online course path is something that you want to pursue or say that even just online business path, I’m realizing that I would start an online course earlier than that.
seven though I think if I were asked the question, like I said, I would answer 5,000, but based on what you said, I’m like, actually, cause I don’t know, but you have to lose, let’s say I have. 50 people. If these may be a little too early, but let’s say it’s 100 people I don’t know. And I’m sitting down, am I okay?

I’m going to launch a course. One, I found that it’s much easier to grow an audience for something like, for a specific product, rather than saying Oh, I’m, I’m I’m writing about productivity. You should subscribe. If you say I have what is going to be the best course on productivity. My unique take on it coming out in 45 days, sign up here to find out about it, like that tends to build momentum.

And all you did was going from, you know, I’m writing about this topic to, I am producing a paid product on this topic. Oh, he must be serious.

So that’s already part of it. And then, especially with this cohort-based model, you could take five people through your cohort and they would walk away. Being even happier.

They’re like, dude, it was the best. There were only five people in it and I got to help him or find his material. Like we got tons of personal attention in the office hours. Like there is so much great stuff from that. And so it goes from why I did this. I put in all this work, all this stuff, different video.

And I spent tens of thousands on video production, all this stuff. And no one bought it too. No, I. Put together a lot of good material and then had this initial beta or this MVP group go through it. And even if you only got three or five or 10 people,sthat would just be the first couple of times at bat.

And then you’d go around, around incorporate all your learnings and go at it again.swhat do you it’s

Tiago: [00:58:56]
sure. Yeah. So, so a couple of things,syou’re right. The cohort-based model dramatically lowers that, that bar you have to meet to make it worth it, You don’t need to hire the film crew at being a studio, all this expensive post-production it’s just zoom calls.sthe first cohort of building a second brain was in January, 2008, 17. And it was 50 people. Just like you said, now here’s the thing I would say, though, you want to charge, you want to be premium right back then that was 500 bucks. These days it’s moralized. You can still get away with 500, but it’s more like a thousand, right?

Like a thousand

Nathan: [00:59:36]
And what are you charging for a second brand now?

Tiago: [00:59:39]
Yeah. So now it’s, there’s three tiers,s1500, 3000.

And. I’m sorry, wait, 1,520 505,000.sso you want to, you want to charge premium. And the reason for that is to make it a real business, to make it sustainable, and to be able to give people the attention you want. Like, that’s the thing you could charge less than say it’s just for the learning.

But to raise that price later is going to be really hard, right? People are going to anchor you at whatever you say. And then every little dollar is like painful.sso let’s just say like, as a general goal, you’d want to charge 500 or a thousand,sto sell at that price point. There’s a certain conversion rate.

Like I think I had a list of around 2,500 at the time to sell 50 spots. Right. So it’s 2,500 is less than I said, but, and I would agree you want a small group, maybe it would only be 20 or something, but

there’s

But

Nathan: [01:00:38]
then you’re still pushing. You need a thousand on the list in order to,

you know, if we’re, if we’re keeping similar conversion

rates

Tiago: [01:00:45]
Exactly. There’s this weird interdependence, right? Between size price, size of list, price, and value that you, you need to kind of make sure they all support each other. I’ve seen this happen. People go, I’m going to charge, you know, 150 bucks for my cohort course. Even if you keep production value, super low, keep things very casual.

Don’t have a course manager, don’t have an assistant. Th the just emotional energy it takes to, to like do the emotional labor for a group of people over a few weeks. There there’s a, there’s a level that it doesn’t go below. Like it just takes something out of you. Right?

Nathan: [01:01:24]
Yeah. And so if you basically say my audience is so small that I need to charge a low enough amount of money to get enough people in the cohort. We’re, we’re basically doing math, the wrong direction, a bunch of times, you know, to get that down and you’re going down the wrong train of logic, then what you end up doing is you, you charge such a low price that then it’s not.

Really worth it, you know, and then you’re not as inspired and so on. So instead of a virtuous cycle, we ended up in a vicious cycle. And so that’s what I hear you saying as to why it’s like, all of that is true, but if you get at least a few thousand people that you can pitch to, then, you know, then you can charge enough that you can invest in it, that they can have a great experience at the people who buy it are really invested and are going to put in that level of effort to get a great

return from it.

And so on. Yeah.

Tiago: [01:02:17]
Then you get the word of mouth, you have the profit margin to hire an assistant and later other people, you feel proud of it you You have a certain pride of ownership that you, you, you teach, not just a course, but a premium course.sthere’s, there’s definitely a flywheel where the price supports the value, the impact, which supports the word of mouth, which supports the price.

So my thinking is just in that flywheel, where do you want to start? Where’s the, where’s the place to enter the fry. The flywheel that’s the best is, It’s an email list because it’s the only part that you, you can’t, you don’t need out the gate. You can just slowly accumulate over a long period of time. And given that’s the case you should make that period of time as long as possible, and get as many people on that list before starting to, to start up that flywheel.

That’s that’s how I think of it.

Nathan: [01:03:06]
okay. So we talked a ton about newsletters and all of that. You and I have,sshowed up session and everything we just talked about.

We also have a shared obsession in

the world of tiny houses, container homes, alternative living,sall of that loves to hear what you’re doing,sin the container home world and what you got, you excited about it.

Tiago: [01:03:26]
Yeah, this is my, my new obsession.smy brother Lucas and I earlier, I guess now last year, 2020,sdecided to start a container home building business. And it was really the culmination of 10 years of his. He had just run the gamut of the construction industry. He had started off as a. As a laborer actually,sbecome a,sproject manager, a superintendent worked for,scommercial builders,ssuper high end custom homes like in Newport beach.

His biggest project was a $10 million house that he was the superintendent for the person coordinating a team of 50 people to build it.she got really tired of custom homes because. A lot of reasons, customers are very finicky, right?sany wanted to go, not modular home building. He worked for two of the top modular home builders in Southern California had various experiences with them that led him to believe that containers were the way,sand he’s, he’s gone.

So, and now I’ve gone so deep into this where containers aren’t the solution to everything. I think you even responded to my tweet one time

Nathan: [01:04:36]
when we can get into that. Cause I.sand this is going to go very nerdy in construction.sbut forever I read cause I, I went the other way in, in built a tiny house on wheels. And then did stick frame.s
whenever you say stick frame, people think that it’s like sounds,sflimsy or something it’s like, no, no, no.

I just mean how houses are built, but,syou know, just did a traditionally framed construction on top of it for better installation and stuff like that. So

I’d love to hear kind of your take on it. Cause yeah, that is a Twitter exchange that we had, you know, about six months or more ago.

Tiago: [01:05:14]
yeah. Yeah. The idea is for a very particular type of building. So the, the homework currently building, which is our first client is a good example. It’s a, it’s this nonprofit called creator cabins.sand the idea is to have a creative retreat center.sJonathan, who’s our partner on it has a property outside of Austin and he wants to do two things, conserve the land, which is beautiful and has some amazing nature and create a place that creative people can go out and just have a, either a retreat or do a place to focus.

Right? So if you look at his requirements, you know, one of them is you have to just deliver it. It’s it’s conserved land. He doesn’t want all these contractors coming in and out, like creating all this footprint.sso it’s, it’s just a, it’s a one day installation. We’re gonna install from beginning to end a 1200 plus square foot house in a single day easily.

And that’s

just from a, from a conservation point of view. It’s pretty

cool

Nathan: [01:06:15]
So how many, how

many containers

is that? Is that four or five

containers?

Okay. Nice. And so those are going to be built in somewhere nearby in Austin or shipped in from a away

Tiago: [01:06:29]
They’re being built. It we’re almost finished. We’re going to finish in the next couple of weeks,sin Southern California.

So, so this is the crazy thing, Nathan. And actually this might be the connection to the, to the theme of, of the other podcasts.sthere’s kind of a crazy hypothesis here, which is that home building is becoming a remote work industry.

If we use these modular techniques, right. That there there’s a yard and it’s just, it’s an empty lot. There’s maybe a source of power and that’s it. There’s not even a bathroom in Redlands, California, that my brother is building the, and we just posted a video. If you go to the Fort shelter, YouTube channel, and you can see a 62nd clip of this,she’s almost done building these, these four containers and then he’s just going to ship them across country in a convoy of,sNot even semis you, you

Nathan: [01:07:24]
Okay. Huh? And so, yeah, I’d love one thing that I’m fascinated with. And actually, I think maybe you and I both got tagged in it in a thread a while ago of people taking internet businesses and doing something else with it. Like there’s someone I’m spacing on his name, who I think of it, Allen,she started a business called less counting.

He lives out in Panama city, Florida, and he. Built SAS company sold it, all of that. And he basically took all of his money from it and has been investing really heavily into his own community in downtown. He’s been buying buildings and renovating them and all this stuff. So I’ve been fascinated by people who are like taking internet money and turning it into like real, tangible things.

And that’s something that I do have,swe, we operate a bunch of Airbnbs and the next few days I’ll get a signed deal on another, another building and all that. But.sI’d love to hear, like, is this something that you’re funding out of, you know, your revenue from courses and all of that.

Yeah.

Tiago: [01:08:31]
Yeah.sfunding. I think that trend, you mentioned, we’re going to see more and more. I mean, it’s already happening in a big way. Just not maybe publicize as a trend. But,sthere’s this, I think this desire to, to, to diversify, to have more concrete assets, like it’s, it’s kind of funny, like on the internet, we feel so secure because, Oh, we’re not vulnerable to COVID and all these things, but when you look at the stack that we depend on how many layers of abstraction, it’s kind of insane that we have any sense of security.

Nathan: [01:09:02]
Yeah, well, along well along those lines, I mean, I don’t think I’m actually going to. Get to this point, but my wife and I were talking well, no, I guess, I guess it will come pretty soon. Well, we make a lot of money from convert and all that. We live fairly conservative lives as far as spending and, and,sthat kind of thing.

And pretty soon we’ll be at the point where revenue from this Airbnb business will cover all of our expenses as a family. And it’s kind of what you’re talking about. Like I don’t reasonably expect that I will ever need like, get into a situation where it’s like, Oh, I don’t make money on the internet anymore.

I have to make money from Airbnb’s on our farm, you know, and from other properties beyond, but it’s also kind of fun to get to the point where you’re like, but I could, like, those numbers have balanced out where I’m now diversified in this thing. And.

Tiago: [01:09:56]
exactly. I think with the events of just this week,smore people are thinking about that than ever.sand so the idea was,swas he out to fund the business? And also just from a, like a family point of view, I just looked at my nephew, my brother’s son, his name is Luke, and he’s just incredible kids, just so cute, so innocent.

And I just thought, I can’t think of any bigger impact, bigger, positive impact on his life than having his dad have his independence. You know, I’d watched my brother over the course of 10 years work so hard for this series of builders. Never be treated that well, never have his, his knowledge fully appreciated work, long hours.

Like, you know, most of us do. And he likes working. You know, we, we both share that we love our work, but there’s something with the flexibility taking a day off when you really need to, you know, sleeping in when you’re just that tired,sbeing there for the, just the, the events of the family that is priceless.

And so when I looked at the, the funds we were making from our business, I thought I could invest in it in all sorts of things, but I want to invest in my family because what else matters like this, this is the kind of stuff that really matters. And so,sreally was the opportunity to make a lifelong dream of his, and actually an interest that I share, like modularity is actually a fascinating concept that relates to knowledge that relates to productivity that relates to online business.

I kind of, it’s kind of like my, my,sMy S my other motive for doing this is to understand how something like physical space can be turned into units. And those units can be combined like Lego blocks to build whatever kind of space, whether it’s a full-size family home, like we’re building now or a home office.

Like with COVID starting there’s this whole other opportunity. Like, I can’t imagine what the demand for a backyard container sized home office is now, or will soon be like this isn’t going away. This work from home situation. So that might be the second product line is,

is a line of home office.

Nathan: [01:12:03]
Yeah, I believe it. When I’m in, I’m sitting in a tiny house home office right now, you know that,sit’s great. You walk across the backyard, you know, you could go. The thing that you said about family, there’s two

aspects of it that really resonated with me. One is there’s sort of this unique set of skills that I think we understand in order to do online business.

One of them is leverage, you know, with the leverage of an audience at the leverage of good marketing, branding, storytelling, all of these things that we’ve brought into play. It’s not necessarily a harder or a better skill or anything else than construction or something else. It’s just, the market just happens to reward it really well.

And so that’s one side of it. And so being able to partner with someone like your brother, in my case, I’m partnering with my good friend, Patrick, who has worked construction for a long time and, and hasn’t ever had leverage in.sin his work. And so to be able to combine his incredible building experience with my knowledge of how to get leverage and capital and marketing and everything else is like, Oh, this is, this is perfect.

And then the

other side

is just from the perspective of, of kids like you and I both have kids now.smine are a little bit older. My kids are nine, six, and then one and. They’re not, it’s going to be a long time before they’re going to understand what, what convert kit is, what I do, any of that.sbut the Airbnb, our little guest house that we went out on Airbnb, they get that and they understand the mechanics behind it and I pay them to help clean it.

And, you know, that’s something that we do together.sor like when we bought a fourplex and got that put on an Airbnb.

Even though it would be far more efficient to just, I don’t know. I don’t think so. Task rabbit here in Boise, but you know, to pay someone on task rabbit to go and assemble all the furniture and set the up, we got together, you know,smy wife,sand our kids, and then our friend Patrick and his kids.

And we all went over there and spent like a Saturday just doing this thing because it’s a, it’s a business and something that they can understand. And, you know, we’re assembling furniture and like getting the TV to work and like building up this whole part.sbecause I want to show them, this is like, this is a bit business.

This is how it works. And they get that in a way. Okay. So we pay for this once and then people pay us to stay every single night and the kids are like, wait, they pay how much. You know, and it like, even if it’s a hundred bucks a night, they’re blown away a hundred dollars. It’s an incredible thing, you know?

And so they’re getting this firsthand example in business that if you’re like, no, you don’t understand. So you sell this course for 3,500 cohort, basically, you know, like maybe by the time 15 or 16, they’ll understand like the true details of that. But,sso I just love. Taking,sthe resources that we have and the marketing knowledge and everything else and applying it to businesses that,
sfamily can be really.

Tiago: [01:15:14]
that’s. That’s beautiful. That’s wow. I had never thought of that. Maybe just cause my, my kid is fresh out the oven, but that is true. That is very true. Yeah. How are they going to learn those bread and butter principles and lessons if they, you know, which they need to learn when they’re, they’re pretty young to sink in.
sif, if we’re doing work that is quite complex,

Nathan: [01:15:43]
Yeah, I think so.s
I’m I’m curious what.

just to kind of wrap up that conversation. What does the next year or two look like for Fort shelter?

Tiago: [01:15:52]
So we’re finishing up the single family home. We’re going to ship it out to Austin.sthen in a few weeks, we’re actually going to go to the tag in convert kit, which is interest colon for shelter,swhich is being added to every day. This is, this is the insane thing. You know, I have a couple of blog posts.

With forms when people’s put in their email address, they get added to the,sto the list. I think I also have a form on, on my brother’s main website. So every time I look at it, it has a few dozen more people. I think it’s up to above 500.

Nathan: [01:16:24]
I’ll just say that I first joined your list for the Fort

Tiago: [01:16:27]
There you

Nathan: [01:16:28]
Like I wasn’t on

your list before. And I was like, Oh, I’ll try to learn more about this. And then I was like, Oh, now I’m also on the rest of Jagger’s list That’s great

Tiago: [01:16:37]
It’s like, it’s like, there’s a stadium, there’s many doors to the stadium. So some people come for the hot dogs. Some people have come for the, you know, the performance. Some people come to their friends or are, are there. And then seeing you have this big, this big audience.
sso we’re just going to, this is kind of the way I do everything is like build up the interest list, start learning from them. So we’ll send them a survey, capture their interests, have a series of interviews, do a Q and a call.sand then once we, once we figured out we know exactly what they want or can perfectly meet the needs of a small group, we’ll

Nathan: [01:17:17]
Which is,suh, you’re just now shipping a container at somebody, which is a different, different world than delivering on the course, but, but you’re right. The sales process and all of that is, is pretty similar.

Tiago: [01:17:28]
yeah, I think this is kind of related to the idea of people buying real estate. I think the margins and the profitability of online stuff is so great and the overhead is so low that it, then it then makes other kinds of businesses that you normally wouldn’t enter attractive.

Like another project we’re doing is we live in long beach, California. We’re going to be,sopening a dance studio. I hear locally. There’s so much amazing commercial space. Now that’s just completely empty. And when you look at the economics of a dance studio, there are daunting. Like people don’t start dance studios to make money.

You know, it’s really tough.sbut with the online business, as long as we break, even, that’s what I’ve told Lauren, my wife, who’s going to be spearheading it. Cause she grew up with this dance studio as the foundation of her community. She, she grew up in it. You know, and so as long as she can break, even within a year or two and pay the bills, it doesn’t need to make money because we can offset the different

sources of revenue.

Nathan: [01:18:26]
Hmm. I love that something else I’m realizing that I probably haven’t shared with,sany listeners before, is that part of the impetus for starting ConvertKit? Is that, and so this is, let’s say you go back to 2012. I had just had a few successful initial. Like book launches. We’re

just starting attraction

with the online audience.

When I said, I want to do ConvertKit as well was I wanted recurring revenue and specifically 5,000 a month, because that would cover all of our expenses because my wife and I wanted to start a coffee shop. And I knew that a coffee shop is a terrible business and that I didn’t want to have to make a coffee shop profitable enough that we could then pay all our bills off of it.

And that sounded really, really stressful. And so then I said, okay, If we had a software company or some recurring product that was making $5,000 a month as a starting point, then up from there that would pay our bills. And then,syou know, we can have this, this in-person business and this scholarship business that,sit could be so much less stressful because it’s not trying to be profitable and pay the mortgage and everything else.

And we ultimately decided that we want to do a farm instead of a coffee shop, but, you know, it’s the same principle

Tiago: [01:19:40]
there you go. We’re we’re fusing the online and offline worlds into just one,

one integrated whole.

Nathan: [01:19:47]
Yep. That’s right. Well, this was fun. Thanks for taking so much time to, to chat through newsletters and everything else.
swhere should people go to subscribe to your newsletter and, and follow what you’re doing online?

Tiago: [01:19:59]
Yeah. Been a pleasure, Nathan. Thank you. All my stuff is on my website, which is Forte Labs, fortelabs.co, not .com, just .co. And if you just add a /blog, you’ll find all of my writing going back six, seven years. And that is really everything I know. So happy to answer questions on Twitter (@fortelabs), is my most common platform, but if you do a search on my blog, you’ll probably get a much more eloquent answer.

Nathan: [01:20:26]
That sounds good. Well, thanks for hanging out