1,000 - The Number For Online Success?

One of the great benefits of the Internet is that small businesses focusing on a small niche stand a chance at success. That’s because, theoretically, it’s easier for them to find customers for their niche product, compared to, say, if they had a physical storefront in some small town. Or even a big city.

If their product is aimed at a relatively obscure market, then if the entire Internet-connected world is their potential customer base, it’s much easier to find enough customers. Enough to keep the business going, whereas a bricks-and-mortar equivalent might not make it.

How Many Customers Is Enough?

How many customers do you need, then? I can’t answer that and I won’t even try. But I will answer a related question. How many satisfied customers do you need to be successful on the Internet selling your product? Answer: 1,000. Or so says Kevin Kelly [via Business Opportunities, Performancing, Chris Garrett], in discussing how an artist can capitalize on the Long Tail phenomenon online. (That is, don’t try to please everyone. Focus on those who would appreciate your work the most.)

He’s say that 1,000 True Fans are enough for success for an artist. True Fans are the people that’ll drive 200 miles to see you. They’ll spend money on tickets, collectibles, etc., amounting to about $100 per year. Having 1,000 True Fans means generating $100,000 per year. (Though he points out an example of one author who gets by with about 200 True Fans and lots of Lesser Fans, all of whom pay something.)

Benefits of Working Online

Now, he is talking about artists (musicians, novelists, etc.), but this “Rule of 1,000″ can be applied to a lot of other Internet-based businesses. Could you live on $100K/year, if you’re working from home? Consider what the benefits are of not working at home:

1. Reduced car-related costs:
   • lowered insurance rate (probably)
   • less gas
   • no parking costs
   • reduced maintenance needs
2. No expensive meals at the restaurant down the street.
3. Or no boring lunches in a brown bag.
4. Less wear and tear on shoes and other clothing.
5. Not having to put up with a crazy, mean or stupid boss.
6. Not having to watch your back just because something thinks you’re after their job.
7. Less office politics to deal with in general.
8. The freedom to go for a walk or talk a nap, should you want to.
9. No being stuck in traffic or having to rely on public transit.
10. Lots of extra time saved by not commuting. For example, there are about 220-240 working days for the average career job in North America, depending on seniority. If you spend even one full hour per day commuting, you’ve saved 30 8-hour days.Could you parlay the extra time into earnings?
11. Time saved not shaving every single day. (I suppose you could throw in “time saved not showering every day.” That saves you money, too. Though I suggest you brush your teeth, lest your family or family pet shuns you.)

Some of the above items might sound silly, but sit down and work out how much you’re actually saving, mentally, emotionally, financially and even timewise. I’m sure you can think of more benefits. Yes, there are downsides, such as less social interaction and more distractions, but there are ways to deal with these negatives. And if you are working exclusively at home (when you’re not on tour, if that’s what you do), would $100,000/year be enough for you?

Of course, if you’re an artist, most of the benefits above probably don’t apply to you. Except those times when you’re at home promoting yourself.

What’s Your Action Plan?

If you do plan on using the Internet to sell something you produce (and that’s key) - even if you keep your job and just do it at home in the evenings and weekends - there are a few questions that you have to answer for yourself.

1. What are you going to sell?
2. How much are you going to sell it for?
3. Who are you selling it to?
4. How many people do you need to be exposed to to find those 1,000 True Fans?
5. How long will it take to find them, and how long are you willing to spend in their pursuit?
6. Is is it a one-time sale per person, or are you expecting repeat business?
7. What are you going to give away, on an ongoing basis, to prove that you deserve those customers?
8. How are you going to keep them coming back?
9. Can you get money from your True Fans in advance, before the product comes out. That is, will they finance your next effort?

Who Can Do This?

Here are a few of the types of people that can use this approach to make a living via the Internet:

1. Musicians
2. Artists
3. Writers/ novelists
4. Filmmakers
5. Stage performers

At least, these types of people have an advantage because they produce physical content. Now, that doesn’t rule out, say, someone who wants to sell dog training content (books, video, in-person training) if they have the appropriate experience to warrant sales. So if you apply that mindset, the list above will grow rapidly to include many other professions.

It can be done, and 1,000 feels psychologically attainable. There are people who are doing it - some in incredibly clever ways - as Kevin Kelly points out in his inspiring, must-read article. (Read the comments there, too.) With web-based services like Fundable, it’s even easier to get pre-project financing.

Some of the commenters of his article point out that some people are making a living with less than 1,000 True Fans. Consider: 500 True Fans x $200/year from each = $100,000. But $200/year is less than $20/month. Is there something you can give your True Fans that they’d pay $20/mth for?

What I’m Doing

This is something that I hope I can accomplish when I start making movies in a couple of years: getting micro-financing. I’ve put in three years of work online to build my “presence” and personal brand (sometimes in a bad way), but it’s all been completely unfocused until very recently. Par for the course when you’re a freelancer paying the bills. But fans have helped financed a TV series and movies - and that’s without the offer of getting to appear in them.

So let’s say I need $1M to finance a low-budget, full-length feature film as my “calling card” to get into the business. That means I need to find 1,000 people who will put up $1,000. What do you give them for that $1,000?

1. Production credit.
2. Credit on the studio’s website/ blog.
3. Visits to the set.
4. Appearances in the film, should they wish it and if they’re not a distraction.
5. A percentage of future studio revenue. (A filmmaker’s “calling card” film will unlikely make any money, even if it picks up a distribution deal.
6. A percentage of web revenue, based on earnings from ad-embedded pageviews at video sharing sites. (An experienced Hollywood filmmaker, Dov S-S Simens, wrote in an indie film mag that that taking a 90-minute feature film and splitting it up into 20 4.5-minute clips with embedded ads paying $25 per 1000 views - i.e., $25 CPM - could generate $250,000 if you can get 500,000 views for each part. That’s not a break-even point, but it’s extra revenue.)
7. A free media package.
8. A chance to meet the actors.
9. Access to dailies.
10. Copies of the final product.
11. A chance to attend the premiere, or showings at festivals - which could lead to meeting other celebrities. (Although it’d be difficult to accomodate all 1,000 producers.)
12. First chance at financing the next product. (This is either a good thing or a bad thing, depending on the relative success of the first product.)

Of course, I’m not going to wait until I have 1,000 producers. In the meantime, I have to produce visual content that proves my abilities. And I have to promote that content online at least until enough people have seen it to convince 1,000 to put up $1,000, with no guarantee of success. Not an easy task, so hopefully some of the other offerings in the list above make it worthwhile to each person. Or I can find 100 people willing to put up $10,000 each. Which is easier? That’s what I have to determine in the next two years. (Anyone want to help me with my $30,000 film school tuition? Six semesters at $5000 each, with 20 short films to produce in each of semesters 2-6. But I already have 60 short stories written in 2002 that will be rewritten as screenplays. You get a percentage of my Fractal Studios lifetime earnings.)

So, Are You Going to Play Too?

What about you? Is this something that interests you? Do you have a plan to accomplish it? Do you have the drive and stamina to see it through? Are you able to straddle the line between being an “artist” and promoting yourself. The latter is in fact difficult for most artists, and I’ve met and/or interviewed many hundreds over the years.