3 builders who never spoke to each other

Choose the category for its margin, not your passion

Buyers price a thing by the box it arrives in, so an ebook stays cheap however much work went into it while the same material as video carries several times the price. Pick formats and markets where demand is strong, competent suppliers are scarce and one unit of work can be sold repeatedly. Margin, not enthusiasm, is the selection criterion.

The method

1. 01

   Choose business models with high margins and low operational complexity, and treat margin as the selection criterion rather than passion for the category.

2. 02

   Recognise that the product category, not your effort, sets the price buyers will accept, and pick categories with a better return on the work.

3. 03

   Target markets with strong demand and few competent suppliers, because commodity products and services cannot command a price.

4. 04

   Prefer a video course to a book: writing carries far more upfront work, gets picked apart in reviews, and is priced well below the value it delivers.

5. 05

   A self-serve tool that collapses a service's price to a monthly subscription will take the market if it delivers the outcome buyers wanted, whatever practitioners think of the quality.

What it returned

• 80%

  Justin notes SaaS margins can run 80% or higher, and contrasts that with the skate and snowboard shop he opened in his early twenties, where a deck bought at $32 sold for $50 alongside inventory, staffing, theft and cash-flow risk.

• $0.99

  Justin notes ebooks on Amazon are expected to sit between $0.99 and $9.99 no matter how much work goes into them.

• $8

  Squarespace replaced hiring a web developer and separate hosting, which cost thousands, with self-serve plans starting at $8/month, then applied the same move to logo design.

• Justin notes a handful of one-star reviews can damage a book author's credibility, while he added five to eight new lessons to his course after relaunching it.

Sources

• ⭐️ Bet on Trends – Jakob GreenfeldJakob Greenfeld · jakobgreenfeld.com · ⭐️ Bet on Trends · 2020-07-24
• Feeling threatenedJustin Jackson · justinjackson.ca · Feeling threatened · undated
• Good businesses have marginJustin Jackson · justinjackson.ca · Optimize for margin · undated
• How I make my moneyJustin Jackson · justinjackson.ca · Online courses > books · undated
• Pricing experiment resultsJustin Jackson · justinjackson.ca · Pricing experiment results · undated
• Creating a New Business Model for CartoonistsGreg Kogan · gkogan.co · 2014-03-01