Why Selling Courses is a Bad Idea: The Best Business Model for 2024

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In the ever-evolving world of online entrepreneurship, it’s easy to get caught up in the hype of the latest “get-rich-quick” schemes. One of the most popular trends in recent years has been the creation and selling of digital courses. But what if I told you that this might not be the golden ticket to success you’ve been led to believe?

As someone who’s been in the trenches of entrepreneurship and has helped countless individuals achieve their first six and seven figures, I’m here to shed light on why selling courses might be holding you back and introduce you to a business model that could truly transform your financial future in 2024 and beyond.

The Digital Course Myth: Unmasking the Truth

Let’s face it: the internet is saturated with self-proclaimed gurus touting their “foolproof” digital courses as the key to unlocking untold riches. But here’s the harsh reality — how many people do you actually know who are making a substantial income from selling courses?

Sure, you might be able to name a handful of big names like Justin Welsh or Dan Koe, but these are individuals with millions of followers. They’re the exception, not the rule. The truth is, for the average entrepreneur starting out, selling courses is an uphill battle that often leads to frustration and disappointment.

Understanding Business Models: A Journey Through the Revenue Landscape

To truly grasp why selling courses might not be the best path forward, we need to take a step back and look at the bigger picture of business models. Let’s break it down:

1. Full-time Employment: The easiest “sale” you’ll ever make is selling yourself to an employer. You only need one customer (your employer), and you’re trading your time for a steady paycheck.
2. Freelancing: The next step up is freelancing, where you’re still trading time for money but with more flexibility and potentially higher earnings.
3. Product-ized Consulting: This is where things get interesting. Product-ized consulting involves packaging your expertise into a specific, repeatable service that solves a particular problem for a defined audience.
4. Digital Products (including courses): While seemingly attractive due to their “passive income” potential, digital products require a much larger customer base to be profitable.
5. B2B SaaS: Software-as-a-Service businesses can be highly lucrative but require significant upfront investment and face stiff competition.
6. Social Media Networks: Perhaps the most challenging business model to succeed in, competing with established giants like Facebook or LinkedIn.

The key takeaway? The further down this list you go, the more customers (or users) you need to acquire to make your business profitable. And therein lies the problem with courses — they require a massive audience to generate substantial income.

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The Journey of Successful Entrepreneurs: A Case Study

To illustrate this point, let’s look at the journey of Alex Hormozi, a highly successful entrepreneur known for his business acumen and marketing prowess.

1. Full-time Employment: Alex started his career in management consulting.
2. Freelancing: He began offering fitness advice, initially for charity.
3. Business Ownership: Alex then opened and scaled to six gyms.
4. Product-ized Consulting: He developed a system for launching and running successful gyms.
5. Info Product: Only after mastering the previous steps did Alex create Gym Launch, his highly successful course.
6. Software and Investments: With a solid foundation and substantial capital, Alex ventured into software Acquisition.com and eventually social media platforms School.com.

The key lesson here? Alex didn’t start with courses. He built his empire step by step, gaining invaluable experience and a deep understanding of his market along the way.

Product-ized Consulting: The Golden Ticket

So, what’s the business model you should be focusing on in 2024? Product-ized consulting. Here’s why:

1. Lower barrier to entry: You can start with your existing skills and expertise.
2. Easier to sell: You’re solving a specific problem for a defined audience.
3. Higher profit margins: You’re not competing in a race to the bottom on price.
4. Scalable: As you refine your processes, you can increase efficiency and profitability.
5. Valuable experience: The skills you develop will serve you well in any future business ventures.

Why Courses and Software Aren’t the Answer (Yet)

While courses and software businesses can be extremely lucrative, they’re not ideal starting points for most entrepreneurs. Here’s why:

1. Requires a large audience: To make significant money from courses, you need a massive following.
2. High competition: You’re competing against established brands and personalities.
3. Difficult to stand out: With so many courses available, it’s hard to differentiate yourself.
4. Requires substantial upfront investment: Developing quality software is expensive and time-consuming.
5. Venture capital complications: Scaling a software business often requires outside funding, which comes with its own set of challenges.

The Dollar-to-Follower Ratio: A Reality Check

Let’s crunch some numbers to put this into perspective. Consider these examples:

1. Justin Welsh: With 1.1 million followers and an estimated annual income of $2.5 million, Justin makes about $2.27 per follower per year.
2. Matthew Laav (myself): With 46,000 followers and an annual revenue of $1.5 million from my product-ized consulting business, I’m generating $32 per follower per year.
3. Anonymous Entrepreneur: A colleague with 85,000 followers is making $20 million annually, which translates to a staggering $235 per follower per year.

The lesson? It’s not about the size of your audience, but how effectively you’re monetizing it. Product-ized consulting allows you to generate higher revenue with a smaller, more targeted audience.

Steps to Building a Successful Product-ized Consulting Business

Ready to dive into the world of product-ized consulting? Here’s a roadmap to get you started:

1. Identify your expertise: What skills or knowledge do you have that others would pay for?
2. Define your target market: Who can benefit most from your expertise?
3. Develop a specific, repeatable service: Create a step-by-step process that delivers consistent results.
4. Price for profit: Don’t undervalue your services. Remember, you’re solving a specific problem.
5. Streamline your operations: Use tools and systems to increase efficiency and scalability.
6. Market effectively: Focus on platforms where your ideal clients spend time (LinkedIn is often a great choice for B2B services).
7. Deliver exceptional results: Happy clients lead to referrals and testimonials, fueling further growth.

Overcoming Common Objections

You might be thinking, “But what about scalability?” or “Won’t I hit a ceiling with product-ized consulting?” Let’s address these concerns:

1. Scalability: As you refine your processes, you can train team members to deliver your service, allowing you to scale beyond your personal capacity.
2. Market saturation: The beauty of product-ized consulting is that you can always pivot to new niches or problems as markets evolve.
3. Personal brand: Building a successful product-ized consulting business naturally builds your personal brand, opening doors for future opportunities.
4. Future expansion: The skills and capital you gain from product-ized consulting can fuel future ventures, including courses or software businesses if you choose to pursue them.

Wrapping Up: Your Path to Entrepreneurial Success

In conclusion, while selling courses might seem like an attractive option, it’s often not the best path for aspiring entrepreneurs. Instead, consider starting with product-ized consulting. It offers a lower barrier to entry, higher profit potential, and valuable experience that will serve you well in any future business endeavors.

Remember, the most successful entrepreneurs don’t just follow trends — they create sustainable, profitable businesses that solve real problems for real people. By focusing on product-ized consulting, you’re positioning yourself for long-term success in the ever-changing landscape of online business.

So, are you ready to ditch the course creation frenzy and build a truly profitable business in 2024? The world of product-ized consulting awaits, and the potential for success is limitless. Your entrepreneurial journey starts now!