Consider the components to a creative business (or any business, really), and here’s what you get:
Who, What, Why, How, and How Much.
- Who is your (ideal) customer or client.
- What is the product or service you’re creating or providing.
- How is a combination of your resources as well as your business plan (as in: how are you going to do the work, and how are you going to connect your product with your customer).
- How Much relates to the value you’re providing to your customer as well as the price you’re charging them.
- Why relates to the motivation, vision, and values of the work you do.
Two sidebars before we get started:
- This doesn’t just have to relate to indie entrepreneurs and start-up CEOs. It can relate to in-house designers, freelance developers, and more. Say you work for a design firm or a recording studio. Your “who” is your boss — your company. Your “How Much” is your salary.
- I used to think you had to start with why. But as I’ve been reading through Cal Newport’s book, I’m realizing that most of us start with what. In fact, Newport argues that you starting with why is actually bad advice. In short, it’s in the process of doing the work that we get much-needed experience and clarity about the sort of work we want to keep on doing, and in that process we are able to build up the relationships and resources we need in order to do the work that matters most to us.
That said, let’s break down the Who, What, Why, and How Much a bit more. I’m going to use The Focus Course as my example.
- Who: My ideal customer for the Focus Course is someone who is eager to learn, do their best creative work, and has energy to move the needle forward in their life. Though I created the course so just about anyone can work through the 40 days of assignments, the person I most have in mind is someone who already has an internal drive to make changes in their life.
What: A self-guided, 40-day course that gives you insight and clarity into your values, goals, stress points, and distractions and then gives you an action plan for doing something about it all.
How: I built the course itself by writing every day, working with a pilot group to test and review the contents, and then working with a designer and developer to create the website that hosts the content.
How much: The price of the Focus Course is $249; the value, though it varies from person to person, is (I hope) much, much more than that.
Why: I’m someone who is naturally spontaneous, distracted, and seems to always have more ideas than time. In my early 20s I realized that I needed to get a grip on how I spent my time and energy or else I’d never make meaningful progress on the things that were most important to me. The ideas and tactics of The Focus Course are things that I myself have used and taught for more than a decade and I wanted to create a fun and even better way way to clearly teach these things to others.
Here’s a sketch I made (don’t laugh) to show how these elements interrelate with one another to form the components of a sustainable business.
As you can see in the chart above, when your product and your customer connect, then value is created and exchanged. It’s at this intersection that your business model exists. You have something of value to offer, and others are willing to pay for it.
Additionally, if your product or service is something that aligns with your own personal values and goals, then when you sell to your customer you’re also giving expression to your vision.
There is immense satisfaction in providing something of value to someone else in such a manner that also sustains the ongoing providing of more value. Consider the converse: when our work and actions don’t align with our vision and values, it can be a huge drain on our morale and motivation.
This is what a sustainable business model is all about: doing work you’re proud of, providing value to others, and having a means to continue doing that work. It’s what Walt Disney meant when he famously said, “We don’t make movies so we can make money; we make money so we can make more movies.”
The money serves a two-fold purpose. For one, it gives some measure of validation to our work because money is a neutral indicator of value. If nobody (as in, literally not one person) is willing to pay for what it is you’re offering, then it’s probably not valuable enough (at least not yet). When that’s the case, simply go back to the drawing board to find a different expression of your creative idea or find a different market (or maybe both).
For his book, So Good They Can’t ignore You, Cal Newport interviewed successful entrepreneur, Derek Sivers. Newport asked Sivers about what it was that led to his entrepreneurial success. Derek replied that he has a principle about money that overrides his other rules: ”Do what people are willing to pay for,” he said. “Money is a neutral indicator of value. By aiming to make money, you’re aiming to be valuable.”
Secondly, money allows us to buy food, pay the bills, and acquire the tools and resources we need in order to keep making art and doing work.
The whole goal of Walt Disney’s movie making business model was to sustain their creative outlet of animating and producing films. It wasn’t about the money for money’s sake — it was about doing work they loved and enriching the lives of their audience. And by selling their work they could keep on making more movies.
For most makers, it’s not about the money. It’s about the creative work. There is (most days) joy in the journey and satisfaction in being part of a creative community. And there is the dream of adding value and enriching other people’s lives.
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Again, from So Good They Can’t Ignore You, Newport writes that “people who feel like their careers truly matter are more satisfied with their working lives, and they’re also more resistant to the strain of hard work.”
While there are many dynamics which contribute to the feeling of a career that matters, one of them is the realization that the work you do is valuable to others. As Sivers said, by aiming to make money, you’re aiming to be valuable.
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On celebrating progress and why the recognition of making meaningful progress on a regular basis is also critical to the feeling that your career matters.
If you’re waiting for finances before moving forward with an idea, the real issue may be Fear, Not Money.
Balancing the margins between cost, price, and value is an art. How do you increase value to the customer without dramatically increasing your cost nor decreasing your price?