Change Catalyst with Shanna Mann: Strategy & Support for Sane Self-Employment

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This is the Only Way Maker Businesses Can Scale

[In the last post I alluded to the difficulties Makers have in scaling their businesses, but I thought the concept deserved its own post.]

You need a teeny tiny amount of math for this post. Not a ton, not even any numbers. Just a concept.

Linear growth= Growth along one metric.
Exponential growth= Growth along two metrics creates a multiplicative effect.

Linear Growth (How Makers Scale) Exponential Growth (How Makers Scale)

The hockey-stick graph you sometimes see when people share their “Here’s how I made it” posts? Unlikely to happen for Makers. Let me show you why.

Usually Makers are constrained on 2 out of 3 of these fronts.

This is the Only Way Maker Businesses Can Scale

Why Scaling is So Hard For Maker Businesses

Allow me to quote myself:

“Could you 3x your productivity? Or hire someone? Could you 3x your prices? No? Okay, so what about distribution? Is there any way to duplicate whatever it is you made so that it can get into the hands of 3x more people?”

Productivity

Productivity is the hardest constraint Makers come up against. Whether you’re writing freelance articles or sewing baby bibs, nothing in the world is going to triple your output unless you make some SERIOUS changes to your business model. The most common change is to hire someone to do the simpler tasks that you do, like researching places to pitch or cutting out fabric.

Still your productivity gains will be minor. If you are twice as productive as before, you’re doing VERY well, and in many cases, a 20% increase is about as much as can be expected from a part-time helper.

Example: Writers cannot launch more than 1 book a year (usually), and they cannot charge more than $15 per book. So their one avenue of growth is audience. There is a small multiplying effect as the develop a back list because new fans will frequently buy multiple books, but that’s the only multiplier available. Exponential growth comes from multipliers.

Price

Price is the next most common. It’s not that one CAN’T break through a price ceiling, just that it tends to require better than average marketing, or a high demand, or something else that makes customers less price sensitive.

2

Raising prices is a damned-if-you-do, damned-if-you-don’t situation. Almost everyone can raise their prices SOME– say, between 10 and 50%. This can give you the breathing room that lets you hire that one part-time helper, to buy some needed tools, to attend a couple more trade shows.

However, at some point along the price spectrum, you move from one audience to another. These audiences have different expectations, different concerns, and hang out in difference places. You could potentially do quite well with this new crowd, but you have to learn their foibles first. And that takes time, attention, and usually some monetary investment.

Example: If you build heirloom-quality rocking chairs, you are limited on the amount you can produce– even with a helper or fancier tools, you’re only going to make a few more chairs per year, and it will typically be a little better than a break-even effort for at least several years. Getting your rocking chairs in front of more eyeballs only facilitates the single avenue you have for growth — raising your prices by increasing demand. Yes, you’re raising your prices, but the only reason you can is because you have many more people who want rocking chairs than there are rocking chairs to be had. This only works if you can offer something relatively unique (or at least seems unique).

Distribution

Finally, we have Distribution. There are a few ways to think about distribution, depending on your business model. If you’re an artist, putting your prints up on Fine Art America is one way to (potentially) reach many more people than you ever could personally. I’ve seen artists go temporarily viral on social media, resulting in a surge of traffic, some sales, and an increase in name recognition. But that’s pretty hard to orchestrate.

You can also think of distribution as morphing your offerings in order to change the target audience. People who get into Patreon know that they have to offer different kinds of rewards to people who want to give $1-20/mo — they have to be more creative than just ‘Oh, buy my book for $22; link below!’ But, there are far more opportunities for a ‘sale’ when you tap into the Patreon network– a community chock full of people who want to give back to creators.

3

The bottom line about distribution is that you’re tapping into some existing network to capture more sales than you personally can drum up on your own. It’s still not an easy growth angle– such networks are crowded, noisy, and continually chasing the next novelty, but of the three, it’s the one with the highest growth ceiling.

Example: Distribution is a growth avenue that is useful to everyone, from getting your podcast onto an ad network to putting your webcomic on Patreon. However, that breeds heavy competition from other people in your shoes. To separate yourself from the crowd, it’s important to be able to demonstrate that you add value to the network– networks are hard to create, so the people who build them want to make sure they’re well-paid for the effort. Pinterest rewards pinners, Patreon rewards engaged Creators; every community first rewards its most engaging and helpful members. Otherwise, expect to have to make use of paid distribution channels like Facebook ads.

Playing With Combinations

Normally in business you are well-advised to try one thing, see how it works, then try another, and compare. It’s slow, but at least you can tell what’s effective and what isn’t.

However, that’s not something I would recommend for Makers trying to claw their way into viability.

4

First, I would recommend you completely close your ears to any suggestion that You Will Absolutely Die if You Are Not on [Social Media Site of the Month] because that’s just drivel. But do remember that novelty in marketing is very effective. And you are a creative, after all. This is something you could be pretty good at, if you wanted to be.

And the way to do this is to pick a small handful of marketing tactics and growth avenues you think would be sorta neat, or would be interesting to learn all about, or are brain-dead obvious (like raising prices). Then do those things ENTHUSIASTICALLY.

(The trick about marketing is that it’s so much easier to be consistent about doing it if you can find a way to enjoy it.)

5

Do those things for at least three months. Then take a look at how they are working. Kick the stuff that isn’t working off your to-do list. Probably keep the stuff that is working (as long as you aren’t bored of it.) Then add a couple more things that have piqued your curiosity in the interim.

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