The growth-to-monetization parallel
Balancing audience expansion and revenue generation in a way that won't burn you our or drive you mad...there are plenty of other tasks for that.
Hi,
As business owners, we are always trying to grow and monetize at the same time. We think it’s the only logical choice for a business, but more often than not we end up standing still. Why is that?
To answer that question, I’d like to introduce you to the growth-to-monetization parallel.I’d like to introduce you to the growth-to-monetization parallel.
On one end of this parallel, you have growth. In order to grow your audience, you need to invest in marketing to get in front of them and reduce friction to hook them. Basically, you have to give stuff away to lots of people for free by spending lots of money.
At the other end of this spectrum, you are trying to maximize your money in the bank to keep your business running and pay your bills, which means paywalling content, raising prices, and severely increasing friction.
These two actions consume most business actions, and it’s nearly impossible for a small business to do both at the same time. Each of us lies somewhere on the growth to monetization parallel, but it’s a bit nebulous where for most of us, most of the time.
I’ll bet you have never thought about this spectrum before. Heck, I only just realized it existed and this is as close to a job as I have in my life.
…which isn’t great, since if you don’t know how to judge both your current position and where you’d like to be, you will likely to make decisions against your best interests, and thus get frustrated and stay broke.
Once you understand this parallel and give context to it, though, hopefully you can make better decisions in your business moving forward.
Growth Phase
For most entrepreneurs, their initial focus is on building an audience. However, this growth-focused approach comes with financial sacrifices. In fact, you are almost always undercutting your money situation in a growth phase because you’re almost always giving at least some portion of your work for free.
However, this problem exists even with entrepreneurs who build a big, engaged audience. Sometimes, successful people are actually struggling financially even harder than newbies under the weight of all their expenses. Many leverage all their time and resources to maintain audience growth, leaving little room for income-generating activities. The illusion of success, driven by high follower counts or large subscriber lists, can mask brutal (and unstable) financial instability.
Bloggers and social media influencers who amass large followings often face this challenge. While they may have millions of subscribers or followers, the income generated from ads, affiliate marketing, or donations may not be enough to sustain them. The pressure to continually produce free content to maintain and grow their audience can lead to burnout, especially when the financial returns are minimal.
Meanwhile, if they stop hustling, so does the growth of their channel, which puts them in a very dangerous doom loop, especially as they try to change their content to appeal to a broader audience.
Monetization Phase
After a business owner builds their audience, their focus eventually shifts from growth to monetization—finding ways to generate income from the audience they’ve cultivated. This might involve introducing paid content, offering services like editing or coaching, launching a Patreon, or selling books directly to their audience.
Money is great. I especially like the act of exchanging it for things we need and want, but most have trouble simply asking people to financial support their work. Even if an entrepreneur grows comfortable with selling their work, it’s a tricky balance to maintain, especially when many people are only in your audience for the free stuff.
Plus, nothing kills growth like monetization. I run a lot of launch events, and I always lose the most subscribers when I’m promoting one, which means I have to make a concerted effort to grow my audience and nurture them once the event is done.
On the other side, if you’re giving away too much for free, you are undercutting your own revenue. So, you end up with a volatile and precarious balancing act that you’re trying to walk at all times, but especially during a monetization event.
The Balancing Act
Successfully navigating the growth-to-monetization parallel as an entrepreneur involves finding the right balance between expanding your audience and generating revenue. Here are some strategies to consider:
Time-limited sales: Introduce sales for a limited time to your audience, like through Kickstarter or an event, which allows you to focus on monetization for a little while and then return to your regular content. PBS pledge drives are famous for this strategy. The problem with this is that you will lose a lot of subscribers as people turn away from your work as you try to sell it.
Market Segmentation: Offer different levels of access or content to your audience. For example, you can provide free blog posts while reserving in-depth articles, exclusive stories, or behind-the-scenes content for paying subscribers.
Maintaining Customer Trust: It’s essential to ensure that monetization efforts don’t alienate your customers. Be transparent about why you’re introducing paid content and ensure that it complements, rather than replaces, the free content your audience has come to love.
Set a goal: A lot of creators set a subscriber goal before they monetize, and then make a big event out of it, so it’s part of a celebration. Sales events should be celebrations both of the work and of the audience that helped build it.
Sustainability and Burnout Prevention: It’s crucial to strike a balance that allows you to sustain both your audience growth and your income over the long term. Avoid the temptation to continually increase free content production without adequate compensation, as this can lead to burnout.
The growth-to-monetization parallel is not just a one-time challenge but a continuous, fluid process that ebbs and flows throughout your career.
Sustainability is key in this journey. Entrepreneurs need to recognize that growth and monetization are not distinct phases but intertwined elements of their ongoing career. The balance between expanding an audience and monetizing that growth is something that evolves over time, requiring constant adjustment and adaptation.
Without sustainable patterns for both growth and monetization, we are all at risk of burning out all the time.
An example proving my point
We’ve talked a lot about how growth and monetization are diametrically opposed to each other, and here is a great example.
I started a recent promotion with almost 100 more subscribers but 33 fewer paid subscribers than I added by the end.
During the promotion, I sent three emails to my list offering a paid membership to The Author Stack for 83% off, or $13.60/yr. Those emails converted a small number of readers into paid members, but it also caused 3x more of them to unsubscribe.
When you grow, it normally takes giving something to find the right people. Meanwhile, monetization means asking something from those people, which naturally turns away people who don’t resonate with your message.
In general, people are very okay with taking from you, but get turned off when you ask anything of them. It doesn’t matter who you are or how long you’ve been doing this work, that is always true.
Everything you do exists on this monetization to growth parallel, and we’re always triangulating ourselves on it. I preference thinking about this in “seasons”, where I launch a thing, and then build new subscribers for the next thing.
How my business works
I don’t think that I’m a great model, but I have built a happy medium that works for me (even if it doesn’t work for some of you). I found it best to smack people with a sale right after joining, so when somebody joins my email list, they are offered two different things across a two week period.
The first is a course bundle including one of my most powerful courses, plus three months access to my paid membership for $97. They only have 24 hours to take that offer or it’s gone forever.
A couple days later, I offer a discount to join my membership for $20/yr. This is lowest than I offer it, with two exceptions, throughout the year. One exception is during our bi-annual pay-what-you-can-afford event. Notice this is not a pay-what-you-want event. That’s very important to me because it puts the onus on them to not abuse the system, not me.
If they make it through that gauntlet, they are probably okay with me selling to them.
The other exception are targeted 24-hour offers that pop up throughout the year that reward people for acting quickly. You might be able to find a $5/yr offer if you keep a watchful eye. Though this is a huge discount, I benefit from training people to look for my emails first and open them quickly.
Then, I augment that with our Kickstarter, retailer, and other launches throughout the year. Last year I was part of 10 campaigns. This year I think it will be 8, but I’m very often running a campaign, and I always let people opt out of hearing about it and still stay subscribed to the rest of my list. People can also unsubscribe from my email lists and still stay subscribed to my Substack, though not the other way around. If they unsubscribe here, they unsubscribe everywhere.
That handles the monetization side, but I also have the growth side working (most of the time at least).
It’s a lot, but I believe that you can ask a lot from your audience, but only if you’re willing to give a lot in return, so that is what I do. We also host monthly expert calls, virtual conference, and other events for our audience for free throughout the year.
That gives me pretty decent organic growth, but I also advertise and attend conferences to find even more people.
The growth-to-monetization parallel is a critical balancing act that can determine the success of your writing careers. While growing an audience is essential, it’s equally important to plan for sustainable monetization strategies that ensure financial stability.
The key is to maintain a balance that supports long-term success, understanding that this journey is ongoing and requires continual adjustments to remain sustainable.
What do you think?
Where are you on this spectrum?
How are you handling burnout?
Let us know in the comments.
It's such a tricky balance.
Something I'm realizing is that if I spend my growth activities on platforms full of free content, then I get a lot of people who only want free content. For example, when I join a group promo on Bookfunnel, then I end up with a bunch of new subscribers who prefer reading free books they found on Bookfunnel rather than paying for books.
An approach I'm trying to explore is growth activities that attract people who are willing to pay for content. Book fairs are great for this, if they have a lot of traffic. So are people reached through Kickstarter's organic discover tools during a Kickstarter campaign.
What about the phase of creating / doing the work though? Like, right now I've received money from Kickstarter, so I'm fulfilling, and I've received money from an editing client (who will pay me more), so I'm also editing. I'm not actively doing work that grows my audience (unless fulfilling their orders so they return again is growth?) nor seeking out additional money. And what about when I'm on a writing binge and barely doing anything but that?