Episode 098 Part 1 – Russell Nohelty

Russell Nohelty 0:01
You’ll know at least that your idea works and who to sell it to, which is the real two most important things business is nothing but product and an audience. So, products, audience, and product. Once you have the profit, you can really put it into marketing to build more of an audience to build more products to get more profit to spend getting money, you know, and that’s, that’s how to generate and start things from a point of nothing.

Richard Matthews 0:30
…

Richard Matthews 1:34
Hello and welcome back to The HERO Show. My name is Richard Matthews and I’m live on the line today with Russell Nohelty. Russell, you there?

Russell Nohelty 1:40
I am. Thank you for having me.

Richard Matthews 1:42
Awesome. Glad to have you here. Russell is coming to us from Los Angeles. And for those of you who don’t know he is a USA Today bestselling author, publisher, and consultant. Runs the small press Wannabe Press and The Complete Creative Academy which helps creatives build better businesses. Now, what I want to start off with is what it is that you’re actually known for what you’ve done before we got on recording, tell me some of the books and the Kickstarter campaigns that you were running. So tell us a little bit about what you do and how you do it for our audience.

Russell Nohelty 2:15
Sure. So I‘m best known for my work on Kickstarter and in comics. So the most popular singular line that we’ve ever put out is called Cthulhu, it’s hard to spell. It is two books, 70 stories, over 70 stories, and over 140 creators telling stories set in the Lovecraft universe about the Gods and Monsters themselves. Most of my work is about magic mythology and monsters. So that’s kind of like the brand that I that I have like all of my stuff has a lot of Lovecraft mythology or Greek-Roman-Christian mythology, Norse mythology, Egyptian mythology. So that is the book that I’m best known for. But the thing that I’m best known for as a creator, not an editor because I edit that book. I’m not the creator of it, is The Godsverse Chronicles. So The Godsverse Chronicles is two graphic novels and four novels that take place over 13,000 years and sort of tell the story of like if all gods were real, but they were just kind of dicks. So it’s women rising up and taking control of their destiny, fighting against the gods, and fighting against what fate has in store for them. One of the books is called Katrina Hates The Dead. That book broke my career open. And then Pixie Dust really sorts of solidified it that I was a known commodity and at least the independent creator space. The most beloved book that I’ve ever done is sitting back there as well though it’s called Ichabod Jones Monster Hunter. It has the most devoted fan base. It’s about a mental patient that escapes from an asylum and becomes a monster hunter during the apocalypse, but doesn’t know if he’s killing monsters, humans. It’s all in his head the whole time. So we have now done 10 issues. Five of them are out officially, we did a kickstarter, and we included the sixth in an add-on last year. But officially, there’s this graphic novel and then a fifth issue out. And we had such a huge following of the book that when I went to that I went to a … , so it’s supposed to go out of print last year, people rose up in revolt, and they said that they demanded more. And so I told them that if we could do a Kickstarter to reprint the first volume and pay for the fifth issue, I would then continue Ichabod through at least three volumes. And so we raised silver $16,000 last year for that book and it is back in print. And we are about a little less than halfway done with the third volume with the second volume coming to Kickstarter in September.

Richard Matthews 5:01
Nice. So you have you mentioned before we got on the call, you Kickstarter a lot of your projects and raise a lot of money for your books. And I assume that’s, that’s a very different model than going to the traditional publishing route. You talk a little bit about that and sort of like your success in that space.

Russell Nohelty 5:15
Sure. So … is direct to consumer company. We don’t do any bookstores. I mean, I won’t say any we do some bookstores, but only on a one to one basis. We don’t deal with Diamond or Ingram or anything except for a print on demand stuff comes from Ingram and then we’re on Amazon and such or ebooks on Amazon. But as far as our hardcovers and our big print run, especially with comics. And we are direct to consumer which means that we do all of ourselves in person at conventions, on Kickstarter, and on our website. So it is a much different model than the customer being the bookstore. The customer is the actual customer. And one of the ways that we do that is through Kickstarter. So on Kickstarter, we raise funds to preorder our books and print them and hopefully pay for production costs. And then the books take about three months to manufacture, and then they come to me and I ship them out and I start the process all over again. But every book gets shipped by me or someone on my team. One series, we did have another company doing the shipping, but generally, it’s done all by me. My team helps somewhat, but really, it’s like 95% me. And we’ve built a nice little audience that really loves our books and sort of the weird, weird, fantasy thriller-y kind of stuff that we do. But it’s really gratifying because every time that someone buys a book, we know that it’s already been a sale. When you’re selling to bookstores, you know, they are buying on speculation that they can sell it, but for me every time I make a sale I know that that that that’s going to be a book that is actually going into someone’s hand and hopefully they’re going to read it.

Richard Matthews 7:07
That’s really awesome. So so that’s the one aspect of your business is the publishing and the writing and the Kickstarter stuff. And then you also have The Creative Academy, which teaches other creatives how to do sort of similar things that you do, or what is what, tell me a little about The Creative Academy?

Russell Nohelty 7:22
Yeah, so The Complete Creative is a nonfiction arm of Wannabe Press. So for years, people have been asking me what – how to build their own careers. And I’ve been keeping a blog and a podcast and interviewing people and sharing my thoughts about the process. And it really kind of solidified for me after the release of my book, How to Build Your Creative Career, which launched The Complete Creative before then I was doing a kind of desperately I was doing phone calls with people and doing talks and there was no real place to sort of be the hub of my creative information. And info sort of information about how to build your career. So at the end of 2017, I took that book, How to Build Your Creative Career, and a bunch of my old blog posts and my old podcast, The Business of Art. And I opened The Complete Creative, which is a – has I believe nine courses now on Kickstarter and writing novels and a bunch of free courses and a bunch of epic blog posts about building your audience and Kickstarter and running virtual summits. And basically all of the stuff that I’ve learned in my career, it’s sort of an unbroken chain of 10 years of my creative journey, which is meant to help people build their own career and about 90 to 95 percent of everything is free. I have free audience building courses, I have free business-building courses, free Kickstarter courses, and then I do one on one consulting and I do a paid courses about audience building and Facebook ads and such for people that are that like really want to take their career to the next level quickly.

Richard Matthews 9:06
Awesome. So if you don’t mind my asking what is your business of revenue mix look like between The Complete Creative and Wannabe Press? Is it like 50/50? Or is one of them bigger than the other?

Russell Nohelty 9:16
It really is about 50/50. It’s crazy because The Complete Creative is much smaller than Wannabe Press. So even though our email list of Wannabe Press is about 25,000 people, it does the same amount of business as The Complete Creative which has an email list, well now about 2500 people, but last year, it’s about 1500 people. And really, that is done by a list of most of that money is made by a list of about 300 people if you can believe it. 300-300 … Who actually buy

Richard Matthews 9:45
… like what you’re doing.

Russell Nohelty 9:46
Yeah, who spent hundreds of thousands of dollars on our marketing services every year. So –

Richard Matthews 9:51
Yeah, you can build a huge business with a thousand true fans. You’re almost there.

Russell Nohelty 9:55
Yeah, it’s really interesting because I mean not to go down a rabbit hole of … should go down a rabbit hole of this thousand true fans thing because like I have a big problem with it.

Richard Matthews 10:08
Absolutely. Tell me about it.

Russell Nohelty 10:10
Okay, so the thing that most people get away I don’t think it’s what Kevin Kelley was thinking of what he wrote this but the what most people getaway is from that is, oh, if I just need a thousand people, then that’s going to be my thousand true fans but in reality, you have to meet so many 10s of thousands of people to get that thousand true fans that you end up building quite a big business to find a thousand true fans. Now, is that always the case? It’s not always the case. But you know, if I just did this, I just released an article on my website. I think last week or maybe coming next week but it was about – by the time this goes live I’m sure it will be there – but it was about how many people you have to meet to have a thousand true fans. So this is specifically about comics and the comics industry is about 137 the size of the overall book industry. And in so you can assume that one of every 37 people that you meet who likes books, is going to be a fan of comics. Theoretically, like that’s like if you have a big enough pool, like if you have a bell curve distribution, then every 37 you meet who are book fans are also comic book fans. And then, but that’s not everybody. So you have to then say, Okay, how many people in the country or in the world are our book fans compared to the overall amount of people and so doing some light digging on Facebook Business Manager, there are about 600 million people who, who 620 or 630 it was just about a third of the overall Facebook audience likes reading books or some activity related to novels. So, you’re looking at about one in three people you meet are going to like books. And one of every 37 of those are going to like comics, which means you pretty much have to look at to have to talk to or reach out to 3.7 million people to find a thousand true fans now you – we’re not like – that’s what targeting is all about. Right? So you’re targeting so you don’t have to just literally contact every single human being in the entire country. You can actually like hone in on just comic book fans, you can go to conventions, you can buy ads in places that that that are specifically tailored to those people. But generally, if you just walked out and threw a rock one in 30 times you would hit a comic book fan, and one in every

Richard Matthews 12:49
Or one in three times. You hit a book fan –

Russell Nohelty 12:51
Yeah, book fan and then one every hundred times is a comic book fan. Yeah, so it’s not just as easy as –

Richard Matthews 12:58
… before you hit 120 people with a rock though.

Russell Nohelty 13:02
Right? Exactly, you would definitely be in jail there and we don’t want to send you to jail. But that’s, that’s sort of, you know, so I’ve gone to hundreds of conventions. I’ve done hundreds of I’ve done dozens, I’ve done almost a dozen Kickstarters. I’ve released tons of books. I’ve met just – I’ve given away 10s of thousands of copies of my book. And now I’m sort of in a place where like, I feel like we’re like I can move to the next level and like really have those like thousand true fans or, or a bunch of fans or whoever many it is that will buy my stuff religiously … but that’s very, like that took 10 years …

Richard Matthews 13:42
One of the things. One of the things we talk about all the time on this show is that people vastly overestimate what they can accomplish in a year and vastly underestimate what they can accomplish in 10. If you’ll consistently put work in over that time period, and yeah, your point’s well taken right. That you know a thousand true fans is probably exactly that, you’re looking for those people inside of the huge realm of people that are your potential audience to find people that actually love you and connect with you. And it’s something that we talked about pretty regularly with, with lots of business owners and my business is like your, your, you know, what, what’s the way to say this? When I work with clients, a lot of times clients are like, I have a problem with competition, right? But this competition is like they’d offer the same thing that I do in a different way or whatever. And generally speaking, like they’re not your competition, because the – it’s your uniqueness, right, your story and your perspective that you bring to your business is going to connect with someone different than someone else, right? Someone who’s going to be a fan of you isn’t going to be a fan of someone else. Right. So like big names in the industry like you know, Tony Robbins, for instance, everyone knows Tony Robbins. Not everyone loves Tony Robbins style. Right?

Russell Nohelty 14:29
Right. … a great example of when I bring this to Stephen King more in my, like the creative industry. But Stephen King sells a few million books every time but like, literally there are billions of people who read books and he has access to all the people that read books pretty much in the entire world, like, at least have access to somehow to read Stephen King, and he’s only selling about one of every thousand literate people in the world.

Richard Matthews 15:27
Yeah, I don’t read Stephen King. I don’t like his style of novels.

Russell Nohelty 15:31
Right? I always talk about how I’m not a big fan of George RR Martin like I can respect the artistry of what he does, but it just does not resonate with me – and but there are millions of people who do resonate with him. And one thing that you’re going to find when you’re on your path to a thousand true fans is you’re going to find for everyone true fan, you’ll find three to five casual fans who will buy some of your stuff, and we’ll buy and we’ll try you out and maybe come back a year. And next year, and so it’s not just like, oh if I had just had 1000 people who buy my books, I’ll have 100,000 person business because you’re going to find casual fans, you’re going to find people who read your work once and don’t like it, you’re going to find so many other people when you’re on that path for every meeting that you have. So when I go to conventions, so we talked about we talked a little bit earlier before we were on camera about, about conventions and how I do about 20 to 30 conventions a year, we didn’t talk about is I do 10 or 12, at least panels every year at the shows. And I’d probably do about 20 speaking engagements across the year at the different conventions and places. And it’s very interesting because I’m a very intentionally specific personality. I have learned how to maximize the things that people like about me and downplay the things people don’t like so that when I’m on a podcast like this, or when I’m on a panel, the right person is going to have their ears perk up and say, Yes, I want to hear about that. But for every 10 people in that panel room, about if there are five people on a panel, roughly, two will go to me and two will go to the next person and the next person, the next person, the next person, because the way that we talk and the experiences that we have resonated with them, and, or it turned them completely off, and they resonated with somebody else because they are a different place on their journey. And they have a different personality of how to talk to somebody and every single person has had a different experience. You know, I am very unique in the fact that I‘m USA Today best-selling author, but most of my sales come from conventions and Kickstarter, which is wholly different than any other author that I’ve ever met really.

I’ve never even heard of anyone doing that other than well, you.

Yeah. And so, when the so it would take somebody who like had a very weird way to make money for them to really resonate with like the thing that I said or one thing that I talked to people about Kickstarter is, you know, I just did a talk for a Facebook group a couple of months ago about like how you can use Kickstarter to basically breakeven on your production costs for your novel. And then you can go into your novel launch, basically like with your book already paid for. And somebody came to me and said, You know, I thought you were crazy. But then I thought about it and I did it and I made the most I’ve ever made in a single day in any of my books. And we ended up breaking even on the cost of the book to produce and now I went into the launch what like all of this extra money that I could spend on marketing, knowing that people did like my book. And so that’s just a very odd way to think about the world and I understand that but I also understand that some people are going to see that 500 other gurus out there in the book space and there are a lot of – there are so many people who like to try and like talk to authors that like the thing that differentiates me is like the thing that, that that that that makes me unique and makes me someone that will attract that attracts people because it is different from the other 500 people who are all looking to the field or think are the same way. And it works. And someone who’s tried a bunch of other stuff will then theoretically, like my stuff and they’ll be willing to try my different works for them, they’ll keep following me down that rabbit hole. So I take a very – because speaking is an ancillary part of my business. I’m able to do it in a way that most people don’t think about or aren’t able to do it. Because I’m just able to speak whatever the heck I want to because my model is built upon: this is my success. You can literally go and objectively look at how successful I’ve been. And then if you like that, this is how I did it. And if you don’t want to do that same thing, I don’t really – I don’t care if it if you don’t want to do it that way, I’m just telling you by literal objective standards, that is how I did it. In fact, that is what I’ve done and this is how I’ve done it and if you’d like to do that same thing.

Richard Matthews 20:22
So if you don’t mind, I want to pick your brain just a little bit because my wife is not in the graphic novel space, but she has a whole series of children’s books that she’s written, right, and they were written for the toddler age group, the age group where parents read the little board books to the children. And she’s got a couple of that are a little higher that are more along the lines of like Seuss-y in style books and we have all the text for them, right? They’re all written and we’ve been looking at a what is our next step like we need to find an illustrator and we need to probably do something with a Kickstarter to get them, you know, published or what not to like, whatever the next step is, but like that’s not our world, right? And it sounds like it’s your world. What are some of like if someone was talking to you, what would your recommendations be for someone who’s in that situation?

Russell Nohelty 21:16
So you should definitely look at my friend Sheri Fink. Who does children’s books and she’s like, amazing at doing like self-published children’s books. But the main thing that you’re looking for, this goes for literally any book. So I’m going to make this as as as specific to you, but as broad as I possibly can.

Richard Matthews 21:35
Absolutely.

Russell Nohelty 21:36
Okay, so you have the text written. I’m going to go back and assume you don’t have the text written for a second and the thing that you’re going to do if whether you have the text written and no artist or you don’t have texts written and you’re just looking for is you can you go on Amazon, and you type in children’s books or fantasy or science fiction, or whatever your category is top 100 and you will look at the top 100 books that are in that category, you are specifically looking for tone and style of the art. But you need to know specifically what age group you’re looking for. Is it a read to a reader book, what you’re trying to get, what you’re trying to get out of that interaction, whether it’s what lesson you’re trying to do, or what you’re trying to teach them. This is really important for kids’ books and even first reader books is you need to know this is a book to read to somebody at x grade or x age level that will teach them y thing and this is what the whole series is about. And this is what we are, this is what we’re trying this is the theme we’re trying to tell. And these are the other people who are making this other thing now for you specifically is you’re looking for the art style that you are that that like most of these people are using that is attractive to you. So there are all sorts of art styles in kids’ books. There’s everything from Dr. Seuss to the Hungry Caterpillar to my friend Chris Heliopolis to Chris Grimley to like literally any art style, you can see is popular but you don’t know necessarily what happens – what’s popular right now? And what sort of trends are going on and so you need to do that. I mean, should have been doing it for maybe like the last year but let’s say you’re doing it now, we’ll need to do it for a couple of weeks every day because things change, things move and you’ll start seeing what is the top what stays at the top. Now you can go back and do work on the top children’s books New York Times author, like the top books for the New York Times and USA Today. They come out once a week and you can look at what is the most popular kids’ book, a YA book, etc other thing. Now, this is yours – there’s a big problem here because what you’re – what is showing up now is what people were making two years ago. So if you’re trying to get a publishing deal, you are – this is a bad idea because the trends in the market have now been saturated. If you’re trying to do a kid’s book that or a self-published book, this is a lot more useful, because now you can see what’s happening now. And if you can get something up in six to eight weeks, awesome, but for your experience, if you’re going back years and doing this, this longitudinal data survey, you can see what trends what art styles, what stuff, what page length has been popular for years. And what I’m looking for is the data and the stuff that like will come back around. I’m not looking for like the trend that came and went in like a year. I’m looking for the ones that have been around for a long time because my plan is to sell these books for 10 years or more. So one thing you’ll see an art style is like there are so many different levels of what a professional art style looks like. It’s mind-boggling. What really matters is what is going to resonate with you, and what you think is going to resonate with your audience. So now, you have to build an audience from that, after that, which we can talk about if you want to. But the places to find art – artists are, there’s a lot of Facebook groups, there’s a lot of, you can literally open up any book that you like, and look at who the artist is of the book and then contact them. You can find people who you know, who do children’s books, and see if they have any recommendations. … , if you contact that artist and they aren’t available, they will at least tell you who they think could work or if you don’t fit their art style. Like if the page rate is too high, they will give you some names of other people who like are sort of in their space. But you really want to find the art style that resonates with you. And this is really tough. Because most people just settle on the first artist who is in their budget and will do it. But I spend 80 to 90% of my time finding an artist or finding a collaborator, whether it’s an editor or proofreader or whoever it is. I spend so much time figuring that part out because that is the key. The key is who’s going to take my work and make it better. My editor then finds my work and makes it better. My proofreader finds her work and then makes it better. My artist takes my words and makes them art that is that that works. And it can’t just be what art style you resonate with, but it has to be the art style that you resonate with that also resonates with –

Richard Matthews 26:40
Enhances the story.

Russell Nohelty 26:41
Right it enhances the story. It doesn’t just like to make the story. Now, there are all sorts of ways that you can make a kid’s book, you could also make the art you can make the art and then put the text on top of the art. You can take the art and make it a separate page next to the art. You can take the art and crop it and letterbox it. And then put the art the words on the top and bottom, you can put though you can not do it, you can put the words on the actual page and like, and then things could open up and like it could be a pop-up book. There are just so many ways that that can happen that you really have to spend a lot of time figuring out what the art style is you want and who you can find. There is almost always somebody that can that has a similar art style to someone who is really really popular. It doesn’t have to be a perfect mimic it shouldn’t be a perfect mimic it should be their own art style. But you’re looking for someone who’s like an accomplished something had a book out that was popular. And and and and so you know, it will get finished and can be with you for the long term because you want somebody who’s not just going to come –

Richard Matthews 27:47
When when you hire artists do you generally hire artists as like, I hire you, you do the art and that’s the end of the transaction or do you hire someone where it’s like hey, you do this and they have like an equity stake in the profits of the book. How does that even work?

Russell Nohelty 28:02
I hate doing royalty statements. So I pay out all of my artists from the moment, except for on the anthologies where people do have royalties. And I only have two royalty statements I have to do every year. And they are friggin nightmares every single time like I hate them so much. So I want to pay people out of their work. I also am very confident that over time, it’s going to be much more beneficial to me to have the book that the money from the book now, because I’m pretty popular in comics, now. I have collaborators who have come to me and asked me to collaborate on their idea or their project. I’m happy to do that. But if it’s my project and I’m going out with it and I am hiring the artist, I am then going to pay them out. And then I’ll own it outright and it will suck for me at the beginning. But, you know, over 10 years that … the book behind just made me about $100,000, which is close to 10 x return on the cost that it costs to make it. So it sucked at the beginning, but then I’d never have to worry about it again. And I can price it out whenever I want and not have to worry about like how much I owe an artist or somebody else.

Richard Matthews 29:16
That’s really awesome. So when it comes to the actual like audience building for a book, and like getting into Kickstarter, you generally starting with a completed product like you have the art done, you have everything done, and you go to market with that, or are you starting earlier in the process when you go to something like a Kickstarter?

Russell Nohelty 29:35
Well, there’s two questions in there, which one do you want me to cover first? How to build the audience or how to do the Kickstarter.

Richard Matthews 29:41
I didn’t know they were separate. I sort of figured you used Kickstarter to build an audience.

Russell Nohelty 29:47
That’s a that’s an absolute fallacy, an audience has to be built before the Kickstarter starts, or at least the nascent stages of an audience have to be built when it starts. So I’ll take you through the process that I use. One, It’s I don’t know what the name of it is. Then, it’s like 1-10-100-1000. That’s basically the numbers that I work on when I build audiences with people. So one means you have to find one human being who is perfectly suited to buy your book or your project. I’m going to go with a book because we are talking about children’s books, … this is for any, any product that you’re trying to make or any service. So the key to finding somebody who is in your audience is to find somebody who likes you, who already likes you, but not enough to lie to you. So these means no parents, no children, no immediate family. No, no. No, like best friends, no old lovers. People who you know, but not enough to lie to you. Does that make sense?

Richard Matthews 30:52
Yeah, absolutely.

Russell Nohelty 30:53
So the best example that I have is I’ve got friends I’m almost that 20 years from high school. I’ve got friends, I don’t talk to very much. But like I knew them in high school, and so but they’re still friends with me and they still interact with me on Facebook. And, and but like we don’t have like we’re not talking every day, but they like me. They know me and they like me and they trust me. And like they engage a lot. And they seem to like the things that I say. So that’s the first thing you’re looking for one human who is a hyper reactor person who really likes the things that you post related to what you’re going to sell. So it doesn’t matter if you post a lot of yarn pictures and like they do unless you’re making something like yarn, crochet patterns, or something. You are looking for a person who, who, who, when you post something about children’s books, is an expectant mother or they had kids or whatever it is like they really really, really, really really liked the things you post and the way you talk about it as well. So, you know, I’m assuming that if you’re making, the most people that have that make children’s books have kids buts I’m not saying it’s all of them.

Richard Matthews 32:02
We have 4 of them.

Russell Nohelty 32:02
Yes. So most – interestingly, Sheri Fink doesn’t have any children, but who have we talked about a little bit earlier as far as I know. But she, but most people have some experience with kids. And when they write about parenting, and people resonate with that someone hyper engages and hyper listens and hyper, like comments on every post, even and you’re and you’re looking for the person who posts everything and you say, I don’t understand, like, What the Why, like why you keep commenting. I never comment. We did not have a close relationship before but somehow you were like really, really, really, really, really engaged with all the things that I’m talking about. I see your smiling so I’m going to assume that you kind of have a picture of who that is in your head, right?

Richard Matthews 32:50
Yeah, I know who that would be for my wife to like, yes. You know she’s got people that follow the stuff that she does. She has a YouTube channel that she follows around our family and that kind of like homeschool stuff. That she does and whatnot.

Russell Nohelty 33:02
Right? Okay, cool. So you have that stuff. And now your job is to go to them. And ask them if they can do if you can talk to them for 30 minutes, because you’re trying to launch a product and you’re trying to get to know them more and make sure that it’s like a good product, like make sure it will resonate with them. And you’re basically trying to figure out, most people focus this conversation on demographic information, which is great, I guess, for somebody and for Facebook ads, maybe. But your real goal is to find the spirit of that kind of person. And so when you look at the –

Richard Matthews 33:37
… psychographic information,

Russell Nohelty 33:38
Yes, psychographic information. So this would be traits, places that they like to frequent. If you look at our website, we have a little a bee called Melissa the Wannabe, she’s in that painting behind me. She’s actually everything that a good Wannabe Press. A fan would be, she’s rebellious and anti-authority and creative and artistic and sarcastic and no-nonsense and practical and, you know, she went to punk clubs back when she was a kid and like, she’s probably got a bunch of tattoos and, and she just like has this kind of like punk rock spirit. And so that is the psychographic information for your – you’re trying to build this model out and you start with one person. And it’s really important that you do not just send them a survey, you actually communicate with them, because people hate answering surveys, but they love talking about themselves. And you’re trying to figure out what sort of makes them tick, but also, what they like about you, what resonates to them about you, where else they hang out, and all of this kind of stuff that like will help you later. The most important part though is sort of the psychographic information of what they’re about, and what it is about you that they like the most. So people tend to like that I like to talk from the hip, and I give practical advice like I’m no-nonsense. I’m a straight shooter, and like, and I generally like am very anti how things are and anti-authority. So like the things that make Melissa tend to also make up the things that people like about me when I, when I talk but everybody is different. I’ve got friends that are very motivational and or very inspirational or very elegant. And, and those people are, have a different resonance with them with. And so then you go from one and guess what you do next to get to 10.

Richard Matthews 35:32
You talk just nine more.

Russell Nohelty 35:33
You do exactly. Now, I use 1-10-100-1000. But like it might be five, it might be six it might be – but 10 is a good number because then you’re going to see what, what is the same between all of these people, what is different, where they hang out with generally the most the brands they associate with the best and what the commonalities are from all of these people. And that’s when you can go into Facebook audiences insights and start looking or start looking at Facebook groups and start looking at all of these other places, but we are not scaling yet. We want to maybe join some of these groups and some of these places, but now we have to pre-validate our idea. So pre validating our idea means we are going to take something like a children’s book, and we’re going to try and design the messaging based upon what the people said they liked about you. So that five of those 10 people will buy it. Now, you’ve already made someone down the funnel, right? This person now knows likes, trusts, and theoretically should be ready to buy from you. If you give them the right product, right?

Richard Matthews 36:41
Yeah.

Russell Nohelty 36:41
Okay. So now the goal is to make sure that the product that you’re offering is going to resonate with those people. So that means finding a few artists maybe and like seeing which one they resonate with most. Which of the sending them a couple of stories or themes and which one is going to resonate with the most. Just making sure you’re on the right path, and then setting up nothing fancy a PayPal link or something, so that they can spend some amount of money $5-$10-$20-$1 doesn’t matter to make sure that they’re going to buy, the less money that they have to spend, the more of them you have to convince to buy. So like, if it’s $1, you really want 10 to 10 people if they’re in your perfect audience to buy, right. And you might find that a couple of them really aren’t in your perfect audience in that first 10 and that’s okay, that again, narrows down to the people that are going to be most likely to buy from you. Okay, so now we have the perfect person, a product that you know is sellable because you sold it five times. And now your goal is to-if you’ve done this right-to find a bunch more people that are like this person. Now, again, we’re not putting a bunch of money in yet because we only got 10 people that’s friggin crazy, please do not start spending a ton of money now. What you’re trying to do is build a city system that turns people from someone who does not know you at all, to someone who knows you, likes you, trusts you, and then will buy from you the simple parts of a funnel, right? So now you’re going into these Facebook groups and going into these places, joining the community. Don’t be a dick and just post your bio links or something but like, like sending them being like, Hey, I have a free book I can give you maybe you have to invest in one of the books, the book that like most people liked in that first 10 shouldn’t still be expensive, maybe $500 to get the art for that book. Then I’m gonna send you a free ebook and whatever you have to do your goal is to find now … to build out the funnel. So that you have a repeatable system that will turn a random person into a buyer consistently and that you have the right people in that funnel. And that … that the product has a profit margin that you can then use for marketing. Okay, now we’ve got 100 people, you know what next? Know what we do next?

Richard Matthews 39:06
Now, I would imagine you start getting into the scaling, right? Using some of the money you use to sell those and get some people to buy from –

Russell Nohelty 39:14
Close. This is when we use Kickstarter to validate our idea. We have not actually validated the idea, we’ve pre-validated it and started a concept. But the thing that we’re making is like not really the product we’re trying to make. So let’s – I use a bike a lot. So like maybe we made a seat for a bike, but we really want to make is the bike. So we’ve now created a product that is profitable to get kickstand, we made a kickstand or we made a seat that is really real or handlebars that are really cool. And now we’re going to take our bigger idea, our real idea. Maybe you want to do five bucks or a line of books or maybe you want to take those books you’ve been printing pod and make a hardcover of them. I don’t know. But whatever it is, we’re now going to Kickstarter. We’ve already got our audience, our messaging, what they like, how to How to make a repetitive repeatable process that will turn the random people into a rabid fan. And then we know there’s a profit margin. So this should be easy. Like, we should easily be able to bring a bunch of people that are already in our audience to, to be able to get ads to bring in a bunch more people so that we can get our big product because now we’ve made some money on that profit margin. So we have ads and marketing and prototyping and all of those things. And our goal is to take that and validate the real product through scale. And we are, you’re not going to do a ton of this yet. Not going to like spending $50,000 to get ads, but you’re spending some part of your profit margin to make sure that you’re in front of the right people, that you’re partnering with the right making the right joint partnerships that your product page looks great that it’s messaged properly and then if you bring 100 people, I mostly have a few, I just ran the numbers something like a 46.5% of my, of my Kickstarters has come from Kickstarter and about 50, whatever the 54% comes from me. So if I’m bringing one person, Kickstarter should bring one person theoretically as well, who found them on their platforms. So if I bring 100 I should be able to get 100 from Kickstarter. And now I know for a fact exactly who bought for how much money. So if I had about 200 people, I’ve seen their pledges. I know how much they did I know who was lying to me or at least didn’t buy and I can say, Why didn’t you buy? No pressure. I just want to know like for the future, like what was it that didn’t resonate with you? You don’t wanna do this during the campaign because of that move. You make them feel guilty. When do this like a month or two after the campaign ends just being like, Hey, I’m doing my moratorium on like, Why you didn’t buy, I’m just wondering, like, this does not pressure. I’m not trying to like convince you to buy, but like I really thought this was made for you. Like, in fact, you were part of the process to like to design this. So like what was it? Was it a money thing? Was I totally wrong? You know, did your needs change? Like what the thing is. And now, theoretically, we’ve got a product that we can use all of those email addresses to build a lookalike audience, you’ve got the seeds of a mailing list, you’ve got the seeds of a Facebook page or Facebook group or whatever it is. And now that you have actually validated the concept and seen that it’s profitable, or at least that it could be profitable. Now is the time you can drop money and scale. You’re not going to do that obviously until you get the books in from Port or wherever. Because then you can sell them. But once the books are out to the Kickstarter backers and you build your store and besides your Shopify site, then you can take all of those people have that information you’ve just gathered and build the business from it. Because up until this point, it’s kind of –

Actually selling the product.

Right? Exactly like you don’t you, you have the validation part of a business, but you don’t like until you can actually make money consistently and bring it in and use that money as a cash flow to pay other people to like build the business and grow it. You don’t really have it like a business in the traditional sense, you’ve got an idea. But by using those sorts of pieces in that order, you then are spending money at … spending very little money, but a lot of time in the beginning. And once you get it right by doing the unscalable thing, then you are still spending very little money to pre-validate an idea and even very little money to validate the idea. And then once you have the idea, and you’re like yes, this is as successful or less successful or more successful than I thought. You can then do figure out a convention plan or an ad plan or a marketing plan or whatever it is, in order to be doing like the once you have the budgetary number, then you can start being like this is how much I can spend on advertising or marketing and I can expect this amount from there. It’s hard because Kickstarter is very forgiving and regular human beings are not very forgiving. So you have to do some work it won’t be as profitable as regular people, but you’ll know at least that your idea works and who to sell it to which is the real two most important things. Business is nothing but but but but product and an audience. So product audience and product. Once you have the profit you can really put it into marketing to build more of an audience to build more products to get more profit to spend getting money, you know, and that’s how to generate and start things from a point of nothing.

Richard Matthews 44:54
Yeah, so for our audience who is listening. That was absolutely brilliant breakdown of how you can take go from nowhere to having an idea and getting it pre-validated and validated into the market actually turning that into a business. Thank you so much for just sort of going through that for me, because I know that’s, you know, it’s one of the things that my wife and I have been looking at, you know, because most of my business stuff is in the services space, which is very different than, you know, building a creative book and getting that out to the market. But it’s, it’s interesting to me after hearing you go through that, it’s the same process we go through, we just don’t use Kickstarter to do the validation, right? We use some other things. But it’s it’s an interesting way to, to think about like you’re following the same business practices when you’re talking about I want to put out a children’s book that we would for anything else that we’re building, which is fascinating.

Russell Nohelty 45:41
Yeah, I mean, it’s, it’s, it’s, it’s, I find that I have more in common with people at my success level across industries than I do with people who are in my own industry at a lower success level because the words that I use are very easily understood by someone who’s doing services or doing a running a product in the baby space or like making cakes or physical products, right? They’re almost all they’re very similar. And while like, you would probably in the services or course space, like put up a landing page and then like drive traffic to that landing page to try and make up to try and validate. I am just doing it through Kickstarter or Indiegogo or some other way. But a lot of the things that I learned from, from the entrepreneurship space, things like when you want to figure out what the product is, you can just put 5 or 10 or 20, different marketing copy up and run them against each other and a very low cost engagement ad and see what gets the most. You can do the same thing with images. So all of that –

Richard Matthews 46:46
We do. We do all that rapid testing for all of our products, right? Where we’ll go through and spend a couple of dollars a day on you know, 15 different images and see which one works the best and do the same thing with headline copy and body copy and whatnot. So, the same process, you’re just applying it to To create a product –

Russell Nohelty 47:02
I am literally just this morning set an I have a book series that I’m gonna that I’m starting to run Facebook ads to the Godsverse Chronicles books those we’ve never really run ads to before. But I just set up 15 different dynamic creative ads, each with 10 ads in them, and five different pieces of copy and five different headlines. And I’m just running literally like a bunch of I’m running basically like 16 or 17 different campaigns across them each other to see which one – because I’m doing this from the very beginning. You don’t want to be like it. Like, like, I wouldn’t do this if I knew what I was like what worked, but for now, I’m literally just taking as many ad images and ad pieces of copy that I can find and testing them against each other to find out what works the best and it’s no different than and instead of using you know the general text of what’s in an ad campaign. I’m using a blurb for my book or I’m using an excerpt from my book as the same means of testing how you would test five or six, five different or 10 different kinds of ad copy against each other.

Richard Matthews 48:13
Yeah, it’s fascinating to me, because it reminds me one of the things that I’ve learned over, you know, 10 or 15 years in business now is that the grass is never greener. Right? There’s, there might be other things that you might want to try or do that you might have a different passion for. But the reality is, is like, it’s not if you’re going to change business or change directions or do something, it should never be because you think it’s going to be different over there. Right? Because the process is the same, the thing that you’re doing is going the same in no matter what industry you’re in, or what it is that you’re delivering to customers, right, you’re always going to go through that process of, you know, taking people through that know like trust funnel, and you’re going to go through that process of you know, validating an idea and making sure that it actually sells like there’s no shortcut to success in business, no matter what it is. You’re going to have to go through that process, no matter what.

Russell Nohelty 48:59
The big difference is that for a physical good product, you want a 10 x profit margin. And for a digital good product, you can have as little as a 3 x profit margin to still look profitable. But if you’re doing anything in the digital space and anything in the physical space, whether it’s books or lipstick or anything, you want to make sure that your ad costs – ad and production costs are 1/10th of your total profit. Otherwise, there’s no way to like really no way to scale that. So that is the one difference a lot of people try to use the same 3 x profit margin that a lot of people use in digital goods, as in physical goods, and they end up getting wiped out because it’s just it’s, it’s a much more expensive game, you’ve got to pay for warehousing and storage and shipping plus the cost of the good. And if you’re distributing food through Barnes and Noble or something, then you’ve got to pay 50 to 60 percent to Barnes and Noble. It’s just it’s a much more intensive process, but the advantages that at the end of the day, they have a tactical thing that they can touch.

Richard Matthews 50:02
So just up top of your head, Do you happen to know what like your cost of customer acquisition per book sale is from a cold audience to someone who’s going to pick up your book and try it, try it out?

Russell Nohelty 50:14
So the cost of all production is $3. Because I so the cost of book production and general other production I try to keep around $3 and printing and getting it to my hands for somewhere between 3 and 5 dollars. And then I spend about $5 more on getting the customer into my funnel physically, I don’t do many ads at all. So I don’t know that physical but I do know that for every $30 we make I spend about $10 now this is a three one profit margin and you’re like a hypocrite, right? I know but because we are direct to the customer, we have a little bit more wiggle room.

Richard Matthews 50:59
You have a little bit more yeah, you have more space to play.

Russell Nohelty 51:02
Absolutely. So my goal is if I can spend $10, on the acquisition of making the product and acquisition, that gives me $10 or so to reinvest into new books, and then –

Richard Matthews 51:15
Ten dollars to feed your family with.

Russell Nohelty 51:17
Yes, exactly. And we run about across all of my companies at a 22% profit margin every year. So that is that that’s, that’s no matter what I do I just and partially because physical goods are a ridiculously expensive business to get into.

Richard Matthews 51:37
It’s it’s right in line with something that we’ve talked about with a lot of businesses here that you’re on the show that most businesses are targeting a 25 to 32% profit margin, right. And even your big businesses like Apple and Google and whatnot are looking to target a margin that’s right around that 30%. Right, and to pay for everything that you’re doing. And, and it’s when you’re younger and smaller, right? You have, you don’t have as many efficiencies. So it’s harder to hit those hit the 30% numbers and you’re going to be lower down in there. And if you can figure out how to run your business on the, you know, low to mid 20% profit margin, you can grow a really big business over time.

Russell Nohelty 52:17
Yeah, absolutely. And you, you, the many, you know that number that you can help the number. So, for instance, last year, two or three years ago, we were down at 15%, or 12%, or something. And my goal was to double the profit margin. And that meant cutting expenses and like figuring out like cutting out a lot of the inefficiencies that we use over time, and I was able to basically double profit margin last year. We’re now like, in a very weird economy, economic place. So I don’t know how it’s going to look this year. But last year, we actually did double our profit margin overall, from our Wannabe Press company. Now, not from our Complete Creative Company, which is very much like profit heavy because it’s all digital goods and all infotainment products or info info info info printer products if you will, but the Wannabe Press side was able to become more profitable and then I was able to push more of my profit from the complete creative into it, which is how we got like pretty much the same profit margins we’re always running just because like Wannabe Press is a very intensive company to run with art production and good physical goods production. And because the a lot of the books are selling for, like $5 or less online on Amazon like you’d end up having to have a lot of scale takes a long time to get that scale. So you’re pushing a boulder up the hill by like investing a lot in ads at the beginning so that like you can make that scale in a couple of years.

Transcribed by https://otter.ai