David Perell

A cautionary tale for course creators

by

For five years, David Perell had kind of a dream online business.

Perell sold a high-ticket, cohort-based course, Write Of Passage, teaching people how to write online.

Write Of Passage sold for $4k a pop. It had 2,000+ buyers.

Like I said, a kind of dream business, at least in the little space of online course creators and such.

I mean, Perell was writing and helping people to do something positive for themselves. He was working in line with his own values and interests. And he was pulling in great money with it.

And then, last November, Perell shut it all down. In an email announcing that the current cohort of Write Of Passage would be the last one, Perell wrote:

“You need more than a great product to make a business work, and the main thing we were missing was a dependable flow of new students.”

I agree with Perell’s first conclusion. I don’t agree with the second.

You do need more than a great product to make a business work. Particularly if your product sells for a one-time fee (even if that’s $4k), and if you have a whole supporting team of coaches and facilitators and staff and whatever, and you’re running ads or paying affiliates to get those $4k sales.

But I don’t agree that the solution needs to be MORE NEW STUDENTS.

I’ve been making a 6-fig income off this newsletter for the past few years, off of just a few hundred buyers, way fewer than Perell’s 2k. I’ve even embraced this attitude formally. My goal is to make more sales from the same number of readers.

It’s a well-known direct marketing truth that all the profits are made on the back end.

It does take more than a great product to make a business work. But instead of chasing the mythical “dependable flow” of new students… you can just commit to creating a sequence of great new offers. (An offer by the way, doesn’t require creating a new product, though a new product will typically make you a new offer.)

Now about that:

As I wrote in my last email, last year, right around the time that Perell was shutting down his multimillion-dollar dream biz, I came up with a new system for myself to help me get more predictable success with new offers.

I applied this system when I had the idea for my Daily Email Habit service. It worked great.

So far, I have only shared my system with the people inside my Daily Email House community.

This month, I will make this system available a bit more widely. I’ll be sharing it with a few people on my list, if I think it can actually be useful to them.

I will make you a deal right now:

If more predictable success with new offers is something that could be useful to you, then hit reply and tell me a bit about your current offer situation. In turn, I will add you to a private announcement list, so you have the opportunity to get my system when I release it later this month.

My prediction about the future of direct response hits

by

“The next Tesla may even hire creators to evangelize the company or at least, serve as a paid marketing channel. Creators are essentially media companies now, which means that the creators of tomorrow will operate a lot like the New York based publications of yesteryear.”
— David Perell

My email yesterday looked at some fancy science, and made a simple point:

A hit product is the result of chance. The first few raindrops of popularity determine which spots in the product landscape become lakes, and which ones deserts.

I think this leads to a few conclusions. One is that, just because a product (or an offer) was successful before, this doesn’t necessarily mean it is worth studying. It might have become successful due to chance more than any intrinsic quality or real demand. And vice versa. You clearly cannot count on the quality of your product as your only key to success.

So what can we do about this?

One option is simply to put out lots more offers. This will increase your chances of getting at least one big hit.

And then there’s the fact that early buzz seems to be crucial to long-term success. Which to me suggests that street teams.. astroturfing… or influencer marketing are really where much of your marketing efforts should go.

And that’s what David Perell is saying in the quote above. Media-savvy businessmen like Elon Musk are already using creators as their main marketing channel. And the “next Tesla” will probably do more of the same.

But hold on a second. Tesla? That’s a whole other country from the direct response businesses I normally talk about.

After all, if some guy in 1995 got a sales letter from Gary Halbert about a book on killer orgasms… he probably didn’t go down to the local bar to ask his buddies if they knew anything about this orgasms book, and if it’s worth the $39.95 Halbert was charging for it.

In other words, people chose traditional direct response offers in a more independent way than they choose cars or movies.

But as I’ve written before, I feel that’s changing. In the same way that traditional brand businesses are becoming more direct response savvy… traditional direct response businesses are discovering the power of having a brand. So the same reality of what makes a big hit matters for modern DR businesses too.

The way I see it, that means you’ve got two options:

One is to become a creator yourself, because businesses will need you more and more.

The other is to hire creators or influencers to promote your offers, so you can create enough initial buzz to make it a hit.

That raises the question of who to hire and when and what they should say… All interesting questions. I’ll talk about that another day. And if by some strange circumstance you want to hear what I have to say then, you can subscribe to my email newsletter.