Pat Flynn on the Art of Smart Passive Income

I recently wrote a review of online marketing guru Pat Flynn’s new mini podcast, AskPat. The work Flynn does is near and dear to me. And in hindsight I may have been overly critical of his motives in my post. He reached out to me after reading my article–which surprised me needless to say.

I was caught off-guard by his sunniness. It seems the “friendly” thing is no ruse. He’s a genuinely open person, and after chatting with him via Twitter and exchanging emails, I also realized the breadth of his savviness.

PatFlynn

His flagship show, The Smart Passive Income Podcast, is probably the top marketing podcast out there today. With over six million downloads, and countless streamed hours logged by his fans (dude is bona fide), Flynn doesn’t have to talk to little guys like me. But he was open to answering whatever question (sans kid gloves) I was willing to throw at him.

Q & A with Smart Passive Income’s Pat Flynn

Is it a coincidence that your success began in the middle of one of the worst recessions in this country’s history. (How did your own employment crisis lead you to your current career?)

Definitely not a coincidence. If it were not for me getting let go, I’m positive I would not have explored the option of online business. [It prompted me to explore] the idea of turning knowledge I had from an exam I took and passed (the LEED exam) into a resource that I could get paid to create … I’m also positive that not being able to get back into the industry of architecture after getting let go forced me to step out of my comfort zone, explore new things, and take bigger risks – and do what I needed to do to make it work.

To clarify, however, the website that I had started (at the time it was intheleed.com), I started when I did still have my job, and it was a way for me to house my notes so I could study for this exam, and also pass along my notes online to a couple co-workers. The idea to turn this into a business never [crossed] my mind until I was laid off and heard about others doing well helping people pass the PM (project management) exam. That was my “a-ha” moment. So, when I finally decided to “businessify” my notes website, it turned out that several thousand people had already been using that site for their own study resource, due to the nature of Google keyword rankings and sharing within forums and websites  … which I had no idea was happening until I put an analytical tool on the site to check web stats and traffic.

Your podcasts are seemingly as successful as your other online properties (6.5 million downloads and stellar iTunes reviews). When did internet radio start to look like an attractive option?

It was a podcast that introduced me to the idea of online business. The podcast was called Internet Business Mastery hosted by Jeremy Frandsen and Jason Van Orden. I heard an interview with a man who was making a living teaching people how to pass the PM exam. Because of this, I always knew I wanted to start a podcast. I even mentioned on my site (smartpassiveincome.com) that I wanted to start a podcast in a blog post I wrote in December of 2008.

Man – I wish I started it then, because it took me a year and a half—until July 2010—to finally muster up the courage to actually do it. I was afraid of how people would [receive] my show and [feel about] my voice. I was just scared of the medium.

With writing, I could edit as much as I wanted and sort of “hide” behind the written word. Even though I was sharing as much as I could, there was that feeling of safety there. With the podcast, it was my voice, and that was scary to me. Thanks to Cliff Ravenscraft (podcastanswerman.com) and Jason Van Orden, who I directly consulted with to help me get over my fear and [lend technical support].

Because of proliferate media fragmentation, many brands, who perhaps wouldn’t have pursued terrestrial radio ad placement, are flocking to podcasts. How much of your income is coming from podcast sponsors?

Like I said, I’ve had my podcast since July of 2010–however, only in a recent episode, #97, did I include my very first sponsor, which has a 30-second post-roll at the end of the episode. I have turned down up to $5,000 per episode because other companies wanted up to a minute promo at the start of the show, and to interrupt the middle of the content as well, and as a listener of podcasts, I always hated that in other shows. As a producer, I couldn’t do that to my audience. I finally found a company willing to work with me and experiment (for two months) for a post-roll spot.

I’m getting paid about $30 CPM, for an average of 65,000 downloads per episode (after 6 weeks). This only just started, but for this current month I would guess that the percentage of total business income that comes from podcast sponsors is 10%. I have several other businesses and income streams, many not related to smartpassiveincome.com, that add to the total.

For many companies, the honeymoon is over with social media and content marketing. There seems to have been a shift recently into all-encompassing ORM and brand development in the digital sphere. A lot of what we (digital marketers) do has become perfunctory. Would you agree the online incarnation of “Pat Flynn” is much more than blog posts, podcasts, and eBooks, but a well-cared-for brand that requires a lot of attention in its own right?

Absolutely. My success doesn’t come from what I produce (blog posts, podcast episodes, videos, eBooks, applications, etc.). Rather, it comes from the relationships  I build with my readers, listeners, subscribers and customers. The products and content are the means by which I develop and nurture those relationships. Not everything I share, create or recommend comes with a price tag. In fact, most of it is free, and because of the strong relationship I have with my audience, (and the value I provide by putting them first) many are seeking ways to pay me back in return.

This happened when I sold my first eBooks at GreenExamAcademy.com (previously intheleed.com). When I first sold my eBook study guide, 25-30% of the customers were people who had already passed the exam. They didn’t need the guide at all. They were only looking for ways to pay me back from helping them pass the exam with my free material. I know this because, when I launched my book, I received dozens and dozens of emails from such people.

Social media, in relation to all of this—like the other types of content that I create and produce —is there to help build the relationship, and interact with my audience in real-time. Even a small interaction that may take five seconds can be a memorable experience for a person. I remember the times I’ve tweeted about a product or something I’m having an issue with, and it’s followed by a tweet from that company reaching out to offer help.

Yes, this does take a lot of time and care, but if you’re actually trying to legitimately help people, that’s [par for the course].

So the elephant in the room (in my opinion): The monthly income ticker at the top of your blog. I know a lot of the draw to the Pat Flynn brand is your ever-growing monthly income, but there’s a sensational component to it that reeks of link bait to me. What purpose does it really serve?

pat flynn revenue ticker

Link bait – no. Attention grabbing, yes. But with a purpose other than what you may think. In the space I’m in, too many people talk the talk. They share things without proof and for the purpose of getting people to buy things that promise instant riches. I hate that. I’m absolutely disgusted by it.

My income reports, which started in October 2008, have become the most popular posts on the site. When I started it, it was to show what I actually did and that it was real–to show I was actually walking the walk. It was a life changing month for me, and I wanted to share it all–all of the lessons I learned that made those numbers become real. After that, people demanded more, and so it became a monthly thing. I pour everything I can into those monthly income reports. It’s not really about the numbers for me; it’s about the lessons that go along with them, because it’s not always positive. I’ve had down months before, and it’s important for me to explain why.

I’m not dumb though. I know the numbers catch people’s attention. I’ve used tools like ClickTale.com to actually see users of my site who visit that page scroll down past all of the words and text right to where I share my monthly totals. But then, they usually go back up to the top and read through.

It’s there because I know it draws people in, but I feel like I have this unique position in the space that I’m in, as the transparent and authentic online marketer, and if that means they view my stuff before the scum out there who try to take advantage of them, then I consider that a win. You don’t see me pushing any products or hard-selling anything in those posts. A regular marketer would obviously sell stuff on their most popular, most attention-grabbing posts. Not me. I don’t do it because that’s what everyone else would do.

You pride yourself in being afforded the luxury to work fewer hours, or none if you really want to, but in my experience many success stories make this claim because they love what they’re doing, and in actuality they’re always working. Are you ever really off the clock?

Absolutely. Every day, when I wake up until my kids go to sleep, I’m off the clock. I start my tasks for the day after they go to bed because my kids and my family are my why. They are why I do what I do . Because I have the opportunity, I don’t work during the day when they are awake. They’re growing up way too fast. I don’t want to miss any of it.

Passive income is never 100% hands-off, in my opinion. In real-estate or other types of investments, they still have to be managed and that takes time and effort, much like creating online businesses that CAN be built to be automated. The beauty of passive income and creating these types of businesses (a la Tim Ferriss’ book, The 4-Hour Work Week) is that I don’t trade my time for money directly. I can stop working, and the businesses will continue to run. Not forever, but enough for me to take three weeks off here, two months off there, take the next two days off to head up to Big Bear to go snowboarding, or just go to the grocery store at 2:00 PM on a Tuesday because there are no lines at all and parking spots available for days.

I work hard, yes. And I work smart too. I don’t waste my time, and I’ve learned to become incredibly efficient. But I’m not chained to my work, and I don’t let my work control me. I control it so I can control the life that I want to live. There are ups, and there are downs. Things don’t always (and rarely) go according to plan and some nights I’m up until 6:00 AM because I’m launching something new or my computer crashed, and I have to re-write everything I had just written for tomorrow’s blog post.

Obviously, financially successful shows require more than a laptop and a microphone. What advice would you have for those interested in podcasting?

1. Start. Nothing happens until you take action and just do it. It’s going to suck. It’s not going to be perfect. You’re going to hate your voice and want to edit every little mistake. Don’t. You WILL get better over time, but before all of that you just have to get started.

2. Connect with other podcasters. It’s a massively growing community, and most of us love and support each other and help each other out. Ask any successful entrepreneur in any space if they did it on their own, if they didn’t have help along the way or people there to encourage them – 99% of them who tell the truth will tell you they absolutely had other people with them along the way.

I’m in 3 mastermind groups – groups of 3-5 people that each meet weekly (virtually) to discuss goals, hold each other accountable, and push each other. And most importantly, be bluntly honest with each other for the purposes of helping each other reach our goals. For podcasters specifically, create a group who listen to each others shows, and give constructive criticism on a regular basis. There’s no faster way to improve.

I know I said I don’t work during the day because I want to spend my time with my kids. During my mastermind sessions–that’s the only exception. The interaction with the others in my groups is extremely important to me.

3. Here’s a free podcasting tutorial I created. Nothing required to have access to it (including your email address). I offer more tips here: http://www.podcastingtutorial.com

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