TSS #006: The Myth of the "Masterclass"Feb 12, 2022
Read time: 2.5 minutes
I'm going to come right out and say it: I don't believe high-ticket online courses are the best option for 99% of people trying to earn money online.
From Sam Ovens and his "$20M funnel" to Dan Lok's "Wealth Triangle", we've been inundated with sharply-dressed bros, renting out private planes and skyscraper offices, delivering $2,000 "masterclass" style courses to the gullible masses.
So, what's a new creator to do?
The unfortunate answer is that most people replicate what they see.
They create an online course, spend 50+ hours making it, and then price it at $897 or even $1,200+.
After all, It took 50 hours. Not to mention that expensive camera and lighting rig you bought. And your time. Oh my goodness, the time you spent. Your time is valuable! Just like Sam and Dan's.
Here's what usually happens next:
You get some visitors to your landing page
A few people put the course in their shopping cart
Nobody buys. Boo-hoo.
You don't have the social capital to support a high-ticket item.
99% of people who are creating courses online haven't built an audience that is highly engaged. They certainly aren't ready to spend nearly a thousand dollars with you.
You can see this playing out in the numbers. Last year, CEO Sahil Lavingia wrote that Gumroad creators had amassed $142M in revenue.
With 46,000 creators on the platform, that's an average of $3,000 per. But the median was actually $70 per year. The top 10% of creators took home nearly 92% of the earnings. (source)
That means the average creator on Gumroad didn't have enough social capital or good enough distribution to make even $100.
Forget $897. And definitely forget $1,200.
Instead, build your revenue by starting with a "trust tripwire".
A "trust tripwire" is a low-cost product that is intended to do 4 things:
Allow customers to make an impulse buy
Provide 100x in value vs. what customers paid
Build a high level of trust to impact future product sales
Generate word-of-mouth sales because of the sheer quantity
I suggest you price your trust tripwire below $100.
The future is $50, not $1,500.
Don't be fooled by what you think you see. There are fewer and fewer Sam Ovens and Dan Lok's entering the online course world today.
Instead, there are more folks like Daniel Vassallo, Arvid Kahl, and myself.
We're all part of the top 10% of Gumroad creators. We all price our products between $10 and $150.
This is how I've sold over $1,000,000 in courses at an ARPU (average revenue per user) of $130.25.
My flagship course, The LinkedIn Operating System has 6,100+ students, and at least 5-10 of those students are saying something incredible about it online every single day.
That's the power of high quantity & high quality!
So, here's my parting advice for new course creators:
Keep your course between 30 and 45 minutes.
Focus on high-value information, not production value.
Make sure your customers achieve one very specific outcome.
Use automated systems to turn everyone into an affiliate for word-of-mouth.
Thousands of happy customers + word-of-mouth chatter + motivated affiliates = a scalable course business.
See you again next week.
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