Smart Passive Income: Launched Out Of His Parents’ House

Do you know how there was a past guest who told me that I should continue to ask all those questions that I want the answers to but I feel a little awkward about? Well, check out the first few questions in this interview and see what happens afterwards. See if that awkwardness is worth the payoff.

In this interview, I want to find out how an adult who went back to living with his parents ends up building a profitable blog. Pat Flynn is the founder of Smart Passive Income, a website where every month he shows his revenues and teaches people how he grows his online business.

Pat Flynn is the founder of Smart Passive Income, a website where every month he shows his revenues and teaches people how he grows his online business.



Full Interview Transcript

Andrew: Coming up, you know how there was a past guest who told me that I should continue to ask all those questions that I want the answers to, but I feel a little awkward about? Well, check out the first few questions in this interview and see what happens afterwards. See if that awkwardness is worth the payoff. Also, if you’re looking to create a blog and build a business off it online, obviously if you know anything of this guest this is the right interview for you to listen to. Check out how he builds a site that taught test prep. Test prep, that’s what he built. And how that turned into his first big one online. And, finally, check out how increasing prices can not only increase your revenues, but actually make your product more valuable. All that, and so much more. So much awkwardness more coming up.

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All right, let’s get started. Hey there freedom fighters, my name is Andrew Warner. I am the founder of Home of the ambitious upstart. And in this interview I want to find out how an adult, who had to go back to living with his parents, imaging that, how he ends up building a profitable blog. Pat Flynn, who you see up on your screen is the founder of ‘Smart Passive Income’, a website where every month he shows revenues and teaches people how he grows his online business. Pat, welcome.

Patrick: Thank you for having me, Andrew. It’s an absolute pleasure and honor to be here.

Andrew: Thank you. You and I have known each other for a long time. Your audience has told me I should have you on and many of them are in my audience too. And, my past guests have suggested that I have you on and I kept saying no. And, I thought we’d start this interview, before you get into how you build this up and what your revenues are. I, talking about why I said no.

Patrick: I actually really curious to hear.

Andrew: The title of your site is ‘Smart Passive Income’ to me my concern is that, who starts anything that matters by saying, I want to be passive about it. Who teaches people how to start a business by telling them, I’m going to tell you how to be passive about it. My sense is that that’s a reaction to this feeling that people have that they can’t make anything work. That they’re tired of working forever not seeing any results and if only someone could show them results and take away the work. Then life will be good and so just the title alone comes across as a disingenuous play on peoples need for some rescuing in their lives. Why go with ‘passive income?’

Patrick: Well the reason I went with passive income is because when I started my very first business after getting laid off, the fact that I didn’t have to be there in order for a transaction to happen, that’s what I classify as passive. Not, you can set up something walk 100% away from it. And, I always to make sure to mention how hard this is and how much time it takes to get to a point where you can automate something. I was very inspired by Tim Ferrous and four hour work-week. I was reading that when I started my websites and my businesses. And that’s where passive comes from. And, looking back I probably could have created a better name for it. Something less, oh yeah you can just walk away from something or maybe it doesn’t require much work. But, again, anyone who knows me and knows my site know that I always drill it in people’s heads that this is definitely not a passive venture upfront.

What is passive is you can create these systems of automation; you can sell products on-line in a way that you don’t have to physically be there in order for a transaction to happen. Stuff can happen automatically for you. You can have a flexible schedule, walk away from the business for a little bit. Maybe not as much as a mini-retirement as Tim Ferriss would say. But, maybe just enough to have a flexible schedule where I can go to the grocery store with my family during the middle of the day, when nobody’s there but other mom’s. And it’s awesome because the lines are really short and there’s always parking. That’s what it’s about and that’s why when I say a ‘smart’ passive income, it’s being able to do it in a way that is providing value to people while at the same time taking yourself out of the business, being able to take yourself out of that business temporarily.

So I totally respect where you’re coming from, Andrew, and I know a lot of people have told me that too. A lot of people have said, ‘Pat, that smart, passive income, it sounds too good to be true. It sounds almost scammy. But it was finally when I started reading some of your posts or listening to your podcasts, that I started to understand what your site was about.’

Andrew: What about this. The other thing that they say is check out his revenue. And I see you’ve got your revenue, your reported gross figures here, month by month. It’s captivating. Even as I was saying, ‘No.’ I kept saying, ‘I love seeing how he builds his revenue.’

But it seems like an emphasis on the revenue, which people who don’t have it want. It’s like the dating site that are going to teach you how to get laid. And then they measure how many times they got laid.

Anyone who really wants relationships is thinking, “How do I get support and love and things you can’t really measure in numbers like this?” Anyone who’s offering, “Sign up for my program and read my site. And I’m going to show you how many times I got laid and here are the pictures of the people.” They are probably not the right people to be associated with. They’re missing the point. They’re speaking to people who are so desperate that they are buying into that world view that they’re wishing and longing for it. Isn’t that also just like everything we don’t like about information marketers?

Patrick: Yeah. No, you’re absolutely right. And I love that sort of analogy of getting laid. I mean I would never talk about that sort of thing. But I think with money it’s a little bit different. When I first did my very first monthly internet report in October of 2008, I never meant to do it monthly. It was just that one month and I just wanted to kind of see what my reaction was.

It was life changing for me what I did in my other business where I generated all this revenue from this eBook, passively. And again, it was life changing and I wanted to share that. I wanted to show people what was really possible.

In addition to showing the income, I talk about all the lessons I’ve learned. Everything that I did right. Everything that I feel I did wrong. So that other people who get inspired by seeing those numbers there, which they do, and I acknowledge that. The numbers are there to inspire, not to mislead, but just get people off their butts and show them what really is possible.

Because I don’t feel like I’m not anybody special. I didn’t go to business school. I just have that drive. I really feel like that’s what I have. And it was other peoples’ success stories that inspired me to get started and I just wanted to share my success stories and sort of pass that forward there.

Andrew: For example, who got you inspired?

Patrick: Well, when I listed, actually when I learned I was going to get laid off in 2008, I had a few months to kind of figure out what to do. I was listening to a podcast called ‘Internet Business Mastery’ podcast. I don’t know if you know the hosts Jason and Jeremy. On their show they had a couple of people sharing their success stories that really inspired me to get started. One of them was a guy named Shawn Noonan, from . He was on the show and Jeremy and Jay were asking him about how he got started. He and his wife make a living by teaching people online how to speak Indonesian. I was, like, ‘That’s awesome. That’s so cool.’

But it was really another guy named Cornelius Fitchener [sp] from PM podcast. He’s also a podcaster. But he has all these products and practice exams and all these websites that teach people how to pass the project management exam. And he’s making a killing.

And I heard his store and I was, like, ‘I have this website that I started as sort of just a guide to help me pass this exam in the architecture industry. Maybe I could do what Cornelius does. Maybe I can share that with the world, and maybe I could get paid for it. I really don’t have anything else to loose.

I tried to get back into architecture actually. That’s all I knew at the time. But they wouldn’t have me. Nobody was building anything, so nobody needed any designers. It was either work a minimum wage, or a little bit more than a minimum wage job, or try to figure stuff out online. And really it was those success stories that kind of gave me the push. So that’s why I share my revenue. That’s why I share the lessons I’ve learned so that people can see what I did right or what I did wrong, and then sort of have a head start from there.

Andrew: Are we thinking to small when we think about examples like that. Like, shouldn’t we be thinking, “What is changing our world today?” Well, I happened to be, I mean, I’m trying to think of how to say this. Shouldn’t we be thinking about, how do I create the software, the new spreadsheet of the world because, look at how spreadsheets have touched everybody’s lives, and they’ve been improved everything from students to businesses to just people who are taking notes. Shouldn’t we be thinking along those lines instead of, how do I just make more money month-to-month how do I create a business that can sustain me?

Patrick: Well, really, it’s not about the money, it’s about helping individual people. Like you said, it’s great to think worldly and big and create the next spreadsheet. But, what I think you can do is niche down and change a smaller group of peoples world. Right? Taking a specific market and changing their world, not necessarily creating a spreadsheet for everybody, but maybe a spreadsheet just for people who have 3 year old kids who are potty training. That will change people’s worlds and it will change the person who is sharing that information as well. And, yes, you’re not reaching everybody, not everybody has a kid, not everybody needs to learn about potty training anymore. And, I don’t know why I pulled out that example, I just went through that, so maybe that’s why, with my kid. It’s not, to me, and I hate to say this, but the riches are in the niches. That’s something that has stuck with me ever since. Really getting into little tiny markets and dominating them. Or, becoming the resource for that particular market and I feel that sort of what I’ve done with Green Exam Academy, which is where I created a website to help people pass this lead exam. The exam in the architecture industry, everybody I speak to is like, I don’t even know what that is. Like, this doesn’t matter to me. But, it matters to 25-45 year old males and females who are in the architecture industry who want their resume to look a little better and who are interested in green buildings and sustained design. So, I think I’m changing their world, and I think instead of thinking big in trying to change everybody, you want to think big on how to change individual people’s lives.

Andrew: Alright, so I want to [??] how you built this up and learn from your experience, but first let me explain why I finally said, yes. I realized it was my own insecurity that was keeping me from having you on as a guest. That I knew the quality of you work, I listened to your programs, I seen your site, I’ve talked to your friends. I mean, we do research on guests anyway to see are they real or not, but obviously when I’m friends with people who are friends with you, I can tell even more. And, then I realize, well you know what my concern was, that my audience that really rips into anyone who’s not a software entrepreneur are going to see some more passive income and they’re going to see that way. That people are going to think that this is my message, are going to see that and they’re going to see the passive income, and they are going to think that that’s my message here and not dig into your site and not understand what it’s about. So, if it’s really my insecurities then I’ve got to get past it and get to the good stuff and let the people who are going to make quick judgments leave the site and the people who are going to make in-depth judgments, well, for them, I’m going to have to work hard and make sure it’s worth the time they spend with me is worth the risks they take on my program.

Patrick: You always deliver, Andrew, you always get deep and down in the interviews. So, I don’t think you have to worry about your audience feeling that way. I’m the one who has to worry about delivering to you audience and I know a lot of your audience already knows who I am and they’ve probably hear me on other interviews before. And, I want to make sure that I can give them something new or a fresh look at something. So, again, I just appreciate you being here with me, I appreciate those very honest and upfront questions and I’m really glad that you finally asked me to be on the show.

Andrew: Well, thanks for doing it. And, you mentioned earlier something that I think people in your audience know which is, that you were laid off. And, that financial situation is what set you off on this path, as you mentioned. What were you doing that, you were laid off so easily.

Patrick: Well, I was in the architecture industry and gotten a great job right out of college through a connection in the marching band. I am a marching band freak, I went to band camp, do all the stuff, whatever, make jokes if you want. But, through a connection in the marching bank I got an amazing job in the bay area in an architecture firm, which is what I went to school for. I went to U. Berkley and everything was perfect. My life was going exactly the way I had planned since I started high-school. But, I was on the path that everybody told me I was supposed to take and everything was happening the way it was supposed to. I was contributing to my 401k, I had a great health plan, and everything was going great. I had wanted to be more of a project manager as an architect. But, being a drafter, then later a senior drafter, my job was to put project manager’s plan on to blueprints, that’s it. So, I had no say.

So, I was really looking to find out how I could stand out in my little firm or office there. So, I could become a project manager or later a job captain. And, one of the first things that most people do in architecture is they toward an architectural license; however, in CA, at least, it might take up to eight years for that to happen. So, I wanted to kind of short cut my way to a point where I could stand out from all my other peers. So what I did was, I found this exam called the Lead Exam and it was about green buildings and sustainable design and environmentally friendly buildings and stuff like that and I ended up trying to pass that exam. I studied for it, and it was the first time I tried studying after college and I felt like after college I was done with studying, but I had to do it again and it sucked. I could not pass this test. I took practice exams and I got 25 percent, it was just ridiculous. So, what I ended up doing was putting my notes online on a blog, at the time it was, and we could talk about why that changed later and you could probably guess why, but I put my notes up on there and for about a year to a year and a half every day I would put more notes on there because there was this really thick reference guide that I could carry around or I could just go online on a laptop or on a computer and study from there. So, that’s what I did.

Andrew: Posted your notes publically for everyone to see as you were studying

Patrick: I just posted them on line so that I could access them; I really had no other… I didn’t know much about how things worked in the online world. Later, I found out that because I had posted publicly for me and for my coworkers that meant that everybody else in the world could find it too, which is exactly what happened. I passed the exam in March of 2008, I learned I was getting laid off, and then in July… I had went to… and that’s when I started listening to Internet Business Mastery and getting excited about online business. One of the first things I learned about was that you need traffic to your website and in order to keep track of traffic you need something like Google Analytics so I put Google Analytics on my site. The next day… about six to 7000 people were already visiting that site. I had no idea why or how that happened. It freaked me out at the beginning. I was scared that I wasn’t putting stuff that was good enough or if it was even legal or not. But I turned on the comments and people starting asking questions that I knew answers to and I sort of became this expert in this little industry. Even though I wasn’t really an expert, I still had to look up all the questions sometimes, but because I was the person posting stuff online and I had this sort of content structure that was helping people I became the expert. And eventually I learned through a mastermind group that I joined, actually through Internet Business Mastery again, that I should write an e-book for this site and create a study guide, so that’s what I did. I spent about a month and a half actually taking the exact same contact that was free on the site, putting it in to an e-book, which scared me also I was like why would anyone buy something that they could get for free already anyway, I wouldn’t. But they were like trust me if it’s convenient, if it looks good, and maybe if there’s a few more bonuses in there and if you’ve already over-delivered to your audience they’re going to want to pay you back.

So, I trusted my advisers in that group and I launched the e-book. The first month in October 2008 I had made $7905 and some odd cents and again that was just mind blowing, life changing, more money that I would make in 3 or 4 months of architecture. And again most of it was just automatic. I had set up the systems using e-junkie to hold my e-book and create the payment processing, e-junkie connected to PayPal. And I would just be at work, because I only had a month or so left, and I had set this up, I would be at work and I would check my emails every hour and I would see another payment notification from PayPal and I would do a little Tiger Woods’ fist pump every single time. Sometimes I would check and I wouldn’t get any sales and then I’d get sad. But…I’d wake up in the morning and there would be more money in my PayPal account. It was just awesome, seriously life changing. That’s when I started this smartcast [SP] thing for the blog because I never knew this was even possible. I was such an amateur to all my business. But I got it, I did it, I made it happen and I was doing it in a way that was different than I had thought internet business was about.., like salesman-y, car salesman, super long, hype-y, exaggerated sales pages.

Andrew: Well, let me ask about the sales page, because that must have been some sales page that got people to pay. But first, the reason people came to your site is because, if I understand it right, you were writing about this exam, a topic that very few people were writing about online and people who were interested in it were freaking out and were dead interested and needed to get anything they could.

Patrick: Yep, absolutely there were really no free resources available for this exam and I had just happened to be putting that stuff online in a way that was easily consumed.

Andrew: Okay. And we’ll get to the name change also. But tell me about the sales page, how did you know how to write a sales page that would get people to buy it?

Patrick: I didn’t know how to write a sales page, I actually picked up a book from Yonix [SP] Silver[SP] that I found at Barnes and Noble called “Moonlighting on the Internet”, I think I actually might have it on my bookshelf over there, but in one of the sections it talks about how to create a sales page. In one of the sections there, it talks about how to create a sales page. It’s a sample sales page with blanks, where you insert the name of your product. And, that’s everything I did. It’s funny because maybe a few months later, when I started getting into the business a little bit more and understand about split testing, and I had showed the sales page to my advisors and my mentors and they were like, you’re really generic, I feel you could do a lot more with it. And, I did, I actually created a longer sales page as sort of the more traditional one that you would see. Because the one from [Yonick] is sort of a medium sized one. And it didn’t perform as well. And then I did one that looked like’s site with the little ‘buy now’ button and sale price and retail price and retail price and things like that and that still didn’t perform as well so, still if you go on there you’ll see the exact template at [] for my exam, for the green associate exam. That one is using that particular template. Which it’s really interesting that that actually works.

Andrew: And, it’s If any of you want to see this. Did you try something else, like advertising, before you went to that?

Patrick: I did, actually, when I first found out that I had all this traffic to the site, my initial reaction was, what can I do right now to monetize it. And, so, I went with Google Adsense, that’s what a lot of people do, because it’s really easy. And, so I signed up with Adsense, I put some code, right in the middle of my site above the fold, just one code, and fifteen minutes later I saw, I think it was, 15 or 18 cents. And, that was the very first change I’ve ever made on-line. And, it was, besides trying to sell concert tickets on eBay, which was a total failure. It was the most fulfilling 18 cents that I have ever made. It was like, I can really do this, all I did was put some code on the site and I have 18 cents. I have to meet the $100 threshold before I see any of it, but this is awesome. And, so I started to sprinkle a ton of Adsense ads and then it got to a point where it was like, this is kind of getting a little ugly, so I started to put them in strategic places after I started to learn where Adsense ads should be. I picked up a book from [Joe Com] about Adsense and I read about Adsense from with Darren Rouse and just really tried to figure that out. From there, I did private advertisements. So, I actually contacted companies who, I saw were showing up on this Google Adsense ads. I contacted them and was like, hey would you like to advertise on my site and most of them were, the first was a site, I’m actually an affiliate for their product now, that’s kind of where this initial relationship went to. But, initially I had asked them to advertise on the site, I was like, hey, my name is Matt Flynn, I get 6 or 7 thousand visitors a day and would you be interesting in advertising. Heck yes! What your price. And, I was like, $50, $50 for a month and they were like, do it. Let’s do it. And, I was like, yes, this is awesome! But, then later I found out I was totally just throwing darts on a wall as far as figuring out a price. I didn’t even know where to start and that’s a sign that obviously I wasn’t prepared. I didn’t even know what I was getting into, but at least I had gotten started and sort of figured out how to contact these companies and create relationships with them.

Andrew: You just called up companies that were advertising on Google Adsense and you cold called them and said you’re running your ads already, why don’t you buy a direct ad with me?

Patrick: Yeah, I was like, you know what, these Adsense ads are cool and I’m sure you’re doing really well with, but how would you like to put a banner-ad on my site. And, maybe you could do it for three months, test it out, whatever. And, the first one they did for $50 for one month, but after that, I just felt like I had to grandfather that particular company at $50. But any other companies I did after that I did for $150 and then it got up to $300 a month. And, at one point, with all the advertising on there, before I launched my e-book, it was about $1500 a month on advertising alone.

Andrew: So, I remember seeing Ad Knowledge’s, they had desk after desk of sales people who were doing that exact same thing, doing a search to see who was buying ads through Google and then they would call them up and pitch them on buying ads through Ad Knowledge also, whose network would get them out on other websites. I get why they do it, I saw the video with Gary Vaynerchuck, where he show people how he would do that same thing. He looks to see who is an advertiser on Google, he calls them up, would you advertise on my site too. And, the guy says yes, and you can see that whole process work itself out. Many people have seen that, many people accept that that is common business practice and they don’t do it because it’s scary to make a cold-call. And I’m looking at your background, nothing in your background tells me you should have been prepared to make that cold- call. So, you a great person to ask, how do you make a cold-call, how do you start off making a cold-call and get past your insecurities?

Patrick: Well, what you do is pick up your phone and you dial. There are a ton of fears and, yes I feared, I had on choice. I was getting laid off, I didn’t know if my e-book was going to work. I was working on it at the time, but I really had no idea that I was going to do as well as it did. And, I was almost desperate, I guess. And, when desperation comes in, when you’re back is up against the wall and you really have no choice, you’re going to act. It’s almost like an act of survival. And, so I felt like I had nothing to lose. And, yes, I was scared, yes I’ve called companies that were, no we’re not interested, do you have a media kit that I can look at? And, I’d be like, no. Because I don’t know what that is. So, they wouldn’t work with me and that’s fine. But, learn as you go and I really think the question you have to ask yourself when you’re making cold-calls, is really what’s the worst that can happen? That’s something that I have always been asking myself as of late. When it come to doing stuff that I fear. It started with the cold calls then it was actually getting behind a microphone for a podcast, and then doing videos and putting my face on it. And, then doing a lot of public speaking. Really, what’s the worst that can happen? And, usually it’s not really as bad as you might think.

Andrew: The worst that could happen Pat? You come on, you do this interview and I ask you a question that tears apart the whole basis of your business, like passive income just doesn’t make sense. And, people go, you know why am I checking out this guys site? Or, you say something goofy or sounds racist for some reason because you’ve slipped up and it comes across. Then, you loose your whole audience. How do you get past those thoughts? My head sometimes goes through thoughts like that, what do you do?

Patrick: That’s definitely a legit concern and really it’s just about being yourself and being honest. If you’re hearts in the right direction and you know what you are getting into, then you’re going to be a lot safer. Now, obviously, with cold-calls, typically the person you are speaking to won’t really know exactly who you are and so, there’s a little bit of barrier there that you can hide behind when you are doing cold-calls. But, obviously you want to be as personable as possible. And, when it comes to stuff on-line, and when it comes to interviews like this, I am being myself and if I say something that slips up, that’s my own bad and I deserve whatever consequences happen as a result.

Andrew: You ended up going back to your parent’s house as I said at the top of the interview.

Patrick: Yep.

Andrew: And that’s where you built up this business, right?

Patrick: Uh-huh.

Andrew: That’s where you launched it?

Patrick: Yes.

Andrew: You say what you were going to say and then I want to ask you a question about it.

Patrick: Oh, I was going to say, I learned I was going to get laid-off in July 2008. I moved back home, but I continued to work at that same office. This was a sister office of the office I started with in Irving, CA. I moved back with my parents in San Diego and took the train every day from Monday to Friday, because it was more economical. Gas was $4-5 at the time. And, I didn’t have to worry about traffic. On the train ride is where a lot my ideas, that’s where I listened to the podcasts, and when I got home at night, that’s when I implemented and took action. And, when I was at work, that’s when I just thought about what I was going to do when I would go home. I, actually, enjoyed the train ride more than the final destination, getting to work.

Andrew: The curse about the doubts, the negative stuff, flies through our heads when we’re at a low point. And, that seems like a pretty big step- back there, to go back to your parent’s house. Tell me about the part that’s vulnerable, the part that is not heroic about how you were able to make cold-calls comfortably and how you were able to generate revenue. Take me to the place that you were feeling unsure of yourself at your parent’s house and you were doubting yourself. What were some of the things that you were hearing the voice in your head say.

Patrick: Well there was the voice in my head, and there was also the voice of other people around me as well. The voice in my head was, is this the right thing to do, should I be going down this path, do you even know what you are doing, are you even fit for doing this stuff on-line. I had no idea of what I was doing. But, there was also the voices around me, my dad would come up to me and say, Pat, like, you’re living at home now, which is cool, you always welcome her, of course. But, now would be a good time to go to grad school. Maybe by the time you finish grad school, the architecture industry will be great again and you can come back with a even better job or a better salary once you go out. So, the thing about my dad is, he’s always right. And, I hate that. But, I just felt like, when I got laid off, that I was doing everything I was supposed to and I still got kicked out. I had no control and I felt like, by doing stuff on-line and hearing all these other people succeeding on-line, that I could, at least, have a little bit of control over my own destiny. If I failed because I didn’t do my part, if I succeed it’s because I deserve to succeed. But, there was also the doubts because I was actually engaged at the time. I was engaged when I had learned I was getting laid off, so I had a lot of thoughts about my wife, or my soon to be wife. What was going to do down with that? Was she going to be supportive? Were we just going to have to live at our parent’s house like all the time? Kids? We can’t have kids when we’re living with our parents. All that kind of stuff was going through my head and really it was those success stories that I kept hearing, that I kept listening to everyday that just kept pushing me forward and as much resistance tried pushing me back, I just tried to keep pushing forward even more.

Andrew: Grad school is professional. It’s respectable. What I’m hearing in these podcasts is not. You did a little bit.

Patrick: What you’re hearing in these podcasts as far as the success stories?

Andrew: Like these [??] making money online. That’s not respectable. That’s not something you want to tell your parents-in-law, your friends at parties. It’s, I’m going to grad school. I’m an architect. I am, that kind of stuff.

Patrick: That’s very true and back then you were more respected if you went down that path and you went to grad school or maybe even got a PhD and worked the way everybody said that you were supposed to work, but I tried that and I got laid off and that was such a big blow to me. I can’t even tell you how big of a blow that was to me because everything was going right and then it just got taken away. I was like, ‘This can’t happen again. This could happen again if I go to grad school and I go down this path. What if it happened again? I really need to do something on my own.’

[??] 6000 or 7000 people were visiting that site every day and I’m very blessed about that and understand that if you’re trying to start something new that you’re not going to get 6000 to 7000 people coming to your site every day. That site had been up for over a year just sitting there. Just giving Google exactly what it wanted to rank high.

Andrew: When I start off this interview questioning the whole Smart Passive Income name and the ethos and the process, I’m sensing in your voice a change, like, This is a guy I’ve been listening to and now this is what he says. Bring back those old voice,’ does any of that happen?

Patrick: Yes. But really what drives me, what keeps me going and really what my focus is now is not those voices in my head anymore. It’s the voices of my audience and those people who I am touching, or those people who I have an effect with and really, I’ve learned through [??]Academy and also now that the more I can help people, the more I can change people’s lives, whether it’s a big thing or a small thing, whatever, that’s more success coming my way.

I really feel like, and this is sort of a saying I have, is your earnings are a byproduct of how well you can serve your audience and I feel like I have a really good understanding of who my audience is on both of those sites and also what they would need and what sort of setbacks they might have that I can help them through and the better I can help them through those setbacks, the more I can educate them. The more I can give value to them the more is just going to come back my way. I’ve had people, on Green Exam Academy when I sold my eBook I would say maybe four, five dozen people bought the eBook even though they didn’t need to. They had already passed the exam but they bought it because, and they sent me emails saying, that they just wanted to pay me back for everything that I’ve given them already for free.

That’s why on Smart Passive Income I also give away as much stuff as possible for free. Tutorials and case studies. I don’t sell anything on the site but I do make a lot of money on it through affiliate marketing by offering, or recommending products that I do use, that I do recommend. That I feel confident in associating with. I don’t recommend anything I haven’t used before and I think it benefits me in this niche that I’m in, the make- money-online niche, which I hate being a part of but that’s the reality of it. I think that helps me.

The fact that everybody else is, the whole industry, most of it, is scamming and they hide stuff and they’re not very transparent and just me being the way that I am, I feel like I have to be that way. That’s why I do my income reports. That’s why I don’t really sell anything. I feel like if people are investing their time with me to learn from me and be educated by me, it’s only right that I show them the whole story. Not just how much money I make but what I do wrong. I’ve done a lot of things wrong. I’ve tried creating software companies or WordPress plugins that just absolutely fell flat on their face but I share that because I want to show people, ‘This is what I did wrong. I didn’t create a storyboard that was good enough for the developer or a wire frame that was good enough and there was a lot of mix up there. I hired the wrong person on [??] because they had the lowest bid, but I didn’t do enough research and things like that.

Patrick: I’m going to come back and ask for the plugins that didn’t work or one project that didn’t work but I want to continue with the narrative and find out how you started smart passive income, but I’ve got one other question about what you said so far and then we’ll continue. Which is, you’ve talked to your mastermind.

Andrew: To me, I feel like, even at this point I hate to admit it, I feel insecure about having a group of people who I can go to for help, because I feel like, why would they help me? Well maybe they’ll give me a good 20 minutes or an hour on the phone, and many past guest have, but to say let’s do some ongoing help for me, they’re too busy! If they’re really helpful enough, they’re going to be too busy to work with me and if the’re not helpful, I mean if they have the time, then maybe they’re just not going to be that helpful. How did you find people that were not only helpful, but actually ended up showing how to push you to create this book that set you on this path?

Patrick: The first [??] That I was ever a part of was [??] Mastermind that met in San Diego when Jeremy from Internet Business Matching moved to San Diego and said, “Hey guys, I’m going to be in the area. Let’s all meet up and hang out and talk about our businesses.” Now we all had this commonality already because we were a part of this sort of course or academy in unit of business mastery county so we had common ground, we had the same goals. We all wanted to be successful in business, and we all became friends on this online forum before we met in person. And I think it really helps when you are joining the group of people who you can consider your friends, because you will go out of your way to help a friend.

Andrew: Because you had the most friends, because you were talking to them online.

Patrick: Correct. And we became even better friends when we started meeting in person. I think it’s the Mastermind groups where you either pay a fee or something and you just meet and you’re meeting people for the first time. That’s where it can get a little bit iffy. I think the true benefit of Mastermind is that one-time meeting which does happen sometimes with some groups or you might pay a certain amount to meet once a year. It’s those ongoing meetings where you can actually see the progress of everybody else in the business helped hold each other up. Help hold each other accountable too. And I think there’s something that goes along with you sharing what you want [??] and what you need help with and knowing that you’re going to be there when other people need help as well. And I think the structure of the Masterminds, at least the ones that I’ve been in, were each week, one person’s in the hot seat and that person shares something that they need help with.

And then we all help that person out as much as possible. And then either next week or the week after, it’ll be my turn. And then I expect that, because I’ve given enough help to people that they’re going to help back in return. Each of the Mastermind groups that I’m in, if someone doesn’t pull their weight, then they’re out. And so there’s sort of an understanding that you really need to be helping people, but also because now we’ve become great friends, we just want to help and so I think, to you, Andrew, or to anyone else listening out there, really try to get connected with people who you can really consider friends, who you’re going to back up. You know, you can almost take a bullet for. That’s how you know you’re in a great group of people.

Andrew: Alright, so you’re now continuing, things are going well, and you get a letter about your site’s name.

Patrick: Yeah.

Andrew: And the letter is from and what does it say?

Patrick: The letter is from the United States Green Building Council and it basically said, “Pat, stop what you’re doing with You are violating intellectual property because you’re using “lead” in the domain name. It’s a cease and desist letter. I didn’t know what that meant at the time. I’d never heard of that term and I was like, “Crap. I’m getting sued! I’m going to lose everything! This is bad!” It was almost as bad as when I got laid off as far as what was going through my head, but I called a lawyer that I just seriously found on Google, and was like, “I just got this letter. What does this mean, what can I do? And they helped me out and they said, “OK well you have a couple options. You can either fight it and try to keep lead in your domain name. It doesn’t look like they have a way that you can sort of license that and get permission to use it.” What I actually found out from the United States Green Building Council was that so many people were creating these sort of lead study guide sites. I don’t know if they found mine or maybe heard of the success of it and tried to create their own. But so many people were creating these sites and not delivering the content that they should be and so lead and the USGBC was worried that these other sites were not doing justice to the name or were giving it bad credibility. And in order to get rid of those, they had to get rid of everybody using lead in their domain name, which included me.

Andrew: Some people listening would say great, just find another name. It stinks, but you’ll find another name, which you did. Just redirect all the traffic to the new domain, life is good. Most people won’t even know the difference, but…

Patrick: But I did the redirect permanent through warner-redirect, which I finally learned what that was about. And then a month later I got another letter, from USC Receipts, saying, Pat, you are still using the domain, you are using it to forward to Green Exam Academy, which was the domain name. Sort of inspired by Internet Business Mastery Academy, fun fact. But, you can’t do that, you’ve got to take it down. So, I think, if you go now, it just say says, site dead, or whatever. I don’t even know what it says anymore. But, it’s gone and I couldn’t even forward. Luckily, that month to month and a half that I had been doing the 301 redirect was enough for Google to see that Green Exam Academy was the new domain. So, all the link to’s was still flowing and all the traffic was still coming through.

Andrew: says gone. The requested resource is no longer available. Alright, so you tried, as I understand, several other things before ‘Smart Passive Income,’ right?

Patrick: Yeah, the success with Green Exam Academy was so cool to me and I wanted to get my fiance involved. So, one of the thing we did was, we wanted to create a couple’s blog. Because all these dating blogs are, blogs about certain couples talking about their lives were popping up at the time. And, so I created on called ‘Couple of Thoughts.’ And, I had envisioned two side to the blog, one being me talking about a particular project and my wife, fiance or wife, talking about the same topic in the woman’s voice. And, there’d be a battle and whatever. And it was, I created the framework of the site and we just started writing a couple posts and we were we like, this is weird, this isn’t really going anywhere. And, so I just left the site. It just, it was so weird because we were so excited about it, and then once we started doing the actual work, it just lost all of its excitement. So, I think the big lesson there is what’s really the point of the site, understand what the point of the site was, and understand what the meat of the site would be, which is that content and that the text between my wife and I. If it had started with a couple of those posts before even worrying about the WordPress site or the pain or any of that stuff, I actually hired a developer to create the site, my site theme, because there wasn’t one available at the time. We would have learned right away that, maybe, we shouldn’t do this. So, that was one of them. Another one, I started learning about keyword research and trying to build site for people who just are interested in a particular topic that might get a high click through rate, through Adsense. And, so I created a site about learning. And, it sort of felt like it had to do with Green Exam Academy a little bit.

Maybe I could forward people there to understand how to absorb the content a little better on that site. Buy, I created a site and it was about how to maximize power of your brain. Because, there were certain key-words that were getting lots of click-through rates, lots of high Adsense payment per click. Again, I had created the framework, did everything, I hired a theme developer and I started creating content and I just was like, what can I do, I’m not even interested in this stuff. Why am I doing this? The lesson there for me was, I was just chasing the money at that point. And, I was just trying to create something just for the money. And, that’s when I learned that you can’t do it that way. You have to find a specific group of people, market, and really try to find out what their pains and frustrations are. That you can understand and maybe that you’ve been a part of before. For me, it was Green Exam Academy, that was a frustrating part for me, so I created this resource that other people lined up with. But, that brain site is so down, but it was a good lesson.

Andrew: Alright, then you launched More Passive Income. How do you get traffic to that?

Patrick: Well, at first there was hardly any traffic. I did blog commenting, like I would comment on Problogger, on [??journey] just because that a tech that people were using at the time. Leave a really valuable comment on their site and make sure you link site in the website field on the…

Andrew: Within the comment.

Patrick: Yeah, and then you get some traffic back.

Andrew: You’re saying, just the website field, putting your URL in there in 2008, 2009 to get you traffic.

Patrick: To get you some traffic, I mean, really less than 100 a week at the start. And obviously, everybody starts with 0. And, I just kept writing and you know, at a number of points during that first year of ‘Smart Passive Income’ I wanted to give up because I was like, what? I’m not getting any traffic, I’m seeing the same exact people leave comments on the site and I felt like I was delivering good content, at the time. But, it was like, who am I writing this for. And, really what kept me going was those few people who actually were commenting on every single post, just saying, hey, thanks this is a great article. Or, I really appreciate the time you spent on this. I mean, there’s just a couple people, there was this woman named Sarah who had a photography blog at the time. And a guy named Jerad who I remember who was so into what I was doing. But there were the only two people. But because I was helping them, it really felt like in the beginning, I was writing my posts just for them. That helped me keep going.

And then it was finally when I had, actually, I’ve never really told this to people. I was really interested in doing a podcast. In December 2008 I had announced on the blog that I wanted to do a podcast. Why? Because a podcast is what inspired me to get started in all my business. I knew it was a great way to connect with people. Obviously, people who are watching this know that.

So, I bought some equipment. Then I interviewed Yaro Starak from Entrepreneur’s Journey. I was in a closet. I took my iMac and I put it in my closet because it sounded better. I think I read that on the form somewhere. But it was so stupid and clunky.

I recorded the interview there. After I recorded the interview with Yaro, he goes, ‘Tell me a little bit about what you do.’ And I told him my story that I just told everybody here. He goes, ‘That’s so interesting. I want to have you on my podcast.’ So he recorded a podcast with me, interviewing me right then and there.

And I was, like, ‘This is so cool.’ And when that went live, I got a ton of traffic. I think that’s s sort of the inflection point where everybody just started hearing about me. Because I was such a big blog at the time. And it still it.

Then I got featured on Pro Blogger also. I think what helped was that I know I have a great story. Sort of a hero story, coming from scratch, living with my parents. I know it’s a good story. But I know it’s a good story that people can relate to and can hear what I have to say.

The funny thing is, that Yaro Starak interview that I did with him got lost in a hard drive failure. So I was never able to post it. That was in December 2008. My real podcast finally came out in July 2010. Actually, this story’s about trying to get that data back. It was going to cost $80,000 and it just wasn’t worth it.

Andrew: I’ve had that too. That’s why I’m so glad that in the beginning I interviewed my friends and people who I knew who I could say, ‘Oh, I just lost everything. Could we redo it?’

Patrick: Yeah. I don’t think I told Yarrow ever. And I don’t think he’s ever asked about it. I wonder if he even . . .

Andrew: I also now, when people interview me, I ask them if it’s OK for me to record a copy of them as a backup. Very often, I need to give them the backup. Which we all need. You’re doing the backup for me of this interview. So in case something goes wrong, I have it.

What’s interesting about that is, is that I also did an interview with Yaro, where I was on his site. I felt like my story was bigger than yours. But it didn’t get much traffic from Yaro.

I think there’s a big lesson in that. The sense that someone might have of, ‘I can’t go do an interview somewhere else because I’m not as big as those other people.’ That’s nonsense. You end up getting more traffic and more attention if you’re more relatable than those other people.

The way to be relatable is sometimes to share your insecurities, your setbacks, your struggles, the fact that you lived at your parents’ house. I think people relate to that a lot. I’ve found that here in interviews. More people want to just do nothing but puff pieces. Just, ‘Hey, I’m great. We should just talk about that. Don’t ask me about my insecurity. Don’t ask me about the voices in my head. What are you, Doctor Phil?’ Really, no one can relate to that. There’s nothing to really grab onto there.

The best example of that is Steve Jobs. He created these perfect products, perfect. You look at look them and just feel beautiful. But when you look at the book that he had written on his life, he went into having that book written, knowing that it wasn’t going to be positive. That there were going to be flaws that came out. I believe it’s because he knew that people don’t relate to a perfect person and don’t care about a perfect person. But they understand and care about and fall in love with a person who has these jagged edges. Just like they fall in love with the product that doesn’t have jagged edges.

Patrick: I definitely agree. I’ve found that, because I have a podcast now with 59 episodes. The episodes that stand out the most, that get the most downloads are the ones with people that nobody knew about. The mom at home who started to make $100,000 from scrapbooking, Lae [SP] Namen [SP]. Or Mike Doonen who created an iPhone app that helps kids with speech therapy. He’s making five figures a month with that.

Those are no names, but they’re doing some amazing things. People can relate to them more. I had Tim Ferris [SP] on my podcast too. I’m a fan of Tim Ferris and I know a lot of people are. But I feel like those other episodes were a lot more impactful.

Andrew: I like the one with the, one of the two guys who do a health site. I never know their names. They sell kettle bells that they have drop shipped. But they also sell their content on a pay-what-you-want. And somehow people are paying them for it. Even though they can get it for zero dollars.

Patrick: Yeah. Definitely. Anthony and Joe from Hybrid Athlete and they were just on my podcast. They have an amazing model. They just give it all away and say, “Hey, pay what you want; pay what you feel this is worth, and they’re doing really good, $400 to $600 a day, they told me.

Andrew: And then the setback. Now, I think, is a good time to talk about it. Should we talk about the plug-in? What can we talk about with SmartPassiveIncome that didn’t work out that we can show people that painful failure or that painful setback?

Patrick: Well, there’s a lot. I’m in the middle of writing a book which has taken way longer than I expected. I feel like I can write a blog post that’s 3,000 words in a day really easily, but trying to put a hundred words into this book is so challenging. I’m struggling with that right now as we speak. Going back to the WordPress plug-ins, actually I think it was Michael Dunlop from PopUpDomination or from (?) he created a plug-in called PopUpDomination that exploded. I don’t know if you use that on your site, but a lot of people use it.

Andrew: He’s one of many people who have turned me down.

Patrick: What? Are you serious?

Andrew: Yeah.

Patrick: No comment. That was a huge plug-in. He’s making bank off of it. I feel like software is the way to go if you want to really generate a good income passively or in a way that you don’t have to be there in order for transactions to happen. You can just sell software. So I wanted to create this plug-in that would be a light box contact form because all the contact form plug-ins – I’m just sharing this idea. I don’t know if anyone’s going to take this or not. I’m not doing it anymore. It was this contact form that would be a light box that would allow you to select a particular topic preset by the blog author. Based on the topic that they select, it either can be cc’ed to a specific person – for instance, if it’s a technical question on something, a particular VA who understands that particular set of inquiries or whatever would be able to answer without you having to be there or a specific auto response or it would populate blog posts in your blog that would potentially answer that question already so people wouldn’t have to message you. They could get the answer beforehand. So I tried to develop this.. created sort of a quick wire frame and I found someone on Elance to do this for me. I spent about $2,000 to get the beta version, and it was terrible. I would never download or touch this plug-in with a ten foot pole. The user interface was terrible. I didn’t even understand it, and I was the one that created.

The reason that happened was because I didn’t know anything about software development. I didn’t know how important an actual user interface was as far as WordPress plug-ins were concerned. What I should do is create as many pages as needed, a kind of walk-through about what every single button does, what every single word says, how every single button words and where it goes, what does it do and how does it act and everything. That’s what I’ve learned recently, but this was just $2,000 down the drain. I just got so frustrated with that. I really had to start from scratch if I was going to do anything with that, and I didn’t have the time to do again. I talked about that on the blog, and I think a lot of people have learned that if you want to get into software. A lot of your audience obviously knows a lot more than I do about that. You really have to find a great developer, and you can’t expect the developer to design for you. You have to find a user interface designer or designers in addition to the developer, or maybe there’s a company out there that has a whole package that can do that for you, both designers and developers, or you have to just be really good about telling your developer what exactly you want because any sort of things left out they’re just going to make up.

Andrew: And you didn’t pursue it because it was tough, but also there wasn’t a passion for it.

Patrick: Yeah, that too. There was a passion at the beginning, but the passion was, again, money driven, and it wasn’t really going to be about who I can help. Really when I think about it, this wasn’t even the best plug-in to create because who was it going to help? How often are people going to be contacted on their blogs and would they really be interested in this? I feel like it was sort of this story about this guy. This is Jeremy Jay from Interpass (?), and it tells a story about a guy who spent years creating this really high end yoga mat thinking that people would buy it, and when he finally came out with it and spent all his life savings on it, nobody bought it. All he had to do was just ask people if they would use. I didn’t do that. I just dove right in and lesson learned.

Andrew: I asked Clay Collins what it was about your site that drew people to you and you also effective at helping him promote lead player. He said that you write epic, he said you write epic shit. You don’t curse on your show, I don’t either, but I feel like I have to do justice to the way that he said it. Anyway, these are long blog posts. I’m looking right now at the post about Clay. Why go this long, nobody wants to read on the internet. Look at what’s happening on Buzz Feed. It’s just photo, caption, photo, caption. You’re done, the story is told, go to the comments or click on one of the other captions. Why, what did you find about going this long?

Patrick: Well, I’m not creating news. That’s the difference there. I’m creating a resource. And, the ultimate resource, the epic shiz or whatever it is when it comes to that particular scene that I am promoting. I did the same thing for Glen Alsaab in Optin Skin. I created a incredible resource. Just as much information as needed. I had a lot of people ask, how long does and epic post need to be. It needs to be exactly the length that it needs to be to deliver everything and to answer every question that people might have about that particular project or product or whatever it may be. And, so for Lead Player I have a video that Clay told me, you know your video about Lead player is better than my video on my sales page. And, what’s going to happen when you do that is that people are going to see you as an expert. It all shows that I actually I’ve used that product and people can trust me when it comes to that product and I can be there to help people with that product. Because I have this relationship with my audience, they see that and they see these products that I recommend and that I don’t always recommend products and there are opportunities to recommend products that I know I can make a lot of money from, but I don’t. And my audience knows that. And, so when I do recommend a product they really pay attention to it. And, that’s why I feel that they do read everything.

Andrew: You can make money from this because of affiliate commissions.

Patrick: Correct.

Andrew: And, so what do you do about the inherent conflict of interest that essentially you find products that you, talk about products that you can make money from?

Patrick: I don’t always. I talk about products that will help people. That will bring value to people. Sometime those are products that I don’t get a commission from. Sometime they are products that I do get a commission from. It doesn’t matter, what matters is that I am helping and delivering something to my audience, and in this particular case, and in many cases it is something that I do get paid for. And, I always make sure to tell people, I am getting paid for this, if you got through this particular link, you don’t have to, but here it is, thank you in advance if you do. If you have any questions you need answered make sure you contact me beforehand. And, of course, when people do contact me and ask me questions, they are interested. And, that additional personal touch that comes through, those emails that come in as a result of offering my help, more often than not, that becomes a sale. I am honest with that particular person about that product.

Andrew: Ultimately, I would usually say, this is a problem, this is the problem with the internet. That there are information marketers who are promoting stuff in reviews, but I don’t feel that with you, I never feel that with you because of what? What are you doing that communicates to people that you are a good person? Because, god knows, there are a lot of good people who come across weird. Who we’re still not trusting. But, I trust you. What are you doing, how do you communicate that trust?

Patrick: I think it’s a combination of a number of things. You know, sharing, like we were talking about earlier, my vulnerabilities, things that I’ve done wrong, which a lot of people don’t do. Just being honest and transparent about everything. It’s definitely not the way I look, because I know that for a fact.

Andrew: I disagree, I think it is the way you look, I think that you don’t look slick, but you look well put together. So, you look like, and I’m looking at your homepage, the first thing I see is a picture of you, I don’t know what those are called, the baby holder.

Patrick: Right.

Andrew: Right. So, I see you, I see the baby, I go, alright, I saw John Chow used to use something similar to his more passive income, but John Chow was dominating a computer and he was talking about, in his photo, it was an aggressive thing. You don’t see that here.

Patrick: It’s funny you mention John Chow because I remember back in the day, he had ‘the’ site whenever it came to marketing and stuff like that and he has a video on his blog, I think he still even has it there, where it’s him walking through the park with his daughter mid-day on a Tuesday and he talks about how this is why he does what he does. And, I can relate to that. But, I don’t want to start anything with John, and I appreciate John and everything he does but I don’t know if that is reflected through other things that he does. Through his blog posts or his other videos, he seems to have a very aggressive personality and I’m sort of the guy that just sits back and I listen. I really also think it’s because I’m not trying to be interesting. I’m trying to be interested in people. That was a quote, actually, from James Shrenko [sounds like]. I want to make sure I give him credit for that. Stop trying to be interesting. Stop trying to be so interesting. Just start getting interested.’

If you go to a party and you just talk about yourself the whole time and nobody’s going to hang around with you anymore or they’re going to talk about you behind [??].

Andrew: How do you make that work? Because you want to talk about the products that you’re talking about but at the same time you want to slip in who you are. You want to show some personality. The most hated interview that I did was with Tim Sykes recently where in the interview he talked about, I asked him about all these photos that he puts online with him and women and his Lamborghini and everything else and he said, ‘My personality’s what sells it.’ I said, ‘What about all the content that you used to do. When I met you, you told me about writing deep, insightful posts,’ and he went from one way to the other. How do you merge them so that it comes across, so that people get to know you and trust you and at the same time they get to hear your ideas and it’s not just dominated by your personality?

Patrick: I sort of envision different kinds of people that I’m writing to or creating [??] for or who I’m creating podcasts for and I envision those people as my friends. I really think about my friends when I’m creating content online, or even if I’m pitching something and I don’t even pitch something because I wouldn’t pitch something to my friend, I would share everything there is to know about that particular product so my friend can make a decision on his own, whether that is a product that aligns with him and what he needs to do.

I really feel like if I wanted to befriend someone I need to share a little bit about who I am beyond about what my site is about. That’s why the picture of my son is on there. That’s why a lot of people know that I just had a daughter six months ago. When I go to conferences a lot of people come up to me. One of the first things they say is, ‘I love the wedding video you did with your wife.’ That video is actually a video, we’re dancing to Peter Cetera, Gloria [??] then all of a sudden the deejay cuts out like he messed up and my wife goes up to him like she’s angry and then all of a sudden he goes, ‘[scratch noise],’ then all this hip hop stuff goes on and April and I do a little choreographed hip hop routine.

People talk about that. They talk about that. They talk about blooper videos with my son in my backyard. They don’t come up to me and say, ‘Pat, I really love that post you created about the top five Facebook tips.’ They don’t say that. They say stuff that has to do with me and my life, that people know that I’m into fantasy football, or that, even on my podcasts, in the beginning of every single episode I put a little fun fact or a little tidbit about myself like I’m deathly afraid of spiders, or that I’ve never finished a game of monopoly or that I’m terrible at tennis or I’ve been in the marching band.

Andrew: The announcer does that. It’s like . . .

Patrick: The announcer does that.

Andrew: . . . “Now the guy who’s afraid of spiders.” Then you address that. Then you go into it.

Patrick: It’s ridiculous that I pay this guy like 250 bucks to say one line.

Andrew: Per intro?

Patrick: No. Not per intro, sorry. For maybe a group of 30 of them. Maybe a little less than ten . . .

Andrew: You tell people about your family. You talk about how you write blog posts for your friends and you imagine your friends when you do it.

Patrick: My audience is my friend.

Andrew: Your audience are your friends and I want to hear more about that because that’s something else that I heard. You did something shocking to the audience and people kept talking about it even here in San Francisco when I was out with them they were talking about what you did, instead of what we were doing together.

First, the price then. You don’t want to charge your friends. You don’t want to send your friends to some site that they have to pay and yet you found that not only is price helpful but increasing the price has, what kind of effect? How did you find this out and what did you find?

Patrick: This was through Green Exam Academy when I was selling my eBook and it’s funny, the first month I had made about 8000 bucks and I got an email from one of my customers who was a small business owner who was like, ‘Pat, love the eBook. It’s really helpful. Thank you. You need to increase your price.’ I was like, ‘Who’s this guy telling me how to do something.’ Then I remembered, ‘I don’t really know what I’m doing and obviously this guy owns a business and he probably knows a lot more than I do,; and we started talking and he was like, ‘Pat, you are totally devaluing your product here.

Every other resource, which was a physical book in this particular niche, was 80 to 200 bucks. Here I was totally going the opposite direction at $19.99. The reason I priced it at that, because I was like, ‘I feel bad charging for people, or I want it to really be an obvious choice for people when it came to price.’ However, when I raised the price 50 percent to 29.99, I sold more product. It was mind blowing and I had no idea why this was happening and I brought it to my master mind group and I was like, ‘Guys, check this out. I increased the price and I got more sales. What the heck is happening here? One person gave me an example. If you go into a furniture store, like a really (?) type of furniture place like everything is #400 or $400 and all of a sudden you see this really nice looking chair but it’s ten bucks, there’s obviously something wrong with it. Why are they selling it for ten bucks? You sit on it and it breaks. I don’t know. That’s the example I remember. One guy I told, like should I raise the price even more. One guy was like, I’m going to punch you, ace, if you don’t raise your price and test. That was the big lesson there, test, test, test. You never know what’s going to happen when you increase your price or you decrease your price, or you try different sales or things like that. So I actually raised the price to $39.99, but I found I didn’t get a number of sales. I set it at that price for a couple of months, and I wasn’t getting the same number of sales as I was at $29.99 so I went back to $29.99. You can do that with your price. I didn’t know that you can do that. I thought that people would get upset if I changed the price, but no person complained about that and each person that visits the iBook is going to see it at that price at that particular moment. They are not going to know what the changes were.

Andrew: Here’s the thing that I heard from your audience. I forget who it was. It’s going to kill me, but actually it was multiple people. At Blog World or New Media Expo, I guess they are calling it now, everyone went out to some kind of lunch, a buffet lunch, and as they were expecting to pay they discovered that Pat Flynn foot the bill for everything. You paid for the whole lunch I don’t know how many people but multiple people. Count the number of people in the room what you must have paid per person and how generous you were. I understand that it endears an audience and gets them to talk, but to get them in the room, to get them to tell me that I should interview you, to get them to tweet about the fact that you’re going to recording this interview. That can’t watch it right now, but they’re tweeting that you’re going to be recording this interview means there’s some passion created. Tell me about some of the things that you do to grow that fire that your audience has. I would like my audience to be passionate about me. I don’t think they’re passionate about me.

Patrick: I think they are. But we could always use a little bit more passion from our audience, of course. That buffet was actually a dinner buffet. I had traded an event meet up for fans in Vegas, and we all went to this buffet. My presentation at the Media Expo was about the power of giving stuff away for free so I thought it would be very appropriate of me to surprise people at the buffet and just be like, “Hey, you guys, I got this.” And so, like you said, create buzz but also I just feel like I need to give back for everything that does happen to me. I know people are out there, “Aw, that’s BS” or that’s such a clich? generic thing to say, but I really honestly do feel like that. I need great (?) and I feel it’s because of my audience so I make sure I give back to them as much as possible. I do that through little old fun things like that. I will hold meet ups wherever I go and speak. I even get down to the fact that I actually reply to people on Twitter. A lot of people don’t do that. I reply on the comment section of my blog. I will go to other people’s blogs. I’ll randomly select three of four people who have left a comment on my latest blog post. I’ll go into their blogs, read a post, and just comment on it. That is incredible for engagement and for creating really super fans. Give people something unexpected, and I think that’s really what it’s all about, giving people stuff that they don’t really expect. For me I try to do that in every which way possible.

I had this thing called RAOK, Random Acts of Kindness, and I’ve tried to inject that into my office as much as possible. Even offline team, I love to just go to Starbucks and just be like, “Hey” to the guy behind me, “Let me get your coffee, please” and usually they’re like “No, no, no, you’re crazy”. “No, this would make me feel good” and it does.

Andrew: Of all the things that you suggested, buying coffee at Starbucks, responding to people on Twitter, commenting on their sites and so on, someone’s listening to us and they’re not as far along as you are but they want to do things that endear them to their audience, what’s one thing they could do that will stand out and get them the passion?

Patrick: What’s great about having sort of a virgin site, a site that’s just starting up is the fact that when you do get people coming to your site, you can really go above and beyond to engage those particular people because you don’t have a hoard of people coming at you. You can see the actual individual people and they don’t get lost in sort of the crowd. I get up to 100-150 comments on every post so I can’t engage with everybody, but when you’re first starting out, you see those two or three people who read comments on your blog or who are customers, you really want to develop a deep relationship with them so one thing that you could do and something I’ve done is actually offer to chat with them off of the website, you know? Be like, “Hey, here’s my Skype. I’d love to just chat with you, see what you feel about what I’m doing or maybe there’s something I can do to help you out.” And yeah, that’s actual time that you need to take to do that, but that’s how you can blossom those hundred true fans right from the start.

And that’s where people start talking and people start to become supporters of you or evangelists who will share you with other people. And yeah, a lot of those people may not have followings or may not be an influential person who can really take your site or your product or whatever to the next level, but it really just takes one or two influential people. And you never know who those people may be. And that’s why I feel like you just got to be nice and generous to everyone. I mean, a really big inspiration to me was Gary Vaynerchuk when I saw him come out Crush It and he got negative comments on his book in Amazon, he would actually offer his phone number to talk to people. And there’d be follow up comments like, “Gary, thanks so much for the chat. I apologize for the comment I said earlier. I am now like a huge fan.” And it’s just that, you know, it probably took Gary maybe ten minutes to do that and now he has a huge fan and he’s proven to everybody else who is watching that he goes above and beyond for his audience.

You know, when I was starting out and my audience was small, I should’ve done that. I should’ve talked to people even more. I did, but mostly what I thought was, “Oh, I’m so embarrassed that my audience is small. I’ll talk to this one person, but I hope he doesn’t discover how small the audience is. I was measuring my self worth and my abilities or I imagined that the other person was measuring my self worth and my abilities based on the size of my audience. And really it was an opportunity to actually talk to every single person in the audience.

Patrick: Totally.

Andrew: And then some of them would’ve been really passionate fans. Let me do a quick plug here and then I want to ask you some questions that I got from your audience on Twitter.

Patrick: Sure, yeah, totally.

Andrew: And the plug, of course, is for Mixergy Premium. You’re a guy who knows how to talk about products. If you were in my place, I need to learn how to talk about my own product better. What would you advise me to do to talk about Mixergy Premium, where there are hundreds of interviews, dozens of courses taught by entrepreneurs?

Patrick: Well, one thing I like to do is called unboxing the mystery, and the reason I call it that is because there’s these YouTube channels, and you’ve probably seen them before, of people just getting shipped some electronic device and they film themselves opening it, and taking out the packaging and looking at the plastic, feeling it out on video and really getting into what is actually inside that product. And those channels go crazy. I mean, millions of views for just like, you know, what does an Xbox look like when you take it out of the box. I mean, people love to see what they’re going to get before they get it. And yes, they’re going to have a relationship with you already and that’s going to help, but I think if you really create some in-depth videos about what they’re going to get when they go in. I mean, not just talking about it, but showing me actual experience of what they’re going to get when they get in there. And also sharing other people’s experiences who go through premium as well.

Andrew: You mean like that intro part, where after you pay here’s the first thing you’re going to see and then the next thing after that. And then what you can do is this. That’s what you’re talking about?

Patrick: Yeah, absolutely. Absolutely.

Andrew: I can’t do that. Because my intro stinks. I’ve got to really beef that up. I mean, basically we give you a page which leads you along, but it’s not pretty at all.

Patrick: Why not?

Andrew: I think I’m not sure yet how to– There’s so much freaking content, I’m not sure how to make it easy for people to go through so I’m testing different links that will show them what’s there and will guide them. But it’s still a pretty overwhelming process.

Patrick: Yeah, I would even– I mean, you have an amazing community who likes to talk, ask them what they feel like they would want to see. And then you could just go from there.

Andrew: But also, I should make it better because you’re right. That is a beautiful thing. Even though I can go through someone’s site and just register and see what happens afterwards, I do like watching those videos. You go through and you put in your password and user name and then let me see what happens.

Patrick: Yeah, oh, absolutely. I mean, one of my most popular videos on YouTube is a video that walks people how to start a website on Blue Host, which is the domain and hosting company that I recommend. And it actually goes through me putting in my passwords and creating a new site, and actually posting a post and putting an image. And I do that in under four minutes, which is the fun part of that video, so I have a timer and shows that you can do that in under four minutes.

Andrew: That’s huge. I would do that. I would want to watch that. Let’s do two questions.

Patrick: Sure.

Andrew: I got a whole lot. There’s one person who said, @thekitkass basically just wanted me to know, “The one thing you need to know about Pat, he TOTALLY cares about his followers. Completely selfless at meetups.” But that’s not useful. The first person to respond, I think, was @meoclouf, who said I should ask you about the energy coffee thingy.

Patrick: OK, so at A guy named David (?). He does all these crazy experiments on his body. Kind of like Tim Ferris’s four hour body style. He created this recipe for coffee that gives me incredible amounts of energy throughout the entire day with no crash. This is sort of weird that we’re talking about this on this podcast, but it actually is really helpful for my focus and my drive during the day and also at night which is when I usually work.

So this coffee, it’s mold-free coffee that’s ground and you brew the coffee. But then you add two tablespoons of butter. Unsalted, grass-fed. It has to specifically be unsalted of course. And then also grass-fed cow butter. And you also add MCT oil which is like a sunflower coconut type oil or you can just use coconut oil and you blend it. Make sure you blend it, because the first time I didn’t blend it and I just got a sip of oil that first time. I was like, ‘This is disgusting.’ But it’s like the creamiest coffee you’ll ever have and it gives you a ton of energy. Especially if you’re on a diet like I am such as the paleo diet or the renegade diet. You use your fats for energy instead of carbohydrates. This gives you about 40 grams of saturated fat in the morning. But that’s a ton of energy for you and it just keeps me highly focused.

Andrew: Alright. This is Manila4610. Says she wants to know, “I want to put a job hunting site up online, specifically for online jobs, where do I start?”

Patrick: Okay, Manila. That must be Philippines. So if you’re from the Philippines, Pinoy pride. I’m half Filipino. If you’re going to start with a job site, you’re in (?). There’s so many bog job sites out there., The best thing you could do is become the job resource for a niched, like a really niched down job site.

I actually have one of the top security guard training sites in the world., which was a little niche site that I created as an experiment on smart passive income. And on that site there’s a job board for security guards specifically. And that gets used daily by people to help them find their jobs. So I really think if you want to create a job site, think about a particular market or niche that you can focus on for your job site. It’s going to be that much stronger, there’s going to be that much less competition, and you’re going to probably reach more people that way.

Andrew: Alright. I think I’m going to leave it there. But there’s so many questions and so many notes that I didn’t get to. Like the way that you push yourself to keep going apparently was to compete with a friend of yours as you were building up your sites. That accountability and that competition kept you going. Let me ask you about last month’s revenue. What was January’s revenue?

Patrick: January I believe was $58,000 gross. Net, about 50.

Andrew: Almost good memory. $51,000 gross. Does that sound right? January 2013?

Patrick: I must be.

Andrew: We’re roughly talking about a site that’s doing 50 or so thousand a month. People can just go to I only ask because I always ask about revenue.

Patrick: Sure. I’ve listened to a couple of episodes where they don’t know the revenue and it’s kind of an awkward moment.

Andrew: It is kind of strange. And then, right now, I don’t know my revenue. I need to, there was like an accounting issue there, where things weren’t categorized right. I took money out of the PayPal account, because everyone was freaking me out on hacker news about keeping money in PayPal. I moved it to another account. The people who did my books, said, ‘Oh, that must be an expense.’ Come on guys. Categorize this better. But we all know your revenue probably even better than we know our own. It’s up on smartpassiveincome. Pat, thanks so much for doing this interview. Sorry that it took me so long to understand that I should have done this interview.

Patrick: No apologies necessary. And thank you for having me. As you know, I never really pushed it either. I wanted to make you decide to (?). I didn’t want to push it. So thank you.

Andrew: I appreciate it. I’m proud to have you on here. Thank you all for being a part of it. Bye guys.

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