📖 "Did my bestselling book turn out to be a financial failure?"

This short article from business influencer Tiago Forte was super insightful. He includes some behind-the-scenes numbers (such as his customer lifetime value, “CLV”) and nice graphs, but some of the biggest takeaways for me were found between the lines.

A few things really stood out to me:

• He seemed to have tried to solve the wrong problem

  
  

His CLV is low, only $720 per customer. For context, my average CLV currently sits at $46,545. We are in similar niches.

He explicitly stated his aim for the book was to make more money (via a loss leader strategy) by bringing in more customers. His efforts were likely better spent on increasing his CLV and getting more from each customer. The original strategy was flawed.

He already had a large customer base and strong reputation, he had (and still has) a real opportunity to significantly grow his revenue and profit by focusing on his existing customers and extending their value. It is much easier, and much more profitable, to sell to an existing customer than to try and get a new customer.

Extending CLV links back to one of my favourite questions for every business owner: what happens next?

Simply knowing what the customer is meant to do next is an extremely powerful way to increase their happiness and increase your profit. Anticipate customer needs.

• His data analysis seemed flawed

  
  

He only took into account the difference in his growth from the date of the book’s publication, he didn’t factor in the trajectory beforehand. It is difficult for him to conclude that the book truly accelerated the growth of his channels.

• He seems to lack external counsel

  
  

I believe that all of his problems with the book would have been easily prevented if he had some kind of outside counsel - an experienced friend, a business coach, or even his own team feeling comfortable to talk to him.

Experience would have questioned whether he needed more customers, or more from each customer. He himself points out that in hindsight it seemed obvious that he shouldn't kill his core offer while his audience growth skyrockets because it WAS obvious that he shouldn't do that. The problem is often that it is hard to see things clearly when you are so close to them.

You need to make sure the people around you are comfortable to challenge you, and to highlight potential blind spots. His team should have flagged the mistake, they may have flagged it and been ignored.

Any kind of external counsel could have made this glaring mistake obvious to him. He lacked the external counsel he needed. This one mistake cost him $3,000,000 and it was easily avoidable.

Be like Tiago Forte in that you admit mistakes and analyse performance, but, equally, learn from his mistakes here. Get external counsel, analyse data fully, focus efforts on identifying which problem to fix. Fix the right problem, not any problem.

Tiago Forte’s social channels growth rates

P.s. I know my client, Denis, from Weekend Publisher will likely be screaming out that Tiago should never have expected to make real money from one book. Most profitability in books comes from creating a series. Tiago seems to have noticed that extending CLV, and extending the book series, is more profitable when he said in the article that his second book was almost pure profit, but unfortunately he doesn't seem to have internalised that lesson yet!

P.p.s. This post actually comes to you thanks to one of my new clients, Kenny, who you saw in some short videos in Work Smart Wednesday last week. I checked out his substack, and he linked to this article. Thanks for the recommendation, Kenny!

I shared this in my Work Smart Wednesday newsletter. Want the full set of related insights? You can read them here: https://worksmartwednesday.substack.com/p/work-smart-wednesday-july-31-2024

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