SAVED 4 LATER: Why you need a Signature Product

By PLUGOblog

As with all my SAVED4LATER posts — I’m quoting it here so that I can come back and more thoroughly analyze and offer my own thinking on the topic later – like it says on the title…

I hear many creators talk about their goal of creating multiple revenue streams to “diversify their income.” This usually comes from wanting to earn more revenue and assuming a new income stream as the best path.

While diversification is beneficial for many reasons, it’s not the most efficient path to increasing revenue.

The diversification myth

The IRS once reported that the average millionaire ​has seven revenue streams​. 

The idea spread like wildfire. 

People interpreted it as causation, thinking that the way to become a millionaire was through diversification. Business owners took this as a directive to diversify their revenue streams inside the business. 

But when you look at that report, those reported seven revenue streams are:

  1. Dividend income from stocks
  2. Earned income from a paycheck
  3. Rental income from real estate
  4. Royalty income intellectual property, inventions, etc.
  5. Capital gains from selling assets that have appreciated in value
  6. Profits from a business
  7. Interest from savings, bonds, or lending activities

The diversification represented here isn’t about the revenue streams of a business, but an individual.

Warren Buffett once said diversification “makes very little sense for anyone that knows what they’re doing” but is instead “a protection against ignorance.”

I’ve heard it said another way…

You GET rich through concentration. You STAY rich through diversification.

That is, it’s the singular focus that achieves major financial outcomes, and then diversification allows you to maintain (i.e. not lose) those outcomes.

The good news for creators is that new wealth is most commonly earned through entrepreneurship. You make something new of incredible value and either generate a ton of cash or sell that valuable asset.

However, this concentration vs. diversification idea applies to both the individual and the business. Focus is the faster path to extraordinary financial outcomes, at which point diversification becomes more prudent.

The cost of diversification

Creators often diversify by creating new products. I’ve been there! You make a thing, launch it, and it makes money. You think, “Woah, that was awesome! I’m going to do that again!” So you do, and that product makes some money, too.

This feels great at the time. It feels like you have the Midas touch: everything you make makes money.

Nathan Barry described this to me as building a strip mall (rather than a skyscraper). You create several discrete, smaller assets instead of making one massive, compounding asset.

But creating new products comes at a massive cost:

  • Any financial investment in the new product
  • The time to create the new product
  • The time to promote the new product
  • The opportunity cost of improving existing products
  • The opportunity cost of promoting existing products
  • Confusion or indecision within your audience

The pure financial costs are generally low. The higher costs are the opportunity cost of 1.) your time and 2.) building awareness of your existing product(s).

When you take the strip mall approach, your future looks like this:

  • Revenue only happens when you actively launch something
  • You have a pile of older products that now generate little or no revenue
  • New “launches” of those existing products perform worse and worse each time
  • You aren’t known in your space for any one thing in particular
  • You’re constantly falling prey to shiny platform syndrome and thinking about your next new product or revenue stream
  • New competitors seem to be growing faster than you are

Things would have been more straightforward, profitable, and effective if you had focused on one product instead.

The benefit of concentration

Let’s imagine the counter-example.

Go back to the point of making and selling your first product. Now, instead of using that experience to inspire an entirely NEW product, you spent the same amount of time making that first product better.

You launch the same product again. Sometimes, that second launch gets fewer sales, which leads to panic. But something far more valuable is quietly happening: you’re building a reputation.

You’re on the path to becoming known for something.

As you repeat this cycle more and more, not only have you strengthened your reputation as the person who does [that thing], but your customer outcomes will improve as you improve that product. And, as a bonus, improving your product is typically much easier than building something from scratch! So you can iterate and run more launch cycles than if you built an entirely new product each time.

Fast forward a few more cycles, and you find yourself with:

  • A very strong product
  • Tons of customer success stories
  • A reputation for being THE person for [that thing]
  • No “wasted” products sitting on a shelf failing to deliver
  • Growing word-of-mouth and natural top-of-funnel growth

Tiago Forte’s Building A Second Brain is a fantastic example of an elegant creator business that took this path. When I spoke with Tiago, he told me that he didn’t feel like he really hit his stride until the 10th cohort of his live course!

The success of Building A Second Brain (which has generated millions in revenue) eventually led to downstream, related diversification, including a self-paced version of the program, books, and speaking opportunities. But that was after he had built such a strong brand and reputation as the second brain guy.

Instead of linearly growing revenue by launching new products, you can exponentially grow revenue through a single signature product.

The signature product approach

Most people talk about attention as the driving force for creators – but I’d argue that mindshare is a better goal.

“Attention” could mean anything from momentary awareness (being shown your Reel) to conscious intent (seeking out long-form interviews with you).

Not all forms of attention are equally valuable.

You don’t want people to just SEEyou – you want them to REMEMBER you.

When people remember you, you’ve earned mindshare. You’re being associated with something specific. Association creates mindshare, which in turn creates word-of-mouth.

Selling multiple products makes it much more difficult to develop an association. Do I associate you with the outcome of Product A or Product B? The more products you offer, the harder this association typically becomes.

Of course, we’re all complex people that contain multitudes. But other people won’t give you that much mindshare. If they can’t associate you with ONE thing, they won’t associate you with anything at all.

This is the power of a signature product. Your signature product is a big, bold flag in the ground that says, “THIS is what I can do for you. THIS is what you should remember me for.”

The fastest way to develop mindshare is to articulate a specific point of view, promise a specific outcome for a specific audience, and create a signature product that delivers on that promise. Your free products and services should align with that promise and help people move in that direction, too – but your signature product is the fast track.

Some great examples include:

These examples span a wide range of product formats and go outside of education. Your signature product could take any form – whatever makes the most sense for you, your point of view, and your audience.

Developing mindshare means that people grow your brand for you. You’re the go-to recommendation for [thing]. Not only will your signature product begin to generate more attention, but selling your own product directly to your audience is the best way to maximize your return on attention.

Develop your own signature product

As usual, I’ve learned this the hard way. As of this writing, The Lab is my signature product. It’s what I’m most well-known for, and it’s knocking on the door of $1 million in total revenue!

But that wasn’t intentional. I started with the strip mall approach, and when The Lab became successful and started generating referrals on its own, I doubled down. 

Now, I’m working in reverse – reworking my product offerings to be more simple and elegant.

Inside The Lab, I’m often helping members develop their own signature product. And after helping dozens of creators do this, I’ve developed a framework to help creators identify:

  1. What your signature product should promise
  2. The format your product should be delivered in
  3. How to position your product
  4. How to price your product
  5. How to name your product

In typical Creator Science fashion, this could get very meta. While The Lab is our signature product today, I see a future where our signature product is helping creators develop their signature products.

As I shared recently, I advocate for developing products through live learning experiences first. So, later this year, I’m running the first-ever Signature Product Mastermind to personally help a small number of creators design their signature products.

Jay Clouse: CREATOR SCIENCE

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