Jay Clouse [00:00:14]:

Hello, my friend. Welcome back to another episode of Creator Science. This is a unique week here on the podcast. Typically I would air a new episode here on Tuesday morning, but I am saving this week's newest episode for later this week. I'm actually going to air it on Friday. You will get 2 episodes this week. That podcast will be with Nathan Berry of ConvertKit, a round 2 interview with Nathan. And it was recorded about a month ago. It has some special news, a big announcement. And that announcement is going to be announced on Friday at ConvertKit's Craft and Commerce conference. I will be at Craft and Commerce. If you'll be at Craft and Commerce, let me know. But in the spirit of protecting that announcement, I'm not airing that episode until Friday. So stay tuned. Keep an eye on the feed. You will get a second episode this week with Nathan Berry of ConvertKit. Now let's talk about this episode here today. This is also a really fun special episode for me. I've been a long time listener of a podcast called Tropical MBA. It is a podcast between Dan Andrews and Ian Shane. It's the first location independent podcast that existed. Location independent entrepreneurship. 2 weeks ago, I had the pleasure of being a guest on the Tropical MBA podcast. Dan reached out to me and I came on the show. And today I am re airing that episode here on the Creator Science feed. Here's Dan. Here's the story of today's episode, bossman.

Dan Andrews [00:01:39]:

Jay Klaus, today's guest. Incredible conversation came on the show a gazillion years ago when he had just quit his job and got his first ramen money and came on this segment called Consulting Corner. I'm in the phone booth, it's the 1 across the hall Hello. Oh, hey, it's Jay. How do you pronounce your last name? Jay Klaus, very German.

Jay Clouse [00:02:06]:

A gazillion years ago is actually about 5 years ago. It was in February of 2018 that I was originally on the tropical MBA podcast and I was just getting started into year 2 basically for my business and I still had no idea what I was doing. At the time I was facilitating group masterminds. You can think of it as group coaching but group masterminds. Now here's what 2018 me was struggling with.

Jay Clouse [00:02:30]:

Back in October I knew it wasn't going to make sense to start new groups over the Thanksgiving holiday. So I had Thanksgiving and Christmas and kind of New Year's to weather before starting someone else, which meant that I suddenly had a 3 month cash flow gap. And so I picked up some freelancing, I did some WordPress development, and I still have some of those clients. And now it's kind of nice having those because that type of work is actually paying my bills pretty steadily, but it's not building a business kind of the way that I want to and doing things my own way, it's client work. And the question is, how do I balance the time of my own creation

Jay Clouse [00:03:09]:

with sort of the opportunity cost of not doing client work? Now I leave that all in there because maybe that sounds familiar to what you're currently going through or what you've gone through in your recent past. And I just wanna show you how far you can come in 5 years of working really hard and knowing what you're trying to work towards. For me, I was trying to work towards a more leveraged life where I was creating content, I was creating digital products, and I was not earning an income just from client work. So that's the backstory. That's why I originally went on the Tropical MBA podcast. Now they brought me back in because things have changed a lot in the last 5 years. I'm going to hand this back off to Dan now and you can listen to the full interview from Tropical MBA in its entirety.

Dan Andrews [00:03:50]:

Well, fast forward to this year, I'm on Twitter and I see that J Klaus, 1 creator of the year, has a 200 person membership paying $2, 000 per annum per membership. Of course he presents accepting the award saying that it was all due to the tropical NBA 30 minute consulting corner. No, I mean, I reached out to JV a DM to congratulate him. And I said, hey, you got to come back, come on the show, and give us the consulting corner. I remember that episode. Yeah, it was actually super cool because I remember he was like in a transitional period, you know, and he like came on the show and we like talked about his problems. And I don't know, some people, you just kind of know that they're going to like push through it and be successful. And I had that feeling about him, honestly, when he was on the show. You know what? This guy's going to like figure it out. There's other people where you're just like, well, good luck, man. And I don't think you have it. There's some people that got that extra. I even said that to Jay. During COVID, he interviewed me for his amazing pod and it was the best interview of me ever. So we'll talk about that a little bit and it's just like there was no need for it. You know what I mean? It wasn't like it was NPR or some shit. It was just Jay and his podcast. He didn't need to put so much effort into it. That really stuck out. And yeah, also had to do some production work this week to today's episode. I found myself not wanting to cut a lot of this interview because I think Jay's just got a lot of incredible things to say. So, all right, let's get moving on to this interview. Jay was on the show 5 years ago where he was just ramen profitable. That was in 2018. He's been voted the CEX 2023 content entrepreneur of the year. Importantly, he has a membership that has a waiting list. He has 200 members paying each 2k a year, boss man. And it doesn't necessarily require a big staff. I think This is an amazing kind of contemporary version or take on Kevin Kelly's thousand true fans, but for internet creators, there's a lot that we went over in this interview from the value of maybe capping memberships to how we got the whole thing started in the first place and how Jay thinks other founders and creators like us can follow in his footsteps. Plus some advice for us, which we highly appreciate it. And let's be frank, he owed us. So definitely like a selfish free consulting angle on this 1. Let's roll it. I don't know if I told you this, the interview you did with me during COVID for your pod, which you just changed the name of, is probably like my portfolio interview. It would be like the interview I would like send to my kids if I died. That was your dad. He did some podcasts at some point. And I'm curious,

Jay Clouse [00:06:44]:

why were you working so hard for that at the time. Like what was your vision of what that pod was going to become? Because I know at the time it wasn't making you a lot of money. Man, that makes me so happy. Part of it was because I feel actually a lot of gratitude to what you and Ian have done here because it was really inspirational to me. So part of me just wanted to do right by you for like all that you guys give here on the show. But with that show, it was the second podcast I had tried to make in the first podcast did not grow very well. So with this new podcast, I wanted to give it a better shot because podcasts are just I think it's a toughest platform to build as a creator. Why? There's no discoverability. There's no like third party that's incentivized to get people to your show unless you get selected by like the small editorial teams at podcast listening apps. You're really only working with word of mouth or whatever audience you can drive to the show. So it's a great audience relationship builder, but it's just not an audience building thing. And maybe that's more of a function of where we are right now in podcasting. You guys started before like there were listing apps really. Almost before there were pods. Yes. So maybe maybe things were different when you were getting things started and people were looking for shows. But now Noah's sitting around saying, man, I want another podcast to add into my weekly listening. It's more like, man, that show does sound good. I guess I'll try to find some time to listen to it. I've heard people lately say, and this wasn't

Dan Andrews [00:08:16]:

common wisdom. In 2015, I was like, podcasting is over. Now I'm hearing the new crew say, cool, newsletters are great, Twitter's great, but oh my, if you can get people to listen to your podcast, It is the greatest. And I'm like, what? Where's this message been?

Jay Clouse [00:08:36]:

I had to wait 15 years for this message. I agree with that take, but that, you know, the big contingency is if you can get people to listen to your podcast. Yeah. So Yes, if you can get people to listen to your podcast, like it's an incredible opportunity. It's an incredible business all on its own. It can be massive and crazy, but that's the rub. It's how do you get people to listen to it? So when I was starting the show, that question was on my mind And I thought, well, if I could be a part of a podcast network, that might give me a better shot. And so I knew 1 guy that was running a network and he had talked to me previously and he basically told me, hey, when we partner with shows, it's best to partner with them from the beginning. The show that you're working on right now, it's already in progress, we can't do anything with it, But if you start another show, reach back out, let me know. And so I really wanted to build something that was impressive to him so that he would take a chance on me and bring me on to the network in the beginning. And the first thing I sent to him, he was, well, this is a show. It's not a good show, but it's a show. What was that concept? It wasn't dissimilar from what I do now, but the intro was more like WTF with Mark Maron where I knew I knew I wanted to have a relationship with listeners. So I thought, well, maybe I'll just be me and be off the cuff for 5 to 10 minutes, but I'm not Mark Maron and nobody cares. And so first off he was like, you got to cut that intro down. You should probably script it. By the way, think about some voiceover throughout that you come in and do some narration that kind of stands out. So he pointed me towards another show called Without Fail by Gimlet that no longer runs, but I liked it a lot in between without fail and TMBA. I kind of took some inspiration for format and just wanted to push it a little bit further because I knew. Yes, the first battle was getting people to click play. But then the second part of the battle was getting them to say, I'm going to tell a friend about this. And I needed something about the show to be remarkable. And I thought, even the production can be more remarkable than most shows. But I'm also not NPR. So there's a line of what production is good enough and possible to sustain for me as a solo creator. And that's kind of where I landed. It seems like Gimlet was doing this startup pod.

Dan Andrews [00:10:41]:

And at 1 point I like did the math. I'm like for each half an hour they put out, there's like 150 human hours or 250 human hours. And then I was looking at the TMBA pod and I was like, okay, producer Jane, Dan, Jay's up for the interview. I'm like, all right, it's 15 hours or 10 hours. And then it's like your pod came out and you like kind of came somewhere in the middle there. And where you were going back and taking the time to do the research and like create scene and create a sense of space on the show that like these higher level produce shows do. Did you have consciousness that that was like the basic specific plan? Yeah, kind of. What I really liked about the audio medium is that

Jay Clouse [00:11:22]:

I could pull in third party sounds and make it really interesting. You know, I had an audio engineer who helped me with making the audio sound good, but it was me tooling around in GarageBand, like doing the layout, making creative decisions, and cutting things out and adding things in. I had fun with it. I think that was really key, approaching this podcast a little bit like art, making it kind of an experience, and I was putting a lot of man hours in. Make sense.

Dan Andrews [00:11:46]:

I'm wondering, I feel like we need to circle back and kind of get some timelines to contextualize the rest of the conversation. Recently I saw on your Twitter you like sort of listed out your revenue over the years. Could you just give us a sense for like how things unfolded and what those sources of revenue are and what your business is and everything like that. And then we'll go from there.

Jay Clouse [00:12:03]:

Totally. So I was in startups until 2017 and I quit my job in April of 2017. And I didn't really know what I was going to do, but I had faith that I could figure something out. So that looked like freelancing in the beginning in the form of website development, email marketing, and then I started putting together these mastermind groups. I was basically forming and facilitating mastermind groups from 2017 up through 2019. And February 2018 is when we aired the Consulting Corner episode with you and Ian. So I was like basically just finishing up my first year of the mastermind product. So I did that for 3 years along with some miscellaneous freelancing. 2017 revenue was just under 30k for the year. And then 2018 went up to about 73. Then 2019 actually took a step back to 54. And then 2020 was a really interesting year for a lot of reasons with COVID and everything. That was the first year I broke 6 figures. And that was also the first year that I started working with Pat Flynn and Matt at Smart Passive Income. You had Matt on the show recently, which is a great episode. Started consulting with Matt and Pat in 2020 during the pandemic. So Matt had some experience with the mastermind group that I was facilitating when he was running his business solo. And so once he was folded into SPI and he was running that business In 2020 with the pandemic, they wanted to fast track building their online community. That thought, who do I know who does online community really well, brought me in to consult on it. And basically, it's like, can we hire you? And I was like, no, there's too much going on. I can't fathom like winding this stuff down. It just doesn't make sense. And he said, well, what if we acquire your community and mastermind stuff you're doing? And we just fold that into what we're doing at SPI. And I said, well, can I continue to do my content creator stuff on the side? And he said, absolutely. So that was what happened. They acquired and basically acquired me to come into SPI and then 2021

Dan Andrews [00:14:08]:

I led the community team there. And I remember you announcing that and I saw that and I was like, oh, that's so badass. I was like, kind of my first thought is like, yeah, of course. And it's weird when you quit your job and you don't make a lot of money to do this stuff to think that like acquisition or working with Pat Flynn or I guess I'm just trying to underline this phenomenon that is still elusive to me, which is that we don't know what's going to happen, but we sort of depend on good things happening and that's sort of entrepreneurship and it's sort of this vague cloud of like get yourself in the game and typically it sounds like you had that faith even back in 2016

Jay Clouse [00:14:43]:

that you were going to be able to win essentially. There's a conversation that Lewis Howes had on his podcast with Kyle Cease but he had this thought on there where he said when we are thinking about opportunities our mind can completely understand what we might lose by making a decision. We know like what is at stake in terms of what we can lose, but we have no idea actually what can be gained. Like you literally have no idea what 1 decision might create 1 piece of content that is seen by 1 person who has a special opportunity that just changes your life forever. But because you have complete information on what you can lose. And we're loss averse as a species. We often just don't take those leaps because

Dan Andrews [00:15:22]:

all we understand is what we can lose. We literally just can't even fathom what can be gained. 1 of my favorite content creators is Venkatesh Rao. And he has a great newsletter. If you're not subscribed, it's fantastic. And he has this whole interesting take on AI and how humans evolved our intelligence, which is essentially like a don't die mechanism. You know, stuff's really deep in us. Like loss aversion is why we're here. And so now we have this idea that, oh, I could like just elbow grease curiosity into a podcast and then acquisition Pat Flynn. That's harder to grok. I talked about this in that episode we did back way back in 2018. I was living super cheap. How did you make it? What's it like having friends with job?

Jay Clouse [00:16:02]:

I was living in Columbus, Ohio, which isn't really known as a burgeoning creative hub. Uh, but that's another way that I knew Matt. Matt lives here in Columbus. I didn't have a whole lot of community in that sense. I don't people that I was pulling into these mastermind groups, but I was living super cheap. I was really, really lean. I learned a painful cash flow lesson in year 1.

Dan Andrews [00:16:23]:

What was that lesson?

Jay Clouse [00:16:25]:

Well, you know, I'm doing these 12-week programs, these mastermind groups, and so it's cyclical in nature. And what I didn't think about was planning my year out of when each 1 of these groups would start. And so we got to the end of 1 of these groups in like October, and that goes through Thanksgiving, Christmas, and New Year's. I basically had to put that program on ice until January. And I had done the math, that program sustained my existence. So now suddenly I had 3 months with no cash flow and over the holidays and my first year of entrepreneurship. Another lesson was I just reached out to people in my network who are entrepreneurs and was like, I have skills. You want to hire me to do something? And this guy, he was basically like, yeah, I actually want to redesign my website. I want to get a better flow for onboarding customers into my SAS product and keeping people using the SAS product. So he basically gave me 4 months of contract work to get me up till the next cycle that ran.

Dan Andrews [00:17:21]:

And then I started to put things in place a little bit better. I think if you're listening to this podcast, you have like a professional skill set, you're like $100, 000 a year person. You can always hit that air break down into $50, 000 a year just to work for somebody right halftime in the creative economy. Like if you grok what what Jay's saying what what we do on this podcast like 50 grand a year is a cakewalk at this point because just our skill sets are so in demand that none of us are working for other people anymore. So if you run into a tough spot, like I was at a DC event a few weeks ago, I just want to highlight this guy's performance. He rocked into the conference and he's like, yo, I'm here for oxygen. I totally took a hit last year. I'm $40, 000 in debt. Amazon shut me down. I had to get an engineering job in X city,

Jay Clouse [00:18:08]:

and everybody was like, awesome. I'd love to step onto the stope box for a second actually, because I think about this a lot, but there's never a binary view of employment. And I did too, I started and it was like, I'm either self-employed or I'm employed, and if I'm not self-employed, then I don't feel good about myself. But really what we have is some amount of time that we sell for some amount of compensation. If you're full-time, like you're selling 40 hours a week for the compensation of a salary, benefits, maybe even a non-compete. Whereas, if we're doing this creator thing and you're trying to get a lot more leverage by creating content, but you have 20 hours a week to sell, sell it. Like, selling your time is gonna be 1 of the easiest ways for you to generate revenue in the near term that gives you the financial engine to build the freedom vehicle that you're trying to do. And it's there's such hard balance when you're employed. It's so easy to turn off from that thing to do your thing. Whereas if like you're freelancing as your financial engine, that's just another thing where you feel like you don't necessarily have boundaries. Like, do I stop freelancing at 5? Uh, that's a TMBA colored soapbox, my friend. Everybody wants to see the internet and do internet things. And it's like, you're already literally getting paid. Like someone's making huge margin off of your time.

Dan Andrews [00:19:16]:

I like doing money things. What happened with the Pat Flynn organization? So you're internal now.

Jay Clouse [00:19:23]:

Yes. And you have no idea. Working alongside Matt for a year, the way his mind works from an operations, finance, human perspective, It's incredible. And that was a big selling point for me. You guys talk a lot about apprenticeships. By the time 2020, 2021 rolled around, I realized I wish I just would have done an apprenticeship the first like 2 or 3 years of my business and learned a lot faster, probably got paid better, built more relationships. And this opportunity walks in my door that's like on delay. Exactly what I wish I would have done early on. I came in, we had a team of 4 people on the community team and I was steering that ship. It was our premium community SPI pro and we did cohort based courses for a while. So we ran a bunch of those cycles while I was there. We did a virtual event. We moved our student community off of Facebook and into Circle. So it was awesome. It was a really great year. We had a lot of success. We grew a lot. The thing was, it got to be like August, September of 2021. And I just realized because I took that job, I said no to all consulting and service work outside of that. It was like I do the SPI gig and then I do content on the side. And it was like by finally just saying no to service work and focusing my creative time on content, the business grew. And it was growing and growing and I just realized I can't serve both of these things basically full time, something's gotta give. So I gave Matt and Pat like a 6 month notice and then we did like 3 months of contract work into 2022. It was awesome. You work for a brand called Smart passive income and you go to them and say, Hey, I'm making some smart passive income over here and I need

Jay Clouse [00:21:06]:

to focus on that full time. Just a quick break for our sponsors and then back to this episode with Dan of tropical MBA.

Jay Clouse [00:21:15]:

And now back to my conversation with Dan Andrews on Tropical MBA. With a lot of creator personality types, there's some crossover with

Dan Andrews [00:21:24]:

non-business minds. There's a cluster of things. We'll say not interested in business. I'm Gen Xer, not interested in selling out. General aversion to sharkiness, to the hustle, wanting to be expressive and not to be bothered. Maybe even wanting to escape the tedium of average normal life. The creator life has always had this promise of a poetry to it, something more. Yet, I think what you've demonstrated in your career that you also have a killer instinct or an ability to build relationships, to make hard decisions. Like the idea that you're going to go to Pat and Matt and be like, yo, I can't work for you guys anymore. Like that's a conversation that I think a lot of people would delay. So I'm wondering if you could bring me into that side of it and how you've cultivated that and if it's how useful it's been to you. I like to use the phrase professional creator a lot because even the word creator is so expansive. The people who are on YouTube, they try to claw that word and say creator means YouTuber.

Jay Clouse [00:22:26]:

But a lot of people identify as a creator if they're creating on Instagram or TikTok or Twitter or a newsletter or a podcast. It's all these things. It's like, oh, I'm making content. I'm a content creator. Shorten that, I'm a creator. I like to use the phrase professional creator because it kind of denotes where you are in the journey and how you treat the thing. On 1 hand, professional means that you are being compensated by the work. It's like a professional athlete versus an amateur athlete. On the other hand, it's also how you show up and treat things professionally. Like a lot, a lot of the creators who get into this just to be expressive and be artistic, they can be difficult to work with as a brand, as a partner, as an employee, because they don't treat things professionally. They don't act like professionals.

Dan Andrews [00:23:09]:

I really wanted to ask you this. The credibility gap, I think, is something huge in the creator and influencer space. How do I gain credibility about 1? And, you know, some people call it imposter syndrome. I'm just going to call it the imposter problem. Like it's a genuine problem. You're Andrew Huberman. Like you better have read some scientific papers. You know, I mean, that's like he solved that problem. Like, how did you solve the imposter problem in your career? I mean it took time. I didn't have the language for this and I didn't realize this is what I was doing at the time. But I tell creators if you're trying to get into this space you have 2 paths forward. You can either look at

Jay Clouse [00:23:45]:

what credibility you already have. You know what earned insight do you already have to lean on? Or you have to basically plan a flag and say I'm interested in becoming really good at this, I'm gonna position myself as a curious beginner. And I'm owning the fact that I'm a beginner, but I'm also wanting the fact that I'm curious and I'm going to do far more research and study of this than you're going to allocate during your day. So you can learn by proxy through me. There's a third way to which is if you're willing to become a master at the creator game so that curious beginner

Dan Andrews [00:24:16]:

you can identify an earned insight partner, which I think is something to explore, like to basically champion someone's message and bring them to market as an operator.

Jay Clouse [00:24:28]:

So I totally agree with that. I used to have this hang up actually. This is what started me writing in 2017. I had this limiting belief that I was not creative. I didn't have ideas. I was just really good operationally and I would have to be searching for someone's idea to champion. And again at the time I thought this is a binary like I am this or I am this and right now I value 1 over the other. I value being an ideas person more highly. So if 1 I had to unlearn that and embrace the the creator the creative artist part of me but you're right like I had such a great operational skill set. I could have done that path and probably could have had even more success today in financial terms, but it kind of depends on what type of lifestyle you want, whether you want to be behind the scenes, whether you want to be out in front. When you have a skill set for both. I actually find that it's really challenging because you limit yourself on both ends. Try and do both. I think so. Bring me into that conversation with Pat and Matt. How did it go and how did you come up and pack into that? I basically said, this is really challenging for me to bring up, but the business is doing really well. It's demanding a lot more of my time. I feel that as I give it more time, I can't give our team here what they need, and this is only going to get worse. I kind of want to see where this is going and give you guys as much advanced notice as possible. I think the conversation happened in September, if I recall, of 2021. And I basically said like, I would like to plan for a transition in January. I thought it'd be easiest to do at the beginning of the year, you know, from like a fiscal year standpoint. And they were really receptive of that. I did 3 months of basically consulting, advisory again, working with the new community lead, Jill, who took my spot. And she didn't need me, but they thought it'd be nice to have me there. So I did that for a couple months and that was kind of nice too. You know it was a year of Uncle Jay. It was it was a year of not having any financial worries because I had a literal salary plus what I could do as a creator. And then to go back in January and say, okay, well, the salary's gone, like you better hock it again yourself. You haven't been doing any services for the last year, so are you really gonna be able to build a fully leveraged business where you don't have to be doing services? Can you do that? And It was challenging. So to have 3 months of ramp down consulting with them also

Dan Andrews [00:26:49]:

was really nice. How did you do it? This is sort of the breakout. Tell us like the results first and then I'd like you to sort of highlight some pivotal moments. Yeah. So 2022

Jay Clouse [00:27:01]:

was the year going back out onto my own. And in January I earned just shy of $10, 000. And the majority of that was About a third of that was in services. So that was January, and I thought, $10, 000, okay.

Dan Andrews [00:27:21]:

So at the time, what does the enterprise look like? I mean,

Jay Clouse [00:27:25]:

it's creating a newsletter twice a week, it's creating a podcast once a week. I have digital products, I had a course on podcasting, I had courses on freelancing, I built this little blog and SEO play called Freelancing School and that was doing pretty well. And I was doing sponsorship. Actually, that's what the bump was. I got a big sponsorship payment for the podcast in February. And then from there, launched a membership starting in March. And that had a big impact on the rest of my year. For the first few months after that, revenue was between 20 and $30, 000 and then finished the month or finished the year averaging about 40 to 45, 000 per month. And I think back to you had an episode probably 2017 or 2018 with Ryan Robinson. And yeah, he was talking about how he was earning $40, 000 per month from a single blog post. And that was so inspiring to me, because I was like, I'm a writer, I can do this. You can do this, I can do this. But then also, Marie Poulin, who is a friend of mine, she teaches you how to do Notion on YouTube. And she has a course called notion mastery. She came on my podcast was telling me she does about $40, 000 per month in revenue and just having people in my life that I could speak to and see that that was possible. It started just making me think differently. Like what would that look like? How could I actually get there? What's thinking differently? Like what's J19 versus J21? Part of it is some level of self-belief and confidence. When you're creating content, you're going out there and you're trying to help people and serve people and educate people, The way you show up really matters. Like people can feel whether you are confident and they can also look and say like, are there any results? Is there any evidence to back this up? So the big difference in the last couple years is that there's just more years of more evidence. And. Yeah, Jay's a thing now. Jay's a business now. He's an institution. It matters. It matters. And what I what I'm really proud of is most of the revenue for the last year has been from the membership community. And that's a place where I'm investing a lot of my time. You came on the show and you had this phrase called a self-licking ice cream cone, which makes sense intuitively. But when I try to like actually understand the metaphor, it kind of breaks down. But I understand what you mean. There are a lot of business gurus who build success, talking about how to build success, and it becomes this virtuous cycle. And I participate in that a little bit like I can't avoid it in the world of online business. Like you can't avoid participating in that to some degree. But you know, I don't have a course that's like, here's how to earn your first $1, 000 or something like that is my least favorite part of the business is being in that like meta upward virtuous cycle thing. But if you're helping people build businesses and you're getting them results, I think you can feel good about it. And for you and for me as community builders, when you build a community space, you build that for an exclusive group of people by design. Because if it's not exclusive, then it's not really a space. You know, it's just the internet. It's the world. And pricing plays a important factor in creating that space. When I was doing the Mastermind stuff in 2017, I was charging like $400 a head. And there are people who are running that exact same business for a different customer charging $10, 000 per year. It's not even the product, it's not the delivery, it's the fostering of the space and the attracting of the people that other people want to be around. I've really had to think about that too, because with the lab, the membership community that I run now, I wanted that to be a space for other professional creators. And so it has to be priced in a way that makes sense with that premise. And when you're working with a higher tier customer, a more advanced customer, or a more experienced, profitable customer, then your prices go up and you as a business owner benefit.

Dan Andrews [00:31:32]:

So if you're trying to do an eight-figure mastermind, like you're not going to do that and charge $20 per month. It doesn't make sense. It's not congruent. And so that's had a big impact on the business too. It's an identity thing too for me. Feeling myself pay that money was unfortunately a hurdle that I had to go through. Like I, I needed to identify with it. Maybe it's the Gen X in me or whatever, but like when I felt myself writing the 5 figure check and being like, yeah, I'm going to do this because it's going to save me like 2 quarters. So I want to hear about you became creator of the year. Congratulations, you did close to $700, 000 in revenue the last rolling 12. What is this? How did it happen? Just incredible. How big is your team? Team is very small.

Jay Clouse [00:32:15]:

Most of my team is focused on the YouTube channel, which is very experimental in early days of that still. I have a very part-time operations assistant. I have a nearly full-time video editor. I have a contract audio engineer. And outside of that, it's all just project-based stuff. My sister actually does the illustrations for the podcast. And so I kick her a few bucks for Christmas at times. We have a thumbnail designer, but mostly it's still just me. And you're right. You get to a point where your currency is time and you'd rather write the check if you know it's going to save you time. Someone described like the business journey has 3 phases of in the beginning you trade your time for money and then you trade your money for time and then you trade your money for money like as you grow. That's brilliant. I love that. Yeah, it's so it's so smart. So you get to a point. So spot on. Yeah. You're in the money for time phase and you just want to, you want to do things that way. So I've, I've started hiring more. I wish I would have hired earlier to be honest, but Hiring is a tough skill to learn. This is something that I actually see an opportunity to teach other people in the creator space as they grow is like knowing how to hire, how to manage people, how to train people, how to get out of your own way. That's what I struggle with is just getting out of my own way. Yeah man, recognition is nice but it's it also doesn't pay the bills. I do really try to pass along like relevant actual insight. You know like I'm not trying to pass along the same advice that was working 2 years ago because it just doesn't work. So I see part of my job is just being a conduit, staying in close relationship with other creators that are operating at the top of the game and then going back out to my people and say, Hey, this is a really interesting trend. I'm seeing that seems to be working. And people appreciate that because that gets results.

Dan Andrews [00:34:06]:

It feels like it's not just for Jay. I think that to me is like a clear 2 silos you can put creators into. And yeah, I think that's a big thing. Especially if like you have a community or not, you can't have a sustainable community of people if it's just for you, like you're gonna have a revolving door. It's going to be a bad time. It's just not going to be the same. Tell me about your business model. I'd love for you to like break down how the operation works and people flow into creators lab. Tell me about the pricing and what they get and like how they find you and how the internals lead to the externals. Flesh out the ice cream cone for me. By the way, if your sister could make 1 of these ice cream cone graphics of it licking itself. I think that that actually would look good with her style. She totally could.

Jay Clouse [00:34:52]:

So actually I was surprised because you know, I come from the world of email is everything and that's what I really tried to do for the first like 3 years. And I would say that half of the community came from email. It's probably like 40% of people came from email, 50% of people came from Twitter, and 10% of people came from the podcast. Podcast is difficult to attribute, but that's kind of the way I see it. I think it could be higher on the podcast side if I was better about putting promotions into episodes or making little ad units to promote the thing, so I really haven't done that very well. But a membership is a social product by nature. So when I'm talking about it on Twitter and then actual members in the lab engage with that tweet and people see the caliber of people who are involved, they think, oh my gosh, I want to be in there with those people. It's a function of years of building really cool, interesting relationships with interesting people So that those people were like, yeah, this would be a great way for me to. Foster a relationship with Jay and learn from him and share with him in a private closed door area.

Dan Andrews [00:35:55]:

Typically, there's like a that's it moment like for me with the DC. It was seen Simon Black's private membership on Ning at the time like Derek Sivers was in there talking about passport stuff and I was like, that's it. That's it. Was it seeing Pat and Matt stuff that you were like that for creators or

Jay Clouse [00:36:12]:

a little bit, but on the back end of the mastermind, I had a slack community of 100 plus people. So like I knew exactly what I was getting into and actually spent like 3 months designing what the membership would look like because I also knew how easy it would be to make it too big and burn out and have like a bad relationship with thing over time. So 1 of the interesting things I did with the lab was I put a cap of the total number of members at 200 people. And that was a really interesting thing that other people hadn't seen. I noticed that people liked. They're like, I would love that because a lot of people have experience going into a place and it's great. And because it's great, more people join and then slowly over time it might not be as great. The experience at least changes and I kind of just wanted to have the same intimate experience of closeness for the life of the project. So there was some of that. What I really try to do more and more of, and I think this is what makes the community and will make the community even more valuable over time. We've got 200 professional creators in there who are all running like pretty data-driven operations, or at least a lot of them are. And what I try to do is encourage people to like really structure their own tests and then share them in the community to say like, Hey, Twitter reaches down this week. So here's what I'm doing to try a different content format and here are the results that I saw or, Hey, I'm launching this digital product and here's the literal email sequence I sent. Here's how I architected it. Here's what happened each step of the way. That's the kind of like knowledge share that I'm trying to put in there because you'll just learn so much faster. Like you just grasp so many new ideas.

Jay Clouse [00:37:48]:

That's different, that's it. Stick around, we'll be right back after 1 more quick break here for our sponsors. And now, back to my conversation with Dan Andrews on Tropical MBA.

Dan Andrews [00:37:59]:

All right, just buzzing in here to say, of course, Jay was on consulting corner in 2018. I don't know if we've ever ginned up consulting corners since then. That was a one-off segment. That's what we do. It's a really great segment. Let's just do it 1 time. Contributed to amazing success story. I wanted to get Jay's perspective because he's been professionalizing his Twitter approach and Ian for me, Twitter has been my equivalent of sharing my cat photos on Facebook. It's my personal thing. It's been interesting just to see Twitter become blogs. I always thought blogs were a very professional thing. That was like your own personal newspaper or whatever. We've known this about Twitter for some time, but now I see more and more people doing it well and having success with it. And so specifically, I wanted to ask Jay about Twitter. Jay, you owe me some free consulting, bro. That's why you're here. I'm so impressed, man. I think it's just so badass what you've done. Congratulations. When I listened to your podcast, I was like, this guy believes this is going to be something. You know what I mean? Like this guy's a believer. He's not just like putting it out there, man. Okay, here's the first thing. How can I be good at Twitter? Is it still a thing? Can I grow my business

Jay Clouse [00:39:19]:

if I decide that I want to be good at Twitter? I think so, especially with the starting point that you have, you know, you don't have a small profile there, but what I think you need to do, I'm looking at your Twitter, You're sharing a lot of links. You got to cut that out.

Dan Andrews [00:39:34]:

No more links. Links are gone. My Twitter account is basically useless to me. My community is private stuff. So I want to turn Twitter into a vehicle to teach people about the possibility of going to 7 figure cash flow business.

Jay Clouse [00:39:47]:

Then I think you could still do well with threads. Even if you have an episode of the podcast where you talk about it or a blog post talking about it, you should write it to be more native to Twitter. And then once it's posted, wait for it to get a little bit of traction and then you can append a link to the episode or the thing afterwards. Like let it start moving. I see what you mean. So Twitter just doesn't want to see you sending traffic off the platform. You'll get conflicting replies depending on who you ask because Twitter themselves will say no we don't throttle links. It's just it's just user preference. People don't want to click a link and go off of platform when they're on Twitter to be on Twitter. There's probably some truth to that but I've just seen undeniable evidence that you don't get the same reach when you start with a link in the tweet for whatever reason. How do you get people to want to follow you on Twitter? I mean people don't seem to want to follow me Jay. I do think that that is where threads still work as well because basically people need to have repeat exposure to any idea before they're like, yeah, I want to, I believe in this, I want more of this. And if you would just put out a tweet, and it goes well and it gets in people's feeds, they're gonna have 1 experience with Dan Andrews and they're gonna be like, huh, that's pretty good. Now, if you do that again and they keep seeing tweets from you, they're more likely to follow you, right? But if you just tweet a thread, it's like that but in a concentrated period of time, you know, they're getting a lot of information from you. They're getting a real audition as to how you think, and that's really interesting. And that's all from the publishing yourself standpoint. But there are probably already other accounts, other friends that you have that have larger accounts on here that are starting similar conversations where you can go and just be thoughtful in the replies and basically audition for people there. What people who are getting started on Twitter don't really rock is if you're publishing on your own account, you have a few hundred, maybe even a few thousand followers, your tweets are not going to get as much reach as a reply on somebody that has a hundred thousand followers. You know, like just more people are looking at that already. So participating in those existing conversations is a time consuming but productive way to go that I encourage people that will give you 1 little scoop here. That's something that I'm playing with and I'm seeing a couple people do really successfully but hasn't really picked up yet. But I think this is where things are headed. I'm seeing that actual video clips are doing better on Twitter than they used to. And it's not vertical stuff, it could be vertical, but what I've had a lot of success with is using horizontal clips of interesting things. And it'd be great if those all came from like my video podcast, but sometimes I'll be watching a YouTube video and in that video, someone says or something really interesting. So I'll clip that out and share it and I'll contextualize it and say, this is why I clip this is why I shared it. That video itself is inherently shareable. It's not me saying, hey, I'm over here being a public loudmouth. Take me seriously. It's saying I'm a tastemaker and I saw this and let me contextualize why I think this can be impactful to you too. Those are doing really well from an engagement perspective. Like just pulling something off of YouTube. Yeah. Wow. That's scoopy. I like that. Yeah. I mean, this is probably like a little bit of a gray area in terms of like copyright and stuff. So good practice is always like attributing where this clip came from and tagging those people. Typically those people are like, hell yeah, thanks for sharing my work. But Yeah, so it needs to be uploaded natively though. I got it. So you can't just post the YouTube clip. Now I haven't seen that return on followers as well as threads do, but the reach can be pretty insane.

Dan Andrews [00:43:27]:

How big of an opportunity is Twitter right now? Is it over or, and if I were to do that, you know, I know I can use AI tools and hire somebody, but how much time should I spend on that? Because I think that's concern us. I've had so much mental trash about Twitter. Like I love the service. Mostly I enjoy consuming content on it. I'm sad that it kind of ate blogs because I loved blogs and I've never really like taken my blogger life onto Twitter and I I feel like I'm just trying to triangulate what it could mean for me and the brand in the future. I think it's still an opportunity. I don't know how big that window is,

Jay Clouse [00:44:01]:

But the reason I do like Twitter besides the upside potential, I feel like the downside is really capped. Because if you spend time making a thread and it doesn't go well, first of all, you should just base that thread on something you've already created, you know, so you're not like ideating something new. But if you make a thread, whether it does well or not, that can be repurposed for LinkedIn, that can be repurposed graphically for Instagram. It's a good way of like vetting new ideas that might become the inspiration for a new podcast episode. But what I find about Twitter is just unmatched is the access to people. People that you and I look up to that we'd love to meet, like, they often have their direct messages open. And by having a platform of, you know, 20, 000 followers here, people are gonna read your message and most likely respond. So the access is so quick. It's so interesting. I just think that there's big upside when you do it well, and not a lot of downside to even the time that you put into doing it. Well, you guys talk a lot about arbitrage here. I still think that there is a little bit of LinkedIn attention arbitrage right now. I don't know if that's where your people are or not, but I think our people are so allergic to LinkedIn, but man, so many people make so much money on LinkedIn. It's tempting. Jay, If someone's listening to this right now, yeah, go on the LinkedIn thing, I interrupted you. Well, it's interesting. I see LinkedIn convert really well for me to email subscribers, actually a higher degree than Twitter when I'm doing it well, but I haven't seen that flip into customers yet. And I think it's because the LinkedIn audience is still a little bit more old school. And for me, like they look at like this hip content creator thing and that it might feel still a little bit at a distance. I also don't have like a great you're like Mitchell at Yahoo dot com just signed up. Yeah, I don't know. I think we'll move more and more there. I also don't have a great pipeline to like a self-paced product from anywhere. Most of my successes come from the lab, which is a high price product that now is at capacity. So I don't even like have something to sell to these people for the most part. But I think I think there's still an opportunity there.

Dan Andrews [00:46:03]:

We're done with our hour. I want to ask you the hardest TMBA question of all time. Jay, there's a lot of people that are listening to the show. 20% of our audience does not yet have a business. I'm curious if you could speak to them a little bit. Folks who are listening to the show to have the courage or the insight to wonder how to take the leap? How might they do it in 2023? I would

Jay Clouse [00:46:24]:

start a creative practice. Like I think a big reason why I got where I was was because I had a non-negotiable deadline for myself to write a newsletter every Sunday. And that took care of a lot of questions. It wasn't like, should I make something? It wasn't, what should I make? It wasn't, when should I publish it? It was, I'm writing a newsletter, I'm publishing it every Sunday. So that gave me a lot of constraints just in that practice of choosing a schedule and choosing a medium. So I think everybody should do that. And then I think you should be aspirational and say 5 years from now, what do I want to have accomplished if you wanna do kind of like a more traditional business, or if you want to do the content creator route, then I think the question is, how do I want to be regarded? What do I want to be the trusted source of information for? Because again, then your options are, do I have earned insight in that already? Do I lean on this thing I've already done, I've already done this for 5 years and that makes me great here. But on a long enough time period, you can actually be really aspirational and say I actually just want to be the best person for this subject and I'm gonna start that study right now because after 5 years, I'll have put more time into it than just about everybody on the planet. There's this creator, Dan Runcie. He has a blog called Trapital. It's at the intersection of business and hip hop. Before Dan got into that, he was not in music. He was a management consultant that just loved hip hop. But he spent years like really studying the hip hop industry and now he has unique access, unique information, a lot of time spent into it, made him the guy for business and hip hop. I think the opportunity is available to anybody if you're willing to like be honest with yourself with what am I interested in, and if I don't have experience in it, it's gonna be a painful 6 years in my case. After 6 years, you've got more experience than just about anyone else out there.

Dan Andrews [00:48:15]:

100%. Jay Clouse, thanks for coming back on the TMBA podcast. Congratulations on your success and recognition. You deserve it. That's it. That's the interview. That's Jay Klaus. He's incredible. Some interviews are tough, Ian. This 1 was not tough. This 1 was just really cool, so I hope the listeners enjoyed it as much as we did. That's it. 1 thing, we're going to be talking about a book next week that I tweeted, and I got some traction. Twitter is telling me that over 20, 000 people read this tweet. It's about a book called 5 People That Will Ruin Your Life. If that doesn't scream read me, I don't know what will. But anyway, we're gonna be discussing some of the concepts in that book next week, along with a bunch of other business goodies. So do join us next Thursday morning, 8 a.m. Eastern Time. That's it for this week. Hey, Thanks for listening to the Tropical MBA podcast. You can go to tropicalmba.com, get access to hundreds of back episodes and all kinds of other goodies. Load up your iPod, that is the cheapest way to fly business class on your next international flight. We will see you next Thursday morning, 8am EST.