Earning more money: How to turn your skills into services that people will pay for

Earning more money: How to turn your skills into services that people will pay for

25 comments — written on January 12th, 2010

Since this is such a huge post, I’m going to start off with 3 notes.

1. Below, you’ll see how to take your skills and identify what “the market” — or prospective customers — will pay for
2. I added lots of examples below, but it’s still complex and information-dense. When you sign up at Earn1k.com, I’ll be going over a more structured, step-by-step program.
3. You’ll inevitably have questions about how to apply this to your skills and situation. I’ll be holding free video office hours on Wednesday, 1/13 at 7pm Pacific, so bring your questions and I’ll answer them for you.

* * *

In a survey of over 1,000 people that I recently did, the #1 reason people don’t start earning money on the side is this: They don’t know what to do.

How do you take your skills and turn them into something that people will pay for? Let’s say you have a full-time job as a project manager or salesperson or software engineer. How can you help that make you $200/month, $500/month, or even $5,000/month on the side?

I want you to pay attention: This is the #1 barrier because it is the hardest step. It’s not some simple 1-2-3 checklist, which is what most people want: a one-size-fits-all solution that they can blindly follow to start earning money. But because it’s so challenging, the rewards are disproportionately large. That’s because 90%+ of people will wash out at this step, leaving the few, the proud, and the now-earning-a-lot-on-the-side.

So if you expect this to be easy, go away.

If you expect this to be customized to your situation, go away.

You’ll have to take a leap to tailor the advice here to your own situation.

My goal is not to have you start earning money immediately after reading this post — even though we all love 1-2-3 steps, earning more successfully is much more complicated than that.

With that, let’s get started on the first steps of taking your skills and turning them into income.

There are a few things that we need to acknowledge up front:

• Out of the 3 easiest ways to earn money, we think the easiest way to earn money on the side is to freelance. You can start earning money immediately, you can rapidly test your offerings, and you can cut through the unnecessary work of productizing and increasing your salary. Accordingly, we’re going to focus on freelancing for the rest of this course.
• My guess is that 95% of jobs could translate into related freelance work. But 5% of could not: For example, you don’t see any freelance cardiothoracic surgeons. (But you can see some doctors moving in that direction.)
• Just like dating, it will probably take repeated failures to find a good match between your skills and what the market wants.

That last point is very important. Sometimes people spend so much time building up a business — with business cards and websites and licenses — that when they actually launch and find the market won’t pay for their offering, they give up, exhausted and frustrated. We’ll teach you how to streamline the launch process so you can rapidly test ideas and refine them. Just like in the dating world, you probably won’t find your right match the first time, second time, or the 5th time. That’s where people give up. But if you optimize your system of learning what people want (and are willing to pay for), it’s simply a matter of time until you hit on something that matches your skills to the market.

Example: How I used these principles to launch this blog and find readers

I originally started “I Will Teach You To Be Rich” as a 1-hour free course that I taught at Stanford. (I consider the blog a mix of freelance and product since I spend ongoing time writing here.) It was never designed to make money, it was just something cool that I wanted to do. When I’d hear friends complaining about money at the dining hall, I’d say, “Hey, you should come attend this class I put together…it’s free and it takes about an hour, and I’ll show you all the basics of money — banking, budgeting, saving, and investing.” The response was VERY positive. People said, “Wow, that sounds awesome!”

And then they would never show up.

Repeatedly, over 1.5 years, I struggled to have anyone show up. I would wonder to myself, “Why am I trying so hard to give people GOOD, FREE information about stuff they really need to know?” I felt like a career counselor, one of the most under-appreciated (and hopeless) jobs.

After trying all kinds of strategies to get people to attend, including emailing THEM and trying to coordinate times, I switched approaches. Instead of in-person events, I launched iwillteachyoutoberich.com so people could read it out of the comfort of their own dorm rooms. Later, I learned why this was so successful: People don’t like attending events about money because (1) it makes them feel bad about themselves, (2) the events are usually boring and/or scammy, and (3) people have to publicly admit they don’t know about money.

It was a classic mistake of not understanding my users (substitute “customers” in for your business).

Lesson learned: You MUST get into your clients’ heads. What are their fears? Hopes? What do they care about most (hint: How much it costs is almost never the first priority.) Similarly, once you get in their heads, you learn that the medium in which you serve your clients matters. (Is it an in-person event or a blog or a weekly phone call?) The way you approach your client matters. And the way in which you sell to prospects matters.

Example: How I consulted for venture capital firms

Like all of us, I know how to use YouTube, Myspace, Flickr, and Facebook. A few years ago, during college, I was able to turn that into consulting gigs with multiple venture-capital firms who wanted to learn how young people were using consumer services on the web. This consisted of me giving them a course each week — online music, videos, social networks, etc — including showing them how guys checked girls out on Myspace. This was perhaps the greatest achievement of my life: Showing how guys found hot girls’ profiles to a bunch of venture capital partners.

Would you have ever thought you could turn your daily routines into a consulting gig? I wouldn’t have before I landed those gigs. But people were willing to pay for it because they had concrete needs: They wanted to understand how young people were using new technologies so they could remain sharp investors. Money wasn’t an issue, but time was: They’d rather hire someone who lived it than try to learn themselves. Once I’d established that I was skilled at these services, but more importantly that I could create an effective structure for teaching the VCs, they hired me.

Lesson learned: It’s not enough to simply be good at something, whether it’s freelance writing, dog walking, or graphic design. Millions of other young people know how to use YouTube/Facebook/Flickr far better than I do. It’s not just knowledge: You have to package your knowledge into something that clients can recognize as valuable. Usually this involves them making more money, saving money, or saving time.

People love talking about passion. Your job should be your passion! You should be a passionate lover. Eat food passionately.

Some of this is true, but passion is also overrated and used as a panacea for everything under …