Creators frequently ask me, "When should I start monetizing?"
First, let's acknowledge that "monetizing" is a weird word.
But, for whatever reason, it seems to have stuck as the word du jour when talking about "making money from all this really hard work I'm doing."
There are differing opinions on this question, and so I wanted to offer my own...
You should start monetizing as soon as 1.) you want to and 2.) you're able to.
That's it. It's that simple.
If you want to start selling something and you're able to convince even a single person to exchange their hard-earned money for it, then I think it's perfectly reasonable to do so.
By the way, there are lots of things that you can sell: digital products, physical products, services, or experiences. I would argue that no matter the form factor, anything you sell is a "product." So, for simplicity, I'll simply use the word "product" for the remainder of this essay.
If you're ready to start selling some sort of product, there are some considerations you may want to take into account...
When you're able to monetize
Anyone can create a product and make it available for sale – that isn't the hard part.
The hard part is convincing a potential buyer to trade their cash for it.
People buy when:
- They have a clear problem or desire
- They find a solution from a person or brand they trust
So by that logic...
- Your product needs to provide a solution or fulfill a desire
- You will need to have built trust with the potential customer
Addressing a problem or desire
Number one should be pretty straightforward – if you're in sync with your target customer, you should have a good understanding of their problems and desires.
But if you're not sure that your product solves a problem or fulfills a genuine desire, you should do some customer interviews. Talk to people who fit the profile of your target customer about their biggest problems and the things they want out of life.
Assuming you're confident about product-market fit...
Have you built enough trust with someone that they would buy from you? I purposefully said "someone" and not "an audience" because you don't need to have built trust at scale yet – you just need to have built enough genuine trust and credibility with a single person in order to make a sale.
We buy from people we know, like, and trust.
We can't buy from you if we don't know you exist, we likely won't buy from you if we don't like you, and even if we do like you, we still need to trust that you will deliver a true solution for our problems or desires.
That's a pretty high bar! You don't build that type of relationship at the snap of your fingers – people are careful about who they trust.
Another great reason to spend some time actually talking to people you know who fit the mold of your target customer is that you'll get a sense of how much trust you've built with them. If you've known this person for years but they don't seem to trust you enough yet to buy from you, why would your Twitter audience?
That's a broad stroke – but, generally, people you've known longer will be more likely to have more trust in you than someone who hasn't known you as long.
The best way to accelerate trust is with time spent together.
That may be direct, 1:1 time in person, in video, or on the phone. Or that may be time spent with you and your content.
There's nothing more impactful than time spent in person with someone. We're social creatures and we pick up on a LOT of social signals when we're in person – subtle cues and nuances like body language.
So, to accelerate the trust-building process, the closer you can get to that in-person experience the better.
Time spent in video is better than plain text. Long-form video is better than short-form video. I would rank the "trust-building" value of different styles of interaction broadly as:
- Real-time video
- Real-time audio
- Async video
- Async audio
- Text-based messages (SMS, email, etc.)
That's a broad stroke – of course, 60 minutes of async video experience is probably more impactful than 60 seconds in person.
The more exposure we have to you and your work, the better sense WE get of how much we can trust you. That's why time is such a crucial component to building trust – and why a lot of people will tell you to wait before trying to monetize.
Why you may (or may not) be interested
There are a lot of reasons you may want to monetize: validation, financial support, or the ability to invest in the business.
Those are all legitimate reasons why you may want to start selling some sort of product. Depending on the role the business plays in your life, it may be beneficial or even crucial for the business to start generating revenue.
However, if you do not have financial constraints right now, there are equally legitimate reasons why you may not be interested in monetizing.
Monetizing changes your decisions
Focusing on monetizing often leads to short-term thinking. Not always, but often.
When we feel near-term financial constraints we often try to solve THAT problem for ourselves. This gets us thinking about monetizing (as opposed to the best long-term strategy for overall business growth).
When you have real financial constraints, this may be unavoidable. But if you don't have financial constraints, it's worth taking some additional time to ask yourself, "What's the best long-term strategy for building my creator business?"
It may not be sinking time into building a product – it may be focusing on creating more content, better content, or building relationships with others in the space.
Monetizing has an opportunity cost
The scenario above helps you to remember that you have a finite amount of personal capacity. If you're investing your time into building a product, that time either has to come from somewhere else or is at least removing time from other opportunities.
That's what opportunity cost is – the loss of potential gain from other alternatives when one alternative is chosen.
Imagine this scenario...
You have two options for how you can spend the next month:
- Creating twice as much content
- Creating the same amount of content + developing a paid product
At first glance, option #2 may seem like the best choice – it generates revenue right now, and option #1 may not.
However, what if creating 2x as much content would mean a 20% growth in your overall audience size?
That 20% audience growth has some major implications:
- That's 20% more impressions for advertisers (now and in the future)
- That's 20% more people starting to build trust with you
- That's 20% more people (and any individual may change your life trajectory)
Not to mention, creating twice as much content means twice as many reps – you'll be creating better content by the end of the month in scenario one!
That may not seem like much in month one, but it compounds.
Let's take this hypothetical tradeoff even further...
If we also assume that your typical audience growth is 10% month-over-month and that you could continue your regular output while also focusing on monetization, here's what your audience growth looks like over a 12-month period:
At the end of a calendar year, you'd be looking at a 260% difference in audience size (7430 vs. 2853) if you invested in growth vs. monetization.
These are totally arbitrary numbers. But I'm using them to exhibit what opportunity cost can truly mean and how it can compound.
Monetizing consumes social capital
I've interviewed hundreds of professional creators on the podcast, and a lot of them spent a long time building their audience before monetizing.
And when they reflect on their journey, they often say something along the lines of:
"I spent so long making things for free that a lot of people just wanted to support me."
I hear this idea over and over again.
And what we can take from this experience is that when you create and help people for free for a long period of time, you're building up goodwill with your audience. I would call this social capital. This doesn't have direct monetary value, but social capital comes from two really valuable resources – trust and goodwill.
Whether we like to admit it or not, we often keep an invisible ledger in our minds.
We all feel social deposits and withdrawals.
This person has been good to me, so I feel like I owe them.
This other person asks a lot of me – it feels like they owe me something.
When you give and give and give to your audience, their ledgers feel one-sided and they're looking for some way to get back to equilibrium. No one wants to feel like a taker – even if you're not faulting them for it!
So when you start to monetize, that's an easy way for people to start to balance out the ledgers in their minds.
When your audience has a one-sided ledger, you'll more easily be able to get them to take action and support you in some way.
You see this often with authors – James Clear is a great example. James didn't really sell anything for a long, long time while he was building his newsletter. But when the book was ready to launch, he was able to ask for favors not only from his audience (buy the book!) but also from other friends to land big podcast guest spots.
If you know you have a big ask coming down the pike, you may want to bank your goodwill instead of selling some product in the near term.
The only way to monetize "too soon" is if you haven't built a product that people are willing to buy. That may be a failure to address a real need or desire, or it may be a lack of customer trust.
But if you've made something your audience wants AND they trust that you can deliver a good product, you can monetize just as soon as you want to.
Monetizing comes at a cost, though – whether it's social capital or just opportunity cost. So beyond being able to monetize, it's up to you whether now is the best time or not.