Misfit Entrepreneur June 2022 - 308: From $100 to over $50 Million, How Successful Businesses Think with Craig Swanson

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Dave Lukas Chats with Craig Swanson

308: From $100 to over $50 Million, How Successful Businesses Think with Craig Swanson

This week’s Misfit Entrepreneur is Craig Swanson. Craig Swanson is an entrepreneur, business coach, and co-founder of the online learning platform CreativeLive. Creative live went from a $100 startup to raising over $50 Million in VC funding becoming a massive success. After leaving CreativeLive, Craig has become the secret weapon behind course creators and business owners such as Sue Bryce, Susan Stripling, and Kaisa Keranen by helping them into the multi-million-dollar mark and even acquisition! Craig is also the board chair of the Seattle Entrepreneurs Organization Accelerator.

I’ve always loved digital assets as a business model. An entrepreneur can take their expertise in an area and have the ultimately scalability with a digital product, course, etc. And Craig has perfected the model. I am excited to get into all of this with him and to share all of his wisdom and experience from his incredible entrepreneur journey.

www.CraigSwanson.org

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Show Notes

Craig started his first business after dropping out of college providing IT services to graphic design companies in Seattle. He did this for 25 years. And then he spun off an internal project which was Creative Live and built it up to massive success. He left there in 2016 and started what he does now - a small investment and incubator company with a fund that invests in and partners with a select few online creators per year to build niche platforms. He also serves his role in EO and is part of their accelerator program.

Talk to us about building a digital business. What should we know?

People hold their ideas so precious that they don’t get them out in the market.
What drives the success of a digital product is the market that has area need that your solution addresses.
It’s not about how good you look or how well you present it. It’s about the market first.

How does someone identify the market and see if there is a fit? How do you test the market?

Create a digital version of something that someone is teaching in person to groups of 10-200+ and has a track record of success.
If it works for small groups of people, then you can create a digital version to scale.

At the 9 min mark, Craig gives an example of how they test a market with a client. It’s best to just listen.

Which type of product makes the best digital business?

It is something that you create once and can continue to sell.
A recorded video training program is the classic digital good and a good product.
Additionally, digital downloads specific to industries, etc.

What is the process you go through to build the business around the product?

The first step is a prototype with a core test audience. (1-10 people that will buy)
With your first batch, you are relying on your existing relationships/contacts.
After success with the protype, you then build a strategy to get your first 100 sales using success stories from you first group and partnering to get in front of other audiences.
Once you serve more than 100 people and prove the product, then you can get to paid advertising and scale.
Craig will give out free content to get people into the funnel and fold.

What are the best ways to market and sell a digital business?

It is different for each product and different for different stages.
Mediums will vary and you probably already have a medium where you get the most engagement and community.
If you are starting from scratch, it is tougher.
You must create an awareness and some sort of following before creating a digital product.

What are some ways to build an audience from scratch?

A niche email newsletter that goes out as broadly as possible.

How do you grow an email list?

Find a small community that you can really serve.
Once you get some subscribers, ask for them to share it.
Go where your market is (Facebook groups, communities, etc. that you can serve and help).
Stick to a narrow niche.

How do you build a personal brand the right way?

The first step is to become clear who you are servicing and audience and speak to that audience.
Don’t approach your brand from a self-centric stance.
The purpose of a personal brand is to connect with and draw in your ideal audience.
Building a brand telling the stories and highlighting what those in your audience are doing to succeed is a great way to build it.
There are 2 fundamental ways to build a brand: Either a student or an expert.
You can position yourself as an expert learner and share what you are learning as you grow in the topic. People can follow and gain from your experience.
As an expert, you can focus on delivering expertise to a community.

4 elements to scale any business?

Scaling a business is when it starts to grow exponentially and can sustain that growth.
The first step is to take something that is already successful with an audience and finding out why it has been so successful.
Then you use the stories of success and their words to share why something is working.
Next is to create a 2-step purchase process in which you have an entry level product from $10-$99 that covers the cost to acquire customers.
The 4th step is to convert the customers into the larger more expensive product.

Any tips on how to create the value ladder?

A lot of work goes into finding the right combination of offering and price that will scale.

At the 36 min mark, Craig gives an example of how they do this…

“A lot of people in business become so fixated on the thing they have built that they want to sell that they stop listening to what the market is telling them that the market really wants.”
You need an awareness to this.

What are the traits of good, high performing businesses vs. those that underperform?

The difference is in the way they think.
A lot of less seasoned businesses entirely fixated on how to make the existing business model more profitable. They are looking for the magic secret that lets them grow.
More mature businesses have found that they have to let go of their original offering or change it to make it the best to grow and scale per what the market wants.
Smaller businesses “swell” their business instead of scaling their business.
Scaling businesses tend to be simpler with a clear focus on just 1-2 products/solutions and build the machine around them to infinitely scale.

At the 42 min mark, Craig and I talk about how businesses are much like life as they grow and gain experience.

Don’t be afraid to kill ideas and let go of legacy things in your business.

From your journey, what do you feel are you most important and impactful lessons you’ve learned?

Letting go of control and learning to trust partners.
Build partnerships that work and commit to them to make them go.
Have a clear mission.
Co-build and co-create.

Best Quote

A lot of people in business become so fixated on the thing they have built that they want to sell that they stop listening to what the market is telling them that the market really wants

Be clear on what is negotiable and non-negotiable about your brand. Let go of negotiable elements and stand firm on non-negotiable.

If something is worth doing, it is worth doing poorly. You get better as you go.

Fail sooner and learn faster.

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