Building Stable Businesses with 1,000 True Fans
You only need 1,000 True Fans to build a sustainable and thriving business. Kevin Kelly of Technium described the concept of having 1,000 True Fans, in his popular essay linked below. These True Fans are the people who will buy anything you produce. They are the people who buy your hardback novels. They travel 200 miles when your gallery comes into their state. They pre-order your gag reel of best bloopers when they could watch your regular show on YouTube for free. They are your True Fans.
Creators Need a 1,000 True Fans to Make a Living
Kelly laid out a plan to calculate how many True Fans you need and how much you need from them to be in business. Let’s say you want to make $100,000 a year, which after expenses is good living for a lot of people. All you need to do is find those 1,000 True Fans who will pay you $100 a year. If you have a partner, then you need 2,000, $100 paying True Fans or 1,000 who will pay you $200 per year. You see where this is going.
Establish a dollar amount you want to make yearly and you can work backwards to a dollar amount in sales from True Fans. Then produce and distribute content that’s worth $100 – more or less – per person per year. It’s not a coincidence that many subscription-based services from Netflix to Spotify are around $8 to $12 a month, which is around $100 yearly or slightly over. Most of your customers can fork out an average of $10 a month on you if you’re worth it.
No more Starving Artist as the guys from Sterling and Stone like to say. There are over 1-billion people online, and you can find your 1,000 True Fans to be a thriving artist. In addition to those spending $100 per year on you, your business will also have one time or repeat customers who are not True Fans.
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True Fans and the Long Tail
The Long Tail shown above is a low, nearly interminable line of items selling only a few copies per year that form a long “tail” of sales, wrote Kelly. This realization created recommendation engines and “Customers Also Bought.” While many people are worried about skyrocketing blockbusters and going viral, True Fans were buying things recommended to them, which generated more revenue over time than the blockbuster spike did.
Stop worrying about going viral. Enjoy the slow build of followers in order to find your 1,000 True Fans. Later, I’ll talk about how to attract those True Fans as well as others, but tomorrow I’ll talk about Seth Godin.
Kevin Kelly’s Technium article credit