Variable income makes me smarter
December 2020 turned out to be a very good month, with $31,962 in revenue and $25,385 in profit. But it didn’t start that well. In fact, half-way through the month it looked like December was going to be one of my weakest months of the year, with an almost 50% drop in revenue compared to the previous 3 months.
An income downturn is never pleasant. But I’ve had enough ups and downs over the last 19 months that I got used to them. In fact, I now realize that I actually may need a downturn once in a while!
Variable income has become my feedback mechanism for the balancing act of not working more than necessary and working enough to maintain a comfortable lifestyle. When times are good, I take it easier or do more speculative things. When a downturn comes, it prompts action. It makes me come up with ideas on how to correct my course quickly.
What’s interesting is that the stressor of an income drop seems to activate a part of my brain that’s usually dormant. All my creative and practical ideas about new promotions and new products tend to happen while I’m in this state, and I’m almost incapable of replicating it without the sting of this stressor.
For example, November 4th, 2020 (presidential election day in the US) started as a very slow day for me. It was noon and I hadn’t made a single sale, even though I would usually be past $200 by that time. Suddenly something clicked, and I had the idea of promoting one of my products by offering people a one-hour break from election news. This turned out to be one of my best promotion tweets ever. That single tweet made $9,270 in direct sales, and what had started as one of the slowest days of the year ended as my second-best grossing day ever.
Something similar happened last month. My info product sales were rarely exceeding $200/day, compared to my previous 12-month average of $817/day. For a month or two I had been mulling over the idea of launching the Profit and Loss product, but I kept getting stuck on how to do it. Should it be a community? Should it be a paid newsletter? Should I offer a free trial? Should I use this tool or that one?
Suddenly, the sting of the stressor made everything clear. All the decisions became easy, and I launched it less than two weeks later, on December 29th, with just 2.5 days left in the month. After the poor start that I mentioned, December became my third-best month ever, with a boost of $11,117 in revenue from the new product over those final 2.5 days.
The slump in early December also prompted me to resume my paid ads experiment for The Good Parts of AWS. I ran a moderately successful ad campaign on Reddit between April and June of last year, where I made $11,321 in revenue from $6,736 in ad spend. However, profitability waned towards the end until it was barely breaking even, so I stopped it and didn’t bother to tweak it and try again (times were good, after all). But once again, a spark of creativity inspired me to improve my ad copy a little bit, and I decided to give it another shot. The ad prices are much higher now than they were back then, but I still managed to make $1,775 in revenue from $795 in ad spend over the last 45 days. The Good Parts of AWS had its best month since August.
There’s something fascinating about unpredictable non-recurring income. Every day starts at $0, and with absolutely no indication of how it will pan out. The delta between the actual outcome and my expectation becomes a very useful piece of information when deciding how to spend my energy. You definitely wouldn’t want to read too much into the daily variance, but in my case, the signal starts to emerge when zooming out to the weekly level. My weekly sales have become the pulse of my business, and my creative brain activates automatically when the pulse dips below a certain level.
Originally published on January 27, 2021
