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Many business experts (although not Pushkin) will tell you that there are two kinds of income: active and passive. To be a successful entrepreneur, you need to cultivate some of both.
Active income, of course, is where you have to expend effort for every sale you make. As crafters, boy are we familiar with this idea! Every handmade product has hours of effort behind it.
Passive income, on the other hand, is where you create a product or service that you can sell over and over again without effort. So the idea is, maybe you put a bunch of ads on your blog, or maybe you release some PDF patterns. Then, as the myth goes, you can make money while you sleep.
Image by Kevin Dooley, via Flickr
I guess you see where I’m going with this. In my travels around the web, I encounter crafters again and again who are hoping for easy ways to harness the power of the internet for passive income. There’s still a lot of pervasive mythology out there about how, if you just find the right formula, the internet will hand you big bucks all day, every day.
Here’s the thing, though: the longer I make my living on the web, the more I’m becoming convinced that passive income is itself a myth.
If some ebook orders or class registrations come through my online store while I’m sleeping, then yes, technically I made money while I slept. But then, I have to get up and do the work of being an online entrepreneur. And it’s a lot of work…
Image by mtsofan, via Flickr
• For example, I have to keep up the stream of free content that draws people to this blog in the first place. If I stop posting, people go away. So I need to write posts and record podcasts and make videos and tutorials. Nothing passive about that!
• In addition, I need to stay present as a citizen of the online community. I need to respond to blog comments, converse on Twitter, read and comment on other people’s blogs, keep up with emails – and while these activities may keep my rather inactive butt glued to this chair many hours a day, they’re still not passive.
• And then there’s the work of constant re-invention. Making a living online requires watching and reading your online community: what are they interested in? What do they need? What can you authentically offer them? Again: butt may be glued, but it ain’t passive at all.
• Oh, yeah – and then there are all the learning hours! The web abounds with new ideas, new technologies, new websites. If you want to stay relevant online, you need to invest time regularly in exploration, reading, and understanding.
Image by FireChickenTA99, via Flickr
Can a blog earn you income? Oh, yes. Can you turn social media into cash? You sure can. But the only way it’ll happen is if you actively put in the hours, every day, to make a name for yourself online. And then actively put in the hours to create good products and services. And then actively put in even more hours to maintain and build your online community, promote your work, and keep seeking new ideas.
So at the end of the day, the hours it takes to maintain (let alone grow) those seemingly-passive income streams may pretty closely resemble the hours it takes to knit a sweater or sew a quilt to sell.
It’s not even that this work, online or handmade, is necessarily hard work – in fact, if you’re of a compatible mindset, it’s the best darn work in the world. But passive income? Easy money? Nope.
Sorry to be a myth-buster there. (Wait – who am I kidding? I would freaking love to be a Mythbuster!)
Loved, loved, loved this one, Diane.
May I butt in? The mentos and coke guys crack me up. Maybe there are sweater explosion possibilities there. ;)
Hmmm… what would happen if we combined Mentos and E6000? Resin and Diet Coke? :-)
Thank you, Kirsty!
You are so right about this. Of course, if you follow the advice in The 4-Hour Work Week, you can just hire a Filipino VA to do it all for you–NOT! I mean, some people could do that, but not me, and I suspect not you. Being a creative and reflective entrepreneur means that YOU are the goods people want access to, so you have to have a personal presence in the game. Actually, I wouldn't have it any other way.
I so agree, Sue! It's like the old “general store” model, where an entrepreneur would serve and have strong relationships with a small village of interdependent customers. It's lovely to feel that you're serving real people rather than a faceless mass audience.
What a great post! Thanks for the mythbusting, although I suspected as much. Sigh. When I look at how much work it is to post a little bitty jewelry tutorial (that I expected to be quick and easy), I am constantly amazed by you guys out there working twenty times harder to grab those eyes. I salute thee (and so many other peeps like my bloggy friend Heather M.) for the dedication. Go, Diane, and thank you also for the brutal honesty!
Thank you for putting this down, I have been feeling the same way. The web doesn't sleep and it's getting harder for me as I realize that people feel that everything should be instantaneous. Even that text you sent wasn't instantaneous. I still love what I do, and the growth and change keeps me interested but definitely on my toes.
Good for you Craftypod! There is no such thing as a free lunch. If you go into blogging for the wrong reasons, you will never be a success. If you are really invested in what you do, the possibilities are unlimited, for instance: classes, kits, books, appearances, videos etc. I think your post will be read all over the internet. Ann
Thank you, Ann! It's true – blogging is indeed a passion sport. :-)
You know, I think the market will develop an appreciation for the time and energy that goes into content creation eventually. It's just that at the moment, everyone has been raised on decades of content being funded by advertising, and that model has kept all the “inner workings' fairly invisible.
Your hard work will pay off! It just takes time…
Thank YOU, Michelle! It rarely “feels” like work, although it's an all-the-time kind of thing. We're all so lucky to have this online community!
Well, it's not passive at first, but it can certainly turn into passive income. I wrote 200 articles for eHow a couple of years ago, and I enjoy getting over $200 a month for what at this point feels like “doing nothing.” It was fun to do–if it has been pure drudgery I wouldn't be as happy about it, I'm sure. I just wish that eHow still had the same business model–no new articles!
I completely agree with you but what really got me going was that super cute cat. I'm gonna go in the living room and bother my cats now…