Welcome back to this next installment of the Lifestyle Entrepreneurs Academy series where I’m sharing the comprehensive training that 8 lucky guys received as part of Project Rockstar 2013.
In this post I want to share what I call the 4 Types of Lifestyle Entrepreneur Business, which build on the results of the Discover Your Identity exercise and help you determine the right type of business for you.
To really help explain this in the most comprehensive and helpful way, I’m including nearly an hour of video from the lecture I delivered in Las Vegas, the full transcript from that talk, and an excerpt from Lifestyle Entrepreneur that describes these 4 types and uses case studies from businesses I’ve started in each type.
So let’s jump right into it and drop any questions you have on the comment thread below!
The 4 Types of Lifestyle Entrepreneur Business
In this video I talk through the four types of lifestyle entrepreneur business, then go into Q&A followed by a fairly detailed talk on SEO. It’s close to an hour of exclusive training content, enjoy!
Type 1: Online Custom
Really, the way I see it there’s sort of this gradient and there’s two axis and I’ll just talk about what I consider each of the quadrants of these four types of Lifestyle Entrepreneur businesses. On the one hand this is a Type 1 Business as I call it is an Online Customized type of business. So, online custom has the connotation of delivering the product or service online and doing it in a way that’s customized to each customer that you engage with.
In the book, for anybody who hasn’t seen it yet I use a business that I’ve started to sort of illustrate each of these examples and also a framework that I’ll teach sometime before the end of this week, which I call the Vision MAP or Vision MAP Framework where MAP is Mission, Actions and Product. So I lay out sort of the Vision MAP for each of these four types of business.
Today I want to start to fill some color in on the different tactics and sort of the high level strategies so you can take the ideas that have been percolating and start to see which type of which hybrid combination of types would fit best to bring your idea to life and make it a functioning business.
For an online customized type of business I’ll talk through quickly sort of the example from one of my own business experiences, which was a company called Village Green Energy. Village Green Energy was founded on the premise that concerned individuals about their impact of their energy usage, their electricity usage on the environment and business that wanted to lay claim to say being powered by green energy to provide them a way to do so that was specific to their situation.
So, the actual product that the business provided was we’d source wholesale renewable energy credits. So we’d buy wholesale power rights from solar energy generators, bio-gas generators, and a couple other types of green energy generators in wholesale blocks represented by say ten megawatt hours. The specifics of it aren’t totally relevant right here.
But then we set up a carbon calculator or an energy impact calculator on our website where you could go I and we had calculations that were backed up by government data and other third party validation of saying like square foot per house by state and even by city has an average electricity of X. So when the user came in and self directed and said, “Okay, I live in a 1,200 square foot house, I drive this specific brand of car, here’s some of the other lifestyle choices I make, how much I travel, etc. Then it would all calculate down to a total energy impact.
Then, of course, we had a customized amount of a renewable energy certificate. And we’d tell them, “Look, you can offset your lifestyle for the year for this price.” And then the actual product that we’d send to them was a certificate that showed exactly where their power was generated and the nature of renewable energy certificates was such that only one person could lay claim to that amount of power. So it was the effect of having a direct connection from say a solar instillation in a desert in Nevada to your house or business.
Going back, the description of this type of business is a Type 1 Online Custom business is that each user has their own personalized experience. Some of the benefits of this was that by having a customized experience you get more of a personalized feel of the brand. Or going on to the website and saying, “Wow. Here’s the specific car that I drive. This is the size house I live in and etc.” Then you could actually purchase that and it would be fulfilled to you name.
So, we also did this for businesses. For businesses the benefit to them was having some marketing collateral. So if it was a restaurant we’d actually underwrite the cost of producing some cards they could set on tables, give them a framed plaque they could hang on the wall. In that way they could communicate to their customers the clean energy purchasing decision they had made.
That’s just one example. But for a Type 1 this is setting up some type of an online transaction that’s personalized to each customer. And there are other examples of this as well. For example if you’re familiar with the Build-a-Bear workshop you can go on and you take the type of bear. Then you give it like a certain hat and clothes. Then ultimately you check out and you get this customized or personalized product sent to you that you’ve been able to create online in a way that’s specific to you.
Type 2: Online Standard
Then the next type, Type 2, would be an online standard type of business. So the online is that this transaction is taking place online or the actual product delivery is facilitated through the internet. This one is sort of in some ways the easiest to access type of business especially for first time entrepreneurs in the sense that you’ve got your website but then every purchasing decision is either I want what they have to offer or not. It’s not a tailored to you experience.
So, there’s a number of examples of products that can be used that are representative of this Type 2; eBook, DVDs, P90X would fit into this, information products, anything that you can go and educate yourself on what the product is and then you either choose to buy it or not. But it’s not customized really to the end user in any way.
Then of course delivery; information products would be a download. Or if it’s a physical product, something like this would be if you do a monthly recurring billing for nutritional supplements, they send it to your house every month. It’s the same type of product and you either choose to buy it or you don’t. This is a Type 2 type of business.
The example I use in there for my business, which is USB Superstore really was a little bit—I think it is more accurate now if I were to do this again I’d probably put my actual book as my Type 2. But USB Superstore was you’d go on, choose the type of product style you want, the quantity and then it get’s produced and sent to you. But there was a little bit of customization in there. So these are sort of like business archetypes or types and really you’re actual company or your business itself can be some combination or some hybrid.
You can see on the diagram here and in the book excerpt how the 4 types of lifestyle entrepreneur business are like a gradient, where your business can fall specifically into one category, or incorporate some elements from each. Is it 100% Customized for each individual user with a complete online delivery? Or is it only one type of product like an eBook and you buy it or you don’t and it’s delivered on line as a Type 2 extreme?
Type 3: Offline Customized
Now in the lower two quadrants would be an Offline Customized experience. And in this case offline is just shorthand for saying that the actual delivery for the product or service is done in person or personally. So while it could be facilitated through the internet this is something like consulting, coaching, any type of advisory roll where you’re either sitting down one to one or your doing a video teleconference or teleseminar or something that’s personalized to the customer’s situation. But you can still actually inform yourself and make a purchasing decision online.
So it fits within this Lifestyle Entrepreneur business framework but the actual delivery of the product or service that you’re buying is personalized to each person. The example I used there was consulting and/or investment banking where you’d essentially tailor each interaction with the client to their specific needs.
That’s not to say that Type 3 businesses must be delivered offline and in the same room as someone, but rather that the delivery is live. Using software like GoToMeeting, Skype, or any other video conferencing or teleconference software it’s possible to have meetings, deliver presentations, do coaching work and consult with clients from anywhere in the world on your laptop.
Type 4: Offline Standard
Lastly, there’s what I call the Type 4 business, which is like an offline standard or in person standardized delivery of a product or service. The example I used here was for my former band. Every time we’d go and play a show we weren’t rewriting a whole album’s worth of material before we’d go up and play each show, right? We’d have our set maybe with a few variations but we’re essentially delivering the same experience, delivering the same performance each time we had an engagement.
I’ve come to realize recently by getting to know a number of people in multilevel marketing that that’s sort of a similar type of Type 4 business in the sense that you know your information about your product. You know the offer you have. Then you’re having a one on one conversation; you’re having a personalized discussion with your prospect or your client. But it’s essentially the same delivery each time. You’re not customizing the offer to each customer or client’s situation, circumstance or wants and needs.
A few other examples of Type 4 businesses are keynote speakers and delivering group training on a similar or the same subject. One way that the Type 4 approach to business is useful is to expand on a Type 1 or 2 business as an additional offering. For example, if you’ve written a book on, say, entrepreneurship, which would be a Type 2, you could offer a live training seminar that expands on the topics in the book and gives interactive exercises for the participants to do, sort of like what we’re doing here.
Plant Your Flag – Choose Your Type of Lifestyle Entrepreneur Business
Within these four types of Lifestyle Entrepreneur businesses, my recommendation would be to see which one suits your personality best. Download and read the excerpt from Lifestyle Entrepreneur attached to this post (you can even read it full screen within the post!) and get a feel for which type, or which combination of types is best for you. Then my recommendation is to plant the flag and start in one specific are. You can always branch out from there.
For example if you’re doing something that’s health and nutrition related maybe you start with a Type 2, an information product or you have some customized. Let’s say like when we were talking to (Lifestyle Entrepreneurs Academy participant) Eric about one of his ideas: creating a blend of healthy cereal and offering that to the customer and they could, say, buy it on a weekly basis or monthly basis delivered to their door. Once you get established in one first type of business that’s right for you then you can branch out or at least be aware of the other auxiliary types of products or services or additional products and services that you can offer.
So, if you started with recurring monthly or weekly delivery of a singular type of product then maybe you can have an add-on or an up sell that would be like a custom diet creation or a custom consultation with the client. And that would be more of like a Type 1 or a Type 3 where you’re delivering a customized experience to them either online through some technology that’s been configured.
They tell you their wants and goals and the allergies or what not and it spits out a recommendation and maybe creates a custom .pdf eBook specific to the information they put in. Or if it would be a Type 3 where you have a video teleconference or actually sit down, understand the client’s specific situation, then make recommendations.
If you cover a few of these bases, and operate in a combination of types, then your business can address a wider potential addressable market. If nothing else it gives you a framework for thinking about how you want to be of service to your potential customers in the way that resonates with you most.
So for somebody that wants to have sort of a really arms-length distance from their business, meaning it’s set up as a system and it runs on its own, then something like a Type 2 where you spend a lot of the time creating a product that fits a market need and then having everything set up so that it’s available to be purchased online. But you aren’t actually interacting with any customer at all or just on an as needed basis for some kind of customer service support. So it lives online and operates without you…once it’s been created and there is a traffic generation strategy in place.
But say you’re more of a personable type of entrepreneur and you want to be engaging with people and getting into their world a little bit more and understanding their situation and offering your own solutions. Then starting from a place like Type 3 as an offline or in person customized delivery like when we were talking about one of your ideas for doing a math tutoring budiness. So actually working with students one on one and understanding their specific situation and then giving them tutoring, which is essentially another way of saying consulting.
Wherever you start you can look at this quadrant and say, “Where else can I expand? Where are the opportunities to do something in a different quadrant and expand the overall offerings that your business has?”
And so, I think of these four types of business and they’re not all online in the sense that they’re all functioning as a standalone system like 4-Hour Workweek totally arms length. But I think this is more representative of how certain people and their personalities can be leveraged in providing value and product or services in a way that reflects their personality and is still in line with the bigger picture of taking the things you’re interested in and passionate about and turning them into businesses.
Each one of these, even if you’re doing a in person consultation would still of course have a website and leverage some of the technologies to build and develop in. Right? So, having a web presence and being able to make a sale online or at least book an appointment and inform the customer what you have to offer is consistent throughout all of them. But these types describe the way that the product or service is delivered and how the customer experiences it.
So, on the left side of the quadrant types one and three are personalized/customized. On the right side it’s standardized. On the top it’s an online delivery whether it’s an eBook download or a calculator that ultimately has some customized product that they purchase and receive. And on the bottom two quadrants it’s an in person and a more personalized experience that they have with your brand, with your business.
That is a good overview of how I view the 4 types of lifestyle entrepreneur business you can start, or grow into. Hope that helps get the creative juices flowing. Drop any comments or questions below and I’ll shoot you a detailed answer!
To your success,