How To Build A Business To Pay You Residual Income With Pat Flynn And Matt Gartland | 774

MORI 774 | Residual Income

 

Is one of your new year’s goals to increase your residual income through your business? If so, we interviewed some of the BEST guests, Pat Flynn and Matt Gartland with Smart Passive Income, who have a PROVEN track record making MILLIONS in residual income through their own business model. Learn how you can apply their model in your own business to NEVER stress about money again!

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How To Build A Business To Pay You Residual Income With Pat Flynn And Matt Gartland

I have got a two-first special. I got a special of two guests here. This is an awesome opportunity. As you know, when I bring on guests, I want the real deal. I don’t want the posers. I want people that are legit. I guarantee that with these guys, you’ve probably heard of them. If you’ve been anywhere in the podcasting world, you’ve probably heard at least one, if not both, of these guys already.

I’m bringing on both Pat Flynn and I’m bringing on Matt Gartland as well. I will give you an intro to both of these guys. Both of these guys are angel investors in companies Circle, Karat, Maven, and things like that. You have Pat Flynn, who’s a podcaster. He is a keynote speaker. He has done lots of presentations that way. If you haven’t checked out his podcast AskPat, we’ve got that as well. We have got Matt here, who’s had multiple startups and been a venture CEO. He has done a lot of stuff and cofounded so many businesses, including the one we are going to talk about, which is called SPI.

We are going to talk about that because many of you are wondering, “What can I do to start generating more income?” Maybe you don’t have hundreds of thousand dollars lying around, but what if you could start to generate additional streams of income that can help boost this up and accelerate your way to financial independence? That’s exactly what Matt and Pat are here to do. Matt and Pat, welcome to our show.

Thanks so much.

I’m going to start asking. What is it you have got up to? Tell us what SPI is.

I will start since I founded the company back in 2008. It came as a result of getting laid off. I thought I was going to be an architect and work from 9:00 to 5:00. In fact, architects work more like 9:00 to 9:00 every day, but I got laid off and I didn’t know what I was going to do to survive. I moved back in with my parents, trying to figure things out.

I ended up starting an online business helping architects pass a particular exam. I had done that because I heard it on another podcast. This is you talk about ripple effects. Ripples keep going and podcasting is a great way to do that. I had heard a podcast where a guy was making six figures a year helping people pass the project management exam, and I was like, “No way. This is crazy. I have taken a lot of exams on my way to becoming an architect. Maybe I can choose one and become the go-to resource for that for people online.” That’s what I did.

I chose a very niched exam called the Lead Exam, and I built a website and I created a study guide. I remember in October of 2008, I sold that study guide. It was a PDF. I had no idea what I was doing, and I sold it online for $19.99. I had made $7,908.55 that month. It completely changed my life. I didn’t think it was real. I thought I was going to wake up and not be back at work, but no.

Lo and behold, it was a real thing and the income continued to grow, and then more people started to catch wind of what I was doing and said, “How did you do that? Can you show me what you did?” I said, “I don’t know what I’m doing, but I can share what I did and you can follow along if you’d like. I’m not going to pretend like I’m the expert here, but sure.”

I started to document what I was doing, and then I started building new businesses. I started an iPhone app company back in ’09. I started podcasting in 2010 and on YouTube a little bit later. I started writing books. Lo and behold, SPI, which was me at the start, has gained this amazing team. Matt is the CEO of the company to help people all around the world take the knowledge that they have and whatever specialty that they perhaps have had as a result of their experience and package it in a way that allows them to generate revenue.

A lot of these investments that I’m sure you talk about on the show here do take quite a lot of time. Imagine if you had an asset like a business that was paying you monthly and not taking too much work. There’s no such thing as 100% passive income in this world, but there is such a thing as setting things up to continue to pay you later and ongoing, like residual income.

That’s what we help people do. We have had millions of people come across our work and follow us across the podcast and YouTube channels. It’s been such a blessing because we can help people, and we get thank yous all the time and we are here to continue those ripple effects. Matt then came on board in 2014 to help organize and structure the team and start to amplify what we were doing. Matt, do you want to talk about how you’ve taken the message to the next level?

It was fantastic. They get plugged in around the five-year mark with Pat in his journey after starting SPI. He and I first hooked up through some friends and it was on a contract basis, which is still a great way for anyone thinking about side income or stuff like that to even tap into a specialty of yourself on the service side to get some exposure and expand your network in a certain new field.

I started one of my new ventures. It became a creative agency. Pat was one of our first clients and became one of our best and most loved over time. That first project with Pat was Let Go memoir which is still a great read. You can find that on Amazon. Our relationship grew and bloomed from there, and maybe much like I went up our favorite superhero movies these days.

Fast forward about 4 or 5 years from that first project together, we formally teamed up at the end of 2018 going into 2019 because we wanted to serve more people. We wanted to be able to engage with them more deeply in such things as communities. Not just like a Facebook group community but an actual membership-based program that people join. We show up, we do private events, and we have some structured programming through those communities. Being able to do that was a marvelous opportunity, and we had to tie them out to bring that to life.

How did you even get connected with Pat here? You’ve got a pretty extensive experience in business as well. What was your story leading up to this?

It mirrored Pat’s a little bit. I didn’t lose my job in the Great Recession, but I was certainly under some pressure. I was in Corporate IT. I had a great leadership track there, but during that era, it makes you challenge your thinking on what’s the biggest impact you are making with your work. I was always that kid with a lemonade stand and doing entrepreneurial things. I always had that in me.

It was around that time when I made the choice proactively to leave a pretty cushy job and get into startups. It felt like the right moment. I was bootstrapping my own thing. I didn’t raise any money, not even from like friends and family. I had a little bit of savings because I had a pretty solid 9:00 to 5:00. I then rolled that into good work, and then it’s all about relationships. It was through some mutual contacts back when things were called the blogosphere. It’s more of the early days of all of this stuff. A good friend of ours, Adam, who runs the show at NerdFitness.com connected us for that first project and the rest is history.

A lot of times when we talk about the show, we talk about passive income and we are talking about putting your money in alternative investments like real estate investing and things like that with other operators so you can be hands-off. This includes some hands-on, but I love this because I know from my own experience too. In addition to my passive income, have the residual income to help enhance all of that. That also allows you to reinvest and do more things and accelerate that plan. It’s huge. Tell us more about the ways people are able to monetize this.

There are a number of different ways to go about it. I outlined a bunch of different ways in my book Will It Fly? for those who are starting out. What it comes down to and what is the most popular, especially in the creator age, is to select a niche, a target market, or a group of people whom you know that you want to serve in some way and start helping them.

MORI 774 | Residual Income
Will It Fly?: How to Test Your Next Business Idea So You Don’t Waste Your Time and Money

A) Create content that allows people to see that you can relate to them and know what they are going through, but also B) Have some helpful valuable content. This is how you get fans, followers, and subscribers. It’s not like you are doing this necessarily knowing that you are going to charge those people with something, but it’s about gathering those people together so that you can understand more about their problems because that’s where all good businesses come from. It is solving problems.

Once you gather that audience, it can be very difficult to do that upfront, but the truth is, your vibe attracts your tribe. When you put yourself out there and you say, “This is what I believe in, this is what I’m for, and this is what I’m trying to help you with,” people will come to you. Getting on platforms like YouTube and here you are on a show, doing something similar and there’s also TikTok and Instagram.

A common question I get is, “Should I be on all those platforms?” The truth is, you need to be on 1 or 2. If you spread your energy across all of them, you are never going to fully show up anywhere, and people want to go to a person who they can see is providing consistent content with whom they can subscribe to. Then you can start having conversations with those people.

Bringing them into a direct message situation where you can ask them, “What are your biggest struggles? What are your biggest challenges?” You might find that you have the experience to help solve those problems or if you don’t, you can be the one to step up to find people, resources, or products to serve those people and that’s where it comes from.

A lot of people who are starting these things on the side, side hustle, and businesses, think that you have to go big and create the next Uber, eBay, or whatever it might be. You can start small. Pick one group of people and try to find one person who has one problem and solve that problem. You don’t even need a website in order to do that. You need to care and that alone will force you to understand how you relate to these people. How do you get them to understand what you have to help them with? How do you help them?

Many people starting side hustle businesses think that you have to go big and create the next Uber, eBay, or whatever it might be. You can start small, pick one group of people and try to find one person who has one problem and solve that problem. Click To Tweet

Once you get that result for that one person, not only do you have this great testimonial and some proof that you can do this, but you have the confidence to go out there and start talking about this on a more wide level. The income comes from maybe you want to help many people in that same way. You create an online course or a group coaching program or maybe you become a consultant or a freelancer like what Matt was talking about. Perhaps you have an idea for software that can help automate something that is normally very difficult and takes a lot of people a lot of time.

I know a person who was in the home inspection space for real estate. They used to go around and have clipboards to do everything. He created an iPad app that allowed people or these agents who would go out and do these inspections to do it all on an iPad and automatically format and save things, and it would save a ton of time. People pay $50 a month to get access to that. If you might multiply $50 a month times 100 people in this world of 8 billion, you are living pretty well. Imagine an extra $5,000 a month coming in. That could be game-changing.

Hopefully, Ripplers, you are reading this because of one thing. They have pretty much said the same principle that I keep driving into your heads every time. Even if we are talking about investing in cashflow and passive income, that’s all important. The real economic principle here is that dollars follow value. How do you show up to serve people, solve problems, and create value or add value in any way, shape, or form that people want to exchange money with you? That’s the secret formula that sadly took me several years of being a financial advisor to finally learn and quit being a financial advisor to finally do it right and then go into this space.

Even in the time when I went in the whole over $1 million and in the last recession, so where you had your own thing. I went over $1 million after being financially independent. I went over $1 million in debt. I had to dig my way back out of that without going bankrupt and it was a sucky position, but I had to teach the things that created value at that time. I stopped teaching people how to get out of the rat race because I was in it. Instead, I started teaching people how to find and free up cash like, “Where do you find the money?” People would always ask me at that time during the recession. “I love to pay you but I can’t find the money.”

I’m thinking, “I’m way more broke than they are.” I wouldn’t say it out loud to them, but I’m like, “I’m way more broke than you guys are. I could find the money easily in your situation.” I’d say, “If I could find the money, would you pay me?” “Yeah.” “Great,” and then done, and they would start paying me. You guys are essentially telling people to do the same thing in their own little area of expertise with the people they want to serve, matching that up, and delivering whatever it is. It doesn’t have to be a certain widget. It’s whatever comes out of you expressively.

One way that we teach this and harness it ourselves through our work at SPI is classic advocacy. If you can help even 1 person or 10 people in a small group and deliver that value, that value manifests as these are loyal not only fans but customers, and then they can tell your story for you in a very genuine way.

Even thinking back to freelance or other service opportunities that can generate income, maybe in the early days. Maybe because you want to get into online courses or these other things that are a bit more scalable and passive at some point, but you want to bootstrap it. That service where can be that little engine that does that.

I think about this as the Power of Ten strategy. It’s not overly complex, but if you can get ten people in a little service capacity, you are offering a skill for service and dollars. You can then roll not only the income but those testimonials and opportunities into then the next thing because you get some validation built into how you are solving their problems.

Then the next thing is maybe a small group coaching or something that’s a little more expansive. That’s like 100 people out from 10, and then you get even more experience and testimonials. You can maybe, at that point, have a podcast and other things running and then you can maybe start thinking about that next level or next power ten up, which is that Superfans which is Pat’s book, or 1,000 true fans and going after that tier.

The 1,000 true fans thing is so key for people who are thinking about this because there was an article written in 2006 that inspired me when I first started. It was written by the senior editor of Wired Magazine. His name is Kevin Kelly, and it was this article called 1,000 True Fans. It was for mainly musicians and artists and people like that, but entrepreneurs are fitting into this category as well.

The idea is that you don’t need a blockbuster hit. You don’t need to serve millions of people and you don’t need to change the whole world. If you can, awesome. The truth is that if you want to have something amazing that can support a lifestyle that you want and help you collect even more money to invest in and to start to expand things in over time, you need 1,000 true fans.

For a musician, it’s the person who waits backstage to snap a selfie with you. If you have products, they don’t even read the sales page. They buy it because they love you so much, your art, and your craft. If you get 1,000 of those people paying you $100 a year, that’s less than $10 a month. A lot of us spend $100 a month on things we don’t even use. This is very generous lowballing it. $100 a year times 1,000 people, you are running a six-figure business already. There are a lot of taxes or whatever, but from a general bird’s eye perspective, it’s not that difficult. Where most people fail is that they try to go too big too quickly.

If you have products and a thousand true fans, they don't even read the sales page. They buy your products because they love you, your art, and your craft so much. Click To Tweet

As I often say, “The riches are in the niches.” Niche down and find those few people, as Matt said. Help them and then you can expand how you help them. Maybe the help is on a deeper level where people are coming and flying over to you to have you show them what to do or you are flying to them, in which case, you could charge more.

MORI 774 | Residual Income
Residual Income: The riches are in the niches. Niche down, find those few people, help them, and then expand on how you help them.

 

Maybe it’s not 1,000. Maybe it’s 10 people, but you charge them $10,000 to help to get whatever it is your specialty is and access to that. It’s hopefully encouraging. When I heard that, I was like, “I don’t need to create something huge. I need to change somebody’s world.” There are a few other people like that, too, that I could probably help.

You support something that Matt said, too, that is important. As he started going through like, “You can do it this way.” You start here and then you build this to here. Notice a podcast or whatever it was down the road. I have heard so many people ask me, “I’m thinking maybe I should start a podcast. I don’t have any followers. I have a few Facebook friends, but I always want to start a podcast. Maybe I want to put on live events.” I’m like, “First get a following. Build this first. Start to test out what you are doing, not just teach something that you’ve never done before. There’s a certain order to it. There’s a certain priority of what you start doing first,” and I’m hearing that from both of you guys.

You can start with a podcast. Many people do, but you have to set the right expectations. If you have no idea of where you are going, you can start a podcast and use that as an experimental ground or a testing ground, but you have to have the expectation that it’s going to take a little bit longer because you haven’t nailed that message and who it is you are serving yet. That’s totally fine. Many people do that. Like Matt said, and what I’m a proponent of is, “Find a group of people, talk to them, and understand them. What are their struggles?” Imagine how much easier it is going to be to start a podcast and know what to say when you already know who that group of people is.

An important thing here is that, especially these days when the tech is in the creator space, it is not a one-size-fits-all path. You don’t have to start with freelance and podcasting. It’s not that linear. As we teach it and try to genuinely live it in our community, especially, it’s a choose-your-own-adventure. There are proven methods and being goal-oriented, even small goals, that can build momentum and start to instill the right habits in your work. These are the real nuts and bolts of how to make a business work.

In terms of your decision-making and where you want to focus, we try to champion a lot of that, build your own path, and build a business on your own terms. The Learner Community, for example, is our open-access community. It’s only like $29 a month and we invite people to come in and learn the ropes on this stuff so that they can make the best decisions possible in the right sequence for them.

How would they get access to that community?

Folks could learn more about it at SmartPassiveIncome.com/Community. When you go to our community page, you’ll learn about not only our Learner Community which is for probably folks reading this that are getting excited about their own venture with our Pro Community. We have another community called SPI Pro. That’s for folks that are probably a little more established in their business and are working on more advanced methods.

The Pro community is application based. You have to apply. It’s one of our quality control mechanisms, but in our Learner Community, anyone is welcome. It doesn’t matter what niche you are in. It doesn’t matter where you are in the world. We are a global audience and we are here to help people learn the ropes of entrepreneurship.

You guys have a newsletter, too, correct?

The newsletter, which is fairly new, is called Unstuck, and so you can get unstuck by getting the newsletter. What it is? It’s stories about entrepreneurship, mostly from my perspective as an entrepreneur for many years. A lot of times, the thing that can help us move forward the most are these small little moments. I wanted to bring these moments out, share them, and teach stories with overwhelming people. If you wanted to get that newsletter, you can go to SmartPassiveIncome.com/Unstuck. That’s where you can get Unstuck. Some of my personality shows up in there as well as a lot of dad jokes, quotes, and other things like that too which are always fun.

A lot of times, the thing that can help us move forward the most are the little moments. Click To Tweet

I want to ask you guys a question as well. I want to go a little bit deeper but more personal with you too. Matt, I know you’ve been a successful entrepreneur and done a lot and with lots of businesses, including this one that you guys are doing as well. Pat, you’ve even had a podcast that has affected people. I know people like John Lee Dumas that attributes his inspiration to you, and he’s got a great community as well.

I can’t tell you how many people have told me, “I look at John Lee Dumas or Pat Flynn,” and they all look up to you that way. For you in your business and your experience, what is it you feel that most people are missing, especially if they are trying to launch something as new entrepreneurs or if they are trying to create a side hustle? What is it you’ve seen in your own experience that if people got this one thing, it would probably make their lives so much easier?

At some point in that person’s journey, probably not at the front, is to truly understand your own core motivations. That might sound heady but oftentimes, other people are chasing someone else’s version of the dream or what success looks like. What we have learned, especially together, Pat and I, over the years of working together and becoming best friends and close friends and our families know each other. We are extremely complimentary but we still share complementary motivations that are different.

We have gone through a formal personality assessment thing to understand how Pat and I are motivated. We work well together, but there are some differences there to understand how we can channel and be the best selves in our work. A lot of people maybe don’t fully understand that because they are seeing the representation of success through JLD, Pat, or someone else, and that’s motivating on the inspiration side on the front end. They get started. Along the way, dialing in what is underneath the hood for you and being able to make sure that that’s connected with your work is the biggest thing.

There’s a book by a friend of ours, Todd Henry, called The Motivation Code. If that is of interest to you, you could take it and run with it because it has opened up my eyes to a lot of things about myself, Matt, and our other team members. From my perspective, this is the thing that I struggled with the most when I first started. There was something in me that made me want to do everything myself. I wanted to have my name on all parts of it. I wore all the hats and I was proud of that, and sometimes you have to do that, especially if you are bootstrapping and you are starting out, but I held onto that way too long.

MORI 774 | Residual Income
The Motivation Code: Discover The Hidden Forces That Drive Your Best Work

I don’t know if it was a sense of pride or the fact that maybe I was just, “Nobody could do this as well as I can.” I was doing the podcast, the artwork, the show notes, and the editing of it for seven years straight, all because I didn’t think anybody could do it as well or as fast as I. What I found out was that there are other people out there who can do these things much better and faster. There are many things that, as a business owner, you have to do that is a part of the role.

In a lot of that, you don’t want to do, like the financials and all the tax-related stuff. It like gives me a headache. I don’t like doing that stuff because I want to focus on creation, building relationships, and connecting with people. There are people out there who love doing those things like Matt, and this is why Matt and I work very well together. I’m not saying you need to hand off and start hiring people right away.

In fact, many people make that mistake, but eventually, get to the point where when you are starting to find that you, as you are working, want to do more of this, but you still have to do more of that, that’s a good sign to go, “What are 1 or 2 things could I potentially hand off, systemize in some way, or bring a virtual assistant on for?” That would have exponentially grown my business and results much faster if I had been more open to that sooner.

I was in that same boat where it was the Chris Miles Money Show and said the Money Ripples show. I was doing my first five seasons all by myself. Once I got to seven figures, I was like, “I’m doing this and I don’t have anybody to support me here. How’s this going to scale?” You can’t. It’s hard to do that. It’s very wise. I wish I had learned that even faster because I probably would have been a different place even today. Great stuff. Guys, I appreciate it. This has been amazing. I will probably end up having to figure out what I need to do with you guys first to see how you can build that community. That’s the thing. We love our community but we can always do better. We can always connect even though we have one. I appreciate your time guys.

Thank you so much.

Thanks for the Ripplers. Keep going.

Everybody else, it’s one thing to read these blogs and another thing to do them. Are you going to be a hearer, or are you going to be a doer of the word? If this resonates with you, check out their newsletter. Go check out their site. Check out SPI and see what they have got there because whether you are starting out or you are a pro, there’s something for everybody and there’s always a next level and next way to learn.

Just from knowing these two guys, there’s not anybody you can be learning from it better. Anybody else that says that they are doing their stuff out there of trying to help you build communities, these guys have lived it and done it. As I said, we don’t bring on posers and people that talk a big game, but these guys have walked a very big game. Go check out their stuff. Go and make it a wonderful, prosperous week, and we’ll see you later.

 

Important Links

 

About Pat Flynn

MORI 774 | Residual IncomePat Flynn is a father, husband, and entrepreneur who lives and works in San Diego, CA. He owns several successful online businesses and is a professional blogger, keynote speaker, Wall Street Journal bestselling author, and host of the Smart Passive Income and AskPat podcasts, which have earned a combined total of over 80 million downloads, multiple awards, and features in publications such as The New York Times and Forbes. He is also an advisor to ConvertKit, Circle, and several other companies in the digital marketing arena.

 

About Matt Gartland

MORI 774 | Residual IncomeMatt is a 5x startup founder/co-founder with 3 meaningful exits to date. Today, Matt serves as CEO of SPI Media, a venture he co-founded with good friend Pat Flynn to take the SPI business to the next level. His entrepreneurial career spans digital media, e-commerce, and the creator economy. Beyond his own ventures, Matt is an advisor to and/or angel investor in such tech companies as Circle, Karat, Maven, and Supercast.