How to Create Profitable Online Courses with Tiago Forte
Tiago Forte is the founder of Forte Labs and the creator of three successful online courses which have generated over one million dollars in sales. His latest, Building A Second Brain, has taught 2,000 students how to save their best ideas, organize their learning, and dramatically expand their creative output.
In this Forcing Function Hour, Tiago joins Chris to discuss the evolution of online education and identify the fastest path to creating profitable and sustainable online courses
See below for the audio recording, resources mentioned, topics, and conversation transcript.
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Conversation Transcript
Note: transcript is slightly edited for clarity.
Chris (00:05): Welcome to Forcing Function Hour, a conversation series exploring the boundaries of peak performance. Join me, Chris Sparks, as I interview elite performers to reveal principles, systems, and strategies for achieving a competitive edge in business. If you are an executive or investor ready to take yourself to the next level, download my workbook at experimentwithoutlimits.com. For all episodes and show notes go to forcingfunctionhour.com.
Now, I’m very, very excited to introduce my co-host for today, Tiago Forte. Tiago is truly on the bleeding-edge when it comes to systematizing creative output and empowering content creators to financial freedom on their own terms. His latest course, Building A Second Brain, has taught over one thousand students from seventy countries. Now I was in the first cohort of Building A Second Brain back in January 2017. All that I knew when I had signed up was that Tiago had made a course and that was enough for me. It was very much a “shut up and take my money” situation. It was still a little bit rough around the edges, but I was so amazed at how he had managed to assemble such an impressive group of people from all the corners of the internet.
Building A Second Brain was a massive paradigm shift—I would never have to stare at a blank page ever again. Tiago taught me that my brain was not for remembering but for building bridges between my ideas. I had taken the red pill and I haven’t looked back since. Building A Second Brain is the first course I always recommend and it’s been incredibly exciting to see just how far it’s come in a couple of short years. Now, that is not by mistake—Tiago is one of the hardest workers in the online education space, and what you’re going to see today is that this process of improving the content, growing the audience, growing the revenue base, has been an ongoing experimental effort, continuously collecting feedback and iterating. And I’m very excited that Tiago’s going to take us under the hood and show us behind the scenes of what it takes to create a successful and profitable online course.
Some of you guys might be curious about how Tiago and I met. I actually met Tiago in San Francisco on my way to Burning Man in the summer of 2017. We were at a Building A Second Brain meetup, actually. And I managed to convince him to drop everything and join my camp with only three days to prepare. So it can’t be said that Tiago doesn’t know how to make things happen under a tight deadline. We’ve been good friends ever since Burning Man and that initial meeting, and I want to sincerely thank him for joining me to share what he has learned about creating profitable online courses and what he sees as the future of online education today.
Before we kick things off, a couple of housekeeping items. As you can see, this is a recording for the after-audience. So this original presentation was eighty minutes long in its entirety, and due to user error, my excitement of having Tiago on and kicking things off, it took me about fifteen minutes to remember to hit the record button, so that's why I'm re-recording the intro today. And what I'm going to attempt to do is give you an executive summary. We took extensive notes about what Tiago said on the first three slides, about the first ten minutes of this presentation, and I'm going to attempt to paraphrase as best I can my main takeaways of what Tiago had said as far as introducing his course, Building a Second Brain, and what he's learned along the way in making it profitable. So you know, this goes without saying, but I'll say it anyway. Any mistakes or confusion about the messaging as far as Tiago's intentions and what he actually did tactically, all mistakes are my own. I'm going to do the best I can to drop you into the stream gently so that when Tiago kicks off his portion of the presentation around minute ten, you'll have a little bit of a briefing and kind of a warm-up before being thrown to the wolves.
And I just wanted to let you know that, in my opinion, this presentation gets better and better as Tiago gets warmed up and as we get into the weeds of the back end. "How do we build this course from the ground up?" So don't worry, you haven't missed anything, this is just an endorsement, we'll say, for the importance of a live experience, which cannot be replicated. Everything is in beta. Sometimes you don't hit record, and people who showed up at the time get a little bit of extra experience. I'm going to do the best I can to replicate that for you. Without further ado, I'm going to begin with the presentation.
All right, guys. And kicking off with the presentation, or at least my executive summary of the beginning of Building a Second Brain and how it came to be. And the focus of this presentation is, "How you can go from zero to sixty in creating your online course," or put another way, how you can go from zero in revenue to 100k in annual income. What's the fastest path to building an MBP course, to validating demand, and start collecting revenue so that you can create some financial freedom?
Tiago started here with a, let's say, a timeline of the revenue, of the lifetime of building a second brain, and you can see here ten discreet spikes representing the ten live cohorts of Building a Second Brain. And so the obvious question that I had was, you know, "Why did you choose live cohorts?" Historically, all courses were set it in, forget it. You get in your cave and you create a course that can be accessed at any given time, and you know, people go through it at their own pace. And you know, Tiago's experimented with this. He had a couple of versions that were self-paced, but he kept coming back to the live cohort version. And the way that he described this is the death of asynchronicity. That he found it most valuable if he could create "you had to be there" one-time experiences. And here are a couple of reasons why.
I mean, first, just the community aspect that's created when everyone is going through something together. You have co-instructors or almost a shared responsibility where other people take responsibility for getting others up to speed or helping to fill in the gaps. Explain things. Monitor the chat. That sort of thing. It also creates this sort of team accountability, that everyone's in it together, which increases the completion of assignments, which increases engagement. That people can see you on video, so you know, you sit up higher in your chair, you pay a little bit more attention, versus watching something a little bit more passively. And this all leads to just higher levels of engagement with the course. Higher levels of completion. So both getting through the modules as well as completing the exercises, which leads to better student outcomes, and thus better testimonials, more referrals. Better results equal more revenue at the end of the day, which is what you're looking to optimize for, is student outcomes. Also, just for the improvement of the course, having the sessions live allows for this immediate live face-to-face feedback. So Tiago talks about how when he's presenting and he can see the gallery of faces, he can immediately tell what parts of his content are connecting with his audience and which parts, you know, they're falling asleep a little bit and need to be cut. And it was a really important mechanism for improving the courses.
The second thing that was apparent to me was this exponential growth. And you'll see this again on the next slide, that, you know, things start off relatively slow. You know, he hits 100k, but it takes a few cohorts to get there. How does he account for this exponential growth? How did he know that things were working? And I think the biggest thing that he talked about was building your audience. So when he started this, he had around a thousand subscribers in his email, and now he has twenty thousand subscribers just a few years later, and that the big metric that he realized he needed to optimize for was revenue per subscriber. That not only has he been growing his subscriber base by putting out more content and placing more of an emphasis on getting newsletter signups . . . You know, now . . . He used to write relatively infrequently, and now he publishes a newsletter every single week. He has been really focusing on how he can provide more value to those subscribers, in order to increase the revenue per subscriber.
And this really emphasizes . . . He gets into this a little bit more when we're talking about the life cycle or the evolution of online education . . . The importance of owning the platform. That being on a platform like Teachable—versus where Tiago was before on Skillshare or like Udemi—allows him to own his platform and thus to control his audience. And I love this quote that Tiago said, "If you can't email them, they aren't your audience." The importance of being able to communicate directly with them.
And then finally, you know, revenue is a multiplier of the number of students times price paid per student, and Tiago was consistently able to add more value to signups, both by creating more of a premium experience by adding in coaching and other aspects to increase the perceived value, but also just understanding better what the value was. You know, in my opinion, Tiago really under-priced in the beginning because we all have this tendency to undervalue our own experience and our own expertise. And so moving progressively to a more premium experience, which is definitely the approach that Tiago recommends, and thus a price-point to support that.
So this will be a quick one. This is a breakdown of that revenue that you saw in the last chart by the cohort. And you can see that the path to the first quarter million in revenue was far from a straight line. That there were ups and downs, different cohorts that performed better than others for various reasons, seasonality, timing, promotion, promotional, that type of stuff. But that there was a progression, there was consistent validation by the low percentage of refunds, as well as at least a let's say "consistent" or "high enough" level of people saying, "Yes, I want this," or, "Yes, this was valuable," in order to continue to build to continue to improve. And Tiago really talks about this process orientation of knowing what's under his control, continuing to iterate on the parts that he can improve as far as his presentation, the content itself, and the engagement of the audience, and really optimizing for that time-to-value. How he can ship faster, how he can deliver value earlier in the course in order to get that critical buy-in. And just kind of highlights all of the experimentation and learnings that so much of this is building as you go. Creating the parachute after you jump out of the plane and that you don't need to get it perfect the first time around. And in fact, Tiago recommends that you have it as crappy as possible. Get the MBP out there, and continue to improve via feedback.
And this is going to be the last slide before I hand things off to Tiago. This is a breakdown of the expenses for the first two years. And so what you can see here is that it's a long list and Tiago kind of went into what was the value of all of these things that he did. And I asked the question of, so, "Of the spending, you know, what was most essential? What was the best money that he had spent?" And his answer really surprised me, was, "None of it." That none of it was necessary, none of it really drove as much value as he thought. A lot of it was experiments, and the nature of experimentation is that most experiments fail. And his advice was that none of it was necessary, especially in the beginning, and that his recommendation was actually to cut more corners and to strip things down to the essential. Get it out there in as rough of a form as possible.
So some specific takeaways which I wrote down and would love to share with you . . . I mean, I'll kind of run down the list here. First, the marketing agency was a complete waste of time and money. And I love the way Tiago put this, that "No one can market for you. No one cares about your content, your audience as you do. Like, it is your responsibility to market. Don't try to hire that out." Next is the coaches, that coaching became an essential part of Building a Second Brain, and optimizing student outcomes, but that it required way more training than he expected. And he kind of over-optimized and added too much on early, and it became a bit of a distraction.
Moving down, videographer. That it turned out to be completely unnecessary, that now he actually films his courses using an iPhone on a tripod, and no one has noticed any change of quality.
And finally, as far as mistakes made, you can see Facebook ads there towards the bottom, that that was a complete waste, complete zero ROI. That others probably could make money off of Facebook ads, but only if it's already a core competency for them. He just didn't have the bandwidth to invest in order to make this a lucrative or profitable source of leads. And so if you're not going to fully invest in something, it's better to focus on the channels that you already have the core competency.
A few other learnings that Tiago shared on this slide. Talking about the explosion of YouTube, and how that has become the best channel of video, and where he sees everyone heading in terms of their attention. As far as promotion, and you'll see this highlighted on the next slide, moving more towards a co-promotion model where he shares audiences with another creator and looks to identify the intersections of their expertise. That's been a key channel of growth for him.
And you know, my question that I asked here, was the obvious was missing, was the value of his time was not accounted for. Only the spend. And this is where Tiago made the confession that early on he placed very little value on his time, basically zero value, and he only actually tracked dollars spent unless he did things that were cheap in dollars but very expensive in time. And that's been a big shift for him, is that now he looks to identify opportunities which have much greater leverage per unit of time.
Okay, so that was way too much of me. I just wanted to give you guys a little summary of what you might have missed if you were not able to join us live, and I'm going to hand things off to Tiago, who's going to talk about acquisition channels and where students of Building a Second Brain have come from.
[original recording begins]
Tiago (16:24): The delivery mechanism can be incredibly rough. Everything else can be rough, as long as essentially you have product-market fit. And the cool thing with content is you can find product-market fit through content. It's such low-risk. You know, like, most people know MVP. Minimum Viable Product. But before MVP you can have MVA, which is Minimum Viable Audience. By creating content, before you have any costs besides your own time, you can test, test, test, test. Build up . . . This is what David did. David spent . . . You know, when David called me to work together, it was a five-minute call. He called me and said, "Hey, do you want to create a course together?" And I was like, "Sure." That was it. And why was that the case? Because I was part of David's audience. He had built, you know, a ten thousand-person email list. I was reading his stuff every single week. When you have ten thousand loyal readers and you're creating a course on writing, you basically can't fail. Right?
Like they have extended enough trust to you that even if the first version is not very good, and David freely admits the first version of Write of Passage was not that good, but with the built-up trust of that audience, they will stick with you. They will give you the feedback and the patience to develop it into something that is good. So I would say start at the very front of the process. Creating better ideas. You know, practicing teaching. Schedule a free local workshop at a library or a company. Just try it. See if people come out of a one-hour workshop being like, "That was super useful. I'd love that." Until you get to that point, you know, this is a principle I've developed, as . . . The educational content has to be proven and validated offline. It has to be proven and validated offline, live, synchronously before you take it online. And the reason for that is with all the strength in the power of online courses, it has an incredible weakness, which is feedback loops are long. Right?
Even this rapid method that I'm teaching you, you know, by the time you plan a unit or a course, you film a video, you make the slides, you make the website, months will pass. If you are waiting months to get the first customer that says either "this is great" or "this is terrible," you know, versus a classroom setting . . . And this is kind of where I started. I taught English in South America. In a classroom setting, you say words, and then the look on their face. Are they like “ . . . ?" Or it's like, “Ah." It's like real-time millisecond-level micro-expression feedback. That's the speed that you need in the early stages before you kind of know what you're doing.
So we wanted to leave most of the time for Q&A, but I wanted to end the presentation portion with a brief history of online education. I think it's really easy to walk in and think of online education as . . . I find people think of one of two things. Either they think it just started, they're completely ignorant of the decades of work that's been done on this, and they go, "Oh yeah, you know, I have this cool idea. What if I like taught like an online course?" And you're just like, "Oh my gosh. Like you don't even know what you're walking into." Or they think it's been going on so long that they missed it. Right? I remember sitting in my little empty San Francisco apartment in the Mission, because I couldn't afford furniture, sitting at my little IKEA desk, when I first left my last job and taking a course on Skillshare, and it was twenty dollars, and it felt like a big deal to spend twenty bucks on online content.
And I took a course on Ruby on Rails. I didn't finish it or end up learning Ruby on Rails, but it was just my first interaction. And I remember seeing it. And he had thousands of students, all the stuff, and thinking, "I've missed the boat. I've missed it. It's over. Game over." You know, Skillshare had this very nicely designed, very good platform, and I was like, "Gosh, I'd really love to be an online teacher, but I missed the boat." That was 2013, guys. We're . . . Like 2013 is now. We are in the first .01 percent of what this movement is going to do. It's going to transform not just education, but every industry. And I want you to just consider, we're like, we're so early. We're so early. We're like when people were using Bitcoin to buy pizzas. That's what we are at when it comes to online education.
So, but let me just give you a little history, because each wave or generation of online education is passing every two to three years, on average. Which is just so fast. Like that right, there is the best signal that it's early. A generation lasts about eighteen months to two years. Right? Okay. So the first generation . . . And I want to preface that this is totally subjective. This is like completely from my own experience point of view. Like someone's going to come in here and find like the dates are wrong, and they were overlapping, or something. But this is just what I have seen over the decade that I have been doing this. The first was the MOOCs [Massive Open Online Courses]. This was starting in the '90s, with things like edX, MIT OpenCourseWare, eventually Coursera. It was like the . . . Remember that first explosion of enthusiasm? "Oh, we're going to . . . You know, thousands, tens of thousands of people all over the world will log on and have their education." Completely idealistic, completely naïve. This word, you know, "MOOCs" was on the cover of Newsweek and Time Magazine and all these things.
This was when I first learned about online courses. So I wasn't really part of the MOOCs. In fact, you couldn't be part of the MOOCs unless you were a professor, right? It just was not open. And what I have below, where it says the MOOCs, is the problem that that generation or that way was trying to answer. In this first wave, the only question was, "How do we get content online?" Right? This was kind of before YouTube. This was before we knew how to do it. So basically what an online course was we had this radical innovation. We set up a tripod with a camera, and we filmed the MIT professor, and then wait for it, we put that video on the internet. That was the innovation. That was the world-changing thing. And it was world-changing. Right?
So that's the MOOCs. The problem with MOOCs is what I said before. They were not accessible. You couldn't teach one unless you were a recognized, you know, authority. And there was no monetization. There was no way to make a living. So what we saw next were the marketplaces. Right? The kind of the most well-known ones are Udemy and Skillshare. And what these were were these websites that said, "Look. We will be a platform." Right, this was the age of platforms. "We'll be a marketplace. On one side will be instructors. Anyone can come." This was a revolutionary change. "Anyone can come, follow our system, our process, and create an online course. And then we'll help you with the marketing and the payments and the refunds and all that stuff by bringing on the other side of the marketplace the customers." Right?
And this is where I started. And it was the best deal ever. Like, Skillshare . . . I just couldn't believe that I could just get on this website, charge whatever I wanted (although the standard then was about thirty bucks), and customers would come to me. Right? They would actually do my marketing for me. I thought, "I'll stay with Skillshare forever." And they were really solving the problem of how to charge. So they came up with certain innovations, such as cross-marketing. Right? If you sign up for Course A, then they know based on what you signed up for that you might like Course B, so they'll email you that stuff. Came up with innovations like payments. Right? Like the cart. Having a cart was the big innovation. They developed things like a thirty-day refund policy. Things like . . . All the stuff around payments, basically to give people like . . . It's so hard to remember now, but putting your credit card anywhere online back in the early 2000s was like a huge deal. We just didn't do that. You know? Or at least you wanted like all these certifications and these authority things, you know, to know that they weren't going to steal from you.
So the problem with the marketplaces, as I said before, is you didn't control the customer. And so what happened is the marketplaces started to realize, "Wait a minute. We have all this content, and we have pricing control." Right? "So why don't we just discount these courses by ninety percent or more, thereby increasing our user base and our revenue and all our metrics, at the expense of the creators? But hey, they have nowhere else to go. What else can they do?" And this is maybe not very generous. Like this was an important phase. Like, they did add a lot of value.
But as I said, my revenue dropped ninety-five percent overnight. People like Ankur, who became the founder of Teachable, he was one of the top instructors on Udemy. And he found the same thing. He couldn't email his customers. Right? Like, when you can't email your customers, they're not your customers, basically. And so there was this exodus. All . . . The irony is the best creators, the ones that actually wanted to build a business, that wanted to scale, that wanted to grow, left the marketplaces.
And honestly, I hate to say it, but when you go on these websites now it feels like the Wal-Mart of online courses. Everything is ninety percent off, and ninety-nine cents, and like . . . Really deep discounts. They're holding onto that old model when most of the value, I think, has moved to the integrators. Okay? So . . . I probably need a better name for that. Because the marketplaces were also integrators, but I just came up with this yesterday, so this is my . . . But this new generation, like Teachable, Thinkific, Kajabi . . . There are many other ones. They lured away the best teachers by saying, "Look, we're not going to get between you and your customers. Okay? You're going to own the email addresses, you're going to have all the information, the customer data. What we're going to do is just give you the tools. We're going to give you a storefront. We're going to give you a platform, but it's one that you completely control that you can leave at any time and take all of your customers and all of your content with you." Right?
So I'm on Teachable, which I think is the largest in North America. They just were acquired by Hotmart, which is the largest platform in South America and Europe. So that's now going to become like a mega-platform. I recommend Teachable. They're an awesome platform. Highly recommended. But basically they said . . . It was quite a trade-off. You know, it's kind of insane if you think about it, 'cause Teachable doesn't make any more money if I make more money. Right? Like I pay them $999 a year. That's true if I have a hundred customers or a thousand or ten thousand. Which is incredible for me, 'cause basically, the more I sell, the lower my expenses. The higher my margin. And you may think, "Why does Teachable agree to that? Why would they not have any upside of their best customers?" It's because of the marketing that I give them. Right? When they have people in their platform like Mariah Coz, like Pat Flynn, like me, we're constantly promoting them, because we love the model so much. So I kind of think that's the trade-off they're making, is they make up for it in the word of mouth. So that's the integrators.
Let's see. So this is kind of where we're at now. And I put this little thing here. This is where we are. And there's a new generation, which I think of as the boot camps. This started first with coding boot camps. Right? Coding boot camps really figured out that you can create all these forcing functions, actually, do it live, have a beginning and an end date, and with all those accountability mechanisms you can actually promise, or in some places guarantee, a really, really attractive outcome, such as getting a job. Right? No previous generation of online courses would promise you anything like that. Coding boot camps were the first, that sort of aspired to that level of quality. And then other sectors started to adopt it. So I'd say the two really leaders in this current generation are ALT MBA and B-School.
ALT MBA is a, I think, six- or eight-week intensive boot camp put on by Seth Godin. He's no longer really involved anymore. He has an entire team. Probably one or two or three dozen people that run that program. It costs, I think, three to four thousand dollars. B-School is Marie Forleo. It also costs two to three thousand dollars or so, and it's similar. I think it's eight weeks, she's basically teaching you how to start a business. And it's super interesting. I just noticed this recently, that both of those . . . Look how they frame themselves. They are framing themselves as competitors to business school. Right? Like that would have never happened before. That would have been insane. For the first time, I think the expectations and the quality of online training is reaching a point where we're now willing to go head-to-head with programs that cost tens of thousands of dollars at the best schools of the world. It's a very, very exciting time. You know, we're promising similar levels of impact at a tiny fraction of the cost.
And that's kind of I think where we are. The boot camps are kind of solving the problem of the integrators, which was the problem of self-paced courses. Self-paced courses were this incredible bonanza, you know, where you could learn at your . . . You know, think of the way it was marketed. "Learn at your own pace. Learn on any device. Learn when and where you want to." It was all about choice and freedom. Now people don't want choice and freedom, 'cause they're overwhelmed by complexity and chaos and uncertainty. They just want you to do it for them. They want you to tell them what to do. And that's what you do in a boot camp. You have these little short sprints on each Zoom call where you're actually creating something, you're building something. You can still use pre-recorded content, and we do. In fact, we have what's called the flipped classroom model, where I have them watch all the lectures and do all the reading outside of class, 'cause that's the easy part, and then the exercises and the activities and the action steps we do live on the call. So I'm actually there with them, where if they have a doubt or a concern I can address it at the moment.
And that's I think what allows us to promise outcomes. That's what gives us the word of mouth, or "This changed my life." That's what allows us to charge what we charge. The fact that we're there with you, you're buying not just our content but our time and our interaction and our feedback. And that's I think a brief history of online education. So one . . . I'm sure there are a million questions, but the last thing I'll say here is—
Chris (31:41): Sixty-five questions.
Tiago (31:45): Oh, that's fine then. So this might be super intimidating. Like seeing how rapidly it's changing and how rapidly it's growing and much more competitive it's getting, honestly . . . But here's the thing. You don't have to start at the beginning. You get to come in right at the front of the wave, right? And the way that I would . . . I know one of the questions is going to be, "How do you recommend I get into this?" So I just want to answer that. Get the word "course" and throw it out. Don't think about the word "course," because the word "course" brings all this baggage from decades and centuries of how education is supposed to look. Instead, I want to give you four words which go together. Think about a "premium group coaching experience." That's what you should be doing. Premium group coaching experience. Each one of those words matters. "Premium" because you're going to come in at the top of the market. Don't start at the bottom of the market. It's a dog-eat-dog world. You don't want to compete on price, you don't want to compete on how many modules, how many hours of video you're providing. You want to compete on quality. You want to go straight to the high end. And you can.
"Group." Okay. The group is important. Do cohorts. I'm telling you, it's far more effective. Do cohorts, because then there is . . . All the responsibility for the experience is not on you, it's also on the group. More and more I feel like I'm there just kind of as a host, as a facilitator. When you get even a small group of . . . Especially a small group of incredible people together, magic happens. They teach each other. They learn from each other, they coach each other, and you're just there in the background like, "Cool." You know, you learn as much as they do. Think about the group. The learning emerges from the group. The learning is not something that you already have in your brain that you are just transmitting to them, right?
The third is "coaching." Right? Think about . . . You know, my Building a Second Brain course. People hear a thousand dollars. "It starts at a thousand dollars. It's so, so expensive. I could just go on YouTube and watch, you know, infinite hours of videos for free." Yes, you could. Okay. But what would you pay me as a coach? Right? The time on the live Zoom calls is something like thirty or forty hours. What would you pay me for thirty to forty hours of coaching? Okay? Now compare that to a thousand dollars. And suddenly it's cheap. Like, coaching has this culture and this expectation, and this model that you pay a lot and you get a lot out of it. Right? You pay a lot of money for the best coaches, and they deliver multiple, multiple times on that ROI. Right? I have a coach, I have a business coach. I love . . . It's really expensive. But I love paying him. 'Cause he can say one thing to me. Just get one mindset, shift it, and pay for a whole year of his coaching in that conversation. It's incredible.
That's what you're doing. You're a coach. An experience. Okay? You're creating an experience. It's not about how many pounds of knowledge. You're not like selling soybeans by the metric ton. It's the experience. It depends on these intangibles, like your presence, the quality of your listening, how much you care. The heart you put into it, the vulnerability. Those things matter far more than how polished your slides are or how nice your website is. Right? And by the way, those are things no one can pirate. Because pirating is also rampant. Right? No one can download and duplicate and distribute your vulnerability, your heart, your personal stories. Right? Or the community. Those things can't be pirated. That's remote. That's how you defend your business.
You can't defend content. Content will always be distributed for free. Just don't even try to fight it. Right? Like instead, invest your time in things that can't be pirated, can't be duplicated. Can't even be copied? I . . . I keep saying "the last thing," but I really have no competitors. There's no one. I found a niche that is big enough to create a highly profitable business, which is sort of like productivity for smart people, or knowledge management for nerds. It's big enough, but it's also small enough where if . . . Honestly, people ask me, "If this methodology isn't for me, where should I go?" And I'm like, "Listen if there was someone else I would recommend them. Heck, I would promote them." I wish there were competitors because then our whole market would be bigger. Unfortunately, there's not, but fortunately, that means if someone wants to learn how to build a second brain, they want to build a knowledge management system, I'm almost the only option.
And that creates incredible freedom in abundance and makes me want to share content for free like I'm doing today. It makes me want to give scholarships, right, because I'm not like, "Oh, I gotta, like, protect the margins." I think for this last cohort we gave seventy scholarships of different amounts. Seventy people, we were able to . . . To some extent or another, you know, we favored teachers, students, people with low incomes, people from developing countries . . . Like the coolest thing about profitability to me is that you get to be generous. When you have thick, fat margins, you get to do things that don't scale and be generous and give of yourself in so many different ways without worrying that you're going to endanger your livelihood. That's the best part. So I'll finish there, but I'm sure we'll get to many other things.
Chris (37:14): Thank you so much, Tiago. That was incredible. Thank you for sharing.
So given where we are in this evolution of online education, the opportunity being at the high end with quality, if I'm someone who wants to create a course, is thinking, you know, "How do I position myself? What do I teach? What should I be thinking about?" Right? You kind of framed it in this way of, "I am the only one who can do what I do." As a course creator, how do I identify what that topic is for me?
Tiago (38:03): Yeah, good question. We call this your personal monopoly. And . . . Excuse me. In the Write of Passage course, we have a whole unit on this. How to find this. But basically, think of a Venn Diagram. You know, like overlapping circles. But there's not just two, but maybe three or four. You've gotta find the collection of circles, that you are at the intersection of those things. So here's the thing. If you only have one circle, right, "I'm going to teach a course on marketing," okay, you're competing . . . When you're, you know, it's sort of like then you're a tiny, tiny little minnow in the ocean, whereas you want to be the big fish in the small pond. Right? So if you're creating a course on marketing, you're competing, you're on this even playing field with every other marketing course on the planet. You combine, let's say . . . Let's just do a thought experiment here. Marketing with . . . Let's pick something here. Like . . . Marketing and teaching, let's just say. How to market your teaching. Right? Like that's kind of what my coach does. It helps you do marketing for online courses. Suddenly the market is vastly smaller but vastly more profitable, and vastly easier to market to because you know who you're going for. Right?
Like, when I, my . . . The call I had with my coach . . . So first I did his course, which was a ten-week, five thousand dollar program. This was a great case study, right? It was by far the most I'd ever paid on an online course. Five thousand dollars was like, so much money. But when he sold this to me, there was no website for the course, there was no curriculum. He didn't use Teachable or anything else. There was no sales page. There was no checkout process. He got on a phone call with me. A one-on-one phone call. And he understood my world so well. I mean it was mostly me talking and him listening, but the few things he said, I understood that he got me. And I was like, "I'm sold." Right?
So imagine that your understanding of a customer can sell a five-figure course that any number of slick sales pages and you know, whatever, couldn't do. That's what it takes. But to understand a customer, you have to have a specific customer. Right? So if you have like, marketing and teaching, maybe you add another one, which is like self-improvement. Right? So I am helping people market courses on self-improvement. Suddenly, that little intersection is so tiny. Right? It's so tiny that decisions start to become very easy. You know, how do you market your business? It's very clear. You use the language of those markets. Where do you hang out? You hang out in the . . . I don't even know if there's any. You know, online communities for online course creators in self-improvement. You subscribe to newsletters. It's like, everything becomes so much more clear when you can zero in like that. And then also you can charge so much more. The smaller the niche, the more you can charge.
Chris (41:10): I love that. We've been talking a lot about the lifecycle. I think there's a lot of curiosity about lifestyle. And I would start this kind of on the selling end. Going away from the financial, what are some of the illegible or intangible benefits that you've seen, as far as being a course creator? How does that bring value to your life?
Tiago (41:34): Yeah, it's wild. It's really . . . It's hard for me to even talk about this because it's so meaningful. It's like . . . It really feels like cheating. It's like we get the very best that teaching has to offer. We get to directly impact, I get to directly impact the lives of students. But then it has the best software. Totally scalable, totally location-independent, extremely high margin, highly scalable. Then it has the best of consulting. You know, I get to . . . The fact that our courses take relatively little time.
You know, when a company hires me to fly out and work with their team, that is probably not profitable by itself, because you need a lot of clients to make consulting profitable, but doing it a few times a year I get to just do it for the learning. And get paid to learn. Right? And then I have these awesome case studies. How I worked with Toyota. How I worked with Genentech. How I worked with all these companies.
It has the best of coaching. You know, the ability to listen and like construct, like a sort of reconstructing that person's mental model, and then see this entry point. What if they just enter here instead of here, their whole world is going to open up. So satisfying. Nothing like it. We have the best of a big company. We can serve any customer anywhere in the world. We have students from more than seventy or eighty countries. But then the best of a small company. The fact that we're only about five or six of us. We all know each other, we go on our company trips, and it feels just like hanging out with friends. It's like . . . I feel like, I really do feel like for a certain kind of person with a certain temperament and certain goals, online courses are a fantastically enjoyable and fulfilling and meaningful business. And incredibly profitable, too. I mean, incredibly profitable. It's really the best thing ever. I really do . . . This sounds so corny, but I really do feel like every day it's like waking up to a dream. And I'm like, "Can this be real? Can I just spend like every day like having fun and learning cool things and working with interesting people and getting paid for that?" And then I go, "Yes, that's the case."
Like, I really cannot emphasize enough how cool it is. And the biggest thing is just you get to make a difference. You get to really, really make a real difference. It's so cool.
Chris (44:06): Tiago, there's a lot of interest in habits and what your schedule looks like. Maybe you could kind of give us a picture of what's a day in the life of Tiago Forte? Maybe in a day in course creation mode, in a day in pre-launch mode.
Tiago (44:24): Yeah. That's an interesting question. Definitely launches are very different. You know, launches are crazy. There's no way . . . They are getting less crazy over time. Like this past one for Cohort Ten was probably the first time I didn't like lose sleep, feel like at the end of my rope at any point, or like I was about to fall apart. It was the first time that we kind of sort of had a plan. But there's kind of a craziness to it, because the whole point is that you're compressing things. You know, what makes it effective for students, which is that there's this momentum, there's this feeling of unstoppable progress towards this one date, there's urgency, there's sort of this feeling like you have to act now or not. All of that is what makes it crazy on our end. You know, opportunities spring up. "Oh, three days before Cart-Close." This happened to us. This huge marketer with a huge audience wanted to do a call. Okay. Now drop everything, the plan is thrown out the window. Drop everything for forty-eight hours, and work on this co-promotion. And we did, and it was very successful. But like, you can't plan those things.
So launches are completely a one-of-a-kind thing. What I will say, though, is that I really like the pendulum. The fact that I have these months at a time where there's very little structure. I maybe have one call a day, two calls a day at most. Otherwise, it's creating, it's deep work, it's focusing, which is kind of what I enjoy more. It's writing, it's doing podcast interviews. It's reading, all this kind of stuff. But then we have this period where it all happens and comes to a head. And then when you finish that launch it's the best feeling. When you close that cart and you have all the sales numbers, and the team is celebrating, and you know, "Okay, this is our crew, this is the group of students that we're going to go through this experience with." And you can just . . . Like, turning off marketing is also the best feeling. Right? And then I even kind of get a kick out of like everyone else who after that date is like, "Oh, can I get in?" You're like, "No, sorry. That was then, this is now." There are clear, defined periods for things, rather than everything happening all the time constantly. Right?
I like the seasons of life. It's nice to have seasons that you're kind of stressed out and kind of crazy and kind of doing more than is sustainable, but then you want it to end and you then move on to the next season. So my days really . . . I think if you sat next to me and looked at my days, it would look like any of your days. You know, I wake up at 7:30 or so. Have my first call usually at 9:00. We have a light breakfast, I have maybe one or two calls in the morning, and then we have lunch. Usually either the morning is free or the afternoon is free, so I can have flow. Basically my happiness is pretty correlated to how much time I can spend in flow, which basically for me means writing. So either the morning or afternoon of each day is free, and I just create half the day, and the rest have calls, have meetings. It's really not that . . . Like the day itself doesn't look that different.
What is different, I think, is that we're building something. Every little project and every little thing we're doing is not just coming and going. It's going into this artifact called a course. Like that's what to me makes it so much more fulfilling. When we spend a whole day to design how the coaching program is going to look, that work gets, creates value basically forever. You know, we'll improve on it, and we'll iterate on it, but when everything can come back around to this course, and sort of coming back to more of a product, you can afford to spend disproportionate amounts of time on things. Right? You can afford to over-invest and fund that thing, because then you're going to get a return on it again, and again, with every single cohort. So I don't know if that answered the question very well, but that's my day.
Chris (48:35): I think one of the main purposes of our conversation today is to accelerate course creators along the path. Right? For you, we've talked about some of these milestones that you've experienced in some of these lessons, or mistakes that you've made and how you've overcome them. If you were trying to recommend some ways that, you know, course creators could save time or maybe avoid some of the mistakes that you guys had to learn the hard way, what comes to mind?
Tiago (49:03): Yeah. And I'll try to keep my answers a bit shorter, so we can kind of get through more in the final twenty minutes, but a couple of mistakes come to mind. One was actually in the middle of kind of that seven years I've been talking about. I walked away from online courses because the second course I created is called "Design Your Habits." I did the caveman style. Didn't get feedback, didn't test. I went into my cave for . . . So my first course was so successful, unreasonably successful, it was very lucky, that I got a huge ego. Got a huge head. "Oh, I can do no wrong. Anything that I teach, people will flock to it." And so the second one I just went into my cave for seriously like close to six months. I came out of my cave, said, "Here it is." And it was all wrong. The title was wrong, the framing was wrong. Nothing had been tested, nothing had been validated. And I don't think . . . I don't know if I ever made my money back on that course. So that was one mistake, was to not test and validate.
This is why I tell people now, you know, that's where all your attention should go. Every little assumption that you're making you have to uproot, and you have to surface, and you have to destroy. Because I can tell you, you have tons of assumptions, fundamental assumptions, that you don't even realize you're making. And you can't discover those through like meditating and sitting and thinking very hard. Only other people can point those out for you. And then I sort of compounded that mistake by . . . I mean, I say "mistakes," but I also kind of needed to do these things. You know? But my conclusion after that second course, I didn't understand what I had done. And so I thought, "You know what, online courses suck. Online courses are not profitable, they're not a good business, they don't work, they don't sell well." And so I left, and I kind of went on this path towards corporate training. That was the year that I did all sorts of corporate trainings. Which were profitable. I definitely made more money. But I really didn't like them. Didn't enjoy them.
You know, I was working with the most productive, profitable companies in the world to make them even more profitable and productive. You know, which . . . It's fine to do that some of the time, but I really, from my . . . I spent most of my twenties volunteering, working for non-profits. And being in the Peace Corps. Like, I have a heart for people that are in need. Like, I need some of my time to be spent with those people. So I missed that. And I finally came back around, and when I came back around, which was for Building a Second Brain, I spent a good eighteen months validating. A good eighteen months writing, asking for feedback, testing it out with friends, testing it out in conversation, testing it out in interviews. And I didn't put together that very first cohort until I was positive that I could have a transformational impact on people. So those are the two mistakes, which tell you why everything that I said during this call, why I am so adamant about testing, is that I don't want you to have to go on that long deviation that I did.
Chris (52:12): So let's imagine that I'm sitting on this call, and you know, you convinced me. I got on here kind of unsure about online courses, but hey, maybe I'd like to make my own. What does that first week look like? How do I start?
Tiago (52:26): Here's what I would say. For anyone, really. First, take it seriously. And market it seriously. Don't go on Facebook. This is what I see all over now, is like . . . And I get it. It's so scary to set yourself up as an authority, and say, "I'm going to teach this course that I created." It's so scary. But when you get on Facebook, is the typical case, or Twitter, or whatever, and be like, "Hey guys, we're just gonna like hang out on Zoom tonight and just like, you know, talk about maybe this and that, and . . ." You just set really low expectations, people either won't show up or they'll show up just expecting to chat. No. Call it a course. Make up a number. "It's going to have this many units." That can change. Say, "It's going to go from this state to this state." Make up a result, or a promise, or an outcome. Even if you have no idea if you can deliver on it. Put something at stake. Something big that is on the line. Put something on the line.
And what I would say is . . . Okay. Let's try to be as specific as possible. Find . . . Before that first cohort, I actually did a beta cohort that was mostly friends. So find I would say between ten and twenty friends. Right? And with ten or twenty, that means you can make individual phone calls. Don't do a mass message, because when you do a mass BCC, you're asking people to ignore you. Okay? Have a phone call. I guess you can't sit down to have coffee with them right now, but have a phone call and say . . . Ask, again, ask something that they can say "no" to. Say, "Look, I'd like you to commit to meeting with me on a Zoom call for one hour a week for the next six weeks. And I'm going to teach you everything I know on X. Is that something that you're interested in and that you're willing to commit to?" Like, that's the question. It's not, "Hey, you know, can you help?" It's like, don't be wishy-washy. Some people will say no.
In fact, if no one says no, you didn't make the bar high enough. If no one said no, or even hesitated, that means that they have nothing on the line. Right? That they have nothing at stake. So in the beginning, you're putting a bit of your reputation at stake. They're putting their time at stake. That's it. That's the exchange of value. If there's no exchange of value, then there's no value. So I think for my beta cohort, I think like twenty-five people said yes, but only half showed up. And that's typical turnout, right? Whoever says yes, half is like good. And so for about four or five weeks, we just met for just an hour each week. And I presented. It wasn't like, "Okay, guys, so what do you think about, what if I taught this?" I had slides that I created. Many of those slides are still in my course today. Right? The slides that they went, "Oh, whoah, whoah, whoah. Hold on. This is awesome. What is this?" And they took me off on a whole different path. Those are the slides that stayed. The slides that were dropped were the ones where . . . And I could see their faces on Zoom. They were just like, you know, dead-faced. Like, you can tell. It's impossible to ignore.
And I did the cohort, and it was just good enough, that beta cohort, that I was confident enough to do a first official cohort where I said I'd charge five hundred bucks, and only had thirty percent done. But for the beta, each week I was making it up. I mean each week, the call would finish, and the next day I'd be like, "Okay, based on how the call went yesterday, based on the questions they had yesterday, what can I do in a week from now?" That was each week for five weeks. And that's, like it's insane, you guys. If you look at Building a Second Brain, still to this day, eighty percent of the content was created in those five weeks. Like, I needed the forcing function of, "Oh my gosh, they asked this question and I have no idea how to answer. Just make something up!" And what I was forced to make up at that moment out of sheer desperation somehow was a moment of brilliance, not always but some of the time, that ended up being that leap of faith that allowed me to say something that if I'd had all the time in the world I wouldn't have said.
This is what I find. If I have a ton of preparation time, I come up with ideas and techniques that are very academic and theoretical, and boring. When I have to make up something improvisational, in the moment, I come up with things like PARA, like progressive summarization, that is lightweight, dynamic, and alive. They feel alive because I came up with them in a moment of aliveness. So it's almost like you're creating all these forcing functions to force yourself to improvise, to force yourself to just make something up that surprises yourself. That's what you need.
Chris (57:06): I love it. And yeah, I'll send the affiliate cheque for dropping "forcing function" a couple of times in there. Thanks. So you know, us productivity . . . We'll say "enthusiasts." Everyone's curious about your stack, right? I know that you've tested out a lot of tools as far as what's the best things to use to create and host an online course, and I believe I probably reference the comprehensive guide to creating an online course, which we'll share the link with everyone. But maybe give a quick rundown of what are the key tools that you use, and why you chose them.
Tiago (57:41): Yeah. Can I share my screen?
Chris (57:44): Hundred percent, yeah. Same button as before.
Tiago (57:47): So this is a post that I made on my blog. It's called . . . So it's part two. Part one was called "The Rise of the Full-Stack Freelancer," which is one of my most popular posts. Basically like what I think work is going to look like in the future for a lot of people. This is part two, where people wanted to know for a Full-Stack Freelancer . . . And all "Full-Stack Freelancer" means is that you capture, you create a full stack of tools, which allow you to capture more of the value that you create. That's it. Like when you're an employee, you're sort of . . . Nothing against employees, but you're sort of in one little part of an organization, part of a machine. You're creating value. And if you create way more value than is expected, you don't get to capture that. Right? Maybe at the end of the year, you might get a bonus, but basically the company pays you a bi-weekly, bi-monthly salary in exchange for capturing your upside.
So with Full-Stack Freelancer, If I was a teacher . . . You know, what would I be paid as a teacher? Look at what teachers are paid. Teachers are some of the most undervalued professions in all of society. And the reason is they can't access their own customers. They need an institution. They need a platform, like a school. At least they have until now. Now, because you can reach your customers, you get to cut out every little intermediary in between. Like, the whole school bureaucracy gets to be cut out. And so this is what it takes. I kind of think of this in a few years . . . So this is just what I would use, even if I didn't have a business. It's like my own personal productivity, my own personal scheduling, all that stuff. And I know this is tough because I just realized I don't have names, only icons. Okay, that's probably a major flaw.
But basically I'll focus on the more online course ones. Then there's my business stack, which is just stuff I need to run my business. And then up here is sort of the online teaching stuff. So you can think of this as the funnel. The funnel starts on the left with social media and with public-facing free stuff. And then it gets more and more expensive, more and more high-end, more and more exclusive all the way to consulting. And this is the way you should think of it. Right? Your funnel . . . Usually, people think of a marketing funnel. They visit my website, they sign up for this, they sign up for that, and they only buy at the end of the funnel. If you want this to be profitable and sustainable, charge them at every stage of the funnel. Charge them here, and then they go down one, charge them there. Keep charging them every step of the funnel, because every step of the funnel has value.
So social media. This is YouTube Buffer, which just allows you to like . . . If you want to schedule all the social media postings for an entire launch, you can do that, and Buffer will post to like the main platforms kind of on your behalf. LinkedIn, where I cross-post. For blog subscriptions at the time I used Medium. Now I use WordPress. Stripe, of course, is indispensable. It allows you to take payments from anyone in the world. Mailchimp is the email marketing software that I used to use. I now use ConvertKit for various reasons, but that's kind of how I manage the blog and then send people emails.
A new element here would be Memberful, which is how . . . So after this post, I now have a paid membership. Ten dollars a month, hundred bucks a year to get access to sort of my exclusive content. So a new tool here would be Memberful. Which, again, twenty-five bucks a month. And that was the same when I had ten customers, a hundred. And now there are a thousand people that subscribe to that. And every time that invoice comes in twenty-five bucks, I'm just like . . . I can't believe, I can't believe it. I can't believe I pay twenty-five bucks for an entire business unit, basically. But anyway. Public workshops are part of it. This is how I test new ideas. Never test things exclusively online. Some parts of it's got to be done in person. This one is Eventbrite. This one is I think how I used to get paid by like corporate trainings. I think it's like bill.com or something. Then we have online courses, which is Teachable, that's where the curriculums are hosted, Discourse, which was our online discussion software. We now use a new platform called Circle.
This is called . . . This is a landing page builder called Unbounce, which is where we have buildingasecondbrain.com. The reason we use that is it's drag and drop, so we can constantly be changing the website, which in the early days is essential. You don't want to have to call up a developer and go through this long process, because you're going to be iterating so fast. Coaching, in the past I used a bill-by-the-minute service called Clarity where you can say, "I want to be paid a hundred bucks an hour." Someone can call you via their service, and for each minute you automatically get paid. I don't do that anymore because . . . For various reasons. But you know, you can even monetize something as quick as a fifteen-minute phone call. You know, when someone asks you, "Oh, can I pick your brain? Oh no, I don't need to hire you. Just to coffee, it's just one question." Send them a Clarity link, and start billing them by the minute from the first minute that they call you. Like, come on. Value your own time.
And then corporate training. So it's interesting. You look, you can see here, as we get to corporate training and in consulting, which are the most high-priced, high-end offerings, there's not much software. It's sort of like those are more manual, more high-touch. You can't automate them. But that's why you charge more. Yeah, Chris.
Chris (01:03:11): Oh, that was the one-minute warning. I think we have to have a sequel to this. There's just so much good stuff here. I think the tactics, the walking through, you know, what the opportunities are and how to fast-track. There's just so much here, and I think based upon, you know, the number of questions that . . . I would actually love to get to the number of questions we're getting in the chat. I think we need to do a sequel. For today, you know, given what we covered, do you have any last words? Any kind of wisdom to share with anyone who aspires to create an online course or wants to get their online course to the next level?
Tiago (01:03:50): Just to go for it. Just to try. Just to look for someone around you, or I guess digitally close by, that you can help, and then start with one person. That's really how it starts. That's how you start testing. Help one person, then two, then three. You don't need to launch this giant ship, you know? It really is just about creating value for others and sharing what you know. You know, not letting knowledge stop with you. Think of all the people that invested in you, that have taught you, that have mentored you, that have coached you. Wouldn't you want to pay that forward and be that for others? And be that for others on such a bigger scale that is now possible? Like, think about that. And the profitability will come. Like, profitability comes when you're doing something that you find interesting and valuable, and others do too, and you're valuing your time, but also being of service. There's a tension there, but it's just a wonderfully satisfying and meaningful thing to do.
And I would just say if anyone wants to be part of the . . . Building a Second Brain is not just about how to take notes. It's really . . . People that are wanting to do this. Like people wanting to get into online education or wanting to create content is one of our biggest audiences because the first thing you have to do before you share is collect it. You can't just sit there on Facebook, one post after another, typing directly into the box. You have to gather up and collect and curate the best of what you have to share, not just spouting off all the time as I do on Twitter. You have to collect and curate, and then you're going to see how much you have to share. So really, you can join us at buildingasecondbrain.com. There's an email form on that page, where I'll send you one email a day for about a week, just introducing you to what it means to build a second brain, and what a second brain is. Introducing to the course. And then once that series is finished, I'll just start sending you my weekly newsletter, which is completely free. And that's really the best way to stay in touch and to just learn more about this kind of ecosystem.
Chris (01:05:54): Thank you so much, Tiago. This was brilliant. I really appreciate you opening the kimono, letting everyone know things you've learned, things that you've experienced along the way, what a day in the life of a course creator is. And it's truly inspirational, the progress that you guys have made. And I'm such a believer in Building a Second Brain, what you guys are doing. So upward and onward.
Guys, thank you so much for joining us. I mean this was a true pleasure.
Tasha (01:06:24): Thank you for listening to Forcing Function Hour. At Forcing Function, we teach performance architecture. We work with a select group of twelve executives and investors to teach them how to multiply their output, perform at their peak, and design a life of freedom and purpose. Make sure to subscribe to Forcing Function Hour for more great episodes, or go to forcingfunctionhour.com to sign up for our newsletter so you can join us live.