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The History of My First Online Business

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The History of My First Online Business

By Pat Flynn on

Railroad TracksI’ve told the story about how I started my first online business hundreds of times before—in conversation, in interviews, and more recently, live on stage—but today I plan on getting into more detail than I ever have before.

Why?

Because the brevity of those conversations often blur the truth about how much time and effort was actually put into my business before I ever made a single penny.

My first monthly income report from October 2008 reports $7,906.55 in earnings. But this was definitely not the first month my business was running.  This was the first month I had monetized it with my own product, a full year and a half after I started.

Let’s start from the beginning so we can see what really happened.

February 2007

I was working as a senior drafter in a Bay Area architecture firm, loving what I was doing and looking for ways to expand my resume and hopefully get promoted and earn a raise.

At this time, I was earning about $38,000 per year.

I really wanted to get my architecture license. But, the process, which is supposed to take three years, typically takes people six to eight years to complete. Sometimes even longer.

Although working toward my license is something my boss would noticed, the path to licensure is one that most of my peers would eventually follow too, so I wanted something else under my belt, something different (and faster) that would help me stand out.

That’s when I was introduced to LEED—Leadership in Energy and Environmental Design—a program introduced in 2005 by the US Green Building Council to systemize sustainable design and create incentive to build environmentally friendly buildings.

There’s an exam people can take to become a LEED Accredited Professional which allows one to manage projects under the LEED rating system, and because everything else was “going green” at this time, I figured it would be smart of me to “go green” as well and work toward my accreditation.

The office only had a few LEED APs (none in my department) and after asking them about the exam, I eventually found out that there was a ton of material to learn and the exam was very difficult to pass. The passing rate was about thirty to thirty-five percent. Plus, there wasn’t nearly as many classes or resources to help people pass the exam as there were for the architecture licensing exam, so a lot of the studying had to be on your own.

I was up to the challenge, so I purchased the study material and went for it.

April 2007

And a challenge it was.

Studying for an exam after graduating college is not easy, especially when you’re in your mid-twenties and your friends are more excited about going out than focusing on their careers.

I wasn’t making any progress. I was studying at most just a few hours a week, and none of it was sticking.

I put the exam on hold, primarily because I was soon moving south (Irvine, CA) to join a team in our sister office for a project that needed more support.

It worked out though because it allowed me to be closer to my hometown of San Diego, live just minutes away from my girlfriend (now wife), and it created fewer distractions to pull me away from focusing on my career.

After getting settled in Irvine in June, I was ready to get back to studying.

June 2007

I quickly realized that even in the new environment, the way I was studying just wasn’t working out and I had absolutely no motivation.

Taking information from a 400-plus page reference guide, jotting notes onto a legal pad, and creating flash cards just wasn’t doing it for me.

That’s when I had the idea to start a blog to help me keep track of my notes and hold me accountable.

Why a blog?

Because of the basic nature of the setup: creating categories, tagging important keywords, cross-linking between certain parts that were related to each other to understand relationships and linking out to external pages that were mentioned in the reference guide (and being able to easily navigate through all of that on any computer—at work, at home or while on travel). It just all made sense to create this exam framework on a website to help me wrap my brain around everything, without ever having to carry reams of paper. It sort of went along with the whole “green” thing too (which, fun fact, I used as a selling point when I launched my ebook, since ebooks weren’t as popular back then).

How did I know about blogging?

I started a Xanga blog in college at UC Berkeley to share random things that happened in my life, mainly just to keep friends and family up to date back home. That’s how I was familiar with the platform, beyond just reading a few blogs here and there while at work (on my lunch break, of course).

And no, you won’t be able to find it. I deleted it a long time ago. 😉

So, I setup a WordPress blog. And one of the first things I did, even before writing any content on the site, was register for the exam.

Boom.

March 3, 2008 was my test date.

I put that in the sidebar of my site so that I could see it every time I opened it.

August 2007 to March 2008

The first couple months of studying seemed to go very well. I was religiously dedicating two-plus hours a night to the exam.

But, when you look at what I was really doing, it was:

  • Actual studying: 20 percent
  • Learning all about how to use WordPress: 80 percent

I was definitely enjoying the WordPress part a lot more than I was enjoying the studying, but I often gave myself the excuse that working on the site and making it look nice was a form of studying.

I even started to design things for the site on my own with Photoshop—like logos and fancy backgrounds—even though this was just a site for myself and any coworkers who might find the information useful too. It was fun, but I also thought that the site could become something cool to share with my boss to show how much extra work I was putting into my career, so I wanted it to look professional.

The reality check came when a couple of coworkers and I took a practice test and I failed miserably. I don’t remember the exact percentage, but let’s just say it was less than the number fingers and toes I have.

That’s when I started to get serious about the exam and serious about using the site I had just spent the last two months setting up, which hardly had any content on it.

For the next six months, for four hours a day (on average), I studied for the exam, which included adding content to the website, not just dolling it up. Making it look nice wasn’t going to get me to pass the exam.

During work (on my lunch break!), at home, and while on travel, I was studying. I was reading what I needed to know, consolidating that information, and posting it online so I could easily reference it later for the test. I created tables and charts to organize things that I didn’t understand, taking the occasional three or four hour stretch to figure out things like how to add a table in WordPress. I created acronyms to help myself remember things and posted that on the site too. I took and added pictures. I created my own sample questions based off the reference guide. When it got to a point where there was nothing else to add, I had everything I needed to pass.

I would often participate in long discussions in forums related to the exam and help people on other blogs I found who were studying for the exam too. A lot of times I’d insert links back to different parts of my site that were relevant to the discussions, but I thought nothing of it. It wasn’t driven by search engine optimization or trying to rank higher in Google. I didn’t even know how all of that worked, and I didn’t care. I was just trying to help out, and I found that the more I helped out, the more I felt like I knew the material.

When I took the exam on March 3, 2008, I passed with flying colors and became a LEED Accredited Professional.

After that, I was almost immediately promoted to Job Captain, and my pay increased to $60,000 per year.

And on March 31st, I proposed to my girlfriend—and we were engaged.

Life was good and was going according to plan.

May 2008

Of course, things don’t always go according to plan.

With the slowing US economy and many companies starting to focus on survival instead of expansion, the architecture industry took a huge hit.

If buildings aren’t going up, nobody needs an architect to design them.

Even world famous architecture firms like Frank Gehry’s were laying off people by the truck load, so for a lesser-known company like ours, the outlook wasn’t good.

By the end of May, our staff was cut in half, reduced hours were enforced, and we were often called in the early morning hours and told to stay home for the day.

I was “lucky” enough to still be on payroll but it just felt like a really sick reality TV show, where people were getting voted off the island and you always wondered if you were next.

Eventually, my time came and I was invited into my boss’s office.

He gave me probably the best work review I have ever received from anyone, but it was obvious where it was headed: I was getting laid off.

Luckily (well, sort of) I didn’t have to pack my things that day, or even that month. I still had to finish up some specific jobs that I was working on, but my boss was courteous enough to give me the heads up that after those projects reached the next stopping point, I was gone. He actually encouraged me to go out and find another firm quickly, because he saw something in me, which I thought was nice, but at that point I wasn’t in the right mindset to do anything really, except think.

I started to experience mild panic attacks, scenarios played in my head about how my fiancé would react or what our future was going to be like, and I even freaked out and started calling all of the local architecture firms to see if there were any positions open—even entry-level drafting positions.

Nothing was available, of course.

When I told my wife, she took it well. She has always believed in me and I owe her everything for that.

Aside from my wife, the only bright spots after the bad news were the notification emails from the LEED exam forum threads, most of which comprised people thanking me or asking questions as though I was expert who knew the answers. The good news, after all that study and hard work, I did know the answers, most of the time—and that’s when the entrepreneurial Pat Flynn you all know today was born.

June 2008

My body was still going into the office a few times a week, but my mind was all about online business and learning about how it worked and what I could possibly do to start earning an income online.

In my mind, I was already laid off.

I had a few months left on payroll, plus a small severance package and some emergency savings if I needed to use it. So I figured I had maybe six to eight months to make the online business thing work, whether it would be something I did with my LEED blog or something else. If not, then I would send out resumes like mad or go back to school to get a Master’s Degree and go from there.

As far as I was concerned, I had no other options but to make it work.

I took a couple of online courses and read a few books to streamline the learning process, and across the board I learned that the one thing that all successful online businesses had (and desired) was targeted web traffic.

I knew I had a few visitors since there were some comments here and there, and I figured a couple of people on the forums may have clicked through the links that I posted when answering questions, so when I set myself up with Google Analytics to keep track and know for sure, I was blown away. 

Once the data started to collect, I could see that hundreds (often thousands, depending on the day) of people were already visiting my site every single day.

They were coming from all over the world and finding me somewhat evenly through Google search, referral traffic, and direct traffic.

Word about my website had apparently spread, and I had no idea.

Google Search

Seven percent of the search traffic came from people searching for my domain (at the time it was intheleed), which I later changed due to legal reasons. LEED was a trademark I shouldn’t have used in my domain, so I changed it to what it is today: GreenExamAcademy.com.

A majority of the search traffic was for long-tail keywords related to the exam. I guess Google loved my content and put it at number one for an unbelievable number of those terms. Again, I wasn’t trying, it just happened naturally due to the SEO-friendly nature of blogs and the fact that the content was exactly what people were looking for.

Referral Traffic

My site was being linked to from a number of other sites around the web. The number one traffic generator was the forum I was participating in, but there were also a lot of little blogs where people were documenting their architecture journey, and many of them were studying for the LEED exam too. So I shared my site as a resource with their followers.

What was really cool was that some of the USGBC chapters used my site as a resource and linked it from their chapter websites, which drove a lot of traffic and created some very powerful, highly authoritative backlinks for me.

Direct Traffic

Direct traffic are things like people typing in the domain directly in a web browser, or visitors coming from bookmarks, desktop shortcuts, and links in emails.

Since a third of my traffic was coming in directly through these avenues, it was a good sign I had started a powerful, authoritative brand.

The mind blowing statistic, across the board, is that an overwhelming number of visitors were spending hours on my site. This scared me a little at first.

What if my notes weren’t good enough? What if I was forgetting something?

I knew the content was good though, and exactly what I needed to pass, so I internally began to become confident in what I had created and was determined to monetize the site somehow.

Adsense

Naturally, the first thing I did was put Google Adsense on the site, because I heard it was relatively simple to setup.

I didn’t know exactly how it all worked or what I was doing, but I signed up, created one image ad, and put it on my homepage.

Within an hour I saw the first dollar I had ever made online—three clicks which added up to $1.08—and although I could find that kind of money between the cushions of my apartment couch, it was an amazing feeling and one I will never forget.

The first day I had earned just over $5.00, and then next it turned into $7.00, and when I added more ad units and learned more about the best places to put ads, the income grew to $15 to 30 per day, and more.

July 2008 to September 2008

My Adsense income at this point was a great start, but definitely not enough to live off of, especially with a wedding coming up in February.

To save money, my fiancé and I both decided it would be best for us both to move back home to our parents’ houses in San Diego, and then I would take the train up to Irvine to get to the office every day and stay on payroll as long as possible.

Every little bit helped and we wanted to save as much as we could for our wedding, and so living in San Diego and taking the train was much cheaper than living in the expensive Irvine area and driving. Gas was nearly $5.00 per gallon at this point, which didn’t help.

The train ride was a couple of hours to and from work daily (that’s four hours every day in transit, three to four times a week), but it definitely was not a waste of time. It was the perfect time to educate myself with podcasts and think about where I wanted to go with my site.

I eventually learned that private advertising could be a good solution for my site since there were a lot of third-party companies that offered practice exams for the LEED exam and/or live training with the goal of getting in front of targeted traffic like mine.

A couple phone calls and a deal later, I had my first advertiser on a 3-month contract for $50.00 per month. More phone calls and a couple emails later, I eventually had four 125 x 125 pixel banner ads embedded in the sidebar of my site, earning a total of about $600 per month.

Now we were getting somewhere.

With my Adsense income and advertiser income, I was earning about $1,500.00 per month, which equates to $18,000 per year. Still not where I would’ve liked to be, but not bad considering. It was like working for minimum wage. But the cool part is that I wasn’t working at all. It was all hands-free income.

The Mastermind Meeting that Changed Everything

After listening to the Internet Business Mastery Podcast every day on the train and becoming a part of their Academy, I was excited when Sterling, one of the hosts of the show, decided to move to San Diego. After chatting with him in the members forum, a number of us decided to meet in person, and have a little mastermind meeting locally.

This mastermind group started to meet regularly, and for a while included Dan Andrews, which many of you may know from the Lifestyle Business Podcast. But it was the first meeting that changed everything for me.

When it was my turn to share my story, I told them about my crazy journey and the site I currently had up, and immediately Sterling turned to me and said:

“Pat, you have to write and sell an ebook on your site.”

The others agreed, but I didn’t really know what that meant.

After some basic explanation, I was convinced to at least give it a shot.

I had nothing to lose, but an opportunity. 

So when I wasn’t sleeping or on the train (or sleeping on the train), I was in front of my computer writing a study guide for the LEED exam in Microsoft Word. Four to eight hours a day (on top of work and travel) were dedicated to making this guide amazing, organized, and beautiful. I slept more on the train than I did at home, but I was excited.

My goal was to create the guide that I wish I had when I first started studying for the exam back in early 2007.

By mid-September, my guide was complete. I turned it into a PDF, created a cover in Photoshop, and boom. Product done.

Now the question was how to sell it.

Again, going back to the mastermind group, I learned about E-Junkie, a digital product delivery service which would automate the entire checkout and delivery process for me, so I set that up on a test page, ran a few transactions I purchased myself, and it seemed to be working.

Later, I found out you can actually create coupons to test purchase your products for $0.00 with E-Junkie. I didn’t know that and bought my own ebook at least four times, full price, to make sure it was working correctly. LOL!

October 2008

After using the sample sales copy template from Yanik Silver’s Moonlighting on the Internet (affiliate link), I published my sales page at 2:00 a.m. on October 2, and put a link to it in the header of my site and at the bottom of every single post.

I didn’t do any sort of launch or create any kind of buzz around it. I just simply released it, and then took the train to work a few hours later, which was, coincidentally, going to end a couple of weeks following.

When I got to work, the first thing I did was check to see if there were any sales.

There were ZERO sales. I have to admit, that was pretty deflating.

All that work for nothing, it seemed. But it was only 8:00 a.m., so I had to be realistic and give it some more time.

Then, something amazing happened.

At 8:40 a.m., I got an email from PayPal with the subject line: “Notification of payment received.” My first sale!

I immediately signed into my PayPal account to see. Sure enough, there it was, $19.99 (minus a small fee) in my account.

I could NOT believe it, and I literally had to go outside and walk around a little just to fathom exactly what had just happened.

When I got back to my desk fifteen minutes later, I saw another email from PayPal: “Notification of payment received.”

Another sale! While I was outside! What?!

And throughout the rest of the day, I’d get emails from PayPal with the same subject line, and every time I’d sign in to PayPal to see if it was actually true.

That first day, I sold 10 ebooks for a total of $199.90.

October 2, 2008 sales

That was the point my life changed forever.

I had earned more that day online than I ever have in any day working my architecture job, and when October finished up and I was officially laid off and didn’t have to take the train anymore, I had sold 309 copies of my ebook, and combined with my Adsense income and pro-rated private advertiser payments, I had grossed a total of $7,906.55. 

You can read more of my later income reports here for what happened next.

That same month, on October 17, 2008, I bought the SmartPassiveIncome.com domain (which was, fun fact, first called Passive Aggressive Income Dude—or P.A.I.D., for short), where I would give away all of the information I learned through experience about how I was succeeding online with GreenExamAcademy.com and any other passive income projects I experimented with. I’m happy to say I am still enjoying what I do here on SPI, and I don’t plan on stopping anytime soon.

So as you can see, a lot of time and effort was put into the site before ever seeing a penny, and when the pennies started to roll in, it took bigger and bolder actions, and even more time, struggle, and hard work to take things to the next level.

Sure, I was scared a lot of the time, but one phrase sums it all up for me:

I had nothing to lose, but an opportunity. 

Thank you for sharing your time with me today, and I hope this inspires you to take bold actions and keep moving forward.

Cheers, and all the best to you!

Click here to read the follow-up post, If I Had to Start Over, This is What I’d Do Differently

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