Part 1 - Introduction

It’s easy to fall in love with the earning dynamics of the most ideal version of a business model…completely disregarding how much it sucks to get there.

So, my goal now with this first short intro chapter is to help you find out if this business model is your cup of tea or not.

I won’t sugarcoat anything. I want you to ride off to the sunset if, by resource, lifestyle or commitment, the membership model is not a fit.

If it’s a match on the other hand, I’ll try to give you all the moving parts of building power membership in the upcoming lessons free of charge. If you choose the tech stack I recommend, consider using my referral links; I much appreciate it.

Let’s go.

Dream State: Having A Thriving Membership

Imagine a world where your membership glides on semi auto-pilot, raking in 6-7 figures while you sip your favorite drink.

At its ideal state, a power membership practically runs itself.

The dynamic is that you have a traffic network (I’ll talk about this elsewhere – basically a mix of CPC ads, value channels, content teasers and affiliates) all channelling highly intrigued* leads into your funnel

- that converts people into paying subscribers.

At the heart of it is a private community, with members more active than a beehive. 1/3 actively posting/reading is heavenly, 1/10 is reachable and still ok.

We’ll talk about non-readers, cooling hearts and churn later. We’re dreaming now.

Among the active posting lovebirds, you have a handful of Super-users. I explain this in the next chapter along with the intrigued I marked above. (level of commitment)*

Because of your Supers posting, reacting, asking, and sharing, the others always have something new to come back for. The welcome & core are autos – you already set this up. They do the heavy lifting, keeping the community alight.

Your job? Just stir the pot with new topics, a few live streams, and that one major yearly release that everyone waits for. (like a course or group-coaching run or similar)

You can also automate improvement programs, depending on the niche.

Now earning-wise, this is super cool. There is a great deal of lagging in memberships, once it’s established. Even if you don’t do shit for 3-4 weeks, you’ll still earn, not even lose revenue, if you match the leavers with newcomers.

At the heart of all this is not the growth tho. Neither the conversions nor the number of newcomers joining.

No. The game is won – and more frequently lost – at the retention rate.

How many cycles people stay at average is where you fly or cry in this model.

Do you have 200 members, paying 50 bucks each month? Neat. 2000, paying 7/mo? Cool. 150 paying 30 per quarter? Fine too.

What makes all the difference is how long they stay in and keep paying the fee.

The higher you can keep the retention (avr. no. of cycles) as your membership grows, the better. You will have a steady income, great fun, respect, authority and pride. Your ancestors will nod their heads. Even Aunt Emma from 1820. You manage to do what so many fail to, including Netflix.

Downfall

Ok. Now that our seats are all sweaty under us, I want to hit you with the dirty truth.

The membership model – and recurring pricing – is over its peak and far over its easy-way-to-$ Wild West.

What I painted above is doable. But it’s fucking hard, primarily for one dirty reason.

Everybody is asking for us to subscribe these days. Many are able to offer perks beyond what we – as a small bootstrapped single-run business – can.
And all those tiny subscriptions – just $7 here, $12 there – this app, that cloud ads up. Understandably people are getting edgy like an irritated Chihuahua when it comes to paying another X/mo.

Not to mention that when it comes to improvement of any kind, the most ruthless, vile competition of all -FREE- is ever more accessible and grabbing.

So getting people to • come in • and • stay • for any $ per period is some acrobatic spectacle to pull off.

So How It Actually Go For Most

…is not as sweet as painted above.

Let’s use Bob as our example, a name everyone can easily unrelate to. So this is not you. This is everyone else, called Bob.

So Pam pays roughly 100/mo for the platform, plus whatever is on the funnel tech – front page, landings, email etc. She runs ads, tweaks the funnel, and tries to keep the take rate above a %, but the ROAS is a disgrace. Paying a fortune to get people to buy into a low $ per mo subscription. Fuck.

The problem is, that while FB is optimizing for conversion – meaning people who are likely to join – it is not the same as people who are likely to stay.

A lot of 1st-month cancellations and refunds are a constant struggle for slow growth.

So Pam tries free trials, discounts and affiliates. This boosts the growth but slices off most of the profit. The avr. value drops and even that mostly goes now to affiliates. + The affiliate tool costs another 100/mo.

But all good. It’s passive income, right? Well. Not quite. Pam is virtually in there all the time, reacting to everything, and adding new posts, and new content. If feels that the membership is on life-support to her fingers. If she leaves, it dries out in two weeks.

Also, the member count seems to plateaued. The more new join, the more leave. This fluctuation kills any sense of fellowship and the revenue is anchored at the same level.

The truth is, that Bob’s* example is the most probable outcome in this model these days. (Joking aside, have you noticed this unwritten rule that negative business examples can never be female? Not fair. Failure is a birthright to all.)

What You Can’t Do

If you choose to commit to the Membership business model – the No. 1 thing you cannot do is … well, not fully commit.

It’s not a set-it-and-forget-it scheme, you can’t expect people to keep paying if you abandon them.

You also cannot pour in people with low commitment. I talk about this in the next lesson. But “cheap” paid-for-it traffic will not work well. You can’t win it midway. You either attract highly committed people, or you will struggle.

This brings the next no-can-do, which is about authority and fellowship. You have to connect to a group of like-minded people sharing the same goal with established authority.

The stronger this sense of ‘movement’ (we are in this together) is, the better. So you cannot not give value upfront. Extra and extreme value. Unexpected bonuses and personal touch. You cannot not have a very positive, attractive personality.*

Before you skim over this or disregard it as some feral elitism. I told you I want to sugarcoat things. Being attractive as a person, with a good voice and a charismatic presence isn’t just a bonus; it’s a necessity. People joining are partially joining because they want to be closer to you. This is what I see in memberships I worked with that are killing it.

Most (all?) memberships I’ve seen that thrive have a very strong free follower base on video or audio. (eg. Youtube channel or podcast) This is the source of their prime quality members.

You can also convert well through email if you have great list management and great style. I’ve seen one example. But generally, people will want more of you within. And I’ve seen where the community dies off because there is not much beyond what people get in email or text.

Now here is the paradox. You cannot also only rely on more new content. On sheer volume. After a while, •more• doesn’t add more. See Netflix.

See, it’s better to improve on the initial experience and then give unexpected awesome to a random handful.

And … as implied before – you cannot not raise super-users. You have to invite and/or raise mini-authorities who add great value on their own and answer everyone.

This doesn’t mean you can retire for months to a remote island to play Disney-Luke. (not identical to the real one)

Now this is my last ‘cannot’ and a personal opinion. Will be controversial. You’ll disagree. You cannot be all pro. Making it look too professional. Through all the tech all the design all the money, write 6-month content ahead with GPT and or pay some cheap ‘content marketer’ intern to post in your stead cheap, sterile, boring, blunt volume. See Netflix.

It has to stay personal. Raw. Natural. You. It has to shape around them, with visible try-n-error.

If you want to just ‘have an agency/freelancer’ running it all up for $$$$ .. that’s not this model.

Understanding The Commitment: What Am I Getting Into

At this point it should be clear now – this is not a half-assed business and it’s also not time insensitive.

Freelancing you can get in and out of. A Course you set up, and will serve the people who enroll in it.

To be honest, a lot of other business models are much more forgiving of you ghosting it for a while.

A Community-based Power Membership is time-sensitive. Read that backwards Yoda. Sensitive the time is for the Power Membership Community.

You cannot add a few things, invite a few members, paint your garage for 3 weeks without looking at it and expect to find everything where you left it.

A drying engagement is not like a drying plant that revives right after you water it. Drying engagement is like a disease. Spreading decay killing everything that once was good in your community. People can always choose not to pay for being part of it anymore and every other budget-chipping subscription encourages them to do so.

It’s a first project. Every day. 7 days. Not the entire day, but a few ideas + planning ahead. You are pretty much marrying into it, for a good 3 years at least before it eases up.

One last nail to the coffin before I ask you the big question.

I mentioned this after the dreamy-doe ideal part – the recurring revenue model is extremely saturated and people get more and more resistant to just keep subscriptions for ‘maybe later’.

It is more common now that people do a grand cleaning on the little recurring expenses, realizing in shock that they are auto-spending heavy $$$ one a dozen of shit they rarely use. And the first meat on the chopping block is memberships.

We get back to this in the Pricing chapter.

I’m ready. Are you? Here is the the Question.

No, It’s Not For Me / Yes It’s For Me

• If you love a certain topic and people who – like you – love this topic.

• If you know a lot about it and want to share in a personal, next-to-a-campfire chit-chatty way

• If you don’t want to spend months on developing digital products afar from customers but rather with them in pieces

• and if you are able and willing to dedicate your time consistently

• and if you have an attractive personality

Then the membership business model suits you well. It’s not the only choice but a good one. On the other hand:

• If you tend to abandon things and then get back to it. (like I do),

• If you have a lot of side projects and love the freedom of allocating your time (like I do),

• If you are unlikable as fuck (like I .. wait what?),

• If you are budget-sensitive to a +-200/mo constant upfront payment,

• If it’s hard for you to come up with fresh topic ideas consistently,

• You are more of an introvert,

• If you change course a lot…

And in general, if reading all the pros and cons above rather discouraged you then there are other business models, that’d likely fit you better. (At least at the start, you can expand to paid communities later.)

Next.

If you’re still with me in this, now that you know what you are getting into, let’s make it happen.

In the next chapters, I’m getting deeper into the key components, and structure tech stack, with some other considerations like pricing and positioning.

This will require you to register. It’s free.