The Elusive Passive Income Product

I’m coming up on the two year anniversary of leaving full-time work in favor of being my own boss this August.

Soon after venturing out on my own, I landed on a more ambitious goal, far beyond simply earning my own way in the world.

I aim to create adequate passive income so that I can manage my business from anywhere in the world part-time (although I love my little cabin so much that I probably won’t venture too far too often).

It’s the ultimate dream for many of us solopreneurs.

I don’t want to hire employees or take my business to an IPO. I don’t want to create the next tech craze or get featured in Entrepreneur magazine. I simply want to create products of high value that can be purchased and delivered online, so that I am free to live life on my own itinerary.

I’ve written a good deal about passive income models and products (see the Cash Flow Muse Experiment posts).  However, I’ve been reluctant to launch my own until I found the right fit – a combination of my strengths and others’ pain points.

The day has finally come. As of yesterday, I have two products up on my professional website that are entirely passive.

Between the Four Hour Work Week and The $100 Startup (both excellent books), many of us hope to brainstorm a creative infoproduct or other instant download that will bring us midnight PayPal deposits while we play on the beach in Brazil.

If it was that easy, everyone would do it.

It’s a compelling idea. Pick a niche topic that you have an affinity for, “otaku” as Seth Godin calls it in The Purple Cow – more than a hobby, but less than an obsession. Then fill a gap or solve a problem. Create something that will delight other aficionados.

I’ve spent many an evening in the hot tub brainstorming solutions to frustrating gaps in my niche areas of interest, such as spray-on tattoo cover-up, roll-on aromatherapy for yoga nerds like me, or glow-in-the-dark chapstick (I can never find mine in the middle of the night).

But more often than not, my creative ideas have already been done or the barriers to entry are pretty enormous.

While I might have an affinity for chai tea and log homes, it only made sense to build upon my existing expertise and then launch products that I knew were needed and that I could deliver better than anyone else.

After nearly two years of consulting, I’ve been paid to do several activities repeatedly – mainly within finance, HR, operations, etc. So not only do I have confidence that these products are needed, their development was entirely funded by consulting contracts.

It’s a win-win: clients who would otherwise pay $50-100/hour can simply download what they need, empowering themselves rather than paying for dependence on outside expertise, and I reach a larger audience with one-time effort.

While the puzzle pieces of marketing beyond word-of-mouth, pricing, and other keys to succeeding online are still works in progress – I’ve started down the path and I can stand behind my products 100%.

If you’re on the same journey, consider what other people turn to you for already. Is there a way you can package your talents into an instant download, or at least a virtual service?

Good luck!