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How To Make Money Online - The 3 Levels

2020-05-19 · Long video (solo, talking head or whiteboard) · Ali · recording, 18:26 · watch on YouTube

Topic: Business and entrepreneurship · mode: Explanation and tutorial · tags: His own numbers, His own products discussed, Lesson from a book, Family, Sponsor segment present

Ali sets out three levels of making money online: selling services such as freelance skills (where to start), selling products (other people's through affiliate links, better your own, ideally digital info products such as online courses), and attention, built by giving valuable free content for years so that an audience who know, like and trust you will buy.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Why make money online: his own side income and the options it gives

  • ★★★ Ali, who dreamed at 12 of making money on the internet, says that 13 years later he makes over three times as much online on the side as from his full-time NHS job as a doctor. — 00:00:00 · NHS
  • ★★ Ali says more people should make money online, partly because money is a massive source of stress in most people's lives. — 00:00:29
  • ★★ Money made online outside a day job, Ali says, gives the option of going part-time, taking a lower-paid job you enjoy more, or stopping work altogether. — 00:00:56
  • ★ Getting to the point of quitting your job through online income takes a lot of time, effort and luck, Ali says, but the process is less mysterious than it feels. — 00:00:56

00:01:25 — What money is, and the three levels of making money online

  • ★★★ At its core, Ali says, money is a medium for exchanging value, so to make money online you must provide some value that someone else is willing to pay for. — 00:01:25

  • ★★★ Ali's three levels of making money online are the three forms of value people pay for over the internet: services, products and attention. — 00:01:54

    “level one, services, level two, products, and level three, attention”

  • ★★ Over 13 years Ali has done all three levels: he started selling services as a web and graphic designer, then sold products for medical school applicants and online question banks, and now leverages his YouTube attention. — 00:01:54 · YouTube

  • ★★★ Selling your services is probably the easiest way of making money online, Ali says, and the one he recommends everyone begin with. — 00:01:54

00:02:25 — Level one: selling your services, from his first websites to Fiverr and Upwork

  • ★★ To make money by selling services, Ali says, you need two things: a skill people are willing to pay for, and people willing to pay for that skill. — 00:02:34
  • ★★ At 12 Ali decided to learn to code and taught himself HTML and CSS, the markup languages of websites, using Google and free online resources. — 00:02:34 · Google
  • ★ To make a video game for his friends, Ali taught himself the server-side programming language PHP in 2006 from free information on the internet. — 00:03:03
  • ★★ For people not into coding, Ali suggests browsing the categories on Fiverr or Upwork, where there are hundreds if not thousands of services people will pay for. — 00:03:32
  • ★★ Not having a monetisable skill is no longer an excuse for not making money online, Ali says: you can teach yourself anything over the internet and then sell that skill. — 00:04:01
  • ★ Ali names video editing as another fairly easy skill to learn and sell online. — 00:04:01
  • ★★ At 12 or 13 Ali told his friends he would design websites; a friend's dad wanted one, and his first website, a janky HTML and CSS site, earned him 30 pounds. — 00:04:31
  • ★★ Finding people over the internet to pay for your services is a much more viable long-term route than finding them in real life, Ali says. — 00:05:06
  • ★★ Ali got his start on getacoder.com, bidding $5 or $10 on web design and development projects at 12 or 13 to undercut everyone else. — 00:05:06
  • ★★ On Upwork and Fiverr, Ali says, you can sell services cheaply at first and charge more and more as you get better, collect decent reviews and build a portfolio. — 00:05:35
  • ★★ Ali sold services for a few years but soon realised he was trading his time for money. — 00:05:35

00:06:04 — Level two basic: selling products, dropshipping and affiliate marketing

  • ★★★ Selling physical or digital products magnifies your ability to make money online, Ali says, because it becomes scalable and is not tied to the time you put in. — 00:06:04
  • ★★★ Digital products, from websites and apps to online courses and ebooks, are the ideal product category, Ali says: a one-time cost of production and zero cost of reproduction and distribution. — 00:06:44
  • ★★ Ali's "level two basic" is selling other people's products, by dropshipping or by affiliate marketing. — 00:07:13
  • ★ In dropshipping, Ali explains, a website takes a customer's order, and the seller buys the product from a third party that ships it to the customer. — 00:07:13
  • ★★★ Ali has never really done dropshipping himself and recommends staying away from it. — 00:07:13
  • ★★ Ali is put off dropshipping by the many online courses on it that seem a little scammy, and because it generally focuses on physical goods. — 00:07:47
  • ★★ Physical goods are less fun to sell than digital ones, Ali says, because you pay for the stock and arrange shipping; digital products are the way to go. — 00:07:47
  • ★★ Affiliate marketing, Ali explains, is selling someone else's products while getting a commission on each sale. — 00:07:47
  • ★ The review website Wirecutter uses Amazon affiliate links and makes perhaps 1 to 3% commission on each sale, Ali says. (hedged) — 00:08:16 · Amazon
  • ★★ Ali has affiliate partnerships with certain products, such as the Paperlike screen protector, which he has evangelised for two years because he genuinely loves it. — 00:08:16 · Paperlike
  • ★★ To learn affiliate marketing properly, Ali points to Pat Flynn's website and podcast Smart Passive Income and its materials. — 00:08:46

00:09:15 — Level two expert: selling your own physical products, apps and info products

  • ★★★ The holy grail, Ali's "level two expert", is selling your own products: you then control everything from aesthetics and price to distribution, logistics and the customer experience. — 00:09:15
  • ★ Ali says Peter McKinnon has done very well selling his camera bag, and Pat Flynn selling the SwitchPod, a tripod for vloggers. — 00:09:15 · Peter McKinnon
  • ★★ Ali does not recommend selling physical products, which take manufacturing and logistics and cost a load of money. — 00:09:44
  • ★ Ali is looking into selling merch himself, but finds physical products hard and thinks them probably more trouble than they are worth. (hedged) — 00:09:44
  • ★★ In summer 2015 Ali and his brother, who both code, built an online question bank for UK medical school applicants taking admissions exams. — 00:10:13 · Taimur Abdaal
  • ★★★ Building a website or app to make money is really hard, Ali says, so a complete beginner should not start by trying to get rich off an app. — 00:10:13
  • ★★★ Selling info products such as ebooks, digital downloads or online courses is, Ali says, a much easier way that anyone can make money online. — 00:10:13
  • ★★ More and more people turn to online education, Ali says, so if you can teach something compellingly online it is ever easier to find people who will pay for it. — 00:11:02
  • ★★ Ali has a series of online courses for medical school applicants on doing well in admissions exams and interviews, which make money every week and month without more effort. — 00:11:02
  • ★★ Ali's Skillshare classes on editing videos and on studying for exams generate passive income: he made each course once and it keeps selling without much more work. — 00:11:02 · Skillshare classes, passive income

  • ★★★ Many people think they cannot teach online because they are not experts, Ali says, but a beginner can teach other beginners. — 00:11:31

    “if you're a beginner, you can teach other beginners”

  • ★★ An online course can be sold through your own website or scaled through platforms such as Udemy, Coursera and Skillshare, Ali says. — 00:12:00

00:12:30 — Level three: supercharging sales with attention and free content

  • ★★★ Even with products to sell, you still need people willing to pay for them; Ali's level three supercharges money-making with attention. — 00:12:30
  • ★★★ The easiest way to sell anything online, Ali says, is the attention of people who know, like and trust you, earned by providing valuable content online for free. — 00:12:30
  • ★★ As an example, Ali suggests starting a blog of productivity tips and writing one or two posts a week drawn from books, papers, articles, podcasts and your own life. — 00:12:59
  • ★★ There is no shortcut to making money online, Ali says: you give value for free over a long time, and after, say, three years you have a mailing list of 20,000 people. — 00:12:59
  • ★★ Ali says anyone who cares about making money online should follow Gary Vaynerchuk on every social platform. — 00:13:41 · Gary Vaynerchuk
  • ★★ In Gary Vaynerchuk's boxing analogy from Jab, Jab, Jab, Right Hook, Ali explains, a jab is giving valuable content for free and a right hook is asking people to buy. (hedged) — 00:13:41 · Gary Vaynerchuk
  • ★★★ Following Gary Vaynerchuk, Ali says you need to provide 25 pieces of valuable free content for every time you ask people to buy something. — 00:14:10 · Gary Vaynerchuk
  • ★★ Ali has followed this playbook on his YouTube channel since 2017, after years of following Gary Vaynerchuk and Tim Ferriss, who flooded the market with valuable free content. — 00:14:39 · Gary Vaynerchuk, Tim Ferriss, YouTube
  • ★★ When Ali sells an online course or a Skillshare class, he has an audience of 600,000 people far more likely to buy from him. — 00:15:09 · Skillshare classes
  • ★★ With a personal brand, an audience that knows, likes and trusts you, you can sell goods and services and even sell attention directly through sponsorships, as Ali does. — 00:15:09
  • ★★ The audience need not be big, Ali says: his friend Noah Kagan, who runs a marketing podcast, shows that with the right small audience you can easily sell a product. — 00:15:38
  • ★★ Ali cites Kevin Kelly's essay 1000 True Fans: get 1,000 true fans following you online, like a musician's fans who go to every show and buy the special edition album. — 00:15:38
  • ★★ A thousand true fans each paying you $100 a year, Ali says, make $100,000 a year, a full-time living. (hypothetical) — 00:16:07

  • ★★★ To the worry that free content stops people buying, Ali answers that people buy your paid stuff only if you give them content for free: you do not build an audience by selling. — 00:16:07

    “People will buy your paid stuff. But only if you give them content for free.”

00:16:39 — Learning to code as the start of the journey

  • ★★ Ali says he now makes much more on the side from selling goods, services and attention online than from his day job of 60 hours a week as a doctor in the UK. — 00:16:39 · passive income
  • ★★★ To anyone starting to make money online Ali recommends learning to code: it is not absolutely necessary, but it really helps when selling any software product online. — 00:16:39
  • ★★ Ali advises teaching yourself HTML and CSS with free YouTube tutorials, HTML in a day and CSS in two days, and then building your own personal website. — 00:16:39 · YouTube

00:17:27 — Sponsor read and sign-off

In the description and comments

  • ★★ Asked for a video on working with remote video editors, Ali answers it will probably be part of his Skillshare class about becoming a YouTuber, being too niche for a video. (hedged) — creator comment · Skillshare classes, YouTube

Threads in this video

Where the stories that moved here went next

Mentioned

Central: Gary Vaynerchuk · three levels of making money online

Also: People: Kevin Kelly · Noah Kagan · Pat Flynn · Peter McKinnon · Taimur Abdaal · Tim Ferriss

Projects: Skillshare classes

Works: 1000 True Fans · Jab, Jab, Jab, Right Hook · Smart Passive Income

Organizations: Amazon · Code School · Codecademy · Coursera · Facebook · Fiverr · getacoder.com · Instagram · NHS · Upwork · Wirecutter · YouTube

Concepts: affiliate marketing · dropshipping · first law of making money · info product · passive income · personal brand

Products: Final Cut Pro · Paperlike · Peter McKinnon Nomatic camera bag · SwitchPod

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