How to Prep for Your First Digital Product

What to do before you start building

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In last week’s deep dive, you learned the twists and turns that led New Haircut to discover digital products that drove passive income. That steady, additional income stream gave us peace of mind that cash was coming in each month.

We reinvested that cash back into our services, fueling healthy, sustainable growth that didn’t resemble me working around the clock to make ends meet.

If you just joined or missed last week’s post, it will give you some helpful background for the next few posts — a 4-part series where we’re rolling up our sleeves to lay out a complete playbook you’ll use to build your first digital product.

The 4-part Your First Product Series includes:

By the end of today’s post, you’ll have clarity on:

  1. Why so many founders struggle to get started

  2. Popular digital products types to choose from

  3. How to pick the right first product to build

Then in the next post, you’ll see exactly how I built my first digital product so you can reverse engineer the process for yourself.

Here goes.

How to Prep for Your First Digital Product - Passive Profits

When I built my first digital product, I was all over the place. I had zero prior experience.

I also had no plan. I built it on my own, in fits and spurts while also running my company. Because of that shaky start, the process took me the better part of 8 weeks. But the next one took me 3 weeks.

In today’s post, I’ll get you started so that your first product goes more smoothly than mine.

We’ll cover the foundational steps that’ll bring you from 0 to 1 — starting with getting you past the same questions and doubts that hold most founders back from beginning.

1. Why many founders struggle to get started

If you read my post, How New Haircut Grew its Profits 1,353% with One Digital Product, you probably noticed that it took years for me to pull the trigger on my first digital product.

Not because I didn’t want to. I was simply unaware it was an option. But even once I began developing clues, fear of the unknown kept me stuck in quicksand.

I still remember mulling over early ideas to digitize one of New Haircut’s in-person training programs. There’s a ton of complexity around the topics we taught. A skilled trainer had always been required to coach the learner through the material.

My main blocker was that, when it came to a digital download of my training programs, I didn’t know what good looked like.

I eventually built out a downloadable PDF. I spent a couple of weeks organizing all of the content, instructions, and templates. And then when the time came to publish it… I stalled again.

I was afraid our customers would massacre us. And so there it sat for two years until I eventually had enough customer validation to proceed.

I share that story because I know that the fear of the unknown has held you, me, and every other founder back from taking the leap.

So how do we flip the switch to move past it?

By creating enough energy and momentum, where the pain of not acting becomes greater than the pain of trying and failing.

Moving past fear with success stories

Nothing short-circuits a fear of failing more than seeing others scaling the same mountain we’re staring up at.

Success stories show us that success is possible. They give us a sense of what good looks like.

Here are a few service-based founders building their flywheel with digital products:

  • The founder of marketing agency, Revenue Zen, created the 7-Figure Social Selling Course to reach customers not yet ready for their premium marketing services

  • The co-founders of Evrygreen, a LinkedIn coaching agency, created Evrygreen’s AI Course to help new and existing customers solve an adjacent problem of leveraging AI for business development

  • Kate Klassen, Co-founder of Coastal Drone, created certification programs and courses to compliment her in-person consulting and training services.

And while Passive Profits exists to help businesses, there is also NO shortage of 7-figure success stories from individual creators leveraging digital products.

I hope these stories leave you feeling less anxious about building your first digital product.

For many more stories about service business founders driving growth with digital products, keep following along for our founder deep dives.

And with that, it’s time for step #2 in your pre-build checklist: Picking which type of digital product you’ll build.

First, let’s get super clear on what we mean by a “digital product.”

Personally, when I hear digital product, the first thing that comes to mind is a website or mobile app. That view is likely biased from spending 25 years working in tech. And while those are digital products, they’re not our focus.

Those kind of digital products require larger budgets and product/tech professionals (e.g. designers, engineers, etc). There could be a very good reason for your company to invest in such bespoke tech. But that’s outside the scope of what we’re covering today.

The digital products we’re discussing:
  • Do not require deep technical skills (e.g. coding)

  • Can be built with free/inexpensive tools, by one person

  • Can be built in as little as a day or two - less is more for product #1

  • Can be built for a budget of <$100

  • Exist online: downloadable or streaming

So that leaves the following product types that we’ll focus us on within this newsletter:

  • Digital Downloads: One or many documents available for download

  • Courses: Pre-recorded educational materials

  • Toolkits: Combo of digital download + course

  • Ebooks: Similar to digital downloads but cohesive long-form content

  • Newsletters: Emailed content (what you’re inside of now)

In an upcoming post, I’ll break down each of these categories, summarize pros/cons, and gather up leading examples to help inform and inspire you.

Below are eight different product types you can publish on Gumroad — a popular creator platform.

Products you can sell on Gumroad (as of Oct, 2023)

In an upcoming post, I’ll curate the top creator platforms, like Gumroad and more, so you can decide on the right one for your needs.

Now that you’ve seen a menu of product types, let’s decide which product you’ll build first.

3. How to pick the right first product to build

This is your first product. Not your 2nd, 10th, or 50th. And so the right first digital product to build are the services you’re already delivering. Here’s why.

Building your first digital product will require you to learn new skills and tools. If you have to additionally develop a new offer that you don’t already have experience delivering, it will add complexity.

You want to understand the nuances of the topic, the questions people ask, the places they get stuck. Without you being there to coach them in-person, you’ll need to make sure your product stands on its own. And learning how to package your skills and knowledge to make your customer successful on their own will take some iterating.

By digitizing an existing service, you also minimize the risk of creating a product that attempts solves a problem your market is unaware of.

To better understand, let’s summarize the five stages of awareness your customers go through prior to purchasing solutions to a problem. These stages were originally coined in 1966 by Eugene Schwartz in his book, Breakthrough Advertising.

  1. Unaware: Customer has yet to experience the problem you solve

  2. Problem aware: Customer experiences the problem but is unaware of solutions

  3. Solution aware: Customer has discovered solutions but has not settled on any yet

  4. Product aware: Customer has discovered your solution but is not yet informed enough or convinced that it will solve their problem

  5. Most aware: Customer understands your solution but has not yet purchased

Credit: Nicholas Scalice of GrowthMarketer

You’re looking for a service to digitize that is closest to the most aware stage. In the product development world, solutions to important problems, which have been validated by a customer market, are said to have product-market fit. That’s what we’re going for in this first digital product launch.

Ultimately, the best first product for you to build will almost always be something I call a wedge product.

How you help your customers move from unaware to most aware, so that they’re primed and ready to buy your offers (service, digital product, or otherwise) is something we’ll definitely cover in an upcoming post! Stay tuned.

Wrapping up

Building your first product can feel daunting. I hope that today’s pre-build checklist moved you closer to committing. Like anything new you’ve tried before, your confidence will mount as soon as you begin.

I’m also here to tell you that, whatever stories you’ve conjured up in your head that you’re not capable, are bullshit. In fact, there’s a very good chance that the entire process will go smoother than you imagined — especially if you continue to follow along. I’ve got your back.

Or as Ellen Hendriksen reminds us, most of our mountains are nothing but molehills. And after enough tries, even the molehills shrink and our freak-outs become fleeting.

Credit: Ellen Hendriksen

Next: from prep to build 🛠️

Speaking of trying… in the next Passive Profits post, we’re moving you into build mode.

In part two of the Your First Product Series, you’ll receive a step-by-step walkthrough of how I built my first digital product so you can apply the process to your products.

Until then, will you help me grow the newsletter by sharing it?

✌🏼Thanks and see ya soon!

Jay Melone
Creator-Founder @
Passive Profits

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