One Reason These Three Make Over $20,000 A Day and You Don't: They Blog

Dharmesh Shah
Dharmesh Shah



I’m very passionate about blogging.  Not in the “share photos of my cat” kind of way, but more in the “put my ideas out there, get community feedback and learn ” kind of way.  Though personal blogging is a great thing and millions enjoy it and get value from it, this site is about business – and so I’m going to give you one more reason why if you are working in a niche market, have a small business or startup and have the skill to do it, you should be blogging.


The example I’d like to use today is the consulting business (there are literally millions of consulting businesses out there).  Let’s say you are a strategic consultant of some sort for some type of niche-market industry and running your own firm.  You may have a couple of partners, or you may be a solo-entrepreneur doing this on your own.  In this model, as is also the case with law firms, financial consulting, etc. there are some simple factors that control the growth and size of the business.  Bear with me as I once again demonstrate my uncanny knack for the obvious:


If you are in the “services” business, your revenue is defined by some function which includes “utilization” (i.e. how much of your productive time is being billed for directly or indirectly) and your “rate” – i.e. what the average price is for those units of time where you are making money.


Yes, this is an overly simple model, but for our purposes, it’ll work just fine (and I’m trying to make a larger point).  In this kind of model, there is clearly an upper limit to the utilization.  That is, even if you plan to work 60 hours a week (or more), there is still an upper limit to how much that time can be utilized.  That theoretical limit is 100%.  Past that point, you have no real “inventory” to sell.  So, given that there is an upper limit to utilization, the other way to grow revenues is to somehow increase the average billing rate (per hour, per day, per project, etc.)  So, how does one do this?  The answer turns out to be relatively simple.  The only sustainable way to have a higher billing rate is for the market (i.e. clients) to perceive you as different.  If you were the same as someone else, offering similar services, and had similar expertise, it would be hard for you to charge much of a premium.  This is basic Econ 101  type stuff. 


So, back to the three people I mentioned in the title of this particle.  Tom Foremski wrote an article on his “ Silicon Valley Watcher ” blog that provides an estimate of how much Tim O’Reilly, Chris Anderson and John Battelle make in speaker fees for an engagement.  The answer is $40k, $34k, and $24k, respectively.  Now, claiming that these individuals make this kind of money because they blog is a bit misleading.  All three have written books and have other accomplishments that is likely contributing to their market value.  But, though I won’t claim that blogging is the primary contributor, I will say that it is a key contributor.  Blogging is particularly helpful for those that are not published or would have a hard time getting a significant audience by this method.


I would argue that most of us are much, much better off taking the energy that would have been spent writing a book – and instead channeling towards writing and marketing a professional blog.  This gives you a lot of the advantages of a book (helps you establish yourself as a thought-leader, gains you an audience, etc.).  The big upside to blogging is that it is conversational (you get to interact with your audience).  I can’t tell you how much that helps.  Blogging also provides a more efficient economic model for spreading your message and establishing yourself as an expert.  Done correctly, it takes less time as well.  In a future article, I’ll plan to outline a number of specific ways that blogging beats book publishing as a way for professionals to differentiate themselves in the services business.


What do you think?  Have you written a book?  Started a blog?  What’s worked for you and what hasn’t?


internet marketing kit

We're committed to your privacy. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our Privacy Policy.

Outline your company's marketing strategy in one simple, coherent plan.