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Aug 18, 2016 · 18m · top-founders

EP 390: Is This The Most Successful InfoProduct Ever?

Nathan Latka · 10m spoken Steve Chou · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of 'The Top', host Nathan Latka interviews entrepreneur and engineering director Steve Chou, dissecting the exact pricing strategy, webinar funnels, and marketing economics behind his seven-figure info-product and diversified e-commerce ventures.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 66.6% of the talking time here. How this is scored →

Nathan as informed peer 3.3 Guest teaching 2.2 Guest disagreement 0.8 Nathan pushing back 1.5
05100:0010:000:49–4:13 · Nathan as informed peer 4/10 FreshBooks Sponsorship and Invoicing Solution Nathan and Steve have a friendly discussion about pricing info products. Nathan shares his thoughts on why upfront lump-sum pricing beats low monthly subscription retention, which aligns directly with Steve's strategy.4:14–6:37 · Nathan as informed peer 3/10 Course Sales History and Top-of-Funnel Lead Generation Nathan presses Steve on total revenue figures and traffic sources, driving the interview forward systematically while Steve provides straightforward numbers on his courses and email funnel.6:37–9:22 · Nathan as informed peer 4/10 Webinar Conversion Mechanics and Scaling Strategies Nathan drills down on the conversion funnel mechanics and asks how this could be scaled from a VC perspective. Steve explains the inherent limits of personal webinars and how automated funnels operate.9:24–12:24 · Nathan as informed peer 4/10 E-Commerce Breakdown: High-Margin Wedding Linens Nathan inquires about typical industry EBITDA margins around 10-12%, but Steve corrects him by pointing out that their personalized wedding linen net margins reach 60% due to emotional purchasing.12:25–16:09 · Nathan as informed peer 2/10 Sponsor Segment: Website Hosting with HostGator This segment features Nathan's mid-roll ad reads followed by the rapid-fire Famous Five questionnaire and reflections on early career paths in Silicon Valley.16:10–16:45 · Nathan as informed peer 3/10 Interview Recap and Financial Milestones Summary Nathan delivers a rapid summary recap of Steve's revenue milestones, course launch dates, and webinar conversion stats before closing out the show.0:49–4:13 · Guest teaching 3/10 FreshBooks Sponsorship and Invoicing Solution Nathan and Steve have a friendly discussion about pricing info products. Nathan shares his thoughts on why upfront lump-sum pricing beats low monthly subscription retention, which aligns directly with Steve's strategy.4:14–6:37 · Guest teaching 2/10 Course Sales History and Top-of-Funnel Lead Generation Nathan presses Steve on total revenue figures and traffic sources, driving the interview forward systematically while Steve provides straightforward numbers on his courses and email funnel.6:37–9:22 · Guest teaching 3/10 Webinar Conversion Mechanics and Scaling Strategies Nathan drills down on the conversion funnel mechanics and asks how this could be scaled from a VC perspective. Steve explains the inherent limits of personal webinars and how automated funnels operate.9:24–12:24 · Guest teaching 3/10 E-Commerce Breakdown: High-Margin Wedding Linens Nathan inquires about typical industry EBITDA margins around 10-12%, but Steve corrects him by pointing out that their personalized wedding linen net margins reach 60% due to emotional purchasing.12:25–16:09 · Guest teaching 1/10 Sponsor Segment: Website Hosting with HostGator This segment features Nathan's mid-roll ad reads followed by the rapid-fire Famous Five questionnaire and reflections on early career paths in Silicon Valley.16:10–16:45 · Guest teaching 1/10 Interview Recap and Financial Milestones Summary Nathan delivers a rapid summary recap of Steve's revenue milestones, course launch dates, and webinar conversion stats before closing out the show.0:49–4:13 · Guest disagreement 1/10 FreshBooks Sponsorship and Invoicing Solution Nathan and Steve have a friendly discussion about pricing info products. Nathan shares his thoughts on why upfront lump-sum pricing beats low monthly subscription retention, which aligns directly with Steve's strategy.4:14–6:37 · Guest disagreement 0/10 Course Sales History and Top-of-Funnel Lead Generation Nathan presses Steve on total revenue figures and traffic sources, driving the interview forward systematically while Steve provides straightforward numbers on his courses and email funnel.6:37–9:22 · Guest disagreement 1/10 Webinar Conversion Mechanics and Scaling Strategies Nathan drills down on the conversion funnel mechanics and asks how this could be scaled from a VC perspective. Steve explains the inherent limits of personal webinars and how automated funnels operate.9:24–12:24 · Guest disagreement 2/10 E-Commerce Breakdown: High-Margin Wedding Linens Nathan inquires about typical industry EBITDA margins around 10-12%, but Steve corrects him by pointing out that their personalized wedding linen net margins reach 60% due to emotional purchasing.12:25–16:09 · Guest disagreement 0/10 Sponsor Segment: Website Hosting with HostGator This segment features Nathan's mid-roll ad reads followed by the rapid-fire Famous Five questionnaire and reflections on early career paths in Silicon Valley.16:10–16:45 · Guest disagreement 1/10 Interview Recap and Financial Milestones Summary Nathan delivers a rapid summary recap of Steve's revenue milestones, course launch dates, and webinar conversion stats before closing out the show.0:49–4:13 · Nathan pushing back 1/10 FreshBooks Sponsorship and Invoicing Solution Nathan and Steve have a friendly discussion about pricing info products. Nathan shares his thoughts on why upfront lump-sum pricing beats low monthly subscription retention, which aligns directly with Steve's strategy.4:14–6:37 · Nathan pushing back 2/10 Course Sales History and Top-of-Funnel Lead Generation Nathan presses Steve on total revenue figures and traffic sources, driving the interview forward systematically while Steve provides straightforward numbers on his courses and email funnel.6:37–9:22 · Nathan pushing back 2/10 Webinar Conversion Mechanics and Scaling Strategies Nathan drills down on the conversion funnel mechanics and asks how this could be scaled from a VC perspective. Steve explains the inherent limits of personal webinars and how automated funnels operate.9:24–12:24 · Nathan pushing back 2/10 E-Commerce Breakdown: High-Margin Wedding Linens Nathan inquires about typical industry EBITDA margins around 10-12%, but Steve corrects him by pointing out that their personalized wedding linen net margins reach 60% due to emotional purchasing.12:25–16:09 · Nathan pushing back 1/10 Sponsor Segment: Website Hosting with HostGator This segment features Nathan's mid-roll ad reads followed by the rapid-fire Famous Five questionnaire and reflections on early career paths in Silicon Valley.16:10–16:45 · Nathan pushing back 1/10 Interview Recap and Financial Milestones Summary Nathan delivers a rapid summary recap of Steve's revenue milestones, course launch dates, and webinar conversion stats before closing out the show.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 83.1% · guest 16.9%0:00 · Nathan 83.1% · guest 16.9%3:00 · Nathan 49.5% · guest 50.5%3:00 · Nathan 49.5% · guest 50.5%6:00 · Nathan 37.6% · guest 62.4%6:00 · Nathan 37.6% · guest 62.4%9:00 · Nathan 54% · guest 46%9:00 · Nathan 54% · guest 46%12:00 · Nathan 90.5% · guest 9.5%12:00 · Nathan 90.5% · guest 9.5%15:00 · Nathan 77.1% · guest 22.9%15:00 · Nathan 77.1% · guest 22.9%18:00 · Nathan 100% · guest 0%18:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 10:40 Rejecting Industry-Standard Margin Assumptions

Steve immediately pushes back against Nathan's assumption of 10-12% clothing margins, noting their margins are far higher.

 Hardest push from Nathan ▶ 4:43 Pressing for Exact Historical Revenue

Nathan refuses to skip historical figures when Steve admits he did not prepare total revenue numbers, prompting Steve to provide annual benchmarks.

 Biggest teaching moment ▶ 10:46 Wedding Niche Net Margin Dynamics

Steve educates Nathan on why wedding linens yield an impressive 60% net margin due to non-price-sensitive emotional buying.

 Nathan holds their own ▶ 3:39 Dissecting SaaS vs Lump-Sum Course Economics

Nathan demonstrates domain expertise by breaking down customer lifetime value churn calculations on low-dollar monthly content subscriptions.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
FreshBooks Sponsorship and Invoicing Solution 4311 Nathan and Steve have a friendly discussion about pricing info products. Nathan shares his thoughts on why upfront lump-sum pricing beats low monthly subscription retention, which aligns directly with Steve's strategy.
Course Sales History and Top-of-Funnel Lead Generation 3202 Nathan presses Steve on total revenue figures and traffic sources, driving the interview forward systematically while Steve provides straightforward numbers on his courses and email funnel.
Webinar Conversion Mechanics and Scaling Strategies 4312 Nathan drills down on the conversion funnel mechanics and asks how this could be scaled from a VC perspective. Steve explains the inherent limits of personal webinars and how automated funnels operate.
E-Commerce Breakdown: High-Margin Wedding Linens 4322 Nathan inquires about typical industry EBITDA margins around 10-12%, but Steve corrects him by pointing out that their personalized wedding linen net margins reach 60% due to emotional purchasing.
Sponsor Segment: Website Hosting with HostGator 2101 This segment features Nathan's mid-roll ad reads followed by the rapid-fire Famous Five questionnaire and reflections on early career paths in Silicon Valley.
Interview Recap and Financial Milestones Summary 3111 Nathan delivers a rapid summary recap of Steve's revenue milestones, course launch dates, and webinar conversion stats before closing out the show.

Statements from this episode (10)

Disclosure
Chou: Blog generates the most profit across his business portfolio
“Most profit is the blog right now, actually.”
Steve Chou Aug 18, 2016 ▶ 2:06
Disclosure
Chou: Online course price is $1,100 and will increase to $1,200
“So right now it's 1100. It's going to be 1200 soon.”
Steve Chou Aug 18, 2016 ▶ 3:58
Insight
Steve Chou: Raising online course prices improved the quality of enrolled students
“I started raising it really quickly because early on the quality of students wasn't so good, and I found out by raising the price, the quality got a lot better.”
Steve Chou Aug 18, 2016 ▶ 4:33
Assertion Not checkable as stated
Steve Chou: Course made $500K in 2015 and matched it by mid-2016
“So last year it did 500,000. And then this year we're already at that same point, half, halfway through the year.”
Steve Chou Aug 18, 2016 ▶ 4:54
Assertion Not checkable as stated
Chou: 10% to 13% of live webinar attendees purchase course
“Like, 80% of the people stay till the end, and I've been getting anywhere from 10 to 13% of people who actually buy.”
Steve Chou Aug 18, 2016 ▶ 7:49
Assertion Not checkable as stated
Chou: Monthly webinars generate $40K to $70K each
“Anywhere between 40 to 65, 70 grand per webinar.”
Steve Chou Aug 18, 2016 ▶ 8:11
Assertion Not checkable as stated
Chou: Course refund rate is around 5%
“The refund rate is on the order of five percent.”
Steve Chou Aug 18, 2016 ▶ 9:18
Disclosure
Chou: Bumblebee Linens generates more revenue than blog business
“So I don't reveal those numbers, but let's just say it does more than the blog. However, the profit margins are obviously less because we're selling physical products.”
Steve Chou Aug 18, 2016 ▶ 9:49
Disclosure
Chou: Bumblebee Linens sees ~60% net margins on personalized items
“For the personalized stuff, yeah, on the order of 60.”
Steve Chou Aug 18, 2016 ▶ 10:54
Insight
Chou: Wedding products command higher markups due to low price sensitivity
“We target weddings, and so you can mark up wedding stuff obviously a lot higher than other things, because people don't care about price so much as quality.”
Steve Chou Aug 18, 2016 ▶ 11:00
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