How The Rich use Robots to Make Big Money

In the book, Rich Dad Poor Dad, Robert Kiyosaki makes the claim that the rich don’t work for money. The rest of the book is spent shedding evidence on that claim and shows you how it is they do make money.

The essential “how” is the rich acquire assets that produce cash flow for them.

24 years later that still holds true. But since then we experienced a tectonic shift in what kind of assets are available to the common person.

The rich buy assets that make money for them, but now there’s a whole new class of rich. The new class of rich are people who use robots to make money for them.

In another 1999 book, The Sovereign Individual, the authors predicted that by this time every individual would have an army of robots at their disposal. They also predicted a digital currency that looks eerily similar to Bitcoin, and that information work would be easily bid out at a task level to everyone in the world.

Most of their predictions were spot on.

In this newsletter, we are going to explore the different ways we can use robots to make money for us.

Because basically all work on the internet could fall in the bucket of “using robots to make you money.” I want to be more specific.

1. Because this is using robots to make money, this is going to be about identifying actual revenue-generating tasks and automating those.

2. I’m a non-technical person, so everything I mention won’t require coding. Though if you can code, you might see ways to take this method above and beyond.

Find what actually generates revenue

If you haven’t already figured this out, in the process of building your company, although a lot of different types of work are important, it is in reality only a few that actually contribute to generating revenue.

You could call this Sales and Marketing, but even then only a portion of sales and marketing tasks actually make money. And if you want to build robots that make money for you, you first have to identify what tasks actually result in revenue.

This is more or less the 80/20 principle. And it’s extremely important that this work is done first and correctly if you want to automate your income.

That might sound obvious when you read it, yet when most people begin automating they tend to focus on automating operations hoping that will result in more money. It’s akin to the “build it and they will come” mindset.

Automating operations is for stopping money from leaving the door. It’s saving.

Automating sales and marketing is for bringing new money in the door. It’s growing.

At the end of the day, the only way you actually make money is if someone takes out their credit card and puts it through your payment processor. And that’s important to pinpoint because that’s what we need to work backward from.

The trick to building a system that produces revenue (without taking forever to build an audience on social media, or writing for 6 months to get SEO traffic) is to write a process in which the potential customer goes from being identified by you to closing in as few steps as possible.

You can call this a funnel if you’d like.

The key phrase here is “as few steps as possible.” It’s really easy to get caught up in a notion of omnichannel marketing and make this a way bigger project than it needs to be. We want to avoid that, especially at the beginning, and move from there.

Good ideas are complex. Great ideas are simple.

Some examples of really simple funnels:

Facebook Ad → Checkout Page (Maybe a landing page in between)

Cold Email → Book a call → Close client

Cold Twitter DM → Email Opt-In for resource → Email sales funnel → Checkout Page

That last one is even more steps than we would want ideally.

Blueprints come first

This is where I and much of the start-up community differ.

A lot of people in the startup community parrot advice like:

• Do a lot of experiments fast

• You don’t need a plan, you need to take action

• Start first and figure out the plan later

But marketing is no mystery that you need to personally rediscover. The craft is already well established and although there is room for innovation, it is not a necessity to succeed.

People who “move fast” can generally capture a lot of land, but it’s hard for them to capture a lot of value.

Instead, we want to create a blueprint for our campaign based on the best practices and fundamentals of sales and marketing. Life is easier when you take the time to get things right the first time.

Our blueprint will essentially resemble a simple customer journey. The things we need to know are:

• Who is my target audience, and how will I identify them?

• How will I get their attention?

• What is my message to them?

• What action do I want them to take?

You’ll know your blueprint is well done if you could hand it to someone else and they can appropriately get the job done.

A good tip here is to make the campaign simple (as few steps as possible), and then provide a lot of detail on how it should unfold.

To give an example, I have a campaign running to grow this newsletter. It’s extremely simple.

I reach out to new followers on Twitter and have a short conversation with them. Within that conversation, I qualify them as a good fit. If they are, I ask them to subscribe. If they’re not, then I’m just having a conversation with a person.

This campaign turned out to be extremely effective. About 1 out of 5 cold DMs turns into a subscriber. So now, I’m working through scaling that campaign by automating the actions that get people to follow me on Twitter.

One of the reasons that campaign works so well is that I focused very much on the fundamentals.

• Who is my target audience, and how will I identify them? → Indie Hackers and Solopreneurs, create a list of people who have those keywords in their bio (ended up being upward of 100K people on that list)

• How will I get their attention? → Engaging with them on Twitter to attract them to follow me.

• What is my message to them? → My newsletter will teach them practical business strategies they can actually apply

• What action do I want them to take? → Subscribe to the newsletter

You can get away with having a short 4 bullet-point campaign plan like this one. Personally, I have a 1-page document detailing who my target audience is and where to find them, a 1-page document for how to attract them to me on Twitter, and a 1-page document for my sales messaging.

Once you have those fundamentals in place, you should be able to create a “visual” representation of what the campaign will look like from the customer's perspective. If you’re an actual visual person then you may want to build a flow chart. I prefer writing down the steps.

Automating for maximum leverage

Once you have identified the shortest route to closing a new customer and have your basic blueprint, the next step is to figure out what to automate for maximum leverage. Some campaigns are more self-explanatory than others.

For example, if you are doing Facebook Ad to a checkout page, there is really not much custom work to do there. The downside to a campaign like this is the cost of ad spend. But if you can make this profitable, it’s very easy to scale.

For other campaigns, how to automate it or what exactly should be automated can require more thinking.

Even if you have the best marketing campaign in the world, it’s always going to be a case that a minority of the people that see step 1 are going to move to step 2. Then, again, a small portion from step 2 to step 3, and so on.

In other words, a Facebook ad might have a click-through rate of 1% and your checkout page might also have a conversion rate of 1%. Those metrics are pretty average. That means 10,000 people have to see your ad to make 1 sale.

Something like a cold dm or email, though not that dramatic, is going to have a similar output. You might have a 4% response rate on email and a 10% response rate on Twitter DMs. Of the people who respond, you may be able to get 10% of people to make a purchase.

So if you’re doing a Twitter cold DM campaign at 10% for the first part and 10% for the second, you need to send 100 cold DMs to make one sale.

The fact that only a portion of leads move onto the next step of the funnel shouldn’t be a surprise to anybody. It’s pretty basic. But it’s one of the basics for a reason.

If you know you have to send 100 DMs a day to new prospects to get one sale…. Well, how many sales do you want to make a day? 10? Then you have to send 1,000 DMs a day. (I’m pretty sure Twitter caps you out at 400 so this isn’t exactly possible without some creative maneuvering.)

Go ahead and try to do that manually. You’d probably cry after a couple of days. I would.

In a simple 2 step campaign like that, the automation of the highest leverage is always going to be the cold outreach. Because that has to be done at a sufficient scale to move the needle.

And that’s great! I love something that simple.

The largest number of human interactions is almost always at the top of the marketing funnel. But that doesn’t necessarily mean that’s the highest leverage place to automate your work. It might be the appointment-setting aspect with a chatbot or something like that.

As a general rule to help figure out where the highest leverage automation is, ask yourself 1. what would produce the most results if I could do it 1,000x a day, 2. what takes up most of my time.

Conclusion

This might seem like more of a tactical newsletter than a strategic one. But I would push back on that. I think this is a good strategic approach to building an automated, or semi-automated, digital asset. Some of the most important aspects of this strategy are:

• Keep the entire business model - if you can call it that - as simple as possible with as few pieces as possible.

• With as few pieces as possible, try to make those really high quality (focus on the details)

• Get the fundamentals right, and let best practices take care of themselves.

• The most important part of this process is identifying where a robot is going to help you create the most revenue.