An important change is underway in the business world. And two friends and tech guys are transforming how people are earning money based on what they know.
In the traditional business model, people were hired based on their body of knowledge; the company determined what that knowledge was worth, and the worker earned a paycheck in return. Earning more depended on getting promoted, or taking that knowledge elsewhere.
Now, in response to the rise of the knowledge economy, a growing number of people are realizing that their knowledge is not only their best career asset; it’s a true, marketable commodity. And they are finding success at tremendous scale, by offering it to a wide base of people who are willing to pay for it.
This in itself isn’t new, it’s been happening online since the internet was born. Remember all those eBooks being sold promising to teach you just about anything for $97, $57, $37? They were the original digital knowledge brokers, and they helped defined the niche.
But the increasingly-sophisticated knowledge industry faces a serious challenge. The time and effort needed to create and market online courses leaves many people struggling to monetize their efforts. And their knowledge, in the process, remains untapped.
To better understand these challenges, and what’s being done to meet them, I talked with Travis Rosser and Kenny Rueter, co-founders of Kajabi. Since its start back in 2010, inspired by a kid’s sprinkler toy of all things – these two have been shaking up the knowledge industry. Kajabi’s customers have collectively made more than $500 million selling their knowledge through online courses.
The company’s been on Inc.’s 5000 Fastest-Growing software companies list for two years running, and its users are selling courses on everything under the sun.
Their story is a fascinating look at what happens when knowledge and passion meets technology at just the right time.
Tomas Laurinavicius: Knowledge as a commodity…what exactly do you mean?
Travis Rosser: Knowledge is your most valuable asset. It’s the one thing you have in life that is constantly growing through your experiences. And for most people it’s untapped. Sure, people work at their jobs but they don’t always use their own knowledge to create a business.
Kenny Rueter: Merriam Webster defines “commodity” as “something useful or valued.” What turns knowledge into a commodity is not just having information about a certain topic, but curating that information through the lens of real-life experiences. This could be through work experience, a hobby, pain or suffering, setbacks or success. Out of all that experience, knowledge is born. And there will always be others out there who want to tap into your knowledge, from your point of view…and will gladly pay for it.
Laurinavicius: You must have a background in education then? How did you get into this niche?
Rueter: No, on the contrary; I have a degree in computer science. The idea for Kajabi came about out of a sprinkler toy for kids, believe it or not. I made a toy out of PVC pipe that plugged into the hose and sprayed water around so my kids could ride their bikes and scooters through it. The kids went wild for it, and Travis and I decided we’d try selling these. But we quickly realized that it would be really hard to manufacture and ship the actual toys.
Rosser: So we thought we’d just ship the pieces, and teach people how to put it together, with an online video tutorial. That seemed easier, but we still had to source the parts and assemble the kits. So we thought why not just teach them how to do it themselves, from start to finish?
We make some videos showing people how to do it, and attempted to upload them on a WordPress site and sell access to the videos. This was harder than we thought. Even though both of us were working in the tech industry, it was way more complicated to do this than we expected.
Rueter: This is when the light bulb went on. I possessed first-hand, useful knowledge about the best way to make a sprinkler toy for my kids, and other people could learn from my experiences to make their own. We decided to build a software platform that allows anyone to sell their knowledge about anything, and this was the beginning of Kajabi.
Laurinavicius: How does this idea of knowledge as a commodity relate to the gig economy…or does it?
Rueter: It totally relates. People are just beginning to realize that they already possess something – their knowledge --- that people will pay them for. People are making REAL money selling something they already have. They are shooting some videos, putting them on Kajabi, and having people pay to access them. Many of our customers have quit their jobs to do this full time on their own terms.
Rosser: In the gig economy, though, you are still trading time for money and you only have so many hours in a day. Your potential is finite. In the knowledge economy you are trading what you know for money on an endless scale. Your course can be bought by anybody in the world day and night and you can make money while you are sleeping.
Laurinavicius: Why do you think your platform resonates so well with folks? What’s your secret sauce?
Rosser: Ultimately, there is no secret sauce; we are a company that actually cares about our customers. We do everything we can to make it easy for our customers to find success on Kajabi. It energizes us to know how much Kajabi has changed people’s lives.
Rueter: We’ve defined Kajabi as a Knowledge Commerce Platform. It is designed to contain everything you need to sell your knowledge online…including the delivery of your online course, and all the marketing pages and emails to build an audience.
We understand that most people who have knowledge about a particular subject aren’t tech wizards. So we designed our platform to help anybody -- regardless of tech skills -- begin to sell their knowledge. The platform is intuitive, and we have a whole team of “Hero Coaches” whose job is to help people get started and be successful.
Laurinavicius: You’re somewhat famous for bootstrapping your company, at a time when many (most?) tech companies would kill for VC or investor funding. What’s the rationale there?
Rosser: There is nothing special about what we did. We solved a problem that we were struggling with and we realized that there were lots of other people who needed the same thing. So back in 2009, we connected with some of the biggest information marketers through social media and convinced them to try out Kajabi. Right away they had success. Word of mouth spread and in 2010, we were able to sign up thousands of customers – without any outside funding.
Rueter: Our #1 core value as a company is that our customer is the Hero of the story. Everything we do is to help our customers be more successful, and if we had brought on VC funding at an early stage, we would have been tempted to treat the VC as the Hero. We may have lost sight of the customers’ real needs and instead tried to manufacture the growth of profits in ways that were not beneficial to our customers’ ultimate success.
Laurinavicius: What’s next for Kajabi? Do you see any leveling off of the potential, or any possibility of the market getting saturated with knowledge?
Rosser: This is just the beginning. We are witnessing a true movement, of average people turning what they know into successful online businesses. Every single person can sell their knowledge, because every single person has a unique perspective on what they are selling.
Rueter: I agree. Kajabi is just getting started. The idea of selling your knowledge online is still a relatively new idea. The average person is not waking up in the morning and saying to themselves, “I could sell what I know to earn some extra money!” We are confident that this is changing quickly, and awareness to this amazing opportunity is increasing daily. I don’t think we’ll ever have the scenario where the market is saturated with knowledge.
Laurinavicius: If you could change one thing in how your company has gotten to where it’s at today, what would that be?
Rueter: I would start featuring our customers’ successes sooner. Currently we have a “Kajabi Hero” wall on our site, where we showcase customers who have made more than $1,000 selling their knowledge. We interview them, write blog posts about them, etc. We just started this within the past year, and there were so many people in the six years prior to that who have had success. I wish we had been showcasing these victories from the start, so that more people would know what’s possible.
Rosser: The only thing I would change is to help more people know about Kajabi. Because when our customers find success on Kajabi, it changes their lives.
