The next area I want to examine is finances: How much money has the book made in the year since its release? How much did I spend to catapult it to bestseller status? And would I do anything differently?
Here are the real numbers.
How much money did the book make by itself?
A year after its release, Building a Second Brain has sold over 100,000 copies in the US and UK alone, including 13,000 pre-orders made in the 9 months preceding its release.
In total, I’ve made $478,800 in advances across all formats and translations of the book.
That includes $325,000 for the initial U.S. rights, plus another $153,800 for 20 other foreign rights sales ranging from $800 in Turkey to $31,000 in China. In other words, all the foreign rights we’ve sold so far add up to 47% of the value of U.S. rights, though it’s expected to keep climbing.
Now that may sound like a lot of money at first. It’s definitely in the top .1% of advances, and a dream come true for any author. But wait until you hear what the corresponding outlay was.
Here’s the breakdown of the main costs:
- $152,000 in U.S. federal (37%) and California state taxes (12.5%)
- $140,000 for the promotional agency
- $125,000 (plus a percentage of ongoing royalties) for the editor
- $40,000 for design (book cover, illustrations, swag, and visual brand identity)
- $25,000 for the website (plus ongoing maintenance)
- $15,000 for a book launch party
- $12,000 on three multi-day writing retreats
To summarize, I’ve made about $478,000 and spent $509,000 in my quest to make Building a Second Brain a bestseller. In other words, despite this book becoming a breakout success, we’re only approaching breakeven.
I’m not including a variety of indirect and personal costs we incurred to make the book possible, from money spent on babysitters and house cleaners to takeout dinners when I was too exhausted to make food. These are just the direct costs required to create and promote it.
If I include the time our full-time staff (not including me and my wife Lauren) spent on the project, these figures look very different. Our team of 6 employees estimates that 28% of their total combined capacity was spent on the book over the last three years, which amounts to another $516,000. Taking that number into account, Forte Labs has spent over a million dollars on this book.
These figures also don’t take into account royalties. We seem to be about halfway through earning out the advance, which means that in about a year (mid-2024) I should begin receiving about $26,000 per month in royalties (8,700 books sold per month, with my share at $3 per book).
At this rate, and taking our staffing costs into account, it should take another 18 months after that, or until the end of 2025, before we break even on the entire project. That’s 3.5 years after the book’s release, and a full 7 years since I first started working on the proposal in early 2019.
To summarize, I can’t help but conclude that, if the book is viewed in isolation, writing traditionally published books is an awful business model for authors.
What if we include online course sales?
What the numbers above don’t take into account, of course, is the extent to which the book has fueled sales of our other products.
Based on our internal data, 16% of our newsletter growth in 2021 and 2022 came from people interested in the book. Since our email newsletter is our main sales channel, this corresponds to roughly $720,000 in course sales if we assume those people purchase in typical numbers. So by that measure, the revenue associated with this book rises from $478,000 to about $1.2 million in total. Which means we’ve already broken even on the endeavor and profited almost $200,000 before even starting to receive royalties.
It has likely also had a positive impact on our other sources of revenue (such as YouTube ads, newsletter sponsors, other ebook sales, affiliate commissions on SaaS tools, and speaking gigs), but it’s difficult to know how much came directly as a result of the book, so these are conservative assumptions.
As a side note, we have a lot of evidence that the book also significantly cannibalized sales of our courses. Comments such as “I read the book and got what I needed, so didn’t feel the need to buy the course” became more common. My conclusion is that the book caused some people to not buy the course, and caused others to buy the course who wouldn’t have otherwise. So the book changed our customer base instead of just growing it.
My conclusion is that traditional publishing only makes sense financially if you have a product or service to sell on the backend. That could be another book, an online course or other program, a set of templates, coaching, consulting, or speaking services.
If I had to spend 7 years working so hard on my book only to break even, I would feel pretty disappointed regardless of any other accolades or milestones I’d reached. The uptick in sales of our products balances the books and makes the whole endeavor worthwhile.
Books are global marketing campaigns
Publishing a book is a lot like launching a massive global marketing campaign for an idea.
You are creating tons of assets, forming dozens of partnerships and alliances, recruiting hundreds of people who will eventually take part in its creation, and leveraging global supply chains throughout the world to make your book available “wherever books are sold.”
All that is worth doing for an idea you deeply believe in, but you wouldn’t expect a marketing campaign to be profitable in and of itself. From that perspective, it’s remarkable that a marketing campaign can even pay for itself and break even! Your campaign will ultimately attract vast amounts of attention, but what do you want to do with that attention once you have it? What action do you want people to take?
A common criticism of traditional publishing is that it isn’t profitable for writers. Based on the numbers I’ve shared, that seems to be true even for a breakout bestseller. But it also kind of misses the point. Writers are no longer just narrow specialists – they have the potential to be global media businesses in their own right. And a business has to do more than supply one product. It has to think about the holistic picture of profitability that is needed to ensure its survival.
The critical importance of having a course
Upon further reflection, having a course is even more pivotal for writers than I understood when I started for a few reasons.
Before the book: First, you need a way to thoroughly validate and prove your ideas before you even put them on the page.
If you’re going to dedicate years of your life to a set of ideas, you had better be sure they work. The best way to do that is to test them with real people through speaking, teaching, coaching, or consulting to see how effective they are for a wide variety of people. Teaching what you know as part of a course allows you to get rapid feedback and iterate through multiple versions of your message to find the one that sticks. Live cohort-based courses are the single most effective way to do this in my experience since live teaching gives you instant feedback on a sentence-by-sentence level.
While writing the book: Second, you need a way to sustain yourself financially during the writing of the book.
As I’ve shared, I fully intended to spend 100% of the advances for my book on its promotion, which meant I needed another source of income to pay my bills (not to mention my team). While speaking, coaching, and consulting can serve to test your ideas, an online course has the advantage of selling while you sleep (or write).
After the book comes out: And third, you need a way to monetize and capitalize on the attention your book will attract once it’s out.
You need a “next step” for people to take once they’ve read your book and want to put it into action. While in theory, you could create this product after the book comes out, it’s much better to have it ready on the day of its release since you’ll have your hands full promoting the book itself.
What I would do differently
If I could go back in time and do it all again, I don’t think I’d spend money differently. I took a maximalist approach of saying yes to everything, which means I left no stone unturned and thus have no regrets.
From a financial perspective, the expenses I incurred seem high but justifiable. You only launch your first book once, and I didn’t want to scrimp and save only to look back and wonder what could have been. That meant I probably said yes to expenditures that weren’t strictly necessary, overpaid instead of negotiating harder, and was less strategic and discerning than I could have been.
On the other hand, I learned a tremendous amount about what works and what doesn’t, which was my ultimate goal. Even if we’re only breaking even now, we also created an evergreen asset that will be valuable for many years into the future.
An informal analysis I did of 20 bestselling nonfiction books revealed that their Google search volume peaked on average 6 years after release. If the same is true of mine (and it’s a huge assumption that it will become a perennial bestseller), then BASB will reach its zenith of popularity around 2028. I can barely imagine how much will have changed in that time, both in the world and in my personal life and business. In a way, it’s out of my control anyway. I’ve given the world the best gift I know how to give, and what happens from here on out is up to the world.
In the next installment, I’ll detail how exactly we went about promoting this book.
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- POSTED IN: Books, Building a Second Brain, Self-tracking, Strategy