The Economics of the Portfolio Career

I struggle to get to sleep. Once I've gone, I'm like a log. But until I’m off to sleepy town, my brain is noisy. Especially when there are things on my mind, like living-expense pressures, income volatility, or feelings of financial inadequacy. I know I'm not unique in this.

If you're like me, your work and having money are important to you. That's the price we pay in a world where we can achieve a great life by growing our bank account. The flipside is that our basic needs require us to have a paycheck through the door. It's why we wake up every single morning and go to work, even when we don't want to.

The glorious part of building a portfolio career is that when you wake up, you know you're working for yourself, doing creative, fulfilling work that helps you build your mini empire. But to keep things ticking along, we need sales, revenue, and profit.

And that's why we need a good grasp of the economic models that power portfolio careers, especially when you're early in your journey, putting together your first lines of business.

If you're reading this, it's because you're likely one of the following:

• Coach
• Consultant
• Entrepreneur
• Freelancer
• Founder
• Creator
• A 9-5er looking to start their portfolio career journey
• Or a blend of the above*

*I'll group all of the above as Portfolio Careerists or "PCs" for short

If you're not happy with your existing business models or are looking for new opportunities to grow, then this essay is for you.

Note this won't be about tax (I'm not qualified, aha). Instead, I'm going to cover the foundational principles around a portfolio career, talk about scale, price points, customer LTV, churn, and all the marketing goodies I've picked up over a 9-year career of working across: service-based businesses, software, agencies, coaching, cohort courses, and digital products. So let's dive in.

Baseline of survival

Before we dive into lofty visualizations of millions or quadruple-six-figure years, we need to know our "comfy number". This is a number you can take home from your monthly salary and still pay your rent, mortgage, all your bills, car, utilities, and have enough money to enjoy life without constantly penny-pinching.

Now, if you're a current PC, you likely know your number. But if you're in a 9-5, you'll need to process: "Okay, if I leave this job, what do I need to keep the lights on?" Look at your finances, look at your outgoings, and calculate the total.

The comfy number is an antidote to stress. As I've mentioned in the intro to this essay, losing sleep ain't healthy. But even from a practical, productivity standpoint, it's hard to operate when you're coming from a place of scarcity, desperation, panic.

This is counter to the hustle-culture dogma that tells us to go all in, put it all on the table, and just keep locking in. Believers in this mantra love to think that the only route to success is through relentless effort, long hours, grinding, cutting back on all needless expenses, and prioritizing work above all else, including friends, family, and mental and physical health.

In my experience, this just isn't true. This only works for the 1% of single individuals with no dependents and no friends, and those who have a unique mindset that allows them to essentially eat both metaphorical and physical crap for an extended period of time.

If you're not in that 1%, you need a clear mind for this game, and a reliable, secure way to keep enough money in the door so you can provide for and be present for those around you, and hit that comfy number (even if this means relying on a 9-5, part-time work, or freelance projects that eat up a lot of your time).

If you're thinking, "Great, so how can I hit that number?" I can't blanket-prescribe the best route for every reader; it's too closely tied to your unique skill set, circumstance, and experience. But if you continue reading this essay, you should have a good grasp of a model that you can take to market.

A jargon cheat sheet

In the rest of this essay, I'm going to be flying through a lot of business terms, marketing acronyms, and whatnot. So let’s cover them in one fell swoop, and if you need to, you can scroll back up and remind yourself of the definition.

• CAC = Customer Acquisition Cost = how much you spent getting a customer (ads, marketing team, tech)
• LTV = Lifetime Value = the amount a customer pays you over their lifetime
• ICV = Initial Contract or Customer Value = the first amount of money a customer pays you
• Revenue = how much money comes in the door
• Profit = how much money is left over after you've paid your costs and overhead
• Costs = expenses directly tied to a sale (transaction fee, commission to partner etc.)
• Overheads = costs not directly associated with the product (office, software)
• High ticket = relatively expensive
• Low ticket = relatively cheap
• Upsell = after closing a low-ticket sale, you offer a higher-ticket option.
• Downsell = after making a high-ticket sale, you offer a low-ticket option (usually used to retain customers)
• Cross-sell = after making a sale, you offer similar price-point products
• Clickthrough rate = How many people who visit your profile on social click through to your website or landing page?
• Conversions = What percentage of people who engage with your content, or visit a landing page or checkout page, turn into subscribers?

I hope that's clear, so you don't get bogged down in this next bit.

An ode to 1000 True Fans

A timeless and well-referenced essay on the economics of a creative career is "1000 True Fans" by Kevin Kelly. In the essay, Kelly talks about the idea that you need 1000 true superfans who spend $100/year on your work, and then you've got a six-figure business. 

I’ll summarise the main points so you don’t need to read the whole article.

In the pre-Internet world, geography and distribution were major barriers for creatives, stopping them from gaining the necessary scale to make a living from their work. Before the web, even the practicalities of getting paid were tough (if you weren't paid in person, it had to be a check in the mail). Now with the internet and social media, you can create value, whip up a website, reach strangers all over the world, and they can pay you via Stripe.

Now, 1000 true fans and $100 is still pretty tricky when you're a musician or artist who actually creates artwork. People, unfortunately, just don't spend that much money on art. I'm an example: take one of my favorite bands, The Gaslight Anthem. I've been a fan for nearly 15 years, have accrued a ton of listening hours on Spotify, have been to two gigs, and have bought one physical record. I know Spotify royalties are pennies, so taking that into account, they're not going to even remotely close to $100/year from me. 

That said, as a creator building a portfolio career in the modern era, that number isn't all that far off. Especially when you look at this breakdown.

$100,000:

• 1 person × $100,000
• 10 people × $10,000
• 100 people × $1,000
• 1,000 people × $100
• 10,000 people × $10
• 100,000 people × $1

Doesn’t look too crazy, right? A few high ticket sales, mixed with healthy medium and low ticket volumes, and you’ve got $100,000. And this isn't to say you need to land on those exact numbers. The underlying question is this: can you create an offer stack and make enough sales to meet those price points every year?

That's what I'm hoping you'll infer from the rest of this essay.

Time math vs. money math

Now, you might have started to think about the offers you could create to start building income streams and hit six figures. But this brings me on to a section that nobody talks about when they're getting you excited about hitting six figures.

The truth is, the number on your tax return tells you nothing about what your day actually looked like to get there. $100k as a consultant doing ten $10k engagements a year is a different planet from $100k as a creator selling ten thousand $10 ebooks. 

Same revenue. Very different life.

Let me walk you through what each of those rows actually feels like.

The 10 × $10k life is calls, proposals, decks, and deep work. You know every client by name. (You probably know the name of their cat at this point). When one of them leaves, it feels crap because you've just waved goodbye to 10% of your income. (I’ve had $5k/month disappear two days after Christmas, it ain’t nice). The work at this level is meaty. You need to be good at sales, or at least good enough to charge that price without flinching when you say it out loud.

The 1,000 × $100 life is the opposite. You're a marketer. You're running ads, building email lists, writing landing pages, and tweaking funnels. You don't know your customers as intimately (though 10 or so will be on your radar). The upside is that when one of 1000 refunds, you don't feel anything because there are 999 others. The downside is you're feeding a machine that's always hungry. New content. New campaigns. New launches. The treadmill never stops.

The 10,000 × $10 life is creator territory. You're posting every day. Your face is your brand. You live and die by the algorithm. The economics only work because you've built an audience that costs you nothing to email. But that audience took three years to build, and it'll take three months to lose if you stop showing up.

You see where I'm going with this.

The 1 × $100,000 client is a different beast entirely. This is likely not relevant to most of you unless you’re working at enterprise levels on large consulting engagements, six-month retainers, or a single done-for-you project for a company with a mega budget. You've got one client. They are your business. If they don't renew, you're at zero. The pressure is enormous, but if you like depth and dislike juggling, it's also kind of a dream.

Here's the thing nobody tells you: most PCs pick a row based on the number and not the life. They see "10,000 × $10" and think passive income, scalable, sexy. They don't think about the daily content slog for the next five years. They see "10 × $10k" and think too much like having a job. They don't think deep work, knowing your clients, and real impact.

You have to pick the row that matches the life you actually want to live.

A few questions worth asking yourself:

Do I get energy from a small number of deep relationships, or do I get drained by them? Am I a better salesperson or a better marketer? Am I building an audience because I want to, or because I think I have to? What season of life am I in? Can I afford a model that takes three years to compound, or do I need money in the door this quarter? If a single client or customer churns, what does that do to my income and my mood?

Your honest answers to those questions narrow the list down to one or two rows pretty quickly.

And the last thing I'll say is this. There's no rule that you have to pick a single row. A lot of the most resilient (and happy) PCs I know run two rows at once, a small number of high-ticket engagements that pay the bills, and a low-ticket digital product that ticks along in the background. The high-ticket work funds the time to build the low-ticket asset. The low-ticket asset is the lead magnet that attracts high-ticket clients.

But before we get to flywheels, let's talk about how you actually price the offers in each row.

Proximity offer

As a PC, you'll help people or businesses achieve their goals and desired outcomes. How much you help and how quickly you get them to the result are the levers you pull when it comes to pricing and creating your offer stack/pricing tiers. The setup you see a lot of PCs roll with is what some call a Proximity Offer. The basic premise of the Proximity Offer is that the more contact the customer has with you, the more they pay. You can often spot these out in the wild, broken down into three tiers:

• Do It Yourself (DIY)
• Done With You (DWY)
• Done For You (DFY)

DIY is when you educate the customer and provide them with the framework, workflow, and to-do steps to follow, so they do it all themselves. These are typically seen as digital products, ebooks, online courses, and paid communities.

Next, you have Done With You, which offers more customer interaction and includes a coaching or guiding mechanism that provides more support than the DIY packages. This extra support usually takes the form of personalized, synchronous or asynchronous calls and communication that provide the customer with bespoke feedback and troubleshooting, helping them reach their desired outcome faster and more effectively.

Finally, Done For You. This is where the customer pays a premium price to have everything executed and implemented for them.

I've put together a table so you can see examples for a few different service types and insustries:

Service

DIY

DWY

DFY

Personal Trainer

Recipe guides, workout guides, and exercise videos

Online coaching and check-ins, personal workout plans, and diet plans

In-person personal training sessions in the gym

Web designer

Website templates, videos, and tutorials on how to piece everything together

1-1 website audits, feedback, optimization suggestions

You build them the website

Therapist

Self-guided therapy books

Group therapy sessions

1-1 therapy sessions

Ghostwriter

Writing guides and best practices

Writing critiques and feedback asynchronously

Fully ghostwritten posts

You should be able to look at the above and piece together your own proximity offer based on what you help people with.

Building the flywheel

I made the proximity offer look like a menu. Pick a tier, set a price, and off you go. That's the basic version. The advanced version realizes that those tiers aren't a menu at all. They're a flywheel.

Each tier feeds the next one. When done well, your DIY product is what draws strangers into your world and serves as a little taster. Your DWY offer is what they upgrade to once they've tried the DIY and realized they want a bit more help. Your DFY engagement is what the most committed (and best-paying) DWY clients eventually move into when they realize they'd rather just pay you to do the thing.

Let me give you a real example. A fitness coach launches a $47 workout guide. Some people buy into it and follow it, and that's the end of the relationship. Fine. But a chunk of the customers like the coach's style, but realize they need more accountability. They sign up for the $97/month group coaching program, which is the DWY. A subset of those clients want bespoke plans, weekly check-ins, and direct access. They move into $200/month 1-1 coaching, custom app access, custom nutrition plans, custom workout plan, and the DFY.

This is the bit most PCs miss. They build a single offer, sell it, and then panic when growth plateaus. The reason this happens is that the PC hasn’t facilitated mobility between the tiers. So when a customer is "done" with that product, they leave, and you have to go and find a new customer to replace them. That's exhausting. It's also why so many solo businesses feel like a hamster wheel.

A proper flywheel does three things at once.

It lowers the cost of acquiring a new customer, because the front-of-stack product is cheap or free. People don't need to trust you very much to buy a $47 guide. They need to trust you a great deal to spend $200+ per month.

It raises the lifetime value of every customer, because a meaningful percentage of them will move up the stack over time. You're not making $47. You're making $47, then $97 per month, then $200, then who knows what.

And it creates a self-sustaining engine because the people who move up the stack often become your testimonials, case studies, and evidence for the next wave of DIY buyers. Your top customers become your distribution.

Now, a few practical things worth flagging.

You don't have to build all three tiers at once. In fact, you really shouldn't. Most PCs I've watched succeed start in the middle, DWY, the coaching tier, because that's where you can charge a real price without needing a huge audience or a massive content engine. Once that's working, you build DIY products out of the DWY work. The frameworks you teach your coaching clients become the ebooks. The templates you give them become the digital download. The recordings of your group calls become the course.

Going the other way, building DFY first, works too, especially if you're coming from a senior corporate background where you can charge premium prices day one. Or you deliver clearer and confined outcomes for clients like a complete rebrand, or a website, or you build an app, etc. Then the DWY and DIY tiers get built later as ways to scale, offer paid low-ticket lead magnets, or increase customer LTV.

What rarely works is starting with DIY. It’s a slog to build the audience and the authority to make the numbers work. For example, when have you bought $39 ebook from a stranger with no audience and no track record? Likely not very often. You need either a name, an audience, or a proven outcome to make low-ticket digital products land. Most PCs don't have any of those at the start. So they grind on a course launch for six months and wonder why nobody bought it.

Start where the trust is highest, and the required audience is smallest. That is the DWY and DFY tiers. Then build downward as you grow.

The other thing worth saying: not every flywheel needs all three tiers. Some PCs run a two-tier model very happily, a high-ticket DFY engagement and a self-serve DIY product, with no middle. Some run DIY and DWY only, with no DFY, because they don't want the implementation work, or the nature of the DFY increases overheads like hiring. The principle isn't "you must have three tiers." The principle is "your offers should feed each other instead of competing for attention."

So, to wrap this section, if your only product right now is a single offer, ask yourself: where does the customer go after this? If the answer is "they leave," you should revise your model. The real value is turning that transaction into the first step of a longer relationship.

That's what the flywheel is. A relationship machine that happens to also generate revenue.

The recurring vs. one-off debate

Another business model decision you need to make is whether to offer your product or service as a one-off cost paid upfront (or in installments) or as a recurring subscription that runs indefinitely. As a generic example, the customer can build their music collection one record or CD at a time, or pay monthly for Spotify for an eternity.

People get this warm, fuzzy feeling inside when they think about recurring income. Those two magic words "passive income" come to mind. It's a lovely idea, right? Front-load a bit of effort, build a reliable way of getting customers, and then see money roll in for months, maybe years on end.

It's why so many PCs love building paid newsletters or paid communities. You can use the income data to build a level of certainty in the business. You know that you typically get X new signups or members each month. You know you typically lose Y customers a month. Your CAC is measurable, and your LTV is clear. It costs N amount in overheads. And with all those numbers, you've got a baseline of revenue and profit you can reasonably forecast.

But what people don't talk about is the price you pay to get there.

You're normally doing a lot of work up front, delaying gratification, and without a guarantee of success. Then, once you've found traction and have a steady stream of customers, there's customer support, refunds, and constant technical updates. Additionally, if it's a content-based business like a paid newsletter or community, you need to be constantly present and feed the hungry content machine with fresh material, or people start dropping off.

Meanwhile, the one-off route is often looked down upon. There's no guarantee of a monthly income. You have to constantly be on the hunt for new customers. If you stop sales and marketing efforts, sales dry up. And you also miss out on huge user outliers, for example, if a customer uses that thing you sold only once, while another customer uses it a hundred times, you're still only getting the same amount of money.

Focusing on those negatives as an excuse to avoid one-off products ignores the major benefits of one-and-done. You build the asset that helps someone achieve the outcome, they pay for it, they get it, and that's it (bar maybe a little support/refunds).

A solo software builder I follow on X, Marc Lou, swears by one-offs. He says that unless there are heavy recurring costs associated with providing the thing, you should go the one-off route. And he has a fair point. One-off takes away that headache, especially if you build a high-value product at a healthy price point. For example, let's say you have a product that is valued at $400. Offer a low-priced monthly subscription at $20/month for that product and work hard to ensure the customer stays for 20 months to reach that valuation. Or you can just cut out all the worry about churn and go straight in at $400.

I've marketed and sold both one-off and recurring products in my career, and the battle to keep recurring customers is a never-ending headache and bandwidth sink. This battle is rough because, as a business, your margins require you to recoup your CAC and maximize LTV and profit.

Now, I'm not sure what'll work for your specific skills and offer. But you can have a blend of both across your portfolio career. Plenty of people do. An SEO consultant can implement a comprehensive audit, setup, and strategy for a one-off fee, then add a small monthly retainer for audits and strategy suggestions. That retainer also gives you an in for more one-off bolt-ons like: "Hey, we spotted this thing that needs fixing. We've got guides and assets on how to do it yourself for free, or we can deploy some manpower and fix it for you today." That's always a smart way to bake in both one-off and recurring income.

So don't be drawn in by the allure of recurring passive income. Nothing is passive. It always comes at a cost. Work out whether you can feed the recurring beast. If there are ongoing costs to providing the service, then yes, a recurring model makes sense. But if not, think: right, this product works as a one-off, and there can be upsells or cross-sells beyond that initial sale, either into recurring assets or into more one-offs.

TL;DR: Be open to the opportunities to combine both revenue models. 

Red oceans vs. blue oceans

Another concept worth knowing is the red-ocean vs. blue-ocean philosophy.

When you're building a product or service, the tantalizing option is to create something the market has never seen before. Tap into an untapped niche. Be first to market. Land in a blue ocean (calm waters, no sharks, no competition) and race away with sales because the audience has never seen anything like it.

It's a seductive idea. It's also a fallacy many PCs fall for.

Here's the thing: there's usually a reason those oceans are blue. Either the demand isn't really there, or there's a hidden reason no one has tried to serve it. What you thought was an ocean of opportunity was actually a muddy puddle you’re annoyed you stepped in.

A red ocean, by contrast, is red because it's full of sharks. Lots of competition. Lots of noise. But there's a reason all those sharks are circling, there's a real market, a real need, and people who are willing to pay. The competition is itself the proof that money flows through that water.

Don't be afraid of red oceans. Look at your portfolio career. Look at your experience, who you've worked with, and who you're currently working with. Take the skills, activities, and audience you've already built, and ask yourself: is there more of that audience I can serve? Is there an adjacent audience with huge crossover? Are there services I've seen others already make good money from that I could replicate, but slightly better?

Maybe you tweak the offer. You could serve a niche that the existing players overlook. Maybe you bring a new approach or a new tool to a problem that's been solved the same way for a decade. That's a much better bet than trying to conjure something completely novel out of thin air. The odds of nailing a blue ocean play on your first try are next to zero. And, like we've talked about re: stress, sleep, and lifestyle design, you don't want to be chasing a pot of gold at the end of a rainbow when there's already ample opportunity right in front of you. Proven business models. Proven service types. Audiences that have already shown they'll pay. Start there.

The Blue Ocean Dream is great for biopic and entrepreneur films like The Social Network. The red oceans, with proven markets and demand, are where PCs actually thrive and get paid.

Charging weekly vs. monthly

In these big essays, I love to give you some tactical tidbits, or straight-up mantras you can take away and apply forever. And here's a good one: if you can, charge by the week, not the month.

People treat "a month" and "four weeks" as the same thing. They aren't. There are 52 weeks in a year, which is 13 four-week cycles (not 12). So if you bill $1,000 a month, you collect $12,000 a year. If you bill $1,000 every four weeks, you collect $13,000.

Same headline price. Same perceived cost from the client's side. An extra grand in your pocket. And if you scale that up, $4,000 every four weeks instead of $4,000 a month is an extra $4,000 a year per client. Big difference.

Now, a quick caveat. I don't think you should charge by time at all unless you can’t avoid it. Your time isn't what the client is paying for. They're paying for the outcome. But if you're going to price a recurring engagement based on time, charge by the week or by the four-week cycle, not by the month.

Distribution is king

Before I start this section, I want to say that a deeper dive into channels and distribution could be a whole other essay, but these four things are the core principles that you need to know from a PC economics standpoint:

1. Be where your customers are. Put your offer in front of them.
2. Don’t rely on your opinion or gut feel. Volume and data are the evidence you need to confirm your hypothesis.
3. Put in the reps. Put your offer in front of a lot of people. Measure the conversions and overall appetite for your service/product.
4. Do the unscalable things first, e.g., cold messaging, cold emails, jumping on one-to-one sales calls, before applying those learnings to more scalable, expensive, or automated approaches.

As a marketer by trade, I've led multiple projects across brand, growth, and content teams in agencies, software companies, and personal brands. And the one thing that is king in all of marketing is distribution. Can you get eyeballs on your offer? Can you do that at a reasonably low cost or in a reasonably efficient way? Does it lead to conversions and sales?

Because building and delivering your product/service is only part of the battle. Distribution is the biggest hurdle, and time in the market and actual sales are the only real metrics that matter. You could have the best service, the best offer, or the best product in the world, but if no one knows about it, no one's going to buy.

But the best part of getting plenty of eyeballs is learning what the market actually cares about.

You could create (what you think is) the best product, service, website, or content in the world, but you won't know unless you expose it to enough eyeballs. Only then can you review the data and see the truth. The market and the sales data are the only opinions that actually matter.

I've been on team projects where too much time was spent on optimizing, tweaking, and perfecting something when the best thing to do was ship it, bring in a lot of traffic and eyeballs, and see what the response was.

So when building your offer, always think about distribution channels that match your:

• Audience
• Offer
• Budget
• Skillset

If you nail Distribution, you can get a lot of things wrong, but everything would still work out because you'll either pull in a lot of money revenue or you'll learn a shit ton. Businesses rely on two major inputs: growth and revenue. To that end, apply the core principles listed above. Pick one channel, put in the reps, track all the metrics that matter, and optimize performance from there. Don't over-optimize a product or service if you're still not getting any market feedback. 

Closing thoughts

So that's the model. The math, the offers, the flywheel, and a little note on red oceans and distribution.

I hope one message you pulled from everything above is that. There are loads of routes to market. Multiple ways you can build your offer stack. You don't need to create something truly unique. You can follow the market and operate in red oceans. And there are plenty of business models you can apply to those red oceans; your route depends on your preferences, your audience, and the type of service you feel you can deliver at this moment. 

What next?

1. If you’re ready to build your first offer, use my Offer Builder expert Daphne, and she’ll help you put together your route to your first Offer Stack and go-to-market plan.
   
   
2. If you’re just starting out, try out my Personal Branding AI Expert, Jessop, to crystallize your brand story, create your game plan, and get you moving towards your Portfolio Career goals.
   
   
3. If you want to hear more from me, join The Path newsletter.

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