Harry Potter author J.K. Rowling, with a net worth of around USD 1 billion, is the richest author in the world as of September 2023.
First, she’s an extreme outlier. Next, you can probably guess that most of her net worth didn’t come from books alone — especially when you factor in that she reportedly received royalties of approximately 15% for each book sold, meaning she earned around $1.15 for every copy sold.
As this story played out over 25+ years, we will start at a more modest beginning and ask how many books an author needs to sell to create a $1m/yr publishing empire.
Note that the goal here isn’t generating $1m one time but building a $1m/yr business. We’re going to give them three years to achieve this goal, which we’ll define as their minimum success criteria.
You can use the 5-minute Rapid Viabilty Test recipe for a quick ballpark, but I’m going to build out a more accurate model instead — using the Traction Roadmap tool (bundled with a paid newsletter subscription).
Traction Roadmapping - Direct One-time Business Models
A direct business model is a one-actor model where users turn into customers.
In a one-time model, you charge customers just once for a product or service, i.e., there is no recurring revenue from a given customer (on average). This is the simplest business model, so I’m starting here. In subsequent posts, we’ll take on more complex models.
Here are the inputs to the model:
- Model Type: Direct
- Minimum Success Criteria: Build a $1m/yr publishing empire in 3 years
- Average revenue per book: $1 (one time)
- Products at this price point report a 1% conversion rate
- As there’s always a hockey stick ramp to achieving product/market fit for a new product, we will start with a 10x/yr growth rate
- We know referrals or word of mouth will be key, but we’ll set this at 0% in the first pass and then dial it up.
Here’s what the traction roadmap looks like with these inputs:
Takeaways
1. Hitting a bestselling list isn’t enough to hit the goal
An author must sell 10,000 books/week to hit a prestigious bestselling list like the New York Times or Wall Street Journal.
To generate an income of $1m/yr after year 3, this author must sell 83,334 books/mo, translating to 1 million books a year or 2,740 books daily!
Getting to bestseller status only gets them halfway to their goal - assuming they make the sales rate stick. This brings us to the next insight.
2. Even one hit wonders are technically bestsellers
An author doesn’t have to sustain the 10,000 books/week rate to claim bestseller status. Technically, they only need to do this once.
One of the first market sizing fallacies many founders fall into is failing to account for repeatable business revenue, which, in this case, comes from distinct customers.
This is why the Customer Factory metaphor and principle of repeatable throughput is so powerful even for non-recurring revenue business models.
Here is what this Customer Factory would need to look like at the 3-year point:
3. One time models really come under stress at the top of the funnel
The factory above assumes the author is building a platform (shown as the signup step), which is table stakes today, as publishing companies don’t really drive traffic to a book. This platform may be a combination of an email list and social media followers.
To sell 83,334 books/mo, this author must generate 833,340 subscribers or followers/mo, translating to 10m followers/year or 27,397 followers daily!
That’s a lot of direct traffic.
4. One time models have to rely on high WOM for growth
The only way to hit numbers this large is by relying on high referral rates (word of mouth) and virality. At an 80% referral rate, these numbers drop to attracting 5,479 followers daily, which is still incredibly hard to achieve.
So, if you’re an aspiring author looking to build a $1m/yr publishing empire, you’ll need to ramp up to
- attracting 5000+ followers daily, and
- rely on high word-of-mouth marketing so you can
- sell 80k+ books a month.
5. Most authors rely on a multi-product strategy
While the numbers above are not impossible, they aren’t easy. The root cause is the low payout rate ($1/book). Authors that make it big, either write a series of best-sellers and hit those numbers, or more realistically, take a multi-product approach to increase their average revenue per reader.
In the non-fiction books world, this translates to paid speaking, courses, workshops, consulting. In the fiction books world, this translates to movie deals, holding on to certain rights, licensing fees, and theme parks.
- Increasing the average revenue per reader from
- $1 to $100 (think selling a course), drops these numbers to selling 834 books + courses per month.
- $1 to $1,000 (think selling a workshop), drops these numbers to selling 83 books + workshops per month.
Coming back to J.K. Rollings and Harry Potter, this is how big of an outlier she is:
- J.K. Rollin’s publishers started with a batch of 500 copies for her first book published in 1997,
- she sold 100,000 copies in the first year,
- the book hit the New York Times bestseller list 1.5 years later,
- she sold 1 million copies in year 2, and
- 4 million copies in year 3.
- By 2018, she had sold 500m+ copies.
What started as a children’s book series went mainstream fast. This is what her first three years looked like:
