What are "toll positions"? (A refresher post!)

Originally Posted by Thomas

Most of info products are not really toll positions. You don't have to buy any of Dan's product to learn about writing successful sales letters or how to create "attention-grabbing" headlines. However, if you want to buy HIS product, he will get a cut (unless it's through a secondary market).

On the other hand, creating a platform where you sell other people's products or perhaps getting exclusive rights to their product(s) would be a toll position.

PS. I really like this thread. Thank you for bringing this subject up.

Good input Thomas.

Keep in mind a couple things about the info products Dan puts out...

First off he's joked that he wishes that "Ultimate Sales Letter" and "Ultimate Marketing Plan" would go away!

Why?

Because they've "How to's" and not "advocacy" books which represent virtually every other book he's written.

The selling of info products is not DK's prime focus.

His prime focus is to get the $19,000.00 initial consulting fee and then put the wheels in motion for at least a $100,000 copywriting/consulting gig– which many times includes royalties.

For a full understanding of the Dan Kennedy "process" I would suggest his "Influential Writing" workshop that he put on in 2007... I think you would find it to be a real eye-opener!

Keep in mind Dan has talked about "toll position" (and Brody's course) during a couple of his seminars. And he purchased the rights to Dr. Maxwell Maltz's information, which is one way of getting a "toll position"– buy an existing toll position!

[Dien Rice]

Originally Posted by MichaelWinicki

Good input Thomas.

Keep in mind a couple things about the info products Dan puts out...

First off he's joked that he wishes that "Ultimate Sales Letter" and "Ultimate Marketing Plan" would go away!

Why?

Because they've "How to's" and not "advocacy" books which represent virtually every other book he's written.

The selling of info products is not DK's prime focus.

His prime focus is to get the $19,000.00 initial consulting fee and then put the wheels in motion for at least a $100,000 copywriting/consulting gig– which many times includes royalties.

For a full understanding of the Dan Kennedy "process" I would suggest his "Influential Writing" workshop that he put on in 2007... I think you would find it to be a real eye-opener!

Keep in mind Dan has talked about "toll position" (and Brody's course) during a couple of his seminars. And he purchased the rights to Dr. Maxwell Maltz's information, which is one way of getting a "toll position"– buy an existing toll position!

Hi Mike,

Thanks for sharing this...! Fascinating!

So (to make it clear) - his books are the "front end"... The consulting, copywriting, and possible associated royalties are the "back end"... and where he makes the "real money"...

As for Maxwell Maltz, yes, I think Dan Kennedy and a bunch of others (I think Jeff Paul was also involved) did buy the copyright to Maxwell Maltz's "Psycho-Cybernetics"... I think they even put out a new edition - "The New Psycho-Cybernetics."

Of course, that's only one toll position product. I don't know what they paid, but if they got a good deal, they would have gotten many times their money back, and I'm sure they're still making money from it now. Of course, there's nothing stopping anyone from getting many toll positions... There's no reason to stop at just one.

The problem I see with consulting is that you get paid... and that's it. In most cases, you have no further "ownership" of your work. (Copywriting at the "high end," where you can also get paid royalties for sales, may be a little bit different from other types of consulting regarding this - but only as long as they keep running your ad... Plus, it's not like you can provide the same ad to a different client if the first client tires of it.)

With a "product-based" toll position, you can potentially get paid for a longer period into the future... The other thing is, when you "own" the toll position, there are also other things you can do with that. For example, if you owned "Psycho-Cybernetics," you could put out an audio version (they've done that already), make a movie out of it, or a documentary, or have it included as part of a larger collection of similar works (with books or articles owned by others), create a version for teenagers, you could license out excerpts of it to be reprinted in promotional materials, turn the book into a paid seminar tour, have a "Psycho-Cybernetics" coaching program (where others do the coaching under your license), if you have a list of customers, there are further things you can do with that list, create collaborative works, e.g. a Rich Dad / Psycho-Cybernetics product, or a Donald Trump / Psycho-Cybernetics product, etc. For all these other ideas, you can get others to do the work, because you own the valuable "toll position" - so they can't bypass you.

Best wishes,

Dien

Originally Posted by Dien Rice

Hi Mike,

Thanks for sharing this...! Fascinating!

So (to make it clear) - his books are the "front end"... The consulting, copywriting, and possible associated royalties are the "back end"... and where he makes the "real money"...

As for Maxwell Maltz, yes, I think Dan Kennedy and a bunch of others (I think Jeff Paul was also involved) did buy the copyright to Maxwell Maltz's "Psycho-Cybernetics"... I think they even put out a new edition - "The New Psycho-Cybernetics."

Of course, that's only one toll position product. I don't know what they paid, but if they got a good deal, they would have gotten many times their money back, and I'm sure they're still making money from it now. Of course, there's nothing stopping anyone from getting many toll positions... There's no reason to stop at just one.

The problem I see with consulting is that you get paid... and that's it. In most cases, you have no further "ownership" of your work. (Copywriting at the "high end," where you can also get paid royalties for sales, may be a little bit different from other types of consulting regarding this - but only as long as they keep running your ad... Plus, it's not like you can provide the same ad to a different client if the first client tires of it.)

With a "product-based" toll position, you can potentially get paid for a longer period into the future... The other thing is, when you "own" the toll position, there are also other things you can do with that. For example, if you owned "Psycho-Cybernetics," you could put out an audio version (they've done that already), make a movie out of it, or a documentary, or have it included as part of a larger collection of similar works (with books or articles owned by others), create a version for teenagers, you could license out excerpts of it to be reprinted in promotional materials, turn the book into a paid seminar tour, have a "Psycho-Cybernetics" coaching program (where others do the coaching under your license), if you have a list of customers, there are further things you can do with that list, create collaborative works, e.g. a Rich Dad / Psycho-Cybernetics product, or a Donald Trump / Psycho-Cybernetics product, etc. For all these other ideas, you can get others to do the work, because you own the valuable "toll position" - so they can't bypass you.

Best wishes,

Dien

Hey Dien,

No question a consulting toll position is a different animal from a product toll position.

Different strokes for different folks kind of things. Some prefer sitting on the couch eating Cheetos while their product or products sell without their involvement.

Yes in the consulting toll position it's a swop time for money thing, but there's a certain amount of "Hey I'm a celebrity (in my niche)" kind of thing and some like that.

I don't think there's a right or wrong way to go.

I'd rather see folks just get out and try to find their own toll position in whichever area appeals to them... but I'm probably getting way ahead of myself.

Quite honestly I think getting or earning a toll position is pretty hard. It's most likely not going to happen without a lot of time and other resources invested– at least for a "big potatoes" toll position.

[Dien Rice]

Originally Posted by MichaelWinicki

Personally I think the "I'm the expert toll position" is in many cases more easily achieved and is easier to maintain long-term than the "find a product" toll position.

Thanks Mike... it's true, being the "expert" is also a type of toll position. That's why some consultants can get very highly paid... People feel that those consultants have expertise they need, and which they can't get from a cheaper consultant!

A quick example is Denny Hatch. He's an expert in direct response marketing, including copywriting. He took down his web page with his consulting fees, but you can still see the old version from 2013... At that time, he charged $700 per hour, or $5,000 per day, to consult with you about your business and marketing.

https://web.archive.org/web/20130530...tons/fees.html

He can charge $5,000 a day - and get it - because he has a strong "expertise" toll position...

Of course, there are many others who get even more... and they can get it due to their strong toll position as an expert...

In this day and age the ability to knock-off a product is beyond epidemic... which makes the lifespan of products (and a product toll position) shorter and shorter.

I think it depends on your protection. For example, it's extremely easy to "knock off" Mickey Mouse, and print Mickey Mouse T-shirts for example. However, you don't see too many of them around - at least in "Western" countries. The reason why is because Disney will legally defend their "toll position" and quickly put these knock-off artists out of business, and make sure they are heavily fined.

However, you need to have the toll position in the first place in order to do this!

In countries where protection for copyrights and trademarks is weak, it's a different story... But that doesn't mean you can't still make a lot of money, for long periods of time, in the many countries (including the USA) where the "rule of law" is strong...

Thanks Mike!

- Dien

Originally Posted by Dien Rice

I think it depends on your protection. For example, it's extremely easy to "knock off" Mickey Mouse, and print Mickey Mouse T-shirts for example. However, you don't see too many of them around - at least in "Western" countries. The reason why is because Disney will legally defend their "toll position" and quickly put these knock-off artists out of business, and make sure they are heavily fined.

However, you need to have the toll position in the first place in order to do this!

In countries where protection for copyrights and trademarks is weak, it's a different story... But that doesn't mean you can't still make a lot of money, for long periods of time, in the many countries (including the USA) where the "rule of law" is strong...

Thanks Mike!

- Dien

No question Dien copyright infringement laws (and others) are a great deterrent.

But first you need to have that "toll position" product in order to have something to protect.

Which brings me back to my whole point in all this... I think creating or finding or building a "toll position" is a difficult thing to pull off.

[Dien Rice]

Originally Posted by MichaelWinicki

Which brings me back to my whole point in all this... I think creating or finding or building a "toll position" is a difficult thing to pull off.

Hi Mike,

I think different "toll positions" (obviously) have different values... For example, owning the copyright to "Psycho-Cybernetics" or "The Lazy Man's Way to Riches" is probably more valuable than owning the copyright to a book all about an obscure Australian radio play that ran in the 1930s/1940s. (A friend of a friend co-wrote the book I'm talking about - and he and the other author really struggled to sell copies, because it's about such an obscure interest!)

However, valuable toll positions can be bought, or you can do a deal. I recently purchased a set of audiobooks (in a non-business niche), produced by an expert in that niche, in which I'll own the copyright outright. The author put a lot of time and effort into it, and spent more money than I paid for it (and that doesn't even count the hundreds if not thousands of hours of his time), and it's a good product... it even got good reviews in established magazines in that niche. However, it's with these kinds of products where having some sales/marketing skills can really help... There are many people out there who create "toll positions" with great potential, who can't market them. If you can't or don't want to buy them outright, many of them would be open to a profit sharing type of deal. If you do this, just make sure you get the agreement written on paper (that contract will be your toll position!).

Best wishes,

Dien

[Dien Rice]

Originally Posted by Dien Rice

However, valuable toll positions can be bought, or you can do a deal.

Here's another example I talked about recently... This is a deal which didn't work out - even though I did get a toll position...

http://www.sowpub.com/forum/showthread.php?p=35452

What I didn't mention in the earlier post was that I had a deal with the inventor (who owns the patent in multiple countries) for a percentage of the gross sales, if we got it to marketability. I would spend zero dollars of my own money.

It didn't work out because, although he wanted my advice, he insisted on doing the exact same thing he was doing before, which wasn't working. I pointed out why it didn't work before (and by implication, why it wouldn't work again), but he was very insistent on doing it the exact same way. I suppose he wanted me to perform some "magic" to make it work this time, when the exact same approach before had failed (and failed for very logical reasons).

I explained it in more detail in my earlier post...

After about a month, I said I'm no longer interested, as I realized I was wasting my time. (I've kept tabs on how things are going, and 3 years later, he's still stuck where he was before. He tried a Kickstarter campaign, which failed dismally - he got pledges for less than 3% of the money he was asking for. This is not a product which would lend itself well to a Kickstarter campaign, in my opinion. It's a good product, I think, but most of the people who would buy this product are generally not internet-savvy, and would never have heard of Kickstarter...)

What this shows, though, is the principle... You can get "toll positions" with zero money spent. But yes, there is some work involved in doing it this way... However, lack of money is not really an obstacle to getting toll positions.

Best wishes,

Dien

[GordonJ]

The I'm the expert model is great, because the products are proprietary.


So being an AFFILIATE is one way to borrow that expertise and the other, as we've discussed many times, is to be the Certifier for the use of a name. gkic (Kennedy) uses the affiliate way

and Jeffrey Gitomer uses the Certification way.

I agree there is NO across the board definition for a toll booth, copywriters who license their ads have one, like musicians who are paid when the song is used.

Also, most experts like these have products they control, some they create and others they acquire like Kennedy did with Maxwell Maltz.

No right or wrong on any of this stuff other than if it works for you.

Some projects don't need two years to develop, others may take 5, all depends on your goals.

Gordon

PS a good toll measurement is survivor ship.
When Dan goes so do the 100k consulting gigs.
Phil Straw took over for Jim Straw and holds on to the toll position of having control over Jim's decades of products.

So a toll preserves the legacy and continues as the expert takes his personal consulting with him and leaves behind his products,

Originally Posted by MichaelWinicki

Great points as usual Gordon!

Maybe this is where the concept of the "toll booth" becomes a little fragmented.

What I mean by that is maybe we need to consider if it's a toll booth that can command .05 and one that can command $5?

Meaning that some business models are going to be more lucrative with far less work involved than others, but that doesn't mean a toll position that makes a net profit of $20,000 a year and requires a half-dozen hours of work per week is a worthless toll booth. For many folks they would be all over that.

Personally I think the "I'm the expert toll position" is in many cases more easily achieved and is easier to maintain long-term than the "find a product" toll position. In this day and age the ability to knock-off a product is beyond epidemic... which makes the lifespan of products (and a product toll position) shorter and shorter.

And while Dan is both prolific in his ability to churn out content and disciplined about doing it... keep in mind that much of his new content is simply regurgitated from earlier content and he's very good at commenting on someone else's content. I don't fault him for that, it's how I would do it. That doesn't make him gifted. If makes him sharp for knowing what he can get away with while doing as little as possible in the way of brand spanking new content creation.

I've got a toll position product that does reasonable well for me. But it sure wasn't easy nor inexpensive getting it started. In addition you many times need additional funds to achieve market acceptance.

Yeah, you can go the wholesale route but that arena is filled with tiny margins and demanding retailers.

As far as what Don does, once you get an advertising product off the ground, and if it makes sense in the market, reselling existing clients/customers on the idea will become easier over time. Again, is this a $5 toll? No. But for many who would like a toll position and neither have the funds to develop their own products nor the time to become a "I'm the authority" toll position holder, the Don Alm approach is better than a sharp stick to they eye-socket.

[Ankesh]

Thanks Gordon and Michael for this awesome conversation.

In my mind, I have 2 definitions.

1. Toll position. A place that you create for yourself in the middle of a lucrative field so that everyone who wants to be a part of the field has to pay you a cut. Dan Kennedy does that with his info products (from what I know, Dave Dee sold more Dan Kennedy products than Dan Kennedy himself - at least that was true a few years back) and consulting (he gets royalty / commission on good performance).

2. The moat. As Warren Buffet says. Create a moat around your product or company so that others can't compete with you.

Dan Kennedy lacks a moat because anyone else can become a marketing guru too. But Sean Ellis has created a moat by coining a new term "growth hacking." He is the first person people will think of as a guru when it comes to growth hacking. Jay Conrad Levinson had done this too with the term Guerilla marketing.

There are various ways to create moats. Patents and trademarks and using legal options (for eg: many restaurants can only either sell Coke or Pepsi products - not both. This is enforced by an exclusivity contract). Keeping price really low so others can't compete (Walmart). Out innovating others. Being the first one to create a platform (Stock exchanges, airbnb.com etc).

I think a lot of Don Alm type ideas are toll positions because no restaurant or hotel will spare adspace for 2 guys. But they may not necessarily be deep moats unless you employ legal contracts to keep things exclusive.

Hmm - lots to think about.

[GordonJ]

Can the person take a year off, conduct no business and not lose income?

Even 100k a year consultants can't do that.

So, maybe if Don Alm sets his businesses up on an automatic renewal, where they get invoiced and just pay to continue, yes, he has a good toll position. And with all the programs he's done and they simply renew, he has a great toll booth.

This one year off is one way to test a toll booth.

Many in ownership or CONTROL positions of products can easily do this, most gurus or Experts can not.

Gordon

Originally Posted by Ankesh

Thanks Gordon and Michael for this awesome conversation.

In my mind, I have 2 definitions.

1. Toll position. A place that you create for yourself in the middle of a lucrative field so that everyone who wants to be a part of the field has to pay you a cut. Dan Kennedy does that with his info products (from what I know, Dave Dee sold more Dan Kennedy products than Dan Kennedy himself - at least that was true a few years back) and consulting (he gets royalty / commission on good performance).

2. The moat. As Warren Buffet says. Create a moat around your product or company so that others can't compete with you.

Dan Kennedy lacks a moat because anyone else can become a marketing guru too. But Sean Ellis has created a moat by coining a new term "growth hacking." He is the first person people will think of as a guru when it comes to growth hacking. Jay Conrad Levinson had done this too with the term Guerilla marketing.

There are various ways to create moats. Patents and trademarks and using legal options (for eg: many restaurants can only either sell Coke or Pepsi products - not both. This is enforced by an exclusivity contract). Keeping price really low so others can't compete (Walmart). Out innovating others. Being the first one to create a platform (Stock exchanges, airbnb.com etc).

I think a lot of Don Alm type ideas are toll positions because no restaurant or hotel will spare adspace for 2 guys. But they may not necessarily be deep moats unless you employ legal contracts to keep things exclusive.

Hmm - lots to think about.