Process Your By-products

Image: Kenny Luo/Unsplash

In 2013, my friend Robleh showed me Sell Your By-products, perhaps one of the most seminal blog posts at Signal v. Noise. 

The idea is simple enough: Whatever you’re selling, you’re also creating something valuable that you haven’t sold yet. Sell it!

Selling By-Products, In Action

Exhibit A: The lumber industry chops and sells wood. They also sell the by-products, the sawdust, wood chips, shredded wood.

Exhibit B: (Apologies in advance, animal lovers.) Meatpackers slaughter animals, and package, distribute, and sell meat. They make soap, fertilizer, buttons, glue, combs and ornaments, felt, from all the animal parts they don’t use for meat.

Exhibit C: A chef creates and sells culinary experiences. They also sell the recipes, techniques, and memories as TV shows, books, memoirs, etc.

Exhibit D: Basecamp builds and sells software. They also sell the by-products, the knowledge and processes that emerge from this process, via books and courses.

Exhibit E: Amazon creates a platform that sells almost everything. They also sell infrastructure services and data centre operations, through Amazon Web Services. 

The Processing of By-Products

If there’s a common thread with these examples, it’s that by-products aren’t necessarily always valuable without processing. By-products don’t sell themselves—they look like waste at first. It takes a keen eye to see the opportunity in the waste, and a plan to actually process the by-products into new things to sell.

Exhibit A, the lumber industry, requires perhaps the least amount of processing. 

Exhibit B, meatpacking, requires more processing—but the opportunity is pretty clear, as long as you understand the process.

Idea By-Products: When By-Products Require Attention

Exhibit C, the art of culinary work, is when things start to get interesting. They’re not as ingredient-oriented like Exhibits A or B. Rather, cooks are similar to commodities—you can substitute one person with the other, and keep the line moving. 

On the other hand, chefs do the work to become distinguished artists—they obviously improve their craft, but they also experiment with their ideas and try new things. They refine and communicate these thought and cooking processes through experiences at their restaurant, as well as through other people and media—TV, books, and such. 

As a result, you can only eat Jiro’s sushi at his restaurant, and only Jiro can make sushi that way. That’s why there’s a months long waitlist to eat there.

But first, before people are willing to buy into this, they need to care. Chefs give up their secrets, turn up the charm, and put their reputations on the line, doing the hard work of self-promotion, in order to earn the ability to sell their by-products.

Same goes for Exhibit D, selling the thinking behind the software. Many people and companies don’t even sell the by-products; instead, they use the by-products as a sample, to get people interested in the software. The best example in my head is Groove’s blog, especially in its early days, and the documentation of their business growth and getting to $100,000 in revenue.

I’ll throw in another example here, which is Netflix’s Techblog. In 2010, Netflix decided that one key to recruiting talented engineers against popular competitors like Google was to start a blog. 10 years, and 400+ posts later, and they have a valuable asset in solving their problem. So maybe, sometimes the byproduct isn’t meant to be sold; it’s simply meant to help you with another problem. 

This is the fundamental idea behind my editorial studio Wonder Shuttle, which helps companies turn their employees’ experiences and projects into more customers and recruits, at lower costs.

High-Processing Idea and Technology By-Products

Some by-products require a really high volume of processing in order to make it work. Exhibit E, Amazon creating AWS, is probably the best example of this. AWS didn’t really come as an idea—but moreso developed organically, emerging through an understanding of Amazon’s core competencies’ and customer frustrations. AWS’s leader, Andy Jassy, asked for a 57-person head count and built a storage solution, a compute solution, and a database solution at the same time.

The situation sounds complex, but simplified, it still came down to bundling and processing. If they didn’t have the resources, they would either have rolled it out incrementally (e.g., one solution at a time), or just decided not to do it altogether.

Scoping the By-Products Bundle

If you’re an independent, you might not have 57 people to throw at your by-products—so you need to start with smaller, simpler, by-products. You also need to make sure that you don’t let the by-products take too much time away from your core business.

Two Tactics for Processing Idea By-Products

As an author and editorial director, most of my experience is with idea by-products like Exhibit C and D. These can be widely applied to almost every industry:

The first is a simple one, which is starting to organize your research and lessons learned into notes that you constantly review. I use the Zettelkasten system for this. If you’re a freelance writer, then you don’t have to keep digging old stats and facts that you forgot—you’ll have a place where you can find them very quickly and easily. It’s an asset that saves time and energy during the actual process. And who knows, maybe after you compile 300 notes, you can start writing a book proposal—or the actual book—on the topic.

Another method of doing this is to simply skip the note and put it all into a wiki or a blog. Maria Popova’s Brain Pickings and Shane Parrish’s Farnam Street are examples of this. Over the years, they’ve grown into vast collections of writing, but initially started as repositories for them to remember the things they were learning.

A third idea, which isn’t as great (so I didn’t count it in the subhead): I have some by-products that are using no-code automations right now, which maybe one day could be valuable to other people. But at this point, I’m still in the lab tinkering. Yet another idea that is being processed.

By-Products Require Processing

At the end of the day, it’s not as simple as selling. The process for identifying, re-packaging, and distributing by-products can vary. Be sure to keep your eyes and ears peeled—by-products emerge not only from your vision, but also through questions, conversations, and insights from other people.

My Favorite By-Product

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