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The $100 Startup

Metadata

• Author: Guillebeau, Chris

Highlights

This book is different, and it has two key themes: freedom and value. Freedom is what we’re all looking for, and value is the way to achieve it. — location: 110

I did it differently—starting with a list of what I wanted to do, and then figuring out how to make it happen. — location: 118

value is created when a person makes something useful and shares it with the world — location: 132

Often, the combination of freedom and value comes about when someone takes action on something he or she loves to do anyway: a hobby, skill, or passion that that person ends up transforming into a business model. — location: 134

then worked with a small team to create a comprehensive, multiyear study involving more than a hundred interview subjects. Combing through reams of data (more than four thousand pages of written survey answers in addition to hundreds of phone calls, Skype sessions, and back-and-forth emails), I compiled the most important lessons, which are offered here for your review and action. — location: 156

Oddly, many of these unusual businesses thrive by giving things away, recruiting a legion of fans and followers who support their paid work whenever it is finally offered. — location: 230

1000 true fans

“My marketing plan is strategic giving,” said Megan Hunt, who makes hand-crafted dresses and wedding accessories in Omaha, Nebraska, shipping them all over the world. “Empowering others is our greatest marketing effort,” said Scott Meyer from South Dakota. “We host training sessions, give away free materials, and answer any question someone emails to us at no charge whatsoever.” — location: 232

Givers { Give and Take

Microbusinesses—businesses typically run by only one person—have been around since the beginning of commerce. Merchants roamed the streets of ancient Athens and Rome, hawking their wares. In many parts of rural Africa and Asia, much commerce still takes place through small transactions and barter. — location: 236

All of the respondents met at least four of the following six criteria: • Follow-your-passion model. Many people are interested in building a business that is based on a hobby or activity they are especially enthusiastic about. As we’ll see, not every passion leads to big bank deposits, but some certainly do. • Low startup cost. I was interested in businesses that required less than $1,000 in startup capital, especially those that cost almost nothing (less than $100) to begin. • At least $50,000 a year in net income. I wanted profitable businesses that earned at least as much as the average North American income. As we go along, you’ll notice that the range varies considerably, with many businesses earning healthy six-figure incomes or higher, but a baseline profitability level of at least $50,000 a year was required. • No special skills. Since we were looking at ordinary people who created a successful business, I had a bias toward businesses that anyone can operate. This point can be hard to define, but there’s a key distinction: Many businesses require specialized skills of some kind, but they are skills that can be acquired through a short period of training or independent study. You could learn to be a coffee roaster on the job, for example, but hopefully not a dentist. • Full financial disclosure. Respondents for the study agreed to disclose their income projection for the current year and actual income for at least the previous two years. Furthermore, they had to be willing to discuss income and expenses in specific terms. • Fewer than five employees. For the most part, I was interested in unexpected or accidental entrepreneurs who deliberately chose to remain small. Many of the case studies are from businesses operated strictly by one person, which closely relates to the goal of personal freedom that so many respondents identified. — location: 267

The baseline test was, “Could you explain what you do to your grandmother, and would you be willing to?” — location: 285

Market testing happens on the fly. “Are customers buying?” If the answer is yes, good. If no, what can we do differently? — location: 312

Patrick McCrann and Rich Strauss were competitors who teamed up to create a community for endurance athletes. — location: 327

Most of them aren’t geniuses or natural-born entrepreneurs; they are ordinary people who made a few key decisions that changed their lives. — location: 335

{ Outliers

convergence represents the intersection between something you especially like to do or are good at doing (preferably both) and what other people are also interested in. — location: 342

Consider these circles: — location: 345

Many of the projects we’ll examine were started by people with related skills, not necessarily the skill most used in the project. — location: 350

Contrary to conventional wisdom, success in entrepreneurship isn’t necessarily related to being the best at any particular activity. Scott Adams, the creator of the Dilbert comic series, explains his success this way: I succeeded as a cartoonist with negligible art talent, some basic writing skills, an ordinary sense of humor and a bit of experience in the business world. The “Dilbert” comic is a combination of all four skills. The world has plenty of better artists, smarter writers, funnier humorists and more experienced business people. The rare part is that each of those modest skills is collected in one person. That’s how value is created.† — location: 362

$ Scott Adams

here is the not-so-secret recipe for microbusiness alchemy: Passion or skill + usefulness = success — location: 372

This can be broken down as follows: 1. Product or service: what you sell 2. People willing to pay for it: your customers 3. A way to get paid: how you’ll exchange a product or service for money — location: 387

But to look at it more closely, it helps to have an offer: a combination of product or service plus the messaging that makes a case to potential buyers. — location: 394

To start a business, you need three things: a product or service, a group of people willing to pay for it, and a way to get paid. Everything else is completely optional. — location: 421

The hard way to start a business is to fumble along, uncertain whether your big idea will resonate with customers. The easy way is to find out what people want and then find a way to give it to them. — location: 440

Instead of giving people what they really want, the business owners have the idea that it’s better to involve customers behind the scenes … because that’s what they think customers want. — location: 455

Kelly discovered that the secret to a meaningful new career was directly related to making people feel good about themselves. — location: 494

An inefficiency in the marketplace. — location: 501

New technology or opportunity. — location: 504

A spin-off or side project. — location: 510

A changing space. — location: 507

Ask three questions for every idea: a. How would I get paid with this idea? b. How much would I get paid from this idea? c. Is there a way I could get paid more than once? — location: 515

Value means helping people. If you’re trying to build a microbusiness and you begin your efforts by helping people, you’re on the right track. When you get stuck, ask yourself: How can I give more value? Or more simply: How can I help my customers more? — location: 528

A feature is descriptive; a benefit is emotional. — location: 534

Strategy 1: Dig Deeper to Uncover Hidden Needs — location: 550

sometimes what people say they want and what they actually want are different things. — location: 551

Strategy 2: Make Your Customer a Hero — location: 564

“Our training programs make customers a hero in front of their bosses or colleagues.” — location: 575

Strategy 3: Sell What People Buy — location: 582

Like the overeager chef at the beginning of the chapter, I was trying to take them into the kitchen with me, not just giving them the meal they wanted. — location: 594

1. Decide on your product or service. 2. Set up a website, even a very basic one (you can get a free one from WordPress.org). 3. Develop an offer (an offer is distinct from a product or service; see Chapter 7 for help). 4. Ensure you have a way to get paid (get a free PayPal account to start). 5. Announce your offer to the world (see Chapter 9 for more on this). 6. Learn from steps 1 through 5, then repeat. — location: 615

If you have an existing business and are thinking about how to apply the concepts from this book, focus on either getting money in the bank or developing new products or services. — location: 623

Can you contact your customer list with a special offer or incentive? Can you introduce a new product or service to complement your existing portfolio? If you’re a coach or consultant, can you offer a special deal for clients who prepay? Is there a new way you can attract subscribers, clients, or customers? — location: 627

But one way or another … just do something. Friedrich Engels said: “An ounce of action is worth a ton of theory.” Choose the ounce of action today. — location: 632

the freely receive, freely give approach. When all else fails, ask yourself how you can help people more. — location: 660

[{ Give and take]]

Follow these two basic rules: 1. Pick something specific as opposed to something general. Don’t be a “business consultant” or a “life coach”—get specific about what you can really do for someone. 2. No one values a $15-an-hour consultant, so do not underprice your service. Since you probably won’t have forty hours of billable work every week, charge at least $100 an hour or a comparable fixed rate for the benefit you provide. — location: 721

OPENING FOR BUSINESS* I will help clients _________. After hiring me, they will receive [core benefit + secondary benefit]. I will charge $xxx per hour or a flat rate of _____ per service. This rate is fair to the client and to me. — location: 726

The missing piece is that you usually don’t get paid for your hobby itself; you get paid for helping other people pursue the hobby or for something indirectly related to it. — location: 783

If the hobby or passion serves as an important stress reliever from your day job or other commitments, are you sure you want to assume full-time responsibility for your hobby? — location: 823

Reality Check Checklist Questions for You Instead of just during your free time, would you enjoy pursuing your hobby at least twenty hours a week? Do you enjoy teaching others to practice the same hobby? Do you like the ins and outs (all the details) of your hobby? If you had to do a fair amount of administrative work related to your hobby, would you still enjoy it? — location: 828

“Yes! You should always follow your passion wherever it leads.” Similarly, almost no one dismissed the idea out of hand. The nuance comes from the idea that passion plus good business sense creates an actual business. — location: 841

So good they cant ignore you

(Passion + skill) → (problem + marketplace) = opportunity — location: 847

Gary is paid through a set fee (currently $250) for his specialized consulting service. Benny sells a direct product (language hacking guide) for a fixed price from his website. Megan also sells a direct product (custom dresses and wedding accessories), but her pricing is variable. Mignon provides her popular podcast service for free to listeners, underwritten by advertising and sponsorship. — location: 853

The business is structured around my life, not the other way around. — location: 901

Music Teacher’s Helper is currently on track to earn at least $360,000 a year. Because his customers commit for the long term and pay monthly, it’s unlikely that this number will ever go down. Instead, it will continue to increase as more and more music teachers join the ranks. — location: 927

There is more than one road to the road, in other words, but one business model is especially useful for location independence: the business of information publishing — location: 991

Brett’s project had all the predictors of success we’ve considered thus far: It began with something he was both passionate about and skilled in, and then he forged his knowledge into a useful package that could be acquired instantly by users. If you wanted to learn about Evernote but didn’t want to spend the time surfing around, a $25 investment could solve the problem. The choice of price was also perfect: Brett could have priced much lower, as some digital publishers do, but he chose to take a stand and provide a clear value proposition to his potential customers. — location: 1051

1. Find a topic that people will pay to learn about. It helps if you are an expert in the topic, but if not, that’s what research is for. 2. Capture the information in one of three ways: a. Write it down. b. Record audio or video. c. Produce some combination of a and b. 3. Combine your materials into a product: an e-book or digital package that can be downloaded by buyers. 4. Create an offer. What exactly are you selling, and why should people take action on it? Learn more about offers in Chapter 7. 5. Decide on a fair, value-based price for your offer. For pricing guidelines, see Chapters 10 and 11. 6. Find a way to get paid. PayPal.com is the most ubiquitous method, with the ability to accept payment from users in more than 180 countries. Other options are available if you want more flexibility.* 7. Publish the offer and get the word out. For an overview of hustling, see Chapter 9. 8. Cash in and head to the beach! (This step may require further effort.) — location: 1058

§Technically, there was no English-language manual; more than a dozen books or guides on Evernote already existed in Japan. This suggested the strong marketability of the project and revealed a gap in the English-language marketplace that Brett was able to fill. — location: 1116

target market had nothing to do with demographics in a traditional sense—the group simply consisted of people from all backgrounds who wanted to live unconventional, remarkable lives. They were “pro-change” and interested in pursuing a big dream while also making the world a better place for others. In other words, I didn’t have to segment or label them according to irrelevant categories. — location: 1133

There are now at least two ways to group them together.   Traditional Demographics:      New Demographics: Age, Location, Sex/Gender,      Interests, Passions, Skills, Race/Ethnicity, Income      Beliefs, Values — location: 1137

In the early days, she tried to sell something that her clients weren’t ready for. She fixed the problem by changing two things: what she offered and to whom she offered it. — location: 1176

This is another sign of a good business opportunity: when lots of people are interested in something but have a hard time implementing it in their daily lives. — location: 1209

Old-school marketing is based on persuasion; new marketing is based on invitation. With persuasion marketing, you’re trying to convince people of something, whether it’s the need for your service in general or why your particular offering is better than the competition’s. A persuasion marketer is like a door-to-door vacuum cleaner salesman: If he knocks on enough doors, he might eventually sell a vacuum cleaner … but at great personal cost and much rejection. — location: 1218

When you’re brainstorming different ideas and aren’t sure which one is best, one of the most effective ways to figure it out is simply to ask your prospects, your current customers (if you have them), or anyone you think might be a good fit for your idea — location: 1226

Questions like these are good starting points: • What is your biggest problem with ______? • What is the number one question you have about ______? • What can I do to help you with ________? — location: 1231

If your motivations are based strictly on the preferences of someone else, you’ll run the risks of boredom, unhappiness, and simply being less purposeful than you could be otherwise. — location: 1257

What should you do when you have more ideas than time to pursue them? Two things: First, make sure you’re capturing all the ideas and writing them down, since you might want them later; second, find a way to evaluate competing ideas. Creating a “possibilities list” helps you retain ideas for when you have more time to implement them. — location: 1280

First of all, keep in mind the most basic questions of any successful microbusiness: • Does the project produce an obvious product or service? • Do you know people who will want to buy it? (Or do you know where to find them?) • Do you have a way to get paid? — location: 1289

Here’s one option: the decision-making matrix. — location: 1295

Score your ideas according to these criteria: Impact: Overall, how much of an impact will this project make on your business and customers? Effort: How much time and work will it take to create the project? (In this case, a lower score indicates more effort, so choose 1 for a project that requires a ton of work and 5 for a project that requires almost no work.) Profitability: Relative to the other ideas, how much money will the project bring in? Vision: How close of a fit is this project with your overall mission and vision? — location: 1299

Jen and Omar began with an idea, kept costs low, and didn’t wait long before stepping forward with a product. Then they adapted to the marketplace response (make more maps!) and built each new product carefully. “It’s funny, because we’re both obsessive planners,” Jen told me. “But this project had almost no planning whatsoever in the beginning, and now it’s our full-time work.” — location: 1369

A marketable idea doesn’t have to be a big, groundbreaking idea; it just has to provide a solution to a problem or be useful enough that other people are willing to pay for it. Don’t think innovation; think usefulness. — location: 1377

Seven Steps to Instant Market Testing† 1. You need to care about the problem you are going to solve, and there has to be a sizable number of other people who also care. Always remember the lesson of convergence: the way your idea intersects with what other people value. 2. Make sure the market is big enough. Test the size by checking the number and relevancy of Google keywords—the same keywords you would use if you were trying to find your product. Think about keywords that people would use to find a solution to a problem. If you were looking for your own product online but didn’t know it existed, what keywords would you search for? Pay attention to the top and right sides of the results pages, where the ads are displayed. 3. Focus on eliminating “blatant admitted pain.” The product needs to solve a problem that causes pain that the market knows it has. It’s easier to sell to someone who knows they have a problem and are convinced they need a solution than it is to persuade someone that they have a problem that needs solving. 4. Almost everything that is being sold is for either a deep pain or a deep desire. For example, people buy luxury items for respect and status, but on a deeper level they want to be loved. Having something that removes pain may be more effective then realizing a desire. You need to show people how you can help remove or reduce pain. 5. Always think in terms of solutions. Make sure your solution is different and better. (Note that it doesn’t need to be cheaper—competing on price is usually a losing proposition.) Is the market frustrated with the current solution? Being different isn’t enough; differentiation that makes you better is what’s required. There’s no point in introducing something if the market is already satisfied with the Solution—your solution must be different or better. It’s significance, not size, that matters. 6. Ask others about the idea but make sure the people you ask are your potential target market. Others may provide insignificant data and are therefore biased and uninformed. Therefore, create a persona: the one person who would benefit the most from your idea. Examine your whole network—community, friends, family, social networks—and ask yourself if any of these people match your persona. Take your idea to this person and discuss it with him or her in detail. This will get you much more relevant data than talking to just anyone. 7. Create an outline for what you are doing and show it to a subgroup of your community. Ask them to test it for free in return for feedback and confidentiality. As a bonus, the subgroup feels involved and will act as evangelists. Giving builds trust and value and also gives you an opportunity to offer the whole solution. Use a blog to build authority and expertise on a subject. Leave comments on blogs where your target audience hangs out. — location: 1383

Focus on 3; also, { Purple Cow
& Jonathan Fields

make sure there is sufficient demand for your product or service before spending your whole life working on it. — location: 1451

We provide [product or service] for [customers]. — location: 1502

We help [customers] do/achieve/other verb [primary benefit]. — location: 1505

Why is the TourSaver offer so compelling? Because it delivers immediate benefits superior to its cost, with an attractive pitch: “Buy this coupon book, use it once, get your money back. Then you have more than a hundred other uses as a bonus.” — location: 1562

The piece of fresh orange was an offer I couldn’t refuse—even though it was free, I would have gladly paid for it if I had the money and was in the right frame of mind to make a transaction. — location: 1571

I realized it was really that my fear was still holding me back; the technical stuff was just an excuse. What if I don’t sell any prints, or what if nobody likes my work? After realizing why I was stuck, I went home and made the site public that same evening. Within two weeks, I had sold that first print.” — location: 1431

I’m always curious about other people’s projects, so I flipped open my laptop and asked for the URL to take a look. “Well,” said Nick, “I don’t actually have the site up yet.” — location: 1420

Whenever something is more complicated than it should be or any time you spot an inefficiency in the market, you can also find a good business idea. — location: 1628

As I drove away, I realized that I secretly wanted him to take longer in getting to me, even though that would have delayed me further. I wanted him to struggle with unlocking my car as part of a major effort, even though that made no sense whatsoever. The locksmith met my need and provided a quick, comprehensive solution to my problem. I was unhappy about our exchange for no good reason. — location: 1671

“If I gave you a treasure map, would you complain that it was only one page long?” — location: 1679

You must learn to think about value the way your customers do, not necessarily the way you would like them to. — location: 1682

The specific objections relate to an individual product or service, so it’s hard to predict what they might be without looking at a particular offer. General objections, however, come up with almost any purchase, so that’s what we’ll look at here. These objections usually relate to very basic human desires, needs, concerns, and fears. — location: 1692

Here are a few common ones: • How do I know this really works? • I don’t know if this is a good investment (and/or I’m not sure I have the money to spare). • I’m not sure I can trust you with my money. • What do other people think about this offer? • I wonder if I can find this information/get this product or service without paying. • I worry about sharing my information online (or another privacy concern). — location: 1694

The core concern for each of these objections relates to trust and authority. You must create consumer confidence in order to overcome the objections. As you craft the offer, think about the objections … and then flip them around in your favor. You want to send messages like these: • This really works because … • This is a great investment because … • You can trust us with your money because … (alternatively, You don’t have to trust us with your money, because we work with an established, trusted third party …) • Other people think this is great, and here’s what they say … • You have to pay to get this product or service (alternatively, The free versions aren’t as good, it takes a lot of work to get it on your own, etc.) • Your information and privacy are 100 percent secure because … — location: 1701

Generally, you should offer an incredible guarantee or no guarantee at all. A weak guarantee, or one that is unclear, can work against your credibility instead of helping it. — location: 1733

If the program doesn’t rock your world, you’ll get 100 percent of your money back, plus 20 percent for your trouble. — location: 1726

{ 4 hour work week

An early look at the future — location: 1809

The worst thing you could do for a launch is to open your movie without letting anyone know. A much better thing is to tell a story. The story unfolds like this … — location: 1808

Why this project will matter. — location: 1813

The plan for the big debut — location: 1816

Whoa, we’re almost ready! This communication happens right before the launch, sometimes as late as the day before. The message is: “This is the calm before the storm. We’re coming down to the wire and are really excited about this.” — location: 1819

OMG, HERE IT IS! The message is: “It’s finally here, everyone has been waiting, and now we’re ready to go.” — location: 1822

If you have no closing, you won’t see the uptick! If you just launch and move on, you’ll have no opportunity for growth. — location: 1833

One more thing: If you admit to a flaw, weakness, or limitation in your product, this will probably help instead of harm you. — location: 1868

It’s tempting to take more money, but if you said it would end at a set time, you need to stick to your decision. In the long run, this works in your favor, because people will realize that you mean what you say. — location: 1866

“It’s hard to put into words why the physical deadline was such an important part of getting the project done,” he told me. “I think it was so motivational because it seemed impossible to achieve, and it made me kill everything that didn’t add to the project being finished.”‡ — location: 1935

“People we didn’t think would have the slightest interest showed up … with friends!” she said. “Meanwhile, people who we thought were totally interested never even responded. The lesson was that you shouldn’t assume someone isn’t interested or won’t attend or won’t buy.” — location: 1949

and long-term plan. Tactics refers — location: 2043

Always return to the all-important value question: How can you help people more? — location: 2034

Influence by Robert Cialdini, who was one of the first to study how consumers decide to make purchasing decisions. Jeff Walker, an entrepreneur and educator, is also well known for his work on product launches. — location: 2050

The distinction between the three icons represents the difference (and the likely success or lack of success) of a person or business hoping to promote something for sale. A charlatan is all talk, with nothing to back up their claims. A martyr is all action with plenty of good work to talk about, but remains unable or unwilling to do the talking. A hustler represents the ideal combination: work and talk fused together. — location: 2092

Style without substance = flash — location: 2102

Substance without style = unknown — location: 2104

Style with substance = impact — location: 2105

Another way to look at it is Style without substance = flash     (Also, no one respects these people.) Substance without style = unknown     (Everyone who knows these people respects them, but not many people know them.) Style with substance = impact     (This is the goal.) — location: 2101

Here’s a sample message: Hi [name], I wanted to quickly let you know about a new project I’m working on. It’s called [name of business or project], and the goal is to [main benefit]. We hope to [big goal, improvement, or idea]. Don’t worry, I haven’t added you to any lists and I won’t be spamming you, but if you like the idea and would like to help out, here’s what you can do: [Action Point 1] [Action Point 2] Thanks again for your time. — location: 2110

John Morefield, an unemployed architect during a time when jobs were scarce, set up shop in a Seattle farmer’s market with a sign that read “5-Cent Architecture Advice.” In exchange for a nickel, he would give advice on any problem that homeowners, real estate agents, or anyone else brought to him. — location: 2159

Tourists landing at the international terminal at LAX are met outside by friendly people with official-looking clipboards who offer to help with directions to the city. “Hey, where are you headed today?” they ask. “Can I be of assistance?” After they provide directions or answer questions from unsuspecting tourists, there’s a pitch: “I’m working today on behalf of a great organization. Can you help us out with a donation?” The implied message is, I just helped you … now it’s your turn. — location: 2176

Matching

Strategic giving is about being genuinely, truly helpful without the thought of a potential payback. — location: 2181

The difference between a contest and a giveaway is fairly simple: A contest involves some kind of competition or judging, whereas a giveaway is a straight-up free offer provided to winners through random entries. There are pros and cons to each: A contest usually requires more work for both the aspiring winners and the business hosting the contest, but it can generate more interest. A giveaway is quick and easy and can generate a large quantity of entries, but since there’s usually nothing to do other than put your name down, the typical giveaway doesn’t create much real engagement. — location: 2217

The One-Page Promotion Plan Goal: To actively and effectively recruit new prospects to your business without getting overwhelmed. — location: 2229

When you’re thinking about how to get the word out and build your business, think about hustling first and paid advertising later (if at all). — location: 2261

Remember that the goal of business is profit. It’s not being liked, or having a huge social media presence, or having amazing products that nobody buys. It is not having a beautiful website, or perfectly crafted email newsletters, or an incredibly popular blog. In larger businesses, this is called accountability to shareholders. Business is not a popularity contest. The CEO doesn’t get away with saying, “But look at all these people who like us on Facebook!” Shareholders will not accept that. You are the majority shareholder in your business, and you have to protect your investment. You have to make sure that your recurring activities are as directly tied to making money as possible. There’s nothing wrong with having a hobby, but if you want to call it a business, you have to make money. — location: 2314

Many aspiring business owners make two common, related mistakes: thinking too much about where to get money to start their project and thinking too little about where the business income will come from. Fixing these problems (or avoiding them in the first place) requires a simple solution: Spend as little money as possible and make as much money as you can. — location: 2321

Therefore, when I spend money on The Mogul Mom, it’s for things that will continue to build my brand and boost my sales while allowing me ample time with my family—things like Web design, payments to a small group of contributors, or a new computer. — location: 2334

A business goal paired witha personal ethos (eg spendingtime with family)

The first principle is that a business should always focus on profit. (Always remember, no money, no business.) The second principle is that borrowing money or investing a lot of money to start a business is completely optional. This doesn’t mean that there are no examples of businesses that have done well through traditional methods; it just means that borrowing is no longer essential. Don’t think of it as a necessary evil; think of it as an undesirable option to be pursued only if you have a way to limit risk or are sure you know what you’re doing. — location: 2340

The average cost of the initial investment was $610.60.* — location: 2359

having a high-end version creates an “anchor price.” When we see a superhigh price, we tend to consider the lower price as much more reasonable … thus creating a fair bargain in our minds. The internal thinking goes like this: “Wow, $2 million for the latest MacBook is a lot, but hey, the $240,000 model is almost as good.” — location: 2444

Option 1 is simple and presents the choice as follows: Do you want to buy this widget or not? Here’s an alternative that is almost always better: Option 2: The World’s Greatest Widget Choose Your Preferred Widget Option Below 1. Greatest Widget Ever, Budget Version. Price: $87 2. Greatest Widget Ever, Even Better Version. Price: $129 3. Greatest Widget Ever, Exclusive Premium Version. Price: $199 — location: 2449

Set the anchor price

Notice the important distinction that naturally happens when you offer a choice: Instead of asking them whether they’d like to buy your widget, you’re asking which widget they would like to buy. — location: 2465

You may have heard of the terms continuity program, membership site, and subscriptions. They all mean roughly the same thing: getting paid over and over by the same customers, usually for ongoing access to a service or regular delivery of a product. — location: 2473

Let’s run some quick numbers, assuming you offer a subscription service for $20 a month: 100 subscribers at $20 = monthly revenue of $2,000 or yearly revenue of $24,000 1,000 subscribers at $20 = monthly revenue of $20,000 or yearly revenue of $240,000 — location: 2485

Brian Clark is an expert at continuity programs, having created a true empire from the art of moving customers from one-time purchases into recurring subscriptions. — location: 2494

While we strive to build all our product lines, the general strategy is to move as many one-time purchase customers as possible to a more lucrative recurring service. — location: 2498

The key to this model is not market share. It’s share of the customer. — location: 2507

many consumers are wary of subscriptions, because they worry that they’ll keep getting billed for the service after they stop using it or that it will be a big hassle to cancel. — location: 2513

The median cost was $125. If we discount the 15 percent of outliers at the upper and lower ranges, the average startup cost was $408 and the median cost remained $125. — location: 2565

*The median cost was $125. If we discount the 15 percent of outliers at the upper and lower ranges, the average startup cost was $408 and the median cost remained $125. — location: 2564

• If you grow your traffic a little and also increase your conversion rate a little while also increasing the average sales price a little … your business grows a lot. — location: 2617

The classic way to increase the conversion rate is through testing by measuring one copywriting attempt (or offer, or headline, or something else) against another and going with the winner. Traffic → A/B test → compare results     After you have a winner, you move on to another test, always challenging the “champion” against another idea. (Google Optimizer allows you to do this for free.) — location: 2630

“Testing is important, but it pales in comparison to the traffic source,” author and entrepreneur Ramit Sethi told me. “People love to spend time split-testing headlines, copy, graphics, even tiny boxes. They can usually achieve greater returns by focusing on the source.” — location: 2636

Find a way to give away a prize and invite people to compete. The bigger the prize or the more unique the contest, the better. You may not make a ton of sales from a contest, but it will bring you more attention and a greater audience for future sales. — location: 2673

If I have to return something, will it be a pain in the ass? Make it the opposite of a pain in the ass—some businesses provide a guarantee of 110 percent, ensuring that the burden is on the business to deliver. Zappos famously created free shipping both ways to take away the hesitation about buying shoes without trying them on. — location: 2677

ALTERNATIVELY, MAKE A BIG DEAL ABOUT OFFERING NO GUARANTEE. Instead of providing an incredible guarantee, provide no guarantee—and make a big deal about this fact. Note that this strategy usually works better for high-end products. It will likely decrease overall sales but increase the commitment level from those who do purchase. — location: 2682

Another easy thing many existing businesses can do to add a new revenue source quickly is to create a service from a product-based business or create a product from a service-based business. — location: 2690

If you have a product business, ask yourself this question: “My product is x … how can I teach customers about y?” Then create a new version of your offering that includes consulting, coaching, a “jump-start” session, premium technical support, or something else. — location: 2696

“Everyone who buys this report loves it, but they don’t always know how to implement what you teach. They also don’t need your high-end one-on-one consulting, so why not offer a series of jump-start workshops that people could take as a group?” — location: 2702

Perry had written a popular report that sold multiple copies every day for $50 each. He was also busy offering one-on-one personal consulting, but one day someone gave him an idea: “Everyone who buys this report loves it, but they don’t always know how to implement what you teach. They also don’t need your high-end one-on-one consulting, so why not offer a series of jump-start workshops that people could take as a group?” — location: 2701

Providing both a product and a service helps with your marketing as well. You can say to prospects, “Hey, my service costs a lot of money because everything is customized. But if you just need a general solution, you can get this version for much less.” — location: 2723

To get an unfair advantage, provide remarkable service.) — location: 2742

In most cases, the change was anticlimactic. Clients said, “OK, sure,” and moved on. — location: 2768

maintain a practice of regular rate increases so that it becomes normal and expected. — location: 2770

You can grow a business one of two ways: horizontally, by going wide and creating different products to apply to different people, or vertically, by going deep and creating more levels of engagement with customers. — location: 2795

Corbett Barr maintains a helpful (and free) set of resources on building traffic at ThinkTraffic.net. — location: 2812

John Jantsch wrote a great book called The Referral Engine, which is all about creating a systemized process for encouraging referrals. Highly recommended. — location: 2814

As a business grows and the business owner begins itching for new projects, he or she essentially has two options for self-made franchising: Option 1: Reach more people with the same message. Option 2: Reach different people with a new message. — location: 2882

I’m grateful to Chris Brogan for the term outposts as well as the general concept of the hub and spoke applied to building a brand. Darren Rowse and Chris Garrett also contributed to this conversation. — location: 3162

However it’s structured, the goal of a partnership is to grow beyond what each person can create on his or her own. — location: 2920

Ralf Hildebrandt operates an international professional services firm based in Stuttgart, Germany. Here’s how he explains why 1 + 1 can equal 3: “My rule of thumb is that a successful partnership (or any type of collaboration) should create a combined business which is at least 33 percent larger than the sum of what the two individuals could achieve on their own. — location: 2921

Hiring employees was my biggest challenge as a business owner. I put it off for years and turned away tens of thousands of dollars each year because I was afraid to grow. Finally, I realized that I had hit a ceiling. I couldn’t make any more money without bringing some members to my team. Since changing the structure, I’m able to accept all of the orders I had had to turn away. I’m no longer overbooked, and I can invest extra time in moving the business forward in other aspects. Do I wish I could do it all myself? I used to, because I don’t like to lead or be led. I don’t like to feel like the boss. But I am so much happier now as part of a team. I’m the pilot of my business, and my crew is there to make my work easier while fulfilling their own goals as well. —Megan Hunt — location: 2973

Outsourcing increases freedom and allows a business to scale without the owners doing everything themselves. — location: 2990

The answer to the question of whether outsourcing is a good fit depends on two things: (1) the specific business and (2) the personality of the business owner. — location: 3029

In a business that relies on a series of relatively mindless, repetitive tasks, for example, outsourcing may be a good option. A business that relies on customer relationships, however, may not be a good fit. — location: 3031

For years I’ve paid a 51 percent commission to affiliates in my business under the principle that they should earn more than I do for promoting my work. At the same time, I make it clear that they’ll need to do more than just slap up a link somewhere. If they want to be successful, they’ll need to create a closer connection between their readers and my business. They can do that by using the products themselves, writing reviews, and offering some kind of bonus to the referrals they make. If you structure your affiliate program in a similar manner, you’ll attract higher-quality partners. — location: 3116

Entrepreneurs are not necessarily risk takers; it’s just that they define risk and security differently from the way other people do. — location: 3178

“I’m running a creative business, but it’s a creativity killer for me to define my whole income on the need to continuously deploy my creativity.” — location: 3191

“All the bad days have two things in common: You know the right thing to do, but you let somebody talk you out of doing it.” — location: 3235

Option 3: Split the Difference Sometimes the choice between small and big has more than two answers. — location: 3238

Contrary to { Never Split the Difference

Every morning, set aside forty-five minutes without Internet access. Devote this time exclusively to activities that improve your business—nothing that merely maintains the business. Think forward motion … What can you do to keep things moving ahead? — location: 3262

The best way to do this is with a two-pronged strategy: Step 1: Select one or two metrics and be aware of them at any given time, focusing on sales, cash flow, or incoming leads. Step 2: Leave everything else for a biweekly or monthly review where you delve into the overall business more carefully. — location: 3309

Here are a few of the most common examples. Sales per day: How much money is coming in? Visitors or leads per day: How many people are stopping by to take a look or signing up for more information? Average order price: How much are people spending when they order? Sales conversion rate: What percentage of visitors or leads become customers? Net promoter score: What percentage of customers would refer your business to someone else? — location: 3317

John’s model is all about creating an entity apart from yourself and then selling it for a big payday. The $100 Startup model is more about transitioning to a business or independent career that is based on something you love to do—in other words, something intrinsically related to the owner’s skill or passion. — location: 3343

Havung a career while also buikding a business - doing something boring while also doing something that keeps me in the game.
buikd a business as a hustke to sell

Holly Minch mentioned the Goldilocks principle: the idea that success is found within certain margins and not at the extremes. “I want the clients to get real value out of what we deliver,” she said, “but not at the expense of our bottom line. And I want the team to have enough work to live well but not so much work that we’re not living.” — location: 3443

“Be careful of letting clients take your business in a direction that makes you hate your job,” said Britta Alexander, one half of the husband-and-wife team running a marketing company in Hastings-on-Hudson, New York. “The further you go down that road, the harder it will be to correct course. And it’s really hard to quit your job when it’s your own company.” — location: 3448

Narcissus articles

I realized that if there was one bride willing to hire us and fly us in, there were probably more. — location: 3514

You can also sign up with groups, such as Kiva.org and AcumenFund.org, that provide loans (usually very small ones) to help people start microbusinesses in their own communities. — location: 3618