The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future by Chris Guillebeau
September 26, 2016
Many people at some point in their lives think about starting their own “thing”. Maybe they are tired of “working for the man” or they want the freedom and creative responsibility that comes with running their own business. Maybe they want to take the leap and try to finally turn their passion into a job (often not advisable) or find a way to flex the skills they’ve developed in the corporate world into an entrepreneurial pursuit that will provide them more control over their working life. Whatever the reason for the “I want to start my own thing” inspiration, I’m a firm believer in the “little bets” idea. If you have an idea that interests you, take a month or two to see if you can turn that idea into something people would be willing to pay for (i.e. place a little bet on it in regard to the time and resources dedicated). This does not mean quite your job for a month or two and dedicate every waking hour to your idea…that would not be a “little bet”. This means finding time to pursue your idea on the side. A lot of people assume that they need huge capital investments to see if an idea is worth its weight. The premise of The $100 Startup is that many people have developed successful businesses with less than $100 in capital investment, and been able to grow that business into a true sustainable income (i.e. all the examples in the book earn at least $50K a year).
This book is a great read, and takes you through a number of startup examples (trials, errors, lessons learned and successes). The stories really bring the book to life, and provide great insight as well as inspirational examples. The below CliffNote’s do not include the startup stories, but instead pull out nuggets of information that are useful to consider if you’re thinking about placing your own “little bets” on a few ideas….
In preparing to write this book, Chris identified 1,500 individuals who have built businesses earning $50,000 or more from a modest investment (in many cases, $100 or less), and from that group he’s chosen to focus on the 50 most intriguing case studies. In nearly all cases, people with no special skills discovered aspects of their personal passions that could be monetized, and were able to restructure their lives in ways that gave them greater freedom and fulfillment.
Here, finally, distilled into one easy-to-use guide, are the most valuable lessons from those who’ve learned how to turn what they do into a gateway to self-fulfillment. It’s all about finding the intersection between your “expertise” – even if you don’t consider it such -- and what other people will pay for. You don’t need an MBA, a business plan or even employees. All you need is a product or service that springs from what you love to do anyway, people willing to pay, and a way to get paid.
Not content to talk in generalities, Chris tells you exactly how many dollars his group of unexpected entrepreneurs required to get their projects up and running; what these individuals did in the first weeks and months to generate significant cash; some of the key mistakes they made along the way, and the crucial insights that made the business stick. Among Chris’s key principles: if you’re good at one thing, you’re probably good at something else; never teach a man to fish – sell him the fish instead; and in the battle between planning and action, action wins.
Convergence model represents the intersection between something you especially like to do or are good at doing (preferably both) and what other people are interested in and willing to pay for.
The more you understand how your skills and knowledge can be useful to others, the more your odds of success will go up. It helps to think carefully about all the skills you have that could be helpful to others and particularly about the combination of those skills.
Building Excitement to Drive Demand Before the Launch: It helps to have a strategy of building interest and attracting attention, described here as hustling. Instead of just popping up one day with an offer, it helps to craft a launch event to get buyers excited ahead of time.
Questions to ask when assessing an 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?
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? Freedom and value have a direct relationship: You can pursue freedom for yourself while providing value for others. A business ultimately succeeds because of the value it provides its end users, customers, or clients. If you make your business about helping others, you’ll always have plenty of work.
Many business owners talk about their work in terms of the features it offers, but it’s much more powerful to talk about the benefits customers receive. A feature is descriptive; a benefit is emotional.
The missing piece is that you usually don’t get paid for your hobby itself; you get paid for helping other people pursue their hobby or for something indirectly related to it.
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.
Most of us like to buy, but we don’t like to be sold. Old-school marketing is based on persuasion; new marketing is based on invitation.
The purpose of a FAQ is to provide reassurance to potential buyers and overcome objections. Your mission, should you choose to accept it, is to identify the main objections your buyers will have when considering your offer and carefully respond to them in advance.
The next time someone asks for something, try saying yes and see what it leads to. Whatever success I’ve had in my own work thus far has always come from saying yes, not from saying no.
At least monthly, connect with existing customers to make sure they are happy. (Ask: “Is there anything else I can do for you?”)
If you’re not sure where to spend your business development time, spend 50 percent on creating and 50 percent on connecting. The most powerful channel for getting the word out usually starts with people you already know. If you build it, they might come … but you’ll probably need to let them know what you’ve built and how to get there. When you’re first getting started, say yes to every reasonable request. Become more selective (consider the “hell yeah” test) as you become more established. Use the One-Page Promotion Plan to maintain a regular schedule of connecting with people as you also spend time building other parts of your business.
General Rule: Spend as little money as possible and make as much money as you can.
Options for creating a price range include: Super-Amazing Version (Gold, First Class, Premium), Product + Setup Help (the same thing sold with special help), and any kind of exclusivity or limited-quantity selection. Also, add something with real value to each higher-level version of the offer.
In almost every case, a recurring billing model will produce much more income over time than will a single-sale model. Even better, after you attract customers to a recurring model (and ensure that you keep them very happy), they are much more likely to purchase other things from you. The key to this model is not market share. It’s share of the customer. And to gain more of each customer’s budget, you first have to zealously treat every customer as a “best” customer, no matter which ones actually end up becoming the proverbial “customer for life.
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.)
The confirmation page that appears after an online purchase is one of the best and most underused places for an upsell offer. Right after a customer has purchased, they are highly inclined to purchase something else. Make a strong offer here.
Great business advice: “Be nice to people and provide a great service”
A list of decisions you should make at the beginning of any joint venture:
How will the money be divided? (Common splits include an even 50-50, 60-40 with the higher share going to the partner who does more work, and 45-45 with 10 percent reserved for administrative costs.)
What are the responsibilities of each partner?
What kind of information is shared between partners?
How will the project be jointly marketed?
How long will our agreement be in place?
How often will we touch base to discuss the partnership?
Focus on Strong Performing Product: If you have a range of projects, products, or activities, it’s almost always better to devote your efforts to the strong performers than to try and pull up the weak ones.