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Here’s your program.
Hey there Freedom Fighters, my name is Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart. Over 700 proven entrepreneurs have come here to tell you their stories, teach you what they learned along the way and give you as much of their personal experience as they can so that you can go out there and based on that build you’re own success story and hopefully find a way to share it with others and teach them the way today’s guest is going to do here with you. And in this interview I’m going to answer the question, how do you build a profitable start up for $100. Chris Guillebeau spent even less than that to build his business which includes UnconventionalGuides.com, a site that helps people do more about what their excited about. Like travel the world for instance. And he’s got a popular blog that I’ve loved and admired for years before I even got to know him, The Art of Nonconformity. And he’s got a new book out called the $100 Startup. You can find out about it at 100startup.com. 100startup.com. Chris, welcome back.
Chris: Thanks for having me back, man.
Andrew: So Chris, there’s a misconception, especially I believe in my audience and maybe I’m perpetuating that by doing interviews with people who raise $5 million to launch their business, but there’s a misperception about how much it takes to start a business. Can you talk a little bit about that before we talk about the solution and the approach that you have.
Chris: Yeah, I think there’s two things, I think one the misconception and also there’s kind of like there’s two different worlds, I think. So there is this world of, you know, big startups. There is this world of funding, venture capital, and Angel Investing and InstaGram being sold for a billion dollars and that’s fine but while that’s happening, simultaneously there’s all kind of just ordinary people from all over the world, not just in certain parts of California or New York or where ever, the story of ordinary people just starting their business and doing their thing often without much education, often without much of a business plan and usually without, as you say, much money or investing at all. And so most of those people what they do, they follow what I call this microbusiness model. They pick something that they’re excited about or passionate about and then they find a way to connect that with the needs of the marketplace, they make something that’s valuable and then they start. So it happens very quickly. It usually starts in 30 days or less. So, I just don’t have any experience in that whole, you know, Tech side big startup side and that’s fine. But what I’ve done for my whole life and what a lot of my readers have done and a lot of stories in the book have done, they’ve just focused on that microbusiness model of starting with what you have.
Andrew: We’ve got an example of someone who did this in an inspiring way but before I even ask you about him, let me ask you this, shouldn’t we, if there is a million dollars in funding out there in Angel Funding and then a 5 million dollar A round and a $20 bajillion, shouldn’t we then if that’s the big time, shouldn’t we be aiming for the big time and think that hey, everything else is too small, you live once, go big or go home?
Chris: It’s a fascinating question. I would say I just don’t know anything about that. Is there a million dollars that we can all get like tomorrow? I’m not sure. You know, I don’t think so. I would say it’s probably, you know, a lot easier, not just easier but maybe even more rewarding, right, to do it on your own and we’re learning to bootstrap and to connect with customers and build something that’s valuable, rather than going through all these hoops and rounds and maybe even years preparing for something to launch.
As I said, it’s just a different route, so if people are focused on that that’s great, but I would say if somebody is out there and they’re working a regular job and they’re just thinking what can I do to create more income for myself or how can I create some independence and freedom for myself, then why go through that whole other route?
Andrew: I can tell you that back in the Bradford and Reed days my brother and I went after funding because we kept hearing that there’s so much funding out, so we said Bradford and Reed with be a huge hit. Some one should give us money. We created a business plan. We had tons of conversations. We did everything we could. We couldn’t raise a dollar. What we found was that it was just kind of an excuse to procrastinate.
Chris: Right.
Andrew: We kept waiting for someone to give us money, like a permission slip, before we got started. I remember the conversation that I finally had with him when I said let’s just stop it. Let’s accept it. We’re never going to take it. Cut that option off completely and see where we can go on our own, and that was a huge turning point for us because after that we started taking responsibility.
After that we started thinking where’s the clever place where we can get new users to be interested in us? How do we make money in a clever way? Who’s making money instead of who has money to invest. Do you have an example, I’m sorry?
Chris: Sorry, I was just going to say you actually started focusing on what your business was actually going to do. You started focusing on the value that you would provide to your customers and all of the questions about operating the business instead of this whole side discussion about who is going to favor us. Which Gods of investing are going to bestow their rounds of finance on us?
Andrew: You know what? I just wanted somebody to believe in me, to say I believe in you so much. I have experience. I have money here and I believe in you so much I’m going to put money into your bank account and help you and be there for you and I realized I was looking for a daddy. I had a daddy who was good, but I was looking for a daddy to come in and make it all OK because entrepreneurship is so tough.
But you have a different approach, one that doesn’t require that kind of coddling, one that doesn’t require the waiting for somebody else to give you a permission slip and one that allows you to base the business that you get into more on passion. We talked about an example from your book, The $100 Startup. Can you tell the audience one of the two examples that we talked about before we started?
Chris: Sure. I think we mentioned the story of Brett Kelly and Brett was this guy who is a self-described geek, lived in southern California. He had a day job that kind of sucked, but he did it and on the side he’s always learning about different things and he was a big fan of Evernote, the free software and he noticed that there was no English language manual available for Evernote.
It’s great, it’s free software, it’s fairly intuitive, but if you want to actually learn a bunch of tricks there wasn’t any manual for that. He spent a couple months just really digging deep and creating screen shots and outlining all these tips and surveying people, just doing all this research in his spare time and he created this product called Evernote Essentials.
I think he sold it for $20 or $25 and his long-term goal, he’d never made a product before, he didn’t have a huge list, he didn’t have massive Twitter following or anything, his long-term goal was, I would love to make $10,000 with this product one day. Long story short, he did that on his lunch period a couple of days and then the product kept selling and kept selling, now he sells about a $300 worth of copies every day and it’s almost entirely profit since he made the product and he delivers everything himself.
This is essentially a $160 thousand a year E-book that he made. One, he had this big financial success, but then also he talks about the kind of stress that he and his family were under before he had this project. He and his wife were both working a lot. She was working a second job, so he would come home and they’d kind of hand off the high five for the kids, but then after he launched this product she was able to quit her job and stay at home.
So he’s talking about one, I’ve got all this income, but then also I have all this freedom and independence that this project has created. So I like that story because it’s a perfect example of The $100 Startup model. Now only did he not want investing, he didn’t need it, it was completely irrelevant. He just made the product himself and put it out there with no risk and did very well.
Andrew: So, from what I remember he had $15 thousand worth of credit card debt, which is painful and I don’t want to brush over the number that you said afterward, $160 thousand in revenue is what it generated and it’s continuing to grow and to grow and to grow.
Chris: From one E-book.
Andrew: From one E-book and he was hired by Evernote. I think on his blog now it says that he’s, I forget what it is, but he’s got some title at Evernote. He’s one of the bigger names at Evernote today at the company.
Chris: Right, which is a fun little side story. He basically makes a full-time income from sale of his guide, but then he also works for them and he works from home, so he basically has two things going on.
Andrew: And this is the model. Find a passion, even if it’s just one piece of software that you’re really crazy for, find a simple way to get started with it and then get to 160,000 in revenue. So that brings up something else that we talked about. Can you talk a little bit about that? That big gaping hole in the middle of this story that the audience needs to know about, what are we missing here?
Chris: I think what we’re missing is the next steps, right? Because there’s a lot of resources out there that are very inspirational and they’re like, Andrew, you should go for it, you should start your business. And your like, great, OK, I’m ready, what do I do? You know. So, I think there’s a big market of dissatisfied people who are fairly motivated and fairly driven but they need to know what the next steps are, right? And so part of what I’m hoping to do with the book is to provide 300 pages of next steps and data and checklists and models and successes and failures and all of that. So, you used the word passion before, I think it’s always important to talk about the distinction between passion and usefulness because not every that we’re passionate about is something that’s useful. But if you can combine your passion, like Brett’s passion for Evernote, with something that other people are also interested in. Like other people have this need, people are downloading Evernote probably by the tens of thousands or more everyday and they want to learn how to use it. So he took what he was really skilled out and excited about and then created something valuable. That’s what made the while thing a success.
Andrew: All right. I want to ask what that first step is. You get this vision, you love, I don’t know, Microsoft Word, or you love Google Docs as much as Brett loved Evernote and you say, OK, what do I do now to go from where Brett was to where Brett is today? And that’s what the audience wants to know, the nest step, I want them to trust this first before we give them the next step. I know that the first thing that they’re going to say is how does Chris know. Where does this come from? I’m sure you know Brett’s story and, but where does this come, this, what you’re about to talk to us about?
Chris: OK. Well, you know, the second part of the question, where does it come from, I’ve always been self-employed myself, I’ve been an entrepreneur since I was 20, I never really built a huge business or anything, I just kind of found a way to hustle and support myself, mostly and originally out of the motivation that I wasn’t a good employee, didn’t want to work for anyone else and so I just learned different things, you know. Earlier I learned EBay, back in the day I learned Google Ad Words and Ad Sense back in the day. After a while I started trying to build my own thing and build my own platform when I became a writer and started making my own products. But I’ve learned through experience, you know success and failure just like everyone else. Now the next thing your asking about is the next step, how to go and how to create the offer, I think, right?
Andrew: Wait. Is that the next step? Is it to create the offer once you have the idea?
Chris: Well, I think you know when we say we have a business idea often, you can quote me as we just have a general idea, it’s not really a business idea so to use the Google Docs example, like I’ve got this business idea, I want to make Google Docs easier for people or something. So, that’s fine but what are you going to make? Are you going to make a product, you know, like Evernote essentials? Are you going to make a service? Is it a consulting service, you know? Is it a workshop service? Are you providing a webinar? What are you actually doing?
Andrew: Good point. Right. There are so many more things that I thought. I was just thinking ebook because mine was on this latest example you gave me but right, there’s courses, there’s consulting services, there’s video guides. OK.
Chris: There’s different things, you know, Skype lessons. I mean there’s many, many different things, right, so the sooner you can kind of go from idea to specific offer I think the better.
Andrew: And you keep saying offer, not idea for a specific product and that’s intentional. Why are you saying the sooner you can get to offer and not the sooner you can create your product?
Chris: Because the offer is more than just a product. You know, you can have a product but you know, how is that product presented. You know, who are you marketing that product too. Who are you offering it to and what is the message behind that product? What is the message behind that product? What is the sales price for that product and how do people pay for it? Do they get anything else that’s part of it? Is there any back end? These are all the issues related to offer so I always focus on offers first and then product second.
Andrew: OK. Do you have an example of how you did it? Something that you launched but before you launched it you created the offer for it?
Chris: Yeah, well the other day we were talking about frequent flyer masters so I think we might have covered that already. Let’s talk about the Empire Building Kit just briefly.
Andrew: OK.
Chris: Which is what I, it was just kind of a precursor to the $100 start up. I’ve always been interested in this whole concept of follow your passion, as we talked about because it’s one of this things where you can’t follow any passion and be successful but on the other hand a lot of successful people have followed their passion so it’s interesting in the distinction there and you know, what did the people who got it right do that the people who got it wrong didn’t. And so, you know, I basically wanted to create a comprehensive online resource that interviewed a bunch of people and kind of dissected their secrets. And so I started thinking about the product but then I started thinking, like how am I actually going to offer this and what’s the killer kind of approach here and I kept thinking well, I’ve got video, that’s interesting, OK. I’ve got some transcripts, whatever blah blah but this is kind of like normal and then finally I had the idea that let’s break it down and give people like one step a day for an entire year. So, and that became, and I forget what I call it, but that was the main pitch for the course is build a business in one year by doing one thing every day. Once I had that idea I built everything backward around that.
Andrew: I see, OK. By the way, that was such a cool idea. I remember when I first interviewed you and you told me about that I just kept thinking about all the different email messages you must have had in Awebber. I think you told me it was the longest drip campaign in Awebber and it was killer to because whenever people signed up they could take the first day of your session, it would be their first day and they would get the first message and the first task. OK, so the first thing you said was I don’t want to just do videos. Andrew’s doing videos and it’s not enough to do just video’s. I can break it down to some kind of eBook. That’s also not enough. Instead, you came up with this strip key. This, what I’m calling the drip campaign but essentially one less in a day via email and that’s what you’re selling. So now you have the offer, what do you do next?
Chris: Well then I’m actually going to create the product. I’m going to define the deliverables, the offer kind of defines the deliverables itself and so then I’m like OK I have a list of these interviews I want to have and I’m going to have these many lessons about these many topics and then I’m going to go into a cave for a month or so and actually create the product. But the point is, before I actually create the product I want to make sure that I have a good use for it. I want to make sure that I’m actually building it towards something because I think a lot of people spend a long, long time building a product and then they launch it and it’s a flop or disappointing and they can avoid a lot of that I think by focusing on offers first.
Andrew: Would you make the offered to your audience first before you went in to build it?
Chris: I mean there’s different approaches to it. I wouldn’t do that myself but I’m just not very good at segmentation. I’m just wanted to launch the thing once. I think if you have the ability to that, there are different people who do different kind of testing and in house launches and then public launches and affiliate launches. I’m kind of a one man show. I don’t really have a team and I try to keep things simple.
Andrew: What about this idea that you could have built software and say hey, you know what, I’m going to show these guys how to build a business. Their probably going to want to know how to build a web business not like a dry cleaners down the street and so I should create software for them. I need a co-founder who will help me build new software that will make a beautiful site for anyone who wants it, give them their own URL and so on. That’s a path that you didn’t even think about. Why not? How do you cut off that path?
Chris: Well, you always have more ideas then you have time to pursue. That’s a good idea. I could have done that. I guess I just tend to focus on what I can do. If I’ve got an idea and I think its good then I’ll pursue it. So, it’s not so much a question of cutting. I’m more into like, adding on things and then cutting them off and I know there’s like a lot of dialog and conversation we can have about that but I tend to do things I’m motivated to do. I was motivated to travel the country and talk to unconventional entrepreneurs and write this book. So I spent the past year and a half doing that. For Empire Building Kit I was motivated to create that so that’s what I did.
Andrew: And, OK, can I tell you that’s what I was fishing for earlier with my question about how do you know this? You and I met in person at your book signing where I got to meet so many interesting people. It was such a good audience that came out to Barnes and noble, you’re doing a cross-country trip. I think you were visiting every city and I though well, who’d going to come. How’s he going to get the right kind of people? It was so cool; I’ve actually stayed in touch with people who I met through the event. One of them, I was new to D.C, gave me a D.C map to keep on my iPhone so if that I ever got stuck, it was a D.C metro map which I thought, interesting, the interesting nice thing to give me but how useful is it? I use it all the time. So it was a really good audience and that’s where you got a lot of the stories that are in the book. You talk to your audience and said what are you doing, where are you having trouble? And that’s what helped you come up with the stories that are in this book.
Chris: Yeah, and that’s how I do a lot of things. I mean I find the audience, the community, very inspirational and when I started traveling and doing these meet-ups it changed my whole life basically. So, I would recommend that to anybody whatever your business is or your blog or whatever it is you’re trying to build. The more you can really understand the needs of those people then the better and you can’t always do it by just asking them. You have to do it by spending time with them.
Andrew: Give me an example of that. Of a conversation that you spent with someone in person that made you say, oh there’s something I missed.
Chris: I think a lot of this whole project that I’m coming out of just comes from meeting these people, hearing stories that really surprise me from small little businesses. Like we had talked in the course about this guy who makes $100,000 a year helping people book their frequent flyer miles, he was in their community. And, when I met that guy, I just couldn’t imagine that he could make this six figure income doing something that you could do for free.
Andrew: Tell people about that, actually I don’t remember … we did a course together where you were teaching the idea from ‘ The Hundred Dollar Start Up’ on Mixer G [??]; mixergpremium.com, for anyone who’s not a member, and if you are a member, mixergpremium.com to is where you can see it. But, I don’t remember that story, someone from the entrepreneur who helped people book frequent flyer trips?
Chris: Yeah, maybe I left it out. This guy named Gary Luck, who’s actually in Arlington, Virginia. He has a day job as a C.F.O and he likes his job ok, but he’s always had this hobby of traveling the world in first and business class using his frequent flyer miles. And, he’s into this whole travel hacking sub culture, that I also write about from time to time. And he just noticed that people kept asking him for advice, like all of his colleagues, you know he would be like, ‘ I’m flying off to Japan first class’ and they started asking him, could you help me book my ticket, I got my honeymoon coming up, you know different things like that. And, he was always helping his friends for free, but he decided I’ll just make this little website. I think its called bookyouraward.com or something. And offer my services. If someone has miles but doesn’t really know how to use them, especially executives with a lot of American Express membership awards points. Then for $250, I’ll put together their whole itinerary, I’ll call the airline for them and sort it out, I’ll make sure to get them everything they want. And, he had no idea that people were going to pay for it, because it’s a free thing, you can do it yourself, right? But, there’s a convenience factor, there’s a knowledge factor, education, all of that. And, long story short, he has at least one booking every day, he’s making more than a hundred thousand dollars a year on the side, helping people do that. And, so, I love stories like that, I think those things are really fun and I found out about those stories by listening and asking appropriate questions wherever I went.
Andrew: OK, so I have this vision, I come up with the offer, in your case you went in, you cocooned for about a month you said, before you launched it. You gave stories in a book of people who said, ‘I’m going to sell it before I even create it, I just want to see if people want to buy it from me.’ Different approaches but both of you are keeping it really simple and launching very quickly. What about the sell? A lot of us are nervous about the sell. In fact, before we even get to how to sell, there’s a nervousness about offering it to the world and having the world potentially reject it, and offering it to the world in a way that isn’t as perfect as you imagined it was going to be, and you want to go in and spend another month perfecting it, or getting closer, so what do we do about that barrier? Especially for artists like many people in your community are.
Chris: At a certain point it is just a mental barrier, it’s something we have to recognize that maybe we’re afraid of failure, but perhaps we’re also afraid of success. And perhaps we’re also afraid of like, is something going to change if I put this out, and of course it’s going to change. So, I think that part of the whole motto of encouraging people to start quickly is to just kind of help them get over that and realize that it’s not going to be perfect, but that’s why you put things out. And big companies do that too, that’s why they put things out in beta, that’s why it’s a long process. So, I’m always about encouraging people to get something going, we did talk about the story of the guy who sold his first art print for fifty dollars. And he talked about how encouraging and empowering that felt and he had never sold anything online before, and he said, ‘this means a lot more to me then fifty dollars.’ Just the idea that a stranger came to my website, clicked the little button, and gave me money. And, if you’ve never experienced that, the first time you do, it’s great, it’s addicting, you want to do it more. You’re like, oh wow, this is fantastic. Even if you don’t have a story like Brett’s, making a hundred and sixty thousand dollars a year. But, even a couple of hundred dollars a month, if you’ve never had any kind of self employed income, it’s a powerful thing and it helps you think a lot more about the possibility.
Andrew: You know it just occurred to me while you were talking, do you know that um, what’s that campaign … the nano,[??] we’re in November …
Chris: Oh yeah, they’re writing a novel about fifty days or something like that …
Andrew: Yeah, write a novel in November, national … November … anyway it occurred to me, there it is, nanowrimo,[??] national write a novel month, national novel writing month, nanowrimo,[??] I don’t know why I’m having so much trouble with it, but it occurred to me that if we did something like that for entrepreneurs, have a month where, come up with an idea in the beginning, launch it at the end of the month, it doesn’t even have to perfect but get pass the hesitation of launching it, that, that might help people get pass that barrier of aiming for perfection, instead of aiming for just get it out there.
Chris: Yeah, no, I like it and there’s also a accountability effect. Which is one of the reasons why I can’t stand this thing either, but that national writing month is so popular because they have little bars and stuff you can put on your website. And everyday you’re like,’ I did this many words,’ and the whole goal, I think is fifty thousand words or something like that. So, it’s like this massive accountability, other people are doing it too. There’s forums, if you write consecutively I think you get a little batch so maybe it doesn’t have to be that complicated.
Andrew: At first it wasn’t that complicated, they just had this idea but the idea that, coming back to the $100 start-up, the main message is launch it and charge also. That’s another big thing that you talk about. Why charge?
Chris: Why not launch for free?
Andrew: Why not launch for free? Build a big audience and then, the look that you gave me when I said that.
Chris: Well, because it depends on what we’re talking about. Are we talking about a business? If we’re talking about a business the goal is to make money. I mean there are other goals as well but it’s not a non-profit, you know. We’re not starting a church or a synagogue; we want to actually have revenue. So, to mean that’s an integral part of it. You can have hobbies that don’t make money but if it’s a business then buy definition it has to make money so why not start with that.
Andrew: Do you have an example of someone who figured out what to charge because that’s the problem.
Chris: Yeah, I’m trying to think because I’m fairly, I’m not so good with testing and things like that.
Andrew: How do you come up with your prices? By the way, the last time you were on you told me I don’t charge that much, I only charge $50 which I thought that’s a decent price or something like that and I started paying attention to pricing since then because back when we first talked I wasn’t really selling much. You really are selling for very little. I see people sell course and guides for $400, $500 and I know because they tell me in private how much revenue they get from it.
Chris: Of course, yeah, I just try to aim for a middle range. I would also say [?] cheap either. Like I don’t have any $5 or $10 product, you know. So, I guess I’m trying to go for a middle ground. Trying to think of a good example, we’re going to have to come back with somebody else who’s kind of gone through that process.
Andrew: OK, so find something and charge for what you’re creating.
Chris: Yeah, of course.
Andrew: Alright, then over deliver and you talk in the book about mile 18 of a marathon they give you an orange slice and how nice a touch that is. That’s what we’re looking for. That little thing that doesn’t cost much but shows that we appreciate. How do we do that? Do you have an example? I’ve got an example of someone who does that brilliantly in a small way. Do you have one?
Chris: Sure. I mean, something that I try to do is I try to use auto-responders fairly well with existing customers and clients and I have a message a couple days after the purchase goes out and it’s like oh my god Andrew you’re amazing, you’re a rock star. We were just sitting around our office today and we say your order come through and we were like holy shit, Andrew Warner purchased something from us. So it’s obviously an auto-responder message but it’s meant to be very tongue in cheek but then at the bottom it’s like we decided to give you something else for free. Like you purchased this version but we’re going to upgrade you to this version, you know. So, I do that kind of stuff a lot. When I advertise different tiers, no one ever gets under delivered but people sometimes if they purchase a lower thing they will get the stuff that’s in the higher thing as well and then their excited about and sometimes they write and their like I think a mistake happened because I got this extra thing and I’m like it’s OK, it’s fine.
Andrew: Oh wow. That’s a great idea.
Chris: Just like a small thing, a very small thing but it’s like you do these things accumulatively and I mean, Guy Kawasaki, Seth Godin, they talk about delight and just whenever we purchase something, all of us, purchase anything is kind of an emotional process and there’s stress and we’re like am I doing the right thing? I might regret this. So, anything you can do to kind of reassure that immediately and make people feel like yeah, this was a good use of my limited resources and I think that helps.
Andrew: So when you create your product do you think about what’s that slice of delight that I can give my customers?
Chris: Yeah. I don’t know if I call it a slice of delight but I think I’m thinking like, what else can we do? And you can go in that direction for a variety of ways. You can also think what else we can do to add revenue. What are the upsell opportunities, what are the cross sell, is there something we can do 30 days later, is there something else we can offer this group of customers 30 days later that might be a good fit or be a good compliment to what they purchased? But at the same time you’re thinking what else can I give them that will please them and encourage them to feel good about their purchase.
Andrew: Alright, so, come up with a product. We came up with the offer for the product. We launched it and we charge for it and we gave somebody a little something extra to excite them about it and they still don’t buy. At that point what do we do?
Chris: Well then we stop trying to persuade them because are you in the persuasion business or are you a door to door vacuum cleaner salesman or are you realized that the world’s a big place and there’s all kind of people out there and maybe we just, I don’t know how to put it, maybe we need to focus more on recruitment instead of evangelism.
Andrew: OK. So instead of saying hey I’ve got this audience and no one’s buying, maybe what we should be thinking is, this is a small audience don’t keep pushing this one product on them, think about who else is out there. So how do we bring people in? You always did this really well but I feel like your talented and you’ve got this gift that I’m not going to be able to duplicate by reading your book. So, and the talent, of course, is writing, is design. You’ve got this way of communicating even what you call, what was the kit, why can’t I think of it right now, Empire Building Kit. You don’t just say I’m going to show you how to build your business, you call the Empire Building Kit every word about it is brilliant.
Chris: First of all, I’ve had some dumb ass names to. My first product was called Discount Airfare Guide or something, so boarding, and then as for the talent thing, these things happen with practice and persistence and the videos, I’m sure the first videos you did were awesome but I’m guessing the ones you do now are probably better then the ones you did in the beginning, right?
Andrew: They weren’t that awesome.
Chris: But I would say that. I guess everybody starts with knowing people, right? So, like, Disorient Brett, he didn’t know a lot of people but he went to all the people he knew, he knew me, he sent it to me. I looked at his eBook and I was like, damn, this actually pretty comprehensive, I see a lot of eBooks and he’s really put a lot of work into this. Sure, I’ll Tweet this out, sure I’ll, do this. And one of the things we talked about before a long time ago was the strategy of starting with a small army and your small army maybe like five or ten people in the beginning. Your buddy from college, your grandma who reads your blog, whatever but everyone can help and everyone can participate so if you give people something to believe in and you maintain that mentality to where when you have 100 people it’s just like there was five and then 1,000, whatever it is. I don’t know, I mean, I don’t think it’s so much about talent or being an amazing network or anything like that. It’s about making something that’s worth talking about.
Andrew: I want to spend a little bit of time on this recruiting issue because it is a problem. I lot of people can create a product. Maybe they can silent get over the insecurity and launch it. Maybe they can get over their issues with money and charge for it but then finding people is tough. You said give them something to believe in. If you sell a book on Evernote or you selling guides to getting frequent flier miles, there isn’t a natural connection between a mission and those products and you both did it. How can we find our mission, the mission behind the product?
Chris: So, in those two examples I would say the focus is not so much the mission but the benefit and both of those products have a very core benefit. You buy the frequent flier thing; you’re going to travel for free, right? You buy the Evernote think your life is going to become easier, you’re going to get more things done, you’re going to be more productive, and you’re going to use that. So, I don’t necessarily think in that case that there’s a core mission beyond that but making people’s lives better is a pretty good mission, right? Improving people’s lives and giving something that’s beneficial to them or taking away something that’s painful to them, another example, I think that’s a pretty good mission, right?
Andrew: But how do you do it and then how do you communicate it to the world. So, trying to think of some example, well, the one example I was going to come up with was shoes because it’s random and then I realized, well, Tony Shay who was on here, did it for shoes. He didn’t make it about shoes, he made it about customer service and shoes happened to be what he’s giving you great customer service for. So, it doesn’t have to connect. You just find that mission and then you communicate it to the world.
Chris: All right, essentially, and I think we mentioned this, it’s all about happiness and helping people to live better and to feel better about themselves and to have more time and more money or less stress, less hassle. That’s ultimately what most successful business do, right? There like, big businesses or micro-businesses, it’s all about improving the state of the world, hopefully.
Andrew: Alex Champagne, who went over your book with me, and this guy actually put together phenomenal book, he’s got a story here that I don’t remember from the book. Nev Lapwood snowboarded addiction, he said we should talk about that as an example of tweaking your way to the bank.
Chris: Yeah, Nev has a great story and that was from British Columbia, Canada. He was a snowboarding instructor and he did OK but the problem with snowboarding instructing is it’s a seasonal business, to limited clients because there’s other qualified people out there. So, he was doing OK but just getting by and then he and a couple of friends had an idea to make snowboarding instructional DVDs basically. So were going to make this whole course and then I’m not confined to the slopes, NBC a few months a year or whatever. This can go out all over the world. And so, he put it out but he had a couple of problems. In the beginning he ordered some stickers from China and they were defective or something. Something didn’t go wrong with the marketing. Problem with the bank. These are just things that just happen. And he kept fixing each thing along the way. Long story short, the product was a big hit. I think it does $300,000 a year or something now. Which again is not huge for some of the startups you talk to, but this is just him, just one guy. One ski bum, self-described, in Canada, who’s making multiple six figures selling these snowboarding instructional DVDs. Now they’re in multiple languages. That’s one of the tweaks. You know, lots of requests from people for different languages. So it’s slowly expanding. And the way he chooses which languages to expand to is based on demand. Basically, they notice when people ask for certain things, and then that’s when they respond to it.
Andrew: How does he get the demand from them? How does he keep track of what people are asking for? And I want to come back to this – what people ask for and what they demand – issue, in a moment.
Chris: Hmm. With him, I’m not sure. I think he has a form or something. I think he’s got some YouTube videos. I mean the English language one is quite popular so people have seen that. And then they say, “Oh, it would be great if we had Italian, or something like that”. I think it’s . . . I don’t think it’s super scientific. I think it is a lot of what I do. I think it’s just paying attention and listening. I don’t know if it’s highly Excel spreadsheet and a lot of data. I think it’s just kind of responding. He also wants to make sure he has time to do what he loves to do, travel the world and keep snowboarding himself. You know?
Andrew: You know you said, “$300,000”. It’s a lot of money to make a year, especially . . .
Chris: It’s a lot of money! It’s a Hell of a lot of money!
Andrew: But you also . . . I forget what you said, but it had something to do with . . . You might have interviewed people that make more. There is this issue that I sometimes have, where I think about, “Oh, Mixergy is doing really well. I’m so excited about how many new members we have! And the people I get to talk to are people who I’d love to just have conversations with for five minutes at a cocktail party. And I get to spend an hour and I get all this excitement”. And then I think, “You know what? The guy I interviewed yesterday is doing that every minute. And he is so much bigger.” You know you start comparing yourself. As exciting as things are, you start comparing yourself to others. Do you ever do that? You don’t seem to.
Chris: I do. No, I do. It’s a bad thing to do. It’s poisonous basically. Nothing good can come from that type of comparison, I think. Maybe the only good thing that can come is some motivation. Right? Maybe some personal motivation. Like, “OK, I want to step it up”. But there’s always going to be somebody with more readers, subscribers, viewers, money, whatever. So when you start focusing on more, that’s a problem.
Andrew: I forget who it was. I’ve got to look this up. Who I interviewed . . . in my research, I found an old New York Times article about him saying, “I only have $10 to $20 million dollars, but my friends have so much more”.
Chris: Right. Exactly. It’s scale. It’s the same thing. It’s scales. The same . . .
Andrew: There was real depression that he was going through when he was comparing himself to them.
Chris: Yeah. I mean it’s probably like there’s somebody running 50 miles a day. You’re running 50 miles a day. But there’s probably somebody doing a lot more.
Andrew: You know what? I do sometimes get that way. I feel like I just did 26 miles on my own. Tomorrow, I’m going to do another 26. That’s a bigger fantasy .. . I never even thought I would even do a marathon, and here I’m doing marathons, on my own, back to back. And then I think about the people whose books I read who go longer. No one is going to remember this. It isn’t even book worthy. What am I getting so excited about?
Chris: That’s a good …
Andrew: The way I get past this, by the way, in both running and in business, is to say –
OK. You heard the guy’s story about how he ran and how he trained. You heard the guy’s story about how he built his company. Are you willing to do that? I go, no! That’s not my passion. I don’t want to do it. Well, can you do it? Well maybe, but do you want to spend six days a week running from beginning to end?
Chris: Yeah.
Andrew: No, that’s not my passion.
Chris: Right.
Andrew: Are you excited about what you’re doing? Yeah, but it could it be a little bit different. Then do a little bit different. Do the part that’s exciting. But forget what you don’t want to do just because you’re comparing yourself.
Chris: So, yeah, it becomes a quality of life issue at a certain point. Right?
Andrew: And, yeah, like, what am I passionate about? Am I really passionate about, let’s say, Instagram. Let’s suppose you were to say to me, “Andrew, if you sat today, and worked for the next – it wouldn’t maybe take you two years, it would take you ten years – you could duplicate Instagram.” I’d go, “I don’t really care about people’s photos. I have no interest in it. I don’t care to solve the problem.
Chris: You don’t want to see what they had for lunch? And like, put a nice filter on their avocado?
Andrew; Yeah, like . . .
Chris: [inaudible]
Andrew: But what I would really want to know is who the people are behind it. Well, anyway . . .
You launch your product and people start giving you feedback. You launched one of your products. I forget which one it was. It was in the book, and I can even remember the part of the book that it was in. But I don’t remember which one.
You had a great launch, and someone said to you, “Chris, call me up and I’ll tell you why I’m not buying from you”. What was your response to that?
Chris: Yeah. I actually don’t even remember which product it was either. But I just remember the launch day. Hundreds of orders are coming in, and I’m drinking far too much coffee, and lots of stuff is happening with the Shopping Cart, and I always try to send personal thank yous to people. So I think it was that day or another day, I think it was that one, that I had sent so many like quick thank yous, like, hey Andrew, thanks for buying, take care Chris, that Google actually shut down my email account for about two hours. They thought I was a spammer or something.
Andrew: Because you were thanking so many customers one at a time, they shut you down. OK.
Chris: Yeah. So I got a Googler on Twitter who kind of looked at the account and opened it up. They said, next time maybe not so many thank yous. But anyway, all this is happening and this one guy is really pissed off, he sends me this little message like, I’d like a refund. And I was like, oh, I’m sorry, of course, but what’s wrong, you know. And he wrote back kind of a sarcastic note and he just said, give me a call and I’ll tell you, you know, how you lost my business or I’ll tell you what’s wrong with your offer, something like that. And I was thinking like, dude, I just don’t have time, like I’m dealing with all these happy customers and people are all like excited and Tweeting about it and stuff. So I just wrote back and I said, I’m sorry that I’ve offended you somehow, here’s your money back, but I can’t call you right now. So I thought about it later and I was like, you know, I’m sure there’s something I could’ve learned from him but at the same time, you know, the customer is not always right. Because I had lots of other customers that were happy and those were the ones that I had to focus on. And so it was just a matter of like, what are we trying to do here? If one person is unhappy then we’ll try to remedy that problem but we’re not going to spend a whole lot of time focusing on it. For better or worse.
Andrew: For better, well, it would be nice if you could talk to every single person and hear all their problems but it’s not efficient to get on the phone with every single one of them and hear them go through why you lost their business.
Chris: Right. And maybe I’m just going to hear that it wasn’t a good fit for him and that’s probably what I would say at the end of the conversation, you know. Thanks for sharing, I agree, this wasn’t a good product for you therefore you have you’re money back. What have I learned from this, you know?
Andrew: How do you go from a guy with less than $100 to having so many customers that Google shuts you down when you thank them individually. Give me a few more steps because there were earlier products that didn’t do so well, what was the first product that you launched?
Chris: The first product that I launched in this incarnation was that discount aircard guy that I mentioned. And it sold about 30 copies and I was thrilled because I did no marketing for it whatsoever, I just put it out and when it made like a thousand dollars from these 30 copies or whatever it was, I was like, there’s some potential here and I had no plans whatsoever to really like monetize my business. I just wanted to be a writer, I did want to write a book, traditionally published book, but I had no plans of like creating this whole thing. So when that happened I saw there was potential and I said, OK, I can do something. A couple other practical things that helped to scale from what it was to what it is know. I learned to offer things at different price points, it made a big difference.
Andrew: You mean same product, different price points.
Chris: Yeah. Well, like creaters, you can have a basic version and an advance version. Just that one step alone make a big difference, you know, in a typical small business revenue. Then I learned, I finally learned to follow your lead and create a continuity program. So where I had a membership site and people are paying every month and it makes it much easier to sleep at night because I know, maybe I’m not launching anything for a while, maybe I’m taking like 6 months off to write a book or whatever, but I still have this income coming in. That helped quite a bit. Getting a little bit more sophisticated with upsale and cross sales, just adding one upsale. Like after people purchased, you know post purchase upsale, you know, you probably know the statistics part much better than me but the most, the time that people are most inclined to purchase from you is right after they have made a purchase from you. So if right after on that thank you page it’s like, hey thanks, you’re awesome, by the way, you know, we’ve got this special deal and no big deal if you don’t want it but it’s 40% off today and nobody else sees this, only our customers see this. You know, just doing stuff like that really added a lot. So it’s very small things but over time they make a big difference.
Andrew: What software do you use to sell? What allows you to do upsell?
Chris: I have a couple of other things, I’m using one shopping cart for it which is very basic off the shelf thing and some people hate it but it has, you know, I think a couple hundred thousand customers. I also have a custom solution that I built with my developer, Nicky Hajal, and he’s amazing, genius guy so he put this thing together for me. But we’re still using some off the self things too.
Andrew: OK. And that’s what allows you the opportunity to offer someone the opportunity to buy one other thing after they buy the first thing.
Chris: Yeah, I think one shopping cart calls it upsell express, which you may have to pay a little bit extra for each month but it’s totally worth it because basically one conversion is going to pay for that monthly thing.
Andrew: Continuity. What software do you use for that?
Chris: That is custom. We’re using Recurly. Recurly.com and it’s integrated with Stripe.com.
Andrew: Oh cool. That’s a really good set-up.
Chris: Yeah, I like it. I had, I was not happy. Well I say me, basically Nicky and two other people who were working on it were not happy with the existing off the shelf solutions for it. We had seen a couple of other things and just didn’t work for us so we made our own for that.
Andrew: We use Wish List Member for that and Premium Web Cart is our shopping cart. By the way, I should know all this because I’ve got to tell you, when we wanted to sell something on Mixergy, we bought your products and we screen shot every step of the your, somewhere in my drop box file is the thing.
Chris: Here’s the thing, you were wrong with it.
Andrew: What?
Chris: You probably saw some errors or something, now I feel bad.
Andrew: I don’t think we saw any errors but we did see things that we wanted to do differently. But it helps us to go through and see how other people sell and what other people do. We bought something from Derrick Halpern recently, Bob Hyler my mentor did, and when he bought it just instinctively we just copy every step of the way, we take screen shots so we know, what is he doing? Different price points, why is that important? I’ve heard Derrick Sivers talk about that.
Chris: Yeah. Curious to see what Derrick says about it but I would say different price points or different options serve different needs and there’s, you know, some people always want a little bit more and if you’re creating a product or a service of some amount of sophistication and there’s probably some things you can put in a basic version, or some things you can put in an advanced version that not everyone needs. So, I would separate those things and have a core version then say if you also want this then here it is here. You know, one practical tip, people often wonder what goes in the advanced version and of course it depends on the niche or the model or the version, whatever, but some of the behind the scenes stuff, people are often interested in the behind the scenes of your own business and some things that you have done to increase profitability and specific numbers and things like that. So if you’re willing to share some of that I would do that but I would put it in a higher tier.
Andrew: I see. Derrick said that, he’s the guy that sold CD baby, and he said, I want to spend more money with you. There’s some people who are crazy like me, he didn’t say crazy, but there’s some people like me, give us the chance to spend more. And sure enough, there are people who just prefer to spend more because they want to take care of the company that they’re buying from. I remember there was a time in my dad’s life where everything he wanted he wanted to buy the best. So it didn’t even matter if it was the exact same product but with the label that said this is the best, he wanted to buy that best. And so, Derrick Sivers says…
Chris: And so you’re giving people what they want, essentially, right? People want to have the option, they want to have the choice and they want to do that and they’re going to feel better by doing that and it’s a strange thing but it’s true.
Andrew: You say, yeah I think it was, you say marketing is like sex, only losers pay for it.
Chris: Right. And I didn’t originate that quote myself, unfortunately, I think that came from Fast Company a couple months ago or a couple years ago.
Andrew: So, you tried buying ads, right?
Chris: Mm-hmm.
Andrew: And what happened?
Chris: You know, I tried buying some ads for a couple of my products and it wasn’t awful. It wasn’t like a terrible flop or anything. I just found that I had superior results doing what I call hustling, you know, I had superior results just doing my thing and connecting with people and writing guest posts and sending mailings to my existing customers and just kind of doing the things that I like to do with the small army strategy. So I guess the whole principle there is it’s not like we’re throwing out advertising completely, it’s just to say that there really is another way, there’s an alternative model. So, to go back to where we started in the very beginning of the interview, you know, if people are like, I don’t know how to get people to my business, you know, I need to buy ads. Well, you could also, you know, chose the hustling model.
Andrew: You also say, don’t fear failure, what’s the worst thing that could happen? You have a story in the book about John.
Chris: Yeah, John Unger has some, actually had some pretty bad things happen, and I don’t want to get this story wrong but he was an artist and his while studio collapsed in on him one day while he was on the roof shoveling snow and then he was also held up at gunpoint by some crazy taxi driver, you know late at night. Lost his girlfriend, lost his apartment, he lost his job in the recession. It just kind of goes on and on. He lost part of his thumb in an accident. So like everybody has a failure to success story but I’d never heard one quite as dramatic as his. But, you know, in the midst of this he went through this soul searching period and he was living in Michigan and there weren’t a lot of jobs to be found and his friends were kind of like, you should pack it in and you should do something to try to get back in the job market somehow. But he chose to kind of stick it out as an artist and now he’s a very successful artists. He makes these fire bowls. I don’t know if you’ve ever seen a fire bowl but kind of like a big thing that hotels and banks have them, some people have them in their backyards, and now he’s doing a lot better. But he stuck it out through that ultimate failure story.
Andrew: What else did I want to ask you? I also want to ask you about from the book. Monitoring you’re business, there’s so many stats. I’ll cover just a little bit more but let me say this to the audience, that one of the things that I love about this book and Chris, you’re previous book, I remember specifically where I was standing when I read your previous book. I remember standing in the subway, reading on my iPhone because I hate reading paper books, I even came to your book signing and I said I will not buy a paper book but here’s a digital version that I bought myself, I didn’t even wait for the publisher to send it to me. But I remember just standing there and just getting lost in your story on the metro. So let me just say this to the audience, a $100 startup is full of these stories that I haven’t even touched on is specific tactics, actionable, and then a story that you’re going to remember. I remember the stories. You can hear Chris tell you these stories just a little bit and you can visualize them and you’ll remember them. Challenge yourself tomorrow and you’ll see that you remember them. Chris, you’re a fantastic story tell, the ideas you have are practical. I can’t recommend this book and you’re writing style enough. Especially, I got to tell you blog posts are fine for me, I like the longer stuff. I like the long, the manifestos, which I remember while I was waiting for my marriage license, had a long wait for the whole day, I was reading one of your manifestos on a PDF, again on my phone. Not like a human being printing it out.
Chris: That’s amazing, thank you for saying that.
Andrew: And I’ll say this too. Usually if I promote things I think people are going to think there’s something in it for Andrew, he promotes this thing and that’s why he’s doing it. I don’t get a share of it. Or I’m worried that they’re going to think, I’m going to get ripped off if I spend a lot of money on this new business idea. It’s not, it’s a book. It’s a book full of these great stories, you can dip in and out of it if you like or you can get lost in it. I’m sure that you will get lost in the book. And even if you’re already running a business, to hear how other people handle the challenged of their life will help you see how you can handle a challenge that you’re working on today or one that’s coming in the future. I will not take this kind of a break in the middle of an interview, especially like 57 minutes into our conversation where I don’t need to butter up Chris to say this, I should have said this at the beginning. I wouldn’t say it unless I meant it. If you have a problem with the book and you’re not happy with it, come to me, I will give you a refund. You wouldn’t even have to take it back to the bookstore, even if you’ve written all over it. I won’t even ask you to send the book back, I will give you a refund personally.
Chris: Thank you, Andrew. If anybody asks for a refund I’ll just send them to you.
Andrew: You say that, even if it’s your friend who buys, I’m not going bankrupt over this. I won’t go bankrupt over this.
Chris: Thank you.
Andrew: Is there some disclaimer I need to offer? Let’s just handle this humanly guys but trust me, we’ve known each other for a while. I wouldn’t recommend this book and I wouldn’t recommend Chris’ writings in general if I didn’t believe in it this much. Should we talk a little but about monitoring your business? I feel like maybe that’s not a high enough point to lead people. Alright, let’s talk about that and then we’ll find a high point. Monitoring your business, one of the problems that I have is everyone keeps telling me about different statistics I should be looking at, different software I could include, it’s just a lot. And I even had Noah Kagan here who now runs AppSumo, at his previous company he said one of the mistakes he made was, at Gambit, was just monitoring too much. What do we monitor and, you know, cause was you monitor gets gross. What do we focus on?
Chris: There’s a lot of different ways to look at that or answer that question. My answer is pick two things, pick two matrix that you’re going to monitor and you’re going to monitor those matrix on a daily basis. You’re always going to be aware of them but there’s just two things, right? So it’s not like there’s all this data or like all this Google analytics, whatever. In my case, I’m concerned with the number of new subscribers to my blog and I’m concerned with the revenue that’s coming through the shopping cart. And those are the two things that I’m aware of pretty much every day and if it starts to kind of go down then I’m like whats, is this normal or should I be doing more, you know, doing something differently. If it’s going up then I’m like what am I doing to cause that. But those are the only two things that I’m monitoring on a consistent basis. Maybe like once a month I might dive a little bit deeper and look at some things, right? Once a month I’ll look at some broader things but, you know, I think it’s really a distraction to look at those things. And also it’s kind of like focusing on the particular stock market price of any company. If you’re doing that, you’re not really focusing on running the company and making the right decisions for the long term, so I focus much more on creating, you know?
Andrew: What about email list? You capture or you ask for an email address, I think every time I visit, when I scroll to a certain part of the page. Oh wait, that’s my Desk.com, I hate that sounds that it does that. I was answering customer support emails on my Desk.com account, used to be Acecily for people who remember, and I guess if you leave it for a while it makes that noise to say, hey, are you still here? Anyway, what about email addresses? That’s a big number for you, isn’t it?
Chris: It is a big number. Are you asking what the number is?
Andrew: I mean, is it something that you keep an eye on because I feel like the number of email addresses would be even more valuable then the number of hits to the site on a daily basis.
Chris: Yeah. That’s what I mean when I say email subscribers.
Andrew: Oh, you said email subscribers. I thought you said hit, OK.
Chris: Not traffic. No, no. I don’t care about traffic basically. I’m just saying it’s not relevant you know? It’s, obviously, if a certain post goes viral and gets lots of people that’s great but I’m by far much more interested in email subscribers. Because that’s the community, that’s people that are raising their hands and are like, I didn’t just stumble on this blog post. I’m actually here and I’m opting in. I want to be a part of that and, obviously, some of them will opt out over time. No I’m totally focused on subscribers.
Andrew: Do you feel comfortable saying how many you have now?
Chris: Yeah. I think right now it’s right at 50,000 with the email and then there’s another group that reads on RSS, I don’t really focus on that as much, and then different groups through Facebook I think is maybe 30,000 or something at the moment, Twitter is more then that. The problem with social networks is people like your page your they follow you on Twitter but then they stop using Twitter. So like over time you build this really big network and you’re like who’s really there. You never really sure you know? Chris Brogan has a lot of good resources about that. So that’s why for me the number one thing I’m looking at is email, is daily opt-in email.
Andrew: And people want to see that. I mean the site is chrisguilo.com but should we just say theartofnoncomformity.com and that will redirect them?
Chris: Yeah that works as well since nobody can ever spell my name.
Andrew: But do read a blog post and just interact with the blog post on the site for a little bit an I think you’re going to see how he’s collecting email address and that’s an interesting thing to see. Alright, final story, do you want to talk about the guy from India who you were telling me before the interview started?
Chris: Yeah. So, we put out this call to hear stories from all over the place and we had some criteria. We said you have to make at least $50,000 a year with your business, you have to be willing to share financial information, detailed stuff about how much money you make, how much it costs to start-up and all that, you have to operate the business with fewer then five employees, in fact most people, people like me are just doing their own thing, you have to have no special skills, have no special skills required to operate the business so, you can learn to operate something but other things, probably not. So anyway, all these different characteristics and we heard from 1,500 people all over the world who filled out a form and gave us this data and then we selected stories from there. So, some of them stood out in different way and that guy from India, his first name is Prina, his story was he helps people make spreadsheets, OK? So at first I heard this and I’m like OK, whatever and then I read a little bit more and I saw his annual income column and it was something like $136,000 a year and I was like, wow, that’s pretty good income in most parts of the United States. In India, I’ve traveled enough to know, that’s a huge income, that’s fascinating, how does he do that? So I looked into it more and I Goggled him and I saw that he was very popular and somebody even posted a blog comment saying that he was their BFF, their best friend forever for Excel and I was like how do you get people to show passion, that’s like the most boarding thing, right? And then I realized, we talked about happiness earlier, the goal is to make people’s lives better, and what he’s doing basically is he’s creating these detailed spreadsheets with macros and stuff for corporate users, people who actually interact with spreadsheets a couple hours a day. He’s making them look good in front of their colleges. He’s saving them time, he basically like, and his whole philosophy is making your customer the hero. So he’s doing that through Excel sheets, which again sounds so boring yet it’s a very helpful thing. And so he’s making six figures in India helping people improve their life at work.
Andrew: You know what, when you say that way it does make sense. Absolutely, how many times do you hand over a spreadsheet to someone? People pay others to make their PowerPoint look nice, spreadsheet same thing. The book’s full of great ideas like that, great business like that and more importantly key tactics that you can use around those ideas. We talked about monitor your business, determine, there’s also outsourcing, anti-outsourcing, tweaking your idea, being profit oriented, being a hustler, launching, over delivering, how to write the right guarantee, and great examples of that, rough awesome format to describe your product. Alright, now I’m actually just pushing, I don’t want to push on the audience. I want the audience to just know that I like this book and if their into any of the stories that they heard today that they should go to 100startup.com and of course thank you for doing the course for the premiums members about how to launch their own start up. All right thank you all for watching and let me know what you think of the book. Bye.
