- Geekmaster
- 2019-08-10 10:16:40
- 10 minute(s)
How do we escape the 9-5 shackles of corporate drudgery to build a life of adventure, meaning and purpose? Can we do this with $100 (or less) in our pocket?
The answer to both questions is yes. At least according to Chris Guillebeau, author of “The $100 Startup: Fire Your Boss, Do What You Love and Work Better To Live More“.
From a pool of over 1,500 small business owners who built businesses earning $50,000 or more from a modest investment (often $100 or less), Guillebeau’s book focuses on the 50 most intriguing case studies.
With the key themes of freedom and value at its core, “The $100 Startup” is a brilliant blueprint assisting “wanna-preneurs” keen to heed the rallying call of the micro-business revolution.
Espousing that borrowing money and debt are optional, the book proposed that entrepreneurs starting such businesses were more interested in the lifestyle it offered rather than making oodles of cash.
By bootstrapping, bartering, reducing overheads (rental and manpower), and leveraging technology (especially the web), one can start one’s own business almost on a dime without being beholden to creditors or venture capitalists.
Less Is More
Microbusinesses—businesses typically run by only one person—have been around since the beginning of commerce.
What’s new, however, is how quickly someone can start a business and reach a group of customers. The building process is much faster and cheaper today than it has ever been. Going from idea to startup can now take less than a month and cost less than $100.
Success is highly linked to providing value. A product or service of “value” tends to help people get more of what they want (money, love, attention) or remove things they don’t want (stress, anxiety, debt). Notice that often the underlying reason for these desires is emotional.
You already have the skills you need—you just have to know where to look. Even if you don’t have the specific skills to run your business of choice, odds are you have related skills.
Chris has spent more than 10 years traveling the world, initially on a quest to visit every country (all 193!) and then on an extended journey of research for his book, The $100 Startup. Along the way, he often meets with entrepreneurs and small-business owners, seeking to understand how they’ve built their projects.
Spice Up Your Rice!
Give Them The Fish
To create true value, we should give people what they truly want, and not just what we think they want. In other words, we should give them “the fish”.
You need to find out what drives your potential customers. What do they value? What do they care about? Learn who your customer is. Dig deeper to uncover hidden needs, latch onto popular hobbies or passions, make our customers heroes, and sell what they’ll buy.
As you begin to think like an entrepreneur, you’ll notice that business ideas can come from anywhere. While thinking like this, you’ll notice opportunities for micro-business projects everywhere you go.
Here are a few common sources of inspiration:
1. An inefficiency in the marketplace
2. New technology or opportunity
3. A changing space
4. A spin-off or side project
Ask three questions for every idea:
1. How would I get paid with this idea?
2. How much would I get paid from this idea?
3. Is there a way I could get paid more than once?
Convergence Unlocks The Doors
We learned that you need to take action to start a business.
But often we take the wrong action. The first thing you need to do to have business success is not creating your product, but to test whether people are willing to pay for that product.
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.
In the overlap between the two circles, where passion or skill meets usefulness, a micro-business built on freedom and value can thrive.
One example Guillebeau shows is that of a guy who wanted to produce an expensive magazine. He advertised his book and found two customers who were willing to pay $900 for his high-end journal. As soon he knew that people were happy to pay, he created the product.
Tweak Your Marketing
Switch From Features To Benefits
When you have your product ready and want to advertise it, make sure you speak about the benefits your product is offering. Do not speak about features, show how your offer is helping your customers.
You should also provide emotional benefits instead of just physical features and focus on what we can add or take away to improve people’s lives.
- Restaurant : From “Food and drinks” to “Relax and let us take care of you after a busy day”
- Software: From “Developer” to “We provide technology solutions to take your headaches away”
Old School Marketing Is Worthless
Moreover it is time to stop thinking of our customers as numbers. Where did that come from anyway? Probably from the era of broadcast mentality where we just sat there as consumers in a zombie like state while commercial messages went into our brain and magically caused us to spend money.
Treat your customers in your marketing efforts like real people. Call it “persona” or “customer profiling” or whatever. But it’s about putting a real name and face to your ideal customer.
- Traditional Demographics: Age, Location, Sex/Gender, Race/Ethnicity, Income
- New Demographics: Interests, Passions, Skills, Beliefs, Values
Do you see the difference? It’s about truly discovering “who” your customer is at a deeper level. And the deeper you engage and know your ideal customer; the easier it is for them to buy from you.
Launch Is Hype
Because a planned launch campaign can provide far better results than simply putting something out there and saying, “Hey, here you go,” you’ll want to think carefully about how to structure it.
The campaign usually unfolds in a series of messages you send to your audience, and you should keep the Hollywood analogy in mind: 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 goal of a good launch is not just to convert as many prospects as possible; it’s also to preserve your relationship with other prospects and increase your influence. The reason this is important is because you don’t want to hammer people too hard; it’s better to build relationships over time.
Tell your audience what you are working on, what it means to them, how it will help them, when they will be able to buy it, and for how long you will have an introductory price.
Show Me The Money
To start a business you do no longer need massive amounts of money. That’s where the title of the book comes from: 100 dollar should be enough to start a micro-business.
There is no need to taking on debt. Staying debt free is certainly not enough. You need to make a living and for that, you need to bring in money. Stay focused on making money. Track what is coming in and what is going out.
Action Beats Planning
So many businesses suffer an early death by over-planning. The thing is, when starting out, if you spend too much time planning, you don’t have enough time to take action.
Far too many want-to-be entrepreneurs spend their time making complicated plans that they never actually put into place. Rather than over plan and underact, you should look to create simple basic plans that guide your way and take action on them, adjusting your course as you see fit.
The not-so-secret to improving income in an existing business is through tweaks: small changes that create a big impact. If a product typically has a 1.5 percent conversion rate and you increase the rate to 1.75 percent, the difference adds up to a lot of money as time goes on.
Keep costs low at the start and get first sale asap.
- Create urgency through time-restricted sales
- Offer reassurance immediately after someone buys something from you
- Create a Hall of Fame to shine the spotlight on customers while providing social proof
- Encourage referrals
- Conduct A/B testing to see which works better
What About Pricing?
When your business is up and running, you need to make changes to optimize your business and bottom line. Make sure those changes are small and can be measured. For example, you might increase prices from time to time, to find out whether this also results in a bigger profit.
Pricing of your product or service is a crucial part of business success. Ask for too little and you might not be able to make a living. Make it too high and your customers might run away.
Do not confuse your customers with too many offers or price tears.
To generate greater revenue, one could adopt three key principles:
- Price one’s product or service in relation to its benefit and not costs of production
- Offer customers a limited range of prices
- Get paid more than once (ie the subscription model).
What's Next?
If you are running a successful business, you should think about what you want to do to grow your business.
You can grow your business my offering more to existing customers; this is called vertical growth. You can also utilize horizontal growth by creating other products for a different customer segment.
To multiply one’s efforts, one could use a “hub-and-spoke” model of maintaining a home base while using other outposts to diversify oneself. One should also determine if outsourcing to virtual assistants, subcontracting and hiring employees would truly work.
Partnerships such as affiliate programmes may also work. However, the author advises that a more generous commission scheme for affiliates may work better in attracting higher quality partners.
Finally, to sustain one’s entrepreneurial efforts, one should decide whether to stay small as a solopreneur or grow one’s business.
Be aware that it is perfectly fine not to grow your business as well. If you are happy with your bottom line, you can optimize on a different metric than money.
Hereafter a few principles on running/growing your business along the way:
- Make sure your social media strategy talks about you and your product enough
- Make sure you work on your business, not just in it
- Select one or two metrics and be aware of them at any given time (e.g. sales, incoming leads)
- Leave everything else for a monthly review where you delve into the overall business
Final Thoughts
Stuffed with fascinating stories of individuals who uprooted themselves from corporate comfort to embrace micro entrepreneurial ventures, The $100 Startup inspires as much as it instructs.
What I love about this book is that while it a how-to guide for someone starting their side business, there is plenty that I can still take away as someone who is already in business.
Humans have the tendency to make things complicated. Chris’ book focuses on the aspect that building a business can be straightforward.
This book is obviously the ideal read for anybody looking to start their own business on the cheap. If you are working a nine-to-five and looking at starting a business, then The $100 Dollar Startup is the perfect companion.
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[…] very little capital, very little risk, and creates the ultimate freedom (especially if you build a lifestyle business). Even better, the nature of business means you’re solving a problem in the world . […]