- 1 The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future
- 1.1 Follow your passion.
- 1.2 Transform your passion into a business.
- 1.3 Give the customer what they want.
- 1.4 Ideas are great, but businesses are built through action.
- 1.5 Focus on adding value for your customer.
- 1.6 What do people want?
- 1.7 Make them an “irresistible offer.”
- 1.8 Promotion is key.
- 1.9 Pre-Launch activity can create buzz.
- 1.10 Grow your business.
- 1.11 Pay attention to your bottom line.
- 1.12 How can you cut costs? Think about:
- 1.13 What are the ultimate takeaways from The $100 Start-Up?
The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future
Author Chris Guillebeau wants to empower you to start your business. Right now. With the skills you already have, and a little seed money. The $100 Startup is all about the micro-entrepreneur. What does that mean? A micro-entrepreneur, or solo entrepreneur, is a one-person business.
Many business owners become entrepreneurs by accident, and then love the freedom and control of being in the driver’s seat. Guillebeau believes that starting your own business gives you more security and freedom, and he’s here to teach you exactly how to get started.
Rather than delving into finding investors, The $100 Startup focuses on how you can start your business with limited up-front investment, grow your business, and eventually become your own boss.
The $100 Startup teaches you to:
- Follow your passions to discover your business niche.
- Build relationships and maximize profits.
- Feel free to live and work on your own terms.
Sound good? Let’s go!
Follow your passion.
You don’t need an MBA to start your own business. Thanks to the internet, you can start a company without plunking down money for a brick-and-mortar space. But where to start? Beyond your professional background, you have other skills you’ve carefully honed over time. It’s not just about “professional” activities.
For example, when Tyler, the Creator lost his job at Starbucks, he was able to shift his focus towards music. According to Daymond John’s Rise and Grind: Outperform, Outwork, and Outhustle Your Way to a More Successful and Rewarding Life, making music started out as an online hobby. As his following grew online, Tyler focused more and more on his craft rather than his day job. After being fired from Starbucks, Tyler, the Creator went on to design a neighborhood carnival that grew into the successful event Camp Flog Gnaw.
However, Guillebeau reminds readers that you don’t have to quit your day job if you don’t want to. Here Guillebeau points to Gary Leff: one of George Mason University’s financial officers by day, and travel consultant working to maximize frequent flyer points by night.
Let’s face it, you spend a lot of time at work, but how do you spend your weekends or evenings? Chances are, you have the seeds to grow your business hiding in plain sight. While not every hobby can grow into a successful business, there’s often a way to monetize your enthusiasm and position yourself as a leading expert.
Nate Silver presents another case study that Guillebeau examines in detail. A baseball fanatic, Silver applied his professional statistics skills to his hobby. Noting down stats during each game, Silver began organizing a database of baseball statistics. This database eventually became PECOTA, a software program that can predict a player’s pitching performance on the field.
Once you’ve identified an interest with potential, Guillebeau suggests that you study it closely. Start researching this field and work to identify speed bumps you’ll need to negotiate, such as regulations like health codes.
- Teach someone about your interest?
- Create a related experience?
- Write or speak about your expertise?
- Sell or create a related product?
- Offer repair services for items related to your interest?
Transform your passion into a business.
Now that you have an interest or hobby in mind, let’s get serious:
- Identify Gaps in the Market: Are you frustrated with a specific lapse in the market? What’s missing and how can you fill the gap? (ie. Do you wish you could attend multiple fitness studio classes for the price of a gym membership? Apps like ClassPass and StudioHop address this.)
- Look towards technology: Online content, apps, and new tools are all potentially rich areas, but think about their inverse, too. (ie. Can you add to the mindfulness niche where you can help customers self soothe and retreat from being bombarded by tech connectivity?)
- Added content: Look at successful businesses. Can you provide an accessory or a service to complement this existing venture? (ie. Can you write guides to expand the traditional use of a product or service?)
As an example, Guillebeau cites Brett Kelly. This former software developer identified a gap in the market. A regular user of Evernote, he wrote a usage guide for other Evernote users. His book was a success with online sales reportedly earning him about $120,000.
Give the customer what they want.
Once you have your interest area, Guillebeau suggests that you talk to friends and look online at forums and social media accounts. Identify your ideal customer. What do they want? Guillebeau cites a 2014 article from the Wharton School of the University of Pennsylvania to show how successful businesses tap into Maslow’s hierarchy of needs.
Ultimately, people want to feel good. By applying these human needs to the needs of your ideal customer as Guillebeau suggests, you will provide goods or services that contribute to this need.
Ideas are great, but businesses are built through action.
Guillebeau asserts that the budding micro-entrepreneur can’t give in to fear. He suggests that rather than spend too long planning your business, you should take action now by writing your business plan.
The $100 Startup keeps this process simple:
- Identify your IDEA
- Write your company’s MISSION STATEMENT (keep this short—about the length of a Tweet to hone in on your actual goals)
- Establish your STARTUP COST
- Design SALES and PROMOTION PLANS.
Focus on adding value for your customer.
Guillebeau argues that value and customer needs are linked. He suggests that while brainstorming, you should focus on how the customer benefits rather than the services you’ll provide. By tapping into the psyche of your customers, you’re fulfilling their needs and creating a business with value.
What do people want?
Guillebeau breaks this down into categories like money, convenience, time, and acceptance. He suggests that you take time to evaluate how can your business facilitate one or more of these wants.
Make them an “irresistible offer.”
Chris Guillebeau emphasizes the “irresistible offer.” What does this mean? An offer is irresistible when the benefits of the purchase outweigh the cost. Guillebeau tells us that you can translate this irresistible offer into sales by create a “nudge,” or call to action, to prompt customers to buy. For example, this can be a limited time offer or a special early-bird rate during your pre-launch period.
Promotion is key.
How can you reach your ideal customer if they don’t know about your business? Guillebeau suggests that you start promoting your start-up in the pre-launch phase. Talk to friends and colleagues about your impending launch, and take to social media to get the word out to an even wider audience.
Guillebeau warns that you should avoid being pushy. A good rule of thumb is to keep your business cards handy and your short mission statement clear and conversational. Chances are, you’ll be asked socially what you do for a living. That’s a great opportunity to take your mission statement for a test drive. How do people react? If they’re interested, offer them your card.
Pre-Launch activity can create buzz.
According to Guillebeau, you should start out with targeted marketing campaigns to reach your ideal customer before you launch your business. Let them know your product or service is coming and why they should get excited.
- Be concrete: Share relevant dates and timelines pertaining to your launch. Let potential customers know how they can maximize their benefit by opting in early.
- Start promoting now: Utilize both social media and word of mouth promotion to build interest and anticipation for your start-up.
Grow your business.
The $100 Startup’s key to building trust is consistency. Focus on increasing traffic to your site by implementing consistent contact. Think about maintaining growth through daily, weekly, monthly contact.
Guillebeau suggests that you aim to post daily to social media. Connect weekly with current and potential customers. Make monthly contact with existing customers via newsletters to let them know about contests, upcoming promotions, and ensure satisfaction.
Create added-value up-sells to tempt customers. Design package offerings that combine goods and services to maximize added value and incrementally increase product cost (and your profit). For example, Guillebeau cites the way restaurants have multiple sizes with varying prices for menu items, and how paying for subscriptions to online platforms like Youtube can eliminate ads.
How do you keep growing? Guillebeau suggests that you take what you’ve already built and expanded it. Let’s look at Nate Silver and his statistics one more time. After selling PECOTA to Baseball Prospectus, Silver created FiveThirtyEight. His new website drew on his strengths and applied his statistical skills in predicting election results. After successfully predicting the results of several American elections, Silver wrote a nonfiction book The Signal and the Noise about the art of statistics and probability.
This is a great example of expanding out from your initial venture and also creating passive income. Once his book was complete, Silver’s only task to continue to monetize it is promotion.
Similarly, Guillebeau cites Jason Fried and David Heinemeier Hansson. Their book Rework works alongside their company Basecamp as an additional opportunity for revenue serves as an extra stream of revenue for their company, Basecamp.
Ideas are great, but at the end of the day, Guillebeau reminds readers that you’re working to build a business that earns a profit. Businesses are only profitable if they’re earning more than they’re spending. He urges readers to keep fine-tune your business plan as necessary. Your goal is to minimize your operating cost while maintaining customer loyalty and satisfaction.
How can you cut costs? Think about:
- Working from home
- Start out by using independent contractors rather than employees
- Be your own PR team
- Research what business expenses are tax-deductible.
Is your business growth healthy? It may be time to scale.
What is scaling? Guillebea defines scaling as stimulating growth without compromising the profits or quality of your business. Guillebea references a 2016 article from Entrepreneur Magazine that suggests micro-entrepreneurs can maximize productivity by outsourcing certain tasks to freelancers or outside companies. How does The $100 Startup suggest you adapt to growth?
Here are some examples:
- Outsourcing tasks (ie hiring a virtual assistant to manage admin tasks, contacting freelance writers to curate your newsletter)
- Automating services (ie using programs for payroll, training programs for your employees, and social media management platforms)
What are the ultimate takeaways from The $100 Start-Up?
- Monetize your passion: Examine your interests and hobbies to find a niche for your business.
- Take action: Plan, but also DO. You won’t have a business if you don’t defeat your fear and put your ideas into action. Write that business plan!
- Focus on sales: Don’t be pushy. Build relationships, and sales will follow. Remember—you’re building a business you’re proud to promote. That makes this part easier.
- Profit Profit Profit: Businesses make money. Don’t be afraid to manipulate your business strategy and overhead. Maximize profit by minimizing your overhead without compromising the integrity of your business.