I first came across The $100 Startup by Chris Guillebeau at a local bookstore many years ago while I was in university. At the time when I read this book, the concepts were not immediately relevant to me. However, since graduating, many of the ideas in this book have had an influence on me. This book offers plenty of practical advice and detailed steps on starting a small business. The following summary includes the essence of each chapter.
Passion or skill + usefulness = success
Everyone has the skills they need to become an entrepreneur - they just need to know where to look. Many projects start with related skills as opposed to directly requiring certain skills. To start a business, you need three things: a product or service, a group of people willing to pay for it, and a way to get paid. You do not need a lot of money to start. Strive for convergence: the intersection between your passion and what others care about.
Instead of trying to teach people how to fish, give them the fish instead. Provide value by helping people and providing something desirable and of worth, created through exchange or effort. Give people what they really want, and not what you think they should have.
Market core benefits that relate more to emotional needs than physical ones. Don’t just market a list of features. People want more of some things, such as time and less of other things, such as stress. Focus on what can be added or taken away to improve someone’s life.
Not every passion or hobby is worth building into a business, and not everyone will want to have a business based on a passion or hobby. Good businesses offer solutions to problems. Businesses that seem to be based on a passion are typically built on something indirectly related, not the passion itself. Always ask yourself, “what is the business model”?
An example of a good business model is establishing a specialized consulting business. This is something that provides value that can be done quickly and without significant overhead. Try to fill a niche instead of being general.
Understand who your people are in terms of their shared beliefs and values. Use surveys to understand your customers and prospects - the more specific, the better. Determine what is the most important thing that you can do for them.
Establish yourself as an authority for your target demographic. Try and simplify something about a process that they would like to benefit from. Take advantage of trends. Use the decision-making matrix, where you aim to maximize impact, effort, profitability, and vision.
Have a bias towards action and launch your business as soon as possible. Avoid getting caught up in planning. Instead, plan as you go and respond to the changing needs of your customers. Market your product before creating it to gauge interest and the initial response. Get your first sale as soon as possible, in order to create motivation that will drive you even further.
Keep your business plan simple, and try to offer a solution that addresses a deep pain or desire:
We provide… for…
We help… do/achieve…
What people want and what they say they want are not always the same thing. Your job is to figure out the difference. Connect your offer to the direct benefits that customers will receive. Generally, people like to feel like they are choosing to buy something, instead of being sold something.
Think carefully about the objections that customers may have and respond to them in advanced. Instill urgency to get customers to make a decision and act now (this can be the difference between a good offer and a great offer). Offer reassurance and acknowledgement immediately after someone buys into something. Find small and meaningful ways to go above and beyond expectations.
Build anticipation for a launch by marketing far in advanced before the launch, and regularly communicating with prospects. Tell a good story and make sure you communicate why people should care immediately, and what the timelines are. Blend strategy - the why, the offer, and long-term plan - and tactics - the how, such as the timing, price, and what the pitch is.
It is not a given that people will come just because you built something. Marketing is important to let people know what you built. Spend half of your time creating and the other half on connecting to people on a regular schedule, getting the word out through the people you already know. In the beginning, say “yes” to every reasonable request, and become more selective as you become more established.
The primary goal of operating a business is to make money. This is not to be confused with a hobby. Aim to get paid in multiple ways and more than once through a variety of methods. You have access to more resources that you think. Get creative to take advantage of different opportunities. You do not need to borrow money or go into debt to start a business.
Increasing income for an existing business is usually easier than initially starting the business. Horizontal expansion involves going broader by serving more customers with different but related interests. Vertical expansion involves going deeper by serving the same customers but with different levels of need.
Through careful choices, you can grow a business without dramatically increasing the workload, which will allow you to scale without hiring more people. For example, through increasing traffic, conversion rates, or price. Easy growth options include adding a service to a product-based business (or vice versa) or deploying a creative series of up-sells and cross-sells.
You can multiply your output by leveraging a variety of skills and contacts, such as affiliate recruitment and partnerships. Depending on the kind of business you are building and your personality, you may want to explore outsourcing. If you decide to enter into a partnership, ensure you have agreements in place and that these partnerships create leverage. Use the hub and spoke model of maintaining one online home base while using other outposts to diversity yourself through social media.
There are many paths to achieving freedom through different working arrangements with your business. You can pursue growth, decide to stay small, or do a combination of both. This all depends on what kind of freedom you would like to achieve.
Aim for a scalable business that is teachable and valuable. Build teams and reduce owner dependency. Work on your business by focusing on tasks related to improvement, instead of just putting out fires. Regularly monitor on a monthly basis a few key metrics that are the lifeblood of your business.
The biggest battle is usually with our own fears. However, we are in control of this. Do not wait for permission or advice to start - just do it and take a big leap. Celebrate your successes and reflect on them when times are hard. Do not waste your time living someone else’s life.