The $100 Startup - Deepstash
The $100 Startup

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The $100 Startup

by Chris Guillebeau

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The $100 Startup Model

  • Follow-your-passion model.
  • Build something that people want and give it to them.
  • Low startup cost.
  • At least $50,000 a year in net income.
  • No special skills.
  • Full financial disclosure.
  • Fewer than five employees.
  • Could you explain what you do to your grandmother, and would you be willing to?

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Passion And Usefulness

  • But in the overlap between the two circles, where passion or skill meets usefulness, a business built on freedom and value can thrive.
  • Not-so-secret recipe for microbusiness alchemy: Passion or skill + usefulness = success
  • There’s no failproof method; in fact, failure is often the best teacher.

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“Passion, though a bad regulator, is a powerful spring.”

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To Start A Business

To start a business, you need three things:

  1. A product or service,
  2. A group of people willing to pay for it, and
  3. A way to get paid. Everything else is completely optional.

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?

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Make People Feel Good

  • The secret to a meaningful new career was directly related to making people feel good about themselves.
  • You can pursue freedom for yourself while providing value for others.
  • Value means “helping people.”
  • The more a business can focus on core benefits instead of boring features, the more customers will connect … and purchase.

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HOW TO PUT HAPPINESS IN A BOX AND SELL IT.

Strategy 1: Dig Deeper to Uncover Hidden Needs

Strategy 2: Make Your Customer a Hero

Strategy 3: Sell What People Buy

  • If your business focuses on giving people more of what they want or taking away something they don’t want (or both), you’re on the right track.
  • Businesses that help their customers be happy are well-positioned to succeed.

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“Catch a man a fish, and you can sell it to him . Teach a man to fish, and you ruin a wonderful business opportunity.”

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Give Them The Fish

  • Give people what they really want, not just what you think they should have. Give them the fish!
  • (Passion + skill) → (problem + marketplace) = opportunity
  • You just have to find the right passion, the right audience, and the right business model.
  • The first $1.26 or first sale is the hardest, so find a way to get your first sale as quickly as possible. Then work on improving the things that are working, while ignoring the things that aren’t.

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Questions Before A Startup

  1. Impact : Overall, how much of an impact will this project make on your business and customers?
  2. Effort: How much time and work will it take to create the project?
  3. Profitability: Relative to the other ideas, how much money will the project bring in?
  4. Vision: How close of a fit is this project with your overall mission and vision?

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“A desk is a dangerous place from which to view the world.”

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Launch

  • In the battle between planning and action, action wins.
  • You need to show people how you can help remove or reduce pain.
  • Mission statement: We help [customers] do/achieve/other verb [primary benefit].
  • “Plan as you go” to respond to the changing needs of your customers but launch your business as soon as possible, with a bias toward action.

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“An ounce of action is worth a ton of theory.”

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Magic Formula

  • KEEP COSTS LOW
  • GET THE FIRST SALE AS SOON AS POSSIBLE
  • MARKET BEFORE MANUFACTURING
  • RESPOND TO INITIAL RESULTS
  • MAGIC FORMULA: THE RIGHT AUDIENCE, THE RIGHT PROMISE, THE RIGHT TIME = OFFER YOU CAN’T REFUSE.
  • Work “on” your business by devoting time every day to activities specifically related to improvement, not just by responding to everything else that is happening.

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Urgency

  • If you’re not sure where to spend your business development time, spend 50 percent on creating and 50 percent on connecting.
  • The difference between a good offer and a great offer is urgency (also known as timeliness): Why should people act now?
  • The message you want to communicate is: “This is why this project will be a game changer, here’s how people will benefit, and here’s why you should care.”

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Substance And Style

  • Style without substance = flash (No one respects these people.)
  • Substance without style = unknown (Everyone who knows these people respects them, but not many people know them.)
  • Style with substance = impact (This is the goal.)
  • Remember that most core needs are emotional: We want to be loved and affirmed. Relate your product or service to attractive benefits, not boring features.

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Show Me The Money

  • Spend as little money as possible and make as much money as you can.
  • Spend only on things that have a direct relationship to sales.
  • Borrowing money or investing a lot of money to start a business is completely optional.
  • Maintain a practice of regular rate increases so that it becomes normal and expected.

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Three Key Principles to Focus on Profit

  1. Price your product or service in relation to the benefit it provides, not the cost of producing it.
  2. Offer customers a limited range of prices.
  3. Get paid more than once for the same thing.

Also, having a high-end version creates an “anchor price.” When we see a superhigh price, we tend to consider the lower price as much more reasonable … thus creating a fair bargain in our minds.

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“Remind people that profit is the difference between revenue and expense. This makes you look smart.”

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Features Vs Benefits

We tend to default to talking about features, but since most purchases are emotional decisions, it’s much more persuasive to talk about benefits.

Example: A feature is descriptive (“These clothes fit well and look nice”) and a benefit is the value someone receives from the item in question (“These clothes make you feel healthy and attractive”).

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Small Changes = Big Impact

  • The not-so-secret to improving income in an existing business is through tweaks: small changes that create a big impact.
  • If you operate a service-based business, consider how you can introduce a “productized” version of the service.
  • Providing both a product and a service helps with your marketing as well.
  • To get an unfair advantage, provide remarkable service.

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You can grow a business one of two ways:

  • Horizontally, by going wide and creating different products to apply to different people. Horizontal expansion involves going broader by serving more customers with different (usually related) interests;
  • Vertically, by going deep and creating more levels of engagement with customers. Vertical expansion involves going deeper by serving the same customers with different levels of need.

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why 1 + 1 can equal 3:

……“A successful partnership (or any type of collaboration) should create a combined business which is at least 33 percent larger than the sum of what the two individuals could achieve on their own.

  • Big problems create big opportunities.
  • Our future is tied to what we do, decisions we make.
  • Be sure to get the paperwork done first.

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“Your time is limited, so don’t waste it living someone else’s life.”

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“I am just a child who has never grown up. I still keep asking these 'HOW' and 'WHY' questions. Occasionally, I find an answer.” — Stephen Hawking