How did his money blind me?

Like most fledgling entrepreneurs, I wanted a mentor. I met as many nearby folks with "entrepreneur" in their LinkedIn biographies for coffee.

These meetings taught me a lot, and I'd suggest them to any new creator. Attention! Meeting with many experienced entrepreneurs means getting contradictory advice. One entrepreneur will tell you to do X, then the next one you talk to may tell you to do Y, which are sometimes opposites. You'll have to chose which suggestion to take after the chats.

I experienced this. Same afternoon, I had two coffee meetings with experienced entrepreneurs. The first meeting was with a billionaire entrepreneur who took his company public.

I met him in a swanky hotel lobby and ordered a drink I didn't pay for. As a fledgling entrepreneur, money was scarce.

During the meeting, I demoed the software I'd built, he liked it, and we spent the hour discussing what features would make it a success. By the end of the meeting, he requested I include a killer feature we both agreed would attract buyers. The feature was complex and would require some time. The billionaire I was sipping coffee with in a beautiful hotel lobby insisted people would love it, and that got me enthusiastic.

The second meeting was with a young entrepreneur who had recently raised a small amount of investment and looked as eager to pitch me as I was to pitch him. I forgot his name. I mostly recall meeting him in a filthy coffee shop in a bad section of town and buying his pricey cappuccino. Water for me.

After his pitch, I demoed my app. When I was done, he barely noticed. He questioned my customer acquisition plan. Who was my client? What did they offer? What was my plan? Etc. No decent answers.

After our meeting, he insisted I spend more time learning my market and selling. He ignored my questions about features. Don't worry about features, he said. Customers will request features. First, find them.

Putting your faith in results over relevance

Problems plagued my afternoon. I met with two entrepreneurs who gave me differing advice about how to proceed, and I had to decide which to pursue. I couldn't decide.

Ultimately, I followed the advice of the billionaire.

Obviously.

Who wouldn’t? That was the guy who clearly knew more.

A few months later, I constructed the feature the billionaire said people would line up for.

The new feature was unpopular. I couldn't even get the billionaire to answer an email showing him what I'd done. He disappeared.

Within a few months, I shut down the company, wasting all the time and effort I'd invested into constructing the killer feature the billionaire said I required.

Would follow the struggling entrepreneur's advice have saved my company? It would have saved me time in retrospect. Potential consumers would have told me they didn't want what I was producing, and I could have shut down the company sooner or built something they did want. Both outcomes would have been better.

Now I know, but not then. I favored achievement above relevance.

Success vs. relevance

The millionaire gave me advice on building a large, successful public firm. A successful public firm is different from a startup. Priorities change in the last phase of business building, which few entrepreneurs reach. He gave wonderful advice to founders trying to double their stock values in two years, but it wasn't beneficial for me.

The other failing entrepreneur had relevant, recent experience. He'd recently been in my shoes. We still had lots of problems. He may not have achieved huge success, but he had valuable advice on how to pass the closest hurdle.

The money blinded me at the moment. Not alone So much of company success is defined by money valuations, fundraising, exits, etc., so entrepreneurs easily fall into this trap. Money chatter obscures the value of knowledge.

Don't base startup advice on a person's income. Focus on what and when the person has learned. Relevance to you and your goals is more important than a person's accomplishments when considering advice.

> Say Hello To The Lean-Hedge Model

People think starting a business requires significant debt and investment. Like Shark Tank, you need a world-changing idea. I'm not saying to avoid investors or brilliant ideas.

Investing is essential to build a genuinely profitable company. Think Apple or Starbucks.

Entrepreneurship is risky because many people go bankrupt from debt. As starters, we shouldn't do it. Instead, use lean-hedge.

Simply defined, you construct a cash-flow business to hedge against long-term investment-heavy business expenses.

What the “fx!$rench-toast” is the lean-hedge model?

When you start a business, your money should move down, down, down, then up when it becomes profitable.

Many people don't survive the business's initial losses and debt. What if, we created a cash-flow business BEFORE we started our Starbucks to hedge against its initial expenses?

Lean-hedge has two sections. Start a cash-flow business. A cash-flow business takes minimal investment and usually involves sweat and time.

Let’s take a look at some examples:

A Translation company

Personal portfolio website (you make a site then you do cold e-mail marketing)

FREELANCE (UpWork, Fiverr).

Educational business.

Infomarketing. (You design a knowledge-based product. You sell the info).

Online fitness/diet/health coaching ($50-$300/month, calls, training plan)

Amazon e-book publishing. (Medium writers do this)

YouTube, cash-flow channel

A web development agency (I'm a dev, but if you're not, a graphic design agency, etc.) (Sell your time.)

Digital Marketing

Online paralegal (A million lawyers work in the U.S).

Some dropshipping (Organic Tik Tok dropshipping, where you create content to drive traffic to your shopify store instead of spend money on ads).

(Disclaimer: My first two cash-flow enterprises, which were language teaching, failed terribly. My translation firm is now booming because B2B e-mail marketing is easy.)

Crossover occurs. Your long-term business starts earning more money than your cash flow business.

My cash-flow business (freelancing, translation) makes $7k+/month.

I’ve decided to start a slightly more investment-heavy digital marketing agency

Here are the anticipated business's time- and money-intensive investments:

1. ($$$) Top Front-End designer's Figma/UI-UX design (in negotiation)

2. (Time): A little copywriting (I will do this myself)

3. ($$) Creating an animated webpage with HTML (in negotiation)

4. Backend Development (Duration) (I'll carry out this myself using Laravel.)

5. Logo Design ($$)

6. Logo Intro Video for $

7. Video Intro (I’ll edit this myself with Premiere Pro)

etc.

Then evaluate product, place, price, and promotion. Consider promotion and pricing.

The lean-hedge model's point is:

Don't gamble. Avoid debt. First create a cash-flow project, then grow it steadily.

Check read my previous posts on “Nightmare Mode” (which teaches you how to make work as interesting as video games) and Why most people can't escape a 9-5 to learn how to develop a cash-flow business.

How I monetized and sold an abandoned side project for $20,000

The Origin Story

I've always wanted to be an entrepreneur but never succeeded. I often had business ideas, made a landing page, and told my buddies. Never got customers.

In April 2021, I decided to try again with a new strategy. I noticed that I had trouble acquiring an initial set of customers, so I wanted to start by acquiring a product that had a small user base that I could grow.

I found a SaaS marketplace called MicroAcquire.com where you could buy and sell SaaS products. I liked Shareit.video, an online Loom-like screen recorder.

Shareit.video didn't generate revenue, but 50 people visited daily to record screencasts.

Purchasing a Failed Side Project

I eventually bought Shareit.video for $12,000 from its owner.

$12,000 was probably too much for a website without revenue or registered users.

I thought time was most important. I could have recreated the website, but it would take months. $12,000 would give me an organized code base and a working product with a few users to monetize.

I considered buying a screen recording website and trying to grow it versus buying a new car or investing in crypto with the $12K.

Buying the website would make me a real entrepreneur, which I wanted more than anything.

Putting down so much money would force me to commit to the project and prevent me from quitting too soon.

A Year of Development

I rebranded the website to be called RecordJoy and worked on it with my cousin for about a year. Within a year, we made $5000 and had 3000 users.

We spent $3500 on ads, hosting, and software to run the business.

AppSumo promoted our $120 Life Time Deal in exchange for 30% of the revenue.

We put RecordJoy on maintenance mode after 6 months because we couldn't find a scalable user acquisition channel.

We improved SEO and redesigned our landing page, but nothing worked.

Despite not being able to grow RecordJoy any further, I had already learned so much from working on the project so I was fine with putting it on maintenance mode. RecordJoy still made $500 a month, which was great lunch money.

Getting Taken Over

One of our customers emailed me asking for some feature requests and I replied that we weren’t going to add any more features in the near future. They asked if we'd sell.

We got on a call with the customer and I asked if he would be interested in buying RecordJoy for 15k. The customer wanted around $8k but would consider it.

Since we were negotiating with one buyer, we put RecordJoy on MicroAcquire to see if there were other offers.

We quickly received 10+ offers. We got 18.5k. There was also about $1000 in AppSumo that we could not withdraw, so we agreed to transfer that over for $600 since about 40% of our sales on AppSumo usually end up being refunded.

Lessons Learned

First, create an acquisition channel

We couldn't discover a scalable acquisition route for RecordJoy. If I had to start another project, I'd develop a robust acquisition channel first. It might be LinkedIn, Medium, or YouTube.

Purchase Power of the Buyer Affects Acquisition Price

Some of the buyers we spoke to were individuals looking to buy side projects, as well as companies looking to launch a new product category. Individual buyers had less budgets than organizations.

Customers of AppSumo vary.

AppSumo customers value lifetime deals and low prices, which may not be a good way to build a business with recurring revenue. Designed for AppSumo users, your product may not connect with other users.

Try to increase acquisition trust

Acquisition often fails. The buyer can go cold feet, cease communicating, or run away with your stuff. Trusting the buyer ensures a smooth asset exchange. First acquisition meeting was unpleasant and price negotiation was tight. In later meetings, we spent the first few minutes trying to get to know the buyer’s motivations and background before jumping into the negotiation, which helped build trust.

Operating expenses can reduce your earnings.

Monitor operating costs. We were really happy when we withdrew the $5000 we made from AppSumo and Stripe until we realized that we had spent $3500 in operating fees. Spend money on software and consultants to help you understand what to build.

Don't overspend on advertising

We invested $1500 on Google Ads but made little money. For a side project, it’s better to focus on organic traffic from SEO rather than paid ads unless you know your ads are going to have a positive ROI.

I placed a link on HackerNews and got 300 signups in a week. This post explains what happened.

Product Concept

The product is DbSchemaLibrary. A library of Database Schema.

I'm not sure where this idea originated from. Very fast. Build fast, fail fast, test many ideas, and one will be a hit. I tried it. Let's try it anyway, even though it'll probably fail. I finished The Lean Startup book and wanted to use it.

Database job bores me. Important! I get drowsy working on it. Someone must do it. I remember this happening once. I needed examples at the time. Something similar to Recall (my other project) that I can copy — or at least use as a reference.

Frequently googled. Many tabs open. The results were useless. I raised my hand and agreed to construct the database myself.

It resurfaced. I decided to do something.

Due Diligence

Lean Startup emphasizes validated learning. Everything the startup does should result in learning. I may build something nobody wants otherwise. That's what happened to Recall.

So, I wrote a business plan document. This happens before I code. What am I solving? What is my proposed solution? What is the leap of faith between the problem and solution? Who would be my target audience?

My note:

In my previous project, I did the opposite!

I wrote my expectations after reading the book's advice.

“Failure is a prerequisite to learning. The problem with the notion of shipping a product and then seeing what happens is that you are guaranteed to succeed — at seeing what happens.” — The Lean Startup book

These are successful metrics. If I don't reach them, I'll drop the idea and try another. I didn't understand numbers then. Below are guesses. But it’s a start!

I then wrote the project's What and Why. I'll use this everywhere. Before, I wrote a different pitch each time. I thought certain words would be better. I felt the audience might want something unusual.

Occasionally, this works. I'm unsure if it's a good idea. No stats, just my writing-time opinion. Writing every time is time-consuming and sometimes hazardous. Having a copy saved me duplication.

I can measure and learn from performance.

Last, I identified communities that might demand the product. This became an exercise in creativity.

The MVP

So now it’s time to build.

A MVP can test my assumptions. Business may learn from it. Not low-quality. We should learn from the tiniest thing.

I like the example of how Dropbox did theirs. They assumed that if the product works, people will utilize it. How can this be tested without a quality product? They made a movie demonstrating the software's functionality. Who knows how much functionality existed?

So I tested my biggest assumption. Users want schema references. How can I test if users want to reference another schema? I'd love this. Recall taught me that wanting something doesn't mean others do.

I made an email-collection landing page. Describe it briefly. Reference library. Each email sender wants a reference. They're interested in the product. Few other reasons exist.

Header and footer were skipped. No name or logo. DbSchemaLibrary is a name I thought of after the fact. 5-minute logo. I expected a flop. Recall has no users after months of labor. What could happen to a 2-day project?

I didn't compromise learning validation. How many visitors sign up? To draw a conclusion, I must track these results.

Posting Time

Now that the job is done, gauge interest. The next morning, I posted on all my channels. I didn't want to be spammy, therefore it required more time.

I made sure each channel had at least one fan of this product. I also answer people's inquiries in the channel.

My list stinks. Several channels wouldn't work. The product's target market isn't there. Posting there would waste our time. This taught me to create marketing channels depending on my persona.

Statistics! What actually happened

My favorite part! 23 channels received the link.

I stopped posting to Discord despite its high conversion rate. I eliminated some channels because they didn't fit. According to the numbers, some users like it. Most users think it's spam.

I was skeptical. And 12 people viewed it.

I didn't expect much attention on a startup subreddit. I'll likely examine Reddit further in the future. As I have enough info, I didn't post much. Time for the next validated learning

No comment. The post had few views, therefore the numbers are low.

The targeted people come next.

I'm a Toptal freelancer. There's a member-only Slack channel. Most people can't use this marketing channel, but you should! It's not as spectacular as discord's 27% conversion rate. But I think the users here are better.

I don’t really have a following anywhere so this isn’t something I can leverage.

The best yet. 10% is converted. With more data, I expect to attain a 10% conversion rate from other channels. Stable number.

This number required some work. Did you know that people use many different clients to read HN?

Unknowns

Untrackable views and signups abound. 1136 views and 135 signups are untraceable. It's 11%. I bet much of that came from Hackernews.

Overall Statistics

The 7-day signup-to-visit ratio was 17%. (Hourly data points)

First-day percentages were lower, which is noteworthy. Initially, it was little above 10%. The HN post started getting views then.

When traffic drops, the number reaches just around 20%. More individuals are interested in the connection. hn.algolia.com sent 2 visitors. This means people are searching and finding my post.

Interesting discoveries

1. HN post struggled till the US woke up.

11am UTC. After an hour, it lost popularity. It seemed over. 7 signups converted 13%. Not amazing, but I would've thought ahead.

After 4pm UTC, traffic grew again. 4pm UTC is 9am PDT. US awakened. 10am PDT saw 512 views.

2. The product was highlighted in a newsletter.

I found Revue references when gathering data. Newsletter platform. Someone posted the newsletter link. 37 views and 3 registrations.

3. HN numbers are extremely reliable

I don't have a time-lapse graph (yet). The statistics were constant all day.

• 2717 views later 272 new users, or 10.1%

• With 293 signups at 2856 views, 10.25%

• At 306 signups at 2965 views, 10.32%

Learnings

1. My initial estimations were wildly inaccurate

I wrote 30% conversion. Reading some articles, looks like 10% is a good number to aim for.

2. Paying attention to what matters rather than vain metrics

The Lean Startup discourages vanity metrics. Feel-good metrics that don't measure growth or traction. Considering the proportion instead of the total visitors made me realize there was something here.

What’s next?

There are lots of work to do. Data aggregation, display, website development, marketing, legal issues. Fun! It's satisfying to solve an issue rather than investigate its cause.

In the meantime, I’ve already written the first project update in another post. Continue reading it if you’d like to know more about the project itself! Shifting from Quantity to Quality — DbSchemaLibrary

Start now.

When it comes to building my business, I’m passionate about a lot of things. I love creating user experiences that simplify branding essentials. I love creating new typefaces and color combinations to inspire logo designers. I love fixing problems to improve my product.

Business marketing isn't my thing.

This is shared by many. Many solopreneurs, like me, struggle to advertise their business and drive themselves to work on it.

Without a lot of promotion, no company will succeed. Marketing is 80% of developing a firm, and when you're starting out, it's even more. Some believe that you shouldn't build anything until you've begun marketing your idea and found enough buyers.

Marketing your business without marketing experience is difficult. There are various outlets and techniques to learn. Instead of figuring out where to start, it's easier to return to your area of expertise, whether that's writing, designing product features, or improving your site's back end. Right?

First, realize that your role as a founder is to market your firm. Being a founder focused on product, I rarely work on it.

Secondly, use these basic methods that have helped me dedicate adequate time and focus to marketing. They're all simple to apply, and they've increased my business's visibility and success.

1. Establish buckets for every task.

You've probably heard to schedule tasks you don't like. As simple as it sounds, blocking a substantial piece of my workday for marketing duties like LinkedIn or Twitter outreach, AppSumo customer support, or SEO has forced me to spend time on them.

Giving me lots of room to focus on product development has helped even more. Sure, this means scheduling time to work on product enhancements after my four-hour marketing sprint.

It also involves making space to store product inspiration and ideas throughout the day so I don't get distracted. This is like the advice to keep a notebook beside your bed to write down your insomniac ideas. I keep fonts, color palettes, and product ideas in folders on my desktop. Knowing these concepts won't be lost lets me focus on marketing in the moment. When I have limited time to work on something, I don't have to conduct the research I've been collecting, so I can get more done faster.

2. Look for various accountability systems

Accountability is essential for self-discipline. To keep focused on my marketing tasks, I've needed various streams of accountability, big and little.

Accountability groups are great for bigger things. SaaS Camp, a sales outreach coaching program, is mine. We discuss marketing duties and results every week. This motivates me to do enough each week to be proud of my accomplishments. Yet hearing what works (or doesn't) for others gives me benchmarks for my own marketing outcomes and plenty of fresh techniques to attempt.

… say, I want to DM 50 people on Twitter about my product — I get that many Q-tips and place them in one pen holder on my desk.

The best accountability group can't watch you 24/7. I use a friend's simple method that shouldn't work (but it does). When I have a lot of marketing chores, like DMing 50 Twitter users about my product, That many Q-tips go in my desk pen holder. After each task, I relocate one Q-tip to an empty pen holder. When you have a lot of minor jobs to perform, it helps to see your progress. You might use toothpicks, M&Ms, or anything else you have a lot of.

3. Continue to monitor your feedback loops

Knowing which marketing methods work best requires monitoring results. As an entrepreneur with little go-to-market expertise, every tactic I pursue is an experiment. I need to know how each trial is doing to maximize my time.

I placed Google and Facebook advertisements on hold since they took too much time and money to obtain Return. LinkedIn outreach has been invaluable to me. I feel that talking to potential consumers one-on-one is the fastest method to grasp their problem areas, figure out my messaging, and find product market fit.

Data proximity offers another benefit. Seeing positive results makes it simpler to maintain doing a work you don't like. Why every fitness program tracks progress.

Marketing's goal is to increase customers and revenues, therefore I've found it helpful to track those metrics and celebrate monthly advances. I provide these updates for extra accountability.

Finding faster feedback loops is also motivating. Marketing brings more clients and feedback, in my opinion. Product-focused founders love that feedback. Positive reviews make me proud that my product is benefitting others, while negative ones provide me with suggestions for product changes that can improve my business.

The best advice I can give a lone creator who's afraid of marketing is to just start. Start early to learn by doing and reduce marketing stress. Start early to develop habits and successes that will keep you going. The sooner you start, the sooner you'll have enough consumers to return to your favorite work.