Ideas for Startup Marketing – Take something boring and make it exciting

If someone asks me which field should I choose for my new business, I would tell them to go with a boring field. Why boring, why not something exciting like Twitter mashups, iPhone apps, a brand new social network etc.

Well, there are multiple reasons for this.

  • Boring fields are time tested for profitability and they have existing customer base.
  • You can easily excite the customers in the boring field.
  • Hiring and retaining employees is easy.
  • Raising capital or getting help is a breeze because everyone knew the line of business and how it works.

But we tend to shy away from boring fields like accounting, law, manufacturing, education, various types of services etc. because, well they are boring.

So today, I want to share a simple example of how you can take something boring and make it exciting for your end users.

Take a look at the example

Medicine cups made exciting

Recently, both my kids had throat infection, cough, cold & fever. So the doctor prescribed a bunch of tonics (syrups) and asked us to medicate them twice a day. All the tonic bottles had similar looking medicine cup. A bland, boring, transparent plastic cup with markings on it to know when you poured 5ml.

Except one of them. It had a fish cartoon on the back. Guess what, my kids love to take medicine from the fish cup. They call it fish mandu – meaning Fish medicine. They line up and open their mouth excitedly when we hold the fish cup in hand. The others, not so much. And it is not because the medicines taste bad or anything. They all are sweet.

Are your customers excited about your product and service?

The lesson is simple. Deliver more than you promised. Understand what excites your customers and give it to them.

So, how are you planning to excite your customers? Share your ideas and interesting examples in comments.

Start-up Founder Litmus Test – Are you going to suck or win as an entrepreneur?

Back in school, you must have learned about litmus test. A simple test to determine if a liquid is acid or base. When dipped in the liquid, blue litmus paper would turn red if the liquid is acidic (and vice-a-versa if the liquid is basic).

Today I want to share a similar test to see if you can fight-it-out as an entrepreneur.

First go ahead and take the test. Answer each question in Yes or No.

  1. You spend at least 75% of what you earn.
  2. You are shy to ask for money for your services.
  3. You want to do everything yourself.
  4. You think you can outsource everything
  5. Your idea of success is yachts, beaches, cars, drinking & lavish life.
  6. You think earning $1 million is easier than borrowing $1 mn.
  7. You do not believe in yourself.
  8. You are waiting for the perfect idea to start your company.

If you have answered 5 or more with YES, your life as an entrepreneur is going to be tough. If you answered 2 or fewer questions with YES, then you have right mindset to become an entrepreneur one day.

How did I fare in this test, back when I started (in late 2009):

1. You spend at least 75% of what you earn:

No. I used to make Rs 40,000 per month after taxes. That is about $1000. Jo (my wife) used to make another $1000. Total earnings: Rs 80,000. We used to spend Rs 20,000 per month –

  • Rent: 8,000
  • Groceries: 4,000
  • Utilities (electric, maid, water, cable, phone, internet): 3,000
  • Petrol (gas): 1,000
  • Everything else (eating out, movies, travel etc.): 4,000

So that is 25% of expenses.

Note: The expense ratio is higher when we traveled aboard for work – mainly because other countries are costlier compared to India.

Why this is important:

Running a family is much like running a business. If you are not able to manage income & expenses in your family (and leave balance profit) then you cannot manage a company. I am not saying all start-up founders need to be frugal. But you need to be wise when it comes to money.

2. You are shy to ask for money for your services

Yes & No. Initially I was shy to charge money for my services. But during 2008, I became confident. This helped me launch my first product in 2009.

Why this is important:

Starting something is like going against a tide. Unless you value yourself & ready to ask, no one will give you anything.

3. You want to do everything yourself

Yes & No. As you may know, I used to do all aspects of my business in 2009 & 2010. That is content creation, marketing, customer service, product development, website maintenance, email, phone support – everything. This has 2 reasons – 1) I did not want to spend money on things 2) I liked doing most of these tasks.

But my approach changed drastically once the business grew. In 2010, when I quit my job to work full-time on Chandoo.org, I already knew that I will be hiring my first employee very soon.

Why this is important:

If you want to do everything yourself, that is an indication that you are a control freak. Sooner or later your employees will hate you for that and your start-up will have troubles. A successful start-up must have good collaboration between all the employees & make them happy.

4. You think you can outsource everything

No. I did not consider outsourcing until 2011. Even today, I do not think I can outsource all aspects of my company.

Why this is important:

If you think you can outsource or hire others to do everything, then you become a free-rider. Someone who enjoys the benefits, but does not contribute much. No matter how brilliant your idea is, unless you fold your sleeves and work on it yourself, you will not get respect from your team. Also, as a founder it is important to understand all facets of your company by working in all areas at least a few times an year. A good example is Zappos, which requires that all employees must work in customer service for sometime before doing their actual work. Imagine how different an accountant, software engineer, production manager will be once they talk to customers on phone for a week.

Related: my thoughts on outsourcing

5. Your idea of success is yachts, beaches, cars, drinking & lavish life

Never. My idea of success is freedom, happiness, family, comfortable life, wanting less & health. I do not mean all the founders should be like saints and say no to luxuries. But, if your sole ambition is to life a lavish life, then starting a company might be a poor idea.

Why this is important:

Focus on specific items or luxuries can yield to poor decisions when running a company. Instead start something because you want to help others or create value.

Related: Follow your passion, but manage poop too

6. You think earning $1 million is easier than borrowing $1 million

No. I think the opposite is true.

Why this is important:

Understanding the concept of leverage and using it is very important for a start-up founder. If you have a great idea and execute it well, then $1 million in your hand can become $10 mn in no time. All good bankers and investors know this. That is why borrowing a million is easier than earning one. It becomes easier when your company spends less that what it earns (ie profitable) and you are not shy of asking for money.

7. You do not believe in yourself.

No. Einstein said, “Everybody is a genius. But if you judge a fish by its ability to climb trees, then it will live its whole life believing that it is stupid.” Although there are various things at which I suck (sports, social gatherings, dancing etc.), that is no way stopped me from starting my company.

Why this is important:

As I mentioned earlier, staring a company is like going against tide. You have to fight everyday with competitors, peers, society & more to earn recognition & your place. Unless you have confidence in you, you cannot do it.

8. You are waiting for the perfect idea to start

Never. When I was doing MBA, I thought to succeed a start-up must have a killer idea. But that belief died once I started working and spoke to more people. I now believe that any decent idea can become a successful startup, as long as we execute it well.

Why this is important:

In many fields like physics, brilliant ideas are important. But not in the field of making money. You need guts more than brains to succeed as an entrepreneur.

 

The best thing about this litmus test

Once tested as an acid, the liquid remains acidic no matter how many times you test.  The best thing about our test is, you can pass it once you change your mind-set & hobbies. You will also notice that I have not included any questions about risk taking. This is because, I think having a full-time job is just as risky as starting something on your own. So go ahead and clear the litmus test. Start something and leave your mark on this world.

How did you fare in this test?

Please share your results and ideas. Do you agree with this test? Leave comment to share your opinions and ideas.

The Jack Welch Rule for Startups: Fire bottom 1% of your customers!

I dont remember when I read Jack Welch’s Straight from gut. It must be 2004 or ’05. But I do remember the core of the book – his relentless thirst for excellence, his passion to make GE the best company in world, his management philosophy and his pioneering ideas.

There are several ideas we can copy from Jack’s journey to make our startups better. Let me tell you about one such idea and how I use it to fire bottom 1% of my customers!

During Jack’s tenure as CEO of GE, every year, he would regularly fire bottom 10% of his managers.

Each year, Welch would fire the bottom 10% of his managers. He earned a reputation for brutal candor in his meetings with executives. He would push his managers to perform, but he would reward those in the top 20% with bonuses and stock options.

[more on wikipedia]

Today, It might not seem like a bold move, but in 1982 it would have taken a lot of guts to even think about such a policy.

Why I fire bottom 1% of my customers

You know that I love my customers and strive to make them heros every day. All our products are designed to make our customers awesome at their work. So the thought of firing a customers seems to contradict with what we do.

Well let me explain.

Every business, no matter how big or small, has a tiny portion of annoying, nagging and irrational customers. In case of a large company, dealing with such annoyances is no problem because they have a lot of resources (customer service teams, marketing budgets etc.).

For a startup, if you want to please an irrational customer, you would have to do that at the cost of not helping 10 nice, rational customers. And that is not all. The negative energy you get from one annoying customer can make you unproductive and down for several hours or days.

But how do I know which customers to fire?

Oh there are always signs. I have a set of group of customers who I fire most often.

The haters

No matter what size your business is and what you do, you will always have someone hating you. If I realize that a customer hates us, I usually offer them full refund and let them go. It is easier to break-up than make-up when someone really hates you. For example, there was one person who bought my e-book a while ago. We have an automatic purchase process, so as soon as the payment is thru, we send an email with download link to get the e-book. But this person some how did not receive the email. So he sent an email which went like,

Hey … I bought your book, but I guess you were more interested in my $10 than book. Because I never got it. I think you are a cheater….

I replied with the ebook as attachment and apologized to him. This should have solved the issue. But he refused to acknowledge the receipt of book and instead went and complained about my business on PayPal. I issued full refund immediately. But this did not stop him either. He kept sending emails with abusive language and never acknowledged my replies or accepted my offer to call him and talk.

The free-riders

It goes like this: a prospective customer would drop an email and ask for a free copy to see if the product works. They promise that if it is what they want, they will purchase 100s of copies for their entire team. At this point, the request is quite normal. So I tell them to visit a page where we keep demo files / videos. These are samples that give a very good understanding of what our product is all about. But the trouble starts when they comeback and request for a full free copy.  A request like this from a student or unemployed person is quite normal as they cannot afford to buy stuff. But a department head in a large company? a sure sign of annoying customer.

The cry-babies

Whether you have an extremely simple product or selling subway tunnel drilling machines, you always find customers who require excessive hand-holding and attention. I think not all customers in this group require firing. But if it gets to a point where the cry-baby customer lets you not work on helping regular customers, you are better off firing the baby.

The buy-this-want-that-ers

I dont know what to call these people, so I gave them a name – Buy-this-and-want-that-ers. One of the things we try to do is provide a clear picture of what we are selling and give free demos. All our sales pages have sections like “Who should go for this?” and “What do you get when you buy”. These clearly state the benefits of the product and who should purchase them. We also have detailed brochures and videos to help our customers decide. And this works very well for 99.5% of our customers. But once in a while we get someone who thinks they are buying X when we are selling Y. Usually they email me and say “Hey Chandoo… I thought your product can do this. But it is not. Can you help.” And I usually offer them a full refund before even suggesting how Y (what they bought) can be used to do X (what they want).

Note: If a large fraction of your customers are in this group, then you should create X too.

The conditional buyers

Often we get customers who say things like, “We will buy this, provided you include a,b,c.”. Now this type of request is very common and easy to address in most cases. Examples of such easy requests are,

  • I would love to buy your templates, do you have any training videos to help me use them?
  • I would love to join this course, but I cant finish it 6 months as I have a busy assignment / personal thing? Can you extend me for few more weeks?
  • I would love to attend your workshop, but I may need some orientation material before attending.

All the above have obvious yes answer with some easy solution. But once in a while, we get requests like,

  • I would love to buy the templates, can you visit our office and conduct a free training on them after purchase?
  • I would love to join the course, can you also solve my work problems?
  • I would love to buy this, but can you heavily customize it so I can use it for my work?

My usual answer to these is NO. I say YES only if the number of licenses / purchases is large or there is a possibility to learn new things.

Various ways to fire customers

We do not want to hurt others, thus firing can be an unpleasant experience both firee and fired. Let me list down a few tactics I use to fire customers.

  • Discourage them from buying: This is easy, especially if the customers are in groups other than hater group.
  • Refund: This technique works well, especially for haters. My philosophy on this is simple. If someone hates you, do not have them more reasons to hate you. [related: when a customer refund leads to love]
  • Ignore: Just ignore haters and naysayers.
  • Say no: Especially if someone wants to negotiate or asks for free stuff. Tell them that you have 100s of customers who pay in full and it would be unfair for them if you offer free stuff or give un-reasonable discounts.
    • Note: If you are dealing with corporate clients (who usually buy lots of copies), then negotiations and discounts are a must.
  • Block them: The last resort. If someone absolutely hates you and wishes nothing but your total failure, just block them. You can block their IP address, email IDs so that they cannot purchase from you or reach you. You are better off focusing on your mission that one person trying to sabotage you.

Do you fire customers?

Fortunately, 99.9% of my customers are nice folks who want to learn, use and benefit from our products. Many thanks to them, I go months without a single negative experience. But when there is someone really annoying, I do not hesitate to fire them and move on.

What about you? Are you saying YES to everyone or screening your customers to serve them better? Have you fired a customer recently? Share your story in comments.

Is your startup = you? Time to separate!

One of the turning points in my startup life is the time I spent in Sweden / Denmark. I was employed with TCS (TATA Consultancy Services) in 2009, when they sent me Sweden (and eventually to Denmark) to help a large insurance company in their IT program.

While I was in the beautiful town of Malmo, I met my mentor,Mr. S. He ran a couple of companies for 2 decades and has a wealth of experience, practical wisdom when it came to running a company in India. Naturally, I discussed my plans for starting a company with him at length, often on our train rides from Copenhagen to Malmo. I still remember clearly what he said on a bright evening when we were taking a bus from Malmo Syd station to his home.

Chandoo, Do not make your company depend on you for everything!

Malmo Town (you can see the opera center)

[Image from La Citta Vitta on flickr]

Do not make your company depend on You! – but why?

In many start-ups, there is no separation between founder(s) and the company. Its like the founder = company. We have all read the stories of Bill Gates, Page & Brin, Steve Jobs, Narayana Murthy etc. They all played vital role in shaping their companies.

But wait!?!

Microsoft, Google, Apple, Infosys  became such world class companies because their founders let the company grow, by accepting that company is not them.

But wait?!?

Many of us are not here to run next Microsoft or Infosys. We just want to run a small, successful enterprise and live happily.

Even, in that case, distancing yourself from your company is a great idea. And today, I want to tell you how I followed Mr. S’ advice and did that.

5 Reasons why you need to make your company not dependent on you

You may be wondering why the heck take the trouble of making my company not depend on me.

Well, here are 5 reasons.

  1. You can enjoy life: Remember, for many of us the reason we start is simple. We want to get away from the hectic 60 hour workweeks and do things that we love & enjoy (like playing with your kids, taking walks with your spouse, watching a movie, reading a book, learning a new sport …) If your company is a big part of your life, you cannot do this.
  2. Your company can grow: Your company is just like plant. When it is small, it needs your support – regular watering, top soil, prevention from pests etc. But once your company is of a good size, the support you give should be different. You need to let it grow.
  3. You work on what you love, not what you have to: No matter how exciting the area of work is, every company has things that you dont want to do. In my case, I do not want to do work related to accounting, taxes, administering my web-server, designing websites, organize my email or do followups. What I really like to do is learn new things, share my ideas, create new products, polish existing ones, connect with customers and help them. By letting the company not depend on me for everything, I can choose to work on what I love and find others to work on the remaining areas.
  4. Your company makes fewer mistakes: A direct consequence of playing a large role in your company is that you are part of every decision. While this gives you some sense of control, it comes with a huge price. You are going to make mistakes. Why? Because, you are not an expert in everything.
  5. Makes selling or closing your business easy: Not that I have any immediate plans for either. But every startup owner thinks about the question, What is going to happen to my company in long-term? While not everyone can get a $100 Bn IPO like Facebook, we all want to prepare for the eventuality – merger, acquisition, IPO or closure of your company. In any case, a company that is independent makes this whole process smoother and gets you better valuation. Imagine how much Facebook would sell for, had Zuckerberg been their only coder.

Making your Company Not Depend on you – The process

For me, the process of making my company independent has 2 steps

  1. Preparation
  2. Execution

In the preparation stage, I have identified all the areas of work that involve my presence and figured out ways to reduce, automate or outsource them.

In the execution stage, I just packed my bags, left with my family to Bangkok for 8 weeks. Even though I am available on phone & email to address the work needs, I tried to minimize the time spent on running business myself.

Step 1 – Preparing to make your company independant

This is the difficult part. In my case Preparation began around Jan 2010. And it took one whole year.

Hire your first employee:

As my business grew, there were areas of work which I could not give as much time as they need. So I hired someone to help me with that. I was worried if the person can do as good a job as I did. But my worries vanished in first week itself. Come to think of it. We are not doing cutting edge research in Physics or Biology. There are 100s (if not thousands) of people who can replace us.

Note of caution – Dont hire too many people before you are making profit

Often, I see startup founders trying to hire a few employees using the seed money (or investor money). While this may work in some cases, it is going to backfire in many. Especially, if you have not become profitable. Your first (and most important goal) should always be to make your company survive on its own. And becoming profitable is a the proven way for it. (You can also constantly borrow money with the promise of gold pot at then end, but you would not find many takers)

Make Revenues (and profits) not depend on your time

In service business (ex: saloon, IT consultancy, clinics, coaching etc.), your revenue is proportional to the time you spend providing the service. If the consultant is on holiday in Hawaii, you can be sure that he is not making any money.

One reason why starting a consulting or service intensive business is a bad idea.

On the other hand, in product business (ex: iPad cases, software, websites etc.), your revenue is proportional to your marketing & your customer reach. So if you are on holiday in Hawaii, still customers are purchasing what you made.

While many startups begin with a service orientation, at sometime, you want to switch to product side.

From beginning I have product orientation in my mind, thanks to Mr. S’ advice. But there are still some areas where my time determines our revenue potential.

Here are a few things I did to minimize that.

  • Emails: Replying to customer emails and connecting with them is an important part of my business. I did not want to let go of this. But then, I tested my beliefs by giving my assistant access to my email account for a month. And I was proved wrong. He did just as good a job as I do. Plus, he highlighted important emails that need my attention. Customers are happy, I have more time on my hands. Problem solved.
  • Consulting: As I mentioned earlier, consulting is a good way to boost your revenues & get valuable real-world knowledge. But over time, I realized that I am not able to fulfill all consulting requests that came our way. So I did 2 things.
    1. Partner with another company: so that they can take up any large consulting requests that came my way (and pay me some commission)
    2. Hire someone to help me in consulting: so that they can do the consulting work.
    Note: In both cases, it is important to make sure they can delivery high quality of work, otherwise, your company will get bad name.
  • Product Creation: Even though majority of our revenues depend on product sales, still I created these products. So I experimented by hiring someone to create the product (based on the vision I had). The end result – others can do just as good a job as I did. Customers are able to get what they want, We made more money – problem solved.
  • Writing Content: Our website content serves 3 purposes (1) It makes people awesome in Excel, which is our goal (2) It helps us in promoting our products (3) It generates some revenue thru advertisements. While I continue to enjoy writing for the site (and here on Startup Desi), it is unreasonable to expect that I can write every week for next few years. What if something were to happen to me (touch wood) or what if I had to be away for a few weeks. So I have asked some of our regular member to become guest authors. I am so glad they choose to join us. Now we have diverse content, perspectives. Also, I realized that a major part of making people awesome in Excel relies on our past content. So, even if we do not write something new for a week or two, no harm done. 🙂 The same applies for advertising revenues too. A good portion of the ad revenues come from past articles.

That said, not everything is separated. There are still a few things that require my time. But these are the things I love to do and want to do. As my company grows, I may decide to delegate a few of them as well.

Set up processes

In large corporations, processes and guidelines often slow things down and stifle any creative work. So many startup founders tend to hate it. But even to keep things simple, you must follow some rules. This is what I did. I defined a set of guidelines, values so that we (my colleagues and I) can make best decisions at any time.

Examples:

  • Help customers at the earliest and easiest way possible.
  • Issue refunds with out questions.
  • When having to choose an option between awesome and something else, go with awesome, always.

Test your Beliefs

Many times we continue to do something because we believe in it. As a startup owner, a big part of my work involves doing new things. So I applied the same to my beliefs and tested my beliefs. For example,

I believed that I must update my site 3 or more times a week to keep my customers happy: Once I tested this by not updating the site, I realized I was wrong. Also, I found that I need not update the site. Other experts can update it too.

Step 2 – Making your company independent

or in other words, cutting the umbilical cord!

Well, provided you have done all the preparation, the next is simple. Just do it. I did this by making a family trip to Bangkok. As you are reading this post, I am in Bangkok enjoying food, sights & foreign experience. We came here on Jan 18th (almost a month ago). I did not have internet access for first 3 days, then my laptop crashed. After 2 weeks, I got a notice from my web hosting company saying my site should be moved to a new server. And guess what? My business is still running and thriving.

Even though I am out of picture from many activities, everything is running as smoothly as it could. To give you a sample, while I am in Bangkok,

  • A new employee joined us in India.
  • Some one optimized our site, improved the security and setup mirror site etc.
  • We had more than 200 customers
  • We paid advanced taxes and payroll taxes
  • We had 14 new articles on the site, 9 of which are not written by me.

Are you making your startup independent ?

How are you running your business? Does it still depend on you for everything or have you made it a separate functioning entity? what are your thoughts in this? Please share using comments.

Related Reading:

If you want to learn more from my experience, read the following too.

Are you being Penny Wise & Pound Foolish with your startup?

Many startup owners fall in to this trap. Recently I too have been penny wise & pound foolish and lost more than $1000. Today I want to share the story with you.

Being Penny wise and Pound foolish - Startups

[source: XKCD]

Background:

Recently, our main business website (chandoo.org) had to be migrated to a new web server, to cope-up with all the traffic we were getting. Being a geek turned in to startup owner, I thought, “whats the big deal, I can learn how to migrate the site and then do it myself”.

So I set out to migrate the site myself.

Big mistake!

What happened next?

Since I was migrating the site from a shared hosting plan to a VPS, there was quite a bit of work to do. Thankfully, I chose Knownhost, one of the best in the industry when it comes to VPS and dedicated server hosting.

I did all the steps required for migrating the site. It took me more than 4 hours to learn all the nitty-gritties of site migration and then another 4 hours to actually move it.

Once everything is done, I pointed my site to the new address. And Bam, our site promptly went down.

Since down-time is to be expected during site moves, I waited for 12 hours hoping to see the site alive again.

But it never came back up. Then I contacted the KnownHost support team. They were very helpful, but since it is pretty common for websites to go offline for about 24-72 hours during site-moves, they suggested that I wait.

I waited 12 more hours.

Since the move happened during weekdays, we were loosing a lot of sales, ad-sense revenue, affiliate commissions during this down-time.

But even after 36 hours, my site was still down. It was down from many locations around the world. This suggested that something may have gone wrong. Because, even though site migrations (DNS changes) can take up to 24-72 hours to propagate around the world, usually, the site loads in some places but not other. But in my case, it was down everywhere. (Note: I used the Internet Supervision to check this.)

The strange thing is I could access our site by going to its IP address, but if I use the name – chandoo.org, it would not load. It suggested that there is something wrong with the way I set up my site’s DNS.

After some more panicking and learning, I signed up for an alternative DNS provider and used their servers to point my site to the IP address. And with in hours my site started loading.

Then, I contacted the folks at KnownHost and explained the problem to them. They were kind enough to fix it for me by modifying the DNS settings. Finally, now, our site loads fine from everywhere.

The Damage

Direct Losses:

Total downtime- 40hours

Loss of Sales: Based on the run-rate of sales on weekdays in Jan, I estimate the loss at $1000.

(Note: not all of this is lost as some people who wanted to purchase returned to it a day later and bought)

Loss of Ad-sense Revenues: At least $300

Loss of other Revenues: $50

Total revenue lost (direct): $1350

In-direct Losses:

Not all the loss is direct. Due to the down-time, we may have turned down few dozens of prospects (new visitors who would join our news-letter or get hooked to our site).

Also, I spent 12 hours or so learning and doing the migration myself.

If I use my hourly consulting rate ($100), that is $1200 loss of time.

But, I know that my time is worth so much more. If go with Jason’s logic in Valuing your time, those 12 hours are worth more than $10,000.

So there you go.

The Gains

Not all was lost in this exercise. To begin with, I have learned some valuable tricks on how to migrate the site.

But the most important thing is, I have saved about $300 by not hiring someone to do this migration for me. Thus I became penny wise & pound foolish.

Reasoning behind $300 savings:

I can see that many web administrators & wordpress experts charge about $15 per hour on Odesk. So assuming, I hire someone and they spend 20 hours to migrate my site, I would have paid them $300.

Lesson Learned.

Are you being penny wise & pound foolish with your startup?

Many times, running a startup involves making decisions without thinking about the big-picture. Often we think, “why hire someone to do it, lets just do it ourselves.” This argument holds good if you have nothing else to do and there is no down-side to it. But, in many cases, there will be an impact on your revenues, reputation, profits or personal mood.

Do you have any examples of being penny wise and pound foolish with your startup? Please share them using comments.

Related: My thoughts on hiring thru ODesk

What are your Startup Goals in 2012?

First, I wish a very happy & prosperous New Year to all our readers.

Time to understand how we fared in last year (2011) and set our annual goals for 2012.

Goals for 2011

Lets take a look my startup goals for 2011 & see how I did.

  • Generate $200,000 in revenues: Thanks to so many loving customers, we did much better. We recorded ~ $420,000 in sales last year.
  • Keep expenses ridiculously low: This year we had a few major expenses for new trainers, affiliate commissions, paypal charges etc. That said, given the healthy revenues, our expenses continue to be less than 20%.
  • To train 1000 students: We did so much better here, thanks to repeat students, word of mouth and our luck. We have trained more than 2,500 students this year.
  • To get 2,500 customers: Again, we were blessed in 2011. We had more than 4,200 customers in last year.
  • To have 25,000 members: A lot of our regular readers spread good news about our website thru out last year. Even though we did not have any press coverage or major website features in last year, we have added 17,000 new members last year, ending with 35,000 member count (member = RSS readers or newsletter subscriber).
  • To have a million page view month: We reached this milestone in September 2011. Since then we are getting more than a million hits every month.
  • To simplify product purchase process: This year I have added 2 employees, an Indian payment gateway and automated many processes so that our customers can get what they want with least friction. It has helped in lowering refund requests, increasing customer satisfaction and freed my time for other important things.
  • To register a private limited firm: This is one goal we did not meet. We are still running our business as sole proprietorship, but it should change in next year.

Our goals for 2012

This year too, I am defining our goals around the startup metrics discussed earlier.

Financial Goals

  • Get $500,000 in revenues: This is a steep task. Although we were very lucky last year, adding extra $100k to our top line requires a lot of imagination, marketing & luck. I will share how I am planning for this with you all as we go.
  • Continue to spend less: As of now, I have no plans to hire more people or spend on advertising etc. So our expenses should continue to be low & reasonable.

Marketing Goals

  • To train 3,000 students: That means 250 new students every month. Again a very difficult task, but not impossible.
  • To get 5,000 customers: I am relying on organic website growth, new partnerships & SEO to help me get to this mark.
  • To get 50,000 members: I am planning to start a weekly newsletter, add a new sign-up gift to encourage more people to join us.
  • To have a million visitor month: We closed the year with 500,000 visitors per month. This year, I am hoping to have at least one month with million visitors.

Operational Goals

  • Simplify website for new visitors: 70% of our visitors continue to be first time visitors. I want to simplify top 5 landing pages so that they encourage new readers to become regulars.
  • Register a Pvt. Limited Firm: This year, finally we should go for this.

Life Goals

This year, I am adding a new section with life goals. While it is important to run a successful company, it is more important to do it with balance. So here goes our life goals:

  • Visit 2 new countries: Last year we visited Maldives & Singapore. This year, we are going to Thailand & one other new country.
  • Read more: Last year, I read 2 dozen or so books. Many of them gave me fresh perspectives, heightened my imagination and made me happy. This year I am hoping to continue the trend.
  • Play more: Last year we started playing badminton. We want to play more this year, may be learn new sports too. Plus, we got an xbox with kinect for the Christmas. So…,
  • Give more: Now that we are settled down with a own house, we want to give more to some of the causes we identify with. We already donate to a school. We want to share more of our fortune with those in need.
  • Spend less: Due to the new house, last year we spent a lot on one time things (new furniture, tv, stove, xbox etc.) This year, we want to consume less.

What are your goals?

One of my all time favorite quotes is, “Whatever the mind of a man can conceive, it can achieve” by Napoleon Hill, in Think and Grow Rich.

I think setting audacious, big & fun goals makes life more fulfilling. So what about you? What awesome things you are planning to achieve this year? Please share using comments.

Dilemma – to grow your start-up or not?

First up, I am sorry for absconding this blog for a while. It is not that I stopped running a business. Instead, I got lost running it.

Today, I want to share an interesting dilemma I am facing and my thinking process.

To grow your start-up or not?

Thanks to the awesome customers and supporters, my little business has been growing more than 100% year on year since I started it. The best part of this growth is that it is organic. It feels great to know that we are getting new customers, new prospects, new ideas, new deals, new link-backs without spending any money on advertising, PR or marketing. But…,

With growth , you get extra work, people to manage and blurred vision.

So, as I am winding up the year 2011, the question of to grow or not is staring at me.

Growing a Small Business & Differentiating from Big Businesses

[original image from Robert S Donovan]

Just to give you a comparison, when I quit my job to get in to this full time (in April 2010), this is how my weekly schedule looked like:

  • Writing new content – 12 hours per week
  • Email & answering – 12 hrs
  • Reading & learning new things – 6 hrs
  • Customer service – 3 hrs
  • Product development – 3 hrs

After 18 months, this is how it looks now (November, 2011):

  • Writing new content – 4 hrs
  • Email & answering – 4 hrs
  • Reading & learning new things – 1 hrs
  • Customer service –  1 hrs
  • Product Development – 8 hrs
  • Phone calls & collaboration – 1 hrs

While it seems like I have been working less (36hrs per week vs. 19hrs per week) , much of it is due to restructuring my time & priorities. That said, I have been working more on commercial side of my business (product development) than fun side of it (writing, reading & connecting).

And this has been a disturbing trend.

So, I want to take a step back and see if everything we are doing aligns with what we want this business to be.

What do we want – Growth, Fame, Money or Something else?

When I started my business, I did not have any loft goals. It was just a means for me to do what I love (play with Excel, connect with people, make them awesome). But as the business grew, I have narrowed the purpose of our business.

We are here to make you awesome

We are doing this by providing online tutorials, help, products & consulting on Microsoft Office platform.

Well, awesomeness is a lofty goal. But there are 2 important questions.

  • How do we make people awesome?
  • How do we measure it?

How to make people awesome?

There is no single or perfect way to make people awesome. You are awesome when,

  • you are very very impressive.
  • you are inspiring
  • you are a rockstar, a hero, a ninja

So how do we take a total stranger on internet and make her awesome? Of course, by being awesome ourselves. This is how we try to make others awesome,

  • Share our ways of doing awesome stuff
    • Writing new content
  • Teach how to be awesome (or like us)
    • Training programs
  • Make products that are awesome (ie inspire, impress and make the user a hero)
    • Templates & Downloads

How do we measure it?

Although not perfect, I have a vague sense of how to measure it.

  • Number of people reading and benefiting from our articles & tutorials
  • Number of people joining our training programs and working thru them.
    • Feedback given by these customers about the effectiveness of the programs.
  • Number of people using our templates, tools & techniques
    • Total downloads, purchases, feedback left
  • Emails & thank you notes received
    • This is qualitative, but you get a pulse of things.

If our goal is to make people awesome,

If our goal is to Make people awesome, then naturally, we must grow to meet new people to make them awesome.

But if that growth compromises our ability to make people awesome …?

As I see it, by spending more time developing products & collaborating, I am not able to make people more awesome.

So here is what I am going to focus for next several months.

  • Writing new content
  • Restructure our website navigation & make it friendly new readers: This is important because even though writing new content helps us make people awesome, every day we get thousands of people land on our site for first time. And we want them to be awesome by not just reading new content, but also consuming older stuff. Currently this is not possible because of the difficult navigation.
  • Trimming our product line: In our urge to meet our customer’s needs, we have created a few products that are 100% awesome. So I want to spend next 2-3 months trimming a few of them. This will free up our time to focus on important things.

What are your thoughts on this?

The question of growth consumes any entrepreneur during the childhood of her start-up. To grow or to remain stagnant. While it may seem easy to remain stagnant, it is just as difficult. There are several natural forces trying to grow or shrink your business all the time. How are you addressing these and what are your thoughts on the growth question?

Please share using comments.

More reading

$100,000 Revenues in a Month – Wow!!!

I know this might sound like bragging, but I want to share a good news with you. My little startup – chandoo.org, has reached another milestone in May 2011. We have recorded sales of $100,718 in May 2011 alone!

In this post, I want to share the revenue break-up and how I reached this milestone.

First some graphs:

Trend of Revenue by Product – for last 13 months:

My revenue comes from 3 components:

  1. Product Sales (60-80%)
  2. Advertising on Chandoo.org (10-25%)
  3. Affiliate Commissions (5-10%)

In May 2010, I have launched a new product – VBA Classes. We had 650+ people signing up for this, a very large number compared to what we estimated. And that is the main reason for the huge bump.

In the above graph, I did not show the VBA Class sales.

Trend of Total Revenue – for last 13 months:

There are two important things here.

1) Obviously, the huge bump in May 2011 which is explained above.
2) A change in total revenue pattern from Jan 2011. If you observe, prior to Jan 2011, My revenues are around $10k per month. But I relaunched Excel School and kept it open ever since. Now, it contributes heavily to both my top line and bottom line every month.

Number of Customers & Repeat Customers in last 13 months:

The best part about this is that, each month we are adding more customers. Also, many customers are repeating. They are coming back to Chandoo.org to purchase something else too. Very good indication that my marketing & customer service is good.

So how did the $100K month happen?

Since I started my Excel School Online Training program in Jan 2010, many customers have written to me and asked me to start a training program on VBA. But due to various reasons, I never started it. That is until May 2011. During last weeks of April, I announced that we will be starting an online VBA Training program, named VBA Classes in May.

We got some very good response for that. So I went ahead and opened the enrollments for the program on May 9th. The enrollment was open until May 21st and then we closed the doors for new students (we will be re-opening this program in September this year).

I estimated that we would get around 150 students for this. Since the course is priced at $97 per student, I assumed, we would make as much as $15k from this.

But, I was wrong!!! We made more than $80k from this course enrollments.

Why so many people joined?

  • Many of my old students have been waiting for this program. So they lapped it up immediately. A total of 112 out of 650 are previous students of Chandoo.org (either Excel School or Financial Modeling Classes).
  • We combined courses to create lucrative offers: After announcing about the VBA classes, few people emailed me and asked, “Why dont you combine Excel School with VBA Classes?”. So I did just that. I gave my customers 4 choices –
    • VBA Classes ONLINE Access – $67
    • VBA Classes DOWNLOAD Access – $97
    • Excel School + VBA Classes – $167
    • Excel School + Dashboards + VBA Classes – $247
      And our customers love it. Many of them went for either $247 or $97 option.
  • We made a very good sales video: Since this is the first time we are doing a VBA Classes, many of our customers had questions and doubts. So I made a short sales video (15 min) and put it on YouTube and linked it from our sales page. Many customers told me they liked the video and understand the potential this course has. Watch the sales video here.
  • Limited Signup Period: Because we kept the registraion window open from 9th to 21st May, we created a sense of urgency. This helped in closing more sales.
  • Many other reasons: I think the success of this (and other products) is not because any one action we do, instead this is because we follow certain values and provide awesome value to our customers.

[Related: How to launch products online?]

$100K Revenue is great, but what about expenses?

Obviously, to reach such a level in revenues, I had to spend good bit of money on various things. Other than the regular monthly expenses, we spent,

  1. $7500 on affiliate commissions
  2. $8000 on partner fees
  3. $500 on software licenses and misc.

So, about 16% of the money we earned goes for expenses that are not usual.

What next?

Obviously my revenues will not be anywhere near $100k in June as VBA Classes is no longer on sale. But I am sure our products will grow slowly and we will add customers each month.

I have plans for few other products in coming months. So they should add to our monthly revenues. We are also planning to discontinue atleast 1 product.

Also, I want to make sure that this spike in revenues does not side-track me or tempt me to spend money foolishly. We still want to be cheap while making our customers awesome. We want to stick to our core values and continue the hard work.

Key takeaways for you:

Not that I became wiser or profound after this month, but I want to share a few lessons I learned with you all.

  1. Never shy to charge more: When I thought of giving a fourth option for $247 that includes Excel School, Dashboard & VBA training, I was skeptical whether anyone would join. But I was proved wrong almost immediately as many people opted for this. So the lesson is simple. As long as you are delivering excellent value, get rid of the self-doubt and charge appropriately.
  2. Get Help: I cannot imagine launching the VBA Classes without the help of Ravindra, Vijay & Hui.
    Ravindra – My VA helps in student enrollment, invoicing, sending receipts, email customer service.
    Vijay and Hui – are our VBA faculty and together we will be teaching the classes.
    In order to scale your business, getting right kind of help is a must.
  3. Partner with others in your niche: Another big reason behind the success of this month is my affiliate partners. They helped spread the message and got me lots of new students.

That is all for now. I hope you found this helpful. I will continue to share my story with you as my little company progresses.

PS: You can sign-up for our email newsletter and get updates when we have new articles on Startup Desi. Click here.

More Resources for Startups:

Trust Your Customers

Often, I have a choice to make,

  • Should I trust my customers
    or
  • Should I go thru some checks and balances to ensure validity of a claim?

Some examples of this,

  1. Customer emails me and asks for a duplicate copy of a software / templates she bought because her hard disk crashed and she lost the files.
  2. Customer tells me he has deposited money in to my bank account and provides a transaction number. Now he wants to have the access to the purchased product.
  3. Customer purchases a product by paying full price. Now, she realizes that I offer 25% discount to ex-students of Excel School on this new product. So she asks me for partial refund to match the discount.

During the initial days of my business (in first half of 2009), I used to check for the authenticity of such claim before issuing a refund or providing access details.

But, now I do something radical yet simple. I trust my customers. I take their word and provide the help or offer the discount they asked.

[Related: My start-up values help me make better decisions]

In each of the above cases, I,

1) Tell her that I feel bad for the loss of data and email the software/ templates. (99% of time, I do not check sales records. In the exception cases, I just have to search by customer’s email ID in my gmail to see if she made a purchase in past).

[related: Customer service tips using Gmail for startups]

2) Issue login details or access to the software they bought. Later, once a week, we reconcile all the bank transfers and make sure there are no mistakes. I never had a false claim from our customers.

3) Thank her for the purchase. Issue a partial refund at the earliest.

Why you should trust your customers?

1) Because it is the right thing to do.
2) Because it is the easiest thing to do: If you do not want to trust your customer, you must go great lenghts to check authenticity of a claim. This takes a lot of time and energy from you. Not to mention, the possibility of an argument and bad feelings. The easy thing to do would be to trust them. You might be fooled a few times, but consider the amount of good-will and positive feelings you are building by trusting others.
3) Because it differentiates you from rest: Most of your competition would be *not* trusting their customers. By trusting your customers, you make a difference and it is a good long term investment.
4) Because trust works both ways: Once you trust someone, they also trust you. And this is very important for a successful business. Consider this example,

Ilona, a customer of chandoo.org, accidentally bought 2 units of a product. So she emailed me and asked for a refund. I went to the shopping cart system, tracked the duplicate sale and hit refund button. The refund was processed immediately. But there was a problem.

Since, Ilona was an existing customer, she used a special discount code to claim 25% off on the product. So, instead of full price ($97), she paid $72 only. But when I refunded, the shopping cart system issued a refund for $97.

I noticed this mismatch, so I emailed her,

Sorry I took time to issue a refund. I have processed a refund of $97 to you. (I accidentally refunded more, have a dinner on me. 🙂 )

This should reflect in your credit card statement in next few days.

To which, she replied after a day,

Thank you very much for the refund.

I really would like to send you back the difference. You earned it, you are absolutely marvellous what you are doing, helping others to concur the mystery of the excel, you are a great business man and you work hard for your money. You reply is always quick and very efficient, you don’t let people hanging there in limbo for a long time. So I can’t keep this money and enjoy knowing that you worked for it.

I felt really happy reading the email. Trust works both ways.

Not only customers – Trust employees, prospects and everyone:

You can extend this philosophy to trust everyone in your life. Trust is an amazing life value that removes a lot of negative energy and keeps things simple. While it is not possible to trust everyone, you can practice it whenever possible to make yourself and others feel awesome.

Do you trust your customers?

How do you trust your customers? Do you have any specific examples? Please share using comments. I would love to learn from your experiences.

Quick update + an Interesting Podcast Link

Sorry for staying away from Startup Desi for long. As you can guess, I am busy – with a product launch. Today, we have launched a new training program, called as VBA Classes to teach VBA to Excel beginners & intermediate level users.

I will be back on Wednesday with a juicy post on running start-ups. But until then I have a podcast interview link for you. This is an interview by Pat Flynn & Yaro Starak – two of my favorite start-up bloggers.

Click here to listen to How Pat Flynn Lost His Job Then Made $203,219.04 In His First Year Online

The interview is for about 45 minutes and packed with lots of insights and info on creating your own web-based start-up.

StartupDesi is one year old – Thank you so much!

Wow, StartupDesi.com has survived the first year. We are no longer infants. Last one year has been a great experience sharing my ideas on running a startup with you all.

Here are some quick stats (25-Apr-2010 to 26-Apr-2011)

34 articles in one year

My initial goal was to write once a week on StartupDesi.com. But I could not squeeze time on certain busy weeks due to a product launch or something else. However, I am very happy with the result – 34 articles with actual content.

Here is a list of all posts till date, go ahead and read something if you are new.

My Story

Working on too many things [Mistakes I Make]
$100,000 Revenues in last 12 months – wow!
When a Refund Customer loves you, you know you have done well

How to Start?

Is it Scary to Start up? [and how I beat it?]
The easiest way to start your own company – start a blog!
Its not Rocket Surgery, Make your First $ already!!!

Running a Startup

What is your Startup’s Goal ?
What are my Start-up’s Values? [and why you should define them too?]
Why I run my company from our Bedroom?
Monitoring a Startup Business – What Metrics to use?
How I keep my startup expenses low [Part 1 of 4]
Why you should do consulting work (despite making huge money from product sales)
What are your Startup Goals in 2011?
How I am saving 180 minutes per day + Free Download
2 Metrics to measure start-up performance – Million Days, Goal Days
Follow your Passion, but Manage Poop too…

Startup Marketing

Do not treat customers like kings, instead make them heros
Startup Marketing & Sales – 7 ways to reduce expenses and increase sales [Part 2 of 4]
How I stopped worrying about page views & started finding customers
What I learned about Google Adwords by spending $103.9
You have NO Market Differentiators – Deal with it.

Selling Your Products Online

How to Launch Products Online?
How I use Skype to Generate More Sales & Be Awesome
#1 Secret to Selling Better – Remind
Should you charge more for your product? [my experience]

Websites & Technology

How much does it cost to run a website based business?
How to Keep your Startup Website Expenses Low?

Customer Service for Startups

7 Things Startups can do that Big Businesses Struggle to get right
How to use Gmail for Fabulous Customer Service – 8 tips

Hiring & Outsourcing

My Experience of Outsourcing Work thru ODesk

Books & Resources for Startups

Lost Posts and a Start-up Book Link

Awesome Examples & Ideas for Start-ups

How to win back lost customers – example from Cleartrip
How are you WOWing your customers? – Story of Amazon Date Picker
2 Lessons on Wowing your customers – From Kingfisher & Mozy

Thank you Once again,

Many of you have sent me lovely emails, wrote encouraging comments and supported this site by spreading a word about it. I am so thankful to you. I will continue to share my ideas and techniques on running a startup with you regularly.