2014 Annual Report and 2015 Goals

Let me start by wishing you all a very prosperous, happy, healthy and fun 2015. 

I hope this year will be the most successful year your life yet.

2014 has been the most successful, fun & interesting year since starting my business. Let me share the journey and set direction for next year in this post.

2014 performance review

At the start of 2014, I have defined these goals for my company. Let us see how we fared.

Financial Goals

  • Get $1 million revenues: We had a very prosperous and satisfying year in 2014. We made total revenues of $1,018,000. The exact figure may vary 5% once we audit our books and close accounts (financial year ends on March 31). Rough break up of revenues:
    • Templates: 24%
    • Online Courses: 59%
    • Live classes: 5%
    • Ads: 10%
    • Consulting: 1%
    • Affiliate & Partner commissions: 1%
  • Launch 2 new courses: In 2014, I could not launch a video course. On the contrary, one of the existing products (Advanced Power Pivot class) was shelved due to contract expiry. I almost launched a new course called as 50 ways to analyze data but a cyclone that passed thru my city knocked me offline for almost a month and put a dent in the course development progress. I will be launching this course in Jan 2015. It is a miracle that despite these setbacks, my business managed to beat revenue targets.
  • Launch 1 new product: I have launched Excel Dashboard Templates product in November 2014 and it immediately became one of the most popular items on our online store. By the end of year, we have more than 700 customers for it.
  • Write one new book: Although I wrote a lot of content, I did not publish a paid book in 2014. But I am happy to say that I have a new book contract on cards. I am co-authoring a book with someone else (details later) and it should be published in 2016.
  • Organic growth in website community: In 2014, I have spent less than $25 on advertising my site or products. All of this money was spent on Facebook. Every bit of traffic, growth, sales we generated were 100% organic.
  • Spend less: 2014 is by far the most expensive year in my life (business expenses hovered around usual levels). This is because at the start of year we bought a new car (Toyota Innova, SUV) and immediately got bit by travel bug. We drove more than 13,000 KM in 2014 visiting 7 different states in India. Every time we took one of these trips, we spent a lot of money for hotels, food, fuel and other incidentals. While these expenses are a small fraction of what we earn, they are significantly higher than what I spent in previous years. Now that my driving itch is more or less satiated, I expect to drive less and spend fewer $s on hotels in 2015. Apart from these expenses, as a family (and business) we spent almost nothing on other things. We bought no new gadgets, few clothes, did not buy any new major appliances, cooked most of the food at home, harvested more than 300 mangoes and ate them during summer.

Marketing Goals

  • To reach 100,000 members: Yes. As of 31 December 2013, we have 50,000 members on our RSS + newsletter list. Another 50,000 members are part of our newsletter thru Aweber.
  • To reach 10,000 fans on social media channels: partially achieved. We have 5,700 fans on Facebook, 6500 on Twitter & 11,000 on YouTube.
  • To release 2 print books: failed. I have not authored a single book this year. I realized writing books is a hard task and I do not particularly enjoy it. So I am saving books for later part of my career.
  • To release an iPhone app: Gave up. This is something that I see as zero value. So I have abandoned the iPhone app development efforts early in 2014.
  • To have a million visitor month: Failed. Our traffic remained stagnant or experienced very small growth in 2014. Our traffic went up by 5% in 2014 compared to 2013. As revenues & members continue to grow organically, I expect the traffic to plateau at this level for 2015 & 2016. This is because most of our traffic comes from search engines. Unless lots of new people start searching for Excel, it is unlikely that we will have million visitor month in near future.

Operational Goals

  • Improve website navigation: Our site continues to get positive feedback from new users and experienced Excel people. Last year (2014), I have added few more landing pages and added articles that can help people learn a concept or technique thoroughly from one page.

Life Goals

  • Visit 2 new countries: At the start of 2014 Jo & I planned to take the kids and go on a round the world tour. But we gave up that idea as we did not feel too comfortable leaving home for such long time. So we could not visit any new countries in 2014. That said, I went to US again for attending a conference.
  • Drive more & Explore India: In 2014 we drove more than 13,000 km and explored a lot of beautiful, fun & inspiring places in India.
  • Stay fit: In 2014 I took up walking & cycling as daily fitness activities. I ran 500 KM and cycled 1,300 KM in 2014. I started cycling in July and I am very happy the progress. It is part of my work out regimen and I aim to cycle more in 2015. I have also switched to a low-carb diet starting August 2014 and immediately saw amazing benefits of it. I am in the best shape of my life now.
  • Write another book: I could not allocate time to write another book. May be in 2016…?
  • Consume less: Our personal consumption levels are very low this year. As a family we spent less than 5% of what we earn this year.

Goals for 2015

Financial Goals

  • $1.25 million revenues: 2014 was a fantastic year despite no new product launches. This year I have a new course coming up in Jan / Feb. I am also planning to hike prices of various products. As of now we are offering some of our products way cheaper than they should be. So all of this should translate to higher revenues.
  • Continue to spend less: Nothing new here. Just maintain the manic obsession with keeping costs low while offering high quality products.

Marketing Goals

  • Focus on email marketing: Since 2013, I have shifted most of my marketing efforts to email marketing and seen great amount of success. This year I want to spend more time nurturing our email subscribers and converting more of them to paying customers.
  • Introduce webinars: I am planning to add webinars to my marketing arsenal. I see many companies offering training programs use webinars to enroll new customers. I want to test this strategy.
  • Advertise: This year, I want to loosen my purse strings and allocate $200-$500 per month on ads. I will be using this money to recruit new leads for our email lists, webinars & courses.
  • Podcasts + videos: This year, I want to spend more time on podcasts and videos. Specifically, I want to create 30 podcasts and 20 videos & share them with our audience in 2015.

Operational Goals

  • Change course enrollment process: So far, my course enrollment process has been like this:
    1. User clicks on link / ad for the course
    2. They go to landing page and read the details about the course
    3. They purchase

The problem with above approach is that it coverts very low % of people. For example, Excel School page converts less than 1% of visitors. This means, people are hesitant to pay for it (despite having the need to learn). As such purchasing a course is not something that can happen in 1 visit. Many people come back to the sales page few times before purchasing.

So In 2015, I want to experiment with a new process along these lines:

  1. User clicks on link / ad
  2. They go to a page that has basic explanation about the course
  3. At the end of page, they are invited to join a special email list
  4. Once they are on that list, I send them 2-3 videos in the span of 10 working days
  5. At the end of last video, I invite them to join the course and send them to another page where they can pay.
  6. Interested people pay and join
  7. Rest will be removed from the list.

During the initial stages I will do a split test so only 50% of the visitors to Excel School go through new process. Once I measure conversion rates and feel confident about new approach, I will switch everyone to go through this new process.

Life Goals

  1. Explore options to move to another country: After spending 33 years in India, Jo & I are itching to spend sometime in other countries. We are exploring options to migrate to either USA, Australia or New Zealand. As it is too early, I am unable to set a goal for this, but hopefully by end of 2015 we have clarity on this subject.
  2. Stay fit: I started 2015 with a 2 day bicycle expedition to Eastern Ghats (range of hills near my city) riding for more than 150 KM on a hilly terrain. I plan to cycle at least 2015 km in 2015 🙂
  3. Consume less: Again nothing new. The only major purchase I have on cards is switching my phone. My iPhone4 is almost 4 years old. Time for something modern that doesn’t crash often.

What are your startup goals for 2015?

One of the best things about goals is that they open imagination windows of your mind. You can think of new peaks to ascent and then plan. So what new and exciting things you are planning to do this year. How are you going to make 2014 the most awesome year in for startup? Please share using comments.

Read previous annual reports – 2013, 2012 & 2011

2013 Annual Report and 2014 Goals

For all the readers of Startupdesi and my brothers & sisters in startup community, I wish a very happy new year 2014.

I hope this year will be the most successful year your life yet.

2013 has been the busiest, most awesome year in my life. In this post, I want to share our company’s journey thru 2013 and set goals for 2014.

Why it is important to do this?

No matter how big or small your business is, it is important to take stock of events and set future course of action from time to time. This will let you appreciate things that gone well, understand where you need help and focus on your mission. That is why every year, I do this. (read 2013, 2012 and 2011 annual goals).

I am going to rely on the startup metrics & measures discussed earlier to review 2013 performance and set goals for 2014.

2013 performance review

At the start of 2013, I have defined these goals for my company. Let us see how we fared.

Financial Goals

  • Get $750k revenues: Once again, we had an awesome year, thanks to customers who love us and people who adore our work. We made total revenues of $962,500. The exact figure may vary 5% once we audit our books and close accounts (financial year ends on March 31). Rough break up of revenues:
    • Product Sales: 79%
    • Advertising & affiliate sales: 13%
    • Royalties from book sales: 1%
    • On site training programs: 7%
  • Launch 2-3 new courses: Last year, I launched 3 courses – Power Pivot Classes, Advanced Power Pivot Classes & The VLOOKUP video book. All three were received very well by our audience, with a total of 2,000 new customers between them.
  • Release an iphone app: Failed. I had to put this (again) on back-burner as I was focusing on new courses and writing a book.
  • Collaborate with other industry leaders in product launches & promos: Yes, last year I forged new friendships with Rob Collie, MrExcel Bill Jelen and few others who helped me reach to more audience and expand our brand.
  • Conduct live classes in Dubai, UK or US: Conducted live classes in USA (3 cities & 2 companies), Malaysia (in Kuala Lumpur).

    With my Advanced Excel & Dashboards Masterclass students in Kuala Lumpur
  • Continue to spend less: Last year is also the most expensive year since I started this company. As I traveled to USA & Malaysia, our expenses piled up. That said, we continue to spend less than 20% of our revenues on business related expenses. Even on personal front, we spent less than 5% of our profits as a family.

Marketing Goals

  • To train 3,000 professionals: Almost got it. We have trained 2,500 people thru online courses. Another 250 were trained thru live classes.
  • To reach 75,000 members: Yes, As of 31 December 2013, our email subscriber + RSS reader community size is 79,000+
  • To have a million visitor month: Failed. In fact, thru out 2013, our traffic remained very stagnant. We grew by 16% in overall traffic (visitors, views etc.) This either indicates Chandoo.org has reached its peak or there is competition. As I could not identify other sites gaining a lot of prominence, I am assuming that we have reached a temporary plateau in our journey. Once we break thru this, I am sure greater heights can be reached.
  • To make people awesome thru more channels: In 2013, I tried to reach more people thru our Youtube channel, Facebook page, my new book (Kindle), live classes. So yes.

Operational Goals

  • Improve website navigation: I did improve few aspects of our website navigation in 2013. I have added few more landing pages so that people looking for information can find it all in one place. We have also migrated our forum to a better, secure software platform and our members are loving it.
  • Simplify internal processes: Did that. That said, I am also sad to report that 2 of our employees choose to leave us in 2013. Sameer, our student helper could not work as his other job became too demanding. Sujatha, our customer service ninja had to go as her husband got transferred and they are starting life in a new city. I am hoping to fill these gaps in 2014.

Life Goals

  • Visit 2 new countries: Yes, I have visited USA (for 2nd time) and Malaysia. Both trips were huge fun and I made tons of new friends.
  • Become fit: I walked 720 kilometers & biked more than 300 km in 2013. Also, I switched to standing desk on Jan 1st 2013. Working while standing has been a healthy experience ever since. All in all, I am happy with how healthy and fit I feel now.
  • Write a book: Check. I wrote the vlookup book and published it thru Amazon Kindle during last week of October. It sold more than 1000 copies already. 🙂
  • Consume less: I am ok with our consumption levels this year. We drove less than 2,000 km this year (if you include our driving in USA, it would still be less than 8,000). We also cooked and ate most of our meals. We relied our garden to grow green vegetables, bottle gourd, guavas, chikoo etc. It was immensely satisfying to eat food grown in our garden. Our electricity consumption is ridiculously low too. I am happy 🙂
Nishanth with guavas from our garden
Nishanth with guavas from our garden

So what is in store for 2014?

Financial Goals

  • Get $1 million revenues: Last year certainly surprised me. So I am hoping that this year, we reach a million in revenues. But I see 2 major problems with that. (1) One of our courses (Advanced Power Pivot) will be retired in February. (2) I have not made any plans for live classes. That said, I am hoping the revenue dent due to these will be offset by,
    • Launch of 2 new courses
    • Launch of a new product
    • One more book
    • Organic growth in our community size (which slowly converts to paying customers)
  • Continue to spend less: This year we are planning to purchase a new car (an SUV so that family can travel with comfort and safely), take a long-term vacation (we are hoping to pull the kids out from school and do a round the world tour for 8 months). So naturally our expenses will raise. But I am hoping as a % of what we earn, they will remain low and our frugal ways will not change.

Marketing Goals

  • To reach 100,000 members level
  • To have a million visitor month, lets hope 2014 will be the year that happens
  • To reach 10,000 fans on our social media channels – Facebook, Twitter & Youtube. Currently 2000, 4700 and 7500 people are following us on these channels respectively.
  • To release 2 print books so that more people can enjoy Chandoo.org offline.
  • To release an iPhone app: I am now viewing our iPhone app as a way to reach more audience than revenue making mechanism. Hopefully this shift in thinking will let me focus some time on it and release the app.

Operational Goals

  • Improve website navigation: I am hoping to add a new menu bar and navigation elements to our site. I am also hoping to improve shopping experience on our site so more people can discover what we sell and buy without friction.

Life Goals

  • Visit 2 new countries: This year, we are hoping to visit 2-3 countries in Europe (Italy, France, Germany, Spain & Turkey are on cards). We may end up visiting more as we are planning to spend 6-8 months roaming the world.
  • Drive more & Explore India: India is a beautiful country and our new car should make driving and exploring far off parts of the country easy. I am eagerly waiting for our car.
  • Stay fit: I want to work out often and feel healthier this year. I am hoping to walk more than 1000 kilometers this year.
  • Write another book: I am stoked by the response I got for my first book. I am planning to write one more and release it around summer of this year.
  • Consume less: Despite new car and possible air travel, I am hoping to consume less and stay frugal.

What are your startup goals for 2014?

One of the best things about goals is that they open imagination windows of your mind. You can think of new peaks to ascent and then plan. So what new and exciting things you are planning to do this year. How are you going to make 2014 the most awesome year in for startup? Please share using comments.

My Startup story & lessons learned (2 video interviews for you)

I am sorry I haven’t posted here in a while. But here is a quick update.

During last few months, I have been interviewed by 2 excellent websites that inspire budding entrepreneurs like us. These are video interviews where I share my story, things I have learned and few ideas for new startups. Watch them below.

1. Running a successful business & living life on my own terms by RadicalTribe

In this interview, I share the story of Chandoo.org, its journey from 2009 to now and how we grew, what our plans are and what I learned (and what mistakes I make).

Many thanks to Faheem for featuring me.

2. On startups, frugal living & online ventures – by Real Leaders.tv

In this interview, I share the story of my upbringing (which taught me frugality, simple living), inspiration behind my work & where I struggle (keeping myself productive).

Many thanks to Dhanya & team for featuring me.

What are your Startup Goals in 2013?

Let me start by saying a very happy new year to you.

I know I have been ignoring Startupdesi for a while now, but it does not mean I am ignoring my company. Quite the opposite instead, as I was busy for most of 2012 growing Chandoo.org and taking good care of it. May be this year, I can spend some more time and at least write 30 articles here. 🙂

Why you should set goals for your startup?

As a business owner and manager, I am strictly against micr0-management and excessive tracking. I think you should keep your start-up flexible and nimble to survive. That said, a start-up with no goal is like a horse without blinders. It might win a race one day, but it will be distracted for sure.

Refer to startup goals & metrics for more.

Year in review – 2012 goals & performance

Lets see what our goals for 2012 are and how we did.

  • Get $500k revenues: Once again we had a bumper year with lots of customer support. We have earned close to $630k in revenues. I will know the exact figure after we close the year & audit our books (which is in April). A rough break-up of revenues is,
    • Product sales – 69%
    • Advertising & affiliate sales – 22%
    • Training programs – 7%
    • Consulting – 2%
  • Continue to spend less: There were no drastic changes in our expense patterns this year. We ended up hiring 2 more employees, migrated our server to KnownHost etc. but our focus on low expenses was never disturbed. Our expense ratio continues to be less than 20%. The only exception to this is when I went to Australia to conduct live training classes:
    • We ended up spending quite a bit on hotels, venues & flights. The expense ration on that trip was close to 50%.
  • To train 3,000 professionals:  As one of my product launches was killed midway, we could not reach this target. We trained close to 2,500 professionals this year.
  • To get 5,000 customers: Thanks to few new product upgrades and support from our partners, we got more than 5,400 new customers this year.
  • To reach 50,000 members level:We started 2012 with 35,000 members. And we closed it with 55,000+. Again, organic growth, word-of-mouth and free sign-up gift helped boost these numbers.
  • To have a million visitor month: Failed to reach this goal. Although our traffic grew by 90% YoY, we are yet to experience a million visitor month. The highest we got is 880k visitors per month in 2012.
  • Simplify website for new visitors: In 2012, we added many more landing pages and created a separate welcome section on our website to help new visitors understand what we do and how we can help them. This has paid off beautifully.
  • Register a Pvt. Limited Firm: Failed. I have decided to run our company as a proprietorship for one more year.
  • Visit 2 new countries: In 2012, I visited Australia & Thailand. Both experiences were really beautiful and fulfilling.
  • Read more: In 2012, I read more than a dozen books. I also spent a lot of time reading from iPad and  on my computer. New skills I picked up are Excel PowerPivot, Objective C programming (basics), VPS hosting & maintenance, advanced VBA, value investing principles.
  • Play more: During start of 2012, I learned how to play squash and thoroughly enjoyed it. But as year progressed, I developed severe knee pains and could not work out or play that often.
  • Give more: We (our family) continued to share a portion of our wealth to those who need.  We contributed to 2 schools & few other causes.
  • Spend less: As our wealth grows, it is always tempting to spend and splurge it on things we do not need. Although we had lavish time in Thailand during beginning of year, we still managed to spend less than 10% of what we earn last year.

Our goals for 2013

Financial Goals

  • Get $750k revenues: As we inch towards a million dollar company, we need lots of imagination, clarity and kickass products to grow. I am hoping to increase our revenues by 20% this year. These things should help in that,
    • Launch 2-3 new courses
    • Release an iphone app
    • Encourage more members to become customers
    • Collaborate with other industry leaders in product launches & promos
    • Conduct live classes in Dubai, UK or US
  • Continue to spend less: Nothing new to say. Just stick to what we are already doing better.

Marketing Goals

  • To train 3,000 professionals and make them awesome in Excel & their work.
  • To reach 75,000 members level
  • To have a million visitor month
  • To make people awesome thru more channels – Youtube videos, iphone app, a print book, live classes and more

Operational Goals

  • Improve website navigation: This continues to be No.1 request I hear from our visitors. So this year, I am focusing on making our site more navigable and friendly to new & repeat visitors.
  • Simplify internal processes: As we add more employees, it is important that I empower them with right tools & processes so that they feel awesome too. I will creating internal portal (only for our employees) where they can finish their day to day work easily.

Life Goals

  • Visit 2 new countries: Although I have not made any plans, this year I am hoping to visit Dubai , UK (or US).
  • Become fit: Last year due to knee problems I could not work out or play as much as I wanted. This year, I am hoping to stay fit and work out very often.
  • Write a book: I have been postponing this for a few years. But I am glad I already started my first book and finished 2 chapters. I am hoping to get it out very soon.
  • Consume less: We have not planned for any major purchases this year. I am hopeful that we stay frugal, calm & content this year too.

What are your startup goals this year?

So what is going to keep you busy and focused this year? Go ahead and tell me how you are planning to grow your startup & improve your life this year.

And once again, I wish you, your family & your company a fantastic 2013.

 

How to survive the first 2 years of startup?

How to survive the initial years of a startup?

It has been 2 years since I quit my job to embark on exciting journey of my own venture. It has been one heck of a journey. Look at these numbers to get an idea on the amount of change in this two years,

March 2010March 2012
Number of customers100390
Number of employees (excluding me)04
Monthly revenue
(excluding advertising, INR payments, consulting fees)
$2,735$29,768
Customers from22 countries35 countries
Average sale value$27.35$76.32
Best selling product
(by quantity)
PM Templates (83 units)PM Templates (228 units)
Best selling product
(by $s)
PM Templates ($2565)Excel School ($12,132)
Most frequent first name of customerMark (4 times)Michael (8 times)
Total visitors to our site371k1,353k
Number of customers buying multiple quantities12 in all months of 201021 in all months of 2011
Refunds by year$42 in 2010$858 in 2011
Total RSS / Newsletter subscribers~ 9,000~ 40,000
Total comments467717
Total spam3,58930,164

So how did we survive the initial years? In this post, I will summarize the ideas that worked for us.

Make Mistakes

Just like the first 2 years of a kid (often first 31 years of a kid) the key to survival is in making mistakes. I do not mean dumb, repetitive mistakes. But the kind of mistakes that you make when you explore, when you learn, when you try, when you assume. Make more of those. These mistakes helped me learn new things about my business,

  • Mistake of doing everything myself helped me realize that I should get help and partner with more to be successful & happy.
  • Mistake of saying yes for everything made me realize the value of NO and simplicity.
  • Mistake of focusing on irrelevant things helped me see the importance of our goal – to make our users awesome
  • Mistake of doing too many things helped me realize the importance of focus.

Ask

There is a saying in India, “if you do not ask, even your Mother will not feed you.” Many startups focus on asking wrong people & ask for wrong things in their infancy. This leads to a lot of stress, discouragement & financial hardship in the early years.

I am glad I have,

  • Asked my readers to become customers & pay me for my products
  • Asked for help thru oDesk & similar channels & hired people
  • Asked leaders in my niche to collaborate & recommend my products
  • Asked my readers & customers for regular feedback
  • Asked my website visitors to join my newsletter, every single time they visit us.
  • Asked the most prolific commenters on my site to join us as guest authors & help us

Do

Almost all of us have ideas as grand as next iPad, Avatar movie or ikea store. But less than 1% of us have the guts to do anything about it. Startup founders are no exception. During the initial stages of a startup, the founders have grand vision & unlimited ambition. Often, this leads to planning paralysis. Founders spend months planning, designing & mocking up things that it delays the actual purpose of the company – to sell something & make money.

Although it has been only 2 years since I started my company, I have been selling products for more than 3 years now. But even after quitting my job, I did not loose focus on the core purpose of our company – to make our users awesome & make money.

Related: It is not rocket surgery, make your first $ already

Measure

No matter how much you ask, how many mistakes you make, how much you do, it all can go for waste if you do not measure. During the first few months of your startup,

We need not be obsessive about this measurement nor too detailed. Most of the measurement is automatic thanks to tools like Google analytics, Bank statements, time trackers & email analysis applications. So use them and make a rudimentary report every month. If nothing, just write down the metrics on a white board and hang it near your workspace. Update it regularly and you will have a clear sense of where you are heading and where you are failing.

Be Patient

A handful of patience is worth more than a bushel of brains

– Dutch proverb

We, startup founders tend to be impatient & anxious. We want the change, fast paced action and movement. May be that is why we did not fit in to the corporate environment and choose our own path. But this very nature can kill our startup in early years. It is very important to give our startup the time it takes to settle down & grow. Never expect immediate results or quick fixes in early years. Instead focus on laying strong foundation, good values, good processes & building teams that work well.

  • Do not expect your new store design, web site layout to be effective overnight.
  • Do not expect your product to make a million dollars in first week.
  • Do not pressurize your employees to perform from day 1.

All this does not mean, we should set our goals very low. Instead, we need to be realistic and give time for our startup to grow. Just like you do not expect your kid to walk on first day after birth, do not expect your startup to fly from first year.

Related: Follow your passion, but manage poop too.

How did your startup survive the initial years?

Is your startup more than a few years old? How did you survive the infant years? Please share your success story using comments. I am eager to learn from your experience & ideas.

Please comment.

Wishing our startups many more years of success & growth.

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.

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.

$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:

You have NO Market Differentiators – Deal with it.

Recently, someone asked me this question in an interview,

Q) What is your market differentiator?

During my MBA days, we had all sorts of fancy, meaningless answers for this type of questions. I could take any number of jargon words like market penetration, excellent quality, strategic tie-ups etc. and mix-and-match them to spew an equally vague answer to this.

Now, I did not know what to say about “my start-up’s market differentiator“.

After thinking for a few minutes, this is what I told the interviewer.

A) Nothing really. Whatever I am doing can be done by anyone. What makes Chandoo.org successful (and profitable) is that I love Excel and share information about it enthusiastically. I love making people awesome and create products that go with this philosophy. I am eager to learn as much as I am eager to teach. So naturally we build a very good community of Excel users from all parts of the world (at last count, our website as 24,000 members). Many of these become customers overtime and enjoy my products (We had 1700 customers in year 2010).

I bet of many of you would be having similar questions when you think about starting your own company,

  • How can we differentiate from our competition?
  • What makes us special and creates warm-feelings in our customers’ heart?
  • How do we protect our product from imitation?

So, lets examine what makes us special.

What will NOT make you special?

In order to understand what makes us special, first we must understand what makes us same (ie not special). Once we know that, you can easily focus on your uniqueness.

Your product:

In all likelihood, your product will not be unique. There will be several equally good alternatives for what you sell. Take anything, for eg., your beer, your car, your bank, your coffee, your boy friend (or girl friend), your shoes etc. etc., everything can be replaced with something else that is equally good. Your customers too think the same way and thus, being over-protective about your product is not going to help.

Your partnerships:

Unless you have a water-tight agreement with your partners, chances are, they will collaborate with others in the same industry. So this makes any type of partnerships you have same as any partnerships your competition has.

Your Website / Store Design:

Very few designs are iconic (like a bottle of coke, ipod, Google homepage or an ikea store). Getting an iconic design would take a lot of time, money and expertise. And small business are short on all 3.

Other things that will not make you special:

* Your website ranking very well on Google for a particular term
* Your business having the best location
* You have the most memorable phone number, website address or whatever.

So What makes you special?

You:

You are special. Although, there are 6 billion others with similar features as you, no-one can match 100% to what you are. Realizing this is the biggest thing in running a small business. Unlike large companies, which can remain faceless and build a generic brand image, a small business like yours, has better chance of success if you focus on individuals.

Why are you special:

No one else in the world has the same story that you have to say. Your passions, your ideas, your values, your sense of humor, your story will remain unique, no matter how many more people flock your industry. Some important areas of your uniqueness,

  • Your story
  • Your values
  • The way you express
  • Your sense of humor
  • Your passion & knowledge

Never let that go away from your business in the name of growth. Instead, keep your image a core part of what your business is. That is what many successful business have done. Think about Apple (Steve Jobs), Microsoft (Bill Gates), Infosys (Narayana Murthy) etc.

Your Customers:

Just like you, your customers too are unique. It may so happen that the same set of people might be customers for someone else too. But the kind of interactions they had with you, the relationship they hold with you and the attention & respect you command from them will be special.

Your Team:

This includes your employees, board members, vendors, partners etc. All of them are special, gifted and rare, just like you. And no other company in the world has the same combination and that makes your company special. The real uniqueness is the kind of experience, passion and energy your team brings to the table to make your company a success.

That is all. I cannot think of anything else that will make us specail and distinguished from rest of the competition.

How do I apply these ideas to my business?

During my initial days of business, I used to worry too much about my website design, too protective about my files & ideas. I used to consider other Excel bloggers as competition.

Then, almost by chance, I experimented by following a different approach.

I started collaborating with my fellow bloggers. I started sharing my ideas and files openly. Instead of focusing on more customers, I asked myself, “how can I know more about the ones we have”. I started sharing personal stories and connected with our readers.

Over-time, I have established a relationship with our readers who now consider me unique, for what I am + what I know.

Now, if you ask my customers, why they use my products, some of the keywords they use are,

  • … like your style …
  • … you explain very well …
  • … your passion for excel …
    etc.

How do you differentiate your business?

I want to learn from your experience too. What do you think makes your business (or you) special? Why do you think customers purchase from you?

Please share your story using comments. I am all ears.

More reading on this topic:

When a Refund Customer loves you, you know you have done well

Refunds are an important part of running online business. But how do you handle refund requests?

Here is the process we use at chandoo.org,

  • All products come with 30 day no-questions asked refund policy.
  • When a customer asks for a refund, I issue it as soon as possible.
  • For customers requesting refund due to specific reason, I try to do a follow-up by asking them how I can help.
  • When in doubt, I go by the principle “It is better to have a happy prospect than an unhappy customer”.

Today I want to share with you a recent email I received from Marilyn.

Marilyn bought my Project Management Excel Templates and she could not use them as she is an excel beginner. Pasted below is a screenshot of the email exchange. Read it from bottom-up.

How do you handle refunds?

What process do you use to handle refunds? How do you wow your customers / prospects with your refund policy. What awesome examples you have seen in this area? Please share using comments.

My Experience of Outsourcing Work thru ODesk

As mentioned earlier, I needed an extra hand to help me with some of the customer support & website maintenance work. My first reaction was to take help from friends. But very few of my friends are familiar with the kind of systems I use, plus they were busy with married life, work etc.

The On Demand Global Workforce - oDeskSo naturally I started looking cheap ways to outsource some of the non-critical work. Once I started looking for freelance workers, odesk became an obvious choice.

How I went about finding a freelancer on oDesk:

In September last year, I started my hunt for a virtual assistant, by posting an Ad in oDesk.

Step 1: Post an Ad for my requirement in oDesk

This was simple. I briefly explained my needs and posted an advertisement in oDesk.

Since my company is not a big company, I received only a few applications.

Step 2: Interview the candidate(s)

Out of all the applications I received, I found one person quite eligible. He is also from a near by city where I live. So I scheduled a telephonic interview with him. The interview revolved around these themes,

  • I explained my company & my philosophy towards customers
  • I asked him about his previous experience
  • I asked how familiar he is with gmail & Excel, two tools that he would be using if hired
  • I tested his spoken and written English skills.

I found the answers satisfactory. So I went ahead and hired him for a pilot assignment.

Step 3: Review of the pilot work

I found out that despite a minor mistake, the person I hired (we will call him my VA – virtual assistant from now) was quite productive and efficient.

So I told him that I will be needing his help once in a while, when I have too much on my pate.

Step 4: Look for opportunities to outsource work

Like every entrepreneur, I too am protective about my work. So it was difficult outsourcing parts of it. But I rationalized that,

  • By outsourcing non-critical, repetitive parts of my business, I could focus more on product development, launches, marketing, content creation, idea generation, collaboration and other interesting stuff.

So I started to assign work for him (roughly 2-3 hours per week, often more).

What I quickly found out is that, he is quite responsive, helpful and learns very quickly.

After 4 months, What are my thoughts about oDesk

  • It took me a while to figure out how oDesk web site works. But after first 2 assignments, I could quickly find the right pages to assign work, review it etc.
  • The oDesk people are quite nice too. For eg. when you join oDesk as an employer, you will be asked to confirm your credit card number. First they will charge your card twice with 2 small random amounts. Then you must confirm the amounts by looking at your statement. Usually for Indian cards, this step takes a while. So I was waiting for my card statement. But I was pleasantly surprised when I got an email that said my card is confirmed by one of their employees manually. Great business move by oDesk (they dont want customers to wait…)
  • The payments are automatic. Every week oDesk would send me an email about the charges for work done in previous week. I could login and verify the timesheets if I want to. They will automatically charge my card on next Monday. So no hassle for me.
  • You need to be very clear: Whenever I assign some work to my VA, I found that I have to be very specific & clear about it. Otherwise, he would take more time than usual.

How much should you pay for a Virtual Assistant?

Based on my research, I think an hourly rate of $3-$10 is appropriate for a Virtual Assistant. For this kind of pay, you can expect to get the following types of work done,

  • Sending, processing, following up with emails
  • Doing simple text editing, HTML editing
  • Web search, Google based research work
  • Basic Photoshop work like resizing images, cropping etc.
  • Creation of word, excel or PDF files
  • Using a relatively simple website / software to add users / invoices etc.

Have you hired any Freelancer? What is your experience?

If you have ever worked with freelance workers, share your thoughts and ideas below. Also, feel free to share your views on oDesk. Please leave a comment.

Related: My thoughts on hiring and keeping expenses low.

Disclaimer: If you click on oDesk links in this post & join them as a employer or employee, I will receive a small commission. I recommend oDesk because they are an awesome way to hire help.