Entrepreneurship

I have collected below a few posts from Tim Ferriss’ blog (http://www.fourhourworkweek.com/blog/) that are solid gold. I have removed some fluff ( [...] ) and added some highlighting. My comments are in red.

Also note that while Tim does tend to focus on “muse”-type businesses (automated, relatively high profit but low revenue), many of his tactics can [should] be applied to other, larger businesses as well.

Enjoy,

PK
@petekeller
icaruspete@gmail.com

How to Create a Million-Dollar Business This Weekend (Examples: AppSumo, Mint, Chihuahuas)
http://www.fourhourworkweek.com/blog/2011/09/24/how-to-create-a-million-dollar-business-this-weekend-examples-appsumo-mint-chihuahuas/

Written by Tim Ferriss Topics: Entrepreneurship

[...]

For some reason, people love to make excuses about why they haven’t created their dream business or even gotten started. This is the “wantrepreneur” epidemic, where people prevent themselves from ever actually doing the side-project they always talk about over beers. The truth of the matter is that you don’t have to spend a lot of time building the foundation for a successful business. In most cases, it shouldn’t take you more than a couple days.

We made the original product for Gambit in a weekend. “WTF?!” Yes, a weekend. In just 48 hours, some friends and I created a simple product that grew to a $1,000,000+ business within a year.

Same deal for AppSumo. We were able to build the core product in one weekend, using an outsourced team in Pakistan, for a grand total of $60.

Don’t get me wrong–I’m not opposed to you trying to build a world-changing product that requires months of fine-tuning. All I’m going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks… only to discover no one wants it.

[...]

Here are the steps you can take right now to get started on your million dollar company:
Step 1: Find your (profitable) idea.
At this stage, you are simply looking for something that people are willing to spend money on. So grab a seat and write down a list of ideas that you think might be profitable. If you’re having trouble coming up with ideas, try using the methods below to speed the research process along:
Review top sellers on Amazon. Find products that already have guaranteed customers, then build something complementary. A good example of this is Dodo making a gorgeous $60 case to buy for your iPad (which costs over $500, and over 5 million sold).

Think of all the things you do on a daily basis. Anything done more than once has potential for a product or service to improve the process. For me, one of those products was a mirror I could hang in the shower. It saves me tons of time while shaving, and now I don’t know how I ever lived without it.

Be cognizant of products you use and frequently complain about. Before Gambit, we were constantly asking our payment tool partners for certain features, yet our requests were always rejected. That was the impetus for us to create Gambit for our own games.

Check completed listings on eBay. This allows you to see how well certain products are selling. It’s also an easy way to measure sale prices of items and gauge the overall percentage of the market that’s receiving bids (i.e. in demand).

Look for frequent requests on Craigslist gigs. These listings are from people actively searching for someone to give their money to in exchange for particular services. Try searching for certain keywords (e.g. marketing, computers, health) and keep track of the total number of results displayed. Evaluate the most popular keywords and see if you can create a product or service around those requests.

Browse the Q&A on LinkedIn. On average, LinkedIn users are worth $134, so there is a good chance they’ll have money for you if you can provide solutions to their problems.
Step 2: Find $1,000,000 worth of customers.
Now that you’ve found an idea, it’s time to assess whether there’s a big enough pool of prospective buyers. In this step, you’ll also want to ensure your market isn’t shrinking, and that it fares well compared to similar markets.

I use Google Trends, Google Insights, and Facebook ads when I’m in this part of the process. They’re great tools that help me evaluate the growth potential of my target market.
For example, let’s say you decide to build information products for owners of Chihuahuas (remember “Yo quiero Taco Bell”?). Here’s how I would check to see if there are enough customers:

1. Search Google Trends for the term “chihuahua” and other similar words (e.g. poodle, dogs) for comparison:

(Click image to expand)

We can see that the word “chihuahua” has a decent search volume (relative to “dogs”), and that “poodle” isn’t as popular. It also looks like the number of searches for “chihuahua” has been relatively stable for the last few years.

2. Double-check on Google insights:


Google Insights is great, because it breaks down the search data by location (i.e. what regions the searches are coming from), by date, and what they’re searching for (news, images, products). Click here to see the full report for the above chart.

3. Look at the total number of people available on Facebook for dogs:

3.1 million. Not bad, not bad.
And for Chihuahuas:


84,260 people. Score.

You can also see if there is a large property that you can piggyback on.
Paypal did this with eBay, AirBnb is doing it with Craigslist home listings, and AppSumo looks to the 100 million LinkedIn users. If you can find a comparable site with a large number of potential customers, you’ll be in good shape.

What helped me with finding $1,000,000 worth of customers for AppSumo was studying my successful competitors; specifically, Macheist. Their site did a Mac-only deal that generated more than $800,000. Macheist shares their sales revenue publicly, but you can use your own business acumen on the CrunchBase list to see which business you want to replicate. For instance, you might research Airbnb.com, discover that they have a profitable and growing marketplace, then decide to create a similar service for alternative verticals.

I like to create a Google Spreadsheet of the key numbers for my competitors’ businesses. Below is an example of what that might look like for Macheist in their Mac bundles. [Warning to the haters: This may not be accurate, but I used these numbers just to get a rough idea of the business’ potential.]

Step 3: Assess your customer’s value.
Once you’ve found your idea and a big pool of potential customers, you’ll need to calculate the value of those customers. For our example above, we’ll need to estimate how much a Chihuahua owner (i.e. our customer) is worth to us. This will help us determine the likelihood of them actually buying our product, and will also help with pricing. Here’s how we do that:

1. Find out how much it costs, on average, to buy a Chihuahua (about $650). This is the base cost.

2. See how much it costs to maintain a Chihuahua each year (i.e. recurring costs). Looks like it’s between $500-3,000. For this example, we’ll call it $1,000.

3. Look up their life expectancy, which is roughly 15 years. This is the number of times they’ll have to pay those recurring costs.

Therefore, a Chihuahua’s average total cost of ownership is:
[$650 + ($1,000*15)] = $15,650

Damn… you could buy a lot of burritos with that kind of cash. Silly dog owners.

In any case, these owners are already committing to spend a LOT of money on their dogs (i.e. they are valuable). After putting down $650 on the dog itself and an average of $80/month on maintenance (a.k.a. food), spending $50 on an information product that could help them train their Chihuahua–or save money, or create a better relationship between them, etc.–does not seem unreasonable. Of course, the product doesn’t have to cost $50, but we now have some perspective for later deciding on a price.

Now we need to utilize the TAM formula (a.k.a. Total Available Market formula), which will help us see our product’s potential to generate a million dollars.

Here’s the TAM formula for estimating your idea’s potential:
(Number of available customers) x (Value of each customer) = TAM
If TAM > $1,000,000, then you can start your business.

Let’s plug in some basic numbers to see the TAM for our Chihuahua information product:
(84,260 available customers) x ($50 information product) = $4,213,000

We have a winner!

Okay, obviously you are not going to reach 100% market penetration, but consider the following…

1. This is only through Facebook traffic.
2. This does not include the 5,000,000 monthly searches for “Chihuahua” on Google:

3. This is only for one breed of dog. If you find success with Chihuahuas, you can easily repeat the process many times with other dog breeds.
4. This is only for one product. It’s far easier to sell to an existing customer than it is to acquire new ones, so once we’ve built up a decent customer base, we can make even more products to sell to them.

By all measures, it appears that we have a million dollar idea on our hands. Now we can move on to the final step!
Step 4: Validate your idea.
By now, you have successfully verified that your idea has that special million-dollar-potential. Feels good, right? Well, brace yourself — it’s time to test whether people will actually spend money on your product. In other words, is it truly commercially viable?

This step is critical. A lot of your ideas will seem great in theory, but you’ll never know if they’re going to work until you actually test your target market’s willingness to pay.

For instance, I believed AppSumo’s model would work just on gut-feeling alone, but I wasn’t 100% convinced people wanted to buy digital goods on a time-limited basis. I mean, how often do people find themselves needing a productivity tool (compared with, for instance, how often they need to eat)?

I decided to validate AppSumo’s model by finding a guaranteed product I could sell, one with its own traffic source (i.e. customers).

Because I’m a frequent Redditor and I knew they had an affordable advertising system (in addition to 3 million+ monthly users), I wanted to find a digital good that I could advertise on their site. I noticed Imgur.com was the most popular tool on Reddit for sharing images, and they offered a paid pro account option ($25/year). It was the perfect fit for my test run.

I cold-emailed the founder of Imgur, Alan Schaaf, and said that I wanted to bring him paying customers and would pay Imgur for each one. Alan is a great guy, and the idea of getting paid to receive more customers was not a tough sell :) The stage was set!

Before we started the ad campaign, I set a personal validation goal for 100 sales, which would encourage me to keep going or figure out what was wrong with our model. I decided on “100″ after looking at my time value of money. If I could arrange a deal in two hours (find, secure, and launch), I wanted to have a return of at least $300 for those two hours of work. 100 sales ($3 commission per sale) was that amount.

By the end of the campaign, we had sold more than 200 Imgur pro accounts. AppSumo.com was born.

I share this story because it illustrates an important point: You need to make small calculated bets on your ideas in order to validate them. Validation is absolutely essential for saving time and money, which will ultimately allow you to test as many of your ideas as possible.

Here are a couple methods for rapidly validating whether people will buy your product or not:
Drive traffic to a basic sales page. This is the method Tim advocates in The 4-Hour Workweek. All you need to do is set up a sales page using Unbounce or WordPress, create a few ads to run on Google and/or Facebook, then evaluate your conversion rate for ad-clicks and collecting email addresses. This is how we launched Mint.com (see one of our original sales pages here). You are not looking for people to buy; you are simply gauging interest and gathering data.

[Note: With Facebook advertising, $100 can get you roughly 100,000 people viewing your ad, and about 80 people visiting your site and potentially giving you their email addresses.]

Email 10 people you know who would want your pseudo-product, then ask them to send payment via Paypal. This might sound a bit crazy, but you’re doing it to see what the overall response is like. If a few of them send payment, great! You now have validation and can build the product (or you can refund your friends and buy them all tacos for playing along). If they don’t bite, figure out why they don’t want your product. Again, the goal is to get validation for your product, not to rip off your friends.

Of course, there are other techniques for validating your product (like Stephen Key leaving his guitar pick designs in a convenience store to see if people would try to buy them). However, I’ve found these two methods to be super efficient and effective for validating ideas online.
No need to get fancy if it does the trick.
The Final Frontier: Killing Your Inner Wantrepreneur
We made it! You officially have a $1,000,000 idea on your hands and you know for a fact that people are willing to pay for it. Now you can get started on actually building the product, creating your business, and freeing yourself from the rat race!

[...]

Don’t let this post become another feather in your Wantrepreneurship cap. Just follow the steps and start working towards your $1,000,000 business! Remember, you can start laying the foundation for your product without building anything.
All you need is one weekend.

The Margin Manifesto: 11 Tenets for Reaching (or Doubling) Profitability in 3 Months
http://www.fourhourworkweek.com/blog/2008/06/24/the-margin-manifesto-11-tenets-for-reaching-or-doubling-profitability-in-3-months/
Written by Tim Ferriss Topics: Automation, Marketing

[...]

These are the principles I review whenever facing operational overwhelm or declining/stagnating profits. Hope you find them useful.

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The financial goal of a start-up should be simple: profit in the least time with the least effort. Not more customers, not more revenue, not more offices or more employees: more profit.

Based on my interviews with high-performing (using profit-per-employee metrics) CEOs in more than a dozen countries, here are the 11 basic tenets of the “Margin Manifesto”… a return-to-basics call that gives permission to do the uncommon to achieve the uncommon: consistent profitability (or doubling of it) in 3 months or less.

1. Niche is the New Big — The Lavish Dwarf Entertainment Rule:
Several years ago, an investment banker was jailed for trade violations. He was caught partly due to his lavish parties on yachts, often featuring hired dwarves. The owner of the dwarf rental company, Danny Black, was quoted in the Wall Street Journal as saying: “Some people are just into lavish dwarf entertainment.” Niche in the new big. But here’s the secret: it’s possible to niche market and mass sell. iPod commercials don’t feature dancing 50-year olds, they feature hip and fit 20-30-somethings, but everyone and his grandmother wants to feel youthful and hip, so they strap on Nanos and call themselves Apple converts. Who you portray in your marketing isn’t necessarily the only demographic who buys your product — it’s often the demographic that most people want to identify with or belong to. The target isn’t the market. No one aspires to be the bland average, so don’t water down messaging to appeal to everyone–it will end up appealing to no one.

2. Revisit Drucker — What Gets Measured Gets Managed:
Measure compulsively, for as Peter Drucker stated: what gets measured gets managed. Useful metrics to track, besides the usual operational stats, include CPO (“Cost-Per-Order,” which includes advertising, fulfillment and expected returns, chargebacks, and bad debt), ad allowable (the maximum you can spend on an advertisement and expect breakeven), MER (media efficiency ratio), and projected lifetime value (LV) given return rates and reorder %. Consider applying direct response advertising metrics to your business.

3. Pricing before Product – Plan Distribution First:
Is your pricing scalable? Many companies will sell direct-to-consumer by necessity in early stages, only to realize that their margins can’t accommodate resellers and distributors when they come knocking. If you have a 40% profit margin and a distributor needs a 70% discount to sell into wholesale accounts, you’re forever limited to direct-to-consumer… unless you increase your pricing and margins. It’s best to do this beforehand if possible – otherwise, you’ll need to launch new or “premium” products — so plan distribution before setting pricing. Test assumptions and find hidden costs by interviewing those who have done it: will you need to pay for co-op advertising, offer rebates for bulk purchases, or pay for shelfspace or featured placement? I know one former CEO of a national brand who had to sell his company to one of the world’s largest soft drink manufacturers before he could access front-of-store shelving in top retailers. Test your assumptions and do your homework before setting pricing.

4. Less is More – Limiting Distribution to Increase Profit:
Is more distribution automatically better? No. Uncontrolled distribution leads to all manner of head-ache and profit-bleeding, most often related to rogue discounters. Reseller A lowers pricing to compete with online discounter B, and the price cutting continues until neither is making sufficient profit on the product and both stop reordering. This requires you to launch a new product, as price erosion is almost always irreversible. Avoid this scenario and consider partnering with one or two key distributors instead, using that exclusivity to negotiate better terms: less discounting, prepayment, preferred placement and marketing support, etc. From iPods to Rolex and Estee Lauder, sustainable high-profit brands usually begin with controlled distribution. Remember, more customers isn’t the goal; more profit is.

5. Net-0 — Create Demand vs. Offering Terms:
Focus on creating end-user demand so you can dictate terms. Often one trade publication advertisment, bought at discount remnant rates, will be enough to provide this leverage. Outside of science and law, most “rules” are just common practice. Just because everyone in your industry offers terms doesn’t mean you have to, and offering terms is the most consistent ingredient in start-up failure. Cite start-up economics and the ever-so-useful “company policy” as reasons for prepayment and apologize, but don’t make exceptions. Net-30 becomes net-60, which become net-120. Time is the most expensive asset a start-up has, and chasing delinquent accounts will prevent you from generating more sales. If customers are asking for your product, resellers and distributors will need to buy. It’s that simple. Put funds and time into strategic marketing and PR to tip the scales in your favor.

6. Repetition is Usually Redundant — Good Advertising Works the First Time:
Use direct response advertising (call-to-action to a phone number or website) that is uniquely trackable – fully accountable advertising — instead of image advertising, unless others are prepurchasing to offset the cost (e.g. “If you prepurchase 288 units, we’ll feature your store/URL/phone exclusively in a full-page ad in….”). Don’t listen to advertising salespeople who tell you that 3, 7, or 27 exposures are needed before someone will act on an advertisement. Well-designed and well-targeted advertising works the first time. If something works partially well (e.g., high response with low percentage conversion to sales, low response with high conversion, etc.), indicating that a strong ROI might be possible with small changes, tweak one controlled variable and micro-test once more. Cancel anything that cannot be justified with a trackable ROI.

7. Limit Downside to Ensure Upside — Sacrifice Margin for Safety:
Don’t manufacture product in large quantities to increase margin unless your product and marketing are tested and ready for roll-out without changes. If a limited number of prototypes cost $10 per piece to manufacture and sell for $11 each, that’s fine for the initial testing period, and essential for limiting downside. Sacrifice margin temporarily for the testing phase, if need be, and avoid potentially fatal upfront overcommitments.

8. Negotiate Late — Make Others Negotiate Against Themselves:
Never make a first offer when purchasing. Flinch after the first offer (“$3,000!” followed by pure silence, which uncomfortable salespeople fill by dropping the price once), let people negotiate against themselves (“Is that really the best you can offer?” elicits at least one additional drop in price), then “bracket”. If they end up at $2,000 and you want to pay $1,500, offer $1,250. They’ll counter with approximately $1,750, to which you respond: “I’ll tell you what — let’s just split the difference. I’ll overnight FedEx you a check, and we can call it a day.” The end result? Exactly what you wanted: $1,500.

9. Hyperactivity vs. Productivity — 80/20 and Pareto’s Law:
Being busy is not the same as being productive. Forget about the start-up overwork ethic that people wear as a badge of honor–get analytical. The 80/20 principle, also known as Pareto’s Law, dictates that 80% of your desired outcomes are the result of 20% of your activities or inputs. Once per week, stop putting out fires for an afternoon and run the numbers to ensure you’re placing effort in high-yield areas: What 20% of customers/products/regions are producing 80% of the profit? What are the factors that could account for this? Invest in duplicating your few strong areas instead of fixing all of your weaknesses.

10. The Customer is Not Always Right — “Fire” High-Maintenance Customers:
Not all customers are created equal. Apply the 80/20 principle to time consumption: What 20% of people are consuming 80% of your time? Put high-maintenance, low-profit customers on auto-pilot–process orders but don’t pursue them or check up on them–and “fire” high-maintenance, high-profit customers by sending a memo detailing how a change in business model requires a few new policies: how often and how to communicate, standardized pricing and order process, etc. Indicate that, for those clients whose needs are incompatible with these new policies, you are happy to introduce other providers. “But what if my largest customer consumes all of my time?” Recognize that 1) without time, you cannot scale your company (and, oftentimes, life) beyond that customer, and 2) people, even good people, will unknowingly abuse your time to the extent that you let them. Set good rules for all involved to minimize back-and-forth and meaningless communication.

11. Deadlines over Details – Test Reliability Before Capability:
Skills are overrated. Perfect products delivered past deadline kill companies faster than decent products delivered on-time. Test someone’s ability to deliver on a specific and tight deadline before hiring them based on a dazzling portfolio. Products can be fixed as long as you have cash-flow, and bugs are forgiven, but missing deadlines is often fatal. Calvin Coolidge once said that nothing is more common than unsuccessful men with talent; I would add that the second most common is smart people who think their IQ or resume justifies delivering late.

The Truth About Abs: How To Make $1,000,000 Profit Per Month with Digital Products (Plus: Noah Kagan results)
http://www.fourhourworkweek.com/blog/2011/11/02/the-truth-about-abs-mike-geary/

A great case study. As with most Tim Ferriss Muse case studies, I suggest you not focus on the question of “how successful is this company, really?” Focus on the lessons being taught.

Written by Tim Ferriss Topics: Entrepreneurship, Interviews, Muse Examples
[...]

Once or twice in the past, I have referred to “someone” who has earned $5,000,000-$10,000,000 per year with e-books and cross promotion.

For that, I should apologize, as it’s not accurate: his numbers are now closer to $1,000,000 per month, and “e-book” doesn’t begin to explain what he does. That someone is named Mike Geary. He prefers to keep a low profile, skiing powder and refining his “muse,” or automated business, to a precise science. From strategic customer service in Germany, to testing for trending, it’s all piece of a well-planned puzzle and well-oiled machine.

For the first time, this post will explain how he built his business, some of the key lessons learned, and common mistakes with digital products.

As you read, keep in mind two things:
- He is, without a doubt, considered one of the smartest online marketers and traffic buyers (a key differentiator) in the world.
- He started off knowing nothing and got there through intelligent testing.

As Thomas J. Watson, founder of IBM, is famous for saying: “Nothing happens until someone sells something.” Planning is valuable, but–long-term–it’s your ability to improvise and adjust that makes the difference.

Enjoy…
Enter Mike Geary
Can you describe your muse?
My “muse” (i.e. business) is composed of three main components:
1. I sell a fitness information product called “The Truth about Six-Pack Abs,” which has sold more than 500,000 copies since 2005.
2. I publish a fitness and health newsletter to about 680,000 subscribers (with subscribers in almost every country), and have built a large content based website that goes along with this fitness newsletter.
3. I act as a media buyer, purchasing large amounts of traffic (mostly in the fitness/nutrition niche) that I funnel to a few select partners. This allows me to become integrated into several other large fitness and nutrition businesses (they promote my product extensively on their backend) since I act as a very large source of their overall traffic.

What is the website for your muse?
My main website, which has the sales process for my “Truth About Six Pack Abs” product, is: www.TruthAboutAbs.com

[Click here to see an affiliate landing page, click here to see the standard non-affiliate/PPC landing page]

How much revenue is your muse currently generating per month (on average)?
The business as a whole (all three components listed above) generates just shy of $1 million in revenue per month. Total revenue for last year was approximately $11 million.

While the financial freedom that this business has created has been amazing, it’s also been very rewarding to receive thousands of emails in our support center from customers who have literally changed their lives with the help of my fitness advice. I still get chills when I read a glowing email from a customer that has lost 100 lbs with my program, totally changed their confidence and energy, and just overall changed their life! So cool.

To get to this monthly revenue number, how long did it take after the idea struck?
To be honest, I was a little slow in learning marketing and building the business, so it took me about five years to get to those numbers. About two years into this venture, I was finally making about $50,000 per year with the online business. As I explained above, growth exploded once I quit my corporate job, and my earnings increased about 10x the following year. Growth in following years went to $3.6 million, then $6 million, and finally $11 million in annual revenue.

How did you decide on “Truth About Abs”?
It was simple really… A mentor told me to follow what I’m most passionate about, and that passion was fitness and nutrition. I can talk all day long about fitness and nutrition, so why not do what I love?

I initially bought an information product that was about $300 (a big investment for me at the time) from a marketer named Ryan Lee. The product was all about teaching fitness professionals how to build a more successful business, particularly online. To this day, I still give Ryan credit for being the guy that got me into this career and changed my life. Thanks, Ryan! [Ed: The product Mike is referring to is no longer available. For those interested, this course covers similar content.]

As I studied Ryan’s course, I thought about my ideas for a potential information product. Working as a personal trainer, I knew that about 90% of the questions I got from clients were always about “six pack abs” or getting a flatter stomach. I also knew that there was a load of crap out there on the internet and on TV infomercials for all sorts of garbage like ab machines, belts, and worthless pills. Finally, I’d seen a ton of bad exercise advice floating around online. That was where my initial idea for “The Truth about Six-Pack Abs” came from. Little did I know that the idea would eventually become such a phenomenal success!

What ideas did you consider but reject, and why?
As crazy as it sounds, “The Truth about Six Pack Abs” was my very first idea, and it’s been the product I’ve continued to focus on throughout the years. I haven’t strayed into other businesses or distracted myself from the product that I knew would be a best-seller. I wanted to keep my focus on one main product. With that said, I do have a couple other products that sell okay, such as my skiing fitness product (AvalancheSkiTraining.com), which I produced solely because it was a labor of love. But to this day, the “Truth about Abs” product remains my bread and butter.

How did you get started? What ultimately lead you to your current lifestyle?
I started my internet business in 2004 because I had become fed up with the time and freedom constraints that came with my old 9-5 corporate lifestyle. My main goals in designing my “new life” were:
1. To build more time freedom into my life. I desperately wanted to design my new life with much more free time to enjoy my hobbies, friends, and family. This “time freedom” was actually a higher priority for me than the financial rewards of starting a web-based business. And this may sound funny, but I also had a goal to eventually NEVER have to wake up to an alarm again (aside from traveling). I despise waking up to an alarm!
2. The ability to travel as much as I wanted, to anywhere in the world, with no financial or time constraints.
3. More financial security for myself and my family.


When I set these goals back in 2004, I was basically working three jobs. I worked an engineering consulting job from 9-5 at an office. I also worked 15-20 extra hours per week as a personal trainer at a local gym, and I was attempting to build my online fitness business.

From 2004 to 2006, I made consistent but SLOW progress on my internet business. By the end of 2006, the internet business was making just as much money as my corporate job. I quit my corporate job in January 2007, and never looked back. Quitting my job at that critical point in time was the best decision I could have made as that freed up the time I needed to dedicate solely to my internet business, which started to boom in the months that followed.

Within another year, my internet business grew into a 7-figure annual business and, eventually, an 8-figure annual business in revenue.

It may have taken a few years to achieve, but I eventually successfully reached all three of those goals… time freedom, ability to travel anywhere/anytime, and financial freedom. Oh, and — except for when making flights — I haven’t had to wake up to an alarm clock in over four years now!

What does your daily/weekly routine look like? Where do you live and what does your lifestyle look like?
It has really been a dream come true. After I quit my corporate job in 2007, I moved to the mountains of Colorado and skied almost every day that next winter. I don’t ski every day anymore in the winter (I’m more picky about the ski conditions now), but I never ever miss a powder day. For those who aren’t hard core skiers: a powder day is like the holy grail of skiing. If you love skiing, you never want to miss a powder day!

In the summer, I do a lot of hiking, mountain biking, and other outdoor fun. And because of my time freedom, friends and family can come out to visit me anytime in Colorado, so I love to host friends and act as a tour guide.

As for traveling, my girlfriend and I now travel at least 10-15 days every month. We’ve traveled to dozens of countries and done all sorts of fun stuff, like heli-skiing in Chile, ATVing and ziplining in Costa Rica, dry suit scuba diving in the Silfra Ravine in Iceland, and tropical scuba diving throughout the Carribean. We’ve also traveled extensively throughout Mexico, Central America, South America, and lots of islands! We plan to do more traveling through Europe and Asia soon.
When I travel, I still work on my business about 1-2 hours per day. That’s what I’ve decided personally is a good schedule to allow me to enjoy traveling and still keep up with my business. When I’m not traveling, I basically allow myself complete freedom of schedule. Some days I’ll feel like I’m “in the zone” and just work all day long, maybe 10-12 hours or more. Other days, I might only work two hours and enjoy the rest of the time doing fun outdoorsy stuff, going to a nice dinner, or golfing with friends.

What were some of the main tipping points or”A-ha!” moments? How did they come about?
In the very beginning, I had this foolish idea in my head that this flood of people would automatically rush to my website, buy my product, and I’d be a millionaire within months. Reality struck when I had a whopping 5 visitors to my site in the first month. At the time, I didn’t understand that you actually have to DRIVE traffic to your site, as people won’t just magically find you.

After about six weeks of having my site “live” and still having yet to make a single sale, I started to get discouraged and thought that this whole internet marketing thing just didn’t work. Then I had a tipping point: I got my first sale! But when I looked at the details of the sale, I noticed that the buyer was one of my mom’s good friends. I had to laugh, but at the same time, it gave me the motivation to push forward, as I saw that the website could make sales if I just produced traffic.

The next tipping point came about 18 months later when I started playing with Google Adwords, and learning how to purposely drive traffic instead of just hoping people would find the site. I’m very technically minded, and Adwords is a numbers game, so that fascinated me. Within a couple months, I started learning how to split test ads, find what converted best for my site, and get massive amounts of traffic for reasonable prices (at least reasonable enough to break even, or make a small profit on the front end). Running a massive amount of traffic on Adwords and doing lots of testing taught me how to buy traffic in other places too, beyond Google’s network.
Another big tipping point came in early 2007, when I finally put my product on the affiliate network, Clickbank. The biggest thing that I did was set my affiliate program apart from the crowd. Here’s how…

At the time, I noticed that most vendors on the Clickbank marketplace were only paying affiliates 35-50% commissions. Even the highest paying vendors were paying 55% to 60% commissions max. To some, that might seem very generous. But at the same time, we’re selling digital products, so we don’t have as many overhead costs as with a physical product and can be more generous.

I decided to be OVERLY generous with affiliates and truly set myself apart from the crowd. Instead of the normal 35-60% commissions, I set my commissions at 75% (which is the maximum percentage you can pay to affiliates in Clickbank). Immediately, this made my product more lucrative for most affiliates than other products that were paying lower commissions. I had hundreds of affiliates shift their traffic to my site instead of some of my competitors. Within a couple months, I jumped up to one of the best selling products on the entire Clickbank marketplace, out of more than 10,000 products.

[Tim postscript: As Mike mentions in the comments, this means:
"For a clarification on revenue, the way that Clickbank works is to take the processing fee and the affiliate fee out before the revenue ever flows into my account, so that $11MM 'per year' actually did not include gross sales numbers. With gross sales, it would be more around $20MM-$25MM per year, I’m guessing."]

Within 6-12 months, most other top selling Clickbank vendors followed suit and switched to 75% payouts. Currently, as a vendor (product creator), if you pay affiliates any less than 75% (as that’s now the standard), it’s very hard to be competitive, because most affiliates will only promote products that pay 75% commissions.

Some vendors still have the wrong mindset and can’t stand the idea of the affiliate making more per sale than they make as the creator of their own product. That’s foolish, however, because the math is simple: would you rather get 10 sales and make $30 per sale ($300), or get 1,000 sales at $10 per sale ($10,000)? Better yet, how about 500,000 sales at only $2 per sale in profit ($1,000,000)? The answer should be obvious. The more generous you can be with affiliates and other business partners, the more sales VOLUME they can send you, especially if they’re buying traffic and incurring that cost. Plus, there’s more backend revenue potential with a higher volume of customers.

The above was a huge takeaway for me, and it led to the development of two priorities that are still at the heart of my business today:
1. Treat my customers like gold. Without happy customers, any business will eventually die. I wanted people to get RESULTS! I don’t just want to sell them some fad or gimmick that doesn’t work.
2. Treat my affiliates (and other business partners) like gold. Going above and beyond while being overly generous with business partners and affiliates effectively jumpstarted my business success. In fact, in additon to being one of the first vendors to pay affiliates 75% commissions, I was also one of the first vendors on the Clickbank marketplace that started to reward affiliates that sent over a certain number of sales each month with bonuses up to 85% or even 90% commissions. The additional percentage points had to be paid manually at the end of the month as a bonus.


What resources or tools did you find most helpful when you were getting started?
I remember buying lots of low priced marketing e-books about search engine optimization (SEO) and pay-per-click (PPC marketing). Those e-books that I bought 5-6 years ago are mostly outdated now, given the techniques change so rapidly. Regardless, the benefit was that I learned how to use both SEO and PPC and stumbled onto new discoveries as I worked with both.

What were your biggest mistakes, or biggest wastes of time/money?
A couple that I can think of right off the top of my head…

I got approached once to buy an “email drop” in a list that supposedly had 5 million names. The list was apparently built through credit card surveys or something like that. I think it only cost $600 to run an ad to this list, so I thought it HAD to be a winner, and I tested it. I ended up getting 1 sale ($40) from that $600 test. Even with a list of 5 million names, that list was basically worthless since there was no relationship, and it had been built solely from credit card surveys. Compare that to a JV (joint venture) partner who has a great relationship with their list. We’ve had some affiliates get hundreds of sales from relatively small lists of maybe 10,000 emails.
I know that buying “email drops” can sometimes work (and I’ve made other successful ad buys in newsletters), but you have to know exactly how the list was built, if it’s maintained regularly, and if it has a loyal following. Otherwise, it could be a garbage list.

Another failed test was a direct mail postcard we tested. The whole campaign cost me about $30,000 to implement (postage costs, postcard creation costs, copywriting, list rental, etc). It seemed like a viable test as I had friends that had moderate success with direct mail pieces before. The postcard tried to get the user to go to a website from the postcard and purchase our fitness product. It backfired big time, as we only made back about $3,000 out of the $30,000 investment in the test. A 90% loss to the tune of $27k… No fun.

Now, I’m not saying that a postcard-to-website sales process can’t work. However, in our example, we obviously had a big missing link to the puzzle and it just didn’t produce sales. I think it’s a trickier process than someone who’s  coming to your site after clicking on a PPC ad or banner ad.

What have been your key marketing and/or manufacturing lessons learned?
I haven’t manufactured any products, so I can’t comment on that. As for marketing, my biggest lessons (as mentioned above) were being overly generous with affiliates and paying them every possible penny that I could. This is the only way to be competitive with affiliates: to be the business with the biggest payout to them. Even if you have to pay affiliates 100% of your front end revenue, at least you know that you obtained those customers without incurring a loss (which doesn’t happen with every type of advertising), and now you have the opportunity to build a long term relationship with those customers and sell them your other products in the future.
Another key marketing lesson I learned is that when buying traffic, be prepared to not make any profit on the front end. Sometimes, in order to compete with other advertisers, you need to be willing to take a small loss on your advertising spend in order to bring in lots of customers. You just need to be careful to know your backend numbers (average future revenue amount per customer) well enough to ensure that your front-end losses aren’t so steep that you can’t make back the advertising loss after a certain period of time.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
I’ve had various radio interviews, and had content picked up by popular websites, blogs, etc. However, some of my best relationships have been companies that I’ve partnered with on media buying (think AOL, MSN, etc.) Spending a boatload of money with certain big companies, and building a long term relationship with them by advertising for years has resulted in special deals for cheaper traffic. If you think about it from the publisher’s perspective, it helps to save them administrative costs by dealing with fewer advertisers, so sometimes I’ve been able to get better deals by agreeing to large contracts upfront. Another advertiser might only buy 1-2 ads, instead of the 50 ad placements that I would buy.

Where did you register your domain (URL)?
GoDaddy.com

Where did you decide to host your domain?
I host with a company called Rackco. It was just a referral from a friend at the time, but I’ve stuck with them for years.

If you used a web designer, where did you find them?
The only thing I had “designed” was my cartoon based header graphics. Again, this was simply a referral from a friend, and the guy I used was a talented cartoon designer named Vince Palko. I’ve also heard that 99designs is a great place to get designs.

Do you have any employees?
I have customer service representatives in a few different countries and major markets. Specifically, I have one person in France, one Swiss for German translation help, an English-language affiliate support rep in Trinidad (he also handles Spanish translation), and one German-based woman who handles German affiliates. Finally, I have a webmaster who helps with site maintenance.

If you were to do it all over again, what would you do differently?
Nothing. I’ve learned so much, even from my mistakes, and everything has happened for a reason.

What are some common mistakes when buying media/traffic?
The most common mistake is not letting enough traffic flow to see true trends. Some people shut down their campaigns after only a couple hundred clicks thinking that it won’t be profitable, but they haven’t let it run long enough to see for sure. For example, a newbie might shut down their campaign after only 500 clicks and 1 sale. But what if they would have made 3 sales in the next 500 clicks, for a total of 4 sales in 1,000 clicks? Data can be pretty variable when you’re still under 1,000 clicks. I generally test an ad for at least a couple thousand clicks. However, keep in mind that I deal mostly with the fitness and nutrition niches and they require high volumes of clicks to see true data.

Another big mistake is not split testing enough variations of ads. Many advertisers give up on losing campaigns after testing only a couple ad creatives. However, I’ve found that simple modifications — such as a one word variation in a headline or a slightly different image or background color — can be the difference between a losing campaign and a profitable campaign. In some instances, I’ve used the exact same ad text combined with slightly different pictures and seen DOUBLE the click-through rate (CTR).

The last mistake is also very common: most advertisers aren’t willing to lose money to find what works. I EXPECT to lose money the first time I test a campaign. Then I tweak the ad copy, offer, etc. based on our testing results, and we see if we can restart the campaign a second time and make it profitable based on what we learned [i.e. what lost the least money, etc.] For example, if I do a $10,000 traffic buy test on a new website that we haven’t worked with before, we’ll usually only make back maybe $6,000 to $7,000 for a net loss of about $3,000. But we also usually learn that one of our ad variations performed MUCH better than the others, and we can work with that specific ad from that point forward and possibly negotiate lower rates. Sometimes we find that the numbers are too far off to work in the future, so we just decide to cut all ties with that particular website and not buy traffic from them again if they can’t offer lower rates.

Any tips for Facebook media buying? Common wastes of money or newbie screwups?
The three mistakes that I listed in the previous question apply to buying Facebook traffic, as well. I’ve found that the most important aspect of Facebook ads is the image, so it’s necessary to test at least 6-10 variations of images for each ad. The image attracts the eyeballs first, then your headline needs to finish the job and get the person to click your ad. One thing I’ve found is that images that have done well for ads on other sites may not always be effective on Facebook. Each site is unique with its style, colors, and layout, and I’ve been surprised by some images that work well on Facebook and others that don’t.

One common mistake I’ve seen with people buying ads on Facebook is paying WAY too much per click. In my experience, you almost NEVER need to pay the recommended bid amount that Facebook displays when you set up your ad. For example, I’ve set up ads where the recommended bid amount was $1.12 per click. I’d bid $0.30 cents instead, and would still be able to get large amounts of traffic (assuming that I was able to get a high enough click through rate on the ad). In order to pay a lot less than the recommended bid price per click, you need to get an above average click through rate, so it takes good ad copy, good images, and the right targeting.

If you had $5K to start media buying, what would you do right now, assuming all sites/platforms (e.g. AdWords) were available to you?
The best quality and cheapest traffic is available on Google’s content network. That’s easier said than done, as Google is currently very picky about what offers they will allow to run. In certain industries, it’s not even worth trying anymore, because Google won’t allow some types of websites to advertise at all. But if you are advertising in an industry that Google still accepts, the content network is wide open, and it’s the cheapest source of quality traffic available in most cases. It’s also one of the highest volume traffic sources available (along with Facebook), but in some industries, the Google content network can be easier to advertise profitably compared to Facebook.

Sometimes you’ll hear marketing “gurus” say that the search network is better quality traffic than the content network. This is false, as it’s industry specific. In my case, I spent over $5 million advertising on Google over the years with fitness and nutrition products, and I can say without a doubt that content network traffic is MUCH cheaper than search traffic, and converts even higher than search traffic in many cases.

What would you do if you had $20K to start media buying?
At this spend level, you can do test campaigns on nearly any major website, as most major sites require test campaigns of around $5k to $10k minimum to get started. We’re talking about big news websites, politics sites, weather sites, and major sites like Yahoo, MSN, and AOL. From my experience with media buying, testing is all that matters as it’s hard to compare CPM rates from one site to another, since placement locations, sizes, etc. are all different. For instance, I’ve had CPM campaigns that were profitable on some sites at super high rates of $6.00 CPM or more, and on other sites, a price as low as $0.50 CPM resulted in a loss. You never know how an individual site will perform until you test.

The usual steps for a media buy on a large site are:
1. Run $5-10k test campaign (most times, initial test loses money). Smaller sites accept much lower test amounts.
2. Optimize the ads that performed best and delete the ads that performed worst.
3. Negotiate a lower CPM rate if the publisher can go any lower (sometimes they can, and sometimes they can’t go lower — depends what other advertisers are paying on average and how much inventory they have available).
4. Re-launch campaign when you’re confident that you will be able to profit.


What are your recommendations for developing information products?
Sell the customers what they want, but give them what they NEED. In my market, what people want are six-pack abs exercises. But that’s not what I give them, because that’s not what they need. They need the right nutrition, the right full body training program, and the right mindset to be dedicated to their goal. Basically, I sell six pack abs, but I teach them how to live healthier and adopt a fitness lifestyle in order to lower their body fat for life.

What have you learned about price points?
It’s been really interesting to see some of the testing for pricing. We’ve tested price points for various fitness info products at $29.95, $39.95, $47.00, $67.00, $77.00, $79.00, and $97.00. I’ve found a sweet spot in the $47.00 price point for most online fitness info products that seems to maximize front end revenue and the total number of customers. Lower price points can sometimes bring in more customers on the front end, but the backend marketing plan needs to be solid in order to make up for the lower price (especially if you’re buying traffic and need that front-end revenue to come close to break even on your ad buys).

How have you tried to minimize requests for refunds?
Truthfully, I’ve just focused on producing a great quality product, which goes a long way to reduce refunds. I know that some people are dishonest and will request refunds even though they liked the product. But I feel that, overall, most people are honest and won’t take advantage of someone on purpose.

A surprisingly common scenario for requesting a refund is when people don’t understand that the program is downloadable, even though it’s spelled out on the site. They think they’re getting something in the mail, then request a refund when they don’t. It’s best to be as clear as possible to make sure people understand that this is a downloadable program. This can prevent loads of customer service requests from confused customers. Of course, if you sell a physical product, this isn’t a problem, though shipping and delivery time may be more of an issue.

How do you test for your content pages?
At this point, it’s fairly easy to test the interest in content pages. I simply come up with an idea, prepare the article, and send it to my email list of about 680,000 readers. The open rates of the email give a good representation of how interesting that topic (email subject line) was to most people.

Also, on each content page, I have the social media sharing buttons (Facebook, Twitter, and Stumbleupon). I can guage how much people like a particular topic based on how much social media sharing occurs. I have some pages with over 40,000 Facebook likes and others with only a couple dozen likes.

Best and worst performers? Most unexpected winners or losers?
My best content pages are typically topics that surprise or shock people in some way, or clear up a confusing topic. Take note of the amount of Facebook likes, tweets, etc. on some of these pages below:

Successful example #1: “Are Whole Eggs or Egg Whites Better for You?”
In this article, I surprise people with my arguments as to why egg yolks are actually the healthiest part of the egg, and anybody eating only egg whites is making a foolish decision. This is a great example of the type of information that goes against the grain and shows how people have been misinformed by the media.

Successful example #2: “The Salad Dressing You Should NEVER Eat.”
This is another good example of a content page that shocks people. Before reading this article, a lot of people had no idea that most salad dressings at the grocery store are a health disaster, full of additives like corn syrup, unhealthy soybean and canola oils, etc. People want to share articles like this.

Successful example #3: “Does Canned Food and Bottled Water Increase Your Abdominal Fat Through Hidden Chemicals?”
This is another article that shocks most people, as it teaches them about a rather unknown chemical that they might be exposed to in canned foods and plastics. These types of surprising articles help people to want to share the article with their friends to help protect their health.

And now for an example of a content page that didn’t seem to work that well:
“The Nutrition Benefits of Kale.”

You can see this page got less than 100 Facebook likes, compared to the examples above that have thousands, or even tens of thousands of “likes.” What’s the difference? Well, I think the main difference is that kale is just not a “sexy” topic. People already know that kale is good for you, so there’s nothing shocking in this article. Compare that to the egg yolks article, where most people think egg yolks are horrible for you, and I give an argument to show why that’s wrong. It’s more shocking and therefore something people want to share with friends.

Most common mistakes and/or easy fixes for content pages?
Assuming the content is interesting and well-written, one mistake I see is that people don’t always make it easy for people to share things on their website. For example, they might just have a Facebook like button at the top of the page, but not the bottom. I like to have sharing buttons at the top and the bottom so that people see the buttons right as they finish the article. I think it’s important to have the social media buttons at the top of the page too so that people see that the page has social proof and is popular right at the beginning.

I also think some site owners can use too many sharing buttons, even more than a dozen total. I like to use the “Big 3″ (Facebook, Twitter, and Stumbleupon) to keep things uncluttered.

What’s next for you?
Honestly, I just want to continue simplifying my business more and more as time goes on.
I have plans for a couple new small projects, one of which is an upcoming healthy fat-burning recipe book that I’m working on with a co-author. Other than that, one of my main goals is to maintain my current lifestyle without getting bogged down by too many business projects. I want to continue pumping out great fitness and nutrition content that helps my readers live healthier lives.
More, and shorter case studies follow in the below posts. Again, focus on the lessons- don’t be a hater and question the rev/profit numbers.
Engineering a “Muse”: Case Studies of Successful Cash-Flow Businesses
http://www.fourhourworkweek.com/blog/2010/11/28/4-hour-work-week-case-studies-muse/

Written by Tim Ferriss Topics: 4-Hour Case Studies, Muse Examples

This post has been in the works for a while.

One common challenge for readers of The 4-Hour Workweek is the creation of a “muse”: a low-maintenance business that generates significant income. Such a muse is leveraged to finance your ideal lifestyle, which we calculate precisely based on Target Monthly Income (TMI).
In the last four years, I’ve received hundreds of successful case studies via e-mail, and more than 1,000 new businesses were created during a recent Shopify competition, but I’ve presented only a handful of a case studies. Here are a few dozen we’ve covered:

How to Sell 10,000 iPad Cases at $60 Each (and Other Lessons Learned)
18 Real-World Lifestyle Design Case Studies [VIDEOS]

In this post, I’ll showcase four successful muses inspired by The 4-Hour Workweek, including lessons learned, what worked, and what didn’t…

In the comments, please let me know: Is this helpful, and would you like more of these posts? What’s missing? If you’d like to submit your own muse for being highlighted, please see the end of this post.

All suggestions are welcome, and I hope you enjoy these as much as I did.
“EarPeace” by Jay Clark
Describe your muse in 1-3 sentences.
EarPeace improves any loud live music or nightlife experience. EarPeace is high fidelity hearing protection that turns down the volume without distorting the sound, it’s virtually invisible, comfortable, reusable, and comes in fantastic packaging.

What is the website for your muse?
http://www.earpeace.com
How much revenue is your muse currently generating per month (on average)?
$5,000 – $10,000 per month

How did you decide on this muse?
My muse solved my problem. I spent carnival in Port of Spain with my beautiful Trinidadian girlfriend and danced for days in costume next to tractor trailers converted to giant rolling speaker stacks. We recovered in Tobago and the ringing in my ears was louder than the waves. I turned to her and asked if she had ever seen ‘stylish’ hearing protection. She hadn’t. Right then I found my muse.

After all the research, I was confident I could inexpensively design a better product, deliver superior marketing, and construct an infrastructure that would run itself. EarPeace solved the three major problems that people have with hearing protection – it destroys sound quality, looks stupid, and isn’t comfortable. When you use EarPeace, live music is crystal clear (you can even hear your friends), people can’t see you wear it (color of your skin and very low profile), and they are very comfortable (and reusable – high value!). I could also wrap it in beautiful packaging and keep a reasonable margin. And, it’s small, inexpensive to ship, and easy to maintain inventory. EarPeace has proven itself a winner.

What ideas did you consider but reject, and why?
I was on the verge of opening a yoga studio in Amsterdam. In January 2008, I flew to Amsterdam to do the final walk-throughs, meetings with business attorneys, real estate agents, real estate attorneys, pay roll processors, personnel managers, accountants, special accountants, other people to help me stay in code for the byzantine list of regulations around hiring people and paying them, and the list goes on… TO OPEN A YOGA STUDIO (insert total exasperation). I read half of “The 4-Hour Workweek” on the way out, and the other half on the way home. I knew right then that the yoga studio (especially in Amsterdam) was not the way. I spent the first two weeks of October 2008 in southern China doing factory tours for EarPeace.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
The main A-ha moment was the realization that I couldn’t be tied down to a space. A yoga studio (as much as I love my practice) makes you immobile. I grew up overseas and the wanderlust is still strong. I have to run my business from anywhere. EarPeace allowed me to do that.

The other tipping points were making the right decisions about staying tethered to the corporate mother ship. Overdoing it on vacation and taking as much unpaid leave as possible were critical.

What were your biggest mistakes, or biggest wastes of time/money?
Over-ordering inventory. This was the biggest mistake. As soon as you get your first run of product, you are already tweaking it and making it better. Bargain and promise the moon on future sales, and keep the inventory low. On the second order (blister packed EarPeace for venues), I over did it. Thank BUDDHA the initial run of boxed EarPeace for internet sales are still almost perfect.

What have been your key marketing and/or manufacturing lessons learned?
Ask as many smart people for their opinion as you can. The forest quickly gets lost for the trees when you are in the thick of operational, distribution, creative, and financial decision-making. Give 5% of the company to a couple of clutch advisers that will give you 1-2 hours per week to review strategy, make introductions, and help drive sales. You CAN NOT do it all by yourself. There are so many marketing communications decisions that make it impossible to do everything alone. And, as quickly as possible, hire someone part-time to do continuous PR.

How did you find your advisers, and what would be your advice to first-timers?
I was lucky enough to have a robust network of professionals and friends that I could turn to for quick advice during ramp up and launch.  My Thunderbird MBA network is INVALUABLE.

However, if people don’t have those sorts of people on speed dial, it’s then a matter of networking.  The American Marketing Association is cheap to join and has several meetings a month where you can meet smart people who are interested in helping budding entrepreneurs.  The SBA has formal adviser programs.  Kauffman Foundation will help connect people.  There are lots of resources, but you need to get out and have lots of coffees, dinners, and beers until you find someone who you trust, who demonstrates the types of core competencies you need, and is willing to be involved / mentor you through the mountain that is starting a business.

How did you find your manufacturer, and what would be your advice to first-timers?
I found my manufacturer through Alibaba.com and GlobalSources.com.  I contacted all of them through my business email, because using a Gmail account will not get you serious feedback.  I started off with a list of 20+ potential suppliers and sent them all emails.  Based on how quickly they responded, the quality of their English, and their willingness to answer my questions, I narrowed that list to about ten.  I sent those ten an NDA and narrowed it further when there was no response or issues with confidentiality.

Then I asked them to demonstrate that they could create what I wanted through mock ups, and further narrowed the list to about five.  After that, I used my MBA network to help find an interpreter that could help me with the factory visits and negotiations.  This was critical – you don’t know what you don’t know, and there is a lot you don’t know about doing business in China.  Having someone who speaks the language and can drive the negotiations is worth the money.  After I found my interpreter, I got on a plane and went to Hong Kong.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
- “A Ringing Endorsement for Earplugs” on Mashable
- Patrick Dierson on the Jay-Z tour
- The Bowery Presents venues in NYC carry EarPeace
- Thievery Corporation has custom EarPeace
- I am making custom EarPeace for SXSW

These all happened through adviser introductions, lots of blind phone calls, and PR. And, being out there. EarPeace had a presence at every major music festival in the late summer. That is a phenomenal work lifestyle.

If you were to do it all over again, what would you do differently?
I would have brought on advisers sooner, ordered less inventory to enable faster product innovation, and spent more money on PR.

What’s next?!
EarPeace is a great product. I am very proud of it. It really works and it’s designed uniquely enough that competing ‘high-fidelity’ products just can’t touch it for normal lifespan. We’re going to transition EarPeace into a consumer, mass-market product. Right now it’s still relatively niche, but EVERYONE needs this. Foam earplugs are great for sleeping, for instance, but you need hearing protection when you are out and about all the time. Whether it’s the movies, the basketball stadium, a loud bar, a restaurant, or the subway. We still need to hear, we just need to turn down the volume. EarPeace does that, discretely, and in a high value way. I want EarPeace at CVS, Walgreens, and Wal-Mart by the end of next year.

Then, I’m taking a break. I’m going back to my favorite Vipassana retreat in Thailand. When I come out after 10 days of no speaking, 10 hours of meditation and 2 hours of yoga per day, and fabulous vegetarian food… the next muse will have manifested itself.
“Summer Jasmines” by Alissa Kraisosky
Describe your muse in 1-3 sentences.
My muse is a foldable, compactable evening and pedicure sandal. It is patent pending, is launched in the US and currently launching in Japan.

What is the website for your muse?
http://www.summerjasmines.com

How much revenue is your muse currently generating per month (on average)?
$1,000 – $2,500 per month

How did you decide on this muse?
I had read Tim’s book on a flight back from a Paris vacation in 2007. I was stuck in a job that was getting more toxic, and Tim’s book got me excited again – kind of like when I was in college and felt like anything was possible. About a year later, necessity became the mother of invention. My feet were hurting walking back to my hotel at a Las Vegas convention center. I wished there was a stylish shoe I could just pull out of an evening bag and wear for comfort. I also wanted something that would easily separate the toes during a pedicure. I pulled out Tim’s book and re-read the chapters on starting a muse, and voilà!

I also used PRLeads and HARO to gain exposure for the product (as mentioned in the book). The idea was put into motion, and Summer Jasmines has since appeared in the Style Network website, attracted the attention of celebrity stylists, and is in the hands of Paris Hilton.

What ideas did you consider but reject, and why?
I thought about doing something in the medical field (my day job is as a physician-psychiatrist) but read Tim’s experiences with BrainQuicken and decided against it. I didn’t want to do something that was too similar to my day job.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
I was walking back to my hotel from a convention in Las Vegas and my feet were killing me – that was my “A-ha!” moment. I did not want to walk back barefoot, so I limped back to the hotel with my uncomfortable shoes on. I did some searching online and found nothing similar to what I developed. I wanted a shoe that could be worn in emergencies, but also daily or to pedicures.

What were your biggest mistakes, or biggest wastes of time/money?
I hired a PR agency, but found they needed micromanaging and it was not helpful at all. I did much better with Tim’s recommendations in the book, such as HARO and PRLeads.

What have been your key marketing and/or manufacturing lessons learned?
My product needs to really be demonstrated or else it just seems like another shoe that’s joining the masses.

How did you find your manufacturer, and what would be your advice to first-timers?
Finding a manufacturer was tough, as I wanted to make sure they made the product exactly as I designed it. I searched in the United States with no success, and it took me three months, multiple Internet searches, and a flurry of follow up e-mails before I found a reliable manufacturer. This manufacturer was willing to prototype my designs, with minimal cost initially (around US $300) per style. When I saw that the sandals were generating a good market response, I was able to order in bulk.

My advice to first-timers would be to start with Alibaba.com. It’s fairly easy to find a contact who speaks English (in my case) and I was also able to find some pretty big name established manufacturers (for example, those who work with Disney and L’Oreal). Be sure to ask them if they do private label manufacturing (the acronym ODM–original design manufacturer–is what you’re looking for.) Ask them to ship a few sample items to you (or prototypes) to avoid a huge inventory of something you don’t want.  Some other acronyms to learn are: FOB (freight on board or free on board) and ISF (Importer Security Filing) so there are no nasty shipping/customs cost surprises later!

Any key PR wins? Media, well-known users, or company partnerships, etc.?
Joe Robinson at “Entrepreneur” magazine recently interviewed me on surviving multitasking and setting boundaries. Again, it happened via PRLeads, recommended by Tim.

If you were to do it all over again, what would you do differently?
I would have not hired the PR firm.

What’s next?!
I want to keep designing more shoes, and figuring out how to integrate this into medicine to increase wellness. I know it will happen somehow!
“Hewley L-Carnitine Shampoo” by Daniel Bradley
Describe your muse in 1-3 sentences.
Hewley products (L-Carnitine Shampoo and Saw Palmetto Conditioner) help men and women combat thin, lifeless and limp hair with a daily 2-step regimen for thicker, healthier hair, as well as new hair growth.

What is the website for your muse?
http://www.hewley.com


How much revenue is your muse currently generating per month (on average)?
$2,500 – $5,000 per month

How did you decide on this muse?
We did research on scientific journals and studies with respect to stimulating blood flow to the scalp. We discovered some exciting results and found that there was a viable niche, and that the pricing of the products allowed for necessary margins.

What ideas did you consider but reject, and why?
Our first muse concept was fish oil. We found a great Icelandic company that has a terrific product that they would sell to us in bulk. We tested the concept using 4HWW tools, but found there was too much competition and not enough differentiation.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
The main tipping point was finding that we could ‘name’ our product with an exciting and key ingredient and also own the domain (e.g., L-Carnitine Shampoo – the domain lcarnintineshampoo.com was available). Tying together the domain and the product name seemed like a great way to ‘own’ a niche. We then realized that having a ‘brand” (in our case Hewley) would add the flexibility of playing around with our products and product line.

What were your biggest mistakes, or biggest wastes of time/money?
The biggest trouble has been trying to outsource website design work. We outsourced our product label design to a great firm, and are super excited about the results. But in the web design world, we’ve not had the best luck. We’ve tried a few firms on eLance and a couple of Shopify designers, but we struggled with finding a designer who knew how to ‘design’ for maximum conversion. This has been our biggest waste of time and money.

[Note from Tim: This is where advisors can be very helpful. First, have an advising conversion expert help you put together "wireframes" or sketches of pages that should convert (using pen and paper, or something like Balsamiq). Then have a designer implement and add aesthetic flavor, after which you have a developer chop it up and create the functioning site.]

We are still struggling with the concept of a brand.  We probably would have stuck to ‘L-Carnitine Shampoo’ instead of ‘Hewley.’  Getting people to understand what Hewley is will ultimately be a positive for us, but right now it’s just a hurdle to get over.

What have been your key marketing and/or manufacturing lessons learned?
Twitter! There are firms out there that will manage your Twitter account for $1500+ per month (yikes!). We found SocialOomph and a couple other firms that troll for followers for about $50/month.  In one month, they helped us build our Twitter following from 10 to 1,400 followers, and it is now a major source of traffic to our website.

We also used a marketer on eLance to develop a brochure for us. That saved us a lot of time, and the marketer knew how to use clear, concise, and powerful language.  The brochure came out great!

How did you find your manufacturer, and what would be your advice to first-timers?
Once we proved the concept and decided it was time to outsource production, we started playing detective.  In addition to Google searches, we took each shampoo product that we studied during our product development and looked for clues as to where it was manufactured (whether it was made in-house or outsourced).  We also asked each potential vendor to name a couple companies that they thought were competitors. With this multi-pronged approach, we found many more manufacturers that were initially accessible on the web through simple Google searches.

My advice for first-timers: Start today.  Commit yourself to your muse by putting the idea out there as fast as possible.  We know a lot of folks who have read the 4HWW and love to discuss it and their ideas, but time moves on and nothing happens.  Call a potential business partner and share the tasks; tell all your friends that you are launching a product on X date; build your test site and get it out there.  My partner and I have learned that the fastest way to get something done is to commit to it. You always have time to perfect the product later.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
We are going to be featured in an upcoming issue of a magazine with 100,000 readers. It came about by reaching out to a rep from the magazine and showing her the brochure. We have also been approached by other sites looking to add our product, but are cautious to protect our margins (4HWW).

If you were to do it all over again, what would you do differently?
We would have had our product manufactured faster.  We spent too much time in “test mode” by mixing and fulfilling orders on our own. Once this was automated, it was a huge weight off our backs. We could focus on selling and marketing instead of fulfilling.

What’s next?!
We have learned so much since we started.  We’ve been working with a chemist on a much-improved product that includes a concentrated serum, and it’s backed up by some pretty impressive results. We will be rolling this out early next year, and couldn’t be more excited!
“Shred Soles” by Nate Musson
Describe your muse in 1-3 sentences.
Comfortable, canted, performance, snowboard boot insoles.

What is the website for your muse?
http://www.shredsoles.com


How much revenue is your muse currently generating per month (on average)?
$1,000 – $2,500 per month

How did you decide on this muse?
I had the idea for this product in the back of my mind since winter of 2005. After reading 4HWW in 2007, I started to hand-make and test different degrees of canted insoles in my snowboarding boots. I know it sounds cliché, but the idea was kind of like an itch that wouldn’t go away – I just had to keep taking steps towards it, and 4HWW gave me the “road map” along the way! I also felt that this product could fit the 4HWW muse criteria, so I went with it.

What ideas did you consider but reject, and why?
I’d considered making a more versatile, non-canted, non-snowboarding specific insole with cool art printed on it. It would have been way easier to make, but I just didn’t feel that it was niche enough. I really wanted to have something that was snowboarding-specific.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
First, my own personal testing. I personally made and tried out hundreds of different insoles with different degrees of canting. Second, the affirmation that I was on to something by a professional boot fitter whose classes I’d attended. I kind of had to dance around the topic since I didn’t have a patent at the time. Third, customer feedback! The very first online sale happened before I even had inventory or marketed the site (the site wasn’t even done!).  I had to send the customer my last sample in my size. A couple months later, he emailed me with this unsolicited feedback: “After 2 foot surgeries, I didn’t think my feet would be able to handle snowboarding, but thanks to the Shred Soles, I’m carving up the mountain. Thanks again.”

What were your biggest mistakes, or biggest wastes of time/money?
$600 phone call to a trademark attorney just to have him tell me that “I’ll never be able to trademark Shred Soles.” He was wrong. I just kept pursuing it with the USPTO and it worked out. Paying for services that I didn’t need yet (or ever), like shopping carts, 1-800#, and a podcasting account. Buying business cards too early, and now the info on them is outdated. Getting stuck on patents and trademarks and not moving forward with the rest of the business because I was concerned that they wouldn’t work out.

What have been your key marketing and/or manufacturing lessons learned?
Manufacturing- Keep making calls/emails until you find the right fit. I made 30 or more manufacturing contacts until I found the right one! I had guys tell me that what I was trying to do was stupid, impossible, and that it’s just not the way things are done!

Marketing- Facebook ads and fan page, Twitter, Email list, submitting to product reviews, posting in snowboarding forums, and a little SEO!

How did you find your manufacturer, and what would be your advice to first-timers?
I found my manufacturer through Google, emailing the few that looked decent, then exchanging more emails and phone calls with them if they responded. I decided that most of them were not a “good fit” for what I was trying to make. Finally, I came across a manufacturer that was receptive to my idea! They always responded promptly, while many of the other manufacturers I’d contacted had been very slow to respond.

My advice for the first-timers seeking a manufacturer would be to send lots of emails, make lots of phone calls, and be persistent! Find one that’s “into” what you’re trying to do and really understands the scope of your project.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
I’ve got some big coverage lined up with the #1 snowboarding magazine through a lucky industry connection. Shred Soles has also been covered by the #1 and #2 independent snowboarding bloggers.

If you were to do it all over again, what would you do differently?
I’d get set up with a mastermind group from the start! That alone would have made the biggest overall impact in every area of the business, IMO!

What’s next?!
The new site just went up, and it has a much cleaner look! I’m going to add some new items into the mix (socks, for instance), as well as a new secret product!  I’d love to do some kind of information product in the future, and have a couple of ideas on the back burner.

Engineering a “Muse” – Volume 2: Case Studies of Successful Cash-Flow Businesses
http://www.fourhourworkweek.com/blog/2010/12/11/engineering-a-muse-volume-2-case-studies-of-successful-cash-flow-businesses/

Written by Tim Ferriss Topics: 4-Hour Case Studies, Muse Examples


The “LapDawg” earns $10,000-$25,000 per month for Tonny Shin.
In the last four years, I’ve received hundreds of successful case studies via e-mail, and more than 1,000 new businesses were created during a recent Shopify competition, but I’ve presented only a handful of a case studies.

In this post, I’ll showcase three successful muses inspired by The 4-Hour Workweek, including lessons learned, what worked, and what didn’t. Income ranges from $1,500 – $25,000 per month…
“LapDawg” by Tonny Shin
Describe your muse in 1-3 sentences.
Portable laptop table(s).

What is the website for your muse?
http://lapdawg.com

How much revenue is your muse currently generating per month (on average)?
$10,000 – $25,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
6 months.

How did you decide on this muse?
I got injured one day, severely twisting my ankle while playing tennis. The doctor said to stay in bed with minimal movement. Well, there is not much to do in bed lying around all day, and I needed my laptop. But it was super uncomfortable to use! Your groin area heats up a lot when it’s on your lap, which is no good for a male.  I tried propping it up on a pillow but the laptop would overheat.  I also got sore in a hurry when I was on my stomach.  I needed something to hold my laptop that was portable, ergonomically comfortable, and easy to adjust to any position I wanted.

What ideas did you consider but reject, and why?
Starting an internet marketing and consulting business. There were just too many negatives. It turned out to be: (1) Un-scalable, since there is only one of me; (2) Time-consuming, not only in the technical/maintenance side, but also educating the client; (3) Cost heavy. You need to find good web designers and skilled programmers, and pay them a good hourly rate; (4) Research heavy. You need to keep up with this stuff all the time; (5) On call. You have to be around if you want to bring in sales and keep your clients happy, no matter what situation comes up.

My most important goal for me planning my own business was all about “ROE,” or Return On Effort, and NOT just “ROI.”  The ROE for consulting would have been way too low, while LapDawg happens to be very high!

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
The main “A-ha” was realizing that starting with the right complementary partners was key to long-term success!  Fortunately, my job at the time gave me access to talented web designers and programmers. Selling them on the idea, getting the right agreements in place, and then splitting the work involved took time to develop.  But in the end, you have to trust that people will do what they are best at.

To this degree, it substantially cut our initial costs as I partnered up with a web designer, and business analyst/programmer who, by profession, allowed maximum efficiency in getting things done right!

What resources or tools did you find most helpful when you were getting started?
Since my partners lived far away from each other in our city, it was hard to get together face-to-face on a regular basis. We decided that a private online collaboration tool would help us communicate better getting the project up and running.  So we signed up for Central Desktop.  At the time, they allowed one project to be free. Anymore and you had to pay. We definitely maxed out that one free project!

We had good private discussions and everything was documented. It turned out to be valuable in that I can now look back and see what I did wrong or right.

What were your biggest mistakes, or biggest wastes of time/money?
Getting the pricing of our product right. Our initial price included shipping. It turned out that, due to the dramatic variations in shipping costs, we were not making any money and actually lost some in our first month.

Raising the price, splitting shipping separately, and changing the value proposition on our website helped significantly.

What have been your key marketing and/or manufacturing lessons learned?
Very important: For Chinese manufacturers, make sure they are the original manufacturer. A lot of Chinese companies will claim they are manufacturers but are in fact middlemen. They will take your requests and modifications, then outsource them to the lowest priced manufacturer who may not produce the best quality, but will give them the best deal. They will go to great lengths to produce authentic proof that they are the original manufacturer, and you have no way of knowing unless you physically visit them.

Hire a consultant who will check them out in person and report their findings back to you.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
Make travel plans to visit Canton Fair. Not only is it one of the largest in the world, it’s also a real eye-opener on what brand names companies use to produce their stuff. Each booth will have brochures and catalogs on what they manufacturer, which are free to pick up in exchange for your business card. Make sure to bring LOTS of business cards!

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
We were mentioned in Kevin Kelly’s newsletter (contacted him).

Placement in “The Shop” in Rolling Stone Magazine for 2 months. (Paid advertisement)
Hands-on reviews from The Gadgeteer, Virtual Hideout, About.com’s Mobile Office, and Digital Trends (all contacted via email).

Where did you register your domain (URL)?
http://moniker.com

Where did you decide to host your domain?
http://softlayer.com

If you used a web designer, where did you find them?
I partnered with one.

If you were to do it all over again, what would you do differently?
Make sure that you have your business basics down first. Proper business bank account(s), incorporate earlier, record expenses properly, keep receipts, and get your accounting straight. It’s very hard to switch things over later, so invest some time at the outset and get it right.

Although obvious in practice, it’s hard to do as it is detail-oriented work and requires patience. It takes away from the “real” work that needs to be done but come tax time, you will absolutely regret that you did not do this from the start. It becomes much more error prone and harder to do everything at the end of the corporate year.

What’s next?!
Develop more products, improve our current products, create more product videos, try affiliate marketing, and experiment more with social media.  There is a whole world of exposure methods online.  You have to dig in and try them all!
“Butterfly Repellent” by Timothy Spencer
Describe your muse in 1-3 sentences.
Natural Defense against social anxiety and stage fright. Safe alternative to beta blockers (when used for stage fright).

What is the website for your muse?
http://butterflyrepellent.com



How much revenue is your muse currently generating per month (on average)?
$1,000 – $2,500 per month

To get to this monthly revenue number, how long did it take after the idea struck?
1 year (2 months on market)

How did you decide on this muse?
After watching the documentary “Bigger, Stronger, Faster,” I learned about a growing problem of musicians and actors abusing prescription beta blockers to mediate the effects of stage fright. I looked to see if there was a natural alternative on the market, and there wasn’t.

What ideas did you consider but reject, and why?
I was originally working on a relaxation drink (think anti-Red Bull). I had contacted manufacturers and was just about to order product when I learned about the growing problem of beta-blocker abuse. I saw a niche and my business made a major pivot.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
1. I play volleyball for my university and tested the initial batches on my team. Positive feedback from the team was very encouraging.

2. I was so excited after having my first logo designed (outsourced on eLance). I made the logo my wallpaper on my computer and iPhone, and showed it to everyone. I don’t actually use it anymore, but it gave real life to the product and motivated me to keep pushing forward.

3. Getting my first few sales online was easily one of the most motivating experiences I’ve had.

What resources or tools did you find most helpful when you were getting started?
The podcast “Automate My Small Business” is GREAT. Youtube tutorials for learning WordPress and Photoshop. ODesk.com for outsourcing and managing VA’s.

What were your biggest mistakes, or biggest wastes of time/money?
Waiting until things were “perfect” before going ahead with them. Market presence was held off for months because we kept fine-tuning the website. I eventually realized that things will never be perfect, and most hang ups are self-imposed.

What have been your key marketing and/or manufacturing lessons learned?
Prompt, positive, and courteous customer service is invaluable. I’ve had great success with providing personalized coupon codes for whoever emails with a question.  For instance, if I receive an email with questions from Amber, I tell her in the response that she can enter the coupon code “amberisawesome” for 10 dollars off. A little more work but well worth it.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
I used thomasnet.com to contact dozens of manufacturers around the country. I found one that was local and we were able to meet face-to-face. He loved the business idea and liked me a lot. My starting budget was very small and I was able to talk him into developing and manufacturing the smallest order he had ever done. He was happy to do so, which would have never happened without a face-to-face meeting.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
I have tried reaching out to local newspapers, attempting to spin an interesting story for them (e.g. “Local student-athlete finds creative way to pay tuition”). No takers yet, but the effort continues.

Where did you register your domain (URL)?
http://godaddy.com

Where did you decide to host your domain?
http://godaddy.com

If you were to do it all over again, what would you do differently?
Move things forward quicker. I think I could be 6 months ahead of where I am now if I had made bolder decisions and taken action instead of waiting for everything to fall into place.

What’s next?!
The next big goal is to try and land product on retail shelves.

The company is very young and I see a bright future. November was the first $1,000+ month and with a continued effort in Adwords and SEO, these numbers will only go up.
“ClockSpot” by Jason Ho
Describe your muse in 1-3 sentences.
Clockspot is a web-based employee time tracking tool, designed for business owners. Employees clock in from any phone or computer. Managers can then check timesheets online instantly.

What is the website for your muse?
http://www.clockspot.com


How much revenue is your muse currently generating per month (on average)?
More than $25,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
12 months.

How did you decide on this muse?
I originally came up with Clockspot because my parents needed a way to track time for different employees at different offices. Being a techie, I insisted that they hold off on buying physical time clocks, and instead wait for me to make them a simple web-based time clock. Within 3 days, I had a rough but usable prototype.

What ideas did you consider but reject, and why?
Out of college, I started a social Question & Answer website called Qaboom.com (pronounced “Kaboom!”). It didn’t work out for a number of reasons: partner conflicts, difficulties gaining traction, a failed partnership, etc. I learned a whole lot, but had to cut my losses and move on.

I dabbled in a couple of startup projects/ideas after that, then eventually came up with Clockspot.  I’ve been running it ever since.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
“The 4-Hour Workweek” really struck a chord with me because my company was growing quickly, and there was this forever-growing list of things that needed to get done. I was working 80+ hour weeks, at the expense of everything else around me: my relationships, my social life, my body… Being a perfectionist, I was very reluctant to delegate tasks to anyone but myself.
After reading the book, particularly the lesson about “The Art of Letting Bad Things Happen,” I decided to outsource support. The obvious benefit was that I no longer had to answer emails and phone calls myself. The most surprising benefit, however, was that it actually increased my focus and productivity by an order of magnitude, which was so much more valuable than the actual hours outsourcing saved me (~20-30 hours/week).

Because I didn’t have to directly deal with customers, I could actually think clearer and make better decisions about the overall direction of the product. Anyone who’s had a startup can probably relate to this: it’s really hard to say “no” to a customer when you don’t have that many of them. Because I wanted to please every customer and acquire every prospect that came in, I had this never-ending list of features to implement. I ended up scrapping this enormous list, and decided to only concentrate on the top 5 items.

Outsourcing support was the stimulus to my four hour work week. I delegated all tasks that weren’t core to my business, moved to Taiwan, then spent the next two years traveling Asia and South America, working only 4 hours/month while my company continued to grow. “A-ha!” is an understatement!

What resources or tools did you find most helpful when you were getting started?
I read a lot of books. About one every two weeks. I had no business experience or real mentors, so I had a lot to learn a lot on my own.

The most influential books I read were:
1) The 4-Hour Workweek (Tim Ferriss)
2) Crossing the Chasm (Geoffrey A. Moore)
3) The World is Flat (Thomas Friedman)

I have since moved to Silicon Valley, so my best resources now are other talented entrepreneurs.

What were your biggest mistakes, or biggest wastes of time/money?
I experimented with many different types of advertising: newspaper, magazine, buying leads, and even hiring a company to cold call. They were all a huge waste of money, but I wouldn’t consider any of them to be mistakes… unless I did them all over again!

My biggest mistake was trying to save money on hosting. When I first started, I went with a budget host, and never bothered to switch until my server crashed one day. After being on hold for hours with the hosting company and being transferred a thousand times, they finally fixed the issue 8 hours later. I lost 15% of my customer base that week.

Clockspot is now hosted on Rackspace, which we pay an arm and a leg for, but now our service is 100% solid. High-end servers, hardware redundancy, load balancing, dedicated firewall, daily security scans, etc. We’ve never had a downtime ever since switching to Rackspace.

What have been your key marketing and/or manufacturing lessons learned?
Track everything. A/B test everything. I am consistently surprised at how wrong my assumptions are.

A good example is to always track the performance of your keywords from start to finish. I used to pay for the keyword “time clock” because it brought a lot of traffic, and a decent amount of sign ups. However, it wasn’t until I started tracking actual account activations (when a sign up becomes a paying customer) that I realized “time clock” wasn’t converting at all, compared to the lower traffic key phrase “online time clock,” which was converting many times more than “time clock”.

If you track enough data, you’ll eventually be able to quantify each action a visitor takes into a dollar amount. For example, I know customers that searched “online time clock” and signed up for our newsletter will have a X% chance of signing up, which converts Y% of the time, which translates to $Z/month in earnings.

Now if Clockspot’s monthly growth ever fluctuates, I know exactly which levers caused it.

Where did you register your domain (URL)?
http://www.godaddy.com

Where did you decide to host your domain?
http://www.rackspace.com

If you used a web designer, where did you find them?
I am both the designer and developer.

If you were to do it all over again, what would you do differently?
Drop out of college to start Clockspot sooner! Just kidding, if mom and dad are reading…
Honestly nothing. I have a tendency to not listen to good advice, which causes me to try and fail, then start preaching that same advice. But as a result, I never really regret anything that I do.

What’s next?!
During my two years of travel, my main accomplishments were:
1) Climbing Mount Everest to Basecamp (where the oxygen is 50% that of sea level).
2) Biked the circumference of Taiwan (~1000 km).
3) Volunteered in the relief effort for Haiti.
I ended up moving to Silicon Valley and plan to start other businesses, as well as get involved in more humanitarian work.

###
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Engineering a “Muse” – Volume 3: Case Studies of Successful Cash-Flow Businesses
http://www.fourhourworkweek.com/blog/2011/03/04/engineering-a-%E2%80%9Cmuse%E2%80%9D-%E2%80%93-volume-3-case-studies-of-successful-cash-flow-businesses/

Written by Tim Ferriss Topics: 4-Hour Case Studies, Muse Examples


One common challenge for readers of The 4-Hour Workweek is the creation of a “muse”: a low-maintenance business that generates significant income. Such a muse is leveraged to finance your ideal lifestyle, which we calculate precisely based on Target Monthly Income (TMI).
I’ve received hundreds of successful case studies via e-mail, and more than 1,000 new businesses were created during a recent Shopify competition, but I’ve presented only a handful of them.

In this installment, I’ll showcase three diverse muses, including lessons learned, what worked, and what didn’t. Income ranges from $2,500 – $25,000 per month…
”Datsusara MMA” by Christopher Odell
Describe your muse in 1-3 sentences
Datsusara MMA makes hemp bags and apparel for martial artists.

What is the website for your muse?
http://www.dsmma.com

How much revenue is your muse currently generating per month (on average)?
$5,000 – $10,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
Three years.

How did you decide on this muse?
I was at a crisis point in my life when I realized I needed to do something I truly loved instead of what I was merely skilled at doing.

I thought deeply on things that I loved. One was Mixed Martial Arts, and another was hemp products. That’s when it clicked. I realized that making a high quality hemp bag for MMA enthusiasts would fill a gap in the market.

What ideas did you consider but reject, and why?
I thought of starting a small MMA fight promotion but decided it would be more trouble than I wanted to deal with.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
It all started to sink in when we got our first prototype. Being able to see and touch the actual product really changes everything. It helped me realize that you truly could make your dreams appear by simply shifting your time and energy into the right places.

What resources or tools did you find most helpful when you were getting started?
A message board called Sherdog.net was our biggest source of early sales. This was due to a few gear review postings by our first customers (friends at my gym).

Having a decent looking website with good product descriptions and photos was critical, as well.

What were your biggest mistakes, or biggest wastes of time/money?
Sending out free gear bags to pro fighters cost us thousands in revenue and was a huge waste, except for the one and only response we got. That one response was from Eddie Bravo, who is well known in the MMA scene and gave us our first pro endorsement. We should have targeted more carefully, because we knew that Eddie loved hemp products and MMA already.

What have been your key marketing and/or manufacturing lessons learned?
In manufacturing, we learned to never rush a product out when you think you are “close enough,” assuming the odds and ends will be taken care of on the final product run. Since we were not 100% specific on what we wanted, our manufacturer cut some corners and cost us quite a bit of money in product exchanges.

But we did learn that if you treat your customers with care, they will stick with you and sometimes become even more loyal despite your mistakes.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
I used Alibaba.com to find manufacturers. It was fairly easy but also a bit terrifying since you don’t always know who or what you are really dealing with.

We looked for manufacturers that had experience with hemp and military gear (we wanted these bags to be very strong). We reached out to several companies, judged them by how good their responses were, then chose a few to make our first prototype. After that, we made our final decision based on quality of the prototype and ease of obtaining it.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
Our Facebook fan page probably generates more interest then any other source at this point and it’s growing fast. We also love that it’s free :)

The endorsement from the sample we sent to Eddie Bravo was very useful, as was the mention by Tim Ferriss on Twitter about the sample we sent him.

We were also approached by many distributors that had simply heard of our gear and wanted to get on board. We picked one from each country that would have an exclusive for our gear. We chose the companies that had a good reputation and the best exposure. This has helped us generate over 60% of our sales, but it does impact our revenue negatively since they purchase at a wholesale price.

Where did you register your domain (URL)?
http://www.poehosting.com

Where did you decide to host your domain?
http://mediatemple.net

If you used a web designer, where did you find them?
I had a friend design the site (paid gig).

If you were to do it all over again, what would you do differently?
I would have shopped around more for a better importer, as our current importer charges half what we paid the first and does twice the work.

I also would have started the Facebook fan page right away.

What’s next?!
We may be expanding soon to other markets outside of MMA if we get some solid financial backing.

We hope to make hemp bags and apparel for all lifestyles while maintaining our quality of goods and customer service.
”Ready Set Go Kits” by Amy Sandoz
Describe your muse in 1-3 sentences
I help schools and families prepare for emergencies by offering ready-made emergency kits and free disaster planning information.

What is the website for your muse?
http://www.readysetgokits.com


How much revenue is your muse currently generating per month (on average)?
$2,500 – $5,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
One year.

How did you decide on this muse?
A friend and I were reading The 4-Hour Workweek at the same time and decided to just go for it. We sat down and listed out all the activities we had ever been involved in throughout our lives, then listed out the products that people in those same activities needed. The next steps were picking the five products that were most interesting to us, researching their markets, and seeing whether there was a drop-shipper available. I’m a long-time volunteer at American Red Cross and knew that people had trouble building an emergency kit. When I found an emergency kit manufacturer, I knew I had found my muse.

What ideas did you consider but reject, and why?
Selling salsa dance shoes and apparel was rejected because of a lack of dropshipper in the U.S., and bobbleheads were similarly rejected because of no desire to try to find a manufacturer overseas.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
My first big sale to a school district – they found me online and I thought “Wow, I actually own a business now!” It really reinforced the online model for me.

What resources or tools did you find most helpful when you were getting started?
I found the “SEO for Dummies” book super helpful, as well as the technical support staff at CoreCommerce.com (my hosted shopping cart software). It was also easy to get overwhelmed, so all action items were broken down into very small pieces, e.g. “Research names for business” or “Research hosted shopping carts.”

What were your biggest mistakes, or biggest wastes of time/money?
I’ve spent a lot of money on seminars and books promising to get me more sales or to the top of Google search for my keywords… and I’d like to get that money back. Most of that stuff was useless.

I also spent a lot of time trying to do things myself. I’m happy with the knowledge I’ve gained, but I think I would have started making money sooner if I had outsourced more things.

What have been your key marketing and/or manufacturing lessons learned?
You think you know who your target market is, but you really have no idea until you have paying customers. When I started the business, I was convinced that my target market was moms in the 35-55 range. I’m finding now that it’s really more of a 50/50 split between men and women.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
I found my manufacturer through an online search and submitted an application to become a reseller. I ordered products from them to see what kind of packaging they came in, how long they took to arrive, and to determine the quality of the kits.

My suggestion for first-timers would be to go out and tour the operation (if you live nearby) and get to know the owner. That way if you have any trouble later, you’ll know where to turn.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
I applied for the Project Rev small business contest through Deluxe Corporation and won! They have been really helpful in getting press coverage and exposure for my business. I also hired a public relations freelancer and we set up a yearly schedule for pitches. I’m happy to report that she has already helped me land four feature print articles and an invitation to appear on a local TV station.

Where did you register your domain (URL)?
http://www.godaddy.com

Where did you decide to host your domain?
http://www.corecommerce.com

If you were to do it all over again, what would you do differently?
I would have found a reputable SEO person and hired them early on. That would have saved a lot of time and confusion.

What’s next?!
I’ve just launched a complementary site (www.ReadySetGoKitsDisasterPlan.com) that allows families to download free disaster planning templates that they can fill out and then tuck into their emergency kit. I’m also experimenting with creating videos about disaster preparedness to help raise awareness.
”Music Teachers Helper” by Brandon Pearce
Describe your muse in 1-3 sentences
Online software to help private music teachers manage the business side of their teaching studios.

What is the website for your muse?
http://www.musicteachershelper.com

How much revenue is your muse currently generating per month (on average)?
More than $25,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
Five years.

How did you decide on this muse?
I used to teach private piano lessons, and got frustrated having to keep track of how much they owed me. I wrote a simple program to track it, put it online so students could check the amount themselves and pay, and it just took off from there.

It started small, making just $1,000 or so per month after the first couple years, but it continues to grow to this day.

What ideas did you consider but reject, and why?
I thought about making a program to help private teachers of all types (ie. dance, yoga, and karate instructors, etc). I rejected it because I thought it was too broad to make one program that will fit all of these types. However, I did eventually create something for larger studios with multiple teachers (www.studiohelper.com) that serves a broader audience, and it’s also doing well. But it’s more difficult to market to such a broad audience.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
When my father-in-law lost his high-position job because of downsizing, I realized that there is no such thing as job security when you work for someone else. I became determined to find a way to have money come to me, no matter how much I work or where I live.

What resources or tools did you find most helpful when you were getting started?
When I started, I was doing everything myself – the programming, the design, the marketing, etc. And I knew basically nothing about starting a business. The Internet was helpful for research, but after I read 4HWW, I became a lot more productive. I started outsourcing things, built up enough courage to quit my job, and the business really took off. These days, I’m working about five hours per week, living in Costa Rica (for now), and thoroughly enjoying my life! (Thanks Tim!!!)

What were your biggest mistakes, or biggest wastes of time/money?
My biggest mistakes, financially and emotionally, were when I partnered with individuals and companies who ended up being more of a drain than a help. They were expensive to remove, as well. But those experiences helped me learn to value my time and product, and to be more cautious about who I do business with.

What have been your key marketing and/or manufacturing lessons learned?
With a complex web application, you can’t write it once and be done; you need to continue making enhancements and listen to user feedback in order to have a successful product.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
No, it’s been a steady, slow-growing process, all self-funded and mostly self-promoted.

Where did you register your domain (URL)?
http://www.godaddy.com

Where did you decide to host your domain?
http://www.liquidweb.com

If you used a web designer, where did you find them?
oDesk.com (Although initially, I designed it myself).

If you were to do it all over again, what would you do differently?
I would have kept the product simpler, and been more picky about what features to include, rather than adding nearly every feature the customer wanted (necessitating a huge redesign later).

What’s next?!
In this business, I’ll be focusing more on marketing and really getting the word out, and pushing our affiliate program more. I’m not sure if I will start another business soon, but I’m starting to look into real estate, just to diversify my income a little.

I’m also working on a book about what I’ve learned in the process of creating this online business, in the hopes that it will help others who want to do something similar. I plan to spend more time writing music in the months and years ahead, continue to travel, and enjoy my life doing whatever I can to make the world a better place.

###

Parts one and two of this series — another six success stories — can be found here.

Do you have a successful muse that’s generating more than $1,000 per month?
Please tell me about it! If it stands out (meaning you give specific details of lessons learned and what’s worked vs. what didn’t), I’m happy to promote you and help further increase your revenue. If you qualify and this sounds like fun, please fill out this form.

Both physical and digital goods are welcome, as are services, as long as they’re low-maintenance, income-generating “muses” as described in The 4-Hour Workweek.

Engineering a “Muse” – Volume 4: Case Studies of Successful Cash-Flow Businesses
http://www.fourhourworkweek.com/blog/2011/09/12/engineering-a-%E2%80%9Cmuse%E2%80%9D-%E2%80%93-volume-4-case-studies-of-successful-cash-flow-businesses/

Written by Tim Ferriss Topics: 4-Hour Case Studies, Muse Examples


The Square36 yoga mat earns $10,000-$25,000 per month for Bob Maydonik.
One common challenge for readers of The 4-Hour Workweek is the creation of a “muse”: a low-maintenance business that generates significant income. Such a muse is leveraged to finance your ideal lifestyle, which we calculate precisely based on Target Monthly Income (TMI).
I’ve received hundreds of successful case studies via e-mail, and more than 1,000 new businesses were created during last year’s Shopify competition (If you haven’t already, sign up for this year’s contest here), but I’ve presented only a handful of them.

In this installment, I’ll showcase three diverse muses, including lessons learned, what worked, and what didn’t. Income ranges from $1,000 – $25,000 per month…
“Square 36″ by Bob Maydonik
Describe your muse in 1-3 sentences.
Oversize yoga mat.

What is the website for your muse?
http://www.square36.com

How much revenue is your muse currently generating per month (on average)?
$10,000 – $25,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
1.5 years

How did you decide on this muse?
I was doing P90X and was annoyed by how inadequate my typical yoga mat was. My good friend, who is also an entrepreneur, convinced me that we should give Tim’s formula a try. So we plugged our big yoga mat concept into the 4HWW business model, and that’s how everything got started.

What ideas did you consider but reject, and why?
We thought about doing a free-standing pull-up bar (and we’re actually still considering this). We also considered rings that could be attached in a door way frame for doing pull-ups, like gymnastic rings for home-based workouts. We rejected the rings for a few reasons: (1) RingTraining.com was already doing it, and (2) we were going to have to deal with a few different manufacturers to have one product made. It was too complicated and wasn’t worth the hassle. More importantly, the market for ring trainers is much smaller than the market for yoga mats.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
Sorry, no major tipping point moments for us. We’re both entrepreneurs and were already part of the New Rich!

What resources or tools did you find most helpful when you were getting started?
Alibaba.com to source our manufacturer. We also really lucked out with Google Adwords. Google built our Adwords campaign for us, then they gave us seed money credit to launch it… all for free.

What were your biggest mistakes, or biggest wastes of time/money?
Our biggest mistake occurred when we ordered our first 20 prototypes. We bought a large roll of PVC mat and asked the yoga supply wholesaler who we bought it from to cut them into 6′ x 6′ mats. If you look on this yoga wholesaler’s website now, you’ll see they totally ripped off our idea (they took a picture of our mat) and took credit for it. We dealt with this by changing the color of our mat to black, amping up the density and thickness, then de-bossing it with our logo. Luckily, the wholesaler has done a crappy job marketing his product. I don’t think he’s affected our sales too much, but it’s still a piss-off.

What have been your key marketing and/or manufacturing lessons learned?
Key manufacturing lesson: Guangxhi (Mandarin for ‘connection’). This is how the Chinese do business. When you meet, you talk about your family for two hours, then discuss pricing/terms for the last 10 minutes. If you go out for beers with the factory manager, you will get way better pricing/terms.

Marketing lesson: it matters what time of day your ads appear. Most people aren’t shopping online during their workday. Ads that appear on weekday nights are best.

Also, incorporating the cost of shipping into our price and advertising “FREE SHIPPING” has been pretty effective for our Google Adwords campaign.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
We found our manufacturer using Alibaba. My suggestion is to find a minimum of three manufacturers who can make what you want. If you’re dealing in China, there’s a good chance all of your manufacturers will be in the same town (different towns seem to specialize in manufacturing one type of product). Go and visit with them all personally. Chinese manufacturers will almost always tell you that they can do what you want, but when you actually meet with them in-person and show them what you want, 2/3 of them will not be capable of producing your product. We visited five factories for our mat, all of which assured us through e-mail that they could produce our product. Only one of the five factories actually could.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
“The New Rules of Marketing and PR” by David Meerman Scott is a killer book on PR/media. However, we haven’t really done a lot of PR/media stuff for Square36. We focused a lot of energy on retail after reading “This Business has Legs” about the ThighMaster. We will be testing in 10 Costco stores across Canada, and are also in negotiations with another large Canadian retailer.

Where did you register your domain (URL)?
http://netfirms.com

Where did you decide to host your domain?
http://bluehost.com

If you used a web designer, where did you find them?
I was lucky: my web designer was my former next-door neighbor.

If you were to do it all over again, what would you do differently?
I’d probably pick a product that’s easier to ship. A 6′ x 6′ yoga mat that weighs ten pounds is not as easy to ship as a pair of shoes or a DVD. Plus, you can fit a much smaller product in a Sea-Can, which would be a nice savings.

What’s next?!
Counting dollars and sending Tim a mat :) Thanks for the inspiration.
[NOTE: Readers of this blog get a discount on Bob's yoga mats with the coupon code 'tferriss']
“iFlip Wallet” by Vincent Ko

Describe your muse in 1-3 sentences.
The iFlip is a niche product that combines the style of a leather iPhone case with the functionality of a flip wallet. Our product is for minimalist iPhone owners who are looking to carry everything in one package.

What is the website for your muse?
http://iFlipWallet.com

How much revenue is your muse currently generating per month (on average)?
$1,000 – $2,500 per month

To get to this monthly revenue number, how long did it take after the idea struck?
3 months

How did you decide on this muse?
Right before returning for my senior year of college, I received an iPhone as a birthday present. Form-fitting jeans were the style around campus and having pockets bulging with an iPhone and thick wallet looked pretty stupid. I evaluated whether I needed all the items in my wallet, and came to the realization that the only things I really needed to carry around on a daily basis were my ID, credit card, a $20 bill, and my iPhone. That’s when I envisioned an iPhone case that also acted as a wallet. When I went online and couldn’t find that type of product, I decided to create it myself.

What ideas did you consider but reject, and why?
Prior to reading the 4HWW, I was actually selling fold-up beer pong tables online. It was a fun product to sell as a college student. However, beer pong tables are huge and heavy. Logistics and shipping from a rented out warehouse soon became too much of a hassle. Along with growing competitors, import tariffs, and shrinking margins, I knew I had to call it quits on a profitable business. The time spent was not equal to the financial output. I traded-in 30 pound beer pong tables for 3 oz. iPhone wallets.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
My A-ha moment was the first time I went online searching for an iPhone wallet. When I found the only product out there was an iPhone case that looked like a mini-purse, a light bulb went off: create an iPhone wallet case that guys would want to buy.

What resources or tools did you find most helpful when you were getting started?
The best resource was learning directly from other muse owners and entrepreneurs. For instance, Mixergy.com does a great job of putting out interviews with entrepreneurs who have been successful. Taking those nuggets of wisdom and implementing them into my business has been extremely helpful. This includes everything from tactics for increasing conversion, tracking statistics, sales language, and more.

What were your biggest mistakes, or biggest wastes of time/money?
The biggest marketing lesson I learned was: you have to get your product in front of people searching for it. Initially, I was advertising on iPhone-related sites. It was only after I invested money into getting my site in front of people specifically searching for “iPhone Wallet” was I successful. This naturally led to me working on SEO for particular keywords.

If you used a manufacturer, how did you find them? What are your suggestions for first-timers?
I found my manufacturer on Alibaba. My suggestion for first-timers is to find the supplier that currently manufactures a product as close to the product you are envisioning, then tweak that product to fit your specifications. I found that creating a custom product from scratch was not only hard to communicate but very expensive. The iFlip was actually a modification of an iPhone case that my manufacturer was already producing.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
I was able to get my product featured on some iPhone accessory blogs by creating a template e-mail and sending out custom messages to sites I thought would be interested. I told all of them that I was a college student who had created a unique product that solved a simple problem.

Where did you register your domain (URL)?
http://www.netfirms.com

Where did you decide to host your domain?
http://www.netfirms.com

If you used a web designer, where did you find them?
I actually designed the site myself. I took a template I purchased at ThemeForest.net for $15 and tweaked the text and images in Dreamweaver. However, I did hire help for SEO. I found two people on oDesk to create backlinks and submit the site to directories.

If you were to do it all over again, what would you do differently?
I have a short video that demonstrates my product. After putting it on my site, sales increased by 25%. I believe that potential customers who see your product in-action not only understand it better but are also more inclined to purchase. If I were to do it again, I would have implemented the video sooner.

What’s next?!
Creating more muses! The iFlip was developed by creating a product I wanted for myself but currently was not on the market. I have teamed up with a college buddy to create several new muses. The key is that we only create products we would use, then we strategically think about the best way to market the product to ourselves. It is a fun process :)
“Keynotopia” by Amir Khella

Describe your muse in 1-3 sentences.
User interface libraries for turning Apple Keynote and Microsoft Powerpoint into interactive prototyping tools.

What is the website for your muse?
http://www.keynotopia.com

How much revenue is your muse currently generating per month (on average)?
$5,000 – $10,000 per month

To get to this monthly revenue number, how long did it take after the idea struck?
3 hours

How did you decide on this muse?
I’d been creating and using these libraries for awhile in my consulting gigs, but wasn’t sure they would be useful to anyone else. One day, I was playing around with my iPad and challenged myself to prototype something in 30 minutes. I did, and it worked on the iPad almost flawlessly.
I wanted to do a quick test to see if this would be useful to anyone else, so I wrote a step-by-step blog post and created a video showing the end result. I also included a downloadable zip file containing the iPad interface library with the blog post. Three weeks later, I had over 10,000 views on the post and over 500 downloads of the archive file. One evening, I thought about prototyping a quick website to see if anyone would buy the libraries if I charged for them. Three hours later, I had a premium WordPress theme linked with an e-junkie shopping cart and I posted a link at the bottom of the original blog post.

The website made its first sale after roughly 10 minutes of being online (The original version of the site looked too ugly – at least for me, as a designer – that I thought about pulling it down, but that first sale told me otherwise).

The full story behind this experiment can be found here.

What ideas did you consider but reject, and why?
Developing plug-ins for Keynote and Powerpoint. I wanted a product with a very low barrier-to-entry so I could quickly test it, and these templates were the fastest. Now I can confidently develop these plug-ins, knowing that I already have hundreds of paying customers who can use them.

What were some of the main tipping points (if any) or “A-ha!” moments? How did they come about?
The biggest tipping point was waking up one day to find more money in my bank account. That was a paradigm shift, as my income was no longer coupled with my time. Instead of consulting/freelancing (trading time for money), I had invested some upfront time to create a system that worked hard for me.

Here are a few other “A-ha!” moments:
- Realizing the first prototype doesn’t need to look pretty, it just needs to work. Instead of spending days (potentially weeks) reinventing the wheel and creating my own e-commerce site, I just bought something that was good enough and tried it out. Total cost: $47.50 ($5 hosting, $7.50 domain, and $35 WordPress theme).

- People buy benefits: if it weren’t for the original blog post, I doubt that I’d have 1/100 of the sales I have now. The blog post continues to be the highest traffic generator for the site, because it shows people what they get out of the product (not just how they can use it).

- Aggressive testing: For Keynotopia’s landing page, I tested over 29 iterations for the copy and layout, reducing the bounce rate from 59% to 12% in less than 30 days.

- Byproducts can be profitable: The UI libraries had been sitting on my hard drive for months before I’d decided to share them. I didn’t consciously sit down to create a business by making the libraries and selling them; they came as a byproduct of working with clients, and all I needed to do was to create a system that delivered them.

What resources or tools did you find most helpful when you were getting started?
- WordPress + Premium themes
- Google website optimizer
- e-Junkie
- TextMate (Mac)

What were your biggest mistakes, or biggest wastes of time/money?
Banner ads. They don’t generate much traffic (compared with AdWords) because they are placed in websites/blogs where people are already distracted by other information, and may not be actively looking for a solution.

What have been your key marketing and/or manufacturing lessons learned?
Great free content (blog posts + videos) converts better than $1000′s in advertising.

Any key PR wins? Media, well-known users, or company partnerships, etc.? How did they happen?
The libraries have been mentioned by some of the top UI designers (including a blog mention from Adaptive Path). I basically reached out to bloggers who had written similar content, left them thoughtful comments, and sometimes shared a free copy of the libraries with them. In the beginning, almost nothing happened, but then the mentions started to snowball.

Giving away a freebie on a well-known blog has helped tremendously with building a strong rank on Google. I gave away a simplified version of the libraries on SmashingMagazine (one of the top design blogs in the world), they wrote a post about it, and it literally brought down the server.
Finally, sharing the story behind the product helps too. I wrote a blog post on how I prototyped the product and it was on the homepage of Hacker News for more than 24 hours. Again, lots of traffic and good back-links.

Where did you register your domain (URL)?
http://godaddy.com

Where did you decide to host your domain?
http://1and1.com

If you used a web designer, where did you find them?
Nope. Just a premium WordPress template.

If you were to do it all over again, what would you do differently?
Do it much earlier. I waited too long to build up enough confidence and discover that what I had built was useful enough to sell.

What’s next?!
Having paying customers is great because they send all kinds of questions and requests. I have great customer service (I personally reply to all emails and tweets), and I have a long wish-list of what they’d like me to build next!