Photo: Stuck in Customs
Preface by Tim
This post is a follow-up to “How to Create a Million-Dollar Business This Weekend (Examples: AppSumo, Mint, Chihuahuas).”
The purpose of this guest post — written by Noah Kagan — is to show you exactly how a postal worker created a $4,000 per month muse. Included are all the tests, e-mail templates, and details you’d need to replicate his success.
Noah was employee #30 at Facebook, #4 at Mint, had previously worked for Intel (where he frequently took naps under his desk), and had turned down a six-figure offer from Yahoo. Since we first met, Noah’s helped create several multi-million dollar businesses, including AppSumo, loved by entrepreneurs everywhere.
For those interested in mentorship, don’t miss the end of this post.
There’s a time-sensitive chance to visit San Francisco for a week… to be mentored in-person by Noah and yours truly.
The journey of Daniel Bliss is a telling one.
Our goal was to take his hobby — he was a full-time postal worker — and turn it into a real business making $4,000 a month so he could quit his day job.
We started working a few months before when he won the AppSumo Make a $1,000 a Month Business getaway to Austin to personally work with me for a week.
The preliminary call after Daniel won the getaway went well. Here’s what he told me:
He was solving his own problem. This is an easy way to figure out what business you should start.
Daniel’s a rock-climber and it hurt his neck to look up while he was belaying (standing on the ground helping the climber above him) so he wanted to buy glasses to make his neck hurt less.
Here’s me with a pair of glasses on and Daniel.
All the glasses on the market were $99, so Daniel figured there had to be a way to make and sell cheaper glasses.
When we talked, he had already found a manufacturer through Alibaba.
Daniel first learned about using Alibaba to find a manufacturer in Tim Ferriss’s book The 4-Hour Workweek (page 175).
He searched suppliers on Alibaba and checked if they were a good fit by testing them on 3 characteristics:
1. How many years (if any) have they been considered a gold supplier?
Gold Supplier is a paid membership on Alibaba.com. All Gold Suppliers in China must pass an onsite check while those from other countries and regions must pass an A&V Check. Basically, this shows that they’re legit.
2. How is their website?
Poke around to see if anything seems shady. Do they have any negative reviews or positive ones? Search their name/email on Google and see what kind of results you get. This should give you a good feeling if they’re legit or not.
3. Is their “minimum order quantity” reasonable for what I’m trying to do?
You want to keep your costs down and not worry about selling hundreds of items. Daniel originally targeted 50 minimum pieces to validate his business without spending a lot of money.
Once Daniel narrowed down suppliers he ordered a few samples to test in person. He took these to his climbing group. Always look at who you have easy access to when selling your product. A common pitfall is for people to look at everyone outside their network and get rejected.
By himself, he sold 12 pairs. He sold 2 pairs to a couple he met while climbing and the rest to his climbing group.
So far, so good.
But then Daniel decided to spend valuable time creating a website: http://belayshades.com
How often have you bought a domain, imagining how large your new business is going to be? I KNOW you have. I have many times. You fantasize about how large your business is going to be instead of actually growing it. This is a common thing we help people with in our Make a $1,000 a Month business course.
Daniel’s been working as a postal carrier in Canada for 7 years, so expanding a business was foreign to him.
Daniel had gotten to the point where he was working without a goal so the first question I asked him was:
“To you, how much money is financial freedom?”
Once you know your destination, getting there is MUCH easier.
Tim’s written about figuring out your lifestyle costing, aka “financial freedom,” here: https://www.fourhourworkweek.com/blog/lifestyle-costing/
For Daniel it was $4k / month to be able to travel to Thailand and go climbing as he pleased.
Now it’s key to do the math to see how many pairs of glasses he’ll need to sell to get to that point.
$4,000 / profit a month
The glasses sell for $60 a pair with shipping
40% profit margins on every pair of glasses.
$60 * 40% = $24
$4000 / $24 (profit per sell) = 166 glasses a month.
Basically, 5-6 glasses a day.
That doesn’t sound so bad, right? When you take a goal and break it into daily targets, it makes the goal seem WAY easier and more digestible.
Before Daniel arrived to work with me, he started worrying about competition and patents.
BUT NO COMPETITOR CARES. Ever!
How many burger places are in your town? Cafes? Japanese restaurants?
Exactly, A TON. There’s enough for everyone and — fortunately for you — most people run their businesses like shit.
Worrying about others in the beginning is just a fear of starting.
Daniel’s focus on filing a patent was another aversion to starting.
The next week, he was worried about liability and everything except growing his business.
I’m not saying you should avoid setting up your corporation or take precautionary measures when it’s the right time. The key is to see what’s actually important for the time being and handling it.
Eventually, Daniel arrived in Austin and we had 5 days together to get his business to at least $4,000 in revenue. Here’s what went down:
Day 1 – Foundation
Now that Daniel knew his goal (sell 5-6 glasses a day) we used Quant Based Marketing to calculate how he could try various marketing tactics to grow his business and reach his goal.
Example of Daniel’s Quant based sheet
See the actual marketing sheet here and feel free to use it for your own business.
What Daniel was previously doing for marketing was paying for Facebook likes and cold calling rock-climbing gyms to gain sales. It was going slowly.
The gyms said they needed time to see if they wanted to buy the glasses. When someone says they need time, it’s because you haven’t sold them properly.
For marketing, the key is to have a “lazy” mindset. With the quant sheet you can estimate the amount of sales you can get from all the different activities and then prioritize based on volume.
It’s critical to find the marketing activities that can scale and be repeated.
Daniel kept doing activities that weren’t producing, like submitting to PR Newswire. It’s not that it can’t work, but we wanted to get results faster.
So I asked Daniel, “If you could only use two of the marketing activities you’ve used before, what would they be?”
1. Personal network + referrals
2. Wholesale selling to climbing gyms / online stores
So we had our marketing sheet and planned to do 1-2 activities per day to see what worked best for his business.
Day 2 – Doing more of what works (personal network + wholesales)
Daniel searched Facebook for every single friend who listed climbing in their profiles and added them to a sheet.
Then Daniel individually messaged them. Yes, it’s work. To get The 4-Hour Workweek I’ve found it takes about 6 months of work to finally relax on substantial monthly income. [Note from Tim: This squares with reality; it usually takes 3-4 months to try enough that you can do a proper 80/20 analysis, then two months to design systems to scale what *is* working.]
Here’s the message Daniel used:
Hope you’ve been awesome.
I saw you like climbing. Me, too!
My neck always hurts when I belay, so I created super affordable belay goggles.
Have about 10 available. Are you interested?
A few sales came just from messaging his Facebook friends. SCORE.
Then we created a list of every rock climbing store offline and online in Canada.
1. Search google for “rock climbing vancouver” or search “rock climbing” on Yelp
2A. Go to websites listed and get the owner’s name (if possible), email, and phone number. OR
Daniel was already calling and emailing but not getting the volume of sales he needed from wholesalers and gyms. I asked to see what he emailed,. He showed me this:
Damn, that is a bad e-mail!
Main things for you and Daniel to learn:
a) Getting a PDF from a random stranger is never something I want to open.
b) Make the subject line exciting to read.
c) Sales emails should ALWAYS be about the other person. Make it valuable for them so they want to reply.
d) Nobody’s name is Hello. “Hey <first-name>”. Work to find the first name.
Here’s an improved version that we worked on:
Subject: Helping you make an extra $1,000 at your climbing gym
Hope things are amazing with you.
I’ve been working with climbing gyms like yours and wanted to hook up your members with my new belay glasses.
http://belayshades.com (people go nuts over them)
Was thinking, we can email your members with a special discount just for you and we split the profit evenly.
Be a great way for you to make a profit and hook up your members at the same time.
Can you let me know by this Friday if this sounds appealing to you?
And here’s the email for online retail stores:
Subject line: Best person to talk with for new climbing gear?
Hey John <store owner>,
Fan of your store and the fact your founder and I both do jewelry making 🙂
Noticed you didn’t have any belay glasses, which are becoming super popular with climbers.
Love to see if this makes sense for your store. Other climbing stores are seeing promising results with it.
How’s this Thursday 4pm CST for a quick 7-minute call to see if this makes sense for your store?
To actually get a response, I had Daniel use what I call the quad-bomb:
1. Search their name on LinkedIn. Send them a connect request as a friend with a CUSTOM message. “Hey <first-name>, Huge fan of your business and wanted to talk about some cool products for your customers.”
2. Email them.
I wait a day here as to NOT annoy them. If they don’t respond, then proceed to 3 and 4.
3. Facebook message them with: “Hey, just wanted to make sure my message got through”.
4. Tweet them. “Hey @twitter-handle. Love to see if we make some magic together. What’s best email for you?”
Why so many channels?
1. So many people are lazy and don’t put the effort in. You get out what you put in.
2. Sometimes people get busy, so your email may just get buried at the bottom of their inbox.
One of the key things that I drilled into Daniel’s head is to have a follow-up time with ANY person you are trying to work with. I use the line, “I have my calendar open, how’s X time to check in?”
Also I use followup.cc as a great free service to get reminders via email.
Rebuttal / sales sheets
Script out your answers to any possible questions during sales calls. This makes it easy to do your sales. This is also valuable so in the future you can have ANYONE do your sales a la The 4-Hour Workweek.
Here’s a sample of those sheets:
You guys are too small for us to work with
I feel we will work well together… we are small and you are big. Since we are small we can keep costs low and pass the savings on to you and your customers. Since you are large and have the reach for distributorship we can do business on a larger scale at smaller margins while still making a profit. Match made in heaven.
What about returns or defects?
We check each product by hand. If there is any problem, we stand 100% behind the product. We have a no-questions return policy for 30 days.
Can you guys do net-90 payment terms?
Yes, we can.
Where have you sold these glasses so far?
We are selling at local gyms and climbing groups all around Vancouver.
Can you give us a discount?
The price is the most affordable on the market. If you wanted to place a larger order, or can offer better payment terms, I’m happy to talk to my team to make it work for you.
Sales Questions to ask whosalers / stores / gyms
1. Something about themselves, a get-to-the-know-them question
2. What are your most popular items for climbers?
3. What are your favorite sites for finding out about new products? If tradeshows, which ones do you guys go to?
4. Do you guys already sell belay glasses?
5. How do you decide which products you want to sell?
6. [POTENTIAL TRANSITION] Well, it sounds like our glasses are right up your alley… (ONLY IF THEY ARE)
7. What’s your preferred amount for a starter order?
8. Is anything holding you back from placing an order of 30 with us today?
9. What are your preferred next steps to get this partnership rolling?
10. How’s x time for a check-in to make sure all is smooth?
Day 3 – Marketplaces + Groups + Advertising
Each day Daniel was in town, he allocated at least 3 hours to try a new method of marketing.
Who knows which will actually work? At the end of the week, we were going to re-evaluate and focus on the most effective ones.
Here are 3 marketing methods we tried out:
Posting on marketplaces
This involves posting your product to sites that already have your customers like eBay, Etsy, Craigslist or Amazon. All totally free, too. Done.
Messaging on Meetup groups
Try messaging meetup groups to do giveaways. No responses? Oh well, move on.
Facebook and Google Advertising
Here’s the exact FB ad we created:
Key things about this ad:
– Target audience is really small (24,000 people)
– Your target should be as NICHE as possible. The more unique — or direct the competitor — the better.
– Newsfeed ads have been performing STUPIDLY well for me, so we chose that route. But what works for me may not work for someone else.
– Limit yourself to your country and focus on just desktop computers, unless your page is very mobile friendly. Otherwise, you will waste a TON of money.
For Facebook ads, do NOT spend more than $10 a day while you are trying to figure out if you can make more than you spend from this marketing channel. DO NOT buy likes either — they are worthless. You have to rely on Facebook to communicate with your customers vs. having direct access. Get people to buy your product directly or give you an email.
Daniel tried Google Adwords with no success. Luckily, he used a free credit he got from starting a new account. You can get bonus AdWords credit via eBay.
Day 4 – Giveaways / Google / Random ideas
On Day 4, we continued trying new marketing techniques to find which would work:
Daniel reached out to various Facebook pages and bloggers related to climbing. Search Facebook for “rock climbing” or whatever your product is, and you should be able to find a few pages related to your audience.
Here’s what he would message them:
Subject: Free Belay Glasses for you and your <group name>
Hey <club leader>,
You guys look awesome! Glad to see the climbing community growing in <location>.
Wanted to let you know about these cool new belay glasses for rock climbers http://www.belayshades.com
Love to send you a pair to try out. If you like them, I’ll happily give you guys a special price you can share with your members.
Easy enough, right? Just email me by <two days from when email is sent> with an address we can ship to, and we will send a pair out to you.
This did not produce any results 🙁
A better approach would be to mail out glasses to climbing writers and group owners and focus on building long-term relationships.
Google Top 20
If you were your own customer, what phrase would you search on Google?
For Daniel it was “belay glasses”.
In a non-spammy way, go through the first 2 pages of results on Google and leave a helpful comment or see if you can sponsor or get involved in that page. Way easier than trying to immediately rank for a keyword through SEO.
Daniel found a lot of forums and blog posts so he promoted himself on these pages. By looking at Google Analytics, we saw this drove a decent amount of traffic and sales to his website.
Posting on Reddit
There’s a decent amount of people in the /r/hiking or /r/climbing subreddits so posting a discount or asking for people’s feedback is a good test.
Daniel’s partner posted this thread and was able to sell a few glasses:
This sold 10 pairs, which is awesome for Daniel! But posting on Reddit and hoping to get responses isn’t predictable, and we want predictable. Can’t run off to Thailand unless you know cash is coming in consistently, right?
Updating his website
His site wasn’t bad, but he had a video that did not explain his product, as well as a random banner slide show that didn’t speak to visitors.
Day 5 – Bringing it all together
The key takeaway from the whole week: looking at what drove most sales so we can scale it up big time.
So from all the days activities, Day 2 seemed to be the most effective (reaching out to personal network and wholesale retailers).
Our goal for the five days was to grow Daniel’s business. By reaching out to his personal network and wholesale retailers and focusing what had already worked, we managed to make that happen.
Daniel got an email from a large online site named Sierra Trading saying they were interested in the glasses.
HOLY CRAP! He’d been waiting weeks to hear back from small local stores. Now an online provider is finally responding within a day. The store buyer originally responded via a Facebook message.
The order placed was for $4,200!!!!!
Lesson of the week: You never know what’s going to work when it comes to marketing. Try new things and then focus on what works until it stops working.
Daniel and the Amigos. Thanks to Anton + Robert for helping with this article.
Big thanks to HomeAway for sponsoring Daniel’s great loft in Austin, Texas.
A Week of Mentorship in San Francisco — An Opportunity
If you want help starting your own business, and if you’re a US resident age 18 or older, Tim and I have a special opportunity for you.
Take the following steps no later than 5pm PST on Wednesday, October 30th, 2013, and you could get an all-expenses-paid trip to San Francisco to work with us on starting your business.
Many surprises await the one lucky winner. Big time. Seriously.
Step 1 – Create a video (2 min or less) on YouTube explaining why you should be chosen. Start the video title with “Tim Mentorship” so we can find it.
Step 2 – Fill out this form. Be sure to include a link to your YouTube video (from Step 1) in the “Tacos or burritos?” answer! This is to ensure you know how to follow directions.
If you’re like Daniel and want the blueprint to start your own business, personal support, and access to a community of 3,000+ entrepreneurs, take a look at “How To Make A $1,000-A-Month Business.”
The Tim Ferriss Show is one of the most popular podcasts in the world with over 400 million downloads. It has been selected for "Best of Apple Podcasts" three times, it is often the #1 interview podcast across all of Apple Podcasts, and it's been ranked #1 out of 400,000+ podcasts on many occasions. To listen to any of the past episodes for free, check out this page.