Story of a Side Project, Part 3
Sometimes, it doesn’t add up
(This is the third and final post about my 2015 side project, CamelCalculators.com. This was a site I built and operated to rent TI-84 graphing calculators to college students. Part 1 is here. Part 2 is here.)
With a few days at home over Christmas, I had plenty of time to assess Camel Calculators and where I might take it. By this point (almost a year in), the business was running smoothly, and I didn’t have to spend much time programming. All the work was in the day-to-day duties like tweaking Adwords campaigns, mailing shipments, and keeping track of returns.
I was proud of the progress (and the money) I had made, but running the business at micro-scale wasn’t cutting it. I needed to find a way to 10x my operations to make it worth writing home about.
Taking what I had learned in that first year, I thought ahead and forecasted 3 big obstacles I was about to encounter.
Obstacle #1 — Need to acquire inventory at scale
The first problem with scaling the business was sourcing a large number of calculators. There were only so many eBay auctions per day, and it would take a long time to build the inventory one by one. I was bidding on auctions manually, but I increasingly ran into a few major buyers who were sniping auctions and outbidding me. Such is life on eBay.
I would have loved to buy 50 used calculators in bulk, but the few suppliers I found were all pretty sketchy. I was not comfortable with the idea of sending a $2000 check to a vendor I didn’t trust.
Obstacle #2 — Unpredictable returns
Every time I spoke with a friend about this idea, their first question was: “What if someone doesn’t return their calculators?” It’s a legitimate concern, but it wasn’t a big problem for me for the first 9 months. Most customers returned on time, some returned a week or two late, and only a few didn’t return at all. For those few cases, I gave the customer plenty of warning, and then charged them a replacement fee.
But toward the end of 2015, I started seeing a new problem with delinquent customers. When I went to charge a replacement fee, I discovered their card had expired, or the card was rejected for insufficient funds. In these cases, I was SOL. This was a frustrating surprise, especially when it happened for multiple orders in a row. It also made it difficult to build my inventory, as my new calculators were more often serving as replacements for stolen product.
There are a couple ways I could have attempted to solve this problem. I could have rejected credit cards that were expiring soon. I could have added a security deposit to the order, which I then refunded on return. These may have cut down on the problem, but it also would have cut down on my conversion. As a user, I would immediately abandon a site that made me put down a security deposit on a sub-$100 item. And I didn’t want to run a site that distrusted its customers.
Obstacle #3 — Ongoing opportunity cost
Finally, I had to to stop and consider the cost of my time. If I was honest with myself, Camel Calculators had now become a part time job for me. But it turned out to be a pretty crappy one. Packing and shipping an order took me at least 45 minutes. My profit on each order after marketing and shipping costs was about $20, so working on this business was paying me $30/hour. That’s not terrible, but it also doesn’t include any of my time finding and buying new inventory, tracking down delinquent customers, or maintaining the site.
But the money wasn’t the main issue. The bigger problem was that operating this business was keeping me from brainstorming new projects. I was in execution mode, which shut off the flow of new ideas. I couldn’t help but wonder: was I spending all my time on a C+ side project, when I could be working on an A+ idea? And was $30/hour worth that?
Deciding to shut down
After thinking about these obstacles, I decided to shut down Camel Calculators. I turned off new orders on the site in January 2016, and waited as all my inventory returned over the next few months.
With the benefit of 5 months hindsight, it seems like an obvious decision. But at the time, it was a tough call. I’ve launched many side projects over the years, and this was the first one to make over $1,000. It was a real business solving a real problem for real people. I sent my calculators to Florida, Texas, California, New Jersey and everywhere else across the country. It was a great experience and only confirmed that I want to run my own business someday. For that reason, I consider it a success. But I ultimately decided that this wasn’t going to be my big idea.
If someone could solve the obstacles above, they could have a decent business on their hands. And if you’re that person, ready to pick up the torch, I still have about a dozen calculators in my apartment that you can take off my hands!
Thanks for reading about my side project! This was my first time writing on Medium and I really enjoyed it. I have a few more ideas for posts that I’ll release soon. Follow me on Medium or over at Twitter (username: lookatpete) to get notified when they go live.