25 Lessons for Solopreneurs from the book ‘The $100 Startup’
‘The $100 Startup’ is a great book for anyone interested in entrepreneurship, particularly starting a one-person company.
It has hundreds of case studies that Chris Guillebeau collected through forms, group surveys, email, phone calls, Skype video calls, and even in-person meetings.
All the respondents met the following criteria:
- Startup cost was between $100-$1000
- Earned at least $50000 a year in net income
- The skill can be acquired through a short period of training or independent study
- Respondents agreed to full financial disclosure
- Had fewer than five employees
1. Keep Startup costs low
Starting a micro business is easier now than ever before.
All you need is:
- A product or service
- Customers (not limited by geography anymore)
- Way to get paid (online payment)
You don’t need an office or employees to start.
2. Sell what people really want and what they will buy
Not what they think they want.
‘If you make your business about helping people, you will always have plenty of work.’
Your business should focus on providing value. Providing value means helping people.
You can do this
By giving customers more of what they want- love, money, free time.
Or less of what they don’t want- stress, hassle, conflict, uncertainty.
3. The action bias
‘In a battle between planning and action, action wins.’
You can go on planning for years but if you don’t take action, you’ve got nothing.
Taking a small step is better than nothing.
Keep costs low. Start as a solopreneur. And plan as you go.
4. Market before manufacturing
Pre-sell your product.
For example, if you’re selling an Ebook, advertise it before you’re done creating it.
It’s the best way to check if people want your product in the first place.
If someone buys it, don’t renege on your promise.
5. Freely give and freely receive
Never compromise on quality.
In a highly competitive market, the only way to stand out is to provide value over and above.
Provide more value than you’ve promised. Make your customers say ‘Wow! I did not expect all these bonuses’
6. Create a killer offer
A good offer is one that people want and are willing to pay for.
In an airplane, travelers often complain about cramped seats. But when given an option between extra legroom or a cheaper ticket, the majority would go for the latter.
And your offer should not sound too salesy. Keep it conversational. Focus on the benefits.
Remember, people hate being sold to.
7. Benefits > Features
Copywriting 101: Convert features into benefits.
Talk about the benefits your product provides. Here’s why-
8. Provide a nudge
This can be in the form of a hard-to-refuse proposition.
Or an incredible guarantee that eliminates the risk factor for people who are on the fence.
It can be in the form of a ’30 day money back guarantee.’
Or ‘60% off if you buy now’
Don’t overcomplicate your proposition.
9. Your messaging
“We offer horse rides”
“We help our clients escape and be someone else”
Which statement is more powerful? The second one.
Your messaging should be simple, uncomplicated and impactful.
10. Self Promotion
Promote your business in an authentic way.
Talk without work = flash
Work without talk = unknown
Talk + Work = Impact
The third one should be your goal. Because visibility creates opportunity.
The easiest way to achieve this goal is personal branding. Pick a social media platform (LinkedIn/ Twitter) and start creating content.
(If you need someone to help you build your personal brand on LinkedIn, reach out to me here.)
11. Relationship Building
Focus on building relationships with people.
Get to know people. Help them. Talk to them and share information freely. Support them in their work.
12. Million-dollar pricing advice
The biggest mistake people make while pricing their product or service is pricing it according to the cost of production or the time it takes to create and deliver.
If $1000 course creators priced their products this way, it wouldn’t cost nearly as much
Instead, price your product according to the benefit it offers. The value a buyer will receive.
Ask ‘How will this improve the users’ life and what is that improvement worth to them?’
13. Offer a limited range of prices
Companies often have basic, premium and enterprise pricing options. The basic one is generally freemium (basic features at no charge).
Have a look at Grammarly’s pricing model-
The difference is, here you’re asking the customer ‘Which plan do you want to buy?’ instead of ‘Do you want to buy?’
A limited range of prices helps eliminate confusion or the paradox of choice.
14. Get paid often
Chris recommends introducing a subscription model in your business. It ensures you get paid frequently.
If you’re an artist, you can encourage people to subscribe to your Patreon.
A writer can have a paid newsletter.
If this underwear company can have a subscription model, almost any business can.
15. Traffic, conversion, and average sales price
How can you grow your business?
- You can drive more traffic to your site
- You can try to improve conversion rates through better copy, design or by tweaking your offer
- You can simply increase the sales price
But here’s an even better option-
Grow your traffic by a little, increase the conversion rate by a little, and increase the sales price by a little.
‘Little by little, a little becomes a lot.’
16. Upsells, cross-sells, and sale after sale
Use them to your advantage.
Upsell is when you get the customer to buy something in addition to what they did. ‘Would you like some fries along with your burger?’
Cross-sell is when you suggest a different product to the customer. ‘People who bought this item also bought’ along with a bunch of options.
Sale after sale is when you offer a specially limited-time offer to someone who already made a purchase.
17. Hall of Fame
In other words, social proof.
Spotlight your best customers. Use storytelling to share how your product helped them. It can even be a text or video testimonial.
It’s more effective in getting new customers than fancy design and good copy.
Have a look at Eddie’s Hall of Fame for his course Transformational Landing Pages.
18. Raise prices regularly
Service providers should ‘maintain a practice of regular rate increases so that it becomes normal and expected.’
No one expects the price of milk to be the same from year to year. Cost of living increases.
Worried about not finding work when you’ve raised your price? In his survey, Chris noticed a pattern- clients generally expected the increased rates and went ahead with it.
Look at it from the client’s point of view- if you’ve been providing good service to them, they’ll be happy to pay a little extra.
Because not working with you would cost them more. In terms of both time and money.
They’ll have to look for another service provider and negotiate prices. And there is no guarantee that they’ll find someone as good or better at the same rate.
Plus a huge amount of work that gets hampered in this process.
19. Product to service, service to product
This is a simple way to get paid more often.
If you have a product, provide a similar service. For most products, you can provide services like coaching, teaching, and consultation.
And if you provide a service, build a related product. No matter what you do, you can create an Ebook or online course easily.
20. Hub and Spoke model
Here, the hub is the home base. The place where you want to drive traffic. It can be an Ebook or a course.
Spoke are the additional channels from where you want to drive traffic to your home base. It can be social media (LinkedIn, Twitter, Instagram, Pinterest), your blog, guest posting, comment section, email newsletters, and so on.
21. Monitoring your business
A/B test a lot. Pay attention to the analytics to see what’s working.
For example, check where your customers are coming from and spend time nurturing your audience there.
22. Communication
How can you differentiate your product from other equally great products? Good communication, genuine relationships, and a strong personal brand.
Communication is more important than you think and very few startups have good communication.
23. Unwanted advice and external gratification
If you start a business, 9/10 people will warn you how risky it is.
Don’t pay heed to unsolicited advice from people who don’t know as much about your plan.
They may mean well but it is often unnecessary and distracting.
Trust your own judgment.
24. The first dollar is the hardest
Once you make your first dollar, it gets easier. The initial self-doubt fades away. You feel more confident.
25. Remember the goal of a business
At the end of the day, the goal of any business is to earn profits.
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