Day One: The Plan {Million Dollar Idea Project}
In my brief time as an adult on this Earth, I’ve built three multi-million-dollar businesses from the ground up. I’ve decided that in addition to my full-time endeavors, I’d like to document every single step of a fully bootstrapped business so that others can see how all it takes to build $1,000,000 is a good idea, focus, and solid business.
Getting to a business worth $1,000,000 is not a particularly lofty goal. For solid businesses with good margins, dependable recurring revenue, and substantial technical assets, reaching $100,000 in annual revenue at a 10x multiple should get us to a $1,000,000 valuation pretty easily.
Starting with some capital certainly helps, but you really don’t need much to get started. I pulled out $5,000 cash from my personal bank account to show how it can be done on a shoestring budget.
It’s important to remember that business is a numbers game, and businesses fail all the time. Knowing when to pursue a great idea is just as important as knowing when to cut off a bad one. If I run out of cash, I’ll admit defeat and move on to the next one.
I’m going it alone on this one, and I’m taking the bold extra risk of exposing my entire business model, suppliers, margins, marketing strategies, and everything else right here on Medium, because I believe in my heart that even with all of this, I will still have the advantage of my superior technical abilities, and it’ll be technology that wins the day here.
I’ll be setting interim goals along the way, and testing and iterating on the idea in tiny steps. So let’s begin.
The Elevator Pitch: A Personalized, AI-Driven Nutraceutical Stack
We’re tapping into the trend of ubiquitous artificial intelligence here, and we’ll be leveraging Google Cloud Platform’s offerings to drive the machine learning components.
The basic premise of how this works will occur in 3 simple steps:
- A simple intake quiz will learn all about your current health, your health goals, and any sensitivities or restrictions you might have.
- For a small weekly fee, we will send you a custom-curated stack of nutraceuticals, packaged in easy-to-comply-with packaging, directly to your door.
- Throughout your week, we’ll periodically ping you via our app, to check in on how you’re feeling, how you are progressing on your goals, and we’ll make tweaks to your stack using AI to optimize for your goals.
The Unknowns
Every new business comes with its own set of unknowns, and understanding these unknowns and how to turn them into knowns is the very process of building a business. This costs money, but since we’re starting with such a small bootstrap fund, we’re going to have to be very conservative here.
The goal is to quickly get to revenue generation, so that we don’t need to keep drawing down on our war chest. Once we have a provable formula for success, we can make a decision to raise additional money, or just ride it out.
Since we’re just starting, let’s list some of our unknowns, and what we know about them.
- Sourcing Nutraceuticals: We need to find reputable suppliers of raw nutraceuticals that can supply us with the raw product to be sold. Since we will be starting with low volumes, our suppliers need to have low minimum order sizes, and since we don’t yet know exactly what steady-state volumes we will need, we need a supplier that can ship quickly on-demand.
- Sourcing Packaging: We need to source packaging that can be easily packed by hand, sealed, and can store our nutraceuticals safely. These will likely need to be custom printed with our branding. Additionally, we will want custom shipping packages that minimize cost while maximizing exposure and “wow” factor.
- Customer Acquisition: It’s no secret that getting people to pay for stuff on the internet is hard, but at least we’re selling a physical product. Still, the cost of acquiring a customer will likely be high, and it’s not likely to be made up for by the first week of paid service. This is likely where the most active work is going to live in the initial phase.
- Customer Value: You have to pay to get somebody in the door, but how much their worth depends on how you price it, and how long customers tend to stick around. I personally believe strongly in the ongoing value delivered to customers, so I’m confident we can be rewarded for that.
- Compliance/Legal: We’re venturing into an area of distribution outside of my wheelhouse, one relating to human consumption. There are risks here, especially from overly burdensome legal compliance. While I’m confident we can deliver a safe product that works as described, the law may slow us down here. This is probably the biggest risk in this venture, but that risk operates on the longest timeframe.
- Operations: I’ll be doing all the packaging myself at first, in a facility that I put together. I’ll be writing all of the safety procedures (tapping in experts where needed, of course), and if we can achieve volume, hiring and training staff. A lot of work here.
- Competition: I’m familiar with only a few potentially competitive players, none who do exactly the same thing. We will need to research the landscape to figure out exactly what we’re up against, but even if somebody else is doing it exactly the same, or even if somebody copies from our playbook by reading this series, I believe it is a big enough market opportunity for many players to grow in.
Stay tuned as we dive into the deep end and figure out what works and what doesn’t. Let’s crush this.
Our first business goal will be to get our first paying customer (and no, my mom doesn’t count). In order to do that though, we’re going to need a plan. That plan begins tomorrow!
