A young man was impressed with one of his Grandfathers rich friends. Being the curious and bold kid he was, he asked how the man had made his money. The old guy fiddled with his fob watch and said, “Well, son, it was 1932… the depth of the Great Depression and I was down to my last nickel. I invested that nickel in an apple, spent the entire day polishing the apple and, at the end of the day, I sold the apple for ten cents. The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them for 20 cents. I continued this system for a month, by the end of which I’d accumulated a fortune of $1.37.”

“And that’s how you built an empire?” the boy asked in disbelief.

“Heavens, no!” the man replied. “Then my wife’s father died and left us two million dollars.”

One of the questions I’m asked frequently is: “What did you do to get started in the (X) business?” which loosely translates to “How in the hell does a geek like you put food on the table?” I can’t really blame them for wondering… I don’t exactly look or behave like a stereotypical business owner. I imagine after meeting me most people have sudden visions of their mother shaking her finger and saying “life’s not fair” flash before their eyes. On occasion some are actually curious and really want to know because they have an idea… we usually become quick friends. It’s not because I like to talk about me or my adventures but because what really makes me tick is the challenge of something exciting and unexplored. No one is more excited than someone with an idea… and I just feed off of that kind of excitement. They are on a mission and I’m happy to be allowed to brainstorm a bit, give some input, and help them get moving along in any way I can. Usually it begins by asking 5 questions that involve a bit of homework. What I call my “baby steps”.

Photo by: Radhika Bhagwat

Here they are… my 5 baby steps to beginning an “Adventure in Capitalism”.

1) What problem(s) will you or your product solve?
I think this is where most of the would be self employed end up shooting themselves in the foot. It seems that the majority of the dreamers go at this a bit backwards. In my experience it has not worked out well to come up with a pretty widget then try to push the square peg into the round hole searching for people who want it. I’ve had the most success when either I’ve personally gotten frustrated about something or witnessed someone else complain about how something frustrated them. Personal experience with a situation where I’ve shouted “There has to be an easier way!” is simpler for me because I can fully experience every aspect of why the problem is annoying and what would make it easier for me. However, just because I’m having a problem doesn’t mean anyone else is… so I go looking for others. I want to explore the feelings of those who have had a similar negative experience for confirmation of a direction and additional input. It’s magical how turning a negative experience into a profit can quickly turn even the biggest pessimist into a silver lining kinda person. Get a note pad or a mind mapping software program and write out as many emotions you or your subjects are feeling. Start with at least 5 and be as detailed as possible including “the why” behind the emotion being felt. (i.e. I feel stupid because this thing has so many buttons I can’t figure out how to stop the time on the clock from flashing.)

2) How will you or your product solve a problem?
Now it’s time to get into the development of a product or service. I take out the list created in the first step and run through each emotion and it’s “why” one by one asking myself or the person I’m working with how (in plain language) will this emotion be avoided and a problem solved? This step is important for several reasons and I think I’m going to go into more detail on a later post, but for now the main point is to help you identify a path for development. Maybe you know exactly what you would do to solve this problem, but if you don’t this will give you the ability to identify what you need to research or brainstorm to create your “fix”. It’s important to be specific and clear on exactly how the details of the manufacturing, or labeling, or design, or packaging, or process, or all of the above are going to improve your customers lives. Using plain language instead of technical jargon will help you explain what needs to be done for your team when you need one, and keep it easy for your customer to grasp why they will love it. I like to try and explain it to my kids… if they understand what the benefit is I’m golden. When Apple launched the iPod everyone knew exactly why they loved it because Apple explained it as “1000 songs in your pocket”. They didn’t focus on memory size, the track wheel navigation, the size of the screen, the quality of the headphones… just what it means to me in plain language. Brilliant!

3) Who is your customer?
In the first step we found a problem, in the second we’ve talked to others with the same problem, and now we can most likely describe who our customers are “demographically” by answering a few questions. What activity were they doing to when experienced some of the emotions in step one? What conclusions can you draw about someone who likes or performs that activity? Are they likely to be in a certain age group? Do you think they would be primarily male or female? Where would the most likely live? I’m sure you can probably think of more questions like these… I’m just trying to give you the general idea. The more details you can determine about your customer the better you’ll be able to relate to them, develop your product/service to cater to them, and then explain why they NEED what you have. Note: Once you’ve launched your adventure don’t stop asking these questions… now you’ll have more people who you can talk to and learn from. Listen to your customers. Don’t get upset if they have a complaint, instead make note and if it becomes a common question or concern… address it immediately. Remember the idea is to continually be looking for an opportunity to turn a negative experience into a profit, so they just did you a favor!

4) How do you make money?
I have a personal list of 20 rules I try to live by and rule number 1 is: NEVER loose money or break even on a transaction. The way I do that is to break all my expenses for an adventure down into a per transaction cost. Error on the side of expensive and then add another 35% for things you didn’t think of just to be safe. It’s easy to charge less if you WANT to compete… but very hard to start charging more because you HAVE to stay in business. It sounds simple but it’s easy to get off track. This is something that I feel should almost be in constant review not for the sake of growing wider in reach, but instead deeper in understanding HOW you are making money. The temptation of brand extension is ever sooooo beautiful from a distance and it’s easy to get “grass is greener” goggles. What typically happens is the success of being focused on a single and profitable product/service get’s all sideways… and a company will wake up spread thin over too many products/services, loosing money for lack of ability to focus on what is making them successful. If they wake up that is. I would be doing you a disservice to not warn you that this particular step isn’t something you do only once and then keep right on trucking oblivious to the construction signs telling you the road is ending. If you’re a big music label who’s core function is promoting your acts so you can sell their music and concert tickets to make your profits… you’ve driven past the signs, the bridge is out, and your hood is on fire. Google a band called “OK Go” and tell me I’m wrong.

5) In once sentence… what does your product/service do for me?
I saved the hardest for last cuz I’m sick like that. I’m kidding… this IS hard, but it’s last because you really need to do all those other baby steps before you can do this one. The reason this is hard is because you just spent all this time coming up with all these great solutions to a problem… most likely with a bunch of bells and whistles… and somehow you’ve got to boil it down into once sentence like “1000 songs in your pocket”. But this thing is shiny, it’s got all these color choices, check out how easy it is to navigate, its a snap to just plug it into your computer and it automatically syncs your songs, and, and, and. Yes, yes, I know… those are all great features and benefits… but what’s in it for me? Don’t talk about your product. Talk about me. What does it mean for me? You can tell me all about your product in the specs, but right now you need to grab my attention with a tag line not a laundry list of cool gizmos on your widget. Go back and take a look at step 1 to review the (at minimum) 5 emotions and the “why” behind them. Which was the most common? Which could you personally identify with after talking with other people? Take that information and in once sentence tell me why I will never experience that emotion again. Don’t worry if you don’t nail it the first time. I’ve changed tag lines up to 7 times before I felt I finally nailed it and then even after launch had to change it again because of new information from customers.

This obviously isn’t an end all be all “5 steps and you’re in business” kind of thing here. That’s why I call them baby steps. They are intended to get you thinking… to get you to be on the lookout… and to help you qualify an adventure before you sink too much money into it.

Let’s talk now. How can I help you turn your idea into an opportunity? What topic should we explore together next? Maybe you have something to add and convert this into 6 or 7 steps? I’m open to taking this blog where anyone wants to take it. I love to interact with anyone who’s got an idea.

Comment below, find me on facebook, or tweet at me!!!

I just realized I’m being a bit selfish. I started this blog as another experiment… sounded fun so why not give it a go right? I figured I would use the platform to journal a bit and get some help from the blogosphere with ideas and feedback on the adventures I take. Innocently enough I ventured into this space with the intention of learning, and while that in and of itself isn’t wrong… what am I giving in return?

Sooooo I think it’s early enough in my blogging to change directions a bit and I’m sure it’s the right thing to do.

Going forward I’m not only going to offer full disclosure on my adventures in capitalism, but I’m also going to do a bit of sharing on some “how to” start on your own adventures. I think it’s been said enough that most people have heard at one time or another that money doesn’t buy happiness. I believe however that it is fair to say money does allow you the flexibility to focus on the things that do make you happy. Whether that is more time with your family, the ability for you (or if your married your spouse) to be able to earn income from home. What if you’re dream is to be completely untethered and have the fortunate ability to work while you travel anywhere in the world. Maybe you’re only looking to cover a car payment… or the mortgage payment. Perhaps y0u’d be happy just having some spending money. What ever it is that makes you happy… I’d love to be able to help you reach for that dream!

Photo by law_keven

Here is the game plan. I’m going to begin to write little tips and tricks and things that I’ve used to do what it is that I do… each time I do I’m going to make a point to offer everyone to pick the next direction for the blog. This can be done in the comments, via email, by a poll, carrier pigeon, or smoke signal.  I’m going to go ahead and pick the first post… but start hitting me up now if you would like.

What would you like some input on? Do you need help figuring out where to start or do you need a tip on some piece of software? Maybe you’re looking for a manufacturer or a web designer? Do you need some tips on business structure? Effectiveness? Marketing? Valuation? Do you feel like I just spoke over your head?

How can I help you with your dream?

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Blogging, Tweeting, Facebooking (is that a word?) is all relatively new to me. Comedian Stephen Wright said, “Do you ever wonder how much deeper the ocean would be with out all those sponges?” I’m not a n00b to business or traditional marketing, but in this space I’m a baby sponge soaking up as much as I possibly can in the vast ocean known as social media. I’d really love your input on this latest adventure.

A little background… The DittoBite CD & DVD Duplication adventure has been successfully launched (Feb, 2010) and has grossed a little over $5,000 thus far via the “Ol’ Fashion” way of doing business… networking face to face. I’ve got to say I’m excited to take this to the next phase of experimentation and begin marketing with my new social media addiction. Enter Justin McCullough from Leader4Hire.net

Justin is a great guy with a good head on his shoulders. He will challenge you to think big and then push you to go for it. He’s not selfish with any ideas he may have and actively shows he genuinely cares about you by taking a pointed interest in following up regularly. His blog title “Leader4Hire” fits his personality perfectly and I would strongly encourage anyone to drop him a line and witness his generosity for yourself.

Justin and I seem to be cut from the same cloth (although he dresses better). We’re both ACTION guys. I had a chat with Justin on Skype recently and talked about how each of us looks at the monumental importance of taking action on an idea/plan to make it a reality. We discussed our individual theories on why some folks will have the best intentions but for one reason or another give themselves a laundry list of excuses as to why they can’t do it…

My Grandfather once told me, “When faced with a decision, just go ahead and jump. Even if you fall flat on your face you’re still moving in the right direction… forward.” I’ve never forgotten that and I think it may be a big part of why I have so much fun trying anything new. James Cameron gave a speech at TED recently where he summed up his talk with one sentence, “Failure IS an option… fear is NOT”. That is just too kewl for words and I couldn’t agree more!

Justin has given me some great ideas to get started and an even better one that I can’t mention just yet. (I’m a tease… I know). The first step for DittoBite is to launch a blog, Twitter, and facebook page. The idea here is to discuss, educate, and inspire people in selected niches that would have a need for CD or DVD duplication. DittoBite offers flat rate duplication, on demand production, drop shipping to your customer, and coming soon… on demand digital printing. So for example potential clients/topics would be:

1) Musicians – techniques, software, beats, tracks, marketing, branding, feature artist, equipment reviews, etc.
2) Information Product Marketers – market research, branding, valuing, pricing, web platforms, SEO, social media, etc.
3) Network Marketing – prospecting, follow up, list building, social media, continuing education, team building, etc.

This is where I would love some input! What other industries do you think would benefit from the DittoBite model? Is there something I’m missing regarding a service or benefit to the customer that would make doing business with us a “no brainer”?

With my hands cupped oddly over my mouth doing the best drive through speaker voice I can muster: “In 3… 2… 1… launch! We have lift off, we have lift off… project 1 has cleared the tower.” My children laugh hysterically as I pretend to rocket from my office to the living room and around in circles while they try to catch me. The dogs join in the fun and jump up waist high to bark at us, leaving my poor wife with nothing to do but roll her eyes at me and giggle.

I get freakishly giddy when I find a project worthy of launch and attempted adventure. I don’t know how or why. I’m not complaining mind you… its almost an adrenaline release of some sort allowing my mind to finally relax. For at least a day or two anyway.

To put this into perspective a bit, I began toying with this latest idea on or around the 16th of January and then went to a full launch by the afternoon of the 29th that same month. I’m pretty sure any real business person would look at that and just laugh at me. Perhaps this is one of the contributing factors to the percentage of hits and misses on these little adventures? I guess I just don’t see what all the fuss is about.

I’m a big NCIS geek. Not this newer hollywood kiddie pool wanna be version but the REAL kick ass original version. Admittedly I started watching the show because Abby is super smokin hot, but I kept watching because of Jethro Gibbs and his no nonsense style of leadership. People end up with a respect for him even if they don’t want to because he’s so kewl. Oh and did I mention Abby is super smokin hot? I digress… Gibbs has 50 rules he lives by and it seems most of them came from a hard life lesson or two. I only have 20 so far, but my number 1 rule is: “Never break even or loose money in a transaction. Ever.” That one simple but effective rule has never failed to ensure I don’t go off half cocked on some hair-brained idea after another pouring money into something until it dies.

Notice I said “transaction” and not project or venture. I’ll never be as good at explaining this philosophy than best selling author Tim Ferriss so I highly recommend reading his book and through his blog. The concept of Relative income vs. Absolute income is something that escapes 97% of the population according to a study I just now made up for this post. I honestly think if you look at every decision you’re about to make or every scenario that may run through your head, break it down to it’s most basic level, then evaluate if it’s cost will be more than or equal to the revenue on a per transaction basis, more times than not you are going to make a good move.

That said, I can tell you from personal experience that even if you make good decisions on a monetary basis it doesn’t ensure that your venture is a good idea in the first place. If you’ve done some research and determined that solar is the next big thing. You’ve put on your thinking hat and found that putting a solar panel inside your home facing the window instead of outside on the roof at the cost of $38/hour brings you a profit of $107/hour. So you should be in the money right? Well… not if the only window in your house faces South.

Ahhh but that’s why it’s called an Adventure right? I’m pretty excited about this adventure, but then again I’m excited about all of them. Self realization for a moment here… is the chase more fun than the win? Hrm… I’ll have to evaluate that one. Creating a new category in that market or “niche-ing down” to an untapped very specific need is something I really love to do when I can figure out how. I can’t burn a CD better than the other guy, I can’t screen print it better, label it better, put it in a jewelcase better, anything like that… the technology is all the same. No one wants to compete on price alone, you’ll lose every time. Service is in the eye of the beholder. So how in the hell do you break into a market with so many competitors? In my little brain’s estimation, you don’t. Create a new category. Make something that is so contrary to what everyone else is doing… so under the radar… something everyone else says “it’s just not worth the headache” to.

In this industry that is the short run crowd. The growing minority of information marketers who have a need for ‘on demand’ duplication and fulfillment to their customers. The musicians looking to sell or give out mixtapes or demos to get the next gig or build a local fan base. The people who like me think it’s silly to pay $2.00 – $4.00 to get 100 CDs but somehow magically the CD gets less expensive to make if the order is 800 and suddenly it’s only $1.00? Huh? Less work + same material cost = higher price? Um… ok.

So without further ado: Adventures in Capitalism, LLC. will soon be cutting the ribbon for DittoBite® CDs & DVDs. ANY order… ANY size… ONE price!

To be launched online by February 15th. Soft launched now! For $0.99 CDs & $1.14 DVDs Call 407-536-9704

Tell me what you think… rip me apart in the comments below and in the mean time I’ll keep you posted!

It’s 10PM as I finally lean back in the big green chair, prop up my feet, and MAKE time to update this blog. I feel like I need to apologize for not updating in awhile. Perhaps apologize isn’t accurate. I feel more like I should make amends for putting off a commitment I made to myself. This i2o blog is supposed to be something I decided to do in an effort to chronicle the activity of my adventures in capitalism. I’ve been making excuses that I’m so busy with the adventure projects that the blog can wait. That’s cheating myself out of a learning opportunity and really not helping me to slow down and analyze my movement to better understand decisions and the resulting errors or triumphs. So here I am… enough excuses.

So the last time I blogged here at i2o I was mid process of testing for all intents and purposes “project 1″ which has somehow turned into what is lovingly referred to by my mentors as The E-Trade® approach to CD Duplication. I’ve set up a Jason Fried style beta launch of a website carefully driving demographic traffic segregated by means of media outlet marketing. Facebook links go to one version of an index page, twitter to another, Google Ads to a third, and blog commentary links to the fourth. Using Analytics and Urchin reports from Media Temple I derived the best bang for my buck in terms of advertising dollars from the web. I only used two criteria for what I deemed “effective” means of publication. Unique visitors and intent to purchase.

Unique visitors is “A statistic describing a unit of traffic to a Web site, counting each visitor only once in the time frame of the report. This statistic is relevant to site publishers and advertisers as a measure of a site’s true audience size, equivalent to the term ‘Reach’ used in other media.” Thank you Wikipedia.

Intent to purchase is a stat that is somewhat less reliable but equally as important to know. That was determined by requesting the visitor to complete a (in this case literal) call to action in order to request a purchase. For the test I simply placed on the website that the shopping cart was down for maintenance and to please call our customer service number (Google Voice Account) to order.

I did this test for only 3 days to determine an educated guesstimate for click through, bounce, and conversion rates.

Google AdWords was a huge disappointment. The CD duplication space is so crowded bids on key words that were even remotely relevant were $4 to $12 a click! For this project… way to high. Facebook on the other hand was amazingly handy. I was able to target specific demographics with unique audiences for each display of the ad exactly what I wanted to pay. Because the ad was so targeted I was able to get the best conversion of the test at 15%. Which if you don’t know is wicked awesome in terms of marketing on a small scale. Twitter is very new to me and quite honestly I’ve not quite figured out how to talk about a product or service without turning people off or coming across as an ad spammer. There are a lot of “out of the garage” CD/DVD duplicators on Twitter who never tweet anything but the fact that they offer duplication service. I found that extremely annoying when I followed them… so any input here would be greatly appreciated. By far the most fun was the blog commentary. Engaging in actual conversations with real people was very enlightening and I got a plethora of feedback which for the most part was disbelief that I would offer such a unique model. Conversion for Bloggers was 3%. Still much better than a mail campaign and will most likely be something I continue just for the shear fun of talking with folks.

Testing completed and a conservative benchmark in place with an actual black ink budget has pushed me forward to full launch. As of February 8th the new adventure will be in full swing and on the path to becoming a new business for AIC, LLC. owned not operated by yours truly. That’s not a typo by the way and I’ll get to explaining that one in another post.

Here are some great questions I got from people in my research:

Q: Do you really think you can break into a saturated market and make any significant income?
A: Um… Yes or I wouldn’t do it! Here’s why I’m optimistic. While it’s true it is next to impossible to come into any market, let alone a saturated one, and make the slightest dent… that’s not what I’m doing. What I’m doing is creating a new category in that market or “niche-ing down” to an untapped very specific need. Charles Schwab didn’t invent the brokerage house. He didn’t talk about better traders, or faster phone guys, number of floor reps or any of that kind of thing EVERYONE else was talking about. Instead he created a new category. The first discount broker. That’s what I’m doing. For the companies that would love to do on demand CDs but find it cost prohibitive without doing them in house. The bloggers who would like to provide tangible information products without having to order thousands of units to get a good price. The struggling musicians that think downloads are great but understand they are difficult to hand out or sell at their gigs. These folks and many others need a discount broker. Here I am.

Q: If this is so great and such a needed solution, why isn’t anyone else like <removed name> or <did it again> doing it?
A: Great question. My guess? They most likely feel like they are the big dogs and no one can knock them off their porch. Perhaps they are right. Experience is a great teacher and I’m a novice with an idea. Then again, Kodak thought digital cameras were a fad that would never catch on and chose to ignore it until it was very nearly too late.

Q: Won’t the hand holding, mastering, art, proofs, etc. for the short run (I think they were inferring novice) types kill any margin you might have?
A: Yes. Which is exactly why I will not do any of that without an extra charge. Those who provide their own master, art, require no proofs and sign off on an “as is” duplication will get the best price as a reward for not being a pain in the keester. Those who may require any or all of those ad on services will have a fee associated with that hand holding. I’m offering a simple solution to a problem of volume duplication. I’m not offering a baby sitting service… those guys can call <name removed again>.

Q: With those extra charges won’t you run off some potential customers?
A: I hope so. I never get into any business with the intent to loose money. Customers who require too much from you are not only a drain financially but mentally on you and more so on your employees. You’ve heard of many business guru’s who give advice to “fire” certain customers? I find it’s better not to hire them in the first place. This company is designed for a smaller demographic with very specific needs and we will cater to them in every value added way financially feasible. I’m not looking to jump into the big pond with the other little fish running from the large mouth bass.

What about you? Go ahead… rip me apart in the comments below and in the mean time, I’ll keep you posted.

Update: After doing research on the King Cavalier DVD idea I trashed it. I found no real mass marketing method of hitting this narrow market. I love the idea of a narrow market focus but to have any kind of ongoing revenue generation I feel I need a communication method or two in order to hit that market on a grand scale. I found no magazines, few fan pages on facebook, and a general lack of interest from the test groups I polled. So… scratch that idea.

This next experiment is fairing much better so far. I’ve done some research into something that I recently learned and felt was not customer focused but profit focused. Not that there is anything wrong with profit, or making as much of it as you can, but this just seemed to me like I was getting ripped off so I wondered how many others felt the same way.

I recently had a client that was in need of some CD duplication. Calling around and shopping the internet I learned that anything under 1000 discs was considered small quantity and CDRs are used as opposed to the replication process of making a glass master and pressing the CDs. Getting prices was a constant fluctuation from $4.00 to $.90 a disc depending on how many you ordered. They all had these price breaks at certain quantities pushing you into tiers of pricing. It wasn’t isolated either, EVERYONE is doing this. I couldn’t find one company not using this model.

Now that’s just a plain offensive to my intellect. These guys buy CDRs in bulk qty regardless of how many I order. They can obviously make a profit at $.90 a disc. Why then does it matter how many I order? It’s not any harder or more time consuming to do 20 instead of 900. In fact I would think it’s actually less work. So why then charge me $4.00 per disc to do less work when your material costs are a fixed inventory expense?

My idea is this… A sort of a brokerage house of CD duplication similar to a brokerage house of the stock market. A small guy like me can’t always buy the required 100 block of ABC stock so the brokerage house pairs up my order of 25 with other orders to get to a block of 100 and close the deal. If I’m able to figure out how to consolidate orders in blocks of 999 to qualify for the best pricing I should be able to pass that savings on to everyone right? In a vacuum anyway… lol

This is how I come up with business ideas. My Grandpa told me once that if I could figure out how to make peoples lives easier I could make money. So when something annoys the hell out of me I figure I’m not alone and see if I can construct a better model that would make my life easier.

I’m going to look into the top ten results on Google for CD duplication and get an idea of their business models, research number of hits to their websites, keywords used, and ad bids they are using. I’ll need to hit an estimated 500% ROI in order to qualify this as something to pursue further.

Please feel free to rip me apart below and I’ll keep you posted!

Well here I go… the first post of my new adventures in capitalism. I’m not exactly sure how to begin this journey chronicling my moves as I navigate this very public display of how I somehow continue to luck into making money. I can tell you it’s not from any kind of formal education or training. I’ve not got a degree in business… or anything for that matter. In fact my goal here is to learn from anyone willing to share their wisdom and insights. I’m just going to write what it is that I’m doing as I’m doing it and hope that somehow I will be able to either get some kind of assistance from some of you guru’s out there or perhaps by bloging each move I can identify some kind of pattern in the seemingly random accidental successes. Although most times it seems there are more failures than successes.

I’ve decided to look for a product to sell. Perhaps create? I’m unsure at this time. I’ve downloaded an app for my iPhone called reQall to take notes in tandem with Evernote I have installed on my MacBook. The idea here is to become hyper aware of my environment and take audible notes of things that I find annoying or frustrating in my daily work, hobbies, family recreation, TV watching, eating… pretty much everything. My thought is to perhaps identify something that could be done bigger, badder, better. Or is that harder, better, faster, stronger? (Sorry it was there… I took it.)

Off the top of my head… I found it frustrating to get any kind of real “how to care for” books on my pet dog Sophie who is a Cavalier King Charles Spaniel. Maybe I could interview some top breeders or trainers and compile some useful information? A DVD might be kewl? I should get some opinions from other owners before I spend too much time trying to make a solution for a problem that is possible I’m the only one that had. I’ll need to figure out some kind of fast and inexpensive way to get in touch with a large group of those kinds of people and poll for some info.

Any suggestions on how to tap into the dog community? I’ll start the gerbil in my head running on the wheel and post back with anything I might come up with also