Thread: My first attempt at a business - 95% failure

Well, here's my story about a failure - I haven't completely given up on this quite yet and I'm still pursuing it, but I am about 95% sure it will be a failure in the end.

Here's the background info: after reading TMF, I was motivated to start a business where I would have more control, instead of the affiliate promotion that I had been doing for the past year. I hated the cancelled commissions, low % of sale that I would earn, $500 max commission, and potential for the affiliate program to be canceled at any time if the merchant so desired.

As part of my affiliate work, I frequently worked on SEO in order to get more traffic to my affiliate site. From my little bit of experience with SEO, I came up with an idea for a business in the SEO industry.

I'm not going to say exactly what it is yet - once I feel like I'm done with it and don't care anymore OR if thing turn around and it gains some momentum, I'll post what it is.

I created the service:
I have spent the last 4 months developing the service - I knew nothing about PHP, so I found a couple Wordpress plugins that offered something similar to what I needed and then started learning PHP so that I could modify the plugins to meet my needs.

About 3 months ago, I went to a forum (this is where my target customers hang out - forums) where I planned on selling my service later to get 5 beta testers. The interest was there at first - I even ended up giving out 9 free beta test accounts.

After that, I received absolutely NO feedback at all. I sent out messages to everyone reminding them that I needed feedback. A couple responded that they were too busy too test, some didn't respond at all, and 2 people actually gave me some suggestions.

"Better than nothing", I thought. I'll add the suggestions that they want, writes a sales page, and release the service to the forum.

The launch:
So, I released my service on the same forum to a very UN-encouraging response - asking $50/month. A couple people saying "this is stupid" and some saying "___ already does this". However, 3 people signed up - 1 at a review price of $25 and 2 at the full price of $50. I offered the first month free, so I didn't get any money yet.

1 of those people cancelled within the first month, so that left me with paying 2 subscribers.

Last Saturday I released my new and improved service to a different forum. I have received two more $25 review subscribers so far. - 1 has signed up and the other has only said they want an account but hasn't signed up yet. I'll see if they actually do.

A couple minor victories:
Even though this idea has turned out to be almost a complete failure so far and doesn't look like it will make me more than $1k a month (without a killer new feature or something like that), I can still make out a few positive things:

1. This is my first time working on my OWN business - in the past I had only done affiliate stuff promoting someone else's business.
2. I got more than 1 person to pay me! Small victories, huh.
3. I have received some experience dealing directly with customers - I had emphasized quick response times to their problems (mainly them requesting a feature that wasn't available yet). Then I tried to implement the requested feature ASAP. That seems to work well and I can carry that on to future work.
4. It IS still possible for this to make more money. If the few members that I do have bring in a good amount of traffic to the site, I try offering paid ads to bring in a little more revenue.
5. I realized at least one BIG reason why this failed - the market is too small! That and I don't offer a service with magnitude, as MJ calls it in TMF. If I could justify a $500+/month price tag, then I would have a chance. But, the market DEFINITELY doesn't number in the millions. I would estimate it at around 500 people. Could be higher, could be lower, but it's definitely not more than ~3,000ish. This is why I am so sure that this is going to end up being not worth pursuing any more.

What next?
Here's where I'm going from here: I'm going to stick with this for another month or two, launch it on 1 more different forum, re-launch it on the first forum, and see where it goes.

My goal right now is to make $750 a month from this - still not much but it will equal the income that I make from my shit job right now.

Even if I reach that $750/month mark, I will still have to start something else, this time keeping in mind scale and magnitude (among other things!). I have NO idea what to do next - I hate not having a good idea that motivates you to succeed!

If you don't get anything else from this post, get this: KEEP IN MIND SCALE/SIZE OF YOUR MARKET AND MAGNITUDE.

Not trying to blow sunshine up your @$$, but: I'd say it wasn't a total failure. Not only did you make some money on it, you learned a lot. Now you have an idea how PHP works and you can probably take that to your next venture. You got to practice envisioning, designing, testing, creating, and releasing a product. That's all good experience. Take what you learned and go find another venture!

Originally Posted by garyfritz

Not trying to blow sunshine up your @$$, but: I'd say it wasn't a total failure. Not only did you make some money on it, you learned a lot. Now you have an idea how PHP works and you can probably take that to your next venture. You got to practice envisioning, designing, testing, creating, and releasing a product. That's all good experience. Take what you learned and go find another venture!

Yeah, I'm trying to stay positive - the only problem with the whole PHP thing is that I really don't like doing it. I mean, I will do it since I can't pay someone else to do it yet, but I really don't enjoy doing it. Coding for me usually consists of 30 minutes of messing with it/banging my head against the wall and 2 minutes of celebration when I figure something out LOL . Plus, I'm lightyears away from being able to make a REAL, enterprise-level web app.

I'm kind of in that period where you realize "Damn, this really doesn't have the potential I thought it would." Still think I might have been able to execute better when it comes to marketing it.

Just gotta find the next venture! Need to find something that can impact MANY more people, and then reach them (still struggle with marketing).

Why not attempt to create an ecosystem of services using this product?

Originally Posted by 77startup

Why not attempt to create an ecosystem of services using this product?

Not 100% sure what you mean, can you elaborate a little?

Hardly a failure. What a great attempt! And if it's costing you 0 in time, from now on, and makes $50/$500/$1000 per month...... that's a win! Go do it a few more times!

Speed++.

Originally Posted by bernieshawn

Not 100% sure what you mean, can you elaborate a little?

Sure. Imagine you own a lot of land with a few houses. You rent out the houses and notice that your tenants really want a store too, so you create a store. Then you create a hospital, and a movie theater and before you know it you've created a town aka an ecosystem. Figure out what else your current customers want and keep selling new services to them.

This is not a failure, you just need to figure out how to tweek it. Lets say your service has something to do with cars. Can you expand that to boats, motercycles, Luxury cars, and so on. Find a way to expand your service to similar types of business. Also pricing of your service. maybe 50.00 a month is too much? Also offer your current subscribers a referal fee if they bring you a customer. Maybe offer part of this service for free and part at a cost that way people using the free part can get hooked and realize the value and pay for the rest.

I don't think it's a failure, it's a good start. As someone who is looking into buying an SEO package or hiring a company eventually; it sounds like something I might want at some point. The only issue for me is that I would want something that I could try for 1 or 2 months for 50.00 with no strings attached. There is a lot of competition in this market - but so far no one gives people the option of:
1- month 69.95, no additional charges to your credit card ever
3- month 50.00/mo - no additional charges ever, no cancellation hassle
12- month 35.00/ month - must call to cancel.

The reason I don't sign up for most things is that I can't get rid of it easily if it doesn't work or if I don't like it. The one company I do want to purchase a (different) accounting/web service from, is giving their stuff away FREE until December, then you have to sign up. Nice way to entice customers, but I am trying to sign up with them NOW for a yearly fee to get it over with and would be happy to be charged right NOW, but they don't allow that yet. -a

Originally Posted by 77startup

Sure. Imagine you own a lot of land with a few houses. You rent out the houses and notice that your tenants really want a store too, so you create a store. Then you create a hospital, and a movie theater and before you know it you've created a town aka an ecosystem. Figure out what else your current customers want and keep selling new services to them.

Oh ok, got it now, thanks! What I have been doing right now is listening to customer suggestions for features and adding them ASAP. I haven't come across any requests yet that I think would justify an increase in price (or another membership level with a higher price) for the feature. Hopefully, I will either receive a request for something that big or think of something on my own.

Although, I do have one idea for an additional product to sell to my existing members - advertising. Assuming I can provide a useful advertising system that provides good ROI to my members, there should be no worry about that not working - everyone wants to make more sales!

Originally Posted by acrystal

I don't think it's a failure, it's a good start. As someone who is looking into buying an SEO package or hiring a company eventually; it sounds like something I might want at some point. The only issue for me is that I would want something that I could try for 1 or 2 months for 50.00 with no strings attached. There is a lot of competition in this market - but so far no one gives people the option of:
1- month 69.95, no additional charges to your credit card ever
3- month 50.00/mo - no additional charges ever, no cancellation hassle
12- month 35.00/ month - must call to cancel.

The reason I don't sign up for most things is that I can't get rid of it easily if it doesn't work or if I don't like it. The one company I do want to purchase a (different) accounting/web service from, is giving their stuff away FREE until December, then you have to sign up. Nice way to entice customers, but I am trying to sign up with them NOW for a yearly fee to get it over with and would be happy to be charged right NOW, but they don't allow that yet. -a

I want to note first that my service does not provide SEO services - it's in that niche, though.

I have an idea that might match what you're talking about in the first part - don't want to say what it is right away, but it involves offering a cheap, one-time price in order to draw repeat customers in.

Originally Posted by rocksolid

This is not a failure, you just need to figure out how to tweek it. Lets say your service has something to do with cars. Can you expand that to boats, motercycles, Luxury cars, and so on. Find a way to expand your service to similar types of business. Also pricing of your service. maybe 50.00 a month is too much? Also offer your current subscribers a referal fee if they bring you a customer. Maybe offer part of this service for free and part at a cost that way people using the free part can get hooked and realize the value and pay for the rest.

I have been looking into the referral option - been looking at affiliate software so that I can implement this (iDevAffiliate seems to be the leading one, does anyone have experience with this?).

A part of me is tempted to change my revenue model by making the service free to use and charging for advertising and per transaction.

My immediate plan for right now is to launch my service on another forum. This will be the 3rd out of 3 forums that I know of where SEO services are very actively bought and sold. Then, I will do a re-launch on the first forum that I originally launched it on since that was back in June.

I can think of 3 other, additional forums where these services are bought and sold, but not in as much volume as the other 3. I will probably launch there eventually, but I'm focusing on the other 3 for now.

Thanks for all the feedback!

How is this a failure? This is exactly how a Fastlane business gets its start. You can't have 10,000 paying customers until you get 1. The hardest part you did. Tweak, adjust, move forward. Get feedback from customers and find out why they canceled -- if they cancel, the value proposition isn't working for them.

If you expect a full blown Fastlane process to be a few months, you will indeed, be disappointed.

(I just did a video on this:
Do You Know The Big Secret Behind Making Money? It Has Nothing to Do With Money!)

Originally Posted by MJDeMarco

How is this a failure? This is exactly how a Fastlane business gets its start. You can't have 10,000 paying customers until you get 1. The hardest part you did. Tweak, adjust, move forward. Get feedback from customers and find out why they canceled -- if they cancel, the value proposition isn't working for them.

If you expect a full blown Fastlane process to be a few months, you will indeed, be disappointed.

(I just did a video on this:
Do You Know The Big Secret Behind Making Money? It Has Nothing to Do With Money!)

Thanks for the response! Just watched the video... here's how I see it now:

Because my target market is so small, I can just add more and more value which will create more and more magnitude, which will in turn justify a higher price. Of course, this is assuming that I don't make something that will reach a related, but broader market. I guess this is where things like offering advertising, etc would fit in.

Is this a good mindset/pattern of thinking?

Maybe this should be moved to progress threads (where I was actually going to post it originally, but was feeling pessimistic at the time).

Originally Posted by Gymjunkie

Are you getting your customers only from one forum? If so maybe the that forum isn't good for that. Maybe mostly freebie seekers hang out there. Expand your marketing. Hell, make an offer here. Don't be secretive about it. SEO is important, it's changing but still needed..

Well, I might offer it here, but I'm not sure about how that works or if I am allowed to.

And I'm getting customers from just 1 forum at the moment. I'm going to offer it on a different forum as soon as I get some time to tweak the last sales post that I made. Then, I'm going to re-launch it on the forum that I originally launched it on back in June. That will make 3 forums in general, and I have 2 more that I will offer it on eventually (5 total).

Originally Posted by Gymjunkie

I think there is marketplace here...

Why are you launching only on forums? Where is website?

I think your results would be way better once you launch fully. You have been doing well I think, let us know more details on the business. It's not about ideas, it's about execution, so you seem a bit paranoid..

Yeah, I am a little paranoid LOL - lack of experience and uncertainty, I guess.

I have been marketing to solely forums for 2 reasons:

1. That's where my target market hangs out.
2. It's free.

I would love to be able to market elsewhere but I'm not sure if it would be received as well. So, for now, I'm sticking to forums but I would love to expand in the future.

Is there anyway I can get this thread moved to the Progress threads? I don't even know if it's possible, but just asking.

Quick update:

Today hasn't been my day - just been feeling very pessimistic about this business. Not only that, but it's been one of those days where you're waiting on people to do something or contact you and you get nothing.

Here's what I've done in the past few days:

-Submitted a sales thread in the 3rd big forum that I'm targeting. Still waiting on approval so nothing happening there yet.

-I lost one member. I decided that I should reach out to him and follow up. Sent a message saying (summed up) "Hey, noticed you canceled your membership. No obligation or anything, but just want to know where I fell short with my service."

-I decided that I should follow up with all new members a few days after they sign up. I sent a quick message to the 2 people that signed up within the last week saying something like "Hey, it's been a couple days since you signed up, please let me know if there's anything I can do for you or if you have any question about using it."

Hope I get some kind of either positive feedback (I need the encouragement) or negative but constructive feedback that I can use to make my service better.

If you give us some more info then we can think of ways to help you. Or maybe you can PM some of us instead. It's hard to help you sell your product when we don't know what we are selling and to whom we should sell it to. If you think it's going to fail then you should not be worried about somebody else doing it. Some times you have to put yourself out there alittle.