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Journey from 40k debt to freedom

A detailed account of a Fastlane process...

leveragehacker

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Hey fastlaners!

Name is Nathan, 22 and from Sydney Australia.

Brief history:
- started my first biz selling vitamins on ebay at 16 - made $12,000 profit in 3 months and then blew it on a girlfriend and other stupid stuff.
- over the next 5 years launched a really broad variety of startups. got seed funding from Angel investors for some and bootstrapped the others. brief summary of them:
  • MuesliForMe - customise your own muesli mix (granola for americans) and we ship it monthly to your door. Subscription commerce model that was inspired by DollarShaveClub. Ran it for a year but struggled to acquire users and keep them. Sold my stake to other cofounders.
  • EyeCrowd - allowed people to get surveys from 99 people on their new logos and marketing material within 10 minutes. Got seed funding and won a business pitch comp, went to Silicon Valley to raise Series A but failed. Gave up way too easily on this one - but also had no domain expertise at all.
  • SuperTea - sourced a white tea supplier in Sri Lanka and validated demand for the value proposition of '3x the antioxidants of green tea'. Imported the tea and then sold through ecommerce. Got bored as hell really quickly and sold the business for a profit on gumtree (like craigslist for australia)
  • AudioHighSchool - thought to create an online marketplace where high school student could download audio notes for their curriculum. the thinking being that kids spend so long on public transport and could be listening to the material as well as reading it. Built MVP of platform with a partner but never launched.
  • The Sandwich Hero - late last year started a sandwich lunch delivery business. We wore superhero costumes when we delivered sandwiches to offices which resulted in great PR and word of mouth growth. Got to 500 subscribers of our daily lunch menu email. Couldn't scale the logistics of delivering in a small window to so many people over a wide area and still make profit - so we decided to open a shop. Invested over 50k of my personal and friends/family - went broke within 3 months. Sold the shop a few weeks ago and now working on my next project.

There's about 10 other businesses I've had that I won't bother explaining - they never advanced. I have a serious issue with sticking things out and I acknowledge that. It's something I'm determined to fix.

Since reading Fastlane over the weekend I've had an internal struggle about my next steps. I'm 40k in debt so I need to make money fast - and after reading the book I'd rather be putting my day hours into generating sales for my new idea, and not giving them to some job. That said - I'm so broke I can barely afford phone credit to do sales calls for my new business that I've today started a new job which takes up 3 days per week.

I'd like to document the journey out of debt and into abundance and use this forum as an accountability partner to taking action towards my goals. My added incentive is that I turn 23 in 2 days and I am in no way where I imagined I'd be when I was 21.

What's next?

Validate new ideaSo my new idea is similar to a yellow pages business model but on a different type of medium. Today I have already begun executing to test the idea and see if I can get my first sale. I'll post some results of that effort soon.
 
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leveragehacker

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Ok so I just had my lunch break at my new job and I used the time to do some cold calling to see if I could generate some sales.

I called 6 businesses.
1 didn't answer
1 hung up after I introduced myself
BUT 4 all listened to my pitch, liked it, and then asked about the price. However then they all balked at the price and declined the offer. The cost of my product that I was testing was $374 which gets them long term exposure (a few years) to over 2,000 people in their local area. 1 person said they would buy it if it was $200 instead.

SO. My learning from this is that I still need to call more target customers in more categories to get more feedback. Initial feedback is promising but might require an adjustment in pricing. Next I am going to try pitching a lower price ($197) which gets exposure to 1,000 people instead. Hopefully this new price point will make the product more accessible for more businesses and result in a sale. It also means smaller profits for me but still very healthy if I can be generating at least 2 - 4 sales per day.
 

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That's a lot of valuable experience man, you'll make it someday.

Just curious, how did you manage to get people 99 votes on their surveys within 10 mins?
 

leveragehacker

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That's a lot of valuable experience man, you'll make it someday.

Just curious, how did you manage to get people 99 votes on their surveys within 10 mins?

I'm not a technical developer but my cofounder at the time used Mechanical Turk - a service owned I think by amazon that allows you to get 1000's of people to do micro tasks. companies like Plenty of Fish will use it to verify profile photos of new signups are not pornographic.
 
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MJ DeMarco

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Welcome aboard Nathan, great to have ya.
 

leveragehacker

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Welcome aboard Nathan, great to have ya.

Thanks MJ, great to be here.

One funny little sidenote about your book; my mum has constantly been shoving Dave Ramsey stuff down my throat the past few weeks and I can't describe how much I laughed with relief when I saw your opinion of what he teaches. I reiterated your points to her about he makes money not through what he preaches but what he sells and she had to agree with you lol.
 

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Op. What are the bankruptcy laws like in Australia? I know people in way more debt than 40k struggling to get by, digging themselves out by a hundred bucks here and there. They have been working on it for a decade. Seriously, their earning capacity sucks so bad they should have filed bankruptcy 10 years ago and rebuilt... It would be off their record by now!

I'm not necessarily saying you should, but some people should look at the debt and wonder if they would just be better off filing.
 
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Kak

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I like to look at it like this. You have a traffic jam on a main road. You have waited in line for an hour but the radio says it will take another hour to get through even though it is usually only 10 minutes. You also know there is a back road that may take 45 minutes... You would be surprised how many people will continue to wait in line because they already waited an hour...

Sunk cost. Get acquainted with the concept and apply it to time in addition to money.
 

JasonR

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Awesome first post, man. Looks like you've tried a lot of things and have been failing forward. Remember, failure is only feedback.

From what I can see, is perhaps sometimes you give up on something too soon.

Keep going, my friend. :)
 

leveragehacker

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Op. What are the bankruptcy laws like in Australia? I know people in way more debt than 40k struggling to get by, digging themselves out by a hundred bucks here and there. They have been working on it for a decade. Seriously, their earning capacity sucks so bad they should have filed bankruptcy 10 years ago and rebuilt... It would be off their record by now!

I'm not necessarily saying you should, but some people should look at the debt and wonder if they would just be better off filing.

I'm not really sure around the specifics of bankruptcy laws in Australia but as far as I know it means you're kinda screwed for the next 7 years in terms of credit rating and ability to secure loans or be listed as a director for a company.

Certainly some people with large amounts of debt might consider declaring bankrupt but i haven't even considered it as an option. The benfits of hustling my way through it via a business system far outweighs the benefits of declaring bankruptcy. Besides, only 12k of that 40k is to a bank, most of it is parents/friend. Can't (and wouldn't want to) wipe that clean.
 
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leveragehacker

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Awesome first post, man. Looks like you've tried a lot of things and have been failing forward. Remember, failure is only feedback.

From what I can see, is perhaps sometimes you give up on something too soon.

Keep going, my friend. :)

Thanks Jason, failure is most definitely only feedback. Giving up way too soon and lack of focus has always been my biggest weakness. Even though I have 3 ideas about what to do next this time round I am focusing on just the one.
 

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Ah. I see. Never mind about the bankruptcy thing. Can't do that to family or friends.
 
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KLaw

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I'm not really sure around the specifics of bankruptcy laws in Australia but as far as I know it means you're kinda screwed for the next 7 years in terms of credit rating and ability to secure loans or be listed as a director for a company.

Certainly some people with large amounts of debt might consider declaring bankrupt but i haven't even considered it as an option. The benfits of hustling my way through it via a business system far outweighs the benefits of declaring bankruptcy. Besides, only 12k of that 40k is to a bank, most of it is parents/friend. Can't (and wouldn't want to) wipe that clean.

Awesome outlook. You borrowed it - now, man up and pay up. Great post and attitude. You will have that debt wiped out in no time. You have made killer progress at such a young age. Very cool stuff - dude!
 
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Good luck! Interested to hear your progress. Keep going!
 

bane

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Man awesome post/thread! And great past progress!
I am a fellow aussie! I'll be watching this thread and the local newspapers closely haha

The Sandwich Hero
It's funny, my co founder and I did a VERY similar thing in my local city! Pretty much the same outcome too! But was a McAwesome learning experience.

Good luck to you mate! But from your history, you wont need it! You are destined for success someday! haha

Cheers
 
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leveragehacker

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Man awesome post/thread! And great past progress!
I am a fellow aussie! I'll be watching this thread and the local newspapers closely haha


It's funny, my co founder and I did a VERY similar thing in my local city! Pretty much the same outcome too! But was a McAwesome learning experience.

Good luck to you mate! But from your history, you wont need it! You are destined for success someday! haha

Cheers

Haha cheers mate!

Defs a wicked McAwesome learning experience. I took away a few key pointers regarding the hospitality industry:
  • The hours and labor required is insane - expect to be worn out
  • One of the most important things to do is SET ASIDE at least 6 months of runnings costs + a fund that you can deploy to make improvements in the shop
  • You need deep pockets
  • Don't do the fitout yourself if you don't have experience
  • Hospitality takes no prisoners
  • Get a proper legal document drawn up by a lawyer if you're doing it with a partner
 

bane

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Defs a wicked McAwesome learning experience. I took away a few key pointers regarding the hospitality industry:
The hours and labor required is insane - expect to be worn out
One of the most important things to do is SET ASIDE at least 6 months of runnings costs + a fund that you can deploy to make improvements in the shop
You need deep pockets
Don't do the fitout yourself if you don't have experience
Hospitality takes no prisoners
Get a proper legal document drawn up by a lawyer if you're doing it with a partner

Yeah cool. I'd agree with all of it! hahaha. I did a big write up of our learnings in our Progress Thread that is within the INSIDERS Forum: https://www.thefastlaneforum.com/co...s-fast-food-delivery.48973/page-5#post-365029
 
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timmy

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Great story.... Hard and fast is always the best way to fail initially. However.... " Your past failures must become the training ground to a new refined, and systematic approach to your future"...
 
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leveragehacker

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leveragehacker

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Great story.... Hard and fast is always the best way to fail initially. However.... " Your past failures must become the training ground to a new refined, and systematic approach to your future"...

So true. I'm trying to make sure I review my past decisions and what went wrong to ensure I make smarter decisions this time round. The proof of that will hopefully be in the results.
 

bane

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Ahh I'll have it read it once I join the INSIDERS - seems worth it from what I've seen on this forum today so far.
Curious to know a bit more about your experience as well - what was your hospitality concept?

From what I can see, you'd really benefit from the INSIDERS man. You're an action taker!!!!

So we don't derail the theme of this soon-to-be excellent progress thread I'll start a private convo with you mate haha
 
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Your high price point might actually be filtering out bad customers. And the fact that you seem to only need 1 - 2 sales per day at the premium price makes it even more attractive.

How are you going to reliably test the two price points to come to an objective conclusion that one is better than the other? You might also want to look into research that says offering 3 prices makes people tend to choose the middle one, and 2 prices makes them tend toward the higher one.

Keep us updated, really cool thread.
 

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Been there and done it with the debt situation, i'd steer clear of bankruptcy. In the UK, It screws your credit record for SIX years. I haven't got SIX MONTHS to wait for anything, never mind all that time. Slowly but surely when you start paying things off, even though it doesn't look like much, you are digging yourself out of the hole. It is tiring but can be done :) I did it!

Well done to all your experience, just remember learn to stick with the course, even if it is hard and you will get there.

Looking forward to reading more from you.
 

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You're going to get it man. Add some fastlane principles to your new business ventures and you're golden. Don't worry about the debt either, it'll take care of itself as long as you focus on the well - being of otbers.
 
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leveragehacker

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Your high price point might actually be filtering out bad customers. And the fact that you seem to only need 1 - 2 sales per day at the premium price makes it even more attractive.

How are you going to reliably test the two price points to come to an objective conclusion that one is better than the other? You might also want to look into research that says offering 3 prices makes people tend to choose the middle one, and 2 prices makes them tend toward the higher one.

Keep us updated, really cool thread.

OMG YES! that's genius. I knew and had read those pricing experiments so many times but it didn't occur to test it with this. thank you thank you thank you. buying that book and participating in this forum is already paying off ;)
 

leveragehacker

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You're going to get it man. Add some fastlane principles to your new business ventures and you're golden. Don't worry about the debt either, it'll take care of itself as long as you focus on the well - being of otbers.

Cheers dude. So true - need to focus on the value I can provide rather than 'i want dat ca$h' mentality haha
 

leveragehacker

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16 minutes ago I turned 23. For the first few minutes I felt depressed, wallowing in the shittyness of the current situation.

But then I remembered. My thoughts mould my reality. I have the power to decide how I react to any given set of circumstances. Just because I haven't reached my goals by 23 doesn't mean shit - MJ didn't get it till late twenties and look at him. There's plenty more who don't get there till much much later. I know that I will never give up, simple as that.

This is my birthday gift to you - my favourite inspiration youtube of all time
 

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