Hey guys, I haven’t been on the forum for a while so I’m due for an update. I realized I was reading too much and action faking so I decided to take a break and get shit done. I should’ve posted something sooner, but better late than never.
Since I was last active, I developed and launched my own product and just recently sold the business. Now my wife and I are taking a bit of time off traveling around SE Asia so I have some time to clear my head. I can get into the reasons I sold the business, but I think the more interesting parts are all the lessons I’ve learned along the way. So I guess I’ll start with that and then feel free to ask me anything below.
First thing most people have asked me…is how much did I sell it for? What was my revenue? What was the multiple on my biz valuation? And of course, how did I find the idea for my product?
The first three questions won’t do jack shit to help anyone, so I’ll start with the fourth one. I found my idea by working in the beer industry. I would do literally any job that related to beer. I cleaned lines and got sprayed with moldy beer…more than a couple times too. Yes I can honestly say I’ve had a golden shower…not the R. Kelly style, but still golden nonetheless. I delivered 160-pound kegs and drove sometimes 15 hours in a single day to make sure our growing sales numbers were actually fulfilled. All the while getting bitched at for the delivery being 15 minutes late. I swept floors, installed plumbing, served beers, made cold face-to-face sales calls. Basically, I did every job I could at least once.
The point of this story is simply that…ALL of my ideas came from my experience working in the industry. I kept a journal with me at all times and eventually had well over 100 different beer products, services, or software ideas. The key takeaway here is: if the reason you haven’t started yet is that you don’t have any good ideas…just go out and get involved in an industry (preferably a big one) and take any opportunity you get to learn something. Then, just keep your eyes open. The more important and shittier the job is, the better the opportunity.
At some point, I realized I needed to just shut up and do something. So I went through all of my ideas and marked off the ones based on three criteria.
And that leads me to my next big lesson. Product development can be VERY expensive and time-consuming. One of the biggest reasons I chose the product was because I could afford to launch it. I found ways to get through the development stages very quickly and cheaply. Basically, I found a way to use mostly off-the-shelf parts that I could resell if the product sucked. This actually turned into one of my product benefits since it wouldn’t cost a fortune to repair. So I spent about $200-300 bucks on parts and built a prototype.
I can’t remember whose term this was, but I love the word “ghettotyping.” At first, I wanted my prototype to be perfect and complete. But then I realized just how stupid that was. All I really needed to know is if the damn thing would work. So I scrapped all my plans to have special parts custom machined, and then just used zip-ties, duct tape, scrap wood, and stole key parts from other products…whatever would allow me to simply test my product. Luckily, it worked…and it worked better than I thought it would.
Great! Now I needed to figure out if it would actually sell. So I spent some time making a few more prototypes that looked decent enough to sell. I found some suppliers who were willing to do small sample orders. I promised to make larger orders if the samples worked. I guess I should also add that it took a very long time to find suppliers for a few key parts I needed. I had almost given up after several weeks of searching until I got lucky and found a picture of what I needed. I followed the link and voila, I finally found the manufacturer.
They didn’t make it to the exact specs I needed, so I asked and the manufacturer said they’d do it if I would buy at least 100 units (roughly $2500). I agreed if they would sell me a few samples to test first and a few weeks later I had the missing parts. Then I went out where I thought my customers were and demonstrated the product. Right off the bat, I had several customers willing to hand me cash….Now we’re in business.
Before this point, I never stopped to think about branding, what business entity should I organize, what kind of logo do I want, and when should I order business cards. These are the things I used to think about before I even had a product. Then someone on the forum slapped some sense into me and pointed out how silly this was.
This time was different though. This time I actually HAD a product and was ready to start selling. It was invigorating to finally get beyond the over-planning stage and I started to get really excited. I had tons of energy and suddenly I was willing to stay up as late as necessary to get things done. And the really funny (or depressing?) part is that all the stuff I just mentioned…only took a few hours. I had organized my LLC, named the product, purchased the domain, and outsourced the logo design in half a day.
So while I waited for all the paperwork and logo design process, I followed through on my word to my suppliers and quickly put in a bigger order. This seems like a good time to mention another thing I learned about dealing with suppliers. If you promise them bigger orders and they deliver, be ready to stick to your word and act quickly and decisively. I have no doubt my suppliers lost money on the sample order and I wanted to build a strong relationship from the start. They went above and beyond for me, so I returned the favor. This supplier turned out to be one of the best I’ve ever worked with.
Next, I went to work on the website. I had no experience and since money was tight at the time, I had to build it myself. Again, this was the type of crap that I’d normally spend way too much time perfecting, so I decided to go with Wordpress and woocommerce. I basically let the reviews decide for me which theme to use and I hit the ground running. The only goal was to have a website that could accept credit card payments and a few pictures with some decent sales copy. Again, money was tight and I couldn’t afford a copywriter, so I learned and wrote it myself. I used stripe for my CC processing for no other reason than it was incredibly easy to setup. Again, I just needed to be able to take payment. Who cares about 1-2% processing fees when I still technically have $0 in sales?
This seems like a good place to stop for now…next post I’ll start with how I got the initial sales rolling and my biggest mistake which lead to a pivot that made the business viable.
Oh, and before I go here's two more random things I learned:
Since I was last active, I developed and launched my own product and just recently sold the business. Now my wife and I are taking a bit of time off traveling around SE Asia so I have some time to clear my head. I can get into the reasons I sold the business, but I think the more interesting parts are all the lessons I’ve learned along the way. So I guess I’ll start with that and then feel free to ask me anything below.
First thing most people have asked me…is how much did I sell it for? What was my revenue? What was the multiple on my biz valuation? And of course, how did I find the idea for my product?
The first three questions won’t do jack shit to help anyone, so I’ll start with the fourth one. I found my idea by working in the beer industry. I would do literally any job that related to beer. I cleaned lines and got sprayed with moldy beer…more than a couple times too. Yes I can honestly say I’ve had a golden shower…not the R. Kelly style, but still golden nonetheless. I delivered 160-pound kegs and drove sometimes 15 hours in a single day to make sure our growing sales numbers were actually fulfilled. All the while getting bitched at for the delivery being 15 minutes late. I swept floors, installed plumbing, served beers, made cold face-to-face sales calls. Basically, I did every job I could at least once.
The point of this story is simply that…ALL of my ideas came from my experience working in the industry. I kept a journal with me at all times and eventually had well over 100 different beer products, services, or software ideas. The key takeaway here is: if the reason you haven’t started yet is that you don’t have any good ideas…just go out and get involved in an industry (preferably a big one) and take any opportunity you get to learn something. Then, just keep your eyes open. The more important and shittier the job is, the better the opportunity.
At some point, I realized I needed to just shut up and do something. So I went through all of my ideas and marked off the ones based on three criteria.
- Would I actually stick to it long enough to give it a chance to succeed.
- Could I afford it?
- Did I have the know-how or at least access to the know-how?
And that leads me to my next big lesson. Product development can be VERY expensive and time-consuming. One of the biggest reasons I chose the product was because I could afford to launch it. I found ways to get through the development stages very quickly and cheaply. Basically, I found a way to use mostly off-the-shelf parts that I could resell if the product sucked. This actually turned into one of my product benefits since it wouldn’t cost a fortune to repair. So I spent about $200-300 bucks on parts and built a prototype.
I can’t remember whose term this was, but I love the word “ghettotyping.” At first, I wanted my prototype to be perfect and complete. But then I realized just how stupid that was. All I really needed to know is if the damn thing would work. So I scrapped all my plans to have special parts custom machined, and then just used zip-ties, duct tape, scrap wood, and stole key parts from other products…whatever would allow me to simply test my product. Luckily, it worked…and it worked better than I thought it would.
Great! Now I needed to figure out if it would actually sell. So I spent some time making a few more prototypes that looked decent enough to sell. I found some suppliers who were willing to do small sample orders. I promised to make larger orders if the samples worked. I guess I should also add that it took a very long time to find suppliers for a few key parts I needed. I had almost given up after several weeks of searching until I got lucky and found a picture of what I needed. I followed the link and voila, I finally found the manufacturer.
They didn’t make it to the exact specs I needed, so I asked and the manufacturer said they’d do it if I would buy at least 100 units (roughly $2500). I agreed if they would sell me a few samples to test first and a few weeks later I had the missing parts. Then I went out where I thought my customers were and demonstrated the product. Right off the bat, I had several customers willing to hand me cash….Now we’re in business.
Before this point, I never stopped to think about branding, what business entity should I organize, what kind of logo do I want, and when should I order business cards. These are the things I used to think about before I even had a product. Then someone on the forum slapped some sense into me and pointed out how silly this was.
This time was different though. This time I actually HAD a product and was ready to start selling. It was invigorating to finally get beyond the over-planning stage and I started to get really excited. I had tons of energy and suddenly I was willing to stay up as late as necessary to get things done. And the really funny (or depressing?) part is that all the stuff I just mentioned…only took a few hours. I had organized my LLC, named the product, purchased the domain, and outsourced the logo design in half a day.
So while I waited for all the paperwork and logo design process, I followed through on my word to my suppliers and quickly put in a bigger order. This seems like a good time to mention another thing I learned about dealing with suppliers. If you promise them bigger orders and they deliver, be ready to stick to your word and act quickly and decisively. I have no doubt my suppliers lost money on the sample order and I wanted to build a strong relationship from the start. They went above and beyond for me, so I returned the favor. This supplier turned out to be one of the best I’ve ever worked with.
Next, I went to work on the website. I had no experience and since money was tight at the time, I had to build it myself. Again, this was the type of crap that I’d normally spend way too much time perfecting, so I decided to go with Wordpress and woocommerce. I basically let the reviews decide for me which theme to use and I hit the ground running. The only goal was to have a website that could accept credit card payments and a few pictures with some decent sales copy. Again, money was tight and I couldn’t afford a copywriter, so I learned and wrote it myself. I used stripe for my CC processing for no other reason than it was incredibly easy to setup. Again, I just needed to be able to take payment. Who cares about 1-2% processing fees when I still technically have $0 in sales?
This seems like a good place to stop for now…next post I’ll start with how I got the initial sales rolling and my biggest mistake which lead to a pivot that made the business viable.
Oh, and before I go here's two more random things I learned:
- Failure is nowhere near as scary as we make it. If you're not taking too much risk, failure usually means you lose a little bit of money or simply waste a little time. And all the while you're learning...If my product failed, I could have sold all the parts on ebay. Or worst case scenario, I lose about $3k and a couple weeks of my time. Now that I look at failure this way, I'm not afraid of it anymore.
- The advice about sticking to one business/project at a time is spot on. It’s damn hard to juggle two projects at once and be exceptional at both. Either you get burned out or the value you provide starts to decline. In the end, one or both businesses usually suffer from the divided attention.
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