« Side Hustle School

#624 - Weekly Recap: Crowdfunding Is Not a Business Model.

2018-09-16

In our thirty-seventh recap of Season II, we'll highlight the lessons learned in this week. Also: listener Q&A!

Side Hustle School features a new story EVERY DAY of someone who started a hustle without quitting their job. You’ll learn how they got the idea, how they overcame challenges along the way, and what the results are.  Share: #SideHustleSchoolShow notes: SideHustleSchool.comTwitter: @chrisguillebeau

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Hello, hello! What's up welcome to side US law school? My name is critical about over here we have just finish: weak number. Thirty, seven of season for those living in real time itself, MID September, entering the fall at least in the northern hemisphere and yeah. So much has been happening. So much more is on the way to talk today about how Proud funding is not a sustainable business model. Have some comments from somebody? who is on the show long ago and actually raise more than a hundred thousand dollars through crowd funding, but is finding its it's, not all its cracked up to be, or at least it's a good starting point, but it does not make for a sustainable business model. As I said, we will ensure that a bit more also got an update and audio from a previous side hustler about how optimizing one project or path can be more profitable than branching out. So some interesting little practical points about conversion rate in that update, so a very practical way
To recap: for you all around today now this week my favorite episode of the show I mean I just gotta, give it away too rise and fall and rise of bird supplies, dot com- I hope you enjoy- that went to its fun in so many ways to look at and e commerce site. It's been around for twenty years, making up to two hundred fifty thousand dollars a year before being penalised by Google and then going down to fifty thousand dollars and then and then regrouping in deciding to specialise in parrots. Just a crazy story. I didn't get a chance to listen to it. That was episode of six eighteen, a toxin whereby some other episodes later I wanted to mention when at the top of the show, because you know the rise and fall of bird supplies- I also this week or actually earlier this year, but it relates to this week. Earlier this year I participated in an onstage conversation in New York City, all about philosophy and how to make your life suck less. This conversationalist, my part of it, focused around my days as a failed pizza delivery. Man
Of course, we went on to some other topics as well anyway. That conversation is now part of a new pie cast which just launched a few weeks ago, and my part when up this week, if you to check that out, it is called the happier our you can look for the happier our in apple pie casts or wherever you listen. If I or just go to the happier our dot org. Ok, let's talk about why you should beware of Kickstarter campaigns. In fact, beware of successful, Kickstarter or indeed go go or other crowd funding campaigns. I got this note this week that I thought was really interesting it's from one of the people that we featured on the show a long time ago. A bachelor got a different update, coming in audio form in just a moment in the next segment, but this note came to me by email or going Bacchus, as you may know, and getting all about dates to see what happened with people whose projects we featured in the first year. The show now this person had a very successful crowd funding campaign when they ended up raising about a hundred thousand dollars. Let me just share a few why this person says I'm just gonna, keep it anonymous in this case
as they're kind of figuring out what to do next and how to touch every group in their business, and this person says a revenue for your one was right above a hundred thousand dollars. We were profitable almost all this money, ninety percent waste generated through that original Kickstarter and then a follow up camp we got a rude awakening when we got off the Kickstarter platform, which did some amazing marketing for us and try to sell our products in the big wide world. The product doesn't market itself and we don't have the same capacity. That Kickstarter does a sore trying to figure out where to go from here. So to me, this suggest a couple of things in first or I appreciate that person allowing us to show the update Hopefully all will be well, but to me it illustrates crowd. Funding can be a wonderful tool for launching a product, but it's not a business model on its own, okay, so you're thinking about going that direction with your business, your product, you know you have to ask yourself. Will you do after the hype dies down like. Let's assume you do have a successful campaign. Maybe it's a hugely successful campaign like this person with a hundred thousand dollars.
Well still, thus greatly always need to be asking yourself like what lies on the other side. What have when I'm not kidding this attention- and this could also applied anything else that is bringing your business or your idea a lot of attention, but then it is ultimately going to be time to find is a campaign it's not going to continue forever. So just something think about your own ideas and also, whenever you hear stories about people, doing crowd, fighting campaigns based really happy with the money they raised. That's great, but always be thinking like ok. What are they gonna do when that money isn't coming any more? Last but not least, on this point, most successful crowd funding campaigns. These days it doesn't happen by magic. So, in the early days it was easy just like with any model, like when any kind of internet thing is new. In the early days you could crap on your lunch money. He everybody. I would like you to have to support. My might you know journey to have lunch at a nice restaurant. You know I do that you have to have much much more of a compelling reason and lots of of facts and in video and everything about it, kind of things,
so when you hear the stories of somebody with a successful campaign know that there is most likely a lot of work behind that process, and I mean to take anything away from people who ve done that. I just want to say, as the story kind of illustrates, we should think about what comes next. The idea in cloud is the cloud it's open that secure its built through business. It's also the cloud its leading the way, but don't take our word for it. Just gonna appear insights to see my customers mate, IBM Cloud above ADA, the? U S? Google cloud and Microsoft Azure over the last twelve months as February twenty Eightth, twenty twenty IBM, let's put smart to work, Gardner Peer Insights reviews constitute the subjective opinions of individual end users based on their own experience. And do not represent the views of Gardner or its affiliates are now a blast from the past segment. We ve got a short will update from someone featured,
so in your one of the show, unless hear directly from him, he's got some really interesting comments, as well as a big success to report so over to Scott they. This scumbag is from Charleston, South Carolina in my site also is strings, find your call mugs, Toby, Toby Debbie, that strength smokestack com and it was featured on episode number forty seven. So since the podcast epoch, we have tripled ourselves and our products, or even featured at a gallop strengths summit in Omaha Nebraska this past summer. My advice to other listeners for quite a while I had been so with only a few thousand dollars in monthly sales. Until I got some help from an e commerce expert, he looked at the metric My online store and noticed that I had a high Conversion rate, I was converting six percent of the traffic to my online
store which was much higher than the industry average of two percent for E commerce sites. He said all I need to do is Dr Weir traffic, so we started drugging traffic with Facebook adds, which has led to three x growth in sale, is the past six months. Big lesson learned for me to get to the next level any day round yourself with people who have achieved what you want to achieve, what I'm working on now. My big goal now is to read ten thousand dollars a month, sales by the end of two thousand and eighteen awesome sky. Thank you. So much for assuring that update congratulations on such an increase of six percent is indeed a very John Conversion rate, may make sense that an expert looked at that and said You know you're you're, converting, really really well, let's find a way to get more traffic to your site so that you can have more sales. Now, here's the thing when you use pay traffic. This is kind of some comments or advice for everyone when
use paid traffic. The conversion rate is usually going to go down because people who are coming to your site, organically or through some kind of referral or word of mouth or some kind of promotion that you ve done our naturally going to convert better than people who are coming interface. God's or Google ads or otherwise having no knowledge or no association with your business rights of those people are going to convert less. But if you're, in a situation where you have that really strong conversion rate, you can afford for it to go down and still make money, because in his case like I don't, I don't know the specific number, but if it dropped from six percent to three percent. For example, even but dropped and have he can still make money if he's paying less for the ads than what he's receiving you know, other end from those who do purchase. So hopefully this shows white, so important, a compelling offer and to work on increasing you're conversion. Because then you have a lot of options you can go out and do that that paid marketing is conversion rate was not grades and he went on it.
Marketing is copied just kind of throwing away money, but fortunately this case he's not because he smart. So once you have a product for sale, keepin monies to main pathways to increase your income, one you can focus on increasing the converse, right by maybe running the copy or getting some better photos taken or meeting with some focus groups, are just now emailing people and asking for their feedback and asking what they didn't understand about the offer or you
and focus on what he's done here, which is getting the offer in front of more people. There are also some other options, including raising the price right, because if you raise the price in the conversion rate stays the same, then your national gonna make a lot more money, but in this case we're talking about either increasing you're conversions or getting the offer in front of more people. In his case, he had the strong conversion rate, so we focused on getting the offer infinite more people and sounded like he's doing pretty well. So congratulations! That's really great Scott and everybody else. Yonah follow along with him and check out what he's doing you can go to strengths, mugs, dot com. When I went there, I just noticed that you have to put in strength mugs with a plural strength. Mugs is taken by somebody else who is undoubtedly trying to play off of his success and strength.
Dot com redirect to strengths find your coffee, mugs dotcom, so that that was interesting. I will include a direct link in a show needs to make sure people go to the right place more these to come. We always love hearing from people who have been featured on the show, as well as those of you who have been listening for awhile, perhaps learning something and maybe applying it in some way. If you have something you want to share with us definite, let us know can give us a car in the hustle hotline can also ask a question there in the months to come here and we fishery more questions attempted answers by myself that Hotline number is eight hundred and forty four nine hundred and eighty eight four hundred and forty nine four thousand four hundred and eighty four forty nine four hundred and eighty seven thousand eight hundred and fifty three or we can also make a little voice memo on your phone and evil eye to podcast, cast, etc so Skoda COM. You can, of course, also just email. I always live hearing what you're up to your successes, as well as your challenges and your obstacles, because that is the side hustle journey. A lot of the joy is found in working through the process.
Speaking of process. Looking back on this week's episodes, so here's a question for you when you think about your skills, your strength, I would have a hard time saying or it restricts, got it thinks that you're good at or what you like to do. Are you better and optimizing process, or are you better at the bigger picture? Now I tend to be better
Your picture myself, I'm actually not super detail oriented. I need to get some help when it comes to details and building systems and all that. But this week stories illustrate how thrilling down and improving a single product are pathway can lead to profits, are sometimes a lot more profits, then just starting new projects or are being pulled in different directions. I think actually almost everyone. These episodes illustrates that in different ways, specifically episode, six eighteen, six, nineteen and six twenty two now you might be commuting or at the gem or somewhere, where you can actually pull up all these episodes. That's the whole point of by cast so just in brief. Six eighteen was once again squawk the rise and fall of bird supplies. Dot com, her original project was selling all kinds of bird supplies to all sorts of bird owner
and she chose to just sell supplies for parents, and then she really chose to focus on problematic parents, which was the whole thing I didn't know about, and parents for your plucking up their feathers and creating like a whole library of E books, all about improving your parents, mental health, so really drilling Donna getting specific, come then six nineteen, I love that story as well. London for
I prefer rents camera gear eleven hundred times. This is someone who is using the gig economy or the peer to peer sharing economy. Whatever you want to call it where people are lending out there, there cambric your computer equipment, other other kinds of physical items to other people. This guy has has completely optimize the process, so most people when they do that, it's just for extra cash he's found a way to make tens of thousands of dollars doing it. So it's actually a real business using a simple network that anyone can register on today and start renting out stuff with so super successful it optimizing there in the last one dimension is six twenty two: when the rubber hits the road, this Mama three earns five thousand dollars a month. That story was just a couple days ago, and it was all about Tom, this woman in Texas, Susan Interior designer and she starts a shop selling rubber stamps and some other items to about rubber stamps. His is a big thing and she's trying to stand out because lots of other people are selling rubber stamps and the tweak that works for her. After trying lots of different stop the twig.
She changes the color on the handle of a rubber stamps and ends up no skyrocketing your business to five thousand dollars a month. She does something else that is bringing in additional twenty thousand dollars. So again, it's all about optimizing, so the real money is in improving the process. If you compare this to the anecdote, the court at the top of the episode that person he raised thousand dollars from Kickstarter. But then I realized belatedly, but they didn't really have a business. You know. Viral attention is not a business model, all the things that people are doing in these episodes this week. That's what makes for a business model, at least if you want something, that's gonna, be sustainable. You want something is predictable and consistent, drawing down into the foundation is gonna, be your pathway to profits. While my friends, I hope have been enjoying side school, I very much working on it and I believe the best is yet to come here in my wrote, I've been wrapping up a book manuscript. I'm excited to tell you more about it soon and am also excited to be done with it. Just because I have so much more, I want to focus on one side of the school. I may mention that last week. Well, it's it's still in process,
but something I'm thinking about every day, and I am grateful to everyone who is a part of this journey, much more to look forward to so coming up on the show next week on a whole other set of good stories, including something about a nutritional, something about it her something about a running shoe guru and something about hots us all kinds of stuff, their per usual. Now before I sign up for the week, I want to say thank you to you. First of all, our listeners you're. The reason we make the show I want to support you fully in your question, create that new source of income for yourself, perhaps even thinking about aside also for awhile, perhaps you started and you got sidetracked or Europe, to some difficulty or obstacle or challenge. Maybe you'd. You already have a bunch of dinosaurs, new figuring out how to optimize or what to start next, wherever you fit into that makes. Thank you for being part of this community. We make the show every single day and I'm definite, not the only person working on it. So you hear my voice, but there's lots other people it making
possible, including our senior producer, Ac Valdez, our continent manager. When koranic assistant producer, Sarah Beret Community LAW is Anja, Chang official show cat. Let me give a bow, and probably some other folks to it, takes a village. All of us, a team, cider school, are part of the onward project that is led by best selling author Gretchen Reuben. You can learn more that at the hour project. Dot, com and, if you do enjoy it by the way, if you enjoy the show its pre its daily at short because respect your time. I know you got lots of stuff going on. I know you're busy, but if you want to help out, you can tell your friends to show them how to subscribe. If you know somebody who needs another source of income, we want to take care of them, so send them to us. And also be amazing, if you could give us a quick little rating and review and apple pie cast it just takes a quick moment and will help other people discover the shop but most important. I want you to do something for yourself. That is what this is all about: it about freedom, it's about creating options, impossibility for your life. It's not about taking a huge risk, is not about walking away from your job tomorrow. It's about building something for your future. Whatever you invasion that to be, that is our goal. That is our
single minded mission every day. So I hope you'll join me tomorrow, every day next week with more stories and act Well ideas. Consider this an investment in yourself, a short little investment in yourself are episodes, go online, six or one a m eastern time everyday. Once again, my name is critical about, and this is side also school.
Transcript generated on 2020-04-28.