The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future (6 page)

Let’s stop for a moment and look at the concept of
value
, a word that is often used without much exploration. What is value, exactly? Here’s a basic definition:

In our context, an even easier way to think about it is:
Value means helping people
. If you’re trying to build a microbusiness and you begin your efforts by helping people, you’re on the right track. When you get stuck, ask yourself: How can I give more value? Or more simply: How can I help my customers more? Freedom and value have a direct relationship: You can pursue freedom for yourself while providing value for others. As we saw in the discussion of convergence, a business ultimately succeeds because of the value it provides its end users, customers, or clients.

More than anything else, value relates to emotional needs. Many business owners talk about their work in terms of the
features
it offers, but it’s much more powerful to talk about the
benefits
customers receive. A feature is descriptive; a benefit is emotional.
Consider the difference in the stories we’ve looked at in the chapter thus far. The V6 Ranch helps people “escape and be someone new.” Isn’t that more powerful than just offering a horse ride? Kelly’s private classes help busy female executives prepare for their day in a quiet setting, a much more meaningful and tailor-made experience than going to the gym with hundreds of other people.

We can apply the same thinking to the examples we briefly reviewed in
Chapter 1
. At its most basic level, we could say that Jaden Hair (founder of Steamy Kitchen) offers recipes on her website, but plenty of websites have recipes. A much stronger benefit, and the one that Jaden puts forward, is that her work helps families spend quality time making and enjoying delicious food. Similarly, Megan Hunt makes dresses, but that’s not the point: She also helps brides share in the anticipation, celebration, and memories of a perfect day. Who wouldn’t pay for that? The list below provides a contrast between features and benefits.
^*

This kind of analysis applies even to businesses that you might think of as boring or commodity-based. Michael Hanna (the mattress guy) talked with me about selling a mattress to a family with an infant and then seeing them return two years later with their three-year-old, who now needed to upgrade to her first bed. This kind of story, which Michael tries to communicate frequently, is much more interesting than talking about box springs or mattress ratings.

Overall, the more a business can focus on core benefits instead of boring features, the more customers will connect … and purchase. As you think about how to apply the $100 Startup model to your own quest for freedom, these three strategies will help.

Strategy 1: Dig Deeper to Uncover Hidden Needs

You might think it’s obvious that restaurant patrons don’t want to wander back to the kitchen and make their own meals, but sometimes what people say they want and what they actually want are different things. Kyle Hepp, a wedding photographer who travels the world from her home base in Santiago, Chile, learned that sometimes you have to look deeper. Kyle’s clients tend to be young and hip, and they’re drawn to her work because it is non-traditional. Sometimes they even say they don’t want
any
traditional wedding shots. “We’re not into old-school,” was how one couple put it. Kyle agrees and spends her time at the wedding getting fun, candid shots that she knows the couple will like.

But that’s not all. Having done this for a while, Kyle knows that what her clients want and what they say they want may be different—and she also knows that the families of the bride and groom may have preferences of their own. Here’s how she handles these competing desires:

Kyle goes above and beyond by giving her photography clients what they really want … even if they hadn’t realized it themselves.

Strategy 2: Make Your Customer a Hero

In India I heard from Purna Duggirala, who said that he operates a training business to “help people become awesome at Microsoft Excel.” Microsoft Excel doesn’t interest me much, but Purna’s financial details caught my attention: In the “Last Year’s Net Income” column on my survey form, he had written $136,000. A salary like that is impressive where I live, but I’ve traveled enough to know that in India it’s huge. What’s more, Purna was on track to earn more than $200,000 the next year, his third year of operation. His customers were big fans. When I Googled him, I found a comment that said he was one user’s “BFF for Excel,” his best friend forever. What was he doing to attract such a response from spreadsheet users?

Purna started his website several years back, but for a while it only contained posts about his family and life in India. In 2009, he settled in and got more serious, chronicling a series of tips and tutorials about using Excel to become more productive. Crucially,
he didn’t target Indians, but instead reached out to interested prospects all over the world. He also didn’t depend on advertising revenue, something that very few people in our study mentioned. Instead, he created products and services himself, offering downloadable guides and an ongoing training school.

He was also a good copywriter. Updating spreadsheets can sound like incredibly tedious work, but Purna positioned the core benefit away from numbers and toward something far more powerful: “Our training programs make customers a hero in front of their bosses or colleagues.” Not only would their work become easier, Purna said, but other people would recognize and appreciate them for simplifying a complicated process.

A former business analyst, Purna quit his job when it became apparent that he would earn much more money with the new business. Despite having such a high income in India, Purna and his wife continue to live frugally. “We are in a position where we would not have to worry about money for lots of years to come,” he says. Even better, new customers arrive every day from Google searches, mainstream media coverage, and hundreds of links. “If I wanted to turn it off,” he told me, “it would be very difficult.” Take it from Purna: If spreadsheets can be made sexy, surely any business can find a way to communicate a similar message.

Strategy 3: Sell What People Buy

In deciding what to sell, the best approach is to
sell what people buy
—in other words, think more about what people really want than about what you think they need. Perhaps a story of my own failure-to-success progression will help illustrate this principle. Early in the life of my business, I created a project called Travel Ninja. Since I’ve been to more than 150 countries and regularly fly more than 200,000 miles a year, I’ve learned a lot about getting
from place to place on a budget. Travel Ninja would be a guide to illustrate how it all works—how to book round-the-world tickets, how to take advantage of airline mistake fares, and so on.

As I surveyed my audience, the initial response was encouraging. Plenty of people said they were excited and wanted to learn about these topics. A previous launch for another product had sold five hundred copies right off the bat, so on the big day I dutifully got up early and updated the site to make it live. Then I waited … and waited. Orders came in, but at a much slower rate than I expected. At the end of the launch day, I had sold only a hundred copies—not terrible, but not great either.

For several weeks, I was puzzled by the low response. The feedback from the customers who purchased Travel Ninja was almost unanimously positive, but so few people had purchased that I knew something was wrong with the messaging. Finally I figured it out: Most people don’t care about the intricacies of how airlines work; they just want to know how to get cheap tickets. My prospects who didn’t buy felt overwhelmed by the details and complexities. Like the overeager chef at the beginning of the chapter, I was trying to take them into the kitchen with me, not just giving them the meal they wanted.

Ah-ha. Lesson learned. I regrouped a year later with another travel product. This one was called Frequent Flyer Master, and I did everything I could to make it more accessible. I even used the previous experience as part of the sales copy: “Maybe you don’t want to travel to twenty countries a year like I do. But if you could go to
one place
for nearly free, where would it be?”

This product did much better, selling five hundred copies on launch day and going on to produce more than $50,000 in net income over the next year. The success was also quite a relief, because for almost a year I had wondered whether people would
buy information about travel. Thankfully, they will—if it’s packaged properly in a way that meets their needs.

Another year later, I applied the lesson even further: The most frequent request from Frequent Flyer Master owners, who otherwise loved the product, was for more updates on late-breaking travel opportunities. With that in mind, I created the Travel Hacking Cartel to tell people exactly what to do to take advantage of deals all over the world. The careful message this time was: Don’t worry about the details; just do what we say and you’ll regularly earn enough miles for free plane tickets every year.

This launch did the best of all—more than three thousand customers joined on the first day. I had finally figured out how to give my customers what they wanted.

As I learned from my early mistakes, homing in on what customers really want from a business is critical. Simply put, we want
more
of
some things and
less
of others. In the “More” column are things such as love, money, acceptance, and free time. We all want more of those things, right? In the “Less” column are the undesirables: things such as stress, long commutes, and bad relationships. If your business focuses on giving people more of what they want
or
taking away something they don’t want (or both), you’re on the right track.