the goose

If you want to avoid competing on price – come up with a USP (unique selling point). This is the mantra of modern marketeers. You need to have some point of difference that marks you out from your competitors. It can of course be tricky to come up with something that makes you unique. While most will claim “better service” or “cheaper prices” as a USP – really these don’t cut the mustard. The acid test for your USP is to ask yourself this question. “Could my competition reasonably make the same claim as I could?”. You’ll find that even seasoned professionals start to splutter if you put that question to them. Few really have hammered out a unique proposition.

Herein lies a common mistake for newbie business owners. They chose a proposition which is so unique – it does not yet have a market. This is where a second acid test needs to be applied. Let us suppose that you have recently secured a 10 year patent on “rose-petal perfumed nappies”. Fantastic. Surely everyone would prefer to smell rose petals compared to the alternative. Patent in pocket – you can be assured your competitors cannot make the same claim. The second question to test your idea by is “Is your product being sought out by people with money to spend?”. Now given you received your patent – it is safe to say that no one else has been looking for this. They will when they know it exists. In that case though – all you have is an idea. A good idea – but an idea none the less. I’ve written before on what an idea is worth. If people are not seeking out your service you don’t have what the experts call a ‘route to market’. No one is googling for it. This means you have to educate your market. This increases the cost and reduces the value of your idea.

So where is the sweet spot? To be in a category that people are aware of – without being completely off the radar. People go searching for plumbers online – but don’t often go looking for nappies there. Come up with an innovative twist (something with value that your competitor cannot lay claim to) in a category which people have heard of before.

Omakase is Amazon’s web robot that adds ads to my website based on what it thinks people would be most likely to buy. I signed up as an amazon affiliate to learn a bit more about how these schemes worked – but ended up learning a thing or two about myself. First off- it seems to think – that because I have a .ie domain name – my visitors would like to buy schmatlsy DVD’s such as “The Wind that Shakes the Barley”. Much as I might cringe – I guess it is a pretty good film. Their top recommendation was “A Love Divided”. I haven’t even checked that out but it sounds like a tale of one womans fight against all the odds. Chick lit etc. Anyway – neither really represent how I would like to be presented but I’m taking this feedback on the chin. Maybe if I put a bit more work in I’ll get some more glamorous recommendations.

As a software engineer – the biggest contribution that I get to make to the world is to help one faceless corporate structure screw a few extra million out of some other faceless corporate structure. Unlike firemen or doctors we don’t get to ‘make a difference’ that often. This is of course just fine for the most part. Few people do – but it does begin to wear the soul a little after a while.

A few months ago – I was at a meeting where someone stood up in front of about a hundred people and started to explain why they were investing in property. He was currently working for a large telecoms provider here in Dublin and was all too good at his job. He had a position with lots of responsability. He hated it. On the side he was investing so that he could ‘give up the day job’. So what? Well – what made this guy different was that he had something really worth while to do with his time when he did manage to get enough money coming in from his investments to fund his expenses. He wanted to build a hospital in Uganda.

He was asked when he was going to achieve this – and after some awkward questions – it finally emerged that he couldn’t leave the job – no matter how worthwhile the end game – merely because of the few grand a month he needed to pay the mortgage. It struck me as real waste. Here was a guy with what sounded like a fantastic drive and ambition – thwarted by something as mundane as a mortgage. So where is this going?

Cut to a few months later at the first mastermind group – where I had produced a ready reckoner showing the number of people you would need to have to have paying you monthly to meet your monthly financial commitments.

Along the left hand side is the monthly cash generated . Along the top is the number of ’subscribers’. You quickly see how many subscribers – paying what sub – are required to build what cashflow.

The striking thing is – to create a cashflow of 2.5k euro a month (0r 30k a year) – all you need is 50 people paying 50 euro a month. In other words – if this guy could get 50 people to donate 50 euro a month – for as long as it took – he could dedicate his time to building that hospital. It seems like a trivial amount. Of course – there is a lot more to it than that. Still and all – he could at least start raising funds etc to get it built -full time. Now consider all the worthwhile tasks in the world that don’t get done simply because there is a mortgage to pay. Kids who grow up not knowing their mothers, community play grounds that never get built – world hunger etc. There are thousands of people out there with worthwhile objectives for their lives who are trapped in a 9 to 5 .

There is another way however. Recently – while listening to Rails Envy – a computer nerd has offered up his time to work on open source community projects in return for 8k of funding. The guy will put aside his professional and personal work to work for the community of programmers that are involved in the Ruby programming language.

What a great idea. Why aren’t more people doing it?

So here is my pitch. I would like to build a website facilitating this type of activity. This is what it will do

• Allow people to post up their ‘pitch’. In other words – upload text and images explaining what it is they would like to do – how long it will take – how they plan to do it etc. This could be anything from cleaning an apartment complex to creating world peace.
• Supporters will be able to ’sign up’ and sponsor the mendicant for as long as the project lasts.
• Once the requisite number of supporters are signed up – payment will flow from the credit cards for the supporters. This will be handled by paypal, worldpay and other online money transfer systems. The website itself will not have any part in handling the money other than to allow supporters to manage their subscription (ie: stop payment, increase, decrease payment)
• The mendicant can then blog and email his/her supporters weekly/monthly/daily with progress on their project. If the supporters feel like they are getting value – the payments continue. If they don’t – they can end the sub.

So how can you help? Well – I will commit to building this website and promoting it. I am looking to prove the pudding by eating it. In other words – I am looking for a pledge from 50 people to pay 50 euro per month for three months until the site is finished. My vision is that hundreds or thousands of people can be given the opportunity to do something really worth while – supported by people who wish they could do the same but in the mean time would like to help out.

What can go wrong with this? Well – there may be all manner of legal issues to be tackled. I am pretty sure that I can get the site built easily enough – it is just a question of getting the marketing right. I have some experience with online marketing and better still – some great friends (you know who you are) who can help with this side of things. The major challenge would be to figure out how to get the word out. That is something you can help with be forwarding this mail to someone you think might be interested. Another way you could help is to pledge 50 bucks for 3 months in a comment on this blog post. If I get 50 people signing up – we’re up and running. That is 150 bucks in total. At the moment – you can’t manage the subscription etc and I will have to keep you up to date by regular old email. For this reason the donation is all upfront. This hopefully won’t be a problem once the site is built! If I don’t get enough people to buy in – I’ll just refund all the money. I’m sure there other T+C’s I should be thinking of. Leave a comment if you can think of anything useful.

Why don’t I just build it pro-bono? Largely because I want to see if this will work. As it happens – I can’t really afford the time with all manner of mortgage / rent and even tax man breathing down my neck. I do promise to work damn hard on it though – and not waste a penny.

Giving in is not something we were brought up to believe in. If you are ‘go gettum’ enough to start a business in the first place – giving up shouldn’t be something that comes easily too you. Some might tell you that “it is often darkest just before the dawn”. Sage advise if you are perched on top of a 10 story building contemplating armstand back double-somersault with one and a half twists in the free position.

There is however one far more scientific approach to deciding whether or not you should give up on a project – compare. If you don’t have another project on the go – start one or better still – find someone else who is running something similar. Not necessarily in the same niche – but certainly with some of the same attributes. If you sell sailing e-books online – find someone selling ebook bibles. If they are coining it while you are still counting the pennies – you might just be in the wrong niche. Of course comparing your strengths with someone else’s weaknesses might be enough to tip you over the edge.

When you do find something to compare with – crack open your KPI’s (number of hits, conversion rate etc) and see how they stack up. If both projects are yours – cull the weak one – or at the very least stop using your time on it. Rather than spoil the project that is going well for you. Thats what I’m about to do right now. Now where did I put that shotgun?

The allure or a ‘brilliant’ idea is something else. You can just about picture how – with the right idea – you don’t realy have to work that hard – the idea can do the work for you. If an idea can make you a fortune, then surely the idea itself is worth a fortune?

Not so of course. The reason for this is that it comes down to good old fashioned supply and demand. How many people do you know with a good idea for a brilliant product? If you haven’t – take a Dublin taxi some day and you’ll catch up real fast. The place is coming down with opinions on what would people would buy. Therein lies the problem. The supply of ideas is actually pretty plentiful. The problem is finding the idea that can be implemented successfully. Then of course – when you have found it – actually carrying it out is where 99% of the real work goes on. Take a look at your average patent licensing fee to recognise that.

You need to harvest thousands of ideas before you’ll find one that is worth while. You can take the effort of finding that idea (in terms of time) divide it across all the ideas out there and you end up witha reasonable valuation. Let us say that there are 100,000 ideas with the potential to generatea cool 1,000,000 in clear profit every year. Admittedly – such an idea is probably more rare than one in 100,000 but we’ll put that aside for now.

So you’ll have to wade through all of those other ideas to find the one that will hit the big time. Assuming a 5x profits valuation on the end cashflow – you need to divide 100,000 into 5,000,000 to come up with its value. That turns out to be €50 per idea. Thats €50 for a million dollar idea.

Undeterred by sleep-deprivation – Saturday was my second ever brainstorming session on automated income projects.  We upped the ampage a bit this time and I invited a selection of guests and shelled out some hard earned sheckles for a meeting room in Dublin.  I had originally intended to hold the event in the office but I got worried when people actually started accepting my invitations.  It would have been a bit too cosy in the Goose HQ boardroom.

I have been giving a variation on the ‘automated income’ spiel for about six months now.  I spent some more time on preparation this time around but found reading from a script a little awkward.  That aside though – the whole thing went pretty well.  We had a good mix of people in the room including

• An IT support expert
• A journalist
• Someone running a ‘Virtual Assistant’
• An accountant (who dove in and presented part of the session)
• My darling Priscilla

All told – we did pretty well.  There was a fair bit of heavy lifting at the start while I introduced the different ways you can create a cashflow online.  We followed up by looking at how it all compares to other forms of investing – and finished off with a brainstorming session akin to the last I’ve mentioned on this blog.  All told the feedback was pretty good although I need to brush up on my time keeping.