Category Archives: Entrepreneurship

January 2017 Angular on Rails Income Report

In January I made $371, according to Stripe.*

*It seems like Stripe can be a little bit inaccurate since it always gives me the total sales number including sales that later got refunded. I had one or two instances where people got charged twice for some reason, so I had to roll back the second charge. There were also a couple people who wanted to pay me via PayPal, so those two things roughly cancel each other out.

Here’s my income for the 6 months Angular on Rails has been making money:

– August 2016: $868
– September 2016: $1053
– October 2016: $1580
– November 2016: $871
– December 2016: $428
– January 2017: $371

You can see a clear downward pattern. Why has revenue gone down? I think the simplest answer is that I haven’t really done anything to make it go up.

Let me talk about what I’ve done since January 1st. Keep in mind that I’m writing this on February 23rd.

A little after January 1st I offered a free training program. I sent out an email to my list of about 1200 subscribers and gave them a link to apply. To my great surprise, over 110 people applied for the free training. That’s almost a 10% conversion rate. Insane.

I told my subscribers that I would choose 20 students in order to keep the class size down, and that’s what I did. I think only about 16 students were able to join because there were time zone challenges. The format was a once-weekly 90-minute webinar. If I remember correctly, almost all of them attended the first session, but only 5 or 6 of the students stuck with it through the end.

I attribute the attrition to the facts that a) it was a free program and b) I had some really serious technical issues during the first session and had to push the whole program back a week.

Anyway, the class went reasonably okay. I plan to do it again. Next time, I plan to provide the students with videos that they can consume on their own time. The “live” time will be more of an office hours type thing as opposed to me just lecturing, which has very little benefit over a video. I’m very glad that I did this free training program before I tried to offer a paid one. I don’t think people would have been very happy if they had paid $X00 for the program I delivered this time.

Another thing I did recently was to pay for a book cover redesign. Here’s the original cover:

jasonswett2d

And here’s the new cover:

winning cover

I got the original off of Fiverr for $15 (IIRC) and the new one off of 99designs for around $550. (I think I overpaid but I’m happy with the end result.)

So, not much of the stuff I’ve done so far in 2017 is stuff that really directly drives sales.

Here’s what I think I need to do next. I have a $39 ebook that converts at a decent rate. Nobody right now is buying my $89 or my $299 product. I think the thing I need to do next is get my $89 product selling.

One obstacle is that I believe my $89 product to be outdated and kinda sucky. It’s hard to persuade people to buy a product I don’t really think they should buy. So I need to refresh the product. Second, I need to do a better job of presenting the $89 product on the sales page. If you give me $89, what exactly do you get? Right now the answer isn’t very clear. I need to make it more clear.

Once the product is refreshed and I make it better-presented on the sales page, I plan to re-launch the $89 product. When I originally launched the video package in October 2016, I made about $1600 that month, and at the time I had about 900 subscribers. Now I have closer to 1400 subscribers, so I think I can expect some pretty good launch sales.

I’m teaching an Angular 2 class in Bulgaria in two weeks and I need all the time I can get between now and then to prepare. I plan to do the $89 product refresh and relaunch when I get back. I’m giving myself about two weeks to do it. My deadline for relaunch is 3/23.

December 2016 Angular on Rails income report

In December I made $428.50. Here’s the full financial history over the months:

– August: $868
– September: $1053
– October: $1580
– November: $871
– December: $428.50

Like in November, I didn’t do much in December to try to make Angular on Rails make money. Instead I spent some time fixing some foundational issues to prepare for long-term success. Now that I know Angular on Rails is something that can make money, it’s no longer premature for me to invest serious time into things like making the site look good.

By the way, you might wonder why December’s figure is so oddly precise compared to the other months. That’s because my new payment plugin allows me to charge percentage discounts, not just dollar amount discounts.

November 2016 Angular on Rails income report

I’m gonna try to bang out this post as quickly as possible.

Income in November was $871. Let’s look at that next to the other months:

– August: $868
– September: $1053
– October: $1580
– November: $871

As you can see, November was the first month where revenue went down instead of up. I believe the main reason for this is that I didn’t really do anything in November to make revenue go up. I didn’t do any launches and I barely communicated with my list at all.

Frankly, I don’t have any plans to necessarily do much in December to make income go up either.

I recently hired a business coach who I think I’ll keep anonymous. He’s not really a coach, just a successful person I know who I believe can help me.

In my first call with this coach who I’ll call “B”, he shared two opinions with me that I found kind of surprising: a) my conversion measurement is woefully inadequate and b) I should get off of Gumroad in order to have a better ability to track sales. Now that I see these things, they’re obvious. But I never would have found them myself. This is the exact reason I wanted to hire a coach and the exact type of outcome I hoped for in our call.

B also suggested that I add a content-specific opt-in to each of my 8 or so most popular blog posts. Right now I’m getting about 40 subscribers a week or 120ish a month. Based on my traffic, B seems to believe that I can and should be getting more like 500 new subscribers a month. That would of course be good.

So my priorities right now are:

1. Get adequate conversion tracking set up
2. Add some content-specific opt-ins to my most popular posts
3. Do a few certain other things to improve my landing pages/sales pages

So I expect revenue in December to be pretty low again, probably even lower than in November. But then I’m probably going to expect January to look more like October or even better.

October 2016 Angular on Rails income report

I decided to do an income report for Angular on Rails for October 2016. I haven’t officially done this before for Angular on Rails. I don’t know if I’ll end up making it a regular thing or not.

In case you’re not familiar, Angular on Rails is a site where I teach Rails developers how to use Angular on top of Ruby on Rails applications. I started the blog in 2014 but didn’t start making serious attempts to monetize it until April 2016, partly because I couldn’t think of a good way how.

In April 2016 I went to MicroConf where some conversations I had made some lightbulbs come on in my head. In June I pre-sold seven copies of Angular for Rails Developers then released the book on August 30th, 2016.

My revenue in those last couple days of August was $868 and in September I made $1053.

On October 25 I released a $199 book + video package which I sold on launch day at a discount of $99 (and, if you had already bought the $39 book, $60). My total revenue in October ended up being $1580.

To sum up the months it has been:

  • August: $868
  • September: $1053 (18% growth over August)
  • October: $1580 (50% growth over September)

My goal for November is $2000 which would be 27% growth over October. I had previously set a goal of $3000 for October which I didn’t hit, but 50% growth is still “better than a poke in the eye with a sharp stick”, as my grandpa used to say. I decided to adjust November’s goal to something less ambitious, partially because I don’t plan to launch any new products in November.

I’m not completely sure where I’ll turn my attention next. I like to think about next steps based on the health of the various steps of my funnel. The first funnel step is traffic. I think I’m good on traffic for the time being. Traffic has historically been 5,000-6,000 visits a month. In October it was about 7,900 visits even though I haven’t been doing anything to actively try to improve traffic.

The next step in the funnel is to opt into my email list. My opt-in conversation rate last month was about 22%. That’s pretty good.

There’s also the conversion rate from subscription to purchase. According to Gumroad I made 40 sales in October and according to Drip I got 270 new subscribers. That means about 15% of subscribers went on to buy something. That actually strikes me as pretty good.

A little while ago I read something interesting Pat Flynn wrote. He said if you want to double your sales, double a conversion rate. It seems kind of crazy but it really is that simple. You can double any conversion rate in your funnel and it will result in a doubling of sales. So maybe the question is: out of all the conversion rates in my sales system, which could be increased with the least amount of time and effort? That’s hard to say. 22% and 15% are both pretty good conversion rates. But I guess that’s not to say they couldn’t be improved. It’s hard to imagine doubling them though.

So far I’ve pretty much only talked about sales and marketing. There’s also the necessity of maintaining the product itself. There are some certain aspects of the book that I’m very unhappy about right now. For example, the material covering authentication is incomplete.

And there’s also the consideration of keeping my list warm. I haven’t been emailing my list nearly as much as I should be. And in order to email my list, I need to have something worthwhile to say. Putting together a worthwhile utterance usually takes me a pretty large amount of time since the nature of my material is such that I can’t just spout it off the top of my head like I could with, say, freelancing advice. There’s research involved. So I have to somehow fit that in.

And speaking of freelancing, that’s what takes up most of my time. For a while I was allocating about an hour a day to working on Angular on Rails, although lately I’ve been barraged with client emergencies as well as sales conversations too good to pass up, and both those things have swiped a pretty huge amount of time from my plate. So I have to get my schedule back under control, and once I do I have to fit all this stuff inside an hour a day.

Perhaps I’ll spend, say, three days a week developing my educational material and three days a week on sales and marketing (Monday through Friday plus an hour on Saturday mornings).

It’s interesting how the nature of the challenge has changed over the years. When I first started with attempts at a product business, the challenge was that I had literally no idea what to do at all. Now the challenge is that I think I know exactly what I need to do, I just don’t know the best way to prioritize. Like Dan Sullivan said, “The skills that got you out of Egypt aren’t the same skills that will get you to the promised land.”

What you should do after MicroConf 2016

This is a post written specifically for those who attended MicroConf 2016. If you run a bootstrapped software business and you haven’t been to MicroConf, do yourself a favor and get on the waiting list for 2017.

It’s natural to think of a conference as a series of talks. As you already knew or surely discovered at MicroConf 2016, the most valuable part of any conference is actually not the content of the talks (although that’s great too) but the relationships you form and the conversations you have during the conference.

You spent a not-small amount of time and money to go to MicroConf. So what you should do after the conference is to put in a couple hours of work to hold onto the relationships, which are possibly the most valuable part of your investment. I’ll tell you how I do it.

First, during my conversations with attendees, I make sure not to end the conversation without asking for a card. (Some people think business cards have been made obsolete by phones but that’s very much not true.)

Maybe you didn’t get everyone’s card, or anyone’s card. That’s okay since MicroConf has its own Slack organization. If you remember the names of the people you met, you can look up those people’s email addresses there. From my stack of cards and from the people I look up in Slack comes my list of people with whom to follow up.

For each person, I do three things.

First, I send an email saying it was nice to meet them. I try to include at least one detail about them from our conversation to show them that I care about them and their business.

Second, I add the person to my CRM, along with all the relevant details I can remember about that person, including both business and personal stuff. Hopefully you’re using a CRM too. I can’t think of any situation where running a business and not using a CRM (or something like a CRM) makes any sense.

Lastly, I evaluate the person’s business focus to see if it makes sense for us to schedule a time to talk and learn more about each other. For example, my new friend Melanie runs a design agency. I know a lot of the kind of people who would hire a design agency, and she might know the kind of people who would hire a developer, so I’ll probably invite Melanie to have a Skype so we can learn a little more about each other’s business. A couple other guys do technical education, which is what I want to do, so I’ll probably talk to them about the possibility of a mastermind.

That’s all. It can be surprisingly time-consuming to do this for everyone you’ve met but it’s very much worth it.

If you were at MicroConf 2016 and you want to keep in touch with me (whether we met in person or not), please send me an email at jason@benfranklinlabs.com.

Driver vs. Passenger Client Engagements

Note: I’ve since decided that I’m not crazy about the terms I came up with in this post and I wrote a new, slightly modified version, which I think is better.

I spent most of 2014 working contracts that were 40 hours a week of billable client work, or some combination of hourly projects that added up to more than 40 hours a week. Most of 2015 was about the same.

I was technically freelancing but I often found myself asking: how is this really different from just having a job?

And I think the answer is that it’s not, at least not in a very meaningful way.

Passenger Engagements

The story of most of my client engagements goes like this: I scan a job board for someone who’s looking for a Ruby on Rails developer. I send them an email, probably with my resume included. The prospect emails me back and set up a time to talk. We talk over Skype and they ask about my skills and experience. If they like me, we work out the details of our arrangement and they give me access to their codebase and issue tracker, and I get started.

This type of client is evaluating me as an individual. They more or less know what they want. I’m signing the contract they have all their contractors sign. I use their technology stack, their way. They communicate their desires to me and I carry out the work. Compensation is based on time and effort.

I call these engagements passenger engagements because they’re driving and I’m coming along for the ride. There’s of course nothing so wrong with this kind of arrangement.

Driver Engagements

There’s another type of engagement that goes like this: I attend a networking meeting, maybe a BNI group. I stand up when it’s my turn to talk and say that I convert tedious and time-consuming Excel-based systems into easy-to-use web applications. A prospect tells me that he uses a lot of Excel, and he’d be curious to hear my thoughts on his situation. We schedule a time to get together, at which point we dig into his situation and see if it matches up with what I do. If it looks like there will be an ROI there, we jointly identify a small initial project to tackle together. The client signs my agreement, gives me a deposit and I get started.

This type of client is evaluating the ROI of a project. They have a high-level business objective but the exact way we get there is not a big concern of theirs. They sign the agreement I have all my clients sign. I use my technology stack, my way. (Maybe I even have someone else do the programming work.) They share their pains with me and I alleviate their pains, my way. Compensation is based on results.

I call these engagements driver engagements because I’m driving and the client is coming along for the ride. Passenger engagements are okay. Driver engagements are awesome.

Driver engagements unlock higher rates

I believe driver engagements are the key, or at least a key, to charging really good rates. In 2014 I tried to raise my rate from $75/hr to $150/hr. I met so much resistance. Eventually I basically gave up on trying to charge $150/hr and did a number of (passenger) engagements at $100/hr. There seems to be some sort of hard psychological wall somewhere between $100/hr and $150/hr where $100/hr is acceptable but $150/hr is shockingly pricey. Frankly, I can understand this, and I don’t blame people for not wanting to pay $150/hr.

Table of differences

Passenger Engagements Driver Engagements
Acquisition method Job boards, referrals Networking events, referrals
Methods used Dictated by client Vendor’s discretion
Work arrangement Usually 40 hours or close Vendor’s discretion
Subcontractable? Almost certainly not Almost always so
Perception of vendor’s role Technician, hired hand Expert and trusted partner
Pricing method Time and effort Results
Pricing anchor Client’s perception of market rates Value of project outcome

I’m shutting down Snip. Here’s why.

About a week ago I made the decision to put a bullet in Snip after almost five years of effort. There wasn’t one big event that caused me to make the decision. It was a number of realizations that built up over time, and then one day a certain customer cancelled and that was kind of the straw that broke the camel’s back.

I had had a level of success with a PPC campaign I had started in late spring, but eventually the PPC campaign inexplicably fizzled and most of the customers I “won” via the PPC campaign didn’t actually end up completing their trial periods. The success was mostly an illusion. It was the day that one of these customers cancelled that I started seriously pondering the idea of shutting down the business.

Here are some of the challenges the salon market presents:

  • Unlike developers, designers and other office workers, stylists and salon owners aren’t on the computer all day. They do use smartphones, but not nearly in the same way we use computers. This makes it hard to reach them.
  • Salon owners have a competitive scarcity mindset. They guard their “secrets”. There aren’t local salon owner meetups. Therefore, there’s little opportunity for referrals.
  • Salon owners usually don’t view themselves as business owners. They’re technicians who happen to be in possession of a business. Most of them also seem to have an expense mindset as opposed to an investment mindset, which is of course an obstacle to selling.
  • Stylists and salon owners are very averse to talking with salespeople on the phone. Most of them don’t really seem to use email in my experience, and in fact many of them don’t even HAVE email. Again, hard to reach.
  • I’m not a domain expert in the beauty industry. I don’t want to be, and I’m never going to be. I can’t build an audience of fans.
  • What I already do for money (programming) has nothing to do with the beauty industry. My product doesn’t feed my service business and my service doesn’t feed my product business.
  • Salons open and close like crazy. I lost a customer recently because they just opened their salon and they failed to get it off the ground. High turnover means high churn.

Of course no market is going to be without challenges, but this one seems particularly challenge-laden. I don’t seem to have above-average entrepreneurial aptitude (as I’ve painfully come to realize over the last seven years of failure). I probably shouldn’t be taking a shot at business success with one arm tied behind my back.

I’m going to take another stab at building a successful product business. This next one will be the seventh attempt. Here’s what I’ll do differently:

  • Pick a product that synergizes with what I already do for money, programming
  • Pick a market that spends a lot of time online, searching for solutions to problems
  • Pick a market in which I can build an audience that cares about things I have to say
  • Pick a market that has money and can pay $X00/mo, not $X0/mo
  • Pick a market that has a problem that can be solved with a relatively simple product that won’t take forever to build
  • Detect the demand first, then build the list, then sell the product, then build the product (or something roughly like that)

Or at least I’ll pick an idea that meets most of those criteria.

I’ve already started researching and brainstorming for my next idea. I’m open to any ideas anyone might have. Wish me luck.

The E-Myth Revisited

I read kind of a lot of books. I thought it might be a good idea to jot down some thoughts on each book I’ve read to a) help crystalize any knowledge I might have absorbed from the book and b) share the book and some of its knowledge with the people who read my blog. (Yes, to my continued astonishment, there are people who actually read this blog.)

Today I finished The E-Myth Revisited by Michael Gerber. I listeded to the audio version on Audible, which I’m glad I did, because it was read heartfully by the author. I don’t say this too often but this book was a mind-blower and a life-changer for me. I’ll explain why.

I’ll start by explaining what “The E-Myth” is. The E-Myth, as I understand it, is that small businesses are started by entrepreneurs. The truth is that small businesses are started not by entrepreneurs but by “technicians experiencing an entrepreneurial seizure”. Instead of creating a business for himself, the technician creates a job, often a shitty job. I found this insight interesting because I’m a technician and I’ve created a job for myself. I’m mostly doing the technical work of a software engineer rather than the work of an entrepreneur.

Michael Gerber contrasted this job-masquerading-as-a-business picture with that of McDonald’s which apparently calls itself “the most successful small business in the world”. The product McDonald’s sells is not hamburgers and french fries but the unique way it has developed of operating its stores. Because McDonald’s has a system that’s been proven to predictably produce the right results, McDonald’s stores can be operated by teenagers with no work experience.

The author’s suggestion is to apply the franchise model to your small business. He doesn’t mean to literally turn it into a franchise. He just means to turn your business into a prototype of a franchise with a documented system describing how it works. Instead of thinking of yourself as someone who works in the business, think of yourself as a stakeholder outside the business. Of course, there’s work that needs to be done, and early on, the founder will be the only person available to do it. The author says to come up with a complete org chart for your business including all the roles that need to be filled. For me and Ben Franklin Labs, that might include programming, marketing, web design, sales, and accounting, for starters. Then I would assign myself to each individual role and design and document the system that describes that role. After I developed a system for each role that was proven to produce the right result, I could hire someone else to fill that position and I could move onto the next position, and repeat.

There was more to the book that I’m not summarizing here but those are the broad strokes that I remember off the top of my head. This is definitely the kind of book I plan to go back and re-read and study, just like I’ve done with How to Win Friends and Influence People and The 7 Habits of Highly Effective People.

The E-Myth is exciting to me because a) the author recognizes the fact that people like me tend to create jobs for themselves, not real businesses, and b) he describes a path for escaping jobhood and creating a real business, e.g. a business that doesn’t require my constant presence.

I’ve already started with the org chart for both BFL and Snip. Looking forward to seeing where this takes me.

How To Meet Successful, High-Profile People

One of the things I’ve found to be true of all rich, successful people is that they know a lot of people.

How did they get that way?

And more importantly, how can little old me meet all these successful people I want to meet, people who don’t necessarily have any reason to give me the time of day?

These questions have interested me for a long time. I’m kind of a slow learner and so it took me a very very long time, but I’ve finally discovered a technique that works.

First I’ll quickly explain how I found the technique. I knew that the golden rule of networking is to give before you get, but not in all situations do I have something to give. For example, what could I give, say, Richard Branson that’s not already within his easy reach? What can I give to someone who’s “ahead” of me in every way? Nothing, right?

Then one day it dawned on me what I could give. Even if I have nothing else to give someone, I can still give sincere appreciation and a legitimate feeling of usefulness and importance the person. This can take the form of simply asking thoughtful questions, listening with genuine interest, and then repeating from the first step.

So when I wanted to improve my salon scheduling software business by making connections in the beauty industry, I decided to put this idea in action by performing interviews with beauty industry influencers with a strong focus on the other person. What I’ve found is that not only are my interviewees very happy to spend the time, but there’s also a strong sense of mutual goodwill built up by the end of the interview.

And in my case I’m also giving the other person the opportunity to promote his or her business, but I don’t know that that piece of it is super relevant. I’ve also done interviews when there was no economical component to it at all, and it still had the same connecting effect.

So there is my suggestion: if you want to meet successful, high-profile people, one good technique is to interview them.

And by the way, here’s a tactical note: the way I’ve done it in the past is to talk to the person over a Skype video chat and record the session using Ecamm Call Recorder which I then upload to Wistia. Then I have the interview transcribed by Casting Words and put it all up on a blog post.

Two Easy Ways to Raise Your Profile

If you want to raise your profile in any area, an effective way to do that is to assume a position of leadership. People will naturally assume you’re “somebody” in that area because you’re in a leadership position. I’ll describe two ways I know of to do this.

Method 1: Volunteering in an Organization

For a year, I served as President of Michigan’s oldest continuously-chartered Toastmasters club. People seem to be impressed by this credential when I share it with them, but it doesn’t represent a hard-won achievement. There was only one person running against me, and her “campaign speech” was “I don’t want to be President. Vote for Jason instead!”

I recently volunteered to serve on my local Chamber of Commerce’s Ambassador Committee. I’ve only been an active Committee member for about two weeks, but I’m already experiencing access to high-quality business connections I would not have had otherwise. Becoming an Ambassador wasn’t hard. All I did was ask.

In organizations run by volunteers, leadership positions are yours for the asking. Most people don’t want the responsibility. In my experience, just about any position can be yours if you just express interest.

Method 2: Teaching

I’ve been blogging about technical topics for years. When I find the solution to some tricky problem and I’m in the mood to write about it, maybe I’ll put up a blog post. Occasionally other people find certain posts helpful.

In 2014 I created AngularOnRails.com with the intention of becoming the internet’s best resource for issue at the intersection of Ruby on Rails and AngularJS. Whether or not I meet this objective, I can always say I’m the author of AngularOnRails.com, which without my having to say anything else indicates to people that I know my way around those two technologies.

By the way, here’s how I came up with the content for AngularOnRails.com: I solved problems as I encountered them, and then I blogged about how I did it. You don’t need years of experience in order to teach something genuinely useful!

You Can Do It

The barrier to entry for teaching is pretty low. But even if you can’t think of something to teach yet, I’d say the barrier to entry for volunteering is even lower. So if you want to raise your profile, there’s a fairly clear and easy path for you to follow.