
I built a profitable business with a $100 budget - viperchill
https://gaps.com/startup-challenge/
======
palakchokshi
That's a marketing headline. A little clickbait-y. That's fine you're a
marketing hustler after all. Let's break down your numbers:

$99.75 in expenses (not counting time spent getting sales or building website)

5 total sales resulting in $450 of sales

108 hours of work done by you. We don't know how much time it took your
brother to create the podcasts. Let's assume he didn't do the 6 podcasts
perfectly in the first go.

30 days of total case study.

$350 in "profit"

Divide your profit by the hours you worked on it. $350/108 = $3.24 per hour.

Now let's consider setting up the website was a one time cost so moving
forward your operating expense is $30/month to host the website and the
podcasts[edit]

Let's take the hours your took to get the sales and divide those by the number
of sales you got. 90/5 that comes to 18 hours per sale. Your average sale
value was $450/5 = $90. Let's say your put a bare minimum hourly rate for your
time of $10/hour that's $180 spent getting a $90 sale.

Now unless you get more visibility and are super savvy in promoting your
podcast your ROI just doesn't pan out.

Let's see what your $1000 budget gets you in 3 months. Might be a good post to
regenerate interest in your podcast. :)

~~~
dharmon
I wonder what Bill Gates' pay per hour was for Microsoft's first month? ;)

I totally am on board with back-of-the-envelope math, evaluating ROI, market
size, etc. But come on. This was month #1, a good chunk of which was doing
one-time tasks (figuring out what the hell the site would actually be, setting
up the template, etc.)

If you want to fault him for something, fault him for the lack of market
analysis to see if this idea really has some legs, besides citing someone else
"making millions of a similar idea". E.g., a red flag was one decent sized
advertiser telling him their ROI on podcast ads are not worth it.

~~~
palakchokshi
Actually a good chunk of work was actually research, marketing and sales since
he didn't start on the website creation till the very end. He picked a
template and modified it so that's not a lot of work either. In the end he got
lucky with getting the first sale. As shown by him he was not able to
replicate his initial sale. In fact now that I read it again all his sales
were lucky shots. None of which he could reliably replicate as a sales
strategy.

Bill Gates also lived with his parents and worked out from their garage. If
this article was targeted at rich kids that want to make money on the side and
don't have to worry about paying rent and buying food then sure don't worry
that you are going to end up losing money in Month #1. and Month #2 and Month
#6.

------
iliketosleep
What i took away from the 15 minutes I spent reading was this: If you're not
afraid to reach out to prospective customers and you know how to make a sales
pitch, you can sell any half-baked product.

Whether it could actually be a successful business or not is an entirely
different matter and would take much longer to find out.

~~~
nedwin
And you'd be surprised how few people actually do this kind of validation
before building a product.

------
danpalmer
The question is: could you take the $100 to a wholesale distributor, buy a
bunch of cheap things, and then go and sell them at a market stall for more
than $400. My guess is yes, especially if you have 16 days of selling to make
your $400. That operation would scale about as well, possibly better, than the
one described in the blog post. This idea ignores the pay for labour, but so
does the blog post.

~~~
iliketosleep
I tried buying goods wholesale and selling at a market stall :) Failed
dismally and lost money :( Need to have the right personality. The guys who
were natural extroverts and spoke with a booming voice got most of the sales.
It's the same in this blog post. He's a marketing guy and very tactful. He's
good with people. Most other people who tried his "business" idea probably
wouldn't get a single sale. So for the average person, it's even worse than
what you suggest.

~~~
wfunction
Did you fail at the buying end or the selling end? (i.e. did you have to pay a
higher price compared to these people, or were you unable to sell at a high
price compared to these people?)

~~~
iliketosleep
I failed at the selling end. I just wasn't able to attract people to come to
my stall. The aggressive sellers got most of the customers.

~~~
tomcam
I love the fact that you gave it a shot. Most people don't get nearly that
far. It's much better experience than most college classes.

~~~
iliketosleep
Yeah I think the difference is that in college you can keep your hands clean.
But REAL business involves a lot of hustling, stuff that can only been seen
and learned in the real world.

------
dheera
Turning $100 into $500 is easy. You can do that by selling lemonade for a week
on the beach. The hard part is to do it in a way that scales more than
linearly.

------
0898
"I hope your biggest takeaway is not that I made any money or that you like
the concept, but that my results are held up by a massive pillar of failure."

This part stood out for me.

There are so many moments in a new venture like this, where you're just
feeling your way forward, and it feels like nothing is working. But you keep
chipping and one day the rock cracks.

Nice read, thanks for sharing.

~~~
viperchill
Glad you liked it. Thanks for the comment!

------
Cenk
Wait, what? You sold ads on a podcast where you read articles you found on
medium aloud?

~~~
startupdiscuss
I know what you're thinking: I prefer to read, so maybe you should start a
business where you transcribe the words onto text so people can read it!

~~~
pavel_lishin
This would actually be great; I'm reasonably sure I can read faster than a
podcaster can speak, and I can certainly skim faster than I can listen for key
phrases with a podcast on 2x speed.

~~~
athenot
That would be a Genius idea!

[https://genius.com](https://genius.com)

------
privateprofile
One thing I don't understand: why was this person contacting prospects using a
deliberately fake name? Did his name carry so much clout that customers would
reply 'shut up and take my money', therefore invalidating the "challenge"?

I also wonder if this person procured authorization from the parties involved
before publishing their e-mail responses on the Web, especially given the fact
that it's rather easy to identify some of these (unwittingly?) "challenge
participants"...

~~~
viperchill
Hey PP,

I am "this person".

My name carries no clout at all, unless it's (potentially) mentioned in the
online marketing world.

I simply didn't want people to be able use the excuse of - "they already knew
who you were" \- to account for any sales.

I don't understand your second paragraph, sorry.

~~~
jdormit
> I don't understand your second paragraph, sorry.

Seems pretty clear to me: did you get permission from your customers before
publishing your correspondence with them?

~~~
viperchill
4 out of 5 yes.

The one that I didn't get permission for, I didn't share.

~~~
jdormit
Gotcha. Thanks for the reply.

------
garysieling
This was really neat - thanks.

I built a search engine for lectures
([https://www.findlectures.com](https://www.findlectures.com)) to counter the
"lots of noise" problem (not podcasts or audiobooks, but it's the same idea).

It never occurred to me there were so many ways to approach the problem, so
this post gave me some things to think about :)

------
eddz
First of all, congratulations on your success and experience.

Second of all, correct me if I am wrong, but you do not seem to be factoring
in your time (16 working days) or any kind of opportunity cost required to
produce the content?

~~~
viperchill
Thanks for the comment.

This is the third and final update, so didn't really cover the time aspect as
in-depth as I had in previous updates.

My aim was to show what you can do without spending money. Time is undoubtedly
an expense, but you have to factor that into any online business.

~~~
eddz
I understand. But to many businesses – especially online businesses – time is
the most significant expense. It is the elephant in the room here. You are not
"profitable" (not even "ramen profitable") until you've factored in this
expense.

~~~
viperchill
For month one, sure. But that's to be expected :)

------
d--b
That Travis guy spent a nice $100. Cheap money for hacker news front page!

~~~
seppin
Alt title: How to get the right title to get a front page of NH article.
Budget? Who cares!

------
bbcbasic
I am not sure how many hours he worked a day, but if he did the full 8 hours,
then for me I see this as costing just $100 plus _cough_ $10k in sacrificed
salary!

Taking that into consideration it would have been more prudent to outsource a
lot of the things and cut it back. I would be more interested in what you can
launch in 16 hours (a single weekend).

------
AngeloAnolin
Thanks for the lengthy article. It was a good read.

Although I would have probably titled this:

"Building a Profitable Business with 100$ and XX Hours"

People only see the $ amount but never take factor the time actually spent
(which is the highest cost I reckon).

------
analognoise
How's that lemonade stand holding up?

~~~
viperchill
What?

------
handzhiev
Making 5 sales and $450 is not a "profitable business", it's just some cash.
With all due respect to your work, the title is just a clickbait. It's to
early to conclude you'be built a profitable business.

------
cestith
$350 over 16 days is about $22 a day. What am I exactly missing about these
profits?

~~~
viperchill
How businesses work.

~~~
palakchokshi
That's a bit snarky no? considering you don't put in labor costs and time
costs it's a bit ingenuous to say you built a profitable business. At a
"profit" of $22 a day you could not pay your rent and food. Your customer
acquisition cost at this stage is much higher than what the customer pays you.

~~~
viperchill
Probably. I apologise. Just reading so many negative comments it's (slightly)
frustrating.

Maybe 'profitable' should have been in quotes instead of startup.

I never tried to wow anyone with my final results, but rather show what could
happen if you just take action :)

~~~
palakchokshi
I agree. But here's what I think would have gotten your point of "take action"
across much better. At the end be honest about ROI and projections.

This is a cold calling marketing campaign you had to do to get your sales. If
at the end you had actionable advice on improving conversion rate of cold
calling campaigns with numbers to back it up(not anecdotal evidence) that
would be very useful.

My suggestion is to track SpokenGrowth.com over a period of 3 months now that
you've handed it off to someone who might not have your marketing skills. Do
another post 3 months later that either proves you can make a viable business
if you "just take action" or shows how hard it can be and maybe do a lessons
learnt post.

I'm all for hustling to market your product or your skills. Good luck on
SpokenGrowth.com

------
startupdiscuss
Can another reader please pick up on the first two discarded ideas and follow
those? Those sound great!

Like the author, I am wary of self-help type stuff but would be enthusiastic
about finance and marketing.

~~~
viperchill
Thanks @startupdiscuss

Would love to see someone else take those projects on as well.

Appreciate the comment :)

------
maxsavin
~"I genuinely wanted to help" and then.. ~"Why didn't that tactic work on
others?

------
dang
We took "Show HN" out of the title. A blog post is not a Show HN.

[https://news.ycombinator.com/showhn.html](https://news.ycombinator.com/showhn.html)

