
How to Make Money in 6 Easy Steps - mrduncan
http://www.inc.com/magazine/20110301/making-money-small-business-advice-from-jason-fried.html
======
jasonfried
Something I didn't know when I started writing for Inc: The authors don't
write the headlines. The editors write the headlines and subheads.

Please don't hold the "6 easy steps" part against me. Easy steps anything
makes me cringe.

~~~
MEHColeman
Anyhoo, this is too many steps. I want to make money in no more than 3 easy
steps. Two easy steps would be even better.

~~~
VB6_Forever
Yes 2, 3, 5 or 7 only for easy steps. Anyone who has 6 easy steps to do
anything is clearly an idot.

~~~
VB6_Forever
I think that there's a herd mentality here w.r.t voting. Thankfully the system
doesn't let the mob downvote too far

~~~
VB6_Forever
baa baa

edit -4 looks to be the limit to downvoting

~~~
VB6_Forever
What getting -4 really means is that if the 'community' of this webtopia could
downvote you more they would

~~~
anateus
Actually, your karma still goes down, there's just no display-level lower than
-4.

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jarin
Regarding technobabble, when I worked at Sunglass Hut I used to mix
technobabble with explanations they could relate to: "This pair has
borosilicate lenses, which is the same glass they use for Pyrex cookware. So
you know it's gonna be durable as hell. This pair has polycarbonate lenses,
which are not as scratch resistant as glass lenses, but they are very
lightweight and comfortable, and they won't break if you drop them."

I think customers liked it because it made them feel like they just got
smarter (smart enough to make an informed purchase).

The other thing I used to do all the time that worked great was suggesting to
hesitant customers (understandable since I was asking them to buy $300
sunglasses in Washington State) that they take a couple of laps around the
mall, get an Orange Julius, and think about it. Most of the time they would
think for a second, walk out the door, and walk back in about 30 seconds later
to purchase the sunglasses.

~~~
khafra
> to buy $300 sunglasses in Washington State

It looks like you're the explanation for the popular factoid that Seattle has
the highest per-capita sales of sunglasses in the United States.

~~~
elai
I think it's cyclical nature of the sun that people forget and loose their
sunglasses enough because they're not needed frequently and have to keep on
buying new ones when they do.

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marknutter
I spent some time in retail sales myself, working for Apple in a Best Buy, and
learned a few valuable lessons. There are two ways to sell to people: logic
and trust.

My approach was logic. I would spend as much time as was necessary very
methodically detailing all the reasons why Macs were superior to PCs, and I
did it in a way that made it obvious I was a fan and not just a salesman. It
took a long time to make these sales, but I was good at it and converted
literally hundreds of people to $1000+ Macs, most of which came in to buy a
$500 PC. A lot of people do respond positively to technical facts and
information.

However, there was another salesman who didn't give a rats ass about which
solution was best, and based what he sold entirely on the spiffs he would get
for selling them, most of which were based off how many accessories and
service plans he sold with the computer. He consistently beat me in sales
every day and could barely tell you the difference between firewire and usb
(insert nerd chortle). He didn't need the technical knowhow. He would talk to
them about completely unrelated things - the weather, their kids, the local
sports team, etc. I'd look over at his customers and they'd be laughing and
smiling, and then look at mine and see skeptical frowns. But his customers
would have an entire cart full of crap they didn't need and the whole process
was complete within about 15 minutes.

Most people just want to feel comfortable when they shop. They want a friend
to tell them what to buy, not a salesman, so the quicker you can establish
yourself as "one of the good guys" the better.

My only consolation was that my return rates were far lower than his.

~~~
jacques_chester
I have a friend who has always had slightly skewed social graces. On the other
hand, he has been roleplaying since he was 14 and can tell you the odds on any
3d6 combination off the top of his head.

When he became a salesman, we were all rather surprised and chortled amongst
ourselves at how, with his underwhelming social skills, he would surely
flounder.

He then proceeded to be the best salesman at his company, by wide margin.

How? He minimaxed their system. It was as simple as that. He sat down with the
product list and the comp rules and calculated the best possible combinations
of items _and only sold those combinations_. He would sell other items too,
but when customers bought them, he would not ring up the sale himself -- he
would send them to the front counter and ask that they not mention his name.

My own path to salesmanship was to study the psychology side. _Influence_ by
Robert Cialdini was my bible and it propelled me into the top of my own
company's ranks by applying some modest mental judo. I made it a rule to never
lie or fabricate, but I still sold up a storm in a completely different way
from my friend.

When you look at selling as a _game_ , geeks with a roleplaying background are
going to dominate because they will experiment, minimax, tweak and study their
way to maximising returns.

~~~
listic
You make me curious. What does "the best possible combinations of items" mean
this case?

~~~
jacques_chester
Sometimes selling certain items + other items had a rule leading to a higher
percentage. For example, an external HDD could be included with a PC at a
discount, but the salesman gets a commission based on the ordinary RRP.
Because of the arcane ways some commissions are calculated, this would raise
his margin on the deal overall, leading to a higher commission on the PC as
well. Not the intention of the retail company he worked for -- but that wasn't
his problem.

Lots of little rules and promotions are constantly coming and going in retail,
and my friend was quite single-minded about optimising for them.

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RiderOfGiraffes
Here's another lesson about customer interaction - don't piss them off with
how long it takes a page to load and render.

I don't like depriving people of their potential for ad revenue, but on the
second page I got so annoyed at how long it was taking to load that I found
and clicked on the "Print" icon. Bam! Full text, cleanly rendered, no flashing
graphics or distracting images.

Data. Possibly information. Readable.

Fast.

Now I might actually read what he wrote.

~~~
RiderOfGiraffes
I happen to have had this item open in a window while I went for dinner, then
hit "Reload" when I got back, and I noticed it's been down-voted. I wish, oh
how I wish, that if someone downvotes me that they'd tell me _why._ Why did
this particular comment not add to the value of HN? Do you just disagree? Tell
me why! Do you think it's wrong? Tell me why?

I really, really would value the opportunity to learn. Even if I disagree with
you, I'll still learn about the existence and content of an alternative point
of view.

~~~
HeyLaughingBoy
Maybe because you said you don't mind people getting ad revenue? Sadly, from
what I've seen around here recently, that would do it!

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may
Step one, stop reading Hacker News. Step two, go do something.

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iworkforthem
This is by far one of my favorite article this year! Everyone has a skill or
two that they are really good at. Being good at it, and actually making money
from it is two very different matter.

I guess most people here can bring ideas -> products. To bring ideas ->
products -> profit definitely take some trying. Take it up a level, ideas ->
products -> profit -> acquired ... it's a dream for me at least. And working
towards it daily everyday!

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mhartl
Regarding step #5: while bootstrapping is great, it's not always the best
choice. I agree with 37signals that more companies should consider
bootstrapping, but lots of great companies have required investment up
front—indeed, historically, virtually all of them did. To make that 5¢
lollipop, you first have to build a lollipop factory. Nowadays the "factory"
might be "an index of the web", and the lollipops might be "ads served based
on web searches", but the principle is the same.

~~~
dmazin
I don't think anyone disagrees that brick-and-mortar businesses require
investment. However, brick-and-mortar businesses earn their investments by
having actual revenue plans. I have the impression that most VC-funded web
startups find revenue plans far less sexy than, ahem, eyeballs. And we all
know where that leads.

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Cariapa
This is a superb article. The portion I was really interested in was the one
on bootstrapping. Completely agree with Jason Fried about taking on investor
funds, maintaining your independence etc.

I've noticed however that the point he makes about self-funding typically
applies to consulting companies: bootstrapping these is very different from
bootstrapping, say a SaaS..oops I mean a cloud company.

I would love to hear from other folks that were able to bootstrap a software-
product company.

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ianhawes
#5, true value of bootstrapping, is probably the most important thing in this
article. So many companies omit this crucial step.

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ffumarola
It seems that from the start you've had an ingrained sense of hustle.

I actually laughed at your anecdote about selling sporting goods. When I was
in high school I sold electronics at Best Buy. We would have reps come in and
tell us about the printer resolutions and pages per minute, the hard drive
seek times, the lcd refresh rate, etc. But, as you said, the customers didn't
care about that. All they wanted to know was if they could print a 4x6 photo
and have it look nice, or run a word processor, or play a video game.

That hustle doesn't seem to die. I've always found a way to turn something
into a more entrepreneurial venture, even when working in a corporate
environment.

Thankfully my best friend and I are partnering up to create something of value
for ourselves now. It's exciting, especially when I've spent the last 10 years
hustling!

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ashishg
Great advice from a well respected entrepreneur. His advice on knowing your
buyers resonates with me. I can't stress enough in knowing the most about your
users & buyers. Understand what they value, and most of all, understand what
they need in order to be a long-lasting customer.

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yellow
[http://www.inc.com/magazine/20110301/making-money-small-
busi...](http://www.inc.com/magazine/20110301/making-money-small-business-
advice-from-jason-fried_Printer_Friendly.html)

Everything in one view.

~~~
mwarkentin
Readability (<https://www.readability.com>) also loads up all 3 pages at once.

------
dools
37signals is a massive inspiration and I feel privileged (am I the only one
that has to look up how to spell that word _every_ single time?!) that I: a)
work in an industry where so many fantastically successful individuals take
time out to share this kind of wisdom and b) there is an online community
where you can go and see the author themselves taking part in the discussions.

Here are the most important parts of this article that stuck with me:

 _"Understanding what people really want to know - and how that differs from
what you want to tell them - is a fundamental tenet of sales. And you can't
get good at making money unless you get good at selling."_

I know I harp on about this constantly but there's this fantastic interview on
Mixergy with Tom Rossi (<http://mixergy.com/tom-rossi-molehill-interview/>)
where he talks about the early days of promoting his CMS and there's this part
where he says that one of the first things he did was "pick up the phone" and
just start calling people to sell it. Andrew Warner is kind of surprised -
picking up the phone and _actually selling something_ is so rarely discussed
as a "user acquisition strategy". If you can cold call, if you can _sell_ ,
then you can get money today.

 _"I thought about the problem and decided to try something new. Instead of
doing long, expensive projects, we'd do short, affordable ones. Instead of
billing $50,000 for a 15-page website redesign that would take three months,
we'd charge $3,500 per page and offer to complete the page in a week. If you
want another page, it's another $3,500 and another week. We called it
37express."_

Of course, this is one of the biggest lessons from "agile" and 37signals in
particular. One way we've implemented this in our own projects is to give an
idea of "likely budget" for a big project, then bill in very small increments
with the smallest of the small at the beginning of the project.

Say there's a job, and you look at the basics of what should be achieved, and
you say "well, $25k will be a good amount for getting something like that
done", then the first bill should be for some prototypical product or even
just _product research and documentation_ delivered in about a week for
something like 10% of the total budget.

Next invoice might be a slightly longer iteration for maybe double that, then
by the third iteration everyone trusts each other, you have a good idea of the
problem domain and you can really just do a 50% upfront 50% completion for the
remainder of the budget.

The other really important part is that each of these early iterations should
deliver _discrete_ value - ie. that you could deliver it, the client would
have gained some value, but could easily discontinue the project or use
someone else to continue if they dislike working with you for some reason.

So you can still do these big jobs, but just treat them as several little tiny
jobs, especially in the early stages. This also removes the need for that
"contract overhead" - when you remove all the risk, you find that you can more
often than not work on basic trust and human decency.

 _"But that's it. Everything else has been bootstrapped - even though dozens
of venture capitalists and private equity firms have offered us lots of money.
Instead, my customers have always been my investors. My goal has always been
to be profitable on Day One."_

We're in the opposite boat ;) although we'd love to get funded for Decal, it
turns out "yet another CMS" just isn't hot enough ... maybe we should make it
social? In the absence of buckets of VC or angel funding it's been great to
have role models in the industry telling us repeatedly that bootstrapping is
not only doable, but preferable!

"On the other hand, from Day One, a funded business is all about spending
money. There's a pile in the bank, and it's not there to collect interest.
Your investors want you to hire, invest, and buy. There's less - and in some
cases, no - pressure to make money. While that sounds comforting, I think it
ultimately hurts. It replaces the hustle, the scrap, the fight, with a false
comfort of "we can worry about that later."*

I've been in both situations - I've been in a company with heaps of funding
and (right now) with barely adequate funding and I have to whole heartedly say
I 100% agree with this.

Man did we waste money when we had it (office, sales staff etc.). And not only
that, but we wasted effort building _heaps_ of features that never made a dime
and didn't make the product more saleable. If your product development process
isn't commercially driven, I reckon you're heaps more likely to end up with a
product you'll never be able to sell.

Thanks for an amazing read Jason, and not just here, but all the other talks,
articles, books (Getting Real is great, still haven't made it to Rework yet
;), 37signals/svn, the products (I'm an avid Highrise user), the lot. You're
an inspiration and a super hero. Keep bangin'.

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tjmaxal
Article aside I'm pissed at the poor UI of INC. Why make me click through
three pages to read the story but put ALL of the comments on the first page.
You crappy UI tainted what was otherwise a good article.

~~~
mchafkin
you might want to try "magazine view"

[https://w1.buysub.com/pubs/FC/ICM/10for997.jsp?cds_page_id=5...](https://w1.buysub.com/pubs/FC/ICM/10for997.jsp?cds_page_id=58372&cds_mag_code=ICM&id=1298938782300&lsid=10591819422010581&vid=1&cds_response_key=I9CNMH14)

(Jason's article is the cover story this month.)

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6ren
_Audiofile_ is a great name. _Paying customers give honest feedback_ \- hadn't
thought of it that way! I understand 37signals took some (small amount equity)
from Bezos.

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kondro
Spread an article across three pages to display the highest amount of
advertising possible per visit.

------
hook
\- "It's all about which side of the money you're on"

\- "it's all about practice"

\- "it's all about passion"

It's all about overgeneralizing.

