The 100 Dollar Startup Book Summary
In The $100 Startup, Chris Guillebeau shows us how simple it can be to create a business: bring value to people in an area you love, take action, and set your own terms.
A book by Chris Guillebeau
Who has not dreamt of breaking free from established employment hierarchies and following one's passion?
Creating a business is simpler than most of us think. The $100 Startup teaches us how we can provide value for potential customers in a domain we are passionate about.
The author shows great examples of people who did just that: starting a microbusiness. Learn what you can do to follow a similar path, leave your nine-to-five job behind and finally, chase your dream.
Another great, inspirational book by Guillebeau.
These are the things I learned by reading the Blinks:
- Keep it simple
- Value action over plans
- Set your own terms
This post is based on the Blinks I listened to while walking to work. I learn from Blinkist's content each and every day. So if you enjoy this post, you will like their content even more.
More and more people around the world create microbusinesses. A microbusiness is a business which you can start on your own, even with limited resources and connections.
You do not need much to start a small business. An offer and people willing to pay for your offer will do.
The most important thing is that you are determined and start to take action.
Many people who try to start a business, find out that the main obstacles they encounter are not competitors or lack of business ideas. The biggest problem is fear. You need to become aware of your fears and overcome them.
Running your own business is much easier than you might have envisioned.
Being passionate about something will not suffice to run a business. You need to find an idea you know someone is willing to pay for in a domain that interests you. You will also need to have the necessary skills to make it happen.
Skills can be build and honed, therefore, do not worry too much about lacking skills. More important is that you focus on the value you create for your customers. If you create value for enough people, and those people are willing to pay for it, you will have a business.
You need to find out what drives your potential customers. What do they value? What do they care about? Learn who your customer is.
Value is created when a person makes something useful and shares it with the world.
We learned that you need to take action to start a business. But often we take the wrong action. The first thing you need to do to have business success is not creating your product, but to test whether people are willing to pay for that product.
One example Guillebeau shows is that of a guy who wanted to produce an expensive magazine. He advertised his book and found two customers who were willing to pay $900 for his high-end journal. As soon he knew that people were happy to pay, he created the product.
When you have your product ready and want to advertise it, make sure you speak about the benefits your product is offering. Do not speak about features, show how your offer is helping your customers.
Concentrate on the emotions your clients are seeking. For example, if a Yoga Studio advertises a course it is a good idea that the studio also shows how relaxed you will feel after having exercised.
If you start a small business, you need to be creative and need to hustle. Chris Guillebeau explains that hustling means avoiding traditional marketing, which is expensive, but rather work with bloggers and other experts in the field.
Another great way to get traction for your business is to utilize strategic giving. For example, you might give away a free course on a topic, to sell your services in the same domain.
You need to build a list of prospects and customers before you are offering your product to the world. Look at how other companies are launching their products to learn how to do it.
Tell your audience what you are working on, what it means to them, how it will help them, when they will be able to buy it, and for how long you will have an introductory price.
Chris Guillebeau did this so well with one of his products that he made over $100,000 within 24 hours after his launch.
Prepare your launch carefully; make sure you remove any obstacles your customers might have buying from you.
To start a business you do no longer need massive amounts of money. That’s where the title of the book comes from: 100 dollar should be enough to start a microbusiness. There is no need to taking on debt.
Staying debt free is certainly not enough. You need to make a living and for that, you need to bring in money. As soon as you have paying customers you need to work on your business. How can you sell more to existing customers? How can you find more customers?
An excellent tool to work on your business is to track one key performance indicator (KPI). In the beginning, this might be the visitors coming to your website. In a more advanced phase of your business, this might be the conversion rate of visitors to customers.
Stay focused on making money. Track what is coming in and what is going out.
When your business is up and running, you need to make changes to optimize your business and bottom line. Make sure those changes are small and can be measured. For example, you might increase prices from time to time, to find out whether this also results in a bigger profit.
Pricing of your product or service is a crucial part of business success. Ask for too little and you might not be able to make a living. Make it too high and your customers might run away.
Do not confuse your customers with too many offers or price tears.
If possible, aim for recurring income. Monthly recurring revenue (MRR) frees you from the need to bring in new customers each month. Having a customer base and selling them a subscription is easier than making one-time sales.
Many small business owners make the mistake that they price their products based on the time they put in to create those products. Don’t do that. You always want to price your product on the value your customer is receiving.
If you are running a successful business, you should think about what you want to do to grow your business. You can grow your business my offering more to existing customers; this is called vertical growth.
You can also utilize horizontal growth by creating other products for a different customer segment. Assume you run a website theme business and find that many prospects cannot afford your premium themes. It might be a good idea to sell those people a basic theme at a lower, more affordable price point.
It is always a good idea to document everything within your business. If you have documents for your different workflows it will be much easier to onboard new people in your business. And when you decide to sell your business you will be able to sell it at a higher price when every process is documented.
Be aware that it is perfectly fine not to grow your business as well. If you are happy with your bottom line, you can optimize on a different metric than money.
Most people will tell you that the crucial part to start a business is having a detailed business plan. This might be true, if you want to get external funding for your startup. But for starting a microbusiness, the business plan is not the most important thing to have. More importantly you need to have the determination to take action.
Planning will, of course, help, but when you make plans, make sure you keep them simple and actionable. You should plan what you want to sell, to whom you want to sell your product or service to, and why your customers want to buy.
It is also a good idea to include a marketing section in your plan. What can you do to make your product get noticed by your potential customers?
Have due dates for all actions in your plan.
When you are starting out, concentrate on making your first 100 dollars. Your first sale will feel great and give you, even more, energy to take action.
When all else fails, ask yourself how you can I help people more.
Starting a business does not need to be complicated. Think about it, you only need a few things to start: an idea you are passionate about, a product or service people are willing to pay for, and finding those people who will pay you.
Yes, you will also need a payment processor or maybe even a fulfillment service. But you can buy those services like you purchase a domain. No things to worry about too much.
Passion for an idea, product or service, customers.
Some people will tell you that passion is overrated and that you only need that unique idea. I strongly disagree, you need to have that passion. Otherwise, you will lose your interest and motivation after a couple of weeks. There is one essential ingredient for your business success: perseverance
If you want to learn more about motivation, I recommend you read the book Change - The Surprising Truth About What Motivates Us by Daniel Pink.
Plans are only good intentions unless they immediately degenerate into hard work.
I agree with the author; you should value taking action over making complicated plans. Sometimes you build a wall by too much planning. Your plan can overwhelm you. Remember to keep it simple. Keep your plans simple as well.
When you start making your idea a reality, make a small plan. This is a simple plan: I want to make my first 100 dollars by selling a tutorial on how to develop an iPhone app.
You do not need a business plan to start your business. Take action because this is the moment you will start your learning process.
I use plans a lot these days. Yes, this contradicts what I just said. My plans are simple and help me to take action. But this is worth a separate article.
Don’t waste your time living someone else’s life.
My dream is to build a business which gives me more freedom than I have today. It is easy to lose your freedom when running a business. Think twice about bringing people into your business, or to join forces with a co-founder.
People add complexity. To manage people is a skill you will have to learn. I’m not saying it is a bad thing to have a staff; but you should think about how / if you want to grow.
I once attended a conference where Rob Walling held a great talk. In the Q&A session somebody asked Rob whether it is better to employ people or to work with virtual assistants. With a big grin in his face, he answered: I favor cash flow over head count
There are many ways to grow your business. But there is always the option not to grow your business at all. Success is a word which needs to be defined by yourself. And there are many more metrics than money. Time, freedom, and happiness are some of the things you can optimize for.
You are the person responsible for setting your terms. This is a good responsibility to have, isn’t it?
- Start a business by making an offer people are willing to pay for
- Become aware of your fears
- Overcome your fears by taking action
- Create value for your customers
- Find out who your customer is
- Value action over planning
- Test whether people are willing to pay for your product before creating it
- Use strategic giving as a tool to win customers
- Stay debt free
- Grow your business horizontally and vertically
- Keep your plan simple and actionable
Humans have the tendency to make things complicated. Chris’ book focuses on the aspect that building a business can be straightforward. In the end you only need to find people who pay for what you have to offer. It can be that simple. But keep in mind; simple does not mean easy. You still need to take massive action and hustle.
- Read more about Chris Guillebeau on his website
- Subscribe to my newsletter and get free access to The 100 Dollar Startup Summary PDF and all of my other book summary PDFs
You also might like the book summary I have written about Chris Guillebeau’s book The Art Of Non-Conformity.