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Online product creation and promotion. The truth Tim Ferriss won't tell you!
Money do not grow on trees!
Make millions, now!
Hype. Hypity Hyping Hype!
What got you to start considering working for yourself in the first place?
Do you know that you are actually a part of a "work at home" market? Dan Kennedy identified this market in 1994 in his "How to make Millions with his Ideas" book. His book is really good and I can see where Tim Ferriss got a lot of his ideas. Even the "Indian" example from Dan reads like the "Mexican fisherman" example from Tim. Coincidence?
The SEO advances of the recent years, combined with article marketing means that it is possible to put up a website for any kind of information conceivable and promote it to the top result in google. Gone are the good old days where the first page in google contained really valuable and honest information. Website promotion costs money and a lot of effort!
Back to hype. You will notice it everywhere. Putting your email address for any "trial" offers would result in a bunch of emails that would scream sales slogans hoping to increase someone's conversion rate. It's like the 21st century junk mail, except it costs nothing to send it to you! These are called "Auto Responders". Save these emails because you would be spamming just like that!
A niche is a small market segment that was previously unreachable. Many large companies still are not interested in niches, but they can still produce thousands of dollars of revenue.
Find a need and fill it.
How do you do niche research? What are the psychographics of your target audience? Are you a member of your target audience?
These things alone should make your head spin. Many books use simple examples: Dog owners is a market. European Puddle owners is a niche market. Getting to know the target audience like that is quite difficult and requires research!
The first thing you will look at is your hobbies. Should I tell you how many golfing, investing or fly fishing sites and products there are already? Competition is a good thing, but niche research is a must. Without niche research you would waste months on dead end projects. These are great for experience, but may de-motivate you!
What is niche research? Spend 10 hours on a niche before jumping in. Talk to people within that niche. Listen to their discussions online. Do you fit in?
Pay, pay, pay!
Everyone is making money online! Jump on the bandwagon before it departs! Act fast, now! Limited time only!
It seems that just about everyone and their grandma wants you to pay for something online. If you are just starting out an online venture, you would be strongly compelled to just pay for information, software and like. The amount of hype surrounding online stuff is incredible and the so called "affiliate reviews" are worthless as they are paid commission for sales. Even words like "Product name + scam" or "Product names + complaints" are often spammed with senseless blogs that are not real. I suspect "product + review" stopped producing real results years ago!
You have to look for 2 important things: "Upselling", where your credit card would be charged a few weeks later and "until opt out" payments. Both are marketing tactics that you may not be familiar with, but would probably use yourself. Because they offer a consistent stream of revenue!
A lot of services online think you would be making thousands very soon and "leech" on to you, charging 20+ dollars per months. By themselves these charges are small, but examine your credit card bill after a first couple months. The stacking of these payments may shock you! The trick here is that once your online business is up and running, you would be "locked in" to these services.
Some examples of online startup costs.
Get rich quick scheme / information/training
- 20-3000$ for a "once in a lifetime" opportunity. A lot of these has been around for years. Ensure you meet the pre-requisites before investing this much money.
Software, hosting, etc
- An average price of a brand new domain is 6-8$
- My hosting costs are 100$ per year for 6 domains.
- PDF printing software - as much as 50$
- Clickbank - 50$
SEO Software - this can be quite good, but pricy!
- Market samurai 75-150$
- Traffic bug, traffic geyser, etc - 20+$ per month
- Word press direct 20$-50$ per month
- Replacemyself 70$-99$ per month
- Onlinejobs.ph 50$ per month
- Plugins for wordpress blog 20-100$ each. Phpbay and PhpZon together cost 100$ together
- Themes for wordpress - 10$+
Paid SEO efforts.
- Produce mediocre results for 150$ per month for a few months, followed by a retainer for 50$ per month or so. That may be per keyword!
Don't have the technology skills? Outsource!
- 6+ dollars per hour for webmaster - managing all of your websites and blogs, etc.
- Publishing a book through Amazon CreateSpace 300-5000$, depending on how little work you want to do (you still have to write the book)
- Making an audiobook? Consider eLance "voice talent" most projects are under 500$
- Looking for pictures for your book? Don't copy them from google! istockphoto charges 1-10$ per image.
Virtual assistant services - when the work catches up with you.
- Elance: 5$+ per hour, up to 400$ per month
- oDesk - 2-5$ per hour
- Philippine employees 200$-400$ per month, expect to train and babysit them for quite some time
- Setting up a sales test on Yahoo: 200$, prepaid
- Setting up a sales test on Google: 200-500$
- After that: Pay Per Click with low conversion rate of 1-2%. That's 50-100 visitors to your sales page for each sale.
- SEO efforts - "free traffic" for first 10 results in search engines. Requires constant upkeep
Just like "free to play" games, a lot of these firms expect to get a piece of the prize before you quit your "make 4000$ per month working 2 hours a week from home" frenzy :(
Do you want to work 4 hours per week? Think again!
Time, time, time. This is the currency of the new rich. Tim Ferriss is right and a lot of activities eat up so much time, it is ridiculous. Even after applying the 80/20 principle, there's still a ton of work that noone else except you would do! Even outsourcing that requires defining what should be done and what the end result would look like.
- Creating a mediocre hubpage with pictures takes about one hour.
- Writing a mediocre article for ezine takes up to 45 minutes
- Creating a squidoo lens or a weeby website can easily take an hour or 2.
- Have you tried writing sales copy? Expect to tear your hair out for 4+ hours
- Have you tried making an overseas phone call to a supplier? What about writing a script for a call like that? A lot of these deal with wholesellers and would hang up after learning that you don't even have a store yet.
- Managing the IT side - setting up links, blog posts, uploading pictures. This can easily take hours, even if done sloppily and hastly!
- Promoting your materials - hours upon hours
This simple word - marketing and product promotion now strikes fear into my heart. So many of us just buy and never think about what caused us to buy.
Making people buy on the other hand is incredibly difficult, especially since most "work at home" people come from drone corporate jobs which never teach you something like that. Business books are not written with small business marketing in mind.
Reviewing the results of marketing. Here real decisions are needed and real money are involved. What is your click through rate for your PPC? What is the conversion rate? How can you increase these? Where do people leave your site.
Marketing is made of thousands of things and using a marketing firm without making any money would also cost you a pretty penny!
So I did check out the inventing section. Invent my way to millions, right? Make the new pill bottle for elderly and licence it for money, right?
The sad truth is that companies already have an invention pipeline worth several years and would only be interested in your invention if it is worth at least 1% of their revenue. Will your pill bottle sell like crazy? The easiest way to lose money is with a new product!
I cannot put it any more eloquently than discussed here.
From reading the blogs and forums, it seems that most inventors have to strike it out on their own and deal with thousands of dollars spent on patent evaluations.
PS. Stephen Key's information product is about 800$.
Google adwords not working. This alone can put a halt to your product micro tests. It simply does not work. Nada. Nobody knows why. Not even google. Yahoo still works but that's about 1/10th of the google's reach.
Word press, hosting, PHP code. A simple incorrect setting in the host's regular expressions recursion depth for PHP can cause your wordpress blog to go blank. Bye bye BANS site!
There are dozens of other little problems that may eat up a lot of time and energy
Outsourcing! Become the manager
Beginner outsourcing requires some serious management skills. People preach outsourcing of low level tasks, but how low is low level? What is the quality of the work that you are paying for?
In my experience, people on eLance are very overpaid. Even 5$ per hour is too much for the services they are providing, and many would ask for 8 or 10$. This does not seem much, until you see the wages of same people on oDesk (1.30$/hour).
Managing. Have you ever managed someone? Have you ever been accountable for delivering real results on time, on budget and with good quality (the triple constraint)? Online outsourcing teaches you these things.
Philippine labor - a real unbiased opinion. This is weird. Learning to work with them takes a lot of effort. Don't let the hype fool you. You will babysit them, you will have to train them. They are not you and will not replace you in any forceeable future, unless you are a master manager. As a master manager, you can make 100k - 240K $ per year working 10 hours per day in a corporation, having great benefits.
In the beginning you would be overwhelmed with the amount of tasks involved in working for yourself and I would strongly advise not getting outsourced help during this time. You will end up putting too much faith into them and see your outsourced workers as your way out.
Internet is still a realm of the IT folks. While it is possible to get things done, set up blogs and pay for software to do things for you, not understanding the technology would bite you. Really hard.
- Writing, formatting, section headers, metadata, etc
- Webmaster - working with hosting control panel, uploading files, sometimes creating databases
- Logic. Search engine advanced syntax such as define: site: allintitle:, etc.
- Web 2.0 - how information is flowing
Skills, abilities, resources
- Discipline. Starting a business requires hours of hard work and learning
- Focus. You will get dozens of ideas interrupting your undertakings.
- Self-starting. After working for someone for many years, working for yourself is like a kick in the groin. For the first couple months you would be reaching for invisible boss above you.
- Motivation. It is possible to put in hours of effort and receive nothing in return. Expect to spend a few months learning the new skills!
- Cash. Not a skill, but starting a business requires capital for advertising, tools, software, etc.
- 6 months of living expenses
- Good health.
- Time. You need a ton of time because you would be doing everything yourself.
- Management experience. If you hire someone to help you, managing them requires skills.
- A place to live with a secure internet connection. I would not make web purchases in an internet cafe or a hot spot.
This is by far my most hated activity. It sounds so easy on paper. It is described so well in business books. But have you ever tried to write a sales letter? An auto responder? A piece of direct mail?
Most people, myself included would start with 0 knowledge of these skills! Sales writing is required to even test the viability of your new product idea (sales micro test).
Sales, marketing and value delivery system development
This is where the corporate speak enters the equation. How do you deliver value to your customer. Think about this sentence. What is value? Who are your potential customers? Can you recall even 10 of their names? What would make them flash their credit cards and pay you money?
Questions like that are rarely addressed, and have an enormous impact.
Next, do you want to create a franchise system? How about setting up a small business system that works? Most "work from home" people never owned a business and, until seeing the benefits, had no interest in business. There are so many issues that have to be worked out, one by one!
Don't let the words or terms fool you - a lot of them are incredibly deep.
Think of niche market research - what is it?
Think of product promotion - what is it? (I just got a 555 tips for ebook promotion book. I never thought there would be over 500 things to think about !!!)
It takes over 10000 hours to be really great at anything. Some people have the right combination of personality, skills, experiences and interests. Such people would find internet marketing, affiliate marketing, niche websites and product creation really easy.
But for the most of us, it would not be like that! This gives birth to the concept of business incubators or business boot camps. Especially those focused on small businesses. I've never been to one of them, but I hear they are pretty expensive.
In the end, the freedom of owning your own business is well worth it. It lets you live and experience life fuller!