One common challenge for readers of The 4-Hour Workweek is the creation a “muse”: a low-maintenance business that generates significant income. Such a muse is leveraged to finance your ideal lifestyle, which we calculate precisely based on Target Monthly Income (TMI).

Despite the dozens of case studies I’ve put on this blog, and the hundreds elsewhere, one knee-jerk objection always crops up: “That might work for a single 30-something guy, but what about families? I have a mortgage, kids, and…”

The following is a guest post by Brandon Pearce. Brandon has three kids and first appeared on this blog as a muse case study for his business, Music Teacher’s Helper, which generated more than $25,000 a month at the time.

Things are even better now.

He and his family have now been leisurely traveling the world for 1,128 days. They are currently living like royalty and surrounded by palm trees.

This post explains exactly how Brandon spends his time over one week…

Have you implemented The 4-Hour Workweek with your family? If so, please let me know in the comments!

Enter Brandon

Three years ago, I’d already moved abroad with my family, automated my businesses, and was living the 4-Hour Workweek lifestyle. At one point, I decided to track every minute of every day for one week to help me visualize how much time I was spending on what really mattered to me.

Many people seem to think that if you only have to work a few hours per week, you must be spending the rest of your time relaxing in a hammock drinking piña coladas. I mean, what else is there to do? Actually, everything!

As you’ll see, I do spend my fair share of time relaxing, being with family and friends, and even doing “nothing.” But I have plenty else to keep me busy, and I enjoy the freedom to adjust my activities according to my changing interests.

While it takes some effort to track each minute of every day, when I’ve done so, I’ve found it helps me be aware of what I’m doing in the moment, and I feel less pressure while doing tasks I don’t enjoy. I also realize that time will keep moving on, no matter what I do. As long as I’m enjoying life, growing, and helping others where I can, I feel like I’m living my life well.

With that introduction, here is one full week of my life, organized by task.

Disclosure: Even though these tasks are recorded to the minute, they’re not always accurate to the minute. Sometimes I forgot to switch my timer right when I switched tasks, so had to modify it later with a little guess work. Being off by a few minutes for several things has led to being off by a couple hours overall. But it will have to do. For this exercise, I used SlimTimer, a free on-line time tracking tool.

Work Time

I define “work” as activities done specifically to help produce income. This week I “worked” a little more than usual because I was getting some video tutorials written for one product, and launched a special offer with another. I also planned some important new features to work on next. For me, it’s normal for this category to be under 5 hours per week total.

- Business: Music Teacher’s Helper: 5 Hours, 18 minutes. This includes advertising/marketing (1:35), checking programmer’s work (1:30), customer support (0:48), and the rest in business planning, finances, and checking stats.

- Business: Studio Helper: 2 hours, 1 minute. This includes working on video tutorials (1:27), business planning (24 min), and the rest dealing with feature requests and checking stats.

- Other: 33 minutes. This includes times spent researching a new business idea.

Total Work Hours: 7 Hours, 52 Minutes

Update: I’ve since hired more programmers and support staff, a project manager, and a marketing director, so I’m doing different tasks, but still working about the same amount of time each week.

[Note from Tim: Before you literalists scream "But that's more than four hours per week!" read the book for context. Greatly simplified, the goal is to increase your current per-hour output 10x.]

Family Time

One of the things I like most about my lifestyle is that I have so much time to spend with my family. We’re together pretty much all day, even if we’re not doing the same thing. Meals, driving, and time with others outside the family are under “Personal Time.”

- Playing with kids: 11 hours, 32 minutes. I try to play with my kids a little every day. Much of this is computer or iPad games with one daughter while my wife is doing homeschool with the other one. But it also includes reading to them, playing hide and seek, “restaurant” and other imagination games.

- Watching Movies: 6 hours, 51 minutes. We watched a few movies with the kids this week, in the evenings, including the 1969 Doctor Dolittle, and Tarzan in Spanish.

- Family Outings: 5 hours, 15 minutes. This includes a little hike up the mountains behind our house, and a trip to the park to ride ponies and bicycles. We also spent time together with our friends, which I’ve included in the Personal: Visiting with Friends section.

- Talking with Wife: 3 hours, 56 minutes. Jen and I enjoy just sitting and talking, as well as reading together.

Total Family Time: 27 hours, 34 minutes

Update: My kids are older now (9 and 7), and we have another baby who is almost two years old. Our two oldest daughters attend a homeschool group most weekdays. And we now enjoy the services of a full-time nanny, housekeeper, driver, and chef. Consequently, my wife and I get more time together, we each get more personal time, and we enjoy different types of activities with our kids.

Personal Time

Even though it looks like I have lots of time left over for myself, I don’t feel like I have much “free time.” I guess that’s because I try to fill my time up with things that I like to do and am passionate about. I still have a full to-do list, and do spend time on things I’d rather not, but I try to work on the most important items first each day. Overall, I’m doing what I love with the majority of my time.

- Sleep: 57 hours, 21 minutes. That’s just over 8 hours per night. This week, we’ve been sleeping in a different room where the sun hits us warmly every morning around 6:30 through the windows. It’s not conducive to sleeping in, but is a very relaxing way to get up.

- Visiting with friends: 11 hours, 22 minutes. We had some friends over for a late lunch one day this week, and we spent an afternoon out with another friend.

- Meals: 11 hours, 2 minutes. We ate out a lot this week (almost every day), and took time to enjoy our food. The meal with our friends is included under “Visiting with friends”.

- Reading: 9 hours, 8 minutes. I have some really interesting books I’m reading right now, although half of this time was spent reading articles and blogs on-line.

- Personal Email: 8 hours, 13 minutes. I had a LOT more time-consuming email than usual this week. I’ve been getting lots of emails from people starting businesses who want advice. I’ve enjoyed being able to help people in this regard. Maybe soon I will have to start charging for consulting and move this into the “Work” category.

- Writing: 4 hours, 31 minutes. This was time I spent working on my new book about how to create an online business. I suppose this could also be considered “Work” since I will eventually sell the book, but that’s not my main purpose in writing it.

- Daily Hygiene: 3 hours, 27 minutes. It’s amazing how much time this takes. But I do love a hot shower.

- Sex: 3 hours, 9 minutes. No, it wasn’t all at once.

- Meditating and spiritual time: 2 hours, 41 minutes. I have a great place to sit for my morning meditation overlooking the hills and the city view. Very relaxing.

- Finances: 2 hours, 3 minutes. This is higher than normal because I’ve been working a lot with my accountant trying to figure out taxes, and have been looking at other investment opportunities.

- Exercise: 1 hour, 47 minutes. This includes my daily stretching and tai chi, and a little weight lifting. This doesn’t include all the hiking and walking we did as a family this week.

- And I spent anywhere from 10 minutes to 1 hour, 30 minutes on each of the following: cleaning and organizing, house maintenance, driving, facebook, games (pool, and angry birds), journal, playing the piano, shopping, time tracking, vacation planning, writing on my blog, and selling stuff on Craigslist.

Total Personal Time: 128 hours, 52 minutes

Update: About a year ago, I started charging $150/hour for consulting and it reduced my email while increasing my income. I’ve also put my book on hold for the time being. And these days, I’d probably count “Finances” as “Work,” since it’s income related. Lately, I’ve been spending more time meditating, reading, and journaling, and am learning more about myself in the process. I’m also taking Qi Gong (Chi Kung) lessons, learning the guitar and ukelele, playing in a small band, studying dreams, and experimenting with connected breathing and emotional awareness techniques to help me be more present to enjoy each moment fully.

How to Improve In the Future

Now that I’ve gone through all the effort of tracking my time for a week, it would be a shame to simply write a blog post about it and not use the data to see where I can improve. In the weeks ahead, I would like to make the following changes:

- More time with my wife, especially reading and talking with her.

- More family time together with the kids at home. We spend a lot of time together outside the home, but when we’re inside, we tend to do our own thing. I also want to take a more active role in homeschool, helping the kids with their blogs, music, as well as math and reading, etc.

- More time working on my book. I’m excited to complete this project and hopefully it will help a lot of people looking to create a business.

- Less time reading online. I want most of my reading time to be focused and intentional, not jumping from item to item.

- Less time on email. I had built up a practice of checking email just twice a day and leaving it alone the rest of the time. But I didn’t follow that so well this week, and found my productivity waver because of it.

Update: I definitely spend more time with my wife now, but probably less with my kids. I’ve stopped working on my book, but have put more time into other interests. My reading is more focused now, and I spend less time on the computer. I still think I have too much email, but most days I can get it all done in one sitting.

Have you ever tracked your time? If you’ve ever charged per hour, chances are you’ve tracked your time working, but have you ever measured what you’re doing with the rest of your time? Yeah, maybe it is a bit fanatical. But I think there is value in it at least every once in a while. If a week seems like too much, even tracking your time for a single day can reveal insights and help you see areas you want to improve.

I’m interested to hear your thoughts below, and what changes you’d like to make in how you spend your time.

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[Note from Tim: An older version of this time table originally appeared on Brandon's outstanding blog. If you liked The 4-Hour Workweek, you'll enjoy his personal stories of entrepreneurship, travel, and more.]

I met Alexandra Liss on a rainy day last September, outside of one of my favorite Thai restaurants in San Francisco.

Alex had just returned from six months abroad, traveling through 21 countries for free while shooting her full-length documentary, One Couch at a Time. She was wrapping up the film and had requested an interview with me.

Our topic of discussion? The Sharing Economy.

Startups that are part of this “sharing economy” — like TaskRabbit, AirBNB, Uber, and Sidecar — have given us unprecedented access to incredible experiences and resources, allowing many people to completely upgrade their lifestyles. By capitalizing on underused resources and new technology, people can live many strata above their income. In Alex’s case, she was able to raise $8,000 through Kickstarter to crowdfund her travel and the making of her film. She also lived rent-free during those six months, staying with more than 80 different strangers she’d met through Couchsurfing.org.

In this post, Alex shares exactly how she’s managed to become a couchsurfing guru, and the steps you can take to travel the world on next to no budget…

Enter Alex

I love the look people get on their face the first time they hear about Couchsurfing.

I might mention how I’ll be hosting a revolutionary leader from Egypt, or that I’ll be crashing in the heart of the Amazon on a stranger’s couch. They inevitably tilt their heads like confused puppies.

Of course, once they’ve experienced Couchsurfing and understand how it works, their whole attitude changes. Nearly all of them end up loving it. Me? I can’t get enough of it.

After six months of sleeping in 80 different homes — staying with people I’d never met — I can definitively say that Couchsurfing has enriched my life more than anything else. In fact, I believe this site is changing our entire world for the better, one couch at a time.

What is Couchsurfing?

Couchsurfing.org is an online hospitality network that connects travelers to free places to stay all over the world. There are more than 4 million globetrotters and backpackers, in 80,000 cities, who want to share their homes and time with you… at no cost!

Couchsurfers are all over the world. This map shows the areas with the highest concentration of members.

A great host can offer a fellow surfer some of the richest experiences of their lives — and vice versa — all without a euro, rupee, dinar, peso, yen, shilling, or dollar being exchanged. Simply for the love of hanging out with a kindred soul.

Couchsurfing has brought more amazing people and incredible adventures into my life than I can count. Thanks to my hosts, I’ve met Peruvian Shamans, zipped through Ho-Chi Minh, taken boat rides in the delta of Maun, hiked to hidden spots in Victoria Falls, sat VIP during the Spanish Valladolid finals, ridden horses on an Afrikaans farm… The list goes on and on.

The bonds that form through Couchsurfing are on a completely different level from those that arise in hostels. Hosts will go out of their way to pick surfers up at the airport, open up their homes, cook exotic meals, and share their world. They can also readily show you the hidden gems in their city, unearthing attractions that you’d never find in a ‘Lonely Planet’ book. If you’ve ever wanted to get the Anthony Bourdain VIP treatment, Couchsurfing is for you.

But it’s not just the surfers who benefit; being a host can be tremendously rewarding, as well. For instance, my hosts in Morocco, Vietnam, and Brazil all use CouchSurfing as a means to improve their English. Others simply enjoy meeting new people and hearing interesting stories from the road. I get just as much enjoyment out of showing travelers around my city as I do being hosted. My appreciation for San Francisco is instantly revitalized whenever I see the wide-eyed look on a grateful CouchSurfer’s face, looking upon a site they’ve only seen in the movies.

Whether you’re hosting or surfing, it’s a win-win for both parties.

“Isn’t it dangerous?”

Everyone has a fair amount of skepticism when they first hear about Couchsurfing. The number one question I get from people is: “What if you stay with an axe murderer?”

My friend Eric, who hosted me in Paris, had this to say about the perceived “dangers” of Couchsurfing:

“When I first heard about CouchSurfing, I thought to myself, ‘There is no way am I going to stay with strangers and get raped, robbed, and murdered.’ But I was curious enough about the concept, so I did some research and made a profile. It turned out to be one of the best decisions I’ve ever made! It completely changed my life and has afforded me to see the world.”

As with anything in life, there are always potential dangers, but most risks can be easily avoided (more on this in the next section). As long as you adhere to community guidelines and use common sense, you are very likely to have great experiences.

Ready to give the Couchsurfer lifestyle a shot? Fantastic!

Here’s my advice for anyone who wants to travel rent-free…

8 Steps to Become a CouchSurfing Guru

1. Create a detailed profile.

Your profile is your key to the Couchsurfer’s kingdom. It allows hosts to learn about and trust you before meeting, and it will be a magnet for other fun surfers wanting to connect. It will behoove you to invest enough time and energy into building an awesome profile.

Here’s a screenshot of mine:

I cannot stress enough how important it is to accurately represent yourself. There’s no use in trying to be someone you’re not, or being bashful about your spiritual beliefs or diet preferences. If something is really important to you, then tell people! Show the community who you really are! The more information you can provide other members with, the better odds of everyone having positive exchanges.

Here’s what you’ll need to do in order to create a great profile:

1. Register on Couchsurfing.org. After signing up, you’ll be asked if you’d like to verify your profile with a contribution. You can skip this part for now (we’ll cover it in “Step 2: Verify Your Profile”) and begin creating your profile right away. Just click your name in the top left corner, then click ‘Profile.’
2. Post 5-10 pictures of yourself. We are visual animals, so don’t be afraid to upload a bunch of fun photos of yourself (ideally from any global excursions you’ve been on). Make sure the photos are interesting or remarkable, which gives fellow surfers material to start a conversation with you.
3. Fill out your profile. There are a lot of fields to complete, but don’t worry! You don’t have to complete everything all at once. Fill out as much as you can, then polish up the rest when you’re up to it. [Since I host a lot of surfers, I included a note in my profile to spell the word “couch” correctly when messaging me. You’d be surprised how many people request to stay on your “coach.”]

If you’re already feeling overwhelmed with the task at hand, relax! Spend some time looking at other members’ profiles, take notes on what you like and dislike, then emulate your favorites when you’re ready to get started. And if you need a starting point, here’s my profile. Feel free to use it as a cheat sheet!

2. Verify your profile.

There are two primary methods for verifying your profile, which are designed to increase security and trust with members on the site. Both are technically optional, but I can assure you that you’ll have a much harder time getting started without having one or both of these:

1. Personal references. Ask a few of your friends to leave a positive reference for you, which shows the community that you are a worthwhile person to host or surf with. If none of your friends have profiles on Couchsurfing, check out some of the local activities and meet up with couchsurfers in your area. Let them know you just joined the site, and after you’ve made a few friends, kindly ask if they’d be willing to vouch for you.
2. Credit card verification. As mentioned in Step 1, you can pay a contribution to “lock in” your name and address. You’ll be mailed a postcard in 1-2 weeks with a code that you can enter into the site.

Members trust members who have been verified, so do not skip this step!

3. Seek compatible hosts/surfers.

Now that you have the two most important pieces in play, it’s time to get the ball rolling. Click ‘Surf’ or ‘Host’ in the site’s navigation bar, enter in your destination, and begin looking through the list of members in the area.

You can also set a number of filters to improve your search results, including:

- Age
- Gender
- Language
- Keywords (e.g. “vegetarian filmmaker”)
- Has photos
- Has been verified
- Most recent login
- Apartment is wheelchair accessible

Take some time to go through all the profiles in these results. It reallys pay off to thoroughly examine a potential host’s/surfer’s profile before you decide to contact them. That means reading their description, scanning their photos, and going through each of their references. Some hosts will want to hang out with surfers; others are short on free time. Some hosts own three cats, or they need to wake up at 5:30 AM… Whatever the case, you can easily avoid mishaps and unpleasant experiences by figuring out what their expectations are of you.

Couchsurfing’s official recommendations for finding compatible hosts and surfers.

Although the chances of an ax murderer hosting or surfing with you is slim-to-none, I always always ALWAYS read people’s profiles diligently. I do not share interests in “making hair dolls” or “watching you sleep,” so I do my best to steer clear of members who could pose a problem.

Once you’ve found a fellow Couchsurfer whose expectations and priorities appear to be aligned with yours, it’s time to reach out!

4. Write legendary requests

The purpose of your first message is to show the recipient how great it would be for you two to connect (it is NOT to immediately reserve a free couch). If you can successfully show that you’re someone they have to meet, a friendly dialogue will begin and you can make plans from there.

Here are a few ways you can create legendary requests:

1. Make it personal. This is absolutely essential. No matter how many requests you send out, every single one should be custom-tailored for its recipient (cut-and-paste CouchRequests are so obvious!)
2. Create a video request. If you really want to stand out, record a video with the camera on your computer and appeal to your host directly. Upload it to Youtube as an unlisted video, then send them the link. This might take longer than writing a message, but it gives them a much better idea of how well you’ll get along and improves your chances of being accepted.
3. Write a catchy headline. Include something about who you are and/or how you want to connect. For instance, one surfer sent me a request during a very busy week. She grabbed my attention in her title (“SOS Fellow Entrepreneur Coming to San Fran!”), then mentioned our similar interests in books and dancing. I made sure to meet up with her the following day!
4. Make it memorable. No one likes boring messages, so include at least one thing in your message that makes you stand out. Mention something you both have in common, suggest cooking them a homemade dinner, talk about your life path or your love for Mario Kart… anything that sets you apart from the crowd.

Be respectful when you reach out to other members. Remember: Surfing is a privilege, not a right. When someone writes a lame request, where they show no interest in their host but free accommodation, it destroys their chances.

Here is an example of what NOT to write in a request:

Hi, my name is Anna, im 20 years old student. I am in New York for summer and am looking for coach. Looking forward to hearing from you – email me on ***@gmail.com

And yes, that is an actual message I received.

The correspondence you have beforehand establishes your connection with this person, so be sure to do it right!

Send CouchRequests to five members, 1-2 weeks prior to your arrival, and you’ll have a couch lined up in no time.

5. Preparing for your surf.

Once your host agrees on having you stay with them, you’ll need to exchange contact and travel information. Here’s what both parties should know…

If you’re surfing:

1. Confirm your arrival and departure date. Although you might change these dates, it’s always polite to set reasonable parameters. This is CouchSurfing, not CouchLiving, so be clear when you’ll be in and out.
2. Write down your host’s address and phone number, and enter it in your cell phone. I can’t tell you how many times I forgot to charge my phone when entering a new country. When traveling, expect for some type of miscommunication or technology fail.
3. Have a backup plan! Whether it be your creeper meter or inevitable failings of plans – you need to have a back up. You’re in a foreign country and always need safeguards. Make sure you have established contact with a few other CSers who you might be able to call/message in an emergency, as well as the locations of some hostels before you arrive. Also, knowing where the nearest Internet cafes are can help you in a pinch to try to find a new place to stay if necessary.

If you’re hosting:

1. Send the surfer your address, phone number, and directions to your couch. Include any details about hidden keys or codes to get in (assuming you’re comfortable with this). And if you’re feeling generous, offer to pick them up.
2. Have their couch ready and room tidy.
3. Have a few local recommendations in mind. Your surfer will want to know the must-sees and tastiest dishes. This is your chance to show the best of your hometown!

One more thing… CouchSurfing is NOT a dating site. Don’t make your host or surfer uncomfortable by crossing into OKCupid territory. And yes, I’d be lying if I said I’d never been attracted to a host or surfer. I’m just saying… keep it classy.

Let the surfing begin!

6. Immerse yourself in their culture.

Congratulations, you’re not in Kansas anymore! It’s time to mute your hometown identity and embrace this new culture. This is harder than it sounds at first, but you will quickly get the hang of it.

Here are a few tips to make your time in this new world much more pleasant:

Avoid tourist tendencies. See the spots you want to see, but don’t follow what every tourist does. If your host is willing, let them take you off the beaten path to their favorite local spots. And whatever you do, leave your “I <3 NYC” t-shirt in your bag.

“When in Rome…” If you’re in a different country, curb your ethnocentrism and attempt to assimilate. Learn how to say “hello” and “thank you” in the native language. Respect their customs, try new foods, use the hole-in-the-ground toilet, be willing to go out when you are tired… In short: show your appreciation!

Facebook surgery. You’re traveling, nerd! Peel yourself away from the computer and go explore Your friends will withhold their ‘Likes’ of your photos until you return.

7. Express any concerns or issues.

If, at any time, you aren’t happy with your CouchSurfer’s behavior, be sure to tell them why. In most cases, the problem will be unintentional or a cultural difference. But if you don’t speak up, your CouchSurfer might never know they’ve bothered you (or vice versa). And if the awkward antlers keep cropping up and lines are repeatedly crossed, it’s your duty to warn the community of your experience in your reference.

In my over 150 CouchSurfing experiences, I have never had to leave a negative reference or had one left about me. However, I’ve had countless instances of cultural misunderstandings and uncomfortable learning experiences. For instance, when I was traveling through Cambodia with my Pakistani friend, Zohra, I thoughtlessly made an off-color comment about terrorism. Whoops. My “sense of humor” was extremely offensive to her, and when I learned about the atrocities she lives with everyday in Pakistan, I realized I’d been watching too many episodes of South Park. Best to leave your amateur hour material at home.

8. Leave the couch better than you found it.

When it’s time to hit the road, make sure that you tidy up and leave your room spick-and-span. If you borrowed anything, double-check that you’ve returned it. If your host isn’t at home when you leave, make sure that you know how to secure the door correctly. Leave a handwritten note or a gift from your home country to say “thanks.”

Last but not least, leave them a thorough reference. If your host treated you well, be sure to write positive things about them so other CouchSurfers will want to stay with them! And if you set the bar with a kick-ass reference, they will usually return the favor.

Final Thoughts

The age of sharing is just beginning. I’ve experienced first-hand the inspiration and transcendence that regularly takes place, and I plan to be a CouchSurfer for life. I want my future children to grow up around different cultures and instill sharing and exchange. And when I’m too old to travel myself, I’ll be hosting from my rocking chair.

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Do you have a story about how Couchsurfing or the sharing economy changed your life? Tell us in the comments!

Also, there are two public screenings of One Couch at a Time coming up soon…

- San Francisco - January 17th (tomorrow) @ 6:30PM at The Hub SOMA, 901 Mission St. (Buy tickets here)

- Los Angeles - January 26th @ 6:30PM at Just Cause Entertainment, 4130 Del Ray (Buy tickets here)

We’d love for you to come join us! (If you’d like to request a screening of the film in your city, click here.)

I first met Mike Del Ponte two years ago when he was running marketing at BranchOut, a startup I advise.

Before joining BranchOut, Mike had explored a variety of career paths, including preparing for the priesthood at Yale Divinity School and serving as a peacemaker in the West Bank.

Earlier this year, Mike came to me with a new product idea called Soma. Soma is, in its simplest form, a high-end competitor to Brita water filters. It combines Apple-inspired design (e.g. sleek glass carafe) with a subscription service that delivers the world’s first compostable water filter to your door. From form to function, from funding model to revenue model, Mike was eager to disrupt a sleepy but enormous market: water. I became an advisor.

To launch Soma on Kickstarter (and raise $100,000+ in just nine days), Mike and his team used some of the techniques that helped BranchOut grow to 25 million users in just 16 months.

You can replicate what he did.

This post includes all of their email templates, spreadsheets, open-source code to build landing pages, and even a custom dashboard Soma’s co-founder/hacker Zach Allia built to monitor their Kickstarter data, social media, and press.

This post is as close to copy-and-paste Kickstarter success as you will find. And even if you have no interest in Kickstarter, Mike’s approach is a blueprint for launching nearly any product online for maximal impact and minimal cost.

Enjoy!

UPDATE: Soma is offering a 7-course, private dinner with me at a historic mansion in San Francisco (travel included) as one of their Kickstarter prizes. At the time this post was published, there was still one spot left.

Enter Mike

How many times have you dreamt of launching a new product, only to let your dream fall to the wayside?

I don’t have the money to even get started! What if it fails?

In the past, these excuses held some weight, as bringing a new product to market could be incredibly expensive. Oftentimes, you had to prototype, build, and then hope the world wanted what you were selling. If not, you could end up with a warehouse full of debt: unsellable inventory.

Now, there are new options. Crowdfunding platforms like Kickstarter and IndieGogo allow you to introduce (test) a new product before you start manufacturing, removing a huge amount of risk. If people like what you’re proposing, you can pull in thousands or even millions of dollars to fund your dream. At the very worst, you were able to test your idea without investing much time or money.

But planning and running a Kickstarter campaign is often done in a haphazard fashion.

To prepare for ours, we didn’t want to leave anything to chance, so we interviewed 15 of the top-earning Kickstarter creators. Their projects ranged from a grizzly bear jacket to a gaming console that raised nearly $8.6 million on Kickstarter. What we learned is that whether you’re successful or struggling, your Kickstarter campaign is often “40 days of chaos,” as one creator put it. Either you succeed beyond your wildest dreams and are overwhelmed with inquiries from backers, press, retailers and investors, or you struggle to achieve your goal and frantically beg bloggers and friends to spread the word. Either type of overwhelm can be a huge headache.

So, we got creative.

Using virtual assistants, growth hacking techniques, and principles from Tim’s books, we raised over $100,000 in less than 10 days. Having accomplished our goal with almost 30 days to spare, we are now relaxing for the holidays. The Kickstarter is behind us, allowing us to get back to product development as we get to know our new community of 1,600+ committed customers.

Here are the steps we used to do it…

Step 1: Start with principles that require less work and yield better results

We chose three core principles for our Kickstarter strategy. The hacks and tactics we’ll share with you are cool, but these principles were the foundation of our campaign. Make sure you understand them before moving forward.

1. Minimum Effective Dose. MED is the smallest input needed to produce a desired outcome. For example, if you want to boil water, the MED is 212 degrees Fahrenheit. Increasing the temperature above 212 degrees will not produce a better result, it will just waste resources. We wanted to focus on the 1-3 things that would allow us to raise $100,000 in 10 days, and eliminate everything else. MED is described in detail in The 4-Hour Body.
2. Outsource and automate. These two steps allow you to get results by delegating tasks and setting up automated systems so you can focus your energy on more valuable projects. The #1 resource we found for outsourcing is Zirtual. Zirtual provides US-based virtual assistants (VAs) for as little as $97 a month. Do not run a Kickstarter campaign (or your life) without VAs. They will save you countless hours of work. The 4-Hour Workweek is the best book on outsourcing and automating.
3. Prep and pick up. Chef’s don’t prepare meals like you and me. They don’t start 15-60 minutes before dinner. Instead, they prep everything in advance (sometimes days before), so they can just heat the food and make it look nice when it’s time to eat. This concept was critical to our success. Our goal was to do 90% of the work in advance. For example, crafting emails 2-3 days early so we just needed to click “send” when we launched. We learned about prep and pick up in The 4-Hour Chef. It’s a game changer.

Step 2: Find the MED for Kickstarter traffic

If you want to raise a lot of money on Kickstarter, you need to drive a lot of traffic to your project. And you want that traffic to be comprised of prospective backers of your project. Applying the concept of MED, we knew we needed to discover and focus on the best traffic sources.

My friend, Clay Hebert, is a Kickstarter expert. One of the things he taught me is a simple trick using Bit.ly tracking. Bit.ly is a link shortening service used by millions of people…and Kickstarter. If you add a + to the end of any bit.ly URL, you can see stats about that link. For example: here are stats for the shortlink Kickstarter generated for our campaign http://kck.st/VjAFva+.

Click here for full size image

Click here for full size image

To discover the top referral sources, we gave our VA a list of Kickstarter projects similar to ours and asked her to list the referrers for each project. Almost without fail, the order of top referrers was:

1. Facebook
2. Direct traffic (primarily via email)
3. Twitter
4. Kickstarter
5. Blogs

Based on this data, we decided to focus all of our attention on just two goals:

1. Getting coverage on the right blogs
2. Activating our networks to create buzz on Facebook, Twitter, and email

We knew that if we did this, we would be listed on Kickstarter’s “popular projects” sections, which is how you get people who are browsing Kickstarter to check out and back your project.

Step 3: Use the 80/20 rule to focus on the best media targets

At Soma, we were fortunate to get a ton of press in just 10 days (Forbes, Fast Company, Inc., Mashable, Cool Hunting, Business Insider, GOOD, Salon, Gear Patrol, Thrillist, The Huffington Post, and many more). We made mistakes and learned a lot. This section offers our best advice on how to get the MED of press and succeed on Kickstarter.

The 80/20 rule teaches us that 20% of stories will yield 80% of your press results. This was absolutely the case for us. One week into our Kickstarter campaign, we reviewed our press coverage. Surprisingly, the post that earned us the most money was on a site most people have never heard of: www.good.is, the online property of GOOD magazine.

We stopped and asked ourselves, “Why did good.is outperform bigger and more well-known media outlets?” We discovered that good.is was in some cases 10x more valuable than other press because the audience is relevant, the readership is substantial (400,000+ unique monthly visitors), we got an introduction to a writer at GOOD, and we reached prospective backers through GOOD’s daily email and its Facebook and Twitter accounts.

Therefore, when making your media list, these are the four things to look for:

1. Relevance – will their readers LOVE your project?
2. Readership – how much traffic does their site get? [TIM: For a quick idea, I use the SEO for Chrome extension]
3. Relationships – do you know at least one person who can make a strong introduction?
4. Reach – will the blog reach prospective backers by promoting your post via email newsletter, RSS feed, Facebook, Twitter, and other channels? [TIM: This is the most neglected checkbox. Blogs that expect you to drive all traffic to their posts are a waste of time. Remember: big site-wide traffic does not mean each post gets much (or any) traffic.]

What follows is a 5-step process for making the world’s greatest media list. Your VA will do 90% of the work. We’ve included email templates you can use to delegate these projects to your VA.

I. Find relevant bloggers using Google Images

Start by looking at who covered Kickstarter projects similar to yours. You can do this by using a simple Google Images hack. If you drag and drop any image file into the search bar at images.google.com, you’ll be shown every website that has ever posted that image. Pretty cool, huh?

Click here for full size image. Below, the Porthole by Martin Kastner.

Here’s the process your VA will use:

1. Find 10 Kickstarter projects similar to yours, and for each, do the following.
2. Right-click and save-to-desktop 2-3 images.
3. Drag and drop each image file from your desktop into the Google Images search bar.
4. Review blogs listed on the results page to see which might be relevant to your project.
5. Fill out the following fields in the attached “Media List” spreadsheet: Publication, URL, first and last name of the writer, and links to relevant posts by that writer.

You now have dozens of blogs that have a high probability of relevance, all neatly organized in a spreadsheet. Your VA can find more sites like the ones in your media list by searching SimilarSites.com.

II. Research site traffic on Compete.com

Bigger is not always better. But it is helpful to know the size of each blog’s readership. Have your VA research how many unique monthly visitors each blog has and add that data to your media list.

III. Identify relationships on Facebook

This may be the most important part of your PR efforts. For us, eight out of ten valuable blog posts resulted from relationships. Either we knew the blogger or got an introduction. When we pitched a blogger without a relationship, less than 1% even responded. With introductions, our success rate was over 50%.

How do you identify relationships? Facebook. Have your VA log in to your Facebook account, search for bloggers in your media list, and add mutual friends to your spreadsheet. You can also search on professional networks like BranchOut or LinkedIn.

IV. Discover each blog’s reach on email, social media, and RSS

After witnessing the value of good.is featuring Soma in their email newletter, we completely changed the way we thought about press coverage. A blog post is just the beginning. Once you get covered, you need distribution. You need to reach your prospective backers through email, RSS feeds, and social media.

To estimate a blog’s reach, have your VA research how many followers it has on Facebook, Twitter, Pinterest, and RSS. Once you make your short list of media targets (see below), you should also sign up for each blog’s email newsletter.

You won’t really know what your reach will be until you’ve landed each story and received a commitment by each blog to promote your posts. But don’t worry, we’ll help you get both below. So keep reading.

V. Review your media list and turn it into a dossier fit for a Seal Team 6 secret mission

Ok. So now you have a really strong media list…and all you had to do is send four emails, which we wrote for you. Not bad. Now it’s time for you to double check your VA’s work and create your blogger shortlist.

1. Open your media list spreadsheet and look at the mutual friends you share with each blogger. Delete the people you do not know well enough to ask for an introduction. Email the people who remain and say, “Hey ____, I saw you’re friends with [name of blogger] on Facebook. Do you know him well enough to make an intro next month? I think our Kickstarter project could be a good fit for [name of blog]. Thanks!” Based on the answers you get, rate how strong your relationship is for each blog (1 = strong, 3 = weak). If your VA didn’t find any mutual connections, tweet or post on Facebook: “Please message me if you know anyone at [name of blog]. I have a great story I’d like to share with them. Thanks!” I did this twice and immediately got introductions.
2. Spend some time on each blog and judge for yourself how relevant it is. Rate relevance in the spreadsheet (1 = extremely relevant, 3 = not relevant).
3. For each blog, research the writers your VA found. Based on their past posts, are they really the best bloggers to cover you? Is there anyone at the blog who is a better fit?
4. Now, sort your spreadsheet by relevance, relationships, and readership (in that order) to prioritize your outreach. Have your VA find email addresses for the top ten bloggers in your spreadsheet. At this point, you should only focus on ten bloggers.
5. Using this template, have your VA make a one-page brief for each of the top 10 bloggers. Print these out and hang them on the wall like wanted posters or put them in a top secret dossier. Whether you fancy yourself a bounty hunter or the next James Bond, your mission is to find, befriend, and get covered by these bloggers so the dream you’re launching on Kickstarter can become a reality.

Step 4: Turn bloggers into buddies

The only thing better than pitching a blogger through a friendly introduction is becoming friends with the blogger yourself.

If there’s one thing we learned from our Kickstarter campaign, it’s that friends are incredibly generous. They will go to great lengths to help you succeed. Blogger friends are no exception. Some of our blog posts came from close friends who offered to help before we even asked. For example, this Fast Company article by Amber Rae that got over 6,000 Facebook likes and 4,000 tweets in just 10 days.

The key is to genuinely form friendships with bloggers. They get pitched every day by strangers who don’t care about them and only want publicity. Do the exact opposite. Really care about them. Figure out ways to be helpful. Hang out. Even if they don’t end up covering you, at least you’ll have a new friend.

Step 5: Get the story and make specific requests to maximize your reach

Once you connect with a blogger that is interested in covering your project, your job is to make it as easy as possible for them to write a story that is valuable to their readers and to you. The benefit of starting with a shortlist of just 10 bloggers is that you can really get to know their blog and writing style. Armed with this information, you can tailor your pitch to their needs. For example, after receiving an email introduction to a blogger at Gear Patrol, the ultra cool men’s digital magazine, I sent over this pitch (to someone not named John):

Hi John

It’s great to meet you. I’m a huge fan of Gear Patrol and wanted to pass on something new that could be a nice fit for your kitchen section. I’ve attached an image of the Soma glass carafe and our revolutionary water filter. Our Kickstarter page has a video and bullet points on why Soma is unique.

We think Soma could be a great story for Gear Patrol for these reasons:

Innovative gear – Soma is the world’s first compostable water filter: made of Malaysian coconut shells, vegan silk, and food-based plastic.
Sleek design – The Soma carafe is made of decanter-quality glass, in a world of plastic pitchers. The hour-glass shape is unprecedented in the industry.
Made for busy guys – Soma delivers your water filters right to your door so you never forget when to change it.

If you’re interested, please let me know how I can make the writing process easy for your team. I’m happy to send more hi-res photos. We launch Tuesday at 8am PST.

Thanks for taking the time to check us out,
Mike

The good thing about Kickstarter is that most of the information and assets bloggers need for a story can be found right on your Kickstarter page, including high resolution photos and the embed code for your video. We built a press page and wrote a press release. In retrospect, they may not have been worth it given the amount of time we spent on them. All you need is a DropBox folder with hi-res photos and 5-7 bullet points about your project that you can paste in an email. The key is to make sure you package everything in a way that’s convenient for bloggers.

[TIM: For more real-world successful pitches (e.g. Wired Magazine, Dr. Oz), see my post "From First TV to Dr. Oz – How to Get Local Media...Then National Media"]

Once you get the story, your work is far from over. Remember, you want to ensure each story reaches people who will back your project. So after a story is confirmed, make sure to ask the blogger the following questions, ideally in person or over the phone one week prior to launch.

1. “We’re launching on Monday at 8am PST, can the story go live at that time?” If they say “no,” ask for the story to be published at another time on Monday, Tuesday or Wednesday 8am-5pm PST, ideally in the morning. If they say, “I’ll try,” push for a confirmation of the date and time your story will go live. We missed out on a lot of valuable traffic because big blogs posted our story at night or on the weekend.
2. “As a subscriber to your email newsletter, I always read the stories you curate and am sure others do, too. Can our story be featured in your newsletter?”
3. “We’ve found that Facebook is the #1 source of traffic to Kickstarter. Can you post our story on your Facebook fan page the morning it goes live? Cool! And I’m assuming you’ll tweet it out, too, right? Awesome!”
4. “I follow you on Pinterest and noticed you have like a gazillion followers. We pinned a new picture of our product. If I send you a link, would you mind repinning it?”

Once we realized how important timing and promotion were, we started making these requests. To be honest, initially I was nervous. I thought it would be more polite to not bother bloggers. But then I learned two important lessons. First, bloggers work hard to create content and they want it to be seen by as many people as possible. And second, bloggers won’t get annoyed by your requests if you’re polite, explain why timing and promotion are so important, and give them the time and help they need to work within the confines of a content calendar they may not control. The more you befriend bloggers and consider their fears and motivations, as well as your own, the better your results will be.

What I’ve just shared with you is a step-by-step approach to getting the most effective media coverage possible. I’ve worked with PR firms that charge $20,000 a month and spend three-months planning a launch. Follow our advice and there’s a good chance you’ll get better results without spending anything.

What I’m about to share, how to activate your network, is equally as important. In both cases you want to create what Tim calls “the surround sound effect.” Especially on the first few days of your launch, you want people to see your project everywhere – on blogs, Facebook, Twitter…everywhere. One tool that creates this surround sound effect is retargeting. For as little as $500, you can display banner ads on various sites to 10,000 people who have seen your project, but may not have backed it. I haven’t heard of many Kickstarter projects using retargeting, but it’s something worth investigating.

Step 6: Segment and activate your network

Someone recently asked us, “How did Soma raise $100,000 on Kickstarter in just nine days?” Our answer: friends. The secret to our success was leveraging our personal networks. Our friends introduced us to bloggers, were the first to back our project, and promoted Soma to their personal networks via email, social media, and word of mouth. Your friends are super heroes. Treat them as such.

The way to activate your network of friends is to give them a sense of ownership. Let them know they are part of the team. That way, they are working with you, rather than doing you favors.

Our Kickstarter launch team included three full-time teammates, two virtual assistants, one intern, and an army of friends. Our network of friends had a strong sense of ownership because we engaged them months before the Kickstarter launched. Here’s how.

1. Ask for (and listen to) your friends’ advice. We asked for feedback on everything from our name to product design to pricing.
2. Offer them “sneak peaks” that no one else gets. We showed our friends product renderings, pictures, and our Kickstarter video long before we released them to the public.
3. Throw a launch party. Having a large group of people in one room, all excited about your project, creates a united energy you can’t create through emails, phone calls, or one-on-one meetings. Invite over 50 motivated and influential friends, show them your Kickstarter video and make a speech telling them why you need their help and exactly what you need them to do. The people who attended our launch party ended up being our first backers and our most passionate evangelists.

Segmenting friends to ensure appropriate messaging

I went through the tedious process of making segmented email lists for my personal network. Since this involved making decisions based on my personal relationships, it was impossible to outsource. It was annoying, but worth it. I exported all of my Gmail contacts, about 7,200 total, into an Excel spreadsheet. Then, I deleted 6,000 contacts I did not have a meaningful relationship with. The remaining 1,200 contacts were divided into three groups: influencers, in-the-know friends, and acquaintances.

1. I identified my influencers using Klout, which measures online influence. Go to www.klout.com, connect with Facebook, select “friends” from the drop down menu in the upper right hand corner of the screen, then click on the “top klout score” tab half-way down the page on the right. This will show all of your Facebook friends, ranked by Klout score. Anyone with a Klout above 60 was put on my influencer list. Our goal for this group was for everyone to share Soma on Facebook and Twitter, right when we launched, to create the surround sound effect.
2. My in-the-know friends were already aware of Soma. They knew about the Kickstarter campaign, and that we wanted them to back our project and spread the word. The people in this group, regardless of their Klout score or financial resources, were ready to hustle for us.
3. Acquaintances were people I hadn’t spoken with in a while. They needed to be told what Soma is and why it’s important. This group was by far the largest, comprising at least 1,000 of the 1,200 people on my master list.

Each of these three groups received a different email when we launched, which you can see here. The acquaintances received a mass email sent via MailChimp. The influencers and in-the-know friends each received a personalized email, everyone was slightly different.

Personalized emails require much more time than one mass email, but we put in the extra hours to honor our friends and reinforce that they’re part of the team. One tool proved to be a huge time saver. TextExpander allows you to paste any saved message – whether it’s a phone number or a 2-page email – into any document or text field, simply by typing an abbreviation. For example, when I type “ppush”, a basic form of the email above appears with fields for me to fill in the name, in this case “Joe”. It’s a must have app that probably saved us 1-2 hours a day in typing.

One tool that we did not use, but should have, is Boomerang, a Gmail plug-in that allows you to schedule emails. We crafted emails to our influencers and in-the-know friends the day of our launch, using TextExpander, then slightly customized each one. What we should have done is write and save these personalized emails a few days before we launched. That way, we could have scheduled them to be automatically sent by Boomerang the second we launched. This would have freed up many valuable hours on launch day.

Step 7: Use landing pages to spark sharing

You’ll notice in our email templates that we often send people to landing pages we built for our Kickstarter launch (rather than to our Kickstarter page directly). We realized that most Kickstarter creators do one of two things:

1. They ask for too many things (“Back us! Tweet! Like us on Facebook! Email friends!), which often results in people doing nothing at all.
2. They ask for just one thing, which people do, but miss out on other actions their friends might do if asked the right way.

We wanted to have our cake and eat it, too. So we asked our friends to click just one link, which of course, had 3 ways to help! Then, when they returned to their email, we had a subsequent ask, which was to forward the email to others.

Why it worked: Essentially we were asking them to do just one thing at a time, typically just to click something.

Throughout the campaign we built two more landing pages. Each were meant to maximize sharing on social media, primarily Facebook. We included videos so our friends were incentivized to visit the landing page and got value. These videos were recorded on an iPhone. They were free to make and only took about an hour to shoot, edit, and upload. Highly recommended.

The emails and landing pages were sent out on days 1, 2 and 9, usually at 8am. We’ve left them up so you can check them out: Day 1, Day 2, Day 9. You can see the emails and Kickstarter updates here.

These landing pages were critical when it came to creating the surround sound effect. We know because every time we launched one, we got flooded with texts and emails saying, “Dude! I’m seeing you guys everywhere. Congrats!” When you get a lot of people sharing the same link on Facebook, it’s displayed to more people, who share it with even more people, and you get this virtuous viral burst that keeps growing.

You can make your own custom landing pages by using our opensource code.

Final thoughts

If you look at our advice, it essentially boils down to empowering people and making it easy for them to contribute to a worthy cause. Always try to empathize with other people. And take the time to say, “Thank you.” It goes a long way.

The best story we heard about using Kickstarter to derisk a business was by the founders of Hidden Radio, which raised $938,000 on Kickstarter. Inspired by The 4-Hour Workweek, they wanted to test out ideas as much as possible. So before building a prototype, they submitted product renderings to a few design blogs. The response was positive, but they didn’t rush into manufacturing. Instead, they tested their idea again as a Kickstarter project, knowing it forces people to put their money where their mouth is. 5,300 people backed their project, which provided proof of concept, capital, and a big group of customers willing to provide free market research. To us, this is a great example of hacking Kickstarter. It’s about a mindset, not just tricks and technology.

Although we stopped marketing our Kickstarter on day 9 of the campaigin, our page is still up and you can reserve a Soma until January 11, 2013. If you’re fast, you may also get a private, 7-course dinner with Tim Ferriss, which is the last reward listed on our Kickstarter page.

Tools

Zirtual – US-based virtual assistants. ($97-$997 per month)

TextExpander – Paste frequently used text and pictures into documents, emails, and text fields by simply typing an abbreviation. ($34.95)

Boomerang – A Gmail plug in that allows you to schedule emails. You can also receive reminders to follow up on an email you sent if the other person does not reply. (Free)

MailChimp – A service to design and send mass emails. (Free if you have less than 2,000 subscribers and send less than 12,000 emails per month)

The 22 Immutable Laws of Marketing – This book provides critical insights on how best to position your product amongst the competition. ($11)

Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing – A must read for anyone doing any form of marketing. The sections on pricing and copywriting will be incredibly helpful as you craft your emails, video script, and Kickstarter page. ($17)

Custom Kickstarter dashboard – We built this Chrome extension to manage our Kickstarter campaign. You can see your Kickstarter, Facebook and bit.ly metrics, as well as tweets and press. All updated in real time. You can even see Klout scores of people tweeting about you and reply right from the dashboard. (Free)

Click here for full size image

Chad Mureta runs his seven-figure app business from his iPhone. (Photo: Jorge Quinteros).

I first met Chad Mureta in Napa Valley in 2011.

Two years prior, he had been in a horrible car accident. He’d lost control of his truck in at attempt to avoid a deer, hit a median, and flipped four times, nearly destroying his dominant arm in the wreckage.

While in the hospital for a lengthy recovery, a friend gave him an article about the app market. Shortly thereafter, Chad began designing and developing apps. His results?

“In just over two years, I’ve created and sold three app companies that have generated millions in revenue. Two months after launching my first company, one of my apps averaged $30,000 a month in profit. In December of 2010, the company’s monthly income had reached $120,000. In all, I’ve developed more than 40 apps and have had more than 35 million app downloads across the globe. Over 90 percent of my apps were successful and made money.”

After finishing rehab, Chad was able to leave his real estate company, where he’d been working 70 hours a week, to run his app business from his iPhone… in less than 5 hours per week.

“Apps” are the new, new thing, thanks to major successes like Draw Something (bought by Zynga for $210 million) and Instagram (bought by Facebook for $1 billion), among others. But for all the hype and promise, few people actually know how to create something that gets traction.

In this post, Chad will discuss his step-by-step formula for rapid app development and sales optimization. It covers real-world case studies and the details you usually don’t see: early prototype sketches, screenshots, how to code if you don’t know how to code, and much more.

Last but not least, don’t miss the competition at the end. If you’ve ever thought “I should make an app that…,” this one is for you…

Enter Chad Mureta

When you are on your deathbed, will you be able to say you lived a fulfilled life?

I nearly couldn’t.

I started my app business from a hospital bed, wondering if I even wanted to live. I had barely survived a terrible car accident that shattered my left arm. I had gone through two groundbreaking operations, and spent 18 months in painful rehabilitation.

With limited insurance, I had racked up $100,000 in medical bills. Even though I survived, I had no clue how to get out of the deep hole I felt trapped in. I was moved to a physical rehabilitation center and worked on reconstructing my body, my mind, and ultimately my life. While I was there, I read two books that made a huge impact: Unlimited Power strengthened my thought processes, and The 4-Hour Workweek inspired me to pursue lifestyle freedom.

During that time, a good friend gave me an article about “appreneurs” and told me I should consider getting into the business. I learned that most appreneurs were one- or two-person teams with low costs, and the successful ones were bringing in millions in profits. Still in my hospital bed, in a state of semi-coherence from the pain medication, I began drawing up ideas for apps.

Three weeks after my final surgery, desperate, broke, and grasping at straws, I borrowed $1,800 from my stepdad and jumped into the app business. Fortunately, taking that leap was the best decision I’ve ever made…

These days, my life is about doing what I love while earning easy income. I run my business from my iPhone, working in a virtual world while earning real dollars. I am part of a growing community of “appreneurs,” entrepreneurs who make money from applications that are used on iPhones, iPads, iPods, Droids, and Blackberries. As of this writing, the world’s youngest appreneur is nine years old, and the oldest is 80!

Appreneurs earn money while creating lifestyles of great freedom. Two of my appreneur friends spend several months of the year doing nonprofit work in Vietnam, while their businesses are generating seven-figure incomes. Another is taking his kids to see the Seven Wonders of the World, creating priceless memories with his family. Still another friend goes backpacking throughout Europe with his wife for most of the year. As for me, I’ve hiked in the Australian Outback, trekked with Aborigines across the desert, climbed in the Rocky Mountains, got certified in solo skydiving, heli-skied in Canada, walked on fire, and most important of all, learned not to take life so seriously.

No matter what your dream lifestyle is, you can have it as an appreneur.

The Opportunity for Appreneurs

There are currently more than 4.6 billion cell phones being used worldwide, enough for two-thirds of the people on Earth. The app market is literally the fastest growing industry in history, with no signs of slowing down. Now is the perfect time to jump into the mobile game.

What happened during the early days of the Internet, with the creation of websites like Google and eBay, is exactly what’s happening today with apps and mobile technology. The only difference is that we have experienced the rise of the Internet and are conditioned to react more quickly to the app revolution. This means that the app world is running light years ahead of the Internet, when it was at the same development stage. Developing apps is your chance to jump ahead of the masses and not be left behind, saying years from now, “I wish I had…”

Common Objections

“I’m not a tech person. I have no experience in this market.”
I was in the same spot, and I still don’t know how to write code. But I found successful people to learn from, emulated their models, and hired programmers and designers who could execute my ideas. If you can draw your idea on a piece of paper, you can successfully build an app.

“The app market has too much competition. I don’t stand a chance.”
This industry is just getting started– it’s less than four years old! What makes the app business unique is that the big players are on the same playing field as everyone else. They have the same questions and challenges as you and I will have.

“I don’t have the money.”
You don’t need a lot of money to start. It costs anywhere from $500 to $5,000 to develop simple apps. As soon as you launch your app (depending on your sales), you could see money hit your bank account within two months.

“It’s difficult… I don’t understand it… I’m not smart enough.”
Just like everything you’ve learned in life, you have to start somewhere. Fortunately, running an app business is far easier than almost every other type of business. Apple and Google handle all of the distribution, so you can spend your time creating apps and marketing them. And you don’t have to come up with new, innovative ideas. If you can improve on existing app ideas, you can make money.

Many people are joining the app gold rush with a get-rich-quick mentality and unrealistic expectations. Maintaining an optimistic perspective is important, but so is understanding that you will have to put in work. My goal in this post is to help you think like a business owner, and show you the map I’ve used to find “the gold.” This is not a one-time app lottery, and you can’t treat it as such. If you think of this endeavor as a long-term business, it will grow and become a sustainable source of income.

Still interested? Then let’s get started!

Step 1: Get a Feel for the Market

As with any business, your success will be directly related to your understanding of the marketplace. The App Store is the marketplace of the app business, so in order to understand the market, we have to study the App Store. This seems rather obvious, but you wouldn’t believe how many developers I meet that don’t understand this concept. They don’t watch the market, follow the most successful apps, or try to figure out why those apps are successful.

In order to become a great app supplier, you must first become an app addict. That means spending at least 2-4 weeks researching the market while downloading and playing with tons of apps (give yourself an app budget of $100 to start). This training period is an investment in your expertise, which will become the lifeblood of your success. The more hours you rack up playing around and studying successful apps, the better you’ll be able to understand their common traits and what users desire.

So, how do you keep pace with the market? The best way is to study Apple’s cheat sheet constantly. The App Store displays the top paid, top free, and top-grossing apps (the apps that make the most money, including free apps), almost in real-time. Apple provides the same lists in the individual app categories.

These charts are golden because they tell us volumes about the market. The best part is this information is freely accessible to anyone, at any moment (unlike the market info for basically every other industry).

Review these charts frequently, and keep a notebook of potential trends you spot. Doing this repeatedly will educate you on successful app design, marketing, and various pricing models. The research you’re doing is simple, costs nothing, and it’s actually fun!

Here are some questions to ask while you’re researching successful apps in the market:

1. Why is this app successful?
2. What is its rank and has it been consistent?
3. Why do people want this app? (Look at the reviews.)
4. Has this app made the customer a raving fan?
5. Does this app provoke an impulse buy?
6. Does this app meet any of my needs?
7. Did I become a raving fan after trying it?
8. Will the customer use it again?
9. How are they marketing to their customers? (Check out the screen shots, icon design, and descriptions.)
10. What is the competitive advantage of this app?
11. What does this app cost? Are there in-app purchases? Advertisements?

Most developers will build an app and expect tons of people to find and download it right away. That rarely happens. You have to figure out what people are interested in and the kinds of apps they’re downloading first, then you build your app based on that insight.

Once you’ve put in the necessary 2-4 weeks of research and feel you have a decent grasp on the market, it will be time to look back on the trends you discovered and explore some ideas for potential apps you can develop.

Step 2: Align Your Ideas with Successful Apps

How do you know if the market wants your app? Again, you’ll need to look at the Top Apps chart. Are apps like the one you want to create listed there? If yes, you’ve got a potential winner. If not, keep looking. It’s that simple.

Don’t hate; Emulate! When you follow in the footsteps of successful apps, you will have a better chance of succeeding because these apps have proven demand and an existing user base. This takes the guesswork out of creating great app ideas.

I can’t stress the importance of emulating existing apps enough. It’s easy for people to fall in love with their own idea, even if the market doesn’t show an appetite for it. But this is one of the costliest errors you can make.

Unfortunately, developers make this mistake all the time. They focus on generating original ideas and spend a lot of time and effort creating those apps. When it doesn’t work out, they go to the next untested idea, instead of learning from the market. Often times, they repeat this cycle until they run out of money and dismiss the app game. This doesn’t have to be your experience.

A personal example of how to successfully emulate competitors is my Emoji app. First, I took a close look at what the market offered and downloaded all the major emoticon apps. I liked what I saw, but noticed that there was a lack of variety and limited functionality.

Screenshots from a competing Emoji app. The app (left) is opened once to provide the user with instructions on how to enable the Emoji keyboard (right).

I wondered how I could improve upon these existing apps, given that the Emoji keyboard had a limited number of emoticons that couldn’t be increased. I was also curious how profitable these apps could be if they were only being used once.

I kept brainstorming until it hit me. I couldn’t add more emoticons to the Emoji keyboard, but I could include unlimited emoticons within my app that people could send as images via text message or email.

I created an app that not only enabled the Emoji keyboard, but also contained an additional 450 emoticons within the app itself, which could be shared via SMS, e-mail, Facebook, and so on. The app was used constantly since users had to return to the app to send an emoticon.

Screenshots of my Emoji app.

The Emoji app was developed in two weeks. It followed the freemium model, meaning free with an in-app purchase option. The app hit the number one spot in the App Store’s productivity category and the number 12 spot in the top free overall category within six days, raking in nearly $500 per day. Bingo.

Whenever you decide to look into emulating an app, ask yourself these six questions:

1. Why are people purchasing this?
2. Can I do something to emulate this idea and take it to another level?
3. What other ideas would this app’s demographic like?
4. How many other similar apps are in the market? (Visit TopAppCharts.com to find out.)
5. How successful and consistent have they been?
6. How does their marketing and pricing model work?

Step 3: Design Your App’s Experience

You’ve studied the market, you see an opportunity, and you have an idea that could be profitable. Great! Now it’s time to turn those thoughts into something tangible.

To convey your idea properly, you can simply draw it on a piece of paper. Maybe it will look like a 3-year old’s artwork, but it will still convey what you’re trying to do. Some people like putting this together in digital form, using Photoshop or Draft. Whatever you’re most comfortable with, and whatever will give the programmers the details they need, is the way to go.

For your viewing pleasure, here are the rudimentary drawings (a.k.a. wireframes) for my first app, Finger Print Security Pro. As you can see, it doesn’t have to be pretty!

And here’s how the app’s final design turned out:

To make the design process easier, I look at certain apps in the App Store and reference them to show my programmers what I’m looking for. For example, I’ll say, “Download the XYZ app. I want the ABC functionality to work like theirs. Take a look at the screenshots from this other app, and change this.” I take certain components of apps that I’d like to emulate, and give them to the programmer so that we are as clear as possible.

Notice any similarities? Highlight’s menu (left) emulated the style of Facebook’s menu (right).

The clearer you are, the fewer misunderstandings and problems you will have once it’s time to hand off your drawings to a programmer. The idea is to convey what the app will look like, where everything will be placed, and what happens if certain buttons are selected. This helps the programmer know what you want and will be a useful blueprint when designing your app. Do not be vague or ambiguous. You should know what every part of your app will do. If you don’t, you need to develop your idea more thoroughly.

You have to consider your design to be final before you can begin the coding phase. Inevitably, you will have ideas for additional features once you start testing the initial versions of your app. But if you decide to make major changes after a substantial amount of work has been done, it can frustrate your programmer. It’s like telling the builder who just installed your fireplace that you want it on the other side of the living room. The news will not go over well. Most people don’t realize this is what they are demanding of their programmer when they ask for big changes. That’s why it’s important for you to take your time and carefully plan every aspect of the app before you submit it for coding.

Step 4: Register as a Developer

You now have your idea drawn out. Before you go any further, you need to sign up as a developer with the platform for which you’re looking to create apps.

Don’t be intimidated by the word “developer.” It doesn’t mean you have to be the programmer. It’s simply the name used for somebody who publishes apps. All you have to do is set up a “developer account” so you can offer your apps for sale in one of the app stores.

Here are the links for each platform and a brief overview of their requirements.

Apple iOS *— Registration requirements include a fee of $99 per year and accepting the terms of service.

Android— Registration requirements include a fee of $25 per year and accepting the terms of service.

BlackBerry— Registration requirements include a $200 fee for every 10 apps you publish. You must have a BlackBerry World App Vendor Agreement in place with RIM (the creator of BlackBerry) to distribute apps.

* For your first app, I strongly suggest developing for Apple iOS, rather than Android or Blackberry. Simply put, Apple users are much more likely to spend money on apps. You will increase your odds of making a profit simply by developing for the iOS platform.

Also, don’t forget to go over the App Store review guidelines. Apple enforces these rules during the review process, and if you don’t follow them, your app will be rejected. For instance, you might remember seeing a plethora of fart or flashlight apps on the App Store awhile back. As a result, Apple has decided to no longer accept those types of apps. Knowing these rules can save you a lot of time and effort. If you see any of your ideas conflicting with the guidelines, reject them and move on to the next one.

Step 5: Find Prospective Programmers

Coding your own app, especially if you’re teaching yourself at the same time, will take too long. The likelihood of you getting stuck and giving up is very high. It will also be unsustainable over the long run when you want to create several apps at the same time and consistently update your existing apps. After all, the goal is to get your time back and escape the long hours of the rat race. Therefore, programmers will be the foundation of your business. They will allow you to create apps quickly and scale your efforts.

Hiring your first programmer will be a lengthy process. You’ll need to: post the job, filter applicants, interview qualified candidates, have them sign your NDA, explain your idea, then give them a micro-test… all before coding begins! But while this process takes time, it is time well spent. Making great hires will help you avoid unnecessary delays, costs, and frustration in the future. You’ll always be looking to add new talent to your team, so learning how to quickly and effectively assess programmers is an important skill to develop.

Let’s get started. The first part of this step is to post your job to a hiring site.

Top Hiring Resources

These websites allow programmers to bid on jobs that you post. As you can imagine, the competition creates a bidding frenzy that gives you a good chance of getting quality work at a low price.

Here are a few of my favorite outsourcing sites:

oDesk— Its work diary feature tracks the hours your programmer is working for you and takes screenshots of the programmer’s desktop at certain time intervals.

Freelancer— This site has the most programmers listed. They claim that twice as many programmers will respond to your ad, and I found this to be mostly true.

Guru and Elance. Both of these sites have huge lists of programmers.

Below is a template of a job posting, followed by an explanation for each of its components:

Click the image to enlarge.

Enter the skill requirements—What programming languages do they know? For iPhone apps, the skills I list are: iPhone, Objective C, Cocoa, and C Programming.

Give a basic description of your project—Keep it simple and skill-specific. Tell the applicants that you will discuss details during the selection process. Do NOT reveal the specifics of your idea or marketing plan. Use general descriptions, and request info on how many revisions (a.k.a. iterations) their quote includes.

Post your ad only for a few days—This way programmers have a sense of urgency to quickly bid on your job.

Filter applicants—I always filter applicants using these criteria:

- They have a rating of four or five stars.
- They have at least 100 hours of work logged.
- Their English is good.

Compose individual messages to all suitable applicants, inviting them to a Skype call for further screening. Most of these programmers will overseas, which can present issues with communication and time zone differences. Therefore, a Skype interview is an absolute must before you can continue. Disqualify anyone who is not willing to jump on a Skype call.

The Interview: Essential Questions to Ask Programmers

Don’t give away any of your ideas during this initial conversation. Whenever the topic comes up, say you’ll be more than happy to discuss everything after they sign the NDA (if you want a copy of the NDA template I use, see the bottom of this post). Here are the questions you should ask each applicant before committing to anything:

- How long have you been developing apps?

- How many apps have you worked on? Can I see them?

- Do you have a website? What is it?

- Do you have references I can talk to?

- What’s your schedule like? How soon can you start?

- What time zone do you work in? What are your hours?

- What’s frustrating for you when working with clients?

- Are you working with a team? What are their skills?

- Can you create graphics, or do you have somebody who can?

- Can I see examples of the graphics work?

- What happens if you become sick during a project?

- What if you hit a technical hurdle during the project? Do you have other team members or a network of programmers who can help you?

- How do you ensure that you don’t compete with your clients?

- Can you provide flat-fee quotes?

- What’s your payment schedule? How do you prefer payment?

- Can you create milestones tied to payments?

- Do you publish your own apps on the App Store?

- How do you submit an app to the App Store? (Can they verbally walk you through the process, or do they make you feel brain challenged?)

Finally, mention that you like to start things off with a few simple tests (creating/delivering your app’s icon and a “Hello, World!” app) before coding begins. You need to tell them this upfront so they aren’t surprised after they have provided their quote. Most programmers are happy to get these tests done without a charge, but some will want a small fee. In either case, be clear with this requirement and have them include it in the quote.

During the interview, pay attention to how well they are able to explain themselves. Are they articulate? Do they use too much techno babble? Do they speak your native language fluently? Do they seem confident with their answers? How is their tone and demeanor? If you have any issues or worries, you may want to move on to somebody else. But if you can communicate with them easily and your gut is telling you “Yes,” you’ll want to proceed to the next step.

In either case, thank them for their time and mention that you will follow up with an NDA agreement if you decide to move forward.

Step 6: Sign NDA, Share your Idea, and Hire Your Programmer

You must protect your ideas, source code, and any other intellectual property. These are the assets that will build your business, so you need to have each potential programmer sign an NDA before you hire them. Yes, it’s rare to have an idea stolen, but it does happen (read the bottom of this post if you want a copy of the NDA that I use).

As you’re going through this process, you will be getting feedback on your programmers’ responsiveness. For instance, if it’s taking too long for them to sign the NDA, it might indicate how slowly the development process will move. Buyer beware!

Once the NDA has been signed by both parties, you can share your idea and designs with your programmer. At this stage, it’s critical to ensure they have the skills to complete your app. You do not have any wiggle room here, especially on your first app. Either they know how to make it or they don’t. You want to hear things like, “I know exactly how to do that” or “I’ve done similar apps, so it will not be a problem.” You don’t want to hear things like, “I should be able to do that, but I have to research a few things” or “I’m not sure but I can probably figure it out.” If you hear those words, switch to an app idea they are confident about or run for the hills.

After you’ve found the best programmer for the job, you can commit to hiring them. Establish milestones and timelines during the quoting process (break up the app into several parts), and decide on a schedule for check-ins that you’re both comfortable with (ask them directly how they like to be managed). You will need to periodically review their work, from start to finish. Most applications go through multiple iterations during design and development, and I won’t release partial payments until I’m fully satisfied with each milestone.

Step 7: Begin Coding

Rather than jumping haphazardly into a full-fledged project, I prefer to gradually ramp up my programmer’s workload by starting with a couple smaller tasks. You need to assess their graphics capabilities, implementation speed, and overall work dynamic (e.g. communication, time zone, etc.). If you’re underwhelmed with their skills, you need to get out quickly. Remember: Hire slow, fire fast. It will pay off over the long run.

Here’s my three-step process during the coding phase:

1. Icon—Ask the programmer to create and deliver the icon of your app. You will probably have several ideas for icons, so pass them on and ask for a finished 512 x 512 iTunes Artwork version of the icon.

2. Hello, World!—Ask the programmer for a “Hello, World!” app. It’s a simple app that opens up and shows a page that displays “Hello, World!”, and it will take them 10 minutes to create. The idea here is not to test their programming skills, but to determine how they will deliver apps to you for testing. This app should include the icon they created, so you can see how it will look on your phone.

3. App Delivery—When the programmers are ready to show you a test version of your app, they have to create something called an “ad hoc” (a version of your app that can be delivered to and run on your iPhone, without the use of the App Store). This ad hoc version of your app needs to be installed on your phone before you can test it. The initial installation was a bit cumbersome in the past, but a new service called TestFlight has simplified the process. I ask all programmers to use this service even if they have not used it before. They will be able to figure it out, and you’ll be able to install your test apps with a few touches on your phone.

The first version of your app is finished and delivered, and you’re now staring at it on your phone/tablet. Give yourself a pat on the back — you’ve made serious progress! But don’t get too caught up with yourself, because now it’s time to begin the testing phase.

Step 8: Test Your App

If you were having a house built, you’d want to make sure everything was in working order before you signed off. You would check major things like the roof and plumbing, all the way down to minor things, like crown molding and paint. You need to do the same thing with your app.

To start, your app must perform as expected. Pull out your initial design document and go through every feature. Never assume that something works because it worked last time you tested the app. Test each feature every time, especially before the final release.

Most importantly, don’t be the only tester. Your app makes sense to you, but it might not to others. You need to get everyone you know, from your 12-year-old nephew to your 75-year-old grandmother, to test your app.

The time you spend on testing is crucial because you will see how consumers use your product, what features are intuitive, what they don’t understand, and their patterns. They will have questions that won’t occur to you because you designed the app and everything about it is obvious to you.

Hand the app to them and say, “Hey check this out.” Don’t mention that it’s your app, what it’s supposed to do, or how it works. Give as little information as possible and watch as they try to understand and navigate through your app. This experience will be similar to the one your real user will have, because you won’t be there to explain things to them either.

Watch them testing your app and ask yourself these questions:

- Are they confused?

- Are they stuck?

- Are they complaining?

- Are they using the app the way you intended?

- Did they find a mistake or a bug?

- Are they having fun?

- Are they making suggestions for improvements? If yes, which ones?

Get them to talk about their experience with your app. They will be more honest if they don’t know the app is yours. Don’t get offended if you hear something you don’t like; their feedback is priceless. Assess each response to see if there’s a problem with your app, then ask yourself these questions:

- Would other users have the same issues? If yes, how can I fix them?

- Should I move things around?

- Should I change colors to improve visibility?

- Would adding some instructions help?

- Should I improve navigation?

Testing and debugging will take several iterations, like the design and development stages. This is all part of the process. Don’t forget to use TestFlight to save lots of time with the mechanics of installing test versions of your app.

Just remember: If you keep tweaking things and adding features, you might unnecessarily increase costs and production time. You need to get the app on the market quickly and in a basic form to test the concept. Only redesign during this phase if you feel you have a good justification for it. Otherwise, add the idea to your update list and move forward with development (I keep an update list for each app and refer back to it when the time is right).

Step 9: Post your App to the Market

At this point, you’ve had all of your friends and family test your app, taken the best feedback into account, and wrapped up any final changes with your programmer. Congratulations – it’s time for you to send the app to the App Store for review!

It’s a good idea to have your programmers show you how to submit your first few apps. Do not give out your developer account login information to your programmer or anybody else. The best way to have them show you how to submit your app, without having to giveaway your login, is to do a screen-share over Skype or GoToMeeting and have them walk you through the process. As your business grows, you might want to delegate this task to someone on your team.

Below is a screencast on how to upload an app to the App Store. As you’ll see, it’s a fairly confusing and tedious process. Best to leave this task to your programmers:

The amount of time Apple will take to review and approve/reject your app will depend on whether you’re submitting on behalf of yourself or a company. If you’re an individual, it will usually take 3-7 days. If you’re a company, it will likely take 7-10 days.

The real fun begins once your app is approved and available for download…

Step 10: Marketing Your App

The App Store is filled with thousands of great apps, but most developers are not skilled when it comes to marketing. Meanwhile, many poorly designed apps rank highly because their developers have figured out the marketing game. How do they do it?

You really need to focus on a few key areas to effectively market your apps, which will allow customers to discover and download them. Understanding how an app’s basic elements are marketing opportunities is essential to being successful in the app business. Your job is to create a seamless flow from the icon all the way to the download button. Let’s take a closer look at these components, which you can adjust at any time from your developer account:

ICON
The first thing users will see when they are checking out your app is the icon — the small square image with the rounded corners to the left of the app title. It’s also the image that users will see on their phone after they install your app.

The icon is important because it’s how the users will identify your app. It needs to look sharp, capture the app’s essence, attract the users’ attention, and compel them to investigate your app further.

Great app icons are clear, beautiful, and memorable.

Many developers create icons as an afterthought and focus all of their effort on the app itself, but the icon is the first impression you will make on the users. The old expression “You don’t get a second chance to make a first impression” applies here. Make sure you have a quality icon that represents your app and makes the users believe it has value.

APP TITLE
Over 80 percent of searches in the App Store are related to an app’s functionality, rather than an app’s name. Therefore, it is critical that you help users find your app when they perform relevant keyword searches in the app store.

Source: Chomp.com

Each word in your app’s title serves as a keyword, much like keywords in search engines. You can think of the title as your URL. For instance, if you type “angry” into the App Store search field, the Angry Birds apps will return as a search result.

DESCRIPTIONS
Having a compelling description for your app is like having a great opening line — people are more willing to learn about you once you’ve piqued their interest. The first chunk of your app’s description needs to be packed with the most relevant information customers should know.

If applicable, use statements like “Top App 2012” or “One of the Most Addictive Games in the App Store.” Follow it up with a call-to-action, such as, “Check out the screenshots and see for yourself.”

SCREENSHOTS
Screenshots are great marketing tools because they give users a visual of what they will experience. Think of them as the trailer for your app. Here are a couple examples of effective screenshots:

Nike+ GPS screenshots.

Free Music Download Pro screenshots. Note the use of captions to explain the app’s features.

Many people shopping for apps won’t read the description, but will instead scroll down to the screenshots. The screenshots need to convey the main functionality of the app without showing too many details that may confuse users. If your screenshots are cluttered, it will be as ineffective as a realtor trying to sell a house with messy rooms. The brain gets overwhelmed and buyers have more trouble seeing the product’s true value. Therefore, the screenshots you include should be clean, appealing, and informative.

KEYWORDS
Unlike your icon and title, keywords are not something the users get to see. When you submit your app to the App Store, you’re allowed to provide keywords relevant to your app. When users search for one of the terms you entered, your app appears in the search results.

For example, if you type in the word “kids” or “game” on the App Store, you will find that Angry Birds is one of the search results. The terms “kids” and “game” are not in the app title. The makers of Angry Birds most likely chose those keywords to associate with their app.

A good example of effective keyword usage is an app I created called Flashlight. Since the name is Flashlight, we came up with keywords, such as “bright,” “help,” “light,” and “camping.”

One time, I added the term “phone” to the keywords of my free prank fingerprint app. This seemingly minor change propelled the app to the number one top overall free category, which moved the company’s income from $1,000 per day to $3,000 per day. This is the power of refining the marketing components for your app. Simple changes can dramatically increase your revenue.

CATEGORIES
The App Store organizes apps into specific categories to help users find them more easily. In addition to the top overall rankings of all apps, each category has its own top rankings and, therefore, generates a certain amount of visibility based on these charts. Users looking for certain apps often browse through these category charts without looking at the top overall charts. For instance, an app that doesn’t show up in the top 200 overall might still be in the top 10 of a particular category.

When you’re submitting your app for review, make sure to select the most relevant category for your app. On the other hand, many apps can be classified into more than one category. You have to choose one, but you can always change the category during an update.

One of my apps, Alarm Security, wasn’t performing well, and I was trying to bring it back up in the rankings. I initially tried changing the name and keywords, but it didn’t move much. The one thing I hadn’t tried was switching it out of the Entertainment category. The app contained various alarm sounds (like loud screams and gunshots), so I assumed users would use it more as a goof than as a tool. I was wrong.

Once I moved the app into the Utilities category, the number of downloads skyrocketed. After five days, the paid downloads had tripled, and it was only because of a category change.

Just as your app will always need certain refinements due to consumer demand and competition, so will your marketing. For most of my apps, I have changed the icon and screenshots three to five times and the title and description between 5 and 10 times. I change keywords almost every time I update apps. I always switch the categories when it makes sense. Keep an open mind and continue to be inspired by your observations during your market research.

Finally, there’s a simple rule of thumb I follow for making changes: Tweak once per week, then measure. You have to allow ample time to see the effect of any changes you make. Measure your results, then make adjustments based on your data in the following week. Your goal is to increase traffic and revenue, all while improving your users’ experience with the app.

Bonus Marketing Tactics

FREE APPS
After you’ve taken care of the basics, your best marketing tool will be offering a free version of your app. It will generate traffic and visibility that you otherwise wouldn’t get.

Free apps create the most traffic because they have the smallest barrier to entry. It takes five seconds to download, and it’s free. Why wouldn’t you push the button? Once the free version of your app gains some traction, you can use it to advertise the paid version of the same app. This is like getting those free food samples at the supermarket. If you like the sample you tasted, you might buy the whole bag and become a long-term customer.

NAG SCREENS
Nag screens (pop-ups that remind users to check out the paid version of the app) have been the most critical marketing tactic for my business. You might worry about annoying users with these ads, and that is a valid concern, but you need to think of nag screens as adding value for your users. If they downloaded your free app and they are using it, a percentage of your users will be interested in buying the paid version of your app. For those who don’t, a quick pop-up message is a small price to pay for using the free version.

You have to accept this and not shy away from this type of marketing. If you’re still on the fence, consider this: When Apple launched its iBooks app, it used a nag screen within the App Store app. If you had an iPhone at the time, you may remember seeing that pop-up inviting you to download iBooks. Well, you were nagged by the one and only Apple.

Basic nag screen (left) vs. Advanced nag screen (right). Advanced nag screens typically have three times higher click-thru rates.

When adding a nag screen, explain to your developer what you are looking for, and reference specific examples of other apps that have nag screens. Be sure you can change the nag screen without submitting a new update to the app store. To do this, tell the developer you want your nag screen to be dynamic. This will allow you to change your marketing message redirect your app’s traffic within seconds. This is an absolute must. Your nag screens will lose a huge part of their effectiveness if you cannot change them on the fly.

How do you assess the effectiveness of your nag screen? All you have to do is keep track of how many times you show a particular nag screen and how many users click “Yes” to check out the app(s) you’re promoting. This is called your click-through rate, and the higher the percentage, the better.

Final Thoughts

This is the first time in history when so many of us have the tools and access to knowledge that can quickly lift us out of the rat race. Your background, gender, race, education, and situation are irrelevant. All you need is the desire and a game plan.

You don’t have to wait till “someday” to fulfill your dreams. You can start right now…

Contest and Bonuses

We’re throwing a contest for any readers who are ready to dive into the app world. Whoever comes up with the best idea for an iPhone app (as decided by me and my team) will have 100% of their development costs covered. That’s right: You won’t need to spend anything to have your app made – all it will cost is your time and effort. This will be a great learning experience for the winner, so if money is all that’s holding you back, we want to help you get started.

Here are the details:

- You have 1-week (ending Monday, April 30, 2012 at 9am EST) to research and design your app idea. Your app should try to fill a void in the market or improve upon apps that are currently available.

- Once you’ve decided upon your idea, post a comment below with a detailed explanation of the app you want to develop. Bonus points if you can show us (with a drawing, video, etc.) how your app will function. More bonus points if you show us the research you did to prove your app’s potential for success.

- You can only submit one (1) idea (one entry per person), so make it good!

- Up to $5,000 USD of your development costs will be covered. 100% of all revenues earned will go to the winner.

- Winner gets a 1-hour phone call with me (Chad) at any point during development or marketing.

For those who are worried that someone is going to steal your idea and make a million dollars with it– you don’t have to enter the contest! Just remember: my success in the app store came from emulating successful apps. In other words, borrowing proven ideas and trying to make them better. If someone else can succeed by taking one of my ideas and improving upon it, that’s only fair game. Don’t let the fear of losing prevent you from trying to win.

Contest deadline has passed; Winner (Alex K.) has been contacted. Thanks, all!

Finally, for those who’d like a copy of my NDA template (along with the checklist I use when hiring a new coder), email a copy of your receipt for App Empire, my comprehensive book on app development and marketing, to bonus (at) appempire.com. The book goes into depth on advanced marketing and monetization techniques, including how to put your business on cruise control (automate).

We look forward to seeing what you guys come up with! Talk to you in the comments

In the world of magazine articles, one of my all-time favorite headlines is “Anything You Can Do, I Can Do Meta” from the MIT Technology Review, a feature about billionaire programmer, Charles Simonyi. Charles designed Microsoft Office and is outstanding at looking at programming as different layers of abstraction.

How can we raise our perspective from 5,000 feet to 30,000 feet to learn a few things? This post will do that with competitions.

Today, Shopify, a start-up I have advised since 2009, announced the winners of their Build-a-Business Competition, featuring a grand prize of $100,000 cash. Winners were determined by combining their two highest-revenue months in an 8-month competition window.

I want this post to show two things, and the second is where meta comes in:

1) How the competition winners won and key lessons learned in taking their products from ideas to profitability. This includes manufacturing, marketing, PR, and just about everything in between. I’ve looked at these types of lessons before.

2) How Shopify has used these competitions to build their own business several-fold and cross the chasm from early-adopter to mainstream. This is something I’ve never written about…

To avoid any linguistic nitpicking, I’m using the definition of “meta-” from Wikipedia:

Meta- (from Greek: ???? = “after”, “beyond”, “adjacent”, “self”), is a prefix used in English (and other Greek-owing languages) to indicate a concept which is an abstraction from another concept, used to complete or add to the latter.

Let’s address creating competitions first and winning them second.

This post might have a few typos in it, as I’m at the hospital with family. If you like, please point them out in the comments and I’ll do my best to fix them.

Creating a Competition Yourself

Let’s look at the stats first, and then lessons learned.

THE FIRST COMPETITION

Tobi, Shopify’s CEO, and I hatched plans for the first Build-a-Business competition over the phone in 2009. It was announced in December 2009 on my blog, and–as you can see from the afterword and scrambling in the initial post, which I suggest you read–it wasn’t perfect.

The imperfection didn’t matter, as nothing is perfect the first time, especially if you’re ambitious. The protocol is: ready, fire, aim. But when the competition wrapped up, despite the bumps, Shopify had made leaps across the board:

- From a revenue standpoint (for Shopify), they’d killed it, right alongside their competitors. Here are some stats:

Revenue PER HOUR for the duration of the contest (180 days): $696.38
Total number of people competing: 1,819
Total number of orders placed: 66,503

- From a media standpoint, they’d jumped from niche to mainstream, including The New York Times.

- Larger, more recognizable brands, like GE and Angry Birds, suddenly chose Shopify as their e-commerce platform, even though these companies could afford custom solutions.

- Shortly after the competition closed, Shopify was able to secure $22 million in Series A and B funding from world-class firms like Bessemer Venture Partners, FirstMark Capital, Felicis Ventures (Hi, Aydin!), and Georgian Partners. These funds were then used to accelerate expansion, as Shopify was already profitable. Funding isn’t just for floating the boat, keep in mind; it can be used to add rocket fuel to a successful launch.

- This leads us to 2012. In February, Shopify was named one of Fast Company Magazine’s top 10 most innovative retail companies in the world.

THE SECOND COMPETITION AND LESSONS LEARNED

Flash forward to the new competition, which was made international (3 of the 8 winners were Australian), and you can see both huge growth and a fascinating trend:

- 3,060 competitors (versus 1,819 in 2010)
- More than $12,000,000 worth of products sold (almost 4x the $3,543,191 in 2010)
- Closely related to the preceding point: Average sales per store were up 56% compared to 2010. Why? Shopify dramatically improved their educational and support efforts this time around.

The trend? Three of the winners–Coffee Joulies, Neu Year, and Opena Case–used Kickstarter to raised funds for manufacturing, and all of them exceeded their fundraising goals, some by miles. Joulies, for instance, aimed for $9,500 and raised more than $300,000! Kickstarter and similar tools were the focus of my recent post, “Beyond X PRIZE: The 10 Best Crowdsourcing Tools and Technologies.” It’s fun to see these services and technologies converging to create companies.

More on that later, but let’s look at some of what Shopify learned through this all. For instance: what type of lawyers do you need, if any? What are the pitfalls? I asked them to find out.

- What were your primary lessons learned in the first competition?

“We learned in the first contest that just announcing a contest and giving out prizes wasn’t good enough. This year, we used social media to help promote our new shops and to bring truly educational content to them. It paid dividends. Mentorship was a major focus of this contest (Tim Ferriss, Seth Godin, and Gary Vaynerchuk).”

- What type of lawyers or other help did you need, and how did you find them?

“The laws concerning contests are different in every country, even in different states. Contest rules are a legal contract between the contest sponsor and anyone who enters the contest, so they should be taken seriously. The potential downsides of mistakes include lawsuits and more.

We found our first lawyer by looking for thought leaders. We read articles written on contest law and contacted the authors who were lawyers. Since were on a budget, we looked for sole practitioners instead of big firms.

For a simple contest, you can go through a ‘Contest Fulfillment company’ that can use their lawyers to draft the rules, oversee the process, and “audit” everything to ensure the winners are not committing fraud or breaking the rules. If you’re sending materials to contestants (e.g. we sent books to everyone), such a company will also do the mailing, etc.”

- Above the prize amounts, what costs should start-ups expect to incur? What unexpected expenses did you guys experience?

“Legal expenses, especially when doing multiple countries, adds up really quickly. If you have all your details figured out before going to your lawyer to draft the rules, you save a lot of time, which equals money. Even a minor change costs a lot when it’s done by a $500/hour lawyer.

We offered a lot of travel prizes during this contest, so you have to estimate those costs carefully. This isn’t easy because you don’t know where your winners will be from and how much hotels and flights will cost. We also gave away thousands of books to people who entered the contest.

It turned out that these were much more expensive to ship than we had originally thought, especially to Australia. Next time, we would probably focus more on e-books and digital goods.”

[Notes from Tim: This is why specifying if you'll accept contestants from outside of your own country is critical. Constantly ask yourself: "What could go wrong here? If I wanted to game this, how would I?" and run through a hypothetical sign-up in your mind. Where will users be confused, or ask "Now what?" For example, if you have a submission deadline, have you listed the time zone? What do you do if someone has a tech problem (server issue, WordPress issue, whatever) with submission outside of their control? Try and cover as many of the what-ifs as possible in your rules so people don't get upset.]

“When it comes to prizes, money isn’t always the biggest motivator. Anyone can write a check. Look for prizes where perceived value is greater than actual cost. In our contest, we are gave away a dinner with Tim Ferriss, lunch with Seth Godin and a meeting with Gary Vaynerchuk. These are literally priceless things that people can’t get on their own.”

- Any other tips for people wanting to hold their own competitions? Warnings or otherwise?

“Know what your objective is. For us, it wasn’t primarily about getting media attention, for instance. That was a fantastic side-effect, for sure, but our main goal was to attract customers who wouldn’t have come to us otherwise.

Consistent support and info sharing is also critical. Just bribing people to do big things often isn’t enough. Building a community where people could share best practices is what made 2011 so much bigger than 2010.

If you’re offering a large prize, definitely consult a lawyer specializing in that area, and most big firms will have a few.”

Winning Competitions

Let’s look at this year’s winners, what they did right, and what they did wrong.

Grand Prize Winner: Coffee Joulies

Who are you and what is your Shopify store?

Dave Petrillo and Dave Jackson, owners of joulies.com

How did you decide on your product? What ideas did you consider but
reject, and why?

Coffee Joulies was just one of an unending stream of ideas we would
toss back and forth over gchat while avoiding doing actual work at our
jobs. What was different this time is that we put our foot down and
said enough was enough. A Joulie is made of two parts: the shell and
the filling. It was the simplest idea we had ever come up with. We
decided it was time to step up and actually make this idea a reality.

There was no way we were going to create an entire business without
figuring out whether people would want the product first. We focused
on rapid prototyping for proof of concept and then manufacturing
alpha-stage Joulies ourselves to see if people would actually buy
them. The goal was to get Joulies into the hands of customers as fast
as possible and let them tell us whether or not they liked the
product, ignoring all the other flapping heads who love to shoot down
ideas to make themselves feel better.

We put up a website and offered Joulies for presale, and pretty much
nothing happened. How do you attract customers to buy a product that
has never existed before? We needed a way to tell the world about our
idea. Kickstarter was our soapbox. We launched Coffee Joulies on
Kickstarter during April of 2011 and ended up getting funded 3,230
percent over our goal from 4,818 backers in 57 countries. It was clear
that we had a hit product on our hands. After fulfilling our
Kickstarter orders we turned to Shopify to build Coffee Joulies into a
business.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

The first tipping point for Coffee Joulies occurred on day two of our
Kickstarter campaign. We had emailed Uncrate, Gizmag, and Gizmodo with
a press release and high resolution images hoping one would pick up
our story. All three posted about us. Next on our list was TechCrunch,
but before we could email them we found out they’d already picked up
our story. We were viral.

The second tipping point came after Dave and I read “The Lean Startup”
by Eric Ries. We were on the verge of jumping into a number of large
batch processes, like an expensive website deployment and a $60,000
progressive die purchase. In the context of “minimum viable product”
(MVP) it became painfully obvious that these big, enticing projects
were not the way to go. Ever since then our focus has been on reducing
cycle time and closing the feedback loop. It has fundamentally changed
how we do business.

The third tipping point came as we wrapped up Kickstarter fulfillment
in November. With MVP on our minds we used a bone version of the
simplest Shopify template that was available to create our website. We
learned a lot as we released the Gift Pack at $100 and then the Set of
5 at $50, and we had it timed so well that we sold out of everything
at 9am on the last day that orders could be placed and still be
delivered in time for the holidays. What more could we want?

What were your biggest mistakes, or biggest wastes of time/money?

We underestimated the amount of time it would take to fulfill our
Kickstarter orders by about a factor of five. We spent a huge amount
of time in central New York solving manufacturing problems at the
factory. During that time we definitely could have spent more time
honing our marketing message and performing A/B testing while the only
thing we were selling was an opt-in to our email list.

We were extremely careful with our money from Kickstarter because we
knew it had to last until all of the orders were fulfilled. That said,
we were tempted on a number of occasions by big-ticket items like
expensive manufacturing equipment, apartments in San Francisco, and
marketing firms. Looking back now we dodged quite a few bullets. The
money we made selling on Shopify came in so fast that we really didn’t have time to blow it. The majority was reinvested to build up
inventory once we learned we had won the Build-a-Business competition.

Key manufacturing and marketing lessons learned?

Key manufacturing lessons: The simplest idea you have will still be
extremely difficult to manufacture, test, and deliver to the customer
in a timely manner. It will also cost more than you think.

Key marketing lesson: At some point the free PR will dry up. Then what?

If you were to do it all over again, what would you do differently?

It’s hard to imagine doing this any differently than we did. We
approached all of our hurdles as learning opportunities and took them
one step at a time so we could find the easiest/fastest way to succeed
and then move on. The only big decision that could have really
changed things is if we had taken on an investor towards the end of
our Kickstarter campaign. There were plenty of times when we wished we
had extra capital, experience and manpower, but who knows where we
would be now if we had, for better or worse. The grass is always
greener.

What’s next?

Moving beyond the internet. Coffee Joulies look great online, but
really are amazing when you hold them in your hand. Also, plenty of
other drinks could use temperature stabilization…

Home Category Winner: Neu Year

Who are you and what is your Shopify store?

Jesse Phillips, designer and owner of neuyear.net

How did you decide on your product? What ideas did you consider but
reject, and why?

I’m a web designer, caught-up in the web-startup gold-rush. So, naturally, I have several web startup ideas. But, since this is my first startup attempt, I wanted to try something easy – something easy to make, inexpensive to test and simple for customers to accept or reject. So I went with the calendar: very easy and cheap to make prototypes, test them, easy to execute, setup Shopify, etc.

Also, with the recent buzz around productivity and productivity products, I thought a new productivity product would have a better shot. And seeing the success of Moleskine and Behance (essentially cooler tools for productivity) – I thought a cooler calendar would have some legs. Finally, since there’s not much competition in the calendar market, and I wanted one myself, I saw an opportunity in the market, and took it.

I have 49 other ideas that I rejected for my first venture because, although they are more sexy and potentially have broader appeal, they would require a lot of effort and cash to startup, and they are in crowded markets. The calendar seemed like the easiest, most simple opportunity for me grasp.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

Since I have no money and I was wasn’t sure if this would work, I decided to do a test (like you suggested) on Kickstarter. We created a campaign to raise $5,000 – just enough to do our first print-run of 1,000 calendars and ship 200 of them to our backers. We were so excited and thought we had the perfect price point to raise at least $10,000. We BARELY made our goal of $5K. This was super discouraging. My mom gave a HUGE donation early on, without which we would not have made it, and that would have been it.

Fortunately, we made it. That was a small tipping point. The big tipping point was when we got on Fab.com. Before Fab, we had been selling for about a month online. In that time we had only sold about 100. It was slow.

When I sent a calendar to Fab it took them a little while to get back to me, but they liked it and wanted to do a run. I had no idea what to expect. I thought – “Ok, maybe we’ll sell 100, or 200 at the MOST.” 3 hours after we started the sale, we had nearly sold-out 400 calendars! They called me excited and asked for 400 more! This was one of the best feelings of my life – this established company was excited about the performance of my product on their network! Wow. It was then that I realized our product was viable (niche, yes, but viable).

Let me also say that it seems impossible that the calendar has sold as well as it has (not that it’s been overly amazing). I honestly believe that Jesus, who is in charge everything, has allowed it to work-out, and I’m thankful for that!

What were your biggest mistakes, or biggest wastes of time/money?

We are new to this, so we made several mistakes:

1. I just entered into an agreement with Groupon. The margins are very tight. From the way we were talking I was virtually promised to sell 10,000. I got caught up in the frenzy of it and made a deal with little to no margin on 5,000 and slightly better on 10,000. I’m looking at our sale right now and we’ve sold 1,700 Looks like we’re going to lose money, potentially thousands of dollars, if we don’t sell a lot in the next 24 hours.

2. We didn’t test our product with consumers enough, or at all. If we had, we would have learned what we learned shortly after launching: people want more than 1 box for the weekend. See, our calendar was aimed at businesses (I guess?) that would focus on the work week, so we put Saturday and Sunday in one box. I thought we were so innovative. Well, I’ve gotten over 100 emails of people wanting the weekend to be split out. And they want dry erase. We didn’t think of either of those. And we’ve probably lost at least 500 sales because of it. We should have really tested this with consumers before hand.

3. Didn’t research how to get into retail outlets. I’m only now learning how that is done and it seems we’re too late to get into retail outlets for 2013 (not 100% on this, but it seems like it).

4. Didn’t do enough research on printers, shipping, etc. We could be getting better pricing on stuff, I’m only now finding this out.

5. Didn’t market the product well – don’t really know how to do that. Paid for too much advertising that never turned-in to sales. And didn’t beat the pavement enough to get free PR on blogs.

Key manufacturing and marketing lessons learned?
Study the crap out of your manufacturing process, so you can find the cheapest way to do it and make sure the quality is good. Get samples. Understand what you’re doing. Plan better, so you can make good estimates and make more at one time. Do one run of 3,000 instead of 3 runs of 1,000 (duh!).

Marketing is tough! Be careful how you spend money. The best marketing is free word of mouth, and for us, relevant blogs. Like Gary Vaynerchuck has said, you have to crush it, find EVERY relevant blog, comment on it, read the posts, find the players on Facebook, email them, go, go, go, email, email, email, comment, comment, comment. Make friends. This is tough work. But it pays off big.

Turns out, one of our best sources of click throughs to our site has been Pinterest.com. Use google analytics, analyze that junk, figure-out where sales are coming from, who your target market is, and reach those folks. This is hard to do, and I suck at it, but our sales have been better when we do this.

Do a contest. One our most successful campaigns was a contest where you were entered to win a $20 amazon gift card, if you tweeted about the contest. We saw a large jump in sales around this time. It helped a tiny, nobody company like us get the jump in exposure we needed.

If you were to do it all over again, what would you do differently?

I would do more research on our product – making sure we had tested all the features with real people (the problem with this is we had lots of skeptics early on, so you can’t always listen to your critics – it’s a balance I guess). I would pound the pavement a lot harder before the Kickstarter campaign to try and drum-up support ahead of time – asking people to blog at specific times during our campaign.

I would have (and I should be) continually contacting influencers (bloggers, tweeters, media outlets) and sharing our product with them – to try and gain free “word of mouth” advertising – which seems to be our most cost effective mode of advertising (but I’m no expert).

What’s next?

We will be making a school year version soon. And we’re making a larger version for teams. Perhaps even making specific versions for Moms, Teachers, Churches, etc. I’ve got tons of other ideas (my enemy, I know). I’m inspired by Studio Neat’s products, and I have an idea for a simple tech accessory that everyone will want next year.

Other Category Winner: Opena

Who are you and what is your Shopify store?

Chris Peters and Rob Ward of openacase.com

How did you decide on your product? What ideas did you consider but
reject, and why?

Because of our backgrounds in design and tool making we knew we had the skills to design a product but we didn’t have the capital so we turned to crowd funding to help raise the funds need to produce it. Many late nights trawling successful kickstarter projects led us to the following:

- Impulsive price point of around $50, people have less objections to buying products around this price point, but it also meant that our particular product could be manufactured to a very high quality due to the low manufacturing costs.

- Had to be a suitable size for postage – after all we were going to be shipping these things world wide so we don’t want something the size and weight of a house brick!

- Wanted to piggyback off the back of another popular trend/product.

- Needed to fill a niche that had little competition.

- Had to have a unique feature that would make our product stand out from the crowd.

- Have a decent margin to allow for marketing, advertising, affiliates, wholesale, and promotion etc.

We rejected a few other ideas mainly because they were too complex, too expensive to manufacture and did not have the broad appeal of the Opena Case.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

There we’re quite a few but three in particular stand out. The first was when we showed the final prototypes to people for feedback. When we asked for them to hand it back they asked if we wanted to sell the prototypes. When we explained that we couldn’t sell the prototypes they became very disappointed and were reluctant to hand them back, so right then we knew we had a product people wanted. The second was when we put the idea on Kickstarter and realized that lots of people loved the idea and we’re willing to put money towards it to make it happen. Nothing better than having your idea validated by people voting with their wallets. The third was when Ashton Kutcher tweeted about it to his 7 million followers!

What were your biggest mistakes, or biggest wastes of time/money?

Our biggest mistake was not having enough faith in our ideas from the beginning. We should have launched our own product years before we actually did it, although it would have been much harder without awesome businesses like Shopify and Kickstarter!!

Key manufacturing and marketing lessons learned?

Get your product right before you ship! Our original design has some flaws that we overlooked during prototyping. This costs us time and money as we had to modify the production tooling and change the design before we could start mass production and fulfilling orders.

Things always take longer than you have been quoted…always!!

Don’t underestimate the importance of packaging! Our original packaging was designed to keep shipping costs low, however, retails stores thought it looked cheap. This effected the initial uptake into retail stores but once we updated the packaging to suit the retail environment the stores and distributors started placing orders.

If you were to do it all over again, what would you do differently?

Jump in earlier, the only thing from stopping you from doing it is YOU. Get feedback from as many people as possible and let them figure out what you have overlooked. Don’t be afraid to take pre-orders but make sure you have your product ready to ship when the Ashton Kutcher starts tweeting about it!

What’s next?

We’ve formed a company (annexproducts.com) to allow us to continue to produce awesome innovative products. We’ve signed up a global distribution partner and we’re just about to hit the go button on production of our second product the Quad Lock Mounting System which is a revolutionary case based mounting system designed for the iPhone 4/4S. Once again we validated the idea on Kickstarter and using social media and we’re now taking pre-orders at www.quadlockcase.com which will be shipping in March.

Apparel Category Winner: FlockStocks

Who are you and what is your Shopify store?

Sophie Kovic, huge Tim Ferriss fan and owner of flockstocks.com

How did you decide on your product? What ideas did you consider but reject, and why?

I read the 4-Hour Workweek and carefully followed the steps. In the book it mentions using the Adwords Keywords Tool to find opportunities in your area of knowledge. I already had some understanding in the beauty section and so whilst searching in that general area I uncovered the rising trend of Feather Hair Extensions. The competition on that keyword was low and the global monthly searches were pretty high. I decided to test the idea. I set up a testing website using Weebly and made 11 “sales” in four hours! It proved it was a winner before I had invested any money, which was essential to me as I only had about $3,000 in my account at the time.

Some other ideas I looked into were pancake pans, bongs and tobacco pipes, nylon stockings and generators. I rejected each one after Adwords testing with test websites. None of them sold the way I’d liked and none of them were really areas I knew anything about. Although I still think the generators have potential I don’t like the idea of posting and storing heavy, bulky items.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

My business was successful very quickly. It was due to the fact that I had no competitors on Adwords and as a result I got a big chunk of the marketshare just by being there and in stock. Competitors were finding it hard to find supply and all I had to do was be visible and I made sales. So the tipping point would only be marked at the point I came into supply and posted my Adwords ad.

What were your biggest mistakes, or biggest wastes of time/money?

The mistakes I have made I am still making! I try to employ the 80/20 principle but have been slow to apply it to my customer base. I have managed to secure some good distributors now but regret I didn’t start sooner. I’ve probably wasted a lot of money on using Adwords incorrectly too. But I’ve kept it pretty lean in most aspects, especially in terms of time. We spent 3 of the past 9 months in business on a mini retirement in Thailand. The book really taught me to trust people to do their jobs correctly. It was a great freedom. I probably could have stayed home to run the business and make it bigger and better over that period, but I was after the freedom at the time as we’d had a difficult couple of years.

Key manufacturing and marketing lessons learned?

Good blogging drove me lots of traffic for free. Certain celebrities were wearing feathers in their hair, so I blogged about them and it drove traffic to my site for months. Celebrity endorsements for products like mine are an amazing way to create interest. Somehow I got on a mailing list for a PR company that organizes celebrity events and it really opened my eyes to how it works and how little it can cost. I nearly put my feathers in the gift bags at the Golden Globes this year.

In regards to manufacturing, we didn’t really have much to do, more like plucking and packaging. This was about finding people I trusted and creating clear objectives, roles and standards. I found someone I trusted who understood what I wanted, then delegated, so all I did was the orders and the ordering.

If you were to do it all over again, what would you do differently?

I would secure distributors earlier on.

What’s next?

We are working to launch our new range of human hair extensions. We have created a grading system that makes it easy for the consumer to identify what standard of hair they are buying. The brand is called Lockstocks and will specialize in selling high quality human hair extensions to salons.

We also have a passion project in the pipeline, where we hope to help people recover from depression without medication. It is based on my partner Tim Butterfield’s research. We have written an eBook and are currently learning how to promote it.

Art Category Winner: Tattly

Who are you and what is your Shopify store?

Tina Roth Eisenberg, aka Swiss Miss, owner of tattly.com

How did you decide on your product? What ideas did you consider but
reject, and why?

I had the idea for Tattly one day in June of 2011 when I applied yet another hideous, badly designed, cheap temporary tattoo on my daughters arm. I simply told myself: “I can continue complaining about this or I can do something about it!” And I did. I took matters in my own hands, reached out to some of my wonderful designer friends to see if they’d be interested in designing tattoos. I had no idea but I opened floodgates. They all said yes and within hours I had first mockups in my inbox. I designed the site, built it and we launched mid July. The internets went crazy and on the second day we even got a call from a very prestigious store in London that asked us for a Wholesale catalog. Little did they know we *just* launched our site. It’s been quite a ride ever since.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

Interestingly enough the tipping point was right during the first few days. It was obvious right off the bat, that the world was, in some sense, waiting for designy temporary tattoos. The excitement for Tattly seems unstoppable.

What were your biggest mistakes, or biggest wastes of time/money?

We haven’t had time to experiment much up until now, so no big mistakes come to mind. I am sure we will have plenty ahead of us as we grow the business. I feel like the hardest part is right ahead of us. We are only 7 months old and we now have to really figure out how to scale.

Key manufacturing and marketing lessons learned?

Find a manufacturer you love and that is pleasant to work with.

Make sure you have enough resources to offer immediate and personable customer support.


People *love* receiving packages that have a personal touch. We put real (and cool) stamps on our mailings and people go nuts over it, which often ends up in a tweet of the stamps.


Put some love into the design of the invoice, these things don’t go unnoticed.

Be prepared to be ripped off; protect your intellectual property from the start.

It’s never too late to reinvent an existing product.

If you were to do it all over again, what would you do differently?

I would (mentally) prepare myself for success. I started this project more or less as a joke with a side project mentality. While there is nothing wrong with that, I wish I would have built the website so it would scale better so I didn’t have to completely redesign and rebuild the site from the ground up 4 months later. Lesson learned.

What’s next?

Growing Tattly and getting it into lots of designy stores, all around the globe.

Food and Drink Category Winner: Simply Hops

Who are you and what is your Shopify store?

Eleanor Downes of simplyhops.co.uk

How did you decide on your product? What ideas did you consider but
reject, and why?

Simply Hops parent company has been supplying major brewers in the UK with Hops for many years. We were aware of the growing supply of craft beers. That is beers brewed on a small scale, generally by small organisations. We analysed the market data available from the Society of Independent Brewers (UK). From this we made estimates of the likely demand for Hops. It was apparent that each customer (potentially over 800 in the UK alone) would take relatively small volumes of hops, and we judged that these would not be as price sensitive as major brewers. We investigated the offer from our competition, and although many customers seemed satisfied, they were looking for alternatives. Our competitors were attempting to service the market in the conventional way, i.e. sales people, phones and bespoke arrangements for delivery. We reasoned that a properly run e-business, could offer improved service (next day delivery) and significantly lower transaction costs. There is keen interest in exotic hop varieties which impart unique flavours to beer. We judged that our links through parent companies and associates would give us a competitive edge in sourcing these varieties. We considered entering this market in a conventional way, but rejected it in view of high costs and lack of novelty compared to the competition.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

We launched the company with a conventional marketing event and advertising and started to get some initial orders. As part of this process we spent time with potential customers and it soon became apparent that most are avid networkers and users of Facebook and Twitter. We decided to explore the use of these media but to respect their social status and avoid a “hard sell”. We just advise of significant events. A definite a-ha moment was seeing how quickly our customers responded and how quickly our number of followers grew. In one case, we announced on Twitter that a particular American variety of hop was now available. Within 2 minutes, we had our first order! The other key learning point was to understand how our customers plan. Sometimes the brewery owner is also the accountant, and head brewer and sales person. They are just busy. If they decide that next week they would like to brew a particular recipe and they can then go online and order what they need then convenience is a big benefit for them. We had judged that having more specialised varieties would be attractive to our customers. We were able to introduce these fully in January 2012 and this led directly to more than doubling our monthly turnover.

Following our launch event, we reviewed how we should get more information to our customers. We concluded that meeting with brewers during normal working hours would not work. Who would brew the beer if the head brewer was in a meeting! So instead we organised an evening session with light refreshments. We are also seeing the benefits of an e-model. Some of our customers make good use of the fact that they can order time of day.

We also learned that providing an efficient phone service was really important. It’s surprising just how many people say that they can collect the goods to avoid carriage charges when they are located hundreds of miles away. A pro-active call from our customer sales manager has led to some very positive feedback. Also in the event of a glitch (usually with the freight side) we are usually able to fix problems very quickly.

Through Shopify, we were also able to see where are main referrals were coming from. We learned that inserting a click through banner on a home brewing forum really accelerated the process.

What were your biggest mistakes, or biggest wastes of time/money?

Early on in the life of the business we received enquiries from customers who did not feel that they should pay by credit card. We accommodated this initially, but this led to some complications with stock management and has now been discontinued.

Key manufacturing and marketing lessons learned?

It has taken us some iterations to get our pricing policy sorted. The initial set-up part of the configuration would have resulted in Simply Hops running a manufacturing operation. We quickly realised that this made the model overly complicated and stuck to our original intent to trade finished packed goods only.

If you were to do it all over again, what would you do differently?

We would spend more time up front defining our sales order/fulfillment process and clearly articulating who is responsible for what. This would save a lot of wasted effort and confusion. We would also think more deeply about building our social media presence, and presence in industry forums and relevant areas.

What’s next?

A few ideas that we want to keep from the competition! We have been successful in sourcing a number of really interesting new and old varieties of Hops. Some will be known to some brewers and some are completely new and “straight out of the breeding programmes”. We plan to introduce improved packaging to make using our hops much easier and improve availability in smaller pack sizes.

Canadian Winner: Clearpath Robotics

Who are you and what is your Shopify store?

Matt Rendall of clearpathrobotics.com

How did you decide on your product? What ideas did you consider but
reject, and why?

Clearpath Robotics started in a university robotics lab. Having experienced huge frustrations ourselves, we knew that researchers and students needed a better way to learn and build robots… So we spun out a company and we set out to solve this problem. There were a few other ideas on the table, but research and education seemed like the perfect starting point for us – it just fit.

We knew that our market needed a powerful low-cost robot. Our first attempts resulted in a great robots that customers loved, but at $5000, they were too expensive for most schools. We refined our designs and got our price down to $3500. Better, but not still not good enough and it was really hard for us to get the price down further.

To keep our costs low, we experimented heavily with open source. In 2010, we began working closely with a really innovative open source robotics company in Menlo Park, Willow Garage. It was started in 2006 by Scott Hassan one of Google’s first engineers. They have developed the world’s best operating system for robots and it is open source (Think of it as the Linux of the robotics world). We partnered with them to launch Turtlebot in the summer of 2011. The Turtlebot is the world’s most affordable professional robotics development tool.

What were some of the main tipping points (if any) or a-ha moments?
How did the tipping points happen?

The biggest tipping point for Turtlebot was making the decision to sell it online. This allowed us to really cut down our customer acquisition cost and we pass these savings on directly to our customers.

What were your biggest mistakes, or biggest wastes of time/money?

We make lots of mistakes. It is very important to us that we make mistakes. It keeps us innovative, it keeps us competitive. One of our most important mantras is “Fail Fast, Fail Cheap, Fail Often”. One of our investors taught us this early on and we live by it. The single biggest “lesson learned” so far is the importance of “slow to hire, quick to fire”.

Key manufacturing and marketing lessons learned?

Instead of spending a ton on traditional marketing, we invest those dollars into proactive customer service and back into development of rock-solid products. It’s all about turning customers into evangelists by delivering a remarkable customer experience. Tons of companies have figured this model out (i.e. Zappos), but it’s pretty rare in our industry. It’s working – our best marketing by far is word-of-mouth.

Manufacturing is so important for us. We spend a lot of time iterating our designs and working with our suppliers to optimize manufacturing process, product reliability and inventory management. I think it is important to have as small a list of trusted and proven suppliers as possible. The bigger the list becomes the more potential sources of error.

If you were to do it all over again, what would you do differently?

I don’t think we’ve done anything regrettable. Sure, we’ve made mistakes – everyone does. We learn from them and become better because of them. Our business is stronger today because of them. It all goes back to our “Fail Fast, Fail Cheap, Fail Often” mantra.

What’s next?

We see the Turtlebot as the very first “personal computers” of the robotics industry. The Turtlebot is the Apple II of the personal robotics industry. We want to make Turtlebot accessible and attractive to a much larger audience. Much like the first PCs, the Turtlebot is only really usable by programmers, hackers and the tech-savvy hobbyist communities. The next big thing for Turtlebot is figure out how to make it easier to use for non-programmers and also to make it even more affordable. Another big tipping point will be the creation of a “killer app” – an application to make Turtlebot highly valuable to the masses. In the mid-1980s, Lotus 123 was the “killer app” that contributed significantly to the success of the PC in the business world. Turtlebot needs its Lotus 123 equivalent. The open source community is working on ths as we speak and we’re working on a few “killer apps” of our own. We’re laying the foundation. Now it’s only a matter of time until something big happens.

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