Podcasting Secrets

As COVID-19 struck this past year, we have all been affected in one way or another. Unfortunately, many have been negatively impacted by COVID’s health conditions, changes, economic status, and numerous other ways. 

Specifically, in business, many companies around the world, from start-ups to larger companies, have been forced to close their doors, file for bankruptcy, lay off employees, or think quickly about how to best adapt to the strenuous circumstances. So, what are the most important lessons we can learn from this global pandemic? 

“When you look at any other major disaster to have taken place throughout history, the world always finds a way to bounce back from the amount of trauma caused by it. Whether it be the Great Depression, World War II, or 9/11, there’s a lot you can learn from the response to huge global disasters from the past.” (Source: Keap.com)

This is episode 1 of 2. In this episode, we will be discussing some business lessons we can learn from this worldwide pandemic, and how we can use this crisis as an opportunity to pivot, improve, diversify our revenue, and become more compassionate and patient with those around us. 

Be Quick to Pivot and Change

If anything is consistent, change is, and it happens quickly. When change occurs, it’s easy to fight against it or resist. Quite often, it’s much more difficult to adapt or “give in” to change. Many changes have taken place this year: a worldwide pandemic and its effects on countries, communities, families, individuals, and the workplace. 

“Businesses have, for a long time, taken for granted just how stable (comparatively speaking) our cultural climate has been and how quickly things can change. Businesses that have been able to pivot amid massive, rapid change have survived. Meanwhile, those that have not been agile have either not survived or have taken a major loss. It’s important to see opportunity in the midst of a crisis or confluence of events, and not be upended by the fear the change may pose.” - Steven Le Vine, Grapevine PR & Consulting (Source: Rolling Stone)

Many times, it is necessary to pivot or change the direction we are going in with a venture, product, service, etc. In the case of COVID-19, the workplace has pivoted to a remote, work-at-home setting (much more than it used to be), and in many other ways. We need to be prepared to adapt to these changes happening around us. Businesses that don’t adapt will suffer challenges such as employees finding a better work-life balance working remotely somewhere else, and clients going to other businesses for help who provide video meetings. 

“We are in a transitional period and employees are becoming more assertive and clear-headed about what they do and do not want out of their employment. That trend started when the millennial generation entered the workforce, but it has become more pronounced across all generations due to the pandemic. Employers looking to recruit and retain top talent will need to meet the expectations of these employees or risk losing them to competitors who offer more flexibility.” (Source: JD Supra)

This crisis has definitely been a tectonic shift that is changing the business landscape, but this has also opened up many doors and created many opportunities for entrepreneurs that were not “typical” before COVID hit. 

Remote Work Has Many Advantages

Remote work has caused many valuable shifts in the workplace. Some of these shifts that will stay, according to Tech Republic, include businesses being more trusting and empowering of employees, managers increasing flexible working hours, virtual teams working across locations and departments, and agile teams forming and disbanding around specific activities.

Working from home has definitely been a shift for many businesses and individuals, but it is possible and allows for valuable opportunities such as those previously mentioned. I personally have benefitted from working remotely. It allows me the freedom to interact with my family and help them as needed. It allows me to spend less time away from them. I also feel that working from home avoids many of the distractions that can take place in a typical work environment and gives me more time to focus on creative and priority projects. And, I love the money I’m saving not having to pay rent and all those related expenses.

According to Arjun Bajaaj on Forbes, with the necessary tools and resources, remote work has resulted in a much more productive outcome, even more so than in an office environment. We need to consider the long-term potential of working remotely. This can help prepare us for other crises in the future, but it also helps the workforce maintain a better work-life balance, which results in a valuable outcome and decreases the expenses of running an office or renting a space. 

Many companies have shifted into this remote work environment, and “they’re finding it works. Not only are employees able to complete their workload [while dressed comfortably], avoid frustrating commutes, and reduce dry cleaning bills, they’re keeping pace with production and morale is high. Some businesses are running with the trend. Twitter and Square have notified employees they can work from home permanently if they choose. Google and Facebook have extended work-from-home options through the end of the year… we may have been thrust into telework, but it seems to be working.” (Source: Zenefits) 

Diversification Can Provide Stability

“Through the pandemic, we’ve learned to diversify further, because you really never know what will happen.” - Bridget Hilton (Source: LSTN Sound Co.)

One of the main tectonic shifts I focus on is recurring revenue, and having multiple streams. When we pour all of our eggs into a single basket, it can be quite dangerous. What if the only revenue stream we have is destroyed overnight? What other revenue is there to rely on? 

This, unfortunately, was evident as COVID spread. Various stores have been hit hard by the effects of COVID and have had to go out of business either because of the pandemic or because they were barely surviving before it. Diversification of revenue can come in many ways, such as SaaS products, membership sites, online courses, masterminds, recurring product shipments, entertainment subscriptions, etc. 

Luis Carmona, the founder of Tripboxx, said:

“As the owner of a few small businesses (an interior design firm, a small creative agency, and a photography business), I have been told too many times to count, ‘If you focused on just one of your businesses, maybe you can grow that one a bit more.’ Now, more than ever, I have never been so glad that I didn’t listen to that advice. I understand the reasoning behind the comments, but this pandemic has shown me that having multiple revenue streams in different fields is the way to go. When one type of business hurts, the others may save you from going completely under. A varied business portfolio is key to ensure that you can stay afloat with the natural ebbs and flows of a small business. I will continue this business model to ensure the longevity of my business.” 

(Source: Spectrum Business)

Steve Haffner, the founder of Pinnacle Thinking, was also forced to develop other areas of products and revenue during the pandemic: 

“As a solopreneur who makes his living as a professional speaker at on-site events, the pandemic completely pulled the rug out from under me. What I have learned is that having multiple delivery methods for my intellectual property is not just as “nice to have” but a necessity. The forced time away from the stage has given me the chance to spend time developing other formats and products that are still true to my brand and expertise.” 

(Source: Spectrum Business)

More Compassion and Patience

Despite living through a pandemic, everyone is battling their own struggles or challenges. It’s difficult to see many of those challenges. It is important, however, to be aware of the struggles or challenges going on in the lives of our business partners, employees, and co-workers. 

Add a pandemic to those already current challenges or struggles. “Everyone is dealing with the stresses of this strange season differently, and it is critical to remember that almost everyone is surrounded by shadows you cannot see through Zoom or hear through a phone call. However, these shadows are very real to them and are likely impacting their worldview massively. This is a great time for extra compassion and patience. And the remarkable thing is that this is in no way unique to these times of plague. I find that a valuable thing to reflect upon, and I hope that those of us reminded of that this year go forward with more compassion and patience.” - Tim Fields, Kabam (Source: Rolling Stone) 

Key Takeaways

Here are some of my key takeaways from today’s episode:

1. Don’t be afraid to pivot or change. Businesses that are able to effectively and quickly pivot when needed are the ones that survive.
2. Crisis opens the door to opportunities. 
3. Employees today are more clear about what they want from their employment. We need to try to better understand and meet these expectations as best we can, or risk losing top employees to competitors. 
4. Working remotely brings many advantages such as a more convenient work-life balance, not having to commute, decreased office expenses, flexible working hours, more focus time, better family connections, and more agile teams. 
5. Diversifying our revenue streams can increase stability, especially during times of crisis. More revenue streams also increase the chances of higher revenue. 
6. Everyone has their struggles or challenges with the pandemic. Many are struggling with challenges other than the pandemic. It is important to be aware of others, what they are going through, and to be more patient and compassionate. 

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Share Your Story 

What business lessons have you learned during the pandemic? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.

Read at: https://monetizationnation.com/blog/69-business-lessons-learned-during-the-pandemic/ 

Having an efficient sales process in place can be the difference between a high-performing and an underperforming sales organization. 48% of participants from underperforming sales organizations said they didn’t have a strictly structured and enforced sales process (Source: Harvard Business Review).

Chris Ochs is a sales process optimization expert. He’s currently the VP and head of sales at Factoreal, a marketing, automation, and customer engagement platform. Chris is also many other things. He is an entrepreneur, senior sales executive, public speaker, and endurance athlete with 20 years of management experience in companies ranging from organic food, software-as-a-service, online event planning, and email deliverability. 

Chris is also the managing partner of CK-HS Consulting, a management consulting company. His company works with small businesses to improve operations and finances and increase the customer base. He has completed more than 50 triathlons, including two Ironman races.

Chris started hustling as a kid. He sold Girl Scout cookies for his sisters. When he got into Junior High, he made $200 a week selling lollipops. He was selling so many lollipops that the Dean of Boys suspected he might be selling drugs. That was when Chris realized he liked making money. 

However, his real enabler was his first job. Right after college, he started selling Cutco knives. The job helped him make lasting connections but more importantly, it made him realize that he hated losing in sales. One day after he lost a sale, he called his manager frustrated to tell him about a customer who couldn’t see how valuable the knives were. His manager told Chris he would teach him so that this would never happen again.

This was the start of Chris’s sales education. He started learning about sales as a process,  science, consumer psychology, behavior, and methodology. When he left the company 12 years later, he was one of the top managers in the history of the company.

Chris spent the next 2 years helping a friend with a new companyーReturn Path. It was also one of the first companies in the space of digital marketing and data analytics. Even though he had no understanding of the technology, he built out their entire sales process till the company had achieved great success. 

Chris’s next stop was at ACTIVE Network, a global marketplace for activities and events that connects participants and activity organizers. When he first joined the company, Chris had a sales team of 24 people covering the U.S. and Europe, but they had not implemented a sales process. He was shocked when they told him it was taking them 3 days to respond to a sales lead. 

He developed and refined a sales optimization process and strategy. By the end of the year, the company implemented it. Chris managed to increase deal velocity and the average order. The following year, the company witnessed $3 million of growth. 

Despite the fact that the entire events industry began to shrink after that, Chris’s department was the most profitable in the company. They were able to contribute $4 million of profit to a company that only posted $2 million of profit. In other words, the company would have had a $2 million loss without Chris’s division.

After Chris left ACTIVE Network, he worked with a friend to develop and implement a sales process for an organic food company in San Diego. Once again, Chris found himself in a business that he knew nothing about. But, this didn’t stop him from implementing a sales process and shifting the company from one that lost $50,000 a month to a company with 12% growth month over month for the following year. 

Chris started business school at UCLA where he specialized in finance, international management, marketing, and entrepreneurship. After he graduated, he looked around and realized that not many people in Los Angeles knew how to sell. So, he started his sales consulting company that specializes in driving sales through market analysis and sales force effectiveness. 

Chris helped more start-ups get off the ground until most recently he joined Factoreal as Head of Sales. He feels that he has come full circle with his current job where he can put to use everything he’s learned over the years. 

I asked Chris to tell us about some of his sales optimization secrets and strategies. 

Before Chris started business school, he always looked at sales as a science. We would also benefit from looking at sales this way, and viewing it as a process with inputs and outputs. When we do a presentation well, we’re building value. We’re presenting a solution that solves a problem. That’s when we get a “yes” and close the sale. 

We should ask ourselves “why would our ideal customer buy our products?” If we’re not sure of the answer, then we haven’t done enough probing. That’s when we need to go back to the process before we can move any further. It’s too expensive to neglect those steps because if we continue, we will get a “no” and the sale will be lost. We need to focus on providing value first.

Chris believes it’s important to know what drives our customers. When there’s an objection, we need to dig deeper and try to uncover this objection. He recalls when he used to work with the organic food company selling goji berries to the Category Manager at the Whole Foods Market in Venice, California. Chris’s customer cared much about leaving work at 3 pm to avoid the traffic jam, so he came to work at 5 am every day. Chris understood this, and when his customer asked for a meeting, Chris told him he would meet him at 5:20 am. His customer was so impressed, and it made him see that Chris took his work and their business seriously. 

Chris showed his customer how buying his product would help reduce his customer turnover, increase his revenue, and become more profitable. Above all, Chris told him he wouldn’t have to justify why he had to leave work early anymore. 

Customers Asking for a Discount

When the customer asked for a discount, Chris moved the conversation to another value proposition, offering to do a promotion for him in his local area instead. It would help drive more people to his customer’s store, hence increase the traffic and sales. 

“The reason it seems that price is all your customers care about is that you haven't given them anything else to care about.” Seth Godin 

We can’t approach a customer and ask them about their marketing budget before we’ve broken the ice and provided value first. After they’ve seen the value we can offer them, they’ll be willing to answer some of the tough questions.

Key Takeaways

Thank you so much Chris for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:

1. An efficient sales process can be the difference between a high-performing and an underperforming sales organization. 
2. Sales should be regarded as a science. The output we get is the result of what we feed into the process. 
3. It doesn’t matter if we don’t understand a certain technology or are working in an unfamiliar industry. These things can be learned. What matters is having a solid sales process.
4. Before we can uncover our customers’ objections and passion, we must first build rapport with them.  
5. Strive to understand the core why’s of our target audience. 

Connect with Chris Ochs

If you enjoyed this interview and want to connect with Chris Ochs or connect with him, you can find him on LinkedIn at linkedin.com/in/chrisochs, visit his consulting company website www.ck-hs.com, or Factoreal website www.factoreal.com. 

Did you like today’s episode? Then please follow these channels to receive free digital monetization content:

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2.   Subscribe to the free Monetization eMagazine.
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5.   Follow Monetization Nation on Instagram and Twitter.

What strategies have you used to optimize your sales process? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.

Read at: https://monetizationnation.com/blog/68-how-sales-process-optimization-can-transform-profitability/ 

In this episode, I’m speaking with Jeff Warnick. Jeff is a portfolio Executive Director and marketing lead at Bristol Myers Squibb, a $140 billion pharmaceutical company that manufactures prescription drugs for cancer, HIV/AIDS, heart disease, hepatitis, arthritis, and psychiatric disorders. 

Passion-driven marketing is where we focus on what our customers are passionate about and connect with our customers through those passions. In today’s episode, Jeff Warnick and I discuss how his company has successfully implemented passion marketing, credibility marketing, and other marketing strategies.

Healthcare is one of the most passionate markets, especially for someone like Jeff who is working with oncologists who are trying to help cancer patients. The customers are in life-or-death situations. It’s a tough area to market in because you are marketing a product that helps customers conquer something they hate (such as cancer) rather than marketing through a level-10 passion that customers love. People don’t exactly line up for chemotherapy as they do for the newest iPhone. The industry Jeff works in is also heavily regulated, and he doesn’t have the creativity and freedom most marketers do.

Previously, Jeff and his team had marketed to oncologists using primarily analytics with lots of charts and tables, focusing on the data. They wanted to better identify the passions of the doctors and test connecting with doctors through those passions. 

Jeff helped set up a system of market research about the doctors’ passions. When physicians participated in this market research, they came into the interview with certain expectations. They thought Jeff was going to give them a patient case study.

Instead, Jeff had them lay back on a couch with the lights dimmed. He asked them why they decided to become a doctor. This takes the physicians out of their element, causing neurons and synapses in their brain to fire that they weren’t expecting.

To do this, Jeff asks questions such as, “Why did you become an oncologist? How can I work with you to help patients more? Where is a place where you are happy?” and more. He also thanks to them for their hard work. 

This disruption from the normal gives the physicians something unexpected, appealing, and intriguing. Because Jeff has established an emotional connection by showing the physicians that he cares about them, their patients, and their passions he is able to establish deeper connection and communication.

When Jeff would ask these physicians why they became a doctor, it almost always came back to a family member or friend who had cancer or got sick. He realized that they had deep personal connections that drove them to choose their careers.

Understanding this core motive had a big impact on Jeff. He wanted to help these doctors help their patients. Patients always want more time, and if they can’t have that, then they want the best quality of time they can receive. 

Sometimes Jeff does the same exercise in a focus group with multiple doctors at the same time. These doctors are used to other doctors attempting to trip them up. They are continually testing each other because that is the culture of the medical world with lives on their hands. So Jeff has to be careful about which doctors he chooses for each group. If there is someone with an alpha personality, the other doctors might be more hesitant to open up. Or, the oncologists often don’t like to get emotional in front of each other, so they tend to be more analytical about it.

“The highest level passions are the emotions attached to the decision, not the decision.” -Jeff Warnick

As marketers, we often focus on the buying decision itself because that’s where we get paid. The key to successful passion marketing is to focus on the passion behind the customer’s decision to buy. 

If we know that a customer likes chocolate ice cream, we can’t just say “here’s chocolate ice cream.” However, if we realize that they like chocolate ice cream because they used to have it with their grandpa every summer, we can connect with that. We can use the story to find a parallel path and serve it up as the emotional driver. The passion is not the ice cream; the passion is the experience associated with the ice cream.

The healthcare industry looks at recurring revenue a little differently than most other industries. They don’t like to think of people’s illness as recurring revenue streams because unfortunately, that means they’re not being cured or they're still ill. However, there are certain types of medical conditions, like diabetes, that end up being recurring. They are also trying to evolve cancer treatment to be something that is manageable like diabetes, making progress toward it being a chronic condition instead of a terminal condition.

Recurring revenue is still beneficial to companies like Jeff’s because they are a public company with shareholders they are responsible to. However, they don’t look at it in dollars; they look at it in terms of patients. How is staying on a medication going to improve a patient’s life? How is the medication going to combat their symptoms or keep their blood pressure where it needs to be?

This patient-oriented view can be beneficial in other industries as well. We can look at how our product or service will improve a customer’s life and market it that way, implementing a recurring revenue system to ensure our products and services continue to improve their life.

The key takeaway here is to build our products and services around something that improves our customers’ lives on a sustainable basis and not just one time. 

Personal health is an intimate subject, so physicians are very careful with how they make decisions. Their patients, however, really need two major things when they are making decisions.

The first thing patients need is all the information. They want to know about the side effects, co-pay assistance, what they should talk to their doctor about, etc. The second thing they want to hear about is the experience of someone else who has been in their situation or who has their condition. 

We can use both of these elements when we are building credibility with our customers. We can give our customers all the necessary information they need to make an informed decision and share the experience of other customers through testimonial videos. 

Key Takeaways

Thank you so much Jeff for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:

1. Passion marketing is a great way to make sure we are focusing on our customers and their core wants and needs.
2. We can get great results if we mix passion marketing and analytics.
3. One way to connect with customers is to disassociate them by taking them outside of their everyday life. Then we can get to the truths behind what they’re passionate about.
4. Focus on the passion attached to a customer’s decision, not the decision itself.
5. Use a story to package that passion.
6. Focus on how a product or service can improve a customer’s life.
7. Build credibility by giving customers all the necessary information they need to make a decision and by helping them connect with other customers.

Connect with Jeff

If you enjoyed this interview and want to connect with Jeff, you can find him on LinkedIn at https://www.linkedin.com/in/jeff-warnick/. 

1. Get a free Monetization Assessment of your business
2. Subscribe to the free Monetization eMagazine.
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Share Your Story 

How have you seen successful businesses use passion marketing? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.

Read at: https://monetizationnation.com/blog/67-how-a-140-billion-pharmaceutical-company-used-passion-marketing/ 

This is Entrepreneurs of Faith, a Sunday episode of Monetization Nation. I’m Nathan Gwilliam, your host. In today’s episode, we’re going to discuss a sermon by a church leader named Becky Craven about how we can use change to become better people and run better businesses.

Keep the Change

Becky Craven said, “Imagine someone going to a market to purchase an item. If she pays the cashier more than the item is worth, the cashier will give her change.” 

Craven likened this to Christ giving us so much, “the heavens, the earth . . . all the beauty we enjoy . . . His loving Atonement,” and “[redemption] from sin and death.” So, what can we give in return? Change—our change. 

This change can be “a change of thought, a change in habit, or a change in the direction we are headed.” He asks us for a change of heart for our benefit, not His. He invites us to keep the change.

“A new heart also will I give you, and a new spirit will I put within you: and I will take away the stony heart out of your flesh, and I will give you an heart of flesh.” - Ezekiel 36:26 KJV

Change Leads to Action—Not Perfection

This call to change doesn’t immediately lead to perfection, but it can immediately lead to action. We have the power to change things in our lives immediately. We can decide to run our businesses differently or treat our associates better right away. These actions lead us to be better, but it is something that we need to continually work at in our lives. When we combine our efforts with the Savior’s ability to change us, we can become new creatures.

"Change does not necessarily assure progress, but progress implacably requires change." - Henry Steele Commager, American historian

Enduring to the End Means Changing to the End

Craven continued, saying, “When I was younger, I visualized myself walking along an upward, vertical path toward my goal of eternal life. Each time I did or said something wrong, I felt myself sliding down the path, only to start my journey all over again. It was like landing on that one square in the children’s game Chutes and Ladders that slides you down from the top of the board back to the beginning of the game! It was discouraging!”

As she started to understand change, she found she could apply it daily in her life, giving her hope. If we continually apply this principle of change, we can endure to the end. Enduring to the end means changing to the end. Craven now understands that she isn’t starting over with each failed attempt, but with each try, she is continuing her process of change.

We must intentionally seek change. “Our daily choices will either help or hinder our progress. Small but steady, deliberate changes will help us improve. Do not become discouraged. Change is a lifelong process,” Craven said.

Help from Others

Craven said, “trusted family members, leaders, and friends can be helpful in our efforts to change. When I was eight years old, my older brother, Lee, and I would spend time with our friends playing in the branches of a neighborhood tree. We loved being together in the fellowship of our friends in the shade of that tree. One day, Lee fell out of the tree and broke his arm. Having a broken arm made it hard for him to climb the tree by himself. But life in the tree just wasn’t the same without him there. So some of us steadied him from behind while others pulled on his good arm, and without too much effort, Lee was back in the tree. His arm was still broken, but he was with us again enjoying our friendship as he healed.”

We may know those who have fallen out of the tree, but we can be the ones to help them back up and urge them to be where they are supposed to. “Can we gently tug a little here and hoist up a little there to help them heal while they enjoy our friendship?” In addition, we may be the ones who’ve fallen out of the tree. If this is the case, we shouldn’t be afraid to accept or ask for help. We have people in our lives who are ready and willing to help us.

“The best antidote I know for worry is work. The best cure for weariness is the challenge of helping someone who is even more tired. One of the great ironies of life is this: He or she who serves almost always benefits more than he or she who is served.” - Gordon B. Hinckley

“You haven’t changed at all!”

Craven also said, “I occasionally run into friends whom I haven’t seen for many years. Sometimes they say, ‘You haven’t changed at all!’ Each time I hear that, I cringe a little, because I hope I have changed over the years. I hope I have changed since yesterday! I hope I am a little kinder, less judgmental, and more compassionate. I hope I am quicker to respond to the needs of others, and I hope I am just a little bit more patient.”

Similarly, we should hope that our businesses change over the years. We should strive to continually learn how to improve them, learning how to better help our customers and treat our employees.

Don’t Wait to Change

Craven loves hiking in the mountains near her home. She says, “Often, I get a little rock in my shoe as I walk along the trail. Eventually, I stop and shake out my shoe. But it astounds me how long I allow myself to hike in pain before I stop and rid myself of the irritant.”

As we make our way through life we might pick up little rocks in the forms of bad habits, mistakes, or bad attitudes. “The quicker we shake them from our lives, the more joyful our mortal journey will be.”

Maintaining change takes effort. Craven cannot imagine stopping along the trail to put the annoying and painful rock she’d just removed back in her shoe. She says, “I would not want to do that any more than a beautiful butterfly would choose to return to her cocoon.”

"To exist is to change, to change is to mature, to mature is to go on creating oneself endlessly." - Henri Bergson

Key Takeaways

Here are a few of my key takeaways from this episode:

1. We have so much that we are blessed with; how can we give back? With our change.
2. Change requires action.
3. Changing and becoming a better person is a lifelong process.
4. Not only should we help others when they fall off track, but we also shouldn’t be afraid to ask for help when we need it.
5. Let us hope over the years we grow a little kinder, less judgmental, more compassionate, quicker to respond to the needs of others, and more patient.
6. Our bad habits, mistakes, and bad attitudes can be like rocks in our shoe. If we remove them, we can more easily continue on our journey.

If this episode of Entrepreneurs of Faith resonated with you, please subscribe for FREE to Monetization Nation so you can receive Entrepreneurs of Faith each Sunday.

1. Subscribe to the free Monetization Nation eMagazine.
2. Subscribe to the Monetization Nation YouTube channel.
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4. Follow Monetization Nation on Instagram and Twitter.

How have you seen change work for good in your life? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.

Read at: https://monetizationnation.com/blog/67-keeping-the-change-how-to-use-change-to-become-better-people-and-run-better-businesses/

Bootstrapping is when entrepreneurs find a way to self-fund businesses instead of accepting investment from outside sources. 

“Bootstrapped startups have a long history in the U.S., with many of the biggest companies in the world starting just from one good idea and no initial funding.” (source: USchamber.com)

Successful Bootstrappers

The history of business is filled with many successful entrepreneurs who bootstrapped their businesses. For example, Steve Jobs and Steve Wozniak built their first computers in Steve Jobs’ parents’ garage. Their first computers, the Apple I, were MVPs (or minimum viable products) through which they could quickly generate the capital they needed to build their business. 

Basecamp, formerly known as 37 Signals produces award-winning project management and team communication software that is trusted by millions of customers around the world. Basecamp was bootstrapped by providing web design services to other companies. According to Jason Fried, one of Basecamp’s founders, the company grew from $1 to a $100 billion valuation without any external investment.

MailChimp helps companies send email newsletters and generates about $700 million in annual revenue. They were bootstrapped by co-founders who had been laid off from their web design jobs. They were named Inc’s Company of the Year in 2017 and are still 100% owned by the founders. 

Tough Mudder produces extreme races. “Thousands of people will pay good money to run the most grueling obstacle course ever invented, which will include ice baths, extreme hill-climbing, and electrical shocks” (source: USchamber.com). The two founders each invested $10,000 of their own money to start Tough Mudder, and with no venture funding, more than 2 million people have now run Tough Mudder races. 

Why Do Businesses Bootstrap?

Why do businesses turn to bootstrapping? Sometimes entrepreneurs don’t have a sufficient track record to secure venture funding.

"Someone once told me that the probability of an entrepreneur getting venture capital is the same as getting struck by lightning while standing at the bottom of a swimming pool on a sunny day. This may be too optimistic.” - Guy Kawasaki

Entrepreneurs who are successful at bootstrapping their ventures can receive many benefits, such as retaining more ownership, decision-making authority, and creative control over the business. 

“A slow bootstrap worked really well [for GoPro]… As long as you can bootstrap not at the sacrifice of competitive advantage, bootstrapping is a really powerful thing because it allows you to be totally devoted to your vision.” - Nick Woodman (GoPro Founder)

4 Bootstrapping Strategies I Have Used to Help Fund My Businesses

I have created and sold three digital ventures that used bootstrapping for all or part of their funding. Here are 4 strategies I have used for bootstrapping my businesses:

Arbitrage

We can bootstrap a business through arbitrage. According to Wikipedia, arbitrage is “the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices at which the unit is traded.” In other words, arbitrage is the process of finding something we can purchase at a low price from one source and resell for a higher price to a buyer.

For example, in the early days of my Adoption.com venture, my best way to bootstrap was to sell domain names. Back then, Network Solutions was the only domain name registrar, but people didn’t really trust the internet to buy and sell yet. So, when Network Solutions let people like me register a domain name, they would physically mail me a paper invoice for that domain name. They gave me 90 days to pay for the domain name. If I didn’t pay for a domain name within 90 days, they would take it from me and put it back into the pool of available domain names for someone else to register.

So, I would register large groups of domain names. Then, during the 90 days of free ownership, I would contact potential buyers and try to sell the domain name. If I was able to sell the domain name, I would pay the Network Solutions bill, then transfer the domain to the new owner. If I was unable to sell the domain, I generally let the domain name expire instead of paying for it. 

Years later, as I had a little more money, domains had become much more scarce and were increasing rapidly in prices. So, I developed a list of hundreds of short domain names I felt would be very valuable. I then reached out to the owners of all those domain names, and I found the best deals. I purchased those deal domains, held onto them for a little while, and then sold all of them to help fund my business. 

Over the years, I sold millions of dollars of domain names, which provided needed capital for my growing businesses. My goal was not to be a domain broker. I always saw this as a short-term arbitrage to help fund my long-term businesses.

This concept of arbitrage can work well in many different niches other than domain names. For example, many people buy products at thrift stores and then resell those items on eBay for a profit. As another example, I know someone who has family connections in the diamond wholesale market. So, she buys diamonds through that wholesale connection and resells them in her small-town college market. 

Professional Services

I have helped bootstrap three of my startup ventures over the years by providing professional services to other organizations. I provided digital development, marketing, and monetization services. For example, in the early days of Adoption.com, I helped a lawyer build a website for lawyers. Also, through the years, we have done consulting and web development for adoption agencies and attorneys. The funds from that consulting and web development work were used to bootstrap the core Adoption.com business. 

Years later, I started a venture to create and grow niche online communities. To fund that venture, I did extensive consulting work for businesses in Brazil, such as Azul Airlines. I spent about ½ of my time over about 3 years working for other companies in Brazil.

This method of bootstrapping can often be the most lucrative in the short run. For example, when I was doing consulting in Brazil, my business partner and I generated more than $1.5 million in consulting revenue our first year. However, bootstrapping through professional services does have its pitfalls. Because professional services usually trade hours for dollars, this type of bootstrapping can consume a lot of time. As a result, there may not be enough time left to effectively grow the core business. The reason this worked for me is that I had a tremendous business partner named Brad Pace who stayed in the U.S. and ran the business while I was consulting in Brazil. 

Also, bootstrapping through professional services is only available when the entrepreneur has developed sufficient skills and experience to sell the professional services for a substantial fee. Young entrepreneurs without a track record may not be able to sell professional services for a large enough fee to make this worth their while. 

Business Plan Competitions

Prize money from business plan competition wins can be incredibly valuable for startup ventures because it is an investment that never has to be repaid, or for which we don’t have to give away equity. Further, it builds credibility and gives exposure when a group of expert judges proclaims to the world that we have the best business plan. 

In the early days of my first business, Adoption.com, I helped bootstrap the business through business plan competitions. I submitted business plans to two competitions and won both. In addition to the prize money, in both cases, I was offered unsolicited investments shortly after winning the competitions. 

I remember one night a business plan competition application was due. The plan had to be postmarked that day. I had gone home to get some dinner, and after dinner, I was going to finish up the application and take it to the post office. As I was on my way back to the office, I was rear-ended. It took forever for the police to arrive and take care of the situation. 

When I was able to leave, I raced to the office and printed the application. Then, I headed to a post office in Phoenix that gave postmarks and was open until midnight. By the time I arrived at the post office, it was after 12:20 am. Remember, the business plan competition application had to be postmarked the previous day. 

As I walked up to the post office, I found it was dark and locked up. However, I saw an employee leaving an employee entrance. I walked over and handed the postal worker the application, and I said “This has to be postmarked yesterday. It’s to help children find loving families through adoption.” The postal worker looked at me, then took the package, and went back inside. Not long after, the postal worker came back out the employee entrance and said “You are in luck. The person in charge of turning over the date stamp was at a baby shower in the post office and hadn’t done it yet. So, I was able to postmark it yesterday.”

There are ethical issues related to that postmark date and the fairness to other applicants I did not consider at that time. I should have been more prepared, and I should not have arrived at the post office so close to the deadline. However, the bottom line is the money, exposure, and credibility from winning that business plan competition was ridiculously valuable for our company, and played a huge role in helping us bootstrap, survive, and grow. 

Preselling

After I had been running Adoption.com for a few years, we had a very kind but pesky competitor running a site called Adopting.org. That competitor was undercutting us on price and making our monetization more difficult. I really wanted to buy this competitor, but I didn’t have the cash to do so. 

However, because I was running a business in the same niche, and already had all the technology and relationships to monetize the site, I knew how much money I could generate per thousand page views. In the negotiation process, my competitor shared with me her site’s page views and her revenue, so I was able to calculate her revenue per thousand page views to use as a comparison. I believed I would be able to implement our revenue streams onto her site after the purchase and make more money from her site than she was making. 

To test this theory, we went to our advertisers and pre-sold essentially all of the advertising on our competitor’s site before we even completed the purchase. Preselling helped remove the risk of this transaction and allowed me to bootstrap the purchase of our leading competitor. 

Many businesses today have seen a lot of success bootstrapping their ventures by preselling through crowdfunding platforms such as IndieGoGo and Kickstarter. One of my past consulting clients named Inergy Solar wanted to make industry-leading, light-weight portable solar generators. They had designed the product but needed the capital. So, they created a great video, put it on IndieGoGo, pre-sold a huge amount of generators, and started production. They secured the capital they needed without having to take out a loan or give away any equity.  

I recently interviewed Eric Farr for the Monetization Nation show. Eric is the Owner and Executive Officer of Brainstorm. Eric told the story of how they found a client who wanted a specific software solution. That client agreed to pay enough money that Eric and his company could build the software. The client retained the right to use the software for their business, and because they funded the software development, they had a lot of say in the features and roadmap for the software. It was a win-win because the client received exactly the software product they wanted for a fair price. However, Eric retained the right to license the software for other businesses and started his software company. This type of preselling is a common way that software companies bootstrap themselves. 

Cost Containment

In addition to generating capital through bootstrapping, another essential element of bootstrapping is cost containment. Because bootstrappers don’t have all the financial resources of venture-funded companies we have to be more frugal and find less expensive ways to do things. 

When we bootstrap, we will often have to forgo the perfect team with seasoned track records. Instead, we will need to find “young and hungry” members of our team from college campuses or overseas who are able to work for a price we can afford at the beginning, with the hope that they can grow their compensation as the profits of the organization grow. 

Getting to Profitability as Fast as Humanly Possible

If we choose to bootstrap, we must get to profitability as fast as humanly possible. In this situation, we must remember that cash flows don’t start until we start shipping. So, bootstrappers don’t have the luxury of being perfectionists. Bootstrappers usually have to be willing to sell and ship products that are “good enough” and not wait until a product is “perfect”. Bootstrappers have to remember that good enough is good enough, and that perfect is the enemy of cash flow. 

Conclusion

Bootstrapping a business is probably going to take more time and than taking an investment. But in the end, we may have a lot more control over our businesses. We will probably be retaining the ability to run the business the way we want to run it. We probably won’t have investors pressuring us to make short-sighted decisions to make quick profits. We will instead have the freedom to focus on the long game if we want to.

“When someone says ‘Think of all the things you could do if you raised a ton of money,’ I instead think of all the things I couldn’t do. I value independence more than any check anyone could ever write me.” (Jason Fried)

Key Takeaways

1. Many of the world’s most successful companies have used bootstrapping.
2. Successful bootstrapping can have great upsides, such as retaining more ownership, decision-making authority, and creative control over the business. 
3. Bootstrapping can also have downsides, such as slower growth, more personal risk, and distraction from our core focus. 
4. Bootstrapping through arbitrage is when we buy something inexpensively from one source and sell it to a different buyer for a higher amount. 
5. Bootstrapping by providing can often be the most lucrative in the short run, but young entrepreneurs without a strong track record may not be able to earn enough money from this to be worth their while. Also, this may distract the entrepreneur from their core business. 
6. Bootstrapping through winning business plan competitions can be a great strategy because we never have to give away equity or repay this investment. Plus, the credibility from winning the competition can give us strong credibility. 
7. Bootstrapping through pre-selling products and services can also give us the capital we need without having to give away any equity or taking out a loan. Crowdfunding platforms can be a great way to do this. 
8. In addition to generating additional capital through bootstrapping, cost containment is also an essential element of bootstrapping. Because bootstrappers don’t have all the financial resources of venture-funded companies we have to be more frugal and find less expensive ways to do things. 
9. If we are going to pursue bootstrapping we have to be laser-focused on getting to profitability as quickly as possible. Bootstrappers have to remember that good enough is good enough, and that perfect is the enemy of cash flow. 

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