This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello, hello, thank you for tuning in today. My name's Chris Guillebeau, this is Side Hustle School. And guess what? Today's episode is going out on Christmas Eve. And wow, what a holiday season it has been.
What a year it has been. I am so grateful for you joining me along the way. We got something a little bit special coming up tomorrow, so be sure you don't miss that episode. But for now, today, this is our "Pen Ultimate Failure Friday" episode. We introduced this new segment at the beginning of the year.
It has been super, super popular. Lots of insight, lots of transparency and honesty, just some great storytelling coming through from many of the side hustlers we have featured sometimes in years past, or sometimes some authors with books coming out who are willing to tell a story of something that went very wrong. Okay, so we call it "Failure Friday," as mentioned. It is a collection of short stories about mistakes, missteps, disasters, and of course, failure. Today's feature comes from Alan Chang.
And we told the successful story of his "Retro Radio Farm" project way back on episode 535. It's such a cool project. I've mentioned this many times in interviews. Alan repairs and sells, well, retro radios, radios from a long time ago. He'll explain a bit more in his update.
And they're just super cool. So I want to encourage you to check out his website as well. Talk about that in the wrap-up. 2020 was a strong year for him. Everything was going well business-wise, at least.
Lots of sales, things were up. Everything was working in terms of his advertising ratio, spending money, but achieving a return. It was far greater from what he received. But then in 2021, that would be this year, he ran into some major problems. So let's let him tell the story.
He had to take a hard look at his business. What did he learn along the way? Here's Alan. I'll be back at the end for that brief wrap-up. [Music]
Hi, I'm Alan Chang.
I'm the co-owner of Retro Radio Farm. We sell and repair old radios from 1930s on up to the 1970s. We also offer Bluetooth and smart speaker upgrades. So here's an update from what we've learned in 2021. Since we last talked, there have been a lot of changes at Retro Radio Farm.
We have moved our side hustle business closer to work. As a result, I now have a new workshop with at least double the space of my old workshop. This makes organizing my radio rebuilds and repairs much more manageable. And I'm now able to acquire more inventory and have the room to store it. I estimate that I have been able to double production and triple revenue since we last talked.
We also had a terrific 2020 and things were looking great. 2021 proved to be very challenging year for us. Basically our marketing tank midway through the year after the Apple iOS 14 change that occurred in April, our tried and true marketing plan that was heavily favored Facebook advertising began to falter. We began to learn about cookies and the cookie list future. The changes affect every advertiser, not just us.
Facebook advertising was getting more expensive and less effective. We were at a point this summer where we were spending a dollar on our ads to make $1.10. And these are not good numbers and it got even worse. You see Retro Radio Farm is a company that sells a niche product. We cater to people who want something different, appreciate a vintage style and are excited by having something that's handcrafted made in America decades ago.
Our pool of existing customers is small enough so that the Facebook algorithm doesn't really work efficiently. Looking back, we were very lucky to be in a business where there are advantages to selling online however, to make sure the customers had a great experience we focused on shipping. Everyone knows that shipping packages now is a big challenge and getting damaged goods makes for a very bad customer experience. So we focused on that and hoped that Facebook would figure it out with advertising. But that didn't happen.
It was a hard lesson to learn. We had to lower our advertising budget and adjust to selling less product. That was hardest of all for me. I was used to selling 10, 15 or more radios a week. I loved hearing the little cash register ding during the day.
I would yell out, "Daddy sold the radio to my children who were studying during lockdown." It gave me so much joy and peace of mind that I had the side hustle that was going to provide a better life for my family. But I had to take a hard look at my side hustle. Retro Radio Farm started out as a passion of mine. To build it into a business, I hired my wife to learn and execute online marketing. She's done great.
She has diversified advertising to include Bing, Etsy ads, Twitter, Snapchat, TikTok, Instagram, and Google ads. We placed more of our ad budget into Google shopping and that proved helpful. Looking forward in 2022, I am more clear eyed about my expectations. In the future, as online advertising becomes more expensive, we're going to focus more on other strategies, not just on social media. So what I learned is that Retro Radio Farm is really just a side hustle.
It's a hobby that I do and I love it. If I can make some money on it, then all better. But I'm still passionate about it and I love tinkering with these old radios. [Music]
Thank you so much, Alan. Really appreciate you sharing that update with us.
As I say, never confuse a single defeat with a final defeat. And I respect this approach of being more clear eyed about expectations. And this happens when you have a strategy that is highly dependent on advertising or on the gifts of Google organic search rankings or anything that is ultimately beyond your control. It's like, if it works for a while, that's great. Nice work if you can get it.
But ultimately I think it is wise to focus more on other strategies just to diversify a bit and such. Also what Alan mentioned here about how when he was spending a dollar to make a dollar 10, for some products and some services, that's actually great. For a lot of businesses, especially if it's a digital product, you are happy to spend a dollar to make a dollar and 10 cents. You'll do that all day because your costs of delivery are very, very low. You know, for handcrafted physical products, you wanna have a much better profit margin.
So of course that's why it was a problem for him. Anyway, thanks again, Alan. Check out his website listeners, retroradiopharm.com. retroradiopharm.com. I have visited many times.
You can also see some cool pictures of his work at retroradiopharm on Instagram. Thank you again for joining me today. Thank you for joining me all year. If you've been around, I am so excited about all that's coming up in the year to come. But of course, I also wish you a wonderful rest of the holiday season.
All right, that's it for today. My name is Chris Guillebeau. This is "Side Hustle School." [Music]
from The Onward Project.
