This transcript was generated from the episode audio and may contain minor errors.
[Music]
Hello, hello, what's up? Welcome to Side Hustle School. My name is Chris Guillebeau. Over here, we have just finished week number 37 of season two. For those listening in real time, it's now mid-September, entering the fall, at least in the Northern Hemisphere.
And yeah, so much has been happening, so much more is on the way. I wanna talk today about how crowdfunding is not a sustainable business model. I have some comments from somebody who was on the show long ago and actually raised more than $100,000 through crowdfunding, but is finding that it's not all it's cracked up to be, or at least it's a good starting point, but it does not make for a sustainable business model, as I said, we'll get into that a bit more. Also got an update, an audio update from a previous Side Hustler about how optimizing one project or a path can be more profitable than branching out. So some interesting little practical points about conversion rates in that update.
So a very practical weekly recap for you all around today. Now this week, my favorite episode of the show, I mean, I just gotta give it away to the rise and fall and rise of birdsupplies.com. I hope you enjoyed that one too. It's fun in so many ways to look at an e-commerce site that's been around for 20 years, making up to $250,000 a year before being penalized by Google and then going down to $50,000 and then regrouping and deciding to specialize in parrots. Just a crazy story.
If you didn't get a chance to listen to it, that was episode 618. I'll talk some more about some other episodes later. I just wanted to mention that one at the top of the show because, you know, the rise and fall of bird supplies. Also this week, or actually earlier this year, but it relates to this week, earlier this year I participated in an onstage conversation in New York City, all about philosophy and how to make your life suck less. This conversation, at least my part of it, focused around my days as a failed pizza delivery man.
And of course we went on to some other topics as well. Anyway, that conversation is now part of a new podcast, which just launched a few weeks ago and my part went up this week. If you want to check that out, it is called the Happier Hour. You can look for the Happier Hour in Apple Podcasts or wherever you listen to podcasts, or just go to the happierhour.org. Okay, let's talk about why you should beware of Kickstarter campaigns.
In fact, beware of successful Kickstarter or Indiegogo or other crowdfunding campaigns. I got this note this week that I thought was really interesting. It's from one of the people that we featured on the show a long time ago. I've actually got a different update coming in audio form in just a moment in the next segment. But this note came to me by email.
We're going back, as you may know, and getting lots of updates to see what happened with people, whose projects we featured in the first year of the show. Now, this person had a very successful crowdfunding campaign. And they ended up raising about $100,000. Let me just share with you what this person says. And I'm just gonna keep it anonymous in this case, because they're kind of figuring out what to do next and how to regroup in their business.
And this person says, our revenue for year one was right above $100,000. We were profitable. Almost all of this money, 90%, was generated through that original Kickstarter and then a follow-up campaign. We got a rude awakening when we got off the Kickstarter platform, which did some amazing marketing for us, and tried to sell our product in the big wide world. The product doesn't market itself, and we don't have the same capacity that Kickstarter does.
So we're trying to figure out where to go from here. So to me, this suggests a couple of things. And first of all, I appreciate that person allowing us to share the update. Hopefully, all will be well. But to me, it illustrates crowdfunding and can be a wonderful tool for launching a product, but it's not a business model on its own.
So if you were thinking about going that direction with your business, your product, you have to ask yourself, what will you do after the hype dies down? Let's assume you do have a successful campaign. Maybe it's a hugely successful campaign, like this person with $100,000. Well, still, that's great, but you always need to be asking yourself, what lies on the other side? What happens when I'm not getting this attention?
And this could also apply to anything else that is bringing your business or your idea a lot of attention, but then is ultimately going to be time defined. It is a campaign. It's not going to continue forever. So just something to think about for your own ideas. And also, whenever you hear stories about people doing crowdfunding campaigns, if they seem really happy with the money they've raised, that's great, but always be thinking like, okay, what are they gonna do when that money isn't coming in anymore?
Now, last but not least on this point, most successful crowdfunding campaigns these days, it doesn't happen by magic. So in the early days, it was easy. Just like with any model, like when any kind of internet thing is new, in the early days, you could crowdfund your lunch money. Hey, everybody, I would like you to support my journey to have lunch at a nice restaurant. You can't really do that anymore.
You have to have much, much more of a compelling reason and lots of facts and video and everything to kind of back things up. So when you hear the stories of somebody with a successful campaign, know that there is most likely a lot of work behind that process. I don't mean to take anything away from people who've done that. I just wanna say, as the story kind of illustrates, be sure you think about what comes next. [Music]
All right, now a blast from the past segment.
We've got a short little update from someone featured also in year one of the show. And let's hear directly from him. He's got some really interesting comments as well as a big success to report. So over to Scott. - Hey, this is Scott Macus from Charleston, South Carolina.
And my side hustle is strings finder coffee mugs. www.stringsmugs.com. And it was featured on episode number 47. So since the podcast episode, we have tripled our sales and our products are even featured at the Gallup Strings Summit in Omaha, Nebraska this past summer. My advice to other listeners, for quite a while I had been stuck with only a few thousand dollars in monthly sales until I got some help from an e-commerce expert.
He looked at the metrics from my online store and noticed that I had a high conversion rate. I was converting 6% of the traffic to my online store, which was much higher than the industry average of 2% for e-commerce sites. He said, all I need to do is drive more traffic. So we started driving traffic with Facebook ads, which has led to 3X growth in sales over the past six months. Big lesson learned for me.
To get to the next level, you need to surround yourself with people who have achieved what you want to achieve. What I'm working on now, my big goal now is to reach $10,000 in monthly sales by the end of 2018. - Awesome, Scott. Thank you so much for sharing that update and congratulations on such an increase. 6% is indeed a very strong conversion rate.
It makes sense that an expert looked at that and said, "Hey, you're converting really, really well. "Let's find a way to get more traffic to your site "so that you can have more sales." Now, here's the thing, when you use paid traffic, this is kind of some comments or advice for everyone. When you use paid traffic, the conversion rate is usually going to go down because people who are coming to your site organically or through some kind of referral or word of mouth or some kind of promotion that you've done are naturally going to convert better than people who are coming in through Facebook ads or Google ads or otherwise having no knowledge or no association with your business. So those people are always gonna convert less. But if you're in a situation where you have that really strong conversion rate, you can afford for it to go down and still make money because in his case, I don't know the specific number, but if it dropped from 6% to 3%, for example, even if it dropped in half, he can still make money if he's paying less for the ads than what he's receiving on the other end from those who do purchase.
So hopefully this shows why it's so important to have a compelling offer and to work on increasing your conversion rate because then you have a lot of options. You can go out and do that paid marketing. If his conversion rate was not great and he went out and did paid marketing, he's probably just kind of throwing away his money. But fortunately in his case, he's not because he's smart. So once you have a product for sale, keep in mind these two main pathways to increase your income.
One, you can focus on increasing the conversion rate by maybe rewriting the copy or getting some better photos taken or meeting with some focus groups or just emailing people and asking for their feedback and asking what they didn't understand about the offer. Or you can focus on what he's done here, which is getting the offer in front of more people. There are also some other options including raising the price, right? Because if you raise the price and the conversion rate stays the same, then you're naturally gonna make a lot more money. But in this case, we're talking about either increasing your conversions or getting the offer in front of more people.
In his case, he had the strong conversion rate. So he focused on getting the offer in front of more people and it sounded like he's doing pretty well. So congratulations, that's really great, Scott. And everybody else, if you wanna follow along with him and check out what he's doing, you can go to strengthsmugs.com. And when I went there, I just noticed that you have to put in strengths mugs with a plural.
Strengthsmugs is taken by somebody else who is undoubtedly trying to play off of his success. And strengthsmugs.com redirects to strengthsfindercoffymugs.com. So I thought that was interesting. We'll include a direct link in the show notes to make sure people go to the right place. More of these to come.
We always love hearing from people who have been featured on the show, as well as those of you who have been listening for a while, perhaps learning something and maybe applying it in some way. If you have something you wanna share with us, definitely let us know. You can give us a call on the Hustle hotline. You can also ask a question there in the months to come. We're gonna be featuring more questions and attempted answers by myself.
That Hustle hotline number is 8449 Hustle, 8449 Hustle, or 8449487853. Or you can also make a little voice memo on your phone and email it to podcast@sidehustleschool.com. You can, of course, also just email. I always love hearing what you're up to, your successes, as well as your challenges and your obstacles, because that is the side hustle journey. A lot of the joy is found in working through the process.
[Music]
So speaking of process, looking back on this week's episodes, so here's a question for you. When you think about your skills, your strengths, I always have a hard time saying that word, strengths, got it, things that you're good at or what you like to do, are you better at optimizing a process or are you better at the bigger picture? Now, I tend to be better at the bigger picture myself. I'm actually not super detail oriented. I need to get some help when it comes to details and building systems and all that.
But this week's stories illustrate how drilling down and improving a single product or pathway can lead to profits, sometimes a lot more profits than just starting new projects or being pulled in different directions. I think actually almost every one of these episodes illustrates that in different ways, specifically episode 618, 619, and 622. Now you might be commuting or at the gym or somewhere where you can't actually pull up all these episodes, that's the whole point of podcasts. So just in brief, 618 was, once again, Squawk, the rise and fall of birdsupplies.com. Her original project was selling all kinds of bird supplies to all sorts of bird owners.
And she chose to just sell supplies for parrots. And then she really chose to focus on problematic parrots, which was a whole thing I didn't know about. And parrots were plucking out their feathers and creating like a whole library of e-books all about improving your parrot's mental health. So really drilling down and getting specific. Then 619, I love that story as well.
London photographer rents camera gear 1100 times. This is someone who's using the gig economy or the peer-to-peer sharing economy, whatever you want to call it, where people are lending out their camera gear or computer equipment, other kinds of physical items to other people. This guy has completely optimized the process. So most people when they do that, it's just for extra cash. He's found a way to make tens of thousands of dollars doing it.
So it's actually a real business using a simple network that anyone can register on today and start renting out stuff with. So super successful at optimizing there. And the last one I'll mention is 622. When the rubber hits the road, this momma three earns $5,000 a month. That story was just a couple of days ago and it was all about this woman in Texas who's an interior designer.
And she starts a shop selling rubber stamps and some other items too, but rubber stamps is a big thing. And she's trying to stand out because lots of other people are selling rubber stamps. And the tweak that works for her after trying lots of different stuff, the tweak is she changes the color on the handle of a rubber stamps and ends up skyrocketing her business to $5,000 a month. She does something else that ends up bringing an additional $20,000. So again, it's all about optimizing.
So the real money is in improving the process. If you compare this to the anecdote, the quote at the top of the episode, that person who raised $100,000 from Kickstarter but then realized belatedly that they didn't really have a business. Viral attention is not a business model. All the things that the people are doing in these episodes this week, that's what makes for a business model. At least if you want something that's gonna be sustainable, at least if you want something that's predictable and consistent.
Drilling down into that foundation is gonna be your pathway to profits. Well, my friends, I hope you have been enjoying Side Hustle School. I very much enjoy working on it and I believe the best is yet to come. Over here in my world, I've been wrapping up a book manuscript. I'm excited to tell you more about it soon.
And I'm also excited to be done with it just because I have so much more I wanna focus on with Side Hustle School. I may have mentioned that last week. Well, it's still in process, but it's something I'm thinking about every day and I'm grateful to everyone who's a part of this journey. Much more to look forward to. So coming up on the show next week, a whole other set of good stories, including something about a nutritionist, something about an actor, something about a running shoe guru and something about hot sauce.
All kinds of stuff there per usual. Now, before I sign off for the week, I wanna say thank you to you. First of all, our listeners, you're the reason we make the show. I wanna support you fully in your quest to create that new source of income for yourself. Perhaps you've been thinking about a side hustle for a while.
Perhaps you started and you got sidetracked or you ran into some difficulty or obstacle or challenge. Maybe you already have a bunch of side hustles and you're figuring out how to optimize or what to start next. Wherever you fit into that mix, thank you for being part of this community. We make the show every single day and I'm definitely not the only person working on it. So you hear my voice, but there's lots of other people making this possible including our senior producer, A.C. Valdez,
our content manager, Whitney Karenik, assistant producer, Sarah Barrett, community liaison, Jed Chang, official show cat, Libby Gilliboe, and probably some other folks too. It takes a village. All of us at Team Side Hustle School are part of the Onward Project that is led by best selling author, Gretchen Rubin. You can learn more about that at theonwardproject.com. And if you do enjoy it, by the way, if you enjoy the show, it's free, it's daily, it's short, because I respect your time.
I know you got lots of stuff going on. I know you're busy. But if you wanna help out, you can tell your friends, show them how to subscribe. If you know somebody who needs another source of income, we wanna take care of them. So send them to us.
And also it'd be amazing if you could give us a quick little rating and review in Apple Podcasts. It just takes a quick moment and it will help other people discover the show. But most important, I want you to do something for yourself. That is what this is all about. It's about freedom.
It's about creating options and possibility for your life. It's not about taking a huge risk. It's not about walking away from your job tomorrow. It's about building something for your future, whatever you envision that to be. That is our goal.
That is our single-minded mission every day. So I hope you'll join me tomorrow, every day next week. With more stories and actionable ideas, consider this an investment in yourself, a short little investment in yourself. Our episodes go online at 601 a.m. Eastern Time every day.
Once again, my name is Chris Guillebeau and this is Side Hustle School.
