Back Pain Sufferer Brings Profits Home To Roost

This transcript was generated from the episode audio and may contain minor errors.

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I am so excited to go back to Canada this week. I'm going to Vancouver tonight, then on to Toronto tomorrow for an event and a bunch of media the following day. I always, always, always love visiting my friends and community and a bunch of amazing people in Canada. We always have such great events and meetups. So that's what I'll be doing as I continue the 100 Citosles Tour.

Really excited about that. But I'm also, also, also excited to welcome you to a brand new week of Citosles School. If we haven't met before, my name is Chris Guillebeau. I have the privilege of bringing you a daily story. Daily is in seven days a week, every single day, a new story of someone who is creating more freedom for themselves through the form of a money-making project, an income-generating project, a way to make some extra cash, but also a way to build a new security for their future.

And the people I tell you about on the show usually do so without quitting their day job by using the skills they already have and without going into debt. If they ever do need to raise some money, they often find a creative way to do it, which is exactly what you're gonna hear about today when a product manager experiences back pain after hunching at his desk, he takes a stand and designs a product for raising laptops to eye level. It's another massive Kickstarter success like we've heard a couple of times recently. This one actually raises more than $189,000, which, of course, is awesome on its own. But I wanna focus our analysis here more on the skill of how to make projections.

That's right, we're gonna talk about math. But hey, don't worry, don't go anywhere. This is easy and very helpful math. It's all about how to do a backup and napkin calculation or estimate. There's a whole chapter on this in the Silaso book.

And in this story, you will see, or hear, it implemented in a real world fashion. So back pain sufferer brings profits home to roost. It's coming right up. Stay tuned. Here's a quick message from our sponsor.

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James Olander was working as a product manager when he first started experiencing back pain. Cause? Spending hours every day hunched over a laptop at his work desk. This was back in 2012 and James was far too young to accept the problem as merely a part of life. So he sought professional advice.

After a string of disappointing doctor's appointments, however, he was close to giving up. The doctors were able to tell him what was wrong, but they weren't really able to do anything about it. They described the situation using a garden hose as a metaphor. If you start pinching one end of the hose, it cuts off the water flow further down. Picking that concept to the spine and nervous system, if you're pinching nerves with poor posture, it's gonna start having an effect on other nerves down the line, which then exasperates everything else.

The problem was brought on by that dreaded hunching caused by a laptop sitting so low that James had to constantly look down to see it. His back was to the wall and he needed a solution. Around the same time, he was also close to turning his back on his full-time job. He planned to get a master's in business with the goal of one day running his own company. While mulling this over, he began looking for ways to ease his back pain.

With that low laptop being the obvious cause, he searched for adjustable laptop stands that could lift the screen, making things easier on his neck and spine. To his surprise, there was nothing on the market suitable to his needs. He was struck by inspiration. It was time to take a stand or perhaps invent one. James decided to make business school his backup plan.

Instead of becoming a full-time student, he'd create the very laptop stand he was looking for, one that was portable, lightweight, and capable of lifting any laptop up to eye level. He educated himself on laser cutting and began working on the project straight away. He figured even if it didn't work out too well, he could stand corrected and make some changes. But first his prototype would have to pass the criteria of his harshest critic, himself. It had to be lightweight and easily carried.

Beyond that, it had to pass what James dubbed the monkey test, where he would try to break, smash, or otherwise destroy the prototype. After a few rounds of experiments, he had what he thought was the perfect vision of his idea called the roost stand. James decided he would try to launch the roost stand on Kickstarter, but before doing so, he took a few prototypes to a free trade fair in San Francisco. There he received a great response and left the fair with an email list of 500 people interested in receiving updates. A few weeks later, he created that campaign and emailed that list of 500 eager recipients.

Within 24 hours, he flew through his initial funding goal. And much to his excitement, that flurry of activity attracted the attention of a lot of media outlets, including TechCrunch, one of the internet's most popular technology blocks. Within days, the roost stand was being talked about all over the internet and funding kept flowing through Kickstarter. James attributes a lot of his success with the media down to having actual prototypes for them to test. Many crowdfunding campaigns are raising money off nothing more than a concept.

For him, since he had a working product, he was able to send them to many of the bigger outlets so they could do extensive writeups and reviews. This helped immensely. It helped so much, in fact, that by the end of his fundraising, he generated more than 20 times his initial goal for a total raise of $189,000. His business idea was standing on its own two legs. After running that campaign, James has plenty of advice for anyone else wanting to do the same.

His biggest advice, though, is to work backwards using the math. For example, if you want to raise $10,000 and each person is going to pledge $50, you need 200 backers. Then, since one third of pledges are typically made in the first 72 hours, you need 80 people to back you in that time period. If you're sending a lot of emails, you need to consider email marketing conversion rates. Let's say a good day yields a conversion rate of 2%.

It then stands to reason that you need to reach out to 4,000 people in order to get those 80 customers. By working backwards from the funds he knew he needed, James was able to figure out the rough numbers of people he should be emailing and how much he should charge. Now, while $189,000 in raised funds probably seems like a huge success, it actually didn't result in much profit for James. The first wave of roost stand customers were getting the product for close to what it cost to make. But it did validate his concept in a big way.

So for the next few years, he worked on refining the process to turn the roost stand into a more sustainable venture. Making every stand by hand was holding him back. So he began outsourcing manufacturing using injection molds, which he funded with another Kickstarter campaign for version two of the product. It was an uplifting success, generating several times the revenue of the first one. In fact, since James started in 2014, he has sold over 100,000 units and is consistently bringing in multiple six figures of income each year.

A lot of the money is reinvested into the brand, but James is also paying himself well. He's more than replaced the income he was making as a product manager. Best of all, he's done this without having to go to business school, instead choosing to learn from the school of life. And at this point, James isn't going to turn back. [Music]

I'm a big fan of doing the kinds of projections that James did when planning his campaign.

That whole portion of figuring out, okay, how much money do I need to raise? And what's the average pledge going to be? And by the way, most pledges remain within the first 72 hours. Therefore I need X number of pledges, X number of customers. And if I'm going to send out so many emails, or if I have this many people on my email list, here's what I can expect.

That kind of stuff is super helpful when you're planning. It's all ballpark because you don't really know for sure, but it can still be really helpful, especially if you have a big fundraising goal like he did. I mentioned I had a chapter about this in a side hustle book. If you registered that book, you'll get a free spreadsheet to help with those back of napping calculations. Just go to sidehustleschool.com/register.

Now that was for my previous book, "Side Hustle." But listen, if you have a new book, "100 Side Hustles," I'm happy for you to use that same form. Register the new book and you'll get that same spreadsheet. So again, that's sidehustleschool.com/register. All right, I hope you enjoyed this episode. Lots of good stuff is still coming up.

Inspiration is good, but inspiration with action is better. To find the show notes, go to sidehustleschool.com/898. And I'm gonna go to Vancouver, British Columbia. I'll speak to you next from there. I'm in Toronto and then somewhere else.

Thank you so much for being part of this community. I appreciate it more than you know. All right, I'm gonna sign off for now. My name is Chris Guillebeau and this is "Side Hustle School." [Music]

From the Onward Project.