More on Entrepreneurship/Creators
Benjamin Lin
3 years ago
I sold my side project for $20,000: 6 lessons I learned
How I monetized and sold an abandoned side project for $20,000
The Origin Story
I've always wanted to be an entrepreneur but never succeeded. I often had business ideas, made a landing page, and told my buddies. Never got customers.
In April 2021, I decided to try again with a new strategy. I noticed that I had trouble acquiring an initial set of customers, so I wanted to start by acquiring a product that had a small user base that I could grow.
I found a SaaS marketplace called MicroAcquire.com where you could buy and sell SaaS products. I liked Shareit.video, an online Loom-like screen recorder.
Shareit.video didn't generate revenue, but 50 people visited daily to record screencasts.
Purchasing a Failed Side Project
I eventually bought Shareit.video for $12,000 from its owner.
$12,000 was probably too much for a website without revenue or registered users.
I thought time was most important. I could have recreated the website, but it would take months. $12,000 would give me an organized code base and a working product with a few users to monetize.
I considered buying a screen recording website and trying to grow it versus buying a new car or investing in crypto with the $12K.
Buying the website would make me a real entrepreneur, which I wanted more than anything.
Putting down so much money would force me to commit to the project and prevent me from quitting too soon.
A Year of Development
I rebranded the website to be called RecordJoy and worked on it with my cousin for about a year. Within a year, we made $5000 and had 3000 users.
We spent $3500 on ads, hosting, and software to run the business.
AppSumo promoted our $120 Life Time Deal in exchange for 30% of the revenue.
We put RecordJoy on maintenance mode after 6 months because we couldn't find a scalable user acquisition channel.
We improved SEO and redesigned our landing page, but nothing worked.
Despite not being able to grow RecordJoy any further, I had already learned so much from working on the project so I was fine with putting it on maintenance mode. RecordJoy still made $500 a month, which was great lunch money.
Getting Taken Over
One of our customers emailed me asking for some feature requests and I replied that we weren’t going to add any more features in the near future. They asked if we'd sell.
We got on a call with the customer and I asked if he would be interested in buying RecordJoy for 15k. The customer wanted around $8k but would consider it.
Since we were negotiating with one buyer, we put RecordJoy on MicroAcquire to see if there were other offers.
We quickly received 10+ offers. We got 18.5k. There was also about $1000 in AppSumo that we could not withdraw, so we agreed to transfer that over for $600 since about 40% of our sales on AppSumo usually end up being refunded.
Lessons Learned
First, create an acquisition channel
We couldn't discover a scalable acquisition route for RecordJoy. If I had to start another project, I'd develop a robust acquisition channel first. It might be LinkedIn, Medium, or YouTube.
Purchase Power of the Buyer Affects Acquisition Price
Some of the buyers we spoke to were individuals looking to buy side projects, as well as companies looking to launch a new product category. Individual buyers had less budgets than organizations.
Customers of AppSumo vary.
AppSumo customers value lifetime deals and low prices, which may not be a good way to build a business with recurring revenue. Designed for AppSumo users, your product may not connect with other users.
Try to increase acquisition trust
Acquisition often fails. The buyer can go cold feet, cease communicating, or run away with your stuff. Trusting the buyer ensures a smooth asset exchange. First acquisition meeting was unpleasant and price negotiation was tight. In later meetings, we spent the first few minutes trying to get to know the buyer’s motivations and background before jumping into the negotiation, which helped build trust.
Operating expenses can reduce your earnings.
Monitor operating costs. We were really happy when we withdrew the $5000 we made from AppSumo and Stripe until we realized that we had spent $3500 in operating fees. Spend money on software and consultants to help you understand what to build.
Don't overspend on advertising
We invested $1500 on Google Ads but made little money. For a side project, it’s better to focus on organic traffic from SEO rather than paid ads unless you know your ads are going to have a positive ROI.
Alex Mathers
2 years ago
How to Produce Enough for People to Not Neglect You
Internet's fantastic, right?
We've never had a better way to share our creativity.
I can now draw on my iPad and tweet or Instagram it to thousands. I may get some likes.
With such a great, free tool, you're not alone.
Millions more bright-eyed artists are sharing their work online.
The issue is getting innovative work noticed, not sharing it.
In a world where creators want attention, attention is valuable.
We build for attention.
Attention helps us establish a following, make money, get notoriety, and make a difference.
Most of us require attention to stay sane while creating wonderful things.
I know how hard it is to work hard and receive little views.
How do we receive more attention, more often, in a sea of talent?
Advertising and celebrity endorsements are options. These may work temporarily.
To attract true, organic, and long-term attention, you must create in high quality, high volume, and consistency.
Adapting Steve Martin's Be so amazing, they can't ignore you (with a mention to Dan Norris in his great book Create or Hate for the reminder)
Create a lot.
Eventually, your effort will gain traction.
Traction shows your work's influence.
Traction is when your product sells more. Traction is exponential user growth. Your work is shared more.
No matter how good your work is, it will always have minimal impact on the world.
Your work can eventually dent or puncture. Daily, people work to dent.
To achieve this tipping point, you must consistently produce exceptional work.
Expect traction after hundreds of outputs.
Dilbert creator Scott Adams says repetition persuades. If you don't stop, you can persuade practically anyone with anything.
Volume lends believability. So make more.
I worked as an illustrator for at least a year and a half without any recognition. After 150 illustrations on iStockphoto, my work started selling.
With 350 illustrations on iStock, I started getting decent client commissions.
Producing often will improve your craft and draw attention.
It's the only way to succeed. More creation means better results and greater attention.
Austin Kleon says you can improve your skill in relative anonymity before you become famous. Before obtaining traction, generate a lot and become excellent.
Most artists, even excellent ones, don't create consistently enough to get traction.
It may hurt. For makers who don't love and flow with their work, it's extremely difficult.
Your work must bring you to life.
To generate so much that others can't ignore you, decide what you'll accomplish every day (or most days).
Commit and be patient.
Prepare for zero-traction.
Anticipating this will help you persevere and create.
My online guru Grant Cardone says: Anything worth doing is worth doing every day.
Do.
Aaron Dinin, PhD
2 years ago
The Advantages and Disadvantages of Having Investors Sign Your NDA
Startup entrepreneurs assume what risks when pitching?
Last week I signed four NDAs.
Four!
NDA stands for non-disclosure agreement. A legal document given to someone receiving confidential information. By signing, the person pledges not to share the information for a certain time. If they do, they may be in breach of contract and face legal action.
Companies use NDAs to protect trade secrets and confidential internal information from employees and contractors. Appropriate. If you manage a huge, successful firm, you don't want your employees selling their information to your competitors. To be true, business NDAs don't always prevent corporate espionage, but they usually make employees and contractors think twice before sharing.
I understand employee and contractor NDAs, but I wasn't asked to sign one. I counsel entrepreneurs, thus the NDAs I signed last week were from startups that wanted my feedback on their concepts.
I’m not a startup investor. I give startup guidance online. Despite that, four entrepreneurs thought their company ideas were so important they wanted me to sign a generically written legal form they probably acquired from a shady, spam-filled legal templates website before we could chat.
False. One company tried to get me to sign their NDA a few days after our conversation. I gently rejected, but their tenacity encouraged me. I considered sending retroactive NDAs to everyone I've ever talked to about one of my startups in case they establish a successful company based on something I said.
Two of the other three NDAs were from nearly identical companies. Good thing I didn't sign an NDA for the first one, else they may have sued me for talking to the second one as though I control the firms people pitch me.
I wasn't talking to the fourth NDA company. Instead, I received an unsolicited email from someone who wanted comments on their fundraising pitch deck but required me to sign an NDA before sending it.
That's right, before I could read a random Internet stranger's unsolicited pitch deck, I had to sign his NDA, potentially limiting my ability to discuss what was in it.
You should understand. Advisors, mentors, investors, etc. talk to hundreds of businesses each year. They cannot manage all the companies they deal with, thus they cannot risk legal trouble by talking to someone. Well, if I signed NDAs for all the startups I spoke with, half of the 300+ articles I've written on Medium over the past several years could get me sued into the next century because I've undoubtedly addressed topics in my articles that I discussed with them.
The four NDAs I received last week are part of a recent trend of entrepreneurs sending out NDAs before meetings, despite the practical and legal issues. They act like asking someone to sign away their right to talk about all they see and hear in a day is as straightforward as asking for a glass of water.
Given this inflow of NDAs, I wanted to briefly remind entrepreneurs reading this blog about the merits and cons of requesting investors (or others in the startup ecosystem) to sign your NDA.
Benefits of having investors sign your NDA include:
None. Zero. Nothing.
Disadvantages of requesting investor NDAs:
You'll come off as an amateur who has no idea what it takes to launch a successful firm.
Investors won't trust you with their money since you appear to be a complete amateur.
Printing NDAs will be a waste of paper because no genuine entrepreneur will ever sign one.
I apologize for missing any cons. Please leave your remarks.
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Sam Hickmann
3 years ago
Token taxonomy: Utility vs Security vs NFT
Let's examine the differences between the three main token types and their functions.
As Ethereum grew, the term "token" became a catch-all term for all assets built on the Ethereum blockchain. However, different tokens were grouped based on their applications and features, causing some confusion. Let's examine the modification of three main token types: security, utility, and non-fungible.
Utility tokens
They provide a specific utility benefit (or a number of such). A utility token is similar to a casino chip, a table game ticket, or a voucher. Depending on the terms of issuing, they can be earned and used in various ways. A utility token is a type of token that represents a tool or mechanism required to use the application in question. Like a service, a utility token's price is determined by supply and demand. Tokens can also be used as a bonus or reward mechanism in decentralized systems: for example, if you like someone's work, give them an upvote and they get a certain number of tokens. This is a way for authors or creators to earn money indirectly.
The most common way to use a utility token is to pay with them instead of cash for discounted goods or services.
Utility tokens are the most widely used by blockchain companies. Most cryptocurrency exchanges accept fees in native utility tokens.
Utility tokens can also be used as a reward. Companies tokenize their loyalty programs so that points can be bought and sold on blockchain exchanges. These tokens are widely used in decentralized companies as a bonus system. You can use utility tokens to reward creators for their contributions to a platform, for example. It also allows members to exchange tokens for specific bonuses and rewards on your site.
Unlike security tokens, which are subject to legal restrictions, utility tokens can be freely traded.
Security tokens
Security tokens are essentially traditional securities like shares, bonds, and investment fund units in a crypto token form.
The key distinction is that security tokens are typically issued by private firms (rather than public companies) that are not listed on stock exchanges and in which you can not invest right now. Banks and large venture funds used to be the only sources of funding. A person could only invest in private firms if they had millions of dollars in their bank account. Privately issued security tokens outperform traditional public stocks in terms of yield. Private markets grew 50% faster than public markets over the last decade, according to McKinsey Private Equity Research.
A security token is a crypto token whose value is derived from an external asset or company. So it is governed as security (read about the Howey test further in this article). That is, an ownership token derives its value from the company's valuation, assets on the balance sheet, or dividends paid to token holders.
Why are Security Tokens Important?
Cryptocurrency is a lucrative investment. Choosing from thousands of crypto assets can mean the difference between millionaire and bankrupt. Without security tokens, crypto investing becomes riskier and generating long-term profits becomes difficult. These tokens have lower risk than other cryptocurrencies because they are backed by real assets or business cash flows. So having them helps to diversify a portfolio and preserve the return on investment in riskier assets.
Security tokens open up new funding avenues for businesses. As a result, investors can invest in high-profit businesses that are not listed on the stock exchange.
The distinction between utility and security tokens isn't as clear as it seems. However, this increases the risk for token issuers, especially in the USA. The Howey test is the main pillar regulating judicial precedent in this area.
What is a Howey Test?
An "investment contract" is determined by the Howey Test, a lawsuit settled by the US Supreme Court. If it does, it's a security and must be disclosed and registered under the Securities Act of 1933 and the Securities Exchange Act of 1934.
If the SEC decides that a cryptocurrency token is a security, a slew of issues arise. In practice, this ensures that the SEC will decide when a token can be offered to US investors and if the project is required to file a registration statement with the SEC.
Due to the Howey test's extensive wording, most utility tokens will be classified as securities, even if not intended to be. Because of these restrictions, most ICOs are not available to US investors. When asked about ICOs in 2018, then-SEC Chairman Jay Clayton said they were securities. The given statement adds to the risk. If a company issues utility tokens without registering them as securities, the regulator may impose huge fines or even criminal charges.
What other documents regulate tokens?
Securities Act (1993) or Securities Exchange Act (1934) in the USA; MiFID directive and Prospectus Regulation in the EU. These laws require registering the placement of security tokens, limiting their transfer, but protecting investors.
Utility tokens have much less regulation. The Howey test determines whether a given utility token is a security. Tokens recognized as securities are now regulated as such. Having a legal opinion that your token isn't makes the implementation process much easier. Most countries don't have strict regulations regarding utility tokens except KYC (Know Your Client) and AML (Anti Money-Laundering).
As cryptocurrency and blockchain technologies evolve, more countries create UT regulations. If your company is based in the US, be aware of the Howey test and the Bank Secrecy Act. It classifies UTs and their issuance as money transmission services in most states, necessitating a license and strict regulations. Due to high regulatory demands, UT issuers try to avoid the United States as a whole. A new law separating utility tokens from bank secrecy act will be introduced in the near future, giving hope to American issuers.
The rest of the world has much simpler rules requiring issuers to create basic investor disclosures. For example, the latest European legislation (MiCA) allows businesses to issue utility tokens without regulator approval. They must also prepare a paper with all the necessary information for the investors.
A payment token is a utility token that is used to make a payment. They may be subject to electronic money laws.
Because non-fungible tokens are a new instrument, there is no regulating paper yet. However, if the NFT is fractionalized, the smaller tokens acquired may be seen as securities.
NFT Tokens
Collectible tokens are also known as non-fungible tokens. Their distinctive feature is that they denote unique items such as artwork, merch, or ranks. Unlike utility tokens, which are fungible, meaning that two of the same tokens are identical, NFTs represent a unit of possession that is strictly one of a kind. In a way, NFTs are like baseball cards, each one unique and valuable.
As for today, the most recognizable NFT function is to preserve the fact of possession. Owning an NFT with a particular gif, meme, or sketch does not transfer the intellectual right to the possessor, but is analogous to owning an original painting signed by the author.
Collectible tokens can also be used as digital souvenirs, so to say. Businesses can improve their brand image by issuing their own branded NFTs, which represent ranks or achievements within the corporate ecosystem. Gamifying business ecosystems would allow people to connect with a brand and feel part of a community.
Which type of tokens is right for you as a business to raise capital?
For most businesses, it's best to raise capital with security tokens by selling existing shares to global investors. Utility tokens aren't meant to increase in value over time, so leave them for gamification and community engagement. In a blockchain-based business, however, a utility token is often the lifeblood of the operation, and its appreciation potential is directly linked to the company's growth. You can issue multiple tokens at once, rather than just one type. It exposes you to various investors and maximizes the use of digital assets.
Which tokens should I buy?
There are no universally best tokens. Their volatility, industry, and risk-reward profile vary. This means evaluating tokens in relation to your overall portfolio and personal preferences: what industries do you understand best, what excites you, how do you approach taxes, and what is your planning horizon? To build a balanced portfolio, you need to know these factors.
Conclusion
The three most common types of tokens today are security, utility, and NFT. Security tokens represent stocks, mutual funds, and bonds. Utility tokens can be perceived as an inside-product "currency" or "ignition key" that grants you access to goods and services or empowers with other perks. NFTs are unique collectible units that identify you as the owner of something.
Rajesh Gupta
3 years ago
Why Is It So Difficult to Give Up Smoking?
I started smoking in 2002 at IIT BHU. Most of us thought it was enjoyable at first. I didn't realize the cost later.
In 2005, during my final semester, I lost my father. Suddenly, I felt more accountable for my mother and myself.
I quit before starting my first job in Bangalore. I didn't see any smoking friends in my hometown for 2 months before moving to Bangalore.
For the next 5-6 years, I had no regimen and smoked only when drinking.
Due to personal concerns, I started smoking again after my 2011 marriage. Now smoking was a constant guilty pleasure.
I smoked 3-4 cigarettes a day, but never in front of my family or on weekends. I used to excuse this with pride! First office ritual: smoking. Even with guilt, I couldn't stop this time because of personal concerns.
After 8-9 years, in mid 2019, a personal development program solved all my problems. I felt complete in myself. After this, I just needed one cigarette each day.
The hardest thing was leaving this final cigarette behind, even though I didn't want it.
James Clear's Atomic Habits was published last year. I'd only read 2-3 non-tech books before reading this one in August 2021. I knew everything but couldn't use it.
In April 2022, I realized the compounding effect of a bad habit thanks to my subconscious mind. 1 cigarette per day (excluding weekends) equals 240 = 24 packs per year, which is a lot. No matter how much I did, it felt negative.
Then I applied the 2nd principle of this book, identifying the trigger. I tried to identify all the major triggers of smoking. I found social drinking is one of them & If I am able to control it during that time, I can easily control it in other situations as well. Going further whenever I drank, I was pre-determined to ignore the craving at any cost. Believe me, it was very hard initially but gradually this craving started fading away even with drinks.
I've been smoke-free for 3 months. Now I know a bad habit's effects. After realizing the power of habits, I'm developing other good habits which I ignored all my life.
Enrique Dans
3 years ago
When we want to return anything, why on earth do stores still require a receipt?
A friend told me of an incident she found particularly irritating: a retailer where she is a frequent client, with an account and loyalty card, asked for the item's receipt.
We all know that stores collect every bit of data they can on us, including our socio-demographic profile, address, shopping habits, and everything we've ever bought, so why would they need a fading receipt? Who knows? That their consumers try to pass off other goods? It's easy to verify past transactions to see when the item was purchased.
That's it. Why require receipts? Companies send us incentives, discounts, and other marketing, yet when we need something, we have to prove we're not cheating.
Why require us to preserve data and documents when our governments and governmental institutions already have them? Why do I need to carry documents like my driver's license if the authorities can check if I have one and what state it's in once I prove my identity?
We shouldn't be required to give someone data or documents they already have. The days of waiting up with our paperwork for a stern official to inform us something is missing are over.
How can retailers still ask if you have a receipt if we've made our slow, bureaucratic, and all-powerful government sensible? Then what? The shop may not accept your return (which has a two-year window, longer than most purchase tickets last) or they may just let you replace the item.
Isn't this an anachronism in the age of CRMs, customer files that know what we ate for breakfast, and loyalty programs? If government and bureaucracies have learnt to use its own files and make life easier for the consumer, why do retailers ask for a receipt?
They're adding friction to the system. They know we can obtain a refund, use our warranty, or get our money back. But if I ask for ludicrous criteria, like keeping the purchase receipt in your wallet (wallet? another anachronism, if I leave the house with only my smartphone! ), it will dissuade some individuals and tip the scales in their favor when it comes to limiting returns. Some manager will take credit for lowering returns and collect her annual bonus. Having the wrong metrics is common in management.
To slow things down, asking for a receipt is like asking us to perform a handstand and leap 20 times on one foot. You have my information, use it to send me everything, and know everything I've bought, yet when I need a two-way service, you refuse to utilize it and require that I keep it and prove it.
Refuse as customers. If retailers want our business, they should treat us well, not just when we spend money. If I come to return a product, claim its use or warranty, or be taught how to use it, I am the same person you treated wonderfully when I bought it. Remember that, and act accordingly.
A store should use my information for everything, not just what it wants. Keep my info, but don't sell me anything.