I built a profitable business with a $100 budget | Hacker News Reader

I built a profitable business with a $100 budget

gaps.com

108 pointsviperchill58 comments

That's a marketing headline. A little clickbait-y. That's fine you're a marketing hustler after all. Let's break down your numbers:

$99.75 in expenses (not counting time spent getting sales or building website)

5 total sales resulting in $450 of sales

108 hours of work done by you. We don't know how much time it took your brother to create the podcasts. Let's assume he didn't do the 6 podcasts perfectly in the first go.

30 days of total case study.

$350 in "profit"

Divide your profit by the hours you worked on it. $350/108 = $3.24 per hour.

Now let's consider setting up the website was a one time cost so moving forward your operating expense is $30/month to host the website and the podcasts[edit]

Let's take the hours your took to get the sales and divide those by the number of sales you got. 90/5 that comes to 18 hours per sale. Your average sale value was $450/5 = $90. Let's say your put a bare minimum hourly rate for your time of $10/hour that's $180 spent getting a $90 sale.

Now unless you get more visibility and are super savvy in promoting your podcast your ROI just doesn't pan out.

Let's see what your $1000 budget gets you in 3 months. Might be a good post to regenerate interest in your podcast. :)

Oh man, if every business owner settled on what they made in the first month capitalism likely wouldn't even exist.

"Now unless you get more visibility"

What online business doesn't aim to grow going forward? I certainly wouldn't rely on the first month results for the rest of my life.

I have too weird an accent to get incredible podcast downloads, but the $1,000 goes to a reader of my site, not me.

Appreciate the feedback :)

I actually am very interested to know if SpokenGrowth grows. I think it's a great idea. Will it become successful depends on a very specific combination of skill set and determination and persistence and having the financial means to persist.[edit] Saying "if I can do it anybody can" is not actually fair since even though you used a pen name you did bring your considerable marketing experience to promoting the idea and site.

But you see there lies the big dilemma. Great ideas are dime a dozen. The question is how big is the market for the idea and how do you reach that market and finally how do you monetize that market that results in a decent ROI. It doesn't have to be mind blowing ROI but something that generates passive income is good too.

I wonder what Bill Gates' pay per hour was for Microsoft's first month? ;)

I totally am on board with back-of-the-envelope math, evaluating ROI, market size, etc. But come on. This was month #1, a good chunk of which was doing one-time tasks (figuring out what the hell the site would actually be, setting up the template, etc.)

If you want to fault him for something, fault him for the lack of market analysis to see if this idea really has some legs, besides citing someone else "making millions of a similar idea". E.g., a red flag was one decent sized advertiser telling him their ROI on podcast ads are not worth it.

Actually a good chunk of work was actually research, marketing and sales since he didn't start on the website creation till the very end. He picked a template and modified it so that's not a lot of work either. In the end he got lucky with getting the first sale. As shown by him he was not able to replicate his initial sale. In fact now that I read it again all his sales were lucky shots. None of which he could reliably replicate as a sales strategy.

Bill Gates also lived with his parents and worked out from their garage. If this article was targeted at rich kids that want to make money on the side and don't have to worry about paying rent and buying food then sure don't worry that you are going to end up losing money in Month #1. and Month #2 and Month #6.

Yes this is clickbait to get him traffic. This is Viperchill, very skilled writer and smart guy who unfortunately makes a living from "get rich by teaching others how to get rich" schemes. There's a grain of truth in everything he says but it's all greatly exaggerated in order to wow the less educated and later sell them something for a profit.

Just type Viperchill into google and watch the suggestions.

It's a sad day to see him polluting HN with his "work".

As the audience here is way smarter than his average followers I hope people with see through his schemes and do not promote him.

Disclaimer: I've outed him in the past.

I liked his blog post and thought it was interesting. I didn't see anything obviously bad in it, I just saw an SEO-type telling a story and promoting themselves through it.

I don't know what he has done in the past but I think you are being harsh.

Hey friend, good point. There's a unique and rare opportunity I'd like to talk to you about involving a bridge in Brooklyn...

In all seriousness, this fellow is a fancy bottom feeder. It's not that there's no value in his products (and ad copy, which is what that "blog post" actually was..) its that he is not SCORE! (https://www.score.org/ https://en.wikipedia.org/wiki/SCORE_Association)

He's not "bad" compared to a Ponzi scheme, but he's obviously venal compared to the Service Corps of Retired Executives.

What i took away from the 15 minutes I spent reading was this: If you're not afraid to reach out to prospective customers and you know how to make a sales pitch, you can sell any half-baked product.

Whether it could actually be a successful business or not is an entirely different matter and would take much longer to find out.

Great comment! I think that's a fair summary :)

And you'd be surprised how few people actually do this kind of validation before building a product.

The question is: could you take the $100 to a wholesale distributor, buy a bunch of cheap things, and then go and sell them at a market stall for more than $400. My guess is yes, especially if you have 16 days of selling to make your $400. That operation would scale about as well, possibly better, than the one described in the blog post. This idea ignores the pay for labour, but so does the blog post.

I tried buying goods wholesale and selling at a market stall :) Failed dismally and lost money :( Need to have the right personality. The guys who were natural extroverts and spoke with a booming voice got most of the sales. It's the same in this blog post. He's a marketing guy and very tactful. He's good with people. Most other people who tried his "business" idea probably wouldn't get a single sale. So for the average person, it's even worse than what you suggest.

Did you fail at the buying end or the selling end? (i.e. did you have to pay a higher price compared to these people, or were you unable to sell at a high price compared to these people?)

I failed at the selling end. I just wasn't able to attract people to come to my stall. The aggressive sellers got most of the customers.

I love the fact that you gave it a shot. Most people don't get nearly that far. It's much better experience than most college classes.

Yeah I think the difference is that in college you can keep your hands clean. But REAL business involves a lot of hustling, stuff that can only been seen and learned in the real world.

I have no idea. Please try it and let me know.

Happy to pay for your costs, Dan. Will be following your updates.

Turning $100 into $500 is easy. You can do that by selling lemonade for a week on the beach. The hard part is to do it in a way that scales more than linearly.

"I hope your biggest takeaway is not that I made any money or that you like the concept, but that my results are held up by a massive pillar of failure."

This part stood out for me.

There are so many moments in a new venture like this, where you're just feeling your way forward, and it feels like nothing is working. But you keep chipping and one day the rock cracks.

Nice read, thanks for sharing.

Glad you liked it. Thanks for the comment!

Wait, what? You sold ads on a podcast where you read articles you found on medium aloud?

Yep, with permission from all of the authors :)

I know what you're thinking: I prefer to read, so maybe you should start a business where you transcribe the words onto text so people can read it!

This would actually be great; I'm reasonably sure I can read faster than a podcaster can speak, and I can certainly skim faster than I can listen for key phrases with a podcast on 2x speed.

That would be a Genius idea!

https://genius.com

That is certainly more labour intensive. I transcribed a couple of lectures from youtube (ok they were mathematical) and it is quite time consuming and I made a lot of mistakes too.

This seems good until one of the blog posts mentions VoiceOver or screen readers :p

That's actually a really good idea.

If the recordings are high quality and enjoyable to listen to I'd subscribe to that podcast. Most web content does not have an audio transcription beyond screen readers.

One thing I don't understand: why was this person contacting prospects using a deliberately fake name? Did his name carry so much clout that customers would reply 'shut up and take my money', therefore invalidating the "challenge"?

I also wonder if this person procured authorization from the parties involved before publishing their e-mail responses on the Web, especially given the fact that it's rather easy to identify some of these (unwittingly?) "challenge participants"...

Hey PP,

I am "this person".

My name carries no clout at all, unless it's (potentially) mentioned in the online marketing world.

I simply didn't want people to be able use the excuse of - "they already knew who you were" - to account for any sales.

I don't understand your second paragraph, sorry.

> I don't understand your second paragraph, sorry.

Seems pretty clear to me: did you get permission from your customers before publishing your correspondence with them?

4 out of 5 yes.

The one that I didn't get permission for, I didn't share.

Gotcha. Thanks for the reply.

This was really neat - thanks.

I built a search engine for lectures (https://www.findlectures.com) to counter the "lots of noise" problem (not podcasts or audiobooks, but it's the same idea).

It never occurred to me there were so many ways to approach the problem, so this post gave me some things to think about :)

First of all, congratulations on your success and experience.

Second of all, correct me if I am wrong, but you do not seem to be factoring in your time (16 working days) or any kind of opportunity cost required to produce the content?

Thanks for the comment.

This is the third and final update, so didn't really cover the time aspect as in-depth as I had in previous updates.

My aim was to show what you can do without spending money. Time is undoubtedly an expense, but you have to factor that into any online business.

I understand. But to many businesses – especially online businesses – time is the most significant expense. It is the elephant in the room here. You are not "profitable" (not even "ramen profitable") until you've factored in this expense.

For month one, sure. But that's to be expected :)

Right near the top of the post: "Time was undoubtedly my biggest expense, which I’ll cover in more detail at the end."

That Travis guy spent a nice $100. Cheap money for hacker news front page!

Alt title: How to get the right title to get a front page of NH article. Budget? Who cares!

I am not sure how many hours he worked a day, but if he did the full 8 hours, then for me I see this as costing just $100 plus cough $10k in sacrificed salary!

Taking that into consideration it would have been more prudent to outsource a lot of the things and cut it back. I would be more interested in what you can launch in 16 hours (a single weekend).

Thanks for the lengthy article. It was a good read.

Although I would have probably titled this:

"Building a Profitable Business with 100$ and XX Hours"

People only see the $ amount but never take factor the time actually spent (which is the highest cost I reckon).

How's that lemonade stand holding up?

What?

Making 5 sales and $450 is not a "profitable business", it's just some cash. With all due respect to your work, the title is just a clickbait. It's to early to conclude you'be built a profitable business.

$350 over 16 days is about $22 a day. What am I exactly missing about these profits?

They could grow as you get my listeners, and therefore increase the ad sales.

How businesses work.

That's a bit snarky no? considering you don't put in labor costs and time costs it's a bit ingenuous to say you built a profitable business. At a "profit" of $22 a day you could not pay your rent and food. Your customer acquisition cost at this stage is much higher than what the customer pays you.

Probably. I apologise. Just reading so many negative comments it's (slightly) frustrating.

Maybe 'profitable' should have been in quotes instead of startup.

I never tried to wow anyone with my final results, but rather show what could happen if you just take action :)

I agree. But here's what I think would have gotten your point of "take action" across much better. At the end be honest about ROI and projections.

This is a cold calling marketing campaign you had to do to get your sales. If at the end you had actionable advice on improving conversion rate of cold calling campaigns with numbers to back it up(not anecdotal evidence) that would be very useful.

My suggestion is to track SpokenGrowth.com over a period of 3 months now that you've handed it off to someone who might not have your marketing skills. Do another post 3 months later that either proves you can make a viable business if you "just take action" or shows how hard it can be and maybe do a lessons learnt post.

I'm all for hustling to market your product or your skills. Good luck on SpokenGrowth.com

As a self-funding concern they don't work that way for long. If you have seed capital or another line of income, sure.

If the point is that you put 16 days of sweat equity in to make $22 a day and trending upward of passive income every day after, that would be impressive. Summarizing that you turned $100 into $450 over the course of sixteen days just sounds like a self-funding hobby. This is not the sort of thing that multiplies your cash 4.5 times every few weeks regardless of input amount. This only scales with more contact and a lot of selling.

What really impressed me were the insights into this space. Getting the initial contact by offering free help up front is an interesting angle. Figuring out that most bloggers aren't interested in really expanding their audiences in a condensed version was a surprise. I'd readily have read through a full article on either of those. The numbers summarized up front almost turned me off the rest of the article altogether.

The techniques of hosting and publishing web content and setting up email are a couple decades old hat to me. Email marketing isn't especially interesting anymore either. The concepts for the business are interesting. The insights into the customers for the final concept are even more interesting. The small amount of money made on the initial experiment proves no angel investors were bled dry to start it rolling, but leading with that just didn't do it any favors with me.

Can another reader please pick up on the first two discarded ideas and follow those? Those sound great!

Like the author, I am wary of self-help type stuff but would be enthusiastic about finance and marketing.

Thanks @startupdiscuss

Would love to see someone else take those projects on as well.

Appreciate the comment :)

~"I genuinely wanted to help" and then.. ~"Why didn't that tactic work on others?

We took "Show HN" out of the title. A blog post is not a Show HN.

https://news.ycombinator.com/showhn.html

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