How to Get Good at Making Money | Hacker News Reader

How to Get Good at Making Money

inc.com

From 2011. Previous HN discussion: https://news.ycombinator.com/item?id=2271421

My take away from this article is that inc.com think they make money by jamming annoying things in front of my face which I have to close to read the damn article.

So what you do is you "print" it to pdf and read it that way. It's worth the effort. The insights are pure gold.

Great read. The last advice - to sell one common product over and over again, each time increasing the price and optimizing the selling process - sounds great and quite fun if you sell something you're interested in. I think it's a great way to learn the "magic" of marketing before starting a "real" business, without risking too much.

What's the value you're providing to people by reselling for more? There has to be some value, else why would they pay you more.

>There has to be some value, else why would they pay you more.

No, and increase in demand raises the price.

I think there could be value for a customer if the product is presented differently. For instance, offer free shipping, give personal reviews, offer warranty or guarantee. Its about differentiation in the market. It really is a study of competitive markets and disruption.

The value can be as simple as they couldn't get it for any less. For example, if the wholesale price of an item is $1.50 at 10,000 units, someone who only needs one may happily pay $7.50 since the alternative is coming up with $15,000

But the author gives example of reselling iPods. I'm not aware of discounted wholesale pricing on iPods, so how would you make a profit without ripping people off (i.e. selling over Apple's price)?

There is wholesale pricing on Apple devices. How else could a store make money on them? Stores don't buy stock directly from Apple; they buy through an authorized distributor.

P.S. In case it wasn't clear to you, Apple devices cost the same from anywhere. That makes them a good example here.

Here's $329 for a mini at Apple.com: http://store.apple.com/us/buy/home/shop_ipad/family/ipad_min...

And here's the same price at Walmart.com: http://store.apple.com/us/buy/home/shop_ipad/family/ipad_min...

Walmart makes a profit because they bought the mini at a wholesale price from an Apple distributor.

If a phone/tablet/game console is new and sold out locally, what's wrong with selling some at a markup? (Especially at Christmas time)

The common ones are providing it cheaper than they can find elsewhere, at a convenient time and/or place, and at a convenient quantity. There are also guarantees, support offerings, etc.

I'll pay more for something that is better documented. If I can see better pictures, maybe a video of the owner using the item itself, more details, a more complete story of ownership. Goods can be commodities, but stories, presentation, and trust are unique.

I was expecting someone to give some standard "value is what people pay for it" or "making the product more visible adds value". But the things you listed actually do add value and seem like a win-win for the reseller and the customer. Thank you for a great response to that question.

Short answer:stock. The simplest form of resale provides value to the guys on the big end by relieving them of the pain of dealing with many small transactions and to the small guys by keeping stock(#) and letting them buy smaller quantities of stuff.

(#) Which is obviously a risk - who knows if you find buyers for all of the 100 thingumajigs you had bought wholesale. And taking this risk is a part of the value provided by the reseller.

All of the answers to your question seem to be missing the point. He is talking about buying a used or discounted item and trying to sell it on for a little bit more. The point is to experiment with your sales technique to learn what works and what doesn't, and also simply to practice selling.

Why might someone pay you more? It is as simple as presenting the product in a better way; in a way which gives the buyer more confidence or otherwise makes them more likely to buy.

Good advice, but most people I know don't find making money exciting enough to pursue it as an end in itself. If you are not interested in what you are doing to make money, you'll probably lack the passion/excitement necessary to really work at it enough that you become good at it.

Selling things on ebay just for fun would make me crazy. I'd rather work on something that I find interesting. Jason has done a good job at identifying things he personally enjoys working on, and then sticks with it long enough to really excel.

I think there are people with the "sales gene" who are passionate about selling, period - to them, the product/service doesn't matter. They just want to sell. . .or be their own boss in any business. Then there's the rest of us. . .

don't find making money exciting enough to pursue it as an end in itself

Is this sour grapes or did they actually get better at making money before deciding it wasn't for them.

But the art of selling (thinking like the buyer) also applies to other transactions in life. Getting an open source project widely adopted. Presenting yourself for a job or a rental apartment. Showing your accomplishments online in your writings. Applying for the job of boyfriend to some girl who has many prospects. Same principals.

To a bootstrapped business, money is air.

Amen Jason.

Reselling something over and over again can be applied to your own products and/or services. Even businesses where every deal is its own special thing should find how to make them more similar to refine their process of selling the same thing over and over again.

Practice really is the only way to get good at it.

There's one thing I've long wondered. How do you perfect the pricing of your product?

Is it really safe to adjust pricing after launching your product (especially with a subscription model)?

You could tweak the subscription in ways that don't really change your costs but allow you to price as separate offerings. Monthly vs. quarterly vs. annual. Data limits, bandwidth limits, different features active, different levels of support, etc.

It's definitely safe to adjust pricing after launch, even for subscription products. The key is to grandfather users in at their current rate if you are raising prices, and to charge them less if you are lowering prices.

You can probably even do a direct A/B test on price if you want, although you have to be careful and considerate if you do so.

Something I've always been curious about with 37s.

What % of their first (say) 100 customers were RoR developers?

Considering they had a design business before they started selling online tools, I'd say not as high as you think.

In fact I'd make a guess that most of the 'beta testers'/first users of Basecamp were probably former clients that had projects to manage.

Rails developers probably helped with the explosive growth of the products, but not as much with the initial investments. Keep in mind the entire idea of Basecamp was that it was to be an internal tool.

Yes, the explosive growth was what I was getting at; I should have specified their first paying customers.

It's kind of like wondering how many customer Fog Creek software got because of joelonsoftware.com or indeed how often YC gets first pick of the best startups because of HN.

0%. RoR wasn't released when we released Basecamp, our first product. RoR wasn't really a thing yet.

Thanks for the answer.

I'm sort of curious how much of the growth of basecamp you attribute to the RoR community though? Do you think if you had instead just written it with PHP or something you would have had a similar level of success?

Very few customers care anything at all about technology issues such as whether a SaaS product is built with RoR, ASP, PHP, Python, or whatever. They just care whether it solves their problem at a price that is a good value.

Unless you are specifically targeting some niche market of software engineers, the underlying technology just doesn't enter into the discussion. Basecamp was built for project managers.

I mean for early exposure. If you have the attention of a bunch of developers because you are leading a popular project then they are more likely to check out your new product than if it was just launched by some random company.

If you do a good job impressing them, they will help spread the word.

The early exposure we got was from our audience on our blog, Signal vs. Noise. They were web design shops like us (that's what we did before we morphed into a product company). These were customers that were like us - small shops that needed a better way to collaborate, communicate, and present with their clients.

Having followed 37signals since their very first blog posts, it was the screenshots of their upcoming app (basecamp) and its great new design that got them attention and a lot of buzz amongst bloggers.

Rails was assisted by 37signals' already established brand and name. The blog already had tens of thousands of subscribers at the point it was released.

Really liked this article. Great tips from a clear master of the game. Thanks for posting.

it's frustrating that there are a number of inconsistencies with his description of his early year on the Product People podcast last week. It makes me feel like in both he's selling himself 'at' me rather than givin me real info. Oh well

I'm trying to find the inconsistencies you're talking about. Here's the Product People transcript: http://productpeople.tv/2013/02/27/ep15-jason-fried/

I compared both; couldn't really find anything.

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