My first business was a gourmet dessert catering company in New York. We hand crafted miniature pies from scratch for weddings and events.
We went on to get featured on TheKnot, and even supplied mini-pies for the wrap party of the IFC cult tv series Whisker Wars.
Note from Chase: I know what you’re thinking, “pies!?” Just give it a bit. Dan’s about to tell the story of how he made his thing recently. It’s a great story (and a tool you need to know about).
Though I don’t make pies anymore, I still moonlight as a private chef sometimes. Last summer I wanted customers to be able to book me online using a credit card, so I signed up for a Gumroad account (it’s free).
I immediately fell in love. Every time I booked a gig my customers commented on how beautiful and easy to use my payment system was.
Selling with Gumroad inspired me. It made me want to create a product of some kind. The problem was, I wasn’t in the mood to come up with the next best internet thing. I didn’t have an idea.
Finding An Idea
I had learned a lot of marketing and web-design skills after quitting the pie business to co-found a social media management company. We had clients like PsychCentral and PBS, and managed over sixty blogs with combined traffic of 600,000+ uniques/month.
It’s always smarter, cheaper, and faster to use the skills you already have to create a product. So, instead of racking my brain for business ideas, I made a list of people I knew who were already creating interesting and meaningful things. On the list were people I respected, admired, and would enjoy helping, even if it was for free.
Over the course of several days and a bunch of emails, I connected with a talented software developer named Fred Bliss. The conversation began with zero expectation on my part; I simply wanted to help him in any way I could.
Two hours in, serendipity struck.
Fred mentioned offhand that he’d sold over three-hundred copies of a WordPress plugin prototype he’d built earlier in the year, but for various reasons he had to put the project on hold, and was hoping to revive it somehow.
When Fred told me what he’d designed the plugin to do, I literally choked on my coffee. Through a fascinating twist of fate, Fred’s prototype was a sales tool that integrated Gumroad with WordPress.
Gumroad is already easy to use; this plugin just made it even easier for WordPress users to sell stuff directly on their websites, and even integrated Gumroad with popular email marketing services like AWeber and MailChimp.
Fred asked me if I’d help him re-launch and market the plugin for a share in the profits. After my emphatic ‘yes’, it occurred to me that by simply listening and trying to be helpful, an online product had all but fallen into my lap.
That conversation was four months ago.
Today, I’m thrilled and honored to be revealing GumPress to the world for the first time here on The Sparkline.
I’m also going to break down how we built it, why we decided to market it the way we did, how we priced it, and why Fred ended up having to redesign a critical part of the plugin from the bottom up.
And since this is my first online product, I’m also going to reveal some very personal fears and insecurities I’ve had along the way.
Fred took the lead on engineering the plugin, so I took the lead on positioning and marketing the product. Before I made even one website mockup or designed the logo, I started writing copy.
The Message & The Theme
I’ve learned that the most important part of marketing anything is the messaging. Even if you build the most useful thing ever created, nobody will care unless you’ve crafted a message that resonates with the right people. Chase speaks about the power of good messaging in his Fizzle course: Essentials of Website Design for Business Builders (alone worth the price of entry).
The first step to finding a message that resonates with the right people is to clearly define the problem that your product solves.
The problem we’re solving is as follows:
Building and selling things on a website is way too complicated. You shouldn’t have to hack code together or be forced to use a bloated & complicated piece of software to make sales happen on your website.
Technical barriers force creatives like us to spend countless hours & many hundreds — if not thousands of dollars figuring out how to get our digital products and services for sale so we can grow our businesses.
After writing about this problem in my journal at great lengths I found a messaging theme that became the foundation of our entire marketing strategy.
A messaging theme should be a statement that represents the fundamental usefulness of your product. It’s a starting point upon which you can build out a variety of benefit-driven selling points.
Our messaging theme became:
“Spend more time getting customers and less time messing with technical stuff that doesn’t matter.”
Now that I’d constructed a messaging theme, I was able to write a bunch of headlines & subheadlines that stuck to the theme. These headlines and subheads became the building blocks of the marketing copy you see on our website today.
It was important for me to check in with Fred at this point to make sure that the tool we’d be selling solved the problems I’d outlined in a way that was consistent with our messaging.
As I’d predicted, the tool fit the bill spot on – except for one hiccup. To use our plugin on your website, you had to first go through an authorization process that was a pain in the ass and took too long.
Fred made the call right away to put in a bunch of extra work to make the authorization process as simple and easy for you as possible. After all, spending time authorizing an app is way less important than making your first sale on your website. We wanted to provide a tool that would get you selling on your site in less than 5 minutes.
With Fred busy on the re-engineering, I dove into creating the website that we’d be using to sell GumPress.
Predictably, the first iteration of my site design sucked; the color scheme was seizure inducing. Thanks to a friendly slap in the ego from Fred, I swallowed my pride and started again from scratch.
Since the messaging was crystal clear, the redesign was relatively painless and the second iteration became the landing page you see today.
Now that we had a landing page, our pricing was the final marketing decision we had to tackle.
Back in my pie making days, we tested many different flavors and sizes. I learned early on that when we offered three different sizes at different price points we’d sell out twice as fast and earn at least twice as much money than when we just offered one size at one price.
I didn’t realize it at the time, but I’d discovered the power of tiered pricing.
As such, we knew right away that we needed to offer three distinct packages at different value-based price points that would appeal to different types of users.
We first decided the three tiers would be differentiated from one another based on their functionality.
Our base tier, which we named the “bootstrapper” package, empowers anybody with a WordPress website to start selling their Gumroad products, services, and subscriptions on their site with a custom ‘buy now’ button — all within five minutes and without having to write a single line of code.
Our middle tier, the “business builder” package, is modeled after the original prototype that sold over three-hundred copies; as such, we wanted it to be our flagship tier, so we packed it with value. It has all the functionality of the “bootstrapper” package, but additionally, it integrates your Gumroad account with one of your favorite email marketing services like AWeber, MailChimp, or GetResponse, so you can grow your business and market to your customers like a pro.
Our advanced tier, the “power user” pack, gives consultants, developers, and power users access to all email marketing service integration modules, a membership site add-on that integrates Gumroad with WishList Member, advanced integration with InfusionSoft, and lifetime plugin updates.
Once we were settled on the package configurations, we needed to finalize our pricing.
We used a combination of ‘value-based’ pricing and what I call ‘comp-pricing’.
Value-based pricing is a way of determining your product’s price based on the value it adds to your customer’s life. It’s a pricing method that results in fair and equitable exchange of value for both the seller and the purchaser.
Some questions we used to influence our value-based analysis were as follows:
- How much would somebody have to pay for a custom solution that does the same thing?
- How many hours would it take for somebody to learn all the skills necessary to hack together their own solution?
- How many sales, customers, and opportunities is somebody giving up by not having access to a tool like this?
- On the spectrum of business priorities, how important is it to somebody to be able to sell stuff on their website?
The answers to these questions helped reinforce the immense value we were hoping to add to our customers’ lives.
We then compared our value-based pricing with the prices of comparable products already on the market. I call this method of pricing ‘comp-pricing’. Value-based pricing gives you a ballpark figure, but comp-pricing can help you determine whether or not your value-based pricing is realistic in the marketplace.
After doing some comp research and consulting with some startup friends of mine, I was shocked to find that we’d undervalued our product by almost fifty-percent. In retrospect, this was directly related to the fact that Fred and I both have chronically undervalued our work for most of our careers. This was a monumental learning experience for us.
If you undervalue the work you do, you will undervalue the products you create.
With a renewed sense of self-worth, we decided to double the prices we’d initially come up with. As I write about this now, I realize how painful it would have been to learn that we were only earning half the value we’d created.
Once we settled on pricing, it was time for me to start reaching out to people I knew who led communities of business builders.
I reached out to Chase, who is a very talented designer and human that I’ve admired for some time. I ended up at a Fizzle cocktail hour a couple weeks later meeting all the guys face to face for the first time in San Francisco.
We spoke about the plugin over tasty cocktails. Chase expressed how much he loved Gumroad and was already planning on doing Gumroad related things on the newly launched Sparkline in the coming months.
I was thrilled when he asked me if I’d be willing to contribute something to the blog. Once again, by simply listening and trying to be helpful, an amazing new relationship all but fell in my lap.
Note from Chase: To be fair, you were wearing a very good smelling cologne and drinking in a cilantro infused gin. I was smitten, Dan.
This experience, and countless others reinforce that the fastest way to make a lasting impression on somebody is to genuinely care about who they are, what they do every day, and who they care about. It’s how I ended up writing to you today, and its how I’ve made a bunch of new and exciting relationships with other communities of business builders as well.
So far I’ve taken you through how I stumbled upon the product idea, specced it out with my talented co-founder Fred, iterated on the design, developed a marketing message, crafted a three-tier pricing structure, and made our first connections.
As promised, I’ll now share the things I wake up thinking about every single day, including the deepest fears and insecurities I’ve had throughout this project.
Fear, Resistance & Insecurity
Building and launching a product is like voluntarily signing up for manic depression. Chances are you’re emotionally attached to the work, and you may find yourself tap-dancing on a roller-coaster of fear as launch day approaches.
The fear of failure becomes increasingly intense the more you have on the line.
Early on, my co-founder Fred imparted to me that his ten year old son had been recently diagnosed with Cystic Fibrosis. CF is a heartbreaking diagnosis, and Fred had been struggling with the longstanding guilt of knowing he’d probably outlive his first little boy.
He also felt stuck in the grind of trading hours for dollars as a freelance developer, and as healthcare-related expenses and challenges piled up he became increasingly overwhelmed.
We embarked on this speculative journey with the singular hope that we could revive a product that proved itself in the marketplace less than a year ago.
We’ve had no money to pay ourselves, but even though together we’ve put over 1,000 man-hours into the project, we’ve actually spent less than $50 total so far.
We pulled out all the stops, wrung every last drop of skill out of our minds, and battled countless nights of depression and fear together on Skype to build this thing.
Still, I wake up every day knowing that there’s no guarantee people will find, try and buy GumPress, and that Fred may never recoup all the time he put into building GumPress instead of finding new freelance gigs to feed his family. What if I led him astray with my Internet dreams?
I have other, more selfish insecurities as well, like:
- What if I botched the pricing and it’s too high or low?
- What if I completely misjudged the usefulness of this tool?
- What if people hate my web design, does that mean I’m a hack?
- What if GumPress flops? Will all the people I respect write me off as a phony?
- What if GumPress explodes? Will I be able to handle it or will I totally blow it?
Although these fears are intense for me sometimes, I’ve found great strength, courage, and resilience in myself through many adversities in my life. I’m not as attached to my fears anymore, which is why I can be vulnerable about them with you.
To conclude, I sincerely hope the stories, insights, and tips I’ve just shared with you will help you in some way — perhaps if only to give you a dose of courage in your pursuit of creative freedom and a self-sustaining business.
If we could get to today with almost no resources, some heavy emotional obstacles, and nothing to sustain us but the dream of having something of our own to share with the world, then so can you.
We’ve even built a tool that can help you get there. You can find it here:
“It’s always smarter, cheaper, and faster to use the skills you already have to create a product.”
Photo via Sue Langford
The Top 10 Mistakes in Online Business
Every week we talk with entrepreneurs. We talk about what’s working and what isn’t. We talk about successes and failures. We spend time with complete newbies, seasoned veterans, and everything in between.
One topic that comes up over and over again with both groups is mistakes made in starting businesses. Newbies love to learn about mistakes so they can avoid them. Veterans love to talk about what they wish they had known when starting out.
These conversations have been fascinating, so we compiled a list of the 10 mistakes we hear most often into a nifty lil' guide. Get the 10 Most Common Mistakes in Starting an Online Business here »