PayPal account: $1,555.18
AppSumo.com 1-day special: $8,211 (keep $3,167) *
AppSumo.com sales: $1,590 (keep $708.75)
Lulu.com account: $206.91
Bulk affiliate sale: $700
Total revenue generated, including affiliates: $12,263.09
Personal gross revenue: $6,337.84
Total investment cost: $2,000 ($1,000 editing, $800 transcription, $200 advertising)
Personal net profit, week 1: $4,337.84
* The split was ~50/50 before fees, net 60/40 after fees.
TLDR: I wrote a book, announced it last weekend on Hacker News, got it promoted on AppSumo.com, and in one week, people have paid over $10,000 to read it. I’ll tell you exactly how I did it. I hope someone steals another idea I have using this method (see end of post). If this sounds like too much work, check out Hyperink.
Granted, the only reason I get to write fancy headlines like that is because of AppSumo.com. I didn’t know what to expect when I announced Startups Open Sourced. I thought the reaction would overall be very good because it’s something I would have loved to read for myself, but to my surprise, I noticed that many of the earliest comments coming in were criticizing my use of the term ‘open sourced’ in the book’s title. The sales got off to a slow start too.
Sunday: the roller coaster
Criticism of the book title was the first setback, but I kept staring at the sales for the book and I didn’t see them do anything for a while. I kept clicking the refresh button, but it didn’t budge.
I wondered if I would even be lucky enough to get one sale. I went back to the site and I realized it wasn’t even loading. I was freaking out–why does the site not even work! Turns out, Hacker News had crashed my Linode VPS and I had to reboot it twice. The CPU was running at 300%. Each reboot took an excruciating 3 minutes. But even after the site was up, I still wasn’t getting any sales. I knew I had to write a follow up a week later, and I thought this was going to be pretty embarrassing if I had to write that I only had a few sales in that first week. These founders would never talk to me again because I was the only person who would read their interviews.
My first sale came at 1:56 PM, and the second one took nearly 30 minutes, it came at 2:28 PM. Then another at 2:33 PM, then another at 2:37 PM, and the intervals started getting shorter. I finally realized that more than a few people would be buying this book. I was still pretty nervous though. This book won’t be read by anyone if people don’t like the interviews, so I wanted feedback more than anything else.
First day: 40 copies sold. Not bad at all. I anticipate the upcoming ‘trough of sorrow’ and brace myself for slower days ahead.
I got a random instant message on my GChat from Noah Kagan, who said the content was so good that he wanted to feature it on AppSumo.com for a day. I worked with Noah Kagan to get a PDF and ePub format on AppSumo–at the time of launching, the ePub didn’t exist and I was surprised at how much work the process took just to convert a Word Document to ePub.
Tip: if you’re writing your manuscript in Microsoft Word like I do, convert the Word document to HTML, then use a program like Caliber to convert it to ePub. This may not get you something that will be “certified” to where you can add it to Amazon, but it at least allows your readers to read your material on an e-book reader, such as the Kindle, iPad, or iPhone.
That was where a majority of the revenue was made: $8,211. I told Noah I didn’t care about making money at this stage, I just want to get the word out and make people aware of it. I said price the book at any amount you want and pay me 30%, but he later insisted on paying me more (it came out to 60/40 after fees).
A friend of mine who I consider to be an expert in the e-book space reassured me that book sales take time to accumulate. Doing special deals where you heavily discount the price may help you spread the awareness, but that’s not where your actual revenue is going to come from. You want to rely on steady sales over a longer period of time, and in order for that to happen you’ll need to make sure the product you’re selling is really good to begin with.
Noah is able to do some testing in advance to understand the best price point for goods. I don’t know what exactly is involved here; I hope to write another story about it when I get some more details. Eventually Noah decided that $7 would be the best price, and the expectation was that if we had 1,000+ sales, that’d be really good. The customers of AppSumo.com got a really good deal–I know the book is worth $20, so it probably won’t get priced that low again. I only made an offer to someone to sell a batch of 100 copies for $7 each when they saw AppSumo, but I explained to them that the deal was only running for 24 hours and the price would go back to $15 afterwards, at least for a while. I still haven’t decided how long I want to run the AppSumo.com deal.
Tuesday through Friday
I remember being extremely tired by Wednesday. My sleep debt was catching up to me, and I had a bunch of final projects due during this week with final exams next week. I thought about every comment I received and let it stir in my head.
Specifically, regarding the title complaint: I tried to understand where the other person was coming from–maybe they had a legitimate point to saying that it was ironic I used ‘open sourced’, should I change the title? I was split on it, and my friends were saying not to change it. The takeaway for me, there: I thought people were taking the term too literally. I’m an advocate for open source, and many of my friends are and have contributed to open source projects, and they loved the title. Overall, I still don’t know how to respond to people’s comments on the issue besides trying to describe as clearly as possible how it came to mind and why I thought it was a good idea. If I saw someone tweet that it was ironic, I offered them a free copy.
I spent most of the time responding to e-mails and making fixes for founders on simple stuff. I re-read some of the interviews and found more edits to make. There were some low points and I remember being really excited to hear from some people who had e-mailed me and said they loved what they were reading and it inspired them to work on something new (Prakhar: thank you for your e-mail). That was the single best part of my week, and then I finally thought “this is a good sign–finally I hear something positive.” I was glad to hear anything at all, I hadn’t heard much other than one or two e-mails.
News that Wufoo was acquired surfaced on Wednesday, so I released their interview. Looking to the weekend, I tried to lower my expectations as I did on Monday. The spike can’t sustain; the deals were mostly to generate awareness, and over time, it’ll normalize. At least I don’t have to feel completely embarrassed going into this one-week recap that I promised in my original announcement.
Sunday: announcement goes full circle
When I announced this post, I very quickly jumped to one of the top spots on Hacker News, and it was last Sunday all over again. The site was #2, but the server had crashed and rebooting wasn’t going to solve anything. I called my friend to get him to remove the story, clearly I’m clueless as to how to deal with traffic spikes. The problem is he didn’t have his phone on him, so I was stuck with fixing this problem on the fly while thousands of HN readers watched a blank page load for over 20 minutes. I ended up writing about how I fixed it on my blog.
The process: start by writing e-mails
My e-mails followed the same general structure when I sent them out to founders:
- A two sentence introduction: I mentioned that I started a company in 2009, it was acquired by another company, and I’m finishing up school. Compliment them on their startup, tell them how much you admire them.
- Why I’m reaching out to them: I said I was interviewing a bunch of founders and I asked if the founder would be interested in doing an interview. I told them it’d only take an hour over Skype.
And that’s it. You don’t want a long e-mail. Provide just enough information so they know who you are, what you’re trying to do, and pop the question: will you do this interview?
Tip: Do not make your e-mail any longer than it has to be. If you don’t know someone, it can be slightly longer, although try not to get too formal in tone. For people I knew, my e-mail was one line: “Hey man, I’m putting together a book and I wanted to interview you for it. Interested?” Also, do not do things like suggest times, or ask them to do anything. You have one goal: get them to hit reply and type in one word: “yes.” The rest can be figured out as you go. Don’t assume you’ll get a response. If the person responds, then suggest one or two specific times. Respond with ‘Can you do Skype Tuesday at 3 PM PST?’ and leave a phone number in your signature. Avoid offering ranges of times, and convert to their time zone; don’t make them do any extra work. Just get a “yes” and get them to agree to a time.
Don’t get discouraged if people don’t respond. Just make a note to follow up and ask if they received the last e-mail. If you’re feeling really bold, try out Evan Reas’ hack: tell them you want them in your book so badly, you’ll e-mail them every day for the next 30 days with a good reason why they should do it. My reason #1 was always: you’ll hopefully get an intern out of this. I used this on Dennis at foursquare, and he replied after the first e-mail. I let him know in advance I had a reason #2, but I actually don’t think I had one at the time. But I’d figure it out between the time I sent that tweet and my next e-mail, which I set as a reminder on my phone. If you use this tactic, let the person know your goal is not to harass or annoy. Let them know that if they ask you to stop then you’ll stop, but otherwise you’re really excited about talking to them. This is one of those things that can backfire if it’s not done tactfully, and you don’t want to come across as desperate, but rather as persistent (I think there’s a fine line there, avoid looking desperate). The goal is to let them know you really want them to do the interview, and you are going to try and convince them why it’d be worth their time.
Actually, even before the call you might have people suggest that they write all of their responses to the interview. Bad idea. Never send your list of questions and say “hey just write up what you want and send it back when you’re ready.” That won’t work, I tried it for 3 people and they never got back to me. They’re probably not that serious about it if they want to do a written response in the first place–the phone call is a much more intimate way of communicating about these things. The call takes much less time overall and places more of the work on the interviewer. One or two hours and the interviewee is done, that’s a cakewalk.
Hopefully you’ve prepared some questions. You can use the same general set of questions with different people, but be familiar with how much press they’ve already gotten. If they’ve been giving the same stories in lots of interviews, you won’t be offering much new information. It may also help to do follow up calls if you run out of time or want to ask more questions to a specific founder. You can have one screen open with Google Docs that contains your list of questions, and then have one screen open on Skype for the call.
Is video necessary for interviews? You would think it would equate to better quality interviews because people can connect while they see each other, but I found that was not necessarily the case. I started out asking people to use video, and then I realized it didn’t seem to add any additional value. It’s nice to see the people you’re talking to, but I was taking notes the entire time anyway. I’d write down things that they said so I could remember to follow up and ask them more about it. People tend to talk in larger chunks to tell stories, so if you hear something interesting, jot it down and then ask them to explain it when they have finished answering.
Tip: You can use a program called Call Recorder by ecamm to record the Skype calls. This records both video and audio. It helps to have a backup: if a founder is not at their desk, have them call you via Google Voice. Google Voice is especially interesting because it allows you to record phone conversations, but only on incoming calls. You can press 4, and Google will make an announcement that “this call is currently being recorded.” Also, record the entire thing with two different methods. I used my iPhone’s Voice Memo application so I had a backup of the whole interview in case Call Recorder failed for any reason. You could also use Quicktime Pro. Just get backups.
To elaborate on that, I always had two recordings of every call I ever did. Except when I talked to Milo. When I called the founder of Milo, I had called a conference number, which I had never done before on other calls. My iPhone didn’t let me record, and some technical problem with Photo Booth didn’t let me capture the entire thing. I never ended up getting to do that call again. I had to remove that from the book, which was painful. His interview was really good. Never allow a call to go unrecorded.
I don’t remember having any problems with Google Chat, except the quality is a little lower than Skype. I probably only did one or two interviews using Google Chat.
Watch out though, the quality of Google Voice is sketchy. Sometimes, you can’t hear a person talking for a few seconds, although Google Voice will record the call perfectly fine. I suspect the reason behind this is because the call is actually routed first through Google’s data center, which then gets routed through your carrier’s network. The call has to travel to two places. I also noticed a delay when I asked a question, it took a few seconds to get a response. Overall, avoid Google Voice, Skype is much more reliable.
The interviews varied in length. Dennis Crowley told me he only had 15 minutes, and I knew he’d be particularly busy so I spent even more time in advance crafting custom questions. I knew he’d get rid of me if I was just asking the same questions every other interviewer asked him. I wrote down all of my questions for him, then I looked up his interviews he did for other people, and then I reconstructed my questions again. The average interview length was 1 hour, although some went over and some went under. I had Dennis for 45 minutes.
Hire a transcriber
I quickly realized I couldn’t transcribe all of these calls, so I looked for someone on Elance. The way to negotiate is to make sure you get them to agree to rates in terms of audio time. Instead of asking someone to work at $50 per hour, make sure they will commit to $50 per audio hour. There’s a big difference, although I didn’t realize it at first.
My transcriber is a guy from Africa who had no feedback on Elance, so I knew I was taking a risk. I told him if he was willing to lower his price from $30 per audio hour to $15 per audio hour, I’d be sure he received positive feedback so that he could continue finding work on Elance.
$15 per audio hour may seem low, especially considering that one hour of audio may take up to 4 hours to transcribe. But when you look at the conversion rate, it’s not that bad. $1 USD converts to 83 Kenyan Shillings. I paid around $800 total for the transcribing, which converts to 66,400 Shillings. That’s about a month’s worth of rent in Nairobi, the largest city and capital of Kenya.
Hire an editor
I also realized I could not edit all of these interviews on my own. I needed another pair of eyes. I posted on Facebook and e-mailed a lot of Facebook groups and school e-mail lists (creative writing tutors, English classes, graduate students, etc) and found a lot of people following up. I offered $15/hour, which again isn’t that high but I said I’d pay cash bonuses at certain milestones to help make up for it. I couldn’t afford to pay editors a lot of money up front because all of this was done using my own money.
The trick here is to make people submit samples of their work. Give them a small piece of one of your transcripts, ask them to submit it to you. You find out two things here. The most important: you find out who is self-motivated and who isn’t. Don’t work with anyone who says “they’ll get around to it” and then never sends it to you. You also find out what the quality is like. Do people change the order of the sentences? Do they fix the grammar and spelling mistakes? Do they correct the acronyms? Do they make it easy to read?
I probably received about 15 e-mails or Facebook IMs in total with people interested, and from those I received about 5 or 6 edits. I ended up choosing my sister-in-law because her sample was really good, and she sent it very quickly. I also hired a friend to help because there were so many interviews to edit. We knew we wanted to average 10 interviews per week between all of us, but we couldn’t even sustain that rate.
The process: edit, edit, open, close, edit
Throughout this entire thing, you’ll find that things can get hectic quickly. You’ll be asking founders for interviews, you’ll need to track whether they replied, when you should harass them if they don’t respond, what date and time they agreed to, whether the interview is finished, how far along you’ve gone in the editing stage, etc. Here are the programs I used along the process to help me with planning and management:
- Use Google Docs to create your list of questions
- Use Google Spreadsheets to list out all the people you want to talk to, check out the screenshot below for some of the columns I used to track. This gets very tiring to manage after a while, so I started using Basecamp to manage milestones and dates.
- Use Basecamp once you’ve got your founders and need to track when the interview opens and when the interview closes (explained more below).
- Use Basecamp Writeboards to keep track of things like: your full list of companies, manuscript progress, memorable quotes, tags, testimonials, and final edit progress.
The transcripts were bad in some spots, but they accomplished a bulk of the work: attempting to get the audio into a written format. It doesn’t have to be perfect, but at least it’s done and I can spend time on cleaning it up. The founders would throw around technical terms or acronyms that made no sense without some context. “YC” was not something that the transcriber was familiar with, so they might have written “why see” instead. So I ended up replaying each interview and editing the transcript.
Here’s the order I used for creating the content of the book:
- You: Edit the transcript. This ensures your editor will keep their sanity, make it the proper format and clean it up. Your editor can then check for basic problems such as grammar, sentence structure, sentence fragments and run-on sentences, and proper ordering.
- Editor: Edit the edited transcript. Your editor’s job is to make sure the copy reads easily. Don’t over-edit. I explicitly told both editors to leave the copy alone when possible so that the founders’ emotions, tone and stories were still in tact.
- Open the interview for edits: send the founder the transcript so they can change it. This is done in case the founder says something they later regretted, or perhaps they said something they weren’t allowed to because it should have been off-the-record. A few founders did a lot of edits, but most of them did light editing or no editing at all. Highlight any parts that are ambiguous. I also marked the interview as “open” in Basecamp so that I knew the founder was editing. Create a backup of the interview before they start editing, just in case. Allow 5 days for this, then close it. E-mail the founders the Google Doc link (just make it public, and share the URL), then let them know that you’ll make the doc private in 5 days. If they need more time, that’s fine, just ask them to contact you so you can open it back up. Be friendly about all of this, let them know it’s okay and you understand if they’re on vacation and need some time to do the edit when they get back. Tell them if they can’t do an edit by a particular date, you’ll be sure to get whatever edits they submit into a later version of the book, mention this up front.
- Close the interview. The founders are not allowed to make any more edits at this point. So make the Google Doc link private. Now you’re going to edit once more, just keeping an eye on simple mistakes and making it easy to read. That’s the #1 focus when you edit: make this entire interview as easy for someone to read as possible. You will usually be removing irrelevant answers, or repetitive answers. The most recurrent changes are run-on sentences. The second most recurrent changes are fillers and certain stop words: “um”, “so”, “yeah”, “like”, etc. Verbal conversations are difficult and painful to read, so that’s where you’ll be doing most of your editing.
- Finish. Just when you thought you were done editing, you’ve got one final edit to make. You’re going to put all of these interviews together into a book and then do one more edit on the whole thing. You can read a little bit faster and be less analytic at this point. Between you and your editor, you might have some inconsistencies that you need to agree on and fix. This could range from using two spaces vs. one space after a sentence, using a single hyphen or a double elongated hyphen, choosing whether to use quotes or italicize when someone is thinking to themselves, etc. Just agree on all of that and make it look like it was edited by one person instead of two or three. Split the entire book in half: one person edits the first half while the other person edits the second half. This ensures nobody duplicates work. Then switch and edit each other’s.
You’ve got a complete manuscript, now what?
After that, you have yourself a manuscript. You have a few more things to do before you get the word out:
- Get testimonials. Get people to read parts of your book. At first, I only sent out 5 interviews at a time and I asked people to choose those 5 interviews. Bad idea, just send the entire thing and suggest they read a few. They can read others if they want, but don’t make them do any extra work. You should make these e-mails short. The way I got Andrew Warner to agree to read the manuscript was a simple e-mail: “Hey Andrew, I’m a huge fan and just attended your e-seminar last week. Would you be willing to check out a few of these interviews I’ve done with startup founders?” He responded “Yes, send it to me.” I sent it, and I got an e-mail shortly after that said “Holy crap. This is awesome.” Some people said “Sorry, this is way too much, I can’t help you out with this.” Just ask around as much as you can.
- Select interesting quotes. Look at interesting quotes from the people in your book. Copy it down and you can use those to give people an idea of the ethos of your book. Give them something interesting so they’ll want to read the rest of it in full context.
- Take care of the cover and typography. Why did I use Arial–a sans serif font–in the entire book? According to the Journal of Cognitive Psychology, “results showed a small, but significant advantage in response times for words written in a sans serif font. Thus, sans serif fonts should be the preferred choice for text in computer screens as already is the case for guide signs on roads, trains, etc.” The actual debate on serif vs. sans serif is not conclusive enough for you to justify using one over the other, but considering most of my downloads are digital and those will be read on a screen, I wanted to go with sans serif. As for the cover design: I iterated through approximately 15 covers. I ended up settling on what was the most simple design.
- Order a proof. Make sure your margins, sizing, and colors are correct. I used Lulu.com to do on-demand printing, and they’re awesome. I wanted to go with a dark background color initially, but the proof didn’t look very good. Microsoft Word uses mirror margins by default, which adds extra padding to odd-number pages, so that’s good for print. Remove mirror margins for the PDF though, it looks awkward.
- Get a web site setup. I use Thesis to make customizing my WordPress page easy. I host WordPress on my Linode 512 VPS. I registered the domain through GoDaddy and I use Google Apps for e-mail.
- Get a shopping cart setup. I was recommended e-junkie by several people, and it’s awesome. I pay $5/month and that’s it, no limits on how much sales I make, and they don’t take any extra transaction costs. Unfortunately, their coupons are static and must be set in advance. I was trying to do a launch and let people get a bigger discount based on their karma, but that just wasn’t possible. Here’s the Ruby code I wrote to handle that if you’re able to reuse it.
- Setup a Lulu.com account for on-demand printing. I thought I was going to have to buy a lot of books and invest a lot of money up front. Turns out, Lulu.com has solved that problem. They let you upload a PSD, manuscript, and then they allow you to sell your book right away. My book costs about $10 to print, so I net $20 on each paperback purchase. The customer pays shipping and handling.
Get the word out.
You are officially halfway there. Now you have the other part, which is just as much work as everything has been so far. Your goal is now to let people know that this book exists and they need to buy it.
I posted on Hacker News, and that was pretty much it for the first day. It hovered around the top 10 for around 5 or 6 hours. AppSumo.com featured me on a Thursday which also caused some Twitter buzz. I’m always thinking of ways to get the word out.
I have a few places I’m advertising:
- reddit.com: $100 for 3 days – I don’t think reddit used all my money on this because I had 75 unique clicks, which would make the CPC ridiculously high. There was an ad running in the compsci subreddit from Thursday through Saturday. I received great feedback from /r/startups on the first iteration. The only comment I got on the actual ad was ‘fake and gay‘, but I explained it to the individual in case they were genuinely confused. Also clarified the purpose of the ad; I think the individual saw me discounting education when the real point of the message was: “hey college students, you don’t have to go get a regular job when you graduate.” 2 people used the coupon code from that ad.
- Hacker Monthly: typically $500 for 3 months, I got a discount – I ran an ad because I knew the readers would be interested in startups and would use many of the sites from the book. No stats here yet.
- Startup Foundry: $100 to be mentioned in 2 videos – I’m still trying to get an ad in there, but I think that audience is exactly who I’m looking for. They want to see interviews with founders and they want to get inspired by it.
- Sponsored some food (55 cookies at $70) for a Hack Night at UIUC. There was probably no return on this, but always happy to help hackers with their blood sugar levels.
Tip: 80% of the people who go to StartupsOpenSourced.com only look at that first page and then they leave. That might sound bad, but that’s how people work. Most people will not pull out their credit card to pay for your book or product the first time they see it. They need to see it multiple times in order to seriously consider paying for it.
Maybe a small, small portion of my first-time visitors are early adopters and willing to try out this “Startups Open Sourced” book, despite not knowing who the author is, or whether the book quality is any good. I’m just some schmuck to them, and in their head they’re wondering, “is this thing going to do anything at all for me? Is this just some random person trying to get a buck from me?” All they know is they’ll get a refund if it sucks (nobody has asked so far).
Your early adopters are the people who take risks on you, and if they e-mail you, you better respond and make sure they are taken care of. Treat your early adopters like gold. Do something nice to them–if you have their address, send a hand-written thank you card.
Overall, I’d have to side with David Rusenko’s advice on this: you should be happy even if you only get a few people who pay. I’m happy with one book purchase per day, that’s pretty sweet for me. Anything beyond that and you know you’re probably a little lucky, and you also are receiving real-world validation that you have built something people want. People are going to spread the word over the long-term if you actually did create something people want, and that’s the single most important thing you can be doing. No amount of advertising is going to push a crappy product. It may get you some sales early on, but after a while it won’t sustain itself.
With that, it’s still too soon to tell from week #1. From the feedback on Twitter, it seems that there are a handful of people that really enjoy reading the book so far. That’s a good sign, and so we’ll see how it fares in the long run.
From here, I’m hoping that the growth will be more organic than advertising or deal-driven. I am expecting sales to settle down a little bit and hopefully become gradually increasing over time. Things I’d like to get done:
- Redesigning the cover. It doesn’t feel quite there yet.
- Changing parts of the typography and interior design.
- Redesigning the web site. It’s pretty sloppy right now. Way too confusing, too cluttered, no clear call to action or clear organization right now. 80% bounce rate still feels really high to me.
- Interviewing more people and adding them to the book. I’m trying to work the right connections to get an interview with Husky Starcraft, the infamous Starcraft caster and college dropout with nearly 500k subscribers and 170+ million views on YouTube. If you’re an early adopter (let’s say you bought a copy of the book on or before May) I’ll try my best to hook you up with video interviews as well as the full text interviews. You only pay once, and you get unlimited upgrades whenever changes are made to the book. I really want to offer something special to my early adopters. I have no idea what that will be, but if this works out in the long run, I’m doing something really special for them.
- I’d like to allow more premium versions of the book to be created, such as hardback versions or better paper.
Steal my idea
There are lots of fun and informative topics someone could write about, but something I’d personally read and purchase–which was a test I used on myself, just like Noah Kagan suggested in his interview–is to interview angel investors and VCs. There is still some mystery to this entire industry, and it’s probably one of the most frustrating things about doing a startup.
Can we find any patterns by talking to lots of angels or VCs? Can we try to understand how they think about startups? Can we find out how to make the entire process suck less, or move faster? How did the investors get their start in the investment world? Can we figure out which ones specialize in one particular field of interest over another?
These are all interesting questions. The problem is that most investors are probably not going to write openly about this stuff on their own. The net effect from my book is to inspire and motivate people. The net effect from this other book should be to figure out how investors work and how to successfully get any one of them to invest in your startup. Bret Taylor, the CTO of Facebook, is just one example where Dan Gross specifically called out one thing that impressed him the most: rapid iteration. Okay, so now you can go and approach an investor like that, get some feedback, and get the code done in less than 24 hours. That’s an investor hack right there. Can’t we get a full list of these hacks so we know in advance what makes each investor tick? What impresses them?
Someone should create this. I won’t have time to do it myself with my next startup that I’ll be doing full-time next month, but I’ll be the first person to buy a copy. I’ll be your early adopter. Let me know if I can help.