My continuity / membership business - Tragic start to finish!!!

by SeanyG
14 replies
Hey Guys,

Don't be fooled. This isn't a 'my IM business isn't working' post. This is a "I got off to a terrible start with my last business but I am going to keep progressing until I reach what my definition of success" post that will update you on my progress along the way.

I have been reading here for a while but have just started posting. I figured that I would give something back by keeping you guys up to date on the progress of my new business. Reading about my failures and successes might help the newer guys on the forum.

All of the posts below were posted on another forum and the thread has got such great feedback that I figured I would post it and updates here as well!

I will first post my background, how I got started and then I will make regular updates on how my business is progressing.

I would love to hear any thoughts / advice / questions you may have!

------

My background:

I am a 24 year old guy living in Vancouver Canada. I have my Bachelors Degree in Business (pretty much useless) and I am a professional house music DJ.

When I was 19 I started my first real business: Play It Tonight. It was a Download Store - similar to Itunes - but it offered high quality song files for dance music Djs. When I started out my dream was to create a business that would allow me to travel and work from anywhere and also to work with what I love: house music (what many of you know as "techno").

I started by contracting out some guy to build the complex store for me. I agreed to pay him $10,000 and it would take him 3 months. 13 months later he had racked up $21,000 and still wasn't done. I fired him and he had spent all of the money. I took him to court and won but haven't been able to collect any money.

My dream was still alive despite this rough start. I took out a $20,000 business loan and bought a 50/50 share in a business that had just started up and was doing the exact same thing.

What I didn't realize going into this business is that the costs of managing, hosting and processing music is HUGE. There was a lot more overhead than I thought there would be and the margins were tiny. Lots of competitors entered the market shortly after us and overtook us. Worst of all, Djs were downloading the same music we were selling for free!

This past summer we decided to shut it down. We were putting in 16 hour days for 3 years and weren't collecting a salary just to try to make it work. At its peak it made $5000 revenue one month but it never got over that.

Looking back now I realize that this was the case because of the market and business model that we chose. I didn't do all of the research necessary on costs and competitors before jumping into it.

For this new business I am setting up I sent a lot of time figuring out what model would fit the criteria that I have: low overhead, not much capital outlay up front, possible to have it fully automated etc. This is how I landed on the email database creation / continuity / sales page / membership site model.
#business #continuity #finish #membership #start #tragic
  • Profile picture of the author SeanyG
    Since I became one of the top nightclub DJs in my city and ran a business that everyone thought was successful, I have been asked a lot of questions about the music industry. I got asked how I became a DJ, how I got to Dj all over the world, how I started a record label, how I got gigs etc...

    Last year I was spending a lot of time in airports and on trains so I decided to write down all of my knowledge on the industry and create a book on how people can become a professional DJ.

    Shortly after, I read the book the 4 Hour Work Week by Timothy Ferris.

    In his part on Muse Automation he explains how to setup a test site to gauge a nice market before you invest in creating a product.
    This test website without any product to sell is comprised of 3 pages:

    First page - sales copy, testimonials, pictures, guarentees etc
    Second page - pricing and order submission info
    Third page - "Thank you for ordering but our book is on back order. Your information has not been saved."

    The idea here is that you drive traffic to your site with PPC. You have analytics setup on the back end to monitor how many users get through to sale pages. Depending on how you tweak the sales copy, you will see what the conversion rate is from the first page to the second pricing page. Then again, you can tweak the price on the second page to see how many people actually "buy" the fake product.

    This will give you a very real idea of how much of a demand there is for your product and weather you can make a ROI before you invest a lot of time and resources into creating a product.

    I wanted to take action and just get the page up so I partnered up with a friend of mine named Jay. Jay is one of the world's biggest name DJs and has a ton of connections. He's buddies with household names that you may know like Paul Oakenfold, Tiesto and Pete Tong. He also knows web design so I figured he would be a good guy to partner up with.

    I broke down what the motivations of DJs are. Why do Djs want to become DJs? What is the conversation inside of their head?

    When you ask Djs why they do it they all say "because I love the music" but the real reasons I found are as follows:

    -they want to have attention / spotlight on them
    -they want to get attention from the opposite sex (hang out with good looking girls)
    -they want to live a glamorous lifestyle
    -they want to have lots of friends
    -they want to travel

    So I took these motives and Jay and I created a simple 3 page site:

    doubleyourdjing-ebook dot com

    I had never used Google PPC before so I blew through a ton of $ because I was paying close to $1 per click! I read the Ultimate Guide to Google Adwords and brought that average down to .20 per click while still generating a similar amount of traffic.

    The sales page is weak. The video looks armature even though my DJ friends say its effective. The testimonials are weak. The Bonus products are not attractive at all. We just threw something up to get the page live and haven't changed it since.

    I started driving traffic to the site half way through October. In the first two days I got two orders at a pricepoint of $39.00 USD. I was ecstatic! We tweaked the sales copy, the arrangement, images, price etc and we ended up getting 2 more orders.

    So far I have spent $520 on PPC in the month and have got 8 orders. Not making a profit by any means but it is enough to be encouraging considering how weak my offer is.

    I say that its weak for a number of reasons:

    1) Because there are other Dj books out there offering the same thing.
    2) Because the preferred medium of DJs is movie files.
    3) Bonus offers aren't that attractive at all.
    4) The name sucks: New Djs don't want to double their djing....they want to get the hope and skills that they too can have the rockstar life that pro djs have one day.
    5) We talk about it being a 'package' and then we are just selling it as an ebook. Not congruent.
    6) The largest market for this type of a product is beginner DJs. These are the people that are most anxious to get started and spend the most money. beginner djs want beginnger skills, not some of the advanced stuff I say is in the book later on.

    It was about this time when I stumbled onto Ryan Deiss's Million Dollar Napkin and Snowball videos which introduced me to continuity and membership models.
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    • Profile picture of the author SeanyG
      I realized that now that I have proven that there is a demand for an informational product for beginner DJs, I can use a more effective model than bringing new prospects to a sales page.

      A lot of the really successful sites I saw that convert well first capture your email address. They email you a bunch of free content, to view this content you are directed back to their site (which gets you comfortable with clicking links in their emails), this also builds rapport and credibility as long as the information is valuable and relevant. After 6 or 7 emails with valuable free information sent out via auto responder - awebber? - you then direct them to a sales page that showcases a product you have made.

      So instead of a sales page I am going to create email 'squeeze' pages that have a little bit of exciting copy, a 1 min short video of me explaining what they will get if they enter their email address below and an email submission form.

      I will create individual 'squeeze' pages for different ad groups on Google adwords and will also create them for different audiences (Beginner DJs, Intermediate DJs, Advanced Djs etc). This will get emails coming in like crazy to my database

      Because video is the medium of choice, I plan to film all of the free info in video format. Short 1 or 2 min videos packed with the most important pieces of info.

      The products that I sell will be in video format as well since that is the easies way for DJs to learn. I will start off selling beginner products and will introduce over time more advanced products. I already have a mailing list of 10,000 intermediate DJs from my last business that I can sell intermediate / advanced products to in the future.

      When someone buys a product they will be offered one free month in my continuity program / membership area (which I haven't even thought up yet) and then they will be charged every month afterwards.

      One of my good friends is a genious when it comes to film. He has a natural gift for cinematography and post editing. He loves working on video and has agreed to do all of the filming and editing for a small cut of any future profits. I'm stoked about this!

      Another thing that I realized is that I don't need to be partnered up with Jerome. He is good at web design but that doesn't warrant me sharing a 50/50 split with him since he doesn't really offer much more value beyond that. I can pay some kid $50 to design sales pages that will look as good.

      I recorded my intro video for the squeeze page yesterday. I got into one of the nicest nightclubs in the city and shot a video of me explaining who I am, what I do, my lifestyle, what value I offer (knowledge) and why I am putting together a free email newsletter. It looks super pro and gets me excited! It kills anything that my competitors have on their sales pages.
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  • Profile picture of the author TeamDW
    I feel you.. has happened to me too many times as well.. Beckham
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    • Profile picture of the author SeanyG
      Originally Posted by TeamDW View Post

      I feel you.. has happened to me too many times as well.. Beckham
      No no... this isn't a tragic finish post...this is a tragic start to fairytale finish post.

      I got a tragic start but am working myself out of it by developing this business.
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      • Profile picture of the author SeanyG
        I would like to start using this model:

        - Bring aspiring Djs to a squeeze page that offers exciting free content and gets them excited
        - Build email list (awebber) with email submission in exchange for free content
        - email regular weekly (or ever 5 day) mailouts
        -After a few emails to build rapport, bring them to a sales page for your product which also signs them up for your continuity
        -Offer a cheaper intro product (just for the sake of getting volume into the continuity program)
        -Upsell to bigger products
        -Send more free information and re-pitch products / affiliates

        The products I will be selling are instructional videos where I guide new DJs through the basics of mixing techniques and what DJs do. Then there will be a bigger package that teaches them how to get their first gigs where I will interview club promoters, successful djs, and give them resources for that.

        Like I said before, I already have an email list of 10,000 Djs from my last business so this model is very exciting for me. All I have to do is setup a squeeze page (after I test my first one to know how it best converts) for this list and direct that list to it.

        Here is what I have to do in order to get going:

        1) - Create background graphic for 'squeeze' landing pages. This has to have a very specific look and feel to it.

        2) - Come up with a list of the hottest tidbits of free advice (tricks, tips, lessons learned) that I can include in the free content to be sent out

        3) -Setup awebber with free content emails that link to pages on my site that show free information. The reason why I want to link back to my own site and not just give it to them in their email is because this way I can have an email submission form. If they send the video to their friends then their friends can sign up as well.

        4) Do research for final product.

        5) Lay our curriculum for final DVD products.

        6) - Film the product I will sell.

        7) - Come up with and create continuity program / membership site. I've been brainstorming ideas for this. Any thoughts for what I can setup as paid, community driven continuity?

        8) - Get an adwords pro to help me tweak my account to get costs down even more. I have a friend that does it for a living for some pretty successful companies and he said he would love to help.

        I think I can get most of these done by the end of the week.

        Looking forward to hearing your thoughts guys.

        Thanks in advance!
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        • Profile picture of the author SeanyG
          My short term goal (6 months) is to make $5000 NET per month CAD. My long-term goal (1 year) is $10,000 NET per month.

          Why $5000? Because that is the most I EVER made in revenue with my last business after 4 years. That wasn't even profit. I wanted to set a goal that is big enough so I don't know how to accomplish it but small enough so I believe its achievable.

          From talking with the internet marketers it sounds like $5000 per month is easily achievable as long as I do things properly and I make use of the 10,000 targeted mailing list I built up with my last business.
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          • Profile picture of the author SeanyG
            I was away for Christmas and New Years in New York. What an amazing city.

            The experience really motivated me and confirmed that I am on the right track by setting up an internet business that will allow me to travel and work from anywhere.

            I am working on updating my task list so I can begin to take massive action again now that i am back in town.
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  • Profile picture of the author Monetize
    Your biggest mistake is hiring a developer to do something
    that you could have learned to do yourself for free. Your
    degree is not useless - apply it to this business.

    BTW, I have a friend who is into techno and I've told him
    a gazillion times to do a ringtone site. I think there's great
    potential there but I could be wrong.
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    • Profile picture of the author SeanyG
      Originally Posted by Monetize View Post

      Your biggest mistake is hiring a developer to do something
      that you could have learned to do yourself for free. Your
      degree is not useless - apply it to this business.
      Interesting take on it.

      I was actually taught in school that you should outsource stuff that you aren't good at. I still believe this. I know nothing about coding. Had I tried to learn coding I would probably still be learning how to code and I wouldn't have gotten all of that valuable business experience. I got 5 years of running the business under my belt.

      That being said, I should have done more research about the guy I hired, the prices of developing a site (it shouldn't be anywhere near $10,000) and most importantly, about the market before investing so heavily into the business!

      BTW, I have a friend who is into techno and I've told him
      a gazillion times to do a ringtone site. I think there's great
      potential there but I could be wrong.
      I have looked into it but the royalties and rights of managing musical content for cell phones are a nightmare. I also want to stay away from anything where the business revolves around storing files. Storing files = storage costs = overhead.
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  • Profile picture of the author John Taylor
    Since when did this forum become a multi-user
    blog?

    This isn't a discussion it's a monologue and, as
    such, should be on a personal blog not a forum.

    John
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    • Profile picture of the author tommygadget
      Originally Posted by John Taylor View Post

      Since when did this forum become a multi-user
      blog?

      This isn't a discussion it's a monologue and, as
      such, should be on a personal blog not a forum.

      John
      I was thinking the same thing. It is an interesting multi-part story and is perfect for your WF blog...

      TomG.
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      • Profile picture of the author socialmindset
        I completely disagree that you should learn how to do everything yourself. I am a Computer Science major and I still outsource.

        The trick is being able to manage and understand what you are paying for and what its worth so that you don't get taken for $21k. The way to do this is to talk to your friends who know tech and web and get them to look over your deals and tell you if they are good value.

        Follow 4 hour ww and use elance to get stuff done. Take the best parts of your competitors sites and use them as a model for what you want.
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