The following are my main takeaways from the video, quoting and paraphrasing the content.
Most companies don’t work: don’t build something people want, don’t use a structure that lends itself to bootstrapping (low money, low time). Bootstrapped means self-funded.
Cash machine, predictable way to make a profit every month. Recurring revenue.
It is hard to get a 1000 customers at any price point.
Goal: 150 customers. 50 from scratching and clawing. 25 from guest-posts and social. 75 from basic marketing.
Example: e-mail people on LinkedIn asking for 1 hour of feedback, offering to pay for it.
Goal: $10000/month revenue. $66/month average per customer for 150 customers. Example price tiers: $49, $99, $249 (business).
Boutique. Few people, more expensive. “I’m just one person making a go of it.”
Annual prepay. “Two months free if you sign up for a year.”
60 day money back guarantee. Instead of free trial.
No picking pennies (eg Kickstarter).
Never sell to consumers. They don’t spend money. Mobile apps developers rarely make money.
Bad market: point-in-time, temporary pain (eg weddings, events, code profilers). Not recurring.
Bad market: virality. Too difficult.
Bad market: market place. Double the work, need both sellers and buyers.
Good market: naturally recurring such as ongoing actual costs (eg hosting), financial cycles (eg invoicing, reconciliation, taxes, reporting, metrics, compliance, hr, admin), pain that changes over time (eg digital marketing, SEO, ad words, competitive reports, e-mail marketing, content marketing, social media measurement, A/B testing), support.
Example: premium support package with priority support. Free money since you want to do all the tickets anyway and it just changes the order.
Good market: not real-time such as decision support (eg analytics, metrics, reports), finance (eg invoicing), project management, content. Bad example: hosting.
Good market: something that can be finished such as WinZIP, hosting, time tracking, bug tracking, CRM, Wiki, task management, e-mail, PDF editor, image editor, web analytics.
Good market: attached to an established product such as Salesforce, Heroku, Apple App Store, WordPress.
Good market: big with multiple niches, room for multiple similar products (eg CRM, project management, time keeping, invoicing).
Adverts are better than social media. Social media is often not repeatable (eg blog with 40000 readers only got 2 sign ups to a new product).
CPC = MRR / 25. You can pay per click 4% of the average revenue per customer.
Sell (before it is too big, to partners, to biggest customer), raise prices or raise capital.
The hardest thing is to know thyself. The easiest thing is to give advice.
Predictable acquisition of recurring revenue with annual prepay in a good market creates a cash machine.