I have managed to start three successful businesses. And I am no genius. It has been said that my last name is the only brain I’ve got. So this should give you great hope — if even I can start three successful businesses, then anyone can. Let me talk about each one so that you can see what I am talking about.
One of the businesses that I started — actually my wife and I in this case — is a publishing company. I’ve written a dozen books, and I have used three different publishers (Butterworth-Heinemann, Prentice Hall and Wiley), but I wrote a book for teenagers and I was having trouble finding a publisher for it (yes, even if you write a dozen successful books and sell hundreds of thousands of copies, publishers STILL snub you. It is part of the game.) So we decided to create our own publishing company.
Here’s the deal with a publishing company. Go pick up any paperback book that you have lying around. It’s probably 300 or 400 pages long. It has a nice, glossy, color cover. It has bar codes on the back. How much does it cost you to print a book like that? If you do a print run of 1,000 or more, they only cost you $2 a copy. Or less. Now look at the list price of the book. You pay $15 or $20 for the book. That’s a 10x markup. So you print a thousand books for $2,000. And you sell them, and you make $20,000. If you sell 10,000 copies, you make $200,000. If you sell 100,000, you make $2,000,000. Now that’s gross, not net. The bookstore takes some of that when it sells the book — it’s only fair. And you have to pay the warehouse and so on. But you can see the point. If you can write a book that people want to read, there is money to be made. And it has gotten a whole lot easier in the last 10 years with printing on demand and so on. Go look at Xlibris, for example.
So we published a book called The Teenager’s Guide to the Real World. It’s now in its eighth printing. That means that we initially printed it and ordered 5,000 copies. Those all sold out, so we ordered a bunch more printed, and those all sold out, so we got another batch… and so on, eight times. Is this book as popular as Harry Potter? No. And it doesn’t matter. There’s still lots of money to be made by writing books.
After I wrote my first book, a funny thing happened. This was a book on a topic called “Motif Programming“, which is a system you used for creating graphical user interfaces on UNIX machines 10 years ago. Right as that book was being published, it turned out that all the major firms on Wall Street decided that they were going to convert from mainframes over to UNIX and Motif. So my book comes out and I start getting calls to do training and consulting in Motif.
Now, what is that? That is luck. I wrote the book not knowing that Wall Street was making the conversion. I just happened to be in the right place at the right time. So a friend of mine and I started a business. We did training and consulting and programming. We started, literally, with that book, $400 and my friend’s PC. We knew nothing about “starting a business.” But we did get lucky. We built that to a point where we had 20 or 25 employees and were making several million dollars a year. And the business still exists. My friend is still doing it, although I went on to do something else called HowStuffWorks.
We could talk for a very long time about the Web, but let me briefly say that, today, there is a lot of money to be made. Google, with its Adsense program and search revenue program, has made it extremely easy to make money on the web. All that you have to do is create a web site that attracts a big audience, and you can make money.
I started HowStuffWorks as a hobby in 1998. In 2000 it had become so popular that it really needed to be a business. Today it is one of the top 1,000 web sites in the world. Something like 5 to 6 million people visit the site every month, and they read about 60 million pages each month.
The great thing about the web is that it is a very open playing field. If you create a web site and people like it, they will tell their friends. And they will tell their friends. And so on. There are all sorts of sites that have made it big this way. Look at Matt Drudge with DrudgeReport.com or Drew Curtis with Fark.com or Rob Malda/Jeff Bates at Slashdot. Go look these sites up in Alexa and see what kind of traffic they get. These are not complicated sites, but they caught on.
HowStuffWorks happened to catch on. HowStuffWorks has succeeded for many reasons — part of that is luck, part of it is my writing style, part of it is persistence, part of it is being able to work with an extremely talented group of people who all help to make the site better. And so on. The thing is, if I had never sat down at the kitchen table and started HowStuffWorks, none of that would have been able to happen for me. I had to take the first step.
If you are reading these pages and you are wondering how you can raise money for your new business, this article will help: How to Raise Money from Angel Investors and Venture Capitalists
[For details on starting your own Web site and making money with it, see Making Money on the Web]
Your goal is to do the same thing. All that you need to do is to find something that people would find valuable…