The $100 Startup – Chapter One: Unexpected Entrepreneurs

Some books deserve a closer read. One of these is The $100 Startup by Chris Guillebeau. It’s a book about turning your passion into a successful small business. The entrepreneurial ideas presented in the book are for more than just cubicle dreamers – there’s a wealth of practical advice on low-cost marketing that would be helpful for govvies trying to get the word out about their programs.

Follow along as I delve into the book, chapter by chapter. I’ll breakdown each chapter, providing a sort of Cliff Notes summary. And I’ll include what you can’t find in the book, such as links to the businesses he discusses, ideas for additional reading and my own thoughts.

I’ll post my breakdown of each chapter every couple days. Get the book and follow me on Twitter at @joeflood as we read The $100 Startup.

I’ve been a fan of Chris for years, being an avid reader of his popular blog and his earlier book, The Art of Noncomformity. He writes about escaping from cubicle nation and leading the kind of life that you want – a heady dream in this time of chronic recession.

What makes him different from a hundred other authors selling this idea?

Practical – He is one of the best writers on the practical details of being a freelancer or running a small business. In his books and blogs, he writes about the sometimes painful aspects of running a business, from getting publicity to organizing a product launch.

Realistic – Chris does not promise to make you rich. His work is filled with examples of everyday folks who have managed to improve their lives. The $100 Startup includes stories of real businesses, with dollar figures attached to them. Some are impressive, but others are quite modest.

Honest – I distrust books which only talk about success. Chris is honest about what’s worked and not worked in his entrepreneurial journey. The $100 Startup contains stories of disaster, as well as triumph.

But enough about Chris. What does his book say?

Chapter One: Renaissance

This first chapter sets the stage. It begins with a sadly typical story – a veteran sales professional gets unexpectedly laid off. What happens next is like a quirky episode of Portlandia. This salesman goes into the bedding business, and pioneers the industry’s first-ever mattress delivery by bicycle.

This story (and related case studies) introduce the idea of micro-entrepreneurship, an idea which has been around for centuries. These are one-person businesses. And they can be setup for less than $100. (The $100 figure is a bit arbitrary. Some of the businesses discussed in the book cost more, some less, but the point is that you can set up a business no matter how little money you have.)

The best part of The $100 Startup is that it is grounded in real stories. These case studies come from Guillebeau’s study of “unconventional, accidental entrepreneurs.” His subjects were interviewed and required to submit financial data. For the book, he profiles a wide range of “microbusinesses” that are successful and low-cost.

They were also created by people who decided to follow their passion. But they did more than just that – they found the sweet spot between what they were interested in and what the market will pay for. These businesses build upon skills that people already have. This is illustrated by the wonderful example of Scott Adams. He took his modest art skills, sense of humor and business experience to create Dilbert.

The basics of business are very simple, according to Guillebeau:

1. Product or service: what you sell.
2. People willing to pay for it: your customers.
3. A way to get paid: how you’ll exchange a product or service for money.

This, of course, is the hard part and where most business books falter. They say “you can change the world!” but skip over the bothersome details. The rest of The $100 Startup will closely examine these three concepts, down to the dollar figures of other microbusinesses.

The chapter ends with a touch of the quaint – James Kirk (really?) leaving his IT job and crossing the country to start Jamestown Coffee in South Carolina. His quote makes a nice coda to the chapter:

There was one moment very early when I realized, this is what I want to do, and this is what I am going to do. And that was that. Decision made. I’ll figure the rest out.

This theme of action bias is a constant one in Chris’s writing, the idea that it’s better to take action today rather than defer your dreams endlessly.

Summary

In this first chapter, Chris has explained the idea of microbusiness, teasing the case studies of ordinary people that he’ll examine in greater detail in the rest of the book. These inspiring tales of doing what you love are grounded in the reality of finding something fun that people will actually pay for. And owning a quaint coffee shop is the perfect story to close with, since it personifies the American Dream, 2012 edition.

Thoughts for Govvies

The formula for a successful business is one that should be applied more to government. Programs are created and endure year after year, without any idea if they are valued by citizens. Would customers be wiling to pay for your product or service if they had to? What would they pay for?

Bonus

Check out the video trailer for the book for more inspiration and to see what a yarn entrepreneur looks like.

Next Up: Chapter Two – Give Them The Fish, or the surprisingly uncommon idea that business should meet the needs of consumers.