I can honestly say that my one of my strongest passions in life is business. More specifically the early stages of business. The genesis, and creation of something tangible from basically nothing. Although I am not anywhere near what I would consider a success yet, I feel I’ve accumulated a ton of knowledge and experience from my many failures and few successes throughout my professional life. I think many of my friends realize this as well as they always come to me with their business questions and are always more than happy that I give them my $0.02.

So this brings me to this internal debate I’ve been having with myself for the past few months. I want to start a podcast series about entrepreneurship and the process of starting a business (focusing on web based) from the ground up. In this series I would cover my thoughts on the changing business environment, how the internet is changing everything, resources, book reviews, inspirational interviews, etc.

I basically want to help as much people who want to start something of their own live their dream life.

What’s Holding Me Back?

Well basically three things.

1. I am embarrassed by the fact that although I feel I know what I am talking about, I still don’t have the proof that I do. I haven’t hit a homerun in business yet and I wonder if its too early for me to start talking business without having anything (financially) substantial to show for it. Right now, I have many theories/beliefs about what works, what doesn’t what’s important but I’m only now beginning to validate or invalidate these ideas.

2. I honestly have no idea what people want to hear about. There are many things that I’ve learned along the way that I guess I’ve taken for granted. I recently had a skype meeting with a few friends of mine who are looking to launch a new website. The questions I thought there were going to ask were completely different from what they actually wanted to know. They were asking things that I honestly thought everyone knew, but when I took some time to think about it, no not everyone does know these things. Questions like, “What legal things do I need to form a business?” or “How do I get payments online?” I’ve learned such a long time ago, I forgot that when I was first starting, I didn’t know where to start either. I think many things I don’t even think would be good topics are exactly the type of things people want to hear about.

3. My plate is becoming increasingly full. Although we’ve brought on some great people to help with the workload at Ukulele Underground, The projects we are launching will take up a lot of time. Not only that, Eatkauai.com still has a long way to go, and the record label needs at least 1 project this year. I also have some client work I need to finish up and a lot of other people who are asking me to design and create their website. I’m worried about spreading myself too thin with yet another project. It’s always been a bad habit of mine to not finish things that I start. It’s a habit I’m trying very hard to break.

So That brings us to this…

This project is something I think would be incredibly fun for me as I can honestly talk for hours about business if the party on the other end will bear it. I do have my concerns though, so honestly I would like some feedback so please leave a comment if you think its a good or bad idea. I’ll be mulling it over and hopefully by the end of the month, I’ll have made my decision if I’m going to do it or not.

In my first post of the new year, instead of talking more about myself, I’d like to point out a few people who I think should be watched in 2010. I fancy myself as someone who can identify the “it factor”. There are a few I stumbled across in 2009 who were just getting their personal brands going and I think can really kill it in 2010 and create legitimate businesses around their content. Although there are many more people who I think are skilled enough and can become successful in due time, these people featured here I feel can create sustainable business models in the next year if they take the correct steps.

DarkSydePhil – DarkSydePhil is a gamer based in the north east. In 2009 he began posting videos of himself playing video games while providing commentary to the in game action. Within one year his youtube channel skyrocketed to over 40,000 subscribers thanks to his hilarious often angry in game commentary.

Why do I think he can turn it into a business? First off, gaining 40k subscribers on youtube in a year from 0 is an indication that he resonates with a specific demographic. Sure 40k is a fraction of the top subbed channels on youtube, but the difference is DSP is very niche and attracts a very specific and lucrative advertising demographic (males with disposable incomes). This audience is growing at a very high rate as well. When December began he was around 30,000 and shooting for a goal of 35,000 subscribers, It reached 40,000 before the year.

What he should do? Create a web presence outside of youtube that allows his viewers to become an online community. By creating a community your options for monetization grow. You can do advertising, sponsorships, products. By creating an online community you allow your viewers and fans to create content on your website via their discussions. Money will come with the eyeballs and the earlier he creates his own space on the web, the faster he’ll get there.

Obstacles – His content (video game playthroughs) skirt the line of legality. Some may argue that play throughs are copyright infringement. If you consider video games the newest form of interactive story telling then this may be the case. There have been court cases that have established that putting recordings of movies and music online as illegal but there has been no precedence set for play throughs as of yet.

Ryan Gutierrez aka gootecks – Gootecks is a top SoCal Street Fighter 4 tournament player. In early 2009 he decided to dedicate more of his time to growing the fighting game scene and began pumping out podcasts, video content, and his own branded event ‘Street Fighter Bar Fights’. Within the last year he has appeared in the documentary ‘I Got Next‘ by Ian Cofino and has been featured on G4 TV.

The good thing about gootecks is that he gets it. Street Fighter fans are amongst the most passionate fans of any video game. They study and devour everything related to the game and many have been doing so since the early ’90s. With the release of Street Fighter 4 in 2009 and the upcoming Super Street Fighter 4 in March 2010, Gootecks has done a great job positioning himself to be one of the faces of the Street Fighter community. He is also friends with Justin Wong, the best SF4 player in the country and if they started working together it would undeniably demand the attention of everyone in the community. I’ve talked to Ryan a few times the last year and many of the ideas he has are awesome and if executed properly and with focus, there should be no reason why he can’t make a very comfortable living for himself doing what he loves.

There are many others who I am watching, some further along than others but these 2 are the ones who I am most intrigued by mainly because they are 2 more examples of the shift in media and media consumption by consumers. I believe that the next, next generation of celebrities will be born on the internet and not on TV and watching people like DSP and Gootecks grow their brand equity online is a good test of my theories.

Anyways, those are my thoughts, who do you think will have a breakout year in 2010? (besides me of course )

One of my biggest problems is remaining focused on my current project. I think it’s a problem that many entrepreneurs deal with. I’m constantly seeing problems around me and thinking up solutions to these problems. For the most part, I’ve done a good job of keeping myself focused. I’ll launch a side project here and there and let it die. Getting them up at least lets me tell myself, ok you did that one get back on track with whats important. That is usually good enough to put out these fires I get.

This new idea however is something that I really think is needed here on Kauai. It’s the first project that I’m attempting that is targeted towards Kauai as it’s market. It’s a problem (not a very serious one mind you) that I encounter probably weekly, and I’m sure others encounter even more. I thought of the idea back in the Summer and after suffering some analysis paralysis, I’m going to start this one this tomorrow and hope to have an early beta ready to go by the weeks end. I hope people on Kauai find it useful and help me grow it into something special because I think if completed, it can become something that benefits everyone that lives here.

I’m also going to document the steps I take with this project here on my blog so others can see how I go about developing and launching websites. It’s probably pretty boring but hopefully some people find it interesting.

More details to come. I know this is horrible timing to do this with Christmas coming up but that’s how I am. When I get the desire to do something, I usually do it as soon as possible (Which is probably why I am G1 in Street Fighter 4, no self control I tell you).  Now if only I could figure out a way to solve my Christmas present buying problems ….

When I first began as a web designer about 5 years ago, the career choice creating websites for clients didn’t seem like a bad idea at all. At my first job, it was not uncommon to bill clients in excess of $5,000-$10,000 for a simple html website. It was easy to run a profitable business with a large enough client list. These days are pretty much all but gone now, sure there are still web design firms, but it is becoming increasingly more difficult to remain profitable as a one man shop. Profitability is not the only problem with the idustry. There are numerous other problems that web designers are now face. Here are my reasons for getting out of the web design industry.

1. Decline in Profitability – There are more people able to create websites than ever. With more people in the market, prices have gone down significantly. The going rate for the best of the best web design freelancers in Silicon Valley is around $50/ hour which is not very much. Salary positions usually come in anywhere from $32,000-$45,000. Not anything glamorous. Not only that, the internet has sped up the global economy as well and outsourcing web design jobs to countries like India, the Philippines, Romania is becoming easier by the day.

2. Rise of Open Source – Part of the reason why the price designers can charge for websites have gone significantly down is due to the rise of web based open source software. When I first started in the biz, you essentially needed to hire a programmer to create any kind of custom application for a website. These custom applications usually came with the highest profit margins because the pool that could do these things was significantly smaller. Open source is community developed software that is free to use. Today there is an open source alternative for anything you want to do. Not just that, the open source stuff is almost always better than the paid option. Great for clients, not so great for designers.

3. Constantly evolving medium - The web is a constantly evolving medium. Software, programming languages, technology to use, browsers are all constantly changing. Whats great today sucks tomorrow. A perfect example of this is Flash. Flash was all the rage when I first started, I spent an enormous amount of time learning about flash because I thought it would make me more attractive in the marketplace, today Flash is bastardized and generally frowned upon by everyone. Table based layouts were the standard when I started, now it’s all about div layouts. Keep in mind this is all in the span of only 5 years. Having to relearn your trade every year is something designers either love or hate.

4.Clients -  It’s nothing against the people I’ve worked with. In fact I think I’ve generally liked almost every client I’ve ever had. The problem comes with the idea that because they hire me, they don’t need to learn anything. Not only that, most don’t even understand why they need a website or why their website is important. This kills me because a website is probably the single biggest marketing investment any business can make, yet they treat it like mustard on a hotdog, not the main focus, just a something a little extra. There are  problems with scope creep, and delays. Scope creep has you doing extra work for the same amount of money essentially lowering your hourly rate and delays push back deadlines which pushes back when you get paid. Both problems are very common in the industry and really hurts when you were counting on that money at a certain date. Sure you can bill for delays, but that is not going to help your case when you go out looking for new clients. Clients although almost always great people are most times not great to work with.

5. 1-1 Work Ratio – This one is by far the biggest reason why I’m personally getting out. When you’re a web designer creating websites for others, the time you spend when compared to the money you earn is a 1-1 ratio. You do work, you get paid. Like a dentist, doctor, etc. It is very hand to mouth and not scalable. Nothing wrong with that, it’s just that for me, I’ve come to learn about leveraging my time and achieving higher ratios when I do any sort of work. For example, we put out a DVD for Ukulele Underground, we did the work once, but we can continue to print it now that it is done for as long as we want. Personally, I’d much rather spend my time creating things like this as opposed to starting from scratch for every new client and doing the EXACT same thing over and over.

With all that being said, there are always going to be web designers around. I think it will be good thing because the ones that will continue to do this are the ones with real passion for it. When all the ones like me are gone from the industry, what you’ll have left are talented passionate individuals and I think that will bring up the standard of quality of web design as a whole. I’m doing my part to help this by stepping out of the away and moving on to new things.

It seems like ever since I returned to Kauai, I’ve watched business after business close up shop. Many of the local businesses still operating are still struggling more than ever. These businesses are family owned and operated and have been gone through multiple generations. When asked why sales are so poor, they always cite outside sources; Costco, Wal-mart, K-mart, Safeway, the economy, etc. How can they compete with these big box stores with huge national financial backing?

I hate to see businesses struggling. I feel that there is always room for everybody to enjoy success. What frustrates me though, is the inflexibility and just lack of basic business decisions that need to be made. There are ways to thrive in a competitive business environment. I understand that there is always a problem of being too close to a problem and I am 100% sure that this is the case for these local companies. Here are the four major things I see wrong with most locally owned businesses on Kauai.

1. Value Proposition - This is the most important, but often over looked concept in business. What makes your business different from all the other businesses in the market? What makes your store unique. When I look at many local businesses that are competing with mainland stores, I can’t see any clearly defined value proposition. They are all attempting to do exactly the same thing as the big guys, offering a little bit of everything, trying to capture the largest market share by offering something for everybody. What these companies should be doing is coming up with a unique value prop that compels shoppers to at least give it a try. If you can’t say clearly and succinctly in one sentence, what makes your business unique and better from your competitors, you don’t have a strong enough value proposition. If you can’t come up with why people should shop with you, why should they shop with you?

2. Define what you are competing on and stick to it - There are only three factors a business can compete on, 1. Price 2. Convenience 3. Quality. Examples of businesses who stick to these factors are Wal-Mart (price), McDonalds (convenience), Mercedes (Quality). The mistake I see many local businesses doing is trying to compete on the wrong factor.

The approach of all big box stores are to compete on price (or the illusion of price). They undercut the competition because they know that price is easily quantifiable to everyone. This is cheaper than this therefore I should shop there. The response by many local businesses is totally wrong, either a) they try to compete on price because that’s what the big guys are doing and get killed or b) they do nothing and get killed. No small local business should be trying to compete on price against a company who is better financially backed and can play with economies of scale. They should instead focus their efforts on convenience (delivery services, helping you to your car, personal shoppers, pick up service etc) or quality, (best quality products or services, do not carry anything that is not the best). Quality and Convenience can in some cases be the same thing so smaller businesses would be wise to focus on that.

3. Define your ideal customer – By attempting to be everything to everyone, you end up serving no one. Local businesses need to clearly define their target customer and do everything they can to market, and provide services and products that are relevant to them. Making changes to try to attract a larger market share is counter productive because you will lose your existing customer base which has been supporting you. Focus on that base and increase your service to them.

Defining your ideal customer is so key because not only will you know how to provide for them, you will be able to cut significant costs by eliminating products and services that they are not interested in. A great example of this Papaya’s Natural Foods. You will not see steroid and antibiotic infused beef at Papaya’s even if it is cheaper. Sure the economy may be hitting them as well, but I bet not as hard as other stores who do not have a clear picture of their customers.

4. Care – Caring about your customer is the single most underrated business principle lost on business on Kauai. Caring doesn’t just mean doing sales and specials. Caring means going above and beyond the expectations of your customers. Caring means giving your customers every reason to give you their business.

One of my favorite local businesses in Hawaii that I feel does a tremendous job with caring for their customer is KTA Superstores on the Big Island. They are the one local store on a neighbor island who has been able to deflect any outside intrusion from mainland or outer island encroachment. They are still the busiest grocery store on the island by far even though Safeway, Walmart, Costco, have all moved in to try to steal their market share. How are they succeeding when everyone else is failing? Not on price, their products are more expensive than most other places. They just care more than the other guys.

They created a brand called Mountain Apple brand which is a KTA exclusive brand which buys and sells products all grown or produced on the Big Island. When you buy a Mountain Apple Brand product, you are supporting the local island economy. Where do you think everyone and their relatives who provide goods for Mountain Apple Brand are shopping?  KTA offers a grocery delivery service that drops off groceries to senior citizens who can no longer drive (I’m not sure if they still offer this service). Derek Kurisu, VP of KTA, hosts a show on Public Access where he goes around the island showcasing individuals and businesses in the community. In fact it’s not uncommon to see Derek walking around the aisles of KTA saying hello to everyone shopping their and thanking them for their business. It would be easy for him to say he is too busy for this, he has a million things to do, but to him, showing his appreciation is just as important as anything else he has to do that day. All of this might sound like smart marketing which it is, but it boils down to one thing; CARING. They just care more and that is why they can’t be touched on the Big Island. Care about your customers and they will care about you. Simple but almost always overlooked.

I hope that many of the businesses here on Kauai will be able survive this current economic downturn. When it comes down to it, the companies who can recognize these things and implement change are the ones who will set themselves up to be successful in the long run. The marketplace is constantly changing the having the ability to adapt and grow instead of being stuck in the old ways is essential today more than ever.

Sanjay Jha Co-CEO of Motorola

When I discovered a month ago that Verizon Wireless was getting an Android device by the end of the year, I became very excited. I had been sitting on a contract renewal for some time now but did not want to renew just yet because there really weren’t any cool phones available from Verizon. Historically, Verizon has always had the lamest phones of any major carrier but almost everyone on Kauai has Verizon so it is so hard to give up that free In-Network calling. I started digging up as much information about it as possible and learned that it was Motorola that would be putting out the phone. Along with all the info about the Sholes, now called the Droid, I kept reading similar stories about how Motorola is now positioned to regain its prominence it had lost since they released the insanely popular RAZR and that it was all due to their new CEO Sanjay Jha.

Being someone who a) is obsessed with almost all things business and b) someone obsessed with obtaining this new Motorola phone, I started digging for info about Mr. Jha and I can honestly say that while he is one of (if not the #1) the highest paid CEOs in the nation, he is looking to be worth everything his is earning. Here is what I like about his leadership style:

1. He can read through the BS - When Mr. Jha first came aboard as CEO of Motorola’s Handheld division, he had meetings with his top executives and asked them to give presentations of what they thought was wrong with the company. What he deduced from all the fluff and finger pointing were that the leadership were the problem. He quickly did away with the hierarchical company structure of separate departments and department executives and created central groups for engineering, marketing, product management, planning, etc coupled with council groups which would work out the problems. Without a department head, there is no “one throat to choke” if something goes wrong, this lead to everyone working harder for each other and striving for the same goal instead of inter-department competition.

2. He’s not afraid to pull the trigger - Mr. Jha has only been with Motorola for a little over a year, yet he has made numerous company changing decisions. Almost all of them hard decisions and most other persons in his position would shy away from to defer blame if something were to go wrong. He realized that Motorola had lost focus, they had a hit phone with the RAZR years ago but the company was now inundated with phones that were either using technology that would be gone in a few years or phones that consumers just didn’t want. He cut Motorola’s entire Symbian (Nokia OS) line and all their outside contractors. When Microsoft failed to deliver changes to their mobile OS, he put all his chips into Google’s Android platform. Many of these decisions lead to massive losses earlier this year but he understands that when your company is in survival mode, you need to cut the fat. Since then, Motorola posted better than expected earning in the 3rd quarter and is in potion to make a more noticeable comeback post holiday season.

3. He makes his decisions with logic and reason - When deciding which processor chip to use in the Droid, Mr. Jha had the choice between the chip his team developed during his time at Qualcomm, or the faster TI OMAP. He chose the OMAP despite the fact he still had many close friends and colleagues at Qualcomm. The same logic applied to firing excess staff. If there were no future in those phones, the company could not afford to keep them on board. Many people will often choose to make the emotional decision rather than the logical one because its simply easier. Though easier, its often not the right choice.

4. He hits his benchmarks - When he came aboard Motorola, Mr. Jha knew his company needed a product that could compete with the iPhone or it would not even stand a chance in the coming years. He set out to deliver two smart phones that could do just that by Christmas of 09. With the recent launch of the CLIQ on T-Mobile and the upcoming DROID release on Verizon, he has delivered on schedule. This shows how effective he has been in getting his team to execute efficiently and effectively.

It is extremely rare that I admire anyone in corporate America. I usually consider them overpaid and incapable but Sanjay Jha has joined a very small group of CEOs that I openly admire. I think he has done a phenomenal job in turning around Motorola not only in terms of getting new exciting phones out but also creating a company culture that is key to the long term success of the business

Will the DROID save Motorola? No one can really say for sure until it is all done, Sanjay Jha has gone all in with the bet and the future for Motorola hasn’t looked this promising in years.

References:

NY Times – Strategy of new Chief at Motorola Appears Posed to Pay Off

NY Times – How Sanjay Jha Overhauled Motorola’s Culture

Business Week – Motorola’s Promising Comeback

When this qualifies as a business trip, you know you’re doing something pretty cool.

Being that today is Mother’s day, I came up with an idea for a way for a flower shop business to increase their yearly revenues.

Offer a subscription service targeted at men that reserve flowers for them for all important dates. Standard package would include, Valentines Day, Mothers Day, for additional fees birthdays, anniversaries, etc. The payment is a yearly subscription and will guarantee that there will be a flower arrangement available for each subscriber at a significant discount on these dates. The customer can either set the service to pickup or delivery (additional costs) and will automatically be sent an e-mail notification on or prior to these dates.

This is beneficial to the customer because a large number of men forget about these dates and are usually scrambling last minute to get flowers or hate buying flowers because it makes them feel unmanly. This way, it removes the duty of remembering the flowers for these dates and removes the unmanliness  of have to call the flower shop 3-4 times a year.

For the shop owner, this is cash on hand at the beginning of the year which can be used to budget recurring expenses. Also because flowers are a perishable inventory, this lets them know that at least a portion of the inventory will move regularly because of  these dates. Also, by offering different packages you may be able to upsell flowers for holidays that these men would not normally buy flowers for. Easter, Girl’s day, etc.

For a flower business to make this work however, would require a few things. 1. Their flower arrangements must exceed expectations of the customer. 2. The owner must make sure that the have those flowers available for their subscribers. This requires excellent record keeping and will probably need to find or create a software to track subscriptions and dates. 3. The shop owner must treat the subscription money accordingly and keep reserves to order flowers for the subscribers at each of their days.

Flowers are an experience product. As the flower shop owners, you are presenting an experience to your customer that they can in turn present to their loved one.  What determines a positive or negative experience is success or failure to exceed expectations.

Them: So what do you do again?

Me: My partners and I run a website where we teach people how to play the ukulele online. We have around 7500 registered members now and get like 20k uniques a month. Not great but it’s a pretty good start considering we started with $300 and spent no money on advertising.

Them: Oh wow, so all those people pay to use your site?

Me: No, we give away all the content for free

Them: … How do you make money then?

Me: Well there’s a lot of ways, we sell ads, we have an online store… We focus on diversifying our income streams so we’re not dependent on one area of our business.  Right now we’re mainly focused on building our brand equity though.

Them: Why don’t you charge your members?

Me: Because that’s not how you do it online anymore.

Them: I don’t get it…

I think I go through some version of this conversation monthly when someone who is not familiar with the internet asks me what I do. Every once in a while,  a guy or girl will just come out and tell me, “You know, you should be charging for your content on Ukulele Underground.”  I usually just agree with them rather than objecting. The truth is, I don’t believe in that method of monitizing content online, I believe that business model is outdated and a thing of the 90s. When I say that method, I’m talking about locking down content in a paid subscription sort of way. In today’s market, especially when dealing with smart, younger, savvy users, you simply can’t do it. Here are my reasons.

1. People my age and younger who have grown up with the internet grew up with the concept that content on the internet is free. We grew up with the original Napster, these younger kids are pros at bitTorrent and file sharing services like mediafile. The technology and the services available today make sharing content easier than ever. If there is something these kids want to find online they will be able to find it. So why even attempt to charge them, they’re going to pirate it anyways. What makes it even worse is that there will be people who will pay for your content, and when they find out that others are obtaining it for free, they will feel slighted and cheated even if they did things the  right way. Just knowing that, I wouldn’t be able to sleep well at night.

2. Free content leads to faster growth. By leaving your content free and unlocked, you facilitate word of mouth marketing and your users will do your advertising for you. Now, for this method to work, your content will need to be legit but if you pump out good quality stuff regularly, they’ll keep coming back and they will bring their friends. If you instead decided to lock down your content from the start, you create a barrier of entry to your content that most visitors will not bother breaking. This goes back to my previous post about how online trust must be earned. If you give visitors no reason to trust you, chances are they won’t and won’t come back.

3. If your stuff is good, people will still buy it later anyways if it’s packaged correctly. On paper doesn’t make any sense at all. Why would anyone buy something that you can easily get online for free? Well the truth is, people do buy it.  They buy it because they think your content is awesome and want to support you, they buy it for gifts for their friends and family, they buy it as collectors items. Whatever their reasoning, people do buy content that they have access to online, even if they’ve already read or watched it. I’ve done so myself in the past.  The idea that if you give something away for free, noone will pay for it later just simply isnt true. We get tons of e-mails asking us if we’re ever going to put our lessons on DVD because people want to buy them. We probably will do this sometime in the near future.

At the end of the day, the fact that the vast majority of the people I interact with don’t get what we’re doing is great. Let them think I’m clueless and an idiot for giving away this stuff for free. My partners and I get it, and we’ll have the advantage and head start while they try to figure it out.

Ukuleleunderground.com has given me the opportunity to meet and befriend so many amazing people throughout the world. I always take some time everyday to think about just how fortunate I am to have made so many new friends within the past year. One of these new friends is a man named Mike Hater from Nashville Indiana. Mike is an amazingly interesting person. He has described himself to me on more than one occasion as a hillbilly.  His youtube channel is filled with videos of him tending to his bee hives, or sitting on old tractors drinking moonshine and strumming an ukulele.

Mike recently found himself out of work and decided it was time to start his own Ukulele Company which he named Mainland Ukes.  Having worked in the industry and been an avid player of the ukulele, it seems like a logical progression. For all I know this is his first foray into entrepreneurialism but he has done so many things right so far it seems as if he has been launching businesses his whole life. Crazy thing is, I don’t think much of it is pre-meditated or planned at all. He just does these things because it makes sense to him.  He’s doing things that so many larger companies who are stuck in their ways will never understand. Mike is 42 years old and does not even own a cell phone, yet he understands how to use the internet for business better than 99% of the people I’ve ever personally talked to. Whether he knows it or not, his business should be studied on how to launch a business with limited capital in the 21st century using the internet.  Let me break down what he’s doing and why he is bound to succeed.

1. He is a part of his business’s community – Mike is an avid ukulele player. He’s worked in the industry helping put them together. He loves playing them. Because of the fact that he already has a passion for the ukulele, he joins internet forums about ukuleles and talks to any other enthusiasts all over the world. He joined the UU forums over 1 year ago, way before starting an ukulele company was even a thought in his mind.  Because of this, Mike, or Hoosierhiver as he’s known everywhere online already has some personal brand equity. People know him and when they found out he started a uke company, they checked it out.

Why is this important? There are billions of websites online. Billions of people trying to convince you to give them your hard earned money on the internet. Who do you trust? How do you know if it’s a scam or not? These days a website is simply not enough. So many people make the mistake of thinking that launching a website is the end all be all of web marketing. You could not be more off the mark. Getting in the trenches, interacting with your potential customers, is the fastest way to gain trust online. You need to give your customers as many ways to reach you as possible. They don’t want to talk to an answering machine or a secretary, they want you.  Trust is not something that should be expected, it needs to be earned.  Because Mike was in the trenches, sharing info, befriending other uke players from around the world, when he announced that he started his new company, he already had a few people that were willing to give his ukulels a shot sight unseen.

2. He has a great product – New ukulele companies seem to be popping up all over the place. Not only that, guitar makers like Fender are now seeing an opportunity to cash in on a growing niche market and are putting out ukuleles of their own. One might look at the marketplace and see oversaturation. So many of these ukuleles are being made overseas, why create another line that is just going to get lost in the crowd?

Mike has an advantage. Because he is a part of the ukulele community, he knows what a good ukulele should sound like and what features ukulele players are impressed by. His ukuleles feature things like high quality covered geared tuners, and real bone nut and saddle. He strings them stock with a more expensive brand of strings. Theses are features that help make his ukulele look and sound better than most other ukes at his price points. When those early adopters who purchased his ukes got them in the mail, they were all blown away by the quality of what they had just purchased. What happens when expectations are exceeded? They all came back into the forum singing praises for these Mainland Ukes  they got from Mike. This lead to more sales from more members. Word of mouth marketing is the most powerful form of marketing, it’s free and spreads like wildfire.  To start that fire, you need to have a solid quality product that exceeds expectations.

3. He Sponsors the Longtail - Advertising online is still a mystery for many businesses. Many fail to see the value in it especially if they are coming from traditional media outlets. The numbers for online viewership are almost always smaller than TV and Radio. Conventional wisdom would say, why even bother?

Before he even launched his company, Mike was e-mailing us saying he wanted to purchase advertising on ukuleleunderground.com. He understood that for his market, there was no better way to reach his potential customers and that ROI for his advertising dollar was highest sponsoring a site like ours. When you sponsor the longtail in your industry, you’re essentially piggybacking on existing brand equity. You create brand awareness and in most cases online, if you sponsor a company that has a strong connection to their visitors, people who see your ad will at least check out what you have to offer. It’s why I personally have tried Sweet Leaf Tea, why I’ve used godaddy to register my domains even though there are cheaper alternatives, why I tried netflix, why I signed up for Raffstar, the list goes on and on. Sponsoring the longtail is a shortcut to building your own company’s brand equity.

4. He didn’t give up - When Mike decided he was going for it and was going to start his ukulele company, he e-mailed us to ask if he could advertise with us and that he wanted to work with us to create a signature ukulele model. His e-mail was ignored. At UU we have a strict policy on who we let advertise on our website. We feel that if we vouch for these companies, then they better bring straight thunder to our visitors and members. We turn down many advertising solicitations because we feel their company would not benefit our members, most usually never get back to us.

Mike was different. He e-mailed again asking the same thing, in fact I think he e-mailed a few times before we finally got back to him.  Always polite but on point. We told him that we were working with another company to create our signature ukulele. He left the door open for us if we ever wanted to take him up on that offer. We eventually allowed him to purchased some advertising and he sent us an ukulele to give away and for us to take a look at what his company was producing.  When we got the ukulele, we were blown away by all the features he was offering. Once again his product exceeded the customers expectations. After a quick meeting it was decided that we needed to be selling his ukuleles in our store and that Mainland Ukes was the company to make our signature ukulele as our previous deal had fallen through.  We added Mike’s ukuleles to our store today and will begin marketing them heavily in the weeks to come. He’s happy and we’re extremely happy with the arrangement as well.  All this because he refused to take ‘No’ for an answer and was professional about it. In business, especially when you first get started, you’ll face rejection a LOT. It can be soul crushing but never giving up is more than half the battle.

Where does Mike stand now? Well he officially been in business for less than a month and he’s already having to place a reorder for his instruments because he is starting to run low. If he continues to create quality products and deliver quality service, there is no doubt in my mind his company will only become bigger and more profitable as time goes on.

Links:

Check out Mainland Ukes and say hi to Mike