Our friend Jake Shimabukuro just performed at TED and received a standing ovation. TED is an exclusive idea conference where the worlds brightest minds come together to present their ideas, research, creations, talents etc. Everyone who is in the audience is a scheduled presenter. You can say that it is a small conference of geniuses (in their respected fields).

Why does this change everything for the ukulele? Many of the people there are influencers to the highest degree, let me give you an example of the type of person in the audience

http://twitter.com/BillGates/status/8916544197

I think it is highly likely for the people there to go and spread the word about what the ukulele is capable of and we may see even MORE new ukulele players out there. There’s a trend at TED to have more and more web and technology speakers and if the uke catches on in that scene, it has the chance to go viral like no other instrument ever. This goes hand in hand with the mission of Ukulele Underground, to grow the next generation of ukulele players which is why, right now, I am losing my mind thinking of the possibilities this may bring.

Jake has been the perfect ambassador for the new wave of ukulele popularity. The entire idea of customer experience is to exceed expectations. Most who have never seen Jake perform before have no idea what the Ukulele is capable of. The juxtaposition between what they think is possible, and what he then demonstrates is possible is light years apart. This leaves a typical audience with a sense of awe and opens their mind to the possibility that the ukulele is a serious instrument.

When my partners and I set out 2 years ago to create Ukulele Underground. Our mission statement was simple. We wanted to create the next generation of ukulele players. To me it’s exciting to see this very mission coming into fruition. In October, we received an email from Noah Cronin a long time member of our website and the ukulele player of the band Kolohe Kai telling us about the release of their album, ‘This is the Life’. Their song ‘Ehu Girl’ off that album is #1 on local radio all across the state.  We recently featured him and a few of his band mates in our monthly lesson.

We also have another member, Denny Kremblas who is a sponsored skateboarder who because of his love for the ukulele has artwork featuring the instrument on his signature board.

B-lo Introduces Denny Kremblas from Denny K on Vimeo.

We are receiving more and more stories like this and it’s one of the most exciting aspects of starting a business that is fueled by a clear mission statement and driven by passion. The next generation of ukulele players are all going to be from Ukulele Underground and I’m glad we got to be just a little part of their lives.

Recently Ukulele Underground lost a member of our family that was loved by a great number of people. Vincent Rooney aka Captain Google passed away on July 6th, 2009. The announcement came on the following day from a friend of his who signed up to tell us of the news. Needless to say, everyone was shocked to find out that not only was he just 19 years old when he passed, he also had been suffering from muscular dystrophy the entire time. He was always so positive and cheerful none of us even had a hint of all the things that were going on in his life.

Shortly after his passing, some of the members on Ukulele Underground got together and recorded a tribute to Vince which was just uploaded to youtube today. Organized by Seeso, one of our mods, it really shows just how lucky we are to have such amazing people be apart of our little space on the internet.

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

Though I haven’t had one yet, I can imagine growing a business is very similar to raising a child. Not so much in the physical pain experienced by the mother at birth, but in the sense of the commitment and dedication required to grow and nurture both. There an initial excitement when they’re brand new. You find yourself staring at it saying to yourself, “wow, I made that!” You devote countless, often thankless hours in the hopes you are helping them grow up right. You take pictures when they reach milestones. You worry about other people hurting them. You do your best to protect them. When they fail, you feel like you failed. All the while, you constantly are wondering if you’re doing this right.

This morning (well actually yesterday morning, it’s past 12 o’clock) around 3:45 AM I woke up and went to my computer. I don’t know why I did, I just had a feeling that something was wrong. There was a blinking IM box from Seeso in Chicago, one of our mods for UU. We had been hit hard with spam and he was trying to delete them all but he didn’t have access to some sections. We began working together, banning all the accounts that he had identified. As I banned, more registered and posted spam posts. We kept deleting more spam posts, the other mods began to chip in. I eventually upgraded the software in hopes that that would be the fix, it slowed them down, but they still were registering and posting spam all the way into the early evening. It was the largest, and worst spammer attack we’d ever experienced to date. I banned well over 50 accounts in one day.

Sure I was pissed. I was pissed at those spammers for trying to ruin the experience of the UU forum members. But never for even one second did I ever think to myself, “Man I don’t want to be doing this.” At 3:50 am all I could think about was taking care of the members and making sure they didn’t notice too much of the spam.  It was like noisy neighbors waking up a baby and the baby starts crying in the middle of the night. You’re not pissed at the baby, you’re pissed at the noisy neighbors.

I’m actually very blessed in the fact that UU has grown the way it has. I don’t consider any of the people on the site a customer. To me, they’re all family, which makes it quite difficult to explain to people who run traditional businesses. I try my best to really get to know as many of them as possible. I care about what they’re going through, and I often find myself just checking up on them on myspace or facebook, just to make sure they’re doing ok if I haven’t seen them on the site for a while. At the end of the day, it doesn’t matter though if other people get it or not. People who are a part of UU get it. There is really the feeling that we’re all in this together and we’re growing this ukulele movement as one. I’m lucky, instead of just me and my partners doing it alone, it’s more like a village raising this child. And this Baby is going to grow up to be HUGE.

Ukulele Underground was featured on the Toilet Paper Entrepreneur Blog today. As I said in the previous post, I love the book and it was an honor to be featured on the website. I did the interview a while ago and Mike decided to hold on to it until the week of his book launch. As with all interviews, it was shortened and revised by the publisher but I think it still came out pretty good. If you have some time, please check it out and leave a comment.