Page 118 - The $100 Startup_ Reinvent the Way You Make a Living, Do What You Love

complaining about how long it takes to arrive, until the day—“finally”—it’s
ready to be screened for the public. Then, the studio hopes, hundreds of
thousands of filmgoers will pay their money and stream into the theater. Without
an active pre-launch campaign, the movie may be great but the odds of
commercial success are far lower.

The same principle holds true for microbusinesses. Whether a Hollywood
movie or the debut of your new sock-knitting class, launches are built primarily
through a series of regular communications with prospects and existing
customers. Just like the movie executives who release trailers over time (first a
short one, then a longer one) and the press events that Apple built up over time
with Steve Jobs at the helm (building anticipation for future products to a fever
pitch), small businesses can reproduce this cycle in their own way.*

Karol Gajda and Adam Baker, two friends with separate businesses in different
parts of the country, decided to team up for a big project. Karol had completed
an engineering degree from the University of Michigan, but never actually
worked as an engineer. He first had the idea from reading a classic ninety-year-
old marketing book called Scientific Advertising by Claude Hopkins. In the
book, Hopkins discussed “fire sales”—the old-school, “everything must go”
tactic used by furniture stores for decades. Karol didn’t have a furniture store,
but he wondered … What if we put together a modern-day fire sale, with an
emphasis on giving away a ton of value for a low price, but only for a limited
time?

Karol and Adam were both in the information publishing business, and they
quickly went to work, approaching other colleagues to participate. The pitch was
intriguing: Contribute your products to the overall mix to be sold as a group for a
low price and during a limited time. Oh, and if you help promote the offer to
your own audience of customers and followers, you’ll earn an 80 percent
commission on everything you sell. It was a good pitch, and Karol and Adam
had spent plenty of time building relationships and developing a strong
reputation for their work. Out of twenty-five requests, twenty-three people said
yes.

Packaging everything together, they ended up with a monster package valued
at a retail price of $1,054. They would sell the package for $97, less than 10
percent of the overall value and a price to which they expected customers would
respond well. The “hook” came from the fire-sale idea: The offer would be
available for only seventy-two hours—no packages would ever be sold again
after the limited time period.

The big day came, and they put the offer online. For ten minutes nothing