Page 197 - The $100 Startup_ Reinvent the Way You Make a Living, Do What You Love

unexpectedly laid off, the shock gradually turned to relief—Erica had been
thinking about starting a service company but never had the time.

The goal was to operate a small transcription service, typing up the contents of
conference calls, interviews, and meetings for other businesses. Erica first had
the idea to provide her service in real time, attending live conferences, typing on
the fly, and delivering the contents before the end of the day. She was good at the
jobs she took under this arrangement, but there were two problems: Live
conference work was scarce, and it interfered with her child care needs.

Erica was worried about competing as a basic transcription service, since
many other companies already performed that role. Live transcription wasn’t the
best differentiator, but Erica found another: adding basic formatting and a nice-
looking layout to the transcriptions she delivered. Most competitors refused to
do any design whatsoever, making clear that their job was just to transcribe.
Many of Erica’s clients were solopreneurs or other very small businesses, and
not everyone had access to a graphic designer or layout person who could take
over after receiving a transcription. The differentiation worked; within three
months of reversing course and putting out the word that she was available,
Erica could no longer keep up and was ready to expand the team.

Then she made another key decision: not to hire employees but only hire
contractors. By building the team on a contract-only basis, she had more
flexibility to increase or downsize the numbers, depending on market needs.
This was important because of the way the industry works: From November to
May in a recent cycle, she was completely booked up and had to recruit
seventeen transcriptionists serving 180 clients, plus a virtual assistant to keep
everyone on track. But in the summertime, very few businesses need
transcription work, so the team shrinks to four people. (The contractors all
understand that the work is cyclical and future projects aren’t guaranteed.)

These days Erica manages the business without doing any actual transcription
herself. She has created a flexible structure that allows her to respond to the
market without feeling locked in or overloaded by doing it all herself. The
business experienced a testing point in the fall of 2009, when Erica’s daughter
contracted a bad case of the flu, requiring Erica to spend almost her whole time
as a caregiver for three weeks. It was hard to deal with on a personal level, she
says, but fortunately, the team was there to back her up and most of the business
clients didn’t even realize she was gone. Riley recovered, and Erica went back to
work, leaving her delayed on invoices but thankfully not delayed on actual
income. The model of team building through contractors worked.