Monthly Archives: April 2011

How I made AppSumo a lot of money through emails

Two quick background stories then I’ll show how some clever writing made AppSumo an ass-ton of money:

———QUICK BACKGROUND STORY 1———

This guy, Noah Kagan is one of my close friends.  He was something like employee number 30 at Facebook and employee number 3 at Mint.com, then started a bunch of other companies.

His new thaang is AppSumo.com which is like “Daily Deals for Geeks”.  It’s like Groupon but for nerds like me.

Well recently Noah moved back to Austin, and he gets bored running his $(he-won’t-let-me-release-his-revenue-but-it’s-really-good) company from home, so he scooters on over to my place to work.

We sit around, work, geek out….and for some reason on Fridays we have a weekly tradition of drinking while we work.  It’s nerd heaven.

Whatever.

On to the next piece of this puzzle:

—————–

——————————

——————————————-

————————————————————

———QUICK BACKGROUND STORY 2———

Roughly 9 or 12 months ago I started taking a deep interest in copy writing.

Copy writing is the “art” of writing…..copy (aka WORDS).

Basically copy writing is used to “sell stuff better”.

Naturally this interests me since I:

1.) Write a lot (hence this blog).

2.) Own an online rave company that persuades people to buy stuff.

It was weird because I was staying up sometimes till 6am reading about this stuff and taking notes.  It somehow just….gelled with me.  I started reading everything I could about copy writing…and essentially bought every book I could about it.

I took notes.

I re-read things.

I re-read my own notes.

All the concepts all the gurus talked about were the EXACT OPPOSITE of what I was doing in my own business…so this angered and intrigued me.

I quickly remembered a sort-of-relatable quote about why so many people fail at losing weight:

“Reading about sit-ups, is not DOING sit-ups”

So with this guilt trip in my head, I decided to implement some of this copy writing junk…even though it was 100% the opposite thing I’d been doing with HouseOfRave.com.

To my utter-shock-surprise the first time I implemented all the copy writing rules I learned….the email blast I sent out pretty much sold out my inventory in two hours.

You can see the exact email I sent out that did this (warning: it’s password protected, so follow the instructions to get the el passwordo).

Fan-freakin-tastic for me eh?

Now let’s move on……

—————–

——————————

——————————————-

————————————————————

———LET’S TIE THOSE TWO STORIES TOGETHER———

So one day Noah’s geeking out at my place, and I get an email from AppSumo for some deal they were running.

It was a Grasshopper.com $100 credit or something like that…and I wanted it.

However I was blatantly disappointed by the email saying simply:

“$100 Credit for GrassHopper.com, the phone system for entrepreneurs!”

AppSumo was still selling a TON of the deals with this format…but after all my intensive copy writing studying, this type of short email seemed like an egregious injustice to AppSumo AND the email reader.

Naturally I yelled at Noah saying, “Dude….I bet a lot of people don’t realize the true value of Grasshopper….why don’t you EXPLAIN what it can DO FOR THE USER, then offer them the $100 off?”

Noah agreed.

I further started showing him the structure of good sales copy, and “How I could TOOOTTALLY do better.”

He put me up to it.

I actually WANTED to do some of the emails in exchange for collecting the performance data.  Where else could I test out several emails a week to 50,000 people?

Anywhozit….I started preparing the emails 2 days before each deal came out, and….

HERE’S WHAT HAPPENED:

The first deal was something of a crappy deal.  Now I don’t mean it was a BAD deal….but it was going to SELL CRAPPY because it was extremely niche based.  It was a deal for a service that sends you 4 sets of matched fonts per month.

Now NO ONE BUT HARDCORE DESIGN NERDS would buy this….in fact, they all know you can get thousands of fonts online for free.  This was a carefully curated collection of fonts, and only hardcore graphics designers would buy something like that….to make it an even harder sell, it was a lifetime membership costing something like $125.

With the old AppSumo email style, this deal had no chance of stellar sales.

But then Enter Copy-Writing-Minded-Neville:

I quickly realized a VERY specific deal would exclude tens of thousands of people in this case…so I tried applying copy writing techniques to neutralize that.  Basically, being open and honest about it.

It started out like this:

If the names “Lucida Sans Unicode” or “Courier New” don’t mean anything to you, go ahead and close this message.

You see my friend, today we’re reaching out only to the community of people known as font whores.

You know who you are!

If your knees go weak when I whisper, “GARAMOND.”
…you might be one of em.

Right off the bat this doesn’t necessarily sound like a typical marketing message.  In fact, it’s mildly offensive and quite sexually suggestive.

But you know what….PEOPLE READ IT.

People emailed us back saying the email had NOTHING to do with their line of work, but they still enjoyed reading the email.

We also got people saying they HATED the email and that it was misogynistic and (insert more whiny-bitch-complainer examples)…..you get the point.

SO THEN WHAT HAPPENED??

To Noah’s surprise, this particular deal TOOK OFF!  It was like one of those movies where the ugly girl puts on some makeup, let’s her hair down and wears a gown and is suddenly hot.

So what did this mean?

It means I just made AppSumo a bunch of MONAAAY!!:

Hooray right?  I just made SOMEONE ELSE a bunch of money!

So that was pretty damn cool.  We turned the ugly girl into the “belle of the ball” with the power of of the pen.

Naturally the Chief Sumo wanted me to do the next email, then the next, then the next etc….

Some funny things happened in the next few email send-outs:

  • Every email did EXCEEDINGLY well compared to past emails. Only difference: Good copy.
  • The emails did piss off a small subsection of people, and the unsubscribe rates went up 1% on certain emails.  1% is actually BELOW industry standards…so we’re all good.
  • We got people saying they LOVED reading the emails and how cool they were.
  • We got some people saying they LOATHED the emails (these for the most part were whiny-bitch-complainers who never bought anything anyway).
  • One of the emails (that I spent a lot of time on) got the HIGHEST CONVERSION RATE EVER for any AppSumo email…..or ANY email I’ve ever heard of in my life.  A normal “good-converting” email is usually at 1% conversion (meaning 1% of the people it goes to actually BUY something directly from that email).  This particular email had over 10% conversion. If you understand what I’m talking about, that’s INCREDIBLE.

So that’s how I made AppSumo a ton of moolah….and learned something in the process.

I should teach a class on this stuff…..

Fringe benefits of owning a blog: Interviews

Haha…today I was awoken by a phone call from a reporter in Montreal about Car2Go.   Apparently he was searching for people who had used the cars frequently and could talk about them from experience.

Unfortunately only Hamburg and Ulm Germany are the other places besides Austin that have had Car2Go for over a year…so his only English-speaking and time-zone-similar place to call was Austin.

So he did some basic searching and found…me!

So after a 10 minute interview or so…he said I would be on the radio broadcasting to all of Montreal how cool Car2Go is!  I’ll try to find the clip at some point…

It’s one of those funny side benefits of posting random stuff on a blog :-)

It kind of reminded me about the random call I got to speak to poor people in Sierra Leon (and accidentally pissed one of them off)!

Gary Halbert’s Hamburger

There’s no better way to demonstrate this concept than it’s original form, so I won’t change it whatsoever.

But I wanted to further ingrain this concept in my head, so I physically wrote it out.

This is an excerpt from one of the Gary Halbert Letters I’m so very fond of.


Questions from Behind The Scenes

I answered a couple of questions in the Behind The Scenes course today.  Here were some of the Q/A’s:

————————————————————————-

Q: Do you write up a contract for the supplier? How exactly do you negotiate or work out the details?
A: Almost every time I’ve started a small business, I’ve NEVER STARTED with a contract.  Later down the line if there’s hundreds of
thousands of dollars in revenue at stake, it might be a good idea to get a contract written up.
BONUS PART OF THIS QUESTION:
Getting a contract written up DOES NOT ALWAYS REQUIRE A LAWYER.  In fact, don’t bother “law’ing it up” with legal jargon bullshit.  Simply write a few sentences down on a sheet of paper that both of you agree to and sign it.  It really can be that simple.
An even more powerful method is to hold the contract up on video, then both verbally agree to it on video and state you understand….but a few-sentenced, simple agreement on a sheet of paper with both your signatures will suffice most of the time.
I’ve known people who have official law-binding contracts written on a napkin.  No kidding.
————————————————————————-
Q: When House of Rave first began, were you stuck with only occasional sales for a long time, or were you able to make a respectable side income from the start?
A: For a short while it was pretty small…I’d just started college when it started making money, and it was maybe $500/month (which honestly is A LOT for a college student).  About a year later it started making $1,000+/month (sometimes 2K or 3K or more depending on the month)….enough money to actually survive on.  However it was quickly a pretty respectable “side-income” for sure.  Relatively little work input to keep it going, and a decent income from it.
Let’s just say I never had money issues in college thanks in part to House Of Rave.
————————————————————————-
Q: How do you keep track of price and stock changes from the supplier? What if the supplier stops distributing a few of your products? Or if they make a dramatic price change?
A: For the most part they don’t change prices that often.  In the past I’ve had them notify me of major price changes, so that solves the problem.  But even if they don’t, I’ll see the price change in the first person that orders that product.  I’ll notice I sold something for $50,  but the supplier is charging $59 for it.  I’ll make the correction with only a very minimal loss (and usually it’s not a loss, it’s just “less profit”).
It’s usually not that big of a deal when something changes in price, as the price difference is often pretty small (or often in my favor because it’s LESS)!
And yes, sometimes best-selling products are discontinued.  Generally this is because the manufacturer stops making them, so even if my supplier WANTS to keep selling them, they can’t….simply because no one makes them anymore.  It’s just part of the business that you deal with.  Sometimes they can get the product from another source, sometimes they can’t.
New products always come along.
————————————————————————-
Q: Hi Neville, Could you give a short explanation/suggestion about the product returns? I’m curious as to
what customers do if things don’t work or they don’t want the product. I’m considering selling internet
radios, which I imagine some customers might complain it’s too complicated, doesn’t work, damaged in
shipping, etc. Thanks, Michael
A: Product returns are handled this way:
If something is damaged upon arrival: I notify the supplier and they immediately send out a new one to the customer.  It’s their responsibility to send out working stuff.  Generally we don’t even request the broken stuff back unless it’s REALLY expensive.
If it’s my fault: Let’s say the customer ordered BLUE and I sent GREEN….I will pay for another shipment to go out.
If someone simply wants to return something for any reason: They send it back to the supplier, and they issue me a refund, I then issue my customer a refund.
It’s usually a very SMALL percentage of people that refund stuff, and it’s also a normal “cost of doing business.”
Imagine if you bought something from a company, you didn’t like it for whatever reason, and you wanted to return it….but they didn’t let you.  You’d be SUPER pissed and probably take it up with your credit card company.
I used to be pissed everytime someone wanted a refund.  Now I simply issue the damn thing and get it over with. It actually:
1.) Makes the customer happy
2.) Is easier for you than endlessly debating WHY the customer is returning something
3.) Doesn’t actually cost that much per month to return something.
————————————————————————-
Q: Hi Neville, I really like the videos but I have a two questions for you about building an e commerce
site. 1) If I am putting a paypal sales button and people start to buy stuff- is it completely legal?
Should I have some sort of company for the receipts or whatever.. and what about taxes ? 2) Lets say
you were not in US, does that model of selling stuff could be managed outside of US? I mean do you
think I can sell stuff with a Us dropshipper to Us customers, although I am not in America-american?
Apparently I asked more than 2 questions sorry about that:) Thanks Arda
A: Hey Arda, you don’t really need to get too worried until you actually start making A LOT of money. As for being outside of America, it shouldn’t be a big problem.
Here’s basically what I’d suggest:  Just DO something to get started…who knows, it might not work at all.  However if it DOES start making a lot of money, then go properly research tax issues in your area.  If you’re making enough money to be worried, then you can probably afford to hire a CPA or lawyer to help you with this.   I started HouseOfRave with no incorporated company or anything, then LATER handled all of it when the money started coming in.
If you don’t start quick, it’s likely you’ll never start at all!
————————————————————————-
To see the videos everyone was asking questions about, you’ll need access to:

“I want to start a business but don’t know where to start”

God I’ve heard that question so many times before.

A good deal of people I know see my lifestyle:

  • No boss
  • No set working time
  • Take any day off
  • Don’t have to commute anywhere
  • Can work from any location

….and they think it’s great.  And I got admit…it ain’t bad!

Many of them realize that working 9-5 is not just 9-5, but also the night before, the morning of….so it consumes and dictates nearly your entire day, what you can do, when you go on vacation etc.

If you like your job…this isn’t really a problem, but if you don’t….yeesh.

So back to the question I get from someone who’s never started a business and now wants to after years of working:

“I want to start a business but don’t know where to start”

To burst most bubbles quickly: It’s doubtful it will happen. I’ve seen long-term working people start successful businesses only a few times. Usually the longer someone’s worked, the more likely they will not succeed.  Most people trying this are in the wrong frame of mind almost immediately. They just want to “make some money” without doing much work.

Anyhow, for this question I will try to assume the role of how I’D PERSONALLY go about starting a business with no particular business acumen.

————————–

First and foremost I’d GET MY LEARN ON.  That’s right….prepare to READ A SHIT LOAD OF STUFF.  And TAKE NOTES.  It’s like school.

Then I would try to implement what I’ve learned and make $100 from it.

That’s it.

————————–

I think those three short sentences above can teach you an immense deal about business.

The benefit of this is:
1.) It’s easy to make $100 in just about anything.
2.) Simply DOING something will very quickly show if you like it or not.
3.) Your desire to learn will be way more intense if you’re currently DOING something real….not just thinking about a hypothetical business you might build.

It is ABSOLUTELY GRATIFYING to destroy the dreams of people who say, “I want to start a business but can’t think of anything”.

Me: “What business books have you read?”

Them: “Ummmm, none.”

Me: “Have you ever written down what you like to do, what skills you have etc. on a piece of paper?  Spent a couple of hours on it?”

Them: “Hmmmmm…..not really.”

Me: “Have you sought out business people you admire and asked them to show you how their business works”

Them: “I once saw YouTube video of Bill Gates.”

Me: “So basically you’ve done NOTHING to realize your dream of starting a business?”

Sincerely,
Neville (destroyer of dreams)

P.S. Here’s some motivation to consume if you fall in that camp.
Earl Nightingale’s The Strangest Secret

Playing with BIG Amps!

A few months back I started learning how to play blues and jazz scales better to perform at a close friends wedding with my brother.

I picked up basic bass scales quickly thanks to some cool iPhone apps, and now we’re performing at the wedding TOMORROW!

It’s at one of those enormous Houston museums, so our little amplifiers won’t cut it…so we rented some big-boy equipment for the job.

Here’s a random little jam we tried out in our parents house:

Notice the GIGANTIC bass amplifier (we weren’t using it in this video) and the massive guitar amp I’m sitting on.  The amps sound so cool, wish I could steal em!

P.S. You might also notice my brother is just slightly better than me at guitar ;-)

NevBlog on Mint.com’s original marketing plan

Hahaha….perusing through some interesting reading material the other day I stumbled upon a post by Noah Kagan who formulated Mint.com’s original marketing plan and recently released it to the public.

Mint.com made a big buzz when after only two years they sold for $170,000,000 dollars…..You can see a cool speech about it here: Aaron Patzer Mint.com Speech.

Anywhozzit, I looked at the very first page of their marketing plan and who do I see?  NevBlog.com!

So what does it mean to be on the first page of a $170,000,000 marketing plan?

Unfortunately, absolutely nothing.

But it did make me smile :-)

P.S. I guess the only result of this is Noah constantly bums on my couch…running his entire AppSumo company from his MacBook Air.  I get to pick his brain, and in return he gets to eat all the bananas and cashews he wants :-)

P.P.S. On a totally random Noah-note, since I’ve been filming all these videos for the Behind The Scenes product and plan on doing more videos, I needed a camera with better video quality (but mainly better sound pickup).  I was riding on the back of Noah’s scooter to a concert he got free tix to.    So this was my first test video when I got my new Canon S95 camera…featuring Noah’s Jew-fro head:

The HoR Product Thaaang

Wow….

So remember this blog post where I timidly let everyone know I built that “How HouseOfRave Works Course“?

A friend asked, “How many would you have to sell to be happy with the results from the blog post?”

My answer was: 10

Turns out it sold a “FEW” more than that :-)

The money was a nice side effect.  But what I’m ECSTATIC about is EVERYONE…and I mean EVERYONE that has spoken with me about it (on phone or email) has been thoroughly happy with what they learned!

SO I finally finished the sales page for it.  Keep in mind, I’ve never built a sales page before so this is new to me.  It was also rather time consuming.  All the Photoshopping, re-arranging, copy writing while drinking heavily took a lot more time than I ever imagined.

I used a lot of those “cheesy internet marketing page” priciples (like making the page REALLLLLYYLY DAMMMMMNNNN LOOOOOOOONG), but I put a “Neville” twist on it so:

1.) It conveys at least some of my personality.
2.) It wouldn’t be so damn boring to make.

So without further ado <— (what does that actually mean??)
….here is the

Behind the Scenes at House Of Rave sales page

April 2011 Goals

Hmmmpph, I didn’t finish a major part of my March 2011 goals….doing my taxes.

It really doesn’t take that long, it’s just I haven’t done it (I must start having someone do these for me).  So that task has been ported over to April 2011.

I also want to finish those taxes before April 11th because I’ll be going home for a wedding which I’ll be playing guitar at (and I need to practice with my brother beforehand).

So with that, here are the April 2011 goals which sit on my desk:

Not really that big of a work load on the goals end….although this month will DEFINITELY be busy with other stuff.

Will update shortly.