The 7 Day Startup Challenge Video Series

***UPDATE***

The challenge is completed and went extremely well. I generated ~$1,300 in revenue in 4 days at 38% profit. I stopped a little short of my goal because I’d proven the concept, but it clearly works well :) In the coming weeks, I’ll post a full breakdown with screenshots of everything so you guys can see.

In the meantime, take a look at these videos to watch how the challenge progressed.

ALSO: Read the comments. I got a lot of great freaking questions, and I answered many via video. Super in-depth info.

LASTLY: Please watch the AJ Leon interview at the end of the post. It’s life-changing.

DD

*******

 

Hi everyone,

I’ll be posting all the videos for the challenge in this post — so every day, I’ll link back here and you’ll find a new video. I will also post live updates here. Then, at the end of the challenge, I’ll do a synopsis with takeaways and breakdowns.

Enjoy!

 

Day 1: Finding Manufacturers, Distribution, My Objectives, Etc

Remember when watching this video that I’ve already validated my idea being that there are already people out there doing this, and the overwhelming response I got on the blog/social media. Ideally, when I actually start selling (tomorrow) I’ll be able to get a better picture of people’s objections, then tweak from there.

Day 2: Doing A Ghetto Budget, Some Projections, Initial Sales

Long day today. Found out a lot about what it will take to sell and distribute the product. Got the paypal store up in running in a matter of 3 minutes and made my first sales. Here’s exactly what I did.

Days 3 and 4: Methodology, More Sales, Success!

This was a REALLY gratifying week!

As I made it to the middle of the challenge, I realized two things:

  1. My methodology absolutely works — I was able to make a profit in a matter of days having literally NO product in hand
  2. I don’t really care to massively scale a dropshipping business. I’m using it as a fun example to show you that literally ANYTHING is possible, but I’m not going to turn it into one of my income streams because I don’t enjoy it as much as my other endeavors.

My initial goal was to make $1,000 in profit, but instead I stopped after I hit just over $1,000 in sales. Which means my profit was somewhere around $400-$500. I’ll make a detailed post in a few weeks that digs DEEP into all the statistics, with scripts that I used etc.

But above all, the most important tool I implemented was the “warm” approach to friends and contacts who I already had good relationships with.

Here’s the thing: People are so SCARED to approach their friends, family or other close contacts with a business idea in the beginning.

Why?

These people are the ones who are most likely to support you, give you feedback, testimonials and proof of concept. They will be forgiving of any initial lags in service and having early clients, even if you already know them, instills CONFIDENCE.

I found about 15 clients, all with different subscription levels, for this mini-venture…and I made it happen in less than a week. Here’s the breakdown:

My friend AJ Leon was a big inspiration for me in this project. A few years ago, he used a personalized approach to raise over $38,000 to write his first book. I took lessons from him, and applied them to this business — specifically, using Boomerang (aff link) to schedule messages to potential customers and sending them out.

Here’s a video from a mastermind I did with AJ where he breaks down the entire process of approaching “warm” contacts and pitching them, using email. I’ve never shared this video before, and usually only show it to those in my mentorship groups.

It’s a freaking HOUR-LONG MASTER CLASS in hustle, money making and ingenuity. And you get it for free….because I love you.

 

I wanted to get this update out, so I’m still working on a comprehensive post with scripts, screenshots and breakdowns. It may take me a little time to write that, as it’s super detailed.

In the meantime, what are your questions about the challenge?

What can I make more clear? What do you still want to know?

 

PS — The last week has been all about dropshipping and ecommerce.

Starting Monday, I’m doing a 2-week in depth series on freelancing, and how you can start using your skills + psychology to make thousands of dollars freelancing online or offline. All free.

Stay tuned :)

82 comments
iamcesarromero
iamcesarromero

@Justin Tan I'd love to pick your brain on ecommerce. Can we chat next week? What's your email address? Alternatively, you can email me cesar@under30experiences.com :-D 

Justin Tan
Justin Tan

Hey Dan, only just got around to watching the video with AJ Leon, it was def an eye opening video. The first thing that really struck me was how instead of asking people to fund his product, he just asked them to share. That was already worth 60 minutes of anybody's time. It's so much harder to reject a share while AJ would then have access to a much bigger crowd + the support of whoever he asked to share his product. I found that to be true genius, and if ever I did a kickstarter campaign, I would do the same.


The second thing that stood out was how he answered the question about validation. I won't lie I feel it as well and I think AJ is right in that we will never shake that feeling. The thing is I think we're (or at least I am) so conditioned to receiving a pat on the head, a signal that from others that we're doing well, that in a way we will always want it. Yet AJ's analogy of looking at our lives as one of a hero (and I love those fantasy books) who has to overcome challenges to do the right thing is a great way of thinking about it. It's getting past the doubt and "can I do it?" that separates good from great, and to become that "great hero".

georgeboyd
georgeboyd

Thanks for the interview with AJ Leon. I enjoyed it. 


Like @Brendan, I wish you had been able to execute on the original plan of hitting the $ and getting the goods to the hungry cubicle dwellers. Still, congrats on your attempt and nice segue into the use of warm networks.

Brendan
Brendan

Impressive, good job!


If you want my 2 cents, I would've liked to see you carry through the challenge to the end. Hit the $1,000 profit mark, especially if you could easily do it, as you said.


I'm not doubting you at all, but

TheDarkLlama
TheDarkLlama

Wow, that vid with AJ... that was a pretty sweet, incredibly valuable thing.  lol how do you do this?  You give away so much value for free, you're awesome!  Thanks dude.

TheAjax
TheAjax

*chuckling at the humble brags*


"Could've easily hit my mark but eeeehh, I got bored after making $500 in a matter of seconds."


coughshowoffcough >.<


On a  more serious note, this is a really awesome demonstration just from the perspective of creating an income stream. It may not particularly be your passion but it shows others a really great tool. It's not even something you did that's unobtainable, it really is for the average person to look at and either they have a way to supplement their income (immediately), or they have a way to create a legitimate income stream. Personally, it's really reassuring to see that an idea I had actually works, especially considering that it's such a new territory for me. I also have a few friends who are starting up various types of businesses who could use the info -- whether it's a tool for raising money, an idea of where to get supplies, or just how to get some initial sales going to get those first profits in -- so it's really dope stuff to share and pass along. I do have a few questions though.


Do you think this method works outside of your immediate network too? Like you used your family, then branched out into your friends, but do you think it would work as well if you were just doing cold sales in the same manner? Also, when you ship stuff to your home and then ship it out to customers, do you repackage it? I was wondering if shipping in its original box would make people just order from the manufacturer instead of you. 

David
David

Really interesting case study Daniel!


One thing I was wondering, is it possible that the business might fall over if you went to scale it outside you're immediate network? Is it possible that the people who know you are supporting you as a favour but won't become ongoing clients, or that they are not the best validation for the idea because they are giving you a hand to help you out (and might whatever the startup was?).


In the writeup I'd be really interested to hear how you might scale this if you were to turn it into a ongoing business!


Looking forward to your freelancing series too. I've been reading your articles for awhile and I think the information you provide is great, really practical and down to earth - which is quite different from many entrepreunerial type blogs!

Pavinder
Pavinder

I’m amazed at the speed you did this, Daniel.  Seriously amazed. Congratulations dude!

What you've shared makes it all sound so incredibly simple.

And I can already hear familiar voices running in my head (negative excuses, self-sabotage, disqualifying myself).  It's fascinating to notice these so rapidly, and start looking at ways to turn them around before they become even stronger.


And also tons of specific questions, which I hope you’ll be able to answer in the detailed post.

Things like:

1. Did you choose Paleo as your idea because you’d already heard people talking about it or already knew people who are really into it?  In other words was the idea almost “pre-pre-validated”? 
2. Did you just randomly call companies in the general “whole food” field and get quotes for various products and only then decide what to sell?  Or did you choose a specific product first and then go searching for a provider?
3. Without buying in bulk (and in advance), how did you negotiate a cheap enough price which allowed you to compete with much bigger competitors?  
4. How did you position yourself when selling to set yourself apart from competitors?  


Thanks again.

Benita
Benita

Nice work Daniel. Thanks to you I no longer have any excuses for being lazy! :)


On another note, I just finished reading One Simple Idea by Stephen Key and I'm just about finished with a sell sheet for a product idea. All I need now is a provisional patent before I start harassing companies. I'm so excited! Thanks so much for what you do. I never would have known that product development could actually be viable route for me if it wasn't for your blog. Now I can't wait to get home from work so I can work on my ideas. You are awesome.

FreshFaya
FreshFaya

THIS IS FUCKIN' AWESOME Daniel. Without sounding corny, but you succeeding with this is like a beacon of light for people like me, removing the excuses in my brain and realising "this shit can really be done!"


I'm sharing this startup challenge in fb and twitter, hopefully will inspire and lift up someone else too!

Tiffany Lee
Tiffany Lee

Hi Daniel.  Thanks so much for doing this challenge!! It has the wheels in my head turning...


I do have a question.  This may sound kind of lame, but what would you suggest if you don't have much of a network already in place?  To be honest, I just don't have any "warm" leads already and most of my family is..well, broke.  Can this particular model work without a pre-existing network?

A Ron
A Ron

What a shock! I was certain you would fail. Where do I sign up for the course?


I have an idea for selling bags of dog poop. My apartment complex has an abundant supply in the little green cans scattered throughout the property. I'm pretty sure I can get my friends and family to buy a few bags up front, but beyond that, I don't know. Maybe the homeless would be dumb enough to buy some to sell at intersections? Do you think that's a good model?

jaffac
jaffac

Hi Daniel,

Wondered how the 7 day startup is going.  I'm following along with keen interest!

I really want to do this exercise with my teenage kids and we have an idea in mind that would work on the subscription model.  Just have a couple of questions:

1- When contacting possible manufacturers how did you pitch them given that you didn't know what sort of numbers you would be looking at, or even when you might place your first order.  Did you just get generic prices for 500, 1,000, 5,000, 10,000 units or was there some other way you did it?  Were they able to brand the packaging the way you wanted or will you just use their 'brand'?  How did you get (and what is) their commitment on delivery?

2 - You mentioned that you launched a website and spoke to your network to get the first orders.  How did you pitch the delivery timeframe to your customers given that you want them to pay upfront (so you are not out of pocket) but knowing that you won't realistically place the order with your manufacturer until you have enough to make a bulk order.

3 - How did you ascertain at what numbers you would place your orders? i.e.: what is your bulk order number?

4 - What sort of marketing are you doing to get yourself 'out there'?

Cheers

Justin Tan
Justin Tan

Hey Dan awesome to see your second video, and good to see everything is up and running smoothly. I think most impressive part of this project is how you're doing it along side all your other work. It would actually be really cool to know how much time you spent on it per day like a few ppl mentioned below

maniaxzero
maniaxzero

Great challenge, Daniel! How were you able to find your manufacturer?

Drew24
Drew24

I'm just starting to follow along and think your 7 day challenge is very interesting.

Did you create a website for this product?

Rich20Something
Rich20Something moderator

@Brendan Hey man, sorry I deleted your other comment by accident!


Yeah, I went back and forth on this — and the simple truth was I had to decide whether I was doing this as a new revenue stream, or as a demonstration. Since keeping up with clients and subscriptions to this service doesn't completely mesh with the other things I'm doing, I opted to keep the number lower because that way it won't interfere with my other projects. But I think that ~$1,300 revenue in a week is pretty respectable for a completely foreign industry with no product in hand, and certainly proof of concept :)


DD

Rich20Something
Rich20Something moderator

@TheDarkLlama My pleasure, amigo. And thanks so much for reading. Anything I can ever do to help, just let me know!

Rich20Something
Rich20Something moderator

@TheAjax @TheAjax Lol you're killing me. It wasn't a matter of seconds, it was a few (~5) hours over several days!!


I made you a little video — it's posting to the comments weird, so just click the play button...should work! Hope you're doing well :)

Rich20Something
Rich20Something moderator

@Benita Thank YOU for actually taking yourself seriously and believing in yourself. YOU are the awesome one.


But BTW, I just screenshotted this and sent it to Stephen. He'll be happy to have helped :)


DD

Justin Tan
Justin Tan

@Benita Hey Benita, how was One Simple Idea? I've heard a lot of good reviews on it and was thinking about reading it. Also what are you working on? It would be awesome to see and hear what other people are up to as well!

FreshFaya
FreshFaya

Would like you to cover how you specifically narrowed down and specifically chose this paleo lunch idea to run with, i know you're gonna do a big post to cover everything, just wanna get this to you so you include it please? thanks

George
George

@Tiffany Lee This is what I wanted to ask as well.  I've only ever earned minimum wage or little better at the jobs I've held in my life, and so my network is more people like me--extremely low income.  I don't have warm contacts of people who are more business-minded like your network, Daniel--I don't know people who own or manage businesses, who can make these kinds of purchasing decisions.

Rich20Something
Rich20Something moderator

@A Ron LOL thanks for the vote of confidence? :)


No course yet.


The dog poop. Could be interesting. How would you validate? 

Rich20Something
Rich20Something moderator

@jaffac Hey man, I dropped you a video to walk through my thoughts on the questions above :) Hope it helps! I encourage you to try this with your kids. I think it will work REALLY well :)


Will upload it shortly!

Rich20Something
Rich20Something moderator

@Justin Tan A few hours, actually. It really helped that these were already "warm" contacts. I didn't need to spend hours prepping to sell them. They were already people I was comfortable with, so the approach was very casual and natural. :)

Rich20Something
Rich20Something moderator

@Drew24 Hey Drew! Yeah, I did, but didn't end up needing it becuase I was able to accomplish my goals by simply networking with people I already had relationships with. Family, friends, college buddies...easy sell, no need to prove my worth to them with a fancy website. Very cool.

Justin Tan
Justin Tan

@Rich20Something  Hey Daniel great job on completing the challenge! Ultimately you proved how simple it can be to start a company and be profitable right from the off, there really isn't very much excuse for the rest of us!! With that said, I'm guessing you have tons to balance between Rich20, your mentorship groups and other projects. How do you choose what to do and what not to do?

TheAjax
TheAjax

@Rich20Something 


You made a video for me. *lip wobbles* More than just answering the questions it's been hard lately. That made me smile. lol. My friends aren't even that thoughtful but I honestly appreciate you taking the time to be so down to earth. I'm a G though so I'm gonna reign in all this smiling and laughter and what not.


I've been considering using LinkedIn as a means of contact and selling but I kind of pulled back on it because I wasn't sure if that was a good method. It's great to have that reassurance as well as an alternative method. Also, that whole branding thing is what I was getting at! In my head, I thought people would order from your site and then they'd get a package from "Company XYZ" and then they'd associate the purchase with the company on the box. That's pretty dope how that works though. You get the ease of shipping but also become a point of reference with the brand recognition.


I don't think I have anymore questions. I'm definitely gonna jack your swagger and see if I can create similar resul -- I mean! I'm just...borrowing your insight for a little while.

Pavinder
Pavinder

@Rich20Something @Pavinder

Hey Daniel,

Thanks so much for this and all the other video responses - it’s really helpful when you explain how down to earth, common sense  and simple some of the stuff you did is, when at first glance your results sound quite intimidating.

One thing I realise I’m still not clear on is the product itself - as far as I can tell, you’ve bought a bunch of different whole food products (snacks, bars etc) which people wouldn’t find in their regular local shops, and are then splitting them up into random mixed assortments, and you then ship this to customers.

Does that mean there’s no branding (other than labels on the individual bars), and customers will simply receive a variety of bars in a plain cardboard box?  How important is presentation in all this, especially when you go beyond immediate family customers?

Benita
Benita

@Justin Tan Hey Justin, I found the book to be very informative. It basically outlines how to find a simple but innovative idea, how to protect that idea without having to spend lots of money on a full patent, how to pitch your idea to companies, and finally how to negotiate a licensing agreement. There are lots of details and examples and he even provides a link to his directory of companies that are actively looking for outside ideas. I think it's definitely worth a read. Even though I haven't licensed anything yet, his tips have made me become more aware of how current products, especially products that have gone unchanged for a long time, can be updated or improved and I've also started to notice small everyday "problems" that are just waiting for a simple innovative solution. I would tell you what I'm working on, but one of Stephen Key's biggest tips is to not publicize your ideas, especially before they're fully developed and without at least a pending patent. I'm not saying you would steal my idea lol...just trying to be cautious!  We can chat if you'd be willing to sign a non-disclosure agreement :)

A Ron
A Ron

@Rich20Something @A Ron You gotta have at least one old, cynical, asshole detractor in the crowd, right?


Anyway, I'm re-thinking the dog poop idea. I'd look weird taking stuff out of the green canisters wearing giant yellow rubber gloves. My neighbors would probably call the cops.


Seriously though, thanks for your courage and congratulations on the success, to each and all, and all that are good...I lost my train of thought.

Justin Tan
Justin Tan

@Rich20Something @Justin Tan Hey Dan yea I thin it makes it a lot easier when the contacts are already warm, and more importantly, receptive and willing to support your ideas. I used to face the same issue a lot as well, but honestly talking to these people not only allow for quick "wins" to boost revenue and confidence, but also opens a lot of doors to potential new clients as well. It's something I used to struggle with (still do sometimes as I come from a family business background), but honestly one of the best things that can be done!

Rich20Something
Rich20Something moderator

@TheAjax Steal away. That's what I'm here for. And as always, thanks for being so cool and contributing. I truly appreciate you :)

Rich20Something
Rich20Something moderator

@Pavinder @Rich20Something Essentially yes, it is a mixed assortment.


To spice it up, I may print something out with some details/a little "origin" story on where each brand came from, and what's in everything.


I may also include recipes. Could even include a hand signed thank you note.


To make things look nice, I'd get a a simple box, tie everything together inside with  a ribbon (where the thank you note would be snugly placed as well), then seal up the box. 


I may have some stickers printed with a logo, then place one squarely in the center on the outside of the box.


Materials would end up costing a little bit more, but it's a one time expense, and would increase the perceived value. Then, as we make more $$, increase the quality of the packaging. 


:)

Justin Tan
Justin Tan

@Benita @Justin Tan  hey Benita, it's awesome that found an idea that might work, I completely understand not sharing it, don't worry! Personally I like to make sure everything is as solid as possible before announcing ideas as well just to avoid the embarrassment or disappointment caused if things don't work out.


I agree though, there are a lot of problems out there that just need slight innovating to work. I have a friend's friend who originally came up with the idea to rent out smartphone to tourists at the airport so they could have internet when travelling. Although it seemed like he solved a problem it wasn't enough. Instead he was a bit innovative and chose to rent the smartphones out to tourists at hotels instead of airports. This created a triple win situation, a win for tourists who got free internet and localized tourist information, a win for hotels who could advertise to their customers and a win for my friend's friend who is able to make money from the idea. His company is Tink Labs, with the product Handy, you should totally check out how he made a small innovation to solve tourists every day problems.

jaffac
jaffac

@Rich20Something @jaffac Daniel, one word "WOW".  Thanks so much for taking the time and effort to make a video to address my questions.  The fact that you did this personally and in such a short time frame demonstrates your connection and commitment to your tribe and it 'blew me away!'  Not only were the answers really beneficial, but it also demonstrated to my teens not to be embarrassed to ask and that people seemingly 'untouchable' people are actually just people and are most often simply willing to help.  Your help has kickstarted us to 'have a go' and we are now on the road to making this idea a reality.  Thanks for all your help.  I really do appreciate it!  Will be in touch.

Rich20Something
Rich20Something moderator

@jaffac my pleasure :) I hope it goes really well, and that you guys start something you're proud of! I'm here if you need — you can call or email any time. 813 528 1927 Let me know how goes!