How Will You Make Money?




You should have an answer to the question “How will you make money?” early on. You may even have several answers. It needs to be plausible. People (like investors) may push back and argue with you about whether or not it’s a feasible business model. If you’re asking people for money, it’s a question you will have to deal with. So, you better be prepared for it.

That being said, you pointed out a few important things. For one, it’s okay to not be sure which will be the ideal business model or price. The process of getting to profitability is something you’ll have to face eventually if your startup continues to grow. You may be able to push it off for a while in favor of focusing on growing usage. That’s the second point, if your product is growing quickly, you’ll often find investors willing to fund your growth despite the lack of a proven business model.

There are only a few major business models though: Advertising, Subscription, E-commerce, Business Development, and Lead Gen are some of the major ones.

Let’s take Facebook as an example. In the early days, Facebook was growing so fast that they were able to get a ton of money before they had to worry about their business model. But it was pretty clear their business model was going to be advertising. It’s a fairly straightforward path to monetization for a social network. Though not all social networks monetize solely through advertising (LinkedIn charges users for premium accounts).

There are some others (like Medium) where the business model is still unclear, but I bet that the founders have a path (or several) towards monetization in their heads.

Yes, solving a problem should be the most important thing for you to focus on. But the reality is that if you’re trying build a big business, you have to have an idea how it’s going to be a lucrative problem to solve.

Storytelling For Startups

In light of our recent Storytelling for Business course announcement, this Founder Friday, I wanted to talk about storytelling for startups and how you can improve your ability to pitch your startup.

I have four basic pieces of advice:

  1. Set up a problem. Do this before you talk about your startup or what you do. Convince the listener that the problem your product is trying to solve is real and significant.
  2. Stop with the Jargon. Don’t talk about about “leveraging big data analytics and optimizing the social graph” because no one knows what that means. Really dumb down what you’re talking about to the level that a five year old could understand.
  3. Make it personal. Tap into people’s emotions by using language that relates to the five senses — show rather than tell. You ideally want to make it concrete and somehow relate to your listener. At the very least, you should be engaging your listener in a dialogue instead of just talking at them.
  4. Use common storytelling beats. Such as the 3 act structure (Exposition, Rising Action, Climax), the 5 story beats (Introduction, Incident, Stakes, Event, Resolution), or Dan Harmon’s Story Circle

No One Cares (About Your MVP)

In this Founder Friday, I answer your questions about MVPs. Questions like:

“How early should I release my MVP?”

(It was basically just iterations of the same question haha)

Look, there are three parts to an MVP.

Product, that’s the obvious part.

Minimum, it should only have the features that it needs. Here you should tend towards less rather than more. It’s your baby and you’re afraid people are going to make fun of it, so you want to give it as much of a chance of success when you release it as possible so you keep adding all these features and polishing it up so it looks good.

But what you don’t realize is that by doing all that adding of features, you’re likely killing its chance of success in the real world — first, because you risk someone else coming in and building it before you, and second, because more features and more polish doesn’t necessarily mean better.

Many products that are successful are actually simplified products of things that already exist. Twitter is just Facebook without all of the other features, and a 140 character limit.

But what counts as minimum? Well that depends on the second word, Viable.

You will only have a GUESS as to what minimum features constitutes a viable product, and you have to actually release it to see if your guess is right. If your product is too minimal to be viable when you release it, then it won’t get usage. So what? No big deal. At least you didn’t waste any time building additional stuff that no one needed.

Then you can go back to the drawing board and think about how your product needs to change in order to be viable. But at least you got really useful information.

That’s one thing that a lot of people don’t realize. If you release your product and it’s not viable — aka no one uses it — then no one will care. It’s not like everyone will know your product is lame and will boycott it and never use it again. No — repeat after me: NO ONE CARES (about your MVP). And that’s a good thing. Now go learn something.

One Month Challenge: Composting

Obviously, here at One Month we like learning, and we’re always trying to learn new things ourselves.

After watching the documentary Trashed, we started thinking about composting. For the next 30 days, we asked ourselves: could we compost and would it stick?

What is composting?

Compost is organic matter that has decomposed and can be recycled as a fertilizer. The idea is simple: put your leftover fruit, veggies, bread and other kitchen trash (see below) into a compost pile. Keep it moist, and turn it periodically to allow air to circulate into the compost pile. Wait a few months, and it turns into nutrient rich soil.

Why compost?

  • Composting is healthy for the planet.
  • It saves tons of trash.
  • The soil from composting is in demand for growing healthy new plants
  • It acts as a natural pesticide
  • It’s useful for erosion control, land and stream reclamation, wetland construction, and as landfill cover.
  • It can be used to produce biogas, a renewable energy source with a small carbon footprint.

What can you compost?

  1. Fruits
  2. Vegetables
  3. Bread
  4. Rice
  5. Tea bags
  6. Coffee grounds

What can’t you compost?

There’s practically no fruit, vegetable, or meat product that can’t be composted, but some materials are likely to produce unpleasant odors, attract vermin, or take an extra-special long time to break down. And of course, plastics and metals don’t decompose. So unless you’re really hardcore, you might want to avoid these items:

  1. Meat
  2. Oils
  3. Dairy
  4. Bone
  5. Plastic
  6. Metal

Do you have any more resources?

This guy explains composting like a boss.

If you’re looking to get started, you can visit the US Composting Council site to find your local composting drop-off:

What We Learned About Learning: Clarity

Nearly everyone on the planet knows that vegetables are healthy.

But how many people are eating broccoli for lunch? It’s not enough to know something, you also need clarity.

What about setting a lofty goal like: “I want to reduce pollution?” But where to start?

To inspire change I could have sent an email with the following facts about the benefits of composting:

But knowledge by itself does not change behavior.

“If you want people to change, you don’t ask [people] to act healthier”, according to Chip & Dan Heath in Switch. What that means, is if you want to be healthier you need to give yourself clear instructions on how to act, for example, “Next time you’re in the dairy aisle of the grocery store, reach for a jug of 1% milk instead of whole milk.”

So we did just that. Instead of saying “let’s help reduce pollution this month” we gave clear instruction for our One Month Challenge,

“Every time you eat a piece of fruit, vegetables, or bread… throw it in the freezer bucket instead of the trash”.

The directions were crystal-clear and the best part was that the results were visual: at the end of every day the pile of compost grew. (And conversely, the trash cans were less smelly and didn’t have to go out as often.)

As a group, we collectively saved 40 pounds of trash by composting. Here at One Month we also love metrics, so we made this Google Doc to measure our progress.

Now it’s your turn:

What can you learn from composting for one month? Leave a comment below to let me know!

One Month Challenge: Berlin

Last month our team grew from two to five.

We like challenges here at One Month, so my co-founder Mattan and I had a crazy idea: What if we all left NYC and worked/lived in a house together for 30 days? Would that accelerate the process of getting to know each other?

We agreed it could! And at the very least it’d be a lot of fun.

Enter Berlin. Why?

a) Berlin is very affordable

b) It has a booming culture and tech scene

Also… Berlin just feels cool! It’s where David Bowie and Brian Eno ran off to back in the 70s to record some of the best work of their careers.

I guess there’s nothing like spending a month in a foreign city with a group of people to help you get to know them!

Did we get anything done?

Without a doubt.

We concentrated on certain creative projects that we just never had time for back in New York City.

Distractions were at an all time low because:

  • New York City wasn’t calling (…with its happy-hours, and FOMO habits).
  • We actively avoided scheduling meetings and phone calls during our time in Berlin. That freed us up to run 2–3 hour workshops and engage in a way that are sometimes difficult back in NYC.
  • None of us had a morning commute. We were all living together, and so we saved about an hour’s worth of energy committing.

What were our company outcomes?

We had some great analytics breakthroughs, we developed the curriculum for our Growth Hacking and One Month Stripe Payments classes. We also filmed Hacker News Nation.

I published some much needed writing, and gave a few talks in Europe including at the Betahaus Breakfast.

Did we grow stronger as a team?

100%. My co-workers became my roommates for 30 days. It’s hard not to learn how to function on a variety of levels all at once.

How did we spend our time outside of work?

Co-working at cafes, riding bikes around town, playing Settlers of Catan, dancing until 6am, cooking dinners together, getting lost, partying at Ritter Buzka, Suicide Circus, drinking Club Mate, Yoga.

How much did it cost?

Breakdown of company costs: $8,300

$3200 — An Airbnb suitable for 3–5 people

$4,800 — Air Berlin flights from NYC to Berlin for 5 people

$200 — Taxis to the airport

$100 — Fruit, coffee, and paper towels around the house

$0 — Using the Betahaus Cafe & St. Oberholz as a co-working space

Just to put this in perspective, as a company we pay about double that price for: a) a year’s worth of accounting, OR b) branding guidelines, OR c) an ad campaign. So it seems like it’s a small price to pay for awesome culture building.

Why Berlin is Great For Startups

  • Berlin is affordable.
  • You can eat dinner for 5–7 Euro. If you live in Berlin full-time you can find a flat for around 350 Euro. Beers are around 2–3 Euro. And we once ordered a Bulleit Bourbon for only 2 Euro! Which is so cheap it felt like I was robbing the place.
  • Berlin is clean — it’s filled with clean air, wonderful people, and tons of parks (Maurer, Viktoriapark, Prinzessinnengarten). For example, Tempelhof Airport… it’s is an old airbase that has been converted into a public park. It’s immense. And it’s right in the center of the city, kind of like adding a second Central Park to Manhattan.
  • The startup scene is growing — Berlin boasts 2,500 tech startup, and it has some serious investment coming in from the likes of Bill Gates, Google, and Sequoia Capital.
  • It’s English-speaking friendly

Unforeseen Difficulties

I didn’t anticipate the jet lag. Not me personally, but the team as a whole. That messed us up for our first two days and is something to watch out for.

Originally we had someone covering rent for our NYC office, but that fell through at the last minute. So we had to eat the cost.

Having our team all work from the house gave us a late start. 10am slowly became 10:30am and creeped closer to 11am. We learned that by starting the day at a nearby co-working space or cafe we could keep focused.

Would We Do it Again?

Yes. Although it becomes more difficult as we grow our team.

An Experiment in Accelerated Learning

Do you remember the first time you traveled abroad with your girlfriend or boyfriend? And being rudely awakened to learn, “Shit, this girl is insane. And this trip is going to be a DISASTER!”. OR instead, hopefully it was a pleasant surprise when you realized, “Yes, ok this is actually somebody I can get along with”.

I thought about this as I arrived in Berlin Day 1. Because if we’re going to learn to work together we might as well find out quickly in the first month, rather than 10 months from now.

Leave a comment: Have you ever had success (or failure) in a live/work situation? Tell me your story.

PS. Watch this video we made: