A lot of times I like to remember my humble beginnings. I feel that it’s important for me to do that. They help me remember the original lean startup vision. When your resources are limited, you can naturally grow your business the lean way. But as your business grows, you generally forget a lot of lean principles because you can afford to live without optimizations. A reminder of some of the principles could be great to continue to keep the structure lean wherever possible but most importantly for your future businesses.
This blog is about two humble beginnings, the other one involving Aamir Attaa, founder of ProPakistani, whom I learnt a great deal from. He ended up being one of the most successful and celebrated bloggers who curated content for Pakistani audience. But in 2010, we discussed completely different things. One of them involved how we could save $60 each every month. And here’s an excerpt of that conversation.
His thesis was that since my blog SmashingLists which served the US audience gets majority of it’s traffic at a completely different timezone (9-12 hour difference) than ProPakistani which was targeting Pakistani audience, we could actually upgrade our servers, have higher resources each, host both sites together, and still save $60 each per month.
We went ahead and did that (and continued doing it while it worked). This was a great lesson back then, and a great reminder today.
However, when the customers are spending less, and the businesses are paying less to acquire them, it makes customer acquisition cheaper for all businesses. Sure, they are cheaper to acquire because they are less valuable, but you are being given a one off opportunity when it’s over-all cheaper to start your business.
The cost to start a new business is significantly lower during a recession.
If you’re not VC funded but bootstrapped like me, this means a great deal. We’re already planning some e-commerce stores and hoping to schedule the launch right when the markets are in deep turmoil.
I’m going to keep his identity confidential as my friend isn’t quite comfortable talking about his story right now.
Here are the facts of his story.
He built his empire over Amazon
His monthly revenue is approximately $100,000 USD.
The gross profit is roughly 27%
The net profit is around 22%
His fulfillment is done by Amazon which means he pays $2.5 to Amazon to fulfill each order and another $1.05 to Amazon for getting him a buyer.
His landing cost to Amazon’s warehouse including the cost of goods and the shipping cost is $1.5
This leaves him with $2 per sale.
If I had to start this business, I would stay a thousand miles away from it just by looking at the sale price of $7. Because to me $7 doesn’t sound like a lot, and it probably doesn’t to you either. Especially after you look into costs of good, Amazon’s fee, ranking and PPC costs, you’re left with under $2 per sale. I would have never worked for $1-2 per order. If I think this way despite being in business, I can say with confidence that most other people would think the same.
The fact however is that he not only created $22,000 per month in income for himself, he has also created $650,000 in asset if he flips his store at any point.
All by selling $7 product and by taking a loan of $10K to pay for inventory and ranking costs. After I had a look at his financials, not only was I surprised, but I was also very proud of him. Had he done the same on a higher price product, I would still be proud of him but not as much as I’m right now. The reason for that is because he proved you can start small and go big. That you can bootstrap or start on a small funding. That you don’t need access to capital as much as you need access to skills and hard-work.
While I write this, and while you read this, he’ll walk away with $650,000 generated in under 3 years. A wildfire that started off a matchstick.
I met this guy in 2009. That’s 11 years ago. He always wore a hat. He loves them.
He taught me how the systems are gamed. I loved it. We were on the Digg’s front-page everyday. We worked for the top guys. I will probably not name them today. May be they don’t want to acknowledge they gamed the system too.
The system was nothing but a recommendation engine. One of the first I had seen. When Twitter and Facebook ranked posts chronologically, Kevin Rose had the recommendation engine figured out. We just knew how to make the best use of it. Reverse engineering it, I would say.
One of our clients in the sports niche got acquired for $150 million dollars. Almost all of our clients are a multi million dollar properties today.
We even made some of our own tiny sites that we drove from Digg.
Over time, struggling between gaming the system for growth, solving an actual problem or doing both at a time, 2020 came.
Today, I’m wondering, how do you build a global business from Pakistan that could one day grow large enough?
How do you hire white people or black people or asian people or anyone to cast them in your ads? Can you? Are there any in this country? If yes, are they actors? They probably aren’t and you probably can’t.
You could outsource though. For tens of thousands of dollars perhaps? Or millions of Pakistani Rupees that you can most likely save in 5 years working in a day job.
If you’re bootstrapped, which you most likely will be because there aren’t any VCs here, what would you do? Would you get that ad made? Or would you pick a hundred ads from the internet, break them apart, and stitch them enough times that they qualify for “fair use” and become DMCA-free. This would probably cost you $50.
Forget about the ads. Not all businesses advertise and advertising could be just one of the many things about building a business. You will most likely require certain kind of digital infrastructure for sure. PayPal? Ability to accept cards i-e payment gateways? But there are none that support this region. What do you do?
You could fly to US or another supported region, setup a company, and use that to setup the rest of the digital infrastructure. But most likely you’ll never get a visa and you probably also can’t afford this travel easily. If you think I’m exaggerating, I know at least 5 tech entrepreneurs from Pakistan who have built multi million dollar businesses but were declined US visit visa.
May be you could fly to one of 31 visa free countries? But they are just as good as your own country as far as the digital infrastructure and access to business tools is concerned.
You could reach out to friends or relatives in US and form a company in partnership with them. You could use that company to setup PayPal, payment gateway and other business tools that you need to begin your business.
But there’s more. You will most likely be banned at some point once you access these business tools physically from within Pakistan.
What do you do then? You could rent a server physically in US. Remote Desktop Protocol. You could access that server remotely and run your business on that. Sounds sketchy, doesn’t it?
But you could get banned for that too. Because it’s not that big of a deal for these multi billion and trillion dollar companies to understand the difference between a data-center’s IP and that of a home in US.
So may be you could buy a Raspberry Pi that you could physically place in someone’s house in US. I’m confident none of my friends or relatives would agree to this. It would seem strange to them that why would someone want to do it? They would think that there could be something malicious going on that could land them in trouble.
You could also buy a laptop and physically place that in their houses and run your businesses with remote access. I know my cousins aren’t going to like that idea. May be yours do.
By the time you would come this far, you would have exhausted 83% of your energies in setting up the the foundation to start your business.
Thousands of entrepreneurs from Pakistan actually have to go through all of this (and more) to actually start their businesses. May be you see a scammer, but I see a victim that turned around his fate and became a hero.
So what happened there? Did we choose that grey hat, or did that grey hat choose us?
I’ve previously spoken about reverse engineering which I think is a really powerful approach that we’ve used all our lives to build businesses and solve problems.
I’ve mentioned of wayback machine as a method to see all-time archive of the websites and the iterations that they’ve done. You can see design iterations and identify what didn’t work for them and not make the same mistakes yourself. You could see how their pricing structure iterated over-time etc. It would be fair to say it’s a “change log” of every website.
Another tool that we’ve largely used is Ghostery. It’s built for something else, but we’ve used it for all kind of fuckery (pardon my language for lack of better word).
It’s a tool that is designed to block any and all kind of trackers including ads, analytics, pixels, cookies and more. It is designed so you can have faster, cleaner browsing experience but there are other things you can use it for.
The good thing about Ghostery is that it is very transparent in providing details of every single tracker that is detected on any site. Which means, we can know exactly about most apps, plugins, modules and tools that a website uses. We can even learn about what ad networks they work with, how they fill their inventory and some even more advanced use cases.
For our influencer driven content sites, our entire advertising waterfall was built by sneaking on other publishers with large amount of premium inventory, identifying their trackers, and reaching out to the advertising suppliers of detected trackers.
You’ve to be really great at copying, before you can begin to think how to innovate.
I finished yesterday’s blog by asking if gaming the system is a good idea to make money or not. I have gamed the system all my life. When I ventured into internet marketing, the first platform I drove traffic from was Digg.com
It was a social news site kind of like reddit that doesn’t exist in its original form anymore. It was an insane source of traffic and Zeeshan mentored me well on how to really make the best out of it. We could get most stories to the front-page on a daily basis. We drove 10s of thousands of unique visits. Not just that, our content reached the eyes of editors of the largest publications in the world which would often result in backlinks and further traffic as well as SEO juice from them. I built my blog SmashingLists almost entirely out of Digg and sold it for a pretty hefty amount back then.
I loved it. It wasn’t just traffic, it was really high quality traffic. After the demise of digg and trying a few other things like StumbleUpon etc, I ventured into viral Facebook marketing. I did that briefly for about 3 months. It certainly was the darkest shade of grey. I don’t encourage anyone to choose this shade in their lives. It’s not worth it.
After that with my co-founders Saad and Zeeshan, we leveraged the organic traffic from Facebook by building and acquiring Facebook pages. Very white hat and we did it for the longest time. We built many websites and made a ton of money.
In summary, gamification of the system has been the heart of our internet marketing journey. I’ll go on to the point to state that if big tech companies claim that they haven’t done it to “hack growth” they lie. Wasn’t Facebook built by scrapping off the student list of all Harvard students? Aren’t AliExpress affiliate ads served on Torrent website popups? I have seen all these mainstream apps like ride-hailing, food-delivery, pretty much everything, capitalizing the grey areas.
Growth hackers study the systems, the AI, find the shortcomings, and capitalize on them. That’s what they are designed to do.
But some people suggest gamification is a small guy game. A few days ago, PG published this tweet
11 yo and his friends are always coming up with ideas for beating the system. I told him that the really big money is not in little tricks like that, but in making things that help people.
I have seen or known 100s of people who have made millions and tens of millions all by capitalizing the “little tricks”. It’s totally possible. It works. There are probably a million case studies of millionaires who made it through beating the system.
Although, really big money, the unicorn status, the billions, are not made with little tricks and gamification. They are made by solving a problem so big that it helps millions and tens of millions people use the service or the product. I’m still willing to bet though, that the growth of these companies are still carried out using the “little tricks”.
Since people from emerging and under-developed world are often not so well off, to them $100 seems like a big deal and they would happily settle for little tricks and gamification as long as it provides them the opportunity to make that $100 and a road that would eventually lead them to become somewhat wealthy.
To finish this off, if you game the system, you’ll make it. If you build a product or service that helps millions of people, you’ll make that every hour what you’ll make with gaming the system in your lifetime. But even while you build a product or service that helps the people, don’t forget to game the system along the way.
A few weeks ago, I wrote about three types of founders. To summarize, they were big spenders, extra savers, and the ones that cut expenses in some areas bit were big spenders in others. We all should aspire to be the third type.
I can’t stress enough how important it is to be frugal with your operating expenses. If you’re not frugal with them, especially once you’re bootstrapped, you’ll always see yourself struggling with money or progress regardless of the revenue.
Not all costs are meant to be avoided though. Some costs, if you avoid them, will hinder growth of your business. Some costs of as little as $1000, could get in the way of your next $100,000 in revenue. So it’s quite important to be generous in some of the areas of your expenses. No I’m not talking about spending extravagantly on a shiny office space. I am talking about spending extravagantly on top talent, expensive tools, and education or training.
Never stop investing in yourself. Never cut corners on hiring talent. You need more talented people than yourself to build great companies. Always buy expensive tools that would put your productivity and growth on steroids.
I remember using PressLabs, a managed WordPress hosting company, for our content websites. Our monthly bill with them, at one point, was 10s of thousands of dollars. Yes, we paid 10s of thousands of dollars every month just to keep our websites online and safe. May be we could have rented a mega dedicated server for much cheaper, right? Yes, we could. However, we would still need top talent to continue to maintain that dedicated server to keep it online and safe at all times.
A few hours of outage, a malware, DDoS or ineffective caching would have been more damaging to our business and the revenue than the price we were willing to incur to keep everything online and safe at all times.
So we incurred that cost, and continued to work from our homes, because our priorities have always been clear about what to spend on and where to cut corners.
On a side note, our stats are still featured on PressLab’s front page 🙂
During the last week, I’ve tried (and trashed) a fitness brand, a home improvement company, a lingerie store, an arts and crafts company and a hair product company. What do you need to launch a new brand? A logo, a story and a line of products.
A brand launch even if you private label your products, does not cost more than $1000-$5000 in most cases. Without private labelling, it costs under $50.
You get your free Shopify trial for each new store which by the way they are extending to 90 days right now. You’d need to buy a domain which can cost anywhere between $2 to $9. You have many many options for free logos including hatchful or logojoy. Information or copywriting of your products and their photoshoot is generally free. You can get it from AliExpress/AliBaba. All of this is enough to get started. The keyword here is that it’s enough to “get started”. Of course once it works out for you, you can give it the attention it deserves.
If your product doesn’t work out, you trash the brand. You come up with a new one. It’s simple and it’s effective. You could create any kind of business using this model. You could make restaurants the same way. My co-founder did that with a biryani start up. All you need is a menu, logo/branding and a story. If it doesn’t work out, come up with new menu and new cuisines. You keep trashing the brands until it works out for you.
If you don’t test, trash, test, your competition will be done making their first ten million dollars by the time you’ve finished finalizing your brand’s concept.
It is often statistically reported that women are paid lesser than men in most lines of work. In tech, specifically, it is said that women are paid 5-40% lesser than their male counterparts.
Another striking statistic that is often highlighted is that women make up only about 25% of the tech workers. This particular statistic doesn’t bother me because in comparison, healthcare industry employees 77% women. One gender could be more inclined towards working in a particular industry than the other and there shouldn’t be anything wrong with that.
Coming back to salaries, Fiverr, a freelance platform reported that on their platform women at average earn $96 against their male counterparts who earn $100. This represents a 4% difference and is by far one of the best reported figures I’ve read regarding the gender equality.
I’ve often written on this blog that freelancing, remote jobs or distributed companies have many advantages. I’ve often highlighted the location and time independence as the most major advantages. You could be anywhere at any time living the millionaire lifestyle.
But the data published by Fiverr has given me new reasons to celebrate the digital nomad lifestyle. You could be a man or a women. You could be a Muslim or Jew. You could be in Syria or Romania. You’ll get the equal opportunities and wages as everyone else on the platform.
Distributed companies, remote employment and freelancing is the answer to gender inequality. Not just gender inequality, it is also the answer to racial inequality or any other kind of inequality. Obviously in addition to granting you freedom and wealth.
Two days ago, I wrote about the reason why I got introduced to PHPMailer. I finished my blog saying that I ended up using PHPMailer for a completely different reason. This blog is a continuation of that.
The Rocketship
In 2011, my music blog Koolmuzone was seeing growth faster than it had seen before. It was burning all the rocket fuel, breaking all its previous records. The kind of growth that made certain people uncomfortable.
One late February night became one of the most miserable nights for me. Days became weeks, and weeks became months, but the misery didn’t end. Someone clearly didn’t like me and so he found a way to take Koolmuzone’s Facebook page down.
The Crash
My page was taken down by a fake DMCA report. It took me many weeks to understand what happened, and I’m going to explain that below as clearly as I possibly can.
Most of the times when you get a DMCA report, it is for copyright infringement. But this one was different. It wasn’t a copyright report. You can see the copy of the claim below
Hello,
We have removed or disabled access to the following content that you have posted on Facebook because we received a notice from a third party that the content infringes or otherwise violates their rights:
[Page: www.koolmuzone.com]
We strongly encourage you to review the content you have posted to Facebook to make sure that you have not posted any other infringing content, as it is our policy to terminate the accounts of repeat infringers when appropriate.
If you believe that we have made a mistake in removing this content, then please visit http://www.facebook.com/help/?page=1108 for more information.
The Facebook Team
The fine line here was that the person who sent this report to Facebook didn’t say I was violating anyone’s copyrights. That there wasn’t any particular piece of content on my page that infringed someone else’s right. The report rather claimed that the ‘page name’ itself is infringing someone’s rights; a trademark claim.
I read that email everyday for many weeks until I found out what happened when I read the following line
[Page: www.koolmuzone.com]
This line made me realize that the content that infringes someone’s rights is the page name itself.
After I realized this is a bogus TM claim, I started seeking for the legal ways to acquire trademark for my brand which wasn’t trademarked at that time, neither by me nor by someone else. The TM didn’t exist in any country or jurisdiction. It was a bogus TM claim that Facebook asked me to resolve directly with the other party by providing his (fake) email address that no one responded to.
First Attempt of Recovery
So I went ahead and locally registered my company, acquired the relevant tax number for my business and obtained the relevant trademark. However, in the end I was still asked by Facebook that it doesn’t resolve any DMCA claims, instead I should directly resolve the matter with the claiming party or in a court of law. A party with a pseudonym and a fake email. I was stuck, and I was still devastated.
Second Attempt
After spending a few more weeks, sometime in April, I thought of something. I thought if Facebook can be as stupid as this with a fake trademark claim, it could be even more stupid than that.
I realized that there could be a potential solution to this problem and the solution could be PHPMailer. The thing about PHPMailer, or any mailer for that matter, is that you can send email “from” anyone’s email address “to” anyone’s email address. This might be difficult for some people to understand but the way the email protocol works is that you can send an email from an email address that you don’t own or have no access to.
The only thing different about such emails are the “email headers” that are commonly used to verify the real origin of such an email. The email headers mention the real domain name / server IP from where the email originated from and can be helpful in detecting spoof emails.
Because Facebook took a page down on a fake TM claim, I wondered if it would restore the page if the fake email address took the fake TM claim back, without verifying the email headers. And so I sent out that email.
The next morning, my page was restored.
I was hurt, very very hurt. I buckled up and got back to work. I had wasted over 2 months because someone wasn’t happy with the progress we were making.
Looking Back
Over the years, I’ve tried to understand the psychology of people who do that. They think there are two ways to win the race. The first way is to run faster, so you can really get ahead. This, in my opinion, is the only way to actually win and make progress. The second way, however, is to hurt your competition, so you can get ahead of him.
The problem with the second approach is that although you get ahead of your competition, you don’t really move farther in the true sense. You’re still standing right there, only with weapons. And if you think about it; what good does it do to you? If you win a race by eliminating your competition, how does that benefit you?
Sure, you’ll get the winner’s medal but without actually moving forward. You’re not going to have any more visitors coming in or you won’t be generating any more revenue. Why would you do all of this for a fucking medal. If, the person who hurt me, is reading this; think about it.
Since then, in the past 7 years, I’ve never worked in the Pakistani industry. It was toxic and I wonder if anything has changed so far. Even if things have changed, I’ve never really mustered courage to ever work here again.
To all the people who have stood by me during this tough time, I owe everything to all of you. To everyone who were the reason for my pain, I forgive you, although I’ll be surprised if you were seeking forgiveness at all.
