My 4 Hours

Update (25. feb. 2010): After I have hired a project manager from the Philippines I spend more like 1-3 hours per week.

I have a service called Get A Shop where I create webshops based on the open source e-commerce system Magento.

I want to show you how I now after a couple of months, currently generate an extra income of approximately 2000$. In the post I won’t share all the numbers, I still have competitors

Getting the idea – find your customers first

The business idea was to create an internet business that was somewhat automated. I know that this cannot be automated as much as some of my other ideas like selling ebooks, but I found potential customers and a real demand for this kind of product on the danish entrepreneur forum Amino.dk where there were a lot of questions from people wanting to start a webshop.

I had previously researched the Magento platform because I wanted to start my own webshop, and I know a thing or two about IT projects and processes (I am also partner in 41concepts an IT consultancy company). Since I didn’t want to work anymore than I already do, I of course thought about outsourcing.

I made a couple of quick calculations on the price of the product, and I found that I could sell the product at a really good price and the idea was born!

Creating the product

1) Process

Since I wanted to sell the webshops at a fixed price (instead of simply selling hours), I had to define exactly what my customers would get. The process was also really important so I spent a couple of days getting the full delivery process defined. A quick example of a couple of my thoughts was that the client get a fixed number of design drafts, and a fixed number of design iterations. For my Danish visitors, you can get a good description of the process here: http://getashop.dk/produkter/info/processen

2) Partners

Now I needed to find someone to actually produce the webshops. I contacted a lot of companies that advertised with Magento knowledge and was located in traditional outsourcing contries. I talked with a lot of Indian outsourcing companies but since my product was mainly a design task (designing the shop), I quickly abandoned them. I did not find a single Indian company that could create a design that did not look like a standard design template. Boring!

I ended up choosing a company from Russia and we have had a really good collaboration. They are proactive and really want to create the best solutions for my customers. The deal is that I pay them per project.

3) Website

The last thing I had to do was to create a website. And let us be frank… While this is of course important, I did not want to spend a lot of time tweaking minor things. I knew that I should be able to sell my product and have people order through the site. So I ended up using the Joomla CMS because it was a one click install on an existing hosting account with Dreamhost. This way I had a new blank website in 10 minutes. I then found a template (costing me 10$) that I liked and successfully modified the Joomla theme (I don’t know how to programme PHP that Joomla is programmed in, but looking at the other templates made it fairly easy to incorporate the design I had bought). After this I posted a project on elance because I wanted a logo. I ended up paying 50$ for the logo. So this was pretty easy, the hard part was to generate all the content for the website that I did over a couple of days.

I ended up spending less than 40 hours over a couple of weeks and a total of 60$ getting my new business running.

Marketing – telling your potential customers about your product

Currently I get leads from three different sources:

• Amino (the forum where the idea started)
• Organic traffic from Google
• Word of mouth (even though I am fairly new in this game, I already get some word of mouth thing going on).

I have done a little search engine optimization (SEO), but could probably do much more.

Room for improvement

• I currently send invoices to my clients after the product is done, but I have to pay my development team 50% up front. I also have to pay for hosting (which is included in my product the first year), so I had to give my company a loan (using my personal finances).
• I would also like to do less project management and I expect that the development team will do this more and more over the next couple of months. Currently I work 5 hours a week, answering emails, doing project management and looking for leads on Amino.
• While this is a nice little business, there is still room for more clients. I just have to scale down my own involvement as the number of clients rises so I don’t work more
• I could still do more SEO

Hope you got inspired to start your own internet business

I know this is a fairly old interview, but I really like the angle on this and wanted to share it with you.

Most people interviewing Tim focuses on the whole Four Hour model. This interview focuses on how Tim was able to get a big buzz going about his book and made it a number one bestseller.

http://mixergy.com/tim-ferriss/

I haven’t updated this blog for some time and it is basically because I have had trouble finding the right person (from the Philippines) to hire for the writer position.

The candidate I had chosen turned me down in the last minute, so I had to start out a round 2. Basically I had chosen someone with too much work on her hands, and she did not have the time to write a full e-book. So for round 2 of the hiring I looked for someone who had the time to begin with (and not the one with the most experience).

Regarding the title of this post and my experiences with outsourcing to the Philippines… I have had Ryan on board since 1. July (this year 2009) and he has done a good job. We have of course had a few misunderstandings, but not more than you would expect from working on the opposite side of the globe from each other. Lately he has been away and this was a big surprise to me as he forgot to tell me that he could not be reached by email (or I did not do a good enough job of telling him that I want to know these things).

So if I had to make a short list of stuff I have learned, it would probably look like the following:

Find your preferred way of communication

I have used email a lot and only called Ryan through Skype a few times, but a friend of mine who has just hired his sixth guy from the Philippines are doing daily Skype calls with all of them.

If you are going to use Skype in your daily communication remember the time difference. I could not maintain a daily skype call as I typically work for clients on location during my normal business hours, and I really don’t want to spend my evenings making Skype calls (also it is night in the Philippines when I get from work here in Denmark).

I told Ryan that I wanted daily status mails on how a task was progressing. He has not been super good at remembering this. So I have just created an account over at 14days where I expect everybody that I hire either full- or part-time to register their hours spent as well as a short description of the work.

Give good task descriptions and remember background information

When outsourcing it is extremely important to break down your work into manageable tasks that can easily be done. Personally I have used the format specified by Tim Ferris (I’m not completely sure that this is how he describes it in his book, but it is how I remember it ): What I want done, How I want it done and When I want it done.

Lately I have also begun to include background information describing Why I want it done. This sometimes help to give an overall scope of the task and keep a big focus while working on different small otherwise unrelated tasks.

Accept that there will be hick-ups along the way

Of course there will be times where you will misunderstand each other or you have not described a task well enough. The good thing is that you have the person full time and because of this have time to fix the task the right way. If you had just outsourced a project, on say elance, only to find out that some part of the project wasn’t done just right, you would have had to create a new project to have this fixed and perhaps tell yet another company about the project. I really like to have a person that I can have a history with.

Learn to identify processes

If there is anything that you can see you would like to have done again (and again), say setting up a wordpress blog, consider making your guy document the process. This way if you were to hire another employee (from the Philippines or not) you could use this process description (or perhaps screencast) to show him/her what you expect. Currently I do a lot of this for my webshop business Get A Shop, where I sell Magento webshops. We have to deliver the same product over and over again, so all processes have been documented on an intranet (a Google site).

And remember to have fun while outsourcing to the Philippines!

I have selected four candidates for the writer position that I’m going to interview over Skype.

The four candidates have all (except one) sent me samples of their work. I must say that I’m already really impressed. They all have between 4 and 9 years of experience and the quality of their samples is really high.

For the the interview I going to ask about:

• Working hours (the position is for 40 hours but are they doing something during the day?)
• Productivity (how many articles can they produce a day – 500-700 words each)
• Experience with writing longer texts such as ebooks

All of this is secondary. The call will help me to find out more about the candidates, such as:

• Personality
• English speaking skills
• Motivation

I really hope that I will be able to finish all the interviews in this week so I can hire one in the beginning of next week. The ebook is not writing itself

I’m a sucker for TED videos. So I thought I would link to a TED video of Timothy Ferriss where he talks about what he spends his time with. I find it really inspiring…

Tim Ferriss: Smash fear, learn anything

And this is really the whole idea behind the 4 hour work week. It is not to stop working, but working with the stuff you really enjoy (or in Tim’s case, learning new stuff all the time).

A quick update on my hiring progress. As I recently wrote, I’m looking for a writer in the Philippines.

Here is a small update.

• I found 24 potential resumes on bestjobs.ph
• I have sent all of them a quick email to see if they were interested
• From the 24 emails sent, I have recieved answers from 10 (all interested) and 2 emails bounced.
• I have also received sample work from most of the 10 candidates

Now I need to decide which of the candidates I want to interview. I expect to interview 2-3 of them using Skype.

These videos do make overs of exising affiliate websites. They are a great resource that identifies three different businessmodels, as well as what works and what doesn’t.

Affiliate Makeover Episode #1 – The Opt-in Site…

Affiliate Makeover Episode #2: The Blog

Affiliate Makeover Episode 3 – Review Site

They are a bit longer that your average youtube video but something you MUST see if you are doing affilitate marketing (or considering it).

As you might know, Ryan my guy in the Philippines is currently researching a topic for my first ebook, so I am looking for someone who can write ebooks and articles for me.

I found Ryan through bestjobs.ph as John Jonas recommended, so I thought I would try Craigslist for the writer position. I will probably start out with a small task in order to test the writer, and then move onto a full time position if I like what I see.

The post on craigslist can be found here: http://manila.craigslist.com.ph/wri/1312445564.html

I might add that the whole process of putting the job on Craigslist was done frommy IPhone while at a family birthday. Long live technology

Each day I commute to and from work.

Currently I have approximately 20 minutes in train each way. As a consultant I sometimes have more travel time, but at the moment it is only 20 minutes in train (and 15 minutes walking).

I actually really like this periode of time alot. Here is a list of stuff I do while I’m on the train:

• Read books (I’ve read a lot of books on the train)
• Listen to podcasts
• Check my email (yes I know I’m only allowed to check it two times a day, Tim – at max. But checking the email in the train enables me to respond to a couple of them. This helps me take my mind of my inbox when I’m at work – as I know that I’ve handled the most critical)

Even though we have a lot free newspapers (filled with advertising) here in Denmark, I rarely read them as they are all filled with the same couple of depressing news. I don’t get any wiser (though it gives me some current affairs to discuss at the dinner table)

My Philippine guy is still researching keywords and niches. I’m looking forward to the next phase where we can actually research the future ebook.

It currently goes a bit slow, but he also need to know how I prefer it delivered and what I really expect from him.

Hopefully we will have found a valid niche within a week, and then he can move on to actually research the niche.

We are using the money word matrix to identify good keywords, and hopefully we’ll find a good niche to move into.