Can Successful People Teach You How to Be Successful? Or, How to Make a Million Selling Beanie Babies

by Alexander Heyne · 4 comments

First, read this story from Forbes

Back in 1994, at the ripe old age of 9, Johnson launched his first business out of his home in Virginia–making invitations for his parents’ holiday party. Word of his skills spread, and by the seasoned age of 11, Johnson had saved up several thousand dollars selling greeting cards. He called his company Cheers and Tears.

But the little guy didn’t stop there. At age 12, Johnson offered his younger sister $100 for her collection of 30 Ty Beanie Babies, all the rage at the time. The young entrepreneur quickly earned 10 times that amount by selling the dolls on eBay  Smelling potential, he contacted Ty and began purchasing the dolls at wholesale with the aim of selling them on eBay and on his Cheers and Tears Web site.

In less than a year, Johnson banked $50,000–seed money for his next venture, My EZ Mail, a service that forwards e-mails to a particular account without revealing the recipient’s personal information. He hired a programmer to flesh out his idea, and within two years My EZ Mail was generating up to $3,000 per month in advertising revenue.

Johnson still wasn’t done. In 1997, he joined forces with two other teen entrepreneurs to create an online advertising company called Surfingprizes.com, which provided scrolling advertisements across the top of users’ Web browsers. Those who downloaded the software received 20 cents per hour (a tiny fraction of the value to the advertiser) for the inconvenience of having ads splay across their computer screens.

The boys employed a classic pyramid strategy to spread the service: Users who managed to refer Surfingprizes.com to a new customer would nab 10% of that new person’s hourly revenue.

But Johnson and company didn’t just want to sell software–they wanted a piece of that juicy ad revenue too. Their solution: partnering with such companies as DoubleClick, L90 and Advertising.com, which could sell the ads for them. Under the agreements, these middlemen would collect 30% of any ad revenue sold, while the three boys split the remaining 70% (less those referral fees).

“I was 15 years old and receiving checks between $300,000 and $400,000 per month,” says Johnson. At 19, he sold the company name and software (but not the customer database) to an undisclosed buyer. Says Johnson, “Before my high school graduation, my combined assets were worth more than $1 million.”

After spending less than one semester as a freshman at Virginia Polytechnic Institute, Johnson caught the business bug again. With a pile of unwanted gift certificates, he and friend Nat Turner launched a business called Certificateswap.com. Their strategy: lower prices. While gift certificates routinely changed hands on eBay, the auctioneer charged a healthy fee–”up to 13% of the cards’ value,” says Johnson. “We took only 7.5%.” Johnson and Turner sold CertificateSwap.com in 2004, when Johnson was just 19, for an undisclosed “six-figure” amount.

Now just 24, Johnson spends his time lecturing on entrepreneurship and making television appearances as a finalist on ABC’s Oprah’s Big Give and as the host of BBC’sBeat The Boss. He’ll also be serving as a business expert on a new Animal Planet series beginning in May. “Put yourself out there,” he advises. “Don’t be afraid of rejection. Don’t be afraid to ask anything.”

Here’s the problem.

If you’re like me, you read an article like this and go “Uhhh okay, fantastic, so where did he get all these ideas from?”

You’re excited at the possibility, and inspired, might even have the work ethic or the connections, but have no freaking clue how you come up with business ideas.

I mean come on, he went from Beanie Babies to $400,000 checks from owning an advertising company.

In the ultimate guide to starting a biz to fund your freedom I talked about the biggest stumbling block for most people who want a start a business: having no bloody idea what kind of business to start.

I mean, you’ve got people in four categories of businesses usually:

#1 People with skills from a previous job

The guy who used to work at a business firm and used the skills he learned to branch off and be a consultant.

Bloggers who end up consulting SEO or Social Media strategy, etc.

#2 People with generic skills they learned in life that they turned into a profession

Life coaches, diet & fitness people, etc.

#3 People who set out to deliberately learn skills and then capitalize on them

“My journey” type businesses or blogs.  ”How I cured my < insert chronic illness > “, “My journey to trophy wife status” “My weight loss journey,” or people who entered a field of study because it helped a problem they had.

#4 People who solve a need for themselves or society

Cameron talked about how he had tons of unused gift cards, so he created a swapping service.

User entrepreneurs, in fact, make up about 50% of the successful startups that survive beyond 5 years.

This is a remarkably consistent theme among some successful entrepreneurs — ideas don’t even need to be crazy out of this world ideas. They just needs to be useful.

In any case, you’re probably like me – you want to go in business for yourself, you’ve read and heard success stories, you probably read The Four Hour Work Week 385 times… however you know exactly no one currently doing it and living it.

Nice.

If it’s apparently so easy and so possible and there are so many successful people (There aren’t, by the way, we just hear the success stories), why can no one read a story or book and when they get successful say: “Yep, I just followed xxx book or xxx person’s advice and I made it.” 

I often question the value of continually reading success stories. Beyond inspiration, are they actually useful?

So here are my  questions to you: Do you think that following successful people’s advice can help make you successful?

Do you think that maybe the advice they would give while they’re struggling to succeed is different from the advice they might give when they’ve already succeeded?

Are there underlying principles behind most successes, beyond just the generic “Work hard” and “persevere” ?

Are some just magically gifted with business sense and an early predisposition towards entrepreneurship?

Beyond the basics and first time advice, how much value is there in reading about other people’s success?

Leave a comment below and let me know what you think –

 

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{ 4 comments… read them below or add one }

Shayna July 2, 2012 at 8:36 am

Great post! I’ve got a lot to say about this.

If there’s one thing I’ve learned 6 months into my own entrepreneurship journey and researching others’, it’s that everyone’s path is SO different. For some, guest posting is the super successful tactic that launches their site to superstar status. For others, podcasting brings them tons of traffic. Others (the lucky ones!) seem to have their businesses grow and magnetically attract people without even trying.

BTW, one of the most realistic descriptions of the entrepreneurship journey, in my opinion, is found here: http://www.tropicalmba.com/living-the-dream/

Anyway, I think all the stories in $100 startup and all the ones I’ve read online have something in common:
– Provide real value that meets the genuine need/desire of your market
– Develop relationships with your prospect/customer base (whether something as intimate as personal e-mails, or as “standard” as just giving excellent customer service)

These two things, I believe, are the rock-bottom baseline of all successful businesses, and have been for years. The specific tactics and strategies are like makeup… they can enhance the beauty that’s already there, but if you try to put makeup on a pig it won’t disguise the fact that there’s a pig face underneath. So if the product doesn’t meet a real need/desire, or if the company treats its customers like crap, it doesn’t matter how good its social media strategy or whatever is. (Are you following me? LOL)

By the way, one thing I’d add to “work hard” and “persevere” is “test.” What has worked for me is taking others’ strategies and experimenting with applying them to my own biz, and seeing what works. That’s the value I get from reading success stories.

For me, what has “clicked” so far has been this:
1) Getting subscribers to my e-list (for which they get a free, useful book) – I can drive this with ads, though I do get “natural” sign-ups too.
2) Autoresponder upon sign-up that asks what they’re struggling with, to which I personally reply to each person who writes me.
3) After a few weeks of useful content e-mails, send them a pitch for the product.
4) Once I create another product, I’ll eventually send them a pitch for that too, after they get a few more weeks of useful content e-mails.
(this whole sequence is similar to Glen Allsopp’s 5-8-13 model in Cloud Blueprint: http://www.viperchill.com/vip/cloud-blueprint/)

This got a 3% conversion rate for me, which is much better than the 0% conversion rate that resulted when I sent traffic from ads directly to my product page (which according to the Ferriss model would make it unpromising, but it turns out people were willing to buy the product, just not “cold”).

One more thing – now that I think I’ve found what’s working for me, I’ve cut off my subscriptions to most of the blogging/entrepreneurship sites I used to read (except for a select few) – so that I can stop doing endless research/planning and invest far more hours into actual content/product creation.

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Shanna Mann July 4, 2012 at 1:50 pm

I think the main purpose of these success stories is just to demonstrate how completely random and seriously not-all-that-good ideas you can start a company from. In that way, they’re a reasonable stand-in for experience.

I also think the main take-away from Johnson’s story is to not *think* about a business idea or *plan* a business idea, but simply just give it a try. And not just read other people’s success stories… :)

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Donna January 18, 2014 at 2:28 pm

Unless you’re willing to take advice from someone who’s living the kind of life you don’t want, taking advice from successful people would definitely help. However, we must know when to follow a successful person’s advice or go with our intuition.

Cameron Johnson’s story is a bit hard to swallow because he did all these when he was still a child. While we were all busy playing games and learning toddler’s stuff back then, this kid was raking in serious bucks. I’ve read that entrepreneurship had always been part of Johnson’s family. He may have inherited a predisposition towards it but probably the environment he grew up with tapped into his inner talent.

Beyond the basics and first time advice, I guess reading other people success’ stories can give us hint on how we can also get there, on how we can make sense of things that happened to us. Since it’s different for every person, it will give us idea how they made it through with the unique setbacks they encountered along the way.

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Mr.Will March 10, 2014 at 4:05 pm

Wow – fantastic set of questions – answers are yes and no, like anything!

Specificially, I doubt anyone can bestow any great genius upon you. That kid managed to make a few things work, and is obviously a natural at putting business ideas together. I doubt it is possible for someone to teach something that is natural to them, or for others to learn it. I learned guitar at such a young age, that there are elements I just can’t help a student with. How does one do barre chords? Erm…….like “THIS”……I cannot break it down any further. Try to go and teach someone how to blink, or how to breathe – and I mean teach it from the very basics, to someone who wouldn’t know how to get started in “how to blink”, and you’ll see the sort of issue there with teaching such things.

On the other hand, rather than any specific set of skill or circumstance, actually modelling oneself on successful people is a great thing. if you get behind the scenes, and actually know someone who is successful at business, and how they approach things then you have a set of skills, outlooks and attitudes that can “rub off” and become part of your own approach. I aren’t talking inspiration per se, I’m talking about seeing people deal with situations on a proper basis, or even sharing their stories to a degree that you can model the attitude or ways of approaching situations.

Mr.Will

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