It’s not all about the money when it comes to business.
In 1997, a 27-year-old songwriter wanted to avoid the hassle of dealing with major record labels when spreading the word about his new album. Now he’s taking his music career online. However, at the time, online record stores only carried CDs from major record labels.
This led him to create a website for his music and brand it “CD Baby.” His music was also sold there.
Unfortunately, online payment processors like PayPal or Stripe did not yet exist, limiting his options for accepting payments. Using a credit card merchant required him to pay $1,000 in initial fees and take three months to complete the necessary paperwork.
After the launch of his “Buy Now” button, he directed his fans and followers to his online store. When he told his pals about it, they all wanted to know if they could put up their own music for sale on his site. Simply as a favor. The man responded with a confident “Sure.”
When Derek Sivers first designed CD Baby, it was to serve as a credit card processing service for CDs. As the idea went, it would be a place where unsigned artists could send their fans instructions like “Buy my CD from this site.”
Already a major event in 1997. The second person to buy from him was a Dutchman who asked via email, “Any new releases?” And initially, Sivers was confused. After that he sent another message:
I’m so sorry. I first mistook it for a store.
Sivers was suddenly struck with inspiration. Maybe he’s a shop, and that’s what you’re worried about. He had a larger platform on which to showcase the work of his pals. And I think it’s great that you’re telling total strangers to go out and buy their music.
His group of friends was extremely happy. As word spread, more of his friends asked if they could join him at the CD sale. Eventually, complete strangers began contacting him as well, both via phone and electronic mail. Many of the biggest names in online music promoted his site. Furthermore, more musicians joined up.
To compensate for the time and effort required to update his website with new albums in the 1990s, Sivers instituted a pay-per-album model. As a result, he reasoned that he could benefit from a percentage of all sales.
To make matters worse, he was at a loss as to how much to ask. So he went into a CD store frequented by musicians near his home in Woodstock, New York, and questioned the sales associate about the business’s practices.
You can charge whatever you like for it. A flat $4 is ours to keep. We pay you weekly,” the store clerk added.
The number of musicians and CD sales that CD Baby could accommodate grew. In addition, Apple contacted CD Baby about becoming a distributor for the iTunes Music Store.
About ten years after that, Sivers realized he needed a change. He received $22 million for selling CD Baby.
It all began when I helped out some pals.
You can increase your own wealth by assisting others in reaching their goals.
One of the things I appreciate most about Sivers is how straightforward his advice is. Creating a successful company is a tough challenge. There’s no need to make things more complicated than they need to be.
His method of doing business is straightforward and successful. A direct quote from his book, “Anything You Want:
“A business plan should never take more than a few hours of work — hopefully no more than a few minutes. The best plans start simple. A quick glance and common sense should tell you if the numbers will work. The rest are details.”
Sivers identified a challenge and sought to develop a solution. Originally, the answer was intended for his own use. However, if his plan works, it could benefit many more people. Therefore, he revealed this information.
Creating value is essential when establishing a business.
Everything that uses a computer is human.
When you examine the financials of your company or side gig and notice that:
You’ve already sold X number of your product/service to satisfied customers.
Someone has unsubscribed from the list, and so on.
So, what do you recognize?
How about the statistics? Alternatively, do you notice any human beings?
People are often reduced to statistics in digitally run businesses. After all, the majority of communication occurs off-screen. And in your analytics reports, they would all appear as meaningless numbers.
However, remember that there is a living, breathing human being behind every set of numbers and every screen, complete with their own hopes, fears, and unique characteristics.
It’s often said that a company’s success depends on how it treats its customers. It’s not all selflessness, though. When people are reduced to statistics, it’s easy to lose sight of their humanity and focus instead on making money. What causes a company to fail in the long run?
You ought to be aware of this fact given that you, too, are occasionally someone else’s client or customer.
We should let it die if it is dying.
An individual at a business conference once posed the following question to Sivers:
“What if every musician just set up their own store on their own website? Since that’d be the death of CD Baby, how do you plan to stop that?”
To this, Sivers replied that he would do nothing. Once the music industry reaches a point where they no longer require CD Baby, the service can be discontinued.
As a result of Sivers’ response, the man was surprised. After all, it’s common knowledge that companies were created to expand and generate increased profits. Once again, though, a business exists to address a need.
That company can close down if the issue has been satisfactorily resolved. It’s time to switch gears and start something new that will bring joy to people’s lives.
Don’t give in to the temptation of endless profit by becoming someone who promotes problem dodging while selling solutions.
And people are more willing to give you money if they think you don’t need it. The same holds true for a lot of other things too.
Banks are eager to extend credit even if you currently have no immediate need for it.
Publishers put out works by authors who have no use for them.
Followers flock to those who pay no attention to them.
As such, etc.
It applies to everyone. We are fortunate to exist in a world where there is plenty for everyone. With such an attitude, you’ll be much more appealing to potential employers or clients.
As the owner, you get to decide the policies for your company.
About accumulating wealth, Sivers says the following. And I think that pretty much sums it up:
“When you make a business, you’re making a little world where you control the laws. It doesn’t matter how things are done everywhere else. In your little world, you can make it as it should be.”
So, make it worthwhile. Make sure that your side gig or business is something that gets you excited to start the day. And continue to find daily satisfaction in life.
Doing all of this for financial gain is pointless. After all, the ultimate goal of working hard is to buy yourself some happiness, right?