Derek Sivers
Start Small, Stay Small - by Rob Walling and Mike Taber

Start Small, Stay Small - by Rob Walling and Mike Taber

ISBN: 0615373968
Date read: 2010-11-16
How strongly I recommend it: 6/10
(See my list of 360+ books, for more.)

Go to the Amazon page for details and reviews.

Great how-to guide about being a micropreneur: an entrepreneur running many small but profitable businesses.

my notes


Make sure people want what you’re building before you build it.

Project/Product confusion:
A project is a software application that you build as a fun side project. The end result is a neat little application that likely isn’t of use to many people.
A product is a project that people will pay money for.

The single most important factor to a product’s success is not the founders, not the marketing effort, and certainly not the product. It’s whether there’s a group of people willing to pay for it.

The genius of niches is they are too small for large competitors, allowing a nimble entrepreneur the breathing room to focus on an under-served audience.

Choose a niche market and focus so tightly that your product becomes the best in class, members of that niche will have no choice but to use your product.

Building something no one wants is the most common source of failure for entrepreneurs.

The best niches are under the radar, and you have to get out and do something before you will find them.

As a self-funded startup you want a market that is already looking for your product, even if it doesn’t exist. This is because creating demand is very, very expensive while filling existing demand is, by comparison, cheap.

A vertical market as a single industry or hobby. Examples of vertical markets include pool cleaners, dry cleaners, web designers, wine collectors and punk rock enthusiasts.

#1 = Market
#2 = Marketing
#3 = Aesthetic
#4 = Functionality

The product with a sizeable market and low competition wins even with bad marketing, a bad aesthetic, and poor functionality.
In the same market, the product with better marketing wins.
In the same market with equal marketing, the product with the better design aesthetic wins.
Functionality, code quality, and documentation are all a distant fourth.

No book, blog or conference could ever teach you more about your customers than you learn from watching them use your software.


Anytime you’re on your computer ask yourself “Is this activity getting me closer to my launch date?”

At this very moment am I making progress towards crossing off a to-do, -or- am I relaxing and re-energizing? If I’m doing neither, evaluate the situation and change it.

Information consumption is only good when it produces something

When reading blogs or books or listening to podcasts or audio books, take action notes.

Define a long-term goal (launch your product), look at the next set of tasks that will get you one step closer to that goal, work, and re-evaluate in a week.

The faster you fail and learn from your mistakes, the faster you will improve.

Using a tool like SlimTimer, track every minute you spend working on your product, broken down into development, support and marketing. This allows you to monetize your time.


Before I start any task I ask myself: “Could one of my contractors possibly do this?”

One of the biggest adjustments is accepting that time is your most precious commodity.

“Dollarize”: showing your prospect how your price is less expensive than your competition due to the amount of money they will save in the long run.

If you value your time at $100/hour, outsourcing work to a $6/hour virtual assistant is a no-brainer.
Putting a value on your time is a foundational step in becoming an entrepreneur, and it’s one many entrepreneurs never take. Skipping this step can result in late nights performing menial tasks you should be outsourcing.

Business idea search engine. I found the best ideas searching on Category->Online Businesses
A list of 999 product ideas. Only a portion are software/website ideas, but even the physical product ideas get your mind thinking about specific niches.
Over 400 home business ideas. More of a generator of niche ideas than product ideas.
Startup ideas YCombinator would like to fund.
by far my favorite web app idea blog. I’ve come very close to pursuing several of his ideas exactly as he’s written them.
crazy ideas from Brad Templeton
I’ve seen quite a few ideas that would work for a Micropreneur on this blog.
Another solid idea blog.
Covers innovations in products and business models. Think about applying the innovations they mention to a niche from your list.
A high-level look at emerging consumer trends.
Another list of business ideas that are already being implemented by someone.


If your price point is in the consumer range of $1 to $50 and your product is priced appropriately for your market, your conversion rate should be between 1% and 4%.
If you’re priced between $50 and $1,000 or offer recurring pricing and your product is priced appropriately for your market, you’ll most likely convert between 0.5% and 2%.

If your website receives 1,000 visitors per month and you have a 1% sales conversion rate you are selling 10 copies of your product each month.
To increase sales by 1 copy each month (10%) you will need to do one of the following:
- Generate 100 more visitors to your website
- Increase your conversion rate by 0.1%
Which do you think is more difficult?
Answer: the first.
Although common wisdom is to focus on traffic, the best internet marketers realize that increasing conversion rates for existing website visitors can yield a better return on investment.

You shouldn’t plan to sell to a customer on their first visit.

Your number one goal, even beyond selling your product, is turning browsers into prospects.

A prospect is someone who has expressed at least a small amount of interest in your product by giving their email.

For someone to provide you with their email address you must:
1. Establish Trust – you aren’t going to spam them or sell their email address
2. Establish Relevance – your product is relevant to their need and that anything you send them will be relevant
3. Establish a Reward – offer something in exchange for their email


Imagine how your ideal customer feels when they arrive at your website:
What do they want to find there?
What will your product provide for them that they absolutely cannot live without?
What is best way to convey this message to them?
What will they respond to?
What elements naturally draw them in? Audio? Video? Images?
What is going to make them click a link?
How should you introduce your product to your customer? What should your copy say on the first page they see?
What is going to convince them to provide you with their email address?
What is going to convince them to purchase your product? To help understand what motivates your ideal customer, think about the following questions:
What keeps your customers awake at night?
What are they afraid of?
What are they angry about?
What are their top three daily frustrations?
What do they desire most?
Is there a built-in bias to the way they make decisions? (example: engineers are exceptionally analytical)
Do they have their own jargon?
Who else has tried to sell them something similar? How have they failed or


No one reads.
Text is a terrible selling tool; audio, video and images are always better.

The vast majority of downloadable products and SaaS applications will perform well with five core pages.
Contact Us
Pricing & Purchase

The #1 goal of your home page is to convince your visitors to click a link.
That’s all you have to do to convince them not to leave is click a single link.
Half of all home page visitors leave without clicking a single link.
The solution? A simple home page with very few options, and large, clickable buttons.

If you choose to have an image for your home page, choose one that shows the result of your product.

Your hook is your four-second sales pitch and it should be the headline of your home page. These are 5-7 word summaries of your product.
It’s the single sentence that grabs the reader in and makes her know she’s in the right place.
DotNetInvoice’s hook is “Save Time. Get Paid Faster.”
FogBugz’s hook is “Bring Your Project into Focus”
Basecamp’s hook is “The Better Way to Get Projects Done”
Bidsketch’s hook is “Simple Proposal Software Made for Designers”
iPod’s hook was “One Thousand Songs in Your Pocket”

TOUR page: include medium-sized screen shots of the major screens filled with data, along with a one-minute screencast (video demo) of each page.

TESTIMONIALS: can also be titled “Buzz” or “Who uses [Your AppName]?” and it’s one of the most important pages on your site. Do not launch without testimonials.
Monitor mentions of your product using Google Alerts and add choice quotes and backlinks to this page.
This not only adds to your list of buzz, but shows people that you will link to them if they write about your product.

CONTACT: Always provide a toll-free number.
Provide both a contact form in the browser and a separate email address.

PRICING: put this as the link on the far right of your top navigation and add subtle highlighting
If at all possible, include an Upsell.
If you don’t offer a free trial, then at least offer a 30-day, no questions asked, money back guarantee.
Go to Startup Lens for a free five-minute screencast review of your site


Make a PDF report from 5-15 pages.
The key is finding a topic that your audience will not only be interested in, but will be ravenous for.
Once you have the title, you can create this work yourself or hire a writer to handle the leg work.
Offering a free, five-day email course can be an exceptional draw.

1. First create your report and offer it as a PDF download for one-month. Note the number of sign-ups you receive.
2. Next, break the report up into a five-day email course and offer it for one month. Compare results and go with what works.


Run Spam Assassin on outgoing emails to ensure they won’t get caught in spam filters
send both HTML and text emails
track clicks and other metrics
send sequential emails when someone signs up
guard against being blacklisted by people clicking “spam” in their mail client

Full-time staff dedicated to sorting out blacklisting problems, spam complaints, and increasing deliverability. You will never come close to achieving their level of deliverability and given how hard you work to gather every email address, it is absolutely worth ensuring they all arrive at their destination.

Providing ongoing content every 2-4 weeks is the best way to build a relationship.

Autoresponder series: a 2-4 week gap between each email.

Share relevant links with a small amount of commentary. These are the best kinds of posts – easy to write but containing a lot of value for your audience. Most audiences (software developers and web designers excluded) are out of touch with current events in their industry so it’s dead simple to provide relevant content with a few minutes of time every few weeks.

Another great source of content is questions from customers or prospects. Answer the question in your email to solidify your place as an expert in this niche.

Tuesdays, Wednesdays and Thursdays are the best days, between 7am and 10:30am.

Core strategies like building an audience, search engine optimization and participating in niche communities have far more impact on your bottom line than most of the new media tools you read about


Don’t think you’re building a brand – you’re not Coca-Cola or Johnson & Johnson.
The minute those users leave your site you are out of their minds forever.

Most products you launch should have their own blog, if for nothing else than to draw search engine traffic.

While the worldwide podcasting and video blog watching audiences are small compared to blogs and infinitesimal compares to mailing lists, the engagement achieved from talking to your listeners is unprecedented. Blogs and mailing lists can’t touch it.

The bond you are able to build with an audio or video audience is unachievable with the written word. There’s absolutely no comparison.

For video blogging, I recommend the book Get Seen: Online Video Secrets to Building Your Business

Google provides a Search Engine Optimization Starter Guide

SEO is only two components: on-page factors and incoming links.

For on-page SEO, I recommend the book Search Engine Optimization an Hour a Day

DMOZ ( – Free. Still worth submitting to. You only get one crack at it, so link to your home page and choose your link text carefully.

Google alerts is one of the most under-used tools in online marketing. Create an alert for all variations of your product names.

For articles, 500-700 words is best. You need 500 to be over the minimum length requirements.


Nearly anything I try to automate is easier to outsource first, and then automate down the line once the volume warrants it.

Out of 30 tasks you might be able to outsource 6 or 8 of them tomorrow if you spend 2-3 hours today writing up the processes.
Compare that with automation, which can take a week or more to get each task off your plate since it takes a lot of code to automate a task.

As a startup, one of your advantages is that you move very quickly. You can roll out new features much quicker than your competition. And being able to manually process some parts of a task can often reduce your development time by 50-80% which allows you to get the feature out the door and in front of customers. If customers decide to use it, then you can automate it. If not, you can throw what little time you spent on it away. You develop the minimum required functionality to make the bare bones feature work; nothing more. You scaffold the rest with a human being; your VA.


Startups are much better bought than sold.

Even if you never plan to sell your startup, you should be collecting and reviewing the data that will ultimately allow you to facilitate an easy sale.

The eBay of website and software sales is Flippa

Here are key metrics you should track:
Traffic Stats – I recommend using Google Analytics.
Revenue and Expenses –
Hours Spent – Using a tool like SlimTimer, track every minute you spend working on your product, broken down into development, support and marketing. This allows you to monetize your time during month-end,

I bought CMS Themer for a song (less than 2x monthly profit).
The site paid itself off in net profit in 4 months.
I owned it a total of 9 profitable months and sold it for a substantial gain.
The reason the site had literally hundreds of interested parties when I listed it for sale was due to one reason:
I had outsourced the hard part, and had tracked my time so was able to document that I had earned over $100/hour on time spent working on CMS Themer.
I was selling a business, and a well paying one, rather than a job like the previous owner.