Bodega Sale Blog

Why Do Rich People Get Even More Rich?

Opportunity, I think is the best word to describe it. While most people consider getting a job in a fortune 500 company as a rare opportunity. Rich people who were born with rich parents don’t event need to apply for a job their entire lives.

Let me first say this, I am not born rich nor wealthy. I consider myself in the middle class in Pampanga. I worked as an employee almost my entire life. Working for somebody else is certainly not glorious but it pays the rent and it supports my family. There must be a little glory in there somewhere.

The topic is why do the rich gets even more richer? and why do the rest of us need to struggle our entire lives in order to survive? I want to discuss about this topic so we can somehow emulate the rich in small ways that we can afford. What kinds of opportunities do the rich have so they can accumulate more wealth than ever before? Is it possible to emulate them so we can become one someday? Just a warning though, below are just my observations so please take it with a pinch of salt.

1. Time - Being an employee is basically bartering your time and energy in exchange for money. As you gain more experience and skill your rates will eventually go higher. But as you sell more of your time you eventually close the opportunities that rich people have. The wealthy do work hard either but they focus their time on finding and accumulating passive income. Eventually, investments such as stocks, real estate, and other passive income can be passed on to the next generations. Like employees, they too gain more experience and skill so they will eventually accumulate more wealth.

2. Risk Tolerance - The rich can afford to lose money. If the wealthy loses money from an investment he will still have enough to recover. That is where the Filipino OFWs (immigrant workers) get a huge disadvantage here. A Father comes home from the Middle East he and his wife opens a small business — let’s say an internet cafe — but disappointingly they had to close it down because it’s not making money. The reason might be financially. e.g they ran out of cash or because of mismanagement due to them being inexperienced at running the business. So the father needs to find another job abroad again for the next 5 years. Rinse and repeat afterwards.

3. Family Culture - People who were born wealthy were brought up in a rich state of mind. They knew from the beginning that they are rich and they knew how their parents became rich. If you’re from the middle class you don’t have this knowledge and so you go to the local bookstore and buy a book like Rich Dad, Poor Dad. Eventually those book will make you delusional and you think you’ll make it in the next 2 years. Then real world will hit you like a brick.
   
   But rich people educate their children through real life experiences in business i.e. They let the business ran by their children and they let their children find investment opportunities and so on. Most of us, on the other hand tell our children to get good grades so they can work for that rich man who was lucky enough to have rich parents.

What do you think, in your opinion,why rich people get even more rich?

The Rise of the Creative Teams

I remember then when our art teacher asked us to draw something about the Philippines on an illustration board as our home work. I drew a similar mini comic of the late Larry Alcala. While most of my classmates obviously asked their parents to draw for them, or drew all the same things like mountains, rice fields and farmers.

I got the best flattery a young artist would have; my teacher took home my artwork. Then in high school I played the bass guitar. Yes, I was a young creative person back then.

Fast forward into the present, I am now a computer programmer but this industry drained out the creative juice out of me. Bug fixing, Databases and API libraries, frameworks all made me now a complete nerd.

And I know I am not the only one. I know programmers who are good at playing the guitar,some are good in art and some are good in photography.

But generally, companies wants us to be geeks. That’s the reason why they hired us anyway. So eventually that creative urge on us will die. Our taste for beauty will vanish.

But let’s say there are companies out there that let creativity flow around the office culture and what benefits will you get? What will be the end product you have with a highly creative programming team? Creative solutions, clever product names, original UI, wonderful user experience. Overall you’ll get a software product that will stand out, remarkable and viral worthy.

This problem is prevalent in the industry, just look how nerdy Google+ is compared to Facebook and Twitter. Google spells nerd. While even older, Facebook looks cool and fresh. Even naming a product with a plus sign is totally nerdy. For business softwares, a good example would be Mint.

Creative teams will win, hire the artists and cultivate their creativity.

Tweet Caddy

Today, I have finally shipped my side project TweetCaddy.com in a single sentence; it’s the most advanced tweet scheduler. And I believe it’s going to send you new customers from Twitter.

This idea came from my past failed project Bodega Sale. I noticed some of the Bodega Sale users are very active on Twitter. These “users” are all Shopify store owners which by the way, they signed up but they did not actually use the app. So I observed, and one store in particular was handling customer service, sales inquiry and lead generation all through Twitter.

The store is in the beauty product niche and it was doing pretty good for an online store at that time. I realized then, that social networks are already playing an important role in internet marketing. Its already 2011 after all. Here are some of the techniques that I noticed they did:

1. They consistently made friends to their niche market.
2. They retweeted and mentioned interesting tweets from their community.
3. They handled customer support pretty well.

And so the next day, I tried to copy the marketing technique on what the online store was doing. But then I just got frustrated with the web interface. I tried the Mac Twitter app but it’s not very efficient marketing tool especially for finding potential customers.

The result, I got struck on this idea to make a simple, easy to use twitter marketing tool for not so techie users. And to enable them to sell easily their products through twitter.

So, I sat down a few days after work, and began experimenting with an RSS feed reader. I went and searched Filipino developers who blog and I put them together so their articles will be announced through the @FilipinoDevs twitter account.

That worked nicely at first, but finding more developers was a bit tricky. So I wrote a Twitter search function which you can search keywords based on tweets and a search function which shows all followers of a user. I named these Keyword and People Search.

For an example of People search: You’r selling shoes. Your customers would be all of the followers of @zappos.

An example of Keyword search: You’re selling slimming products, Search for people who tweeted “I want to diet.”

Did you get the idea?

Now why should you sell to twitter users? Because they are sneezers. They are young risk takers and willing to try and click on anything. They are very social and their profiles and tweets are mostly public.

A lot of things are planned in the future for Twitter Caddy so please stay in touch.

Thanks for reading, I hope you check out the app and I hope it brings you more customers.

Why Startup Weekends Don’t Work

Last Friday, Oct 21 2011 The first Startup Weekend Manila was held in MINT College. This event gives an opportunity to entrepreneurs to bring their startup ideas to reality. You first pitch your idea then they’ll vote. The ones who get enough votes will get a change to “work” on their project for two consecutive days.

This is the first I’ve seen in the Philippines. I’m sure there are smart young developers out there who had organized their private hackathons but this one is really a big event for the Filipino developers. Over 200 people have attended the event with a registration fee of P1,000. (23~ USD)

My love for my country is back once more. We have a brain drain happening in the Philippines — our intelligent and hardworking people are leaving and are working abroad and few of us remaining don’t have our visas yet. :) Kidding aside, I’m very proud of my fellow Filipino entrepreneurs for pursuing their dreams no matter what it takes.

I feel jealous as I look through the pictures in twitter. Saying to myself I wish I was 21 again with a Mac Book Pro and learning from these brilliant mentors and fellow entrepreneurs. But I had to focus on my tweet scheduler app because I have been in an out of focus for the past 3 years. And I swore to myself that I shall build only one thing and get my ROI as soon as possible.

In addition, I don’t believe that startup weekends will help if your goal is to make profit. You can come there for networking and getting education from mentors but if your goal is eventually make something profitable then you don’t need to participate. Below are the reasons why I think the startup weekend will not work.

1. They Promote Instant Gratification - Perseverance and hard work can’t be taught in schools, by ebooks and by mentors. Sure you can inspire them and tell them to take action on their ideas. But it’s when after you finish version 1.0 and that all your energy will go all the way down to the bottom is what will break you.
   
   What is tricky here is that you’ll never going to experience the bottom during the weekend development phase. This will happen after you get all features completed and all your energy exhausted — burn out is common in the startup world and no mentor can help you there.

2. Profitable ideas won’t win votes - Who would vote for the boring B2B app and the greedy business man? Winning ideas are usually the ones that would cure problems of society and changes the world. Would you vote for a appointment scheduler and invoicing for dentists that charges $50/month or would you rather vote a crowd sourcing app for giving orphans a decent birthday party? Unless the panel of judges are all dentists the second idea would win by a mile.
   
   See my point? The first idea sounds boring and greedy but the second one is exciting, touches the heart and a would-be crowd favorite. Media would write about it i’m sure. I don’t want to sound mean here (I’m very sorry for the orphan example) but if the core of your idea is not to make money then sorry, it’s just a side project or a hobby.
   
   All I know in the history of mankind is that wealth is the greatest motivator. Not material things, but wealth. Example, travel the world, best education for your children, freedom from debt, freedom on doing what you like and etc..
   
   This is why believe in ideas like Finishweekend.com and Ludum Dare’s October challenge are good ideas. Finding and getting customers to use your app and charge them monthly is terribly difficult.

3. Cash Prize - Startup manila has a cash prize of 15k SGD (P511k~ or 11k in USD) What if you won? Would you hire a developer and setup an office? That money will burn in just 2 months, so in my opinion, that is not seed money, it’s a prize. Like a cash prize from a singing contest.
   
   Actually, I’ve told my friends that startup weekend is sounding like the American Idol for the developers where the winner will have to work for continuos hours. Anyway, You’ll not create any buzz without it, the prize is for marketing the event.

Having said those reasons I still believe that one of these participants would make it on top. I am still proud that we have these young passionate entrepreneurs that would someday build the next killer app. And thanks for the organizers and sponsors for making it happen.

As for myself, I’ll need to finish my own bootstrapped app which is now on it’s 3rd month in development. I’ll blog how it goes in the future.

A Summary of My Adventure

It’s almost a month now since I posted about my experience on Bodega Sale. Where I worked on the app for 1 year on the side and it did not sell to a single user. Remember this was a web app where we usually charge a recurring monthly or yearly fee. So the customer will really give it some thought before subscribing. And when they do subscribe, they will definitely use it.

Lessons From Hacker News

I was really amazed how the traffic came from my post on Hacker News. But what I am grateful for are the advices and comments that I had received. Below are some of them:

From Jeff K: He said that my target markets are

1. New start-ups that want to use Shopify and
2. Someone who’s slowly growing and where Excel no longer cuts it.

I was really aiming for #2 because they were the ones who are established and they have a steady cash flow. But these well established small businesses will not let their sensitive records to be put on someones server who they don’t know.

But it’s possible, it’s 2011 you can now do businesses to people whom you’ve never met. Maybe if I started building their websites or uploading their products, I could establish a client relationship with them.

From Johnderk: He said “Detatch from Shopify.” I’m not sure if the problem was the platform. Because there were apps that are selling in Shopify. They claim to have 14,000 stores but I can’t tell how many of them pay for apps. This maybe a valid tip.

Travis Russi Great post. He woke me up with this one. He said

“BodegaSale looks like any other accounting product, just with some lipstick (i.e. Navy or Green themes).”

That is so true. My excuse here was that coding this project was really really boring. Working on an accounting software was all about imaginary money and products like pencil, notebook, staplers. I maybe subconsciously doing these decorations just for the sake of getting excited again to get back to work.

“If something takes 3 clicks to perform, figure out how to make it take only two clicks. If 2 clicks, get it to 1 click.”

This is what I had iterated during the project. And I probably iterated it too much. What is wrong with UX is that it disengages you with the reality that users will soon get used to it. Just like the TV remote, it has so many buttons but eventually everyone including grandma will get used to it. It just takes time.

Provide value for the customer first — something that will solve their problems — then UX will come second. I’m not a UX expert though so don’t take my advice personally.

With these lessons, I definitely learned a lot! A lot more than reading books or someone’s blog. The bottom-line for me and for us geeks is that marketing is shockingly difficult. Marketing is not just about that landing page, seo, ppc, social media marketing etc.. It is the entire business. It is understanding the market and their problems. And trust most importantly; Just how do a stranger on the internet establish trust with thousands of people? I’ll blog as soon as I found out!

Dying App: Bodega Sale a Web-based Bookkeeping App

For the past 2 years I have continued to struggle on selling SaaS (Software as a Service) products. Although, I have been a provider for my family as a freelancer and I get to pay the rent and bills every month. But for me and for some others, entrepreneurship is just an irritating itch that I need to scratch — maybe for the rest of my life, but I’m fine with that.

Last June, I launched my lastest SaaS product Bodega Sale the results of this adventure as of today are:

By the way, the app was launched on June 27, 2011, so after 5 weeks of marketing:

130 views of the screen cast.

6 app installs.

5 uninstalls.

2 support tickets.

0 usage.

208 coding hrs (1 year of working on the side. maybe 4 hrs every week (52 weeks x 4hrs)

So I’ve learned things the hard way. I’m now going to share with you on what I think went wrong.

Lesson 1: Focus.

Why I failed was mainly because I was out of focus. Not because I have a day job. Well maybe somewhat a little bit. But without my day job as a freelancer, I have no other sources to fund the business. So the effect of having a day job is unimportant. Working on something for 208 hours is a big deal.

The focus that i’m trying to say is the focus for the customer. As a computer programmer or preferably called web developer, and because I’m such a specialist on code writing — I believe so — I went to leverage on that expertise and just made a great product. So I went and seek out a product that was sellable and I’ve had experience with (Elohai small business solutions a small business inventory shareware. And a customized accounting software from an enterprise customer during 2004-2006). I’ve analyzed and googled a lot. The obvious choice was a SaaS accounting software. And I’ve thought these are like staple for any business they are selling everywhere around the world I would never lose. So that’s how I made an accounting app for Shopify.

Focusing back on customers. My customers and users are supreme pragmatists. They will never (99.9% never) try to replace their current accounting system for any new and unknown one. But they will maybe try if you’re the version 2 of the currently installed program. Or if they are loyalists to a brand, for example Microsoft.

Most small businesses will begin using business software by solely using excel spreadsheets, they enter their numbers they will use it everyday, they will email it to their accountant at the end of the month it’s done! The lesson that I’ve learned here is that I was a surgeon offering surgery to a patient without a bleeding neck. In other words my product has no problems to solve.

So the most important lesson was that I should have focused first on finding customers with bleeding necks. I should have spent more time on finding and communicating with people with real life problems.

Lesson 2: End users of accounting software don’t have early adopters.

There will always be early adopters in your software. Even if you hide your product from your relatives and friends. You’ll always get early adopters. They’ll signup with an email account that they never use, check out the product. But they will never come back.

To be successful here is to have those excel-using end users to uninstall excel and use your product every day. And that is very difficult to achieve and it’s the same difficulty as going to the moon. But it’s not impossible, Microsoft Office already did a great leap on making them to stop from using pen, paper and the typewriter. It’s between Windows 95 to Windows XP everyone all shifted like a herd.

This is why I believe accounting software like any ERP software are best marketed by sales people with a company insider. Just how I got the contract for my first accounting software in 2004-2006. I got that contract because I had an insider which approached me about the problem they are facing with the old dos accounting system.

Accounting software will sell if you market it with the classic cold calling, brochure giving, one on one sales, and personalized support. But unfortunately not with web-based… yet.

So maybe Bodega Sale will do well someday. I have still a marketing plan to execute and I have no intention on abandoning that plan.

But maybe someday, It could just turn into an enterprise product inside a company’s server room :)