In the last 6 months or so I’ve become a big Milton Friedman fan. Complex issues like inflation, money supply, economic growth, unemployment, government spending, deficits, etc always seemed like complex issues to me with many sides to the story. You could read or ask 20 different people about issues like that and you’d get 20 different answers.

Somehow, Milton Friedman seems to make them easy to understand, and I feel almost embarrassed that I didn’t understand them better before.

He has now passed away, but I just finished watching part of his 1980 documentary called “Freedom To Choose” and it’s outstanding. You can watch one part of it here, although I recommend you check out the whole thing.

I was shocked when reading Fortune Magazine recently (where Obama and McCain discuss the economy) to see a quote from McCain stating that his economic role model was Milton Friedman. That certainly caught my eye. Although I’m more liberal socially on some issues than McCain, this was a huge plus for me. I don’t think Obama’s plan for the economy makes any sense at all (he wants to raise business taxes, taxes on wealthy, and increase government spending… basically the exact opposite of what would help the economy).

It’s interesting to note that Scott Adams, the creator of the Dilbert comic strip, has decided to fund a study from the top 500 economists (at great personal expense) to see where they fall on the presidential election coming up. I feel pretty confident they will come down economically on the side of McCain (it’s just such a shame he hasn’t come around on some other issues, I’m not totally sold on him :).

Apparently, even Arnold Schwarzenegger is a Milton Friedman fanboy! (Which actually really helps explain his politics.)

What do you think about Milton Friedman? Had you heard of him before this post? Leave a comment below.

I’m fond of telling people that 9 out of 10 of my business ideas fail. I don’t just say it for effect. It’s actually true.

Of course this doesn’t mean that starting a business is risky. It just means that you need to go through a lot of ideas quickly, and inexpensively, to find one that works.

Some of these didn’t so much utterly fail as they did just not excite me after a while or didn’t really take off. It’s very possible that you could have a decent business idea, and it just isn’t quite the right fit at that point in your life. Anyway, I think it’s healthy as an entrepreneur to try a variety of things while still not being so ADD as to jump ship before an idea really pays off. It’s a delicate balance.

Without further ado, here they are…

1. GetItSmart.com
   

   This website I started way back in 2000 with a friend of mine. Basically, we resold and drop shipped computer hardware. Thanks to the incredible WayBackMachine which keeps a record of what every page on the internet looks like over time (they must be using ridiculous amounts of data storage) I was able to dig up a screenshot of what the site actually looked like back then (minus a few images).

   

   Basically, my friend and I found a couple distributors of refurbished computer hardware that were selling at a steep discount. These distributors also had absolutely no website front end that could present actual pictures and useful information to a buyer. Their catalog was practically just a list of serial numbers in an excel file and maybe one line of text.

   I decided to learn PHP and wrote a little script which would take the product lists from the distributors, come up with an appropriate picture and description (mostly by scraping from other sites), mark their price up by $100, and list it on our website.

   This business did ok for a couple years and we would occasionally sell some computers and make a couple hundred bucks. I remember feeling an incredible RUSH doing this and I think it is what first got me addicted to becoming an entrepreneur. It was an incredible feeling to just be some kid who threw up a website, and we would have people from all over the U.S. call up and make orders. Little did they know they were talking to a 16 year old kid sitting in his bedroom, giving me their credit card number.

   Why it failed: A few reasons. The dot com bubble burst and people stopped buying computer hardware. I also went off the college around this time. Finally, my business partner decided to take a bunch of money out of the account and ultimately went to jail for credit card fraud. This was the first of several unsuccessful 50/50 business partnerships. You can read here about why I don’t believe in doing those anymore.

2. Club Promoter
   

   For a while in college I decided it would be fun to be a club promoter. I’d seen some of my friends do it, and they seemed to pull in a large amount of cash occasionally, plus there were other benefits like they seemed to hook up with the hottest girls.

   The tough part was finding a club manager who would take a chance on us since we were totally unproven (I had a few friends together on this one too). Essentially by going out and drinking a lot we finally found a manager who gave us a Thursday night to prove ourselves. In case you don’t know, Thursday is a “dead” night for most clubs. They make all their money on Friday and Saturday so basically he was risking nothing by giving us a Thursday when they probably would have been closed anyway.

   Being the geek I am, I brought a technology aspect to the business. Within a week I had written a script (are you seeing a pattern here?) to scrape email addresses off Facebook for people at our University. We soon had a list of about 1000 email addressees plus our own list of friends. We would then set up drink specials that “only” students from our school could get and send out email blasts.

   We had fun for a while, and would basically make money in a couple different ways. Sometimes we would do a “cover charge” at the door (which we would keep) or sometimes get a percentage of bar sales if we hit certain sales targets.

   Why it failed: Primarily because the bar industry is full of shady characters, especially bar managers. Each week it was a negotiation. We would end up having to cover certain costs like the DJ or security. We could never get quite enough people to really PACK the place. College students were poor and didn’t want to spend money. I think a couple nights we actually came out negative. We did have a hell of a lot of fun though.

   Here is a picture of me doing a “Zoolander style walk off” at a fashion show themed party we promoted. If you aren’t sure what that is you need to watch the movie Zoolander immediately. Good times.

   

3. Corporate Blogs
   

   This idea I developed over a discussion with a mentor. Basically, we realized that blogging had a lot of potential and most big companies didn’t really get it as a lead generation tool.

   The idea we came up with was to help companies get their own blog going and market it. Our pitch was something like this: “we’ll set the thing up at zero cost to you and take all the risk, but if it starts to generate leads then you’ll pay us 20% of the new business generated from the blog, if it generates nothing then you pay nothing!”

   This pitch was well structured for a fledgling company because the idea of “i don’t make money unless you make money” works if you are totally unproven.

   Why it failed: It wasn’t a “bad” idea, but I decided it would be annoying and too much work to deal with big companies and try to get them to understand the concept. As a lifestyle choice, this was not very passive either, and I thought it would be a struggle to find the right people in a company to generate the content for the blog (a huge component).

4. Interviews With Self-Made Millionaires
   

   The idea for this business was to do 1-hour interviews with self made millionaires, and sell them as a subscription product. Basically, you’d pay $20/month or something and each month you’d get a CD or mp3 of someone who had started their own business and become rich.

   I even did a few of them which you can get for free here and here.

   I liked the idea of subscription products. After all, at $20/month I would only need to get about 250 subscribers and I’d be pulling in $5,000 a month (the production and distribution cost is very low).

   It also had the side benefit that I’d get to meet a lot of important people. There is no easier way to get someone’s time and attention then if you say you want to interview them (we are all a little vain I suppose).

   Why it failed: I think this was a good idea actually and it could still work. For some reason I just couldn’t get excited about it after a few months. It was a pain to set up the meetings with these people, schedule them, and then mix the audio/upload it etc. I enjoy just having conversations with people about business all the time, but this formalized interview thing just took all the fun out of it. And somehow it didn’t feel right to sell it afterwards, I’m still not entirely sure why. For some reason I found myself subconsciously avoiding it, and if I wasn’t really excited about it then it would be hard to do a good job.

5. Being a Business Consultant
   

   I briefly entertained the idea of becoming a “consultant” to people who are starting up businesses and even registered a domain name to promote myself. This idea quickly fizzled though.

   Why it failed: I had lots of experience, but not a ton of success yet. It would have been like the blind leading the blind. Also, people starting businesses are generally poor and have no budget for consultants. Oh yeah, and it would have been trading hours for dollars. Not passive enough.

6. Model Crowd
   

   This was somewhat similar to the club promotion idea, but some time later I decided that what really made a club successful was if attractive women showed up. If attractive women showed up, then men would show up, and if men showed up they would spend lots of money trying to impress the attractive women and the bar’s sales would be high. It all revolved around hot girls.

   Therefore, I figured if we had a bunch of attractive women, maybe clubs would pay to have them show up…either by giving them free drinks or a small stipend. This would be part of the clubs marketing budget to show they were the “cool” place to be.

   I promptly went out that night with a clipboard and began cruising bars recruiting girls to sign up for our newly formed “ModelCrowd” business. Notice it has a double entendre…model as in fashion model, and model as in “well behaved and a good example”.

   My pitch was simple and remarkably effective (I’d say it had about a 95% close rate). It went like this: “Hey you’re hot, want to get paid to show up at bars? Here put your email on this list.”

   Why it failed: Honestly, about 24 hours after conception, the idea seemed kinda stupid. Even if some club owners did decide to hire these girls, how much would they be willing to pay me (a couple hundred bucks?). Plus, these party girls would be very unreliable employees and who knows when and if they would even show up. In terms of developing an active social life, this might have been an interesting idea, but in terms of a business idea it didn’t have much merit.

7. Evolved Guns
   

   I met up with a mechanical engineer who also happened to be doing some really cool gun designs in his spare time. For some reason, I decided it would be a good idea to design a custom handgun with him even though I had practically zero experience in this area. We soon christened the new company “Evolved Guns”.

   After a while, we came up with a really cool design that looked like this:

   

   It was not a handgun from scratch. Instead it was a modified 1911 (one of the most popular and venerable handguns out there today, many companies make their own version of it, the original design which came out around the year 1911 is still widely used today, which is a fascinating story in itself).

   It had some neat stuff, like a laser grip (when you squeezed it a red dot laser would turn on to show where you were aiming), a compensator what blasted fire out the top (sort of like nostrils) to reduce recoil, a super light titanium frame, and a black chrome finish that was nearly impossible to scratch.

   I spent a lot of time and money on this one. The design went through 6 revisions, there was a MOUNTAIN of red tape to get the federal firearms license from the government, we played with lots of parts, milling equipment, etc.

   Why it failed: Ultimately, I couldn’t find a manufacturer for it and never even got one made which makes me sort of sad after all the work (the picture above is of a CAD rendering, not an actual one). If anybody wants to take a crack at making this thing send me an email, I have all the CAD drawings which you can use for free. Twice I had a major manufacturer lined up that fell through. Ultimately, I had to let it go for a variety of reasons. One, I was sort of out of my league here and had very little experience in manufacturing or mechanical engineering. Two, the insurance and license was expensive. Three, the price tag of the gun was getting pretty high (about $3,000) which made it a toy for rich people. And it was totally impractical for “typical” gun owners who were concerned with self-defense or hunting. Four, it was giving my parents ulcers. Five, again bad situation with business partner. Learned a lot in the process though :)

8. Brian’s Evolution
   

   This was the first blog I started. It was more of a personal blog. I eventually scrapped it though and started this blog (Breaking Free) instead.

   Why it failed: It was focused too much on me, and no one wanted to read it. When I started StartBreakingFree.com it was more focused on helping other people. Personal blogs don’t have much earning potential I don’t think.

9. The Breaking Free Challenge
   

   This was a companion website I thought about making for a brief while which would help people get their first business started. Each day for 30 days it would give them a task like picking a domain name or doing some marketing, and they could write about if and how they accomplished it.

   Why it failed: I decided not to do this idea because it was too structured. Businesses aren’t this cookie cutter, and I realized after getting into it a little bit that the steps I was creating for each day wouldn’t apply to everyone. I think this might have worked better for a more specific idea like a “30 day challenge to creating a blog” or a “30 day challenge to lose 10 lbs” or something. But for “starting a business” it was too generic of a goal.

Anyway, that’s it. You can see I have been all over the place with my ideas.

The ones that have worked have been the exception. But whenever one doesn’t work, I take it as a valuable learning experience and know that it will make my next one that much more successful.

By the way, ShoeMoney has a great post on this same topic which you might enjoy reading. It seems to be a common theme among entrepreneurs. Success comes after a lot of failure.

Until next time, keep breaking free!
Brian Armstrong

Many of you have taken advantage of the 3 free books I give away on this website. Since I’ve started doing it the number of subscribers has gone up consistently.

Today I’m going to teach you how to get your own free books that you can give away. This is a great technique to generate leads in any business, whether it is subscribers to a blog, or just to get email addresses of people who may be interested in your product.

Some people have asked, “How are you able to give them away?”

The answer is that these books are either in the “public domain”, which means the copyright has expired, or they are under the “creative commons” license, which means you have some freedom to use them.

One of the best places I’ve found to get these types of books is Scribd.com.

Supposedly they are one of the top 300 sites on the internet (that no one has heard of), receive 20 million visitors a month, and have 17 billion words in their “library” of uploaded documents.

I suggest you take some time to browse their site and see what pieces of content might be useful in your niche. They have other types of content besides books as well, such as sheet music, art, slides, and essays.

What material can I give away for free?

Copyrighted material is the strictest: you can’t use it without paying. Public domain works are the most open: you can do whatever you want. Creative commons is somewhere in the middle.

As you browse the different documents on Scribd you will see little icons that tell you what the copyright situation is. Here is what each one means (it can get a little tricky):

Public Domain

Public domain works are the most wide open. You can download them right off Scribd and distribute them on your own website. You can even edit them however you want and sell them.

According to Wikipedia:

In the United States, all books and other works published before 1923 have expired copyrights and are in the public domain. In addition, works published before 1964 that did not have their copyrights renewed 28 years after first publication year also are in the public domain…

The Creative Commons License

The next four are all more specific versions of the creative commons license. Under all of them you can still give the book away for free.

Attribution

This means you need to give credit to the original person who created the document. Most commonly, by leaving their name or website intact inside the work to show they were the original author.

You can still do whatever else you want with it though, including giving it away, selling it, or editing it.

Non-Commercial

This means you can still give it away for free, you just can’t sell it.

No Derivatives

This means you can only give away verbatim copies of the work. You can’t edit it.

Keep Same License

You can make derivative works (edited copies) but they must be distributed under the same creative commons license that the original used.

Conclusion

You can read more about the creative commons license here, but as you can see, under any of the creative common licenses you can still give the book away for free (which was my main goal). Just keep the author’s name in there and don’t edit it and you should be fine.

I don’t really recommend trying to sell public domain or creative common works (although some people do this). Instead, give them away for free to generate leads.

There really are some great books out there. I read and paid good money for both Think and Grow Rich and The Richest Man In Babylon when I bought them in paperback years before this website. It wasn’t until much later that I realized they were available to distribute for free.

So there you have it. Go to Scribd.com and check out some free material that your potential customers might really like. Then give it away to them in exchange for their email address to build leads for your business.

Most people don’t buy anything the first time they come to your site, and if they leave you will never hear from them again. But if you give them some instant value in exchange for their email, now you can follow up with them at some point down the road to build trust and a real business relationship.

Until next time, keep breaking free!
Brian Armstrong

Two more of my guest posts came out today in the blogosphere.

The first is on Problogger.net and shows the results of some split testing that I did on this website. It is titled Split Testing: How To Increase Your Adsense Earnings 94% Overnight.

Screenshot:

The second came out on LifeHack.org and it titled 8 Essential Skills They Didn’t Teach You In School.

Lately, I’ve been simultaneously using less and less of what I learned in school while discovering more and more skills that are vital to success which were never even offered in school!

If I were to be 100% honest, probably the most valuable skill I learned in college was how to talk to girls (certainly a vital skill for happiness and success, but not what I was there to learn).

The economics classes? Nope, mostly academic mumbo-jumbo that is entirely useless to all but a handful of policy makers. The computer science classes? Hmm, maybe about 10% of that I’ve used, but it’s nothing I couldn’t have picked up with a couple good books, which I routinely do now. The history, English, philosophy, and physics? Aside from giving me a general understanding of the world and making me sound smart at cocktail parties, I can’t think of anything in there that I really use on a day to day basis.

Much of college gave me a bad taste for education. It made learning a real drag. I got through it to get the degree, but it wasn’t until after school that my education really began.

So what are the top skills that should be taught to every man, woman, and child who enters our education system? I’m glad you asked…

You can read the rest here…

As I’ve written about in the past, guest posts are a great way to build your readership on a blog.

Until next time, keep breaking free!
Brian

Today I got to play lawyer. Some of you may remember this real estate deal which went bad, in part due to my own ignorance and in part due to an unscrupulous contractor.

If it had been an honest mistake with this guy, I’d say it’s water under the bridge. But this particular contractor was just thoroughly unethical and I decided to go after his ass Donald Trump style and make him pay.

I always wanted to try being a lawyer. Mostly just because you get to wear $2,000 suits, act like a bad-ass, and take down mob bosses (of course when I found out this didn’t happen in real life, I quickly moved on to secret agent as my next profession of choice). It was finally my day in court. I put on my best suit (more like $200, but still) and woke up at the ungodly hour of 8:45AM to head to court. At first I thought he wouldn’t even show, but he did and the anticipation was heavy in the air as I furrowed my brow and starred him down (I was watching some discovery channel recently, and this alpha male sure as hell wasn’t going to break eye contact first).

I recognized the feeling coming over me. It was the same feeling I get before doing public speaking, acting, or that one time I tried stand up comedy (no one laughed). It’s nervous energy but it’s also a rush. One of my life philosophies is that you should continually try doing things that sound a little scary to expand your comfort zone. This is how you build confidence. Try to have that scary - pit in the bottom of your stomach - feeling at least once a week if you can. I had never gotten to prosecute a crook in court so I figured even if I lost it would still be worthwhile as an educational exercise.

I had practiced my opening arguments and was all set to launch into a dazzling diatribe complete with photos and earth shattering proof the likes of which Jack McCoy has never seen. I could even picture the standing ovation from the rag-tag audience that populates a small claims court house and the press waiting outside to snap my photo as the defendant was escorted in silver bracelets. Unfortunately, my daydreaming was cut short as the judge called us up and announced he was sending us to mediation.

Mediation is apparently standard practice in small claims court where they sit you in a room with a neutral third party and see if you can work it out. I still got to do my diatribe though.

It started out predictable, I laid out the facts of my case clearly and simply. I had also sued him for an absurdly large figure in the hopes this would be a starting point for negotiations (which it was). It was then his chance to respond, and boy was he a weasel. I got the feeling this man had been practicing the art of bullshitting since he was in the womb. I couldn’t tell if he really believed some of the stuff he saying (delusional) or if he was was just good at faking it. Probably a bit of both.

He had perfected the art of saying a bunch of totally unrelated things in rapid succession during an argument to the point where you forget what the main point was (a tactic I first saw employed successfully by my old college roommate when picking up women).

It would have been a pretty open and shut case in my favor, except he did pull one pretty neat trick. It turns out when he bid the job, his first bid included an itemized list of stuff to be completed and a bid for labor only. I didn’t want that so he submitted a second bid later for labor and materials which is the one we actually signed. Problem is, the second bid referenced the list of items in the first bid and didn’t duplicate it in one complete contract.

Therefore, we were left with a somewhat unfortunate situation where the contract and the list of items document had a contradiction. One said he was bidding for labor only, and the other said he was bidding for labor and materials both.

The one with the signatures on it stated what we actually agreed (labor and materials) but he stapled the original list of items to the back of the contract so it looked like all one document. Bad weasel!

Sure, it had no initials on it or anything (a thinly veiled ploy of a desperate man), but I still needed the list of items document to show what he had not completed so I couldn’t discount it completely. At the very least, the judge would have had to admit there was some contradiction between the two pieces of paper and this opened up a window (however slight) of doubt.

I have to say, the 150 year old man who was mediating was very impressive. We verbally sparred and battled on, both concluding the man across from us was a complete idiot, and eventually gave up communicating and decided to go before the judge. But the mediator wasn’t done yet. He asked to speak to each of us individually.

After lecturing me on how to get a better contract next time when dealing with the criminal under-world of contractors, he looked me straight in the eye and said: “Brian, what will make you happy?”

That was a good question I had to think about. Money? Yes. Punishing evil? Yes. Getting him to admit he was wrong? I’d given up on that…you can’t change people who are a detriment to society unless they want to change themselves. He wasn’t ready for that yet. Still needed a few more lawsuits against him. I eventually came up with a figure that would make him think twice before screwing over other citizens, and it was his turn with the mediator.

Anyway…long story short, I eventually walked outta there with $2 grand. I would have been a lot happier with $5 or $6, but oh well. As they say, a negotiation isn’t successful unless both people leave feeling like they gave something up. And hopefully he’ll at least think twice before taking advantage of someone next time.

Chalk one up for the good guys.

Lessons learned:

• Do scary things in life, they help you grow.
• Lawsuits are emotionally draining and bring a lot of negative energy into your life. Next time I would love to be able to afford some swanky (real) lawyer to take care of it for me. This way I’d still be able to punish crooks without it taking up my personal time or energy (I have far more fun things to be doing).
• Next time I’ll work harder on getting an unambiguous contract. It’s worth a few awkward moments and being stickler up front for paperwork to save this headache down the road. Itemize every item that needs to be done and have them initial each NUMBERED page so there are no “paper-rearranging-stapler-weasel” tricks.
• My biggest lesson (which seems obvious and everyone told me but I still didn’t do): DO NOT pay a contractor a dime until the work is done, period. Don’t ever give them money for materials up front, even if they say they can’t afford it. Inspect the hell out of their work before paying, and don’t ever let a contractor talk you into giving them money up front. Walk away from the deal if you have to. The day you write the last check is the last day you will ever see them (unless you are in court).

At the end of the day I have to remind myself that this was an incredibly valuable (and inexpensive) lesson to learn so early in life. Many people don’t get taken advantage of so early in their business careers, and I’m almost glad it happened now instead of when there was a really big deal on the table. You just can’t learn this stuff in business school. Thank you, Mr. Weasel contractor, for teaching me about the world.

Until next time, keep breaking free!
Brian

If you’re in Houston, I’ll be speaking tonight at the Internet Marketing Clinic at the University of Houston.

2302 Fannin St, Houston, TX 77002
7pm to 9pm

It’s free to attend and you can register online.

I’ll be talking about how to make passive income online with web businesses.

Hope you can make it!
Brian

Hi Brian,

I wanted to write a quick email to let you know that I really enjoying reading your blog. I actually stumbled upon it when I was browsing randomly at Youtube videos and saw your video about not watching the news. I purposely don’t watch the news, mainly because I, like you, don’t think what is presented is any way reflective of what really is happening around me. It’s usually negative and biased in my opinion. So, I read certain portions of the New York Times and lots of blogs. From watching that video, I checked out your website, and I started reading the articles there. I happen to read lifehack.org almost religiously, and saw the donald trump criticism article, and realized that I’ve been reading your articles all along and just never made the connection.

Anyways, I just wanted to send you an email to commend you on your work and introduce myself. It’s always refreshing to see some of the philosophies I believe in practiced by others. I’m finishing up my PhD in grad school this year in Dallas, and I’m at a standstill of what I want to do next or where I want to go. I love the principles you teach on your website; I would love to start a job on my own terms, rather than work at an academic institution or pharmaceutical company. Frankly though, it’s utterly frightening since I have no idea how or where to start. I’d love to hear more about your motivation and your initial fears in starting what you started, so maybe I can get a sense of how I can get balance life with work.

Keep up the great work and hope to talk soon,
J

Hi J,

Good to hear from you. Yep I was in the same position recently. Finished up grad school and had always wanted to work for myself, but the temptation of big companies was too great (and also I think on some level I was afraid others would think I just couldn’t get a real job and that’s why I became an entrepreneur). So anyway I took an offer at Deloitte & Touche out of grad school, really didn’t like it that much, quit after 3 months to work for myself. It was the scariest thing I’ve ever done.

I think I had to do that corporate thing at least for a bit though so I knew what I was missing when I left. Otherwise I would have always wondered, especially when the going got rough. Entrepreneurship has some big ups and downs, its an emotional roller-coaster and you’ll want to quit at times, so it’s good to have some firm sense of what you DON’T want to go back to to use as motivation. It’s finally starting to pay off, but it didn’t happen right away (about four years actually).

Quitting is really hard. And if you go the corporate route “just to try it” and then go get a nice new house and car that you need to make payments on, you could end up trapped in the rat race for a while. Keep your expenses low and have confidence in yourself that if you were ever about to hit poverty you can always get another job. From that point of view, you really aren’t giving up much by quitting.

I’d start trying out a bunch of business ideas (whatever interests you) and see what works. This will be a great education that you can do on your own for a bit or on the side while at a job. Don’t be afraid to go through a dozen ideas or so before finding something that works (9 out of 10 of my business ideas utterly fail so I go through them quickly and inexpensively). If and when one of them hits, it will make it a lot easier to quit. I had a little company going before quitting. I took a huge pay-cut by leaving but it certainly made it easier.

Find solace in the fact that although you aren’t sure what to do, NO one (especially at your age) really knows what they want to do in life. At least YOU are spending some serious time thinking about it and exploring options instead of taking the safe and easy way out that everyone else does. That’s something very few people do.

Keep us posted and best of luck!
Brian

This video shows an interesting panel of people who’ve started web companies:

• Marcus Kazmierczak, VP of Engineering, MayasMom.com
• Marcus Frind, Founder, PlentyofFish.com
• James Hong, Co-Founder, HotorNot.com
• Dave Lu, CEO, Fanpop.com
• Karen Northup, CEO and Founder, CoreFino

Check out a hilarious story around the 18:57 mark from James Hong about how he bootstrapped HotOrNot.com for literally zero dollars. By the way, if he were to do it today it would have been even easier by simply throwing some Google Adsense on the page.

I have always had a certain respect for people who understand the idea that starting a business today doesn’t require much money. You’ll notice that Marcus Kazmierczak in the next breath after James’ story talks about how MayasMom was funded with $100,000 and they just took on a $100 million round of financing.

I have to wonder what in the world they were thinking.

Correction: Marcus wrote in to say it was $1 million, not $100 million. Sorry for the error!

As we’ve seen before, taking on investors is almost always a bad idea. Why would they give away a huge percentage of their company and take on all that debt? If it is a good enough site, it should be bringing in income from almost day one, and there is absolutely nothing on that site which required $100k much less $100M.

It made sense later when I did some research on the site. Basically Marcus Kazmierczak had no business being on the panel. First of all he is an employee, not really a founder. Secondly, the other websites shown on the panel are true blue internet success stories, all among the top 5,000 most popular websites on the internet. MayasMom.com barely breaks into the top 100,000.

If you don’t see the video below you can click here.

By the way, here is Marcus Frind’s check from Google for $900,000 that he talks about in the video. It is from just two months of Adsense earnings.

To learn more about how to start your own business for little or no money, grab a copy of Breaking Free. Thanks to all who have enjoyed it and written in.

I’ll have some more guest posts coming out this week. Stay tuned!
Brian Armstrong

One unfortunate part about blogging is that great content can quickly get pushed off the home page as you continue to make new posts.

New subscribers sometimes miss out on some “hidden gems” from the past.

I was looking back at some posts from the past year, and these really stood out to me as some of the best content that could really help people get their first successful business started (and quit their jobs).

I hope you enjoy them. Even long time subscribers may see something they missed or that needs reviewing:

• How To Create A Business Website In 4 Hours
• 46 Ways To Start A Business With Little Or No Money
• Interview With A Self-Made Millionaire - Steve Davis
• Interview With A Self-Made Millionaire - Howard Rambin
• Interview With A Self-Made Millionaire - Kevin Morgan
• How To Understand And Create Financial Statements For Your Business
• How To Go From Business Idea To Launch In One Month
• How To Choose A Killer Domain Name For Your Business Website
• 10 Ways To Come Up With A Million Dollar Business Idea

Here’s a question from a Breaking Free reader:

I’m not sure if you have any experience with this, but i’m wondering since the world and borders are shrinking, what are your thoughts on opening web based businesses in other countries. Is there anything that someone should know before going at it? Most specifically the USA and Canada.
There may be some legal issues as well as logistical.
-Lucky from HelpYourSelfGetLucky.com

Yes, I think this is a great idea. What’s most exciting about it to me is the idea of taking a business idea which you KNOW already works in the U.S., and then being first to bring it to market in another country.

Being First Counts For A Lot

Ebay was first to market as an auction site in the United States. They reached critical mass first and therefore dominated (the value of the site is directly linked to the number of people using it so there was a high barrier to entry for competitors once Ebay got going).

However, Yahoo Auctions was first to market in some other countries (like Japan) where they now dominate. Yahoo IS the Ebay of Japan, nobody there uses Ebay.

Why not become the Netflix of Canada, or the MySpace of the Netherlands, or the Zappos of Honduras.

The reason I like this idea is that it reduces the uncertainty in starting a business. You already KNOW the business idea is good because it has been proven to work in one place already.

What To Watch Out For

You do have to move quickly and catch on to a trend early. Most of the big ones (Amazon, Ebay, Netflix, etc) I’m sure are already being knocked off. You need to get in early when you see a site that has some success. It doesn’t have to be a huge site either, it could just be doing well in come niche.

The other concern here I’d say is to take an idea where it pays to be a local. For example, doing Netflix in another country would require knowledge of the local postal system. Twitter, on the other hand, could be launched in 50 new countries tonight with few changes. Pick an idea where you will have an advantage as a local and it isn’t trivial for the big dog to swoop in before you really get going.

Finally, you do have to watch out for cultural differences here as well. Selling beef jerky in India where most people are vegetarian might not work so well.

Save The Legal Fees

Regarding the legal aspect, I’m not a lawyer, but I wouldn’t be concerned about that at all. After all, once MySpace and Facebook became popular there were literally hundreds of social networking sites that cropped up that were all basically copies, and they didn’t face legal repercussions. Add to this the barrier of operating out of a foreign country and I think it’s pretty safe.

Of course, you would never want to actually copy the code off their website (that would be illegal), or if you were an employee at MySpace and then left to start your own copy there may be an issue there.

But strictly “reverse engineering” the functionality of a site is perfectly legal and ethical I think. Thats how all great innovations are made. Take the best pieces from everything that is already out there, and then take it one step further.

Feel free to send me other questions you have about starting a business. Please keep them to one paragraph or less and include a link to your site with your question.

What other proven sites exist in the U.S. which haven’t been brought to other countries? Leave us a comment below.