Turd Paycheck

How to Blow $100K in 18 Months

For starters, we broke a stack of the same rules we were teaching:

Rule #1 (from the Third Paycheck website): If you cant bootstrap it, then its not worth doing. Instead, we pushed investment money into the business instead of making it pay for itself as it grew. EPIC FAIL.

Rule #2: Create a profit quickly. Instead, we were willing to invest while the company made very little money for a long time. EPIC FAIL.

Rule #3: Launch canoes, not warships. In other words, run lots of small marketing efforts that cost little money until you find one or two that rock. Then, double down on the winners and sink the losers. Instead, we built a small warship with employees, computer programming, a slick website and the works. EPIC FAIL.

Natalie Allen took a bullet for all of us who participated in the downward spiral of Third Paycheck, a small business coaching company, by interviewing with Micro-business Fanatics to reveal what shed learned.

Third Paycheck was conceived to provide micro-business coaching to folks interested in starting a small business not coincidentally, its the same business model as Micro-business Fanatic. The coaching itself worked famously. The clients were generally thrilled with the quality and impact of the coaching. But Third Paycheck just couldnt get their marketing off the ground. They failed to get their message out to enough new clients.

As Natalie unpacks the black box of Third Paycheck, she talks about three major lessons:

Lesson One: If your marketings not showing promise in 90 days, move on!! If you arent having success with your current marketing strategy in 90 days or less, youre chasing a loser and you need to dump the marketing strategy, dump the business or both.

Lesson Two: Be careful investing any money until you know your marketing works. Its super-easy to pour investment money into a business even though the marketing isnt showing signs of life. In eighteen months, Third Paycheck substantially tested three marketing strategies: internet pay-per-click, email marketing and seminar marketing. None of these showed any signs of being able to generate a decent return on investment. Yet, Third Paycheck plowed forward for a whole stack of months, burning cash.

Lesson Three: Dont chase the megabucks win. Natalie talks about going after smaller wins with bigger chances of success instead of shooting-for-the-stars. She compares it to the difference between video poker games and megabucks slot machines. The video poker games dont promise huge wins, but they have the potential of building up to a nice return on your gamble. The megabucks slot machines, with the rolling jackpots, offer millions of dollars against zillion-to-one chances of winning. Natalie compares long shots like Third Paycheck to the megabucks machine. Play video poker, Nat says. Forget the long shots.

Category:

People & Blogs

Tags:

• microbusinessfanatic
• mbf
• business
• micro
• fanatic
• how to
• business advice
• small business