The Lazy Entrepreneur Podcast

Sam Priestley dives into modern day lifestyle entrepreneurship. What is working, what isn’t, and how exactly do you build a business that funds the life you want to live?

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“Whenever there is a hard job to be done I assign it to a lazy man; he is sure to find an easy way of doing it.” – Walter Chrysler

Most Recent Podcast Episodes

All of the following episodes can be listened to in any order. So find a subject you’re interested in and start there!

#51: Betfair Trading

“I had already been doing it a couple years and was quite successful, but this I had always felt was the dream. If you can make money on this, this is where the big money would be. I thought it looked really glamorous.” – Sam, on getting started on betfair trading

My professional gambling stories. In this episode, I tell Emma some stories about my attempts to make money trading on Betfair.

Recommended Listening:

  • Episode 11: My Professional Gambling Story – Matched Betting & Arbitrage
  • Episode 33: Value Betting

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

01:45 – What is Betfair trading
02:25 – How betfair makes its money
04:17 – Comparing Betfair to the stock market
05:53 – Sam’s effort to go full time on Betfair
08:09 – Starting small: two pound bets
09:22 – Why Sam doesn’t continue doing Betfair
12:31 – Attempting to create a viable Betfair trading algorithm
14:58 – The ball and chain bot
16:05 – Collaborating with a reader on professional gambling
17:25 – What is funding circle?
19:09 – eBay arbitrage bots
20:22 – Sam’s speech at a matched betting conference

Transcript

SAM: Hello and welcome back to another episode of the lazy entrepreneur podcast, we are your hosts, Sam and Emma Priestley.

EMMA: Hello.

SAM: Emma do you know what the most popular podcasts we’ve done are the two most popular podcasts.

EMMA: Well based on our conversation last night, you said the budgeting one was very popular because of all the comments, but I don’t know how many listeners that’s had, so no.

SAM: Yeah, that one is quite new. Maybe that would be popular in a bit. But of all the 50 we’ve done, the two most popular ones have been the one about professional gambling and the one about value betting.

EMMA: Yes so just like your blog.

SAM: That used to be the most popular then Amazon FBA overtook it. That’s what we thought. Because of that, I thought we should do another one on gambling.

EMMA: Lucky me.

SAM: Emma isn’t as interested in professional gambling as I am.

EMMA: What was the comment that someone made after we did the value betting podcast?

SAM: Oh they said something like, props to your wife for sitting through all that.

EMMA: Yeah because my wife definitely wouldn’t.

SAM: Yeah yeah, but that’s alright. Emma is attracted to me because I’m nerdy.

EMMA: Aha.

SAM: Let’s get nerdy about trading on Betfair. Do you know what betfair is?

EMMA: It’s a gambling website.

SAM: Yeah.

EMMA: I would have no idea what the term is, it’s not a casino.

SAM: Or a sports book, it’s a marketplace.

EMMA: Marketplace, I wouldn’t know that it’s called that.

SAM: It’s also called a betting exchange which works similar to a stock market but instead of buying and selling companies, you’re buying and selling the probabilities of an event happening. So what does that mean? That means that instead of going to a normal bookie and betting that a horse is gonna win, you can go to a betting exchange and you can buy and sell those bets with other people. Yes so just like on a stock exchange where you might be buying and selling companies, you have this bidder spread where people are offering to sell the probability an event at a certain price and other people are looking to buy it at a price, and this spread moves and then when people agree on a price a trade happens.

EMMA: So how does Betfair make its money.

SAM: So Betfair takes a commission based on the winner of the event.

EMMA: And is that percentage set.

SAM: Yeah so they take on average 5% of the winning amount, the more you bet the lower that amount gets. Because it’s a marketplace it means that you can trade on both ways.

 

EMMA: Yeah.

SAM: So we’re gonna talk about horse racing for the sake of this article, this podcast, so on a horse race if I bought the odds of one horse winning at a certain amount and then the odds changed, the market moved, I could then potentially sell out that same bet and lock in a profit before the event happened.

EMMA: Okay.

SAM: So with betfair trading, what you can do before the race starts, you can buy and sell hundreds of times, the same event, watching the market move up and down, and each time looking in a little profit or loss. So trading out of your position. Similar to how you do on the stock market. Lets say you bought some whatever IBM at a hundred pounds and then it went up to a hundred ten and you sold your one IBM, you would have made ten pounds profit.

EMMA: Yes.

SAM: It’s exactly same with that with horse-racing, so you can do all this trading before the event happens, then when the event happens the horse goes on and wins or loses or whatever but you’re okay because you’ve traded out and so what I thought once upon a time and I still do was that betfair is pretty much exactly the same stock market and there have been professionals making money on the stock market forever basically for a hundred years. But on the stock market everybody is a professional and it’s quite developed and there’s a lot of money there whereas on the betting markets, it’s mainly amateurs, people just going off and punting their bets, so I thought, could I take some of those techniques that we used in like the 80s on the stock market and apply them to the betting markets and hopefully make a bunch of money. Before we start I’d like to say that betfair trading is is one type of professional gambling that has always eluded me and I’m still hoping that one day it will sort of work out. So I’m just gonna tell you the story of my experiences trying to make a living being a betfair trader.

EMMA: You should all see the smile on Sam’s face while he’s getting ready to tell you this story.

SAM: You should see the non smile on Emma’s face. So I’ve always thought this for a while, that there’s some way you can make money out of this system and then in July 2009 so a little over 10 years ago, one of the professional gambling forums I was on had a competition and it was a month-long competition and everyone started with the same amount money and it was who could turn that money into the most amount over a month of trading on Betfair.

 

EMMA: Yeah.

SAM: So I thought this is the time for me to give this a go full time. So I thought for one month I’m going to be a betfair trader full-time, I’m gonna get all the training software, I’m gonna set up my computers with loads of different screens, all with different charts and stats on it and these ladder graphs and I’m gonna sit there all day betting on every horse race.

EMMA: So hang on, at this point had you done any professional gambling.

SAM: Yeah by this point I was already making decent money from gambling.

EMMA: On betfair.

SAM: I was doing the matched betting and arbitrage which you can hear about in the other podcast or on the blog post.

EMMA: So what I am saying is you weren’t completely new.

SAM: I wasn’t completely new, I had already been doing it a couple years and was quite successful, but this I had always felt was the dream. If you can make money on this, this is where the big money would be. I thought it looked really glamorous, have you ever watched something like Wall Street where they’re sitting there and they got all the screens on there and they’re placing their bets and they’re in this beautiful penthouse duplex apartment there is a half naked girl on the bed behind them and he’s there doing his trading on the stock market.

EMMA: No, that’s not real life.

SAM: No well that’s what I was hoping as I sat down at mine with my multiple screens and started trading. So I opened up a horse race maybe ten minutes before the race started and just tried to trade the volatility as it moved, there’s a bunch of things that I looked for so you can see trends that were happening, so you can see the odds start to change, you could try and chase the change to make money out of that. You could do a bit of market making so there’s a spread between the buy and sell prices. You could go in the middle and hopefully trade on both sides of that. Might get a bit of profit. You can follow the weight of money so you can look to see if there’s someone trying to place a really big bet but doing it bit by bit, because if someone places a lot of money it moves the market so you can look for that, you can try and manipulate the market yourself by moving it up and down and hoping to trade off people’s sort of psychology and see how they react.

EMMA: So are these all assumptions that you had before you went into this month or will they be some of the things that came out of doing this month?

SAM: A bit of both. I did a bunch of research, there isn’t really that much information about it, I bought a few books about stock market, didn’t really learn anything useful. And I sat there for hours every day, I started off because we only had a 50 pound float, so I started off with just two pound bets, I’ll pick my two pound bet, hopefully the market would change a little bit then I’d trade out my two pound bet and if I was successful, I’d make something like 3p.

EMMA: Wow.

SAM: And if I wasn’t successful, I’d lose something like 3p, 5p. So I did this day in and day out for 30 days.

EMMA: I’m impressed you got through it.

SAM: And I won, I won the competition. I basically tripled my money. In the first two weeks, I was pretty much, I lost money and then I got back to break even. And then for the final two weeks I made a consistent profit and for the last, so I had to look at my my history just now and for the last sixty races I traded, I only had three losing one’s, an average of 50P profit per race.

EMMA: Congratulations.

SAM: Thank you very much.

EMMA: One of your proudest achievements.

SAM: Finished a month, here I was ready to make it in the big time as a betfair trader and that’s it and that’s the peak of my bet fair trading success in July 2009. Basically, it’s just so boring. You’re making 50 P for half an hour work.

EMMA: It’s not very sexy is it.

SAM: And the emotional roller coasters you go through as the things are moving away from you, going up and down. So after I finished it, I thought, my first was let’s try and scale it up and place the bigger bets, but I was already kind of bored of it by this point, so I thought let’s try and automate it. And for maybe the next five years, five or eight years I spent quite a lot of time on the optimization. Once the company got a bit bigger, we hired a PhD who worked on it for six months, we hired another couple of people to build a better model of it, I did it did a few courses on data mining and big data and how to find information and stuff. Did a few AI things to try and automate all this trading. I spent quite a lot of money and built a big testing software so basically collected split second it split second data from horse racing on Betfair for a couple of years so you could run automated tests to see what would happen if you recreate your strategy over a year period, so you create a little AI that would go off and place bets for you and then that would run for a year.

EMMA: Is that successful.

SAM: Well we built the software, if that’s what you mean.

EMMA: Did you use it.

SAM: Yeah, but the problem is you can’t backtest the effect that your money has on the market. So let’s say I place one hundred pound bet on the market. Me placing that bet will change the market.

EMMA: Yeah yeah okay.

SAM: So I can back test this software.

EMMA: You can’t just base it on what happened previously.

SAM: We can make assumptions in the software like me placing this bet it will get filled, but maybe it won’t get filled and honestly we never, like each time we start a project, we’d get 3/4 way through and and then give up. We never really finished any projects.

EMMA: Why, why, because you were bored?

SAM: We were doing lots of things at the same time, so it would often be because something else came up, so we would be trying all sorts of different ways to make money gambling professionally. And one thing would take off and so we kind of drop everything and focus on that. And the trading on Betfair never really, never really took off. And so maybe a year ago, I started looking into it all again, I quit the business, this professional gaming business I ran a few years ago now, but because this trading on Betfair has always eluded me, and because like if you get some software algorithmically trading on betfair for you that’s just like printing money, how cool that is, having a bit of software that runs around making money for you, that was a dream and that still is something in my mind and so betfair is a betting exchange, there’s not a betting exchange that opened up called smarkets, and they now make their money from prop trading their own market. So you don’t make any money from the commissions, from the bets, they lose money. Where they make money is they’ve got a team in-house who just trade on betfair or trade on their own market and that’s where their money comes from.

EMMA: That’s mental.

SAM: I think that’s quite cool. It’s a bit cheeky.

EMMA: Yeah really cheeky. And they’re public about that.

SAM: I don’t know if they’re public about that. At one point we used to go head-to-head with because we basically when they started their traders were absolute garbage and so we found some ways to..

EMMA: Identify them.

SAM: And yeah and then make money off them.

EMMA: Yeah cuz they’re rubbish.

SAM: And then after that we got a few, cuz we need we knew everyone, we knew the CEO of smarkets and he contacted us and said, guys please could you stop this.

EMMA: Did he try to recruit you?

SAM: Actually he did. We did a proposal for them to market make on smarkets. And what we wanted was we wanted them to pay us a percentage of the turnover we did. And they kind of agreed but we couldn’t get there on what percent we wanted.

EMMA: Wow.

SAM: Yeah so I’m still kind of looking into it now. Every now and again, problem is it needs a decent amount of time to just sit there, for a month or two, and just go really deep into it all again. And everytime I took it up, I spent a few days on it, and was just like I’ll come back to it later.

EMMA: That’s not you at all.

SAM: One day I am going to work this out. Let’s have a look at my laptop screen now, I wonder if I still do. It might have a load of bots on here, load of algorithms, it always used to. I remember sitting on my computer for five years was a book called the ball and chain bot, which was one of my algorithms.

EMMA: What a terrible name.

EMMA: I thought it was quite a good name because it was a simple concept and the idea was that Betfair is the main exchange and there’s a few other bet exchanges out there and all the other exchanges are going to mimic what happens on betfair because if they don’t there will arbitrage opportunities in between them. So I called it ball and chain, so where betfair goes everyone else has to follow. So it’s a chain because it’s not immediate. It will only start moving once the difference gets big enough for there to be an arbitrage. So my thought is we could pick up where the arbitrage is going to happen before it does with this ball and chain bot. But probably just wasn’t complex enough. So I had loads of these things I was working on, never really got into them. So why are we talking about this on this podcast. One of the reasons is I would be interested to know if any of the listeners have done, made it from trading on betfair because I did on one. There was one reader of the blog who contacted me and came to visit us in Tunbridge Wells. We basically started professional gambling at the same time and when I went into arbitrage value betting, he found opportunities in trading on Betfair and went that route and so he was telling me some of the strategies that worked for him that don’t work anymore but they worked a few years ago.

EMMA: Yes and now they make good adverts.

SAM: And this is interesting and it it makes you think, because like we found one opportunity that he didn’t find which took us in one direction. He found an opportunity I didn’t find which took him in another direction and he’s still kind of doing it full time now and slowly retiring basically.

EMMA: So today’s how like open the opportunity is, it’s not like there’s this one perfect solution you’ve got to work really hard to find.

SAM: No it’s all about finding a little niche that no one else has found and making the most of it.

EMMA: Yeah yeah just because you find something this year doesn’t mean Betfair doesn’t close it.

SAM: And it’s also worth saying that the stuff I made from trying to trade on betfair, I was able to use on other marketplaces. So

EMMA: What do you mean by other marketplaces. Within gambling?

SAM: No, not within gambling. So for instance, funding circle is a peer to peer lending company, and they have an exchange on there where you can sell your loans. So the idea is you go on there and people say they want a loan for their business, and then loads of people will plays it no and it’s also worth saying no the stuff I learned from trying to trade on Betfair I was able to use on other marketplaces yeah so what do you mean by other marketplaces so for instance in gambling no northing gambling so for instance funding circle is a peer-to-peer lending company and they have an exchange on their well where you can sell your loans so the idea is you go on there and you people say I want to loan my business and then loads of people will lend a little bit of money for business and they’ll lend it for a percent, so it might be twelve and a half percent. There’s a secondary market where people who own little bits of loans of different companies can go sell those loans, so they might say well I got it for twelve and a half percent. I’ll sell it at like a 1 percent premiums to make a bit of money because the markets changed.

EMMA: Yes.

SAM: That’s how I built software which would trade on that and would look for, it was really simple, all it did was look to what the average price the loans were selling for and then if someone put a loan up for sale for too cheap, I would buy it.

EMMA: Yep.

SAM: So I did that for a while, had a business software that just ran around doing that for six months or so, and that worked quite well. So there’s a few examples of that, I think one area where I should have gone into but didn’t was in auto cryptocurrency trading because there are so many opportunities there but it just never particularly interested me. Anywhere there is an exchange, there are these opportunities. In some respects, it’s kind of what people are doing the retail arbitrage on Amazon.

EMMA: That’s what I was just thinking.

SAM: It’s another marketplace but it’s just buying and selling.

EMMA: It’s all about price.

SAM: So one thing people do on eBay is they have a bot that goes and finds stuff on Amazon that is sold for more expensive on eBay. And just copies the listing across, hosts it automatically, then if someone buys it on eBay, it just automatically puts the order through on Amazon. So that’s all automated and they’ll have thousands of listings, just, it’s the same sort of thing is finding the little arbitrage trading opportunities, learning about the way that markets work, taking advantage of the way people react to certain situations. So yeah so that was one reason, if you have any experience, I’d be really interested in hearing from any readers or listeners. You can message me at hello @ Sam Priestley dot com. That’s hello @ Sam Priestley dot com and I’ll put a link in the show notes as well. And secondly as I said, people seem to like the podcast we do on professional gambling, so let’s do another one. Something I haven’t really talked about before. Was that as boring as you thought it was going to be.

EMMA: No, it was a bit better, a bit easier to follow than the value betting one.

SAM: Okay, maybe this should be a regular thing. Stories from professional gambling days. Because I got a lot of them.

EMMA: Well you do love telling them.

SAM: I don’t think I’ve told you most of them.

EMMA: No.

SAM: I once did a talk at a matched betting conference, I wish I’d recorded, I was so in my element, there’s so many silly stories.

EMMA: Was the crowd loving it?

SAM: They absolutely loved it.

EMMA: You never told me that, that you did a talk.

SAM: It was a bit weird because, the guy messaged me, like I knew him from back in the day in one of these forums and he messaged me, come along. Wasn’t doing anything better at the time so I went along to it. But, the problem was is that everyone else doing a talk was doing it to sell something.

EMMA: Whereas you were because you just wanted to tell some silly stories. So of course you went down quite well.

SAM: And then, he asked me again a year later to come back and I think I said I’ll do it for a fee, 5,000 pounds.

EMMA: So ridiculous he’s never going to pay.

SAM: And he said no thank you. Well if you like that, let me know as well if you think you could hear some stories. I really like talking to people who have done stuff like that because it is always so weird.

EMMA: It’s very niche.

SAM: You hear about opportunities you just don’t know existed, and it doesn’t need to be about gambling, like I was talking to someone the other day who came down to me in Tunbridge Wells from reading the blog and he was telling me that he worked for a company where what they would do is they would create those slideshows where it would be top 10 celebrity bums or something. Or something and there’d be those slideshows and they go on and you’d click through, so they would make hundreds of those a day, spam facebook advertising with them, advertising on the website and they knew it if you got to like number four on the slide show, they’d be making money from you advertising versus what they were spending, so it was just an arbitrage. They were paying advertising to get people on the website knowing they’d earn a bit more from advertising themselves.

EMMA: Wow.

SAM: And they just found this little niche, grew it to a multi multi-million pound business in a couple years, yeah, so if anyone’s got any stories like that, tell me more. Cool. Anything to add?

EMMA: No, no.

SAM: You got any experiences on betfair trading?

EMMA: No, I have not.

SAM: On that note, thanks for listening and goodbye.

#50: Most Businesses Can Be Run Remotely, Just Worse

“We decided to purposely not do as well at the business that we’re running in order to maximize the amount of free time we have to do the stuff we want to do, and that’s okay.” -Sam, on opting to run Pipehouse Gin remotely

Most businesses can be run remotely, just worse. And that’s OK.

Recommended Listening:

  • Episode 43: Don’t Compete On Price
  • Episode 14: The Pros & Cons Of A Digital Nomad Lifestyle
  • Episode 4: When Should You Go All In On A New Business?

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure
01:05 – The breakdown of professions in the coworking space
02:58 – Running ecommerce businesses remotely
04:17 – Gin business conundrum
07:03 – The consequence of copycats in business
08:44 – Don’t be afraid to do a remote job that no one has done before
10:17 – Even if you don’t want to work remotely, you should get your business ready for remote work
13:00 – There are some benefits to working remotely and so you should leverage them as much as possible
15:45 – Gin specific business benefits to travelling
17:05 – Impromptu photo shoots
Transcript

SAM: Hello and welcome back to another episode of the Lazy Entrepreneur, we’re your hosts, Sam and Emma Priestly.

EMMA: Hello.

SAM: What are you squinting at?

EMMA: You haven’t even told me what we’re doing.

SAM: Oh, well today we’re doing an episode on, most businesses can be run remotely, just worse.

EMMA: Ouch.

SAM: Ouch, yeah, I think that’s true. I wanted to bring this up because we went to a talk on the struggles of being a digital nomad a couple days ago.

EMMA: Which was as cringy as it sounds.

SAM:And someone in the audience put their hand up and asked, so what businesses do people run remotely, so does everyone here do the same sort business? And it is weird that you do often see people doing the same sort of thing in, so we’re in this coworking called dojo which has about 300 members currently of which it’s like a third of them are programmers, a third of them have like e-commerce one-off businesses, and then the rest are doing a mixture of sort of life coaching or marketing. There’s load of those marketers, maybe a third of them are marketers.

EMMA: Yeah I’d agree with that.

SAM: Either way, everyone seems to be doing quite similar things, and when we come in, I mean they say what do you do, and we say we run a gin business where we make alcohol, we get like the weirdest look and everyone is like, oh, you can do that remotely?

EMMA: Yeah they think it’s pretty cool and they want to know more because we stand out.

SAM: We stand out it, it’s a bit different. And it is quite cool, that’s why we do it right. Trying to look cool.

EMMA: We are cool.

SAM: Anyway, it kind of got me thinking is why are people doing all these sorts of businesses and why do we not see this huge breadth of businesses that we see in the world. And the jobs that people have in the world. Why is that not replicated in Dojo?

EMMA: Yeah.

SAM: Because the truth is that most businesses and most jobs can be done remotely, just worse. That’s the caveat that we kind of got to talk about because there is this falsehood about remote jobs that people say you’ve got to find a job you can do better or just as well remotely to be a digital nomad or you’ve got to start a business, you’ve got to start over a remote business in order to be a digital nomad. The problem is there aren’t that many businesses that are better run remotely or can be run just as well remotely. Even the ones that people kind of say these are good remote working businesses, it’s not true. Those businesses are often better run from a set location, pretty much all the ones we mentioned earlier. Like an ecommerce business. It’s fine running an ecommerce business when you are one man man band traveling the world, but as soon as your business grows and you take on employees, having a set location is really good.

EMMA: And business partnerships and relationships.

SAM: Yeah, ecommerce sometimes then goes local like your brand of tea cups or whatever it is that you sell doesn’t need to always and only be online. You probably want to expand it and doing that, you’ll do better at if you’re in one place. Same with life coaches, that seems to be the popular trend at the moment, becoming life coaches well would you rather talk to a life coach over a dodgy Skype connection across the role world where there is a delay between each word.

EMMA: And it’s hard to and schedule a time.

SAM: It’s hard to schedule your time because you’re 12 hours apart or something you can go in and meet face to face.

EMMA: Yeah.

SAM: We see a lot of online English teachers. Well again, would you rather have an English teacher who you meet up to face-to-face or someone you speak to over skype. So yeah these businesses can be done online, but generally you’ll be better at it in one place. Same with the gin business. We had to decide with our gin business whether we wanted to scale it and we had this conundrum, did we want to stay in one place, double down on the business take on investment, get a load of employees in, and then try and make it huge or did we want to keep it as a lifestyle business, taking over how it is, making a bit of money and then just go off and do our own thing. Go travelling. And we decided to go traveling. We decided to purposely not do as well at the business that we’re running in order to maximize the amount of free time we have to do the stuff we want to do and that’s okay. And I think that’s something that nobody will tell you is it it’s okay for your business not to reach its maximum potential. You can go off and do other things, you can get your business to a point where it’s paying for your life and you’re happy with it, you can run a business remotely that is worse than if you ran it from one place and that’d be okay.

EMMA: Yeah. Because your priorities change don’t they?

SAM: You know your priorities change, you have different things you care about. But also like what about what costs living.

EMMA: Yeah.

SAM: Cost of living in Bali is tiny compared to cost of living in London.

EMMA: So you don’t need as many sales.

SAM: Don’t need as many sales to have the same quality of life here as we do in London. We need to do a fraction of the amount of business. So yeah, our business would be better if we were based in London, but maybe it wouldn’t have the same impact on the quality of our life. Because we would be working much harder, probably still reinvesting all the profits honestly, I don’t think we’d be taking much out. And then living like a worse life basically. It’s just weird to say that your business doesn’t need to be as good as it can be. It is okay to do a weird business that doesn’t really suit remote working but still makes some money.

EMMA: I guess there’s something to be said about the price, like particularly if it’s like a service that you’re offering, like a life coach or marketing. I think making your business remote I think people tend to then charge out less and therefore you’re kind of downgrading yourself and your value.

SAM: Yeah and that’s the reason why your business would be better if you’re based in one place because you can charge more. People will pay more because you’re not competing with every other life coach or online English teacher or whatever the businesses is in the world, which you are if you’re just remote.

EMMA: Yeah and it’s a trap, like you have a whole podcast on pricing.

SAM: Yeah yeah that’s well worth listening to if you’re doing this sort of business is that everybody gets their pricing wrong. I think the other thing to add that is a trap as well is that because you see some people succeeding as remote working in these things, everyone else then copies it and then something becomes a lot harder to succeed in that business. So at dojo there are a lot of people struggling to make a copy of a business that someone else succeeded at because suddenly, like competition is huge. Whereas we are literally the only gin business dojo.

EMMA: Yeah definitely.

SAM: And it’s weird right because a life coach, your customer is, could be everyone at dojo. Could be everyone in the co-working space.

EMMA: Yes.

SAM: You could legitimately sell to those people and hopefully make a bunch money. But those savvy people they know that half people there are life coaches and they’re really skeptical and the chance of getting many customers is just not gonna happen.

EMMA: Yeah.

SAM: Whereas if we went in with a pallet of gin and started selling gt’s to people, everyone would take us up on it. And they would take us up on that because they want to support us as well, because it is like something weird, like ah, there’s a gin business at dojo, how cool is that.

EMMA: But that goes back to the types of businesses people just like to do online, and they are pretty much the same. There isn’t a huge amount of creativity.

SAM: And there should be.

EMMA: Which i think us surprised us about being in this massive digital nomad community here in Bali.

SAM: Yeah there’s a lot of stuff that’s a little bit too similar.

EMMA: Yeah.

SAM: Don’t get me wrong, a lot of that is working so there’s a reason for that, but there is a lot of similarities.

EMMA: Is everyone listening to the same podcast, reading the same book, reading the same blog that’s telling them to all do the same thing?

SAM: And what they’re doing is they’re following the pioneers of remote working and then trying to copy what they’re doing.

EMMA: Yeah.

SAM: Okay I got three points I kind of want to bring up that kind of points this episode and that is the first one instead. Don’t be afraid to a remote job that no one has done before. Being unusual is a unique selling point and I mean you’re probably more likely to do better.

 

EMMA: Yep.

SAM: If you’re working a normal job, like yeah you might need to take a pay cut in order to do it remotely and you might be worth, you might need to work the same number of hours and be less productive than if you were in the office and therefore get paid a bit less, but that’s okay. Similarly, you can be doing a business like a gin business that no one has done remotely before, that’s okay too. Or, like, do you know one the other remote businesses that used to run? A coffee shop.

EMMA: Yeah.

SAM: How on earth do you run a coffee shop remotely.

EMMA: Yeah you hardly ever went in did you.

SAM: And when we first went traveling, remember when we did my conference calls from hostels in like South America, calling in with the management team. Getting the weekly stats and making decisions.

EMMA: It’s actually bit ridiculous looking back isn’t it?

SAM: Its completely ludicrous but you can do it, you can run a coffee shop from the other side of the planet due to the wonders of the internet. It’s just gonna be worse.

EMMA: Yeah.

SAM: So there we go, the first thing: don’t be afraid to do a remote job that no one has done before. Being unusual is a unique selling point. The next step is, you’re probably thinking well that’s nonsense because I need to go into the office each day or my bosses aren’t gonna let me work remotely but onto my second point is that even if you don’t want to work remotely, you should get your business ready for remote work because a business that was relying on you means that you are the bottleneck for that business, so a good business should be able to run itself and that is pretty much what all the podcast episodes we do talk about is building a business where every step is either automated or outsourced.

EMMA: Yeah and able to scale.

SAM: Exactly, yeah if you are the person packing envelopes, packing parcels and send them out, you are limited by how many parcels you can pack.

EMMA: Well yeah and you’re limited by the hours in your day.

SAM: Exactly, you are a bottleneck, you can’t, you might be able to double the size of your business but you can’t 100x the size of your business whereas you can if you can build your business with the idea that you want to take yourself out of it, that can be so you can travel the world or it can just be so that your business is good. This is something you should be doing anyway, even if you don’t want to go traveling. That’s what we have at the coffee shop, the coffee shop had a management team in place who are responsible for the day-to-day runnings, everything about the business day-to-day was automated, it was just a strategy, larger scale decision-making that I was involved with and that could be done via emails and via fortnightly calls about it or maybe once a month I can’t remember. Same with the gin business, we’ve built a supply chain that doesn’t involve us at all, so for our stock to go from being made for all the bottles to arriving at the right place for the ingredients for the gin to get there, for then the gin to be distilled and made, we put in a bottle the label put on, the cap put on, for that then to be stored in a warehouse and then we a customers orders online or a business wants to order another case and it all gets sent out automatically. That is a good business. If we were trying to do that ourselves, we wouldn’t be able to do it.

EMMA: Yeah it’s not scalable.

SAM: So yeah, so you should be trying to build your business anyway like you aren’t that important to it, that you you aren’t the key person, you aren’t the bottleneck. And also we don’t really talk about selling businesses in these podcasts. If you ever want to sell your business, you being the most important cog in the machine means your business is basically unsellable.

EMMA: Yeah, you need to be removed from it.

SAM: You need to be removed from it or else how can you ever be taken over. So that’s #2. Get your business ready for remote work because a good business is not reliant on you. And then the third point which hopefully will be a bit more positive, yet the business can be worse because you are running it remotely, and that is true for most businesses, but there are some benefits to working remotely and so you should make the most of them and leverage them as much as possible. So we spoke about all the different weird people in Dojo, someone said to us the other day that it is on the fringes of society that you meet the most creative people, you get the best ideas, you get to see people living in different lives and starting weird businesses. And that’s true. In Tunbridge Wells we’ve met a lot business people, but they’re very

EMMA: Traditional.

SAM: Yeah we met a lot of very traditional businesses, people doing business in the same way that’s been done for 200 years.

EMMA: Generations yeah.

SAM: No one in dojo’s co-working space is traditional.

EMMA: Yeah.

SAM: None of them are running a traditional business, they’re all trying to be a bit creative or working it out and just chatting to them, you get inspired and you get ideas that wouldn’t have thought about other ways, so leverage that. The other nice thing about travelling and working remotely is that each country will have businesses that you just don’t have a home, and so even though you might not be meeting the entrepreneurs behind it, you’ll get inspiration from, oh this can really work in England.

EMMA: Yeah, this app or this type of restaurant or this type of restaurant or whatever it is.

SAM: This food stall or this coworking space or whatever it might be. And that is quite cool, just travelling around you get inspiration from stuff that we just don’t have at home. Also for products, well I can’t tell you how many times I’ve asked what their product is they’ve told me something I’ve never heard of before and they’re like heres something online, oh when I was traveling and I was in Uzbekistan and Timbuktu or whatever and they have this great product, this great foot scrub or something that I thought would do really well, so I found someone there who was making it and then imported it to the UK and started selling it, which is good, you get inspiration. It’s also your chance to then expand internationally, check out a new market, that’s one of the things we want to do with our gin, is that while we’re here in Asia, we think Asia could be a really good market for Pipehouse Gin, we think that our earl grey and cucumber gin from Tunbridge Wells in England would do really well at places like Hong Kong, so that’s what we’re exploring. We’re using this opportunity, we’re not spending all the business money for really expensive flights to Hong Kong, we’re just traveling naturally and when we end up in these places, we’re seeking out distributors and people in the know that we can talk to. Just a couple of days ago, we met a importer of alcohol here in Indonesia. So yeah we’re definitely going to talk to them about what we can do to import our gin here.

EMMA: Yeah and before that we met a drinks rep for several big drinks distributors in Hungary, we’ve got loads of advice from her in terms of trends and yeah we’re thinking Hungary.

SAM: Yeah and in Ireland we met someone else who’s the head of marketing for a big drinks distributor in Ireland.

EMMA: Yeah I forgot about that.

SAM: Yeah so it’s a bit weird, it’s bit random but it’s international expansion, also if you’re doing e-commerce, it’s a good chance to meet your suppliers. You know I say that if you’re running a business where you’re finding a factory in China to make something for you and you’re importing it to the west and selling it, you don’t need to go and meet them, and often it’s cheaper for you to create your first product or get loads of samples through then if to fly out there and often flying out there isn’t as useful as you think it would be. But if you’re in that part of the world anyway, why not go and meet them, why not go and see them and help build that relationship? Another opportunity, another good thing about it is to take great photos of your products, of your brand, do some marketing. As a guy here living in the same hotel as us who makes jeans for guys whose thighs are too big for regular jeans.

EMMA: That goes to the gym a lot.

SAM: And so the other day, we asked him what he’d been up to today. And he said, oh well at this co-working space he met someone who’s a professional photographer and there’s someone who’s a professional model and they went and did an impromptu day of going to all the cool locations around Bali to take photos of his products? That’s pretty cool. Why not leverage that? Something else for those of you in a regular job is it’s a good opportunity to send those early morning emails. Your time zone means that your afternoon is their morning, you can really impress them by then waking up and they’ve got all these emails, and thinking Emma’s being really productive today.

EMMA: Or Sam being on a conference cool before 10 a.m..

SAM: Yeah yeah we had it, it was at 7 a.m. their time.

EMMA: It was quarter to 6:00, 5:45 am.

SAM: Yeah because we’re trying to set up this sort of franchise system for pipehouse gin for running events around the UK, so we were chatting with one of our first potential franchisees and they were friends of ours who know me quite well and they found it hilarious that they were chatting to me at quarter six, so much so that they put it on their instagram story.

EMMA: It was so shocking that they even recorded it.

SAM: There you go, that’s me, early riser. Something else we hadn’t really mentioned is when you’re working remotely, you can live a lot cheaper. When starting a business, you don’t have that much money and the more money you can reinvest in the business, the better it’s going to do whereas if you’re living in a high cost of living place, it means that you have to take out enough to cover your expenses, whereas if you’re in Thailand or somewhere cheap, you might need to take a lot less so you can bootstrap it for longer, you have a longer runway to make the business succeed, and yeah that’s it. So those are my three things, don’t be afraid to do a remote job or start a remote business that no one has done remotely before. Being unusual is a USP and even if you don’t want to do a remote job, if you don’t want to work remotely, you should be getting your business into position where you could because a good business is not reliant on you. A good business doesn’t need you there every day. Yeah let me rephrase that because a good business is reliant on you, it’s just not reliant on you for the day-to-day running of it. It’s reliant on you for the big thinking, the strategy.

EMMA: Creativity.

SAM: The creativity, if you are the necessary for the day-to-day running of the business, it also means you are a bottleneck to expansion and scalability and then if you are working remotely, yes your business will probably worse than if you’re just based in one place, but there are some benefits so leverage those benefits and make the most of it. Alright, Emma Priestley, remote gin distiller, anything to add?

EMMA: No, I don’t think so.

SAM: Awesome, well thanks for listening, if you got any feedback or you happen to have a business that works much better remotely, actually there probably is one, if you’re a travel blogger, being remote is quite important for that. Unless you’re a travel blogger, and you have a business that works better remotely and get in touch, then prove me and yeah, any feedbacks, say hello at sam priestley dot com and until next time, adios.

EMMA: Bye.

#49: I’ve Started A Budget And You Should Too

“You are in quite a variable career, and you don’t know what is going to happen and so having that insurance in place, having a savings is what will give you that longer runway to make it work” – Sam, on the main reason to budget

For the first time ever I have started keeping a budget. In this episode, I try and convince a sceptical Emma that budgets are great.

Recommended Listening:

  • Episode 46: The More You Earn, The Harder It Is To Start A Business
  • Episode 32: Financial Independence & Early Retirement

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

02:00 – Prestige of brokeness in digital nomadism
03:11 – Asking your parents for money when you’re 35
04:48 – Hedonistic adaption
06:42 – How our price expectations change over time
07:57 – Reason 1 to budget: to not have to work a 9 to 5 again
09:17 – It’s easier to save more than to earn more
11:05 – Reason 2 to budget: You have more fun
13:55 – Emma’s first experience in Thailand
14:37 – Reason 3 to budget: Closer to culture
16:38 – Reason 4 to budget: It’s like keeping a diary
17:08 – Reason 5 to budget: Knowing you can control your expenses is empowering

Transcript

SAM: Hello and welcome back to another episode of The Lazy Entrepreneur, we’re your hosts Sam and Emma Priestley.

EMMA: Hello.

SAM: And today we’ve got a very exciting episode that Emma has been buzzing about. We’re going to talk about budgeting and it’s because for the first time ever I have started to budget. Emma is not particularly happy about this.

EMMA: Nope.

SAM: But it’s kind of been motivated by two things, one of which is that we’re in Bali at the moment and we’re meeting a lot of people who are doing the whole digital Nomad thing, they’re starting businesses, they’re traveling a lot and most of them, maybe not most of them, but a lot of them seem to have absolutely no savings at all.

EMMA: Yes.

SAM: Which is bonkers because they are in really fragile careers, they’re starting and stopping loads of different businesses, they’re hustling as they’d call it, and they’ve got no guaranteed income each month. I can kind of understand if you work a full-time job and you get lulled into this false sense of security that you’re going to receive a paycheck every month and so therefore it’s okay to spend all your money, but it’s absolutely ludicrous that people living this kind of fragile life without saving anything, they’re just spending everything.

EMMA: Yep it’s very hard to save.

SAM: And yeah I mean it’s it’s hard to save, so I thought it’d be an interesting topic to talk about because of that and I think if one of those things where in this sort of digital nomads group, people I think are a bit more open about talking about their struggles.

EMMA: Yes.

SAM: Like there’s almost a prestige to struggling, having no money and hustling and working hard and someone’s told us the other day they’ve gone broke four times in the last year or something like that. There seems to be a sort of prestige behind that, like it’s part of the journey.

EMMA: And I don’t really know why.

SAM: Yeah it’s a weird culture isn’t it. It’s funny how cultures like that pop up, it’s definitely not the culture we had in Tunbridge Wells , it was the opposite there. Everyone was trying to show off how much money they’re making.

EMMA: I guess the point is once you’re already in a cheap place to live, there’s less risks around not having very much money because your day-to-day living costs a lot lower than probably home.

SAM: Yeah that’s probably true. The only problem is we have seen it before, is people end up getting trapped in somewhere like Indonesia or Thailand where the cost of living is very low and they can’t really afford to leave or go home.

EMMA: Yeah and I suppose the other thing is you don’t have your support network around you like you would at home so you probably don’t have any friends spare rooms you can stay in or parents can give you some food. And it’s pretty, it’s a pretty strange thing to think that you could, you’d need to ask your parents for money because you spent it all.

SAM: Yeah especially when you’re 35 or however old a lot of these people are.

EMMA: Yeah.

SAM: And the other thing is there’s no safety net here, like there’s jobseekers allowance and things back in the UK, there is some stuff the government puts to stop you hitting rock bottom. If you hit rock bottom in Bali no one’s gonna care.

EMMA: No, and probably no one is going to know.

SAM: Yeah so that’s one side that I thought would be quite interesting to talk about, and quite interesting to I suppose lead by example, do it ourselves. Do budgeting. Because how can I tell someone about budgeting if I don’t do it myself. It’s hard right?

EMMA: Really hard.

SAM: And then secondly, and the more important reason why we’re doing this is that our lifestyle is creeping up and up and up, and getting more and more expensive. I’ve always out earned my expenses, but I started when I was at university and I was living as a student and when I started to earn money I kept spending as a student and then my kind of expenses have slowly kept up with my peers and maybe just slightly, slightly outpaced them. There’s this concept I quite like that everybody wants to be just a little bit better than everyone around them.

EMMA: Yeah.

SAM: You want to be just a little bit better than everyone around you. You don’t want it to be like miles better, you just want it to be a little bit better. And if you’re in Tunbridge Wells and you’re surrounded by people with fancy cars and vintage wine collections, then it’s a lot harder to be just a little bit better. And then also there’s this concept of hedonistic adaption that if you have something good, you need to have more of it it, like you keep needing more to get the same level enjoyment out of things. Like Dan Bilzerian is a sort of instagram celebrity, he’s always sort of posting pictures of him surrounded by half naked girls on yachts and machine guns and things like that. Very very popular. And I looked into an interview with him and he basically said that he’s had everything and now nothing really gives him joy anymore because there is no next level that he can spend to. Like everything is just boring.

EMMA: Which is ridiculous.

SAM Which is ridiculous, like how can he have that life that he’s literally got millions of followers because loads of people want that life and he just, so yeah and that’s what we’re experiencing. So one example of this to that quite hit home recently was about three years ago we stayed in like the nicest hotel we’ve ever stayed in, and it was amazing and we stayed there for a few days and we’d been kind of thinking about it ever since and then since then and now, we stayed in quite a lot nice hotels to the point that we came back to that hotel a few weeks ago, and I thought, oh this is actually quite affordable. When we first went I was horrified by how much it cost and then we’ve gone back and how I’m like, compared to the other place we stayed it’s actually not too bad.

EMMA: Well part of that is because at the time when we first picked it, you did think it would be twice the price.

SAM: Well I remember it being so I think it’s about 250 pounds a night, and I remembered it being about 450 pounds of night but I only remembered it being 450 pounds a night because that is what my idea of a luxury hotel should cost has slowly crept. And that just seemed normal and so when I heard that it’s actually 250 pounds, I was like, oh, bargain! How ludicrous is that. So I want to counter that, I don’t want to just keep needing more and more and more to get to the same level of happy. So yeah, we started a budget, we got a little app we use called spendy where we add everything we spent on it. It’s quite good actually, it’s almost a bit like keeping a diary because when we go out for a meal or something, we’ll put it into the app and then we’ll add a picture for it so you were writing, oh what did we have done Monday? You can open up the little app and have a look.

EMMA: still not sold. I have a diary which doesn’t require me to not spend any money, which I am very happy with.

SAM: So, to try and convince Emma and to convince everyone else listening, I’ve come up with five reasons why keeping a budget is a really cool thing and we should all do it.

EMMA: I wish you could see us recording this, you should see the smile on Sam’s face right now, you are so you happy!

SAM: I really am! I really am, I’m quite smug. So number one the best way to never have to work a 9 to 5 again is keeping a budget. It is much easier to save money than it is to earn more, but everybody can save money, everyone can budget, but not everyone can earn more money because you need quite a bit of luck, and you also need some sort of level of skill or competence in something in order to earn more money. So, yeah if you want to quit your job as soon as possible, then spend less money and save it. We did an episode on financial independence and early retirement which is quite like a big community in itself. You can google it, it’s like FIRE, financially independent retired early, and their whole philosophy is you don’t need to earn loads of money, you just need to not spend a lot yeah and that if you save half your salary, you can retire in, I don’t know, 10 years or something like that. And that’s what they’re doing, there’s huge communities of people doing that. That’s because it’s not very good advice to say, well the best way to quit your job is to go in and find the job that pays a million pounds a year and then retire after two years.

EMMA: Yeah that is ridiculous.

SAM: But it is possible to say well maybe you can you know have a few less Starbucks each day. Maybe go support your local coffee shop where it’s actually cheaper. So yeah it’s easy to save then to earn more money, and also for every pound or dollar you save, is actually worth more than an extra pound or dollar earned, because of taxes. Like if you’re in a higher tax rate, you basically have to give half that dollar away, so you’d have to earn two dollars for every dollar you save.

EMMA: And also you can do something with that savings, so you can invest it.

SAM: You can put it to work so it actually earns you more money. And then when you see the charts of this sort of stuff with compound interest, it doesn’t take that long if you’re saving quite a lot before your income from your investments are outpacing your actual job or salary, and then you know, perhaps the most obvious thing is that keeping a budget means it gives you insurance for the future. So, for me, insurance is making sure I don’t need to get a job, but like that can be all sorts of things, if you’d have a job it could be insurance against getting fired, losing it, it can be insurance against falling ill and not being able to work. That’s a risk for me, you know, I don’t have a job that will pay me sick pay if I suddenly can’t work, that’s it. If I’m true to the name of this podcast and I’m really lazy and just don’t do anything, at least I have a little bit of insurance.

EMMA: Well and for a lot of people it’s paying their mortgages which are not necessarily fixed price. They could really fluctuate and do you have enough money to pay that?

SAM: Yeah, well what would happen if your interest on your mortgage goes up by three to five percent?

EMMA: Yeah.

SAM: A lot of people would be really screwed, so yeah, saving gives you a bit of insurance. So that’s number one, the best way to get out of your 9-5. Number two is that you actually have more fun at the budget end of the world. Emma is giving me a slightly unimpressed look.

EMMA: You can only get away with that phrase because we’re in Bali and we’ve been in Thailand.

SAM: No because everywhere has its budget versions, so here we could be in really expensive five-star resorts, we could be getting taxis everywhere, we could have a personal driver who drives us around. We could have rented like a huge villa and then just not left it for the whole time.

EMMA: Yeah.

SAM: I always try and say, have you ever tried to meet someone or organize a night out or basically have fun at a five-star hotel that doesn’t involve just you? It doesn’t happen. Those people don’t want to talk to you. Whereas what about our hostel?

EMMA: Yeah.

SAM: Every hostel you go to, you can go down and say, does anyone want to go out tonight? Or just go and introduce yourself to people, everyone’s up for having a chat. It’s also where you have all the adventures at the lower end, we have the saying that everything that happens is either fun or funny. Even if it doesn’t work out, it makes a great story. So later, what are the best stories you hear about people’s travels or what they say in? It’s the stuff that’s kind of got a bit wrong and they are a bit silly. If everything’s perfect, that never happens. Yeah it’s more fun and it’s more challenging which therefore means it’s more rewarding. So, for instance, hunting out the best cheap eats in a place is quite, we enjoy that. We enjoy going to all the street food.

EMMA: Yeah.

SAM: Finding all that kind of stuff, not just sticking to the really high-end restaurants, not just working our way down like the michelin list, it’s finding those secret places.

EMMA: Yeah and also, people’s recommendations tend to be rubbish.

SAM: Yeah well that’s a whole episode in itself. Same with working your way aroudd a city. We got to know Changu really well which is the part of Bali we’re in because we’ve got a scooter, so we’re having to explore it ourselves and look around. If we’re only going to the top-rated places on TripAdvisor and getting a taxi to each one, I think we’ve definitely had a more rewarding experience. Same with like finding somewhere to stay. Like, how we did it is we spent a day going to visit loads of different guest houses and villas. Just trying to find one to stay at as opposed to just going on booking.com and booking like a 5 star resort.

EMMA: Yeah, and it is a lot cheaper. It’s very direct.

SAM: Miles cheaper, yeah. Even just getting from the airport to your accommodation, like in Bangkok, we decided to get public transport from the airport to our hotel, and we basically end up walking through the red light district. And so this was Emma’s first experience in Thailand. saying we’ve liked finding somewhere to stay well how we did it is we spend the day going to visit loads of different guest house and villas to try to find the best one to stay out as a post is going on cooking calm and looking like a five-star resort yeah and it’s a lot cheaper to go direct miles cheaper yeah even just getting from the airports your accommodation my in Bangkok we can’t we thought to get public transport from the airport to our hotel and we may see him that walking through the red light district and so this was Emma’s first experience at Thailand, we were walking down this street and all along the street were mostly naked women, kind of like shouting at us, with like little suitcases rolling through.

EMMA: And I thought wow this is Bangkok, this is what I think I had in my head, I didn’t think it actually happened.

SAM: You didn’t think it actually exists. And a few days later, you said what’s your favorite thing we’ve done so far and I think that’s what you said, is that walk down …

EMMA: So crazy.

SAM: It’s so crazy and you only get that if you’re not like, the problem with living in the high end is that you’re a bit like buffered from everything around you, and all the adventures. Which brings me on to my next one which is the number three is you’re much closer to culture if you’re on the budget ends.

EMMA: Yeah.

SAM: LIke if you go travelling and you stay at the high end, you’re only really meet locals who are the staff of the hotels and the restaurants. You don’t really get to know what life is like. You get this rose tinted white washed idea of the culture. If you talk to a lot of people, some of the most fun they had has been backpacking around the world where they don’t have any money and not having much money has led to more adventures and more fun, you talk to people about some of their best times, a lot of people say sort of freshers at university at first university and part of that is you got no money and everyone is in the same boat and you’re trying to work it out because you got independence and it’s the time where you’re probably poorest in your life and also having some of the most fun and closer to the student culture, because even at university there were people who came in with quite a lot of money. Instead of staying in the cheap hall of accommodation with everyone else where you make all the friends, they would rent a house that’s quite far away and instead of going to the really cheap student dives for food and drink, they would go to the high-end bars and their experience was like completely different.

EMMA: Yeah that reminds me actually, I had a friend of my course that lived in a flat that her parents owned in Lovington all three years. I thought she was crazy.

SAM: Yeah it’s ludicrous isn’t it? Even though like student halls were nice, it’s just more fun and closer to culture, closer student culture that kind of university is all about. So moving on, number four which is basically what I said already was that using this app and keeping a budget is like keeping a diary. It tells the story of what we’ve been doing and it means, I don’t keep a diary, I’ve tried to before and I’m really bad at it but this means that when Emma says, oh what did we do last monday, I have a look and I could see the pictures and think, oh that was really fun. And I quite like a deal and so I could look back at all the food we’ve got and be like, wow, that meal was only 11 pounds, that was amazing, that was like the best fun we had. Whereas otherwise my memory would just forget those sort of details.

EMMA: Yeah.

SAM: I’m quite liking that and number 5, maybe most important, is that knowing you can control your expenses is empowering in itself. And it’s something that even though my businesses are going well and I don’t need to budget basically, it is something that I worry about, it’s that insurance thing. Like what happens if it all disappears, and especially with the lifestyle creep and knowing that my life is just gonna get more and more expenses, like.

EMMA: If we’d stayed in Tunbridge Wells.

SAM: If we’d stayed in Tunbridge Wells surrounded by people trying to keep up with the Joneses, not budgeting, it’s something that like was worrying me a bit, because I was earning my most amount of money when I think was 23 and then I decided to quit all my highly profitable stuff so I said, life is great, I don’t spend that much money, I’ve earned more than enough to keep me happy for ages, and let’s just go and do some fun stuff and start interesting weird businesses. Well that was fine for however old I was, 24 25 year old Sam to say. But then you get to 30 year old Sam, and Sam is spending three times the amount of money that 25 year old Sam was spending, and I thought, Sam why did you quit so early and just build up a bit of a buffer zone.

EMMA: Because you probably would have spent more.

SAM: Well yeah probably would’ve spent more, and that’s it, it’s like the trajectory. I saw life just getting more and more expensive because you know, we’re still just the two of us, we don’t have any kids, we’re healthy, we don’t have any responsibilities, that is going to change at some point. And then life will get more expensive. So knowing that we can keep control of our expenses and that this lifestyle creep doesn’t have to happen is quite apparent. I find that quite empowering, hopefully you will too at some point.

EMMA: Yeah I can’t agree with that right now. It’s only been about a week. It feels like a lifetime.

SAM: I think it’s been about three weeks.

EMMA: Really?

SAM: Let me have a look. Two weeks.

EMMA: Wow, well halfway.

SAM: It’s worth saying that Emma is complaining about nothing because I don’t think our life has really changed at all, we’re still eating out three times a day, having massages, going to fancy bars, buying the most expensive cocktail on the menu.

EMMA: Well actually.

SAM: Doing everything you’ve always done.

EMMA: Well I would say we have done less. I have definitely not always had the most expensive cocktail.

SAM: Just because you’re slightly thinking about it bit more and you’re expecting my reaction.

EMMA: Yeah and I haven’t had as massages.

SAM: Wow, I think that is a good point to leave this. There you go, we are budgeting, I think that people should budget and that saving money is important because of loads of reasons but I think that the main one, especially for people out here doing the digital nomad thing or trying to build their own business is that you are in quite a variable career, and you don’t know what is going to happen and so having that insurance in place, having a savings is what will give you that longer runway to make it work, and so you won’t be having to go back and get a job. Well thanks for listening, any feedback. Do you know what feedback, I think the feedback we’re going to get is loads of people are going to tell me how stupid I am for not bugeting before. That the firs time I’ve budgeted is when I’m 30.

EMMA: I think they should send us some encouragement.

SAM: Tell us how great budgeting has been for you and your wife.

EMMA: You.

SAM: Yeah thanks for listening, feedback to hello at sam priestley dot com, please leave us a five star review on iTunes and Spotify or wherever you’re listing on, and apart from that, adios.

#48: Money Is Either Important Or The Most Important Thing

“To create a business that does good in the world, it’s got to be a profitable business that makes money and then has this overflow of cash you can then use to invest in all the good things you’re doing.” Sam, on establishing business priorities

For most businesses, nothing is more important than money.

Recommended Listening:

  • Episode 43: Don’t Compete On Price
  • Episode 8: How To Start A Coffee Shop

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

01:14 – The source of the title quote
02:30 – Giving comes from overflow
05:48 – Consequences of having a split vision
07:23 – The background of many of the digital nomads in Bali
10:00 – Separating charity and profit

Transcript

SAM: Hello and welcome back to another episode of the lazy entrepreneur we’re your hosts, Sam and Emma Priestly.

EMMA: Hello.

SAM: We’re reporting to you from Bali at the moment and I hope that’ll give us some extra insights.

EMMA: Meeting some more digital nomads means.

SAM: Meeting some more digital nomads and actually the next few episodes I’ve got coming up a little bit are based on sort of stuff I see people doing out here that I think is either wrong or can be improved upon.

EMMA: That’s a very diplomatic way of putting it.

SAM: Indeed.

EMMA: So let’s start off with this, that is in business, money is either important or the most important thing. Money is either important or the most important thing. I wish I knew where that quote was from, I didn’t make it up. I heard it somewhere and I’ve been googling frantically and I just can’t find it anywhere. So I think it must’ve been on on the podcast or something.

EMMA: We’ve heard it together somewhere, either we listen or watch something or.

SAM: Yeah but wherever it was, we heard it maybe a couple of months ago and it’s really stuck with me because I think it sums up a few mistakes I’ve made in the past.

EMMA: I remembered where it’s from.

SAM: Where is it from?

EMMA: That talk we went to at Hush Heath Winery, the CEO talking.

SAM: Oh well there we go. This quote is attributed to the CEO of Hush Heath who I imagine might have stolen it from someone else, judging by chatting to him. Cool so there we go, money is either important or the most important thing. And yeah and I think it sums up a few mistakes that I’ve made in businesses before and also a big problem I saw when I was running my grants, so I had this scheme where I was giving grants and new businesses and it meant that I received hundreds and hundreds of applications of people’s business plans for their new businesses, and I think this quote sums up one of the big things wrong with a lot of them and also we’re in Bali which is kind of where all the people who want to do good and start a business seem to end up. So at the co-working spaces we’re at, there’s a lot of people who are trying to start good businesses. They want to make money but they also want to do some good for the world. And then interestingly enough we went to church yesterday.

EMMA: Yeah.

SAM: And in that, one of the things they were talking about was giving and in that he said that you could only give if you’re good with money, and giving comes from the overflow so you have to make the money and then have more than you need in order to be able to give it away. And that’s the same in a business, that businesses can only spend money on stuff that isn’t that important for the business itself, for the running the business if it’s making money it’s doing good. Because most businesses aren’t at that point, most businesses are really struggling to get by and for them, money is the most important thing because without it, their doors close. So let me talk to you a little bit about the coffee shop that I used to run. It’s still there but I’m not involved anymore and that was something where we have this idea that we’d have a business that kind of made money but also be good, it was a not for profit, we had all this kind of ethical problems we saw with other businesses, a lot of coffee shops we wanted to write and yeah so some examples of that are we wanted to pay them a living wage, which was higher than what most other coffee shops were paying. We didn’t want to do split out contracts, so what most coffee shops would do is they’d have busy times of the day and they’d only pay people to work at busy times. You’d have to come in at the morning, work and then you’d have this unpaid time in the middle, and then you’d have to come back in in the afternoon.

EMMA: That’s awful.

SAM: Yeah that’s just what everyone does because that’s the way for them to manage stock, that’s cash flow. So decided not to do that, we also decided not to do zero hour contracts which at the time were quite a big thing in London and yeah a lot of that sort of employment instability that a lot of people were suffering with. We also wanted to pay long-term sick leave and maternity leave and that sort of thing which is quite hard to do when you’re a small business and small coffee shop, and we did all that but the business really really struggled and part of it was because of this we weren’t able to compete. We didn’t first of all make sure we had an overflow of money to spend on all these things because all these things cost money. It costs money to have all these people working when it’s not busy and you don’t need them. It costs money to have people on set contracts that mean we can’t drop people and hire new people depending on sort of the seasonality of the business or whatever happens. It costs money to pay people when they’re not working because they’re sick, and obviously it cost money to pay people more than the minimum wage, that they would have accepted them at every other coffee shop worth paying.

EMMA: Yeah.

SAM: But what we didn’t do, we didn’t get the business to a profitable enough point that we could start to offer these things, we said right from the word go this is what we’re gonna do, the business is here to do good, it’s gonna be fine it’s a business, all these charities. They got rubbish coffee shops, we’re a do good coffee shop, it’ll be really really popular and everyone will understand our mission and it’ll be great. But it didn’t really work out like that, the business never really made any money, it kind of broke even but break even isn’t good enough because we took on a load of debt in order to finance it and we weren’t able to pay back our debts which basically means the business failed. And yes the business is still going now, but that’s because me and someone else basically paid all the debt out of our own pocket and then stepped away from the business just let it keep running.

EMMA: So you’re saying in the strategy, when you set up the coffee shop, money wasn’t the most important thing and it should have been.

SAM: Exactly we had a split vision basically and money was quite far down the list of priorities for business, but it is a business. Money is either the most important thing, and when it’s not the most important thing because you got overflow, it’s still very important. And this kind of concept applies to like normal life as well, say we for instance when we were living in Tunbridge Wells, we would choose to shop local and we would pay quite a lot more for sort of the meat and groceries that we’re eating to support local businesses and we wanted to not support factory farming and stuff like that.

EMMA: And have better quality food.

SAM: And have better quality food, but a lot of people can’t afford to do that because for them, money is the most important thing because if they don’t get the best value they can out of their shopping, then they can’t afford it.

EMMA: Yeah.

SAM: This is a problem I see with a lot of the businesses that we see starting in Bali, they kind of got this ethical idea and they want to just attach a business to the side of it and the money side of it is kind of a second thought. They’re like, oh let’s just have a clothes shop that competes with all the other clothes stores out there, charges the same prices, but everything is ethically sourced which costs five times the amount of money.

EMMA: Yeah doesn’t make any sense.

SAM: It doesn’t make sense, like you can’t compete with those businesses who for them money is like the ultimate goal and that’s what they’re doing by putting money third or fourth or fifth on your list.

 

EMMA: Do you think it’s a bit of a rebellion though with digital nomads that a lot of people that we’ve met so far in Bali have come from big corporate jobs in cities where money has been the focus of the company they’ve worked for, not necessarily them and they want to do something good in the world and kind of rebelling against having a business to make a lot of money.

SAM: Yeah I think that’s definitely true. And I’m not saying there’s anything wrong with wanting to do good in the world, it’s very admirable and that’s kind of what we want to do as well but to create a business that does good in the world, it’s got to be a profitable business that makes money and then has this over flow of cash you can then use to invest in all the good things you’re doing or the stuff you want to do, so even if you want to create a business where ideally money is going to be sort of fifth down the list, to begin with money’s gonna be the most important thing.

EMMA: Yeah.

SAM: And I think a lot of people go into this position thinking, well I don’t need to be that on it with the numbers because that’s not the focus of the business, and they say I’m not very good with numbers but doesn’t matter because that’s not what we’re trying to do here. That’s not true at all, this is one of the things they were talking about in this church talk we went to yesterday. In order to be the best giver possible, you’ve got to be the best with your finances possible and the best at managing your money and not spending too much and earning as much as possible. And the same is for your business. I think there is a implicit contradiction between a for profit business and a sort of social enterprise, or a charity. Something that is there to kind of do good. You can have both and some people do have both very well, but whenever I’ve tried to do it, it hasn’t worked out.

EMMA: Yeah.

SAM: And I haven’t seen many people manage to get that balance right. I think it’s better to focus on a business to make money and then from the overflow of that, you can either change that business a bit to make it more good, or you can then go and put that money in something completely different, a completely different venture whose sole purpose is to do good.

EMMA: Yeah.

SAM: Keeping those two separate also helps to make it very clear to your customers as to what is going on.

EMMA: Yeah what are your values.

SAM: Yeah what are your values? Like you understand a charity, you understand charity wants your money for a certain…

EMMA: Cause.

SAM: And then that money gets spent. You understand a business, a business wants your custom in order to make money, but there’s a next level of education to say I want you to shop at my butchers where the meat is double the price of the supermarket down the road because this comes from the local farm and Bob the farmer makes it and he brings it in every week. I’ve been to see the cows and they have a great life.

EMMA: And if if the butcher doesn’t get enough customers, he’s going to fail and is going to have to close.

SAM: He’s going to have to close or he’s going to have to compromise on his original vision of using the more expensive ethical farmer.

EMA: Yeah.

SAM: And this is the problem we get with farmers in the UK. The margins are getting tighter and tighter and so they’re having to make compromises they don’t want to make in order to make money because for them, money has suddenly become the most important thing because without it, they’re gonna have to close and they’ll be out of business. So yeah so this basically what I want to say. Regardless of your business, you gotta take the money side really seriously, really really seriously. Even if your ultimate goal is to do good, first of all you’ve got to make a profitable business to have an overflow that you can then use and it’s all well and good saying you’re going act in a more ethical way than all your competitors, but your competitors are probably in the money is the most important thing and they’re probably not doing as well as you think they are, they’re probably, their margins are probably a lot tighter than you expect. So if you’re going to do the exact same business, you’re going to really struggle to spend more money than them, and still have a successful business. So yeah you might be able to do it, what we could have done with the coffee shop is we could have said the coffee here is six pounds instead of two pound fifty because and then list all the reasons why.

EMMA: Yeah, do you think you would have got many customers?

SAM: And I think we would have got 0 customers.

EMMA: Yeah and also reflecting on the coffee shop business that starts were one of the highest costs, so maybe you could take some of your values to other parts of the business.

SAM: Yeah indeed and like there’s a lot of stuff you can do which doesn’t cost you any extra money.

EMMA: Yeah.

SAM: Like good culture in a business where you can treat your employees a lot better than most other bosses do. And stuff like that, so there is things you can do. But I think really what I am trying to say is take the money side really seriously. And that’s kind of it. Short and sweet. Money is either important or the most important thing. That’s true in business. That’s true in life. You need an overflow before you can start using that money for good. And the better you are with money and managing your business, and making it the most efficient, profitable business possible, the larger overflow for doing good or for making those ethical changes that you want in the world.

EMMA: Definitely.

SAM: Cool, well thanks for listening. If you have any feedback, please email me at hello at sam priestley dot com.

EMMA: Adios.

 

#47: We Are Going To Become Instagram Celebrities!

“There’s a real value to just declaring a challenge giving yourself a project to do and then telling everyone about it because if we don’t, I’ll probably get lazy and not follow through.”
-Sam, on why he and Emma are doing this challenge now

A new challenge. We are going to take a brand new Instagram and turn it into a business. Follow along as we succeed or crash and burn. 

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

01:47 – How Emma and Sam respond to others telling them they are too late to become IG celebs
03:10 – The benefits of a public challenge
05:03 – The role of intentionality in this process
07:35 – Value proposition and strategies
08:55 – Describing different tiers digital nomads
10:39 – The strategy behind instagram celebrity effort
14:16 – Potential black hat approaches
17:33 – Learning on the go

Transcript

SAM: Hello and welcome back to another episode of the lazy entrepreneur I’m your host Sam Priestley and as normal we’re joined by my lovely co-host Emma Priestly.

EMMA: Hello.

SAM: So I thought this would be an interesting episode because we’re basically declaring the launch of a new challenge, a new experiment that we are running together and basically what we’re doing is we are going to try and become Instagram influences, instagram celebrities which is a bit weird because neither of us are particularly good at photography. Neither of us really have any experience with instagram, we don’t know the ins and outs of it. We’re not particularly photogenic people.

EMMA: Speak for yourself.

SAM: I’m not very photogenic, I just take pictures of you all day, that might do it.

EMMA: Well I’m a bit awkward for that.

SAM: What I do think is that Instagram is a platform that is just going to get bigger, I think Instagram celebrities and influencers are currently undervalued, even though people seem to be getting paid more than they should be, I think actually they are getting paid less than they should be and that for brands they’re actually a really good good medium for getting their brand out there and marketing their business.

EMMA: It’s a marketing tool isn’t it?

SAM: It’s a marketing tool, so I’ve been thinking about this for a while and the account we talk about we’ve actually started it three years ago and just never actually posted anything about it. So we had the idea a few years ago and back then we thought Instagram was gonna get bigger and better and I still think that now. And back then the people who we kind of spoke to about it said we were too late, we missed the boat. And I’m sure some people are thinking that now that were too late and we’ve missed the boat.

EMMA: Yeah.

SAM: I don’t agree but also I thought it’d be interesting because I as a bit of a social experiment, how do we get treated as someone with hardly any followers, how do we get treated someone with a middle amount followers, how do we get treated as someone who’s a bit of a celebrity. It’s gonna be interesting how the brands treat us, how the other accounts that we interact with, is there going to be like a snowball effect as we get more followers. It’s just people follow us because other people are following us, not because necessary our contents good or is it all about the value proposition that we’re putting out there?

EMMA: Or is it just going to be really hard to get more followers? Is it gonna be really like growing very organically, very slow.

SAM: Yeah, yeah. Are we going to completely fail? I think a lot of us have this idea that there’s a lot of luck involved in Instagram and then who makes it? So I’m hoping to try and prove that wrong by being deliberate, having a good thought up plan or strategy that we can declare today that we’re gonna make it as instagrammers and then in a year’s time we’ll be proven correct and if we don’t it’ll be interesting as well.

EMMA: Yeah.

SAM: So why are we declaring this challenge now? Because partly I think there’s a real value to just declaring a challenge giving yourself a project to do and then telling everyone about it because if we don’t know, I’ll probably get lazy and not follow through but if I know you’re all watching and judging me, judging our success I think it will make me work harder.

EMMA: Yeah and you’ve done that, you’ve written a blog post and you released it by email yesterday and now you’ve got loads of people contacting you about it.

SAM: Yeah I thought we got quite a lot of negativity about this challenge, about it being a bit vapid and unimportant. It’s actually the opposite, we’ve got a lot of people who think it’s a really interesting challenge and it’d be nice to actually document the steps and really we are coming from a position of not knowing anything so it’s gonna be you know how the hashtags work and then that’s the first thing, we’re gonna try to just put loads of hashtags on those first few posts and see if we get any followers from that. What response will we get from that, what hashtags are working well? Then we’re going to start trying to interact with other instagramers both just by liking and following and also by messaging people privately and trying to build a community around it and yeah stories, I don’t really know what a story is. I’m sure they might have a place so I’m not sure how that works. And also just how the algorithm on Instagram works, if that’s having a lot of followers within a short space of time, does that help propel you and appear on the explore page, does having a lot likes on your post in a short amount of time make it appear in some places?

EMMA: Or is it about quantity of posts?

SAM: Yeah. Quantity of content. I think there is something about routine, so let’s take a step back and talk about the three things that are quite important for this challenge to work and they’re all something to be quite deliberate about. So we’re not going to start posting random pictures and hoping we’re going to take off and become celebrities. We’re going to come up with a good value proposition, a good reason why people will want to follow the account. What it is about the account that sets it apart? Like a unique selling point like any other business. If I’m treating this Instagram account as a business, it’s got to be different to every other instagram accounts. So we come up with a value proposition for why you should follow it and also for why companies should invest in it. Because at some point in the future we’re going to want to monetize it and so it’s worth thinking for now, is what is it about the account that is worth people giving money to you basically. Second thing we got to be very deliberate about is a strategy to attract followers and get interactions. Just because we’re posting and stuff that are in line with our value proposition doesn’t mean we’re going to get followers.

EMMA: No.

SAM: So we got a think about marketing strategies and as soon as we don’t know what we’re doing, that’s gonna be a lot of experimenting, a lot of trial and error basically.

EMMA: Yes, monitoring what’s working and what’s not.

SAM: Yeah yeah trying one thing. If it doesn’t work trying something else. Just being open to mixing and matching strategies. And I think the one thing we got to be careful of is that if something isn’t working, we stop doing it and move on to the next thing because just from my initial research, I found loads of really awesome Instagram accounts that have amazing pictures and have been posting for years and have hardly any followers.

EMMA: Yeah.

SAM: And you can see they’re trying to become a photography account.

EMMA: The contents there.

SAM: The contents there, it’s absolutely amazing. But they’re just doing the same thing over and over again and expecting different results.

EMMA: Yeah which is the definition of insanity isn’t that.

SAM: And they might be getting a few followers here and there but there’s no your exponential growth. Doesn’t look like it’s ever gonna transition into a business, into something more than a hobby basically. And then the final one I think is gonna be important for this is routine. And I’m putting this as a whole section itself because it’s something I’m very bad at.

EMMA: Yes.

SAM: And it’s something that is going to be different to pretty much any other business I’ve done where regularity of creating content is gonna be important. That’s the whole social media thing, you can’t have content from a month ago and hope they’re going to find it, it’s all about now.

EMMA: Yeah the here and now.

SAM: So we’ve kind of answered some of these questions, so that’s what we’ll talk about now. I’ll tell you a little bit about the account we’ve come up with what the value proposition of it is, and what our strategy is gonna be to try get followers, and then what the routine is gonna be. And all of these might change, that’s the nice thing about something like instagram. It’s not like you create your little ignores cool description and then it’s set for life. We can always change it if we get a better idea or something changes, but having a good idea of where we’re starting and where we’re going I think it’s quite important here. So what is the account? The account is called the posh nomad, that’s the handle and it is a pseudo anonymous account, we’re not going to be in it but it is going to be following our journey. And we’re targeting it at digital nomads who are remote workers, people who make a living from their laptops and can live anywhere that’s online. What a lot of these digital nomads end up doing is they end up traveling full-time, living in different places and they are constantly looking for the next place to live, the next place where their budget is sufficient for the standard of life they want, where there’s interesting people there, where there’s community, where there’s exciting thinking to do. So that’s people we’re targeting, that’s the nomad part. The posh part is that most digital nomad accounts are aimed at people looking to live on a really low budget.

EMMA: Yes.

SAM: So digital nomads include everyone from people who got hardly any money and moved to a really cheap place in order to grow their business and have really low expenses.

EMMA: Somewhere like Thailand.

SAM: Somewhere like Thailand where you can live on a thousand dollars a month and they’ll go there and then spend six months working on their business and trying to create something great. That also includes people who have kind of made it already and are earning a decent living. Or who were programmers and have remote jobs and are able to travel the world while actually earning a decent wage. And I think there’s actually a gap in the market where of digital nomads who are also living quite a good life, so that’s our target. If you’re earning a similar salary to sort of a city professional in London, what quality of life can you have as a digital nomad? And that is what we’ll hopefully document. It is also something I think we would follow ourselves if it was out there.

EMMA: Yes definitely.

SAM: So that helps as well.

EMMA: So tell us if you have found anything like it.

SAM: Yeah let us know what you think of this value proposition, let us know if you can think of someone else who’s doing it well that we can look at. Yeah so that’s the posh nomad, feel free to have a look, as of yesterday we had about 30 followers and hopefully it will become 31. And we will see how it gets on, and hopefully it will grow. And what I’m gonna do is we’ll probably do a few podcast about this and I’m gonna do a blog post about it, so it’s gonna be written the first blog post already, and then the next one will be after a month or two, talking about what we’ve learned and what’s working and what isn’t working and hopefully it will be a nice series tracking the progression or tracking the failure of this experiment. So that’s the value proposition. The strategy, how are we gonna get followers? Well as we said earlier, we don’t know what we’re doing, it’s gonna be a lot of trial and error so I’ve kind of come up with a few different stages I want to work through. First one is just passive posting, so posting the picture with some hashtags, seeing if anyone’s going to follow it.

EMMA: Yeah, really simple.

SAM: If you create it, will they come? I think the answer is going to be now. I don’t think instagrams got any reason to show our post to anyone, there’s got to be some other external influence on that and there’s pressure on it. So we’ll try that for a bit and see how we go on. On top of that we’re going to layer to stage two, interacting with Instagram users. I think the strategy here will be something on the lines of looking at people in a similar niche to us. Seeing who is following them and who is interacting with their posts, and then either reaching out to them, liking their posts, sending them a message, commenting on their pictures and seeing if that can help us build an actually engaged following.

EMMA: Yes.

SAM: So that’s gonna be quite labor-intensive, and I’m sure that will work. We’ll definitely get followers from that, but are we gonna get enough that it is worthwhile. That might be something to take us from two hundred to a thousand followers, which is quite labor-intensive but I assume that after some point for the time we’re putting into the followers we’re getting it’s not going to be really worth. At which point hopefully we’re gonna layer or interacting with influencers. Hopefully at this point we’ll have value to give to other people, so then we’ll start interacting with the bigger accounts. We’ll have whatever 15,000 followers or more, doing collaborations with them, trying to share audiences with them.

EMMA: So, with those influencers with the bigger following, would they still be digital nomads related to kind of luxury travel or would they be a bit broader?

SAM: I mean there’s something we got to work out as we go along see what works. We might find a niche that has a cross-section of audience, even if it’s not, even if they’re not the same thing.

EMMA: Yeah so like a fashion brand or.

SAM: Yeah we might find a swimwear brand or like a holiday brand who has a similar audience who’s interested, or entrepreneurship maybe. Maybe there will be other people interested in entrepreneurship, don’t really know about the digital nomad community. I don’t we know how collaborations are going to work with that, I’m sure there is some ways to do it, whether that is shout outs or reposting each others stuff or Instagram stories. I don’t really know how we’re gonna work that out and hopefully it will work and I’m sure we gonna try some other things maybe look for stuff that’s not on Instagram, bloggers say who don’t have that much of an instagram following and then try and cross audiences there so we can hopefully translate some of our followers on Instagram to their blog and then they can hopefully transfer some of their blog followers onto Instagram.

EMMA: Particularly in the areas we’ve chosen to live so far, for example, Bali, there’s a huge amount of bloggers online writing content about where to go and things to eat in Bali, so it’s quite an easy one to reach out to.

SAM: Yeah hopefully, hopefully. But we’ll see how we get on. So those are all what I call kind of the white hat, accepted strategy kind of stuff. If we do all of that and we don’t get anywhere, then I’m quite interested in trying and just seeing what happens if we do a bit more of the slightly dodgy stuff, some of the black hat stuff, such as buying likes on posts. Let’s see if we can game the Instagram algorithm to push our pictures up on to say the first page, the discover page. What we’re trying to do is we’re trying to keep the followership authentic, which is where the value is but then just try and fake the algorithm on Instagram to make us appear to more people to hopefully build a legitimate followership through some slightly squirrelly methods of liking and commenting and stuff like that. Don’t really know how that’s going to work out, but hopefully we don’t ever get to that point, it’s just if we aren’t able to, if none of our other tactics work. And don’t worry I’ll tell you all before we start doing that. The reason of doing this is I’m just quite interested in how all this stuff works and I think it would make an interesting blog series. And if none of that works then I think what we’ll just try to do is just buy a load of followers and then see how that changes the way people interact with the accounts because I kind of have this theory that if you fake it until you make it, you will make it and Instagram seems to be a very, it’s a bit like that Black Mirror episode which I’m not sure if you’ve seen where depending on how much you’re liked by people depends on your social status and how people treat you, so it’ll be interesting to see if that’s actually true. If we have a seemingly popular even if it’s fake Instagram accounts, will we suddenly get loads of attention from people? We’ll definitely tell you if we do that and we’ll basically declare the experiment a failure and then we’ll declare the social experiments and see if that stuff works. And I think that’s kind of it for for the plan so far.

EMMA: Sounds good, sounds very exciting.

SAM: I do love a new project, by the way this is so what we’re going to be doing, the instagram account is a digital nomad couple who are spending like an average london city salary. Kind of traveling the world and working, so it’s going to be loads of pictures of food and landscapes and restaurants and hotels in different parts of the world. It’s going to be contributed to by both of us, we’re gonna be the ones commenting and replying to people and yeah, and we’ll see how we get on. And maybe if you’re listening to this in a year’s time, and we have a really successful account, you can see where it started.

EMMA: Yeah that’s quite cool.

SAM: And it’d be interesting to see how, all the stuff I said here, how naive and idiotic it sounds once we actually know how the platform works. Because this is some thing, I think it’s better to just dive straight in and get on with it.

EMMA: And that’s the point we want to learn more about it.

SAM: Yeah and make mistakes day. And we’re gonna make a load of mistakes, a load of stupid things. And the best way to learn that is by making the mistakes, not by this amount of time researching it. Cool, so yeah, please check out the account, give us any feedback. If you got any tips, or if you’ve got a decent Instagram account and you’ve tried things in the past and you can steer us away from some errors then please get in touch. Yeah you can just DM us, is that the right word, DM? On our instagram account, the posh nomad. Or you can message us, email us at a hello at sam priestley dot com. Yeah, anything to add?

EMMA: No, that sounds good. It’s quite a, this is what we’re doing but we’re not sure how it’s gonna work.

SAM: Yeah we got no advice to give. In fact it’s the opposite, we’re asking for advice at this point. And we don’t know what we’re doing. That’s kind of the fun of it. There’s something great about being a beginner I think, so it should be fun. Alright, well that’s the end of this episode, please leave us a good review even if there’s not much to review about for this post, but hopefully once it’s built up it’ll be really good. So please leave us a review 5 starts would be appreciated. Any feedback for the podcast, hello at sam priestley dot com. If you’re somewhere in Southeast Asia traveling around and you fancy meeting up, or you’re onto Instagram and see you were in a similar place, then yeah shoot us a message and we’ll go for coffee or drinks or food or whatever.

EMMA: Sounds good.

SAM: Alright adios.

EMMA: Bye.

 

#46: The More You Earn, The Harder It Is To Start A Business

The older you get the harder it becomes to quit your career and start something new. The more you earn, the harder it is to replace your income. The more you spend, the harder it is to survive on a low income. And the more responsibilities you have the Now is the best time ever for you to start.

In this episode we discuss the above, but also the flip side. The more you earn, the more money you have to cushion your new project. The more you spend, the more room you have to cut expenses. And the more responsibilities you have, the greater the benefit from having control of your own time.

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

01:05 – Emma’s friend’s criticism of Sam
02:07 – Why Sam got a master’s
03:20 – Benefits of reducing living expenses
04:50 – Three areas that make starting a business difficult: Income, expenses and responsibility
05:50 – Emma on the importance of mindset
07:30 – Quitting a high paying brokerage job to start an online bookshop
10:00 – Discussing the social pressure of quitting your job
11:57 – Big lifestyle changes
14:55 – Example of friend’s downgrading their lifestyle in favor of pursuing personal interests
18:20 – Difficulties with the hedonistic treadmill

Transcript

SAM: Hello and welcome back to another episode of the Lazy Entrepreneur, we’re your hosts Sam and Emma Priestley.

EMMA: Hello.

SAM: Today we’re talking to you from, well actually we’re still in Bangkok as we have been for the last couple of episodes. But we’re off today and tomorrow we’ll be in Singapore which should be fun, so you have any suggestions of what to do there please email us at hello at sam priestley dot com and then we’re going to Bali, so if you happen to be in Bali if you’re digital nomads then we look us up. So Emma it was not long ago that you met up with a friend who happened to also listen to the podcast. Bit randomly, which I was very chuffed about my. Quite nice isn’t it when someone out of the blue said, oh I listened to that podcast. But what I was a little less chuffed about was her criticism, her feedback for the podcast. She basically said something on the lines of, well it’s all well and good for him, he’s never had to work. I couldn’t do that, I have a job, I have a mortgage, etc etc.

EMMA: Yeah she was talking about the financial burden of the life that she lives, or we all live and she can’t afford to quit your job and then start a business you actually want to do.

SAM: Yeah and why is that? So it kind of got me thinking, what is it about my story, because she said it was easier for me then it would be for her.

EMMA: Yeah.

SAM: And why is that, why? So for those of you that don’t know, I started doing business through my own business when I was at university, and then when I graduated I went off and did a masters, so I would be able to work while doing a masters and not actually spend too much time on it but also I’ll have something to put on my CV because I had this like fear there that no job would respect the idea of starting your own business and that I’d have like a weird year or two gap in my CV if it all failed that I wouldn’t be able to explain. Makes no sense at all because

EMMA: I’ve never actually heard you say that.

SAM: Have you not?

EMMA: No.

SAM: Well that’s why I did it yeah. I needed a CV filler in case all this fails and if you have to go and get into the real world.

EMMA: Get a job.

SAM: Yeah because you’re taught to get a job you need to have a degree and that’s the most important thing and that this traditional route is what will make you most employable. What they don’t tell you is that everybody else is taking that traditional route, and the way to make yourself employable is if you have done something similar but then you also want to have done some interesting stuff as well.

EMMA: Yeah.

SAM: So I think my CV probably would have looked better if I hadn’t done the Masters and had just done the business instead. Both sounds a bit ridiculous.

EMMA: But you didn’t have the confidence to do that because that’s not how you were told to live your life.

SAM: No no that’s not the common wisdom, that’s not the advice you get from the careers adviser. So I was a student at the time which meant I had no money.

EMMA: But you also had low living costs.

SAM: I was living as a student, all my peers were students, so for me to start a business, it’s not like I was giving up an income. I was just able to kind of carry on living the same lifestyle I was. And the amount of money I had to earn to equal the life that I had before was really, really low.

EMMA: Yes.

SAM: And anything was better than nothing.

EMMA: Yes, there’s a really low entry but also like massive opportunity that you could actually earn quite a lot of money relative to what you were used to earning.

SAM: Yeah I could escape that horror of having to get a job at the end. Well it kind of got me thinking, I think there’s sort of three areas where it was easier for me back then than it would be for your friend or someone else who wants to start us at like the older age and I think each of these is just gonna get harder and harder the older you get, the longer you wait.

EMMA: Yeah.

SAM: Yeah, it’s never gonna be easier in the future and you do hear people saying I’m gonna wait until I get promotion at work before doing my own thing, I’m just gonna work really hard for this. I’m just gonna wait to the kids go off to university, then I’ll have loads of free time and I’ll be able to work on this. I’m just going to wait until I’ve finished this project I’m working on, whatever is and the idea it’s going to get easier in the future and that the things holding you back now are going to disappear, and actually I think the opposite is true. That earning more, having a better life, it just makes it harder and as you get older you just get more and more responsibilities as you get older. And, more and more problems with yourself as well. Like health-wise, and things like that. So what I want to do is talk about the sort of three areas, so I’ve got you know, income expenses, and responsibilities which I think of those three areas and then talk about how we can flip that around and say that actually, the stuff that which you think is holding you back, how ridiculous is it that earning a high income makes it harder for you to go and do something you want?

EMMA: Yes.

SAM: That’s absolutely nonsense.

EMMA: Yes but it’s true!

SAM: But it’s true! So I wanna talk about how we can flip that around a little bit and its what I want to talk to you about because this was a situation you were in where you had a very high income job compared to your peers which you had to give up and you have very high expenses which you then have to give up, and all that kind of thing. So we’ll have a little chat maybe it’ll be helpful for your friend or for anyone else listening who’s thinking well it was so much easy for him or there’s going to be a better time in the future. The best time is now, it’s only gonna get harder but if it feels hard, there’s probably ways you can make it easier, there’s probably advantages to the stuff you have.

EMMA: Yeah I think a lot of it’s about mindset and I think a lot of people will relate to this.

SAM: Yeah cool. Okay so let’s talk about income then to start on. There’s this weird thing that the more you make, the harder it is to go and do your own thing. Which is counterintuitive because you’d think that earning a lot of money meant you could save a lot, which meant you’d have a big cushion.

EMMA: Yes.

SAM: For trying something new. But that’s not really how it works because we want to be improving the whole time, so it’s very hard to give up a high income and downgrade to a lower income and to replace the income you have, let’s say you’re a 35 year old working in the city at the peak of your career. To replace that income, starting something from scratch. Yeah of course it’s possible but it’s gonna be a lot of work.

EMMA: Yeah.

SAM: Whereas to replace your grad salary, your starter job just after you’ve left University or just after you left school is much easier. It’s not just about that, it’s also about the social pressure of of giving up something that’s so good.

EMMA: Yeah both from work and from your friends and family.

SAM: Yeah but nobody is going to say, yeah well done, quitting your really high-paying job and going to become a violin teacher or whatever it is that you really want to do. It doesn’t happen. I’ve told you this story before and I might have said it on the podcast but my old business partner used to work as a broker in the city and when he first started in the first few months, they were sending around for chain emails and stuff they found funny and you know they were all quite laddie.

EMMA: Sounds horrendous.

SAM: Yeah all the sort of stuff you hate and one of the things that they were sending around to laugh at was this guy who worked ahead of them, he’d sent an email to all the brokers he worked with saying, I’m quitting my job I’m going off to do what I’m really interested in, going off to start a bookshop, yeah an online book shop, and then said haha what an idiot why did you do that. Oh yeah I’m sure you know where this is going, that was Jeff Bezos, the founder of Amazon, now the richest person in the world. But at the time when he quit all his kind of friends in his work were taking the piss out of him.

EMMA: Yeah, of course. It sounds silly doesn’t it?

SAM: It sounds silly, maybe you’re not gonna make it but maybe you will. Doing something different, he was doing very well, he was for his age he was very highly achieving in the sort of hedge fund world and giving that up was just nonsense.

EMMA: It just goes back to successes, like that successes episode that we did. And people value money as a success more than most other things whereas when you’re quitting your job to start something you actually want to do, your successes are measured in a completely different way.

SAM: Yeah definitely definitely, because for you, success might be being able to go and do practice yoga all day long, or brazilian jiu-jitsu or whatever interests you and one way to get there is to earn loads of money, save most of it, quit, and then you have this big buffer that you can just do a little something that you define as successful, but where’s society or your peers are probably saying oh you’re giving up such a bright career you’re gonna become a loser and failure, which is quite hard to get over.

EMMA: Yeah which is what a lot of people said to me when I left PwC.

SAM: So this is what you did is you quit your salary and went to start something from scratch something, which you knew would be very difficult to replace that salary.

EMMA: Yes.

SAM: You became a freelance marketer.

EMMA: With no clients.

SAM: With no clients and yes you were aiming to replace the salary or most of that salary with what you were doing but what you you weren’t gonna replace was probably in the career progression as a freelance marketer, you probably weren’t ever gonna earn that much more whereas if you stuck around at PwC for another twenty years you probably would have gone a few rungs up.

EMMA: Yes definitely.

SAM: Yeah, which is there’s a hard choice to make but I think it was a right one.

EMMA: Yes, me too.

SAM: I think you’re ok with the social pressure kind of cuz you knew me, we were dating.

EMMA: Yeah and also you were an example of how it could work.

SAM: Yes yes.

EMMA: I think when you’re doing it on your own and you have no one in your life that’s supporting you and encouraging you and someone to talk to and also to go through the detail of it, like how to do a tax return, and how to structure like the pricing of my service. Like all that kind of stuff. I had you to help me, whereas a lot of people don’t have that.

SAM: Yeah if everybody’s telling you it’s a bad idea, it’s hard to go against that, whereas you had me who was popping around all day having fun, you had my friends who were doing the same thing on one side and then at work you had all these people who’ve been in the career for many many years, and who didn’t really want to emulate that lifestyle, you kind of had two choices and you chose the one which you thought you’d prefer. But one thing you found quite difficult was you couldn’t really afford to give up that income.

EMMA: No.

SAM: Based on where you were living. When you decided to leave, which was about six months before you actually did, you were living out of your overdraft every month.

EMMA: Yep.

SAM: When payday came, you’d overspent and so your expenses, even though you’re earning a decent amount of money, were exactly on what you were doing and so the difficulty then is that for you to downgrade your income, you then end up not being able to support the life that you were coming to live in.

EMMA: Yes so therefore we changed lifestyle.

SAM: Well exactly, that is what we did. Well we did a few things but one thing we did is just quit that life altogether and moved to the other side of the world and completely changed life altogether because it’s, if you think the social pressure of taking a lower income is hard.

EMMA: Yeah.

SAM: The social pressure of downgrading your lifestyle, downgrading your house, downgrading restaurants is pretty much impossible. Like people do it and when you hear about people making drastic lifestyle changes and budgeting, so much respect to them because it is really difficult. You wouldn’t do something like downgrading your car and knowing that the neighbors are watching.

EMMA: Yeah.

SAM: It’s so difficult and we did try, we tried to do a budget for you to try and save money.

EMMA: And I did and I got out of my overdraft, but.

SAM: Well yeah you didn’t manage to cut your expenses, what you managed to do was get a pay rise at work.

EMMA: Yes. And not spend any more.

SAM: That’s it, which is hard in itself because you managed to not increase your expenditure and so you had I think maybe four or five months at the higher salary where everything extra you were just able to save.

EMMA: Yeah.

SAM: Whereas up until then, every time you got the pay rise, you’re just spending at an increased.

EMMA: And it was all about being able to save so that I could have some money when we first went travelling and packed up our life, so that I could invest time in the marketing business and get clients and get money so I could kind of live off the savings, so there was like a clear plan but it was also quite short term. It was about six months.

SAM: Yes you had a short goal you’re working towards and then we’re making this huge life change where your expenses would never be the same again.

EMMA: Yes.

SAM: Whereas if you had stayed in London and quit your job and start something new from scratch you probably would have had to make some more drastic changes to your lifestyle, which would have been hard, but this is why a lot of people recommend moving house. It’s very hard to stay with the same peer group or neighbor group who have got used to you in a certain life, whereas moving can work out well and that can be moving from a high cost of living area like London to something much cheaper, Cardiff, Manchester or someone completely different. In Bangkok my cost of living here is dirt cheap and the lifestyle is pretty good. Or it could just mean downgrading to a different neighborhood in the same place. That was one of the arguments we heard in the beginning wasn’t it. Is I have a mortgage to pay, but most people with a mortgage could probably downgrade their house, move somewhere a bit smaller, they lose a lot the burden from the mortgage and probably have a decent amount of money left over, and their net worth is going up, their expenses are going down and then you now have a bunch of cash they can use for other things.

EMMA: Yeah but it’s so much easier said than done.

SAM: So much easier said than done. We’ve actually got a couple of friends who are slowly making this transition, they’re a couple. One of them has recently quit his job and start doing something he’s he’s much more interested in.

EMMA: Which he’s so happy about.

SAM: He said he like wakes up excited every day, he’s loving it, he has so much opportunity, he’s saying before he used to lay up at night not wanting to go to sleep because then you have to wake up and go to work in the morning which then made him extra tired and miserable and everything and she is a hugely successful in what she does, a high paying job and she’s kind of like, looking at you know the next potential steps there and something that’s probably not for her yeah and they’re talking about downgrading their house. They’re only 30 but already talking about moving from a three-bedroom house to a one or two-bedroom house because they’ve worked out how many rooms in a house they actually use and how much they can save by going somewhere else and how much extra free time that would free up. And if they ever have kids, how much more time they can spend with their kids if they have that free time. Which honestly brings us on to the next point I was going to talk about, which is responsibility. And it’s funny because all these things that people say use as an excuse that they’ve got to keep in the rat race. There is this absolute flipside so that a lot of people say, we’ve got kids, I can’t quit everything. It wouldn’t be fair on them if I downgrade my income, I want them to live the best life possible. I’m willing to make sacrifices for what I want for them. Whereas they’re thinking the exact same thing but come to the opposite conclusion, which is I want to see my kids. I don’t want to pay a huge cost of childcare.

EMMA: Yeah.

SAM: I want to actually have time to raise them myself and that’s one of the things we think about isn’t it. I would love to be a stay-at-home dad, and one of the ways I can be a stay-at-home dad is internet business, working for yourself, doing other kinds of stuff.

EMMA: ANd working at strange times of the day and not really being a routine you can work as as and when. It’s very flexible.

SAM: Yeah exactly, it’s the freedom of your time to work when you want. It’s the same that our other responsibilities are is eldercare with ill family or relatives. Again, eldercare is really expensive.

EMMA: Yeah.

SAM: If you have control of your time, if you have your free time, if you’re doing your thing. You could cut all that expense and you can look after them spend more time with them. So responsibility is this double-edged sword I think and your responsibilities are only gonna get more and more as you get older and that’s not gonna change really. It’s gonna get harder, you’re going to have more responsibilities and yes you probably will need a higher income in order to sustain that. Having a household with kids in it is more expensive than having a household with no kids in it. Which is why I say it’s never gonna be a better time than now, so it’s not now but if you haven’t started and you have kids, look at the other side of the coin. Yeah you’ll be saving on childcare, you’ll have more time to spend with your kids, you have more flexible hours, so none of these things I think you should really put you off starting. If you feel like you can’t give up your income, maybe you ease a social pressure in which case maybe get out that social group. Maybe it is the issue of the expenses, which case maybe downgrade your your lifestyle. If you can’t do that, move to somewhere where you can have the same or better lifestyle but at a much cheaper cost. I mean we didn’t even get into this like hedonistic treadmill that you don’t actually get any happier the more you have.

EMMA: Yeah. That’s what I mean about the mindset you’ve got to spend more to be more happy.

SAM: Yeah. But having a bigger house doesn’t make you happier, it just gives you more responsibilities, so we have kind of done this ourselves just in the last few weeks where we have a four-bedroom house with a nice car or convertable, loads of furniture and we went, got rid of it all and went down to just a carry-on suitcase. And the weight of responsibility lifted from owning all this junk to owning hardly anything.

EMMA: Well also the upkeep of the house. It was just so much.

SAM: How much time we spent cleaning that place, the bills, the worry of the car getting damaged or scratched.

EMMA: So that’s you more than me.

SAM:You don’t worry about scratching it anymore. And as we recorded this, we’re on the 25th floor with an amazing view out over the cityscape, pretty awesome. And if something gets damaged it doesn’t really matter.

EMMA: No.

SAM: Anyway that’s kind of off the point, what we’re saying is yeah if your expenses are too much, consider cutting them and that could either be done by budgeting better and downgrading your lifestyle or by moving and just changing your lifestyle to something more affordable. And responsibilities, yes responsibilities are going to get worse and worse as time goes on, but there’s always a flipside. There’s always by giving up your income, you’re actually freeing up time and freeing up time and allows you to be better at your responsibilities. Anything else to add?

EMMA: I don’t think so. Sounds good. Take the jump.

SAM: Yeah it is never going to get any easier. It’s just going to get harder but actually the flipside of having a huge income that you can’t give up is that you have a huge income.

EMMA: Yeah.

SAM: So take that, save a bit of money that will then give you all that freedom of time to do all that stuff which you want to do. All right, adios. Thanks for listening. And if you have any feedback, email us at hello @ sam priestley dot com. We always appreciate a good review so if you have a 5 star review on Apple podcasts or whatever you’re listening at that’d be great. Goodbye.

#45: Our Viral YouTube Video – The Stats, Strategy & Long-Term Impact

“But it’s probably also worth saying that people weren’t interested in the video because of the table tennis, they were interested in the learning. Going from not knowing something to getting quite good at it by being dedicated and putting in the work.”
– Sam’s take on why the video went viral

Sam tells Emma about what led up to and how exactly his obscure table tennis video went viral and got more than 12 million views. They delve into the numbers of how much it made, and the long-term impact it has had on his different businesses. They also discuss how to recreate the success – a small number of views in the right place in front of the right people can snowball and lead to massive results.

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

00:47 – The initial idea for the video
03:25 – Reddit and the video going viral
04:25 – Interviews on random Danish TV shows
05:53 – The videos Sam and Ben made that didn’t get press
07:29 – How the video finally got traction
09:45 – The inaccuracy of the coverage
12:14 – Effects of the viral video
14:01 – How the book idea came about
16:42 – People’s interest in dedication rather than in table tennis
19:10 – Sam on trolls

Transcript

SAM: Hello and welcome back to another episode of the lazy entrepreneur, we’re your host Sam and Emma Priestly.

EMMA: Hello.

SAM: Emma today, I want to tell you the story – actually unlike most the stories I tell you which you’ve never heard before, I think you were around when this happens.

EMMA: Yeah I think I was.

SAM: I think I have been seen by more than 10 million people, romping around in really short shorts, playing table tennis.

EMMA: I was going to say that’s a good intro with that saying playing table tennis.

SAM: You got a bit excited there didn’t you, oh that sounds fun. That is back in 2014, I had a friend come to me Ben Larkin, there’s actually an episode where I interviewed him. And he’s got a table tennis blog and he said he wanted to take someone who never really played Table Tennis before, train them every day for a year and he’ll give him private coaching, and then that person would then go and do like the semi pro circuit and try and get into be one the best in the country at table tennis. He had this theory that you could, by training someone properly, you could do that kind of 80/20 thing where you get rid of all the rubbish training everyone was doing and be really efficient and get really really good at table tennis. So he came to me, and I said yeah sure let’s do it and we videoed it every day and I spent the year playing tennis and I got quite good but I was nowhere near like world-class. I got good for someone who’s been playing table tennis for a year. I didn’t get good for someone who’s playing table tennis professionally. But yeah, that’s alright it’s kind of interesting anyway. So in the cutscene are all the videos we made at that year, made like a one second a day compilation of it, put it onto YouTube, nothing really happened, we had a few followers who were following my progress and maybe we had I think we had 15,000 views or something just from those initial few.

EMMA: In how long?

SAM: Two weeks maybe, but it was kinda like we sent it out to our email lists and then they watched it and then that was kind of it.

EMMA: Yeah and Ben’s table tennis blog is pretty big.

SAM: Yeah and so a lot of people watched it, but then it wasn’t really getting many views of the day.

EMMA: And you hadn’t really planned to do anything with it right?

SAM: No because we kind of thought the challenge was a bit of a failure really. Yeah I got quite good, and we ended on a video that’s quite good, I started the video pretty useless and then by the end I’m pretty good.

EMMA: Yeah you can see the progression.

SAM: You can see the progression which is quite cool but we thought there was no need to push it because it’s not that impressive. Like I did, I think I did I went on the semi pro circuit and I’ve had 120 matches or 110 matches of which I lost all but four or five of them.

EMMA: Yeah.

SAM: So I’ve had this like two and a half months where I’ll just get battered. I was competing every weekend just getting wrecked all the time.

EMMA: Yeah including Christmas, it was horrendous.

SAM: Yeah because there were competitions every weekend. So Christmas was on a Tuesday and the weekend before I was off on tournament somewhere around the country and then a weekend after at another tournament and so yeah we thought nothing much of it and then one day I woke up to loads of text on my phone, and turns out someone had gone and posted it on reddit and I think it’s just a bit weird, like the idea that someone spent a year playing table tennis and putting it together.

EMMA: Quite niche.

SAM: So people kind of loved it and it went viral and now it’s got over 10 million views and so I thought we can just kind of talk about what that was like, how that happened, because I’m quite interested in all the stats, I kind of monitored how that journey of the viewership happened from where it started and how it spread across the internet, how the viral stuff works and also how much money it made, like what use is it actually having a viral video. So you were there when this happened, but I’m not sure we’ve talked about this that much.

EMMA: No we haven’t we talked about it very much. You talked about what it was like to receive phone calls from press people, it was quite exciting, do you want to do this interview on this random TV show or whatever.

SAM: Yeah I think it was a Danish TV. I think we were on.

EMMA: That was quite cool.

SAM: And we thought it was going to be just a voice interview, so I think we were just kind of sat in my living room, me and Ben on skype and I think I was in a dressing gown or something, like proper bed hair and I think we were just live on this Danish TV show, live streaming and I don’t think they were prepared for it and it was all in Danish, so we’d say something and then the hosts were talking Danish and we’d kind of laugh and they’d ask us something again and I still have no idea what they were speaking about, probably joking about us.

EMMA: Well my impression of the video was it was a bit of a whim that you made one. I didn’t think anything of it and then all of a sudden it went viral and it was like, oh wow actually maybe we should put some effort into this.

SAM: Well what we were doing throughout the year, was every week we were uploading a compilation of video the previous week with us talking over it, talking about what I learned, what I was working it.

EMMA: Yeah I see that is quite a lot of work.

SAM: It was loads of work into the videos and they never really got that much traction, we had people interested in it, people were interested in the first week and then we kind of lost interest and then a few people who kind of watched all of them, and we did do lots of work into that. We did Q&A sessions, we hired sort professional videographers to do some of the filming. None of that actually made it, or got into the final one second a day video, and yeah and it was fine like it it did the purpose. The challenge was a little bit of failure, I got better at table tennis which was quite fun, and then at the end of it, Ben kind of thought, well let’s do something to set it all off, so we sort of close this chapter in our life, which was this one second a day video. And we’d been watching a few other ones, one second a day videos were getting a bit popular at the time, and I think soon after that I started doing one of my own, just of daily life and you quite like because people who you know take a picture of themselves every day and you can see them getting older over the course of a few years. I always thought that was quite cool. But anyway, so the video came out, about two weeks later someone posted it on reddit, and then and it I think got to the front page of Reddit and that got it to about 50,000 views, so not that many and so you can look at the chart of the viewership from where they’re coming from and you see it go peak for reddit and then reddit dies off and just as it is almost dead, the traffic coming from reddit you start seeing the other ones pick up, and basically what happened was, is that as soon as it started appearing on that sort of trending section in YouTube and people and other media personalities and writers sort of saw it on the front page of Reddit, they started writing articles about it.

EMMA: Yeah.

SAM: And then after about five hours I reckon from it being posted on reddit, we started seeing all these other articles start popping up around the internet on Huffington Post and LadBible and The Telegraph and BBC News and BuzzFeed and.

EMMA: Amazing.

SAM: All these different places and then that got it a few more views and I think that got it to about 1.5 million.

EMMA: In how long?

SAM: Maybe like three or four days.

EMMA: Wow.

SAM: So we had 50,000 from reddit which started it all off, then 1.5 million from all these other news sites and then over the next year and a half, the other eight point five million, the vast majority of the views just came from the YouTube algorithm slowly feeding it traffic. Sort of a few hundred thousand every month.

EMMA: It’s so interesting isn’t it, thinking that reddit started it and it was only fifty thousand.

SAM: That’s it, it was this kind of like little explosion which showed people were interested. Fifty thousand of the ten million.

EMMA: Yeah that’s amazing. And you couldn’t have one without the other.

SAM: No, you couldn’t have one without the other. There was something about reddit then that momentum sort of pushed it everywhere else. It was interesting. I find very interesting in the vast majority of viewers were coming from YouTube, so YouTube obviously they’ve got their algorithms to work out what it is that people actually want to look at, and there must be something about that initial momentum and then all the traffic coming from all these other reputable websites that made everyone think this is good and then just keep feeding it traffic for years to come, and it still gets fifty thousand to a hundred thousand views four or five years later. That was quite interesting and I also feel that is the sort of thing you can replicate. Like it can’t be that difficult to force those initial views, like getting to the front page of Reddit is the sort of thing you can pay like a black hat hacker type person to do, it was interesting. So I’ve never really tried to repeat it but it’s always something in my mind that actually, to get that ten million views you only need a very small fraction of that. But in a short space of time in the right place for it then to sort of spread throughout the internet. The other thing that was really interesting was how inaccurate a lot of the articles ended up being.

EMMA: Yeah that’s what I was gonna say, did you have any involvement in the content of those articles, like BBC, Huffington Post, like the Telegraph, the more well-known.

SAM: So the Telegraph was the only interview we did with a journalist at the time.

EMMA: Was that a phone call?

SAM: Yeah a phone call. The BBC article was actually written about six months later and that was a lot more in depth and a lot better so that was actually quite good and the person spent maybe a couple of weeks writing that. Whereas all the other articles and stuff was what people had written in probably about half an hour just to get the content out there. And there was so much, so much inaccuracy. Bear in mind, this was a challenge that effectively I failed. I was just trying to get good and didn’t get, I wasn’t even in the top 1,000 in the UK and the articles were saying stuff like, he’s now a professional table tennis player. He’s the best in England, that he smashed a challenge, that this proves that anything’s possible.

EMMA: Because that’s what the readers wanna hear isn’t? They want the positive spin.

SAM: And these reputable places as well, you think they just haven’t really bothered in doing any background research because they just wanted you to get the article out as quickly as possible. And the Chinese whispers of it are where they’re getting information from. Like some of them, the better written ones would have links to our website. We had a website, expert in a year dot com and they’d link to that but most of them wouldn’t have read that it was quite obvious you know that we wrote a short sharp description of what happened. And most people just never bothered going to that and they just referenced other articles that they’d read who’d been written just as quickly by someone with no knowledge of anything and it’s just this Chinese whispers where each one is slightly exaggerating on the last one they read. Until it’s not really truthful at all, but some of them got the name wrong, they said it was Ben Larkin who learnt where actually he was the one who coached me. A lot of them spelled my surname wrong which seems to happen all the time anyway.

EMMA: That happens in life.

SAM: It was just, it was quite eye opening I thought because generally you can have had this idea that at least the facts in sort of mainstream media is fact checked. But that obviously just wasn’t. So that is what happened, I thought it was quite interesting to talk about what the effects that has been you know how valuable actually is a viral video, how much has it made and has it affected my other businesses.

EMMA: Yeah how did you monetize it?

SAM: So YouTube itself has a monetization algorithm where it put adverts before and after, and so we have that and the way it worked is we had used someone else’s music as the background and what YouTube did is it split the royalties between us and the person and the musician.

EMMA: Wow.

SAM: And so the total royalties came to about two thousand dollars per million views of which we got about half of that, so over the ten million views, we’re talking about ten thousand dollars. So not that much really.

EMMA: No, but considering you didn’t really think it was gonna make any money.

SAM: Considering I was just luck, but on the other hand if we were trying to make viral videos and we’d made twenty of them, which one went viral and these videos, they’re not easy, they take a lot of time and work. 10 million views is a lot of views for like an indie video producer.

EMMA: Yeah.

SAM: But if I made a documentary, I wouldn’t get anywhere near that amount even if it was really really good. So that’s quite interesting. The other thing we try to do is we wrote a book about the thing, it’s called expert in a year, the ultimate table tennis challenge.

EMMA: And did you plan to write that book?

SAM: No, we wrote the book as a result of all the publicity we got off the back of this video and all the media stuff and a couple of publishers kind of approached us, not with any real firm offers, just being like maybe you should write a book about this.

EMMA: And that gave you the idea.

SAM: That kind of gave us idea because we thought who wants to read a book about learning table tennis, it’s so niche. That book came out maybe, we wrote it quite quickly so I think it was about six months after the video had gone viral that the book came, put a link to the book on the YouTube video and on our web site and I don’t think we got we got hardly any sales of the book as a result of the video on the video. So I think we sold about 5,000 copies in total of which I reckon most of them are because we kind of gamed the Amazon algorithms a little bit and so we were the best seller in table tennis for two or three years so anytime we search for a table tennis book on Amazon our thing would come up, so I think that’s where the vast majority day sales would come. We basically found the little niche, table tennis books, nobody’s written books for that before really and then we were just the top result for that for a long time. We also had our table tennis business where we made table tennis bats. That was already doing alright before the video came out and I kind of looked at the sales over that period where we were getting loads of views and there wasn’t really any change, we saw a huge jump in the number of impressions, the number of people viewing our listings.

EMMA: Yeah.

SAM: And very few extra sales, so we probably got some interest because it’s quite a decent business. Over time I wouldn’t be surprised if that made the same again as what we made actually just from the YouTube adverts. So maybe another 10,000 dollars.

EMMA: Yeah and it’s just because customers were purchasing when they were viewing your product pages there and then, they may have gone back and purchased it later.

SAM: Exactly it’s so hard to try to plan this thing, especially when it’s an already established business. How do you track whether that blip is just random, where it’s just natural growth or not. And we don’t 100 percent know how algorithms for these sort of things work because one thing we did notice is to the expert in a year website, expert in a year dot com started to get a lot more google traffic after this and I think it’s because they’ve ended up with all these links, high value SEO links from all these kind of reputable media sources, and even today we haven’t written a post on that website in four years or something, and it still gets 100 200 300 people a day just coming to it from from Google.

EMMA: Yeah, which is worth doing isn’t it.

SAM: And that might have then have led to some sales of the book, might have lead to some sales of the table tennis bats. But it’s probably also worth saying is that people weren’t interested in the video because of the table tennis, they were interested in the learning. Like going from not know something to getting quite good at it by being dedicated and putting into work and obviously being a bit of a clumsy. I think in the BBC article they called me an uncoordinated computer geek, which is one of your favorite terms.

EMMA: It really is. It makes me laugh so much.

SAM: And I think you quite like that, seeing being rubbish to being quite good. Seeing that you can improve. So if we’d written a book about, just about progress, about conquering your goals, that might have done a lot better. Whereas not many people actually went there and then started playing table tennis and then bought a table tennis bat. We did actually try and transition a little bit, we started a podcast, the expert in a year podcast which I think we did maybe three or four episodes of before stopping. We did, on the website we changed it a little bit to try and become an expert in anything in a year, and like a community hub for people doing different challenges to work together and our kind of idea was that a year is not good enough to make you an expert in anything, but is good enough to make you good enough. Better than all the people you know basically, better than any amateur which I still believe and I went off and I started doing brazilian jiu-jitsu afterwards and Ben went off and started doing marathons afterwards.

EMMA: Yeah more challenges and self development.

SAM: More challenges and self development. So we could have made more of it, but we didn’t and really it was just quite an interesting experiment.

EMMA: And also it was quite out of your comfort zone. I think it was quite interesting to have something like an online video and then it leading to more traditional press like BBC and Huffington I know they’re online articles but they are traditional press which is an industry you and Ben have no experience in.

SAM: Yes I agree agree and it’s a great way to get into those sort of mainstream media type stuff because they’re looking at what is popular with the people online to decide what they think will be popular with their readers. Because we had 50,000 from reddit who are kind of the early adopters, then we had the mainstream media who actually had way more reach than reddit did, but are looking to reddit for inspiration, which I think is where the main lesson is there and something I’ve been meaning to do more on. Meaning to spend a bit more time experimenting with viral marketing and just haven’t done yet. And one of the reasons I haven’t is because you get so much criticism, like so much, so many mean comments and stuff. Whatever you’re doing, I’m playing table tennis for a year, like how, what how can you be angry at someone for doing that? It’s ridiculous and I’m not very good at taking criticism, I’ll take things way too personally.

EMMA: Yeah.

SAM: There might be a thousand comments of which two were mean and I remember the mean ones. That’s what it is. Well there you go. You find that interesting?

EMMA: Yeah. Yeah I did. What’s next in the viral marketing? And what are you going to do next on the back of this?

SAM: What are we going to do next? What crayz stunt can we pull? I don’t know we can think about that. If you have any ideas listeners, please email us at hello at sam priestley dot com. If you have any general feedback for the podcast, email us that as well. On that I would like to say goodbye.

EMMA: Goodbye.

SAM: And adios.

#44: I’m Now A Digital Nomad, Again…

“Twenty-seven-year-old aren’t meant to lay on the beach all day doing nothing productive” – Sam, on the work-vacation balance while being a digital nomad

Sam & Emma have hit the road again and are recording this episode from Bangkok Thailand. So how have their opinions changed on what it’s like living on the road? 

To quote wikipedia: “Digital nomads are a type of people who use telecommunications technologies to earn a living and, more generally, conduct their life in a nomadicmanner.”

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

01:37 – Throwing off the shackles of society
02:10 – Three issues with being a digital nomad:
02:15 – (1) Community
03:17 – (2) Productivity
04:42 – (3) Not having a base
06:00 – The process of getting rid of all of Emma and Sam’s possessions
07:36 – Discussing experiences of community in travels thus far
09:01 – How friendships change
10:25 – Motivation and work
13:03 – Upcoming travel plans for Sam and Emma
15:33 – Comparing travel experiences to the first open ended trip

Transcript

SAM: Hello and welcome back to another episode of The Lazy Entrepreneur I’m your host Sam Priestley and as normal we’re joined by my lovely wife and co-host Emma Priestley.

EMMA: Hello.

SAM: So sorry it’s been so long since our last episode. It must be what, like a month or something.

EMMA: Probably.

SAM: We had a bonus one, but the last one that we did I think was early June and it’s July now so, sorry. But we have a good excuse and that is that we have sold all our possessions, given up the house we were renting, and hit the road and we’re currently recording this from Bangkok and last time we were in Tunbridge Wells. We’ve had a complete change of life. We’re now just living out of a carry-on bag, carrying the suitcase, basically a handbag.

EMMA: Yes.

SAM: And I thought it would be interesting to talk about that in this episode and, yeah, readress the whole digital nomad thing because you might have hobbies on a previous episode on this before called the pros and cons of being a digital nomad and in it we talked about a previous trip we did where we spent in a year and a half traveling full time, being location independent, living anywhere while working online. And at the end of that post, we basically said that we’re gonna stop and we’re gonna settle down for a bit, which is what we did. We rented a house, we got a car, we bought some furniture, we did basically everything that kind of thirty year olds are meant to do and now we’ve thrown off the shackles of society once again, we hit the road. So you can hear all the pros and cons in the previous episode, but I think what we basically said was that one type of life wasn’t really much better than the other. They both have their pros and cons and there were a few big cons for being a digital nomad and I think the three that are most relevant because I want to discuss how we’re planning on addressing them this trip, and also maybe how our mindset may have changed a little bit. So one of them was community, that’s one of the big reasons we wanted to settle down somewhere was just to get to know the neighbors, be a part of the local community, contribute to that local community, do some more sort location dependent stuff, like running your supper clubs.

EMMA: Gin events.

SAM: Gin events, and being around friends basically. Making friends that last longer than a month.

EMMA: And family.

SAM: And family. Because travelling isn’t that easy, even if you do slow travelling which is what we’re doing where you stay in places a bit longer you’re still having to make new friends every month, every time you move.

EMMA: And say goodbye.

SAM: And say goodbye. And everyone kind of knows it’s a bit transient. You can’t really get too close with the locals because they got their lives, they’ve been there a long time. The travellers are often moving every couple of days. It’s kind of only other digital nomads that you end up making really good friends with and hanging out all the time, and they’re just as transient as you. So it’s either you moving on or them moving on all the time, and we found that quite difficult in our first year. The second thing I want to talk about was productivity, on the big reasons for stopping it was that we just couldn’t get that much work done. There was just too much to do, too much sightseeing, the stress of always moving.

EMMA: We were quite tired, too. We didn’t really have the energy to sit down and do weeks long-worth of work.

SAM: Yeah because it’s not just about the energy or the time you have in the day. Because there are other things we’re doing, but even when you’re not going around doing all the touristy stuff, you still have that kind of underlying level of stress from knowing you know where am I going to go next, how am I gonna go to talk to the person in a supermarket.

EMMA: Yeah, speak a different language.

SAM: Speak a different language, so you’re constantly thinking about how you’re going to fly, where we’re gonna do next, as well as all the touristy stuff. And I think in that post I write something along the lines of twenty-seven-year-old aren’t meant to lay on the beach all day doing nothing productive, and that’s kind of what I felt. And then the last one I wanna talk about was not having a base really, not having somewhere you can come back to and call home.

EMMA: Yeah.

SAM: And what we only really realised that was important was when we finished our first stint of that previous trip and we got back from South America and just kind of landed at our parents house and just the feeling of that kind of like, oh wait we didn’t know that was there. A shed or something you’re perfectly comfortable which you don’t have to feel if you’re basically moving home every week, every month. Cool so shall we address those?

EMMA: Sounds good.

SAM: I’m interested to hear your thoughts as well, because we kind of talked about this but I don’t think we’ve ever really gotten that much into detail. So community, how are you feeling about community this time around?

EMMA: Well we haven’t really joined any yet? So far, the two new places we’ve been are Croatia for my friend’s wedding and then we’re in Bangkok to see some uni friends, and we haven’t really gone to many workspaces or done the usual activities. To be fair in the last two days we’ve been into church and brazilian jiu jitsu and yoga, but it takes more than going just one time to get a community and to make friends. So to me, it’s like it’s quite early.

SAM: Yeah and these first few stops we’re moving quite quickly through. And also we’ve been hanging out with each other.

EMMA: Yeah and also moving, getting rid of the stuff in our houses was really stressful, really tiring and we needed some downtime.

SAM: That was way more work than I thought it would be.

EMMA: Yeah I don’t think either of us were ready to throw ourselves into going out every night, talking to loads of new people, making loads of effort putting ourselves out there. It’s been very light like a holiday, which has been lovely and much-needed and something we definitely didn’t have when we went to Buenos Aires which is our first stop in our last trip.

SAM: It’s weird isn’t it because it’s quite a different move this time because the house that we left, we actually had loads of furniture whereas before it was just all rented service depts which had furniture already there and it was just kind of our clothes and stuff.

EMMA: Yeah we didn’t have that much stuff.

SAM: We didn’t have a car back then, we had a car this time. So it’s just been a different level of work and also we had a four bedroom house this time whereas before we were in flatshares. And just the amount of rubbish you accumulate over two years.

EMMA: Yes horrendous. Absolutely horrendous.

SAM: I felt such a weight off my shoulders moving out with just like a little suitcase. It’s so nice.

EMMA: It makes me really happy like we moved from moving hotels in Bangkok a couple of days ago. We only moved like a 10-minute walk but it was just so so easy that there was hardly anything to carry and to wheel it on.

SAM: Yeah.

EMMA It just made me think how much weight we were lifting with the furniture and all the stuff getting rid of the house.

SAM: Yeah but we’re back on community, so as I said we haven’t yet really made much effort with community but we do have a few plans and one of them is that when we were going to Bali and we’re planning on spending a bit of time there and we’re gonna land straight, go to the co-working space, we’re already in all the Facebook groups, I’m gonna be doing jujitsu you’re going to be doing yoga. We’re gonna go to church as well, so we have kind of four or five different spots where we’re gonna hit within the first few days of being there, all of which will hopefully have its own little community that we can slip right into.

EMMA: Yeah.

SAM: And particularly Brazilian Jujitsu, church, co-working, are very easy communities to join and they’re quite active as well. Yoga probably not as much.

EMMA: People don’t really chat during yoga.

SAM: But it may be different in Bali where it’s a bit more, everyone doing it.

EMMA: Every day, yeah.

SAM: So that’s the plan. But that doesn’t really solve the problem of people moving all the time and our friends being back at home in England and our family being back there as well. So I don’t think there is a really good answer, there’s probably going to be a time where we’ll really miss it. The one thing I would say is we are planning on returning every three months.

EMMA: Which is what we did last time.

SAM: It’s what we did last time. And in terms of keeping up with our old friends, that is fine. Because you end up seeing people as much as you would when you’re living there.

EMMA: In your case you probably see them a bit more.

SAM: I definitely see them more so because I’m very passive so that gave me an excuse to make an effort with people.

EMMA: Yeah which is good.

SAM: Whereas people go oh, we’ve got to meet up before you go off again and then you do where when you’re just kind of living perpetually.

EMMA: Years go by.

SAM: And I think that’s just kind of a problem. And I think it’s just the grass always feels greener on the other side, when we’re traveling before by the end of it, we’re quite looking forward to come home, by the end of this tenancy.

EMMA: We wouldn’t wait to leave.

SAM: We’ve been desperate to leave. But it’s been so good, I’ve had such a great time as you say it feels a bit like a holiday so far so let’s see what it’s like once we once we settle down. Which then brings me on to productivity. I think that I thought I would be much more productive than I was just because I’d have an office and loads of free time during the day.

EMMA: In Tunbridge Wells.

SAM: Yeah, I was travelling and not doing as much work as I wanted to do, and then I move to Tunbridge Wells and instead of it being so I don’t have time to do things, it’s I don’t have the motivation to do things or the energy to do things. So.

EMMA: You can’t blame it on the travelling.

SAM: I can’t blame it on travelling, I’ll blame it on being lazy and so it’s gonna be interesting so I started tracking my hours and I’m gonna be keep doing that while travelling and it would be interesting to see how my hourly rate, how many hours I get in a month, how that will be affected as we travel because I have a feeling that I might be more productive here and that’s not just about the hours I put in, but it’s about creativity. I feel like I’ve been a lot, I was getting a bit in a rut and what I’m hoping is that just the fact that we’re constantly moving, doing new things will be creative, then also that as we join all these digital nomad communities of people doing interesting things, I’ll find some creativity there. Find some ideas from other people, inspiration from other people doing awesome things.

EMMA: Yeah that’s what I’m really hoping. Like you’ve definitely got that to a certain extent from the people you’ve interviewed for the podcast. I think that’s been really good because it’s been a way of like forcing you to network with other people that have online businesses and and go into like quite a deep chat about that business which is the bit you enjoy. You don’t like the small talk, but I think you’re gonna get a lot more of that in Bali, which is going to be good.

SAM: Yeah, I agree.

EMMA: But as you kind of alluded to, I don’t think your working hours are necessarily gonna go up. I think your productivity is going to go up.

SAM: Yeah.

EMMA: There’s definitely a finite amount of hours in a day that you can work on a normal average day.

SAM: Yeah.

EMMA: What I mean is just cuz we’re going into co-working space doesn’t mean we’re gonna be doing 9-5 because that’s just not how you work.

SAM: No no I prefer short sharp or when you’re properly in the zone and then just like a really long.

EMMA: But you can’t plan for that.

SAM: And sitting in front of my computer waiting for motivation to work versus knowing we’ve got to go out in half an hour because we’re going to a street food market so I go to get this bit done actually suits me a bit better.

EMMA: So that is why we’re doing a podcast right now.

SAM: Yeah we’re going to a street food market in five minutes, I thought let’s get one in quickly they’re only half an hour. We haven’t done one in so long, we need to get back into the groove and we got new microphones or at least tiny little ones that you just kind of clip onto yourself so I’d be interested to see how the sound quality fares. To be honest it might be another three or four days until I get around to editing this and uploading it but that will improve once we once we hit Bali. So in the next few days we’re off to Singapore to check out the architecture and more street food and then from Bali, the veggie food and the community.

EMMA: Yeah be a bit healthier, try to be a bit more productive.

SAM: Cool. Alight yeah well before we close it off I want to quickly talk about what has been harder about leaving this time and going and what has been easier about leaving this time and going. Because it’s based on two different sensibilities of being a digital nomad. And I thought it would be quite interesting for people who are listening to this and talking about going on their first trip. The things we found really easy was packing up our life.

EMMA: Yeah.

SAM: If I’m going to be honest. Like at, the time I don’t think we thought it was that easy because you had to manage your exit from your job, you had to save up some money, but on the counter side to that is you were starting a whole new business so you had no financial secuirty at the time so you had this idea that not only were you travelling but you’re responsible for building a business from scratch.

EMMA: And earning enough to live.

SAM: And earning enough to live, and also it was something completely strange, that type of traveling you’d never done before. You really like being organized and the idea of having a one way flight and just landing in Buenos Aires which was our first stop last time.

EMMA: We had like three nights in a hostel and that was it. It was terrifying. Whereas now it’s the complete opposite.

SAM: Now you’re so good and comfortable. Like when we moved here to this hotel versus where we were staying before, we just looked it up the night before, see where we wanted to stay and just rolled our suitcases right down. Singapore was a bit different because it’s so expensive there. So it was kind of like, we want the cheapest in and the cheapest flight out. That was more just being a bit smarter about the organization side of it, because what you can just organize everything for like the next day. The Internet’s pretty cool like that, and you can book hotels and be in media, you don’t need to give him much warning, you don’t need to give your flights much warning.

EMMA: That’s my memory of South America.

SAM: And South America end up getting stuck in a few places we’d look at flights for the next week and they’d all be sold or really really expensive. So we end up doing a really weird route around just because we’re just getting the cheapest thing.

EMMA: And that was fine.

SAM: Whereas this time we had a bit more of a plan. Alright well we’re rambling, so going has been was easier the last time into of packing up. Packing up has been really hard this time as we talked about earlier.

EMMA: Yeah.

SAM: But actually, being here like the stress, like the worry about it has been much easier because one, we don’t have to build a business as we go. We kind of got that sorted already which is a bit more comfortable we got work to be doing while we’re out here. If anything too much work.

EMMA: Well that’s the difference with me, your work is the same.

SAM: Yeah I was the same.

EMMA: Yeah whereas I was absolutely terrified going the first time.

SAM: And I think like we’ve met a lot of people who have been in that situation where they’re going because they want to go, not because their business allows it yet, or the job allows it and then they try and work it out as they go which is so obvious and it’s a bit stupid to say but it is much easier to go when you have that financial security.

EMMA: Yeah, I think the other difference this time in terms of packing, actually part of it was easier to me because I knew what to put in my bag, whereas the first time I had no idea would pack and we had big suitcases.

SAM: Over the course of a year and a half, we downgraded from a huge suitcase and a carry-on to just to carry on.

EMMA: Yeah.

SAM: And it should be easier now because we’re more in sunny places.

EMMA: Yeah.

SAM: Which means I’ve only got one gi for jiu-jitsu which is a bit of a pain. I don’t know it’s just something of the grass is always greener. We got so stir-crazy being in the same place being on an adventure, and don’t get me wrong we had a great time, made loads of friends, started a business, Pipehouse Gin which a very local business, started your supper clubs which I think has been quite shaping for you. You’ve been very glad you’ve done that.

EMMA: Yeah very.

SAM: Which we couldn’t really, well we might be able to do the gin but it was much easier doing it in a local place, experimenting with markets and getting to know all the local bar owners and shop owners and stuff like that so it has been great. Just change is good and I’m sure we won’t do this forever, maybe we will.

EMMA: Yeah and it’s made me realize how much I love cities.

SAM: Oh yeah, I’m loving Bangkok. Talking of which we got some nice street food to go eat.

EMMA: We’re gonna go to Chinatown.

SAM: Chinatown, a few cocktail bars.

EMMA: Can’t wait.

SAM: And hopefully tomorrow I’ll edit this podcast and get it out for you. Alright well sorry that’s been a bit of a rambling episode. I’ve thought it’s better to do something rather than nothing. Hopefully this will kickstart us again and we’ll go back to our twice a week schedule. Emma’s giving me an unlikely look.

EMMA: You’re giving yourself an unlikely look.

SAM: I’m giving myself an unlikely look. Alright, adios.

EMMA: Bye.

Bonus: PPC Advertising with Oscar Ford

Oscar runs pay-per-click agency Anuncia. He specialises in Google advertising and was kind enough to take a look at some of my businesses to see how we could improve our advertising. In this episode of The Lazy Entrepreneur Podcast he goes over when and how a business new to PPC should set up their campaigns. 

Download Episode

#43: Don’t Compete On Price

“Don’t compete on price, it doesn’t matter what business you’re doing, you should probably go in more expensive than you think you should.” -Sam, on setting ambitious prices

Whatever your business is you shouldn’t try and beat your competitors on price. In this episode, we talk through three different types of businesses that we have run or run in the past and why it was the wrong decision for each of them to compete on price.

Resources Mentioned In This Episode Of The Lazy Entrepreneur Podcast:

Listen to this episode of The Lazy Entrepreneur Podcast on:

iTunes | Spotify | YouTube | Stitcher

Structure

00:48 – Why you want to price yourself higher than your competitors
01:15 – Price competition in different industries
03:55 – The reason Emma priced herself in the highest bracket for freelance marketing
05:15 – The type of client you want to hire you
06:35 – Time spent working vs. finding work
07:37 – Making bigger margins
09:24 – It is easier to reduce price than raise it
10:38 – Examining Pipehouse Gin
13:03 – Seeing past price in competition
15:09 – It’s more expensive than you think
19:50 – The Wren Coffee
22:40 – Coffee shop margins
24:41 – The cup fiasco
25:35 – Supper club pricing and progress

Transcript

SAM: Hello and welcome back to another episode of the lazy entrepreneur, we’re your hosts Sam and Emma Priestley.

EMMA: Hello.

SAM: And today I wanted to talk about the race to the bottom and why you shouldn’t compete on price and I think I can say that as a sweeping statement. I never have ever done a business where I should have gone cheaper.

EMMA: That’s a pretty bold statement.

SAM: It is a pretty bold statement, do you know what I mean by competing on price?

EMMA: Does it mean that you’re not just gonna look at all your competitors and then price slightly lower than them?

SAM: Yeah pretty much, it goes a little bit beyond that, that instead of just pricing yourself the same with your competitors or trying to beat them on price, you will probably want to actually price yourself a bit higher, especially when you’re starting off. You don’t really know who your competitors should be so the companies you’re looking at probably aren’t really your direct competitors at all but that’s all the sort of stuff we’re going to cover today, and what I want to do is I’ve got three different types of businesses I want to talk about, businesses that we’ve run ourselves, either of us, and then talk about the different things that come into play about why on each time it’s best not to compete on price. So first off, I want to talk about freelance marketing. Freelance marketing or any sort of service or consultancy based business this is a business that Emma started, this was her first one when she left corporate life, she became a freelance marketer selling her services on upwork or freelancer or other websites like that. Second business I want to talk about is Pipehouse Gin which is our craft gin business where we obviously have a product, we sell bottles of gin but this is also true for any other kind of generic product based business such as my table tennis business where we make table tennis bats or any one of the hundreds of Amazon FBA businesses out there. It’s also important not to compete on price and now finally I want to talk about a coffee shop I used to run and similar strain, your supper clubs that you still do run. You’re selling a product but it’s an immediate product in a physical location, so three very different types of businesses.

EMMA: Sounds good.

SAM: So let’s start off with freelance marketing. So for each one, I’m gonna go through what I think are the five reasons why we shouldn’t compete on price. And then explain each one, so for freelance marketing, unless you can’t win the race to the bottom, that the price indicates the quality and the expectations that people get from it. That you’ll probably want a bigger margin than you originally expected. That everything is going to be more expensive than you think. And finally it is easier to reduce your price than to increase it. All right that was rapid so doesn’t matter if that went over your head, just to give you an over line of what we’re going to talk about. So freelance marketing, first off, I want to say you can’t win the race to the bottom and this was particularly clear with freelance marketing where you’re in this open marketplace with hundreds if not thousands of thousands of other people all competing for the same customers, and really all you’ve got to show for it is your profile which might have a picture of you, a little portfolio of what you’ve done before, some reviews. You have the previous work you’ve done before and then the price that you’re charging.

EMMA: Yeah.

SAM: And so you were up against people from developing countries who were charging five dollars an hour, you’re up against people in developed countries and in similar areas to you who were charging anywhere from twenty five to fifty dollars an hour, and then also a few really expensive people who are charging anything from $50 to $500 an hour, so starting off you went straight for that higher bracket is what you priced yourself. Do you know why you did that?

EMMA: Well because I’d had quite a lot of experience in marketing and I wanted to appear to have high value so that I could be doing consultancy work rather than the kind of nitty-gritty hundreds of hours of marketing admin. I wanted to do the advice side and the strategy side.

SAM: Yeah, which is what you ended up doing. So you’re saying price indicates quality, they’re not gonna hire you for data entry when you’re $75 an hour, whereas they might hire an expert marketer for $5 an hour for data entry. Also, likewise I think one of the reasons you did it was also that you realized that there were people out there who were willing to do it for cheaper than you were.

EMMA: Yeah and that’s fine.

SAM: And that if you decided to compete with them on that price, you wouldn’t win.

EMMA: Yeah I didn’t want to.

SAM: And if your client was looking for the cheapest person, they could go to someone who’s not you.

EMMA: Yeah and that was fine by me.

SAM: It’s a weird thing. Often the best clients to have are the ones who aren’t that price conscious. If you’re only working with the people who were trying to get it for as cheap as possible, you know probably gonna hit issues at some point. So when we talk about that we’re in a race to the bottom, we talked about price indicating quality, that when people are shopping they only really see price and that they’re gonna hire you for your strategy side and actually the overall consulting stuff rather than than the cheap jobs. Let’s talk about how things are going to be more expensive than you think. So freelance marketing is something where you don’t think there are any expenses, it’s just you. So when pricing yourself, you’re saying $75 an hour, it’s quite easy to then compare that to what you would get paid in a normal job.

EMMA: Yeah.

SAM: And say well I got paid forty pounds an hour then, or forty dollars an hour then maybe I should charge forty-five dollars an hour for my freelancing. Or maybe you think the opposite, maybe I should charge a bit less because I don’t have a big name company behind me.

EMMA: Yeah and I’m thinking about expenses, I didn’t often have an office and didn’t really commute to work.

SAM: Yeah you didn’t have any expenses that you might associate with a business. But what you did have was a huge expense of time spent finding clients.

EMMA: Yes, the new business side was very time-consuming.

SAM: Yeah, so what do you reckon maybe half your time, maybe even more than that was actually spent finding clients versus actually doing the work.

EMMA: It just scaled like I don’t even know how long I was doing it for a year and a half yeah I don’t know to start with the first three months, most of my time was spent on new business, whereas if you look at the last three months, hardly any time was spent on new business. So you had to invest the time upfront to build your client base, and also I had repeat customers, so towards the end of the year and a half, I didn’t have to do as much new business.

SAM: The other expense that you have is stuff like bad clients who might not pay you.

EMMA: Yeah.

SAM: Or clients who might say that you haven’t delivered what they wanted to, and then basically force you to work extra for free.

EMMA: Yeah.

SAM: Or extra work around this such as interviewing or having the post contract chat.

EMMA: Yes.

SAM: All this kind of stuff you haven’t really factored in that are actually expenses just because you’re not paying for an office or paying for staff doesn’t mean you don’t have expenses as a freelancer, as a one-person business. The next one I want to talk about was you were on a bigger margin than you probably think. And that’s I think true for this one, it’s more true for some of the other ones we are going to talk about, but generally when starting a business, people look at how much they’re gonna make to make a profit. So they might say for this $75 an hour, you’re going to be making $75, so then they do some quick maths and they say, “Oh well in a week I’m gonna work this number of hours and then at the end of the year well, when I want to work I want to earn the equivalent of my old salary so I want to earn whatever is $70,000 a year therefore…” and they kind of work backwards. They say this is how much I want to earn, therefore this is how much I should be charging. We’ve already said your expenses are going to be bigger than you think they are, but also you’re the number you’re probably going to sell and the margin you make doesn’t really… those you can’t really do that math.

EMMA: No definitely not for freelancing. I mean I had no idea how much business I was gonna get in the first few months let alone the first year so I didn’t even do those calculations because I wouldn’t even know where to start.

SAM: Yeah, yeah and exactly. You don’t know how much business you’re gonna get. That’s true for product business, that’s true for freelancing.

EMMA: To me I always thought something was better than nothing, which isn’t really a very positive outlook on what a new business, but that’s how I started.

SAM: And then finally I want to say that it’s easier to reduce your price than to increase it. So if people know you’re charging a certain amount and then you up it, so let’s say you have one client and then they come back for some repeat work, it’s quite difficult then to tell them the price has gone up and you can’t do it, but then they might say no.

EMMA: Yeah, yeah whereas I had a very full on client for 3-4 months where I had quite a few billable hours per day and therefore I gave him a discount after the first month because actually the work that I was doing was quite a lot of their admin stuff.

SAM: Yeah.

EMMA: But he wanted to pay, he wanted me because of my expertise in his area of business but because he was guaranteeing a certain number of hours a day, it meant that I was then happy to negotiate with him.

SAM: And he feels good because he’s getting a deal.

EMMA: Yes.

SAM: Which is the other thing because some people just love to negotiate, and so by having that flexibility to reduce price if needed, you get to indicate the high quality that you’re selling by having that high initial price but then also still get customers who are then feeling good about it by having a reduced price. If we talk about a bit more in our in our next business, so that’s freelance marketing, let’s move on to to Pipehouse Gin, our gin business. Let’s hit all these these five categories again. So first of all the race to the bottom, what it should be obvious with a craft gin business. We’re up against the biggest companies in the food and drink world. A lot of gin brands are owned by just a handful of companies all of which are going to be able to produce gin much much much cheaper than we can.

EMMA: And it’s so much more scalable as well the quantity they can produce.

SAM: They can do unbelievable quantity and they can also they can also take lost liters in order to win the race to the bottom. So there are a lot of companies who will purposely lose money on a line in order to take a large chunk of the market.

EMMA: Yeah.

SAM: That’s just not something we can do. We don’t have millions invested, we don’t have the scale, we just can’t beat those people on price. The other thing to think is that we’re not really competing against them, so when we start off, so we our first product is an earl gray and cucumber gin and so a lot of people think that we’re competing with Hendricks which is another cucumbery gin, but we’re not really, we’re double the price of Hendrix, we’re artisan, we’re totally different marketplace.

EMMA: Yeah we’re small batch.

SAM: We’re small batch. Yes we can’t possibly compete with price, and we can’t we shouldn’t really try. So that’s true for the ones like those big brands and it’s also true for the kind of artisan but the first wave who are now really big, so there’s a bunch of other gin brands who were going in at the sort of 30 pound price range, to 35 pound price range, and one of the problems we have when starting is there’s a few other smaller gin producers around, and with our pricing that we were selling to bars and restaurants and stuff was hired than theirs.

EMMA: Yes.

SAM: So they were saying, well I’ll just go to this person because they’ll do it for cheaper.

EMMA: Because they’re another local gin.

SAM: Because they’re another local gin, and one of the reasons they were cheaper we found out is that they purposely found what our pricing was and lowered it a little bit, so if we started competing with that, we just hack away each other’s margins. Reduce the price and none of us are making any money and they can do it, they got more investment for us so they can take a loss for longer, they’ve got bigger capacity than us so they can afford to do it and they’ve been around longer than us. But we’re not trying to compete with them, we’re not trying to compete on price with them, we’re trying to compete on quality.

EMMA: Yes.

SAM: And when they’re going in cheaper than us and dropping their prices and we’re holding firm our higher price selling well if you want it that’s the price, that indicates a quality.

EMMA: Yeah and it supports our really strong branding as well which is really important to us.

SAM: Yeah and it’s something that is paying dividends cause there’s a lot these places who will now will only pay that reduced price for our competitor but will still pay us the higher price.

EMMA: Yes.

SAM: And it’s hard to go in with a price that’s higher than the other people in your industry so for us for the other artisan gins, but we had to do it and we’ve still got sales and it meant that we were able to build a viable business that earned money from day one, rather than something that didn’t really work and that’s because you’ll probably want a lot bigger margin than you think, and this is a good case of that whereas we could have reduced our prices but then we would have only been making one or two pounds a bottle.

EMMA: Yeah.

SAM: How many bottles of gin do you need to sell in order to make one or two pounds of bottle?

EMMA: And the other thing is you can’t reduce your price for one customer because they all talk so it would mean you’d have to reduce your price across the board. I think to put it into numbers with gin, for the hundreds of bars and restaurants we’ve approached, off the top of my head there are only two that have not taken our gin on price. Everyone else has taken it. So it’s a very small percentage of business loss we’ve had over the the higher price.

SAM: Yeah.

EMMA: Just a price alone.

SAM: And it’s worth paying mind, when we’re selling gin we’re literally going door-to-door to talk to the bar owners, and if we were only making one pound the bottle and we were only buying six bottles, we would not be able to justify it out.

EMMA: No.

SAM: So even though we are losing out on a few customers who might have bought it if it was cheaper, we wouldn’t be doing that, because we wouldn’t get those customers at all because it wouldn’t be worth us going door-to-door. It wouldn’t be worth us paying sales representatives to go do that. Next up will be it’s more expensive than you think. That’s definitely true about gin when we first did our back of the napkin margins and worked out how much we’re gonna make, we missed out a bunch of things. We didn’t appreciate that we’d mess up the box sizes when we bought our first boxes and have to throw away the 500 boxes. We didn’t appreciate how many breakages we’d get on deliveries.

EMMA: Yep.

SAM: We didn’t appreciate something stupid, it was VAT, we didn’t realize we paid VAT on top of alcohol duty.

EMMA: Yes.

SAM: Which cost us an extra two pounds a bottle.

EMMA: Yeah which is unbelievable that we have to do that.

SAM: It’s tax on tax, it just turned out to be more expensive. Same with the sales, we have to pay for advertising, we have to pay for representatives to go in, we need to give away a lot of free gin, a lot of free samples to get the sales, kind of expensive because we’re not that experienced in this tough business we weren’t really able to predict properly. And then finally for the gin is that it’s easier to reduce your price than to increase it, so this is an area where we kind of messed up a bit.

EMMA: Yeah.

SAM: With Pipehouse Gin, we went in at the top end of what the artisan market was currently charging which turned out to be lower than we should have done. We should have just been

EMMA: confident

SAM: confident enough and just charged more than everyone else.

EMMA: Yes.

SAM: Because what then happened is six months in we had to go round and up our prices and when we have lots of regular customers that is a really difficult conversation that has to be had with each one in particular telling them to raise the price, and since raising the price it hasn’t been any more difficult to get new customers than it was before when it was 2 pounds a bottle cheaper but we shot ourselves in the foot by having going in at a price we thought was right. We should have just gone in higher it is something else we did where we did we got correct with with table tennis, so when I first started my table tennis business there was one other competitor who was selling similar products and in fact they were the ones who kind of inspired us to start because I’ve seen this great product and they were selling it dirt cheaply, they were selling it for about 12 pounds a bat. We thought that is ludicrously cheap, it’s the only thing on the market, we think we can do it better and so when we started up we initially priced our bat at about 25 pounds, so over double what they were charging.

EMMA: Bolshy.

SAM: And outsold them pretty quickly because people don’t expect anything good from 11-pound bats, they were by having the price so cheap they were damaging the reputation.

EMMA: Yeah it almost almost sounds like it’s a disposable thing. You use it once and throw it away at that price.

 

SAM: And then after about three months of selling, we upped our price to 30 pounds and found that actually sales didn’t really get affected at all. If anything it went up slightly, we found like the sweet spot between how much we we’re making per bat and sales and margin that was perfect for us.

EMMA: So it’s interesting, I didn’t realize that it happened with the bats so it’s interesting how there’s two businesses that you’ve run and that had that price.

SAM: Yeah well with the bats, we upped it not because we weren’t making enough and we had to do it but because we thought we could up the price because we experimented with new market and what we did is we did a bit of them because was mainly sold on Amazon and online, we could do effectively A/B testing where we offered a few different prices and then we could test, we can analyze by how the sales were affected from each one. And bear in mind if you go from 25 quid to 30 quid, that extra five pounds is almost all profit.

EMMA: Yeah.

SAM: Because all your margins are really taken care of so any extra you can put up, it’s great and is extra profit.

EMMA: Wow, what a nice place to be.

SAM: Which is something you can do on our online business like that, but you can’t do when you’re going door to door, selling bars locally where they’ll talk. You can’t give each of them a different price.

EMMA: Or selling at a market stall.

SAM: Right, you can’t give one customer one price and the next customer another price, so it’s something which you could use your common sense about it. But generally yeah set it as high as possible and then pull your prices back if you need to. And then the final business we wanted to talk about was a coffee shop or your supper clubs. So I started the coffee shop in London, it was called The Wren Coffee and next door to it was Pressed Manger who’d sell filter coffees for one pound a cup.

EMMA: How do you compete with that.

SAM: How on earth do you compete with what must be a loss leading thing.

EMMA: Oh yeah.

SAM: Obviously we can’t win the race to the bottom with them, and in fact we were then comparing ourselves to the other artisan coffee shops, places like Taylor Street barista and Caravan and Workshop and what we should have done, but we didn’t do is we should have priced ourselves above them.

EMMA: Yes.

SAM: Because we were in a better location, people aren’t as price sensitive as you think they are. We were the only artisan coffee shop within a walking distance where we are, so we had the market cornered but we didn’t, we just went in at the same price as what they were charging. Again this is another one, it’s easier to reduce cost tham increase it, and six months later we upped our prices and that was really difficult and we actually lost quite a lot of customers because of it.

EMMA: Wow.

SAM: And these customers wouldn’t have bat an eyelid if it had been a high price to start with, it was the upping the price they didn’t like. That they came in one day and it was one price and came the next day and they’ve got the exact change and then they can’t afford it.

EMMA: Yeah.

SAM: It was very difficult, so you can’t win the race to the bottom, it’s easier to reduce price than to increase it. Price indicates quality if I’m a coffee snob, which I am.

EMMA: Yes.

SAM: But might not know much about coffee like definitely I was in that situation at one point, where as long as it looked good I thought it was good.

EMMA: Yeah you like the look of the branding.

SAM: Then I’m gonna be looking at that three pound flat white, I’m thinking that’s gonna be better quality than the one pound filter coffee sold next door. Coffee’s a weird one though because you can go to Starbucks and pay 5 pounds for coffee that is much worse than what you get in a coffee shop, so I still I think the artisan coffee market has priced itself quite badly.

EMMA: Yes.

SAM: And we’ve been to countries where the coffee is more expensive and the cost of living is cheaper.

EMMA: Yes.

SAM: So I think in London in particular, coffee it’s a bit too cheap and it is going up and that’s another reason why our business never made any money because it’s very difficult to make a really good quality artisan product for two pound fifty and make any money out of it because you want a bigger margin than you think.

EMMA: Because it’s not just the cost of the cup and the coffee beans and the milk and the water, it’s everything else around it.

SAM: Everything else around it, it’s all the stuff. You’ve gotta sell a lot of coffees in order to make any money, so we had I think we had the turn over something like 1,400 pounds a day in order to break even.

EMMA: Yeah which is crazy.

SAM: Think how many two pound 50 cups of coffee that is. You gotta be like you gotta be churning them out on a conveyor belt.

EMMA: And that the customers want to pay for them.

SAM: So making a pound a cup just isn’t good enough. You gotta have other things and what we were told before we started, which we didn’t listen to, is if you want to make money from a coffee shop, you can’t do it from the coffee. If you want to have a good quality coffee, you need to have something else that makes the money such as food. That’s definitely something we should have gone a bit higher. Same with food, should have been a bit more expensive and yeah you just touched on it there, but everything’s more expensive than you think. Coffee shops a really obvious example of this where you don’t really know what you’re getting yourself into. We didn’t know you have to by law pay for pest control. We have to have a pest control contract and there’s only a few companies to offer pest control contracts and so they’ve got the market locked down, that it’s a legal requirement so we have to pay a thousand pounds a year in order for someone to come round twice a year and just have a look round. That’s ridiculous that we didn’t know which is an extra 700 coffees we had to sell in order to cover that. And there were loads of things like that, stuff like a coffee machine breaking down, staff leaving, sick pay. We printed the wrong times on our cups. Did I tell you this story?

EMMA: What times?

SAM: So we ordered something like a hundred thousand takeaway cups and on it we had open monday-friday these times, saturday sunday these times.

EMMA: You weren’t open saturday sunday.

SAM: We were when we first started but about a month in we decided not to open saturday sunday by then we had two year supply cups.

EMMA: What did you do? Throw them away?

SAM: I think what we did is we bought stickers and stuck over and spent hours sticking over this cup. Just things like that that you don’t expect, but that’s not a lesson I’ve learned cuz we had the same problems, I’ll just talk about the boxes from Pipehouse Gin. There’s always unexpected expenses, so there we go, that’s the end of this podcast. Don’t compete on price, doesn’t matter what business you’re doing, you should probably go in more expensive than you think you should. I once heard someone say you need to feel uncomfortable with how much you’re charging. If you don’t feel a bit uncomfortable, you should probably charge a bit more and I think that’s some good advice. And so on that, I’m gonna say goodbye. Emma, do you have any anything you’d like to say?

EMMA: What about my supper club?

SAM: Oh supper club, oh yeah let’s talk about your supper club. I kind of threw that in with the coffee shop. It’s the same sort of thing, isn’t it is? When you started to you charged 30 pounds a head yeah people to come around and have dinner with us, basically so you have eight people plus us two, each person pays thirty pounds and they get a three course meal out of it. One of my best friend, my best man in fact, his reaction was why would anyone pay 30 pounds to come to your house when they can go to Petri Express and pay fifteen pounds?

EMMA: Yeah.

SAM: Like, we’re not competing with Petri Express, it’s a different. We can’t compete on price for that, we can’t compete with a supply chain economies of scale restaurant who are turning over hundreds of tables a day.

EMMA: Yeah.

SAM: And charge the same. It’s a totally different thing and we gotta charge accordingly. And likewise, you charge 30 pounds a head and then about a year in you were saying, no you should probably charge about 50 pounds a head.

EMMA: 40.

SAM: 40 and you never had the confidence to do it because you’d already put in initial thought into everyone head, that this is how much it costs, was if you’ve started at fourty, you’re only selling seven or eight tickets, it would have been the same difficulty selling those tickets.

EMMA: But part of it was confidence for me I didn’t want to go in at forty because that sounded too high, because I’d done some research of other supper clubs across the country, not necessarily the local ones that I thought looked really good and 30 quid was slightly cheaper than them.

SAM: Yeah.

EMMA: And that was me being stupid.

SAM: And that’s a good throwback to what I said about going to a point where you feel a bit uncomfortable.

EMMA: Yeah and also I felt if I did raise it to forty, I felt like I needed to offer it to someone else, because a lot of my customers were returned, it was about fifty percent return so they were going to come back and have a similar meal.

SAM: And knowing from your regulars there’s definitely ones who would not have come back because of the price increase.

EMMA: Yes.

SAM: Just out of the principle of the matter.

EMMA: Yes and they would have told me so as well.

SAM: Yeah but they’re not they’re not price sensitive at all, they would have paid the larger amount to begin with. Definitely, but it’s the principle.

EMMA: It’s the principle of it. Yes exactly same.

SAM: Price indicates quality if you’re choosing between supper clubs, you don’t really have any competition but if you did, if it was saturated with supper clubs, then price indicates quality on that. You want a bigger margin than you think, bare in mind when people are doing a supper club, they’re thinking people are only gonna be there from whatever seven to eleven each day. Well what you don’t realize is you spend the whole day cooking and then you spend the previous couple of days shopping for ingredients and planning the recipe and following up with people and getting the money and marketing it and everything. So, it’s more expensive than you think and you need a bigger margin than you think in order to make it worth your time.

EMMA: Yeah.

SAM: And that’s it. Alright well thanks for minding me about that. Anything else, well we’re off to an awards ceremony now.

EMMA: So wish us luck.

SAM: If you have any feedback, email us at hello@sampriestley.com. Adios.