Name: Iain Row
Business name: My World Journal
Start date: December 2002
Number of staff: 1
Having come up with an original idea for a business in a niche market, entrepreneur Iain Row set up My World Journal, an online service that allows travellers to create a website dedicated to their adventures and experiences.
“One of my best friends went travelling, and didn’t want a leaving present - he had no room in his rucksack and felt it was heavy enough already,” explains Iain. “I was working as a freelance web designer at the time, so I decided to make him a website that he could update easily from anywhere in the world.
“Setting it up cost about £1,500 initially, which I was able to cover by reinvesting the small profit I’d made from the freelance web design, so I never had to borrow any money.”
Everything seemed to be pointing towards a successful launch of the new business, but Iain suffered a blow that many firms never recover from – he simply couldn’t get any sales. It took Iain six long moths to get his first sale, a depressing barren spell which he admits caused many sleepless nights.
“Having no sales in six months was the hardest thing I’ve had to cope with, and very stressful – much more stressful, in fact, than the three months solid I spent working late into the night developing the site,” he says.
“Although I had confidence in the strength of the idea, I knew that I couldn’t afford much of an advertising campaign to let people know that My World Journal was in business, so it was hard to see where the breakthrough would come.”
However, Iain has managed to turn things around since those difficult days, and My World Journal is now thriving. So how did manage to get a flood customers to sign up after a six month drought?
“First, I halved the price at the suggestion of a friend, who was himself travelling around the world,” recalls Iain. “As he pointed out, a night in a hostel cost less than my cheapest product! I was able to drop the price because the marginal cost of each Journal is very low, the fixed costs set the price, and you need the volume to recoup them.
“Second, I found a regular source of traffic – theGumTree.com. This site is frequented by Antipodean travellers and allows free posting to its bulletin boards. Soon it was responsible for a large proportion of my referrals.
“Third, I offered a free seven day trial. The main problem was that, as a unique product, nobody had ever seen a World Journal before. Most people have never had their own website, and are understandably reluctant to pay for something that might not be worth the money. The free trial allows them to experience all the features, and see how easy it is to use, with no commitment.”
The changes Iain implemented had the desired effect – after getting his first sale last May, he already has over 1,200 users signed up to the service and, after a strong Christmas period, is expecting My World Journal to expand over the coming year.
Despite the success of My World Journal, Iain unsurprisingly has regrets about the way he went about setting up his business. Although his job as a freelance web designer ensured that the initial lack of sales didn’t leave him bankrupt, Iain can think of several changes he’d make if he had to start all over again.
“I should’ve done better research on prices before I started,” he admits. “I approached it from the wrong angle – I was charging businesses £40 an hour for web development, so giving people a website for the same price per year seemed like a bargain to me. However, my customers obviously thought differently.
“Also, it took me far too long to realise that I needed to offer a free trial. I’m still kicking myself about that – I got my first sale within a week of implementing it.”
So, what advice would Iain give to other startups that are struggling to make their first sale?
“If you’re just starting up and have never had a sale, you need to ask people you can trust to give you a straight answer,” he explains. “Start with – ‘Would you spend your own money on this?’ and don’t argue with their responses, especially if it’s not what you want to hear.
“Encourage them to criticise – your potential customers won’t tell you where you’re going wrong, they’ll just leave.”