Thursday, August 24, 2006

My Products and the Next Step

As this was started as a poker blog about my experiences playing for a living, I didn't think anybody still reading would care too much about my company but I've had multiple requests and even a little bicker about me not getting into what we sell, so I'll gladly get into it here, if you don't care, skip this post.

Through incoming 800# calls what we do is signup customers for a free trial to use one of our services. When we ran the company before, and as we are getting started now, we offer an auction listing service to callers interested in finding a good deal on a used car. Their membership entitles them to three things:

1) Access to our members only website where they can get auction listings for their area along with tips on purchasing a vehicle at auction along with a host of other information, services and tips, all related to attending auctions or to purchasing a used or new vehicle in general.

2) Access to our member support department where they can call in and speak to a live rep who will give them listings over the phone, explain the process to them and assist them in finding a good deal on a used vehicle for sale by owner or through a dealer in their area.

3) Auctions listings for their area as well as other helpful membership materials that we mail out to them, and which they can request, free of charge, at any time during their membership.

After covering $1.95 in shipping they have a free trial to use the service, during which they can cancel at any time, and after which they are billed monthly if they choose to remain members. We tweak the trial period lengths and monthly membership fee, but the standard is somewhere in the neighborhood of a 30 day trial and $20 a month thereafter. They can cancel at anytime and get a refund for any unused portion of their membership.

We are rolling out a real estate forclosure listing service very soon, but this is a much more involved product as the listings need to be constantly updated and accurate for each area. We're hoping to have this ready for market within the next month. It works the same as above except that it is all geared around the specific property listings and the service typically bills at a higher monthly rate, in the neighborhood of $40 per month after their trial.

Once people activate their free trials we offer them free trials into other services from partner companies. For accepting any one of these they typically get a free gift of some kind like a 3day/2night hotel stay or a $25 gas card. We call these 'upsells' and we offer several of them to each caller, and most people signup for them. We get a 'bounty' on these sales from the partner companies and it provides a nice source of stable, large revenues, as opposed to the stable but slow in coming recurring billings we get for our 'core' products.

Simple model really: we drop ads for the core products, generate calls and teach rep's to field the calls, teach them how to get a high number of upsells and then sit back and watch the money come in. Very sceintific and little is left to chance or guesswork, which I like.

If you aren't asleep yet, I'll tell you about the long term vision for the company. We'll be setting this firm up as a partner to a call center outsourcing firm, currently without a name, that will take inbound calls for a number of different business types. Discount Connection (the company I described above) will be just the first client of this firm and will provide the start-up revenue to get it kick-started.

The outsourcing firm will have small to medium centers setup around the globe. First office being in Las Vegas, next will likely be Thailand, then destinations of our choosing to follow: Argentina, Spain, Estonia etc. The centers will be staffed with recent American college graduates who want to travel but might not have enough money saved up to finance such travel, or who perhaps just want the experience of living and working abroad. We'll probably expand the pool to college students who want to do work abroad programs or just take time off etc. We'll get a talented and motivated labor pool who likely wouldn't take the same work in their home towns, and who will be willing to work for less than their fair market value back home. They'll get free room and board, an exciting place to live and work and a fantastic experience. Our partner companies will get to skip the down-sides of working with call centers in India and other places while still acheiving the cost savings they are looking for. We anticipate partnering with a wide range of corporate clients such as Dell, Verizon Wireless, AT&T and many others.

This model has been tested and has been successful with European companies and we are confident it will work with American companies as well.

All of the above is obviously a calculated risk on my part, but one that can possibly pay huge dividends for me in the event of a sale, IPO or just in having a successful and profitable company that doesn't require a tremendous amount of my time after the start-up and early growth stages are completed.

Flame away, but bear in mind an amazing quote I read today from Albert Einstein:

'Great ideas often receive violent opposition from mediocre minds'

Thanks for reading, now get back to working on your early retirement!

Wild Bill