Show Notes
In this episode of Startups For The Rest Of Us, Rob interviews Ken Wallace, of MastermindJam, about his new project Nugget. Nugget is a subscription based product that sends you startup ideas on a monthly basis. Ken talks about the origins of Nugget, some of the negative and positive feedback he got pre-launch, as well as his launch strategies.
Items mentioned in this episode:
Transcript
Rob [00:00]: Before we roll this episode of ‘Startups for the Rest of Us,’ you may have heard that my startup DRIP was acquired by Leadpages in the last week. And if you tuned into this episode to hear Mike and I discuss it, unfortunately Mike was on vacation this week. So this week is an interview with Ken Wallace. I think you’ll really enjoy it. But be sure to tune in next week and possibly for several weeks after, where I expect there will be a lot of discussion about the acquisition, the thought process. There was so much that went into it. It was months and months of conversation. In addition, we’ll be talking about the mental side of this, the psychological side, over on my other podcast ZenFounder at Zenfounder.com. So if you’re interested in hearing more about that, sit tight. That’ll be coming. But for now let’s dive into this week’s episode. In this episode of ‘Startups for the Rest of Us,’ I talk with Ken Wallace about how to charge for startup ideas. This is ‘Startups for the Rest of Us’ episode 297.
Welcome to ‘Startups for the Rest of Us,’ the podcast that helps developers, designers and entrepreneurs be awesome at building, launching and growing software products, whether you’ve built your first product or you’re just thinking about it. I’m Rob.
Ken [01:14]: And I’m Ken.
Rob [01:15]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. Mr. Ken Wallace, welcome to the show.
Ken [01:20]: Thanks for having me. This is amazing.
Rob [01:22]: Yeah, it’s awesome to have you here. So for folks who don’t know you, you’re probably best known for starting MastermindJam which has kind of the become the defacto recommended MicroConf and Startups for the Rest of Us service for finding other startup mastermind members. You’ve also been to several MicroConfs and you host The ‘Nights & Weekends’ podcast with our mutual friend Craig Hewitt.
Ken [01:44]: Correct. Yes. Sure. I’ve been to five MicroConfs actually.
Rob [01:47]: Indeed. Wow. Have they all been Vegas, or did you make it any of the others?
Ken [01:49]: All Vegas. Yeah.
Rob [01:50]: Cool. And you’re coming to us from Chicago, is that right?
Ken [01:53]: Yeah, the Chicago area. We actually live in northwest Indiana, so yeah. When I first started coming to MicroConfs, I was commuting the 90 minutes every day into downtown Chicago.
Rob [02:01]: And since then, you work from home now as well as with MastermindJam on the side?
Ken [02:04]: Yes. Correct. So full time working from home now, and MastermindJam. And then now Nugget.
Rob [02:10]: Indeed. And that’s what we’re here to talk about today. And the reason I wanted to have you on is I feel like there’s a lot of value in what you and Justin have put together in terms of doing something that may be counterintuitive to some of the common wisdom we hear about in blog posts. So when we were talking about this offline you said, “There’s common wisdom of like ideas aren’t worth anything, it’s all about execution.” And yet you’ve started Nugget, which is at Nugget.one. And so that’s Nugget.O-N-E. And, in essence, you are selling startup ideas. You’re selling access to new startup ideas.
Tell me about what you’re up to and kind of how you guys got here.
Ken [02:44]: Right. So, the selling access to startup ideas, we find that a lot of founders – a lot of entrepreneurs – seem to get stuck in a step. All entrepreneurs, I think, we have in common the knack of looking around the world and seeing a world of abundance, and seeing ideas everywhere we look. And the problem is how to pick one, how to validate one. And a lot of times entrepreneurs – especially tech founders -will pick one that feels interesting or feels close to home, but they don’t pick one that actually has a waiting customer on the other end that is willing to pay them money. So, what we do is we source ideas that are definitely from a person who is willing to pay money today to have this problem solved. And then we send those out to the paying audience. So what you get in addition to the actual business idea, you get a person that says, “I am dying to pay for this. I would 100% pay for this, or pay for it out of my own pocket if we could have access to software that did X, Y and Z to solve this pain point.” But then we also give you a community to help you execute on that idea and to clear the next hurdles that come up.
So, back to how we started. Justin Vincent – you might know him from the Techzing podcast – he approached me a few weeks ago asking if I was willing to help him out with Nugget. And he had kicked around a few other name ideas for this. But the point was one business idea every single day, and find a way to monetize it and find a way to really help entrepreneurs through this. Now Justin and I have kind of been – he’s been helping me out just kind of as a mentor maybe or a mastermind of two where we just kick around ideas for how to grow MastermindJam, and also kick around ideas for what was going to be his next business since he had a successful exit from Pluggio. And so, we’ve been talking for months. We met on another discussion forum, Discuss @ Bootstrapped.fm, where he posted an idea saying, “Hey, wouldn’t it be great if there was a service out there that matched people to mastermind groups.” And at that time I was maybe eight months into MastermindJam, so the sphincter tightens a little bit and you’re like, “Uh, oh. Competitor.” I was looking at him as not only a competitor, but he had just had a successful exit, he’s got time on his hands, he’s got some money in the bank, he’s going to eat my lunch. Like right away. So I reached out to him immediately, and I knew a lot about Justin from listening to Techzing and listening to some ‘Startups for the Rest of Us.’ The two podcasts have kind of had a good relationship for a long time. And then so we just kind of developed a friendship from there. Basically, I reached out to a potential competitor, I opened the kimono, I showed him exactly how MastermindJam worked, what the business was like, what the challenges were, what the hurdles were, what the vision was. And he said, “I love it. I love that business for you. And I don’t love it for me. So what else can I do?” And from that point forward, we were just helping each other out to find a good business fit for him. And he helped me out tremendously for MastermindJam pricing or for different business model questions. So that’s how we kind of became friends.
Rob [05:24]: Very cool. And for those listening, there might be MastermindJam customers or people who’ve considered using your service. And you wanted to be very clear that you are not shutting MastermindJam down and that you’re basically pursuing both ideas at once.
Ken [05:38]: Yeah, that’s correct. MastermindJam is really at a point where it’s largely automated. So all the processes that match people into groups just happens automatically. You sign up, you get it put in the queue and, based on your answers to the onboarding questionnaire, the computer algorithm basically does the rest. Really I only need to step in every week if there’s a problem with that, where maybe somebody’s answered questions in a really restrictive fashion so that the computer can’t really find them a match in a timely fashion. Or if there’s something going awry in a group and members need me to step in and help out. That’s really what I do for MastermindJam. So, on an ongoing basis, I had a few extra hours every week to help Justin out with this. So, yeah. MastermindJam can keep doing that, can keep growing. There’s still some things I’m going to do to help with marketing for that because as the MastermindJam business is, it’s almost like a marketplace where you need a certain traffic of people to make the thing work in a timely fashion. So, I still need to market that to make sure it’s viable for the people that sign up.
Rob [06:34]: For sure. Yeah, and like your – You know the headline on Nugget is, it’s changing but it says, “Receive a new business idea in your email inbox every single day. Receive a shiny business idea, receive a fresh business idea.” And so the idea is that you guys are, essentially, sourcing business ideas. And are they limited? Are they mostly, let’s say, like SaaS business ideas? Or are they software-based business ideas? Are they B2B, B2C? Is it filterable, or have you just focused on a single line, like a vertical?
Ken [07:01]: They are all over the map. The ideas are all something that can be approached with an online business. So it’s SaaS, or it’s like an ecommerce site. You know, something of that nature. Something that can be focused on online, and marketed online, and the perspective customers can be reached online. Those are really the only requirements to get through our gauntlet. The ideas range from an app to help parents find video games and mobile apps for special needs children. That was the one that just went out this morning. We had a food truck owner requested an app to help him locate where the upcoming events are in my community, “Where I can go to find foot traffic for the food truck.” These are all kind of like software ideas. There’s some biotech ideas, there’s some healthcare ideas, there’s some eBay auction tools, there’s some Amazon FBA reseller tools to help them track cost-of-goods-sold in their FBA inventory. Really, from day to day, all over the map.
Rob [07:55]: Cool. So you’re offering these business ideas and you guys have been live for how long?
Ken [07:59]: We went live last Monday morning at midnight.
Rob [08:02]: Okay. So you’ve been live for about a week and a half and your launch was –
Ken [08:05]: Yeah, June 28th, 27th.
Rob [08:06]: Yeah. And your launch was pretty good. I know both of you guys but I didn’t hear about it from you that you launched. I heard about it from the broader entrepreneur startup community. You were on Product Hunt I knew. You said you got on Ask Hacker News. There was something else. Tell us the story of like how that came about, and was this a carefully kind of calculated launch? You and Justin got together and said, “We’re going to kind of hack this and submit it to all these places”? Or did you stumble upon these thousands of visitors that you received on your launch day?
Ken [08:33]: About three weeks ago Justin and I got serious about this and we’re like, “You know what, let’s move forward with this. I think we can maybe make this work. The only way to find out is just to get it in front of customers and see what happens.” Justin and I both are in a situation where we both have day jobs and a family and a limited number of hours we can devote to this. So it kind of dragged on for about a week and a half. And I think I was the bigger hurdle. Justin could devote more time to it than I could. But the problem was I was the tech guy. So he kept waiting on me to get the site up, and get the messaging out.
In that process of getting all the landing pages up, and the logo on things, and trying to choose a tool to use as our membership site and our discussion forum. In discussions Justin had with his Techzing cohost, Jason Roberts, and also Jason and Justin’s friend Phil – who is also on their show once in a while – they were adamantly against the name Nugget. So they pulled Justin aside and just grilled him for about an hour on why Nugget was a horrible idea moving forward, there’s a lot of upside to changing the name. And so, they kind of – three quarters of the way – convinced Justin that we needed to change the name. So Justin got on slack with me, and this was here about maybe ten days ago now. He said, “Look, we’ve got to change this name. Jason and Phil cornered me, and they really want us to change the name and here’s all the arguments why.” And I’m like, “Look man, you’re in charge of the branding and a creative. I’ll go with it. I don’t think it’s a good idea. I think it’s a waste of our time. I don’t think our audience really cares about the name right now. I think they really care about solving those hurdles in their business. So, if we’re going to change the name let’s do it. Let’s make the decision tonight and let’s just get it done.” And then we spent many evenings in a row just trying to get everything transitioned over to the new name, the new logo; we’ll leave the placeholder on the old site so if somebody happened there they get redirected gracefully to explain the move. In the middle of all this, Nugget.one is still up collecting waiting list signups. In the middle of all this, somebody mentioned us on Ask Hacker News. And suddenly we have all this traffic, now, coming to the site.
So, previously it was six or seven hits a day, which were mostly Justin and I. And then suddenly we have 50, 60 people hitting us that hour. And I’m looking at the Google analytics thinking, “Wait a minute. Why is the meter pegged? Why are we getting so much traffic?” You track it back and it’s this thread on Hacker News. So I said, “Justin, we’ve got to stop and rethink about this. You can’t switch horses midstream like this. We’ve got this streamer traffic coming in and it would just be confusing to everybody; confusing to the people coming over, confusing to the original person that posted us. We need to rethink this. Maybe if this is a name change that has to happen, we do it later in a more organized fashion. But right now, this is like switching midstream. This is changing your name in the middle of your Super Bowl ad.” is the analogy I used. And so he’s like, “Fine. Fine. Let’s leave it as Nugget.”
Well, the problem with that is we had transitioned so much over. Now it’s, “Okay, put everything back to Nugget.” So we’re just wasting so much time on thinking about the name. So we finally get everything back, we’re going through the motions of doing all the testing that you do before a launch, and we didn’t really have a solid launch date in mind other than he and I were just kind of tired of not being live. We’ve got a lot of people that are signing up on our really simple landing page and we just wanted to know, we’re dying to know, how many of those people were willing to put a credit card down. We hadn’t asked them for money yet. A lot of people are always willing to sign up for Beta, but it doesn’t really matter until you ask them for money. So about 11:30, midnight on Sunday night, I sent out an email to a few people saying, “Hey, can you just double check, make sure the language is good, make sure there’s no bugs in your browser, that kind of thing.” Well, one of the people that I emailed with was Haydn Shaw. And Haydn shoots me an email back saying, “Hey, this looks great. It’s really interesting. Want me to post this on [Product Hunt?] for you?” And it’s just one of those moments where you’d really like to say no. It’s like in the pit of your stomach it’s like, “Uh, I don’t know if we’re ready for that.” But it’s like, “Yeah, go ahead. We would really appreciate that.”
The problem with that was at this point I still don’t know any details. I don’t know when he’s going to push it live, I don’t know. Is he going to do it right then? Is he going to do it Tuesday or tomorrow morning? I had no clue. So, the next morning – Monday morning at 8 a.m. – I get an email from Haydn, “Hey, I just put it on Product Hunt. You’re going to want to jump in there right away and start answering questions.” So, suddenly we go from, I think, up to that point in a week of having just the trial page up we had 180 people sign up for just the waiting list. Suddenly, that day 4.5 thousand people visited the site.
Rob [12:53]: That’s awesome.
Ken [12:54]: It was just off the charts. And suddenly, I had to actually turn off the stripe notifications because it was distracting. I would actually stop and try to look up the customer and just find out details about who could this possibly be. It was just distracting throughout my day job business day. So it was a good problem to have.
Rob [13:10]: It always is. The day that you turn off the trial notifications and the new sign up notifications. Awesome. Cool. So had you guys done any prior validation to this? I know that Justin had emailed me several months ago he asked my opinion and for some thoughts on it and I think he had a mockup of a PDF or something. But is that what you had done? You had emailed several people?
Ken [13:29]: Um-hmm.
Rob [13:29]: Did you have validation that like, “Yeah, you should move forward with this.” And got to the point where this launch started? I mean, we’re kind of working backwards at this point, but –
Ken [13:36]: He sent out a lot of emails like that and so did I. I talked to Craig on my podcast about it. Craig hated the idea [laughter]. I talked to the people of my Mastermind group about it. They loved the idea. I got a lot of mixed messages. And at the end of the day, we got enough positive signals that we thought it’s kind of like where there’s smoke there’s fire. And that’s what caused us to put up the initial landing page. It was a one-pager: “Here’s what we’re going to do, we’re going to send you this every day.” There really was no talk of a community. There was no talk of any other add-ons. It’s just like, “At some point we’re going to ask you for money, but here sign up for this.” And 80 people did. So that just kept giving us good vibes that this at the core there was something there that people wanted.
Rob [14:14]: Yeah, to get 180 that quickly it tells you that somethings going on here. Whether everybody’s going to be willing to pay for it or not is another thing. But at least you have some validation that there’s interest here. So you guys have had a lot of conversation about the business model, I suppose. I guess it’s always been – since I’ve heard about it – it’s been a monthly subscription. I know that you probably started at a low price and have moved it up. Did you give it to anybody for free, or has it always been a paying service? Talk about how you guys thought about that and what levels you’ve been at and whether that’s worked or not.
Ken [14:41]: Right after the initial landing page went up, I saw Paul Jarvis and Jason Zook launch emojibombs.com. And it was kind of a similar idea where – I can’t remember if it was daily or weekly – but they send you basically emoji that’s been personified into a character. And they send it to you in an email at $11 a year. You just click “Buy Now” for $11 a year we’ll send this thing to you. And I know the PDF he probably sent you is a lot more complicated than just this simple one-pager, “click here to buy”. So he was like, “You know, just to validate that this is right let’s put up that landing page.” So that was kind of like the start of our talks. It’s like, well if people are willing to pay $11 a year just to have something fun, would people pay $11 a month to get an actual business idea that’s actionable, and that they can actually take it and run with it; that’s been vetted and analyzed. Would they actually pay $11 a month for that? And so we sent that around to a few people. Like, for instance, [Greg Polumbo?]. He got back to me. He said, “Look, the idea is interesting. But at $11 a month do I believe that you’ve got a business idea in there that could potentially earn me five or six figures every month?” He’s like, “No, $11 feels amateurish for what you say your offer is.” And I’m like that’s interesting. So people really do attribute the potential value of the product – even before seeing it – from the price. And Justin and I know how much time we’re putting into analyzing these business ideas, but we can’t also charge for that time. So, it’s not like a one for one. This is a $1000 idea so here, pay us $1000. So we just settled on let’s start at $49 and we can test up from there. And for a few people on our trial-to-paid conversion list we can actually test coupons or discounts if we need to if that proves to be too high.
So before the launch day – “launch day” because it was all kind of unplanned – the business model changed a lot. So initially, for the first day that we had the trial landing page up, we said, “This is free right now, but it’s eventually going to be $11 a month.” And to those people – the ones that signed up – we offer it for that, because that’s the deal they saw. So we’re willing to grandfather them in at $11. But we quickly took down that offer and took away any mention of price just so we could see if we could communicate with people on the side and see what price points they’re willing to go to; $25 a month, $49 a month, is this a $100 idea? The problem is you get a lot of confusing feedback from people. You talk to my podcast cohost and he figured, “I don’t want to pay monthly for this. Because if your business is good that means I’m going to churn after two or three months. But if your business is bad, and after three months and I’m still paying this monthly fee and I haven’t found a business idea, I’ve got to ask myself why am I still paying. Because your goal is to give me business ideas.” So this is all good feedback that we’ve been working through.
Rob [17:25]: Yeah. That makes sense. Pricing is really hard. My two cents is I think making this truly a monthly business is going to be tough, and that probably you’ll want to go with just an annual upfront or – I don’t like lifetime, but that’s the concept here. It’s that someone really is kind of just paying to have access to this for an extended period of time. It’s funny, I was talking at lunch with some folks and I said, “You know, SaaS providers, if you look at a lot of them, they’re trying to go towards annual and all the WordPress providers who do annual they’re trying to go towards monthly.” It’s like we’re all trying to go for what the other guy wants.
Ken [17:56]: Grass is always greener.
Rob [17:57]: All the annual guys with a one-time fee, they want more flat revenue, whereas the SaaS know that the flat revenue takes forever to grow so we try to go for the big upfront cash payment, which is the annual payment. So, I think in the end there’s pros and cons to both and my guess is trying to go for a higher price point, but perhaps not recurring or really infrequently recurring like annual, feels like a better fit than trying to pay monthly. Because your churn is going to be – the same reason everybody points out – if your service doesn’t work, they’re going to church. If it does work, they’re going to churn. You’re in the worst position there.
Ken [18:30]: This was an endless debate, because we feel that – equal to the value of the actual ideas – we feel that maybe the ideas are almost a hook to get you into the community to get you executing on the ideas. If that makes any sense.
Rob [18:41]: It does. And I think if you’re able to monetize either a community, or you’re able to add add-on services or if there’s anything else there –
Ken [18:48]: Exactly.
Rob [18:49]: – this could be killer lead gen. But you’ve got to get that stuff going.
Ken [18:52]: Yeah, come for the business idea, stay for the – It’s almost like a masterminder, the community that’s helping you accomplish your goals.
Rob [18:59]: And what’s funny is I was looking back. So Justin had emailed me May 9th, which was about two months ago, and he had sent a PDF of this. And I sent a few different responses and I said, “I think this idea might have legs the way you’ve presented it. It will have high churn but that doesn’t mean you shouldn’t do it, because if you can get it running you can start add-on services like landing pages and courses on building and launching and I think you should go for it.” And then I replied again and I said, “Oh, and by go for it I mean don’t write a line of code but get ten people to commit to paying you $50 a month for it. And then launch the damn thing manually and see how it goes.” And so, that’s kind of where you ended up. It’s kind of funny.
Ken [19:31]: Well, we had a long discussion about that too, because originally we thought, “What about $9.99, because nobody’s going to churn at $9.99 if you’re seeing business ideas coming through right. Because it’s kind of a fear of missing out kind of thing.” And it’s like Rob advocated $50 a month, so $11 is still more than $10. Your email kept pushing us higher up the value chain.
Rob [19:53]: Yeah, what a trip. I remember thinking about this and thinking the way that a lot of us would – gut feeling – we would want to make this cheap because you think, “Ah! Business ideas. They’re a dime a dozen.” But I think what you’re providing – from what I’ve heard. I haven’t used their service, but from what I’ve heard the vetting and kind of the depth that you’re going into with these ideas is far beyond just a two sentence summary of something in an email. And I think there’s a lot of value there. And even if you have one fifth of the customers, if you’re charging five times more I actually think you’re going to be better off, unless you really are going for a volume plan and doing up sales later. But if you’re going to make money from it, I feel like there’s value here. Speaking of that specifically, talk a little bit – like maybe one example of – what is included in these emails. Because when I heard – I think I heard you explain it on ‘Nights & Weekends’ – I was surprised and impressed with the level of detail that you’re going into and kind of the resources and the research and the other stuff that you’re including when you get this idea.
Ken [20:49]: Well, the one that went out just this morning I spent three hours on it. We give the industry it’s in – or the niche, whatever you want to call it – whether it’s B2C or B2B. We give you the original user – we call it the “user submission”, but you can think of it as a user story – the actual unedited “I really wish this pain were solved” text that we got from the potential customer. And then we go into our analysis, and we try to do kind of a who, what, and how with the analysis. So who is this target audience? Where do they hang out online? Are there ways to find them? Where are their forums? Where are their communities, Facebook groups, whatever? We look at the what. What is it they’re asking us to provide? Is this technologically feasible? Is this something that’s easily achieved or you need a huge funded team? Are you building Uber or are you building a new WordPress directory? What end of the spectrum is it on? And then we talk more about the how. We dive into the how of like you want to look at these competitors and these other technologies in this space. And so, we do kind of a really thorough kind of run-down of what questions you’re going to have before you would dive into even looking more into the business. Like, “Who are my potential customers?” How you’re going to achieve the technological hurdles that we describe. And then we have usually at least three or four – but the one last night had eight or nine – links of resources that was like must reading after you read this references from what we talked about.
Rob [22:05]: And so a question that might come up in someone’s mind is, so you’re sending these business ideas out and there are tens, hundreds or perhaps eventually thousands of people that are going to be getting these. Are they less valuable – or I would say they are less valuable if a bunch of people start them all at once. Do you have any mechanism to keep 20 people on your list from snatching one idea and running with it?
Ken [22:26]: This is one thing that we’re experimenting with. When we launched we had three pricing tiers. We had the free trial, then we had the middle tier which was the standard $49 a month or a yearly for $490, and we had the higher tier which is advanced access to Nugget. So you’d get the business opportunity seven days before anybody else saw it. That was $97 a month. We hit 2000 MRR in the first two days of launch because we had people signing up for all four of those paid plans. We validated that those numbers work, that people are willing to pay all four of those plans – the $49, $490, $97, $970. And so what we ended up doing was realizing we, at the time, didn’t have enough of these ideas in the queue to start giving people advanced access plus having the normal stream of people. And it was splitting our time in a way that we didn’t want to do. So we downgraded all the advanced access people to regular paying. So that totally adjusted the revenue curve right there. So everybody that signed up at $970 or paid for the year of advanced, they got downgraded to the normal plan.
So right away we were in conversations with those people that signed up for advanced access. So now we know, this guy signed up, he wants to see all these ideas before anybody else. So you reach out to him. “Why is that? Why do you want to see these ideas?” For a lot of these people, they said, “I don’t care about the community. I don’t want anybody seeing an idea before I get to. I want the opportunity to skim your database of ideas, cherry pick the ones I want and have exclusive access to it.” Almost like on Getty images or istockphoto, you can have exclusive rights to an image. Same kind of deal. So we do have an audience that wants that. But on the other end of the spectrum we have an audience that doesn’t care as much about the ideas and they really are begging for the community, which leaves us kind of torn. For instance, before you and I got on the phone, Justin and I had a 40-minute call with a customer just to talk about that, because he was really excited about the community and kind of ho-hum about the ideas.
Rob [24:18]: What a trip. So you’re split there and I’m wondering – I mean, I’m intrigued by someone willing to pay for exclusive access, because could it be something where everybody pays $49 a month and that’s kind of the entry level and then you see how many views certain ideas have had – or all the ideas – it shows 50 people have viewed this idea. And if you want to buy exclusive access which basically removes if from the database from then on, you pay a one-time fee of however much. $50, $100, $200 depends. Is that something that’s been discussed?
Ken [24:50]: Yes. We’ve been not only discussing that anytime a customer comes at us saying, “Hey, you should do this.” we’re like, “Great. How much would you pay for that?”
Rob [24:56]: Yeah. Totally.
Ken [24:57]: Because here’s the stripe link. That kind of thing. We had one customer say, “You know, I like the idea but I wouldn’t pay more than $3 a month.” And it’s like, “Well, thanks anyway.” Another customer reached out and said, “You know, I like this idea but money’s tight right now. I couldn’t pay more than $15 or $17 a month.” And so we said, “Would you pay $20 and here’s a link? We’ll make that happen for you.” So those kinds of discussions have gone on. Customers have reached out and said, “I would definitely pay for exclusive access.” We’ve been in deep conversation with those particular customers of, what would that look like? What would the community see? Would they suddenly see this idea vanish from nowhere? There was four days of discussion and it’s just gone. What happens at that point? So we’ve really got to dig into that. But we are definitely toying with that.
Plus, there’s the advantage here that once we get a corpus of these nuggets – 30 days, 60 days, 1000 nuggets even – suddenly you can build really cool tools that help people analyze. Because before we put out the nuggets – I mean we have all these things in a database and we have facets of information about each idea. So, “Is the idea bootstrappable or not? Is it more of a funded suited thing? Is it B2C or B2B? Is this a marketplace? Is this idea really a marketplace? What industry is it in?” So somebody could log on and if we had a search tool to sell them exclusive access to, and say, “You know, I’m not interested in the daily feed, but if I could just search and see if you have any healthcare ideas that are bootstrappable with this tech, blah, blah, blah, and just look at what you have. And then maybe even set an alert; like email me when something like that shows up. I would pay a monthly fee for that.”
So we’ve had customers that are like, “Oh yeah. We would definitely sign up for that.” We’re so early right now we don’t have enough of these opportunities in the can to make that kind of a tool even worthwhile because you’re not going to log into a tool that has ten ideas in it. You want at least a thousand.
Rob [26:39]: Yeah. I have a question for you piggybacking on that. I guess it’s really two questions. I’ll break it into two pieces. One is: from where are you sourcing these ideas? And I understand that this is kind of your secret sauce. This is your Coca-Cola formula so you don’t have to tell me everything precisely, but how much are you talking about that?
Ken [27:00]: Justin told everybody on his podcast so I think I’m okay talking about it.
Rob [27:04]: Alright.
Ken [27:05]: When Craig asked me that question, I was all cagy about it on my podcast.
Rob [27:08]: I remember.
Ken [27:09]: I was listening to techzing and he’s telling everybody how it works. Right now, we’ve got a few channels in mind that we’re going to eventually be sourcing from a lot of different channels. Right now, just to get started, we’re using Mturk – Amazon’s Mechanical Turk.
Rob [27:22]: I knew it. When you didn’t reveal it on ‘Nights & Weekends’, I was thinking, “I bet they’re using Mechanical Turk in a very clever way.” The thing here is, you can tell us exactly how it’s done. It doesn’t matter, because I would never go to the lengths that you’re going to go to to find an idea and, yet, I would pay for ideas. You know what I’m saying?
Ken [27:39]: Yeah.
Rob [27:41]: It’s only going to be the people who are going to bitch and complain about your $7 a month price point that are going to go do it themselves. Anybody who is actually probably going to spend the time, and has at least a modicum of money, is not going to go through the process that you guys are doing today and that you’re going to get better at, right? If you do this for six months, you’re going to be way better than us even if you told us the whole approach to doing it.
Ken [28:02]: Yup. Mturk, I don’t know if you’ve used it, it’s kind of a hassle really. It’s not at all user friendly. And there are things that you can do through the API programmatically that you can’t do in their user interface. There’s a ton about Mturk that sucks. So we don’t want to be wholly reliant on that. Like, it was down for four days for no explanation, and it just came back up. But initially, when we first talked about this, just to see if it was feasible, Justin went on – it was like 7 a.m. on a Sunday – and for an hour he had this, they call it “”hits”, so he put the hit out and we were going to pay $1 for anybody who submits and idea to us. And then people, at 7 a.m., started submitting tons of ideas. That’s just how it begins. If we got this good a quality of ideas on a Sunday morning at 7 a.m., what would happen if we did this every day. So we’ve been testing what times a day that certain kind of people that have certain kinds of ideas that fit our audience are around answering these questions. So there’s a lot of learning that we’ve done on Mturk. But that’s right now how we’re getting the ideas. In the future, we can’t be wholly reliant on that but it’s doing good for now.
Rob [29:08]: Right. That makes sense.
Ken [29:09]: In fact, it’s given us more of a backlog than we can actually handle.
Rob [29:13]: Well, that was going to be probably my final question. The obvious question was when you’re talking about cranking out 30 ideas a month, 360-ish a year, you wonder – as an outsider – can they keep this up? Can the quality still be high? How many business ideas can someone possibly generate? And I guess what you’re saying is you’re not really generating them out of thin air. You’re using a massive distributed nervous system, essentially, of a lot of different brains.
Ken [29:40]:Yeah. Crowd sourcing.
Rob [29:41]: Cool. Well, sir, we’re at time. I really appreciate you coming on the show today. I feel like our listeners probably got a look into a couple things. One is how to cleverly use a third party service like Mechanical Turk to build a business on, which I think is cool. I always love ideas like that. And like another is that you guys have moved fairly quickly. I know it’s been weeks in between maybe the initial discussion, but I got an email from Justin less than two months ago and you guys launched within that period. And, as you said, got to 2000 MRR for a certain glimpse of time. And then, you’ve essentially gone against some conventional wisdom which says that business ideas aren’t worth anything. It’s all about execution. But you’re value adding is what it is. You’re not giving two or three sentence summaries, you’re giving this whole email with the research and like you said, you spent three hours on it and there can be value in that.
Ken [30:29]: Yes.
Rob [30:30]: Very cool. Well, if folks want to keep up with you, where should they look?
Ken [30:33]: You can go to Nugget.one. We are also on Twitter @_nuggetone. And also you can just email us at feedback@nugget.one.
Rob [30:41]: And if you want to hear more of the ongoing developments of this I would check out the ‘Nights & Weekends’ podcast with Ken Wallace and Craig Hewitt. Thank you very much, sir.
Ken [30:51]: Thank you. It’s been a joy.
Rob [30:54]: So, if you have a question for us you can call our voicemail number at 888-801-9690 or email us at questions@startupsfortherestofus.com. Our theme music is an excerpt from ‘We’re Outta Control’ by MoOt. It’s used under creative comments. Subscribe to us on iTunes by searching for startups and visit startupsfortherestofus.com for a full transcript of each episode.
Thanks for listening and we’ll see you next time.
