atree

Hi Murkin. I'm not saying it's typical, and I'm probably using a bad example here, but business owners in my experiences dealing with them fall heads over heals for purchases that will help them grow revenue. A solid product that just does that, and pitched well, will make the $25 seem like a pretty good deal for them. 7-page business research reports (e.g. from Forrester, Gartner, etc.), for instance, tend to go for a few hundred dollars, so businesses do spend on investments that give them good returns.

Hey Nate. Sorry for the clarity issue. Running a $1M one-man operation is definitely pushing it; it's possible, but that's probably too much to put on one's shoulders. A typical $1M company probably has around 5 employees, which I should've mentioned. (The exact revenue per employee however should be based on your industry's averages to see how you fare with your competitors/industry)

Hey sivers. I mentioned it below, but throwing your marketing dollars entirely on the 30M probably won't be the best idea because you don't know your initial conversion ratios. You can try it on a sample size to get the ratios, and then build up gradually as you're hitting your numbers profitably.

Hey intellectronica. I'm definitely not claiming that business is predictable; you can do certain things though to hedge your bets (hopefully I mentioned it in my post below, but let me know if I'm still sounding unclear since I tend to to do that).

Hey guys. I'm the topic's author.

I think Trizle makes more sense if you read it in context with everything else on there; my total apologies for the ambiguity.

Some points:

1. The typical $1M business has about 5 full-time employees working on it (~$200K in revenue per employee); so while building a business that generates that much by yourself is possible, it's out of the norm. I should've definitely mentioned that.

2. You probably don't want to throw X market dollars at something without understanding your conversion rates first. First, get your average conversion rates (you can do that through statistical inference) from a random sample of your target market, determine if the model is profitable, then gradually expand your reach.

3. The "$25 bi-weekly newsletter" is just one product example; you can replace it with whatever product you're selling, and then use the model to determine your conversion rates to get an idea of how many pitches it'll take with your current model. For instance, selling a $200 product would take 10x less pitches than a $20 product (in terms of revs) to make X.

4. The free market creates incentives to provide as much value to your customers as possible; it's a broken system when you let get-rich-quick folks exploit others and get rich; mechanisms drive society, and that's why the Trizle articles tend to emphasize that providing immense customer value as the sole way to building a solid company for the long-term in a free-market economy.

There are no get-rich-quick-schemes, and any model that tells you that you can consistently earn greater returns than Warren Buffett's annual ROE of 20% is likely suspect. Solid, long-term companies, are built over years/decades.

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BTW, I love Ycombinator's board (pleasantly surprise someones posted the article here); I come back daily to read the stuff you guys/gals post on here. I come from a technical background (EE degree, using Rails daily), so it's always a fun read every time.