Techdirt

Just wanted to say thanks to Mike and the crew at TechDirt for the link.

Well lots of bad news the day before I launch. I have to move from Rosenberg to Houston at the end of May. This is going to make things difficult for my phone bank offering. We'll see what happens tomorrow.

I can always set up again in Houston once I get settled there.

I felt that this deserved its own post.

As I was walking between my home and the apartments, I was thinking about how I can grow my business without any VC/Angel funding. At the end of the day, VC is great, but I can't bank on it being there for me.

So I came up with this. My origional idea was built around the use of long range digital radios that would allow me to monetize the relationships between ex-patriots within it's reach. But that's a little more capital intensive that I can afford right now.

I was thinking about Fiesta and its competition with other grocers. At least in Rosenberg, it seems to lag a distant third. HEB is the dominant force for high end neighborhoods like Greatwood. A segment of my Hispanic market lives there. Mostly your successful contractors and builders.

Wal-mart holds sway over the middle class. They also cater to a lot of Mexicans. They have a few products that are geared to their niche. Between providing cheap staples and some simple Mexican products they take a lot of potential business away from Fiesta.

So Fiesta does business with the poorest customers in this niche. They carry a lot of Mexico specific products and provide similar services. And yet Walmart and sometimes HEB eat their market share. There's also a Kroger in the area that squeezes the market for them.

Back to Fiesta. They are heavy into remittance to Mexico. They also provide bill pay and low cost utilities. So they are definitily focused on serving the same niche I am.

I could install a simple WiFi network in there store here in Rosenberg. Let customers make calls while their shopping, but restrict the geography. I watch a lot of people make calls to Mexico from pay phones in apartment complexes. Why can't Fiesta capture these people? With my WiFi network and Skype I can bring more customers to Fiesta. I'd be a layer in their relationship with their customers.

But what about the customers they already have. I bet it would help increase sales per customer. I'd say it's nearly a fact that the longer you stay in a grocery the more you buy. Say you go in for nothing but milk. They put it in the back hoping you'll see something else to buy on the way to the milk. And if you walk around looking after you picked up the milk, you'll probably find something else to buy.

The way I see it is that providing this Skype service in Fiesta would increase the average time that their customers new and old spend in their store.

I think I can increase Fiesta's metrics like sales per customer, revenue per sq. ft as well as total customers. I think I can help Fiesta win back market share in Rosenberg. This idea would also work for any other business in the Mexico niche here in Rosenberg so I should be able to find customers for this idea.

The only kind of company I can see it not working is restraunts. Keeping the same customers in the seats for 2 hours wouldn't be benificial for them.

Sweat Equity

Well it's started. The die is cast. Time to watch the ripples.

I spent the most of the day out in my market putting up and passing out flyers for my April 8th commercial start. I was much more nervous that I thought I would be. I've been a soldier, a missionary and numerous kinds of employee. I thought I'd been through just about every social situation possible. I found out how wrong I was. That's what made me nervous.

I think it came from the fact that I'm representing no one but myself. In every other scenario I at least had the reputation, good or bad, of whatever I was representing to work with. Now I'm just a nameless guy talking to people about how they call Mexico.

I actually turned off my network last night and left it off this morning so that I wouldn't have any distractions in getting out the door. It helped a lot. I can spend hours following the ebb and flow of business across the blogosphere.

I was actually scared the first few times I put up my flyers. This led to me thinking a lot about the mechanics of what I was doing. It's been a really long time since I put a great deal of thought into how to fold paper and cut tape.

Thankfully I've learned to face my fear. It actually becomes a source of motivation for me. I can't say I like it, but when I feel it, I can definitly get going, set it off, blow up, etc.

It took me about 20 flyers to calm down enough to enjoy what I was doing. Actually, putting sweat equity into my business. I'd gotten tired of talking about all the testing and re-testing I was doing. Back to the flyers. I was excited all the way through the first apartment complex.

At the end of the first complex, there's a little run down strip that is a great Mexican niche. A taqueria, a Mexican video store and some kind of remittance business geared toward Mexico. There are a lot of Spanish publications set out for free in front of these businesses. I decided to take advantage of this free advertising and put a flyer inside the ones marked "Gratis". I figure whoever opens it is looking for a lot of value so I hope they'll consider my products.

I finished the other 2 complexs I had targeted. During this time I realized that I definitly need to study some Marketing Best Practices. I also need to develop my own marketing strategies to deal with my current trickle of personal capital.

Finished distributing my flyers, I dropped by my brother's house. We talked about what I was doing. His wife is a 2nd generation Mexican. Her extended family is huge and has strong connections to Mexico. She listened and then told me that people in her family would be interested in my products since they call Mexico all the time.

This made me really nervous. With strangers for customers, I can prepare for our encouters. Our relationship is in the context of B2C. With extended relatives, I wonder what contexts will come about. If they become my customers, what will they expect? I've since moved from nervousness to curiousity about this subject.

Which makes me wonder if I can use it as marketing and/or growth opportunity. Can I do a great job servicing my extended family and grow from there? We'll see.

So today has been really exciting.

Well I've got it all set up. I'm going for the first $500. I've bought 50ft of Cat-5e cable and run it from my router out the front door where I'll have a table set up. I'll be offering my free and subscription phone services there. I'll be placing flyers at Victoria Gardens, Mustang Crossing and Lamar park - all densly populated by Hispanics - starting the first week of April.

Just thought I'd give an update on what's been going on. I've been talking with 2 venture firms. One here in Houston and one in England. It's felt like an endless english class with all the writing I've been doing.

On my own front, I'm saving up $500 to launch my first product here in Rosenberg. I'll pretty much just break even on it, but it will demonstrate that there's a market and give me some cash flow.

Another successful test. This time of 2 boxes communicating with each other for free. It was beautiful. I was at my girlfriends house in her company as well as her parents. She said she was proud of me, which did worlds for my confidence. Her mother was impressed. Her mother is exactly the kind of person I want as a customer. A completly non-technical person that understands in simple terms what was happening. Her father works for BMC and is deeply educated in all things technical. He was silent, but had nothing negative to say, which in his case is a good thing. He is very good at finding the holes and problems in things.

We first called LeMans, France and Perth, Australia. Then we called Portsmouth, England. After everyone had a chance to use and see Skype in action, we called between the phones. Complete success. They rang within one second of placing the Skype call with the other phone. The voice quality was great. There were some voice quality problems to other Skype users, but those were fixed once they got their microphones/headphones straight. Calling with a phone is so much easier.

I'm ready for my Flash Phone to arrive. I got the tracking info for it today. It's last mark was in Toronto, Canada so it'll be a little while yet. I'm going to purchase a Skype USB phone and some SkypeOut and then being selling. It's nearly time. I'll have to purchase a cable connection at my brother's home in Victoria Gardens, but that won't be too expensive month to month. I'll also have to purchase a WiFi router, preferably MOBI so that I can stand outside with my laptop and offer free calls to Mexico.

I've got prices!! I finally got to talk to my MPLAT salesman and I got pricing on my first 10 Flash Phones and the following 100.

First 10 US$22.00 each = $220.00 + $70 shipping = US$290
Following 100 US$19.10 each = $1910 + $150 shipping = US$2060

The $290 will be easy. It'll cost me about 1/2 a weeks pay. The $2060's a little steep for my pocket book, but once I get the first 10 sold and delivered I should have more than enough confidence in my market to make that kind of investment.

I'll be working on pricing of various products over the next few days. I'll be posting them when I'm done. I've already got most of the pricing for the Flash Phone figured out.

Here's the transcript of my chat with the MPLAT salesman:

[10:48:17 AM] Aaron deOliveira says: hello Mr. Liu

[10:53:24 AM] mplatsales says: hello

[10:53:43 AM] Aaron deOliveira says: is this Lomen Liu?

[10:53:51 AM] mplatsales says: Yes. I　am

[10:54:22 AM] Aaron deOliveira says: this is Aaron deOliveira - marroncito

[10:54:32 AM] mplatsales says: yes. how are you?

[10:55:34 AM] Aaron deOliveira says: well. i would like to find out about wholesale prices for F2k Flash Phones

[10:55:43 AM] mplatsales says: Ok

[10:55:53 AM] mplatsales says: How many you need?

[10:56:16 AM] Aaron deOliveira says: what's the smallest amount i can get to start with?

[10:56:26 AM] mplatsales says: 100

[10:56:38 AM] Aaron deOliveira says: so 100 is the smallest lot for wholesale?

[10:57:08 AM] mplatsales says: No. First you may order 10 unit and just test your local market.

[10:57:14 AM] mplatsales says: or 20

[10:57:27 AM] Aaron deOliveira says: do i order 10 at full price?

[10:57:44 AM] mplatsales says: Of course , still have best discount.

[10:57:57 AM] Aaron deOliveira says: how much will the first 10 cost?

[10:57:58 AM] mplatsales says: NOT FULL price

[10:58:12 AM] mplatsales says: USD22.00

[10:58:38 AM] Aaron deOliveira says: so can i get that price through MPLAT.com or do i order through you?

[10:58:52 AM] mplatsales says: From MPLAT.COM

[10:59:06 AM] Aaron deOliveira says: how do i get that price from the website?

[10:59:18 AM] Aaron deOliveira says: does it give it to me automatically when i order 10?

[10:59:23 AM] mplatsales says: No.

[10:59:45 AM] mplatsales says: I will do proforma invoice for you.

[10:59:53 AM] Aaron deOliveira says: okay

[11:00:06 AM] mplatsales says: And then you will pay it by paypal or bank transfer.

[11:00:20 AM] Aaron deOliveira says: cool

[11:00:22 AM] mplatsales says: Do you order the sample

[11:00:27 AM] Aaron deOliveira says: not right now

[11:00:38 AM] Aaron deOliveira says: i haven't gotten the first one i purchased yet

[11:00:57 AM] Aaron deOliveira says: and i haven't gotten any tracking information for it

[11:01:03 AM] Aaron deOliveira says: how long do they take to get?

[11:01:10 AM] mplatsales says: One week.

[11:01:19 AM] Aaron deOliveira says: okay

[11:01:30 AM] Aaron deOliveira says: i'll place the order for 10 when i get the first one

[11:01:39 AM] Aaron deOliveira says: so i can just get on skype and just order with you?

[11:02:09 AM] mplatsales says: No. you may send the email to sales@mplat.com , one salesman will contact you.

[11:02:26 AM] Aaron deOliveira says: and i can still get the $22 price?

[11:02:39 AM] mplatsales says: Yes. We have price list.

[11:02:55 AM] Aaron deOliveira says: so when i order 100 how much is each one?

[11:02:57 AM] mplatsales says: Same price will depend on your order quatity

[11:03:08 AM] mplatsales says: USD19.10

[11:03:45 AM] Aaron deOliveira says: that's a good prifce

[11:03:46 AM] Aaron deOliveira says: price

[11:03:57 AM] Aaron deOliveira says: so why do you sell them for $55 individually?

[11:04:22 AM] mplatsales says: The price is FOB china price, you need pay the delivery fee.

[11:04:37 AM] Aaron deOliveira says: how much is shipping?

[11:04:49 AM] mplatsales says: So, the 100unit delivery fee will be USD150.00

[11:05:14 AM] mplatsales says: No other handle fee, or extra fee for this .

[11:05:46 AM] mplatsales says: So you may get the profit from the shipping cost for end user when you sell it at USA

[11:06:03 AM] Aaron deOliveira says: so the total cost for 100 is 1910 + 150 = 2250?

[11:06:19 AM] Aaron deOliveira says: you can ship directly to my customers?

[11:06:57 AM] mplatsales says: We sell at high price just would like to protect the partner

[11:07:07 AM] Aaron deOliveira says: ah

[11:07:11 AM] Aaron deOliveira says: good plan

[11:07:27 AM] mplatsales says: Yes. the total price will be USD2250 for 100unit

[11:07:34 AM] Aaron deOliveira says: good

[11:07:46 AM] Aaron deOliveira says: could you tell me the shipping cost on the first 10?

[11:07:53 AM] Aaron deOliveira says: 220 + ? = ??

[11:08:11 AM] mplatsales says: USD70.00

[11:08:21 AM] Aaron deOliveira says: so the total cost is 290?

[11:08:27 AM] mplatsales says: Yes.

[11:09:12 AM] Aaron deOliveira says: can i ask which shipping company ya'll use? UPS? FedEX?

[11:09:35 AM] mplatsales says: UPS, FedEx, DHL, if you like

[11:09:58 AM] Aaron deOliveira says: the shipping costs aren't the same for each shipper are they?

[11:10:35 AM] mplatsales says: We will not charge any extra cost for delivery fee, we may use any carrier as you like.

[11:10:58 AM] mplatsales says: Or if you have shipping account, then you don't need pay any shipping cost.

[11:11:12 AM] mplatsales says: We use your account to finish the delivery.

[11:11:24 AM] Aaron deOliveira says: shipping account with who? your company?

[11:11:47 AM] mplatsales says: No, your company's account at carrier company.

[11:11:52 AM] Aaron deOliveira says: ah

[11:12:06 AM] Aaron deOliveira says: and you'll be shipping from ShenZhen?

[11:12:13 AM] mplatsales says: For example, you have account at UPS, then use your account and we don't charge any fee.

[11:12:42 AM] Aaron deOliveira says: okay

[11:12:46 AM] Aaron deOliveira says: thanks for all the information

[11:12:52 AM] mplatsales says: We have different factory in china, we will choose the best delivery address to finish your order.

[11:13:02 AM] Aaron deOliveira says: i'll email sales@mplat.com when i'm ready

[11:13:13 AM] mplatsales says: Great, have a good day.

[11:13:33 AM] mplatsales says: i am so excited to setup the new business relationship with your company.

[11:13:45 AM] mplatsales says: look forward your feedback.

[11:13:46 AM] mplatsales says: bye

I gave a demonstration to my parents of how Skype works and how I'll be building these private networks. I had James try the Skype Test Call over the phone. He got a confused look as though he didn't know quite what he was doing. Next we called a man in Malaysia and had him on speaker phone. The speaker was a little crackly, but we heard him clearly. I asked him where he was (Malaysia) and what time it was there.

After the demonstration, James had a lot of questions about the legality of these networks. I explained to him how people use private networks all the time without knowing it. CB/Ham radios. Free cell phone to cell phone calling. Even hooking up a generator to your house is using a private network of sorts. After all his questions, I think he has a better understanding of what I'm doing.

My mother is becoming incrementally more supportive. She's moved from luke warm to real interest. She's heard calls from Taiwan and Malaysia so far. Once I get some SkypeOut minutes, I'll have her call her brother in Washington and maybe even Japan where she lived for awhile.

I guess now would be a good time to explain why I've made the switch to Mexico. I've been talking to people I know who know El Salvador and none of them can (or will) share their contacts there with me. Oh well, I was kind of expecting this. So I've decided to work in Mexico where I can get to myself without a lot of cost.

I'm going to focus on Mexican bus lines and Mexican areas like Victoria Gardens and little Mexico. I figure I'll be able to find customers who are invested in contacting Mexico. I can also talk to Carlos. He runs a "service shop" doing private curreny exchange, selling phone cards and other small services mostly to immigrant workers. There are a lot of options.

Like I said before, I'll buy some SkypeOut minutes and count them as advertising. I feel that when people talk to their friends in Mexico for an hour or two they'll be tempted to buy.

I tried out one of the boxes on my phone at home and it worked. I wasn't screaming at my laptop anymore, I was talking through my phone - adapter - laptop - wifi router - cable modem - internet/skype to people on the other end. I actually had a confrence call with 3 Danes and a Swede. It was awsome.

I'll be testing the other box at Kimberly's house this Thursday to make sure that they can find each other. I'll also want to test the call forwarding feature, so I'll be forwarding it to her cell phone.

This is going to be awsome. I'm even more excited than I was yesterday getting the adapters and downloading Skype 2.0