By far the most common question I receive is on Muse Creation and Development. I’m a big believer in modeling successful people and reproducing their strategies. If they can do it, I can do it, too. It looks like I’ve found just the guy to model and he’s willing to share his secrets. I recently sent out a Tweet asking “if anyone has a muse that truly requires less than four hours a week and makes six figures a year”. Out of all the responses I received – I like Dale, of Pigtones.com, the best. Dale’s muse hits all of the muse criteria so perfectly (i.e. online, automated and scalable, etc.). So, without further ado (does anyone actually know what ado is?) let’s get right into it.
Muses are such a pressing topic with our Jet Set Life audience that I decided to create a series on Muse Creation and Development. I want to feature people who are really doing it. People that get to live the life of their dreams by leveraging the two most powerful currencies, time and money. The Four Hour Work Week is very clear that with these two currencies all other things are possible and without them, nothing is possible. So, let’s get right into it. I would like to start from the beginning (muse creation) and go right up to where you are currently (muse development).
Before we jump into the questions, tell us a little about yourself, including what you were doing before you created your muse.
I have always been a serial entrepreneur. I have started and ran 13 different businesses. Some successfully, some not so successfully. But my most successful one (before the muse) was my last one. It was a real estate company that I built up and took public in 2003; it focused soley on buying non-performing mortages from banks. I was the CEO for 5 yrs before leaving in December of 2007.
I left because my wife and I were getting ready to have our first daughter, she was only a few months away. The 80-100 hour work-week for the CEO of a public company was grueling and no place I wanted to be when I had a new daughter.
I had read a book that previous summer called The 4 Hour Work Week, by Tim Ferriss, and it fundamentally changed the way I looked at business. Before, it was all about trying to get the biggest company or make the most money, because somehow that was to translate into freedom at some unspecified future point. I knew I was no where near there yet. I had to totally reevaluate my life. In December of that year I decided to leave the company that I had built (and took public) and put it in the hands of a new CEO and the largest hedge fund investors. I really didn’t know what I was going to do, but I thought I had about 3-4 months until my daughter was born to figure it out.
[Rob: I did an interview with Tim Ferriss of the Four Hour Work Week here which maybe useful in understanding Dale’s thought process and some of the terms used in this post.]
1) That’s a great story and one that we can all learn from – waiting for that big pile of cash at the end of our lives isn’t all it’s cracked up to be. I understand that P.I.G.TONES is an online business that allows you to change the voice of your GPS system in your car. Is this something that you came up with or has this been in existence for a while?
On December 31, 2007, a friend of mine and I were driving from Idaho back to Dallas, Texas. It was snowing like crazy in the mountains of Colorado and it was about four o’clock in the morning.
We couldn’t see the road ahead and the mountain pass was closed behind us, but we had a brand new GPS from under the Xmas tree. We had zoomed in so much that we could see the twisting turns in the road ahead and it helped us drive through the total white out. In the exhaustion and the unreality of the situation, we imagined different voices coming out of the GPS, including the voice of GOD, as a humorous voice, asking us what we were doing up on the mountain in those conditions. We managed to survive the trip and the next day when we were relating our trip to our friends, we told them about the funny voices we imagined hearing from the GPS. We thought it would be cool if we could change the voices on the GPS to something funny.
I began research on Jan 2nd and after about 3 days of research I determined there was a viable market with no one doing it for Garmin and only a few sites for Tom Tom. I launched into a week long research project to see how we could do it and whether or not it was really a viable market. At the end of the week I determined it was open territory, the market was ripe, nothing existed yet, and there was a demand. I wrote out a 32 page business plan so I would have a reference to look back on and see if I was on track. And away we went.
2) Why did you choose this particular model as your muse – in other words, were there certain criteria that were musts for you in selecting your muse?
Having previous experience running several businesses (and being a CEO for a publicly traded company), I have a pretty good idea what needs to be in place for me to take a run at it. I determined that the market fit several of my core criteria:
1. The market was huge. Over a 10 year period GPS sales were significantly increasing and in December of 2007 several important bench marks had been attained:
a. The market reached a market size similar to cell phones (back when ring tones started to become popular).
b. The GPS was the number one requested electronic device for the Xmas season in 2007.
c. There was very little competition.
d. It could be created, hosted and delivered online with no physical product (one of my top criteria).
e. I determined that the voices could be created by other people (this was important since I didn’t know anything about audio production). I also determined that all the editing could be outsourced as well.
2. It had an existing model already out there. Ringtones were a huge money maker for many people and are still downloaded by the millions. So, I saw that the customization of electronics were a hot product.
3) Having a truly automated (and scalable) business is critical in setting up a great muse. Could you describe for us the automation process in finding all those great voices we see on your site as well as the process in having them ready for download and sale?
One of the most important things we wanted was to have an automated business. After creating the first eight voices we realized that we had established a system. We mapped it out, assigned the process points to people, figured out where we had to interject ourselves and under what circumstances. Our process is not simple, but it is well mapped out now. Since the end goal is to create a new voice at least once per month, we send a survey for voice suggestions (including a space to write in your favorite) to our customers. We get the survey back and pick the top 2 and send those to our audio guy. He submits the character voices to an audition process, picks the top voices and sends a script to the voice talent. The script is written by him (and his wife) and is submitted to us for additional lines or funny things we might want to add. If he doesn’t hear anything from us in 48 hours he goes ahead with it. From there the audio is sent to the sound engineer who has a very complex process to cut and modify it to fit the software requirements. We actually had to have a piece of custom software written for us to be able to even create the voice. At that point he runs it through the software program and we have a finished voice. It is then posted to the site and an email that fits the “character” that we created goes out to our list as well as creating new blog posts, etc. The site handles the delivery of the product via electronic delivery through our shopping cart (1shoppingcart.com). Support is assigned to a single person who we pay less than $250 a month. We also have outsourced someone to do the blogs and the videos for the products.
The only things that I do now are:
· Check the script going to the talent for additional lines that I think should be included.
· Check the accounting monthly.
· Send out the survey asking for new voice ideas.
· Enjoy the cash flow!
4) Was it difficult to get cooperation from the big companies in the GPS world like Tom Tom and Garmin?
Actually, Tom Tom allows users to create voices, but it’s not easy. There is no need to get their permission.
Garmin, however, made it almost impossible. They didn’t want anyone mucking around with their software/hardware. We actually had to take apart several Garmins, reverse engineer them to be able to figure out how they made the voices. Then we had a custom piece of software written for us to make the voice. Since I didn’t know any of the tech stuff, I had to find people who were capable of overcoming the technical hurdles. The funniest part is Garmin recently contacted us and said they loved the site and were actually impressed that we broke through their protections and created something fun and funny. It actually earned their respect and they recently even decided to let us use their software as a test to see what we could do with it. Our site caused them to start developing voices for the Garmins as an experiment. Our early attempts to contact them made it clear that they really didn’t have anyone for us to talk to when we initially began this process. So, we did it any way.
5) What would you say was the biggest obstacle in getting your muse up and running?
I would have to say, without a doubt, knowing absolutely nothing about:
1. The tech of the GPS.
2. Anything internet marketing related.
3. Websites, Adwords, etc.
I had been a Commercial Diver in Alaska, a Commercial Fisherman, a Landlord, a Repo-Man/Bill Collector, a Real Estate Investor and CEO of a public company. I didn’t have any tech background other than my constant use of computers.
Knowing nothing forced me to think in terms of systems and delegation.
The one thing I did have to do was- totally- commit myself to the idea.
I locked myself in an office for 45 days and just read everything that I could get my hands on about internet marketing. There were not many exact models out there that I could copy. In fact, much of what I read was about creating an information product and being a guru. This is not guru stuff. I focused on what did work and let go of anything that was in the “supposed to work” sections. I also have a principal that I operate from that helps me with the obstacles: failure is part of the process.
Anything that I engage in, I go into it KNOWING that I will fail at various aspects of it. I just like to get those aspects out of the way as fast as I can so that I can get to the fun and successful parts. Obstacles are there to trim off all the things that don’t work.
6) Knowing what you know now, what would you differently?
If I had to start over I would do 2 things differently:
1. Hire some really good talent in traffic generation on the internet (adwords, paid search, content networks).
2. I would have showed up on Garmin’s door and bugged them until they gave me a sit down meeting. It would have saved me having to reinvent the wheel with all the costs and time that were associated with that.
Those 2 things would have saved me about 75% of what I did spend and it would have sped up our launch and ramped us up considerably.
7) Let’s talk about testing the muse. Would you describe for us what that process was like? In other words, did you use Adwords and if so, what was your click through rate like and what have you learned from that process?
When we were in the testing phase we didn’t know anything about adwords. Our first month we spent $5K in adwords and had $800 in sales. Pretty dismal. We were bidding way too high on keywords we thought would bring the traffic. We got traffic, but no one was buying, which really meant we were getting the wrong kind of traffic. We threw a lot at the wall and wanted to see what would stick.
Our next month we did $3K in adwords and had $2500 in sales.
What we learned was a couple key things:
1. Optimize your page for the words you are bidding on. It brought our bids down from $1 a click, to .22 cents a click. A huge step in the right direction.
2. We no longer target the word Garmin. Although there is a HUGE amount of traffic for that one keyword, we found most people were looking to buy Garmin GPS units. They were not searching for what we had to sell. We had to get more specific in our keywords.
3. We tried a bunch of voices we thought people would like. The first time we asked our customers what they would like, they told us. We created that voice and in 1 month that 1 voice outsold everything we ever did prior. It was amazing. We stopped thinking we were funny, or knew what people would want. In fact, we never actually used a voice that we came up with. We simply ask our customers now and give them exactly what they are asking for. So simple it slipped our minds for months. Huge lesson there.
8) Do you own any other muses? If so, would you describe them?
I have been creating one recently and just made it live last week. This one is a 52 week course in a specific niche. Something that I discovered a few years ago, there is very little good or reliable information out there. It’s what I wished I had when I started business.
It’s a 12 month membership course that’s all about how to raise money, where to find it, how to get it, how to get the funding for start-ups, or growing a business. I have raised a little over $90 million in the last 15 yrs for my projects and companies. And it’s a huge secret how to do it correctly, or seems that way. It’s kind of like an insiders only club of people who know how to do it. If you want to grow a company to a huge size, or start one, you need capital. So few people really know how to do it. I got some of my friends to get together with me and develop this course. Everyone, from a guy who buys and sells public companies, to professional money raisers, to SEC attorneys and professional investors. It’s a good group and we are developing some great stuff. This is more a passion of mine and I mostly do it simply, because it’s fun. We are only allowing a limited number of people on the site at a time, because I don’t want it to eat up too much of my time. The ideas we have put together on how to raise money I haven’t seen anywhere else. It’s just fantastic insider stuff. I know I personally have paid over $100K a year to professionals to come and help me raise money, so I know the value of the information we are giving. Since it is insider type info, I called the site www.raisingcapitalsecrets.com, an excellent place to start.
9) What was your work life like before setting up P.I.G.TONES and what is like now?
Just prior to starting P.I.G.TONES, as I mentioned, I was easily doing an 80-100hr work-week as a CEO of a public company. It was just too much time. After reading Tim’s book, I had to reassess my life. When I was younger I spent almost 7 years traveling and playing – I loved it! But I was broke most of that time. The reason I got into real estate was so I could have passive income. What a joke. Real estate is NOT passive if you really want to be successful. As I’m sure a lot of people are discovering in these hard times. But the lure of the carrot was out there and I continued to build up my real estate holdings and even took a company public doing it.
I waited until I was 38 to have a baby . I was ecstatic and just couldn’t wait to be a father. There was just no way I could spend time with my daughter working as many hours as I did. After reading The 4 Hour Work Week, I reevaluated my whole life and decided that I didn’t want to be like so many older people that I know. The ones who say, “kids grow up so fast and I missed so much of it”, that was the single driving force in developing my muse. I also realized that:
1. It was possible, therefore, I could do it.
2. It was critical for me to be able spend time with my daughter.
I reevaluated and re-engineered my life to make way for a new baby.
I now work from the house, but mostly I get to hang out with my wife and my daughter. Perfect.
10) What was your first month of income like and what is it like now?
Well, since I had left my job as CEO and my wife was no longer working as a Pharmacist, our income went to zero. So, it was critical to make this work. There was no “going back”.
As I mentioned before, we had a negative cash flow for the first couple months. However, on month 3 we had about $6500 in income and about $2k in expenses. From there it went to about $8K a month, same expenses (mostly adwords expenses) till it reached $10K, in month 5 it jumped to $15K then to over $20K. We had to keep our expenses low. The cost of voices, the cost of accounting, the cost of support and Ad Words, our expenses were coming to just over $3K a month. The time spent on it has dropped as well from an all out 40+hour week to just a few hours per week. There are weeks when I won’t even look at the site. Our support is simple. If any one has a problem that support can’t fix or they are unhappy for any reason, we simply refund them. Period. If we can make them happy by giving them an extra voice or 2, great. We love testimonials and even have one from a Vice President of Google. After receiving a testimonial, we usually send a couple voices as a thank you gift.
The site consistently does over $20K a month now and we are just getting ready to revamp the site, as well as come out with a new product. A “recording of your own voice” product where we will let the customers make their own voice and if it’s good we will sell it and share in the revenue with them. This should be out in about 2 weeks.
11) What advise would you give someone who says “I don’t even know where to begin to select my product”?
Someone once told me, “look for a hungry crowd”. I didn’t really understand that until P.I.G.TONES. I had always dealt in necessity (real estate: people need a place to live) rather than a group that wanted something. When I mentioned the idea to people, I kept getting almost the same response, “Wow, I love that idea” or “Can you do X actor”. Everyone thought it was a no brainer.
I say if you are starting out, develop the skills to sell something online. Try selling some other person’s stuff. See if you can master that. Then creating your own product simply becomes: find the hungry crowd and feed them. It’s easy to feed a hungry crowd.
The next step is to put yourself in the place of a consumer. What do you LOVE to consume (and sell that).
Or, as I am doing with the new site, sell your expertise. I know how to raise money. It’s easy for me. There are people out there who would love to know how I do it and would happily pay to know. I know I did.
12) Are there any resources you would recommend? Things that helped you out?
Yes there are:
1. If you don’t understand business, go read anything by Peter Drucker.
2. I would recommend The 4 Hour Work Week by Tim Ferris, excellent book for change of mindset. It’s only ok on the “how to”, but great on the “why to” parts. Life is far more important than work. Design your life around what you would like to do and it can happen.
3. For internet learning I would recommend 2 things:
a. The Internet Business Mastery Podcast by Sterling and Jay. Absolutely right on excellent stuff, both in the “how to” category and the “why to” category. They have a number of podcasts stretching back a few years. Made my driving to work an excellent place to start thinking about this stuff.
b. NitroMarketing’s the Nitro Blueprint. Just an excellent 10 step course on getting a muse up from the scratch. Good stuff. I used most of it for P.I.G.TONES (everything, but the specific product development).
12) What’s next for Dale?
Well, my daughter takes center stage, so obviously that. Since I never could sit still, I am going to be taking up flying and ultra light flying. I’m looking into that now.
P.I.G.TONES is in negotiations with some top Hollywood talent to start producing voices. Secret stuff I can’t tell you about until we complete the negotiations.
www.raisingcapitalsecrets.com is coming along nicely and should be up for some big advertisement we plan on starting in the next month or so.
One of the biggest things I have realized is that I can spot trends and I can act on them. I am thinking of going into publishing people and their muse. I have been toying with the idea of a back office support network to muse development for other people, sort of like a muse incubator if you will. Let them come up with the content and product idea and I can help take it to market. I’m exploring that now.
Another project that I had put on hold when my daughter was born, was the development of several private islands in Belize. Some time next year when my daughter is a bit older, my wife and I will pick that project up since we love it. We will see where it leads. Well, I hope that helps. Anything you imagine you could do. Why not? Could be fun!
Rob: Dale, thank you so much for your candor and willingness to share everything you did in this interview. What’s the best way for someone to get in touch with you? “They can reach me at Dale@pigtones.com.” Great. Thanks again for this interview.
We’re off to South Beach tomorrow for some sunshine and parties! If you want to follow our updates in Miami (or around the globe) follow Rob and Kim on Twitter here.