Case Study: Bootstrapping an Online Information Business

Friday, June 15, 2007 at 11:00pm by Site Administrator

Ever been told you’re good at teaching people how to do something? Maybe you’re good at a piece of popular software and think you could produce a few tutorial videos captured from your computer screen. Or do you have some skill that can be captured in live video?

A CNN Money article in March indicates that how-to videos are hot, and my own observations suggest that this is true. Even when there’s a subscription price involved, there might just be a market for your videos. What’s more, the cost of startup might be very low, and you don’t necessarily need a lot of subscribers to make a comfortable living. It just becomes a matter of finding the right subscribers. (If you’re listed in a few video/ podcast directories, or have a blog that accompanies the videos, it becomes easier to find those subscribers.)

The CNN Money article focuses mostly on San Franciscan dance teacher Evan Margolin’s SalsaBootCamp. His monthly video subscription price increased from a US$9 to $37 and still pulls in enough members to garner him $20,000 per month. That’s roughly 540 subscribers. Even if you worked at some how to videos part-time and only garnered 100 subscribers at the same price point, that’s close to $4,000/month of extra revenue.

Now, even if you can’t dance or don’t have anything you can teach in live video, maybe there are information/ instructional screencast videos that you can produce – these days for a song.

Screencasting is relatively easy, and while you do have to learn a few storyboarding and scripting skills, if you have a clear voice, this just might be an opportunity for you.

A screencast, if you’re not familiar with it, is simply a video that has captured someone using a piece of software. This is done with screen capture software such as Camstudio (free) or Camtasia Studio (US$299). Every action you take and all the screen changes are captured in a screencast video. You can see examples of what I mean at Tubetorial, where I’ve covered a variety of software that’s useful to bloggers.

The part that I’d like to emphasize is that whether or not you plan to offer live video or screencasts, you can bootstrap an online information business. In the case of live video, keep your production costs down until you have enough of a trickle of revenue to afford more lights, better backgrounds, a director, etc. For screencasting, you can literally start for next to nothing – provided you have a computer and high-speed access to the Internet.

Here is a suggested approach, though I’ll point out that I’m not necessarily endorsing any of these options. Some additional links are provided in the clickable mindmap at the end of this article. (None are affiliate links, and if you know of better options, great.)

  1. Brainstorming.
    Write out some how-to video ideas.

  2. Equipment.
    Buy an inexpensive microphone or webcam with microphone. (If you’re offering live video, get a $300 camcorder. It’ll probably have rudimentary video editing software included.)

  3. Test run.
    Download and install the free Camstudio to test out your screencasting skills.

  4. Bootstrapping.
    When you’re relatively happy with your work and want fancier screencast production, download a free 21-day, fully-functioning trial of Camtasia Studio (and Snagit). If you time it right, you can produce a video, sell a few copies, and pay for a full version of Camtasia Studio with the proceeds.

  5. Domain name.
    Register a $0.99 .info domain name for one year at GoDaddy. Or a $0.99 .info or .org at estdomains.

  6. Site hosting.
    Get some cheap hosting. Site5 has a great deal right now where if you pay 24 months upfront, you can get 5 Terabytes of monthly bandwidth and 110 Gb of disk space for only $5. That’s enough for a small video site.

  7. Articles or blog.
    Write a few articles to draw the search engines in. (I’m overly simplifying this step.)

  8. Video teasers.
    Post sample videos on your site.

  9. Promote.
    Use a video sharing service like YouTube or SplashCast, etc., for short teaser videos. Such services are presently free. Some offer content contributors a way to earn some revenue, but if you want your own subscription model, think twice. Either way, make sure that a watermark of your logo is visible in sample videos, or that your website address is.

  10. Offer premium content.
    When traffic picks up, offer full-videos. You’ll have to decide whether you’ll offer them free and run ads, or to charge a flat price for access, or a monthly membership. It’ll depend on how much content you’re planning and your production schedule. To simplify payment collection, use PayPal, which is relatively simple to integrate into your site, even for subscriptions. If you allow credit card payments via PayPal, you will have to pay a fee on each transaction. If you start off with no credit card payments, then you will not pay any fees.

Most of the above process applies to live how-to videos. Visit the immensely popular, amusing Ask a Ninja site and you’ll see that even humorous how-tos can do well – even if they don’t really teach all that much.

The principal idea is that if your topic is salable and the timing of your site rollout is right, you can bootstrap your way to a reasonable income without a large initial cash outlay. When you have the funds, whether from advertising on your site or from sales/ subscriptions, you can reinvest some of it for higher quality production tools to improve later content.

Toolkit categories:
These are some of the software categories that are useful for an online information/ screencasting tutorial business:

  1. Calendaring and planning.
  2. Brainstorming.
  3. Communication.
  4. Conferencing and collaboration.
  5. Creating content.
  6. Publishing and distribution.
  7. Payment processing.

Most of these tools can also be used to maintain a site offering live how-to videos. A clickable mindmap of specific tools is shown below. Just click the page icon beside a tool’s name and you’ll go to it’s web page. While the list is by no means comprehensive, it should be a good start.

Over time, I’ll try to cover some of the other aspects of building and maintaining an online information business. Of course, what would a case study for a bootstrapped startup be if I didn’t offer a live example. I’ve got one in production, and I’ll introduce in the future, along with discussions on how it’s doing.

Online information business toolkit mindmap

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  1. Raj,

    What a great post! There is no question that how-to videos are hot and that camtasia screencast product growth makes even mushrooms jealous.

    What an excellent mindmap as well!

    All the best,

    Comment by Peter - Camtasia Guide — June 17, 2007 @ 9:33 am

  2. Thanks, Peter. I’m hoping to delve a bit more into how to offer how-to videos on other sites I write at. Though I’ll drop links from here.

    Apologies for the giant vertical gap of white space. Mindjet MindManager seems to do that when generating the clickable image map. Or it may have something to do with the way WordPress handles the generated code.

    Comment by Raj Dash — June 17, 2007 @ 2:35 pm

  3. Hi Raj,

    This is Austin from Yugma ( Your article is very interesting for those starting up small businesses! I would like to encourage you and your readers to take a few minutes to check out Yugma, our web conferencing and collaboration program. On June 22 and July 12 at 11:00 am US Central Time, we will be broadcasting a webinar focused on how online collaboration can help small businesses grow. Yugma is completely focused on being extremely easy, inexpensive, and cross-platform compatible, and our set of features is comprehensive and comes at a price that compares very favorably to others. In addition to having excellent service for Windows users, we’ve been getting great reviews for our ease of use and support for Mac users. We also recently launched support for Linux (8 versions supported), and will shortly be rolling out a Beta test for our upcoming VoIP feature. CNet recognized Yugma this year by selecting us as a finalist in its 2007 Webware 100 Awards.

    Feature highlights:
    - Extremely easy-to-use design
    - Free service connects up to 10 people
    - Premium services connect up to 500 people
    - Real-time desktop sharing and collaboration
    - Mouse and keyboard sharing
    - Whiteboard and annotating tools
    - Session recording and playback
    - Real-time private and public chat
    - Built-in file sharing
    - Yugma can be embedded into any website or application
    - No Spyware, Adware or Malware

    I encourage you to try our service out. We currently offer 15 days of trial Premium Service, and our basic version is FREE forever. It allows you to invite up to 10 attendees, anytime. As you can see, the features and price are hard to beat! I hope you like what we’ve put together and that it can help you and your readers start a business. We would love to hear your review of Yugma or answer any questions you may have. Just email us at [email protected]. Thanks!

    Best regards,
    Austin Sponsel
    Yugma Marketing Team

    Comment by Austin — June 21, 2007 @ 6:47 pm

  4. Austin: thanks very much for the tip. I will definitely chekck Yugma out and write about it somewhere on my tech sites, if not here.

    Comment by Raj Dash — June 21, 2007 @ 7:25 pm

  5. Hello Raj,

    I have to say that this post is very interesting and informative. I will definitely consider employing a how to video in the future. Thanks for breaking down the process and supplying some links.


    Comment by Roshawn Watson — July 16, 2007 @ 3:42 am

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