1449: The Co-Op Business Model: Share Whatever You've Got AND Pricing Philosophy by Derek Sivers on Management

[00:00:00] [SPEAKER_00]: This is Optimal Work Daily. The Co-Op Business Model, Share Whatever Youve Got, by Derek Sivers of Sivers, SiVE.rs.

[00:00:12] [SPEAKER_00]: I feel like I know almost nothing about business, because the only business I've ever done is the Co-Op Sharing Model. It goes like this.

[00:00:20] [SPEAKER_00]: Step number 1. You Have Something That People Want

[00:00:23] [SPEAKER_00]: It Might Be Something You Own, Something You've Learned How To Do, or Access to valuable resources, space, or people.

[00:00:30] [SPEAKER_00]: Step number 2. Find a way to share it with everyone who needs it.

[00:00:34] [SPEAKER_00]: Not necessarily for profit, but just because it's what you do for friends and it's the right thing to do.

[00:00:40] [SPEAKER_00]: Step number 3. If it takes some effort for you to share it, charge a little something for your effort to ensure that this giving can continue.

[00:00:48] [SPEAKER_00]: That's all. My Examples.

[00:00:52] [SPEAKER_00]: Copyright Forms. In 1994, the US Copyright Office still didn't have their copyright forms online. You still had to mail a letter to Washington DC to ask them to mail you some blank forms if you wanted to copyright your songs.

[00:01:06] [SPEAKER_00]: So I scanned all the forms and put them on my website for free as printable downloads for any musician who needed them.

[00:01:13] [SPEAKER_00]: For the next year or two, until the government started putting the forms online, my site was the only place to get them.

[00:01:19] [SPEAKER_00]: This was my first effort to contribute back to this great invention of the internet. Trademark instructions.

[00:01:26] [SPEAKER_00]: In 1995, I learned how to trademark my band name. It took many hours of work to figure out the legalese but I did it.

[00:01:33] [SPEAKER_00]: I wrote out the step by step instructions and put them on my band's website for free.

[00:01:37] [SPEAKER_00]: For years, it was the go-to resource for musicians who wanted to trademark their name.

[00:01:42] [SPEAKER_00]: UPC Bar Codes.

[00:01:45] [SPEAKER_00]: In 1996, I had a little record label so I got a UPC Bar Code account which let me put unique UPC Bar Codes on my CDs.

[00:01:53] [SPEAKER_00]: I had to pay $750 to the Universal Code Council to get a company account but that meant I was allowed to create 100,000 products under my account.

[00:02:02] [SPEAKER_00]: Musician friends asked how, so I showed them how but also said they could use one of mine. At first I did this for free as a favor until friends started sending strangers my way.

[00:02:12] [SPEAKER_00]: Because it took a little work to generate the number, create their barcode graphic and keep track of their unique IDs forever, I charged $20.

[00:02:20] [SPEAKER_00]: Over the next 12 years, this made me almost $2 million.

[00:02:26] [SPEAKER_00]: Online store. In 1997, I got a credit card merchant account to sell my own CD at live shows.

[00:02:33] [SPEAKER_00]: It cost $1,000 in set-up fees and took three months of red tape paperwork.

[00:02:38] [SPEAKER_00]: Then I built a little online shopping cart which also took months of work just to sell my own CD.

[00:02:43] [SPEAKER_00]: Musician friends asked if they could use mine instead of having to go through all that work so I said okay.

[00:02:49] [SPEAKER_00]: At first I did this for free as a favor until it was taking up all of my time.

[00:02:54] [SPEAKER_00]: I made $25 minutes of work to digitize stock and set up a new album in my system. I charged $35 per new album.

[00:03:02] [SPEAKER_00]: Because it took 10 minutes of work to pick, pack, and ship a purchase CD, I charged $4 per CD sold. Over the next 12 years this made me about $20 million.

[00:03:13] [SPEAKER_00]: Web hosting. In 1999, I had learned a lot about hosting websites.

[00:03:18] [SPEAKER_00]: Linux, Apache, PHP, SQL, FTP, DNS, Q-Mails, Spam Assassin, etc. I had done it for myself for my Dan's website then for CD baby and bought my own servers.

[00:03:31] [SPEAKER_00]: So when friends would complain about their existing web hosting company, I host them on my servers instead.

[00:03:37] [SPEAKER_00]: At first I did this for free as a favor until it was filling up my server.

[00:03:41] [SPEAKER_00]: Because each server cost me $300 a month and I had to hire a full-time person to manage this, I charged $20 per month in 1999 that was really cheap.

[00:03:52] [SPEAKER_00]: Over the next nine years this made me about $5 million.

[00:03:56] [SPEAKER_00]: My blog. Since 2000 I've been sharing everything I've learned for free.

[00:04:01] [SPEAKER_00]: I'm not the smartest guy probably below average but it costs nothing to share and it's the right thing to do.

[00:04:07] [SPEAKER_00]: So I do. Over the last 11 years this made me incredibly happy and lucky because of all the interesting people I've met by doing it.

[00:04:15] [SPEAKER_00]: What's the point? None of these things looked like a business venture. All of them were just sharing something I already had.

[00:04:22] [SPEAKER_00]: People often ask me if I have any suggestions for what kind of business they should get into. I tell them the only thing I know how to recommend.

[00:04:29] [SPEAKER_00]: Start by sharing whatever you've got.

[00:04:34] [SPEAKER_00]: Pracing philosophy by Derek Sivers of Sivers, SIV.rs.

[00:04:41] [SPEAKER_00]: For years I made a living playing at universities. One time a college far away in Ohio about a 12-hour drive asked what I would charge to do a two-hour show.

[00:04:51] [SPEAKER_00]: I said $1,500. She said, oh that's a bit too much. What would you charge to do just a one-hour show?

[00:04:58] [SPEAKER_00]: I said $2,000. She said, no wait you'll be performing less now more. I said yeah exactly what you're paying me for is to get there.

[00:05:08] [SPEAKER_00]: Once I'm there playing music is a fun part. If you tell me I have to get back in the van and drive home after only an hour and I'm going to charge you more than if you let me play for a couple hours first.

[00:05:17] [SPEAKER_00]: She liked that so much that she came up with the 1500.

[00:05:20] [SPEAKER_00]: Point is businesses creative. You can do things any way you want. There's no need to adhere to norms. Norms are for businesses without personality.

[00:05:29] [SPEAKER_00]: Poor your personality and philosophy into the way you do business. People will actually appreciate it when you do things in a surprising way.

[00:05:36] [SPEAKER_00]: It shows them you care more than most that you're putting yourself into this, that you're not just in it for the money.

[00:05:45] [SPEAKER_00]: You just listen to the posts titled The Co-op Business Model, Share Whatever You've Got, and Pracing Philosophy both by Derek Sivers of Sivers that's siv.rs.

[00:05:58] [SPEAKER_00]: This show is sponsored by Better Help. We're all marveled at how quickly kids learn and that sense of wonderment they have well doing it.

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[00:06:59] [SPEAKER_00]: For more from Derrick, by the way you can check out one of our other podcasts, Optimal Living Daily Derrick writes about personal development quite a lot, so he's featured over there too.

[00:07:09] [SPEAKER_00]: Again, that's Optimal Living Daily. But that wraps up another episode here, so have a great rest of your day. Hope to see you back here tomorrow where you're Optimal Life awaits.