From Startup Newsletter To Best Selling Book: How This Entrepreneur Pulled It Off

image001A version of this article previously appeared on Inc.

John Lusk, along with his Co-Author Kyle Harrison, leveraged their humble company's newsletter into The MouseDriver Chronicles, a New York Times bestselling book.

Along the way, they created a supportive community of emotionally attached stakeholders that would be the envy of any Social Media Manager. Here's how they pulled it off.

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2013-05-31

You can watch/listen to how John and Kyle turned their email newsletter into an international bestseller in the following 9-minute excerpt from John's recent talk at UC Santa Barbara.

From 35 To 500 Readers

Upon graduation from Wharton, John and Kyle launched a startup based upon a simple, pedestrian product: a computer mouse shaped like the head of a golf driver. Putting their expensive educations to good use, they aptly named their novelty product a "MouseDriver".

image002Consistent with the statistics cited in Why Entrepreneurs Hate (Most) MBAs, the large majority of John and Kyle's classmates accepted positions at investment banks and consulting firms upon graduation. However, a number of them wanted to vicariously experience the startup world through John and Kyle's venture.

The company's newsletter was initially created to share their entrepreneurial journey with their family and friends. According to John, "So, we, we sent...(an email) to about 35 people. I said, 'Hey, listen were going to start writing this newsletter and it's going to highlight our trials and tribulations, our failures and our successes. It's gonna highlight our emotions, our ups and our downs. If you want to be kept informed just send me an email and let me know that you're in, and that was it. And of those 35 people... everybody opted in."

The opening paragraphs of that first newsletter are indicative of the captivating and accessible writing style, which eventually cultivated a huge audience.

Dear Friends,

We have no income and no venture capital funding. Our inventory is being financed by companies with names like Chase, Citibank, First USA and Capital One. Our office consists of a refrigerator, oven, sink, two desks, a bay window and one very large Texas flag. The only thing that makes our 7-second commute to work interesting is avoiding the inventory of computer mice stacked in our living room. We're motivated, passionate, excited, terrified and at many times, have absolutely no idea what we are doing. Every hour of the day is filled with constant mood swings and the question of "What the hell are we doing?" enters our minds on a daily basis.

But...we're having a great time and we truly believe that this is an experience of a lifetime.

Do you care to hear more?

It is difficult to nurture a community around a cool, sexy, highly engaging product. It is usually impossible to do so when the focal point is a novelty gift.  Yet, without realizing it, John and Kyle had begun to build a community of virtual stakeholders who eventually developed an emotional bond with the company.

To John's surprise, the number of subscribers to the company's newsletter began to quickly grow.“We started sending out the newsletter... in September of 1999.  It was really no longer than a page um... every three weeks. And it was really kinda... blogging, in a sense. If we had a blogging platform then, we would have been blogging. The newsletter started to grow pretty quickly. Within three months, we had over 500 subscribers and again, you had to send me an email that said,' I'm in.' We weren't marketing the newsletter, it was just out there, sort of growing organically."

Crowdsourced Advisors

In addition to providing a source of emotional support and encouragement, John began to use the newsletter to solicit advice. According to John, "The newsletter became, sort of a de facto Advisory Board for us. We would send out some of our issues, we would highlight some of the problems and the challenges we were having with MouseDriver and all of a sudden, people would respond. I'm not talking about one or two people responding, we get 10, 15, 20 responses for a particular problem.

(For instance) we had a hard time collecting from the May Department Stores. They owed us $100,000 and we weren't really sure what to do, and we really needed the money. We talked about that in the newsletter, and we had like 12 or 13 responses from people saying, 'You need to contact so-and-so because they're a collections agent dealing with the May department stores, they can get your money back' and they were right. So we were connected to people that helped us get our money back. So in a sense, we crowdsourced our advisory board and... it worked phenomenally well."

The popularity of the company's newsletter soon began to grow at a pace that outstripped the MouseDriver's relatively meager sales. Per John, "We continue  to grow the business and as the newsletter grew, the media kind of picked up on the story as well. The media... wasn't... saying, 'Wow, this is the best product ever and you guys are just killing it.' It was...'Wow, we've heard about your newsletter, and it seems to be motivating and inspiring entrepreneurs around the country. We'd love to talk to you about it.' (At this point) the Mouse Driver Insider Newsletter was really inspiring folks... from university professors, to VCs, to entertainers, the bankers, to other entrepreneurs, and that's what the media picked up on."

Enter Inc. Magazine

The turning point for John and Kyle was a cover story in Inc. Magazine. "February of 2001, Inc. Magazine ended up doing a cover story on Kyle and I called, An American Start-Up. Again, the story wasn't about how our product was just knocking it out of the park. It was about our newsletter and how we weren't afraid to put things out there, and to talk about how hard it was to be an entrepreneur.

So naturally, we started getting all this product awareness, right? And... people started to know about MouseDriver. As that story got out there, we got all this increased awareness... increased product distribution and our revenue started slowly... crawl(ing) up."

Not surprisingly, the Inc. article also generated tremendous interest in the newsletter. Unfortunately, in the pre-blogging days of 2001, John had to literally send each newsletter out via Outlook, which limited the number of recipients that could be included in each email. Thus, as the number of subscribers grew, the overhead associated with communicating with them increased significantly.

In John's words, "(After the Inc. article) our newsletter completely took off. We went from five thousand subscribers to ten thousand subscribers in less than... six months. I call these folks raving fans, because... every time we put out a newsletter we would just get these crazy responses.  We got so many responses we kind of were trying to figure out, ‘What do we do with all these people?"

From 10,000 Readers To Bestseller

However, before John and Kyle could fully harness the power of their growing newsletter audience, their focus was drawn to codifying their entrepreneurial experiences in book form. “Once the media picked up on it, every major publishing house... (called) from Time Warner and Harper Collins and Harvard Business Press and Perseus. Saying, 'Hey, we want to pay you to write a book.’ So Kyle and I sat down for about 30 seconds and said, 'Do we want to do this? Yeah, let's do it, because if we have a book out there it's more awareness for the product and we'll sell more MouseDrivers.' So, I sat down and started spending about 50% of my time writing the book.

And so the book came out... I believe January 2002. It hit a number of bestseller lists... universities picked it up as required reading right out of the gate. And Kyle and I, when we sat down to write the book, we really wanted to write a book that we could have used. We wanted a book that was real.

We really wanted to encourage people to do what we had done. You know, despite the fact that we had all these highs and lows, we felt like we had learned so much about ourselves. The 4 years that we spent with MouseDriver, we'd learned... everything we learned in business school and then some, especially around common sense and street smarts and how to read people and these are things that you just don't get from any other corporation and these are things that are going to help you in everyday life."

Lessons Learned

There are a number of community-building lessons entrepreneurs can draw from John and Kyle's experiences, including:

1. Journalize: As BigFrame Founder Sarah Penna noted HERE, maintaining a journal helps you keep your successes and failures in their proper perspective. It will be invaluable you when it's time to write your own bestseller.

2. Consistency: Communicating with your constituents on a set schedule keeps your community engaged and forces you to create content, even when you feel you don't have time to spare.

3. Vulnerability: Most people tend to be more empathetic, and thus more helpful, when you share your shortcomings and mistakes, along with your triumphs.

4. Ask For Help: Don't be afraid to call upon your community for specific assistance.

5. Speak, Don't Preach: These folks are already believers; don't alienate them by talking "at" them. Rather, write in a conversational style that encourages your fans to add to the discussion.

6. Sales Matter: Although they did many things right, John and Kyle failed to generate significant MouseDriver sales from their community. As John noted at the conclusion of his talk, "The book did help us increase sales... but we could have increased a lot more, had we had the distribution, had I been actually focused on sales like I probably should have been, instead of writing the book."

Let's get real. Your customer blog probably won't morph into an international bestseller. However, it will have served its purpose if you are able to establish a connection with your users that generates incremental sales and provides your company with advisory and emotional support; in good times, as well as bad.

Follow my startup-oriented Twitter feed here: @johngreathouse. I promise I will never tweet about unicorns or that killer burrito I just ate.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.


Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.





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