From The $100 Startup · Part III, Chapter 11

Moving On Up

"Remind people that profit is the difference between revenue and expense. This makes you look smart."
— Scott Adams

The first $1.26 is the hardest

Over and over in the study, founders told me the same thing: growing the business wasn't nearly as hard as starting it. "It took a while to find something that worked. But once we were rolling, we gained traction and quickly took off."

I call it the first $1.26 is the hardest principle — because one day many years ago I made $1.26 with a new project while on a layover in Brussels. Not enough for a Belgian waffle, but I had a good feeling about the future. The same feeling shows up in nearly every story in this book once that first sale arrives. The first one validates everything. Everything after is reinforcement.

Nev Lapwood and Snowboard Addiction

Nev Lapwood was a classic ski bum. He lived in Whistler, British Columbia, worked off and on in restaurants at night, and snowboarded during the day. Life was basic but good — until the limited employment ended and he was laid off. He started offering snowboard lessons in person to make ends meet. His students loved him, but the model had built-in limitations: lots of competition, few clients, limited season.

What if he could teach people all over the world, virtually? Nev worked with a couple of close friends to build Snowboard Addiction, a worldwide series of online tutorials. The first year brought in $30,000 in net income — the highest income Nev had ever earned. Year two hit just under $100,000 with affiliates and a broader range of products; year three, after he added translations in nine languages, was on track for $300,000.

"Starting this business after being laid off has been the best decision of my life," he says. "My plan is to travel for six months of every year and run the business for the other six." He still hits the slopes during the day.

The three tweaks that grow any business

If you grow your traffic a little, increase conversion a little, and raise your average sale price a little — your business grows a lot. Those are the three levers.

1. Increase traffic

A new business owner once told me she was disappointed in her first launch — only four people had bought. "How many prospects were on your list?" I asked. "Maybe a hundred?" Four percent is an excellent conversion rate. Her problem wasn't conversion. It was that her audience was too small. The first move was to grow the audience.

2. Increase conversion

Once you have a stable base of traffic, look at conversion — the percentage of prospects who become customers. A/B testing copy, headlines, and offer details is the classic way to improve. One useful warning, from Ramit Sethi: "Testing is important, but it pales in comparison to the traffic source. People love split-testing headlines, copy, graphics, even tiny boxes. They can usually achieve greater returns by focusing on the source."

3. Increase average sale price

Upsells, cross-sells, and sales-after-the-sale. The difference:

	How it works	Message
Upsell	Offers a higher-level version or add-on at purchase	"Would you like fries with that?"
Cross-sell	Offers related items to customers making a purchase	"Other people making this purchase also bought these things."
Sales-after-the-sale	A special one-time offer right after a sale	"Thanks! This one-time offer is only for customers."

The confirmation page after a sale is one of the most underused places for an upsell. Conversion rates there can hit 30% or higher — your customer just gave you money, they're in buying mode, and a strong contextual offer feels like a gift rather than a pitch.

Action-based tweaks

When founders talked about how they actually moved the needle, a few patterns showed up. Many set aside 30 minutes every morning strictly for business improvements before diving into the day's operating work. Here's what that half hour can do.

• Create a hall of fame. Spotlight your best customers — let them tell their own stories. Variety matters; people relate to different perspectives. This is the social proof that your product works for all kinds of buyers.
• Install a new upsell. Probably the highest-leverage tweak you can make. A good upsell isn't sleazy — it's contextually appropriate, and the response is often "thanks for the offer!"
• Encourage referrals specifically. Vague asks get ignored. "Can you send our offer to three of your friends?" or "Can you like our page on Facebook?" gets done. The post-purchase confirmation page is a great place to ask.
• Hold a contest. The bigger the prize or more unique the contest, the better. You may not see a sales spike from the contest itself — but you'll get attention and a bigger audience for the next launch.
• Introduce the most powerful guarantee you can. Zappos created free shipping both ways. A 110% guarantee. The point is to make the burden of risk fall on the business, not the buyer. Or do the opposite — make a deliberate choice to offer no guarantee, and make a big deal about that. Both work better than a weak guarantee.

Product-to-service, service-to-product

One of the fastest ways to add a new revenue stream is to flip your model — add a service to a product business, or a product to a service business.

Perry Marshall, a Chicago consultant, sold a popular $50 report and offered $5,000 one-on-one consulting. Someone pointed out a gap: "Everyone who buys the report loves it but doesn't always know how to implement it. They don't need your high-end consulting either. Why not run group jump-start workshops in between?" He wasn't sure. He tried it anyway. The workshop generated over $1 million in revenue for his small firm.

Reese Spykerman, my designer, went the other direction. The inquiries to her custom design service split into three categories — high-budget prospects who became great clients, low-budget prospects who weren't a fit, and a middle group with interesting projects and decent budgets who didn't need full custom. She built a line of flat-rate website themes and headers for the middle group. Not as bespoke as her custom work — but much better than everything else on the market. Same skills, new offer, different price point.

Either direction works. The shift gives you something to say to prospects: "My custom service costs $X because everything is built from scratch. If you just need a general solution, this version is $Y."

Raise your prices regularly

Andy Dunn, a developer in Belfast, priced his services so low when he went freelance that some projects were unprofitable. In one case he ended up several thousand euros in debt after bidding too low and subcontracting part of the work. The fix was a 25% rate increase. He was scared to do it. Then relieved.

The simple act of raising my rates by 25% allowed me to either work seven hours less a week, or make a significant increase in my monthly income. The other unexpected benefit was that it gave me much more confidence. Until I upped the rates, I didn't make the connection that I was worth more than I had been charging.

I surveyed fourteen freelancers across the US, Canada, Australia, the UK, South Africa, and New Zealand who'd raised their rates. The verdict was unanimous: "Before my price increase, I was worried no one would hire me again. After the increase, I realized how easy it was and I wish I'd done it sooner." The most common client reaction was "It's about time! You're worth more than you've been charging."

The most useful advice the freelancers gave: maintain a practice of regular rate increases so it becomes expected. Nobody expects the price of milk to stay the same year to year. Pick a date — January 1, or the start of your fiscal year — and raise prices on that date every year. Offer current clients a grace period or discount. Don't price based on time — price based on value.

Horizontal vs vertical growth

Two ways to grow a business: horizontally (different products for different customers) or vertically (more levels of engagement with the same customers).

Perry Marshall went vertical: same audience, new price tier. Nathalie Lussier (whose story shows up in Chapter 3) went horizontal: she applied her tech skills to an entirely new audience while keeping her raw-foods business running on 80% autopilot. She called it franchising herself.

Either works. The point is to pick deliberately rather than adding products and services at random.

Key takeaways

• Growing an existing business is usually easier than starting one. Momentum is real. Once the first sale lands, everything compounds.
• Three tweaks: traffic, conversion, average sale price. Improve any one and revenue rises. Improve all three a little and the compound is significant.
• The post-purchase upsell is the most underused move. A strong contextual offer right after a sale can convert at 30% or higher.
• Add a service to a product business, or vice versa. Perry Marshall's workshops added $1M. Reese Spykerman's themes captured the middle-budget customers she'd been turning away.
• Raise your prices on a regular schedule. Once a year. The reaction is almost always "it's about time."
• Choose horizontal or vertical growth deliberately. Different products for different people, or more levels for the same people. Pick.

Where this fits in the book

"Moving On Up" opens Part III of The $100 Startup. Parts I and II covered who the unexpected entrepreneurs are and how they actually launched. Part III turns to what comes after the first sale: growing without losing your life. The next chapter (Chapter 12: How to Franchise Yourself) covers leverage — outsourcing, partnerships, affiliate programs. Chapter 13 covers the long-term question of whether to stay small, go medium, or build for a sale.

For the practical site version of this chapter, see how to scale a small business (from side hustle to full-time).

Frequently asked questions

How do you grow an existing small business?

Through tweaks. Three levers: increase traffic, increase conversion, increase average sale price. Improve any one and revenue rises. Improve all three even a little and the compound is significant.

How do I increase the average sale price?

Upsells, cross-sells, and sales-after-the-sale. The post-purchase confirmation page is the most underused upsell location — a strong contextual offer there can convert 30%+ because the buyer is already in buying mode.

Should I raise my prices?

Probably, and probably more often than you do. Andy Dunn raised his rates 25% and the response was "it's about time." A survey of 14 freelancers across six countries who'd raised rates returned a unanimous "I wish I'd done it sooner."

Should I add a service to my product business (or vice versa)?

Often yes. Perry Marshall added group workshops between his $50 report and $5,000 consulting and generated over $1M. Reese Spykerman productized her custom design service into flat-rate themes for middle-budget clients. Same skills, new offer.

Where does this fit in The $100 Startup?

Chapter 11, opening Part III. After Parts I and II, the question becomes how to grow without losing your life. This chapter covers the specific tweaks that move the needle without requiring more employees or outside investment.