Bootstrapping with $120k Credit Card Debt to $7m Revenue: Scott Skinger, CEO of TrainSignal (Part 3)

Sramana: How did you take your initial courses to market? How did you access customers?

Scott Skinger: In 2002 I was building courses. Before I could get a course to market, I ran up close to $120,000 in credit card debt.

Sramana: Whoa! What were you doing with $120,000 of credit card debt?

Scott Skinger: Everything that I was trying to do cost more money than I expected. I spent money on server infrastructure, on DVDs, and some of the money was used on my personal living expenses that I needed just to get by. Over the course of nine months, I accumulated close to $120,000 of credit card debt. By the end of 2002 I had $120,000 of high-interest credit card debt.

In December 2002, I had yet to launch a website. I had it built and ready to launch, but I had hit a point where I needed to go back to work to launch TrainSignal. I finally got a Yahoo store launched and posted some products there. I had a hope and a prayer that if I put the product there, I would get some traffic. Obviously, I struggled and did not get a lot of sales in early 2003.

In 2003 I was back to teaching full time. I worked until 7 p.m., and then I would get home and focus on TrainSignal in the evenings. I started to pay down credit card debt and gained some traction over the next year and a half.

Sramana: Where did the traction come from?

Scott Skinger: Eventually I got some web traffic. In 2003 and 2004 I was buying Google clicks for a nickel or a dime. I was able to do that on my own. I also started getting some organic rankings in Yahoo and Google. That got me some sales here and there.

What really got me traction was new products. The focus I had on quality was driving repeat business. When I released a new course, I would send a note to all of my customers announcing the release of the new course. The vast majority of them would come and buy that course as well. They really loved what I was creating. I also felt that a lot of them wanted to support a small business like mine. I had enough repeat business in 2003 and 2004 that I kept my hunger and passion alive. I wanted to build more content to help people.

Sramana: What were you pricing these courses at?

Scott Skinger: The first price I sold courses for was $29.95. When I first created the course, I positioned it as a lab book. I had it professional bound. I put the video training on a CD in the back of the book. After about six months I realized that by just repositioning the product where the video was the primary product with a book to supplement it, I could charge twice as much money for the product. I raised the price to $49.95 over the course of six months. Sales increased when the price was right. For the past two years, we have sold our courses for $400, and in many ways it is the same course. The value proposition was still very strong and our overall experience still stacked up very favorably to classroom-based training, which can cost up to $5,000 for an individual course.

This segment is part 3 in the series : Bootstrapping with $120k Credit Card Debt to $7m Revenue: Scott Skinger, CEO of TrainSignal
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