I thought it would be fun to have an annual journal of the tiny house business. I've chosen to write about the business side because that is my focus at Tumbleweed. Our little company has 2 employees: Jay the founder and designer, and myself, Steve, the business and tech guy. At the onset of 2009 my plan was to focus the majority of my attention on Tumbleweed. Ever since turning 30, I’ve been a serial entrepreneur. Before joining Tumbleweed, I was a restaurateur and real estate investor.
Sometimes life has other plans for us, and 2009 was just that. Unfortunately for me, I had a perfect storm of problems in 2009 which thwarted my plans to develop Tumbleweed in the way I wanted to. I found myself embroiled in four different lawsuits that stemmed from my father's passing. It was stressful, costly, and wreaked havoc on my life. My restaurant business took a tremendous amount of my time in the down economy as well.
Needless to say, my plans for Tumbleweed did not come to fruition in 2009. The first half of the year we focused on our new book, a re-write of Jay's older book under the same title, "The Small House Book." Jay did an amazing job on his new book, and the final result was a beautiful book that was 196 pages. It was completed on the 11th hour, and we printed 1,000 copies.
This was our first foray into serious book publishing. In the past, we had done runs of 1,000 books at a time, but our older books were much smaller, simpler, and far less expensive. When the books were completed, about 40 copies went out, and we immediately got complaints that the pages were falling out. Our printer apologized for using the wrong type of glue on some of the books and promised to fix the problem in just a few days. They also agreed to ship any books we sold during that time for free. A few days quickly became weeks, and they stopped shipping our orders without telling us. They also continued to ship the bad books without fixing the binding. It was such a mess, that it took six months to finally settle the bill.
Our first run sold out very quickly, and we have since found a new vendor. The second run went okay, but it too had its share of problems.
The website stayed pretty static, and none of my plans to reorganize the site found the time. Our website had become "bloated" and difficult to navigate. It is something I really wanted to fix in 2009, but will have to fix in 2010.
Early in 2009, I read a book called "Landing Page Optimization". If anyone is really serious about running a web based business, then you must learn the importance of conversion testing. For years we've been able to grow our website traffic, but I never much considered the effectiveness of the words and pictures on a page - until I read that book. I spent what little free time I had on that subject, and the few areas I did focus on showed tremendous results. Most tests I did had practically no effect, but about 1 in 10 changes made a HUGE impact. I'm an avid reader of business books, and all told I probably read about 10 books on web based businesses this year. The net result was that I made a few minor changes that had dramatic results.
Building the Fencl
This year we decided to build our first mobile home, and it would be the Fencl. The Fencl design came about because it was clear we had a large number of customers interested in a small house that combined the Weebee and the Tarleton. Our plan was to build the house, take it on tour across the country, and sell it on the East Coast.We choose the East Coast as our final destination because many people had expressed interest in buying the house on the East Coast.
In the past, when we built houses, we hired a contractor and agreed on a fixed price. This time, we decided to hire the crew ourselves and pay an hourly rate. The net result was a financial loss, as the wages exceeded budget.
The final product was a beautiful green home ready to tour the country. At the time, I was overwhelmed with my other job, and I hired a publicist at the last minute to help me promote the upcoming tour. I wasn’t able to spend the time necessary, and the house went across the US without much fanfare. Accordingly, without the media exposure, it was hard to sell the house.
Currently, the small house is available for sale in Ohio, and you can tour it 7 days per week.
The year ahead
We have some big plans for the coming year. Realistically, most of the projects we are working on now won't come to our website until 2011. Keep an eye out for more posts about the road ahead - it is something I plan to blog about. I'll be reaching out for partnership opportunities in the coming year, and I'll be using our newsletter and LinkedIn to do so. Go back in time: 2008
2008 felt like a huge success to us Tumbleweeders; we survived. When I first joined Tumbleweed in 2007, I did so because I loved the idea. I knew others loved it, too. But could it really be a business? In it is preceeding 5 years, it never made a profit. How would it survive? How long could Jay continue to work without being paid? How long could I do that?
It was October, 2007, when our sales fell off a cliff. The banking industry was starting to seize, and we began to worry. Most of our house buyers either refinanced or sold their homes before buying a Tumbleweed. With declining home values and banks getting jittery, we knew things were going to change. Recognizing that easy money would no longer be available, I bet that in 2008 we wouldn't sell any pre-made homes (which was the primary source of income). We correctly got ahead of the curve on this housing and banking crisis and decided to reshape our business. We knew we needed to survive without being dependent on selling a single house. It was the best decision we could have ever made. Maybe it was luck or maybe we were smart, but the bottom line was that we were right. We didn't sell a single house all year; and not only did we survive, we thrived!
But 2008 didn't start off with big smiles. The beginning of the year proved difficult. We had to cut back on staff hours, and all our employees quit. We couldn't afford to hire new people, and Jay and I decided we'd need to do it alone. Jay would work full-time for Tumbleweed and draw whatever extra money was available, and I would work part time in the evenings (for free) after working a regular paying job during the day. We were in downsize mode.
Recognizing that we couldn't count on the sale of houses to earn a living, we changed our focus in early 2008 from ready-made house sales to catering to the do-it-yourself builder. Jay had sold plans in the past, but never in the volume I had envisioned. He thought I was crazy, and fortunately Jay was crazy enough to go along, too. It would require that we change our paradigm. At the end of the year, we sold more plans in 2008 than in the past 6 years combined.
Many contributing factors proved successful. Jay's new designs garnered a lot of interest from our core audience. Those were released in our new portfolio. Additionally, Jay had greatly improved the detail of the plans, and we added pictures and videos of sample plans on our site.
We had experimented with our first workshop at the end of 2007. This was an emergency attempt to bring in revenue after sales dropped 70% in October and fell even more in November. The workshop didn't make any profits on its own, but I realized that it attracted the do-it-yourself crowd. And the plans purchased by the people who attended the workshop got me thinking about more workshops.
I set our goal for six workshops in different cities across America in 2008. We decided to do three in conjunction with Jay's Border-to-Border Tour in July. The Border-to-Border tour was conceived as a way to attract media attention and connect with passionate fans of ours who didn't live in our immediate area. The workshops were so successful that we added two more dates before the year end; and it was something that Jay really enjoyed doing.
The Border-to-Border tour had it is glitches, but proved a huge success. With the attention of the media, we landed a front page article on the New York Times, a CNN story, and a feature story on AOL's home page and Yahoo.com. In 2008, we also systemized our ability to handle press requests and deliver them the pictures they needed. All told, Jay managed approximately 100 interviews from media all around the world.
The new website didn't come without it is fair share of problems. Hillary was in charge of designing and building our new website, but she quit when we couldn't afford to pay her anymore. Can you blame her? After she quit, I basically locked myself in my tiny 40 square foot computer room each night for about 3-4 hours and programmed away. Two weeks later, we had a new website. The new site would not only look better, but would be easier to program. It was. For the next several months I tweaked the site this way and that way. One of our priorities was to improve the content so that we didn't spend so much time answering the same emails again and again. Slowly but surely, I fixed the site so that the quantity of emails declined 90%, and I could shift my time from answering emails to writing blog entries and adding more houses to the website. (Yes, this year almost all my time was spent on answering emails).
Looking back at the year as a whole, we achieved so many of our goals that we set out to conquer in 2007. Our new website was completed. Jay doubled the quantity of designs, incorporated downstairs bedrooms, and added a great deal of detail. We also made a taxable profit for the second year in a row - something that will prove to be very important for our plans for 2009 and beyond.
We're both proud and honored that in 2008 we had over 1,000,000 visits to our website. It is a number that's so large, I don't believe Jay or I can really even put our minds around it. If I had one word to describe Tumbleweed in 2008, it would be "transformation".
I'm writing this review at the end of 2008. Basically, I decided it would be nice to have an annual journal of Tumbleweed's growth process as a business.
When 2007 began, Jay was still running a solo operation. He was a one man show: designing houses, talking to the media, building houses, mailing books, and more. He hired the occasional assistant, doled out the basic tasks, but seemed to come up short when it came to meeting his real business needs. Jay and I had casually discussed partnering together; but the real change in thinking for me happened when Oprah called. In my mind, that was the turning point for Tumbleweed. Jay almost turned it down because he could barely handle the current amount of business. In the end, Jay appeared on Oprah, and I decided to join Jay in his quest to "dream big and build small" in March of 2007.
Jay is a wonderful artist and promoter, but hardly a business person. The first tasks were to get a hold on existing business and analyze what we had. And what did we have? Thousands of unanswered emails (mostly spam), 100's of unfilled book orders, and inventory shortages. We spent most of the year trying to catch up. And the backlog wasn't helped by the changes I made to the website in my first 10 days with Tumbleweed. Analyzing the pages customers were visiting (and more importantly weren't visiting), I instantly knew the website wasn't working for us. Using that data, I made about a dozen changes on our website and our sales doubled overnight. But there was still more to come.
We hired people, and dramatically improved upon the almost nonexistent customer service. It worked, and business doubled again. At the same time, we also identified the areas that we needed to improve. It was clear that our homes really struck a chord with people, but our books and website didn't convey the same sense of style. We set out on a plan to make a new website that was more beautiful, create at least 10 new designs to incorporate elements that customers were clammoring for, develop a new book, and improve the plans for all of our houses. Later in the year, we decided to experiment with workshops, too. We also hired a wonderful photographer to reshoot our houses, modified our website again, and haphazardly tried to improve anything we could. It all took much longer than expected, cost much more than we could have imagined, and proved to riddle us all with anxiety.
The year 2007 is forever etched in my memory as "The Year of Anxiety". Tumbleweed's potential was so enormous. We wanted to do so much, and it was so hard to make a plan and stick to it. It seemed almost impossible to talk to anyone without hearing ten great suggestions of how to improve our business. Managing all those ideas, including our own, proved to be a real challenge. We had to force ourselves to stick to our plans and build our foundation. In 2007, we laid the foundation needed to stay afloat. For a business that went from one employee to four almost overnight, we did a good job staying within our boundaries.
If "anxiety" describes the emotional memory of 2007, "foundation" describes the achievement.