A ten-million-dollar business run on two numbers
Derek Sivers didn't set out to build a company. He tried to keep one from happening — and the constraint became the model.
Derek Sivers was a working musician selling his own CD online in 1998 when friends asked him to sell theirs too. He didn't want a company; he already had the life he wanted. So he wrote down a distribution deal designed from a musician's point of view: keep every artist listed no matter how few copies they sold, never let anyone pay for better placement, tell artists exactly who bought their music.
The pricing was almost an afterthought. He charged a $35 one-time setup fee and kept a flat $4 cut of every disc sold, whatever price the artist chose to charge. That's the whole model. Six years and roughly ten million dollars in revenue later, those were still the only two numbers running CD Baby, which grew to represent over 150,000 independent musicians before Sivers sold it.
He later put it plainly: a business plan shouldn't take more than a few hours to write. The instinct to make it complicated is usually a way of avoiding the harder question of whether anyone actually wants the thing.