when HiFi is just not an option

You see it done all the time, and it’s just so wasteful.

People take a bunch of perfectly good trash, and they just toss it in the garbage can.

Unbelievable.

The thing is, any time you create something, you’re going to end up with a lot of odds and ends, scraps that end up on the metaphorical cutting room floor.

What if you could sell your product . . . but then find a way to repurpose and sell the by-products of your product too?

Welcome to waste management 2.0

For our new Question the Rules course, Lee interviewed Jason Fried, founder of the software company 37signals. (That’s the company that makes a bunch of amazing products including Basecamp and Highrise.)

We were fascinated by something Jason had to say — a topic that he and partner David Heinemeier Hansson devoted a section to in their great new book Rework:

Sell Your By-Products.

For instance, here’s an excerpt about Henry Ford:

Ford learned of a process for turning wood scraps from the production of Model Ts into charcoal briquets. He built a charcoal plant and Ford Charcoal was created (later renamed Kingsford Charcoal.)

Ford could have just tossed all of that extra stuff that was thrown off while his factories were creating their product. After all, it was garbage, and the production of the Model T was all that mattered.

But he didn’t, and created a revolutionary new product — one that became a substantial profit center.

Creative recycling for creative types

If your first thought is that the by-product concept doesn’t apply to creative work, just look at the movie industry.

Every time they make a film, they shoot a lot more footage than ends up in the actual flick. Most of the footage used to end up on the cutting room floor, or maybe in the outtakes that they’d run over the credits of Smokey and the Bandit.

But today? The by-products of filmmaking are everywhere. Cut scenes and alternative endings help sell DVDs, or end up on YouTube as a way to promote a theatrical release.

Adding this formerly wasted material even allows the movie studios to create an easy upsell. They create two tiers of pricing for a DVD:

1. Customers can get the basic version. They can buy just the movie.
2. Or, for just a few dollars more, customers can get their hands on a more in-depth version, chock full of by-products — which is the stuff that used to be called “trash.”

The “waste not, want not” attitude is a choice you can make about any business. And once you decide to start looking at the “waste” you’re producing, you’ll find useful by-products everywhere.

Where to look for by-products in your own business

• If you’re doing creative work like writing or graphic design, how about recycling rejected client pitches?
• Can you take the effort you put into your cool custom web design and turn it into a more generic template that you can sell over and over?
• Can you take the interviews you do on a writing project and post the raw versions on your blog?

Keep looking and you’ll start finding useful waste everywhere. Even your vacations can end up having useful by-products.

Think about it: You go someplace cool, interesting, or beautiful. You eat some great meals and talk to interesting people. You take photos or shoot video of the things you see, and the people you meet. You do this because you’re into it. Because it’s part of what you do on vacation.

But once you’re in the recycling mindset, it’s easy to think of a dozen ways to use that stuff — the “leftover media” from your experiences. You could write travel articles, sell video clips, create “microstock” photo services, publish an e-book guide, or post a YouTube video that pulls customers back into your business. You could write posts on Yelp! Or Foursquare.

Maybe that sounds ridiculous. But smart, creative entrepreneur Chris Guillebeau does something very similar. He takes remnants and artifacts of what he loves to do (travel) and uses them to strengthen his business.

Take an inventory of your own creative residue, and you may find you’re sitting on a little gold mine. As Jason Fried points out, the book Rework is actually a by-product of running the business of 37signals. And that bit of “runoff” made the New York Times bestseller list.

Not bad for yesterday’s trash.

About the Author: This article is a by-product of the interview Lee did with Rework author Jason Fried as part of Lee & Johnny’s brand-new Question The Rules course. Did we mention it was going to be 75% off until Saturday? Click here to check it out.

(Editor’s note: We were so excited about Johnny’s new course, and proud of the great work done by one of our own regular writers, that we snagged an affiliate link for it. We’ve taken a sneak peek at the course and we think it’s a great resource for entrepreneurs who want to play a sharper, smarter game. Sonia will share more of her thoughts on Questioning the Rules tomorrow.)

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