Entrepreneurs often ask, “How do I make sure that an idea is going to be viable in the marketplace?” During this episode of Freedom Fast Lane, Ryan Daniel Moran answers that, along with the common question, “How do I take my business in a different direction and make sure that direction has merit?” Pat Flynn joins Ryan to answer these questions and discusses how to get paid up front for a product before it exists.
By following a methodology Pat talks about in his new book, Will It Fly?, we can identify how to mitigate risk when taking on a new business decision, whether it be releasing a new type of product to our existing customers or releasing a new product to the marketplace without any foundation. There are ways to ensure the new has a desire in the marketplace. It can be tested by having people vote with dollars.
Is it ethical to charge money for information that is within your head?
This can come from a customer base if you are already selling on Amazon and taking regular sales. It could also be that you are posting your content in places where other people are seeing it who themselves have a large audience.
Pat’s overall goal is to be the entrepreneur who is on the leading edge and able to discover things before everyone else, along the lines of Gary Vaynerchuk. He admits for a while he didn’t believe he was worthy of selling information, but wants to be the trusted advisor for his audience. For a lot of people, it takes multiple touch points and value opportunities before someone transacts and pays you back. Due to a mind shift over the past year, and having come from a scrappy beginning, Pat has more of a CEO mindset. In order to grow a long-term business, it’s important to have your own assets and be confident in selling.
The Fear of Selling
Many people don’t sell because they are afraid of selling. The reason there are ‘wantpreneurs’ is that people believe they need more information, fear no one will want to buy their things, and wonder what their value is in the marketplace. However, there comes a point where you are doing your audience a disservice by not selling, as people want to pay you back, and you are not giving them the opportunity. If you are putting out good things, money will show up because people are voting for the concept with their dollars. The transaction is the vote, but you have to deliver on that.
The Big Shift
Members of Pat’s audience told him that he wasn’t helping as much as he should because he didn’t have something to sell. However, Pat believes the greater the fear the greater the reward on the other end, so he uses nerves as an indicator that he has to keep going. Generally, the results are stronger than the fears.
You don’t have to dive into a new empire on day one. Instead, simply test on a small basis so you can be confident when it goes full scale. Get validation in the marketplace and have people give you feedback. You can run controlled experiments with sample sizes of your target audience to understand how the market will react to what you are doing. Validation has to happen in a way that you need to get customers to pay you up front before you build your idea. That is how you will know for sure if this is something you should continue to do. You should never build something based on assumptions or what only you think. The bigger mistake is when people get validation through what people say rather than what they do.
Build a Hyper-Targeted Beta Group
You can get in front of audiences that are not your own and use them as a beta group. Have people pre-order your idea, and be honest about having not built it yet. The price doesn’t matter at the validation stage; it is more about whether or not the person is willing to pay for it. You now have a group of early adopters who can influence what that product becomes, so you can build it in a way that it is meant to be built for them instead of guessing.
This platform provides a great validation method, but it does come with some cons such as it’s not a controlled environment. You could drown in the required fulfillment. The pro is that through the process of building, you stay in direct contact with the audience.
If you go through the process and discover you didn’t get enough people to get behind it, then refund those people or reassess and deep-dive, and question those who didn’t pay and ask why. This will help figure out the problems and allows you to reconsider.
If you can’t validate an idea with your list of customers, then that idea won’t work at all. Someone who is cold and doesn’t know about you and the brand isn’t going to buy it if your raving fans won’t. Take advantage of the email list you’ve already built.
How many people do you need to pay to get the green light to move forward? It’s actually not that many. The 10-15% range seems to be the magic number.
Thoughts are projections in your brain made to keep you safe and mean nothing about what is true in reality. What is true is what people vote and pay for. You will never know your true capability until your idea is tested and validated in the marketplace.
The Process for Feedback
Refine and define the idea. Even though it sounds counter intuitive, make sure to talk about your idea. Keeping your ideas to yourself can at times harm you. The benefits of sharing your idea far outweigh keeping your idea a secret. You need people to look at your idea from different angles and poke holes in it so you can make it better. The more you discuss it, the more it becomes real; the more real it is, the more likely you are to take action on it.
Your Market Map
- List all the places where your target audience exists.
- Who are the influencers that have already earned the trust and authority?
- What is being served to the audience already?
- What are they paying for?
- How much are they paying?
The above tool provides you with ideas on where you can advertise and guest post, as well as a list of people whom you should build relationships with on social media and at conferences. The market map also shows what products to look at as an affiliate and to further understand the market.
Links to Resources:
Will It Fly? (book)