What I love about my career is the learning curve. Every opportunity is a learning opportunity. Over the past decade in business, I gathered a great deal of knowledge on the [ do’s ] the [ don’ts ] and [ everything-in-between ].
My lessons come from various sources; mentors, books, my business partners, my staff, local entrepreneurs, superstar entrepreneurs like Musk, Thiel, Jobs and from the grind in the real world of business.
I want to share 3 valuable lessons hoping that it might prevent someone from making avoidable mistakes.
So many entrepreneurs are fooled into starting businesses when they are clearly unprepared. We often hear people say – ” Don’t think about starting a business, just start. ” or ” The best time to start a business is now”.
This is bad advice. Stop, take time to think and sharpen your approach first.
Sell your product before you build it.
Building a product before you sell it, is like going to war with fragile weapons and no knowledge of the landscape. You are totally unprepared, ill-equipped and failure is imminent.
Sell your product before you build it.
Make sure you understand this statement, read it again. Sell your product first, before you build it. Most entrepreneurs [ including me in the past ] jump right into building their ideas into products before really selling the idea first.
Sure, friends and family members praise your idea and convinces you it will make lots of money. However, they are not the ones that have to pay you without even knowing you.
Take your idea, get a professional brand designed for it, and a really good product pitch, and go line up your first 30 clients through marketing. Not your immediate network, market to the open world and find 30 clients that are willing to spend x amount on your product. This way you will learn about what the market really needs, you will answer most of their questions in your final marketing material and you will be 100% prepared when you launch the real thing.
Once you do that, thank them for it and give them life time guaranteed free use of your product, this way you won’t disappoint them, you will win their respect and trust instead. Once you have 30 clients willing to pay for your product, you build it. If you need to raise funds to build your product, it will be much easier now that you have your first 30 clients and proved there is a market that needs your product with a willingness to pay for it.
Many entrepreneurs with completed products struggle to find 30 clients. Limit your risks.
Price your product around what people are willing to pay for it
Forget about how much money you want to make or how much you revenue you need to pay off your investment. The pricing of your product or solution has nothing to do with you or your debt.
Pricing is all about what value your product or solution delivers and what people are willing to pay for that value.
The margins people are willing to pay for products and tools are very tight. The distance between a hit or miss is minuscule . Too expensive, people think to hard about it. To cheap, they doubt the quality.
In my experience, talk to as many of your future clients as possible, and base your pricing on real data and market research. Find out what are people’s pains and what they will be willing to pay for your cure.
Your offering needs to be a 10 times multiplier
This is one of the most valuable lessons I wish I learnt much earlier in my career.
Hardly any idea is something new. Most ideas are a better or cheaper way of solving a problem that someone else is already solving. So if your idea is just a bit better, or slightly different or better priced, you won’t make it.
All the critical problems for both business and consumers are already solved, which means that people would need to cancel their existing solution and jump ship to yours – for some companies this could be a massive event at astronomical cost.
For people to jump ship to your solution, you need a 10 time multiplier on your competitors.
Either 10 times cheaper or 10 times more features, or simply just a 10 times better solution. The fact is, your target audience need to look at your product, compare it with other solutions and you have to be the obvious choice, by a mile.
A better idea does not mean people are going to buy. Listen to advice, but far more importantly, distinguish and cut out the noise.