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How to Launch a Business From Scratch Part 1: The Open loop Product Development Framework

The Open Loop Product Development Framework by Tom MorkesA couple months ago, I mentioned I was collaborating on a new business venture – a training platform for veterans.

Last week, we wrapped up the launch of our premium product: a veteran’s business mastermind.

Minimum price of entry: $3,000.

We now have a small group of veteran’s going through our program as well as 5 figures to kick-start building out new products and services in order to scale and grow the business.

This is just another example of the lean launch I wrote about several months ago, and another example of selling on proof of concept alone.

Over the next few weeks, I want to take you behind the scenes of how we did this, including:

  1. How we developed the idea into a shippable product (today’s lesson)
  2. How we developed a lean sales funnel (building an audience from scratch in less than a month)
  3. How we managed to more than quadruple industry standard conversion rates for a live sales webinar (or what I like to call: “The Coffee Is For Closers Technique”)

I’m also rolling this out as a video series.

Would love to know what you think in the comments below.  So once you finish watching, let me know!

What I discuss in Today’s video:

  1. Background on the idea and the project itself
  2. How we fleshed out our idea, refined the vision and scope, and eventually launched our premium product
  3. The 8 steps of The Open Loop Product Development Framework

A Brief Overview of The Open Loop Product Development Framework

Every business, product, invention, whatever – starts with an idea.

The idea’s not the hard part.

Forming the idea into a shippable product is.

The Open Loop Product Development Framework approaches product  development (and when I say products, I mean in the broader sense, including services) from the angle of progressive refinement.

In other words: every element of what goes into developing a successful product (or service) is interconnected. Every element affects every other element.

If you change the customer segment, this will affect your marketing and sales channels, and possibly your problem and solution.

If you decide to charge more for your product, this changes the revenue model, which directly affects how we define the problem, who our first customers will be, etc.

Hence: open loop.

The 8 Steps of The Open Loop Product Development Framework:

Step 1: Identify your first 10 / first 100 customers

Step 2: Determine if this a real problem / pain people have (and are willing to pay to fix)

Step 3: Define the solution (product / service ) you’re offering

Step 4: Define your unfair advantage (why should we pay attention to you? what makes it impossible for someone to copy what you’re doing?)

Step 5: Identify how you will reach your first 10 / first 100 customers

Step 6: Determine revenue + expenses (how much do you plan to make from this? is it worth your time and effort?)

Step 7: Set a ship date

Step 8: Go back through steps 1 – 6 several times before the vision is refined (don’t take longer than a couple days) then start building your product / service / offer

Was The Open Loop Product Development Framework Useful?

If so, let me know if the comments below.

And also let me know:

  1. what else you’d like to read?
  2. what other information would be useful?
  3. what could be explained in more detail?

Check back next week for an update on how we developed our lean sales funnel and built an audience from scratch in less than a month.

Started, finished, and shipped in Denver, Colorado

Soundtrack: Bon Iver Pandora Station

Total writing and filming time: 5:40 hrs

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Business Building Toolkit

Play

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Morning Brew in Kailua

I first spotted Abstract Magazine in the wild when I was ordering a coffee from Morning Brew in Kailua Hawaii.

Next to the counter was a small stand with a bunch of bright, hot pink magazines.

The style was so bold I picked one up to browse through it.

I was so impressed with the magazine, from the artwork, to the physical design (it felt great in my hands), to the content of the magazine, that I had to buy one for myself.

I asked the barista “how much?”

“Nothing – it’s free.”

I was floored.

So I did the only logical thing I could think of: I hunted down the managing editor, Richard Melendez, to figure out how they did it.

What Richard Melendez and I Talk About:

  • The origin of Abstract Magazine
  • How Abstract relies on up and coming artists and writers to create this amazing publication (and believe it or not: they are all volunteers!
  • How they were able to spread the magazine so rapidly throughout Hawaii
  • Why they decided to produce a physical print of the magazine when digital can be so much cheaper
  • The development of a creative incubator to produce Abstract
  • And much, much more…
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Where You Can Find Richard Melendez (and Abstract) Online:

www.facebook.com/abstracthawaii

@abstracthawaii

www.abstracthawaii.com (coming soon)

www.instagram.com/abstracthawaii

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If you enjoyed today’s podcast, please leave a review on iTunes here. Thanks so much in advance for your support.

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Me jumping off a bridge in Ecuador. It has nothing to do with this blog post but it still rocks.

This past June, my wife and I spent 15 days exploring Ecuador.

Unlike the other countries we visited this past year, our Ecuador adventure involved a lot of bus travel.

On the plus side, Ecuadorian bus travel is cheap.

We traveled by bus from the Pacific Ocean to the Amazon jungle, with a couple stops in between for good measure, all for less than $100 USD.

On the not-quite-plus-side, the bus system is entirely unpredictable and you never know how many buses you’ll need to change to get to a particular destination.

On one such night, after about 6 hours of travel (with a few more hours to go), we found ourselves stopped at a standard Ecuadorian bus stop:

  • Old ladies working in kiosks selling laffy-taffy
  • Bathrooms you have to pay to enter
  • And a bus terminal “exit” tax they levy against you when you leave (which I guess means if you don’t pay, you can’t leave the bus station…)

As we waited for our next bus, we came in contact with two other gringos; a couple taking a 2 week vacation in Ecuador. They had spent the past few days in the Galapagos and were now headed to the Amazon jungle.

“Perfect,” I thought, as we were also on our way to the Amazon (and if there’s one thing my Human Geography studies have taught, it’s that foreign travel is safer in packs).

So we got to talking the usual traveler’s talk:

  1. Where have you been?
  2. Where are you going?
  3. What place have you liked the best?
  4. What’s after this town / country / continent?

And of course, once these questions come to an end:

  • What do you do?

Our new acquaintances were grade school teachers. They spent the past year saving up for this trip and in about a week they were headed back to the States to teach and start saving again for another trip.

When it was my turn to answer, I told them I do a little teaching myself – on topics like pricing, lean startup, and business growth hacking – and that I basically collaborate on various projects and publish books for a living (my own and others).

“What school do you teach at?” she asked.

I don’t – I teach from a platform I created. It’s entirely online.

“So who do you work for?”

No one. I created the platform myself. I’m my own boss.

“Well, what books have you written?”

I mentioned one of my books, The Complete Guide to Pay What You Want Pricing, and told her it’s all about an unconventional pricing technique that helps people increase their reach, impact, and sales.

“What makes you the expert?”

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It’s been months since this interaction, but the question still comes back to me from time to time:

What makes you the expert?

There are dozens of socially acceptable answers to this:

  • I have multiple degrees in the subject matter…
  • I have over 30 years work experience in the field…
  • I won an award from a foreign or east coast institution for my work in this area…

But here’s the thing:

It doesn’t matter.

And I’m not just saying that because I have none of the above…

I’m saying it because it really doesn’t matter – not to you. Not to your work. Not to your life.

“What makes him or her the expert?”

This question is irrelevant.

But there is a question that does matter. It’s the same question I asked our Ecuadorian acquaintance after she asked me what made me an expert:

“Why aren’t you?”

As in:

  • Why aren’t you the expert?
  • What’s stopping you from being considered the go-to, subject matter expert in your field?
  • Why haven’t you shipped anything (book, blog, business, whatever)?

Because I promise you this: it has nothing to do with degrees, or awards, or “dues paid”….

But it does have to do with your actions…

Today, tomorrow, and every day for the rest of your life.

And while you don’t have to justify or validate your actions (you shouldn’t), you do have to start.

So maybe the better question is:

“When?”

I hope the answer is today.

Started, finished, and shipped in Denver, Colorado.

Total writing time: 3:41 hours

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