For a step-by-step path to creating, marketing, and launching your first five or six figure product, read: Collaborate: The Modern Playbook for Leading a Small Team to Create, Market, and Sell Digital Products Online.
In the fall of 2013, I resigned my commission in the US Army.
It was a pretty great moment, I’m not going to lie.
For the previous 9 years, I had been part of an organization that wouldn’t let me go a day without shaving or tucking my pants into my shoes...
But no more.
I was free.
During the last few months before I officially left, I got a lot of questions, usually on the topic of "what’s next?"
“Not sure, but something big,” I’d say.
(and my battalion commander and peers would roll their eyes…what was bigger than what I was already doing?).
Fast forward 8 months and I’m sipping a doble espresso con crema at a side café in Buenos Aires, Argentina (home of black market currency exchangers on every street corner, Madonna’s musical Evita and Johnny Rico), and I’m writing this essay in gym shorts and a 10 day old beard.
Most Argentinians probably see me and think: beautiful American.
But that superficial analysis doesn’t tell the whole story (except for the living the dream part…check).
Because from that little computer (not a Mac), I was making online alchemy happen.
In fact, just two weeks ago, in a side café much like the one I’m currently in (except from South Africa at the time), I was doing something I was pretty sure was IMPOSSIBLE…
From my location-independent office (coffee shop with wifi), I was launching a brand new company (a remote, business incubator program).
We were just closing up the doors to the program, accepting the last couple entrepreneurs into the program, and the numbers were in…
We cleared $41,000.00.
What our team looked like after the final sales push:
* * *
But Tom, how can you launch a business from a coffee shop!?
Don’t worry, I’ll feed you baby bird…
There are a number of things that are remarkable with this launch.
Beyond the decent dollar amount we brought in (not the biggest online launch I’ve read about, but enough to validate our business model), and the fact that we were able to launch it from anywhere in the world (I was in South Africa, my partners were in the USA, and our customers were from around the world) we also:
- Launched the program as Pay What You Want, letting people choose their contribution amount based on how they valued the worth of the program (to my knowledge, this has never been done before)
And arguably even more impressive, and what I want to teach you today:
- Launched the program in less than 30 days with nothing more than an idea
Yes, it’s possible.
Yes, we did it.
And yes, you can do it too.
Today, I’m going to share with you the exact strategy and techniques we used.
Today, I want to focus on profitable idea creation theory and practice.
In other words: how do you create an idea that is MARKETABLE (i.e. one that has a good potential of making money)?
In the next article in the series, I'll cover the launch itself (how we got people to find us and buy our idea – the actual practical steps of creating the sales page, the sales funnel, the sales copy, etc.), and the week after that: how we leveraged initial success to build out our program (think: scaling)
If you have any questions, just post a comment below.
Here we go:
The Profitable Idea Framework
Step 1: Start with a Problem, not the Solution
I’m not going to spend much time on this one.
It’s fairly self-explanatory - but not common practice.
I get emails all the time from people asking for advice on an idea they have. The problem is, they’re coming to me with a solution. Usually a version 9.0 vision they’ve been pondering for a while.
The reason this is a problem is because they started backwards. When you come up with an idea for a product, service, or fully-fleshed out whatever, you’ve skipped over he most important part: the real problem or pain that needs fixing in the first place.
If you want to build a passion-based business – or any business for that matter – you need to start with a problem.
What’s broken? What needs fixing? What would people PAY to have fixed?
That’s all business is: fixing problems.
It’s not any more complicated than that.
No, it doesn’t matter if you think it’s a good idea (more on this below).
All that matters at the start is that you begin with a REAL problem that needs REAL fixing (and there are already people paying to have this problem fixed…don’t go inventing problems, there are enough in real life already).
Step 2: Kill Bad Ideas…FAST
A lot of people have a lot of good ideas.
A lot of good ideas either:
- Don’t go anywhere (probably cause they’re not good ideas)
- Die at launch (because they’re not good ideas)
Now I’m not talking about hobby projects.
If you have a great idea for a hobby or something you’re passionate about, go for it. Doesn’t matter if other people like it. Do it cause you enjoy it, enough said.
But if you want to build a business from your passion (what we’re talking about here today), then it’s important to understand that if people don’t want your idea, they won’t pay for your idea, and your great idea really isn’t a great idea.
So we need to kill bad ideas as soon as possible in the product launch lifecycle, otherwise we risk wasting time and money (the grim reapers of business).
So step 1 is to kill off all your bad ideas – fast.
- Sketch out your idea (wireframe, model, diagrams, notes, whatever – enough so your average public school 7th grader can understand it).
- Show your idea to the people you want to sell it to (marketers sometimes call this group your ‘target demographic’ or ‘ideal customer’ – doesn’t matter. It’s the people you intend to sell to in the near future).
- Ask if they like it.
1 of 2 things will happen:
- They don’t. In which case, either modify the idea and bring it back to them, or scrap it and create something new.
- They like it.
If they like it, move onto step 3.
Step 3: Progressively Validate the Surviving Idea
Now here’s the important part…
If they like it – do NOT build it.
That’s what amateurs do.
Someone gives them a pat on the back for their idea and they go into full production mode.
Pretty soon, their home is filled with thousands of Kitten Mittens and no one is buying.
Yes, it’s a great idea. But it doesn’t matter unless people buy.
I’ve done this myself before, and I’ll let you in on a secret: it never pans out how you want it.
No, what you need to do after someone tells you your idea is awesome is VALIDATE IT.
In other words: give them the chance to buy it.
As in – put money into your hand for your idea BEFORE you create it.
This technique is nothing new. It’s basically a glamorous way of saying: get preorders.
Most ‘lean start’ businesses, especially in the software world, use this idea to validate their ideas before they spend years building something.
But it also works for in person events, physical products, services – you name it, you can probably get a preorder.
I used preorders for my book The Complete Guide to Pay What You Want Pricing, where I offered nothing more than a concept of what I was building and was able to bring in enough money to validate building it.
I've since gone on to do this with a half-dozen businesses, books, products, services, and more.
For the business in question, we did the exact same thing but in a bigger way.
This required a more methodical, scaled approach to validation, which I’ll explain below…
Case Study: Progressively Validating Our New Business Idea
Okay, so sometimes you can’t sell your idea right on the spot.
Sometimes, you have to build at least a portion of it before you can truly judge if people will want it (and before people are willing to pay money for it).
This is where progressive validation comes in.
Just because people won’t put down $10k for your idea right now doesn’t mean you should build it then try to sell it.
This isn’t the 1950’s anymore.
Nor does it mean you should scrap the project.
Instead, you should systematically and methodically validate your idea as you build it.
Progressive validation is all about surgical risk mitigation.
At EVERY stage of the product development lifecycle, there is at least one primary risk (usually is takes the form of a major assumption) that could destroy our chances of a successful launch if we do not mitigate it.
The primary risk at the outset of any business or creative venture is the idea itself.
Notice the major assumption we talked about earlier: the ‘great idea’ assumption.
What is great? How do we define and measure great? Finally, how can we be sure it’s great?
When it came to our new business, we wanted to build a premium, remote, business incubator program (with a specific focus on what we call "heart-centered business").
We must systematically challenge every assumption here.
First, what is the pain or problem we’re fixing?
- People want to build a business but lack the resources, mentorship, and guidance to ship their idea successfully.
Can we validate this statement?
- Yes, there are dozens of incubator programs all across the country. We know this is a real pain that people pay to have fixed every day (and new incubator programs are popping up all the time).
Second, heart-centered…do people care about building businesses that they’re passionate about, or do they only care about making money?
- We validated the concept of our heart-centered business idea over the course of several months simply by writing about it on our blogs and having conversations with other entrepreneurs. We also paid attention to similar heart-centered offers on the market and realized people wanted this stuff (and would pay for it).
Note: we took our time building our individual platforms (this blog, for example), which was validation that these topics are important to people. But you could expedite the process by methodically asking questions and researching competitors in your industry. You could do this in less than a month, easy.
Third, are people willing to pay a PREMIUM for an incubation-style program?
- The Foundation is a fairly popular SaaS development program. They charge anywhere from $5k - $10k. Yes, people will pay a premium if they believe they will get results. We developed our program using theirs as our competitive standard.
Step 4: Launch Your Minimal Viable IDEA
*note: the last step – progressively validate your idea – is something that is ongoing. You should constantly be validating your project as you build it.
For us, once we did our research and realized there was potential for such an incubation program, the next step was forming it into a sellable idea.
This section is quite big, so I’m going to leave this for next week.
Next week, we’ll take a look at:
- How to create a heart-centered business model in under 17 minutes (the exact model and technique we used)
- How to form your idea into a sales offer that your ideal customer can’t refuse
- How to build out a sales page that converts readers into buyers
- How we built all this in under a week with very simple and accessible tools
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