Since its founding in 2009, Uber has grown to be valued at more than $18 billion.
It's one of the fastest growing startups in the world.
Here's what that looks like, relative to other major tech startups (and their billions in value):
If you're not familiar with Uber, they're a ride-sharing company that allows people to easily grab a ride in most major cities across the United States (and abroad - I used an Uber in Amsterdam just a couple weeks ago).
But unlike a traditional taxi cab service that has a ton of overhead (the vehicles themselves, the structures to park and service the vehicles, the union workers, etc.), Uber simply uses technology and software to connect the dots between the owner of a car who wants to make some extra money and the the person who wants a simple, clean, painless ride to the airport.
Great idea, sure, but that doesn't explain the rapid growth rate.
What does begin to explain it is Uber's clever marketing and viral referral program...
I love the start of a new year.
The desire (and energy) for positive change; the ideas that become goals (and eventually reality); the seemingly limitless opportunities that beg us to step up to the plate, at least to give it a try...at least this once...
The beginning of every year is a time when aspirations collide with unconquerable optimism in a beautiful, chaotic, hopeful cluster bomb of goals, timelines, and determination.
There's something palpable about it for me, and I love surrounding myself with people who lean into this energy and funnel it into their projects for the new year.
That's why I love reading year end reviews of my favorite personalities, brands, and people, like:
I’ve found that transparent, in-depth year end reviews have serious gold buried in them – the kind that can help the rest of us take our personal and professional goals to the next level.
That’s why today I wanted to share my own year-end review, or what I like to call the 2014 After Action Review. (more…)
On Monday, November 11th, I’m launching a new book about collaboration.
I’ll be using a platform known as Publishizer.com to crowdfund the book.
Publishizer is a lot like Kickstarter, but for books.
If you’re not familiar with Kickstarter, it’s a crowdfunding platform that allows artists, writers, entrepreneurs, and creators of all types to pre-sell their idea before they build it.
Crowdfunding is powerful because it allows creators to put an idea out into the world, and if our happy readers like it, they can choose to support us and help us bring our ideas to life.
The benefit to the creator is obvious: no more spending months or years working on a project just to find out nobody cares.
With crowdfunding, we know immediately if this is a project worth pursuing.
But crowdfunding on a platform like Publishizer doesn’t just benefit the creator. (more…)
How can you turn an idea into a business:
That’s what Jon Nastor, ex-punk rocker turned entrepreneur and founder of Velocitypage.com, wanted to know.
And for the past 12 years, Jon has been actively answering this question.
Here’s a direct quote from Jon’s Clarity.fm consulting page:
I have been an entrepreneur for 12 years and full-time online for 3. I have built, from the ground up, 6 different SaaS products --- all with zero technical ability. I have built multiple businesses from zero to $45k/month+ recurring revenues, with no debt and no financing.
How is this possible, though?
Conventional wisdom tells us we need to master the skill or trade we want to make a profession out of, or that we need lots of money or financing to build something profitably.
But here’s Jon, a person who self admits to having “zero” technical ability, yet he’s started multiple businesses with no debt or financing.
What is Jon doing differently that allows him to succeed where so many others fail? (more…)
Learn how to sell anything (that’s worth selling) in this 7 minute video that film critics everywhere are raving about*:
*I can’t confirm nor deny this statement.
Last month, I led and shipped a collaborative business project - a business training platform for veterans.
Two weeks ago I explained how I thrashed the idea using The Open-Loop Product Development Framework. This allowed us to outline and wireframe our product and specifically how we’d intended to launch it.
Last week, I explained how we developed our lean marketing funnel by using The 1-1-1 Product Launch Method. This let us build out the entire sales funnel to drive potential prospects to our product offer.
Today, I want to talk about how we presented our offer.
Let’s get to it:
In 2014, I collaborated on and launched a 5-figure business.
What started as just an idea several months prior culminated in a launch that brought in $40,000+, allowing us to fund our operations for the foreseeable future and take our business to the next level.
In part 1, I wrote about “The Open Loop Product Development Framework” - a process I use to thrash an idea until it’s clear.
What exactly needs clarity?
“The Open Loop Product Development Framework” allows us to systematically find this clarity as we thrash and build out a basic (but useable) business plan.
The fundamental principle of “The Open Loop Product Development Framework” is this:
Great ideas don’t matter without great execution.
At this point, you have a clear idea of:
Now we need to focus on turning this basic outline into a shippable product.
In next weeks blog post, I’ll explain in more detail how to build a product wireframe you can sell on proof of concept alone (as well as how to sell it). Today, I want to focus on building everything around your offer - the stuff that determines if your product or service ends up a success or failure.
In other words: how to create a sales funnel.
For a more in depth look at building a team and shipping a product to market, checkout Collaborate: The Modern Playbook for Leading a Small Team to Create, Market, and Sell Digital Products Online.
Last week, we wrapped up the launch of our premium product: an intensive business mastermind.
What's a business mastermind?
In our case (although they aren't all created equal), think of it like a 6 month 'a la carte' business training program + personal mentoring led by some of the most successful entrepreneurs online (think millions in listeners, views, and in some cases: revenue).
Minimum price of entry: $3,000.
A steal for the value (less personalized programs run upwards of $2k - $3k per MONTHS), but expensive as a one time purchase nonetheless.
Last month I got an email from a friend. After 6 months of hustle, she's throwing in the towel. Why?
I felt bad. I hate seeing people fail. I hate it even more when a project fails that hasn't been properly tested in the marketplace. In my friends case, she had only tried one option. It didn't work. Surely there's a better way...
Granted, not all projects are worthwhile. Some simply aren't economically viable.
Others might be able to sustain themselves through whatever means (force, trust fund, etc.), but to what end (the excruciatingly slow death of the postal service comes to mind)?
But the reality is: you can't know whether a project is worthwhile from the first failure (not if you want to eventually build something that lasts).
So I told my friend that she shouldn't shut down just yet. Instead, she should pivot.
Last month I helped launch a product that did $41,000 in gross revenue.
While the launch was a success, the remarkable part isn’t the amount we brought in (I’ve seen bigger launches).
No, what’s remarkable is the process we used to get it off the ground.
You see, most business product development cycles go through a standard process:
They save the launch (and the profit) for the end.
It can work, but it leaves the entrepreneur exposed to a lot of risk:
Do stuff the old fashioned way, and you'll feel like this guy when no one shows up to buy:
* * *
The interesting part of all this is that it’s actually possible to mitigate the risk of most big ventures, but you have to flip the process on its head:
This nonstandard process puts all the pressure at the beginning: validating your idea with a product launch. There are certainly drawbacks, which we’ll discuss later, but as a product development process, it mitigates the greatest risk to a new enterprise:
It lets us know right away if we’re building something worthwhile (something people want and will pay money for).
This is exactly what we did for our business incubator program, where we brought in $41k from the sale of an idea and a promise.
By selling the idea before you build anything, you save time and money and mitigate the riskiest parts of a new venture. [share]
And in the following sections, I’m going to show you exactly how we did it so you can do it yourself.
But before we get to the meat of it, we should start by debunking a few misperceptions…
If you read a lot of business books or are in a startup yourself, you might be thinking all we did was apply the Lean Startup to our business.
While that’s partly true, it misses the main point.
Let me explain:
The Lean Startup is a process for efficiently creating a new business (Silicon Valley tech startups in particular) by reducing waste (waste of time, money, etc.) through a focus on validation (real world confirmation that our ideas are correct).
Here’s a really simplified example of how it works:
Step 1 – form hypothesis: if we email our list 10 times a day about product X, we will increase total sales of product X*
*note: the hypothesis is usually based on some sort of fact or experience, not just pulled out of thin air like this one was…
Step 2 – test hypothesis: ACTUALLY send out 10 emails a day; measure sales.
Step 3 – confirm hypothesis: Did it work? Yes / no. If yes, optimize. If no, test something new.*
*bonus points for identifying side effects (in this case, probably a lot of unsubscribes and hate mail).
Step 4 – iterate: Now continue to use this same structure to test ideas in the marketplace.
It’s a little more methodical / scientific than that (sometimes), but you get the point. Instead of just doing things on a hunch or because something seems like a good idea, lean startups take more time to develop their ideas into testable hypotheses.
The process is really powerful and is the standard for tech startups and SaaS businesses.
But what if you’re not a Silicon Valley startup?
What if you don’t have the benefit of seed funding to test and validate to your heart’s content? What if you have mouths to feed, real expenses to pay, and this ‘idea’ doesn’t have the benefit of yearlong tinkering?
Is there another way?
I’ve been studying lean methodology for the past couple years.
When I say study, I don’t mean watching TED talks and sharing them on my Facebook feed.
I mean reading, analyzing and actually applying it to my business and products.
When I wrote The Complete Guide to Pay What You Want Pricing, I did something similar. I wasn’t writing just to write (that’s what my blog is for). No, I set out with the intent to create something people wanted and would pay for.
I did this by finding a topic people loved (through progressively validating the idea one blog posts and guest blog post at a time) and lean launched a book back in November.
When I launched Insurgent Publishing, I didn’t have a lot of money or time. I needed to validate from the beginning – otherwise the idea was as good as dead before I ever started.
I progressively validated the idea by crowdsourcing the solution for our first product (as in: I got people to contribute to the first publication – The Creative Entrepreneur), launched a lean pre-sales campaign, and finally finished and shipped the journal on 1 January.
Now, with our new, in-person business incubator program, we wanted to take the same principles we had been using for the past year, but with one major difference…
We wanted to apply the lean startup process to a premium product – one with more overhead (read: $20,000 minimum).
This meant people would be pre-ordering something for $10,000 not $10…
A big difference.
Question is: would the same techniques that worked to launch a $10 product work for a $10,000 product?
The Lean Launch (a term I think I just made up) takes the Lean Startup methodology and applies it directly to product development.
In the same way that the Lean Startup seeks to launch a business quickly and efficiently, a Lean Launch seeks to launch a single product as quickly and efficiently as possible.
Taken to its edge, the Lean Launch is the process of selling an idea BEFORE you build it. [share]
For my purposes, product here is a broad term. The product we’ll be talking about in this case study is an in-person business incubation program (a product / service hybrid).
It applies equally to:
If you can build it, you can sell it before you build. [oh man, that was nasty. Tweet it]
The Lean Launch is a practical methodology; a series of steps you can apply to any idea to sell it BEFORE you build it.
It’s not a new concept.
Think of it like presales but on steroids, or running your own personal Kickstarter (but without that silly platform taking 30% of the profit or whatever).
The point is, it is more than possible to get people to buy something that doesn’t exist.
It happens all the time, millions of times a day.
And I’m going to show you how it works.
Most people probably think I’m crazy for what I’m suggesting (I am a little)…
Or they see the benefits to selling before you build - in theory - but the idea of putting it to work escapes them.
If that’s you – you’re probably thinking too much, or you’re thinking too directly about your specific situation.
For just a moment, don’t think about widgets and applications and software. Instead, consider some other area like politics. The majority of people buy into what their representatives / congressmen / presidents say with their vote and / or campaign contributions. But for what?
For the promise that they will get X, Y, or Z (less taxes, more jobs, a cleaner environment, whatever)
When it comes to selling a proposed product or service, same rules apply (although in my case and yours, there are repercussions if we don’t follow through...wink wink).
Another important thing to consider: you’re not selling to everyone.
In fact, you’re purposely NOT selling to everyone.
Instead, you’re selling to a select few (very few) early adopters. Passionate early adopters. The kind of people who are already seeking what you’re building and are will to buy on proof of concept alone.
Last week, I took you through my Profitable Idea Framework:
Step 1: Start with a Problem, not the Solution
Step 2: Kill Bad Ideas…Fast
Step 3: Progressively Validate the Surviving Idea
Once we’ve taken these essential first steps, it’s time to create a sellable idea. For that, I’m going to walk you through section 2: the Minimal Viable Launch Blueprint.
This is the same blueprint I use for every launch, from books to consulting services to conferences, to you name it.
So take out a pen and paper, bookmark this page, and let’s get to it:
Notice how we don’t create a business model until AFTER we’ve progressively validated the idea (no sense in building a business model for every great idea you have).
Also notice that it should take you no more than 20 minutes to create a working business model.
For The Flight Formula (and every project I’ve ever worked on), I use Ash Maurya’s Lean Canvas as a framework (check it out at www.practicetrumpstheory.com; and if you like this material, buy his book: Running Lean). Ash’s Lean Canvas is excellent in that it’s a one page business model that hits all the essential elements of a new (and existing) business.
And it works even better when you focus on just one product or service (which is what we’re doing for our lean launch).
Your 17 Minute Back-of-Napkin Business Model should cover the following essential areas:
This took us less than 15 minutes to make but gave us enough of an idea to start building-out our minimal viable idea:
Barring any major issues (reference #6 and #7 above), this one business model gives you EVERYTHING you need to get started. More importantly, it lays out the core of what you’re creating, so if you’re ever stuck and wondering what to do, you can reference this business model to see if it fits.
Once we have the business model, it’s time to sketch out the essential pieces.
Wireframing is both art and science.
When I say build the wireframe, I mean create an outline and a skeleton for the essential pieces of what you’re creating.
At a broad level, this means outlining:
Wireframing also means outlining the product or service itself in great detail.
When it came to The Flight Formula, we created pages of organized outline. We broke things down by day, by event, by goal, etc. Having our event wireframed in detail allowed us to craft a comprehensive sales page quickly and efficiently, and allowed us to sell the idea with confidence (we knew exactly what we intended to build). If you were to look at our wireframe for the event, you’d be able to picture exactly what the incubator will be like from day 1.
A meticulous wireframe is not an option.
You need to wireframe out your product or service in detail so you can create your marketing campaign and sales page (if you’re using one), and ultimately: to sell your idea.
Final warning: do not skip the wireframe.
This part is tricky because once we have a great idea, our natural tendency is to start building everything.
But the reality is, you don’t need to start creating the membership site for the business you plan to launch right away. Nor do you need to record the training videos, outline your intro, or create hi resolution graphics…
The essential pieces of a lean launch are:
For our in-person business incubator program we were lucky in that my collaborators and I had email lists (all you Resistance Members out there - you're number 1!). Between the two of us, that was several thousand people whom we had already built trust with over many months (and years in some cases).
That meant, at a minimum, our sales funnel would look like an email or two to send people to a sales page and / or a live webinar.
We decided to create a full-on sales page because our product was so expensive, but in many cases, creating a whole sales page isn’t essential. You can just as easily create the pitch in a PowerPoint and save it for the end of a live webinar (which is what we did that helped fill all the spots of our program).
Framing your pitch is a matter of preference and intuition…
There’s no best practice for it, only things that work better for some people and for some products.
But here are some statistical truths, in case you’re not sure what your product launch needs (you can use your best judgment to decide):
You can also possibly break all the rules here and have some success. That’s cool – go for it.
If you’d rather be more confident, though, I’d say use the tools and techniques that work (don’t reinvent the wheel – save your creativity for the experience and the product or service you’ll be creating for the customer down the line.
*note: next article, I’m going to walk through, step by step, the process of building out only the essential pieces of our program as well as the tools we used to do it.
I know the hardest thing sometimes as a new entrepreneur is not knowing where to begin or what tools to use, which is why I want to show you exactly how we did it so you can model us (yet have the freedom to change whatever you want for your own purposes).
When you read this step, I want you to picture someone on that ridiculous 80’s game show where they want big money but no whammies.
In this case, you want committed early adopters and pre-orders (and still no whammies).
The only way to get sales is by selling, and when you finally go to launch, you’re the only one who’s going to sell your product. If you’re an introvert like me, this will be painful the first time (or first 100 times).
But there’s no way around it.
Even if you’ve setup an awesome affiliate program or you have a great no-brainer product, it doesn’t matter. You still have to be the one that sells it.
If you want to be an owner, an entrepreneur, a creator who makes an impact (not a hobbyist)…
Then you also need to be a salesman.
No, you don’t have to do anything slick.
And while there might be selling skills you could learn to improve your results, I believe that’s much less important than (1) creating something of value and (2) articulating that value of said creation to people who want to hear from you.
Yes, easier said than done.
No, there are no shortcuts.
So there it is.
If you have an idea you want to bring into the world, this is how you do it (if you want to spend more time creating things people like and less time shooting in the dark).
There are obviously a lot of variables thrown into the mix anytime we begin instigating.
As clear as the path to our in-person incubator program launch is to me now, it wasn’t that way in the beginning.
Sure, I’d launched books and other small projects, but never a massive undertaking like this one…
And using Pay What You Want made launching even more difficult with hundreds of more variables now entering the equation (yes, I was crazy for doing it –no, I wouldn’t take it back)…
But the reality is there was no hand-holding, no clear path, and no guarantees. We had to figure it out as we went along, accepting the bumbs, bruises, setbacks, and failures as part of the journey.
In the end, it was a sometimes difficult experience, but totally worth it.
And we’re just getting started. 🙂
Next week, I’ll share with you:
For bonus material, including how to create a lean sales funnel, how to build Facebook Ads to build an audience from scratch, and more check out the "Business Building Toolkit"
This isn't the first product I've shipped that's done over $10,000 in sales.
In fact, I'm writing a book on the step by step process I use to lean launch an idea from just an idea (with no money and no connections).
If you'd like updates, sign up here.
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:
And arguably even more impressive, and what I want to teach you today:
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:
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).
A lot of people have a lot of good ideas.
A lot of good ideas either:
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.
1 of 2 things will happen:
If they like it, move onto step 3.
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…
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").
First, what is the pain or problem we’re fixing?
Can we validate this statement?
Second, heart-centered…do people care about building businesses that they’re passionate about, or do they only care about making money?
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?
*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:
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