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AndyTalks with @Scot about business failure and talking to people

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Andy Black

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AndyTalks with @Scot about business failure and talking to people

This is our second recorded call which I enjoyed as much as the first.

(Our first call can be found here: AndyTalks with @Scot about Sales, Silence, and Building Marketplaces)

In this second call @Scot candidly discusses why his previous business venture failed, and some of his learnings.

He has great advice, particularly for engineers, analytical types, and forum dewellers who might be caught up in the echo chamber of their own head.



> Click here to access the recording <

What were your takeaways?

What will you do differently going forward?


(For other recordings click HERE.)

 

The-J

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Liked before listening. The first call was great. Looking forward to this one. Will edit with my takeaways.

TAKEAWAYS:
  • Common thread in AndyTalks podcasts: forum cats are Internet people. I'm an Internet people. Internet people wanna start a business w/ their laptop w/o talking to people. Talk to people. Diesel + coffee.
  • Finding a need for many often starts with MJ's story because it worked. However... you don't really know what people want until you try and sell it.
  • Pivots are worthwhile when based on customer feedback
  • It's OK to do 'non-scalable' things, especially in the beginning!
  • Stop thinking like a technician and just run it. Stop assuming X% conversions and $y CPC and all that.
  • Stop building stuff to build stuff, solve problems instead
  • Why make a directory when you can be directly generating leads + have the business pay for it?
  • VC funding can be something that is easy to get used to
  • How to learn Adwords/FB: sign up a client (that's how I did it! Be transparent with it though)
  • Don't build the 'directory' until you absolutely need it, build it when it becomes too painful to operate without it (don't build first, solve the problems you actually have)
  • "Overthinking is solving problems you don't have" - Andy
  • "Find a real need" - Scot (that is, find a problem that people ACTUALLY have)
More of a summary than anything but it's pretty good overall. Good stuff Andy + Scot.
 
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Andy Black

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Liked before listening. The first call was great. Looking forward to this one. Will edit with my takeaways.

TAKEAWAYS:
  • Common thread in AndyTalks podcasts: forum cats are Internet people. I'm an Internet people. Internet people wanna start a business w/ their laptop w/o talking to people. Talk to people. Diesel + coffee.
  • Finding a need for many often starts with MJ's story because it worked. However... you don't really know what people want until you try and sell it.
  • Pivots are worthwhile when based on customer feedback
  • It's OK to do 'non-scalable' things, especially in the beginning!
  • Stop thinking like a technician and just run it. Stop assuming X% conversions and $y CPC and all that.
  • Stop building stuff to build stuff, solve problems instead
  • Why make a directory when you can be directly generating leads + have the business pay for it?
  • VC funding can be something that is easy to get used to
  • How to learn Adwords/FB: sign up a client (that's how I did it! Be transparent with it though)
  • Don't build the 'directory' until you absolutely need it, build it when it becomes too painful to operate without it (don't build first, solve the problems you actually have)
  • "Overthinking is solving problems you don't have" - Andy
  • "Find a real need" - Scot (that is, find a problem that people ACTUALLY have)
More of a summary than anything but it's pretty good overall. Good stuff Andy + Scot.
Great writeup @The-J. Rep+

Reminds me of a few more things:
  • I believe it was James Altucher that said something like "You can get money from investors or customers, but not both." That really resonated with me.
  • Be careful what your goal is. If it's to "build a social network/directory/app" then you're going to start building things that are best practice for that, rather than build things best for your customers.
  • "You can't sell to needs, only wants." (Andy). If someone needs something but doesn't want it then good luck with that.
  • Are you sure you need to implement email automation?
  • My "list" isn't in aweber or mailchimp.
  • Silicon Valley loves The Lean Startup but when they "pivot" are they really split-testing instead of changing direction based on actually engaging the market?
  • At the start, do things that don't scale. We learn from the high friction of hand-to-hand combat with the market. As @Scot says: "TALK TO PEOPLE".
 
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Andy Black

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I wish more people heard @Scot's message in this call.

I've now had over 1,500 PMs with fellow forum members. I've no idea how many calls I've had with fellow forum members.

One of the tell-tale signs someone is stuck is that they won't talk to people.

Engineer types are happiest building stuff.

Analytical types are happiest modelling stuff.

Academic types are happiest learning stuff.

That's all well and good, but if you want to identify a need, and identify people who have that need, then it's important to get out there and talk to people.

Then you can build stuff that actually helps people - because they told you it helped them.

Build models of what's actually happening, instead of what you hope will happen.

Learn from your own market feedback rather than from someone else's experience.

Engage the market in one to one combat. Roll up your sleeves. Get into the trenches. Get your nose bloody.

"Spend your money on diesel and coffee"
 

Scot

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If anyone wants to know how much it can cost you when you don't talk to people.. $5,000 down the drain in my last business attempt. But I was lucky, it could have been much more.

Do things that don't scale, offer white glove service to your first customers and just find out what they want!
 

Nicoknowsbest

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Awesome call guys, thanks @Andy Black & @Scot!

Some of the things I wrote down were:
  • As @The-J already mentioned, most of us seem to be Internet people here on the forum. Internet people know how to handle a computer, buy data, analyze data, build stuff and just get lost in their worlds. Some us think we can make money by "shuffling around electrons", to use @Andy Black's words. Business is done among people. So go out and talk to them. It took me a while too, and I fell back into old habits for a while, but don't hide behind your screen. Think about it as doing a disservice to your community if you don't go out and provide value for the people around you.
  • Very interesting insight from @Scot about the various angles a marketplace can have. It's not only the barber's or the consumers perspective, but also the shop's or the brand's.
  • I found it great how @Scot just went to barber shops and walked in on slower days to talk about his idea. Great way of getting the timing right.
  • Super interesting discussion about "needs" and "wants". Loved the term "white space" brought up by @Scot. If you have water, shelter and food, we are not talking about real needs anymore, but rather needs combined with wants. If you have a need and don't want to fulfill it, I might go down trying to serve you.
  • The strategy of slapping up a landing page with a fake "buy now" button to test your idea has been popular since the 4HWW. I agree with you guys to ignore that and rather build an email list. It feels more ethical and true at the end of the day. And, people who sign up to follow your journey might become real, raving fans. I'd rather have one of those than a click on a fake "buy now" button.
  • I fully agree with the fact that taking on investors early on is a crutch you might have to deal with the rest of your (business) days. It makes you give up control. I'd rather get money from customers, which proves my offer and business model, than from investors, which basically keeps the guessing game up and running at a far too high price. Also, I'd rather learn to bootstrap and watch my money, because I believe that if you cannot get profitable with a minimum budget, you might also not be able to get profitable with a multi million budget. I'd rather learn and tighten my game with pennies so I protect my downside when scaling, than learning with a big budget possibly loosing significant money along the way. Loved the toothpaste metaphor @Scot - you just have to get creative on a small budget.
  • Interesting point made about effective vs. efficient. You can work efficiently, but be totally ineffective. If you are efficiently effective, you are the boss.
  • I like the idea of not scaling too early. If you scale without having your processes right, you might burn along the way. So, do things that don't scale, get your processes watertight and scale incrementally. Always solve only the problems you are currently facing.
  • Don't build stuff, such as directories, until you can 't operate without them anymore. Why build a directory for one client?

Thanks for sharing, some very valuable lessons learned!
 
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Andy Black

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Awesome call guys, thanks @Andy Black & @Scot!

Some of the things I wrote down were:
  • As @The-J already mentioned, most of us seem to be Internet people here on the forum. Internet people know how to handle a computer, buy data, analyze data, build stuff and just get lost in their worlds. Some us think we can make money by "shuffling around electrons", to use @Andy Black's words. Business is done among people. So go out and talk to them. It took me a while too, and I fell back into old habits for a while, but don't hide behind your screen. Think about it as doing a disservice to your community if you don't go out and provide value for the people around you.
  • Very interesting insight from @Scot about the various angles a marketplace can have. It's not only the barber's or the consumers perspective, but also the shop's or the brand's.
  • I found it great how @Scot just went to barber shops and walked in on slower days to talk about his idea. Great way of getting the timing right.
  • Super interesting discussion about "needs" and "wants". Loved the term "white space" brought up by @Scot. If you have water, shelter and food, we are not talking about real needs anymore, but rather needs combined with wants. If you have a need and don't want to fulfill it, I might go down trying to serve you.
  • The strategy of slapping up a landing page with a fake "buy now" button to test your idea has been popular since the 4HWW. I agree with you guys to ignore that and rather build an email list. It feels more ethical and true at the end of the day. And, people who sign up to follow your journey might become real, raving fans. I'd rather have one of those than a click on a fake "buy now" button.
  • I fully agree with the fact that taking on investors early on is a crutch you might have to deal with the rest of your (business) days. It makes you give up control. I'd rather get money from customers, which proves my offer and business model, than from investors, which basically keeps the guessing game up and running at a far too high price. Also, I'd rather learn to bootstrap and watch my money, because I believe that if you cannot get profitable with a minimum budget, you might also not be able to get profitable with a multi million budget. I'd rather learn and tighten my game with pennies so I protect my downside when scaling, than learning with a big budget possibly loosing significant money along the way. Loved the toothpaste metaphor @Scot - you just have to get creative on a small budget.
  • Interesting point made about effective vs. efficient. You can work efficiently, but be totally ineffective. If you are efficiently effective, you are the boss.
  • I like the idea of not scaling too early. If you scale without having your processes right, you might burn along the way. So, do things that don't scale, get your processes watertight and scale incrementally. Always solve only the problems you are currently facing.
  • Don't build stuff, such as directories, until you can 't operate without them anymore. Why build a directory for one client?

Thanks for sharing, some very valuable lessons learned!
Great write up. Thank you.


I'm curious...

What's your ONE Thing that you took away from this call?

What's the ONE Thing you'll do differently going forward?
 

Nicoknowsbest

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Thanks Andy!

What's your ONE Thing that you took away from this call?
The ONE thing for me was the discussion about needs and wants. I hadn't look at it like this before, so this was really an eye opener for me.


What's the ONE Thing you'll do differently going forward?
If I take this learning and apply it to my industry, I have to admit that there might be a lot of people who need me (especially , but considerably less who need AND want my services.

This means for me to re-adjust my strategy and...

...find people actively looking for similar offers and create value for them.

I'll make sure that I find them, wherever they are and I'll take care that they can find me, wherever they are looking.

To be specific:
  • I'll refine my AdWords campaigns according to my best performing keywords (proof that they need and want my services) and tighten my "search term - "ad" - "landing page" funnel.
  • I'll document my journey better and make it accessible in order to help more people.
 

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