CENTS spreadsheet + Entry/Need Formula

[mikodigital]

Hello Fastlaners,

I am looking for a way to select the best idea for a Fastlane Business in an attempt to LIMIT RISK.
I have searched the forum and found very interesting threads about google and adwords but wanted to include it in a global approach, so this is what i did.

CENTS spreadsheet:
In very-CENTS.png attached, i put ideas in competitions:

1. i check if each idea is a Money Tree or not and what kind
2. i give a personal score out of 10 for Control, Entry, Need, Time, Scale
3. i give extra 1, 2 or 3 points for Interstates
4. i sum up everything to get a Total score

>>> results:

1. this helps me rules out ideas that are not money trees and will never be fastlanes.
2. this helps me get a top 3 ideas that have a good score (45 or more out 0f 50)
3. problem > i feel like it's easy to determine control, time and scale just with my own judgment, but that entry and need are very tricky, i need to dig deeper.

NEED AND ENTRY FORMULA:
In need-and-entry-formula.png attached, you can see that i am trying to determine entry and need with the help of google. i have 4 statistics available right now. On the far right, I have given a scale and importance factor for each statistics.

need	google monthly search volume
entry	google total search results
entry	adwords competition score
entry	average adwords bid

need = volume stat/volume scale*volume factor
entry = (results stat/results scale*results factor
+competition stat/competition scale*competition factor
+bid stat/bid scale*bid factor) / 3
total score = need - entry

>>> results :

1. only top 3-4 ideas get good score, ruling out all the others with very poor scores.
2. within the top 3-4, one has a much greater score and seem to be the right way to go.

My questions are:
- what do you think of both excels as a tool to chose your next fastlane business?
- for the NEED score, what statistics could we use other than monthly volume?
- for the NEED score, what kind of minimum monthly volume do we need for fastlane?
- for each statistics, what factor of importance would you give it to ponderate the score formulas?
- do you know of other tools or ideas, concepts to help me chose between the 10 startup ideas?

Thank you

 

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[mikodigital]

66 views and no replies... the NEED for implementing CENTS is zero? LOL or my marketing is bad i need to rephrase my thread!

 

[GrandRub]

how do you get the keywords for your calculations in the second screenshot? google ads API?

 

[mikodigital]

I have re-written the thread and now adding my 2 formulas. hope this helps and/or gets feedback

 

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[mikodigital]

how do you get the keywords for your calculations in the second screenshot? google ads API?

i did it the manual way:
idea: rental system for garages with intentional iteration in barcelona
keyword: rent garages barcelona

very simple and maybe flued? should i use a more specific tool for that like Browser add-on to see Google search volume everywhere or something? i used google ads for the statistics.

 

[mikodigital]

hello, I have added a poll on this thread so that we could share strategies about how to gauge NEED for a business idea. I was told years ago that 9 startups out of 10 are a failure. In my opinion, the book gives a very big emphasis on not being selfish and produce valuable things for people... so i feel like this topic is important. How can we become a successful producer if we don't understand or anticipate people's need? should we use statistics, or blind guts! or just launch product fast and fail fast... it sounds in the book like MJ started a lot of business' that failed before he got his hands on something that worked for him. so should we blindly start 10 projects and see what works... or should we crunch some numbers in like i showed and try to make a wiser, more direct way to Fastlane choice? I remember the book broadly says to "keep an open eye for opportunities" and "think like producers", but is this realistic to detect/select a Fastlane wisely? Thank you @MJ DeMarco

 

[Jeff Noel]

I am looking for a way to select the best idea for a Fastlane Business in an attempt to LIMIT RISK.

I don't want to pop your bubble, but here's how to do that:
Approach people in the market you're looking at, tell them more or show them your MVP. If people are interested, seek more validation (bigger scale). If not, move on to another project.

That's a broad definition of how it should be going. There's no need to overcomplicate things. Begin on step #1 then complete step #2.

Enchère is bid in English.

 

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[mikodigital]

I don't want to pop your bubble, but here's how to do that:

I am happy that you pop my bubble, I am here to learn.
Yes i have a big tendency to overcomplicate things... LOL.
Ok will just move on and create my MVP !
Thanks for your helpful feedback
If anyone has other insights or feedback.

 

[BD64]

NEED AND ENTRY FORMULA:
In need-and-entry-formula.png attached, you can see that i am trying to determine entry and need with the help of google. i have 4 statistics available right now. On the far right, I have given a scale and importance factor for each statistics.
needgoogle monthly search volumeentrygoogle total search resultsentryadwords competition scoreentryaverage adwords bid
need = volume stat/volume scale*volume factor
entry = (results stat/results scale*results factor
+competition stat/competition scale*competition factor
+bid stat/bid scale*bid factor) / 3
total score = need - entry

This makes no sense. First off those search volumes, competition scores, etc. are estimates - often times very inaccurate estimates. Trying to derive an arbitrary formula from them doesn't accomplish anything.

Use those estimates as soft validation that a market even exists. Not as hard proof of NEED or ENTRY.

It may do some good to give the books another read, MJ goes into detail on how to validate the market need and entry barriers. As some point, I believe he even references using keyword search volume.

Ultimately I think you are overcomplicating things. Go out to the market and see if you can turn your idea into $$$. There is no such thing as the 'best idea' and execution is what really matters.

 

[Bekit]

I love the idea of a spreadsheet for vetting ideas, but I think it has to be a lot more nuanced than this in order for it to actually give you any useful results.

For instance, in your need-and-entry-formula.png image, the top result is something that has 4400 "average monthly searches." My sister started a business in 2016 that she validated based on the fact that there were approximately 4800 monthly searches in her local area and there were no competitors. But that was all she did to validate demand. It was just a guess that lots of people actually wanted it. She closed down the business this year because demand was simply too low to scale the business. I wouldn't count the monthly searches alone as enough evidence that something is a viable business.

Another example: Your criteria list for need and entry don't give you robust enough insight into the REAL factors. You listed...

need | google monthly search volume

I am assuming that you are using these numbers due to the ease of pulling them from a central location - but in my opinion, that will lead you astray.

Let's just think for a moment about what we mean by "need" in real life.

I need to eat.
I need shelter.
I need clothing.
I need water.
etc.

Those are basic needs. Think about what characteristics they all share. Convert those characteristics to criteria in the form of questions. Add those criteria to your spreadsheet, give a score to each question, add up the raw scores, and then find a way to convert the raw scores to a 1-10 final result.

For instance...
NEED:

• How much harm will come to people if they don't fill this need? 0-10, where 0 is "no harm" and 10 is "death"
• Will filling this need protect people from physical pain? Yes/No
• Will filling this need protect them from financial loss? Yes/No
• How aware are people of this need? 0-10, where 0 is "no one is aware" and 10 is "everyone is aware"
• How have people responded when I have approached them with this idea? 0-10, where 0 is "no one cares" and 10 is "everyone wanted to buy it right away"

I think the same thing about your criteria for Entry.

You listed the criteria...
entry | google total search results
entry | adwords competition score
entry | average adwords bid

But again, how do these numbers tell you anything relevant? Again, I would construct a set of questions based on what entry actually means. Entry doesn't mean that something has a high number of Google total search results, an expensive Adwords competition score, and an average adwords bid. You're leaving out a lot of nuance.

What if, instead, you asked questions like these...

ENTRY

• How much money does it cost to get started in this business? 0-10, where 0 is "free" and 10 is something only Bill Gates could afford to get into.
• How much time does it take to acquire the knowledge to do this business well? 0-10, where 0 is "everybody knows this already" and 10 is "it takes a lifetime"
• How much effort and distasteful labor is involved in this? 0-10, where 0 is "it's easy, anyone would do it" and 10 is "It's almost impossible, and almost no one would ever bother to try it."
• Do I have certain assets or resources that aren't available to the general public? Yes/No
• Do I have proprietary or secret systems or methods that other people would be unlikely to figure out on their own? Yes/No

Use your spreadsheet to calculate these totals and then use that as a more robust sorting mechanism to vet your ideas.

 

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[BD64]

I love the idea of a spreadsheet for vetting ideas, but I think it has to be a lot more nuanced than this in order for it to actually give you any useful results.

For instance, in your need-and-entry-formula.png image, the top result is something that has 4400 "average monthly searches." My sister started a business in 2016 that she validated based on the fact that there were approximately 4800 monthly searches in her local area and there were no competitors. But that was all she did to validate demand. It was just a guess that lots of people actually wanted it. She closed down the business this year because demand was simply too low to scale the business. I wouldn't count the monthly searches alone as enough evidence that something is a viable business.

Another example: Your criteria list for need and entry don't give you robust enough insight into the REAL factors. You listed...

need | google monthly search volume

I am assuming that you are using these numbers due to the ease of pulling them from a central location - but in my opinion, that will lead you astray.

Let's just think for a moment about what we mean by "need" in real life.

I need to eat.
I need shelter.
I need clothing.
I need water.
etc.

Those are basic needs. Think about what characteristics they all share. Convert those characteristics to criteria in the form of questions. Add those criteria to your spreadsheet, give a score to each question, add up the raw scores, and then find a way to convert the raw scores to a 1-10 final result.

For instance...
NEED:

• How much harm will come to people if they don't fill this need? 0-10, where 0 is "no harm" and 10 is "death"
• Will filling this need protect people from physical pain? Yes/No
• Will filling this need protect them from financial loss? Yes/No
• How aware are people of this need? 0-10, where 0 is "no one is aware" and 10 is "everyone is aware"
• How have people responded when I have approached them with this idea? 0-10, where 0 is "no one cares" and 10 is "everyone wanted to buy it right away"

I think the same thing about your criteria for Entry.

You listed the criteria...
entry | google total search results
entry | adwords competition score
entry | average adwords bid

But again, how do these numbers tell you anything relevant? Again, I would construct a set of questions based on what entry actually means. Entry doesn't mean that something has a high number of Google total search results, an expensive Adwords competition score, and an average adwords bid. You're leaving out a lot of nuance.

What if, instead, you asked questions like these...

ENTRY

• How much money does it cost to get started in this business? 0-10, where 0 is "free" and 10 is something only Bill Gates could afford to get into.
• How much time does it take to acquire the knowledge to do this business well? 0-10, where 0 is "everybody knows this already" and 10 is "it takes a lifetime"
• How much effort and distasteful labor is involved in this? 0-10, where 0 is "it's easy, anyone would do it" and 10 is "It's almost impossible, and almost no one would ever bother to try it."
• Do I have certain assets or resources that aren't available to the general public? Yes/No
• Do I have proprietary or secret systems or methods that other people would be unlikely to figure out on their own? Yes/No

Use your spreadsheet to calculate these totals and then use that as a more robust sorting mechanism to vet your ideas.

Love this feedback, taking a more qualitative approach. Agreed 100%.

 

[mikodigital]

@Bdenner64 Thanks a lot for your feedback.

This makes no sense. First off those search volumes, competition scores, etc. are estimates - often times very inaccurate estimates. Trying to derive an arbitrary formula from them doesn't accomplish anything.

i strongly disagree.
- this data is very precise and used by millions of marketing professionals everyday. what makes google one of the most powerful companies in the world today? data!
- my formula gave me some very good verification about existing businesses that are slowlane... they got the worst score because demand is high but competition much higher and entry is very easy. i have verified myself that these calculations are helpful in real life.
- i was hoping someone would give more insights about the available data, formula factors, ...
- i am using the data to try to understand the markets, it s a great tool !

Use those estimates as soft validation that a market even exists. Not as hard proof of NEED or ENTRY.

i agree. but in order to get hard proof you need to launch a product which is time and money consuming. in my opininion, not doing this soft validation is a big mistake. you should start with this.

It may do some good to give the books another read, MJ goes into detail on how to validate the market need and entry barriers. As some point, I believe he even references using keyword search volume.

will do !

Ultimately I think you are overcomplicating things. Go out to the market and see if you can turn your idea into $$$. There is no such thing as the 'best idea' and execution is what really matters.

i strongly disagree. every startup idea are potential hundreds of hours of work and thousands of dollars spent... for a 1 out of 10 chances to success. ruling out ideas from the beginning based on personal insight (screenshot one) and data (screenshot 2) is very helpful.

 

[mikodigital]

@Bekit your feedback is very helpful, i will add your questions in my stylesheet. i need to make more efforts on the first part of my study which was using my brain to try to guess the market.

i only disagree with the fact that you completely disallow and underestimate google highly valuable data:
- knowing what people are searching for, where, in what language, and how many!
- knowing what your competition spend on marketing, and how many competitors do you have!
> in my opinion, both approach are complementary. use your brain AND use googles brain to get the most precise insight.

this is what i learn from this thread:

HOW TO CHOSE YOUR NEXT FASTLANE BUSINESS in three steps
1. gather ideas

2. soft market validation
- people insight (talk to potential customers about your ideas and gather feedback)
- personal insight (spreadsheet with precise questions for each criteria)
- google data (spreadsheet with precise data for different keywords)
- google ad campaign with landing page

3. real market validation
- make MVPs with the best ideas, launch and fail fast

>>> following these steps might save you thousands of hours of works and a lot of money

 

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[MJ DeMarco]

I'd consider the following a good "NEED SCORE" ...

• Total industry size, or total estimation of folks who can use my product/solution
• The ability to target those who need the need solved
• Existing solutions that are similar ... if there are 3 companies who are thriving, you know the need has been validated. Where can you skew?
• How many attributes can I skew to draw sales from similar solutions?

All your criteria you mentioned is helpful for validation of the above, but it almost sounds like you're trying to reinvent the wheel, or create some never before seen item.

 

[mikodigital]

Approach people in the market you're looking at, tell them more or show them your MVP.

- the feedback from people about your idea can give you some clues, but it s quite limited because a lot of things alter their judgment.
- show a MVP needs time and most probably money

i wont start 10 MVPs randomly...

 

[mikodigital]

All your criteria you mentioned is helpful for validation of the above, but it almost sounds like you're trying to reinvent the wheel, or create some never before seen item.

Why am i obsessed about CENTS and NEED/ENTRY in particular:

• i am a web developer and was paid to build 5 startup websites, all of them are just a big fail
• i made a startup myself that kind of had a small success, i sold it for 10 000 euros, the new owner paid me 20 000 euros more to keep developing it, but ultimately it failed. all my competitors on the same idea failed and one of them invested 200 000 euros.
• i was told in training that 90% of startups just fail . (i just googled it as well : link)

let's face it: going fastlane is risky. i understand failure is great and needed. but lowering risk is important as well. i feel like the two biggest risks factors are:

1. weak NEED/ENTRY scores
2. bad execution

so right now i am trying to lower that NEED/ENTRY risk and at the same time, i am trying hard to think as a producer, and understand what people need/want/desire... which is my weak point right now. I am a successful slowlaner executer, but i lack the producer mindset/understanding/insights.

 

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[mikodigital]

Thanks a lot for your feedback @MJ DeMarco . You are GREAT!
I will read again the chapter about NEED and ENTRY
I will buy your second book as well.

 

[Bekit]

Glad my input was helpful to you.

As a fellow digital marketer, I can't help but add...

i strongly disagree.
- this data is very precise and used by millions of marketing professionals everyday. what makes google one of the most powerful companies in the world today? data!

i only disagree with the fact that you completely disallow and underestimate google highly valuable data:
- knowing what people are searching for, where, in what language, and how many!
- knowing what your competition spend on marketing, and how many competitors do you have!
> in my opinion, both approach are complementary. use your brain AND use googles brain to get the most precise insight.

Be careful about attaching too much weight to data from Google keyword planner. Digital marketers everywhere are constantly frustrated by the fact that this data is notoriously inaccurate (when it can be verified) and wildly unpredictable.

While it might be true that Google built their business on the powerful use of excellent data, it is by no means the case that they are actually SHARING that data publicly.

I would use the numbers as a rule of thumb, but never trust them entirely.

 

[mikodigital]

I would use the numbers as a rule of thumb, but never trust them entirely.

Thanks for the heads up and i understand what you mean, i can't trust that data blindly.

When i look at my data more precisely:

- average adwords bid
> some ideas have 0 euros ! > AVOID (no business, no need)
> some ideas have 1 to 3 euros > good (existing business without too much competition)
> one idea has 5 euros (website creation) and one idea has 25 euros (SEO) > AVOID (too much competition)

- competition score
> this number is more obscure... i could lower the importance factor in the formula for that one...

- ... and so on. each data gets me insights

what i found from this data is that one idea out of 10 has a much better score:

volume is the highest (in real life, people want that and talk a lot about that right now)
search result is low compared to other keywords (yes it s hard to create that right now)
competition score is low (57)
and adwords bid is ok (3,13 euros) (successful business are making money out of that right now)

4400

3010000

57

3,13 €

this data make sens to me and i trust google, it s not 100% accurate but it s still valuable data.

 

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[ZF Lee]

Be careful about attaching too much weight to data from Google keyword planner. Digital marketers everywhere are constantly frustrated by the fact that this data is notoriously inaccurate (when it can be verified) and wildly unpredictable.

The same might go for data on general market stats, like total industry earnings, market share and so on.

I completed a white paper about industry backgrounds a few days back. I was scratching my head at how the CEIC stats were like two times less than the market research blogs (which link their sources to a broken website or non-existent channel), and the documentation of the calculations were either no different, non-existent or f*cked up.

Although historical data can give some insights, there's such thing as 'random walk', where folks may see a chart and think there's a trend, but who knows, there isn't.

I'd agree with the notion of talking directly to prospective customers first. They may have answers that past data might not be able to capture accurately.

It can be time consuming, so it helps to see what customers that competitors are aiming at, to help you narrow your search of prospects. Then you can change the attributes to look out for in prospects later when needed.

I'd consider the following a good "NEED SCORE" ...

• Total industry size, or total estimation of folks who can use my product/solution
• The ability to target those who need the need solved
• Existing solutions that are similar ... if there are 3 companies who are thriving, you know the need has been validated. Where can you skew?
• How many attributes can I skew to draw sales from similar solutions?

All your criteria you mentioned is helpful for validation of the above, but it almost sounds like you're trying to reinvent the wheel, or create some never before seen item.

For some reasons, reading these principles has a little voice whispering in my ear, 'Econometrics....'

Must be from my last college exam, just ended today...

Probably I could try to relate the concepts of BLUE estimators, Central Limit Theorum and so on, but it would sound like Greek (time series still feels like Greek to me, although its arguably the most important shit in the field) and wouldn't matter for the bigger picture of things.

 

[Consolation]

I think you have to check on @Andy Black threads (all of it).

let's face it: going fastlane is risky. i understand failure is great and needed. but lowering risk is important as well. i feel like the two biggest risks factors are:

1. weak NEED/ENTRY scores
2. bad execution

Play to win. Not to lose.

what makes google one of the most powerful companies in the world today? data!

Might be unrelated to your thread, but that's only the tip of the iceberg. Google skewed value in the way we acquire those data. Think about the days when there was no Google..

 

[PizzaOnTheRoof]

Hello Fastlaners,

I am looking for a way to select the best idea for a Fastlane Business in an attempt to LIMIT RISK.
I have searched the forum and found very interesting threads about google and adwords but wanted to include it in a global approach, so this is what i did.

CENTS spreadsheet:
In very-CENTS.png attached, i put ideas in competitions:

1. i check if each idea is a Money Tree or not and what kind
2. i give a personal score out of 10 for Control, Entry, Need, Time, Scale
3. i give extra 1, 2 or 3 points for Interstates
4. i sum up everything to get a Total score

>>> results:

1. this helps me rules out ideas that are not money trees and will never be fastlanes.
2. this helps me get a top 3 ideas that have a good score (45 or more out 0f 50)
3. problem > i feel like it's easy to determine control, time and scale just with my own judgment, but that entry and need are very tricky, i need to dig deeper.

NEED AND ENTRY FORMULA:
In need-and-entry-formula.png attached, you can see that i am trying to determine entry and need with the help of google. i have 4 statistics available right now. On the far right, I have given a scale and importance factor for each statistics.

need	google monthly search volume
entry	google total search results
entry	adwords competition score
entry	average adwords bid

need = volume stat/volume scale*volume factor
entry = (results stat/results scale*results factor
+competition stat/competition scale*competition factor
+bid stat/bid scale*bid factor) / 3
total score = need - entry

>>> results :

1. only top 3-4 ideas get good score, ruling out all the others with very poor scores.
2. within the top 3-4, one has a much greater score and seem to be the right way to go.

My questions are:
- what do you think of both excels as a tool to chose your next fastlane business?
- for the NEED score, what statistics could we use other than monthly volume?
- for the NEED score, what kind of minimum monthly volume do we need for fastlane?
- for each statistics, what factor of importance would you give it to ponderate the score formulas?
- do you know of other tools or ideas, concepts to help me chose between the 10 startup ideas?

Thank you

I think you’re trying to quantify something that’s inherently unquantifiable.

Determining needs and finding opportunities will always be done by the brain + experience.

 

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[mikodigital]

@ZF Lee @PizzaOnTheRoof @ClaverCasley Thanks for your additional feedbacks very helpful as well.
Thanks to all the people that replied and also to those that filled the poll.

HOW TO SELECT YOUR NEXT FASTLANE BUSINESS :

1. gather ideas done
2. soft validation done
   • ask yourself if it respects CENTS with detailed questions on each aspects done
   • ask google search/ads for basic insights about NEED and ENTRY done
   • ask potential customers for valuable insights done
3. market validation
   • you could start by an ad campaign with a landing page i skip
   • ultimately you need to make a MVP in order to test the market my next step

 

[Roli]

i made a startup myself that kind of had a small success, i sold it for 10 000 euros, the new owner paid me 20 000 euros more to keep developing it, but ultimately it failed. all my competitors on the same idea failed and one of them invested 200 000 euros.

That's awesome! You have more info than you realise.

Why did it fail?

Poor execution?

Not enough need?

Wrong price point?

Poor marketing?

Other reasons?

Drill down into these reasons and use them to guide your CENTS or NECTS as I like to say.

Remember, we often learn more from failure than success.

 

[Madman1996]

This makes no sense. First off those search volumes, competition scores, etc. are estimates - often times very inaccurate estimates. Trying to derive an arbitrary formula from them doesn't accomplish anything.

Use those estimates as soft validation that a market even exists. Not as hard proof of NEED or ENTRY.

It may do some good to give the books another read, MJ goes into detail on how to validate the market need and entry barriers. As some point, I believe he even references using keyword search volume.

Ultimately I think you are overcomplicating things. Go out to the market and see if you can turn your idea into $$$. There is no such thing as the 'best idea' and execution is what really matters.

Kinetic execution comes to my mind I read unscripted 2 times but always felt there was something missing I didnt read the kinetic execution part the most important chapter of the book market research is bull## crap
Real engagement to the market is worth all your time I can't believe the script society etc has us so tight specially in school before you do something you gotta now the answers first this is so deeply rooted after leaving college this still is your default operation system

 

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[mikodigital]

DAY 70
Hello everyone, so i listened to what you said and just launched my product here Base email professionnels - SUPRABASE
let's see how people react

I realised i was trying too hard to control the NEED because of the fear to fail.

It s not so easy to put yourself on the line and create something for others that might reject it!