How many customers to validate your idea?

[Andy Black]

I’m going to have to create a thread soon.

For the record, here’s my definitions:

A prospect is someone who may or may not be interested in your offer.

A lead is someone who *is* interested in your offer.

A buyer is someone who’s bought from you, once.

A customer is someone with a custom of buying from you (aka a repeat buyer).

I call a customer a client if I’m providing a service.

None of them are clicks or traffic.

 

[RazorCut]

I don't think you need to base it on the number of potential users but just a meaningful sized dataset.

If you can economically survey a hundred people in your target market then that is certainly credible. 50? Possibly. But obviously the more the better.

Be careful of those that say they will switch platforms because it usual is only a small percentage who actually will unless there is very strong grounds for making the move.

People tend to stick with what they have got until they are forced to make a move. Especially to a new competitor with little to no track record. Price is not a strong factor either. People could save large chunks of money switching their mortgage, changing banks, switching their services providers etc. but most don't as they don't want the hassle.

 

[Andy Black]

One?

(A customer is someone who’s bought from you.)

 

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[whiz]

As @Andy Black said, one.

1,000,000 people can say that they'll buy something, and then you put the credit card form in front of them and they close the tab.

But if one person hands you $, then you know you can probably get a 2nd person.

Unless you got the 1 person in the world out of 8,000,000,000 that wanted your product. Or unless it's your mom. Family doesn't mean shit either. They will buy things just to save your ego (pyramid schemes of essential oils, etc.).

I notice that you've become frustrated with the way Andy speaks and because he's not giving you some golden ticket... you have to read between the lines.

A lot of Andy's posts are about mindset because that's really the foundation to success... if you truly want to help people then you'll find a way to make it happen.

You say you have to build a platform to solve a specific need within a pre-existing platform. What does that mean?

That's like saying you can't sell washing machine repair without owning a laundromat.

If you have a solution, and you can provide value... then prove it and make someone pay for it

Stop looking for ways to overcomplicate

You should probably be more specific and fill us in on what you're planning to build so you can get more relevant and constructive criticism - you've been writing in hieroglyphics for about 1.5 month now...

No one's gonna steal the idea - half the forum members working on our own shit and the other half are too lazy/unconfident to take the required action to steal your idea

You could write a step by step roadmap and they'll find some excuse

 

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[Rabby]

I think what you're missing is the connection between "research" and, to use Andy's words, "helping people." In my estimation anyway. Since I don't know what your product is, I'll use some examples.

First off, when we do medical "research," we have to find people who need help with something right? So just by knowing this, we know that research and helping someone (solving their problem) can be part of the same process.

Now a business example.

Let's say you identified a type of business that uses a software management system. That is to say, software that keeps track of their orders, accounting, compliance, customers, inventory, etc. Most businesses use some variation of the management system.

Ok, so they're all grocery stores. Doesn't matter. They are mostly using either ZYX Soft's product or VUT Soft's product. They're the market leaders in grocery store management software in your region.

So what do you do. From reading the thread so far, one might guess you will go to the grocery store owners or managers and say "hey, if I made a faster, better store management system, would you switch to mine?" And when the store owner says "faster and better? Sure! I'll buy it!" You take that as a yes.

You want to know how many of those store owners you need to say "Sure! I'll buy it!" Right?

The answer from my experience is, it doesn't matter how many people say "yes" given the scenario above. It isn't valid "market research." You don't have a reasonable estimate of what someone will actually pay to solve a specific set of problems. You haven't caused a test subject to perform actions that indicate a relation between problem and solution -- utility! -- and cost.

Something like that. I'm actually not an expert on "market research." But I know enough about research to know it requires results that mean what you think they mean.

That's why people say stuff like "get someone to buy it" and "find a paying customer" and "help someone." You can trust those kinds of action a lot more.

The thing they pay for doesn't have to be identical to your final solution though. Getting them to pay, or closely approximate paying (attempt to pay and be told "sorry coming soon" or something), tells you the problem is what you think it is . Sometimes it tells you that the problem is slightly different than what you thought, which might save years of your life instead of developing almost-fit products.

Now, let's say you go deeper with the example management system. Why do you want to build a "better" management system? Does the one people are using look stupid and Web 1.0? Is it slow? Are the buttons hard to find? Do employees, who you've observed, make mistakes when using it? Do managers have a difficult time predicting how much inventory to order using the system's tools?

The above questions are a move in the right direction. For any question like the above, you can start fishing for a "cost."

It may turn out that it is worth nothing to a grocery store owner/manager to have a management system that looks "Web 2.0." Lack of aesthetic beauty on the screen costs them a perceived $1 over the 10 year life of a system.

But it may also turn out that employee mistakes cost them $1,000 per month, and that optimizing the ordering system could save them $2,000 a month in spoiled products.

Are those real problems? Yes. We quantified them, so they must be (heh). If you can reduce mistakes by 50% and optimize ordering by 50% of the losses, you have a solution to $1,500 per month worth of problems.

Not all problems have to be quantified in money. Time, especially the time of owners or rare and talented employees, or the time of customers, could be opportunities.

That said...

If you discovered the above quantifiable problems, it would still be suspect in a way to just go out and build a management system. That is, unless it was incredibly cheap and non-time-consuming to do so. But then I wouldn't be typing all this.

10 years ago, I would have just built the management system and tried to sell it. In fact, I've done that. My theory was "build 10 products and one will work." Pretty inefficient. I know I'm not the only one though, so I'm not too embarrassed to admit it

More recently, I realize this is not optimal, like a lot of the people here will say. Today, the only way I would "build the management system" would be if (1) I owned a grocery store and needed a better management system or (2) a grocery store owner was so gung-ho that they either paid me something right now to plug a hole in the problem, or offered to put me on retainer to develop a solution, or introduced me to their industry association and started lining up financing so that all the grocers could benefit.

That kind of response. Otherwise, you can waste months or even years building stuff nobody wants. That's what people are talking about. I've actually built products nobody will ever use... believe me, it's not for you. I've also built things that lots of people use, by the way... in case anyone's judging

Using the grocer example, what if you asked them if you could come in one day a month and look over inventory and train employees; and if you could save them the $1,500 per month on inventory and mistakes, they pay you $550? Or a similar test that doesn't require a huge investment up front before you find out if the buyer is "real" or imagined?

@Andy Black @whiz what do you guys think? If a few grocers said "yes" to that offer, and you could build a software solution that solves the same problem without an auditor/trainer visiting the locations, would you be willing to build a product?

I would if they said "yes" emphatically enough and went for their checkbook (assuming I could build the solution economically for all parties). Conservatively, get a store to hand me a check for the $500, then hand it back and tell them I'll return with software that does the same thing. If I was ultra conservative, I would either get the stores to actually pay me for a month or two (I laugh thinking about this, because it's not glamorous but it's pretty practical in some ways), or get an equity backer. Then my equity backer could force me to get a store to pay me first

Ok so there's an example. Let me know if it helps.

 

[Rabby]

But from what I am understanding, we want them to pay us to ultimately validate the idea. I'm guessing this also validates the price because we might say "would you buy xyz, it costs 20 dollars?", is this correct?

Yes. Or closely approximate paying us -- be demonstrably willing to spend a similar amount of money to mitigate the same problems you will solve with your product. In my opinion that is good enough. Like, if they would retain you as a consultant to stop inventory losses. That means inventory losses are a real problem right? You have a problem and a solution that you can get someone to pay for. Now I think you can build the substitute solution with a lot more confidence.

Personally, I would accept certain proxies for actually getting paid. In my case there are a few things I've gotten really good at, maybe well known for in some circles, and people try to hire me to solve certain problems. The knowledge that someone is trying to pay me $500 or $50,000 to solve one of those problems gives me some validation that I can build a product to solve the same problem, and my risk is not as great as taking a shot in the dark. Others might disagree, I'm not sure.

I was thinking about this while typing my response here. I think the greatest risks are not about money. They're about people wasting their time and energy; ultimately finite resources in a life.

So thinking about that, I wanted to make sure of two things:

1. I'm not giving bad advice right? I'm not going to send a human life in the direction of waste? The idea is terrible to think about.
2. Do I follow my own advice? If I do, it implies I think it is correct. If I don't, either I am a hypocrite, or a fool who knows what to do but doesn't do it. I don't want to be those things, clearly.

So as a result, I wrote the latest meditation in my progress thread. You might be interested, because you can see the things I used to validate that "solution," even though I am not directly charging money for it right now. I'm actually glad I thought it through. I was right, in my opinion, that I have a valid solution that will solve problems and ultimately be easy to monetize. And to gain adoption, now that I think on it. But I also caught myself thrashing earlier in the same thread. I think the relative security I've gained from business can also result in wasteful actions if I'm not careful. Maybe that applies to everyone. In fact, it sounds a lot like morale hazard. At any rate, I am not fully immune myself.

Takeaway. If we don't discipline ourselves, we fall into disorder. The discipline is matching our words and actions to the concepts we know to be true.

One of those concepts is that "economic rewards come from serving real needs."

So we have to know if we're serving real needs. How do we know, if we haven't served any? We get someone to trade value for value with us, or we find very close approximations for those transactions. The faster we get to the point of someone putting a dollar in our hands, proving the need, the less likely we are to waste our time and energy.

 

[Andy Black]

Whatever works but as far as I'm aware for building a startup this is the process. Correct me if I'm wrong it seems to me you did something that worked in your context and you assume it will work in every context. I don't think it will work in every context. I don't blame you considering I didn't give information on what the potential business is, but still.

And YES market research is an absolute must. It's the way to see if there is any demand for your product. 1# reasons businesses fail is because of no market need. I don't plan to fall into that category. To me it sounds like a common sense thing to do and any business person I think would tell you that market research is a must.

Surveying is one form of my primary research that I'm doing. It's the ONLY way I can verify to see if my assumptions are correct.

Yes, it’s based on my experience...

Of starting and running my own business.

Of working in two highly funded tech startups that failed.

Of working with many many small businesses that build stuff instead of engage the market and help people.



It’s also based on my experience of PMing over 2,000 forum members and having hundreds of Facebook messages with people.


Anyway.

My definition of marketing:

1. Find out what people want.
2. Find out how to help them.
3. Find out if you can make a profit.
4. Do it.

My argument is that you may as well do it by engaging the market in the trenches by looking for people to help, helping them, and figuring out how to make a profit.

That way, by the time you get to step 4, you’ve already done it, or failed fast, pivoted, or whatever the lean startup books say you should do next.


You say “building a startup”. That’s my red flag. I worked in a startup “building a social network”. Ffs...

Yes. It’s my own experience. Enough to write a whole thread:

• Stop Building Stuff

Do I think it’s the only way?

No. If you’ve experience starting up and running businesses already, then I think you have your own strategies that work.

If you haven’t, then this is a strategy that can help you avoid all the pitfalls out there, the ones that want you to study, consume, take courses, etc.

Ask yourself: “Who can I help this week?”

 

[eliquid]

Validating an idea can only be done once someone gives you cash.

Anything less than that, is Bull Sh*t in my book.

Bull Sh*t doesn't pay bills. It for sure doesn't validate anything.

 

[Contrarian]

My thoughts, in no particular order:

Just because the end game is a platform doesn't mean you have to start out as one.

Is the platform you intend to build some kind of two-sided marketplace? If so, that's even more reason not to start out as a platform, because you have the chicken and egg scenario to deal with. A million times easier to create a platform for an audience you already have.

Research isn't some passive thing where you sit there wearing Homer Simpson's intelligent half-glasses and pore over paperwork and read stuff. It's about interacting with the thing you're researching (in this case, your market) and seeing how it responds to various stimuli.

Don't take advice from the "startup world" on building a business. They have millions of dollars to throw at something that's never made a cent yet - and in many cases, never will. You don't. The game you're playing is entirely different.

Any significant project will always take four times as long and cost multiple times more money than you think it will. Can you afford that if you don't make any money for the next few years? What if you get it wrong and have to start all over again?

Which of the following scenarios sounds more likely to be successful to you?

A) Guy with no background in the logistics or staffing industries sends out some surveys, gets some positive responses and decides to build "Uber for truckers"

B) Guy with no background in the logistics or staffing industries sets up shop as a freelance recruiter for truckers.

He becomes successful at it, then turns into a "real" staffing agency and hires people.

Builds a national database and a network of trusted clients and contacts.

With the money, network and industry knowledge behind him, builds "Uber for truckers" and launches it to his eager market.

Food for thought, I hope.

 

[RazorCut]

Ah, you will have to stop rattling @Andy Black cage by calling a prospect a customer.

 

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[Andy Black]

Let's pretend Hypothetically I wanted to build a better version of these sites

* Ebay
* Facebook
* Upwork
* Netflix

Could you please provide examples for each of these, helping someone in the stage of market research?

Why would you want to build a better version of Upwork?

Because there’s money to be made?

Or because you can see a better way of helping people who want to sell their skills and people who want to hire those skills?



If you can see a better way of helping someone with skills get found by someone who wants to hire them, then go do it.

Get one person with skills hooked up with one person who wants those skills.

Keep doing it.

Start getting paid.

Keep doing it.

Start evolving repeatable processes, and tools.

Before you know it you might have a wee platform.


Go listen to this:

• www.tropicalmba.com/services

Have you read this:

• Stop Building Stuff

 

[Andy Black]

I still think you’re in danger of “building stuff” when it’s much easier to get paid to provide a service to businesses, and also effectively get paid to develop your people, processes, and technology.


The internet is just one big lead gen machine. Pretty much all of those sites you mentioned (Facebook, Amazon, Netflix, Upwork, etc) are all big lead gen sites. People find them, stick, and either buy from those sites or advertisers on those sites.


Say I used Upwork a lot and something about it frustrates me. I don’t use Upwork so I can’t pinpoint anything but bear with me.

Many would be tempted to build a version of Upwork that resolves the particular frustration they see.

I’d prefer to help people overcome their frustration by helping people such that they don’t use Upwork anymore.


Go back to first principles and answer this for yourself:

Who am I helping?

What am I helping them with?

How will I help them?

 

[LiveEntrepreneur]

If you are in a market where well over 50,000,000 people globally are using those services, how many people should you have saying that they like your idea before executing the actual product? From customers that I've interviewed they seem willing to move to another platform and they like my idea, so I've validated my hypothesis to about 10 people so far I believe.

I have done market segmentation so I am at the start not targetting people in every country, but just one or two for now and that ends up being in just that one country over 5m people.

 

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[Andy Black]

I live by the three quotes in my signature.

When I get stuck or lost I ask myself: “Does this help my customers?”

 

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[Andy Black]

Lol, I wasn't frustrated because Andy didn't give me a golden ticket. I was frustrated because because it his approach just makes no sense in my opinion. I didn't disagree with him, in fact I agreed about helping people part. But it annoyed me that he completely disregarded the market research part, which just makes no sense to me.

If I was to follow his advice very strictly I would take out the money that it takes to build the platform and just start marketing to get people to sign up. Though this approach seems like the biggest mistake to me because even if I provide value they might not even want it.

I'm not ignoring market research. I suggesting that the market research happens when you go out there and engage the market.

Here's two ways I do "real-time" market research:

1. How to get profitable or fail fast with AdWords
2. How to use forums (and Facebook groups)

I'm also not suggesting getting people to signup to anything where they don't get any value. The only signups I get are to the free trial of a paid course.


Anyway...

Maybe these podcasts might help you:

• http://www.tropicalmba.com/services/
  
• http://www.tropicalmba.com/scale/
• https://podcast.quickmail.io/073-how-to-launch-your-startup-with-cold-email-part-1/
  
• https://podcast.quickmail.io/074-how-to-launch-your-startup-with-cold-email-part-2/

 

[LiveEntrepreneur]

I don't think you need to base it on the number of potential users but just a meaningful sized dataset.

If you can economically survey a hundred people in your target market then that is certainly credible. 50? Possibly. But obviously the more the better.

Be careful of those that say they will switch platforms because it usual is only a small percentage who actually will unless there is very strong grounds for making the move.

People tend to stick with what they have got until they are forced to make a move. Especially to an new competitor with little to no track record. Price is not a strong factor either. People could save large chunks of money switching their mortgage, changing banks, switching their services providers etc. but most don't as they don't want the hassle.

That's actually a good point. But my target audience have said they would switch services. So don't know if this is validation. With the example you provided it's more complex, mine is simply just signing up to the website and getting started.

Is there any questions you recommend I add into the survey?

 

[Andy Black]

Is there any questions you recommend I add into the survey?

Leave the survey till later.

How many people have you helped so far?

300 surveys & emails, 5 free calls, one $400 sale (in 30 days)

 

[LiveEntrepreneur]

You *need* to do market research first?

Depends what you mean by market research.

By surveying people?

Or by finding people who desperately need help, convincing some to allow you to help them, helping them, and then figuring out how to get paid?

Do you want to do this as an academic exercise, or by helping people and hen getting paid?

Whatever works but as far as I'm aware for building a startup this is the process. Correct me if I'm wrong it seems to me you did something that worked in your context and you assume it will work in every context. I don't think it will work in every context. I don't blame you considering I didn't give information on what the potential business is, but still.

And YES market research is an absolute must. It's the way to see if there is any demand for your product. 1# reasons businesses fail is because of no market need. I don't plan to fall into that category. To me it sounds like a common sense thing to do and any business person I think would tell you that market research is a must.

Surveying is one form of my primary research that I'm doing. It's the ONLY way I can verify to see if my assumptions are correct.

 

[LiveEntrepreneur]

Yes, it’s based on my experience...

Of starting and running my own business.

Of working in two highly funded tech startups that failed.

Of working with many many small businesses that build stuff instead of engage the market and help people.



It’s also based on my experience of PMing over 2,000 forum members and having hundreds of Facebook messages with people.


Anyway.

My definition of marketing:

1. Find out what people want.
2. Find out how to help them.
3. Find out if you can make a profit.
4. Do it.

My argument is that you may as well do it by engaging the market in the trenches by looking for people to help, helping them, and figuring out how to make a profit.

That way, by the time you get to step 4, you’ve already done it, or failed fast, pivoted, or whatever the lean startup books say you should do next.


You say “building a startup”. That’s my red flag. I worked in a startup “building a social network”. Ffs...

Yes. It’s my own experience. Enough to write a whole thread:

• Stop Building Stuff

Do I think it’s the only way?

No. If you’ve experience starting up and running businesses already, then I think you have your own strategies that work.

If you haven’t, then this is a strategy that can help you avoid all the pitfalls out there, the ones that want you to study, consume, take courses, etc.

Ask yourself: “Who can I help this week?”

Is it just a mindset thing everything that you're trying to tell me?

Like this "You say “building a startup”. That’s my red flag. I worked in a startup “building a social network”. Ffs..."

Are you trying to say the goal isn't to "build a startup", but to help people instead? Don't get me wrong, my motive going into my current idea was to solve a problem and provide value.

Because I am trying to apply your "help someone", line of thinking and I just can't see how it fits in the current context of market research. It just makes no sense to me.

Let's pretend Hypothetically I wanted to build a better version of these sites

* Ebay
* Facebook
* Upwork
* Netflix

Could you please provide examples for each of these, helping someone in the stage of market research?

 

[LiveEntrepreneur]

Validating an idea can only be done once someone gives you cash.

Anything less than that, is Bull Sh*t in my book.

Bull Sh*t doesn't pay bills. It for sure doesn't validate anything.

That makes sense, it definently proves at least in my eyes that there is a market for it. I remember reading in a book and it said "The real test is when you ask them to take their wallet out".

 

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[Andy Black]

If you are in a market where well over 50,000,000 people globally are using those services, how many people should you have saying that they like your idea before executing the actual product? From customers that I've interviewed they seem willing to move to another platform and they like my idea, so I've validated my hypothesis to about 10 people so far I believe.

I'm curious.

Can you provide a service to the people using the current platform and help them overcome whatever is frustrating them?

Can you get paid to do it?

 

[LiveEntrepreneur]

I'm not ignoring market research. I suggesting that the market research happens when you go out there and engage the market.

Here's two ways I do "real-time" market research:

1. How to get profitable or fail fast with AdWords
2. How to use forums (and Facebook groups)

I'm also not suggesting getting people to signup to anything where they don't get any value. The only signups I get are to the free trial of a paid course.


Anyway...

Maybe these podcasts might help you:

• http://www.tropicalmba.com/services/
  
• http://www.tropicalmba.com/scale/
• https://podcast.quickmail.io/073-how-to-launch-your-startup-with-cold-email-part-1/
  
• https://podcast.quickmail.io/074-how-to-launch-your-startup-with-cold-email-part-2/

I see what you are trying to say. That the real market research happens when you got paying customers?

 

[LiveEntrepreneur]

I think what you're missing is the connection between "research" and, to use Andy's words, "helping people." In my estimation anyway. Since I don't know what your product is, I'll use some examples.

First off, when we do medical "research," we have to find people who need help with something right? So just by knowing this, we know that research and helping someone (solving their problem) can be part of the same process.

Now a business example.

Let's say you identified a type of business that uses a software management system. That is to say, software that keeps track of their orders, accounting, compliance, customers, inventory, etc. Most businesses use some variation of the management system.

Ok, so they're all grocery stores. Doesn't matter. They are mostly using either ZYX Soft's product or VUT Soft's product. They're the market leaders in grocery store management software in your region.

So what do you do. From reading the thread so far, one might guess you will go to the grocery store owners or managers and say "hey, if I made a faster, better store management system, would you switch to mine?" And when the store owner says "faster and better? Sure! I'll buy it!" You take that as a yes.

You want to know how many of those store owners you need to say "Sure! I'll buy it!" Right?

The answer from my experience is, it doesn't matter how many people say "yes" given the scenario above. It isn't valid "market research." You don't have a reasonable estimate of what someone will actually pay to solve a specific set of problems. You haven't caused a test subject to perform actions that indicate a relation between problem and solution -- utility! -- and cost.

Something like that. I'm actually not an expert on "market research." But I know enough about research to know it requires results that mean what you think they mean.

That's why people say stuff like "get someone to buy it" and "find a paying customer" and "help someone." You can trust those kinds of action a lot more.

The thing they pay for doesn't have to be identical to your final solution though. Getting them to pay, or closely approximate paying (attempt to pay and be told "sorry coming soon" or something), tells you the problem is what you think it is . Sometimes it tells you that the problem is slightly different than what you thought, which might save years of your life instead of developing almost-fit products.

Now, let's say you go deeper with the example management system. Why do you want to build a "better" management system? Does the one people are using look stupid and Web 1.0? Is it slow? Are the buttons hard to find? Do employees, who you've observed, make mistakes when using it? Do managers have a difficult time predicting how much inventory to order using the system's tools?

The above questions are a move in the right direction. For any question like the above, you can start fishing for a "cost."

It may turn out that it is worth nothing to a grocery store owner/manager to have a management system that looks "Web 2.0." Lack of aesthetic beauty on the screen costs them a perceived $1 over the 10 year life of a system.

But it may also turn out that employee mistakes cost them $1,000 per month, and that optimizing the ordering system could save them $2,000 a month in spoiled products.

Are those real problems? Yes. We quantified them, so they must be (heh). If you can reduce mistakes by 50% and optimize ordering by 50% of the losses, you have a solution to $1,500 per month worth of problems.

Not all problems have to be quantified in money. Time, especially the time of owners or rare and talented employees, or the time of customers, could be opportunities.

That said...

If you discovered the above quantifiable problems, it would still be suspect in a way to just go out and build a management system. That is, unless it was incredibly cheap and non-time-consuming to do so. But then I wouldn't be typing all this.

10 years ago, I would have just built the management system and tried to sell it. In fact, I've done that. My theory was "build 10 products and one will work." Pretty inefficient. I know I'm not the only one though, so I'm not too embarrassed to admit it

More recently, I realize this is not optimal, like a lot of the people here will say. Today, the only way I would "build the management system" would be if (1) I owned a grocery store and needed a better management system or (2) a grocery store owner was so gung-ho that they either paid me something right now to plug a hole in the problem, or offered to put me on retainer to develop a solution, or introduced me to their industry association and started lining up financing so that all the grocers could benefit.

That kind of response. Otherwise, you can waste months or even years building stuff nobody wants. That's what people are talking about. I've actually built products nobody will ever use... believe me, it's not for you. I've also built things that lots of people use, by the way... in case anyone's judging

Using the grocer example, what if you asked them if you could come in one day a month and look over inventory and train employees; and if you could save them the $1,500 per month on inventory and mistakes, they pay you $550? Or a similar test that doesn't require a huge investment up front before you find out if the buyer is "real" or imagined?

@Andy Black @whiz what do you guys think? If a few grocers said "yes" to that offer, and you could build a software solution that solves the same problem without an auditor/trainer visiting the locations, would you be willing to build a product?

I would if they said "yes" emphatically enough and went for their checkbook (assuming I could build the solution economically for all parties). Conservatively, get a store to hand me a check for the $500, then hand it back and tell them I'll return with software that does the same thing. If I was ultra conservative, I would either get the stores to actually pay me for a month or two (I laugh thinking about this, because it's not glamorous but it's pretty practical in some ways), or get an equity backer. Then my equity backer could force me to get a store to pay me first

Ok so there's an example. Let me know if it helps.

Yeah it does help, thanks.

This here
"Otherwise, you can waste months or even years building stuff nobody wants. That's what people are talking about. I've actually built products nobody will ever use... believe me, it's not for you. I've also built things that lots of people use, by the way... in case anyone's judging"

Is what my concern was. But from what I am understanding, we want them to pay us to ultimately validate the idea. I'm guessing this also validates the price because we might say "would you buy xyz, it costs 20 dollars?", is this correct?

 

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[LiveEntrepreneur]

Yes. Or closely approximate paying us -- be demonstrably willing to spend a similar amount of money to mitigate the same problems you will solve with your product. In my opinion that is good enough. Like, if they would retain you as a consultant to stop inventory losses. That means inventory losses are a real problem right? You have a problem and a solution that you can get someone to pay for. Now I think you can build the substitute solution with a lot more confidence.

Personally, I would accept certain proxies for actually getting paid. In my case there are a few things I've gotten really good at, maybe well known for in some circles, and people try to hire me to solve certain problems. The knowledge that someone is trying to pay me $500 or $50,000 to solve one of those problems gives me some validation that I can build a product to solve the same problem, and my risk is not as great as taking a shot in the dark. Others might disagree, I'm not sure.

I was thinking about this while typing my response here. I think the greatest risks are not about money. They're about people wasting their time and energy; ultimately finite resources in a life.

So thinking about that, I wanted to make sure of two things:

1. I'm not giving bad advice right? I'm not going to send a human life in the direction of waste? The idea is terrible to think about.
2. Do I follow my own advice? If I do, it implies I think it is correct. If I don't, either I am a hypocrite, or a fool who knows what to do but doesn't do it. I don't want to be those things, clearly.

So as a result, I wrote the latest meditation in my progress thread. You might be interested, because you can see the things I used to validate that "solution," even though I am not directly charging money for it right now. I'm actually glad I thought it through. I was right, in my opinion, that I have a valid solution that will solve problems and ultimately be easy to monetize. And to gain adoption, now that I think on it. But I also caught myself thrashing earlier in the same thread. I think the relative security I've gained from business can also result in wasteful actions if I'm not careful. Maybe that applies to everyone. In fact, it sounds a lot like morale hazard. At any rate, I am not fully immune myself.

Takeaway. If we don't discipline ourselves, we fall into disorder. The discipline is matching our words and actions to the concepts we know to be true.

One of those concepts is that "economic rewards come from serving real needs."

So we have to know if we're serving real needs. How do we know, if we haven't served any? We get someone to trade value for value with us, or we find very close approximations for those transactions. The faster we get to the point of someone putting a dollar in our hands, proving the need, the less likely we are to waste our time and energy.

Your advice is great, imo. I'll check out that thread. I always appreciate anyone's help on this forum.

 

[LiveEntrepreneur]

I still think you’re in danger of “building stuff” when it’s much easier to get paid to provide a service to businesses, and also effectively get paid to develop your people, processes, and technology.


The internet is just one big lead gen machine. Pretty much all of those sites you mentioned (Facebook, Amazon, Netflix, Upwork, etc) are all big lead gen sites. People find them, stick, and either buy from those sites or advertisers on those sites.


Say I used Upwork a lot and something about it frustrates me. I don’t use Upwork so I can’t pinpoint anything but bear with me.

Many would be tempted to build a version of Upwork that resolves the particular frustration they see.

I’d prefer to help people overcome their frustration by helping people such that they don’t use Upwork anymore.


Go back to first principles and answer this for yourself:

Who am I helping?

What am I helping them with?

How will I help them?

Ok thanks.

 

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[LiveEntrepreneur]

My thoughts, in no particular order:

Just because the end game is a platform doesn't mean you have to start out as one.

Is the platform you intend to build some kind of two-sided marketplace? If so, that's even more reason not to start out as a platform, because you have the chicken and egg scenario to deal with. A million times easier to create a platform for an audience you already have.

Research isn't some passive thing where you sit there wearing Homer Simpson's intelligent half-glasses and pore over paperwork and read stuff. It's about interacting with the thing you're researching (in this case, your market) and seeing how it responds to various stimuli.

Don't take advice from the "startup world" on building a business. They have millions of dollars to throw at something that's never made a cent yet - and in many cases, never will. You don't. The game you're playing is entirely different.

Any significant project will always take four times as long and cost multiple times more money than you think it will. Can you afford that if you don't make any money for the next few years? What if you get it wrong and have to start all over again?

Which of the following scenarios sounds more likely to be successful to you?

A) Guy with no background in the logistics or staffing industries sends out some surveys, gets some positive responses and decides to build "Uber for truckers"

B) Guy with no background in the logistics or staffing industries sets up shop as a freelance recruiter for truckers.

He becomes successful at it, then turns into a "real" staffing agency and hires people.

Builds a national database and a network of trusted clients and contacts.

With the money, network and industry knowledge behind him, builds "Uber for truckers" and launches it to his eager market.

Food for thought, I hope.

I sound alot like the first one. I feel like you won't get experience until you start something. Though the second one would probably be more successful.

 

[RazorCut]

Is there any questions you recommend I add into the survey?

You would need to brainstorm with someone who knows what your product is.

You could always get them to sign up in advance before launch. Do they have to part with any money? If so is it a one off fee or monthly (i.e. SAAS format).

 

[LiveEntrepreneur]

One?

(A customer is someone who’s bought from you.)

Oh I did it again lol.

 

[LiveEntrepreneur]

Leave the survey till later.

How many people have you helped so far?

300 surveys & emails, 5 free calls, one $400 sale (in 30 days)

None, I don't think I can help them yet. I need to do my market research first. I know you push the providing value thing alot and its fair enough but I'm thinking are you taking it too literally lol?

 

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[Andy Black]

None, I don't think I can help them yet. I need to do my market research first. I know you push the providing value thing alot and its fair enough but I'm thinking are you taking it too literally lol?

Have you listened to that call?