Insights from digging for a (SaaS) business idea

[YaWeil]

Fastlaners,

I give all credit for starting this thread to @MartinH! I was greatly inspired by his thread - so much that I made my first idea extraction calls last Thursday. Since Martin does not seem to be taking up his thread again, I want to start sharing my experiences and insights with you.

(If you don't now what I mean by idea extraction be referred to Dane Maxwell's explanation at SPI)

And now...Day 1

Why the heck I'm doing idea extraction (IE)?

Well, I'm nearing the end of my studies and am basically pretty old for that. This is because I've tried many things (a musician in an orchestra for one year after school, then training as police officer for two years, then studying two different majors) got good at them and...QUIT. Because I realised they wouldn't take where I want to be: in a situation where my work doesn't tie me to one location. I like being around my family (which is hundreds of miles away from me), I like being around friends (which are spread out over the world), I like traveling to unfamiliar places, and I love being around my girlfriend. I DON'T LIKE TO HAVE MY JOB KEEPING ME FROM UNITING THESE WANTS.

So, when I discovered Dane Maxwell's "method" that really blew my mind. A SaaS business would not only be location-independent, it would also mean to not trading time for money. That meant...FASTLANE...so I jumped right in.

Picking an industry

In my free time I'm a passionate drummer, so I really just went from there and literally typed "drums uk" into Google. Most sites one the first Google page were drum retailers, and a search of that term brought up more than a million pages, so I just went ahead with that industry. (I haven't found quite the UK equivalent to manta.com, but I found this business directory which at least gives you emails and names of company owners you wouldn't be able to find on the comany website)

Cold emailing

The first small challenge (and a bit of work) is finding out email addresses of business owners. I got the best results by taking the @example address from the company website and searching for "manager(or "director" or "owner") email @example" via Google. For more email hacks check out this article of Josh Isaac.

Having collected a dozen emails addresses, I sent out this email which got me about a 20% response rate.

"Dear <name>,

I was looking at your website and thought it was great, so I felt the need to reach out.

My name is Yannick and I am a drummer turned entrepreneur doing research on the drum retailing industry. My goal is to learn about the biggest pains you have running your business and to solve a big problem that will make your life easier.

What are the biggest frustrations with managing your business?

I would love to hear back from you, even if it’s only one sentence.

Cheers,
Yannick
-------------------
Yannick Weiler
LinkedIn profile"

Jumping ahead to cold calls

The responses I followed up by asking for a phone call which in 0 cases landed me one. Might be that I should have emailed back and forth some more to build up trust and then asked for the phone call. But by the time of my second mail I had simultaneously tried to directly cold call retailers without sending an email first...And that lande me TWO IE CALLS IN ONE DAY.

To get past the gatekeeper I used this script:

(authoritative voice) “Hi, my name is Yannick, can I speak to <name of business owner>, please?"

This did the trick once. The second gatekeepee asked in what matter. Response:

“Well, I’m a student doing research on drum retailers in order to make their
day-to-day-business easier and more profitable. I want to find out about the biggest
problems you face in your store in order to come up with a solution. Can I set up a time to speak to him?”

I didn't want to set up a time, but I guessed this more polite version would stand better chances of being put through. In any case, it worked.

The calls

Contrary to my expectations, both owners were actually really happy to talk, and even though one said he had customers in the store and couldn't talk for long we ended up speaking for 30 minutes. People do like to rant about problems, it seems!

So, my nervousness quickly faded and I pretty much went straigth ahead by asking the following questions:

"What’s the most painful task you have day-to-day?
What takes up most of your time?
What are some of the repetitive tasks that you have to do on a day to day basis?
What are the tasks that you do that take up the most time?"

I asked in that order and only one at a time. When something faintly problem-like came up I dug deeper via "Tell me more about that". Imho THIS REALLY IS THE MOST IMPORTANT PART, since if you do not dig, you'll not even see the problem.

One of the guys for instance told me that both emails and accounts are his most painful tasks. Interesting I thought, and wanted to know more about the emailing: "Tell me more". Basically, far too many customers were enquiring for better prices than on the website via email. When hebfinished explaining I tried to rephrase that, he confirmed, and I thought...WELL, I DON'T SEE THE SOLUTION...and went on to ask about his accounts. Pretty much the same here: he talks about surface problem, I rephrase, don't see the solution. Then the conversations trickles out.

Lesson learned

• Cold calling is far from scary, it is actually quite fun. People seemed to appreciate being listened to, so I'm stoke to continue calling tomorrow.
• Digging deep is difficult. I should have gone into much more detailled questions about his emailing and accounts. Dane, in this live IE call, does it mainly by asking: "What's do you do first? What's thebsecond step? What the third etc.". It is only in that way, I think, that I - as someone with zero retailing experience and not knowing the person I speak to - can understand the actual processes in order to improve them. So, perhaps it's less about finding problems in general (the other owner's biggest problem were currency exchange rates) and more about finding problematic processes?!

Tomorrow I'll do more cold calls and also try to get back on the phone with the email/accounts gentlemen.

I'm grateful for any sort of comment, suggestion, criticism!

 

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[jarbino11]

Genius idea- hope nothing but the best for you


Sent from my iPhone using Tapatalk

 

[YaWeil]

Day 2

Thanks @jarbino11!

Cold calling #2

Today I returned to cold calls immediately. I recently listened to a podcast on the idea of how speed of execution might keep up motivation. That really resonated with me, so I didn’t want to “waste” time emailing first, since on Day 1 my success rate with cold calling was even higher…
…not today! Over the weekend my old passion for drum teaching resurfaced, so I thought I’d switch from drum retailers to drum schools. I called around a dozen, got two people to schedule a call for Thursday, and one to talk to me. Others were busy.

My experience so far tells me not to open with a large question like “Can you walk me through a typical day of you”, since people seem to be inclined to end the conversation before it has started then.

So I went “What’s the most painful activity you have to do day to day?”. He: “Changing nappies” (I could hear a baby cry in the background). I was baffled, asked him a few more questions about his actual business, but he assured me there was nothing problematic or painful associated with it. Third guy to tell me this.

I still don’t really believe it, because I, for once, could come up with annoying things about any work. But on the other hand I didn’t want to bother him any longer. Yes, I still do feel like I’m bothering people more than helping them, and that’s, I think, a limiting belief to be overcome for successful IE.

Frustration

After a dozen calls, I got frustrated, because on Day 1 I had already had two actual IE conversations by that time. I took a long break and – deride me for saying this or not – that turned out to be crucial. I had been so drawn in by my ambition to find someone’s pain that I had been sitting at my desk for close to three hours already. I guess that my conversations with people didn’t benefit, and neither did my thinking.

Fastlane Forum feat. Inspiration

Hope came back, as so often, via the Fastlane Forum: I read a post where @SinisterLex made a comment about perseverance, and how you can get to a point where you actually KNOW THAT YOU WILL SUCCEDD, IF YOU JUST KEEP GRINDING AWAY. I really have thrown away too many things I put much work in and got good at that I could have made living off but didn’t (drumming, writing literature, even twice changed my major at university), so I really want to stick with this until, at least, I get to a point where I feel what Lex has said to be true.

So during lunch break, I decided to call back in with a guy I had talked to during Day 1. Initially I had planned to do that later this week, because I had sent him an email on Friday with this document attached that could help him manage his emails better. So far, I hadn’t heard back from him, so I thought I’d leave it until later in the week. To give him more time to read the email.

During lunch I realized: THIS IS CRAP. Why would I wait for something of which I don’ know whether it has actually happened, will still happen, or none of those options at all. You might think this is a minor point, but I think it’s absolutely crucial. There was a limiting belief justifying my procrastination. After all, cold calling someone is not the nicest thing in the world, and my head, at least, tries to play all kinds of tricks on me to keep me from taking action. And taking action to my mind is the most important part to any entrepreneurial endeavor!

A first painful Problem

Long call cut short: the guy is frustrated with how he manually has to manage his accounts. He has looked at existing software which is much too expensive for him (“tens of thousands of Pounds”), and I think it could be fixed by something much less costly.
What really brought me to understand this problem was that I asked him about the process he uses to do accounts as often as it took me to finally understand how it works. I think it’s important to ignore the voice in your head saying: “How many more times will you ask about this again. You should have understood by now. They guy will think you’re a stupido.” That doesn’t happen, and he seemed actually quite happy for being able to rant about the task.

In summary: it’s not a niche problem. I’d even guess that most small businesses in retailing suffer from it. Since I guess, this is what’ll have to be check via more calls on day 3.

But do you think it’s actually bad to be looking at a problem that’s VERY commonplace??
A friend told me it’s actually something she has experience in all small and mid-sized businesses she has worked in. Maybe it’s crazy, but the thing almost seems too commonplace and too straightforward to be problematic.

 

[100k]

Tried this shit. My pain point: I f$cking hate cold calling to do idea extraction. Someone should set up a business that specializes in providing that service.

Good job, keep persevering!

 

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[YaWeil]

Day 3

Yes, @100k definitely can see why! And since I didn't manage to have an insightful call today, I'll share some thoughts on the actual process of making cold/IE-calls

Activity log

I cold-called around ten companies today, but most of the owners were not in or busy. With those who were busy I at least re-scheduled for next week. I also called various owners of drum schools during the last few days, and most of them really are very happy with their business. So this industry, perhaps, is not the best to go to. I'm now focusing on drum/music instrument retailing again.

The cold-call mindset

I'm beginning to see why IE is not as easy as it sounds when people who build successful businesses with it are talking about it. It often took me a dozen calls to get one business owner on the phone. So you definitely need some patience and not shrink away after being turned down a few times. Still, people in general were really nice and appreciated me calling in. I tried to focus on the thought that I'm actually spending my time to help them without asking anything in return just yet. And whenever I hung up on an unsuccesful call, I tried to go on to the next before I could find myself reflecting on it - or talking myself out of it.

Yet, when you have an insightful call, you'll feel absolutely stoked! It's amazing to see that people are actually willing to talk to you about details of their business with the only incentive being that you offer to listen. So I encourage you to go ahead and try IE-calling for as long as you hit on that first small success. That really has helped me to stick to it.

Useful other ways of finding business ideas

Since, I'm only IE-calling any other day - there's this odd little thing called job in between -, I try to listen and read about other methods for finding business ideas. Yesterday, I got pretty excited over Noah Kagan's interview with Pat Flynn over at SPI. He approaches the idea-question a bit more from the opposite side by focusing on his pains and needs or those of people and communities around him. What I found motivating here is the momentum: you start with an idea and directly go into validation instead of spending time on figuring out the problem/idea in the first place like in IE (yet, you’re validating at the same time...sort of). Since I happen to have a blog for students who are frustrated about writing term papers (which I’m quite comfortable with), I’m trying to validate an info product on that matter now. I’m basically using fb ads to spread the word (and have already found that with ads on my fb-page I only receive likes from weird people that seem not even to speak German), and am excited to see how it goes.

But, I also will go back into IE after the weekend! (Hope this increases the pressure for me ;-))

 

[seojims]

Man! Cold calling is the best and worst thing I ever done. I hope it work out for you. And You can probably. I hope it work out

 

[eliquid]

Im actually looking at developing a series of blog posts, or an ebook, or a course on coming up with ideas and idea validation.

Not sure the direction I will take, but I'm interested to see your progress.

 

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[Equilibrium]

when you send emails, embed a tracking pixel in it. this is a 1x1 transparent square, or ''web beacon'' Here's how to do it
if you are building a cold email list, this will tell you if a email was opened.
congrats on realizing it was crap to wait for something you don't even know if it happened.. now you can know next time IF ANYTHING happened.

 

[YaWeil]

Day 4

Man! Cold calling is the best and worst thing I ever done. I hope it work out for you. And You can probably. I hope it work out

How best, how worst @seojims? I'd be interested to hear about your experiences.

Im actually looking at developing a series of blog posts, or an ebook, or a course on coming up with ideas and idea validation.

Not sure the direction I will take, but I'm interested to see your progress.

Cool thing @eliquid, go ahead! I haven't been able to find a free, comprehensive guid on Idea Extraction. And I think picking the right niche is absolutely crucial in terms of motivation. So lots of potential for mistakes there. What's you IE-experience?

when you send emails, embed a tracking pixel in it. this is a 1x1 transparent square, or ''web beacon'' Here's how to do it
if you are building a cold email list, this will tell you if a email was opened.
congrats on realizing it was crap to wait for something you don't even know if it happened.. now you can know next time IF ANYTHING happened.

Thanks @active employ! I can also recommend ToutApp, which has worked more than fine for me.

----------------------------------------------
Today...

...I did a couple more calls, and heard more drum retailers being unhappy with the amount of email queries coming in. Not sure how/if software could be of help there. I recommended auto-completion software to one retailer, but obviously that's only speeding up the writing, not automating it entirely. If anyone has a solution there, it would be great to hear about it - or you just go ahead and pre-sell it to retailers ;-)


SaaS business idea up for grabs

Also, I relistened to a recording of a call I did last week, and really got surprised by a suggestion of the retailer that I didn't notice during the call. This guy was unhappy with the way he did his accounts, and actually solution to it all by himself - only that he thought it would be much too expensive to do via software (which I think is untrue). So if you're looking to build a software business, you'll find the idea here in my recording of the live idea extraction call.

By watching the video you'll also help me get closer to receiving a scholarship for The Foundation class that is about to start. So, if you do: awesome, thanks a lot! If you want to have the whole recording of the call (15 mins), just give me a shout, and I'll send it to you.

 

[ilrein]

If you find someone who has a specific software need, I could make it in a few days and contribute to this thread.

No charges, of course.

 

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[YaWeil]

Thanks for your offer @ilrein. I haven't validated the problem/solution wih other retailers yet, but I'm at it. Have you listened to the recording? (Tell me if you need the full call.) Do you think it's possible to build the barcoding-stock-software for less money than he thinks?

 

[ilrein]

Thanks for your offer @ilrein. I haven't validated the problem/solution wih other retailers yet, but I'm at it. Have you listened to the recording? (Tell me if you need the full call.) Do you think it's possible to build the barcoding-stock-software for less money than he thinks?

Just listened to it. I'm not totally sure what he's asking for, TBH.

I can tell you there's tons of open source barcoding code libraries (http://lindell.me/JsBarcode/)

Again, I don't totally get what he wants, but if you could break it down into a simple MVP, I can deliver.

 

[nemeck]

Im actually looking at developing a series of blog posts, or an ebook, or a course on coming up with ideas and idea validation.

Not sure the direction I will take, but I'm interested to see your progress.

did you ever do this?

 

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[eliquid]

did you ever do this?

I havent yet, too many other things got in the way

 

[francevalue]

@YaWeil Any news?