Hey guys,
Great to meet you all. I'm currently a 24 year old living in South Africa and trying to develop a business according to the Hard first principle but running into some challenges regarding balancing quick wins with the CENTS methodology. I'll start with context first so you have the full picture.
Context
From the age of 18, I knew I wanted to build a business, and during university I tried a few guru models like dropshipping but failed pretty quickly, mainly due to lack of cash at that point in time. After finishing uni at 21, facing a lack of cash and real domain experience, I moved to the UK and began working as a salesman in financial services to:
1) gain experience
2) build the skill of selling ( I had no marketable skills at the time and so wanted to develop something transferable across industries and aligned with entrepreneurship)
3) earn some cash
From this, I used my free time to try build a maths tutoring business on the side ( All I had experience with at that point was a bit of tutoring here and there as a student so I thought I'd try "start small" and see if I could build something ).
The problem here was that was "building a business" at this point in time, was just a youtube channel. My thinking was that considering I was quite time strapped with a full time job, I thought my time would be better spent trying to develop a maths orientated youtube channel (for a specific syllabus), and once I gain a following, then monetise with a paid platform because I'll have demand, similar to how many "influencer businesses" start. The issue is I never actually went about validating the business by asking people to pay first.
The problem was, the views and subs never came, and so facing burnout in the job + a lack of success in the youtube channel after 2.5 years of content creation, my hypothesis was simply that I wasn't spending enough time on YT to create higher quality vids and learn the algorithm better. I was posting weekly, and tried my best with the content but nothing seemed to land.
As a result, I made the decision to move back to South Africa with parents to dedicate myself to the YT channel full time whilst combining it with a paid offer. I fully appreciate this decision looks rash, and in hindsight it probably was, but at the time I was trying my best to make a calculated decision, and at that point it was predicated on the idea that time on YT was the bottleneck, I could always get a job locally or the UK again (dual citizen) if things didn't work out, I'm young and I had sufficient cash reserves and I'd save a lot more living at home.
From here, I went all in, working diligently, but started to burnout around month 6 going full time. The channel continued to barely grow and funnel people into the paid offer despite my content quality getting better ( I think at least, probably some bias here), and my knowledge of the YT algorithm getting much stronger. I made pivots via facebook ads, got a few customers (free at first), but that was getting very expensive and the economics were beginning to look grim in terms of CAC:LTV and I didn't have income coming in. Even the best case looked meagre at best.
I began to ponder about all the assumptions I had made over the last 3 years. The fact is, I wasn't even that good at maths. I was only doing it because I saw maths help was a need in the market, and could do a good job when creating tutorials, but honestly wasn't that good at live sessions, and felt that mastering the syllabus beyond my original knowledge was procrastinating when the real issue was getting customers in the first place. I looked into hiring someone else to do live sessions, but honestly the business model seemed economically unviable when I assessed the metrics, there was very little differentiating me from others, and it began to look more like the sunk cost fallacy was the only thing keeping me going.
Situation Now
With that context in mind, I started doing some exploration on the side regarding solving problems in the industry I previously worked in, to try evaluate if I could build a solution to the problem.
The problem here was that I have found some decent traction quite quickly, and this makes me second guess as to whether this business model is viable. This might sound stupid I know, but I'm skeptical by the ease to which I've been able to make some decent progress ( 2 POCs in about 3 weeks of cold outreach).
Here's my analysis, let me know if I'm fluffing things up, or have miscalculated.
What seems like a barrier to entry
1) I have 3 years of domain experience in this specific financial services niche, and reached a senior level, which gives me credibility when talking to prospects in this sector. I also understand the industry very well, and when talking to prospects, we're very quickly on the same page.
2) During my time working, I made a solid effort to get good at sales, which made me good at my job. As a result, I'm able to cold call, run outbound cold email campaigns and conduct client meetings pretty well and move things forward.
3) If I get enough clients, I'll probably move back to where the clients are based (Europe), and do my best to conduct F2F customer relationship management to deepen the relationships.
What has no barrier
The code itself. Anyone could build the solution I'm building with AI. My only edge are the points above, where because of my domain experience I'm able to build something that properly addresses the issues of the market with the nuances that brings, and the sales experience to get and run meetings.
My question
After this insanely lengthy post (thank you for staying with me), my question is: How do I know if the barrier to entry is sufficient? I want to try build something that's hard and has a solid barrier to entry, but I feel like I've already got some decent traction here.
I'm wondering if this traction is sustainable long term from a CENTS perspective, and if I'm choosing easy now only to experience hard later. If so, how do I mitigate this? I understand CENTS is a process too, but it feels that software is so easy to build, that any edge built on your product has no moat behind it.
Great to meet you all. I'm currently a 24 year old living in South Africa and trying to develop a business according to the Hard first principle but running into some challenges regarding balancing quick wins with the CENTS methodology. I'll start with context first so you have the full picture.
Context
From the age of 18, I knew I wanted to build a business, and during university I tried a few guru models like dropshipping but failed pretty quickly, mainly due to lack of cash at that point in time. After finishing uni at 21, facing a lack of cash and real domain experience, I moved to the UK and began working as a salesman in financial services to:
1) gain experience
2) build the skill of selling ( I had no marketable skills at the time and so wanted to develop something transferable across industries and aligned with entrepreneurship)
3) earn some cash
From this, I used my free time to try build a maths tutoring business on the side ( All I had experience with at that point was a bit of tutoring here and there as a student so I thought I'd try "start small" and see if I could build something ).
The problem here was that was "building a business" at this point in time, was just a youtube channel. My thinking was that considering I was quite time strapped with a full time job, I thought my time would be better spent trying to develop a maths orientated youtube channel (for a specific syllabus), and once I gain a following, then monetise with a paid platform because I'll have demand, similar to how many "influencer businesses" start. The issue is I never actually went about validating the business by asking people to pay first.
The problem was, the views and subs never came, and so facing burnout in the job + a lack of success in the youtube channel after 2.5 years of content creation, my hypothesis was simply that I wasn't spending enough time on YT to create higher quality vids and learn the algorithm better. I was posting weekly, and tried my best with the content but nothing seemed to land.
As a result, I made the decision to move back to South Africa with parents to dedicate myself to the YT channel full time whilst combining it with a paid offer. I fully appreciate this decision looks rash, and in hindsight it probably was, but at the time I was trying my best to make a calculated decision, and at that point it was predicated on the idea that time on YT was the bottleneck, I could always get a job locally or the UK again (dual citizen) if things didn't work out, I'm young and I had sufficient cash reserves and I'd save a lot more living at home.
From here, I went all in, working diligently, but started to burnout around month 6 going full time. The channel continued to barely grow and funnel people into the paid offer despite my content quality getting better ( I think at least, probably some bias here), and my knowledge of the YT algorithm getting much stronger. I made pivots via facebook ads, got a few customers (free at first), but that was getting very expensive and the economics were beginning to look grim in terms of CAC:LTV and I didn't have income coming in. Even the best case looked meagre at best.
I began to ponder about all the assumptions I had made over the last 3 years. The fact is, I wasn't even that good at maths. I was only doing it because I saw maths help was a need in the market, and could do a good job when creating tutorials, but honestly wasn't that good at live sessions, and felt that mastering the syllabus beyond my original knowledge was procrastinating when the real issue was getting customers in the first place. I looked into hiring someone else to do live sessions, but honestly the business model seemed economically unviable when I assessed the metrics, there was very little differentiating me from others, and it began to look more like the sunk cost fallacy was the only thing keeping me going.
Situation Now
With that context in mind, I started doing some exploration on the side regarding solving problems in the industry I previously worked in, to try evaluate if I could build a solution to the problem.
The problem here was that I have found some decent traction quite quickly, and this makes me second guess as to whether this business model is viable. This might sound stupid I know, but I'm skeptical by the ease to which I've been able to make some decent progress ( 2 POCs in about 3 weeks of cold outreach).
Here's my analysis, let me know if I'm fluffing things up, or have miscalculated.
What seems like a barrier to entry
1) I have 3 years of domain experience in this specific financial services niche, and reached a senior level, which gives me credibility when talking to prospects in this sector. I also understand the industry very well, and when talking to prospects, we're very quickly on the same page.
2) During my time working, I made a solid effort to get good at sales, which made me good at my job. As a result, I'm able to cold call, run outbound cold email campaigns and conduct client meetings pretty well and move things forward.
3) If I get enough clients, I'll probably move back to where the clients are based (Europe), and do my best to conduct F2F customer relationship management to deepen the relationships.
What has no barrier
The code itself. Anyone could build the solution I'm building with AI. My only edge are the points above, where because of my domain experience I'm able to build something that properly addresses the issues of the market with the nuances that brings, and the sales experience to get and run meetings.
My question
After this insanely lengthy post (thank you for staying with me), my question is: How do I know if the barrier to entry is sufficient? I want to try build something that's hard and has a solid barrier to entry, but I feel like I've already got some decent traction here.
I'm wondering if this traction is sustainable long term from a CENTS perspective, and if I'm choosing easy now only to experience hard later. If so, how do I mitigate this? I understand CENTS is a process too, but it feels that software is so easy to build, that any edge built on your product has no moat behind it.
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