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The Process of Creating A Real Product

Discussion in 'Product Creation, Inventing, Importing, Sourcing' started by pickeringmt, Aug 14, 2014.

  1. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    One of the best parts of this forum, and pretty much the backbone of what makes The Millionaire Fastlane so powerful, is the fact that you get people speaking from their experience.

    Some of the threads on here from guys like @MJ DeMarco, @biophase , @JackEdwards , @AllenCrawley , @SteveO , and so many others can change the trajectory of your life – all from sharing the things they have done and learned along the way.

    So, today I wanted to take a crack at this myself and outline the process I used to create a physical product and launch my own small business – and hopefully give some value back to the community here.

    I will be totally upfront here – I am pretty green as an entrepreneur. In fact, I had gone all the way through the process I am about to give you before reading TMF. I made a lot of mistakes. So what follows is about 80% what I did and 20% what I would do differently.

    Also, this is fairly “stream of consciousness” – so if anything doesn’t make sense hit me up in the questions.

    Anyways, let’s do this thing.

    How to start a product-based business

    A little background

    If you are like almost every other person on earth, you use products. You use something to wash your face. You use something to moisturize your skin. Maybe you are a grizzled blue-collar man with hands that have skin that cracks from the intense work you do. Any given person uses a lot of “generic” products every day, from soap to toothpaste to lotion.

    The process of creating a product based business begins here – with the products people use. There are probably products you yourself use right now that you don’t even really like – but they are just “what you use”. This is where your opportunity is.

    The most important thing to understand from the beginning here is that your product, while essential to the process, is not the most important piece. This whole process hinges on your brand. The only way to create and sell a product is to create and sell the brand.

    My experience so far has been in personal care products, so I will frame everything in that context, but this process will apply to any product you want to create yourself. To make this whole process easier to understand, I am going to use a hypothetical product to illustrate some of the points.

    I have always thought pomade would be a good one, so let’s go with pomade.

    Phase 1 – Creating the product

    While branding is key, you do need a product first. This part is very simple, but takes a little time as it is more of an R&D stage than anything else.

    So, you get on google, and type in “make your own pomade”. Spend a few hours going over at least 10-15 different recipes. You will most likely notice right off that, regardless of your actual product, the majority of the recipes will be very similar. This is what you use to start creating your own recipe for your product. Pinterest is also great for this step.

    Focus on natural products only. This is generally what people expect from a higher-end, handmade product. If you can, go for organic ingredients. You can find pretty much every kind of natural ingredient for these type of products at natural food stores. Plan on spending between $50 - $100 for a good round of ingredients to get you started. The best way to figure out what you need is to look at your recipes, and check out comments if it is on a blog – almost all will be a blog post with comments. Check out what people are saying about the recipe, and what they say about possible variations that would work well. Also, hit up amazon and check out comparable products. Read reviews and find out what people like and don’t like about the different products.

    This would also be a good point to start cataloging some competitor analysis as well. While there is pretty much room in ANY product category for another option, you want to be the best option. The only way to be that option is to be the best relative to the other options – to differentiate your brand. A big part of a product based business like this exactly what MJ lines out in the TMF when it comes to low barriers of entry – you have to be exceptional at something. Check out Etsy for your product and take a look at how many people are doing very similar things – this will help.

    Anyways, if you do the due diligence here you should see a shopping list taking shape pretty quickly. You’ll probably notice several base ingredients that are common to all of the recipes. Spend some time researching what the ingredients do, and understand why they are in the recipe. It is pretty easy to become a product expert quickly with something like this.

    Go down and buy the stuff immediately. Don’t wait. Once you have the stuff sitting there, you will feel like an idiot if you don’t do anything with it.

    I would suggest making at least 5 different recipes, so for us this is 5 batches of pomade. Try to make batches that you can use for at least one week. You should use your product every day, and document everything. Take notes. What do you notice? How long does it last? Is it comfortable? There is an infinite amount of qualities for any product, and the more you pay attention to, the better your product will be.

    Once you go through this round of batches, you will most likely already have an idea for some type of hybrid batch. This is the point where your own product begins to form. You’ll want to work the best qualities of all of the batches into one single product. This will be a process of trial and error.

    Keep making small batches, and don’t be afraid to share them with friends and family in exchange for feedback. Just try to avoid talking about this being part of a business idea – trust me.

    Phase 2 – Creating Your Brand

    In all honesty, “phase 2” is a little deceptive here because your brand has probably been taking shape in your mind during the product testing/creation phase.

    Anyways, now that you are moving closer and closer to a perfected product with each mini-batch you create, you need to focus on creating a brand around the awesomeness of the product you are creating.

    So let’s look at our pomade again. Perhaps what we didn’t like about the alternatives was the petroleum-base of most retail options. Perhaps we created a product that was less greasy because we wanted a more natural looking hold. Perhaps the product we created uses ingredient X to make the pomade easy to fix your hair over and over again because you are a hard-ass biker and get sick of your hair getting screwed up by your helmet and not being able to fix it. It is all based on the need, the micro-problem that your product solves.

    This is the same problem your customers want solved.

    This part will be individual to every product, but fundamentally it is the same with every product. You need to understand the actual value of your product, understand who else values that, and build a brand around that person.

    So, building on the example above, you made your biker pomade. Your single job is to be THE pomade for bikers, because your pomade is the solution to EXACTLY what bothers them. You are the reason that they buy and are disappointed with alternatives. Your product becomes the definition of what they want.

    The nuts and bolts of the branding in short is as follows:

    • List all the words that describe the entity that is your brand (exclusive, sassy, nerdy, colorful, natural, manly, etc.) and group these words by theme. This will help you narrow your “Pillars” down to 4 words that are the core message of your brand.
    • From these core words, define in one sentence your Brand Essence – the sentence that says exactly who you are.
    • From this, you understand your Brand Promise, which is where your brand essence meets your product benefit.

    If you really want an in-depth look at this, check out THIS POST from Richard at A Better Lemonade Stand. Incredibly good stuff.

    Now that you have defined your brand, that message has to crystalize into every aspect of your product. The product itself is already an embodiment of the brand, but the packaging, tagline, graphic materials, and everything else needs to be a symbol of this same message.

    I personally love doing this part myself, but it would be very easy to take your branding materials and go to 99designs, elance, or even fiver and have a cohesive creative brief created for you. A lot of it will depend on your budget, but the richer of a brand experience you can create for your customer, the more they will connect with your brand. Again, you have to stand out.

    This is a huge subject – more than I can cover here in this already obscenely long post.

    Phase 3 – taking it out to the world

    OK, at this point you have:

    1. A product that is awesome, that you make yourself.
    2. A brand that symbolizes your awesome product relative to your ideal customer

    Now the operational components of this project come into play.

    At this point, it really becomes a matter of buttoning up a bunch of details, like:
    • Containers
    • Labels
    • Shipping/ fulfillment
    • Costs/pricing
    • Social Media
    • A website

    I’m just gonna leave this one wide open for now. All of the things listed above are really going to vary between products and brands. Again, if you have a specific question don’t be afraid to ask.

    What I did here was just list out each piece and knock it off the list. The best thing you can do is create a simple word document and just spend time everyday blowing it out in every direction possible. This document becomes a dynamic worksheet for building your business, and never leaves you wondering what you should do next.

    It really is this simple to get up and running. I can already hear the comments about this not being fastlane – a product at this point really is not. The point is that you could build it from here into a fastlane business, and this whole process for me in my own business cost me a total of about $500, which I have made back within a month or two in a more crowded niche than I would go into if I did this again.

    Hope this helps!
     
  2. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Killer write up and very on point. This is a very similar process that I've gone thru. People should understand that many multimillion dollar companies have started just like this. Rep transferred!
     
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  3. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I totally agree man, when you look at brands like Burts Bees or Tom's of Maine and see how much they were bought out for by companies like Clorox and P&G it makes it easy to get interested in something like this.

    Especially if you have any kind of interest in Marketing or Business. Most people get into making products like this because of an interest in the craft aspect of the process and fall short in the marketing and business areas.

    Thanks for checking it out Allen!
     
  4. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    So, one thing I forgot to put in here is that there are really 2 major channels that you have with your initial offering as you work to build some awareness about your brand.

    The first, most obvious, and most difficult to develop is an online presence with your targeted niche segment.

    I say this is the most obvious because it is always the most widely pursued, and I say this is the most difficult because it is ..... the most widely pursued. The first thought of everyone is to run out and join every FB group and post about their business.

    You need a much better plan than that. This is a whole 'nother post - and would take me off point. But definitely something we will get to here if people are interested.

    The second channel is local selling.

    People will buy your product just because YOU make it locally. If it is a good product, they won't buy anything else. This plays on people's familiarity instinct - the same reason people cheer for the local team during playoffs even if they never watch a game.

    This IS still relative, but it holds true. Don't overlook local opportunities just because eCommerce is so sexy.
     
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  5. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Rep transferred, thank you so much for sharing.

    I also think that a lot of great Fastlane opps are in actual physical product businesses. Seems nowadays everyone defaults to online which its increasingly becoming crowded.
     
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  6. Leo Hendrix
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    Great post
    I am actually finally working on a product that I think could be fastlane just for a week now...I'm at the r&d stage and the product is not complete yet...but Im working on the business model (bmfiddle.com is cool)which seems to be what your speaking of in phase 3...did you do a biz model? Like a writeup
    that is? I think I will revert to phase 2 for now as I'm falling into a block atm...my partner actually did mention the importance of the brand, although I guess I shrugged it off subconsciously or delayed working on it, due to my assumption that our target market would not.care about the brand. As the product is new but incorporates existing products, and the target market are usually not highly educated and usually do not care for brands...
     
  7. ProblemSolver
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    ProblemSolver Contributor Read Millionaire Fastlane

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    Near where I live, there is a bee farm. I've always wanted to stop by and try their honey but just haven't made the time to do it. The other day, one of their workers knocked on my door and was going door to door selling it. I paid $5 for the bottle which is fairly expensive compared to what i would have paid for it in the store but the fact that it was local and I wanted to support a local business made the extra dollar or two worth it to me. Plus, I know it was fresh!
     
  8. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Man, the only thing your target market cares about is the brand!

    as far as a business model, all I do is sit down every day and vet the idea for an hour - got this from @Jack edwards. Just play out every angle, every possibility, every action, strategy, possibility you can think of - every day for an hour. He said to do it for 90 days.

    This really works well. I wish I would have known about this BEFORE I had started my business - I could have avoided a major stumble on my part.
     
  9. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I think it might be because it is easier to create a fantasy about something when you don't really understand it. People think that the internet will do the work for them. I slipped on this actually - my whole plan was solid as a rock up to the launch of my product. That was where my naive assumption that it would just "take off" took over.

    It was a little different after I actually launched :blackeye:

    I will add that this has been an awesome way to get into entrepreneurship and I have learned a lot.

    Still have a LOOOONG ways to go......
     
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  10. Juhill
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    So true!
     
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  11. SYK
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    SYK Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Great post. Man I swear you were reaching into my brain and documenting my recent life.

    I'm in the functional food/beverage space and my kitchen looks like a scene from Breaking Bad. Scales, ingredients everywhere, and recipe formulas scrawled across anything that'll hold ink.

    Because functional benefit is vital to my testing I have my results split into "subjective" (how I feel consuming the product after intervals of time) and "objective" (a series of rigid scientific functional tests I take after consuming the product).
     
  12. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    This is VERY cool man! You are one of the first product people that I have met outside of personal care stuff.

    I'd love to hear more about what you are doing, whether in a pm or sharing here on the thread.
     
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  13. Harley
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    Harley Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Great post!
    I would be curious to hear more on your thoughts for creating a great brand from the start.
    I attended an entrepreneur workshop recently that was run by a serial entrepreneur, who had built and sold many multi-million dealer businesses. He also has a best selling book out. His take was, pay attention to your brand and what you want to portray, but don't give it too much of your time. He put a dozen logos/brand names on the screen and asked does anyone recognize these. No one in the large group did. He then went on to explain that most of these were huge companies that spent a fortune on advertising an brand promotion and if they could do that and still not be recognized, then for your average start up, there were far more pressing parts of your business to focus on.
    This is just one persons opinion. Would be curious to hear others thoughts.
     
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  14. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I see where he might be coming from here, and I think this would need to be more in context.

    If I am looking at an IT management company for my business, yes branding will be a very minor factor - but still might influence who I actually call.

    If I am staring at a shelf in the store, looking at 10 different brands of pomade or natural deoderant or whatever - brand is almost the ONLY thing that differentiates these products.

    A good product is assumed here. You put in the time to develop something worth not only using, but buying. But the brand must be there to get that sale in the first place.

    If you don't believe me, think about how you would sell your favorite cologne online. It is almost impossible to convey sensory qualities in a way that can motivate people to buy based solely on those qualities. Just like buying toothpaste in Walmart. Imagine that process in your head right now - walking into that aisle and looking at a wall of options.
    What is it that puts that one box in your hand?
     
  15. Leo Hendrix
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    Leo Hendrix Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Ok....thanks...for reminding us the importance of Brand...great example!
     
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  16. MatteFFS
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    MatteFFS New Contributor Read Millionaire Fastlane

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    Great post!

    The Ted Talks video with Simon Sinek is also really good (it's in the article OP linked).

    "People don't buy what you do but why you do"
     
  17. timmy
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    timmy Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Great post and thanks for sharing your process here.
    I am in the traditional physical product space also and nothing gives me more pleasure than seeing someone ( anyone really) create a product from nothing! An old guy I knew referred to such people as "The gods of humanity" However in our current global economy, it seems the online presence is the only means to scale anything worth its sauce. As part of my process I am concentrating my efforts on automation at all stages. (Tesla principle)
     
    Last edited: Aug 15, 2014
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  18. AllenCrawley
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    AllenCrawley Legendary Contributor Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    I recommended some books in another thread a while back that really showcase the importance of branding, specifically storybranding. The books aren't about branding per se but it's something you'll pick up on while reading.
    • The Republic of Tea
    • Wild Company (the story of Banana Republic)
    • Peterman Rides Again
    • The Barefoot Spirit
    I just bought a book titled "StoryBranding 2.0 Creating Stand-Out Brands Through the Purpose of Story" by Jim Signorelli. Looking forward to digging into that one.

    Editorial Reviews here.

     
  19. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I get what you're saying here, but I think it is a matter of our modern perspective. Look at some of the product companies that started as individuals making something and scaling it, and the only real difference you get with the online piece is the timeline can become much, much shorter today.

    Like Burts Bees. That took like 20+ years to scale in the offline world. Today it could have happened in fewer than 10 with their brand, Social Media, etc.


    This is where the business becomes a fastlane opportunity to me. The beauty of this whole process is that you begin with a good margin on your products because you are doing the work. As it scales, every piece becomes something you can automate as the business/product validates itself in real time.
     
  20. Mexidan
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    We also created a product.. it was a long and painful product as we didn´t have access to any quality suppliers for things like labels etc because of the volume..

    I personally feel we now have a very good product.. but we´re struggling with coming up with a ´WHY´ that´s powerful enough to use for branding.
     
  21. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I actually print my own labels at this point - I use onlinelables.com. Adds more headache, but it is what it takes to make it work. When I can justify a run of 500-1000 labels, it won't be my problem anymore.

    You can't let stuff like that block you from getting where you want to be - there are always alternatives

    I didn't get into this area much on the original post, but every aspect of your operations should be scaled over time. Don't buy a year ahead of your business goal and struggle with problems you don't even need yet. Don't buy a bottling machine that can do 400 bottles an hour when you dont even move 100 bottles a month yet- even if it is cool and looks convenient.

    I also buy containers from containers and packaging.

    Of course, using the sources like these does not scream efficiency on a large scale. That isn't the point though. These sources give you a professional presentation - which is almost as important as a good product. Have you ever seen a product in a retail store that had cheap packaging? My guess is you never spent the money to find out if it was any good or not (store generics aside).

    My point here is that you need to be ready to pay a higher Cost per Unit in the beginning and expect your costs to go down as your volume increases. This is fine anyway because you should start out making a retail margin on your product anyway - which you use initially to reinvest in your business.

    Over time, your costs will increase as you move towards automating your business, but things like ingredients, fulfillment, packaging, and labels will actually get cheaper per unit as your volume increases.

    We'll have to get into pricing on here too.....

    This alone is a powerful enough why - the real issue is expressing that feeling you have in terms that others will interpret as value
     
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    I think when you use the word "brand", it might help to think of it as a synonym for "positioning" in the early stages. ultimately, your brand will stand alone, and people will associate it with the position you've created. But, when people are encountering you on the shelf for the first time, and your brand is unknown to them, what they're really taking in is how you're positioning yourself in the market.

    Also, keep in mind, there are plenty of contract manufacturers out there that can help you make great products much more easily than the trial and error. might it cost more money? Absolutely. But, it quickly opens the door to ANY CATEGORY you want to compete in.

    Whether you intend to do something entirely radical, or kind of a me-too product, you can really shorten your curve this way if you have the $. it will also make it much easier to scale when you need to.
     
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  23. pickeringmt
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    pickeringmt Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Yeah, but where is the fun in that?

    I'm kidding, but I really do see benefit in bootstrapping a product to a certain extent. I like to think of it as "just in time validation" - just dynamic scaling.

    It keeps things realistic in my opinion.

    That being said, there is absolutely power in cash for creating a product.
     
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    Interesting viewpoint!
     
  25. Leo Hendrix
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    Have you used Lean Startup Methodology at all?