From the desk of Razvan Rogoz,
Lean methodology is something every entrepreneur should learn.
You shouldn’t be allowed to register a company (or worse, receive your first seed of funding) until you have read this book. While it is not applicable to every field and every type of project, knowing what it is will give you a major advantage in your entrepreneurial venture. Plus, it works quite well on online businesses too.
You see, most entrepreneurs have a “1.0” release in mind. This usually means a complete, market ready product. If this is a piece of software, it is a stable, bug free, feature rich package. If this is a course, you’re talking here about all the videos, the PDFs and the membership site behind it.
There is a problem though.
You rarely know if something sells until you sell it. You can create the best eBook in the world on your topic and not have a marketplace for it. You can spend six months and tens of thousands of dollars on your SaaS just to realize that you are solving a problem where nobody actually asked for a solution.
This is the concept of a product match.
This concept has been popularized by Eric Ries, the one who brought this mindset of lean into the mainstream marketplace (I don’t know if he invented it or not but most do know of it because of him). Your prospect doesn’t care about your product as you do. He doesn’t care about how technologically advanced is or how much time you’ve invested in making it happen. Your prospect will buy only if it can solve his problems in an effective manner and he cares enough about those troubles to seek solving them.
And most products, unfortunately, do not get product match. Most online marketers invest hundreds of hours of effort into developing something that nobody wants, no matter how brilliant it may look to them. Most sales letters do not target the exact desires, fears and beliefs of the buyer persona. Most PPC campaigns are not targeted towards the people who are ready to buy.
To give you an example here, last year, a friend of mine ran a PPC campaign for a copy I’ve developed for him. He came to me disappointed that he got no results whatsoever. I’ve started asking questions. The PPC ad was good enough and everything seemed fine. There was a problem though. He targeted non English speaking countries because they had the smallest bid score. He was trying to sell an info-product at $30 in places like Bangladesh and Sierra Leone, places where $30 can mean a week’s pay for a family.
It failed because it wasn’t a product match. As soon as he sent quality traffic, he got results. Of course, the quality traffic was multiples more expensive than the trash traffic but experience taught me that there’s nothing more expensive than investing into something that is proven to not work.
To get back to the point, imagine yourself in this situation. You are a marketer. Your passion is to raise peacocks in a farm. You want to create a course on this. You’ve made hundred of thousands of dollars per year from this business. You know it works. So you write for over a year your eBook. Then you record 15 hours of videos. You give them everything, including the spreadsheets you use to manage your business. Since you know this will get them at least $100.000, you price it at $1000 and wait for the million dollar cheque to come in.
The problem it doesn’t. Nobody ever asked for a $1000 course on how to raise peacocks. It may work or not but the prospect is not looking for it. This is like the ugly duckling that may be a great date and life partner but nobody is interested in dating her to begin with.
So what would make a lot more sense there?
Take 1% of that time invested and validate the idea. Instead of writing a 200 page course, write a 500 word blog post and see if there is any interest. Or ask ten people you know what they think about the idea. Or create a mock-up product where you pretend to sell it but when they want to check-out, they’ll get an error. Or run a PPC campaign to a landing page leading to a product launch and see how it converts.
You test with the minimum viable product. You don’t assume that something it will work but rather you take a scientific approach and try to approve or disapprove an hypothesis.
If you’ve got enough interest to be sure that people would buy (someone paying is the best proof), you move to stage two. Stage two is not mortgaging your house to pay for it just because someone said it is a good product. No. You scale your MVP to the next level. You take it from 0.1 to 0.2, not to 1.0. Then you test again. You see if there is more interest now. You try to gauge market reaction.
You do this several times until you are sure that your idea is not a dud. And if at any point your idea is proved as a dud, you have two options. You can cancel the project completely or you can pivot. Pivoting means keeping the same outcome but changing the approach. It’s a “if the door is locked, I’ll try the window” type of approach to life.
Now, I know what some of you may think. This is boring and it is not entrepreneurial and I don’t belong in this field if I tiptoe my way to a successful launch. Chances are that if you say something like this, you’ve never launched a product. When you invest all your savings and months or years of your life to bring a product to market, you don’t care about adventure. You care about being on the right path, that’s all. Most products fail and most people who start a business end up not even breaking up even.
It is sad because while most entrepreneurs are amazing and smart human beings, with a huge dose of maturity, a lot of them fall into the narcissistic side. While being a narcissist is sometimes a good thing, it’s kind of fatal in entrepreneurship. This is because you’d ignore critical data from the marketplace that tells you to go left or right. You’d put your instinct above market data and while some people succeed in doing this, some people win the lottery too.
For every rogue entrepreneur that comes with a brilliant, high risk, untested idea and makes millions out of it, there must be 10.000 that simply lose everything. Gambling is not a proper way of launching a business.
Lean methodology is complex. There are classes that look like an MBA just teaching this. In the corporate field, lean methodology can mean running tens of tests with hundreds of people at any time. Some projects are worth billions. But in the internet marketing field, you don’t need to know lean accounting and complex organizational and managerial charts. You just need to know a few basic rules.
Start every project as small as possible and look for buyer validation first. There are many ways to move ahead but the best one is when people are interested in paying you. This generally means a simple landing page where you sell a product that doesn’t exist. As long as you don’t charge credit cards, it is okay.
If you receive the buyer validation, scale, maybe to 0.25x of your vision and then try again. Maybe sell an inferior, smaller product. Maybe break down your product. I remember how an online marketer took an course, divided it into 12 months and sold it. What buyers did not knew was that only the first month was done. The payment model was subscription based and he was going to fund development of month two from the sales of month one. This is a good application of lean.
If at any point you have clear data that there is not interest, don’t hope. Hope won’t change a lot. Instead pivot. Ask yourself if you can accomplish your goal through different means. Maybe a new format or a new product. And then go through lean again. Validate your assumptions.
I know that it is slow. But the thing is that if you invest all your time and money upfront and it doesn’t work, that’s going to be infinitely slower. Plus, truth be told, I can find out if there is a real interest for a product in two hours. I can set up a dummy PPC campaign with real traffic, a real landing page and see how many people buy it. If 5 out of 500 buy it, then it’s safe to say 10 out of 1000 will buy it too. Then I can go further and scale this to some degree, knowing that I’ve received market validation.
Eric Ries wrote the book mostly for big business and highly funded start-ups. These are companies that spend $5.000.000 to develop an application for IOS and then hope that it doesn’t sink, as opposed to spending $5000 to create a prototype, give it to 500 people and see what they think about it. Yet, lean methodology works in everything, even in the way you live your life. It is about iterative improvement through market validation. It’s about keeping your investment as low as possible to find out if it is a good idea, test and then only if it works, go further.
So the next time when you write a sales letter or build a product, before you invest all your hard earned time and money, please take the time to validate your ideas first.
Are you interested in discovering how I can help your business or how we can apply these concepts to your own venture? Then let’s have a talk. For a limited time, I’m giving away complementary 30 minute calls. In these sessions, we’ll discuss ways in which we can maximize your customer value, boost your conversion, achieve more sales and increase any other relevant metrics in your business.
Please use the link below to get started:
Click Here For Your Complimentary 30 Minute Call!
Best regards,
Razvan Rogoz
The Business & Self-Improvement Copywriter
Click Here For Your Complimentary 30 Minute Call!
Best regards,
Razvan Rogoz