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Have An Idea For A Business? Great, Now Do Your Homework
I had a big idea last summer.
My idea was a website that reviewed business books and generated money through subscriptions and Amazon’s referral program.
Dumb, right? Well, coming from a single dude stuck in quarantine, I thought I invented Airbnb.
I hired a website developer, designed a logo, created an Instagram account, a Facebook account, a Substack account, and a LinkedIn account. Then got to work writing the first few reviews.
I was so excited to share my idea that a simple yet critical question never crossed my mind: “do people even want this?” By November, I could tell it was a flop.
It sucked. But I won’t make the same mistake again.
I learned entrepreneurs start with a product that works for the individual. But the trick is creating a product that works for other people.
Look, you’re going to get a brilliant idea at some point, but don’t dive headfirst like I did and waste your time on something that nobody wants.
That’s why real entrepreneurs do their homework before launch.
Here’s what you can do. And what I’ll do next night time around.
Just talk to people
Jerry Seinfeld published a joke book called “Is This Anything?” The title references the moments when he’s on to something funny, so naturally tells the joke to anyone who will listen.
If that’s not entrepreneurship, I don’t know what is.
When we have an idea, we naturally want to talk about it — just to see if we’re on to something. Bartenders, Uber drivers, friends while watching football, parents at dinner, girlfriends, boyfriends — anyone we feel comfortable asking “Is This Anything?”
Maybe your peers won’t feel the same way, “that’s not a problem dude.” Or maybe they think it’s ingenious. That’s when you realize that your idea could save the world — time to take the next step.
Paint a picture of your dream customer
Expert marketer Russell Brunson preaches the importance of knowing your dream customer: the hypothetical person who consumes your product because it makes them say, "Hey, you made this for me!"
"If you're going to find them, persuade them to follow you, and hopefully change their lives… You need to know and understand them better than they know themselves."
-Russell Brunson
Identifying your dream customer might be easier than you think because it could be you! Other times, a leap of imagination will be required.
Try this. Make a list of your competitors and find out their target markets. Then simply ask yourself:
Where do these people live?
How old are they?
Where do they shop?
Who do they follow on social media?
Where do they hang out?
What are their dreams and aspirations?
Now paint the picture of your dream customer in your head. Can you see them?
Shop Competitors
“If you know the enemy, you know yourself.”
-Sun Tzu
Steph Korey and Jen Rubio, the founders of the luggage brand Away, started with a simple idea: a bag that was fashionable, practical, and affordable. But what does that look like?
To find out, Steph and Jen went shopping.
“We went shopping every day,” Jen told Guy Raz on NPR. “We went to every department store. We went to every luggage store. We made google maps of stores around New York and compared all their experiences and all the prices. We kept very meticulous notes of what was out there.”
Market research doesn’t mean writing a 40-page business plan complete with a SWAT analysis and market demographics. Keep it simple.
Jen and Steph built a library of knowledge about the luggage market and used that information to leverage their creativity and intuition to design their unique bag.
Schedule a Zoom with your dream customer
A few months ago, I was interviewed via Zoom by two college graduates who wanted to design commercial real estate software. They didn’t have a product yet, but they had a plan. They knew CRE technology lingered in the Stone Age and they wanted to blast the industry back to the future.
Their problem: they knew nothing about commercial real estate.
I was their dream customer, a young CRE agent willing to drop the cart and buggy for a Tesla. I wasn’t alone. Using LinkedIn’s search feature, they found dozens of agents ready to talk about their pain points with CRE tech.
Imagine the power of that information. Not bad for a few kids who just graduated college in the middle of a pandemic.
See how the sausage gets made
The founder of AllBirds, Tim Brown, wondered why no one could produce a simple, comfortable sneaker. So he did what any sane man would do, he flew to Southeast Asia and toured footwear factories.
“I’m walking into this world that was intriguing and surprisingly complicated and incredibly old fashioned.” He told Guy Raz on NPR. “I realized my innovation alarm was going off because I’d ask these really, really, simple questions, and no one can give me a clear answer.”
If you’re creating a tangible product, you could do worse than walk a factory floor for a few hours with a notebook and dig for the questions that nobody can answer.
What if your product isn’t tangible?
Then find the factory floor equivalent. For example, the CRE software company that interviewed me might benefit from shadowing a CRE agent for a day: noting the modes of communication, how they tour real estate, what technology they use, and what technology they don’t use.
Think about how you phrase survey questions
Consider survey's the macro component of your research.
According to an article published in the "Start-Up Grind," A market survey will answer the following questions.
Who is my target market?
Is my product idea in demand?
How many people are willing to pay for my product?
The survey questions must serve a purpose and be well worded, which might be more challenging than you think.
"It was the stupidest idea ever," Jen Rubio said about their first survey. "If you have a survey that says 'what would you like to see in your luggage?' Everything gets checked."
It wasn't helpful.
The next time around, Jen sent out a survey to 800 people. Instead of providing a list of options, she asked thoughtful, open-ended questions about the entirety of their travel experiences.
"How do you pack?"
"What do you do when you first check into a hotel?"
"Where do you put your luggage?"
The information she received turned out to be a gold mine that helped Jen and Steph refine the perfect piece of luggage for Away.
Use the information as a guide, not gospel
I played golf in college. The day before each tournament, we played a practice round on the course. We didn't keep score or even work on our swings. Instead, we used the round to hard-wire in our brains the intricacies of the course:
Pick out our targets.
Learn the correct distances on par 3's.
Get a feel for the speed and slope of greens.
We committed that information to memory, so by tee time, we could relinquish any analytic effort while on the course and let our athleticism, creativity, and flow shine during the tournament.
That's how entrepreneurs should treat market research. Don't let the market interfere with overall decision making, but use the information as a guide so you can let your creativity break free.
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