I am become market testing, the destroyer of dreams! My first 2 launches.
This post is part of my Six Startups in Six Months project. In which I try to market test and launch 6 MVPs in six months. Learn more about it here
I did it! The first launches are under my belt. I ended up doing 2 in the first month because I have some deep seated emotional problems and feelings of inadequacy that drive me to overwork. Now let’s dive into the carnage and watch my dreams go through the meat grinder!
Launch 1: Kitten Mittens
I wanted to experiment with an ecosystem built from Shopify, AliExpress, and FB/Instagram Ads. I felt that I needed to get my feet wet with a launch that carried low psychological risk. I knew I wouldn’t take much of an ego hit if a store, brand, and product I wasn’t heavily invested in failed. Plus, if it turned out be really easy to set up and quickly successful it would save me a ton of work on more complicated business models. Oh Adam of two weeks ago, how innocent and misguided you were.
It was as I hoped, incredibly easy to set up. I had a store online selling multiple drop shipped items and some paid social ads running in an evening’s worth of work. I got some decent interaction on my Instagram ads and drove traffic to the store. I experimented with a few different styles of ad copy, pricing, and targeting and was able to improve my metrics.
Despite all this I didn’t drive any sales and my overall metrics numbers were pretty low. People weren’t buying kitten mittens dropshipped from China. They didn’t want them if they were free (with $8 shipping and handling). They also didn’t want them for $12, with free shipping. They also didn’t want emojii socks as an add on. Well, they wanted them, lots of people put things in their cart. But no one bought anything. Cheap stuff from China will always be cheap stuff from China. Even if you wrap it up in great copy and targeted ads.
My takeaway from this test (and a lot of research of competitors and Shopify forum posts) is that the competition is pretty fierce for drop shipped online retail. When something is this easy to set up, the low hanging fruit are getting picked clean. For this ecosystem to work, you need a real competitive advantage. One advantage would be offering unique products that other dropship sellers don’t have access to. You could do this either by developing exclusive relationships with suppliers or offering products of your own design. The risk with either of those is that your competition will come in and rip off your products if they see you turning a profit. My biggest lesson was that the true challenge in selling physical products online is giving customers something of real enduring value that they can’t get on Amazon cheaper and faster. Anything else is just chasing short term profits in shark infested waters.
Go or No Go:
In it’s simplest form (as I built it) this one is a No Go. Overall this space seems like a bit of grind with lots of competition. There might be something there in the future if I could apply my learnings and develop a more sophisticated marketing strategy with email lists, social content marketing, and an unexploited niche. For now though it’s getting shelved and the lessons will be rolled into future launches.
Launch 2: Aviko+Watts Underarm Cleanse
This was my attempt at launching my own product. I’ve been working on this for months, testing formulas, creating profit models, researching suppliers, designing branding, testing on my friends, and doing product photography. I’d spent a considerable amount of time, a non-zero amount of money and had a lot of psychological investment in this thing.
The testing plan was pretty simple. Run FB/Instagram ads that point to a clickfunnels page hosting a free product giveaway. I’d charge a small amount ($2.76) for shipping and handling to see if people were willing to spend money on this product. Also, that way I wouldn’t need to have final product packaging or scale my primitive manufacturing techniques (pouring stuff into bottles by hand).
My CTR (click through rate) on my video ads was really good, 2% is a solid number out of the gate. That confirmed 2 assumptions. Video ads are where it’s at and even with pretty generic targeting, people are at least interested in a natural deodorant product.
Despite my best efforts, FB still regularly rejected my video ads. I would change a few things and get them to run for a little while but they would eventually get pulled. You can’t show close ups of body parts, and you can’t have too much text. That was the core of my campaign so it was pretty frustrating to be stymied by the FB ad police. When the ads were up I was able to get good CTR but never enough volume to test any real conversion rate assumptions.
On a deeper level I found myself mostly going through the motions on this launch. I didn’t believe in the product. I use it myself and it’s pretty good, but it’s not significantly better than the competition or particularly innovative. It all hinged on really great marketing. But do I really want to spend my life working on a product whose only competitive advantage is great marketing? That doesn’t sound sustainable. Nor do the pricing models really work out the way I’d like. It’s a high volume, low margin product. There’s a lot of people doing a better job with this kind of product out there, but I had invested so much time and energy already that I really felt I had to follow through regardless. I’m glad I did, but it felt like an albatross I had to shake rather than a grand adventure.
I really like clickfunnels. It’s an easy platform with pretty good flexibility. It’s a great way to perform these kinds of tests. I was even able to launch my first test while on the free 14-day trial. Honestly, before I did any of my product development or heavy research, I could have made a video ad and a clickfunnels page in an afternoon, launched, and gotten a ton of market feedback with maybe 12 hours of work. Then I would have been able to test my basic assumptions about the product with very little risk and no costly product development efforts. But there’s an even bigger efficiency lesson here. Before doing the market test work, I could have spent five minutes and run the idea through a decision system to figure out if the business model was really worth pursuing at all. Instead, I did neither of those things and spent hours and hours doing a bunch of strategic planning and product development that ultimately felt pretty wasteful. Overall it helped me learn a ton about what kind of work is actually useful in the early stages and led to my development of a consistent testing strategy and a great little profit modeling spreadsheet. So it wasn’t entirely wasted effort, but I absolutely wouldn’t go this route again.
Go / No Go:
This one is a no-go for me. I’m confident that I could probably retool my ad campaign and get decent CTR and conversion. But my profit models required exceptional CTR and Conversion at a premium price point (4% CTR and 4% Conversion at $15.99 retail). Additionally I’d be busting ass filling bottles and fulfilling orders until I got enough volume to outsource manufacturing and fulfillment. Also, the volume needed for this thing to hit my profit goals is really high. Thousands of units sold per month. If I believed that I had something really special here I would follow through and tough it out. But I don’t. So It’s getting shelved.
My shelf full of ground up dreams is growing larger by the day. I quite like it. Looking at all those once shiny and beautiful ideas now mangled and desiccated in their little jars, it brings joy to my heart and a tear to my eye.
My transformation has begun. At the end of this six months I will be a cold and ruthless dream killer. Only dreams that are strong enough to withstand the brutality of my testing system will save themselves from the fate of their fallen comrades. What have you got in there Adam’s brain!?!? Bring your greatest champions to be tested in the harsh arena of market reality! The market cares nothing for your optimistic profit forecasts and unrealistic customer acquisition models! Nor does the market want what your weird little indie-band taste profile wants. The market wants innovation and value. It wants it cheap and convenient. It wants it all wrapped up in a way that seems new and exciting but not too scary and different. Mostly it just hates you personally and all of your ideas.
But dear Adam, please don’t forget, the market is HUNGRY! If you feed it exactly what it likes, it will reward you handsomely regardless of what it thinks of you personally. Now go back and bring it 1,000 more dreams.